1. Introduction and Background of Budget
The Capital Budget of the public sector or sometimes also known as Public Budget concerns how the government plans its revenues and expenditures at the Federal level, State level, and Local government level, to carter for the needs of its development programs and projects. In a democratic society, the division of resources between the public and private sectors is roughly determined by the desires of the electorate. But because it’s such a complex and time-consuming task to acquire adequate political information, the electorate is chronically ignorant.
Since the Revolutionary War, democratic system of governance has forever been looking for ...view middle of the document...
1. Definition of Budget
Budgeting is a universal and essential activity of governments and it being define in several terms by many scholars. Among them are:
Based on Webster’s Dictionary;
“Budget is a plan that clearly defines the estimate Expenditure and Revenues of a program (or Project).”
According to Sullivan and Steven (2003):
“Budget is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending.”
Coe (1989) defined budget as:
“Budget is a projection of future revenues and expenditures and can also be viewed as a plan for spending and receiving funds”.
While according to Beardon and Yawson (2000):
“Budget is the outcome of systems and relationship through which the varying needs and desires of a nation are heard, prioritized, and funded”.
Wildavsky, A. (1978) in other hands define budget as:
“Budget is a document, containing figures that propose expenditure for certain items and purposes. In addition that a budget is also a statement about the future, and it attempts to link proposed expenditures with desirable future events.”
Nigro (1980) said that:
“Public budget is the financial plan of the government, which determines the proposed revenues and expenditures, so as to achieve the goals and objectives (of the nation).”
Goode (1984) provide the meaning:
“Public budget is the process, which involves the planning, preparation, legislation, approval, and evaluation of government resources (revenues) and expenditures.”
Also Gildenhuys (1997):
“Public budget is a document indicating how a public entity spends the financial resources in order to realize specific public goals.”
The Chartered Institute of Public Finance and Accountancy (CIPFA, 1996) also define:
“Public budget as a plan quantified in monetary terms prepared and approved prior to a defined period of time, usually showing planned income to be generated and/or expenditure to be incurred during that period and the capital to be employed to attain a given objective.”
So, we can provide an understanding that budget is financial plan that consist of expenditure and revenue, and also there are program of receiving, saving, borrowing and spending funds, to achieve the public goals and objectives. It becomes a legal financial plan after it has been approved through the legislative process.
2. The Function of Budget
Gildenhuys (1997) recognizes the functions of a pubic budget as follows:
1. The budget is a policy statement declaring the goals and specific objectives an authority wishes to achieve by means of the expenditure concerned. It is public policy expressed in amounts of money and is the actual embodiment of policy and of implied policy objective. In policy-making, realization of the most important objectives and aims should receive priority. As a policy-making document, the budget generally contains a definition of both the quantity and...