Question

In: Accounting

Does performance budget measure outcomes or outputs? Can simple measures tell the whole story?

Does performance budget measure outcomes or outputs? Can simple measures tell the whole story?

Solutions

Expert Solution

solution :

performance budget :

:A performance budget is a budget that reflects the input of resources and the output of services for each unit of an organization. This type of budget is commonly used by government bodies to show the link between taxpayer funds and the outcome of services provided by federal, state or local governments.

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. Performance budgets, as the theory goes, are designed to motivate employees' commitment to producing positive results.

Efficiency, however, does not necessarily indicate effectiveness. Effectivenessmeasures are used to mark output conformance to specified characteristics. ...Outcome measures are the most difficult level of measure used in a performance budget system. These are measures of outcome, impact, or result.

simple measures :

the act or process of measuring something. : a size, length, or amount known by measuring something. See the full definition for measurement in the English Language Learners Dictionary. measurement.


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