A budget audit examines whether the budgeting process is effectively operating. It is an
evaluation of the budgeting effort. The budget audit examines techniques, procedures,
motivation, and budget effectiveness. Effective budgeting should be dynamic.
A budget audit detects problems in the budgeting process. It should be
conducted every two to three years by an independent party not a part of the budget
staff. The budget auditor should report to upper management, who can take appropriate
action. An outside consultant should be independent and objective, and should provide
fresh ideas.