Legislative budget planning should use stakeholder engagement.

It also should be noted that the different PBM activities serve different groups of audiences and purposes. For example, although the budgetary planning module should be done primarily by the budget office and financial analysts, dialogue about fiscal constraints and the implications of budgetary planning for the departmental (Macro budget planning) (Micro budget planning) Budgetary Planning - Develop annual and multiyear budget forecasts - Assess short-term and long-term liabilities -Develop spending targets for discretionary and nondiscretionary spending - Develop spending targets for departments and cross-departmental programs Policy Planning - Identify policy priorities with the leadership and key stakeholders - Develop cross-departmental and departmental action plans for key policy priorities - Develop annual and multiyear performance goals - Develop key performance goals and outcome indicators for key policy priorities Sound revenue administration, reliable accounting and financial management systems, effective financial control Sound data quality management, reasonable capacity for evaluation and performance measurement, effective stakeholder engagement Departmental Budget Cycle - Identify departmental priorities and develop departmental action plans - Develop the annual budget requests and justifications - Monitor operational, capital, and program spending progress and results of departments Program Budget Cycle - Identify cross-departmental and subdepartmental program priorities and develop program strategic plans - Develop annual budget requests and justifications - Monitor program spending process and results Spending Review and Performance Audit - Review departmental and program performance measurement results - Identify deficiencies, vulnerabilities, and risks - Recommend remedial and improvement actions Figure 2 A System of Performance Budget Management 754 Public Administration Review • September | October 2018 budget cycle should involve the executive leadership, members of the legislative appropriation and authorization committees, and departmental leadership. In addition, policy planning activities should involve both executive and legislative leadership as well as key external stakeholders and constituency groups, members of the legislative authorization committee, and even the auditor’s office. It is particularly important that dialogues about the implications of policy and budgetary planning on the program budget cycle should engage representatives of the public and service users so that a citizen perspective can be integrated into program performance budgets. An example is the City of San Jose, California, which divides up all city spending and programs into six crossdepartmental service areas: community and economic development, environment and utility services, neighborhood services, public safety, transportation and aviation services, and strategic support (City of San Jose 2016). Under each area, the city has strategic priorities, performance goals, program budgets, and budget strategies, and these priorities and strategies are developed through an extensive engagement process with the citizenry, community stakeholders, the mayor and the city council, the city manager’s office, and the budget staff (see figure 4). The city budget also includes specific recommendations from the city auditor’s office that have funding impacts and shows to the public and policy makers how the proposed budget will address the concerns raised and hold departments accountable for improvement and results (City of San Jose 2016, attachment C). Because PBM activities serve the needs of different stakeholders, performance reporting should be user-friendly and customized to their respective needs. For example, budget offices may explore the use of multiple reporting platforms, from print reports, websites, and social media tools to mobile phone apps. Many U.S. cities, such as Boston, Detroit, Denver, and New York, are using government websites and smartphone apps to let citizens submit complaints and track the performance of city services (Ho and McCall 2016). Many also provide citizen-friendly financial and performance reports that are shorter, more readable, and outcome driven (Yusuf et al. 2013). A big, single report that tries to present all performance results to all users and stakeholders is no longer an acceptable reporting strategy given today’s technological and media environments. The coexistence of these mutually supporting PBM activities also implies that performance budgeting is a multifaceted and complex organizational phenomenon (Schick 2014). Even when one activity, such as the legislative use of performance goals and outcome information in budgetary decision making, is disappointing, other activities, such as multiyear strategic planning and the effort to strengthen budget communication and performance-oriented dialogue, may contribute positively to the results of budget execution (Dull 2006; Heinrich 2012; Lee 1997; Melkers and Willoughby 2005; Willoughby 2004).