Performance Based Budgeting

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Introduction: The U.S. federal government has attempted to align spending decisions with expected performance since World War II. President Hoover and Congress created the Hoover Commission in 1947 in an attempt to reform the way executive branch agencies measured and reported department outcomes. The Hoover Commission focused on promoting economy, efficiency and improved services, and performance budgeting was designed to provide intelligible information to the President, Congress, and the public (GAO, 1997, page 30). The Commission recommended that attention shift away from government inputs (items of expense and lists of federal employees) to government outputs (accomplishments, activities, and related costs) (GAO, 1997, page 30). The Commission defined performance budgeting as: “Under performance budgeting, attention is centered on the function or activity—on the accomplishment of the purpose—instead of on a lists of employees or authorizations of purchases….this method of budgeting concentrates congressional action and executive direction on the scope and magnitude of the different Federal activities. It places both accomplishment and cost in a clear light before the Congress and the public.” (GAO, 1997, page 30). Explanation of theory: Performance budgeting is categorized under the systems/cybernetic theories where performance is demonstrated through cost data budgeting (Williams, 2013, page 9). There are three forms of performance budgeting: direct, presentation, and performance informed. Direct performance budgeting is the allocation of resources directly and explicitly to units of performance, generally outputs. Furthermore, this form of performance budgeting refers to the Hoover Commission proposal (Williams, 2013, pa... ... middle of paper ... ...ion. (GAO publication No. GAO/AIMD-97-46). Retrieved from U.S. Government Accounting Office on February 8, 2014: http://www.gao.gov/archive/1997/ai97046.pdf Williams, Daniel W. & Calabrese, Thad. (2013). A Taxonomy of Budget Theories. Retrieved from Blackboard January 21, 2014: https://bbhosted.cuny.edu/bbcswebdav/pid-14809885-dt-content-rid-37089222_1/courses/BRUCH_PAF_9140_NUF_A_201402/Taxonomy.pdf Williams, D.W., & Calabrese, T. (2011). Towards a Metatheory of Budgeting. Retrieved from eReserve on February 8, 2014 http://ereserve.baruch.cuny.edu.remote.baruch.cuny.edu/eres/docs/30314/williamscalabrese_2011_web_.pdf Young, Richard D. (2003). “Performance Based Budgeting Systems.” USC Institute for Public Service and Policy Research Public Policy & Practice. Retrieved on February 8, 2014: http://ipspr.sc.edu/ejournal/assets/performance%20based%20budgets.pdf

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