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Guide to Cascade™ Performance BudgetingCascade™ Performance Budgeting is a system for integrating budget and performance information down through all levels of a department or agency. It does this by linking day-to-day programs activities and their costs to the long-term outcome goals of the entire organization. The Cascade™ system and the accompanying how-to Guide were developed by John Mercer, an independent performance management consultant, often called “the Father of GPRA” for having proposed and developed of the Government Performance and Results Act. Described in the press as “considered by many a foremost expert in performance-based budgeting,” he has been implementing and championing governmental performance budgeting for over 20 years. Click the following link to download the step-by-step Guide to Cascade™ Performance Budgeting:
The Cascade™ approach to Performance BudgetingThis 33-page guide includes 24 tables and charts illustrating a step-by-step approach to performance budgeting. It describes how performance budgeting supports effective performance management by bringing real transparency to federal agency operations. The process starts with the outcome goals that agencies are integrating into their budgets through budget account realignment, as instructed by OMB. It then drives supporting output and other measures down through the entire organization in a series of interconnected performance budgets, until they reach the front-line managers. The system is then linked to the type of day-to-day operations that managers supervise. The significance of this is that the unit costs of day-to-day program activities are linked to the long-term outcome goals of the department or agency. This is is what agencies will need to do if they are serious about implementing real performance management systems. It is also entirely consistent with the requirement that agencies implement Managerial Cost Accounting systems, such as Activity-Based Costing. Performance Budgeting and Pay-for-PerformanceA significant benefit of performance budgeting as illustrated in the Guide is its potential impact on reforms relating to governmental pay-for-performance. Existing performance measurement systems may not provide a sufficient basis for fairly linking to managerial compensation. Performance budgeting can provide a fair and rationale basis for evaluating a major portion of managerial performance, but the budgets have ultimately to be linked to day-to-day management of program activities. This is the approach taken in the Cascade™ system. An important aspect is identifying the activities managers supervise, and then linking to these activities their full costs. This provides a basis for defining and measuring effective management – get the right results, and look for ways to reduce the unit costs of those results at the same time. The managers out in the field and on the front lines of delivering services are the ones who will determine whether the entire enterprise is successful or not in achieving its outcome goals. For this reason, it is important that these managers have their own responsibilities linked directly to the agency’s plans and budgets. Cascade™ Performance Budgeting does this. Performance Budgeting assistanceJohn Mercer would be pleased to provide expert assistance in performance budgeting to your agency, whether it is federal, state, local, or a foreign government. Feel free to contact him to discuss possible consulting services. |
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