Performance-based Budgeting Research Articles

Post-Implementation challenges of the Outcome-Based budgeting model in budgetary practices: a Malaysian perspective

Purpose This study aims to explore the challenges in post-implementing the Outcome-Based Budgeting (OBB) model in budgetary practices in Malaysian Government agencies, in the context of government official’s perspective. Design/methodology/approach A qualitative methodology by collecting data from eight budget experts within federal government agencies through semi-structured interviews was used. Purposive sampling was used to select informants based on their relevant experiences and roles in the OBB model and associated budgetary processes. Data analysis involved thematic analysis using ATLAS.ti software, with member checking to enhance credibility. Findings Sustainability, innovation characteristics, organisational dynamics, individual capabilities and social context are identified as critical factors influencing the successful post-implementation of the OBB model in Malaysian federal government agencies. Organisational dynamics, encompassing policy control and Budget Review Officers role, as well as social factors, such as the presence of an OBB champion and broader buy-in, significantly impact the model’s effectiveness. These findings underscore the complex interplay of factors shaping the post-implementation phase of OBB in the Malaysian budgetary context. Research limitations/implications This study is constrained by its qualitative methodology and focus on the Federal Government of Malaysia, limiting the generalisability of findings. Future research using quantitative or mixed methods, expanded to include other government entities and comparative analysis across government levels is recommended to enhance understanding of OBB implementation challenges. Practical implications This research contributes to the existing body of knowledge on Performance-based budgeting (PBB) implementation, particularly in developing countries. By identifying critical success factors and barriers, it offers valuable insights for policymakers and practitioners seeking to improve public financial management. The study’s focus on Malaysia’s OBB experience provides timely and relevant information for addressing challenges in budgetary practices. Additionally, the research offers practical guidance for organisations navigating change management and building capacity for PBB implementation. Originality/value The study’s originality lies in its focus on the post-implementation challenges of the OBB within Malaysian Government agencies, which are largely under-studied. By using the Diffusion of Innovation theory, the study systematically investigates the interplay of sustainability, innovation characteristics, organisational dynamics, individual capabilities and social context in shaping OBB outcomes. Identifying sustainability and organisational dynamics as critical success factors contributes to the ongoing discourse on public sector budgeting reforms, particularly in developing country contexts.

Optimizing Cost Efficiency through Cost Control in Construction Projects: A Review

This study explores various methodologies and factors influencing budget performance across different sectors, particularly in construction and public budgeting. Construction projects are inherently complex and prone to cost overruns, making cost control a critical aspect of project management. This study investigates the impact of cost control on cost efficiency in construction projects. A neural network model was utilized to identify key management factors affecting project budget performance, focusing on critical aspects such as project manager experience, team turnover, and budget updates. Several monitoring techniques for cost and performance deviations, including Activity-Based Ratios, were also analyzed, revealing their varying effectiveness. In the public sector, performance-based budgeting systems were discussed, with an emphasis on integrating planning and performance metrics for more informed decision-making. Challenges in implementing such systems were highlighted, particularly regarding political and organizational barriers. In construction, various approaches were examined, including cost estimation frameworks and performance-based budgeting tools. The research underlined the importance of accurate budgeting and cost control measures in both construction projects and public administration, suggesting that strategic adjustments, better forecasting, and active stakeholder participation could improve overall budget performance. This research paper presents a comparative analysis of various process-based cost control models utilized in construction projects. The objective is to evaluate each model’s effectiveness, advantages, and limitations to provide insights for project managers in selecting the most suitable approach for their specific project needs. Key Words: Cost Efficiency, Cost Control, Construction, Projects

Public Sector Accounting: A Key to Achieving the Sustainable Development Goals (SDGs)

This study aims to explore the role of public sector accounting in supporting the achievement of the Sustainable Development Goals (SDGs) in Indonesia. Public sector accounting plays a key role in ensuring transparency, accountability, and efficiency in the sustainable management of government finances. This study employs a qualitative method with a literature review approach, examining various research and reports related to the implementation of accrual-based accounting, the Balanced Scorecard (BSC), and sustainable finance. The findings indicate that the implementation of accrual-based Government Accounting Standards (SAP) has improved the quality of local government financial reports, positively impacting public financial governance. Additionally, the use of BSC in performance-based budgeting is deemed capable of supporting the achievement of the SDGs pillars, particularly in the education, health, and economic sectors.

