Budgets are basically organisational plans expressed in monetary terms for a defined period of time. They definitely reflect the priorities and goals for the given period. Yes, budgets are a policy statement with respect to short term (for the period) goals.

Generally in agreement with Muhammad in that a budget is primarily a planning document or at least should be viewed as such. The guidance, however, comes from preexisting policy goals that are based upon organizational mission and values articulated over the medium to long-term.

Budget is a policy document, that includes vision, activities and required budget to implement the planned tasks. My organization integrates work plan with budget. If there is no work , budget is not allocated. We do prepare an annual work plan for all departments with vision and activities. Budget is estimated for completing task. All departments are guided by their work plan and aims to complete the task within the stipulated time period. For any work that is not anticipated, we first approve the work then makes budget allocation. Quarterly reporting system is established and performance is monitored by a Committee. Annual report goes to the Board. Therefore, budget is directly related to organizational goals.

Thank you gentlemen for you contributions. Binod, I agree with you that only a work plan should attract a budget. Timothy - your comment that budget is a planning document is at the crux of budget planning. This planning should go hand in hand with the goals of policy. If it is academic excellence: what conferences are we attending, how can we promote our university/academics, what is our ROI per conference? Muhammad - if one could build on the budget and policy to make it into a long term commitment and culture, the organisation will become one of excellence.

Karin, If we have to achieve a great result from the amount we spend; budget and workplan should go together. This helps us to focus our priority, spend money in our priority areas; cost benefit of a project is properly assessed; and supporting document are analysed. This ensures the financial discipline in the organization. Being involved in the Corporate Planning Department of a central bank; we have made a tremendous success in budget preparation, monitoring and follow up and it is linked with the work plan. Work plan is linked with the organizational goals.

"Different International and National cultures also influence the way in which budgets are prepared. The four dimensions of culture of power distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity are huge influences. Most of the time is it is so embedded in thought process that the participants don't realize that they have these prejudices. . Participative budgeting is not usually encouraged/implemented in a culture that rates high on power distance, uncertainty avoidance, or masculinity. Budgeting is an internal process and hence lack of cultural similarities will pose a problem in the budget being communicated across subsidiaries of the organization. so when you have an organization which is multicultural in in its make up BUT with distinct separation between those who "plan" the budget and those who "approve" and 'Implement' it. The interactions between national and international cultures then play a very important role in how one manages "budget buy in and budget implementation"

Budget is an  organisational plan expressed in monetary terms for an operating period. Budget also reflects the priorities, goals, and values of the organisation. So, budget is also an policy statement with respect to goals and values.