Acta Univ. Agric. Silvic. Mendelianae Brun. 2016, 64, 939-947
Published online 2016-07-04

The Budgetary Process with a Use of Modern Approaches in Cost Management

Jiří Hammer

Department of Public Finance, Faculty of Finance and Accounting, University of Economics, Prague, nám. W. Churchilla 4, 130 67 Praha 3, Czech Republic

State organisational units still compile their budget as incremental and as such it therefore disregards causes of the origination of costs and does not put a sufficient pressure on increase in efficiency of economy. This article aims to propose a budgetary setup for operating costs using the methods of ABC/ABM (Activity Based Costing/Activity Based Management) in state organisational units (SOU). Essence of the proposed procedure towards budgetary setup as well as cost management is specification of such cost drivers that reflect the causal link between activities of the given organisation and indirect operating costs. Through a system of linear equations there is in turn resolved parity between demands on budgetary funding of a specific activity and full costs of activities. Using a multiple regression analyses, for selected cost groups there was also tested their dependence upon criteria that may act as general cost drivers. Undertaken research has also uncovered that frequently used variable “number of workers” cannot explain the analysed cost groups. Benefit of proposed solutions is increase in efficiency of SOU economy. This way, the management receives a tool for budgeting and cost control not only within the process structure based on activities, but also within individual items of the budgetary classification.


The article originated within solution of the project IGA VŠE F1/02/2013 „Public finance in developed countries“.


20 live references