WHAT IS ZERO-BASE BUDGETING?

nagement strategy to help policyater some time. For ing technique endeavors to redirect effort and, improveg to the current. In mosturrent year. For “increments” that have been added to thiscrementaliable and thishigh or too low.udy of thosedined.t programs to be subjected to zero-basedhe current year’sa particular program is justified. On the contrary, the wisdom of spendingyeram under review?goals and objectives of the program important enough to warrant theive ways of achieving theseder of

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the programtion of evenue to matchthe demand for spending, it is useful for government to have a ranking of programs andactivities based on proven effectiveness, as well as suggested alternatives to expensiveor ineffective programs.There are two basic steps to the process of zero-base budgeting. The first step is todevelop what is referred to as “decision packages.” The second is to rank the decisionpackages. The decision package is a document that identifies and explains the specificactivity, its goals and objectives, measurement of performance, costs, benefits, andZero-base Budgeting is a budgeting and financial mamakers achieve more cost-effective delivery of public services

The concept of zero-base budgeting has been utilized successfully by privcorporations and recommended for application to the federal budget fogovernment use, this planning and budgetfunds from lower priority current programs to higher priority new programsefficiency and effectiveness, and reduce spending.Traditionally, most government budgets have been constructed by addinexpenditure level such amounts as seem warranted by circumstances jurisdictions, expenditures for the coming year will exceed those of the cthis reason, most attention is directed to theyear’s expenditures to reach the proposed budget total. A major flaw in inbudgeting is that it assumes the current year’s expenditure level is justif may not be true. It may be either tooZero-base budgeting, on the other hand, is a detailed and concentrated stactivities that might be considered costly or ineffective and that continue to be fundeprimarily because they are never examIt may be useful for one or more governmenbuget analysis every year. In such an analysis it is not assumed that tspending for an money at all on the program is examined.Thse questions are typical for analyses of this type:

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Is there any measurable evidence of the value of the prog

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Are theexpenditure being made?

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What would happen if the program were not provided at all?

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Are there other less costly and more effectobjectives?

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Where would the program fit in if all programs were displayed in or importance?Would the benefits be greater if a portion of the funds spent onunder review were used instead for other programs?An important element of this budgeting procedure is that it forces prioritizagovernment programs and activities. With the prospect of insufficient r