Basic Report

The purpose of this study is to review practices of program budgeting and suggestpolicy proposals for its successful settlement. Local governments in Korea changedtheir budget system from line-item to program budgeting in 2008 as a process offinancial reform.In fact, the current program budgeting is at an early stage, so it doesn't meet theobjective of introducing a new budget system. In other words the current programbudgeting is not designed to be linked with consolidated performance managementsystem, so new budget system does not provide appropriate performance informationon the governmental programs.Therefore the study covers the general and broad perspectives of programbudgeting, mainly focusing on suggesting policy recommendations required in asuccessful settlement of new budget system.The composition of this study is as follows: the chapter 2 overviews thetheoretical background such as concept, type, and basic structure of programbudgeting and foreign cases including U.S.A., U.K., Australia and Japan, and thechapter 3 examines the reality and the problems of the current program budgeting inlocal government.Then, based on the analytical results of the current program budgeting system, thechapter 4 suggests some policy proposals: (ⅰ) programs should be systematicallyclassified to be more consistent with the mid-term policy, (ⅱ) program budgetingneeds to be linked with performance management and performance indicator shouldbe developed by function/category of public services(programs), (ⅲ) the calculationof total cost of public services(programs) is gradually required for the purpose ofmeasuring the performance of program in new budget system.