system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: how do movie budgets work?

When a move has a $1bn budget, does that mean the company give that money over to the director and then it is divided up amongst all their costs?

Is this money paid at the start before production? What happens if they are over/under budget and how does this work logistically?
gpt
The director does not deal with money.  That's the producer's job.  

The producer works for the company fronting that budget.  They are in charge of making sure the money is spent in the way intended.  The director is the creative force of the film.  So the director goes to the producer and says "we need all this shit to shoot this scene".  The producer determines how much all that will cost.  They do the same scene by scene by scene, and the producer writes a budget and a production schedule.  Then that budget is presented to the producer's boss, the executive producer.

The executive producer looks at the budget and decides if he thinks the movie is worth it.  Then he approves the budget (sometime with changes, e.g. "Do we really need this?" and argues with the director about why X is necessary and if they can get away with using cheaper Z").  The process takes a *long time* and movies can get stuck in "development hell" where the director, producer, and executive producer are just going back and forth forever.

There is not a lump sum transferred to the producer.  Rather, every cost is given to the producer as an invoice, and it is billed receipt by receipt to the executive producer's company.