Analysis Of Government Departmental Budget Expenditure Performance Management

The problem of financial efficiency is one of the important topics in studying the public finance theories, which promotes the building of real national financial institutions and institutional reform. In the condition of modern market economy, the core goal is how the public finance would maximize the comprehensive benefits in the investing process by using limited budget resources. Achieving this goal would satisfy the growing needs of the social public, solve contradiction between the public profits and financial security, and improve the budget internal management. With a rapid economic development, the largest developing country, China faces many profound and complex social difficulties during a transitional economic period of time. In particular, the deficiency of social and public services and inadequate supply of quality are the pervasive problems, which are difficult to meet the demands of the masses. Therefore, the requirement of government budget funding is needed, in order to protect the economic and social harmony and maintain the institutions and systems deep-rooted, stable and healthy development at a critical period of changes. On one hand, China needs to maintain a relatively rapid economic development, and ensure the revenue continues to grow. On the other hand, China needs to further innovate the system reform of the government budget expenditure management, the patterns and means of management, enhance the efficiency and effectiveness of budget expenditures and better provide the public with sufficient, high-quality public goods and services.Since the founding of PRC, China's budget expenditure management pursues an investment-controlled budget management model. This has a direct relationship with the traditional planned economy, but with the establishment and consolidation of the market economy system in China, public finance construction is expected to solve the drawbacks in the input-controlled budget management mode, such as the alienation of budget expenditure control, which led to a serious gap between input and outcome, the lack of flexibility in the budget expenditure management and inefficiency implementation, and also led to the separation of supply of prescription budget and department responsibility, and the inconveniences in approval of the budget expenditure, which was difficult to determine a reasonable budget expenditures size and to optimize the purpose of the structure of budgetary expenditures, etc. Because the traditional input-based budget management mode of control is difficult to adapt to a market economy under the conditions of the practical requirements of the government budget management, budget expenditure management system innovation is imperative, which will focus on the budget outputs and outcomes as the core. The objective of departmental budget expenditure performance management reform is to replace the traditional input-based budget management control to performance-oriented budget management mode. Departmental performance management will combine financial efficiency with budgetary expenditure management, and select the specific content, namely the theoretical issues of financial efficiency, to transform into real system means of the government budget expenditure management through the guidance of the performance management. The budget expenditure management is translated into departmental budgets with expenditure management, and further means the project expenditure budget management.The structural system of this dissertation can be divided into eight chapters, following the sequence of asking questions-study of theories-practice review both at home and abroad-reform and framework design-examples. Except for the first introductory chapter, the dissertation can be summed up into four modules. The first module is the part of theoretical basis, including the Chapter 2 and Chapter 3, concerning the basic principles of government performance management and the innovation of government performance management and departmental budgeting, and expenditure management system. The second module is an overview of the practice, including Chapter 4. It focuses on China's performance in the government budget expenditure management reforms in the pilot status of the practice, as well as the experience of foreign-related reforms. The third module is the part of design of the reform, containing the Chapter 5, Chapter 6, and Chapter 7. It emphasizes the basic ideas of our performance in departmental budget expenditure management reform, institutional system development and application of technical means. The fourth module is part of the examples discussed, including Chapter 8. It shows the practical significance of performance management reforms through specific budget for the executive branch of government departmental budget expenditure management reform.The content of each chapters are as follows:Chapter 1, Introduction. It briefly introduces the process of choosing the topics, especially the rational thinking on governance reform, financial efficiency and the government budget management system reform. It summarizes the related study and resources on the government budget performance management both at home and abroad, sets out ideas and frame structure, introduces the study scope and methods of the dissertation, as well as the innovative exploration and future research prospects.Chapter 2, Basic Principles of Government Departmental Performance Management. It analyzes the meaning and characteristics of performance management, outlining the government sector reform and the organic combination of performance management theory and practice background, as well as differences and similarities between government departments, performance management and enterprise organization performance management. It also makes brief description of government departmental performance management reform practice in Western countries. Performance management comes from the management practices in private sectors. It organizes efficient and high-qualified output as its principle, and uses limited resources to achieve the maximum benefit for its basic feature. Introducing the performance management into the government sector's reform conforms to the public image of the innovative government. It helps to build a highly efficient, honest government; especially by using budget funds effectively will enable it to play the best part. Introduction to the basic principles of government departmental performance management, on one hand, highlights the public sector position in the government budget and sets step for government budget performance management reform. On the other hand, it further widens people's understanding of the concept budget performance under the circumstances of government reform.Chapter 3, China's Government Departmental Budgeting Performance Management and the Innovation of Expenditure Management System. It depicts the related