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Accounting and Financial Practices Performance-informed budgeting

Performance-informed budgeting

It is important to promote the use of performance indicators in budgetary decision making, that is, the use of the estimated budget must be linked to technical and commercial indicators that measure the investment objectives and costs used. Processes whose indicators are within the target must be prioritized in the allocation of the budget, while processes in which performance indicators are below the target must be constantly reassessed. The main results of this practice are: (i) improving the setting of objectives and the monitoring of performance; (ii) emphasis on planning; (iii) improving management, transparency, and efficiency. Performance budgeting is useful to improve performance orientation, including program evaluation and spending reviews.