5.2 Budget Classification

Budgets can be centered around (1) inputs, (2) outputs, or (3) outcomes.

Budgets can be classified according to inputs, outputs, and outcomes, which reflect different stages of an organization’s activities and impact.

Inputs refer to the purchases made by the organization, such as supplies, equipment, labor, consumption goods, and capital assets. These inputs are relatively easy to measure and control because they represent tangible expenditures and resources used by the organization.

Outputs are the direct products or activities produced by the organization. These include measurable actions such as classes taught, miles of roads maintained, tons of solid waste managed, arrests made, and children vaccinated. Outputs represent the immediate results of the organization’s operations.

Outcomes, on the other hand, are the accomplishments of the organization, reflecting the broader impact of its activities. Examples include the safety of people and property, the educational attainment of the population, and the successful placement of program participants. Outcomes are often the most difficult to measure because they are influenced by external factors beyond the organization’s control.

Ultimately, organizations exist to achieve results, and understanding inputs, outputs, and outcomes helps clarify how resources contribute to achieving these goals.