What should a budget include according to GFOA principles?

A budget that adheres to the Government Finance Officers Association (GFOA) principles is expected to be a comprehensive document that outlines not only financial projections but also the strategic direction of an entity. Including a development plan with approaches to achieve goals ensures that the budget is aligned with the organization’s overall objectives and priorities. This approach provides a framework for decision-making, guiding resource allocation and helping stakeholders understand how financial resources will be utilized to meet specific objectives.

By incorporating a development plan, the budget serves as a performance measurement tool, allowing the governing body and the public to track progress toward these goals over time. This is critical for transparency and accountability in public finance, as it connects financial resources with the outcomes they aim to achieve, thereby fostering a better understanding of the priorities and strategies adopted by the organization.

The other options do not capture the full scope of what should be included in a budget. Focusing solely on projected income, which is what the first option suggests, neglects the essential elements of expenditure planning and strategy required for a balanced budget. Listing potential budget cuts, as mentioned in another option, is not a comprehensive budgeting practice; rather, it is a reactive approach that does not guide a proactive financial strategy. Concentrating only on historical expenditures limits