Municipal Budgeting and Accounting

Budgets are important as a means of controlling municipal expenditures and identifying revenues. Their structure, the information they provide, and their importance in decision-making has grown significantly. When properly designed, they contribute to the accountability and transparency of the overall municipal finance system and reduce the possibility of corruption and misappropriation of funds. Central to budget making is the role of municipal accounting. Three bases are used—cash accounting, accrual accounting and modified accrual accounting. Recently, most countries have moved to full accrual accounting or a version of it. This provides local decision-makers with the best information for making efficient and effective decisions in managing municipal budgets.