List four budget formats that have been used in the past. Which type is used most frequently? What are its component parts as well as advantages?

Question

What will be an ideal response?

Answer 1

Budget formats include the line-item budget (or object-of-expenditure budget), the performance budget, the program (or results or outcomes), the planning—programming—budgeting system (PPBS), and the zero-based budget (ZBB). Line-item budgeting (or item budgeting) is the most commonly used budget format. Line-item budgeting breaks down the budget into the major categories commonly used in government (e.g., personnel, equipment, contractual services, commodities, and capital outlay items); every amount of money requested, recommended, appropriated, and expended is associated with a particular item or class of items.
The key characteristic of a performance budget is that it relates the volume of work to be done to the amount of money spent. The best-known type of budget for monitoring the activities of an organization is the program budget, developed by the RAND Corporation for the U.S. Department of Defense. PPBS is a decision-making tool that links the program under consideration to the ways and means of facilitating the program. It is thus a long-term planning tool, better informing decision makers of the future implications of their actions, and is typically most useful in capital projects.