Which of the following best describes a budget policy?

A budget policy primarily outlines the procedures and framework for how a budget is prepared, adopted, and submitted. This includes defining roles and responsibilities, timelines, and the methods used for stakeholder engagement. Having clear procedures ensures that the budgeting process is transparent, accountable, and consistent across fiscal years.

The effectiveness of a budget policy lies in its ability to standardize practices around budget development, which can enhance the quality of fiscal planning and management. This foundational aspect helps municipalities operate more efficiently as they navigate the complexities of financial decision-making.

While options that mention financial goals, tax guidelines, or the use of reserve funds may be components or considerations within a budget policy, they do not encapsulate the broader procedural focus that the correct answer highlights.