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 Plans and Priorities to Budget Resources

results-focused budgets are the wave of the future OECD: results-focused budgets are the wave of the future

generally, there are six ways to classify: Classification: the ways in which budget information may be presented or classified generally, there are six ways to classify:

by organization

by source of revenue Taxes? Grants? Sale of Assets? 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 function COFOG General public services Defense Public order and safety Economic affairs Environmental protection Housing & community amenities Health Recreation, culture and religion Education Social protection

by program (or result)

Multiple classifications are being used by most countries The EU 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 Outcomes Efficiency

Outputs Generally measures of physical things, services or events. You simply count them.

Output Examples: or fund 1,000 research projects in a given year 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 Outcome Think in terms of percentages or fractions of a solution when you are looking for an outcome measure.

Outcome Example: 70% 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.

The goal has been completed 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 or 1 year per research study

Performance Measures or Performance Indicators The devices we use to calibrate results

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: the number of seats available. (An output) “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