What type of budgeting allocates funds by specific categories or departments?

Line-item budgeting is a method that allocates funds by specific categories or departments, detailing each line item of expenses, which typically includes salaries, equipment, and supplies. This approach simplifies the budgeting process by providing a clear, itemized list that is easy to understand and manage. It is transparent and allows for straightforward tracking of expenditures against budgeted amounts.

This method contrasts with program-based budgeting, which focuses on the outcomes and objectives of various programs, rather than individual line items. Similarly, zero-based budgeting requires every expense to be justified from scratch for each new budget period, which can often lead to a more complex and time-consuming process than simply categorizing funds by department. Incremental budgeting builds on the previous budget by making adjustments, which can sometimes overlook detailed category allocation in favor of broad increases or decreases. Thus, line-item budgeting stands out for its clear allocation of funds into specific categories or departments.