Performance budget definition
/What is a Performance Budget?
A performance budget reveals the provision of goods and services that result from the expenditure of a certain amount of funds. The concept is most commonly used in government, where the focus of the organization is on providing resources to the general public. The budget is divided into individual programs, each of which states the amount of output expected. One can then use this information to compare the amount of output generated to the amount of taxpayer funding invested in an activity.
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Examples of Performance Budget Outputs
Examples of performance budget outputs are the provision of meals to the elderly, training classes to unemployed people, health services within a geographic region, and the percentage of children graduating from high school.
Disadvantages of a Performance Budget
A possible downside of this approach is that a program manager might be tempted to adjust the underlying numbers to make a program’s performance look better than is really the case.