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+ Exclusiveness: The budget is concerned with money,, , * Specificity: It should be allocated, , . Budgeting is the formulation of Plans for a, , jn numerical terms. siven future Period, , —Koontz, , principles of Budgeting, , According to Rene Stourum, universality,, and accuracy should be the principles of b, , According to Howard, SK, the principles of budgeting are:, . Annularity, , + Comprehensiveness, , * Unity: It should contain both lon, , comprehensiveness, udgeting., , ig term and short term, , expense items (annual Operating funds), , d not, with issues, , to identifiable objects, , Accountability: Money should be spent as indicated in the, , budget plan., , Purposes of Budgeting, Main Purpose, , To ensure the most effective use of scarce financial and non, financial resources, , Specific Purposes, , It conserves the resources by, , It provides detailed plan to reduce uncertainty, It controls expenses by efficient and economical —, It provides the mechanism for measurement of work effort on, a timely basis, Ensures the accountability by someone for variances from, budget a, Enhances the budget planning sit, Coordinates effort among organizational eee, Establishes a frame of reference for pean fie tie, Provides a criterion for evaluating — ares =., Allows for feedback, concerning the events to, spending confirm the budgetary ae, Offers a useful format for communica’ Sperm, Provides best care that science can make P', , vi 31, economical a basis as a., It aids in planning and controlins, , 5 needs . —, Itquides for action on for economic and social policies, It serves as an i, , regulation., , , , , , , Budget and Budgetary Proce, , , , Tesult. Budgetary, steps are followed., , The budget Process consists of activities that encompass tI, , evelopment, implementation, and evaluation of a plan f., the provision of Services and capital assets., , , , Process is a sequential activity where vario, , Prerequisite of Budgetary Process, , According to Furst, 1981, following are the Prerequisites th:, , should be met before the actual Process of budgeting:, , * The goals or objectives must be known, , : a must be an organizational structure to support th, , plan, , Each individual who will have responsibility for the budge, , must be involved in its development if commitment to th, , goals and budget is required, , The Manager should have the knowledge about budge, , Process. They need to have the orientation regarding forme, , Or process utilized in the specific institution, , * Data must be available to facilitate forecasting or projectin, activity, , * The budget period must be clearly defined, , * The accounting system must be clear, , * Feedback must be available to departmental managers t, measure and guide their performance, , * Assumptions related to budget must be known and utilize:, throughout the process., , * Assumptions must be uniform and coordinated organization, wide, , * Prioritizing the goals of organization according to importance, and affordable within a specific period of time before the, capital or program budget is prepared, , * Development of forecasted units of activity, , * Prepare statistical budget to develop the operating budget, so that capital budget can be Prepared., , Features of Budgetary Process, , * Incorporates a long-term Perspective, , * Establishes linkages to broad goals, , * Focuses budget decisions on results and outcomes, * Involves and promotes effective communication, °, , Provide incentives to government management anc, employees., , Principles of Budgetary Process, , * Establish broad goals to guide government decision makingbroad goals provide overall direction for the governmen, and serve as a basis for decision-making., , * Develop approaches to achieve goals: Define specific policies, Plans, programs, and management strategies to achieve it, long-term goals., , * Develop a budget consistent with approaches to achiev, Goals-A financial plan and budget that moves toward achieve, ment of goals, within the Constraints of available resources, should be prepared and adopted. 5
