THE TYPES OF BUDGETING

NAME TOPIC HIGHLIGHTS

THE TYPES OF BUDGETING

LINE ITEM
 This refers to teacher’s salaries,
repairs, consumables and the
like, of which a particular
amount of money is allocated.
 The specific items of revenue
and expenditure are listed in
line-by-line basis.
 Line item budget is prepared
with reference to the previous
year’s budget where possible
expenditure remains the same.
Zero-Base Budgeting
 A system that requires
management to take a fresh
look at all programmed and
activities each year.
 This type of budget does not
consider the previous year
budget but assume that the
programmed is starting fresh
 regardless of whether the
budget is higher or lower than
the previous one.

Incremental Budgeting
 It makes use of the information
in the budget of the preceding
year. In other words, it is a
budget prepared using previous
period’s budget as basis with
incremental amounts added for
the new budget period.
Performance Budgeting
 Concentrates more on outputs
or the outcomes of services
through the measurement of
the achievement of each
programmed or activity in any
aspect. Example is the
construction of school building.
This implies that allocation of
funds and resources are based
on the potential results.