A budget is a detailed plan, which shows the financial consequence of an organization's operating activities for a specific future time period (Langfield, Thorne, & Hilton, 2003: 422). Developing a budget is a critical step in planning any activity for businesses, government, enterprises, and for individuals. The managers need information to help them manage resources and create value. Moreover, budgeting and performance evaluation are closely related, since the budget provides many of the performance targets which must be achieved by management. As Purdy and Gago has stated that "Budgeting is a complex affair, amongst other things, arising from the relationships of a budget with other parts of an organizations. The budget's use is associated with the manager's personality and pattern of leadership (2002:235).
Furthermore, in the public sector it has been difficult or almost impossible, for any manager to have an overdraft to spend more than what parliament has approved in the annual budgeting. If expenditure in excess of he budgeting is expected, it has been necessary for the manager to go through a particularly difficult process of getting an approval from the parliament. The way for emphasizing budget management is purely political and traditional. Therefore, it is hard to escape the fact that a government's annual budget is a great political event. This is one of the important ways in which the public sector's job differs from a private sector business manager. On the other hand, the budgeting process can serve five primary purposes:
o It forces management to plan ahead and anticipate the future on a systematic basis
o It provides management with realistic performance targets
o It serves as a communication device with which the various managers can ...