Question

As a department supervisor, why might you often not get what you have asked for in the capital budget?

Answer 1

In today's world, there is a lot of focus on cost containment and measures to control cost. Once a supervisor drafts a budget for his/her department, Management knows and feels there are some cushions planned within it. As a human tendency, we tend to keep a safety cushion in capital matters. In budgeting, this is known as slush funds which supervisors try to get allocated for unexpected needs. Hence, department supervisor might not get what has been asked by him/her in the capital budget.

Further, with the increased pressure to cut costs, Management wishes the supervisors to go with a tight budget and use necessary measures such as productivity improvements and right sizing.