- 10 Marks
PSA&F – Nov 2019 – L2 – Q2a – The Budgeting Process in the Public Sector
Comparison of incremental and zero-based budgeting and explanation of zero-based budget stages.
Question
With continuing pressure to control costs and maintain efficiency, the time has come for all public sector organisations to embrace zero-based budgeting. There is no longer a place for incremental budgeting in any organisation, particularly those in public sector, where zero-based budgeting is far more suitable.
Required:
- Explain the terms ‘incremental budgeting’ and ‘zero-based budgeting.’
- Identify the five main stages involved in preparing zero-based budgets.
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