Dear pavan,
budgeting cant be carried at directly level 5 but it can be carried out at any level
note that when you carry out budgeting at lower level like 5th level then that budget is totalled up at upper level,but still the controlling element is the 5th level WBS element and already as budget is consumed at 5th level then the upper levels are having nill budget,so if you even raise the PR or PO at upper level i,e, at level 4,3,2,1 then system shall throw error and you can control even when you carry out budget at lower level,
hope this shall help you to convince and answer your client