i) Explain any THREE types of relationships between Government policy and the annual budget. (3 marks)
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- Annual budget is designed as a plan for implementing government policy;
- Annual budget is designed to translate government policy into financial outlays and inputs and outputs;
- Annual budget is designed to serve as a guide for managing the economy;
- The budget document is used as a means of looking for possible directions and reactions or changes to the implementation process.
ii) Explain FOUR reasons why the budget is regarded as a management tool for public accountability. (4 marks)
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- Budgeting involves public sector managers in the budget process;
- Budgetary process is used to assess whether activities of public sector entities are the most effective means of achieving their objectives;
- The budget is used to assess the cost effectiveness and cost efficiency of operations of public sector entities;
- The budget is used to plan the cost of inputs, outputs and activities linked to the objectives of public sector entities;
- The budget is used to determine not only recurrent expenditures but also development and investment expenditures.