What Is Performance-Based Budgeting?

Performance budgeting is a method for the government to first formulate relevant business plans and engineering plans, then formulate plan implementation plans based on government functions and governance plans, and determine the cost of implementing the plans based on cost-benefit analysis to prepare a budget. Since the 1990s, the focus of budget reform worldwide has been on performance budgets that can effectively improve government administrative performance. Judging from the practice of the performance budget reform in developed countries, performance budget has achieved significant results in improving the efficiency of the use of public funds and improving the performance of government departments.

Performance budget

(One way to prepare a budget)

Right!

Performance budgeting means that the government first formulates relevant business plans and engineering plans, then formulates plan implementation plans based on government functions and governance plans, and

The characteristic of performance budget is to determine the budget according to the plan, calculate the cost according to the budget, analyze the benefit according to the cost, and then measure the benefit

Performance budgets include the following:

The difference between performance budgeting and traditional budgeting methods is that it puts

In the implementation steps of performance budget, you can consider three steps:

The first step is to implement a pilot reform of "Project Performance Budget" for some project expenditures. Before the full implementation of performance budgeting, we can start with the evaluation of the effectiveness of some specific project expenditures and optimize the departmental budget through the performance evaluation of project expenditures. To this end, the financial department must formulate a project performance budgeting method, establish a project expenditure performance evaluation system and its framework system. Establish a project library and implement rolling management. Each department prepares the annual project budget according to the project performance budget preparation method and the project library. The government entrusts the financial and auditing departments to evaluate the performance of the expenditure items of various government departments. The government makes awards and penalties based on the results of performance evaluation, and rewards the departments with better annual project performance. For the departments with poor annual project performance, the budget is reduced until the project is cancelled.

The second step is to comprehensively promote the project performance budget in all departments.

The third step is to fully implement the departmental performance budget. The implementation of departmental performance budgeting is to establish a "performance" concept, targeting "performance targets + departments + performance results", and appropriating funds according to effects and efficiency. It is a budget model combining "process" and "outcome".