Program Budgeting and Accountability in Local Government

Much has been written about program budgeting and its relevance to improved efficiency and effectiveness. However, there is little discussion about the relationship between the use of program budgeting and accountability. While, organisations using program budgeting focus on the issues of performance, the accountability of management to an elected body, such as a local council has been given little attention. In this article three questions are posed: (1) Is the performance information available to enable councillors to form a judgment about management's performance?; (2) Is management involved in determining issues of policy, such as objectives, programs and performance measurement?; and (3) Are councillors confronted by a greater volume of budgetary documentation but with no increase in time to consider it? The results show that program budgeting does not always enhance accountability in local government.     

Budgeting for Contracting in Local Government

While the amount of contracting out seems to be leveling off, the number of larger, long‐term contracts seems to be increasing. Such contracts are generally not well described in local budgets. Recent efforts in some cities to shift to more outcome‐oriented performance budgeting should push toward more clarity in reporting on major contracts in the budget. This article examines how a handful of major cities handle contracts in their budgets—in some cities contracts are omitted from the budget or all merged into one budget line—and makes some suggestions for improvements.     

Participatory Budgeting in Australian Local Government: An Initial Assessment and Critical Issues

Participatory budgeting (PB), a process whereby governments seek direct input from citizens into financial decisions, is gaining a foothold in the community engagement practices of Australian local governments. Following questions of definition, we survey the theoretical terrain, locating PB within several components of local democracy. We then provide details of six PB processes in New South Wales, Victoria, and Western Australia. We identify several questions for the future of PB in Australian local governments, including the role of deliberative practices as part of the broader work of councils, the issue of the adaptability of councils and leaders, the impacts upon state and local governments, and the role of third parties. The article concludes by reflecting on how PB sits with democratic practices at the local level if it continues to be implemented.     

Issues in Program Budgeting

Funding arrangements for human service programs are often complex, particularly when intergovernmental financing is involved. There are two financial arrangements used by human services administrators to assure that money budgeted is spent as intended. Reallocation of unspent funds among jurisdictions and carryover to the following year of unspent balances are examined in this article based on examples drawn from two programs in Minnesota.     

To PPB or Not PPB – Budgeting in Victorian Local Government

Budgeting is an important element in a public sector organisation's accounting control system. There are a number of budgetary methods that could be used, each with an explicitly different focus. This article investigates possible reasons for Victorian local government selecting line item budgeting, planning programming budgeting (PPB) or a combination of the two. While program budgeting arguably failed in the USA, research shows it was adopted by local government. Australian researchers report similar findings, yet the introduction of program budgeting into local government has not been explored. Four reasons are postulated: (1) PPB will be adopted because of the complexity of the organisation; (2) PPB will be adopted because it is perceived as an aid to planning; (3) line item budgeting will continue to be used because users are familiar with this type of budgeting; and (4) management's support for the adoption of PPB will be a significant factor in its introduction. A questionnaire was distributed to all the local governments in Victoria and 60 percent were returned. The findings reported in this article confirm the reasons postulated.     

Biennial Budgeting in the Federal Government

This article examines the possible outcomes of changing from the current annual budget review to biennial budgeting. It looks at the experience of various states and its application to the federal level. It explores all of the supposed benefits , including less time spent on budgeting issues, more accurate budget projections, reduction of congressional workload and increased congressional oversight and, for the president's point of view, increased power of the executive branch. Concluding on a cautious note, the article offers some plausible applications of biennial budgeting to the national budget.     

Financial Control in Australian Government Budgeting

With the arrival of accrual accounting and "accrual output budgeting," there have been huge changes in the mechanism of central financial control in the budget-dependent Australian public sector. This article outlines and evaluates these changes. The new parliamentary appropriations arrangements are discussed, as is the increased role played by nonappropriated departmental "own-source" funding. The shift of emphasis from legislative to administrative financial controls is noted and analyzed. Consideration is given to the implications of this shift of emphasis, and of the increased complexity of the financial control framework, for fiscal transparency and democratic accountability.     

The Line-Item Veto in Government Budgeting

Beginning in January 1997, the president will have the power to veto line-items in appropriations bills This article examines four paragraphs about the line-item veto from Jesse Burkhead's Government Budgeting . Eight themes from Burkhead's writing are identified and compared to practice by the states.     

Budgeting Rules and Program Outcomes

It is not efficient for a budget system either to enable excessively frequent changes in programs and tax policies or to be rigid and unresponsive. Program durability is one measure of how a budget system weighs the competing goals of resoluteness and responsiveness. The federal budget has different processes—mandatory and discretionary spending and tax expenditures—each based in separate congressional committees and relying on separate procedures. This article examines the budget systems' durability. One finding is that mandatory spending programs and tax expenditures are more durable than programs backed by discretionary spending. However, while programs targeted to vulnerable populations and supporting long‐term planning, such as in income support and health, might benefit from durability, these programs display shorter durability, not longer. While displaying greater durability, tax expenditures do respond to changes in different economic sectors, based on the changes in spending of other budget systems.     

