Public Sector Budgeting Techniques: A Comprehensive Analysis

Budgeting Techniques in the Public Sector

The need to rationalize public expenditure has driven the sophistication of budgeting techniques in industrialized countries, which have evolved significantly over time.

1. The Administrative Budget

The starting point of all budgeting techniques is the administrative budget, often referred to as the classic budgetary ideology. It consists of assigning the necessary resources to each administrative body for its operation.

• Objective: Administrative control of government.
• Legal Purpose: It serves as an instrument to ensure that resources available to the executive are not used for amounts or purposes other than those approved by the legislature.

2. The Functional Budget

The functional budget incorporates an administrative classification of expenditure based on the roles played by the state, regardless of the specific administrative body involved. This structure allows for a clear understanding of which sectors and functions are allocated public funds.

3. The Budget Execution

Due to functional deficiencies in previous models, a new system based on functions, activities, and projects emerged in the USA after World War II. This technique requires:

1. Each administrative unit to define its objectives through a classification of functions, activities, and tasks.
2. The adoption of an accounting system to quantify the costs of these activities (analytical or cost accounting).

4. The Program Budget

This system integrates the budgeting process with the planning of state economic activity by selecting alternative programs designed to target specific audiences.

5. Zero-Based Budgeting

The zero-based budgeting technique is similar to the program budget but emphasizes more selective planning. It requires each center manager to periodically justify all aspects of their budget, even considering the potential elimination of programs. While difficult to implement, it can be highly beneficial when applied to specific services or activities. Notably, there are few references to its application within the Spanish public sector.