Performance Budgeting Made Practical:
method and tools to link budgets to results in government

Abstract

Government leaders are under legislative and administrative pressure to produce performance budgets that link resources to results. This, in fact, can be of great benefit to staff.

Traditional budgets list each group's cost factors, such as compensation, travel, and training. This encourages micro-management ("you don't need that much training"). It provides no basis for understanding the total cost of projects, or the linkage between budgets and agency strategies. And it doesn't make clear what the final budget pays for ("we gave you all that money; now it's your job to do whatever I ask").

Performance budgeting -- termed activity-based budgeting (ABB) or investment-based budgeting in industry -- calculates the costs of an organization's products and services, its deliverables. Budgets are easier to defend when it's clear how resources will contribute to the agency's mission and strategies. Costs are easier to compare to outsourcing on an apples-to-apples basis, highlighting those areas where internal staff are more (or less) efficient than vendors. And once the budget is decided, everyone understands what's covered and what isn't.

As a positive side effect, performance budgeting encourages a culture of results orientation, customer focus, entrepreneurship, and teamwork.

This session explains exactly how to prepare an activity-based budget, and summarizes the many financial and cultural benefits.

Outline

* Legislative and administrative pressures for performance budgeting

* How performance budgeting can work to your advantage

* The approach: activity-based budgeting

* How costs are calculated

* Overview of the ABB process

* Benefits: financial and cultural

Contact us to discuss your specific interests and requirements.