Budget methodology of the fiscal budget

Performance budgeting is a method of budgeting in which the government first formulates relevant business plans and engineering plans, then develops plan implementation programs based on government functions and governance plans, and determines the costs required to implement the programs on the basis of cost-benefit analysis.

Performance budgeting is a budgeting system introduced in the United States in the 1950s. After the Second World War, the United States Roosevelt's New Deal came to an end, the issue of control of the compound budget has attracted the attention of the United States Hoover Commission on Administrative Improvement, which raised two basic questions: one, what should be the maximum number of ideal expenditures on the main items of the budget? And, secondly, how can approved projects be carried out efficiently and economically through the legislature? The Hoover Commission, influenced by the performance budgeting techniques then prevalent in some of the major cities of the United States and being practiced on a trial basis by certain departments of the federal government, recommended the adoption of performance budgeting in the federal government in 1949. The Planning-Programming-Budgeting System (PPBS) also originated in the United States. The U.S. government every year hundreds of billions of dollars for military spending, in 1960, the U.S. economists Dow Hickey and McKesson's book "Defense Economics in the Nuclear Age" discusses the efficiency of the defense economy, and suggests that the military design should be a variety of feasible options to compare the costs and benefits. 1961 U.S. Secretary of Defense McNamana adopted their views, and recommended that the Department of Defense in the Department of Defense Program Project Budget on a trial basis. According to the analysis, the United States to adopt this according to the funding (input) and effect (output) of the analysis to prepare the defense budget, a year can save billions of dollars. The Johnson administration therefore decided in 1965 to introduce this budgeting system in other branches of government as well. Traditionally, budget expenditures are organized according to who spends (i.e., what department) and where the expenditures are directed (i.e., personnel funds, utilities, equipment expenditures, etc.). This can be called input budget design. In the case of program and project budgeting, expenditures are categorized by program and the various types of programs are aligned as closely as possible to the identified policy objectives, thus allowing for a unified design that breaks through departmental boundaries, while linking program outcomes to inputs, which helps to improve the efficiency of budgetary expenditures.

In short, the program and project budgeting system is developed on the basis of performance budgeting, which is based on the objectives set by the state, focusing on project and the use of quantitative analysis methods to prepare the budget. Zero-BaseBudget (ZBB) is a form of managing finances that was adopted by the American business community in the early 1960s, requiring that each program be re-evaluated at the beginning of each year in order to achieve savings and efficient use of resources.

Zero-based budgeting refers to the budget program of all the arrangements from the actual needs, based on cost-benefit analysis to determine the amount of expenditure on various items, and then comprehensively determine the overall program of expenditure. Zero-based budget method is proposed for the traditional base budget method, the base budget is the actual number of the previous year or the average of the previous years as the basic basis for determining the budget year's expenditure program, which is characterized by focusing on the past, do not pay attention to the future, focus on the historical factors, do not focus on the development factors, and thus some of the original irrational, unnecessary expenditures continue to be retained, while adapting to the needs of the new development of the expenditure is not easy to be fully taken into account, resulting in the scale of expenditure and development of the budget. As a result, some unreasonable and unnecessary expenditures are retained, while expenditures to meet the needs of new development are not easily taken into account, leading to irrationality in the scale and structure of expenditures, imbalance in the interests of expenditure targets, and inefficiency in the use of funds. The zero-based budget method can better solve the above problems. The term "department" refers to the first-level budgetary unit that has a direct relationship with the treasury in terms of funding allocation. The departmental budget is a budget prepared by each government department and submitted to the legislature for deliberation and adoption after examination and approval by the financial department, reflecting all departmental revenues and expenditures. It is organized on a departmental basis, and a department prepares a budget. The budget of each department consists of the budgets of the units belonging to the department and the budgets of the department's organs. The departmental budget system is a budgetary fund management system based on the preparation of departmental budgets. Under the departmental budget system, each department prepares its own budget and draft final accounts, organizes and supervises the implementation of its own budget, and regularly reports on the implementation of the budget to the financial sector at this level.