In the context of budgeting, what does "justifying every dollar" mean?

The concept of "justifying every dollar" in the context of budgeting refers to the practice of critically evaluating each expense and its necessity, as if starting from a clean slate. This means that when preparing a budget, one should not automatically assume that previous expenditures are justifiable or necessary. Instead, every line item should be assessed based on current needs, priorities, and available resources.

By budgeting from scratch without relying on prior budgets, the management can ensure they are aligning the financial plan with the current objectives and conditions of the community association. This approach encourages a thorough analysis of where money is spent and promotes accountability in financial management, ultimately contributing to better resource allocation and financial health of the association.

In this context, it becomes clear why the other options do not align with the concept. For example, pre-approving every expense does not allow for critical assessment of necessity, and performing audits focuses on past budgets rather than justifying current allocations. Allocating dollars to specific projects also does not capture the broader concept of initial evaluation and justification of all expenses from the ground up.