What are the current budget management model

I. Government budget management mode change --- the change of the U.S. government budget management mode as an example

In the western countries have established and formed a modern budget management system, although the budget management reform involves budgeting, budget execution, budget supervision and other aspects, but the key is the reform of the budget management mode. In the 50 years of development, it has gone through the following stages:

1. Linear Budgeting (1950s)

The so-called Line2Item Budgeting (Line2Item Budgeting), is based on the government's personnel funds to ensure that the elements of the budget. Line2Item Budgeting simply lists a wide range of expenditures, such as salaries, overtime, postage, gasoline, office supplies, etc. It is based on an annual budget cycle. It is an annual budget cycle that focuses on government supplies, with personnel expenses as the main target, and uses a base plus proportional growth in determining the next year's budget. Linear budgeting is similar to the base method of budgeting in China. Linear budget stabilizes the supply of government funds, but has the following problems: First, it cannot control the expansion of government agencies. Secondly, it is not conducive to the improvement of government efficiency because there is no direct link between the government and the services it provides. Thirdly, the government budget expenditure is out of control, resulting in the expansion of expenditure.

2. Project planning budget (60's)

For the problems in the linear budget, in the 60's, the project planning budget (Planning , Programming , Budgeting System) appeared on the scene, so the government budgeting mode was initially established. Project planning budget is an attempt to combine three reasonable elements of "planning process, planning role and budgeting system". It integrates the design, planning and preparation of government budget objectives into one, and there is nothing new in these elements, but its characteristic is that it tries to combine these different elements. However, we should see, the project plan budget is not able to solve all the problems in the government budget, for example, the government's recurrent budget expenditure is difficult to realize the project management, and thus there are potential management loopholes.

31 Zero-Based Budgeting (1980s)

Zero2Based Budgeting (ZBB) is a familiar model of budget management, a zero-based budget. This concept requires the identification of decision units, decision groups, individual levels within a portfolio, and the assessment of optional spending levels for individual units within a portfolio. The purpose of zero-based budgeting is to require each budget unit to justify each budget item and each part of the budget, otherwise it may be rejected. However, zero-based is fundamentally flawed. The complexity of the methodology creates many problems, such as the fact that it is very difficult to "budget for everything, everywhere". Even if the preparation, but also will cause "insiders can not say, outsiders can not see" the situation.

4. Performance Budgeting (90s)

Performance Budgeting (Performance Budgeting), also known as efficiency budgeting, is a government budget management model for the purpose of pursuing efficiency. Performance Budgeting, as a public ****expenditure budget model, is composed of three elements: performance, efficiency and budget. Performance is the performance target; Effectiveness refers to what specific indicators to measure the financial expenditure after the completion of the achievement and completion of the work; Budget refers to the amount of allocation required to achieve this performance. Performance budgeting is very different from the input-based budget management model. It is a dynamic and vibrant budget management model based on efficiency. In this model, the issue of financial performance becomes one of the most important elements of the budget. Performance budgeting is not only important for the rational allocation of each department's budget, but also for improving the efficiency of the use of financial funds under the constraints of the existing financial resources. Therefore, the prospect of introducing performance budget management mode in government budget management in China is quite bright.

Second, the current government budget management in China's main problems

1. Budget content is not comprehensive

For a long time, China's financial allocation of financial funds into the budget and extra-budgetary. The budget we prepare is only the budget, and the financial allocation is only on the budget allocation of funds, there is no extrabudgetary funds as the government's macro-control of financial resources to use. This inevitably leads to extrabudgetary funds outside the budget management, there are many well-known problems. Firstly, it has led to a general laxity in financial discipline and inefficient use of a large amount of financial resources; secondly, it has contributed to the phenomenon of corruption and economic crimes committed by certain government officials. In addition, there are also "extra-systemic funds" - these funds are collected and used by government departments and units in a decentralized manner by virtue of the government's power, but exist in the form of small treasuries or secret accounts, and are neither included in the budget management, nor in the extra-budgetary management. These funds are collected and used by government departments and units in a decentralized manner by virtue of government power, but exist in the form of small treasuries or secret accounts, which are neither included in budgetary management nor in extrabudgetary management. Since the 90's, although all levels of government in the strengthening of extra-budgetary funds made a lot of effective work, but the proportion of extra-budgetary revenues to fiscal revenue in most years is still maintained at about 30%, a part of the government in the name of the collection of funds and a variety of fees are still outside of the budgetary management, the government budget has lost the integrity of recognized.