Performance-Based Budgeting and Corporate Innovation: Evidence from a Quasi-Natural Experiment in China

ABSTRACT This paper exploits a quasi-natural experiment to investigate the relationship between performance-based budgeting (PBB) and corporate innovation in China. The findings indicate a significant rise in patent applications and patents granted among firms headquartered in provinces that have adopted PPB. The increase is particularly pronounced for firms in provinces facing higher fiscal pressure and stronger government audits. The positive impact of PBB on corporate innovation is considerable for corporates with state-owned attributes and high financial constraints. The mechanisms of government fiscal transparency, research and development subsidies, and tax incentives are supported. Additional analyses indicate that the current PBB in China shows limitations in covering the governmental fund budget comprehensively. Moreover, in regions with increased government spending on science and technology, the influence of PBB on corporate innovation is significantly more pronounced. Collectively, the evidence implies that PBB can serve as a catalyst for corporate innovation.

Budget Transparency and Accountability in Local Government

This study aims to evaluate the effect of budget transparency and accountability on local government performance, especially in public financial management. This study uses a literature review method by analyzing articles published in the last five years related to the topic of transparency and accountability in the public sector. The results of the study indicate that transparency and accountability play an important role in improving the effectiveness of budget management and the performance of local government employees. Performance-based budgeting has been shown to increase the efficiency of public resource utilization. However, there are challenges in budget absorption, especially at the end of the budget period.

Pengaruh Partisipasi Anggaran, Sistem Pelaporan Terhadap Implementasi Akuntansi Pertanggungjawaban Dengan Komitmen Organisasi Sebagai Variabel Moderating PT. Perkebunan Nusantara IV Medan

This study aims to analyze the influence of human resource (HR) competence and the Regional Government Information System (SIPD) on the implementation of performance-based budgeting at the UPT Puskesmas of the Medan City Health Office. In addition, this study also looks at how organizational commitment moderates the influence of HR competence and SIPD on the implementation of the budget. The method used is a quantitative associative approach with a Likert Scale-based questionnaire instrument. The research sample consisted of 123 respondents including the Head of the Puskesmas, Technical Activity Implementation Officers (PPTK), and Head of Administration (KTU) from 41 UPT Puskesmas in Medan City. The analysis was carried out using the Structural Equation Modeling (SEM) method with the help of SmartPLS.3 software. The results of the study indicate that HR competence and SIPD effectiveness have a significant effect on the implementation of performance-based budgeting. Organizational commitment has also been shown to moderate this influence, strengthening the relationship between HR competence, SIPD effectiveness, and budget implementation. This finding is important for improving budget management in the health sector.

Performance-based budgeting reform and evolution of performance information quality: empirical analysis of Indonesia

Performance-based budgeting reform and evolution of performance information quality: empirical analysis of Indonesia

Pengaruh Penganggaran Berbasis Kinerja Terhadap Kenaikan Tunjangan Kinerja Bawaslu Dalam Perspektif Hukum Keuangan Negara

This research explores the impact of performance-based budgeting on the increase in the performance allowance of Indonesia's Election Supervisory Agency (Bawaslu) from the perspective of state financial law. This research examines how performance-based budgeting, which emphasises efficiency, effectiveness, and accountability, affects financial management and justifies the increase in allowances. By analysing the legal framework, empirical data, and performance metrics, this study aims to provide a comprehensive understanding of the alignment between budget allocations and performance outcomes in Bawaslu. The method used is normative research with primary, secondary and tertiary legal materials. The data generated from legal materials are described to find objective results. The results of this study The use of a performance-based budgeting system (ABK) by Bawaslu has influenced the policy of increasing performance allowances. Bawaslu's performance measurement refers to the principles of state finance, including efficiency, economic effectiveness, accountability, responsibility, professionalism, proportionality, and openness. The increase in Bawaslu's performance allowance is in accordance with the performance improvement that has been evaluated by Menpan RB, which is the institution responsible for bureaucratic reform.

