Although not part of the project, my personal thoughts about budget are that accountability and responsibility are not properly placed. Most businesses have problems with this unless they pay attention to it. Giving someone budgetary accountability and not responsibility for the decision to spend money makes he/she feel like they either shouldn't be held accountable or they should be able to say yes or no on proposed spending.
This type of situation can happen between cost centers and revenue centers because cost centers spend money, but revenue centers have to make money. Gary is a revenue center and Blake is a cost center. Transfer pricing is accounting's solution to this. It turns Blake into a internal revenue center meaning he has to sell his services to Gary and Gary has the authority to say yes or no to any service Blake is selling. Blake has to price his services (internal pricing) as if he was an external vendor. Gary will look at Blake's proposals and agree to the ones that meet his revenue goals and risk-taking adversity levels.
More or less, by act as if they were third parties, it might bring them closer together.
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