What type of budget is designed to control and measure outcomes?

A performance budget is specifically designed to link resource allocation to the outcomes or results of programs and activities. This type of budget focuses on measuring the efficiency and effectiveness of services provided, making it particularly useful for organizations like fire services that require accountability and transparency in their spending.

By using performance budgets, managers can assess how well various programs achieve their intended goals. This form of budgeting not only tracks financial expenditures but also evaluates the impact of those expenditures on service delivery. For instance, in the fire service, this could involve analyzing response times, numbers of incidents managed, or community safety statistics relative to the budget allocated for training and equipment.

The other types of budgets, while useful in their own contexts, do not primarily focus on measuring outcomes in the same way. Incremental budgets make adjustments based on previous years' budgets without necessarily linking costs to specific performance outcomes. Program budgets center around funding specific programs but may not ensure performance measurement is the focal point. Traditional budgets tend to be more static and generic, focusing mainly on the financial aspects rather than on assessing efficiency and effectiveness.