The budget system of a local government unit consists of their methods and practices for planning, adopting and executing financial policies and programs to attain their political, economic and social objectives. Its main objective is the availability and use of money to provide the services required or expected from local governments.
The local budget has two principal objectives, both of which are fundamental to orderly and progressive government supportive of the current role of local government as partners in national development. These are follows:
Budget activities tend to recur annually and thus became part of what is known as the budget process. The budget system gives meaning and direction to the budget process by establishing the policies and procedures and other criteria and its steps in the process. This have five major steps namely the budget preparation, authorization, review, execution and accountability.
- to carry out local government activities under a comprehensive development and fiscal plan prepared, authorized and executed in accordance with prevailing statutes, administrative regulations and the principles of sound fiscal management.
- to provide for periodic review and disclosure of the budgetary status for local government in such detail that enables persons entrusted by law with the responsibility to determine the adequacy of budget action taken, authorized or proposed and the true financial position of local governments.
The Municipal Budget Office is then tasked to provide technical services to the Chief Executive and other local officials in the budget process. (Please see graph for the detailed budget appropriations)