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