Building budgets, building futures

How to build an inclusive budget for your community

Every community has its own story to tell, and budgeting is one of the tools shaping that narrative. Whether it’s planning for programs and services, responding to emergent needs, or setting the stage for long-term projects, creating a budget is about more than balancing numbers — it’s about investing in your community’s future.

Budgeting can feel overwhelming. It’s complex, time-consuming, and requires shifting priorities that can change the course of direction while trying to align reality with strategic goals. But it’s also an opportunity to take control, set clear priorities, and track progress. Most importantly, it’s a powerful tool that promotes best practices in fiscal accountability to your main stakeholders — the members and citizens of the community.

This summary will help you navigate the budgeting process while empowering your staff, senior management, Council and the community at large.

Why budgets matter: Compliance and community vision

At its core, a budget is about meeting your community’s goals while fulfilling important regulatory requirements. Indigenous Governments must prepare budgets to remain compliant with Public Sector Accounting Standards (PSAS). Without one, financial statements can be qualified, which can affect funding opportunities and relationships with stakeholders.

Compliance is just one part of the picture. Budgets are also tools for bringing your community’s vision to life. They help you decide how resources will be used to promote sustainability for priorities of elected Council.

Budgeting provides the opportunity of a stop gap: An important time of year to pause and gather the dedicated staff — an important resource that supports leaderships vision. They are the middle management and support team responsible for developing programs, the launching of new initiatives, and major infrastructure development — all aligned with the community priorities and vision.

Imagine your Council wants to expand community housing. A well-structured budget can outline the funding needed, secure financial backing, and ensure resources are available to meet this common need. Governments that align budgets to their long-term strategic or comprehensive community plans often find it easier to secure funding, as they clearly demonstrate a vision aligned with community priorities.

It’s also noteworthy to begin the budgeting process at least three months before the fiscal year-end. This allows the time to plan, develop workplans — keeping within this ideal timeframe required to complete the process.

Building together: Engage and empower your team

Effective budgets come from collaboration, not isolation. Involving the right people in the process ensures your budget reflects on-the-ground realities and builds accountability.

Start by involving program-managers — they oversee day-to-day operations and know the details of funding needs better than anyone. Their involvement ensures budgets align with actual program goals. Councils that involve managers in the budgeting process, also often see stronger ownership of spending decisions throughout the year.

 Best practices for a collaborate and inclusive budget process:

1. Host an initial workshop with managers to discuss programs, priorities and anticipate needs for the year as well as the budgeting process itself.
2. Provide clear templates or tools to guide managers in developing their budget inputs.
3. Schedule follow-up sessions to address questions and align on final budget drafts.
4. Consolidate the budget and update the multi-year budget, if applicable — typically, five years.
5. Provide the draft budget and multi-year plan to the Finance & Audit Committee for review and recommendations.
6. Present the budget to community along with high level departmental objectives aligning with the comprehensive community and strategic plans.
7. Council to pass the annual budget by quorum at a duly convened Council meeting.

Turn over or lack of human internal resources present a common gap in a successful budget process. Hiring outside or temporary resources can be an objective resource to drive the process. This may include facilitating group workshops, to streamline the process, ensuring each programs needs are accurately reflected. This can support the Chief Administrative Officer (CAO) and finance team if there are not sufficient staff to support the budget process.

Balancing needs: Priorities, practicalities, and opportunities

Budgeting also involves tough decisions. It’s about balancing essential services, addressing current challenges, and planning for the future.

Here are a few key considerations:

• Ongoing programs: Start with core services that the community relies on, such as health, education, or social support. Evaluate whether these programs are running effectively or need adjustments.
• Emerging needs: Identify any new programs that reflect community priorities, such as cultural revitalization projects or youth initiatives.
• Capital projects: Infrastructure like roads, housing, and community centers often require multi-year planning and significant resources.

It’s also important to review surpluses or deficits from previous years. For instance, if a health program finished with an allowable surplus, decide whether to reinvest it allocate it elsewhere — and breakdown large capital projects into smaller phases to manage funding more effectively over multiple years.

A great rule-of-thumb is to create a long-term capital plan (five to 10 years) that outlines projects, funding sources, and timelines. Use this as a roadmap for both the current and future budgets.

Staffing and wages: Supporting your team

Your staff are the backbone of your community’s programs. Ensuring competitive wages and thoughtful planning for staffing needs can help retain top talent and attract new team members.

Areas to focus on:

• Cost of living adjustments: Annual adjustments to ensure wages remain competitive with regional trends.
• Performance incentives: Build room in the budget for merit-based raises or bonuses.
• New roles: Asses whether additional positions are needed to meet growing community demands or execute new programs.

Focusing on these areas can ripple into other opportunities within. One Indigenous Government budgeted for a new housing coordinator position after identifying a gap in their ability to manage capital projects. This small investment led to more efficient project management and greater community satisfaction. To identify appropriate salary ranges for your region and roles, consult wage benchmarking tools or HR resources.

Budgets as living tools, monitoring and adapting

Once a budget is approved, it should remain an active part of your decision-making process. Regularly reviewing and updating your budget ensures it stays relevant as circumstances change.

Best practices for monitoring budgets:

• Monthly reviews: Compare actual expenses against the budget to identify variances early.
• Quarterly reporting: Many funding bodies require quarterly reporting along with Council – a best practice is consistent and regular reporting to manage risk and identify overspending trends.
• Flagging variances: Over-or underspending in any area should prompt discussions about adjustments.
• Dynamic updates: Treat your budget as a flexible tool that evolves throughout the year.

Through the monitoring and reviewing process you can ensure you keep consistent and catch inefficiencies. For example, a Council may realize they were consistently underspending on training due to limited staff availability. By reallocating those funds mid-year to a housing initiative, they were able to better meet their community’s needs.

To make this process easier, schedule regular check-ins with program managers and senior leadership to review progress and adjust the budget as needed.

Addressing challenges: Navigating common hurdles

Budgeting isn’t without its challenges but addressing them proactively can lead to better outcomes.

Challenges:

• Lack of expertise: Without a finance director, budgeting can feel overwhelming.
• Unclear funding sources: Consolidating unrestricted funds into a single pot provides clarity for decision-making.
• Short-term focus: Align budgets with strategic plans to ensure long-term priorities aren’t overlooked.

Solutions:

• Host a complimentary budgeting session with advisors who specialize in Indigenous financial planning.
• Leverage free tools and templates

For more support, reach out to external services, such as trusted partners or advisors who can provide support, training, or even templates to streamline the process.

Collaboration in action: A success story

There was an instance, where a Council faced challenges with their budgeting process after a finance director position was left vacant. Managers were unsure how to start, and the Council lacked a consolidated view of their finances.

Through guided workshops, they developed a clear and actionable budget. This included consolidating unrestricted funds, creating detailed program budgets, and planning for future infrastructure projects. For the first time, their Council approved the budget before the fiscal year began, giving them confidence to tackle priorities like housing repairs and youth programs.

Budgeting isn’t just about meeting regulatory requirements — it’s about shaping the future of your community. The budget process is much more than numbers – ultimately, it’s about people, the community and the future generations. By involving the right people, planning proactively, and using budgets as living tools, your government can create a financial framework that supports both immediate needs and long-term aspirations.