Budgeting for outcomes: improving on a best practice.

• Author: Mucha, Michael J.
• Position: [PM.sup.2] CONNECTIONS: PERFORMANCE MEASUREMENT & MANAGEMENT

Over the past 10 years, many governments have turned to budgeting for outcomes as a way to create sustainable budgets that fund programs and services aligned with their communities' long-term needs, regardless of the revenues available. BFO is a performance budgeting process that is based on identifying priorities that reflect the results that citizens want, and then developing strategies and funding programs and services aimed at accomplishing those priorities. Proposed programs and services are prioritized and ranked and funded within each major, high-level priority based on their prospects for achieving desired results. All governments that use BFO implement essentially the same core elements, but each organization implements slight (or in some cases significant) variations in the standard format, and these variations have led to different process outcomes. The GFOA and the City of Baltimore, Maryland, recently assembled a group of practitioners to discuss their experiences with BFO.

CONSIDERING IMPROVEMENTS

In October 2012, the GFOA and the City of Baltimore hosted BFO 2.0, a forum designed for experienced BFO practitioners to discuss their experiences, lessons learned, and implementation stories. The goal of the event was to discuss strategies and ideas for building upon the basic BFO process, since a clear trend in the GFOA's BFO research is that governments make improvements with each successive BFO cycle, based on they have learned from experience. Approximately 45 people attended the event, representing organizations from across the United States that are known for their BFO processes, including the City of Fort Collins, Colorado; the City of Redmond, Washington; and Mesa County, Colorado. Below are some of the improvements participants saw as key to "future versions" of BFO, to get the most out of the process and to encourage other governments to use it.

Merging BFO with Overall Performance Management Efforts.

Budgeting for outcomes is a part of a larger performance management approach. To use it effectively as a tool that encourages overall accountability, efficiency, and improvement, organizations need to use other tools such as performance measurement, process improvement, and program evaluation. For example, to decide the degree to which a stated priority has been achieved, organizations need performance measures to evaluate results, both at the program level and the community level. Process improvement strategies such as Lean...