From the Massachusetts Finance Committee Handbook:

Budget Preparation and Submission
The prime function of the finance committee is reviewing departmental budgets and submitting a balanced budget to town meeting. All municipal officers authorized to spend money must annually
provide the finance committee with estimates of how much funding will be needed “for the prope r maintenance of the departments under their jurisdiction.” These estimates are submitted to the town accountant, or if there is none, to the finance committee or possibly the selectman
 (Chapter 42 s.59 M.G.L.).
These estimates are used in the preparation of a town’s annual operating and capital budgets . The Massachusetts Department of Revenue (DOR) has ruled that finance committees are
responsible for preparing and submitting their municipality’s annual budget. (Chapter 39 s 16, Ch. 41, s 59 and s 60M.G.L), unless there is a charter or bylaw giving this authority to the board of selectman or town manager(DOR’s In Our Opinion, 93-310). The exact format of an annual town budget is community specific. DOR has determined that while the law regarding annual municipal budget format is directed to cities, it should also be followed by towns. The format found in the law addresses itself to budgetary basics. Almost all towns and cities in the Commonwealth go well beyond this in their annual budget presentation package (see Chapter 2). DOR has also ruled that only a town meeting — not the finance committee or selectmen — may determine the exact budget format to be used (see In Our Opinion, 92-145). The state also specifies that only town meeting may transfer appropriated monies. Town meeting cannot delegate this authority to the finance committee (Chapter 44 s33B M.G.L.) , see also In Our Opinion, 92-836). However, in 2006 the state allowed the Board of Selectmen, with the approval of the finance committee to transfer sums between May 1 and July 15. This does not apply to appropriations for the local or regional school systems or light boards. Transfers are limited to 3% of the department budget or $5,000, whichever is greater. Transfers are by majority vote. Further, the courts have ruled generally that even though a town bylaw calls for the finance committee to hold public hearings, these hearings are “incidental” to the proper function of the committee and are there fore not mandatory (Young v. Westport , 302 Mass.597, reaffirmed by Illig v. Plymouth, 337 Mass. 239).

posted by Jeff Bennett