Budgeting

Budgeting Toolkit by Janet Shapiro (email: toolkits@civicus.org) 1
OVERVIEW
Brief description
This toolkit provides guidelines on how to go about developing and monitoring a budget. It Will help you with an overall organizational budget as well as with a budget for a specific Project. It includes tools for estimating costs as well as tips for ensuring that your budgets Meet the needs of your project or organization. In the examples section we give actual
Examples of budgets and how they can be monitored.
Why has a toolkit on budgeting?
Budgeting is the key to financial management. The toolkit will help you plan, develop and use budgets effectively in your organisation. If you have a sound understanding of the principles of budgeting, you will be well on the way to sound financial management. If you use this toolkit in conjunction with other toolkits, as indicated, you will increase the capacity of your organisation to manage its finances effectively. You will also increase its ability to
Survive through foresight and planning.
Who should use this toolkit?
This toolkit is aimed specifically at people who have had little or no experience with budgeting. Perhaps you have not been involved in running an organisation, project or department before. Or perhaps you have not been involved in the financial management side of the work before. Now you are faced with the task of developing a budget, or budgets, and you are not quite sure where to start. If you are in a situation like this, then this toolkit will be useful for you.
When will this toolkit be useful?
_ After you have done the strategic planning for your organisation, and your action Planning (see toolkits on planning) and you need to know how much money you will require in order to do what you have planned.
_ When you need to work out how much it will cost to run a particular project or department. _ When you want to ask a donor to support a particular aspect of your work.
Budgeting

BASIC PRINCIPLES
Before you develop the budget
Something you should not do when you are developing a budget is make it up as you go along”. As with most good practice in managing an organisation, good practice in budgeting involves clarity of purpose, detailed planning and considerable thought. Among the questions you should be asking yourselves throughout the preparatory budgeting stages, and while you are actually developing your budget, are:_ Could we have spent less last year and still achieved the same results, or better? _ Have we wasted money in the past? If so, can we avoid doing so in the future? In this section of the toolkit, we look at: _ What is a budget, who should be involved in budgeting, and why do we budget? _ The operational plans _ Estimating costs _ Sources of finance. These are all issues that you need to address before you begin developing your budget. They are an extension of the planning process on which all budgeting is based. (See also the toolkits on Overview of Planning; Strategic Planning; Action Planning)
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WHAT IS A BUDGET?
A budget is a document that translates plans into money - money that will need to be spent to get your planned activities done (expenditure) and money that will need to be generated to cover the costs of getting the work done (income). It is an estimate, or informed guess, about what you will need in monetary terms to do your work. A budget is not: _ Written in stone – where necessary, a budget can be changed, so long as you take steps to deal with the implications of the changes. So, for example, if you have budgeted for ten new computers but discover that you really need a generator, you could buy fewer computers and purchase the generator. _ Simply a record of last year’s expenditure, with an extra 15% added on to cover inflation. Every year is different. (See also the section on different budgeting techniques.) Organisations need to use the budgeting process to explore what is really needed to implement their plans. _ Just an administrative and financial requirement of donors. The budget should not be prepared as part of a funding proposal and then taken out and dusted when it is time to do a financial report for the donor. It is a living tool that must be consulted in day to day
work, checked monthly, monitored constantly and used creatively. _ An optimistic and unrealistic picture of what things actually cost – don’t underestimate what things really cost in the hopes that this will help you raise the money you need. It is better to return unspent money to donors than to beg for a “bit more” so you can complete the work. Two key questions you should be able to answer about budgeting are: _ Why budget? And _ Who should be involved in budgeting?
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Why budget?
Why is it important for an organisation, project or department to have a budget?
The budget is an essential management tool. Without a budget, you are like a pilot navigating in the dark without instruments. _ The budget tells you how much money you need to carry out your activities. _ The budget forces you to be rigorous in thinking through the implications of your activity planning. There are times when the realities of the budgeting process force you to rethink your action plans. _ Used properly, the budget tells you when you will need certain amounts of money to carry out your activities. _ The budget enables you to monitor your income and expenditure and identify any problems. _ The budget is a basis for financial accountability and transparency. When everyone can see how much should have been spent and received, they can ask informed questions about discrepancies._ You cannot raise money from donors ness you have a budget. Donors use the budget as a basis for deciding whether what you are asking for is reasonable and well-planned.
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Who should be involved in budgeting?
Budgeting is a difficult and responsible job. Your organization’s ability to do what it has planned to do and to survive financially depends on the budgeting process. Whoever does the budgeting must: _ Understand the values, strategy and plans of the organisation or project; _ Understand what it means to be cost effective nd cost efficient (see Glossary of Terms);_ Understand what is involved in generating and raising funds. To ensure you have all these understandings, it is usually a good idea to have a small budgeting team. This ay only mean that one person does a draft budget which is then discussed and commented on by the team. Where staff is competent to take full responsibility for the financial side of the organisation or project, the following would normally be involved in the budgeting process: _ The Finance Manager and/or Bookkeeper;
_ The Project Manager and/or Director of the organisation or department. Where staff lacks confidence to do the budgeting, then Board members can be brought in. Some Boards have a Finance Committee or a Budget Sub-Committee. It is a good idea to have someone on your Board with financial skills. S/he can then help the staff with budgeting. The budget is the business of everyone in the organisation. At the very least, senior staff should understand the budget, how it has been drawn up, why it is important, and how to monitor it. Where an organisation has branches and/or regions, or several departments, then each branch, region or department should draw up the budget for its own work. These budgets then need to be consolidated (put together) in an overall budget for the organisation. Each branch, region or department should be able to see how its budget fits into the overall budget, and should be able o monitor its budget on a monthly basis. inancial monitoring works best when those closest to the spending take responsibility for the budget.
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THE OPERATIONAL PLANS
Your operational plans are the plans for the actual work. They are also called action plans or business plans. In a normal planning cycle, the organisation or project will begin with a strategic planning process. Here you look at the problem that needs to be addressed and the specific role of your organisation or project in dressing it. This then is related to what actual activities need to be undertaken to achieve the planned impact. This is the operational plan andit is the operational plan that needs to be “coasted.” You cannot prepare a budget until you knowwhat it is you are planning to do. Operational costs will only be incurred when you do the actual work. They are also known as direct costs. You may ask whether you can’t at least prepare a budget for the costs you know you will have anyway – like rent, telephone, stationery – before you get into strategic planning?
The answer is “no”. Your overhead costs should be dependent on what you intend to do. So for example, if you decide to focus your activities in the rural areas, you may decide you need much smaller offices in the urban area that has been your traditional work base. Your
overhead or core costs are affected by your operational plans.
The planning cycle should look something like this:
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ESTIMATING COSTS - CATEGORIES
The cost estimate is what helps you determine realistically what it will cost to implement your operational plan. When you carry out your plans you will probably need to make use of a wide range of inputs. Inputs include people, information, equipment, skills. Most of these inputs will have a cost attached to them. These are the costs you need to estimate in order to develop a budget. Careful cost estimation helps in the ollowing ways: _ It helps you develop an accurate budget; and _ It helps you to monitor and control the actual costs of carrying out activities. The costs you need to estimate fall into the following categories: _ Operational costs – the direct costs of doing the work e.g. the cost of hiring a venue, or of printing a publication, or of travelling to the sites where fieldwork needs to take place. Here you would include materials, equipment, transport and services. _ Organisational costs (also called core costs) – the costs of your organisational base, including management, administration, governance. Once you have decided on the best organizational set-up to support your operational plans, you will incur the organisational expenses on a regular basis – even if you do not carry out your plans or have activity levels as high as you had hoped. So, for example, if you hire premises for four projects but only manage to carry out two, you will still have to pay rent for the extra space. If you have hired a full-time receptionist on the same belief, you will still have to pay her salary, even if she is under-utilized. _ Staffing costs – these are the costs for your core staff – the people involved in management, the people doing work that cuts across projects. (These costs can be included as a category under “organisational costs”.) These costs include their salalries and any benefits such as medical aid or pension fund payments for which the organisation is responsible. You can “charge staff costs out” to the various projects on which the staff members work. So, for example, if your Publications Officer is going to spend half her time working on publications for a particular project, then you can include half her salary and benefits in your costing for the project. If your Director is going to spend 15% of her time providing management support to the head of the same project, then 15% of her time and benefits can also be charged to the project. _ Capital costs – these are costs for large “investments” which, while they may be necessary because of a project or projects, will remain organizational assets even after the projects are over. Vehicles and equipment such as computers and photocopiers fit here. They may be used by all projects, or they might only be required for a specific project. Depending on how you intend to use the equipment, you might budget for it under operational costs or under organisational costs. Why does it matter which category you choose to estimate your costs under? Because many donors prefer to fund operational costs (or, as they sometimes put it, direct project costs) rather than core organisational or staffing costs. Look at the section on frameworks for estimating costs for more help.
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WHERE DOES THE INCOME BUDGET COME FROM?
Where does the money come from?
