A Study On The Improvement Of Budget Expenditure Performance Evaluation System

Since the 1970s, in response to the challenge of economic globalization and political democratization, in particular, in order to solve the problems for financial difficulties and public trust, western countries have been more concerned about the results and effectiveness of fiscal expenditures, and changes to the government budget management model have been made accordingly. Some countries start turning to the budget management model mainly based on performance evaluation, which is the trend of reform on performance budgeting. Performance budgeting is a new budget management model, a change of the budget process, and particularly a progress for the concept of budgeting. The starting point of the reform on budget performance management is the pilot of project expenditure performance evaluation, which has adequately drawn on foreign practical experience for performance budgeting, integrating the concept and method of budgeting into the budget management process in combination with China's national conditions.Finance is an important foundation and pillar of a nation's governance, while innovation on budget performance management is an important part of fiscal reform, budget expenditure performance evaluation is the key to budget performance management. Therefore, we should establish and improve the budget expenditure performance evaluation system, which is of significance to promote innovation on budget management, deepen financial reform, and advance the modernization of national governance. Specifically, the implementation of budget performance evaluation can reflect the public service orientation of being responsible for "customers",which is conducive to further optimizing the allocation of administrative resources, reduce administrative costs, improve administrative efficiency, and facilitate the transformation of government functions to create a favorable environment for development and provide quality public services. The implementation of budget expenditure performance evaluation can constrain and meanwhile stimulate the effective usage of financial resources by the departments to practically improve the efficiency in the use of financial resources, and effectively alleviate the contradiction between budget revenue and expenditure. In addition, the requirements such as result-oriented, multi-parties involved and highly transparent budget required by the budget performance evaluation are all the specific requirements proposed on the budget expenditure management by reforms on fiscal publicity and democratization. Constantly improving the budget performance evaluation system is helpful to deepening the reform on budget management so as to realize the democratic governance of public finances.This paper selects budget expenditure performance evaluation as the subject of study, learns from and draws on international experiences, refers to existing research results both at home and abroad, summarizes Chinese practices of budget performance evaluation, as well as makes study and improvements on the budget expenditure performance evaluation system that is applicable to China's national conditions. This paper proposes that, for the further improvement of the budget expenditure performance evaluation system, we should be fully aware of the current stage of the budget performance evaluation management, and on the basis of current development, we shall strengthen the driving role of laws and system, improve the organizational system of performance evaluation and related measurement system, and innovate methods of performance evaluation to improve the application level of performance evaluation results, and enhance publicity of budget and performance accountability. At the same time, when focusing on medium and long-term considerations, we should explore and establish the medium-term budget management model for performance management to improve the government's consolidated system of financial reporting. We need to make efforts to build a budget performance evaluation system with a more complete framework, more prominent features and more secure execution.After years of explorations and practices, the reform on budget performance management of our country has achieved certain success:the mechanism and system of management have been continuously improved; organizational safeguards have been strengthened; the basic work is increasingly reinforced; the performance evaluation is promoted steadily; and the overall level of budget performance management is continually improved. Meanwhile, however, there are also some problems, for example, the concept of performance has not penetrated deep into the people's mind; the safeguards of legal system need to be strengthened; performance evaluation system is not perfect enough; and supportive measures are required to be improved and so on. Especially, the research and application for the measurement system of budget performance evaluation is far from perfect. Performance evaluation system is the basis and core content of the implementation of the work related to performance evaluation, which is not only an effective tool for performance evaluation, but also the demonstration of outcomes from the performance evaluation. Setting up scientific and reasonable measures of evaluation is of great significance for promoting the budget performance evaluation. This paper introduces China's exploration of the budget performance evaluation system and makes proposal with respect to current problems to improve the measurement system, while takes the Ministry of Transportation for example, to carry out case studies on the design of measures for budget performance evaluation. These case studies firstly combine with measures for overall expenditure performance evaluation used by the department for design of departmental functions, and secondly select representative projects of the Ministry of Transportation concerning the measure design. Such case studies have certain reference value for the establishment of measures for departmental overall expenditure performance evaluation and for the improvement of measures for project expenditure performance evaluation.On this basis, this paper finally discusses on how to comprehensively promote the reform on China's budget performance management and proposes policy recommendations. In the new development stage of the budget performance management, it is required to keep on strengthening the concept of performance and guide various sectors of the society to take the initiative to understand and support the budget performance management, so as to turn the management activities focusing on performance, applying performance and managing performance into a norm; to continue to deepen the basic theoretical research and provide theoretical insights that are scientific, effective and suitable for China's national conditions to guide the practice of budget performance management; to further strengthen the "top-level design", taking the "top-down approach",strive for supports from senior administrative leadership, and form an organizational structure that will fully support performance reform to overcome the resistance to reform; to combine the concept of performance into the whole process of the reform on fiscal budget management, to ensure that all kinds of reform can connect well with each other so as to achieve better results of the reform; to promote performance management based on a comprehensive concept for fiscal effectiveness. Since policies made on a scientific basis is the foundation that can determine and impact the effectiveness of fiscal expenditure, we need to keep on exploring and studying on the performance evaluation model that are scientific and effective for various fiscal policies.