Accrual Output Budgeting

A form of budget system currently in use in the United Kingdom, New Zealand and Australia that, based on performance budgeting, places the entire budget for each department on an internal market or purchaser/provider basis.

(Graham, Andrew. 2007. Canadian Public-Sector Financial Management. Kingston, ON: School of Policy Studies, Queen’s University; Montreal: McGill-Queen’s University Press.)

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Governments purchase services and products from department in market-type transactions. Government funding is treated by departments as revenue. Departments have their own profit and loss statements. This is intended to encourage competition and maximum use of internal resources. Credit provisions exist for depreciated capital as a separate budget.