In the toolkit on Developing a Financing Strategy there are many ideas about how an organisation can generate income. In the the toolkit on Writing a Funding Proposal, there are many ideas about how to relate to donors and how to prepare a funding proposal that does the job – raising money for your work. Here we want to look at how you go about including income in your budget. What sorts of categories should be included in your income budget? This will depend on your usual, or planned, sources of income generation. Some possible broad categories are: _ Promised donations _ Probable donations _ Possible donations_ Income generated from sales _ Income generated from services _ Subscriptions _ Membership fees_ Special events _ Investments _ Campaigns. In your budget you make reasonable estimates of the income you can expect to generate from each category specified. These will serve as targets for your ncome generation. Budgeting
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BUDGETING GUIDELINES
While budgeting depends to a certain extent on the particulars of your organisation or project, there are certain guidelines which apply across projects and organizations. BUDGETING RULES These are not rules that are fixed for all time. They offer some guidelines that will help you deal with common situations. _ It is usual for long-term projects and organisations to prepare a budget which makes projections for several years at a time. While it is usually only the budget for the forthcoming year that is really quite accurate, the projections for the following years gives some indication of the levels of funding that are likely to be needed. Some allowance is usually made for inflation for subsequent years, as well as for the anticipated activities which may differ from the first year. A three-year budget should be based on a three-year plan. _ Contributions in kind (not money, but goods) should be included as a note to the budget (for more on notes see the consolidated budget in the examples). Although they are not part of the budget, they reduce budget costs and so should be indicated. This includes the contribution made by volunteers in the form of sweat equity (see Glossary of Terms). _ Some costs that need to be estimated but that often get forgotten: Start-up costs – for a new organisation or project, such as large-scale recruitment, moving in, building alterations, launching the project or organisation. Research and development – consultation, needs assessment, planning processes. Democracy and governance – establishing the structures, recruiting for them, getting a constitution developed and accepted, training embers of voluntary structures. Marketing or public relations – building a professional image. Replacement of capital goods. Monitoring and evaluation costs for projects. _ Estimates are informed guesses, not just uses. Do your homework, get quotes, phone around to arrive at a likely cost. Check any figures you have room previous years that may provide helpful information. Note down any price increases you already know about (e.g. a salary increase of 10% may have already been agreed.) Make notes of any unusual expenses hat are likely to occur (e.g. moving your offices). A few dollars may not seem a big amount, but multiplied any times over this kind of discrepancy can make a big difference in your budget. _ Keep your notes! As you LAN your budget and make decisions about how you will estimate costs, keep your notes handy so that you an go back and check where the amounts came from. You may, for example, work out your workshop costs on the basis of a certain amount for photocopying, based on an estimated per page cost. When, a year later, the costs are higher than anticipated, you should go back to your notes and
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see where the discrepancy comes in. Or, in another scenario, a donor make ask you to explain how you arrived at the cost per participant for workshops. _ For your own management purposes, break the budget for the forthcoming year into a monthly budget. This will help you when you are watching your cash flow (see section on watching your cash flow). It will also help you to pick up variances (see Glossary of Terms) quickly.
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DEFINING YOUR LINE ITEMS
Line items are the actual items listed in your budget. So, for example, under the category “training costs”, “stationery” might be a specific line item. Under the category “governance”, “training for Board members” may be a specific line item. It is up to you to decide what your categories will be and to decide what the line items under each category will be. So, for example, one organisation may include “governance” under “management”, and “donor liaison” under “fundraising”, while another may have them as separate categories or line items. How do you decide which categories and line items you should use in your expenditure
budget? _ If this is the first time you have done a budget, begin by listing all the items that are going to cost the organisation or project money. Later on, you will have some idea of the categories and items that make sense for your organisation or project so you will be able to take short cuts when you list your line items. _ Once you have the list, group things into categories according to the emphasis you put on categories in your management practices. So, for example, if you, as management, think it is important to keep track of training costs, then “training costs” would be a category. Items such as stationery, venues, printing costs, food, accommodation, transport, trainers’ fees and so on would be line items under that category. However, perhaps your organisation does not do much training and only intends to run one training course as part of a bigger project. Then your category might be “Project X”, and “training course” might be one line item. _ Think in terms of cost centers. A cost centre is a grouping of activities that make a coherent financial unit. So, for example, each project within your programmed might be a cost centre. You then budget both income nd expenditure for that cost centre and keep your financial records in terms of cost centers. This enables you to assess each project, department or unit financially. If you opt for a cost centre approach, your cost centers will determine the main categories under which you list line items. If you go this route, then the “directorate” would be a cost centre and so, for example, would “training” or “publications” or “resource centre.” _ Sometimes it is possible to work out how much a category of expenses is costing even if that category has not been listed as such, and the item is reflected as a line item under a number of categories. o, for example, you may not have a category “transport”, but if you want to know how much transport is costing the project or organisation, you can add up the transport line item listed under several categories. _ If you plan to raise funds to cover a particular category, then, obviously, that category needs to be distinct in your budget. So, for example, if you want to raise money for capacity building in communities, then you need a category in the budget that is headed “Capacity building in communities”. Under it there might be line items such as “workshops”, “fieldworker salary”, “transport” and so on. Your budget notes would explain how ou arrived at the “workshops” amount. (See budgeting rules and example consolidated budget for more on budgeting notes.)
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How do you decide which categories and line items to include in your income budget?
Look at the section on where does the income budget come from? These are the possible categories you could have for your income budget. Under a category such as “sales” you might have line items such as “training”, “publications”, “craftwork”, depending on what you sell. Under “possible donations” you might have line items such as “tin collections”, “campaigns” , “direct mail appeals”, “donors” and so on. (See also the toolkit on Developing a Financing Strategy, strategic options for financing.)
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DIFFERENT KINDS OF BUDGETS
In addition to your main working budget – what you realistically expect to generate or raise, and how this will be spent – you can also have some “what if” budget options. “What if” budgets allow you to prepare for the unexpected – whether it is good or bad. Your “what if” budgets could include: _ A survival budget. This is the minimimum required in order for the organisation or project to survive and do useful work. _ A guaranteed budget. This is based on the income guaranteed at the time the budget is planned. Usually the “guarantees” are in the form of promises from donors. However, unexpected situations, such as a donor grant coming through very late, may make it necessary to switch to your survival budget. _ An optimal budget. This covers what you would like to do if you can raise additional money. Once extra money comes in or is promised, it becomes part of your working budget.
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DIFFERENT BUDGETING TECHNIQUES
The two main techniques for budgeting are incremental budgeting and zero based
budgeting.
_ Incremental budgets are budgets in which the figures are based on those of the actual expenditure for the previous year, with a percentage added for an inflationary increase for the new year. This is an easy method that saves time but it is the “lazy” way and is often inaccurate. This budgeting technique is only suitable for organisations where each year is very similar to the previous one in terms of activities. Very few dynamic
organisations or projects are so stable that this budgeting technique really works for them. _ In zero based budgets, past figures are not used as the starting point. The budgeting process starts from “scratch” with the proposed activities for the year. The result is a more detailed and accurate budget, but it takes more time and energy to prepare a budget in this way. This technique is essential for new organisations and projects, but it is also probably the best route to go in a dynamic organisation that is proactive in taking on new challenges.
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SOME BUDGETING ISSUES
In this section we address some of the questions that are often asked about budgeting under the following headings: Budgeting price increases
How do you allow for price increases in your budgeting process Budgets are prepared in advance. There are likely to be price increases between the time of preparation and the time when the amount is spent or received. Take this into account when you do your budgeting by estimating what the costs or value will be when the expenditure is made or the income received. If there is likely to be an increase in costs then make sure that you also estimate for an increase in what you charge in fees for services or in sales of products. You need to keep your calculations for your budget because some donors may be willing to rovide a supplementary grant if you can show clearly that you calculations were based on a smaller rate of inflation than actually proved to be the case. The level of detail needed How much detail do you need to include in your budget? This is not a simple question to answer. On the one hand, the less detail you give, the more flexible you are. On the other hand, leaving the budget too open makes it less useful as a management tool. This does not mean that every single thought and detail should be included in the budget line items. So, for example, you could have a global amount for “training” under a project, provided that you have your own notes on how you arrived at the amount. In general, however, the detail, while it may restrict you in negotiations with donors, provides you with useful management information. One way to deal with this is to have different versions of the budget for yourselves and for donors and potential donors. The donor version would be more flexible and less detailed, and the management version so less. In general, your donor version should follow the guidelines provided by the donor agency for how it wants you to present your budget. If the agency does not have written guidelines, speakto the project or desk officer who deals with your area of work and aks for advice on how toprepare the budget. Your management budget is translated into your bookkeeping system and, to the degree that the budget is detailed, your bookkeeping system will be detailed and will be able to provide you with valuable information about where and how you are spending your money or generating income.
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Contingency amounts
What is a contingency amount?
A contingency amount is an amount that you put aside to deal with unforeseen events. While budgets should be informed guesses, there is still an element of “guessing” in them. The future is uncertain and organisations and projects have to survive in uncertain times. Because of this, some organisations allow for a “contingency” line item in the their budgets – usually about 10% of the overall annual budget. However, many donor agencies do not like this and refuse to fund a “contingency” line item, possibly because they believe that organisations and projects should be more accurate in their budgeting. One way to deal with this, is to build contingency amounts into the major line items in your budget, allowing for an additional 10% over and above your calculations. Budgeting income generating projects How do you budget for a project that not only costs money but also generates income for the organisation? An example might be a training course for which you charge and from which you expect to make a profit over time. (See also the toolkit on Developing a Financing Strategy: Earned income.) In your overall budget for the project or organisation, you could include the costs in the line items reflecting expenditure, and the income in your line items reflecting income. However, for management purposes you will want to be able to monitor in greater detail than this, in order to establish at what stage a break-even point is reached. Your bookkeeping records should be set up in such a way as to make it easy (See Glossary of Terms) for management to access this
information. Timeframes Organisational budgets (for the whole organisation) are usually calculated for a year at a time (based on the financial year of the organisation). This also applies to ongoing departmental budgets. Once you have an annual budget, it is best to break it down into months, for management purposes. A monthly breakdown facilitates monitoring (see the sections on budgeting for monitoring and watching your cash flow). When you present a budget that covers several years, make sure that this budget is based on a medium-to long-term plan, and is not simply an uninformed guess. Budgets for specific, timebound projects may be calculated for the whole life of the project. For monitoring purposes it is probably best to break this overall project budget into years (where the project runs over several years). You may then also decide to break it up into months.
