Budgeting is a valuable anticipatory tool, able to support technically efficient production, manage financial vulnerability, and increase financial resilience. However, inaccuracies in the budgeting process can undermine these objectives. The authors investigated the sources of budget inaccuracy and the consequences for technical efficiency, employing a six-year panel of Australian local government data. The results suggest a reduction in technical efficiency of 0.6% for every 1% increase in expenditure inaccuracy.
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McQuestin et al. (2021) studied this question.
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