Optimal Government Budgeting Contingency Reserve Funds

During recent years, more state and local governments have made provisions in their budgets for establishing and maintaining contingency reserve funds. A recent study by the National Conference of State Legislatures(NCSL) found that over half of all states now have such funds. The basic purpose of these contingency reserve funds, also referred to as "rainy day" funds, is to insulate governmental budgets from unexpected fiscal disruptions brought about by such factors as unanticipated revenue shortfalls and expenditure overruns. What have received less attention, however, are the criteria which governments need to use in deciding whether to establish such contingency reserves in the first place, and if so, how large these reserves should optimally be. This article explores these two issues, using the State of California as an illustrative case study     

Local Government Failure in Australia? An Empirical Analysis of New South Wales

The complexities of contemporary local governance in Australia and other advanced democracies provide social scientists with significant theoretical and empirical challenges. Drawing on recent developments, including public choice theory, economists have sought to develop taxonomic systems of government failure specifically tailored to local government circumstances. This paper seeks to extend the Dollery and Wallis (2001b) taxonomy of local government failure by invoking Olson's (1965) concept of political entrepreneurship. The paper then attempts to determine the empirical validity of the augmented taxonomy by examining it in the context of NSW local government.     

Do State‐Funded Property Tax Exemptions Increase Local Government Inefficiency? An Analysis of New York State's STAR Program

This study tests the effects of a growing form of indirect state aid—state‐supported property tax exemptions—on local government efficiency. We hypothesize that larger exemptions, by lowering the effective tax price paid by local homeowners and thus their incentive to monitor efficiency, will reduce local government efficiency. We test this hypothesis by examining the introduction of New York State's large state‐subsidized property tax exemption program, which began in 1999. We find evidence that, all else constant, the exemptions have reduced efficiency in districts with larger exemptions, but the effects appear to diminish as taxpayers become accustomed to the exemptions.     

Implementing Program Budgeting in the Serbian Ministry of Defense

The Republic of Serbia's Ministry of Defense (MoD) is attempting to implement a program‐oriented, multi‐year budgeting system in 2010. This paper reveals several challenges that threaten the success of this initiative. First, we find that the proposed budget system confuses organizations and programs. Second, there does not appear to be a centrally coordinated effort to implement program budgeting, leading to significant disparities in comprehension, organization, and implementation amongst the subordinate commands in MoD. Finally, there is a distinct lack of communication within the MoD regarding the necessity of a program budget and how the process should move forward. These issues inhibit the implementation of program budgeting in the MoD and diminish the possible gains associated with the multi‐year, programmatic allocation of defense resources.     

The Evolution of Local Government Budgeting in Poland: From Accounting to Policy in a Leap and a Bound

The evolution of U.S. public budgeting has been described by Schick (1966) as a progression from a control orientation to a management and then a planning orientation. Lee (1992) has tracked the evolution of central budgeting staff largely from a group of accountants to a more varied set of backgrounds, dominated by public administration and general liberal arts educations. As Poland decentralizes fiscal and administrative responsibilities and powers to gminas (local self-governments), the gmina councils are beginning to view the budget as more than a financial accounting tool proscribed and prescribed by the central government. They are beginning to see the potential for using the budget as a policy and management tool. The evolutionary transformation of budgeting, which took fifty years in the United States, may take only five years in Poland. The evidence for this metamorphosis is based on interviews with several gmina city budgeters, with special attention devoted to the city of Lublin.     

An Evaluation of Local Government Websites in New Zealand

Abstract

The study assesses the effectiveness of New Zealand local government Websites in providing equitable and appropriate access to government information. All local government Websites that could be identified were evaluated using 37 criteria, and visitors to approximately half of these sites were surveyed to determine their perceptions of the effectiveness of the sites. Results show that although there is a good range of information provided on the better sites, some smaller regional or district councils sites provide little in the way of basic information to their citizens. The study also found a limited range of transactional services available on New Zealand local government Websites, and a widespread lack of disabled-enabled access to sites, along with poor provision for user privacy and security. User comments focused on the need for more information and more up-to-date information to be provided, and better search facilities on sites. Although over 90% of users approached a particular site seeking specific information, less than half were able to find the information they sought. Significant indigenous and ethnic minority groups were underrepresented among users. The study concludes that there is room for considerable improvement in the use of the Web as a primary communication and transaction channel within the context of the government's vision for extending e-government in New Zealand to local government and Other agencies.     

The Use of Program Analysis in State Budgeting: Changes between 1990 and 1995

Reform literature has long championed the notion that program analysis should be utilized in budgetary decision making. This article reveals that, although the 1990s may have shown renewed interest in this line of reform nationally, a noticeable decline seems to have occurred in the conduct and use of program analysis by states. The article examines other changes in the period from 1990 to 1995, compares different executive-branch units with one another in their involvement with program analysis, and considers possible relationships between executive and legislative use of analysis Few linkages are found between the characteristics of states and their use of program analysis. The article concludes with a discussion of possible explanations for the changes between 1990 and 1995 and the implications of those changes.