Budget methods and practices involve setting and tracking financial goals, income, expenses, and

investments. This includes creating a budget, tracking spending, allocating funds, planning, and
understanding cash flow. It is important to understand how much money is coming in and going out and
to regularly review the budget to ensure financial goals are being met. Additionally, budgeting allows for
better decision-making when it comes to spending and investing and helps to identify areas of
overspending and under-investing.

Budget Methods:
 Zero-based budgeting: This method of budgeting starts from a zero base, without any preset
allocations. All expenses are reevaluated and must be justified. This method helps to identify
and eliminate wasteful spending and prioritize programs that offer the most benefit to the
public.
For example, a company may use zero-based budgeting to create a budget for its marketing
department. The marketing department must provide justification for each expense, such as the
cost of advertising in a particular medium, the cost of hiring a particular agency, and the cost of
running a particular campaign. The department must also explain how these expenses will help
the company reach its goals.
 Incremental budgeting: This method is based on the current year’s budget. The budget is
adjusted based on changes in expected revenues and expenditures. This method is more
efficient and cost-effective than zero-based budgeting but does not always identify wasteful
spending.
For example, a company may decide to increase the budget for its marketing department by 5%
from the prior year. The company would then add the additional 5% to the department's total
budget for the current year to create a new budget.
 Performance-based budgeting: This method of budgeting allocates funds based on performance
outcomes. Programs are evaluated based on their goals, objectives, and performance measures.
Funds are allocated based on the program’s success in achieving these criteria.
An example of performance-based budgeting is a school district that allocates funds based on its
students' performance on standardized tests. Based on the test results, the school district can
determine which schools and programs need more resources to improve student outcomes.
 Activity-based budgeting: This method of budgeting requires programs to be broken down into
individual activities. Budgets are allocated based on the cost of each activity. This method helps
to provide a clear picture of how funds are being used and can identify potential areas of waste
or inefficiency.
For example, if a company is launching a new product, it can use activity-based budgeting to
allocate funds for research, development, marketing, and production. This will help them
determine the most effective way to allocate their resources to achieve their goal.
Budget Practices:
 Cost-benefit analysis: This practice involves analyzing the costs and benefits of a program or
project to determine its overall value. This helps decision-makers to decide whether a program
or project is worth the investment.
 Risk assessment: This practice involves assessing the potential risks associated with a program or
project. This helps decision-makers to identify potential sources of waste and inefficiency.
 Public consultation: This practice involves consulting with the public to gather feedback on
proposed programs and projects. This helps superiors to identify the needs of the public and
ensure that proposed projects meet those needs.
 Transparency and accountability: This practice involves making budget information available to
the public and ensuring that public funds are being used responsibly. Decision-makers must be
held accountable for their decisions and ensure that public funds are being used in a responsible
and efficient manner.

In conclusion, Budget methods such as zero-based budgeting, incremental budgeting, performance-

based budgeting, and activity-based budgeting help to ensure that funds are allocated in a responsible
and efficient manner. Budget practices such as cost-benefit analysis, risk assessment, public
consultation, and transparency and accountability help to ensure that public funds are being used
responsibly and to their fullest potential. By understanding and following these methods and practices,
people can ensure that public funds are managed responsibly and used to their fullest potential.

Preparation and Submission of Budgeting on Government Funds

1. Develop a budget plan: The budget plan should include detailed information regarding the
number of funds needed, the purpose of the funds, and an itemized list of expenses.
2. Review Your Current Budget: Analyze your current budget and record your expenses. Make sure
to include all of your monthly and annual expenses, as well as any one-time expenses. This will
help you plan for future expenses and ensure that you are not requesting more funding than
you need.
3. Research Price and Cost Estimates: After reviewing your current budget, begin researching and
recording cost estimates for all your expenses. This will help ensure that you are not over-
budgeting or under-budgeting.
4. Gather supporting documents: To support the budget plan, you will need to submit any relevant
documents, such as cost estimates, project timelines, and any other relevant information.
5. Submit the budget: Once the budget plan and supporting documents are prepared, they can be
submitted to the relevant government agency. Depending on the agency, there may be specific
forms or requirements that need to be met.
6. Monitor the budget: After submitting the budget, it is important to monitor the progress to
ensure that the funds are spent as planned.
The budget should include an itemized list of expected expenses, such as the cost of materials, labor,
and any other necessary costs. In addition, you should provide detailed information about the purpose
of the funds, such as what the money will be used for and how the money will benefit the community. It
is also important to include cost estimates and project timelines in the budget plan to demonstrate how
the funds will be used in an efficient and effective manner.