Zero-base Budgeting Research Articles

State resource allocation and budget formats: towards a hybrid model

This article evaluates quantitatively the impact of four common budget approaches on disaggregated United States state spending data in the 1990s. Pooled time series cross sectional data of the 50 states is used to test the impact of incremental, program, zero-based, and performance-based budgeting on the dependent variables state total and functional expenditures. The results demonstrated that there was support for all of these approaches in terms of their impact on state budget outputs. These findings imply that budget decision-making should focus more on a system-wide approach, which takes into account many of the characteristics of these rival models, rather than exclusively focusing on each one singly. A possible suggestion is a hybrid form of budgeting, which is a combination of incremental and rational approaches.

Zero-Base Budgeting: Employees Perceptions and Attitudes in Brunei Public Sector Organizations

Zero-Base Budgeting: Employees Perceptions and Attitudes in Brunei Public Sector Organizations

Zero-based budgeting in china: experiences of Hubei province

Sometimes regarded as the best method of prioritizing budgetary expenditures, Zero-Based Budgeting (ZBB) was introduced into China in the early 1990s and systematically adopted since the recent budgeting reform although it has experienced numerous failures in many countries. This study examines ZBB as practiced in Hubei province in China. In Hubei, although the reformers are intended to create ZBB as a general budgeting framework, eventually, it was a Chinese style Target-Based Budgeting (TBB) rather than ZBB that has been put into place. Interestingly, ZBB has not disappeared but is deliberately applied to budgetary decisions of one type of expenditures under the Chinese style TBB. However, even in the field where ZBB is practiced, its achievements are at best moderate. The Chinese experiment of ZBB presents something new not only for the theory of ZBB but also for the budgeting literature.

A response to “zero-based budgeting in China: experiences of hubei province”

A response to “zero-based budgeting in China: experiences of hubei province”

What Do We Talk About When We Talk About Performance? Dialogue Theory and Performance Budgeting

This article examines the Program Assessment Rating Tool (PART) in the federal budgeting process. The early evidence on PART prompts the search for a theory of budgeting that accepts that performance information will influence decisions but will not be used in the same way from decision to decision, as the espoused theory of performance budgeting suggests. Dialogue theory emphasizes the ambiguity of performance information and related resource allocation choices. An exploratory test of dialogue theory is undertaken through an experiment involving graduate students assessing PART evaluations. The results illustrate a variety of ways in which different individuals can examine the same program and, using logical warrants, come to different conclusions about performance and future funding requirements. INTRODUCTION: THE RETURN OF PERFORMANCE BUDGETING The President’s Management Agenda (PMA) of 2001 heralded the most recent effort to introduce performance budgeting to the federal government, based on the seemingly indisputable premise that ‘‘everyone agrees that scarce federal resources should be allocated to programs . . . that deliver results’’ (Office of Management and Budget [OMB] 2001, 27). The PMA called for the integration of financial and performance information by increasing the quality and range of data available to decision makers, assuming that greater technical and allocative efficiency would result (OMB 2001, 21). These basic propositions are shared with the Government Performance and Results Act (GPRA) of 1993 and other previous efforts to introduce some form of performance budgeting at the federal level (such as Program Planning Budgeting Systems under President Lyndon B. Johnson, Management by Objectives under President Richard Nixon, Zero-Based Budgeting under President Jimmy Carter) and, more recently, at the state level (Melkers and Willoughby 1998). But GPRA has failed to create a strong linkage between performance information and decision making (General Accounting Office [GAO] 2004a; Radin 2000). The PMA notes that ‘‘after eight years of experience, progress toward the use Address correspondence to the author at dmoynihan@lafollette.wisc.edu. doi:10.1093/jopart/muj003 Advance Access publication on December 9, 2005 a The Author 2005. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org. JPART 16:151–168

