Summary

The program budget is an alternative to the traditional structure of the budget and the advantage is that it is oriented towards the outcome of the planning process. The expenditures in it are divided by specific programs, and the cause-effectual linkages between the financial resources and the results obtained in the particular event are more visible. Program budget is defined by the OECD's definition of "budgeting that connects resources and measurable results". According to the United States Supreme Audit Agency (U.S General Accounting Office), "results-oriented budgeting means integrating information into the budgeting process."

Program Budget - this is a plan on how resources should be used in the current fiscal year. The budget is the decision-making base and at the same time reporting weapons about how these decisions were made. The main advantage of the program budget is compared to the traditional, organizational structure budget that the program budget allows the budget to be based on the results of the planning process that is effective planning. Effective planning implies that people responsible for its implementation have the necessary skills to solve the problems set out in the program. In the format of the program it is clear that the cause-effective relationship between the financial resources and the results obtained in the concrete measure is the most important precondition for effective use of state finances. Also, the program budget allows the entire budget to be viewed in terms of funding and funding of its funding and not only within the organizational context.

In Georgia, the process of implementing program budgeting in local self-governing units, is at the initial stage. The municipality has been tasked to prepare the program budget from 2013.

As the budget is the main financial document, it is necessary to be accurate and perfectly reflect the financial performance of the organization. Despite this, there are significant shortcomings in the program appendix of budgets drafted by self-governing entities in Georgia.

One of the main purposes of the program budget is to determine what the result is to be spent on the spending. Problems also appear in this direction. Specifically, there are some shortcomings in the stage of determination of indicators of intermediate and final results of programs and sub-programs. In particular, indicators are not useful and do not allow measurement and evaluation of the results achieved within the program.

Considering that the main purpose of the program budgeting is to establish the connection between the achieved results and resources spent on achieving the objective, the drawn-up program budget can be used as an advantage to the effectiveness of the municipality. Thus, we consider it important to focus on this issue. Explore and investigate the gaps allowed in the process of distribution and recording of the revenues and expenditure budgets of the municipalities and fix recommendations and proposals to facilitate the development of comprehensive reporting and successful budget system.

To improve the methodology, there is still a need to improve the gradual development of a parallel program budgeting. Given the fact that this stage of the budget preparation format and the significant shortcomings observed in many cases can not be spending units in the budget as a result of utilization of the results achieved in efficiency, it is recommended to prepare a mid-term planning and reporting more detailed instructions, within the expected and achieved results and the results of the assessment indicators.