BAS Case Study - March 2023

operations supervisor as needed to assist in the efficient oversight of the branch operation and lending functions.


The Board of Directors recognizes that a realistic and comprehensive budget is an important tool for monitoring the Bank’s performance and progress toward the Board of Director’s strategic goals for the Bank. The Bank’s budget is presented to the Board of Directors for review and comment and is approved annually. The budget is prepared by the CEO and Accounting Manager utilizing projections based upon overall strategic direction and goals, historical results, contractual obligations, trend analysis, projected loan and deposit balances, reasonable goals, anticipated changes or activities, anticipated fixed asset expenditures, staffing needs, etc. Prior to approval, the Board of Directors thoroughly reviews the budget on a line item basis, including budget assumptions and methodologies, and will determine the feasibility of achieving the budgeted net income. The Board of Directors has and will continue to evaluate actual income and expense line items on a monthly basis. The month-to-date and year-to-date budget and actual income and expense results are presented to the Board of Directors on a monthly basis for review and discussion. A separate monthly budget analysis will be included in the board packet to provide documentation of budget variances. As a part of the monthly budget analysis, the Accounting Manager will include a review and analysis of overhead expenses with the goal of identifying inefficiencies or areas of improvement opportunities. The review of overhead expenses is part of the daily accounts payable and general ledger management processes. As a result of the overhead expense review, the Accounting Manager will recommend and/or implement changes to expenditures for reducing expenses and improving efficiency. Another aspect of the overhead expense review includes an annual review of existing contracts and communication with the Senior Management team to identify opportunities to renegotiate or seek new vendors and/or obtain improved services and products. Identified opportunities for improvement will be implemented as soon as practical and included as an amendment to the monthly budget analysis presented to the Board of Directors for review and discussion.

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