2. unscientific budgeting cycle

From the perspective of the national budget, the budget preparation time is too short. Generally in November of the previous year issued a notice of budgeting, in March began to discuss the draft budget by the National People's Congress, a short three-month period of time is very difficult to be as large as a country's budget to compile a good fine. And the grass-roots financial departments for the preparation of the budget time is even later, shorter, and even some areas only a week or so that is to complete the preparation work. Budget as a scientific forecast, should be based on objective and reliable basis, but the current preparation of this "high efficiency" so that the arrangement of revenue and expenditure is obviously with a great deal of hasty and blind, and its reflection of economic information is inevitably distorted, can not play on the implementation of the binding effect of revenue and expenditure, and brought about the implementation of the inefficiency. Due to the hasty budgeting, leaving hard gaps, in the implementation of the only frequent additions, frequent adjustments, the emergence of a "one-year budget, budget year" situation.

3. Budgeting lack of predictability

For a long time, China's budgeting is only in the established revenue and expenditure arrangements for funds, the lack of scientific analysis and forecasting, not a good combination of budgeting and economic forecasting. Due to the lack of predictability of the budget, it is difficult for the financial sector to make reasonable arrangements for budgetary funds: in a budget year, the need for a large amount of budgetary allocations for the department may not get the budget, while some of the original financial needs of the department is not much with a relatively large budgetary base to obtain a large number of more than the funding needs of the budget. This has led to a chaotic state of budgetary management in which "more money is given to whatever work goes wrong". This seems to have become the norm. This practice gives us the message that the worse the work, the more money you get.

4. The budget implementation process is not binding

The government budget is approved by the legal process, the government in a fiscal year of the basic financial revenue and expenditure plan, with the binding law, any department or individual shall not be changed arbitrarily. In the implementation of the budget, often the local financial budget is only good, the state ministries and commissions and the new policy, financial expenditure changes, uncertainty factors, coupled with some government leaders do not pay attention to budget management, arbitrary changes in the amount of the budget, resulting in frequent changes in the budget, an important factor affecting the local financial sector to seriously prepare the draft budget.

Obviously, the above problems are our budget management to the market economic system in the process of conversion of key issues, and the current input-based budget management model is difficult to solve these problems. It can be seen, the current budget management model can not adapt to the requirements of the market economy, in order to solve these problems, we must carry out the innovation of the management model.

Third, the reform of China's government budget management mode of thinking

1. The need to implement departmental performance budget

(1) the main defects of the departmental budget

First of all, due to the departmental budget of the basic expenditure budget using the traditional staffing-based management approach, which is conducive to the realization of the fairness of the government's budget allocation, but is not conducive to the realization of the efficiency goals.

First, because of the traditional staff-based management of the basic expenditure budget in the departmental budget, although it is conducive to the realization of fairness in the distribution of the government budget, it is not conducive to the realization of the goal of efficiency, and it is even more difficult to achieve the purpose of streamlining the staff of government agencies.

Secondly, in the departmental budget in the project expenditure budget, objectively there is a "project hunger" and project declaration on the arbitrary. If the project expenditure budget does not establish a set of scientific performance evaluation mechanism, do not really put the project performance to the first place, it is difficult to solve these problems. In the departmental budget management mode, we may just start the implementation of the project to talk about the performance, and not the performance of the project to be achieved throughout the entire process of project implementation, resulting in a large number of people and money "image project", "tofu dregs of the project "

This is the first time I've ever seen a project like this one.

(2) in our country directly adopts the performance of the budget problems

First of all, from the vertical comparison, although the performance of the budget has many of the advantages of the previous mentioned, but we can see, in the reform of the budget management model, the United States from the linear budget to the project plan budget, and then to the performance of the budget, it took 30 years, during the period of time, but also experienced a zero-base budget of this kind of twists and turns. According to the British scholar C. Brown's "gradualism" point of view, social reform is a gradual process. Then, it is reasonable to link the reform of China's budget management mode with the reform of the government and carry out the reform step by step. Secondly, from the perspective of horizontal comparison, China's current budget management reforms include reforms of departmental budgets, classification of government revenues and expenditures, and budget accounts, as well as the establishment of a quota system for staffing, a system of government procurement, and a system of centralized payment and collection from the state treasury. These reforms basically remain at the stage of improving the input-based budget management model. As a matter of fact, the conditions are not yet ripe for China to move to comprehensive performance budgeting. At this stage, although the departmental budget reform has made certain achievements, but we should see that it still has some inherent weaknesses, to overcome these weaknesses, the direct use of performance budgeting there are still certain problems. Therefore, the departmental performance budget reform on the smooth transformation of the public **** economy and the whole society's financial management level are of great practical significance.