CSCA presidential reflection: Our stories... our legacy

IMPORTANCE OF STORIES We are the stories we tell. As Walter Fisher (1989) suggests, we humans are storytellers. We make sense of others and ourselves through story. A key concept in Fisher's narrative approach is the concept of narrative itself. Often we think of narrative as simply a story. This is a mistake, for as Fisher indicates, When I use the term 'narration,' I do not mean a fictive composition whose propositions may be true or false and have no necessary relationship to the message of that composition. By 'narration,' I mean symbolic actions--words and/or deeds--that have sequence and meaning for those who live, create, or interpret (1987, 58). Or put another way, there is no genre, including technical communication, that is not an episode in the story of life (1985, 347). Thus, for Fisher, all communication is narrative. Narrative is not a specific genre (for example, stories as opposed to poems), but rather, a mode of influence. Thus, listening to a class lecture, talking with your friends, listening to a political speech or the evening news, reading a book--all consist of your hearing and shaping narratives. In Fisher's thinking, story is imbued in all human communication endeavors, even those involving logic. All arguments include that cannot be verified or proved in any absolute way. Such ideas arise in metaphor, values, gestures, and so (1987, p.19). In short, Fisher attempts to bridge the divide we often have between logos (rational argument) and mythos (story, or narration). Because of my belief in the power of story, I chose the theme, Our Stories ... Our Legacy for the 2002 CSCA convention in Milwaukee. Stories are inevitable. What are the stories we tell? Some of us tell generally positive stories; others, somewhat negative ones. Whichever type we tell, these stories shape our perceptions of our lives. So too, our professional organizations. The quality of our professional organizations is influenced by the nature of the stories we tell. How was the convention? my colleagues ask when I return to campus. For the convention, I created a timeline on which I placed stories of CSCA members. In this reflection, I want to share with you those stories, and then suggest the legacy I believe they create for CSCA. The stories are just as I received them. I have done no editing-after all, these are not my stories, but those of others. We each tell our own story in our own way. The stories follow, as close as possible, a timeline from the beginning of CSCA to the present day. THE STORIES At the 1937 convention in Wisconsin those present were so discouraged that they almost decided to abandon what we now call CSCA. I had not gone to Madison as I expected it to be knocked in the head and did not especially want to attend the funeral. Then came a telegram asking if I would serve as Executive Secretary. I thought the honor was less than overwhelming, but agreed to serve. The association was dead broke. I called a meeting of all the speech teachers in Columbia, elementary, high school, college, university, totaling 30, and we decided to hold a bang-up convention right here in Columbia, Missouri. We had no funds but told everybody to spend what was needed and present the bill in April. The printing bill was enormous, nearly $200 for the 8-page programs. We planned the program and invited top people. Most of them did not even know where Columbia was. Little airline service those days, everybody came by car or train. 80 people participated in the program. 300 people were present, each paying a $1.25 convention fee, which was enough to meet our bills. We ended the year as we began, with a zero-based budget. But the Association was now in full health, meeting in 1939 in Minneapolis with 390 delegates. That was my first CSCA convention. Names? Andrew Weaver, Ralph Dennis, Alan Monroe, C.T. Simon, Bower Aly, Wilber Gilman, A. Craig Baird, Gladys Borchers, W. …

Accounting research and researchers of the nineteenth century and the beginning of the twentieth century: an international survey of authors, ideas and publications

At the beginning of the nineteenth century the former glory of Italian accounting was overshadowed by its decline during the eighteenth century, and literature from France, England, Germany, America and other countries took centre-stage. ‘Theories of accounts’ (rather than ‘accounting theories’) dominated not merely the early but also the later part of this century when Italian accounting had regained a prominent position beside other countries. The relation of those theories to the ‘charts of accounts’-which later became so prominent in Continental Europe is historically important. The controversies over personalistic versus materialistic accounts and that between entity versus proprietary theories, as well as the emergence of other theories are discussed with reference to individual authors. Diverse topics from railroad accounting and auditing to various aspects of cost accounting are investigated. Particularly important are the pioneering efforts of this period that anticipated further developments. These manifested themselves in the following ideas: entity theory, flow of funds statement, matrix accounting, different aspects of valuation, allocation and depreciation, price-level adjustments and indexation, current values, exit values, residual income valuation, managerial control, the emergence of competing accounting (and Bilanz) theories, the separation of fixed from variable costs, fixed and flexible budgeting, zero-based budgeting, PERT, transfer prices, break-even charts, variance analysis, job-order costing, labour and machine hour rates, standard costing, price determination, integrating financial and cost accounting, clean surplus theory, agricultural accounting, holding gains, and other topics. Appendix A offers an overview of Nineteenth century scholars concerned with accounting history (together with one representative work of each), and Appendix B lists the nationally (and often internationally) prominent names of accounting authors born in the nineteenth century but also or exclusively active during the twentieth century. The paper integrates approximately 400 publications of which less than half are of the English tongue.

