What is the difference between performance budgeting and line-item budgeting?
A program Performance Budget can be distinguished from a Line-Item Budget in a fundamental way. The line items show what each dollar will be spent on: salaries, benefits, office supplies, travel, utilities, equipment, etc.
Why is line-item budgeting the most widely used budgeting approach in the Philippines?
Line-item budgeting is still the most widely used approach in many organizations, including schools, because of its simplicity and its control orientation. As a result, this approach enhances organizational control and allows the accumulation of expenditure data at each functional level.
What is performance budgeting in the Philippines?
In a nutshell, therefore, a performance budget may be described as one emphasizing the programs or services conducted; and is based on functions, activities and projects which focus attention upon the general character and nature of the work to be done, or upon the services to be rendered, rather than upon the things …
What is performance budgeting How is it an improvement on traditional line-item budgeting?
Performance budget focuses on the results to be accomplished. The performance budget, given its program structure, changes the focus of conversation from detailed line items to broader objectives and performance of public programs, and allows more conversant budgetary decision-making.
What is the meaning of performance budgeting?
Performance budget also referred to as performance-based budgeting is a practice of preparing the budget based on the evaluation of the productivity of the different operations in an organization. Hence, it is the process of identifying the results achieved by each division of the organization.
What is the performance budgeting process?
Performance-based budgeting is the practice of developing budgets based on the relationship between program funding levels and expected results from that program. The performance-based budgeting process is a tool that program administrators can use to manage more cost-efficient and effective budgeting outlays.
What do you mean by performance-based budgeting?
Performance-based budgeting is the allocation of funds based on programmatic results that contribute to organizational goals. Performance-based budgeting is not intended to punish or reward departments or agencies, but instead to focus on progress toward measurable goals during the budget process.
How does the budget work in the Philippines?
Budgeting in the Philippines is on an obligations/cash basis. The government accountingsystem is on an accrual basis. 1.2. Annual budget formulation cycle The annual budget formulation cycle can be divided into two phases: first, to set theoverall budget parameters; second, to allocate resources to departments and agencies.
Which is the best description of Performance Budgeting?
In summary, performance budgeting may offer considerable enhancement to the line-item budget when appropriately applied. Program and Planning (Program) Budgeting. Program budgeting refers to a variety of different budgeting systems that base expenditures primarily on programs of work and secondarily on objects.
How is a site-based budget similar to a line item budget?
Although the underlying preparation process is distinct in each approach, the formats of the prepared budgets may be quite similar; for example, the format of a site-based budget may be quite similar to the format of a line-item budget. Each of the six basic approaches has relative advantages and limitations.
Which is better performance or line item accounting?
The performance approach is generally considered superior to the line-item approach because it provides more useful information for legislative consideration and for evaluation by administrators.