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The budget
By now you should have done all your preparatory planning and be ready to draw up your budget. As you work through this section, you may want to refer to the budget given in the example – consolidated budget.
It is useful to think about the process of drawing up a budget in steps. By now you should have already gone through the first three steps as part of your preliminary work for developing the budget: 1 List the items on which you spend money. You will know what these are from your action planning process (see the toolkit on Action Planning). Group the items under headings or cost centres. (See the section on defining your line items.) 2 Estimate the unit cost of the line items and then the annual costs. (See the sections on Estimating costs – categories and framework for estimating costs.) 3 List your likely sources of income or revenue. Categorise them. This is the basis of your income budget. (See also, Where does the income budget come from?) Now you are ready to begin putting your budget into a budget format. The remaining steps are: 4 Prepare your budget format. 5 Do your addition. 6 Add in notes to explain items that may not be clear. 7 Get eedback on your budget. 8 Finalise your budget.
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BUDGET FORMAT
Your budget can be prepared using an ordinary word-processing programme. If you have access to a spreadsheet programme such as Lotus 123 or Excel, and you know how to use them, this will make your task easier. But it is not essential. Your budget format must make allowance for both the income and the expenditure to be reflected. Go to the example of a consolidated budget to see how this is done there. The budget format should reflect the categories and line items you have decided are important for your organisation or project. (See the sections on Estimating Costs – categories, framework for estimating costs, and Defining your line items.) Your budget format for an organisational budget should allow you to put in projected amounts for about three years, as in the example of the consolidated budget. Your format must also allow for sub-totals and for a total expenditure and a total income amount. Remember that the format ou use for a donor may be different from the format you use for your own management purposes. (See the section on Level of detail needed.) In the example of the consolidated budget, you will find a management version, rather than a donor version. For most donors, you will be able to simplify to some extent. So, for example, you might put all “sales” under “income” into a global amount under the line item “sales”. We have done the more detailed budget because we believe that it is the management version that is most important.
The difference between your budgeted income and your budgeted expenditure shows you whether you are likely to have a deficit (too little money) or an excess (more than you need). If there is a large deficit, either you need to cut down on expenditure or to raise or generate more money. If you have a large excess then you probably need to adjust the amount that you are asking from donors. Donors are usually not keen to fund a surplus. However, if you are trying to establish a capital fund for investment, then you need to explain this to donors and ask them if they are prepared to make a contribution in the interests of long-term sustainability of the organisation. (See also the toolkit on Developing a Financing Strategy: investments.)
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ADDITION
It is now time to insert actual costs into your budget. If you have already done the preliminary estimating work this should not be difficult. (See the section on Framework for estimating costs.) _ Fill in the amounts you have estimated for each line item in the budget, across the three years. Use your estimates and be careful to get the amounts right. Be sure that your working notes will enable you to justify any amount if you are asked by a donor or a Board member to do so. _ Add up your sub-totals. Check them.
_ Add up your overall totals. Check them._ Calculate whether you have a surplus or an excess. Decide how ou are going to handle this situation. (See the section on Budget Format.)
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NOTES
In your budget, you should include some notes. These should explain amounts or line items that may puzzle a donor or a board member or another member of your staff or management team. Anticipate questions that they may ask and use your notes to make explanations. You do not need to litter your budget with notes, but where something may well be puzzling, explain in a note. This will save you time responding to queries.
In the example of the consolidated budget you will see that the notes are given separately, but with a reference in the budget. So, for example, there is a note that explains why the cost of transport in “Training” goes down in Year 2. You could have a note explaining that a company or government agency was providing an in-kind donation (see the section on Budgeting Rules), hence a particular line item was less than one would normally expect. You could have a note referring to salary increases and organisational policy on these to explain the rise in salaries over the three year period. The point of including notes is to make the budget clearer and more transparent, and to preempt questions. Read the budget as if you were a possible donor. This will help you identify where notes will be helpful.
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FEEDBACK
Once you have written the budget, checked your addition and put in the explanatory notes you think are necessary, it is time to get feedback. From whom should you get feedback? _ From the people who worked with you on drawing up the budget. _ From others in the project or department. _ From your finance department, accountant or bookkeeper. _ From your Director (unless you are the Director). _ From your Board or the Finance Sub-Committee or Budgeting Sub-Committee of the Board. What do you need feedback on? _ On the categories and line items – has everything that needs to be included been included? _ On the notes – do they explain everything that needs a special explanation?
_ On the addition – is it right?
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FINALISE
Once you have feedback, make necessary adjustments to the budget, check your calculations once again, and finalise the budget. Finalising your budget does not mean filing it away and never looking at it again.
Once the budget is finalised, it is time to implement it – both in terms of generating the necessary income and carrying out the activities that incur expenses. The budget gives you a basis for monitoring your work financially and that is what is dealt with in the next section on monitoring the budget.
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Monitoring the budget
The budget is the most important tool you have for monitoring the finances of your organisation, project or department. You use the budget to: _ monitor your income and expenditure to see whether or not you are on target; _ report how you are doing financially to your staff, board and donors; _ do cash flow projections; _ make financial decisions. BUDGETING FOR MONITORING Budget monitoring is used to measure how closely an organisation is meeting its objectives in terms of its finances. Comparisons of actual income and expenditure against the budgeted income and expenditure need to be done regularly. To do this, you need to be able to prepare a variance report (see Glossary of Terms and the example of a varience statement). This shows you, month by month, where you are over-spending, under-spending or on target. In order to be
able to do a variance report and in order to be able to do cash flow projections, you need to break your overall budget up into a monthly budget. The monthly breakdown is what gives you your management tool. For an example of a monthly breakdown of a budget, go to the example of a monthly breakdown. Budgeting
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REPORTING AGAINST BUDGET
The purpose of reporting against your budget is to show those to whom you are accountable, or those who are involved in your work, whether or not you are doing the work stipulated and whether or not you are going to have the resources you need to complete the work. When you report against your budget you are reporting on how close your financial planning has been to your actual financial performance. The variance statement compares the expected income and expected expenditure with the actual income and expenditure. The variance statement gives you an overview of what has happened in the reporting period (one month, three months etc). It also gives you an overview of financial performance for the year thus far (“year-to-date”). A variance statement shows you whether there are any trends that are developing in financial performance about which you should be aware. It gives you the opportunity to take action to correct roblems. So, for example, if the variance statement shows you that you are repeatedly spending too much on stationery each month, you could: _ keep a tighter control over the stationery; _ recongise that you have under-budgeted on stationery and either shift some money from somewhere else in the budget to stationery, or try to raise or generate more money to cover the anticipated shortfall. The important thing is that you will be aware that all is not right and be able to take remedial action before the problem gets out of hand. Spending too much is not the only problem. Sometimes when you spend too little you also have a problem. So, for example, an organisation that finds it is way under budget on training expenses may identify the problem as being too little activity in the Training Department. This may require re-planning for the rest of the year to ensure that targets are met. When you report to your department, your superiors in the organisation and your board, you need to do so on the basis of a variance statement. On the next page you will find a useful format for a variance statement. (See also the example of the variance statement.) Whenever you have a variance of 10% or more (either too much or too little), you need to look for an explanation and, if necessary, to take remedial action.
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WATCHING YOUR CASH FLOW
The cash flow forecast is a tool that allows you to anticipate the expected income and expenses on a monthly basis. It maps out how money will flow into and out of your bank account. By watching your cash flow, you can identify when you may not have enough money in your account and take remedial action. The “map” you need is your budget broken down into months, with extra rows at the end showing net inflow or outflow projections, and your opening and closing bank balances. Totals J F M A M J J A S O N D Net inflow/outflow Opening bank balance Closing bank balance These rows summarise what your financial situation (money in the bank) is likely to be at the end of each month. The information on net inflow/net outflow will come from your budget broken up into months, and then subtracting your expected expenditure from your expected income. (See example of a monthly breakdown.) Steps to take to make a cash flow projection: 1 Break your annual budget into a monthly budget, based on your expected income and expenditure for each month. 2 Total your monthly income and expenditure and subtract the one from the other to get a net inflow/outflow. 3 Add the money in the opening balance to any surplus, or subtract any deficit from the opening balance. 4 Now you will have your closing bank balance which tells you how much money you are likely to have in the bank at the end of each month. 5 Update this monthly from your actual igures. 6 Compare what your expected expenditure is for the following month with your balance from the end of the previous money. 7 When your expenditure exceeds the money you have available, then you need to take remedial action immediately. What form can remedial action take? Some suggestions: _ Adjust your spending. _ Try to speed up donations or possible inflows. _ Ask the bank for an overdraft on the basis of promised income. (It is usually better to set up an overdraft facility with the bank before you need it – just in ase! But don’t use it unless you are sure money is coming in).
Budgeting
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MAKING DECISIONS
Monitoring the budget is not just something that you do so that you will know more about your financial performance as an organization or a project. You need the information to be able to take decisions. The cycle ooks like this: The success of the process is dependent on the ability of those with management responsibilities to make decisions and take action. The steps involved are: 1 Prepare your baseline information. (Budget, monthly break down) 2 Get information on financial performance. 3 Analyze the information and work out what it is telling you. 4 Look at the potential consequences to your financial strategy nd plans. 5 Draw up a list of options for action. 6 Get consensus and a mandate to take action. 7 Share adjustments and plans with the rest of the organisation and, if necessary, your donors. 8 Implement. 9 Monitor.10 Build your learnings into future budgeting processes. CIVICUS: World Alliance for Citizen Participation is an international alliance established in 1993 to nurture the foundation, growth and protection of citizen action throughout the world, especially in areas where participatory democracy and citizens’ freedom of association are threatened. CIVICUS envisions a worldwide community of
informed, inspired, committed citizens in confronting the challenges facing humanity. nitor
Make Monitor Implement Decisions
Budgeting
30
These CIVICUS Toolkits have been produced to assist civil society organizations build their capacity and achieve their goals. The topics range from budgeting, strategic planning and dealing with the media, to developing a financial strategy and writing an effective funding proposal. All are available on-line, in MS-Word and PDF format at www.civicus.org and on CD-ROM. For further information about CIVICUS: CIVICUS: World Alliance for Citizen Participation 24 Pim Street, corner Quinn Street Newtown, Johannesburg 2001 South Africa P.O. Box 933 South dale, 2135 South Africa Tel: +27 11 833 5959 Fax:+27 11 833 7997 1112 16th NW, Suite 540 Washington D.C. 20036 USA Tel: +202 331-8518 Fax: +202 331-8774 E-mail: toolkits@civicus.org Web: http://www.civicus.org We wish to acknowledge GTZ for its support in translating these toolkits into French and Spanish.