Phenomenological Study and The Effect of Human Resources Capability and The Implementation of Performance-Based Budgeting (PBB) Model on Institution Performance

The purpose of this study was to analyze the phenomenological study and the effect of human resources capability and the implementation of performance based budgeting (PBB) on institution performance. This study uses mix method. The results of deep interview can concluded that the implementation of PBB at University of Ibn Khaldun Bogor had been carried out but haven’t maximal yet in implementation. The relationship between the human resources capability and the implementation of PBB with institution performance will be tested using multiple linear regression analysis. The independent variables are the human resources capability and the implementation of PBB and the dependent variable is institution performance. The relationship between variabels can be written: Y = 0,467+ 0,183 X1 + 0,798X2. Based on a multiple regression test, only the implementation of performance based budgeting variables have a significant effect on institution performance. The F test showed that all variables can explain the dependent variables. The coefficient of determination of 75,4% means human resources capability and the implementation of performance based budgeting affect institution performance by 75,4%, and the remaining 24,6% is influenced by other factors that are not described in this study.

Pengaruh Kompetensi Sumber Daya Manusia dan Efektivitas Sistem Informasi Pemerintahan Daerah terhadap Implementasi Anggaran Berbasis Kinerja dengan Komitmen Organisasi sebagai Variabel Moderating (Studi pada UPT Puskemas Dinas Kesehatan Pemerintah Kota Me

This study aims to analyze the influence of human resource (HR) competence and the Regional Government Information System (SIPD) on the implementation of performance-based budgeting at the UPT Puskesmas of the Medan City Health Office. In addition, this study also looks at how organizational commitment moderates the influence of HR competence and SIPD on the implementation of the budget. The method used is a quantitative associative approach with a Likert Scale-based questionnaire instrument. The research sample consisted of 123 respondents including the Head of the Puskesmas, Technical Activity Implementation Officers (PPTK), and Head of Administration (KTU) from 41 UPT Puskesmas in Medan City. The analysis was carried out using the Structural Equation Modeling (SEM) method with the help of SmartPLS.3 software. The results of the study indicate that HR competence and SIPD effectiveness have a significant effect on the implementation of performance-based budgeting. Organizational commitment has also been shown to moderate this influence, strengthening the relationship between HR competence, SIPD effectiveness, and budget implementation. This finding is important for improving budget management in the health sector.

Indonesian national health policy: Legal analysis of the elimination of mandatory health spending

Pusphose: The elimination of mandatory spending in Law No. 17 of 2023 on Health has sparked controversy, particularly because it contradicts the World Health Organization's recommendation that allocates 5-6% of GDP to health budgeting to facilitate better access to healthcare services. This removal also potentially violates the Indonesian Constitution, which through Article 28E, Article 28H paragraph (2), Article 28D paragraph (3), and Article 34 paragraph (3) guarantees the fulfillment of health rights for vulnerable groups. Method: This study employs a legal dogmatic research method to analyze the constitutionality of eliminating mandatory spending in Law Number 17 of 2023 on Health, as it pertains to the 1945 Constitution of the Republic of Indonesia, using John Rawls' theory of justice as a tool for legal analysis. Result: Law No. 17 of 2023 on Health has eliminated the mandatory spending provision, which previously stipulated a minimum health budget allocation of 5% from the national budget (called APBN) and 10% from the regional budgets (called APBD), as per Law No. 36 of 2009. The new law introduces performance-based budgeting, but it remains unclear how it will be implemented, especially at the regional level. The main criticism is that this potential elimination could reduce health guarantees for vulnerable groups, contradicting the principles of social justice mandated in the Indonesian Constitution. Conclusion: Although the Constitutional Court has rejected a formal review of this law, opportunities still remain for a substantive examination of the real impact of this elimination on the health access of vulnerable groups.

