A performance-enhanced budget bases its budgeting decisions off of results in lieu of basing it off of money. By using performance-enhanced budgeting it is believed to keep a level of accountability among those involved in the budgeting process. Performance-enhanced budgeting allows for funds to be allocated and to be measured against set objective. This type of budgeting also looks at the fluctuations of the funding in lieu of on the amount of funding from past budget cycles. When looking at traditional budgeting, decisions are based off of money spent, or allotted, for a set amount of time for specific line items. Under traditional budgeting, agencies also do not have that flexibility because their decisions are centered in past spending. Best yet, it allow agencies to be brought to the forefront that align with the desired outcomes of the budget. This then brings those agencies to the forefront for the legislature. The accountability factor helps look past law compliance or past decisions regarding the funding. As a whole, it forces the hands of lawmakers to take in to consideration other priorities, which allows different agencies to make decisions more freely than that under a traditional system.
Some of the other advantages of performance-enhanced budgeting begins with educating legislators with the basis of the state-funded programs and the purpose of those programs. Another advantage is allowing past legislative funding decisions to be justified. It allows for more accurate estimations of what could happen as a result of the decisions regarding the funding. Furthermore, it provides a greater opportunity for communication in terms of what the return on investment is with tax dollars. It also focuses on the keeping the same programs and their current spending levels.

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The federal budget process has the following four stages: (1) Budget Preparation; (2) Budget Approval; (3) Budget Execution; (4) Audit Evaluation. For the Budget Preparation, both the agency and Office of Management and Budget must conduct this preparation. For the Agency, they use both agency budget offices and agency subunits to prepare a budget submission to be sent to the Office of Management and Budget. Once the budget request is received by the Office of Management and Budget, they negotiate with the agencies on budget allocation levels. The President’s budget will then be approved by Congress, where they will come up with budget resolutions, authorize bills, and appropriate bills. The bills will then go back to the President for a signature or veto. Once approved, the budget will be executed among the programs. Then, down the line an audit and evaluation will be conducted on the agencies by auditors for recommendations of any changes. Through performance-based budgeting, a context is created to help consider both performance and cost information. Also, it creates a solidified measure of performance for this budgeting process.

The three main findings of the study were: (1) “The attention of the federal government to strategic planning and the supply of performance and cost information has increased substantially in the 10 years since the passage of the Government Performance and Results Act” .; (2) “The federal government has never been in a better position to make its budget decisions more informed by considerations of performance” .; and (3) “The Congress can contribute to the ability of the federal government to engage in performance informed budgeting, but progress is not wholly dependent on congressional action” . The first finding’s relevance in improving the federal budget process is creating a communication effort that provides a steady message to all federal managers. It also looks at the teamwork aspect behind the budget process and recommends that it should be done together, not disjointed. Also, the agencies involved in the process should continue to improve and strive to achieve their strategic goals. The second finding’s relevance looks at the creation of a more performance-informed budgeting focusing less on Congress and shifting more towards how info can be essential for management resources regarding the executive branch. Also, federal agencies should have a more sound understanding of how performance can effect each stage of the budget process. The third finding’s relevance look at shifting Congress’s focus on reformatting the authorization process for better communication to agencies and how the restrictions placed on agencies by them effect the agencies’ overall progress.

  • Joyce, P. G. (2003). Linking Performance and Budgeting: Opportunities in the Federal Budget Process. Washington D.C., Maryland.