SOURCE OF INFORMATION

Exports
Data on U.S. exports of merchandise from the U.S. to all countries, except Canada, is compiled from the Electronic Export Information (EEI) filed by the USPPI or their agents through the Automated Export System (AES). The EEI is unique among Census Bureau data collection methods since it is not sent to respondents soliciting responses as in the case of surveys. Each EEI represents a shipment of one or more kinds of merchandise from one exporter to one foreign importer on a single carrier. Filing the EEI is mandatory under Chapter 9, Title 13, United States Code. Qualified exporters or their agents submit EEI data by automated means directly to the U.S. Census Bureau.
The United States is substituting Canadian import statistics for U.S. exports to Canada in accordance with a 1987 Memorandum of Understanding signed by the Census Bureau, U.S. Customs and Border Protection, Canadian Customs, and Statistics Canada. Similarly, under this Memorandum of Understanding, Canada is substituting U.S. import statistics for Canadian exports to the United States. This data exchange includes only U.S. exports destined for Canada and does not include shipments destined for third countries by routes passing through Canada or shipments of certain grains and oilseeds to Canada for storage prior to exportation to a third country. These shipments are reported on and compiled from EEIs.
Department of Defense Military Assistance Program Grant-Aid shipments being transported as Department of Defense cargo are reported directly to the U.S. Census Bureau by the Department of Defense.
2. Imports
Published data on U.S. imports of merchandise is compiled primarily from automated data submitted through the U.S. Customs' Automated Commercial System. Data are also compiled from import entry summary forms, warehouse withdrawal forms and Foreign Trade Zone documents as required by law to be filed with the U.S. Customs and Border Protection. Data on imports of electricity and natural gas from Canada are obtained from Canadian sources.
3. COVERAGE
General
The official U.S. import and export statistics reflect both government and non-government shipments of merchandise between foreign countries and the U.S. Customs Territory (the 50 States, District of Columbia, and Puerto Rico), U.S. Foreign Trade Zones, and the U.S. Virgin Islands, without regard to whether or not a commercial transaction is involved. In general, the statistics record the physical movement of merchandise between the United States and foreign countries.
The statistics used to compile the merchandise trade balance exclude the following types of transactions:
United States trade with U.S. possessions, trade between U.S. possessions, and trade between U.S. possessions and foreign countries (except Puerto Rico and the U.S. Virgin Islands).
Merchandise shipped in transit through the United States from one foreign country to another.
Shipments to the U.S. Armed Forces, including post exchanges, for their own use, as well as U.S. merchandise returned by the U.S. Armed Forces for their own use.
Monetary gold and silver.
Issued monetary coins (in current circulation) of all component metals.
Bunker fuels and other supplies and equipment for use on departing vessels, planes, or other carriers engaged in foreign trade.
Shipments of furniture, equipment and supplies to U.S. government agencies as well as such merchandise when returned to the United States.
Imports of articles repaired under warranty.
Some other transactions are not considered to be of statistical importance, such as shipments of personal and household effects of travelers and certain temporary exports and imports.
Exports
Exports measure the total physical movement of merchandise out of the United States to foreign countries whether such merchandise is exported from within the U.S. Customs territory or from a U.S. Customs bonded warehouse or a U.S. Foreign Trade Zone. The following are examples of some types of shipments that are included in the statistics and are of such a nature that their inclusion merits separate mention:
Department of Defense Military Assistance Program Grant-Aid shipments under the Foreign Assistance Act.
Foreign military sales.
Shipments of commodities for economic assistance under the Foreign Assistance Act. (Totals for exports under this program are published quarterly or as they become available.)
Shipments of agricultural commodities under P.L. 480 (Agricultural Trade Development and Assistance Act of 1954) as amended, and related laws.
Sales of U.S. vessels to purchasers in foreign countries.
U.S.-built satellites launched by U.S. space vehicles limited to: (1) launched on behalf of a foreign purchaser, and/or; (2) launched on behalf of international organizations.
U.S.-built satellites exported for launch in a foreign country limited to those launched for a foreign purchaser.
Domestic Exports
Exports of domestic merchandise include commodities which are grown, produced or manufactured in the United States, and commodities of foreign origin which have been changed in the United States, including U.S. Foreign Trade Zones, from the form in which they were imported, or which have been enhanced in value by further manufacture in the United States.
Foreign Exports (Re-exports)
Exports of foreign merchandise (re-exports), consist of commodities of foreign origin which have entered the United States for consumption or into Customs bonded warehouses or U.S. Foreign Trade Zones, and which, at the time of exportation, are in substantially the same condition as when imported.
Imports
Imports of merchandise include commodities of foreign origin as well as goods of domestic origin returned to the United States with no change in condition or after having been processed and/or assembled in other countries. (See discussion of American Goods Returned after Processing and/or Assembly below).
For statistical purposes, imports are classified by the type of transaction.
Merchandise entered for immediate consumption. ("duty free" merchandise and merchandise on which duty is paid on arrival).
Merchandise withdrawn for consumption from Customs bonded warehouses, and U.S. Foreign Trade Zones.
Merchandise entered into Customs bonded warehouses and U.S. Foreign Trade Zones from foreign countries.
Bonded Warehouses
Bonded warehouses are authorized by U.S. Customs for storage or manufacturing of goods on which payment of duties is deferred until the goods are removed into Customs Territory. These goods are not subject to duties if reshipped to foreign points.
Foreign Trade Zones
Foreign Trade Zones are enclosed areas, operated as public utilities, under control of U.S. Customs with facilities for handling, storing, manipulating, manufacturing, and exhibiting goods. The merchandise may be exported, destroyed, or sent into Customs territory from the zone, in the original package or otherwise. It is subject to Customs duties if sent into Customs territory, but not if reshipped to foreign points.
American Goods Returned After Processing and/or Assembly
Domestically produced goods are shipped from the United States to other countries for processing and/or assembly and then returned to this country. Imports containing U.S. content which qualify for special duty-free treatment on the U.S. portion fall into the following groups:
Articles of metal manufactured in the United States, which were exported for further processing abroad and returned to the United States for more processing.
Textile articles assembled abroad and entered under a Special Access Program or Special Regime.
Articles assembled abroad from components produced in the United States, except textile articles entered under a Special Access Program or Special Regime.
Separate statistics are available on American goods returned after processing and/or assembly abroad.
General Imports
"General Imports" measure the total physical arrivals of merchandise from foreign countries, whether such merchandise enters consumption channels immediately or is entered into bonded warehouses or Foreign Trade Zones under Customs custody.
Imports for Consumption
"Imports for Consumption" measure the total of merchandise that has physically cleared through Customs either entering consumption channels immediately or entering after withdrawal for consumption from bonded warehouses under Customs custody or from Foreign Trade Zones. Many countries use the term "special imports" to designate statistics compiled on this basis.

4. STATISTICAL MONTH
The month of importation is the month in which the U.S. Customs and Border Protection releases the merchandise to the importer.
The month of exportation is based on the date when the merchandise leaves the United States. (For vessel or air shipments, it is the date when the carrier departs or is cleared from the port of export.)
5. MERCHANDISE TRADE BALANCE
The merchandise trade balance represents the difference between U.S. exports based on F.A.S. values and U.S. general imports based on Customs values. (See discussion of Valuation below.) This balance corresponds to a measurement of the international payments or credit flows resulting from the physical movement of goods between the U.S. and foreign countries. Monthly balances are based on seasonally adjusted data.
6. SEASONAL ADJUSTMENT
The Census Bureau is seasonally adjusting the merchandise trade data at the most detailed end-use level possible. These detailed data are then summed to the 1-digit level for release with the monthly merchandise trade totals.
The seasonally adjusted data are also provided to the Bureau of Economic Analysis (BEA) for use in compiling the quarterly National Income and Product Accounts (NIPAS). The BEA supplements these data in the NIPAs with quarterly adjustments for six of the end-use categories which exhibit seasonality on a quarterly basis but not on a monthly basis.
The 1-digit level end-use categories provide data for the following broad aggregates: (1) Foods, feeds, and beverages ; (2) Industrial supplies and materials; (3) Capital goods, except automotives; (4) Automotive vehicles, parts and engines; (5) Consumer goods (nonfood), except auto; and (6) Other merchandise. This seasonal adjustment procedure is designed to reflect seasonal patterns at the most detailed commodity levels. The adjustment is made at that end-use commodity level for which significant stable seasonality is identified.
The use of the end-use commodity classification system for seasonal adjustment ensures methodological consistency with the quarterly adjusted balance of trade data published by the Bureau of Economic Analysis (BEA) and reflects the BEA coding descriptions which combine data into broad categories based upon principal uses of the commodities.
The Summary of U.S. Export and Import Merchandise Trade (FT 900) for each month includes revisions for carryover to the prior month's aggregate unadjusted and seasonally adjusted (current and constant dollar) export, import and trade balance figures as well as to the end-use totals. These revisions do not appear in other foreign trade reports.
