Social and Cultural Policy

How the Budget System Can Contribute to Corruption:

Opacity and Lack of Transparency:

Complex Budgetary Processes: Beneath the apparently clear and rational system, budgeting may involve a number of susceptible and unclear steps, with little public participation/transparency. This lack of transparency can create opportunities for corruption, such as:
Misallocation of Funds: Money can be embezzled to give it or use it for other purposes in the best interest of some people.
Inflated Costs: Tenders and contracts can be obtained at exorbitant prices for the award givers and the real prices are paid by the officials in cash difference.
Kickbacks and Bribery: Corruption through bribery and kickbacks ensures that the particular agency is able to receive funds, convenience for budgeting and approving projects.
Limited Public Participation:

Lack of Citizen Input: Deficit participation in the process of formulating its budget leads to lack of accountability and can also leads to the practice of corruption.
Lack of Public Awareness: The public cannot know where their money is being used, or when and where corruption is taking place if they are not informed about the budget.
Weak Oversight Mechanisms:

Inadequate Audits: It means that weak auditing systems may not be able to pick and check cases of corruption hence making them go unreported.
Limited Accountability: Misconduct is likely to be fostered whenever there are no precautions against officials employing public funds for unauthorised purposes.
How the Budget System Can Help Prevent Corruption:

Transparency and Accountability:

Open Budget Initiatives: Budgeting for and with citizens, engagement of citizens in budgetary processes, online access to budgetary paperwork, and citizen feedback forums can help reduce corruption in budget processes.
Independent Audits: Internal auditing is very useful in financial reporting irregularities since the auditing work is done by independent agencies.
Technology-Enabled Solutions:

Digitalization: E-governance of the budget, wherein people use technology to manage their budget such as through control panels, is a better way of managing budgets since it specially eliminates the mechanisms for manual alteration.
Strengthening Institutions:

Independent Regulatory Bodies: Improvement of the functions of independent regulatory agencies might improve the monitoring and implementation of budgetary laws and policies.
Civil Society Engagement: This paper finds that active Civil Society Organization engagement in budget monitoring and advocacy can contribute to the identification and mitigation of corruption risks.