What budgeting requirement does the Constitution impose?

• A. No budgeting requirement.
• B. Biannual budget with no reporting.
• C. Budget set by external auditors.
• D. An annual budget approved by the chapter or board, with financial reporting.

Answer: (D)

The idea being tested is that the organization must govern its finances with a formal annual plan that is approved by its leaders and kept transparent through regular reporting. An annual budget sets the expected income and expenses for the year, guiding how funds are allocated and ensuring resources align with programs and priorities. Requiring that this budget be approved by the chapter or board places financial decisions under the oversight of those charged with fiduciary responsibility, fostering accountability to members. Financial reporting then communicates actual results to members and leaders, showing how money was used and highlighting any variances from the plan. This combination—annual approval plus ongoing reporting—provides planning, control, and transparency, which is why it is the correct approach. Options lacking budgeting, or substituting external control or skipping reporting, would undermine governance and accountability.