Certified Professional Public Buyer (CPPB) Practice Test

What is Results Oriented Budgeting primarily focused on?

1. Maximizing the total budget amount

2. Linking resource allocation to performance criteria

3. Reducing the budget in unproductive areas

4. Providing budgetary support for non-performance related activities

The correct answer is: Linking resource allocation to performance criteria

Results Oriented Budgeting is primarily centered on linking resource allocation to performance criteria. This approach emphasizes the importance of achieving specific outcomes and results rather than merely focusing on the amount of money spent. By aligning budgetary decisions with measurable performance goals, organizations ensure that resources are directed toward programs and initiatives that effectively meet strategic objectives. This method encourages accountability, as departments are expected to demonstrate how their expenditures contribute to desired results. In contrast to this focus, maximizing the total budget amount does not necessarily consider whether those expenditures lead to meaningful results. Similarly, while reducing the budget in unproductive areas may seem beneficial, it does not inherently create a connection between spending and performance outcomes. Providing budgetary support for non-performance related activities diverges from the essence of Results Oriented Budgeting, which seeks to ensure that every dollar spent is justified by its contribution to measurable success.