The Impact of Financial Report Quality and Performance-Based Budget Implementation on the Accountability Performance of Government Agencies with Accounting Control as a Moderator

This study aims to examine the influence of accounting controls in moderating the relationship between financial reporting quality, the implementation of performance-based budgeting, and performance accountability of government agencies in Local Government Work Units (SKPD) across Bogor City. The research employs a quantitative approach using Structural Equation Modeling (SEM) with PLS software and IBM Statistics SPSS 26.0. The unit of analysis consists of employees with specific criteria within the Regional Apparatus Organizations of Bogor City. The sample consisted of 144 respondents, and data collection was conducted through a questionnaire. The results of the study indicate that financial reporting quality and the implementation of performance-based budgeting have a positive impact on the performance accountability of government agencies in SKPD Bogor City. Furthermore, accounting controls positively moderate the relationship between financial reporting quality and the implementation of performance-based budgeting on the performance accountability of government agencies across SKPD in Bogor City. Keywords: accounting control, quality of financial reports, implementation of performance-based budgeting, accountability for the performance of government agencies

Performance-based budgeting or budgeting-based performance?

Performance Based Budgeting carried out in Indonesian private higher education found lots of constraints. Apart from factors of cultural work, leadership, and negative perceptions of the community academics, obstacles, and budget limitations are big challenges. This study examines field data related challenge of performance-based budgeting in Indonesian private higher education in particular linked with budget limitations. This study uses a quantitative method with an equipped open questionnaire for getting input about the implementation of performance-based budgeting that is recommended in finance management finance in Indonesian private higher education. Respondents were heads of financial management at 213 private universities in Indonesia. Statistical results show that budget limitations have a significant negative effect on performance-based budgeting in terms of performance orientation of -0.824, implementation flexibility of -0.634, and functional approach of -0.654. Furthermore, proposal optimization of performance-based budgeting with challenging Budget limitations is discussed.

Exploring Public Finance Policies: A Qualitative Inquiry into Fiscal Policy Analysis, Government Financial Management, and Public Sector Financial Health

This study explores the complexities of public finance governance, focusing on fiscal policy analysis, government financial management, and public sector financial health. Employing a qualitative research methodology, the study aims to analyze existing literature to uncover key themes, trends, and challenges in these domains. Through systematic literature review and thematic analysis, the research synthesizes insights from diverse disciplinary perspectives, including economics, public administration, and political science. Findings highlight the significance of fiscal policy as a countercyclical tool for promoting macroeconomic stability, the importance of effective financial management in ensuring transparency and accountability, and the multidimensional nature of public sector financial health. Challenges such as corruption, inadequate institutional capacity, and political interference are identified, underscoring the need for proactive measures to strengthen governance integrity. Innovative approaches, including accrual accounting standards and performance-based budgeting frameworks, offer promising solutions to enhance governance effectiveness and resilience. The study also emphasizes the role of adaptive governance strategies and agile financial management frameworks in responding to unforeseen crises while maintaining long-term fiscal sustainability. Future research directions include exploring the differential impacts of fiscal policy interventions, assessing the long-term implications of the COVID-19 pandemic, and examining the role of international cooperation in addressing global fiscal challenges.

Accountability And Transparency Analysis Of Local Government Financial Performance (Study of Regional Apparatus Organizations (OPD) in Pohuwato Regency)

Since the implementation of performance-based budgeting, all local governments have been obligated to create good financial performance of their local governments. As such, financial performance is one of the most significant topics to be studied in public sector organizations, including the government. the growing calls from public sector entities including national and local governments and government work units for the adoption of public accountability. The purpose of this study is to ascertain how accountability and transparency affect local governments' financial performance. This study employs a quantitative methodology. Purposive sampling is the method used in the sampling process. In order to collect primary data for this study, 210 respondents were given questionnaires. The study's conclusions demonstrate that: 1) Accountability has a positive and significant impact on the local government's financial performance; 2) Transparency has a positive and significant impact on financial performance; and 3) Accountability and Transparency have a significant impact on the Pohuwato Regency Regional Government's financial performance at the same time.

