Abstract: Zero-base budgeting (ZBB) is a budgeting process that asks managers to build a budget from the ground up, starting from zero. However, ZBB has been the subject of a fair amount of controversy over the years, owing primarily to questions about the value derived from ZBB analysis versus the cost required to put ZBB into practice. The goal of this paper is to define what ZBB means in current practice, describe the uses of ZBB, and to help public officials facilitate a conversation in their organizations about the value of ZBB.
GFOA’s research found that “textbook” ZBB or ZBB systems that conform to the theoretical ideal are almost unheard of in present day financial management. However, an increasing number of governments that exhibit leadership in budgeting practices (albeit still a minority) are considering elements of ZBB and incorporating them into their budget processes..
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