Tables of the seasonal factors are available free of charge from the Foreign Trade Division (FTD). Additionally, interested data users may contact the FTD for more detailed information about the seasonal adjustment program.. Historical data as well as the detailed unadjusted and adjusted data are available on a cost basis on either hard copy or diskette.
7. CONSTANT DOLLAR ADJUSTMENT
The U.S. Census Bureau began publishing seasonally adjusted constant dollar merchandise trade data in January 1990. The constant dollar series was created to meet the requirements of the Omnibus Trade and Competitiveness Act of 1988. Census replaced its fixed-weighted constant dollar series with a chained-dollar series with the release of the April 2003 issue of the U.S. International Trade in Goods and Services (FT-900), on June 13, 2003. We adopted this methodology to improve the quality of the constant dollar series and for consistency with other official government statistics released by the Department of Commerce. Users are reminded, however, that the Census constant dollar series will not match BEA’s constant dollar series because of the underlying coverage differences between the current dollar NIPA and Census data.
A technical paper is available to explain more about the new series and the differences between the real dollar data produced by the two methodologies. Look on the Foreign Trade Division’s Web site at www.census.gov/foreign-trade/aip/priceadj.html or contact the Special Projects Branch of the Foreign Trade Division on (301)763-3251.
8. VALUATION
Customs Import Value
The Customs value is the value of imports as appraised by the U.S. Customs and Border Protection in accordance with the legal requirements of the Tariff Act of 1930, as amended. This value is generally defined as the price actually paid or payable for merchandise when sold for exportation to the United States, excluding U.S. import duties, freight, insurance, and other charges incurred in bringing the merchandise to the United States. The term "price actually paid or payable" means the total payment (whether direct or indirect, and exclusive of any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the place of importation in the United States) made, or to be made, for imported merchandise by the buyer to, or for the benefit, of the seller. In the case of transactions between related parties, the relationship between buyer and seller should not influence the Customs value.
In those instances where assistance was furnished to a foreign manufacturer for use in producing an article which is imported into the United States, the value of the assistance is required to be included in the value reported for the merchandise. Such "assists" include both tangible and intangible assistance, such as machinery, tools, dies and molds, blue prints, copyrights, research and development, and engineering and consulting services. If the value of these "assists" is identified and separately reported, it is subtracted from the value during statistical processing. However, where it is not possible to isolate the value of "assists", they are included. In these cases the unit values may be increased due to the inclusion of such "assists".
Import Charges
The import charges represent the aggregate cost of all freight, insurance, and other charges (excluding U.S. import duties) incurred in bringing the merchandise from alongside the carrier at the port of exportation in the country of exportation and placing it alongside the carrier at the first port of entry in the United States. In the case of overland shipments originating in Canada or Mexico, such costs include freight, insurance, and all other charges, costs and expenses incurred in bringing the merchandise from the point of origin (where the merchandise begins its journey to the United States) in Canada or Mexico to the first port of entry.
C.I.F. Import Value
The C.I.F. (cost, insurance, and freight) value represents the landed value of the merchandise at the first port of arrival in the United States. It is computed by adding "Import Charges" to the "Customs Value" (see definitions above) and therefore excludes U.S. import duties.
Dutiable Value of Imports and Calculated Duty
The "dutiable value" represents, in general, the Customs value of foreign merchandise imported into the United States which is subject to duty. The "Calculated duty" represents the estimated import duties collected. Estimated duties are calculated based on the applicable rate(s) of duty as shown in the Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes. See Section 6 (Reference Aids) of this Guide for a list of rate provision codes which indicate the free or dutiable status of merchandise imported into the United States.
F.A.S. Export Value (Excluding Exports to Canada)
The F.A.S. (free alongside ship) value is the value of exports at the U.S. seaport, airport, or border port of export, based on the transaction price, including inland freight, insurance, and other charges incurred in placing the merchandise alongside the carrier at the U.S. port of exportation. The value, as defined, excludes the cost of loading the merchandise aboard the exporting carrier and also excludes freight, insurance, and any charges or transportation costs beyond the port of exportation.
U.S. Exports to Canada
The use of Canada's import data to produce U.S. export data requires some adjustments to make the two comparable.
U.S. exports are valued at the U.S. seaport, airport, or border port of export in the U.S. and include inland freight charges. Canadian imports are valued at the point of origin in the U.S. and do not include inland freight to the U.S. port of exit. To compensate, Canada adds an estimated 4.5 percent of the value to each transaction to cover inland freight (except for shipments where freight is not a consideration, e.g., large aircraft, vessels and drilling platforms.)
Average monthly exchange rates as quoted by the Federal Reserve Board are applied to adjust the Canadian import data to U.S. dollars. A formula for converting U.S. total exports to corresponding Canadian imports is provided in the initial release of the statistics (FT 900) along with the monthly conversion rate.
Balance of Payments (BOP) Basis
Goods on a Census basis are adjusted by the U.S. Bureau of Economic Analysis to goods on a BOP basis to bring the data in line with the concepts and definitions used to prepare the international and national accounts. Broadly, the adjustments include changes in ownership that occur without goods passing into or out of the customs territory of the United States. These adjustments are necessary to supplement coverage of the Census basis data, to eliminate duplication of transactions recorded elsewhere in the international accounts, and to value transactions according to a standard definition.
The export adjustments include:
U.S. military sales contracts - This deduction of U.S. military sales contracts is made because the U.S. Census Bureau has included these contracts in the goods data, but BEA includes them in the service category "Transfers Under U.S. Military Sales Contracts." BEA's source material for these contracts is more comprehensive, but has no distinction between goods and services.
Private gift parcels - This addition is made for parcels mailed to foreigners by individuals through the U.S. Postal Service. (Only commercial shipments are covered in Census goods exports.)
Gold exports, nonmonetary - This addition is made for gold that is purchased by foreign official agencies from private dealers in the United States and held at the Federal Reserve Bank of New York. The Census data only include gold that leaves the customs territory.
Some smaller adjustments are also made to exports: Deductions for repairs of goods, developed motion picture film, and military grant-aid. Additions for sales of fish in U.S. territorial waters, exports of electricity to Mexico, and vessels and oil rigs that change ownership for which no export document is filed.
The import adjustments include:
Inland freight in Canada - An addition is made for inland freight in Canada. Imports of goods from all countries are valued at the foreign port of export, including inland freight charges ("customs value"). In the case of Canada, this should be the cost of the goods at the U.S. border. However, the customs value for imports for certain Canadian goods is the point of origin in Canada. The BEA makes an addition for the inland freight charges of transporting these Canadian goods to the U.S. border to make the value comparable to the customs value as reported by all other countries. Insurance and freight charges for transporting goods to the United States from all other countries to the U.S. border are included in services by the BEA. (The same procedure is used for Mexico as an Other Adjustment, but is much smaller.)
Gold imports, nonmonetary - This addition is made for gold sold by foreign official agencies to private purchasers out of stock held at the Federal Reserve Bank of New York. The Census data only include gold that enters the customs territory.
Imports by U.S. military agencies - This deduction of U.S. military sales contracts is made because the U.S. Census Bureau has included these contracts in the goods data, but BEA includes them in the service category "Direct Defense Expenditures." BEA's source material is more comprehensive, but has no distinction between goods and services.
Some smaller adjustments are also made to imports: Deductions for repairs of goods, and developed motion picture film. Additions for imported electricity from Mexico, conversion of vessels for commercial use, repairs to U.S. vessels abroad, and valuation of prepackaged software imports at market value.
Services
The U.S. Bureau of Economic Analysis collects and compiles U.S. services import and export statistics. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis combined goods and services into one report and began publishing a joint monthly press release, titled U.S. International Trade In Goods and Services report (FT900), in January 1994. The services statistics are estimates of services transactions between foreign countries and the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and other U.S. territories and possessions. Transactions with U.S. military, diplomatic, and consular installations abroad are excluded because they are considered to be part of the U.S. economy.
Services are shown in seven broad categories. Types of services for imports and exports are the same for six of the seven categories. For the seventh, exports is "Transfers Under U.S. Military Sales Contracts" while for imports the category is "Direct Defense Expenditures." The following is a brief description of the types of services included in each category:
Travel - Purchases of services and goods by U.S. travelers abroad and by foreign visitors to the United States. A traveler is defined as a person who stays for a period of less than 1 year in a country of which the person is not a resident.
Includes expenditures for food, lodging, recreation, gifts, and other items incidental to a foreign visit.
Passenger Fares - Fares paid by residents of one country to residents of other countries. Receipts consist of fares received by U.S. carriers from foreign residents for travel between the United States and foreign countries and between two foreign points.
Payments consist of fares paid by U.S. residents to foreign carriers for travel between the United States and foreign countries.
Other Transportation - Charges for the transportation of goods by ocean, air, waterway, pipeline, and rail carriers to and from the United States. Includes freight charges, operating expenses that transportation companies incur in foreign ports, and payments for vessel charter and aircraft rentals with crew.
Royalties and License Fees - Transactions with foreign residents involving intangible assets and proprietary rights, such as the use of patents, techniques, processes, formulas, designs, know-how, trademarks, copyrights, franchises, and manufacturing rights. The term "royalties" generally refers to payments for the utilization of copyrights or trademarks, and the term "license fees" generally refers to payments for the use of patents or industrial processes.
Other Private Services - Transactions with affiliated foreigners, for which no identification by type is available, and of transactions with unaffiliated foreigners. (The term "affiliated" refers to a direct investment relationship, which exists when a U.S. person has ownership or control, directly or indirectly, of 10 percent or more of a foreign business enterprise's voting securities or the equivalent, or when a foreign person has a similar interest in a U.S. enterprise.)
