Which budgeting method combines performance measures with budget outcomes?

Performance budgeting is designed specifically to link the allocation of resources to the outcomes of programs and services. This budgeting method focuses not only on the financial aspects but also on the effectiveness and efficiency of spending. By establishing performance measures, it allows organizations to evaluate how well they are achieving their goals and objectives in relation to the budgeted amounts.

This approach means that departments must demonstrate how their spending contributes to performance outcomes, enabling decision-makers to assess whether resources are being used effectively. It encourages accountability and a results-oriented perspective because it provides a direct connection between the resources allocated and the performance results produced.

In contrast, line-item budgeting focuses primarily on the specific expenses within the budget, without a direct correlation to performance outcomes. Comprehensive-risk budgeting considers risk management but doesn't inherently connect budget allocations to performance objectives. Zero-based budgeting requires justifying all expenses from the ground up but does not specifically emphasize performance outcomes. Thus, performance budgeting stands out as the method that unequivocally integrates performance measures with budget outcomes.