Univrsity Of Tehran Press Accounting and Auditing Review 2645-8020 33 1 2026 01 21 Diagnosis of the Government Budget Preparation Stage and Proposing Solutions for Reforming Iran’s Public Budget Structure Diagnosis of the Government Budget Preparation Stage and Proposing Solutions for Reforming Iran’s Public Budget Structure 159 185 105655 10.22059/acctgrev.2025.396280.1009113 FA Seyed Mohammad Moghimi Prof., Department of Public Policy, Faculty of Public Administration and Organizational Sciences, College of Management, University of Tehran, Tehran, Iran. 0000-0002-9866-2170 Saied Samiie Assistant Prof., Department of Futures Studies, Faculty of Governance, University of Tehran, Tehran, Iran. 0009-0002-8993-6528 Mohammad Hosein Bojari Sefat MSc., Department of Public Finance and Budgeting, Faculty of Public Administration and Organizational Sciences, College of Management, University of Tehran, Tehran, Iran. 0009-0008-2916-4857 Journal Article 2025 05 29 <strong>Objective</strong> The budget, as the government's most critical financial document, plays a pivotal role in achieving policy objectives and delivering public services. However, Iran's budgeting system faces numerous structural challenges during the preparation and formulation phase, significantly undermining its efficiency. This study focuses on diagnosing these challenges, seeking to address the fundamental question of what obstacles and deficiencies exist in the process of preparing and formulating Iran's government budget and how these issues can be resolved to reform the budgeting structure. <strong>Methods</strong> This study employs a qualitative approach, utilizing thematic analysis. Data were collected through semi-structured interviews with financial and planning experts, budgetary documents, and official reports. The analysis process involved categorizing 240 initial codes into 87 selective codes, 29 sub-themes, and ultimately 11 main themes, forming a comprehensive thematic network that depicts the deficiencies in the budgeting system. <strong>Results</strong>  The findings reveal that Iran's budgeting system, during the preparation and formulation phase, is beset by significant structural challenges. A primary issue is the lack of coherence in planning, shown by the disconnect between long-term development plans and annual budgets, inconsistencies between upstream policy documents and budgetary policies, and the absence of linkage between budgets and capital acquisition plans. Violations of fundamental budgeting principles—such as comprehensiveness (due to extensive off-budget activities), transparency (owing to incomplete financial disclosures), and annuality (through the inclusion of permanent provisions in the budget)—represent critical challenges. Additionally, the absence of scientific mechanisms to evaluate the effectiveness of government expenditures, inadequate consideration of the economic implications of budgetary policies, and methodological shortcomings in revenue forecasting highlight another deficiency, namely the weakness in the evaluation system. Institutional dysfunctions also significantly impact the budgeting system's performance, including the misrepresentation of state-owned enterprises' financial performance, excessive influence of supra-governmental entities in shaping budgetary policies, and the undue sway of interest groups in resource allocation. Furthermore, the prevalence of cost-based approaches, relying on historical precedents rather than policy priorities, is another identified deficiency, evident in the focus on superficial cost control rather than outcome management and the neglect of resource efficiency. <strong>Conclusion</strong> Reforming Iran's budgeting system, especially in the preparation and formulation phase, requires a strategic overhaul to address its structural deficiencies and align it with national development goals. Transitioning to a program-based budgeting framework is critical, as it prioritizes policy outcomes over historical cost patterns, fostering efficient resource allocation. Full transparency in revenues and expenditures, supported by comprehensive financial disclosures, is essential to uphold the principle of transparency and curb off-budget activities. Developing an economic budget grounded in robust quantitative models will enhance revenue forecasting accuracy and align fiscal policies with economic realities. Strengthening institutional oversight and accountability mechanisms will mitigate the undue influence of supra-governmental entities and interest groups, ensuring equitable resource distribution. Revising cost structures to prioritize efficiency and outcome-based management, alongside reducing extrabudgetary activities, will bolster fiscal discipline. These reforms will transform the budget into a dynamic tool for sustainable development, enhancing transparency, accountability, and the effective realization of Iran’s long-term developmental objectives within a coherent and resilient fiscal framework. <strong>Objective</strong> The budget, as the government's most critical financial document, plays a pivotal role in achieving policy objectives and delivering public services. However, Iran's budgeting system faces numerous structural challenges during the preparation and formulation phase, significantly undermining its efficiency. This study focuses on diagnosing these challenges, seeking to address the fundamental question of what obstacles and deficiencies exist in the process of preparing and formulating Iran's government budget and how these issues can be resolved to reform the budgeting structure. <strong>Methods</strong> This study employs a qualitative approach, utilizing thematic analysis. Data were collected through semi-structured interviews with financial and planning experts, budgetary documents, and official reports. The analysis process involved categorizing 240 initial codes into 87 selective codes, 29 sub-themes, and ultimately 11 main themes, forming a comprehensive thematic network that depicts the deficiencies in the budgeting system. <strong>Results</strong>  The findings reveal that Iran's budgeting system, during the preparation and formulation phase, is beset by significant structural challenges. A primary issue is the lack of coherence in planning, shown by the disconnect between long-term development plans and annual budgets, inconsistencies between upstream policy documents and budgetary policies, and the absence of linkage between budgets and capital acquisition plans. Violations of fundamental budgeting principles—such as comprehensiveness (due to extensive off-budget activities), transparency (owing to incomplete financial disclosures), and annuality (through the inclusion of permanent provisions in the budget)—represent critical challenges. Additionally, the absence of scientific mechanisms to evaluate the effectiveness of government expenditures, inadequate consideration of the economic implications of budgetary policies, and methodological shortcomings in revenue forecasting highlight another deficiency, namely the weakness in the evaluation system. Institutional dysfunctions also significantly impact the budgeting system's performance, including the misrepresentation of state-owned enterprises' financial performance, excessive influence of supra-governmental entities in shaping budgetary policies, and the undue sway of interest groups in resource allocation. Furthermore, the prevalence of cost-based approaches, relying on historical precedents rather than policy priorities, is another identified deficiency, evident in the focus on superficial cost control rather than outcome management and the neglect of resource efficiency. <strong>Conclusion</strong> Reforming Iran's budgeting system, especially in the preparation and formulation phase, requires a strategic overhaul to address its structural deficiencies and align it with national development goals. Transitioning to a program-based budgeting framework is critical, as it prioritizes policy outcomes over historical cost patterns, fostering efficient resource allocation. Full transparency in revenues and expenditures, supported by comprehensive financial disclosures, is essential to uphold the principle of transparency and curb off-budget activities. Developing an economic budget grounded in robust quantitative models will enhance revenue forecasting accuracy and align fiscal policies with economic realities. Strengthening institutional oversight and accountability mechanisms will mitigate the undue influence of supra-governmental entities and interest groups, ensuring equitable resource distribution. Revising cost structures to prioritize efficiency and outcome-based management, alongside reducing extrabudgetary activities, will bolster fiscal discipline. These reforms will transform the budget into a dynamic tool for sustainable development, enhancing transparency, accountability, and the effective realization of Iran’s long-term developmental objectives within a coherent and resilient fiscal framework. https://acctgrev.ut.ac.ir/article_105655_fd451f6188884f1b028270c34d5bf56f.pdf