United States Treasury Office of Technical Assistance

United States Treasury

Office of Technical Assistance

Program Budgets Focus on

Results

Course Definition:

A program is a group of activities designed to achieve certain purposes or results (goals and objectives)usually defined by a planning process.

Programs Connect Programs Connect Plans and PrioritiesPlans and Priorities

to Budget to Budget ResourcesResources

OECD:

results-focused budgets

are the wave of the future

Classification:

the ways in which budget information may be presented or

classified

generally, there are

six ways to classify:

by organization

M inistry of Fun M inistry of Education M inistry of O ther Stuff

Prim e M in ister

by source of revenue

Where is the money coming in from?Taxes?Grants?Sale of Assets?

source of financing

• User fees?

• International Financial Institutions?

• Debt Issue?

economic classification

• Personnel (Labor)

• Materials (Goods)

• Services

• Transfers

• Capital

by functionby function COFOGCOFOG– General public servicesGeneral public services– DefenseDefense– Public order and safetyPublic order and safety– Economic affairsEconomic affairs– Environmental protectionEnvironmental protection– Housing & community amenitiesHousing & community amenities– HealthHealth– Recreation, culture and religionRecreation, culture and religion– EducationEducation– Social protectionSocial protection

by programby program

(or result)(or result)

Multiple classifications are being used by most countries

The EUEU uses a mixture of program and function,

called “Activity-Based Budgeting”

Keys to Good Program Budgets:

Measurable Goals and Objectives

Three Ways to Measure Results:

Outputs

OutcomesEfficiency

Outputs

• Generally measures of physical things, services or events.

• You simply count them.

Output Examples:

The budget might fund the construction of two new schools

or fund 1,000 research projects in a given year

Output Examples:

These countable results could be documented on paper or in an electronic form.

Output Examples continued

Physical objects (or units of workload)

represent output measures, such

as:

“3 computer systems

installed”

Output Examples continued

“2,500 students graduated”

Give an example of an output measure that does NOT involve education

Outcomes.

This is a technical term for an effectiveness measure.

Outcomes show qualitative, measurable progress towards a major goal or objective,

or the completion of the goal.

Example of a National Goal:

Constructing schools within a one hour traveling distance for 90% of Oravian students.

%% of a Solution or of a Solution or OutcomeOutcome

Think in terms of Think in terms of percentages or fractions of percentages or fractions of

a solution when you are a solution when you are looking for an outcome looking for an outcome

measure.measure.

Outcome Example:

The Oravian Education Ministry can certify that "70% of the population now lives within 1 hour of a local school".

It has achieved major progress toward an important, measurable outcome.

70%

Outcome Example 2:

90% of the population lives within 1 hour of a local school.

The goal has been

completed

Efficiency

Efficiency measures are often expressed as the

unit cost of producing or purchasing an item or a

service.

Efficiency Example: Unit Cost

It might cost $10 to buy one textbook.

It is essential to assure that all of the costs associated with the production of an item or service have been identified.

Perhaps the delivered cost is $ 11.

Productivity Example:

Efficiency can also be measured by looking at the productivity of

resources

for example

the number of student class hours taught per professor. 

Time Efficiency Example

Another example would be the time it takes to accomplish a

certain task

such as 1 hour per class

or1 year per research study

Performance Measures Performance Measures or Performance or Performance

IndicatorsIndicators

The devices we The devices we use to calibrate use to calibrate resultsresults

Performance Measures Examples:

The Goal is: “to make university education available to 20% of the population by 2010”

(An outcome)

Measure: % of population able to attend

The Objective is:

“to expand the number of university seats/places/enrollments by 10,000 in 2004”.

(An output)

The measure is:

the number of seats available.

Program Budgets are the best format for good analysis because:

They have clear statements of purposes and expected results

Program Budgets are the best format for good analysis because:

Additional data is produced for analysis

Program Budgets are the best format for good analysis because:

They emphasize value for money

Program Budgets are the best format for good analysis because:

Accountability is assigned to specific agencies or managers

capital improvement program estimated operating expenses

DEPARTMENTPROJECT TITLEPRIORITY NO. OUT OF REQUESTS

TOTALCOMMENTS:

Source of EstimatePossible Variance

DescriptionOperating Costs

First YearOperating Costs

Second YearOperating Costs

Third YearOperating Costs

Fourth Year