Planning, Programming, and Budgeting System (PPBS) Quiz

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Questions and Answers

What is the primary purpose of a line-item budget?

To identify areas for cost reduction

To track expenses for accounting purposes (correct)

To allocate resources based on expected outcomes

To compare financial information across different economic periods

What is essential to consider when creating a line-item budget?

Employee compensation

Present year's expenses

Projected future expenses

Previous year's expenses (correct)

What is the focus of performance budgeting?

Improving resource allocation

Achieving results (correct)

Spending money

Tracking expenses

What is the decision process for performance budgets based on?

Outputs or outcomes of services Signup and view all the answers

What is the benefit of using performance budgeting?

Improving accountability Signup and view all the answers

What is typically included in a line-item budget?

Expense categories Signup and view all the answers

What is the purpose of comparing expenses from year-to-year in a line-item budget?

To create and adjust budgets Signup and view all the answers

What is the characteristic of a performance budget?

It reflects both input resources and output of services Signup and view all the answers

What is the primary goal of performance budgeting?

To allocate resources based on organizational goals Signup and view all the answers

What is the name of the budgeting system introduced in the 1960s in the USA?

Planning, Programming, and Budgeting System (PPBS) Signup and view all the answers

What is the primary purpose of Planning, Programming, and Budgeting System (PPBS)?

To provide management with a better analytical basis for making program decisions Signup and view all the answers

What is the first phase of the PPBS process?

Planning Signup and view all the answers

What is the purpose of cost-benefit and cost-effectiveness analysis in PPBS?

To analyze the possible alternative projects to achieve program objectives Signup and view all the answers

What is the primary focus of performance budgeting?

Outcomes and results achieved Signup and view all the answers

What is the last phase of the PPBS process?

Evaluation Signup and view all the answers

What is the benefit of using a functional classification in PPBS?

To classify the budget on a functional basis like functions, programs, projects, and activities Signup and view all the answers

What is the primary purpose of government budgeting?

To allocate revenues and borrowed funds Signup and view all the answers

Which of the following is NOT a phase of the budget cycle?

Budget Implementation Signup and view all the answers

What is the primary function of the Development Budget Coordination Committee (DBCC)?

To coordinate budget preparation among government agencies Signup and view all the answers

What is the purpose of Budget Accountability and Review?

All of the above Signup and view all the answers

What is the primary feature of a line-item budget?

All of the above Signup and view all the answers

What is the primary responsibility of the central budget authority during Budget Execution?

To allot appropriations to and incurrence of obligations by spending departments and agencies Signup and view all the answers

Which agency is responsible for translating approved priorities into expenditures?

The Department of Budget and Management Signup and view all the answers

What is the purpose of submitting a Physical and Financial Report of operations on a quarterly basis?

To report actual performance against plans or targets Signup and view all the answers

Study Notes

Budgeting and Performance

Cost-effectiveness, Comparability, Representative, and Accountability are key aspects of budgeting relevance.
Performance budgeting emphasizes outcomes over inputs, holding staff accountable for organizational goals through evaluation and communication of results.

Planning, Programming, and Budgeting System (PPBS)

PPBS was introduced in the USA in 1961 by Robert McNamara and was used until 1975.
It provides a better analytical basis for making program decisions and integrates planning, programming, and budget functions.
The five basic phases of PPBS are: Planning, Programming, Budgeting, Operations, and Evaluation.
Key components of PPBS include:
Specification of Objectives in quantitative terms
Systemic Analysis using cost-benefit and cost-effectiveness analysis
Functional Classification of budgets
Organization and budget formulation
Evaluation of performance based on financial and physical performances

Line-Item Budgeting

A line-item budget lists expenses and provides previous year's expenses for comparison.
Key components of a line-item budget include:
Expenses grouped by category (e.g. office materials, employee compensation)
Previous year's expenses for comparison
Present year's expenses

Performance Budgeting

Performance budgeting is a strategic method that allocates resources based on expected outcomes and performance targets.
It focuses on achieving results rather than just spending money, aiming to improve accountability and effectiveness in resource allocation.
A performance budget reflects both input resources and output of services for each unit of organization, leading to optimum utilization of resources.

Budget Cycle and Government Budgeting

The budget cycle has four major phases: Budget Preparation, Budget Legislation, Budget Execution, and Budget Accountability and Review.
Government budgeting is a critical exercise of allocating revenues and borrowed funds, entailing the management of government expenditures.
The Development Budget Coordination Committee (DBCC) is the main agency responsible for budget coordination in the Philippines.

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Test your knowledge on Planning, Programming, and Budgeting System (PPBS), an approach to achieve organizational goals by allocating resources and evaluating outcomes.