Phoenix Ltd. is a not-for-profit organization that began operations on January 1, 2013. The organization provides support for individuals who are trying to start a new life after experiencing poverty. You are the organization's accountant. The CEO, Marijke de Waal, is interested in demonstrating accountability to the organization's various funding agencies and private donors. She has heard that some not-for-profits prepare formal budgets for upcoming periods, something that Phoenix has not yet done. She is interested in implementing a system of budgetary control and wonders if such a system would affect Phoenix's recordkeeping and financial reporting. Marijke would like to meet with you to discuss it further in a month from now. For now, she would like a brief memo to update her on budgetary control systems.
Required
Write a memo to the CEO. In this memo you should do the following:
(a) Explain budgetary control systems and the possible impact of a budgetary control system on Phoenix's record keeping and its financial reports.
(b) Describe how a budgetary control system would be useful for demonstrating accountability to Phoenix's funding agencies and private donors.