Public Budgeting - Essay Example

PUBLIC BUDGETING al Affiliation Performance budgeting Texas Case The Texas practices an advanced system of performance budgeting. Texas has been developing and using performance measures for a long time at various agency levels. The formal incorporation in its biennial process of budgeting began in 1991. Performance budgeting has been implemented in all agencies of the state and universities concurrently. Nearly 3,000 performance indicators are in place-designated- as “key performance measures” with the key function is to facilitate policy makers during deliberations involving budgeting.

The Auditor of the State is in charge of reviewing the validity of performance measures of Agency`s. Both the legislature and executive are significantly involved in the system practice. Performance budgeting system is implemented to successfully to enforce constant requirements on agencies. The Agencies must explain in event of significant failure ranging from 10 percent or more to adhere to set performance targets (Clynch 2006).The performance based system of budgeting is very effective in a real practical scenario.

Especially in public administration where for every input- tax payer’s money- they expect tangible results. Performance based budgeting plays a massive role in influencing operations effectively and efficiently. The system in itself is inherent with small economic departmental unit accountability. The single unit performance assessment style results in differentiated system.This differentiation is vital since public agencies always undergo through many procedures before finalizing an actual budget execution phase.

Post-execution analyses time is also shortened through the performance based budgeting system (Clynch 2006). The whole practice involves the co-collaboration of different departmental bodies within the government. This collaboration is essential for more than just budget preparation procedure, negotiation procedures and approval processes. The coordinative collaboration of departments is important in approval of values to be allocated in order to attain defined goals after the finalization of the budgeting (Kelly 2003).

The system`s advantage revolves around its rational methodology of budgeting. Whenever an organization defines the amount to allocate to a department or activity, it considers the costs against benefits for each funding level. If there is no justification for the spending the amount is reduced. The system links objectives to outcomes. A body that practices performance budgeting uses performance management (Clynch 2006). When management wants to justify the funding needs to budget makers it will link objectives to performance outcomes expected.

A disadvantage of the performance based budget arises when the budget documentation proposal is fixed. A governmental or non-profit making organization may use a fixed proposal document to carry out its business transactions with a specific level of funding. The fixed document does not provide room for adjusting fund allocations during mid-term period in response to changes of conditions which may occur. The system is appropriate in the public sector since performance-based system first establishes goals of the organization or department, the measurement or assessment tools are designated (Redburn 2003).

This Balanced method in which Key Performance Indicators are defined and linkages created between causes and effects in a ripple effect model is effective for the public sector where monitoring and association of input and output is always a priority.References(n.d.). Retrieved February 23, 2015, from http://www.lrc.ky.gov/lrcpubs/rr302.pdfAHC/AHCT, HC/HCT, and LV CMOS logic data book: Performance budgeting for 5-V and 3.3-V systems. (1996). Dallas, Tex.: Texas Instruments.Clynch, E. (2006). Budgeting in the states: Institutions, processes, and politics.

Westport, Conn.: Praeger.Kelly, J., & Rivenbark, W. (2003). Performance budgeting for state and local government. Armonk, N.Y.: M.E. Sharpe.Redburn, F. (2008). Performance management and budgeting how governments can learn from experience. Armonk, N.Y.: M.E. Sharpe.