Performance budget as a tool for measuring the effectiveness of selected local government units

Abstract

The activity of local government units (LGUs) consists in performing tasks for their community. However, local and regional authorities should focus not only on organizing and financing tasks, but also control whether the planned effects of these tasks were achieved. It reveals the problem of the LGUs effectiveness in implementing tasks financed from public funds in local budgets. The aim of the article is to assess if the performance budget is a tool for measuring the effectiveness of LGUs – in the theoretical aspect (assumptions of performance budgeting), and empirically (based on data for the Dębno municipality, Stargard county, Kraków and Warsaw cities). To accomplish the indicated goal, the author carries out a critical analysis of literature, a review of legal acts and LGUs’ reports as well as case studies for the mentioned LGUs. The obtained results allow for a positive assessment of performance budget in theoretical terms. Its empirical confirmation depends on the solutions adopted by the examined LGUs concerning their objectives and measures. The conditions for measuring the LGUs effectiveness in performance budget are: precise formulation of the objectives for the tasks, correct identification of the effects assumed for the tasks, as well as the selection and definition of performance measures for individual objectives. It is worth noting that measuring the LGUs effectiveness often translates into their greater sense of responsibility against local community for the effects obtained as a result of spending limited public funds for tasks implementation.