Performance Budgeting and Planning-Programming-Budgeting (PPB)

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What is a budget?

A plan expressed in monetary terms, covering a specific period, usually one year.

What information should a budget plan contain?

Types and amounts of proposed expenditures, purposes for which they are to be made, and proposed means of financing them.

What is the difference between budgeting in profit-seeking enterprises and governmental budgeting?

Budgeting in profit-making enterprises is usually flexible and can be changed, while governmental budgets are generally unchangeable without much effort.

Why do governments have unchangeable budgets once fixed by law?

To ensure money is used for the appropriate purpose and to avoid penalties for non-compliance. Signup and view all the answers

What is the role of budgeting in governmental accounting compared to FP accounting?

Budgeting has a greater role in governmental accounting than in FP accounting. Signup and view all the answers

Why is the accounting system designed to support the budget in government?

To align with the unchanging nature of government budgets and to ensure compliance with legal requirements. Signup and view all the answers

What is the main characteristic of incremental budgeting?

Budget for each period is based on the budget for the previous period, adjusting for expected changes. Signup and view all the answers

Why is incremental budgeting considered unlikely to result in the optimum allocation of resources?

It tends to perpetuate inefficient and unnecessary practices, leading to unnecessary expenditure built into the budget. Signup and view all the answers

What is the main idea behind Zero-Based Budgeting (ZBB)?

Each program must justify its existence every year, starting from zero. Signup and view all the answers

How does ZBB differ from incremental budgeting in terms of justifying programs?

ZBB requires programs to justify their existence every year, while incremental budgeting assumes continuity from the previous year. Signup and view all the answers

What does ZBB focus on when evaluating programs and services?

ZBB focuses on evaluating different ways of carrying out programs and choosing the best approach. Signup and view all the answers

Why is ZBB considered a method of continually evaluating programs?

ZBB requires each program to be justified annually, ensuring ongoing assessment of its necessity. Signup and view all the answers

What are the major sources of non-tax revenues in Ethiopia?

Charges and fees, investment revenue, miscellaneous revenue Signup and view all the answers

What is the second major item in the revenue budget of Ethiopia?

External assistance Signup and view all the answers

How are recurrent expenditures in Ethiopia primarily financed?

By taxation, broadly from domestic revenue sources Signup and view all the answers

What does the capital budget in Ethiopia cover?

Acquisition of newly produced assets in the economy Signup and view all the answers

What is the annual period over which budgets are prepared called?

Budget cycle Signup and view all the answers

Who approves the annual budget in Ethiopia?

The Council of Peoples Representatives Signup and view all the answers

What is the first step in the typical budget cycle as described in the text?

Preparation of the macro-economic and fiscal framework Signup and view all the answers

What is the final step in the typical budget cycle as outlined in the text?

Allotment Signup and view all the answers

Which stage involves the allocation of the expenditure budget between Federal and Regional governments?

Allocation of expenditure budget between Federal and Regional governments Signup and view all the answers

What is the role of MOFED in the budget process?

Budget review by MOFED Signup and view all the answers

When is the budget finally submitted to the Council of Peoples‟ Representatives?

Submission of the budget to the Council of Peoples‟ Representatives Signup and view all the answers

What is the main focus of performance budgeting?

The relation between input and output of each organizational unit Signup and view all the answers

Describe the emphasis of Planning-Programming-Budgeting (PPB) approach.

Broad policy goals, strategies, and objectives Signup and view all the answers

What does the government budget in Ethiopia represent?

A plan/forecast of expenditures and revenues for a specified period Signup and view all the answers

When does the fiscal year in Ethiopia start and end?

From July 7 of one year to July 6 of the next year Signup and view all the answers

How does PPB evaluate different ways of meeting goals and objectives?

By analyzing costs and benefits Signup and view all the answers

Give an example of how PPB looks at government programs.

Ministry of Health and Ministry of Education's AIDS programs Signup and view all the answers