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Helena has seen the Century Group, a not-for-profit, in-home health care organization, grow during the past ten years to a RM500 million revenue, multi-state organization. Helena was promoted to her controller position six months ago, after serving capably in several financial accounting positions at the Century Group.
At a Budget Review Committee meeting last Friday, several committee members expressed frustration with the pace of the budget development. They described the newly introduced "bottom up" system of participative budgeting as "unwieldy," "slow-paced," and "repetitive." Helen's objective in introducing the participative approach was to involve to a much greater extent lower level supervisors and employees. Helen is meeting with the Budget Review Committee again tomorrow when she plans to explain the advantages of "bottom up" versus "top down" approaches to the budgeting process. She has asked you to assist her in preparation for tomorrow's meeting by preparing the following:
Question (a) A description of participative budgeting, including some basic advantages of this approach to budgeting.
Question (b) A description of the concept of "budget ownership," one of the values that participative ("bottom up") budgeting is said to have.
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