Education Financing Planning Strategy in the Field of Middle School Education Development, Maybrat Regency Education Office

This research aims to examine education financing planning strategies in the field of junior high school education development at the Maybrat District Education Office. This study was carried out using a bibliographic approach, which involved collecting secondary data from various relevant literature sources. The main findings of this research show that the main source of education financing in Maybrat Regency comes from the Regional Revenue and Expenditure Budget (APBD) and School Operational Assistance Funds (BOS). However, this funding allocation is often insufficient to meet school operational and development needs. In addition, some schools are trying to find alternative funding sources through collaboration with private institutions and non-governmental organizations, although these initiatives are still limited. This research also found that transparency and accountability in the management of education funds need to be improved through financial management training and the implementation of an integrated financial information system. In addition, annual budget planning carried out by schools in Maybrat Regency needs to be performance-based and more flexible in dealing with changing needs. Other challenges include limited facilities and infrastructure, as well as limited accessibility due to remote geographical conditions. Recommendations from this research include diversifying funding sources through developing partnerships with the private sector and non-governmental organizations, strengthening financial management capacity through regular training, optimizing the use of funds through performance-based budgeting, and increasing community involvement in planning and monitoring education financing. It is hoped that the implementation of these strategies can improve the quality of education and create a more conducive learning environment for students in Maybrat Regency.

Education Financing Planning Strategy at Yppk Santo Petrus Ayawasi Elementary School

This research aims to identify and formulate effective education financing planning strategies at YPPK Santo Petrus Ayawasi Elementary School through a literature review. The findings were obtained from analysis of relevant literature, which includes identification of financing needs, sources of financing, and management and use of education funds. From the results of the analysis, it was found that SD YPPK Santo Petrus Ayawasi needed infrastructure improvements, development of teaching staff, and extracurricular programs as priorities in planning education financing. Diversification of funding sources from the government, community and private sector is needed to increase school financial stability. Effective fund management through performance-based budgeting, transparency, and the use of information technology are also keys to a successful education financing planning strategy. Based on these findings, the recommendations given to SD YPPK Santo Petrus Ayawasi include conducting routine needs analysis, increasing diversification of funding sources, implementing a school management information system (SIMS), and strengthening transparency and accountability in fund management. It is hoped that these strategies can help schools optimize education financing planning and improve the quality of education provided to students.

The Influence of Transformational Leadership Style, Organizational Commitment, Reward and Punishment on Performance-Based Budgeting: Empirical Study at Public Broadcasting Institutions in Jambi City

The Influence of Transformational Leadership Style, Organizational Commitment, Reward and Punishment on Performance-Based Budgeting: Empirical Study at Public Broadcasting Institutions in Jambi City

Leadership and Rewards Drive Performance-Based Budgeting in Indonesia

This research investigates the impact of organizational commitment, human resource quality, leadership style, and rewards on performance-based budgeting in Sidoarjo Regency's local government agencies. Using a quantitative approach and surveying 100 employees, data were collected via closed questionnaires and analyzed using SPSS Statistics software version 26. Results show that while organizational commitment has an insignificant impact, leadership style and rewards significantly influence performance-based budgeting, and human resource quality has no effect. These findings highlight the importance of effective leadership and reward systems in enhancing budget implementation. Limitations include a restricted sample size, suggesting further research with broader scope and additional variables. Highlight: Leadership Impact: Leadership style significantly affects performance-based budgeting implementation. Rewards Role: Rewards enhance employees' performance and budget implementation. Human Resources: Quality of human resources does not impact budget implementation. Keywoard: Organizational Commitment, Human Resource Quality, Leadership Style, Rewards, Performance-Based Budgeting

Impact Analysis of the Influence of Institutional Capacity and the Use of Performance-Based Budgeting on Original Regional Revenue Receipts in the Tanggerang Regency Area

This study aims to analyze the impact of institutional capacity and the use of performance-based budgeting on local revenue (PAD) in the Tangerang Regency area. This research uses a quantitative descriptive analysis method using secondary data obtained from various trusted sources. This research identifies institutional capacity, which includes aspects of human resources, institutional systems, and managerial capacity, and analyzes the implementation of performance-based budgeting to increase PAD revenues. The results of the analysis show that strong institutional capacity significantly contributes to increasing PAD revenues. Apart from that, the use of performance-based budgeting has also been proven to have a positive impact on PAD revenues. The implication of this research is the importance of increasing institutional capacity and implementing performance-based budgeting effectively as a strategy to increase PAD revenues in Tangerang Regency. This study makes an important contribution in the context of regional financial development and public financial management, as well as providing a basis for more effective policymaking in increasing regional income.