INSTRUCTIONS NOT FOLLOWED:Could you please answer each of the 4 questions not put it all together? The study question is ask you to answer 4 questions not just one.

Name:

Instructor:

Course:

Date:

PPBS and ZBB Comparison

The process of budgeting offers a mechanism for a company to establish objectives and goals, for identifying inadequacies or weaknesses in the firm and in the process; it helps in integrating and controlling the diverse activities that are conducted by numerous agencies within extensive organizations including both public and federal (Kelly, 45). Additionally, budgeting needs a robust analysis and evaluation of the company’s resources that have been employed in the previous tenures, planning and evaluation of what has been accomplished and in the process, programming future course of action by allocating and distributing resources for the next budget period. Moreover, the government always incur challenges when it comes to evaluating the efficiency and effectiveness of its program since it fall short of the readily definable net revenue measures enjoyed by the industries. For instance, the reformers who existed in the early sixties believed that the reason behind this situation was down to poor decision making on the part of policy makers coupled with the uncoordinated nature of the manner in which decisions are made (Kelly, 46). In other words, according to them, they were of the opinion that rational and coordinated decision making was crucial to but believed that greater employment of analysis tools will greatly improve the current situation. In essence, they thought that categorizing the budget will help facilitate the budget analysis. Therefore, such analysis was emphasized in the planning, programming and budgeting systems (PPBS) and after a later stage, it was also stressed in the Zero-Based Budgeting (ZBB).

Programming, Planning and Budgeting System (PPBS) is a budgeting process that is employed in determining the requirements and allocation of resources when it comes to the Department of Defense (Riccardo, et al 108). Additionally, this system was created to offer support to the multiyear force as well as the financial plan and in the process, help reconcile the differences that existed between the funds and requirements while at the same time offering due process for all defense force services to distribute resources to the needed goal to support the Military Strategy. On the other hand, Zero-based Budgeting was introduced to the defense or rather federal process in the year 1977 (Riccardo, et al 101). In so doing, it has increased the involvement level of the Secretary of Defense office in the development and improvement of the service programs. In other words, the principle goal of ZBB is to incorporate managers at all budgeting process levels hence justifying the resource requirements for new initiatives as well as existing activities. Moreover, it also encourages the managers to focus the budgeting process on matters to do with decision packages coupled with alternative funding levels namely; current levels, minimum levels, and enhanced levels.

PPBS are a budgeting instrument that is designed to alter outcomes, processes and the implications of the government budgeting in important ways. In other words, this system purposed to improve the planning process as far as program development is concerned in advance, before allocations of budgetary are made. Moreover, it also helps to allow decisions of the budget to be carried out based on the plans that are previously made. In fact, its main objective was to make programs and not agencies the primary focus when it comes to budget making (Kelly, 49). In essence, PPBS was viewed as an instrument of reducing overlapping and duplicative programs but it was essential in studying programs in isolation from there agency so as to choose the best optimum program. One clear advantage of PPBs is the fact that it offers a formal and systematic technique of improving decision-making as far as resource allocation is concerned (Riccardo, et al 108). Apparently, it also improves the chances of ensuring that there is a rational tax allocation hence increasing the chances of maximum impact.

Zero-based budgeting is a form of budgeting that ignores the legal, political and social constraints but ends up arriving at decisions of budgeting in amore artificial, and ideal environment. In essence, this form of budgeting was viewed as the most ideal way of arriving at how resources and activities should be allocated to realize the goals that are agreed upon. This process entails two major processes namely; developing decision packages and ranking the decision packages (Riccardo, et al 106). As a result, once the decision making packages have been identified and ranked, the individuals in management can now be able to distribute resources based on most important activities irrespective of whether they are new or current. It is from this step that the final budget is constructed based on the decision packages that were approved by the budgetary committee. In practice, based on the words of Allen Schick, Zero-Based Budgeting can be classified as more of a marginal analysis form than a requirement of the need to build the budget from zero. In other words, it was an instrument used to shift the attention to decrements below the base from increments above the base. This tool was essentially an improvised form of incremental budgeting despite the fact that it is considered a rational –budgetary tool. In essence, ZBB continues and refines the concepts and practice of incremental budgeting.

Therefore, when the two budgeting process are looked at closely, it is clear that PPBS concentrates on the activities that will be conducted and not basically how they should be done whereas the ZBB concentrates on how to realize a particular objective (Riccardo, et al 108). According to PPBS, budgeting is basically the calculation of cost based on a number of decisions in programming and planning despite the fact that in reality there are many alternatives and policy decisions to be taken into consideration during the budgetary process. ZBB on the other hand provides a comprehensive and detailed evaluation and analysis of policy coupled with a number of alternatives on the many operations and activities within the program from which the general policy and objective has already been defined. Additionally, PPBS concentrates on new programs or rather primary changes in current programs and in the process, it does not force the continual evaluation of ongoing operations and activities but, Zero-based Budgeting forces the people in charge to review in detail the effectiveness and efficiency of all budgets and plans (Kelly, 45).

In summary, PPBs and ZBB are both micro-economic tools fused for centralized decision making. In other words, as far as PPBS offers decision making on primary policies and objectives as well as basic fund allocations, ZBB offers an opportunity to transform this activities and objectives into an effective and efficient operating budget and plan. In so doing it permits the managers to analyze and evaluate the implication of various levels of funding on program elements and programs so that limited resources can be allocated effectively.

Work Cited

Kelly, Janet M. Performance budgeting for state and local government. Me Sharpe, 2015.

Mussari, Riccardo, et al. "Design, Trajectories of Reform, and Implementation of Performance Budgeting in Local Governments: A Comparative Study of Germany, Italy, Lithuania, and Norway." Local Public Sector Reforms in Times of Crisis. Palgrave Macmillan UK, 2016. 101-119.