Performance-based budgeting (PBB) is budgeting that relates funding to expected results. PBB is often referred to as managing for results. It is a process that relies heavily on strategic and operational planning, and performance accountability to build budgets.
Louisiana began its journey toward managing for results in 1987 which involved a transition from line item budgeting to program budgeting. The concept really began to take hold in both executive and legislative branches in 1995. Since that time, program budgeting has evolved into performance budgeting.
Act 1465 of the 1997 Regular Legislative Session (also called the Louisiana Government Performance and Accountability Act) mandates performance-based budgeting in the Executive Branch of Louisiana state government. There are now statutory requirements for strategic planning, operational planning, performance accountability, and performance reporting for all Executive Branch agencies (whether they are headed by statewide elected officials or officials appointed by the governor or another entity). Post-secondary institutions are included as well.
Performance accountability measures progress and results.
Building in accountability during the strategic planning and policy development processes enables an organization to measure progress toward accomplishment of desired results. Accountability involves regular monitoring and periodic review and evaluation of policies, plans, and programs. It examines the extent to which strategies have been implemented, compares actual with expected results, and identifies reasons for and magnitudes of differences between actual and expected results.
Louisiana's Executive Branch departments and agencies are required to submit quarterly performance reports through the Louisiana Performance Accountability System (LaPAS). LaPAS compares actual performance with annual performance standards and quarterly interim targets and calculates variances. Variances greater than 5% must be explained by reporting entities.
Agency performance standards and actual performance reports are open to public view through the LaPAS View function on the LaPAS homepage.