Outcome-Based Budgeting: OBB

In view of the country's agenda of making Malaysia a high income nation by 2020, the government has introduced the Outcome-Based Budgeting (OBB)for all government departments at the federal, state, local authority and agency levels.

Today, Universiti Teknologi MARA (UiTM) organizes a one-day awareness seminar to introduce OBB to heads of responsibility centres at the university. The university will be giving a 1-2 year transition period to all departments, faculties, state campuses and centres of excellence to implement OBB. By 2014, all budgets must be outcome-based. Outcome or Performance based budgets use statements of missions, goals and objectives to explain why the money is being spent. It is a way to allocate resources to achieve specific objectives based on program goals and measured results.

As such, OBB includes three key components: Results Based Budgeting (RBB), Results Based Performance Evaluation and Results Based Management Information System. Outcome-based budgeting differs from traditional approaches because it focuses on results rather than the input utilization - on what the money buys and the outcome of the purchase. This enables policymakers to determine what activities are cost-effective in reaching their end outcome. Successful implementation of an Outcome Based Budget framework hinges on the integration and linkage of the Budgeting process with the Performance Management processes and consistent monitoring of outcomes.