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Questions Addressed by Results-Based Budgeting
1. Where are we now?
2. Where do we want to be?
3. How do we get there?
4. How do we measure our progress?

Background on Results-Based Budgeting

Results-based budgeting (RBB) was introduced during the development of the FY2007-09 budget to encourage more efficient and effective government. It will solidify a budget process that emphasizes performance and accountability.

In preparation of the FY2007-09 budget, state agencies completed the initial phase of North Carolina’s results-based budgeting initiative by outlining the following:

  • Why an agency exists, through the development of a mission statement;
  • What an agency wants to achieve, through the development of goal statements;
  • Why agency programs exist, through the development of fund purpose statements;
  • What activities are performed, through the development of service statements;
  • How many resources are devoted to an activity, through the development of service analyses; and
  • How well agencies are performing their work, through the development of performance measures.

The initial RBB elements provided practical information that led to more informed decision-making. Stakeholders were able to easily understand the purpose behind an agency, the specific work that is performed, and the current resources dedicated to each service. Performance measures started to provide an assessment of program effectiveness.

Next Steps for RBB

The next phase of RBB challenges agencies to bring goals, strategies, and budgets into alignment to shift resources from past patterns to future priorities. Each agency will assess its current goals and operations and ensure its future direction is transparent, explicit, and corresponds to its mission and outcomes by addressing the following questions:

1. Where are we now?
2. Where do we want to be?
3. How do we get there?
4. How do we measure our progress?

These questions prompt agencies to document the current environment, develop what they wish to achieve, and, most critically, determine how to achieve it. Agencies also will re-evaluate performance measures to strengthen monitoring and accountability. This phase’s new elements require agencies to adopt a forward-looking approach that focuses on concrete strategies for realizing goals and desired outcomes. By answering these questions, an agency will be able to identify its most critical work and how it will be completed. As a result, it will be able to make more informed and justified budget decisions.