Zero Based Budgeting (ZBB)
When ZBB Started
In June 2013 our Superintendent, Dr. Foose, presented to the Board of Education the Howard County Public School System (HCPSS) Strategic Plan, Vision 2018: Fulfilling the Promise of Preparation . This marks the exciting beginning of a new era for our school system. To begin implementation of our strategic plan we start with the Operating Budget, which is the resource allocation component of HCPSS’s strategic plan. It is the mechanism for allocating funds to pay for the resources needed to achieve the goals outlined in plan.
Watch an Overview of ZBB
Vision 2018 Goals
As we prepare the Superintendent’s Proposed Operating Budget to the Board of Education, we are committed to fostering inclusive budget discussions centered on the four strategic goals of the school system:
Goal 1: StudentsEvery student achieves academic excellence in an inspiring, engaging, and supportive environment.
Goal 2: StaffEvery staff member is engaged, supported, and successful.
Goal 3: Families and the CommunityFamilies and the community are engaged and supported as partners in education.
Goal 4: OrganizationSchools are supported by world-class organizational practices.
Zero-based budgeting (ZBB) is a technique used for developing annual budgets that complement the budget planning and review process. Zero-based budgeting allows top-level strategic goals to be implemented into the budgeting process by tying them to specific functional areas of the organization. Due to its flexibility, this method of budgeting allows department heads to identify alternative ways to utilize limited resources through a systematic review.
A zero-based budgeting starts from a “zero base” and every function within an organization is analyzed for its needs and costs — all expenses must be justified. The budget is built based on the needs for the upcoming year, regardless of whether the new proposed budget is higher or lower than the previous one. Once developed, the budget is balanced given funding constraints.
Zero-based budgeting is a method of budgeting in which all expenses must be justified and every function within an organization is analyzed for its needs and costs. The purpose of the ZBB analysis is to assess a particular program’s activities against its statutory responsibilities, purpose, cost to provide services, and desired performance outcomes.
Some of the advantages of ZBB are that the process:
- Facilitates efficient allocation of resources, as it is based on needs and benefits rather than history.
- Drives managers to find cost effective ways to improve operations.
- Increases staff motivation by providing greater initiative and responsibility in decision-making.
- Increases communication and coordination within the organization.
- Identifies and eliminates wasteful and obsolete operations.
- Requires programs to identify their purpose and their relationship to strategic goals.
- Helps in identifying areas of wasteful expenditure, and if desired, can also be used for suggesting alternative courses of action.
The ZBB development, review and analysis process will require collaboration among the HCPSS staff, the Budget Office and the Executive Team. This new process will be rolled out in stages to allow time for training staff on the necessary tasks. The results of the ZBB analysis will be presented to the Superintendent during the fall budget development process. A final report of all ZBB analyses will be published in conjunction with the Superintendent’s Proposed Budget request to the Board of Education.
Account managers will complete the following ZBB budget steps for each program they manage:
Step 1 – Identifying key activities
- Identify key activities of the program.
- Identify alignment with the Strategic Plan, Vision 2018: Fulfilling the Promise of Preparation.
- Identify staff performing the key activities and the percentage of their time on each key activity
Step 2 – Identifying resource needs
- Analyze program budget and expenditures by identifying all non-salary costs to perform each activity within the program.
- Identify proposed program enhancements and/or new program initiatives.
Step 3 – Providing program summary
- Prepare a concise narrative of the program’s key activities.
Step 4 – Measuring program performance
- Identify program goals and performance measures used to evaluate the success of each key activity.
More detail on the ZBB process is provided in the Zero-Based Budget Manual .