The time of year has come for many of you to start planning your budget for the next fiscal year. Depending on the size of your city, planning can be complicated and cumbersome, and you may always feel as though you are trying to hit a moving target.
The personnel reductions often means that administrators don’t have resources to produce an accurate set of data for budget development. In addition, manual budgeting processes can be time-consuming and filled with errors, as your team struggles to verify that they are using the latest and most accurate numbers.
Performance-based budgeting is the practice of developing a budget for a particular department based on the expected results from that department. Here’s a brief summary of how budget-based budgeting works:
Determine the performance measures that will be used to evaluate program performance. Measures may include those that assess quality as well as measures for efficiency.
Account for all resources that are contributed to the program’s execution, including general administrative and other expenses that must be allocated according to each program.
Each program within a given department is evaluated according to the measures developed in step one. Programs can be given scores to designate their standing in the performance-based budgeting process. Ideally, the programs can be evaluated on a monthly or quarterly basis so that adjustments can be made to improve scoring.
Performance-based budgeting is a process, so don’t expect to master it in your early days of working with the process. In fact, the implementation of performance-based budgeting moves through a process, starting with initialization and moving through to managing and optimizing before it is considered to be in a mature phase.
Comcate provides real-time analysis for budgeting and planning with tools and reporting that capture the reality, rather than forcing you to rely on your best guess. The reporting dashboards that are accessible with Comcate’s software provide all the tools and resources you need to initiate performance-based budgeting in your department.
For more information on performance-based budgeting, give Comcate a call. You can also take a look at a white paper created by the ICMA, which describes the process in more detail.