Which type of budget places the responsibility for meeting budget targets on departmental or service managers?

The operating budget is designed to outline the expected income and expenditures of an organization over a specific period, typically a year. It plays a crucial role in the financial planning process, as it requires departmental or service managers to plan their activities and associated costs to align with the overall goals of the organization. By holding these managers accountable for meeting budget targets, the operating budget encourages them to manage resources efficiently and effectively, ensuring that spending does not exceed the allocated amounts and that revenue targets are met.

In contrast, the capital budget focuses on long-term investments in physical assets and does not involve the same level of departmental accountability for ongoing operations. The cash budget, on the other hand, serves to track cash receipts and disbursements over time, which is an aspect of financial liquidity rather than departmental performance. Lastly, the control budget refers to the mechanisms in place to monitor and compare actual spending against budgeted amounts, but it does not specify the accountability structure for meeting those budget targets in the same way the operating budget does. Thus, the operating budget is specifically structured to place responsibility with the departmental or service managers.