Which phase of the budget cycle focuses on determining funding requirements for the upcoming fiscal year?

The formulation phase of the budget cycle is where the focus is specifically on determining funding requirements for the upcoming fiscal year. During this phase, budget proposals are developed based on needs assessments and forecasts, allowing organizations to outline their financial requirements for programs and operations. This involves gathering data, setting priorities, and creating budget justifications that reflect the strategic goals of the organization.

The primary objective during the formulation phase is to ensure that all necessary resources are identified and requested in a manner that aligns with anticipated fiscal policies and priorities for the future. This sets the groundwork for subsequent phases of the budget cycle, where the proposed budget is further reviewed, adjusted, and eventually adopted. Overall, the formulation phase serves as the critical initial step in the budgeting process, establishing a clear understanding of what funding will be needed and why.