Budgeting

financial plan and a basis for evaluating performance and an expression of public policy and a form of control having the force of law. Thus, a governmental budget is a legal document adopted in accordance with procedures specified by applicable laws. A governmental budget must be complied with by the administrators of the governmental unit for which the budget is prepared. By law, the administrators cannot exceed the budget without a formally approved budget amendment. Moreover, because the effectiveness and efficiency of governmental efforts are difficult to measure in the absence of the profit-centered activity that characterizes business operations, the use of budgets in the appropriation process is of major importance. Accordingly, budgetary accounts may be incorporated into the formal accounting systems of governments, and a budgetary comparison statement must be issued.