Author: Financial Management Resource Bureau
Communities across Massachusetts are constantly working to develop and refine their annual budget process. Whether your community relies on well-established structures like charters and bylaws or uses more informal processes, the goal remains the same: to create a clear, balanced, and sustainable budget that effectively aligns financial decisions with community goals.
The Purpose of a High-Quality Budget
The Government Finance Officers Association (GFOA) defines a high-quality budget document as more than a collection of numbers. It tells the story of how the budget was created and serves three critical purposes: a policy guide, financial plan, and communication tool. When your budget document meets these standards, it becomes a consistent roadmap that supports your community’s budget mission throughout the entire fiscal year. To learn more about the criteria related to an award-winning budget document criteria visit the GFOA Budgeting Best Practices.
Components of an Effective Budget Document
While layout and design vary by community size and preference, effective budget documents generally include the following:
- Executive Summary: A concise overview of financial conditions, key drivers, trends, and major impacts.
- Department Narratives: Explanations that directly connect budget requests to mission, staffing, service levels, performance, and resource needs.
- Financial Forecasting: Illustrates how current decisions influence long-term sustainability. Our forecasting template samples can be found here.
- Capital Plan: Ensures that capital projects align with lifecycle costs, service demand, and long-term goals. For more information and resources related capital planning, visit our Capital Planning page.
- Visuals and Tables: Charts, graphs, and summaries that make information easier for all readers to interpret. Data that can be easily incorporated in your community’s budget documents can be found on the DLS website under City & Town Data Visualizations.
- Organized Information: Includes clear headings, consistent formatting, and navigation tools such as a table of contents or glossary to help both new and experienced readers locate information quickly and understand the narrative behind the numbers.
Strengthening the Budget Process
A predictable and transparent budget development process is essential for improving the quality of the final document. Clearly defining responsibilities, timelines, and expectations leads to better policy alignment, more accurate projections, and stronger communication. Many communities achieve this by adopting an Annual Budget Process policy.
A documented process is crucial for supporting continuity during staffing transitions, election cycles, and organizational change. The Financial Management Resource Bureau (FMRB) has developed numerous financial policy manuals for cities and towns across the Commonwealth. Sample financial policies that include annual budget process are available on the Division of Local Services website. A helpful attachment to budget policy is a budget calendar. Templates to create a budget calendar can be found on the DLS website underMunicipal Finance Tools, Templates & Calculators. This ensures enough time for necessary budget meetings, forecasting, capital prioritization, appropriation adjustments, and public review.
Available Training and Support
Improving a budget document is a continuous process that does not need to happen all at once. Focus on one component at a time—such as policies, forecasting, or capital planning—to make the process more manageable. With each improvement, the document becomes clearer, more consistent, and provides budget narrative to support decision making.
The Division of Local Services is committed to supporting communities in this effort. Recent offerings from FMRB have focused on in-person and hands-on forecasting and financial policy development training. Beginning in 2026, these trainings will be rolled out in a regional format to increase access and participation statewide.
Helpful Resources
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Editor: Dan Bertrand
Editorial Board: Tracy Callahan, Sean Cronin, Janie Dretler, Jessica Ferry, Christopher Ketchen, Paula King, Jen McAllister, Brianna Ortiz, and Tony Rassias
| Date published: | December 18, 2025 |
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