The correct answer is: a) Start the budgeting process from scratch each year.
Zero-based budgeting (ZBB) is an approach to budgeting in which every expense must be justified for each new budget period. This means that all budget items are evaluated each year, and no item is automatically included in the budget simply because it was included in the previous year’s budget.
ZBB can be used to improve efficiency and effectiveness in government budgeting by forcing agencies to carefully consider their priorities and to justify all of their spending. It can also help to control costs by eliminating unnecessary spending.
However, ZBB can also be time-consuming and complex to implement, and it can be difficult to get buy-in from all stakeholders. Additionally, ZBB can lead to short-term thinking, as agencies may be reluctant to invest in long-term projects that do not have immediate benefits.
Overall, ZBB is a powerful tool that can be used to improve government budgeting. However, it is important to carefully consider the potential benefits and drawbacks before implementing ZBB.
Here is a brief explanation of each option:
a) Start the budgeting process from scratch each year: This is the key principle of zero-based budgeting. Under ZBB, every expense must be justified for each new budget period. This means that all budget items are evaluated each year, and no item is automatically included in the budget simply because it was included in the previous year’s budget.
b) Eliminate all previous budget allocations: This is not an accurate description of zero-based budgeting. Under ZBB, agencies are not required to eliminate all previous budget allocations. However, they are required to justify all of their spending, and they may choose to eliminate some budget items if they are not deemed to be necessary.
c) Reduce unnecessary expenditure: This is a potential benefit of zero-based budgeting. By requiring agencies to justify all of their spending, ZBB can help to identify and eliminate unnecessary expenditure.
d) Focus only on the most urgent needs: This is not an accurate description of zero-based budgeting. Under ZBB, agencies are required to consider all of their needs, not just the most urgent ones. However, ZBB can help to ensure that resources are allocated to the most important priorities.