Question

What type of budget is best to use when configuring productivity data to get actual data?

Answer 1

A performance budget is a budget that reflects the input of resources and the output of services for each unit of an organization. The decision process for performance budgets focuses on outputs, or outcomes, of services. In other words, allocation of funds and resources are based on specific goals agreed upon by budget committees and agency heads of services.

The main aim of this approach is to connect performance information with the allocation and management of resources.

Performance-based budgets need to contain information on the following elements:

• inputs (measured in monetary terms);

• outputs (units of output);

• efficiency/productivity data (cost per activity);

• effectiveness information (level of goal achievement). T

he performance-based approach should begin at a policy level with the organisation developing goals and explicit policy objectives. Managers then must develop relevant performance measures which will track the achievement of these objectives. These performance objectives are then integrated with budget preparation to allow for the alignment of spending plans with performance reporting at the time the budget process is initiated. At the end of each budget period performance-based audits can be completed, which measure the results of programmes using the same performance measures produced in the budgeting process