Transactions with unaffiliated foreigners consist of education services; financial services (includes commissions and other transactions fees associated with the purchase and sale of securities and noninterest income of banks, and excludes investment income); insurance services; telecommunications services (includes transmission services and value-added services); and business, professional, and technical services. Included in the last group are advertising services; computer and data processing services; database and other information services; research, development, and testing services; management, consulting, and public relations services; legal services; construction, engineering, architectural, and mining services; industrial engineering services; installation, maintenance, and repair of equipment; and other services, including medical services and film and tape rentals.
Transfers Under U.S. Military Sales Contracts (Exports only) - Exports of goods and services in which U.S. Government military agencies participate. Includes both goods, such as equipment, and services, such as repair services and training, that cannot be separately identified.
Direct Defense Expenditures (Imports only) - Expenditures incurred by U.S. military agencies abroad, including expenditures by U.S. personnel, payments of wages to foreign residents, construction expenditures, payments for foreign contractual services, and procurement of foreign goods. Includes both goods and services that cannot be separately identified.
U.S. Government Miscellaneous Services - Transactions of U.S. Government nonmilitary agencies with foreign residents. Most of these transactions involve the provision of services to, or purchases of services from, foreigners; transfers of some goods are also included.
Services estimates are based on quarterly, annual, and benchmark surveys and partial information generated from monthly reports. Service transactions are estimated at market prices. Estimates are seasonally adjusted when statistically significant seasonal patterns are present. No country or area detail is available due to the lack of adequate source data upon which to base estimates.
The revision policy is as follows: Each month, a preliminary estimate for the current month and a revised estimate for the immediately preceding month are released. After a revised month is released, no further changes are made to that month until more complete source data become available.
9. COMMODITY CLASSIFICATIONS
Schedule B
The export statistics are initially collected and compiled in terms of approximately 8,000 commodity classifications in Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States. Schedule B is a U.S. Census Bureau publication and is based on the Harmonized Commodity Description and Coding System (Harmonized System).
Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes
The import statistics are initially collected and compiled in terms of approximately 14,000 commodity classifications in the Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes (HTSUSA), an official publication of the U.S. International Trade Commission. The HTSUSA is the U.S. import version of the Harmonized System.
The United States and Canada both compile their merchandise trade statistics in terms of the Harmonized System; however, they have different annotations beyond the basic 6-digit codes.
Approximately 80 percent of the U.S. Schedule B export classifications are directly comparable to Canadian import classifications. These classifications account for 85-90 percent of the total value of U.S. exports to Canada. Many of the remaining 20 percent of the Schedule B classifications represent little or no trade with Canada. In these cases, the Canada import code is recoded to a single Schedule B, usually the class with the most trade or the residual classification for the root 6-digit Harmonized System code.
There are some instances where the U.S. and Canadian Customs agencies do not agree on the 6-digit Harmonized System code under which a particular commodity or group of commodities should be classified. In these cases each statistical agency may classify under the 6-digit code designated by its national Customs agency. Efforts by the U.S. and Canadian Customs agencies to align detail statistical classifications will continue over the next several years.
In some reports the HTSUSA and Schedule B classifications are rearranged and summarized into other classification systems as indicated below:
Standard International Trade Classification (SITC-United Nations Statistical Papers, Series M, No. 34/Rev.4).
The SITC is a statistical classification of the commodities entering external trade designed to provide the commodity aggregates needed for purposes of economic analysis and to facilitate the international comparison of trade-by-commodity data.
The Harmonized System and SITC Revision 3 are interrelated. The rearrangement of import and export data reported in terms of the Harmonized System into the SITC allows for an additional means of comparison between the U.S. and its trading partners in terms of commodity classification and trade statistics.
Certain foreign trade reports present HTS and Schedule B classifications summarized into approximately 3,000 5-digit SITC codes.
Within the SITC framework, "Manufactured Goods" includes all products classified in groups 5 through 9.
Manufactured goods conform to the SITC sections that include chemicals and related products, n.s.p.f.; manufactured goods classified chiefly by material; machinery and transport equipment; miscellaneous manufactured articles, n.s.p.f.; and commodities and transactions not classified elsewhere.
North American Industry Classification System (NAICS)
The North American Industry Classification System (NAICS) has replaced the U.S. Standard Industrial Classification (SIC) system. The NAICS provides a consistent system for economic analysis across the three North American Free Trade Agreement partners – Canada, Mexico and the United States.
NAICS is built on a production-oriented or supply-based conceptual framework in that establishments are grouped into industries according to similarity in the processes used to produce goods or services. A production-oriented industry classifications system ensures that statistical agencies in the three countries can produce information on inputs and outputs, industrial performance, productivity, unit labor costs, employment, and other statistics and structural changes occurring in each of the three economies.
The structure of NAICS is hierarchical. NAICS uses a six-digit coding system to identify particular industries and their placement in this hierarchical structure of the classification system. The first two digits of the code designate the sector that represent general categories of economic activities, the third designates the sub-sector, the fourth digit designates the industry group, the fifth digit designates the NAICS industry, and the sixth digit designates the national industry. An industry is a grouping of economic activities. Though it inevitably groups the products of the economic activities that are included in the industry definition, it is not solely a grouping of products.
There are 20 sectors in NAICS. New industries are identified and added periodically which reflects the enormous changes in technology and in the growth and diversification of services that have marked recent decades. A key feature of NAICS is the Information sector. A few of the new and important industries created in this section include: Internet service providers and Web search portals, and Internet publishing and broadcasting. Also included in the Information sector is electronic shopping and electronic auctions.
End Use Commodity Category
The HTSUSA and Schedule B classifications are summarized into six principal "end-use" categories and further subdivided into about 140 broad commodity groupings. These categories are used in developing seasonally adjusted and constant dollar totals. The concept of end-use demand was developed for balance of payments purposes by the Bureau of Economic Analysis. (See discussion of Seasonal Adjustment).
Agricultural and Nonagricultural Commodities
Agricultural commodities consist of nonmarine food products, natural fibers, unmanufactured tobacco, and other farm products subject to federal legislation such as Section 22 of the Agricultural Adjustment Act. Some processed agricultural commodities are included if the value added by manufacturing accounts for less than 50 percent of the final value of shipments as reported in the latest Census of Manufactures. Examples of processed agricultural commodities include cereal flours, dairy products, canned meats, canned fruits and vegetables, vegetable oils, animal hides, fur pelts, wine, and beer. Textiles, leather products, distilled beverages, forestry, and fishery products are classified as nonagricultural commodities.
Assignments of individual HTSUSA and Schedule B classifications generally are determined by the U.S. Department of Agriculture and differ from the guidelines in the Standard Industrial Classification of the United States (SIC).
Advanced Technology Products (ATP)
About 500 of some 22,000 commodity classification codes used in reporting U.S. merchandise trade are identified as “advanced technology” codes and they meet the following criteria:
The code contains products whose technology is from a recognized high technology field (e.g.), biotechnology).
These products represent leading edge technology in that field.
Such products constitute a significant part of all items covered in the selected classification code.
This product and commodity-based measure of advanced technology differs from broader NAICS industry-based measures which include all goods produced by a particular industry group, regardless of the level of technology embodied in the goods
10. COUNTRY DESIGNATIONS
Country Classification
The names and codes of the countries of the world are listed in Schedule C, Classification of Country and Territory Designations for U.S. Foreign Trade Statistics, the system used for publishing both import and export country statistics. Schedule C is arranged in geographic order according to continents. Countries and territories are listed in sequence within each continent, generally from north to south and west to east. The classifications appearing in Schedule C conform to those prescribed by the International Organization for Standardization (ISO) and are recommended by ISO for international exchange. Schedule C is published as a statistical annex in HTSUSA and as a part of Schedule B.
Export Country of Destination
Country of destination for exports is the country where the goods are to be consumed, further processed, or manufactured, as known to the shipper at the time of exportation. If the shipper does not know the country of ultimate destination, the shipment is credited to the last country to which the shipper knows that the merchandise will be shipped in the same form as when exported. (See discussion of the designation for Unidentified Countries under Statistical Presentation below.)
Import Country of Origin
Country of origin for imports is the country where the merchandise was grown, mined, or manufactured, in accordance with U.S. Customs Regulations. In instances where the country of origin cannot be determined, transactions are credited to the country of shipment. Certain foreign trade reports show country subcodes to indicate special tariff treatment afforded some imported articles. See Section 6 (Reference Aids) of this Guide for a list of country subcodes.
Statistical Presentation
Abbreviated country designations are used in lieu of complete country names in the foreign trade program. Numerical codes are used for automated purposes. Alphabetic abbreviations are used for published reports.
The designation UNIDENT (Unidentified Countries) in the export statistics, reflects shipments of certain grains and oilseeds for storage in Canada but ultimately destined for third countries, the specific country of ultimate destination being unknown at the time of shipment. This is not a part of the U.S./Canada Data Exchange. Annually, by Special Announcement, based on information supplied by the U.S. Department of Agriculture, specific country of destination information on exports of such grains and oilseeds is published. This designation also includes satellites launched in the United States on behalf of international organizations.
The designation OTH CTY used in some reports represents the total for countries from or to which imports or exports of the particular commodity averaged less than a $50,000 per month on a cumulative year-to-date basis.
The major world areas for which foreign trade data are shown represent individual Schedule C countries or groupings of several countries into geographic areas or economic unions. (See Section 5 on Country Groupings.)
11. QUANTITY AND SHIPPING WEIGHT
Quantity
Units of quantity shown are published in terms of the units specified in the HTSUSA and Schedule B for each classification.
When two units of quantity are required for an item in the HTSUSA or Schedule B, both units are shown along with the value.
