<![CDATA[Fiscal decentralization has increased local governments' responsibility to allocate public resources for community welfare. Despite growing adoption of participatory planning and performance-oriented budgeting, limited research examines how local institutions collectively formulate welfare-oriented budgets within Indonesia's decentralized system. This study analyzes the budget allocation process for community welfare programs in Banyuwangi Regency, Indonesia, examining formulation stages, allocation determinants, institutional coordination, implementation challenges, and evaluation mechanisms. This qualitative case study collected data from January–June 2024 through semi-structured interviews with 13 informants from Bappeda, BKAD, DPRD, sectoral agencies, academia, and community leaders, supplemented by observation and document analysis, and analyzed using Miles, Huberman, and Saldaña's interactive model, with credibility strengthened through triangulation. Findings show welfare budget allocation follows an integrated sequence: Musrenbang, regional agency forums, the Annual Regional Development Plan, budget policy deliberation, executive–legislative negotiation, provincial evaluation, and Regional Budget enactment. Priorities are shaped by poverty and stunting rates, health and education needs, fiscal capacity, and community aspirations. Bappeda coordinates planning, BKAD assesses fiscal feasibility, sectoral agencies design programs, and DPRD deliberates and oversees. Key challenges include limited fiscal space, revenue fluctuation, delayed transfers, and inconsistent data. The study concludes that effective welfare-oriented budgeting requires integrating participatory planning, fiscal capacity, coordination, and performance accountability, contributing an integrated governance framework linking planning, finance, oversight, and participation.]]>
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