Governments have long been trying to connect performance with
budgeting. Along the way we have seen everything from a focus on
publicly available annual plans and reports to the use of
performance measures in budget documents and the carrying out of
sweeping reviews of operations, services and programs. At the heart
of all this is the desire for information about how government
works and about its successes, along with its failings, to then
make decisions about funding, staff and other resources. But how to
make this happen?
Legislation or a clear mandate is surely a starting point. In
our experience, though, the answer to successful performance-based
budgeting goes beyond this, encompassing engagement, performance
measures, aligned improvement practices and supported change, as
shown in the model below.
Engagement includes communicating on a regular basis with
managers and staff to address the always-present concerns that
"it's only about cost cutting." It is vital to
communicate and re-communicate that the broader objective of
linking performance with budgeting is to assign budgets and
resources based on planned as well as known results that are seen
Engagement is also about facilitating collaboration between
divisions, departments and agencies in the pursuit of shared goals.
It is important to understand the audiences for the performance
information being generated and to ensure that what is provided is
straightforward and usable for making budgetary decisions.
Another part of the answer is found in the use of performance
measures. There must be a practice of identifying current and
potential measures of performance and related reporting
requirements, with the objective of answering the questions,
"Do these tell the story of both progress and results?";
"Can the information be sourced and relied upon?" and
"What is required to sustain the use of these
Alignment of Improvement Practices
A third part of the answer is alignment of
performance-improvement practices, be they Lean processes,
enterprise risk management, audits or consultations, in order to
find synergies in answering critical questions like "Are needs
and commitments changing?"; "In what ways are the desired
results being realized?"; "How are the issues that
influence success being managed?" and "Are we making the
best use of financial, human and other resources?"
The fourth part of the answer is found in supported change,
namely through the implementation of the recommendations that
result from program and service reviews for their current and
future relevance, effectiveness and efficiency. This depends, in
turn, on the willingness to put necessary supports in place to
achieve intended improvements.
With these four elements in place, and in a way that fits with
the key decision points in government, the benefits of tying
performance to budgeting can be realized.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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