economic theories of public budget expenditure management and analyzes the performance of the government budget expenditure on the need for management reform. It presents China's government budget expenditure management reform, especially the history of the departmental budget reform, and sets forth the theoretical basis of China's departmental budget expenditure management system innovation with performance management as its core. As a failure of government system, the phenomenon of budget maximization exists in the public sectors. The low performance of public budget expenditure has always been worried the economic theory researchers and policy makers. Because of the actual situation of China's government budget expenditure management reform, it needs to find an effective way to solve this low performance problem by adoption of reform and innovation. Government departmental budget expenditure performance management is an effective suggestion proposed as a measure to evaluate the levels of budget outputs and outcomes.Chapter 4, Reform Practice of China's Departmental Budget Expenditure Performance Management and an International Reference. It analyzes the motivation of China's departmental budget expenditure performance management reform, introduces the theories and the status quo of its development and adds evaluation to the reform. It also shows how China learns the reform experience from OECD countries. Through the description of departmental budget expenditure performance management both at home and aboard, on one hand, it shows that in the process of continuous improvement of China's public finance system, the government budget management system has fully reflects a number of characteristics of changes during the transitional period of economic system. The important content of the reform is to transform the traditional input controlled budget management model into the performance-oriented budget management approach. On the other hand, it analyzes the problems in practice and the inspiration from international experience, indicating that reforms of the government budget expenditure performance management is not only in line with the objective laws of public budgets under condition of market economic changes, but also conforms to the globalization trend of the government budget reform, of which the departmental budget expenditure performance management is the top priority of the reform.Chapter 5, The Basic Ideas of China's Departmental Budget Expenditure Performance Management Reform. It introduces China's overall plan for the reform of departmental budget expenditure performance management, sets out the principles, objects, frames, steps, and the supporting measures, as well as the rational knowledge and the grasp of the reform. Departmental budget expenditure performance management reform involving a wide range of aspects, reaching deep-seated changes in the government budget system, is a comprehensive, complex system work. It needs to design a comprehensive reform program to guide the reform in the longer period of time, eventually improve the departmental performance management system for the form of budgetary expenditures and ensure the establishment of long-term mechanism to achieve the reform. According to China's overall approach to departmental budget reform, the main target of the reform will be the departmental project expenditure budget. Chapter 6, The Construction of China's Departmental Budget Expenditure Performance Management System. It studies China's departmental budget expenditure performance management system for building a specific system, and before the budget different sectors units, the common characteristics of institutional building elements in the reform, such as organization and implementation systems, performance planning, process design, information collection and management, performance evaluation, reporting, performance audit, and the results of application. All the necessary steps in the performance management system should be established as the conventional mode to form the government budget expenditure management, so as to build a complete sound system, which is the fundamental guarantee of truly improvement budgetary expenditures and realization the objective of transformation the mode of departmental budget expenditure performance management reform. Each item in the system has its specific meaning and role, and together constitutes an interdependent, interconnected cycle, with organization and implementation, performance planning, process design for the preparation, performance information collection and arrangement of the norm and the management foundation for the work, performance evaluation and the report system as the key management tool, and performance audit, the results of applications in the latter part of monitoring.Chapter 7, The Applications of Technical Means in China's Departmental Budget Expenditure Performance Management. It discusses the various technological means for the operation of budget expenditure performance management system. The implementation of departmental budget expenditure management reform in the real performance of the government budget management practices requires not only a comprehensive system of protection, but also a scientific and technological means to support it. Application of technical means is an essential approach to implement the content of the system, accession to the real, objective information on departmental budget expenditure performance management. The application of technology mainly aims at the performance evaluation stage in departmental budget expenditure performance management. This chapter clearly distinguishes the different technological means of the different public sectors budget expenditure performance management. It focuses on the construction and applications of performance management indicator system, benchmarking, methods, and information technology of support systems. Chapter 8, The Reform Design of China's Departmental Budget Expenditure Performance Management, with the Example of National Civil Aviation Sector's Expenditure Budget. The significance of theoretical research is to guide scientific practice. This chapter selects national civil aviation authority as an example of a real government departmental budget unit. It sets out the construction of departmental budget expenditure performance management system and applications of technical means in theory. Through field visits, thematic research, and in-depth understanding of the status of National Civil Aviation department budget management in the project expenditure budget preparation, approval, implementation, and supervision, it analyzes system obstacles civil aviation will face during the expenditure budget performance management reform project and the need for the reform. Besides, it focuses on planning and design of the civil aviation project expenditure budget performance management system, and makes a specific instruction about the application of its technical means.