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they can use to indicate the value of one result versus anoth- er. This process should not be perceived as a budget alloca- tion exercise (whereby the budget of a certain result is deter- mined by the votes attributed to it). Instead, participants are communicating and expressing that certain results (and therefore the programs that eventually influence these results) might have greater relevance than others. Intended Result: Revealing the identity of your community and the objective meaning of what is relevant to it through the process of defining results. A priority-driuen budgeting process can be used to eualuate capital projects or one-time initiatiues in the same way it is used to eualuate programs and seruices. For instance, the capital improuement plan can be ranked against the priority results. 4. Prepare Decision Units for Evaluation. Evaluating the services against the government's priority results NVV 1-i e n is at the crux of PD B. First, the decision id r, °'v e n unit to be evaluated must be defined. A decision unit is the organizational sub- unit around which budgeting decisions U �1 id e r'stan id I� n g will be made. For PDB, the decision unit tl-iat drive r-e' VE must be broad enough to capture the tasks that go into producing a valued result for citizens, but not so large as to encompass too much or be too vague. If the decision unit is too small, it might capture only certain tasks in the chain that lead to a result, rather than the overall result, and might over- whelm the process with too many decision units and details. Traditional departments and divisions are not appropriate decisions units for FLAB because they are typically organized around functions rather than results. Hence, research subjects took one of two approaches to this issue: offers and programs. an offer; and to make it easier for outside organizations to par- ticipate in the FLAB process. For example, multiple depart- ments can cooperate to propose a new and inventive offer to achieve a result instead of relying on past ways of doing things. A private firm could submit an offer to compete with an offer made by government staff. Research participants that used the offer approach aueraged one offer for euery$1. 5 million in reuenue that was auailable in the priority-driuen bud�.qeting process. The drawback of offers is that they constitute a radical departure from past practice and might be too great a con- ceptual leap for some. This could increase the risk to the process, but if the leadership's vision is for a big break from past practice, then the risk could be worth it. For example, Mesa County's board is interested in having private and non- profit organizations fully participate in a, pl-i(Dl-ity... its budget process at some point in the �p r110 a, C 1-1 future, so the offer approach makes sense for that jurisdiction. L) u ird r,,,-5et n �g C) tl-ie fihr-st stqp IDS ti(D ga,hi a, dear- Offers. Offers are customized service packages designed by departments or cross-functional teams, or sometimes pri- vate firms or non-profits) to achieve one or more priority results. Offers are submitted to evaluation teams for consider- ation against the organization's priority results. Offers are intended to be different from existing organiza- tional subunits for several reasons: to make a direct connec- tion between the subunits being evaluated and the priority results; to encourage innovative thinking about what goes into Of tl-ie fi-,iict,(D��'S Programs. A program is a set of relat- ed activities intended to produce a n Iu e s. desired result. Organizations that use the program method inventory the pro- grams they offer and then compare those to the priority results. Programs are an established part of the public budgeting lexicon, and some governments already use programs in their financial manage- ment, so thinking in terms of programs is not much of con- ceptual leap.This means less work and process risk. However familiar the concept, though, the programs need to be suffi- ciently detailed to allow for meaningful decision making. Generally speaking, if a program makes up more than 10 per- cent of total expenditures for the fund in which it is account- ed for, then the program should probably be broken down into smaller pieces. If a program makes up I percent or less of total expenditures, or less than $100,000, it is probably too small and should be combined with others. Also,the program approach might provide less opportunity for outside organizations to participate in the budgeting process. That because the starting point is, by definition, the existing portfolio of services. For that same reason, radical innovation in service design or delivery method is less likely. April 2010 1 Government Finance Review 13