Chapter 3: BUDGETING SYSTEM

2. - Traditional Budgeting System (TBS), it is the earliest form of formal
budgeting system used by the Ministry of Finance in most
countries, especially before World War II.
- Traditional budgeting is annual (repeated yearly) and incremental
(departing marginally from the year before.
- It is also in the form of line-items such as personnel or
maintenance
- The traditional budgeting system, therefore, provides a means for
national governments to promote accountability with regard to the
utilization of funds and to ensure every expenditure matches the
original plans.

3. -Focus on the
achievement of objective
of the expenditure.
-This system is only -based on line item
-This system
to make the expenditure
controlled the
budgeting system
expenditure of the -are expressed in terms
become simple and
various ministries of of the objects of
there are no expenditure
the government.
evaluation.
-all the budget are made
based on the objectives
as highlighted in the
budget.

4. The treasury have -just focus on
a full power to object and not
control over the objectives
budget.

5. Does not emphasize
on the effectiveness
Data Provided not
and efficiency of
enough because it is Not focusing on
financial information
for short term overall goals
that complies with
planning only.
the legal
requirements.

6. -TBS does not determine one
objective
-TBS is not capable of
providing clear information -does not seem suitable to
determine spending heads
EG: the amount of money that serve for the same
allocated to services objective
-also fails to identify level of -launched by different units.
activity for each service.
- fails to compare cost of
spending
made for similar object of
expenditure

7. The government need to improve on the
practicality of this budgeting system.
Thus, another budgeting system known as
Program & Performance budgeting system then
introduced .