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Building the Knowledge Base of Nonprofit Management:
A Searchable Database
Funding Human Services: Fixed Utility versus Fixed Budget
Abstract
It is argued that government allocations for human services based on
inputs rather than outcomes reduce efficiency in social & health
service provision. An alternative system of budgeting or contracting
on the basis of cost per closed case & case outcome is discussed.
An interdependency between fixed budget & fixed utility models of
allocation is affirmed. The locus of decision making for
operationalizing this interdependency is the program & budget
review panel, to which operating agencies & government departments
must submit financial & program accounting information from year
to year. In isolation, the fixed budget approach degenerates into
routine allocation or contract renewal, with a focus on such input
& output variables as volume of service & unit cost, & the
fixed utility approach degenerates into political stalemate. Simulated
examples are given to demonstrate how allocation on the basis of
inputs & outputs alone provides an incentive to inefficiency,
& a fixed utility orientation to efficiency. 1 Table, 10
References. HA
Journal
(Winter 1986)
vol10
no4
pages23-30
Categories
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Nonprofit Management
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Budgeting
