What is one of the first principles of GFOA budgeting?

Establishing broad goals to guide decision-making is a fundamental principle of GFOA budgeting because it ensures that financial resources are aligned with the overall mission and objectives of the governmental entity. By having clear goals, the budgeting process can prioritize funding for programs and services that best reflect the community's needs and strategic vision. This approach fosters transparency, accountability, and effective resource allocation, making it easier for stakeholders to understand how budget decisions support the organization's objectives.

In contrast, developing a budget without defined goals would result in a lack of direction, making it difficult to assess the effectiveness of the budget. Focusing exclusively on expenses fails to consider the necessary investment in programs that drive growth and service delivery. Likewise, avoiding performance evaluations would hinder the ability to measure the outcomes and efficiency of the budget, further compromising decision-making processes.