The long view: lasting (and fleeting) reforms in public budgeting in the twentieth century

The knowledge base in public budgeting has certainly grown during the twentieth century, but the most enduring features of public budgeting were developed or documented in the first half of the century. The line item budget is still the dominant format in government budgeting; incremental adjustment to the previous year’s allocation is still the dominant budget process. Later developments in public budgeting, like planning-programming-budgeting system (PPBS), management by objective (MBO), zero-based budgeting (ZBB), and performance budgeting have had very little enduring impact on the practice of budgeting, largely because they reflected presidential attitudes about the role of government in society rather than theoretical advances in budgeting.

Asset management: remedy for addressing the fiscal challenges facing highway infrastructure

Abstract In recent years, increasing claims have been advanced for asset management as a promising new approach to infrastructure management. If these claims are seen in the light of past management fads, such as zero-based-budgeting (ZBB), management-by-objectives (MBO), total quality management (TQM), and business process reengineering (BPR), asset management may be considered the latest in a long line of management fads being marketed by consultants to transportation agency managers. However, asset management can be an effective response to the fiscal challenges confronting the United States' highway infrastructure. This paper explores asset management in light of recent developments in the funding, condition, documentation, and management of the US highway infrastructure. The paper begins with a discussion of capital biases associated with traditional US federal highway funding programs. It then describes the advent of innovative financing approaches that have evolved in response to the inability of the Federal Highway Trust Fund to meet burgeoning highway renewal and replacement needs, caused in part by widespread deferred maintenance of the highway system. The paper suggests that public sources of funding for the highway system will not be adequate to renovate or replace current highways and build new capacity. Closing the expected shortfall in public highway funding will require sustained infusions of private sector funding. However, the financing of highways through public–private partnerships will require state and local transportation agencies to radically change the ways in which the highway infrastructure is managed. Within the context of gradual changes in highway management and financing, the paper suggests a critical role for asset management – in demonstrating prudent stewardship of highway infrastructure and facilitating private sector confidence in highway investments. The paper examines the implications for innovative highway financing resulting from recent developments in asset management: • further devolution of highway program and funding responsibilities to state and local levels of government; • developments in asset management processes and practices; and • the infrastructure reporting requirements recently developed by the Governmental Accounting Standards Board (GASB). The infrastructure reporting requirements of GASB's Statement No. 34 are intended to increase accountability for publicly owned infrastructure and promote improved management of long-lasting capital assets. GASB 34 also provides a basis for enabling public agencies to finance implementation of asset management techniques and renewal of infrastructure assets through securitization. Covenants associated with securitized highway bonds would provide the fiscal discipline needed to ensure that responsible agencies abide by the terms of the bond agreements – thereby assuring preventive asset maintenance and freeing up resources for debt service payments. Shadow tolling provides a useful mechanism for generating a positive revenue stream to support securitized highway bonds. The paper concludes that asset management is a proven and essential process for helping the US rebuild and expand its highway infrastructure.

Developments: Just How New Is Best Value?

This article compares Best Value, the performance measurement framework presently being introduced in local government in the UK, with Planning and Programming Budgeting Systems (PPBS) and Zero Base Budgeting (ZBB). PPBS and ZBB are resource allocation techniques which became popular in the 1960s and 1970s, but later declined in popularity. It appears that there is much of PPBS and ZBB in the Best Value framework. There may be a lot to learn from the past, and many issues to be addressed, if Best Value is not to suffer the same fate as PPBS and ZBB.

Redirection in Georgia

The budgeting reform literature is replete with examples of reforms such as performance budgeting, program budgeting, and zero-base budgeting that have failed to achieve their stated goals. This article analyzes a new budgetary reform that has been introduced in the state of Georgia, which appears to be accomplishing what its proponents have pronounced. This reform is known as redirection. The article defines redirection, explains how it works, and shows that redirection has enabled budget actors to reset budgetary priorities and reduce agency acquisitiveness, at least in its first 2 years in operation.