Shipping Weight
Shipping weight represents the gross weight in kilograms of shipments, including the weight of moisture content, wrappings, crates, boxes, and containers (other than cargo vans and similar substantial outer containers). Shipping weight data is available for shipments by vessel and air only.

12. CUSTOMS DISTRICTS
District and Port Classification
The names and codes of the Customs districts and ports are listed in Schedule D, Classification of U.S. Customs Districts and Ports for Foreign Trade Statistics. The geographical limits of each district are published in the U.S. Customs Regulations. Schedule D is published as a statistical annex in HTSUSA and as a part of Schedule B.
District of Exportation
Vessel or air - the Customs district in which the merchandise is loaded on the vessel or aircraft which takes the merchandise out of the country.
Rail, truck, pipeline, or other overland transportation - the Customs district through which the merchandise crosses the U.S. border into foreign territory.
Aircraft exported under their own power are credited to the Customs district from which they are flown out of the United States.
Import District of Entry
The district in which merchandise clears Customs for entry into consumption channels, bonded warehouses or Foreign Trade Zones.
Import District of Unlading
The district where merchandise is unloaded from the importing vessel or aircraft.
Statistical Presentation
Abbreviated Customs district designations are used instead of complete names in the foreign trade program. Numerical codes are used for automated purposes. Alphabetic abbreviations are used for published reports.
Special Districts
The following types of shipments are included for statistical purposes in special Customs districts and are not reported by geographical location of the individual Customs district of entry or exportation:
Vessels under their own power or afloat (imports and exports)
Low-valued imports and exports (See discussion of Low-Valued Statistics below)
Mail shipments (exports only)
Norfolk, VA-Charleston, SC-Mobile, AL (Exports of bituminous coal). See discussion of Customs Districts under Other Quality Issues.
Wilmington, NC-Savannah, GA (Exports of cotton linter pulp). See discussion of Customs Districts under Other Quality Issues.
13. STATE EXPORT DATA SERIES
Background
The Census Bureau is responsible for collecting, compiling, and publishing export trade statistics for the United States. Information on U.S. exports of merchandise is compiled from the Electronic Export Information (EEI) filed by the USPPI or their agents through the Automated Export System (AES). These data measure the physical movement of merchandise out of the United States to foreign countries. Information on the state from which the merchandise was shipped has been collected and made available since the 1980s.
Origin of Movement (OM) State - Based on Origin State
In 1985, a new field indicating the state where the export journey begins, was added. This field allowed the compilation of the State of Origin of Movement Series. The OM series based on origin state, available since 1987, provides export statistics based on the state from which the merchandise starts its journey to the port of export; that is, the data reflect the transportation origin of exports.
Origin of Movement (OM) - ZIP Code Based
The ZIP Code of the United States Principal Party in Interest (USPPI), the party in the United States that receives the primary benefit monetary or otherwise from the shipment, was redefined in 2004 to indicate the origin of movement of goods. It does not necessarily represent the location of the USPPI. Due to increased electronic reporting in the AES, the validity of the reported ZIP Code has improved since 2004.
Effective with January 2006 statistics, a new OM State series - based on ZIP code, will be made available upon request for the following state data products - the FT900 Press Release Supplement, and all three options of the Quarterly and Annual reports.
Limitations
In certain cases, the origin of movement is not the transportation origin. Whenever shipments are consolidated, the state of origin of movement will reflect the consolidate point. This effect is particularly noticeable for agricultural shipments. Intermediaries located in inland states ship agricultural commodities down the Mississippi River for export from the port of New Orleans. In this case, they would report Louisiana, the state where the port of New Orleans is located, as the state of origin of movement.
The primary impact is on the state distribution of nonmanufactured exports, which are generally exported by intermediaries. The most visible result is a tendency to understate exports from some agricultural states and to overstate exports from states like Louisiana that have ports that handle high-value shipments of farm products.
The series DOES NOT represent the production origin of U.S. export merchandise. In some cases considerable manufactured exports are attributed to states that are known to have little manufacturing capability. One reason is that commodities produced by out-of-state suppliers can be shipped from in-state distribution centers. Another factor is shipments of manufactured commodities from in-state warehouses and other distribution centers that are arranged by exporters located out-of-state. In both cases, manufactured exports from the non-industrial state are magnified in the OM series.
Where to Get State and Substate Export Data Products
Each month, the Census Bureau publishes state value totals by manufactured, nonmanufactured and total exports for the OM state data series based on Origin State in the FT900 Press Release Supplement exhibit 2. More detailed data are available quarterly and annually in machine- readable form by state, region or port. A list of the data products and contacts is given below:
· Monthly Summary -- FT900 Press Release Supplement. Trade Data Inquiries & Controls Section: 301-763-2227
· State export data by 2-, 4-, and 6-Digit HS by country of destination and method of transportation is available in the WORLD TRADE ATLAS * U.S. State Export Edition on CD-ROM. For software information or to place an order, call Global Trade Information Services (803)765-1860 or check their website at http://www.gtis.com.
· Quarterly and Annual OM state data on CDROM. Please call our Current Systems Programming Branch on (301)763-2214.
· Option 1: State by 3-Digit NAICS Commodity by Country (Total, Air and Vessel).
· Option 2: Region by 4-Digit SITC, District/Port of Exit, & Country (Total, Air & Vessel).
· Option 3: State by District/Port of Exit, & Country (Total, Air & Vessel)- No Commodity Detail.
· Production Origin Series. Exports by production origin are available from Exports from Manufacturing Establishments compiled by the Manufacturing and Construction Division (MCD). The 2002 edition, available on MCD's web site (http://www.census.gov/mcd), gives exports by state, NAICS (North American International Classification System) and major economic sector.

INQUIRIES:Direct inquiries to the Special Projects Branch, Foreign Trade Division: 301-763-3629.\
14. LOW-VALUED STATISTICS
Exports
Export statistics are fully compiled on shipments to all countries, except Canada, where the value of commodities classified under each individual Schedule B number is over $2,500. Value data for such commodities valued under $2,501 are estimated for individual countries using factors based on historical ratios of low-valued shipments to individual country totals. All low-value estimates are classified using a single commodity code. As a result of the data exchange between the United States and Canada, low-valued exports to Canada do not need to be estimated. The U.S. Census Bureau receives low-valued data from Canada summarized by commodity code.
Imports
Import statistics are fully compiled on shipments valued over $2,000 (or $250 for certain quota items) for any article that must be reported on a formal entry. Value data for shipments valued under $2,001, and not required to be reported on formal entries, are estimated for individual countries using factors based on historical ratios of low-valued shipments to individual country totals. The estimates for low-valued shipments are classified using a single commodity code. They are omitted from statistics for individual commodity classifications.
15. TRANSPORTATION STATISTICS
Method of Transportation
The transportation statistics are presented in terms of three categories - vessel, air and all methods - based on the method of transportation by which the merchandise arrived in or departed from the United States. In some instances, shipments between the United States and countries abroad enter or depart through Canada or Mexico. Such shipments are recorded under the method of transportation by which they enter or depart the United States regardless of the transportation mode between Canada or Mexico and the country of origin or destination.
There are some differences in the coverage of these statistics, primarily as follows:
The data for "all methods of transportation" include exports and general imports by vessel, air, truck, rail, air mail, parcel post, and other methods of transportation.
The data for vessel and air exports and general imports represent waterborne and airborne shipments only (merchandise actually leaving or arriving in the United States aboard a vessel or an aircraft).
Imports and exports of (a) vessels moving under their own power or afloat and (b) aircraft flown into or out of the United States are included in the "all methods" data but excluded from the vessel and air statistics.
Mail and parcel post shipments (including those transported by vessel or air) are included in the "all methods" data but excluded from the vessel and air statistics.
Low-value shipments are included in the "all methods" data but excluded from the vessel and air statistics.
Intransit Shipments
Shipments of merchandise transported in bond through the United States en route from one foreign country to another without having been entered as an import are called in-transit shipments. The in-transit statistics include only inbound or outbound merchandise moving by vessel.
Vessel entrances and clearances by Customs district are published monthly.
16. U.S. TRADE WITH PUERTO RICO AND U.S. POSSESSIONS
Source of Information
Statistics on shipments from the United States to Puerto Rico and the Virgin Islands, and on shipments from Puerto Rico to the United States, are compiled from from the Electronic Export Information (EEI) filed by the USPPI or their agents through the Automated Export System (AES).
Statistics on shipments from the U.S. Virgin Islands and other U.S. possessions to the United States are compiled from automated data submitted through the Customs Automated Commercial System and from import documents filed with Customs officials.
Data on shipments from the U.S. to other U.S. possessions as well as between the possessions are not compiled.
Coverage
Statistics are separately published covering shipments 1) between the United States and Puerto Rico, 2) between the United States (including Puerto Rico) and the U.S. Virgin Islands, and 3) from other U.S. possessions to the United States. U.S. possessions refer to those listed in Schedule C, Classification of Country and Territory Designations for U.S. Foreign Trade Statistics.
Previous discussions and definitions relating to the export statistics should be applied to statistics on shipments from the United States to Puerto Rico and the U.S. Virgin Islands, and on shipments from Puerto Rico to the United States. Similarly, previous discussions and definitions relating to the import statistics should be applied to statistics on shipments from the U.S. Virgin Islands and other U.S. possessions to the United States.
Trade with Foreign Countries
Puerto Rico is a Customs district within the U.S. Customs territory, and its trade with foreign countries is included in the U.S. export and import statistics.
The U.S. export and import statistics include merchandise trade between the U.S. Virgin Islands and foreign countries even though the Virgin Islands of the United States are not officially a part of the U.S. Customs territory.
Data on trade of other U.S. outlying possessions with foreign countries is not compiled by the the United States.
