Traditional line item budgeting includes financials and personnel spending. Program budgeting, the first step in priority based budgeting, underlays programs to those both of those costs. Knowing programs brings many benefits to organizations (see more here). Tell us the biggest benefit you've seen from program data so far!
We have recently been asked how we are accounting for expenses that do not run through the financial system or budget but which our leadership considers to be part of the contribution to a program (whether it's from the City or the community). Two examples are: Our City applies for a CDBG grant through the County. We have an agreement with the County to send a portion of our annual award to a local non-profit. Since those funds never reach the City's financial statements, they are not included in our program budget for local partnership funding. We have a significant number of volunteer hours for departments including the museum, library and police department. Since there is no expense or revenue associated with those volunteer hours, they are not included in the budget, but some of our programs are benefiting from the use of volunteers and the full cost of the program is not captured since those hours are volunteered. Has anyone else struggled with defining how these parts should be captured in the PBB Process?