OBJECTIVES OF BUDGET PREPARATION
During budget preparation, trade-offs and prioritization among programs must be
made to ensure that the budget fits government policies and priorities. Next, the most
cost-effective variants must be selected. Finally, means of increasing operational
efficiency in government must be sought. None of these can be accomplished unless
financial constraints are built into the process from the very start. Accordingly, the
budget formulation process has four major dimensions:1
· Setting up the fiscal targets and the level of expenditures compatible with
these targets. This is the objective of preparing the macro-economic
framework.
· Formulating expenditure policies.
· Allocating resources in conformity with both policies and fiscal targets. This
is the main objective of the core processes of budget preparation.
· Addressing operational efficiency and performance issues.
During budget preparation, trade-offs and prioritization among programs must be
made to ensure that the budget fits government policies and priorities. Next, the most
cost-effective variants must be selected. Finally, means of increasing operational
efficiency in government must be sought. None of these can be accomplished unless
financial constraints are built into the process from the very start. Accordingly, the
budget formulation process has four major dimensions:1
· Setting up the fiscal targets and the level of expenditures compatible with
these targets. This is the objective of preparing the macro-economic
framework.
· Formulating expenditure policies.
· Allocating resources in conformity with both policies and fiscal targets. This
is the main objective of the core processes of budget preparation.
· Addressing operational efficiency and performance issues.
