Performance Budgeting

Performance budgeting is a results-oriented financial planning method that links funding directly to measurable outputs, outcomes, and performance targets rather than just inputs. It strengthens accountability and efficiency in the public sector by aligning resource allocation with program results, ensuring taxpayer money is used effectively to achieve specific goals. Key features and benefits of performance budgeting include: Focus on Results: Shifts focus from what is being bought (inputs) to what is being delivered (outputs and outcomes). Enhanced Accountability: Allows governments to justify spending by demonstrating tangible results to stakeholders and the public. Improved Efficiency: Aids in evaluating the productivity of operations, allowing managers to direct resources toward, or away from, specific programs based on performance. Measurement Metrics: Relies on quantifiable performance data to evaluate program success. Goal Alignment: Aligns the budgetary process with the strategic goals of an agency or government department. Common challenges include difficulty in measuring qualitative outcomes, potential disagreement over priorities, and the need for significant, high-quality data to track performance accurately. -- Google AI -- Image source: Pixabay