Introducing performance budgeting methodology within the Maltese public sector

Abstract

PURPOSE: The study analysis the need of Government to alter or shift from the current line-item budgetary approach. The issue investigated is to whether adapting performance budgeting reform would induce revolutionary changes in the rigid budgetary process being applied in Malta thus attaining key sustainability issues required to enhance desired economic progress, greater fiscal discipline, more informed budgetary decisions to enhance transparency and accountability. DESIGN: These objectives have been achieved through an intense research by conducting questionnaires throughout the Ministries involving Director Generals, Directors Corporate Services, Public Officers at the Budget Office and Financial Controllers. FINDINGS: Despite literature criticism with regards to budgeting, this study reveals that the majority of the respondents still perceive budgeting as a very worthwhile exercise. Although other tools might compliment the budgeting process these are not considered as its substitutes as the main belief is to improve current system rather than abandoning it in favour of other approaches. CONCLUSION: Criticism and/or failure to adopt new performance budgeting approaches are not necessarily attributable to a system failure but depend on the suitability of the budgeting approach being implemented within the complexity of various socio/economic elements. Respondents agree that current budgeting system needs to be upgraded gradually into a system focusing on an effective cost calculation and valid measure of costing for inputs and outputs for outcomes. However such is attainable through willingness of all stakeholders and those at the helm of Government to implement a gradual change in culture and mentality. VALUE: It is aimed to encourage further research to shed more light of weaknesses of traditional budgeting systems and to induce change to acquire greatest benefits from innovative approaches vital to move away from rigid budgeting processes.