Management

Question 1

Planning Programming Budget System (PPBS)

Answer 1

Ties budgets to performance objectives

PPBS has four distinct characteristics: (1) it focuses on the fundamental objectives or purposes of a program (thus, it is a performance budgeting system), (2) it explicitly identifies the future implications of current budgeting decisions, (3) it considers all costs, and (4) it systematically analyzes alternative programs. Although PPBS was expected to revolutionize municipal decision making, it did not because it was too complex.

Question 2

Zero-Based Budgeting (ZBB)

Answer 2

Starts from a “zero base,” and every function within an organization is analyzed for its needs and costs.

In a ZBB system, last year is a closed book, and every program must be justified as if it were brand new. The “Green Bible” lists four steps to ZBB: (1) “decision units” are isolated, (2) the decision units are analyzed into “decision packages,” (3) the decision packages are prioritized by management, and (4) the budget is compiled – based on the available resources and the above prioritization.

Question 3

Capital Improvement Plan (CIP)

Answer 3

Includes operating costs and long-term maintenance costs

Typically a five- to seven-year plan for planning and funding public facilities and infrastructure. It includes both the construction of new facilities and the rehabilitation or replacement of existing capital facilities. A key element is the link between growth in a community and timing of capital investments—also known as concurrency.

Question 4

Performance Budgeting

Answer 4

Ties budgets to performance objectives