The Importance of Applying Performance-Based Budgets in Light of the Provisions of Financial Oversight as an Input to Rationalize Expenditures and Close the Government Deficit

Abstract

The search problem stems from the limitations of the traditional system, which fails to account for the unique circumstances of financial and economic crises and their variables. Moreover, it overlooks the planning aspect of budgeting by not linking expenditure items to the objectives of administrative units. Consequently, assessing the efficiency and effectiveness of government programs and activities becomes challenging. To address this issue, the research aims to investigate how Performance-Based Budgeting (PBB) can improve the efficiency and effectiveness of financial control in government units, with a focus on rationalizing public expenditures to tackle the government deficit. A random sample of 44 participants, consisting of accountants, auditors, and administrators from the public sector, received experimental questionnaires. After a week, the same number of participants were given another set of experimental questionnaires to assess the consistency of their responses. A questionnaire was designed to explore the significance of implementing program and performance budgeting in relation to financial control measures as a means to streamline expenses and tackle government deficits. It comprised 61 items divided into three sections. The results showed a strong correlation coefficient of 0.81 between the two distributions, indicating stability in the participants' answers. The main conclusions drawn from the study indicate a significant positive impact of performance-based budgeting and its three dimensions (optimal utilization of available resources, requirements for implementing program and performance-based budgeting as a planning tool) on the dependent variable of rationalizing public expenses to address government deficit, with the mediating variable represented by financial oversight. The study recommends including developmental indicators to assess the performance of each activity within the programs to determine the effectiveness, efficiency, and quality of government units in achieving pre-defined goals.