Problems and Peculiarities of Budgeting the Activities in Socially Oriented Non-profit Organizations

In the digital economy, the strengthening of the role of socially oriented non-profit organisations (NPOs) in addressing issues related to the harmonization of the social and economic aspects of society development, cannot be achieved without refocusing accounting on the solution of strategic tasks. An important tool of strategic planning and accounting in order to attract and monitor the use of earmarked funds — is budgeting, which had not been adequately reflected in the accounting activities of socially oriented NPOs. The organization of budgeting system in socially oriented non-profit organizations is based on the following characteristics: the problem of selection of calculation units; a high level of uncertainty of a profitable part of the budget, which is financed by revenues from basic and associate activities; the social orientation of the non-profit organizations, which defines the enhanced responsibility for performance and requires the clarification of the concept of operations results in itself. In the socially oriented NPO, the use of the result-oriented budgeting model, in which the expenditure of trust funds is administered in accordance with the principle of centralization on the one hand, and on the other hand, the objectives are achieved on the basis of the principles of decentralization, ensures planning, execution and monitoring of budget expenditures in direct connection with the specified, and achievable results. Under this model, the mobile annual budgets with a step equal to one month’s budgeting are used. Budget performance analysis aims to assess the quality of socially oriented non-profit organizations’ performance, which have a double-sided nature: on the one hand, the Organization’s efforts are evaluated, and on the other hand, the task force is evaluated. The effect of earmarked funds’ use becomes visible in subsequent reporting periods and is determined with regard to socially oriented NPOs within the society.

1. Gamol’skii P. Yu. Non-profit organizations: features of taxation and accounting. Moscow: Book and Business; 2011. 352 p. (In Russ.).

2. Klychova G. S., Khairullin R. R. Topical issues of automation of management accounting. Bukhgalterskii uchet v byudzhetnykh i nekommercheskikh organizatsiyakh = Accounting in budget and non-profit organizations. 2016;(9):2–5. (In Russ.).

3. Egorova S. E., Budasova V. A. Methodical approaches to the development of the cost budgeting system in the conditions of volatility of the environment. Vestnik Pskovskogo gosudarstvennogo universiteta. Seriya: Ekonomika. Pravo. Upravlenie = Bulletin of the Pskov State University. Series: Economy. Law. Control. 2017;(5):145–149. (In Russ.).

4. Endovitskii D. A. Budgeting in the system of university financial management. Bukhgalterskii uchet v byudzhetnykh i nekommercheskikh organizatsiyakh = Accounting in budget and non-profit organizations. 2007;(8):97–108. (In Russ.).

5. Atkinson A.A., Bunker R.D., Kaplan R.S., Young M.S. Management accounting. Transl. from Eng. Moscow: Williams; 2016. 880 p. (In Russ.).

6. Burns J., Scapens R. W. Conceptualizing management accounting change: an institutional framework. Management Accounting Research. 2000;(11):3–25.

7. Bahan’kova E.R. Non-profit organizations: Financial management. Moscow: Book and Business; 2011. 249 p. (In Russ.).

8. Nikolaeva O. E. Classic management accounting. Moscow: KRASAND; 2014. 400 p. (In Russ.).

9. Ostaev G. Y. The need to introduce budgeting in organizations. Bukhgalterskii uchet v byudzhetnykh i nekommercheskikh organizatsiyakh = Accounting in budget and non-profit organizations. 2016;(12):24–31. (In Russ.).

10. Davila T., Wouters M. Managing budget emphasis through the explicit design of conditional budgetary slack. Accounting, Organizations and Society. 2015;(30):587–608.

11. Arogyaswamy B. Social entrepreneurship performance measurement: A time-based organizing framework. Business Horizons. 2017;60(5):603−611. DOI: 10.1016/j.bushor.2017.05.004 1016/j.bushor.2017.05.004

12. Kuhnen M., Hahn R. Systemic social performance measurement: Systematic literature review and explanations on the academic status quo from a product life-cycle perspective. Journal of Cleaner Production. 2018;(205):690–705. DOI: 10.1016/j.jclepro.2018.08.201

13. Nicholls A. The functions of performance measurement in social entrepreneurship: Control, planning and accountability. Values and opportunities in social entrepreneurship. London: Palgrave Macmillan; 2010:241−272. DOI: https://doi.org/10.1057/9780230298026_13

14. Shatsky A., Volkov D., Hramushina H., Folosyan M. Social entrepreneurship: Problems of formation and development. 34th International Scientific Conference on Economic and Social Development. Economic and Social Development. Moscow: Russian State Social University 2018; 955 p. URL: http://soccongress.rgsu.net/netcat_files/261/472/Book_of_Proceedings_esdMoscow2018.pdf (дата обращения: 14.01.2019).

15. Villaluenga S. Revenues assigned to the financing of expenditures in the budget and its implications for the administrative organization and accounting system in the religious institutions and public administration under an historical perspective. De Computis-Revista Espanola De Historia De La Contabilidad. 2016;13(24):57−73.