17. SOURCES OF NONSAMPLING ERROR
Import and export data are a complete enumeration of documents collected by U.S. Customs and Border Protection and are not subject to sampling errors. However, while quality assurance procedures are performed at every stage of collection, processing, and tabulation, the data are still subject to several types of nonsampling errors. The most significant of these include reporting errors, undocumented shipments, timeliness, data capture errors, transiting goods, and underestimation of low-valued transactions. For more information on nonsampling errors, including efforts to mitigate their effects, please refer to the
Reporting Errors
Reporting errors are mistakes or omissions made by importers, exporters, or their agents when reporting import or export shipments. Most reporting errors involve missing or invalid commodity classification codes, missing or incorrect quantities or shipping weights, and missing, multiple, or incorrect state of origin designations. Such errors can significantly impact detailed commodity statistics if not corrected or corrected inaccurately, but have a negligible effect on export, import and balance of trade statistics.
In addition, errors may result from the correction of misreported data. The data are subjected to several types of error detection and correction checks, including on-line validations for data reported electronically through the Automated Export System (AES) or the Automated Broker Interface (ABI). Such validations immediately refer errors back to the filer for correction. However, data from all sources are also edited and corrected through clerical and electronic means. Clerical correction is time consuming, expensive, and can often prevent data from being included in the correct statistical month. Electronic corrections, or imputes, are less expensive, but may introduce some error into the statistics.
Undocumented Shipments
Federal regulations require importers, exporters, or their agents, to submit import and export information for all merchandise shipments above the established exemption levels. Exemption levels are $2,000 for imports (or $250 for certain quota items), and $2,500 for exports to countries other than Canada. The U.S. Census Bureau has determined that not all required documents are filed, particularly for exports, as import information is subject to greater scrutiny by U.S. Customs and Border Protection in relation to the administration of tariffs, quotas, and other enforcement activities. Goods withdrawn from Foreign Trade Zones (FTZs) for exportation, and exports of U.S. goods through Canadian ports en route to other destinations are two examples of commonly unreported shipments that can lead to errors in export statistics. Undocumented foreign merchandise entering FTZs, which should be included in import trade statistics under general imports, is an example of undocumented import data that can contribute to the problem of import undercoverage.
Timeliness
“Carryover” is the term used to identify the import and/or export records that were either not received or not processed in time to be included in the current month’s statistics. Such records may be carried over into a subsequent month’s statistics, and are often the result of late filing or processing problems, such as rejection of a shipment because the data failed to meet certain edit criteria established to protect the accuracy of the statistics.
Data Capture Errors
The U.S. Census Bureau captures import and export information either from paper documents that are keyed manually, or from automated collection programs, such as AES, ABI, and the U.S.-Canada Data Exchange. Lost documents, errors in the on-line validations and edits of electronically reported data, and incorrectly keyed, coded or recorded documents are examples of data capture errors than can impact the statistics.
Transiting Goods
Shipments of goods moving through the United States en route from one country to another, where the United States is not the country of ultimate destination, can create coverage problems that affect trade statistics. When such goods, referred to as transiting goods, are shipped under bond, they are not subject to duties and are excluded from the merchandise trade statistics in accordance with the guidelines for international merchandise trade statistics established by the United Nations. Many companies, however, enter transiting goods into the United States using an import entry summary and file an export declaration when the goods leave the United States. While this practice does not affect the total trade balance, it does affect bilateral trade balances, and creates discrepancies between U.S. statistics and those of other countries. This issue is especially problematic for bilateral trade between Canada and the United States, where goods transiting through the United States from Canada are entered as U.S. imports from Canada.
Underestimation of Low-Valued Transactions
The United States does not require importers and exporters to file documents for shipments valued less than a specified exemption level (see discussion on Low-Valued Statistics). The U.S. Census Bureau estimates the total value of trade beneath the exemption level for each country using factors based on historical patterns of trade. The data on which these factors are based are old and do not reflect recent changes in trade patterns.
18. OTHER QUALITY ISSUES
In addition to no sampling errors, import and export transactions may be subject to other factors that can have an impact on the quality of our published data. These other quality issues include estimated calculated duty, inconsistencies in comparisons of commodity data, and the suppression of quantity, shipping weight, or Customs district for disclosure avoidance. This information is provided below. Also, many U.S. Census Bureau merchandise trade publications include statements on quality and reliability specific to each report. For more information beyond what is provided below, please refer to those publications.
Estimated Calculated Duty
Estimates of calculated duty do not necessarily reflect amounts of duty paid and should, therefore, be used with caution. The inclusion in the figures of some U.S. products returned after processing and assembly abroad, for which a portion of the value is eligible for duty free consideration, may cause these duty figures to be somewhat overstated as a result. In cases where articles are dutiable at various or special rates, a dutiable value is shown but no duty is calculated. Thus, there is an understatement in the estimates of calculated duty to the extent that these situations exist.
Comparison of Commodity Data
The omission of a commodity number from certain reports does not necessarily mean that there were no exports or imports of the commodity during the month. It is possible that some shipments may not be classified by commodity.
Data users are cautioned that comparison of U.S. exports with corresponding Canadian import data at detailed commodity levels is not recommended. Corrections, differences in classification interpretation and in editing and processing environments make these comparisons uncertain.
In addition, the comparison of data on U.S. exports after 1989 with data for prior years at levels other than for total exports and exports by country may show distortion. These distortions may result from the availability of detailed data for undocumented exports to Canada, which were previously estimated only at the total level. Distortions also may result from the changeover to the Harmonized System effective with the January 1989 statistics.
When publication of data under a particular commodity classification causes disclosure of an individual firm's transactions on a worldwide basis, it is sometimes necessary to combine several classifications into one. Even though the detail is reported it is published under the combined classification, usually a pseudo classification.
Quantity and Shipping Weight Suppression
When the statistics disclose a company’s shipments of a particular commodity to or from a specific country, it may be necessary to suppress quantity and/or shipping weight data. Similarly, when disclosure occurs on a worldwide basis, it may be necessary to suppress shipping weight and/or quantity data for shipments of one commodity to or from all countries.
Districts
Statistics for two or more districts may be combined and published under an arbitrary designation or shipping weight may be excluded from an individual district as a solution to disclosure situations. As a result, statistics for individual districts may be understated due to the suppression of weight of the affected commodities.
19. REVISION PROCEDURE FOR MERCHANDISE GOODS TRADE
Monthly Revisions
Monthly revisions are applied to the prior month data to account for transactions that are received too late to publish in the appropriate reference month. The revisions represent a small number of transactions for previous months. Monthly revisions are made based on the end use commodity classification system and published in the monthly FT-900 U.S. International Trade in Goods and Services Report. Each month we revise the aggregate seasonally adjusted (current and chain-weighted dollar) and unadjusted export, import, and trade balance figures, as well as the end-use commodities for the prior month. These revisions are included in exhibits 1 - 15. Country detail in exhibits 14 and 14a and SITC detail in exhibit 15 do not include revisions. The timing adjustment shown in Exhibit 14 is the difference between monthly data as originally reported and as recompiled. Exhibits 16, 16a, 17, and 18 do not include revisions.
Quarterly Revisions to Chain-Weighted Dollars Series
In the last month of each quarter, the current and previous quarter's data are revised to incorporate the Bureau of Labor Statistics' monthly revisions and align Census and the U.S. Bureau of Economic Analysis' quarterly data. Quarterly revisions are made based on the end use commodity classification system and published in the monthly FT-900 U.S. International Trade in Goods and Services Report. Quarterly revisions are made to the chain-weighted dollar series only. These revisions are included in exhibits 10 and 11.
Annual Revisions
Each June not seasonally adjusted goods data is revised to redistribute monthly data that arrived too late for inclusion in the month of transaction but that were included, initially, in the month in which the data were received. In addition, any corrections made to previously published data are applied to the statistics. Once the redistributions of data to the proper month of transaction and corrections are completed the data for the prior year is recompiled and published in the FT-900 U.S. International Trade in Goods and Services, U.S. Imports History (DVD), U.S. Exports History (DVD), and USA Trade On-Line.
Factors for seasonal adjustments and trading day adjustments are also recomputed and the seasonally adjusted current-dollar series is revised for the prior three years and the first three months of the current year. Similar changes are made to the chain-weighted dollar series.
Other Revisions
Revisions to the import and export statistics in the form of errata are issued annually and are available free of charge upon request. We also post these corrections as they occur on our website. These errata provide corrections to statistics issued in prior foreign trade reports and data products. The data are presented by statistical month in commodity number arrangement only. The revisions are shown in commodity classification by country by Customs district order as net amounts to be added to or subtracted from the previously issued statistics. There are no separate data for shipments by vessel or by air.
The Census Bureau receives revisions from Canada and makes corrections for prior period transactions to the cumulative-to-date totals for U.S. exports and U.S. exports to Canada. These revisions are applied at the detail level only with the release of the annual revision report.
The initial release of the statistics (FT 900) and certain reports include special announcements as warranted to call attention to the discovery of large or significant revisions and to provide information on the appropriate data corrections and program changes.
20. SOURCES OF FURTHER INFORMATION ABOUT THE FOREIGN TRADE STATISTICS
Supplementary information and explanations of interest to users of foreign trade statistics (such as notices of changes in statistical procedures, and so forth) are included as special announcements in current issues of the statistical publications. Reports providing additional detail compiled but not published may be obtained on a cost basis.
Copies of foreign trade statistics are available for public reference use at various International Trade Administration district offices, Census Regional Offices, and at some U.S. Customs and Border Protection offices. Since the distribution of foreign trade material varies among offices, inquiries regarding the availability of particular types of

Source: Webmaster, Foreign Trade Division, U.S. Census Bureau, Washington, D.C. 20233
Location: MAIN: REFERENCE: GUIDES
Created: 14 July 2004
Last modified: 12 June 2009 at 10:58:43 AM