Starts with the second half of the 19th century.

Budgets up to the Reform Period, previously under the laws of Sharia, and later made  on the basis of sovereign decrees.

For the first time,budget right was adopted with 1876 Constitution.

The first budget of the Republic of Turkey is the budget of 1924.

In our country, modern budget right has occured with the law numbered 1050, named ‘Muhasebe-i Umumiye’ in 1927.

After 1927 appliance of classical budgeting has continued but an innovation have been made about categorization of beginning from this date. After 1950 budget expenditures are seperated as current and investment expenditures. It was the first time an economic categorization have been made.

New arrangements has came with 1961 Constitution for budgeting.With this constitution,way of judical control has opened to tax,expenditure and budget law.

Since 1964, dual classification of budget expenditures was subjected to consisting of three parts by being current ınvestment and transfer expenditure

Until 1973,budget exhibited that classical budget system.

Expenditures = Revenues Goverment must be in the micro level. Budget deficit and budget surplus No connection to the amount of

services Takes care only financial part. Efficiency of services

1)With classical budget,determinable that what goverment purchased how much they spent.

Traditions are important for determination of expenses.

2)Political factors plays a major role.3) It does not enable to making the

optional programs and making the comparison between them.

4)İnformation gathering and raporting systems.

5) Classic budget has not been established relationship with the plan.

6)Spendings tends to show a steady increase in classical budget.

7) strict control through accounting constituted that essence of classical budget.There is no governance of efficency and effectiveness.

Classical budget PPBS

Payment to instutions

Payment to services

Annual Long term

Inputs outputs

No alternative project

Cost-benefit analysis

Comparison between classical budget and programe base budget

Sense of classical budget

Sense of new budget

Non-equivalent sense of budget

Equivalent sense of budget

Classical budget system Performance budget system

Annual Long term

Legislative,executive and judicial governance

Public governance

Financial audit Performance governance

Planning, Programming, and Budgeting System (PPBS) is in effect an integration of a number of techniques in a planning and budgeting process for identifying, costing and assigning a complexity of resources for establishing priorities and strategies in a major program and for forecasting costs, expenditure and achievements within the immediate financial year or over a longer period.

In Turkey, this system was used since 1973 because of the deficiencies of the classical budget system. Also the change and development of economic and fiscal policies led to the application of the program based budget system. But in 2006 with the code no 5018, the use of this system is ended.

PPB System’s main elements are the program structure, program analysis withlong-term program and financial plan. In particular emphasis on the analysis of the program for the realization of this matter fully;

aims of the Government possible alternatives the total cost estimate of the program for each

year, the expected benefits from the goals

were determined for each year  estimates of alternatives, and the

remaining ambiguous points

should be brought disclosure and written.

PPBS, consists of four major parts. 

These are:

  classification justification granting an allowance  system analysis

With Program Based Budgeting, we can not determine the aim of government expenditure. We can only determine which commodities government buy and how much government pay to them.

The lack of determining aims, programming services was blocked.

Turkey’s budget techniques didn’t improve well.

Turkey tried to make budgets with past experiences.

Because of not using new techniques, new information collection systems didn’t improve in PBB.

Between PBB and planning relation didn’t occure when Turkey uses the system.

In PBB if one good is purchased in one year, this good will be calculated each year after the current year. Removing the good from budget has no place in this budget system.

came into operation in Turkey in December 2003 by the enactment of the Public Financial Management and Control Law

The term “performance-based budgeting” is used in the PFMC Law

Three broad types of institutions are defined in the PFMC Law:

public administrations within the scope of central government,

social security institutions, local administrations.

Three broad categories of budgets:

central government budget general budget special budget regulatory and supervisory agency budget

social security institution budget local administration budget

strategic plans performance programmes budgets accountability reports complementary tool, called analytical

budget classification.

medium and long-term objectives, core values and policies, goals and priorities, performance indicators of public

administrations as well as the methods followed to achieve those and resource allocation.

Strategic plans cover five-year periods in Turkey.

performance targets and performance indicators of a public administration related to the programme period;

activities to be executed, and the resource requirement so as to achieve the targets;

information on the related administration. required for the public administrations covers one year and are prepared each year

Multi-year budget framework: The appropriations of the first year are

established by the Central Government Budget Law (CGB Law)

The appropriations of the following two years are set as indicators by the administrations and not legalised

The classification of expenditure budgets is based on four categories:

institutional, functional, financing, economical classification.

Reports include the following elements: the resources used, and the reasons for any

deviation regarding the budget targets and realisations;

financial information comprising information regarding the activities of associations, institutions and organisations aided through assets and liabilities;

information on activities and performance information performed as per strategic plans and performance programmes; and

general information on the related administration. Public administrations and spending units are

required to issue accountability reports each year (PFMC Law).

Regulatory administrations Undersecretariat of State Planning

Organization (SPO)- Devlet Planlama Teşkilatı (DPT)

Ministry of Finance (MoF) – Maliye Bakanlığı (MB)

Implementing administrations All public administrations covered in the

PFMC Law including the SPO and the MoF are implementing administrations for performance budgeting

The performance budgeting process can be illustrated from the perspective of both the regulatory and the implementing aspects.

The budgeting process begins with the publication of the medium-term programme and ends with the publication of the law on the central government budget (CGB) in the Official Gazette.

The medium-term programme includes basic macro policies, principles, and economic figures as targets and indicators in line with the development plans and strategic plans of the institutions and the requirements of general economic conditions.

Appropriations are prepared using the fourth level of the economical classification, but they are legalised in the detail of the second level.

After the approval of the CGB Law, the administrations under the general budget prepare their detailed expenditure programmes (DEPs), which are on a monthly basis. The DEPs are then approved by the MoF on a quarterly basis and for the second level of economical classification.

The appropriations of the administrations are released quarterly by the MoF based on the approved DEPs.

Internal control, co-ordination of which is the responsibility of the Strategy Development Departments, is a complementary tool for performance budgeting.

External audit, which is also a complementary tool, is an ex post audit performed by the Turkish Court of Accounts within the framework of the accountability of administrations under general government.

The budget system of Turkey follows incremental budgeting.

Accounting is on an accrual basis in Turkey; on the other hand, budgeting is on a cash basis, resulting in a dual system for budgeting and accounting.

Current and capital expenditures are separated; the former is the responsibility of the MoF and the latter is the responsibility of the SPO.

Ebru Tercan 2008431062 Erdi Çangar 2007431012 Evrim Yıldırım 2007431050 M.Görkem Cüneytoğlu 2007431010