A Simple Guide to Working with Finances in Education - Tanzania ...

2.3 Basic Budget Principles: How the budget should work.As a tool of economic policy, the budget is the means by which the governmentseeks to achieve three key economic policy goals:a) ‘Fiscal discipline’, which means controlling overall government spending so itdoesn’t go beyond what money has been raised.b) Allocation of resources in line with the government’s policy goals. Good budgetsshould start with an assessment of what needs have to be met, followed by plansof how to meet those needs, followed by a budget.c) The economic, efficient and effective use of resources in achieving its policy goalsIn addition, the budget tells public institutions, such as ministries or schools, what thepolicy priorities are by informing them how much may be spent for what purpose,thereby guiding policy implementation.Finally, the budget process should mean that the government is accountable to theelected representatives of the people. Government may not raise taxes that havenot been approved by parliament and may not raise more money than parliament hassaid they can. If they do, it is called ‘exceeding expenditure appropriations.’Budget work in cycles, and the diagram on the following page shows what is in thecycle. It should take about three years to complete a cycle, in the first year the budgetis being prepared and approved, in the second it is being implemented and in thethirds year accounts for it are submitted and approved.5