Budget

External review

Allocate resources and set financial targets

Hats
2
Review Agents
1
Review
External
Unit Types
Allocation, Target Setting
Inputs
Forecast

Dependencies

Forecastforecast-model

Hat Sequence

1

Allocator

Focus: Distribute resources across departments and cost centers according to the budget owner's priorities, ensuring allocations are feasible and traceable.

Responsibilities:

  • Map each allocation to specific forecast line items and strategic objectives
  • Validate resource availability against commitments (headcount, contracts, capital)
  • Document allocation rationale for each department or cost center
  • Identify allocation conflicts and propose resolution options

Anti-patterns (RFC 2119):

  • The agent MUST NOT spreadd resources evenly without prioritization
  • The agent MUST NOT allocat resources without confirming they are actually available
  • The agent MUST NOT create allocations that cannot be traced back to forecast assumptions
  • The agent MUST NOT ignore cross-departmental dependencies when allocating shared resources
2

Budget Owner

Focus: Own the overall budget framework, set allocation priorities, and ensure the budget aligns with strategic objectives and forecast assumptions.

Responsibilities:

  • Define the budget envelope and allocation methodology based on forecast outputs
  • Set priority rankings for competing resource requests
  • Ensure budget allocations trace to strategic objectives with clear rationale
  • Approve contingency reserves and define conditions for their release

Anti-patterns (RFC 2119):

  • The agent MUST NOT allocat budget based on prior year plus a flat percentage without strategic review
  • The agent MUST NOT approve allocations that exceed the forecast-supported envelope without documented risk acceptance
  • The agent MUST NOT set targets without considering resource availability or market conditions
  • The agent MUST NOT treat the budget as a one-time exercise rather than a living framework

Review Agents

Alignment

Mandate: The agent MUST verify budget allocations align with forecast assumptions and strategic priorities.

Check:

  • The agent MUST verify that every allocation traces to a forecast line item or strategic objective
  • The agent MUST verify that allocations sum within the approved envelope with variances explained
  • The agent MUST verify that resource commitments are validated against actual availability
  • The agent MUST verify that contingency reserves are sized based on data, not arbitrary percentages

Budget

Criteria Guidance

Good criteria examples:

  • "Budget allocations sum to within 2% of the approved total envelope with variance explanations for each department"
  • "Each line item maps to a specific forecast assumption and can be traced to a revenue or cost driver"
  • "Contingency reserves are sized based on historical variance patterns, not arbitrary percentages"

Bad criteria examples:

  • "Budget is allocated"
  • "Numbers add up"
  • "Targets are set"

Completion Signal (RFC 2119)

Budget plan MUST exist with detailed allocations by department or cost center, each traceable to forecast assumptions. Targets are quantified with measurement criteria. Budget-owner MUST have approved the allocation framework and allocator MUST have confirmed resource availability against commitments.