2. A few suggestions for the implementation of departmental performance budgeting

(1) Introducing the accrual system in government budget management and government accounting

Since the 1990s, with the reform of public *** financial management in various countries, the accrual system (also known as the accrual system) has been gradually introduced into government budgeting and accounting. With the improvement of the socialist market economic system and the construction of the public *** financial framework, departmental budgets, centralized payment system, government procurement system and other reforms continue to deepen, the introduction of performance budgeting to optimize the process of departmental budgets using the accrual system is essential.

First of all, from the core idea of departmental performance budgeting, it emphasizes on strengthening the efficiency of government work. The introduction of the accruals system makes it possible to recognize and measure cost information associated with specific outputs and outcomes in government budgets and reports, thus providing important support for the performance-oriented departmental performance budget management model. This is not possible under today's cash basis.

Secondly, from the general trend of government accounting reform in various countries, they have experienced the process of shifting from a full cash system, modified cash system and modified accrual system to a full accrual system. In fact, when a country's budget management shifts to a performance-oriented model, the supporting role of government accounting changes is very important. One of the major reasons for the failure of performance-based budgeting reforms in developed countries (typically in the United States in the 1950s and 1960s) is that government accounting at that time was primitive by today's standards.

(2) Adhere to the performance budget to optimize the basic expenditure budget

The basic expenditure budget refers to the administrative organization's recurrent expenditure budget, including the personnel budget and public expenditure budget two parts. In China's basic expenditure on the basis of the implementation of fixed staff quota management, adhere to the performance budget to optimize the basic expenditure budget is to: First, in accordance with the principle of streamlining, unity, efficiency and administration in accordance with the law, continue to streamline government agencies. Through institutional reform, strictly limit the establishment of administrative personnel, improve the efficiency of government work. At the same time, the current inefficiency of the department to be eliminated, to avoid unnecessary budgetary expenditures.

Secondly, the finance department should rationalize and adjust the "per capita expenditure level" of each department in order to improve the efficiency of government departments and reduce unnecessary expenditure.

(3) Adhere to the performance budget to optimize the project expenditure budget

The project expenditure budget refers to the departmental recurrent budget, in addition to the need for financial allocations for a variety of constructive, business and special projects. It includes special utility costs, career special expenditures and constructive special expenditures of three categories. Adhere to the performance budget to optimize the project expenditure budget, first of all, we need to continue to refine the three categories of project expenditure budget, such as special expenditures for business purposes, should be divided into operating and public welfare institutions of the boundaries. At the same time, each specific project should be rationally ranked and managed on a rolling basis. Secondly, we need to integrate the design, planning and preparation of project expenditure budget objectives. According to the rules of efficiency, the government departments to design the relevant projects, and the government planning to help improve the efficiency of the completion of the objectives, through the calculation of the costs and benefits of each implementation plan, the project will be included in the budget, and finally complete the preparation of the project expenditure budget.

Fourth, the concluding remarks

September 1999 issued "on improving the 2000 central budgeting notice", the Ministry of Finance formally put forward the departmental budget, which marks the reform of China's budget management model has entered a substantive stage. In fact, from the base law budget to the departmental budget is a major reform, but its reform needs to be further improved. To solve the problems in China's budget management, the implementation of departmental performance budgeting in budget reform is a good way.

References

1. Liu Shuming, Liu Yueming, Shao Jianhua. The budget management of contemporary developed countries. Journal of Beijing Academy of Finance and Trade Management, 2001 (2) : 24

2. Ma Guoxian. China's Public Expenditures and Budget Policies. Shanghai: Shanghai University of Finance and Economics Press, 2001. 215-279

3. Tong Benli, Ma Guoxian. Performance Budgeting, Single Fiscal Account and Government Procurement are the Three Core Systems for Constructing the Framework of China's Public Expenditure System. Hubei Finance and Taxation, 2000 (4) : 10

4. Wang Yongjun. Accrual system and government budget management reform. Financial Research, 2002 (3) : 32

5. Fan Jing. How to Optimize Departmental Budgets with Performance Budgeting. Agricultural Research and Economic Management, 2003 (2) : 34

Author:Zhang Ru Source:Industrial Technology and Economics