A budget allows an individual or organization to track spending and match expenses with the money available. Budgets are essential tools for being financially responsible, but they can be complicated to analyze and develop. Many organizations, including government agencies, school districts and non-profit organizations, use budget committees to perform the task of proposing or implementing a budget.
A budget committee allows an organization to employ a democratic process in determining spending allocation and fiscal policy. Each member of the committee receives a single vote, and the majority rules. This prevents any one member of the organization from enacting an unfair or irresponsible budget decision without support from other members. This can lead to a greater sense of fairness and prevent resentment between departments that have conflicting budget needs. It also enhances shared accountability because the entire committee, and the organization it represents, is responsible for spending decisions.
A budget committee brings together multiple voices on important spending issues. This represents a major advantage over a single person making budget decisions. Each committee member is a potential source of new ideas for budget cuts, spending increases and cost-saving measures. In the case of government budget committees, a larger group of people is more likely to propose a budget that voters will approve and will find to meet their diverse needs in the community.
Rather than forcing one or two people to spend a great deal of time drafting a budget proposal, the budget committee system spreads out the effort over many members. The committee secretary deals with administrative tasks, and the committee members each add budget-related tasks to their work schedules in such a way that no single member has an unfair burden. This allows an organization to avoid hiring a specialized budget staff by managing its human resources in an effective way.
Over time, members of a budget committee change as the organization grows and evolves. For example, a non-profit organization that adds new departments can add new members to the budget committee to represent the interests of those departments and have a say in budgeting. As departments merge or close, the committee would lose members. Senior members leave the committee and are replaced by new members who bring emerging viewpoints and ideas to the group. Term limits also can keep a budget committee from stagnating with members who refuse to make necessary changes for the future.