This guide provides practical guidanceon program classification, that is, on how to defineprograms and their constituent elements under a programbudgeting system. Program budgeting is the most widespreadform of performance budgeting as applied to the governmentbudget as a whole. The defining characteristics of programbudgeting are: (1) funds are allocated in the budget toresults-based programs. For example, the educationministry s budget provides allocations of funds to a primaryeducation program, a secondary education program, and atertiary education program, while the environment ministry'sbudget includes a nature conservation program and ananti-pollution program. (2) Line item controls limitsimposed by the parliament or the ministry of finance on theamounts ministries can spend on specific types of inputs(such as office supplies, travel, and utilities) areradically reduced, although certainly not entirelyeliminated. (3) Good performance information on programs iscollected and used in the budget preparation process toassist budget decision makers to determine how much money isallocated to each program. The core objective of programbudgeting is improved expenditure prioritization. This guidecommences by outlining the basic principle of results-basedprogram classification. It then explains the accounting andorganizational structure realities that must also beconsidered in developing a sound program classification. Inthe subsequent sections, the guide then discussessequentially the key specific issues that arise indeveloping a program classification.
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