Performance Management in Public Budgeting and Accountability

Introduction

Over the last several years, there has been a growing emphasis on developing strategies tied directly to public performance management. Part of the reason for this is that information has surfaced highlighting the tremendous amounts of waste occurring at the governmental level in comparison with the private sector. Evidence of this can be seen in a report conducted by the Congressional Budget Office (CBO), which found that the U.S. government wastes conservatively between $150 billion and $200 billion every single year (Schieneder, 2002, p. 59). This is troubling because, despite a host of different efforts to control unnecessary spending, the reality is that waste continues to rise at an alarming rate.

As a result, a variety of programs have been introduced to help more effectively focus governmental resources where they are needed most. At the same time, these efforts concentrate on increasing accountability through what is known as performance management — programs designed to provide administrators with effective tools for controlling funds and determining where they are allocated. To evaluate the usefulness of these programs, this paper examines a number of pieces of literature on the subject, offering specific insights about how performance management is helping or hurting the way various levels of government provide services.

Effects of Performance Management on Governmental Accountability

Performance-based management programs are utilized by nearly every level of government, though their track record is somewhat mixed depending on how the tool is applied and the overall scope of its use. As far as successes are concerned, performance management has proven effective at addressing certain issues within different levels of government. Evidence of this can be seen in research collected by Forrester (1997), who found that performance management programs improve accountability by clarifying how various resources are being used and tracking where funds are being spent. Part of the reason for this success is that performance management creates a change in behavior and in the organizational culture of most governments. This helps improve accountability and the way various services are provided to the general public. Administrators gain more effective control in determining which projects are most in need of assistance, and over time these entities become more responsive to the public and better able to avoid the waste often associated with governmental programs (Forrester, 1997, pp. 466–484). This is significant because it demonstrates how performance management can shift attitudes and change the way government employees conduct their work, leading to greater accountability and more careful use of resources.

However, other research indicates that performance management is not a comprehensive solution to addressing the various needs of the general public. The system has been used unevenly across different levels of government: some embrace it fully to improve service delivery, while others address specific issues without implementing any formal performance management procedures. The result is a spotty track record among various administrators.

The Problem of Partial Implementation

Evidence of this inconsistency can be found in a study conducted by Melkers (2005), who examined 300 local governments and found a significant disparity in how performance management tools were being utilized. Many local municipalities were less enthusiastic about performance measures, while various county governments found the tool effective in helping them control their budgets. This occurred because when a performance management system is implemented in half measures — as was common in many cities — it does not produce the desired results or change the operating environment. But when it is completely integrated into the budgetary process, it improves communication and the way various departments work together, ultimately improving how resources are utilized to address organizational objectives (Melkers, 2005, pp. 180–189). This study is important because it shows that performance management is not a universal fix for the challenges facing municipal governments. Instead, an approach must be taken that carefully examines how the system will be embedded in governmental culture and how it will be used to tackle specific problems.

Moreover, other research indicates that all levels of government face similar problems when performance management systems are not effectively integrated. Without full integration, various half measures fail to confront the internal culture of government agencies or the levels of bureaucracy that have become entrenched. This is problematic because it creates an appearance of addressing wasteful spending while leaving no real change in the budgetary process or how underlying issues are confronted.

Conclusion

Performance management systems are both helping and hurting the way various levels of government deliver services. The outcome depends largely on how comprehensively this protocol is utilized by a particular government. Those entities that fully implement this approach in every aspect of their budgetary process are able to improve accountability, service delivery, communication, and how effectively they reach organizational objectives. This highlights performance management as a genuinely effective tool that allows governments to address citizens' needs in a cost-effective manner.

However, the use of performance management systems can also serve as a hindrance when various provisions are adopted only in half measures. In those cases, governments claim to be addressing the needs of the public by introducing the system, yet underneath the surface nothing meaningfully improves. The program provides only partial information and affects only select aspects of the budgetary process, rendering it ineffective in controlling costs, changing the operating environment, or improving communication. Over time, this has an adverse impact on the types of services delivered to the general public.

Therefore, the most effective way to use performance management systems is to adopt a comprehensive program in which every aspect of government utilizes these tools on a regular basis. If this approach is taken, governments will be better equipped to deal with a host of challenges while also controlling the waste surrounding service delivery.

Bibliography

Forrester, J. (1997). Budgetary reform through organizational learning. Administration and Society, 28(4), 466–484.

Heinrich, C. (1999). Do government bureaucrats make effective use of performance management systems? Journal of Public Administration, 9(3), 363–378.

Joyce, P. (2003). Linking performance and budgeting. George Washington University, 4–47.

Melkers, J. (2005). Models of performance measurement. Public Administration Review, 65(2), 180–189.

Schieneder, J. (2002). Campaign finance reform. Routledge.