Some aspects of the usefulness of living systems theory in a municipal organization

This article is mainly based on articles in international professional journals forming the author's dissertation paper entitled ‘Informatics and Systems Science Applications for Analysis and Structural Improvement of a Municipal Organization’. The article may be seen as an attempt to relate certain concepts of LST (living systems theory) to the activities of a municipal organization mainly represented by the capital of Sweden. This article deals partly with concepts of indicators of fulfilment of an activity's desired outcome according to its main purpose and the difference between these concepts with consideration of a municipal organization. However, a most important part of the article is devoted to giving an example of the implementation of the critical subsystems in a restructuring and planning process where zero-base budgeting together with breakthrough thinking have vital roles to play. Thus, through a coupling of the principles of the critical subsystems to the principles of zero-base budgeting and using breakthrough thinking it could be possible to achieve an effective investigation of a municipal organization and its problems. The article also deals with certain paradigmic influences in society which also can influence a municipality. Copyright © 1999 John Wiley & Sons, Ltd.

The New Public Management: How to Transform a Theme into a Legacy

Two Parables A traveler returns from a three-day stopover in India and entertains his friends with stories he heard there. Aha! cries one of them, a publisher. Your stories will make a fine book. was there only three days, the traveler protests. It doesn't matter! asserts the publisher. Readers won't care. That may be, says the traveler? but the book's title must clearly indicate that I spent only three days in India. Of course! agrees the publisher. When the book appears, it is duly titled India: Yesterday, Today, and Tomorrow. A traveler to the United Kingdom, Australia, and New Zealand returns to his public administration colleagues with stories of far-reaching administrative reforms he has heard about in these countries: Next Steps, managerialism, whole of government reform driven by economic theory. Aha! an entrepreneurial colleague cries. Very interesting! Let's publish your stories. But, it's only three countries, and it's only neo-Thatcherism, and it's too soon, and ... the traveler protests. Nonsense, the entrepreneur scholar replies. Readers won't care. scrupulous traveler nonetheless insists: The title must clearly indicate that these reforms are unproven. Certainly! says the colleague. In due course, the traveler's stories begin to circulate as The New Public Management. claim that a neo-economic New Public Management, or NPM, has been inexorably replacing bureaucracy with virtual markets around the world has, from its first appearance, seemed tenuous to many students of public administration.(1) At an International Public Management Network workshop in June 1997, participants noted that the New Public Management begs many questions, such as: do we mean by new? do we mean by public? do we mean by management? And, above all, What is actually happening--what specific changes are being implemented--and why? How are they related? How are they different? Such ambiguities are reason enough for the term's popularity, especially among academics. Advocates for the New Public Management--those with answers--and public management scholars--those with questions--can both advance their agendas through associating with an alleged worldwide movement whose sweep and drama they can promise to promote or clarify. Despite being nominated to paradigm-hood by admirers, the New Public Management is an ephemeral theme likely to fade for several reasons: (1) the initial shape of the Westminster reforms that inspired the term will eventually be disfigured in the course of political succession, and partisans and scholars alike will see opportunity in proclaiming the metamorphosis or death of the New Public Management; (2) as comparative work across countries and sectors accumulates, fundamental differences among reforms will begin to eclipse superficial similarities; (3) the term new will be viewed as an inconvenient adjective for emerging forms or objects of inquiry; and (4) political debate will require a fresh theme to attract attention to and support for the next wave of ideas for administrative reform. Most of us could write the New Public Management's post mortem now. temporary excitement surrounding the New Public Management creates an opportunity worth exploiting, however, and I shall attempt to do so in this article. movement has created an opening for further intellectual development of the field, at least for those prescient enough to avoid crawling incautiously out on the same limbs where the remains of Brownlow Commission, Hoover Commissions, Planning-Programming-Budgeting System (PPBS), Zero Base Budgeting (ZBB), Management by Objectives (MBO), Total Quality Management (TQM) (and, soon, Reinventing Government, or REGO) enthusiasts decompose in the wind. For those who position themselves between the tree and the saw, the New Public Management will leave behind a toothy grin, as have its predecessor reforms. …

