A functional budget is the budget that is achievable and is related to a specific unit or process or function or department of the organisation. I t is a group of related activities aimed at accomplishing a major service or program for which a unit of government is responsible. A functional budget is prepare for a process of function. By functional budgets, we mean budgets that relate to an area of an organisation that produces, or does, something. This is not necessarily to say that we are talking about manufacturing alone. We can have functional budgets in manufacturing, in commerce, in government. We can have functional budgeting in non profit making organisations too.