한국지방행정연구원

Basic Report

Year
2015
Author
Sung-Il Lim , Hyo Lee

Strengthening the Linkage between Performance Management and the Program Budgeting

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The current Program Budgeting was introduced in 2008 for the purpose of performance management on various budget expenditures, particularly focusing on program and activity levels. Nevertheless, in reality, the budget system did not work as was intended. The central government recently revised the Local Finance Act to require all local governments should submit budget performance planning and results reports to local councils, beginning from fiscal year 2016. However, there arise questions on the effectiveness of the government measure considering the poor preparation status for the performance management infrastructure of local governments.Recognizing the problems, this study develops an analytical framework and criteria based on the theory of performance-based budgeting, and applied them to selected local governments and a specific expenditure item(infants care supporting expenditure). Some problems and policy implications drawn from the results of the analysis are: low level linkage between performance planning system and program budgeting, a lack of infrastructure for performance management in the Program Budgeting of local government, a lack of linkages between budget level of activities and programs in terms of performance objectives and performance indicators, and lacks of principles in selecting performance indicators (objectivity problem).Therefore, to operate as a performance based budget, current Program Budgeting needs to be keenly linked with the current performance management system mainly designed for the organizational element of local governments. Or it should develop its own performance management infrastructure separated from the current performance management system. The study proposes ways of developing the current Program Budgeting into de facto performance-based budgeting in two different approaches.