Bureaucracy and Democracy: The Case for More Bureaucracy and Less Democracy

It hasn't been my aim to tell people what to think...I have tried, rather, to tell them how to think -- specifically, of course, about public administration. The United States is facing a serious problem with the interface between its bureaucracy and its electoral institutions.(1) Politicians often run for office by campaigning against the bureaucracy. The current antibureaucratic buzzword government, replaced the cost-benefit analysis of the Reagan/Bush administrative presidency (Durant, 1992), which replaced Carter's civil service reform and reorganization. Zero-base budgeting, management by objectives, program planning budgeting systems, civil service reform, and reinventing government are all efforts to convince us that bureaucracy is the problem with governance in the United States.(2) If we could just somehow get bureaucracy under control, we could balance the budget, eliminate poverty, reinvigorate the education system, and cure male pattern baldness. Missing in the political debates is any serious assessment of bureaucracy, its performance, its pathologies, or its promise.(3) In comparison to other industrialized democracies, however, the United States bureaucracy appears to be much smaller and leaner (Rose, 1985). It relies more on the private sector to deliver goods and services. It is composed of technocrats rather than administrative elites. And, I will argue that it is both reasonably effective and at the same time highly responsive to legitimate political demands. The problems in American government, in my view, are not problems of bureaucracy but problems of governance.(4) In contrast to what is adequate (some might even argue excellent) performance by the bureaucracy (Goodsell, 1983), the performance by our electoral institutions has been dismal. As an illustration, Congress and the president have been engaged in a futile 25-year battle to balance the budget. Tilting at economically forecasted windmills, different Congresses and different presidents have agreed to balance the budget (Gramm-Rudman); have acquiesced in deficits nearing three hundred billion dollars; have perpetrated the myth that one can balance the budget without either raising taxes or cutting spending;, have on numerous occasions shut down the federal government; but have accomplished little more than to make Alan Greenspan's job more difficult. As the electoral institutions have eliminated the feasibility of sensible fiscal policy, a bureaucracy (the Federal Reserve) has compensated. In the policy fields of health care, affirmative action, budget deficits, crime, drugs, and so on, electoral institutions have been unable either to provide a deliberative forum for resolving political conflicts, or to adopt good public policy.(5) The only political consensus appears to be that bureaucracy is bad and needs to be restricted. The irony of the situation is that as the electoral branches stalemate, they act against the bureaucracy -- the one part of government that has a capacity to govern. Public Administration's Sins Are Sins of Omission The governance problem can be blamed in part on the field of public administration. We have readily and enthusiastically helped to reorganize, reform, and reinvent bureaucracy. We have worked suboptimizing wonders on the bureaucracy but have long since passed the point of diminishing marginal returns. There are no more, if there were any, silver bullets that will slay the bureaucracy dragon and magically improve governance in the United States. Most of the dragons have starved to death: few of the bullets hit anything. Intellectually the field of public administration made two mistakes that contributed to our current governance problem. First, in rejecting the politics/administration dichotomy, public administration was unambitious in its territorial claims. As scholars, we were happy to argue that the administrative process was inherently political and, therefore, we confined our study to bureaucratic politics. …

The budget process in schools of nursing: a primer for the novice administrator.

All administrators are expected to be competent in budget and financial management. Novice administrators of schools of nursing are expected to know about the budgetary process, budgeting techniques, and the various types of budgets that can be used, such as the open-ended budget, incremental budget, alternate-level budget, quota budget, formula budget, intramural budget, zero-based budget, and cost center budget. In addition, administrators are expected to know what key questions need to be asked about how the budget is structured and revenue sources and how to manage and evaluate their budgets.

Management accounting: this century and beyond

The focus of cost management should be on decisions. The management accounting system has two simultaneous missions: (1) transmission of information to help reach wise economic decisions; and (2) motivation of users toward organizational goals. Three noteworthy developments in management accounting during the past 30 years have been: (1) emphasis on contribution reporting: (2) zero-base budgeting; and (3) activity-based costing (ABC). ABC has several welcome and unwelcome influences on cost accounting systems. The search for cost accounting systems that better link causes and effects is unending. Cost-benefit trade-offs between desires for simplicity and elaborate systems are dominant considerations.

