ABSTRACT
This chapter discusses the specific challenges that budget decision makers and financial managers must keep in mind when they implement performance-based budgeting (PBB) systems. Scholars and practitioners have contended that PBB might not be easily applied to governmental budgets when they are too complex and heavily driven by political influence from interest groups and partisan politics. When governmental budgets are complex and driven by political influence, budget decision makers cannot apply PBB to budget processes. PBB can be applied to local government programs or single-agency programs, such as regional nonprofit or health-care organizations. The Substance Abuse and Mental Health Services Administration (SAMHSA) implemented PBB systems. Some states have used zero-based budgeting (ZBB) and have opted for PBB instead of pursuing ZBB. Faced by the 2008, financial market crisis and state revenue shortage, the Utah state government adopted PBB systems. The Utah Department of Human Services received low performance evaluation scores, but the governor proposed increasing its budget on the grounds.
