Budget process

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A budget process refers to the process by which governments create and approve a budget, which is as follows:

  • The Financial Service Department prepares worksheets to assist the department head in preparation of department budget estimates
  • The Administrator calls a meeting of managers and they present and discuss plans for the following year’s projected level of activity.
  • The managers can work with the Financial Services, or work alone to prepare an estimate for the departments coming year.
  • The completed budgets are presented by the managers to their Executive Officers for review and approval.
  • Justification of the budget request may be required in writing. In most cases, the manager talks with their administrative officers about budget requirements. Adjustments to the budget submission may be required as a result of this phase in the process.

Budgeting refers to the setting of the expenditure with respect to the organization’s core function which is responsible for the overall functionality of the firm. Budgeting is the setting and allocation of the capital which is then used in the proper way to achieve the set or designated targets of the firm. Budgeting needs to be very much focused and clearly prepared so that it covers all of the financial constraints in that sense that any of the investments that would be planned in the future will cover the financial targets of the firm, its viability should be in due course of the firm’s overall strategic financial plan, the routine and daily occurring expenses will have their proportionate allocation so that any investment will be in a way that will not hurt any of the scheduled existing expenses of the firm. Budgeting needs to be done in a proper and meaningful way that covers all the financial targets of the company, these targets needs to be achieved in order to be called successful budgeting. Financial budgeting is also referred to as an investment appraisal that finalizes and clearly shows that the investment through which the firm will be going must have fulfilled all financial targets.

Terminology

  • Revenue Estimation performed in the executive branch by the finance director, clerk's office, budget director, manager, or a team.
  • Budget Call issued to outline the presentation form, recommend certain goals.
  • Budget Formulation reflecting on the past, set goals for the future and reconcile the difference.
  • Budget Hearings can include departments, sections, the executive, and the public to discuss changes in the budget.
  • Budget Adoption final approval by the legislative body.
  • Budget Execution amending the budget as the fiscal year progresses.

Constitutional economics

Constitutional economics is the study of the compatibility of economic and financial decisions within existing constitutional law frameworks, and such a framework includes government spending on the judiciary which in many transitional and developing countries is completely controlled by the executive. It is useful to distinguish between the two methods of corruption of the judiciary: corruption by the executive branch, in contrast to corruption by private actors. The standards of constitutional economics can be used during annual budget process, and if that budget planning is transparent then the rule of law may benefit. The availability of an effective court system, to be used by the civil society in situations of unfair government spending and executive impoundment of previously authorized appropriations, is a key element for the success of the rule-of-law endeavor.[1]

Notes

  1. ↑ Peter Barenboim, Defining the rules, The European Lawyer, Issue 90, October 2009

References

See also

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