MBO in Municipal Government: Variations on a Traditional Management Tool

Management By Objectives, or MBO, is a traditional management approach to directing the efforts of managers and the organizational units for which they are responsible. This technique has been used in government for more than 20 years, and substantial literature has accumulated affirming its utility. Yet, the history of MBO in the public sector has been uneven, and its role and importance in government are unclear. It is frequently criticized as being ineffective or counterproductive, and it often seems to be undervalued by the academic and professional public administration communities. In this article, we seek to clarify these issues at one level of government, focusing on how municipal managers use MBO and how they assess its impact. MBO is intended to motivate stronger performance on the part of managers and employees through goal setting, participative decision making, and objective feedback (Rodgers and Hunter, 1992). In its broadest construction, it is seen as a planning and control system which is designed to encourage self-control over an individual's work while assuring that managers' efforts are aligned with the organization's overall goals and priorities. According to Swiss (1991), the heart of a full-fledged MBO process is the negotiation between a higher level manager and a subordinate manager of a performance contract that has the following components: (1) major objectives to be accomplished by the subordinate manager within specified completion dates, (2) resource commitments to support these objectives, (3) action plans and milestones for accomplishing these objectives, (4) periodic meetings of the manager and subordinate to review progress and make midcourse corrections if necessary, and (5) an assessment at the end of the MBO cycle of the subordinate's performance, which should feed into both personnel appraisal processes and MBO planning for the next cycle. Swiss characterizes MBO as being particularly useful for providing direction and control over project oriented agencies where workloads shift and priorities tend to change frequently, as opposed to another major management approach, performance monitoring, which may be more appropriate for managing the continuing operations of organizations whose outputs are relatively stable. Evolution of Public Sector MBO MBO originated as a business management technique in the 1920s and was implemented on a widespread basis in the private sector during the 1950s and 1960s as it became popularized by the writings of Peter Drucker (1954 and 1964) and others. It was introduced in the federal government by the business-oriented Nixon administration in the early 1970s (Brady, 1973; Malek, 1974). MBO was instituted first in several large executive departments and then on a government-wide basis in the form of presidential MBO intended to help the White House gain control over the federal bureaucracy. However, this latter effort was quickly overtaken by the Watergate crisis, the ensuing demise of the Nixon administration, and the installation of Zero Base Budgeting by the Carter administration as the central tool for managing the federal government. Nonetheless, individual MBO systems have been retained or modified by a number of federal departments including Defense, Health & Human Services (Swiss, 1983; Brumback, 1993), and Commerce (Collamore, 1989). Experimentation with MBO at the federal level spawned considerable interest in the approach (DeWoolfson, 1975; Morrisey, 1976), and MBO systems quickly spread to state and local governments (Odiorne, 1976; Moore and Staton, 1981). For example, several cities including San Francisco, Dayton, Ohio, and Charlotte, North Carolina, have been profiled as using MBO as an integral component of sustained results-oriented management strategies (Epstein, 1984). Mali (1986) examined the use of MBO by the city of Phoenix, Arizona, initiated in the early 1970s, and found that it is closely integrated with several other strategies including organization development, productivity improvement, and employee involvement programs. …

A Reflection on Small Government

This paper discusses the issue of small government in Korea by way of reviewing a recent article on the subject published in Spring, 1492 in the Korean Public Administration Review. The article is by four Korean political scientists led by Dong-Suh Bark. The Korea's Fifth Republic of the 80s under Chun Doo-Whan first broached small government. Largely, to redeem his couptarnished Fifth Republic, Chun streamlined the bureaucracy. This resulted in personnel reduction, consolidation, and the adoption of a zero-base budget. The Sixth Republic under Roh Tae-Woo formed a group to study governmental reform. Nothing much came of it, however, as Roh gave way to pressures resisting change. Corning into power in 1993, Kim Young-Sam, the reform-minded president of the Seventh Republic has put forth small government as a part of his overall reform agenda.

Entrepreneurial Budgeting: An Emerging Reform?

The process of government budgeting has changed significantly in the 20th century, beginning with the introduction of executive budgeting in the 1920s. Since the 1950~~ a relatively major reform has been proposed about once each decade in an effort to overcome some of the perceived deficiencies of incremental line-item budgeting-performance budgeting in the 1950~~ pro- gram budgeting in the 1960~~ and zero-base budgeting in the 1970s. In the 1980~~ there was a growth of what might be called "automatic control budgeting" in which voters and policy makers tried to impose statutorily prescribed formulas on revenues and expenditures, the most notable examples being Proposition 13-type laws, Gram-Rudman-Hollings, and the movement for a fed- eral balanced budget amendment to the Constitution.1

Definitions and explanations of the new financial vocabulary.

NHS reforms have led to a new vocabulary for nurses. This article explains the meaning of the terms budgetary control, establishment, pay and non-pay, zero-based budgeting, trust regimens and the external financing limit. An understanding of these terms will help nurses implement the reforms.