Budgets are a great tool for planning and controlling how organizational resources are used.So from the "control" perspective, final budgets are just that - final.BUT, on the other hand, life happens!So then what?

In my experience with many organizations, after the organization completes budget preparation (which may entail several iterations as departments work to get all the puzzle pieces together), the budget is then presented to the Board of Directors for final approval.Once that budget is approved, that's it - it doesn't change.

However, because life happens, there will inevitably be unplanned and unbudgeted expenditures that must be addressed.(Typically, this tends to happen more in the later part of the budget year, as no one has access to a 12-month crystal ball!)Organizational policies usually require additional approvals for such unbudgeted expenditures.The policies also establish thresholds on who can approve unbudgeted items.For instance, a department manager might approve $1,000, a division manager might have authority to approve $10,000, and VP, CEO, or Board approvals for successively higher amounts.

Have you encountered situations at your organization where unbudgeted expenditures require additional approvals?