66-79; Mikesell, 1986, pp. 141-155).
In an objects of expenditure budget, all of the various types of goods and services which must be acquired and used by an organization are itemized in the budget (Lynden, & Lindenberg, 1983, p. 66). The original motivation for this budget format, and still the greatest advantage of this type of budget is that it opens to public exposure exactly what it is that money is used to buy by non-profit and public sector organizations. The disadvantage of this budget format is that it makes no effort to assess the effectiveness or the efficiency of the expenditures included.
For the manager, an objects of expenditure budget requires that he or she justify things, as opposed to justifying what it is that an organization does, or is supposed to do. On the other hand, this budget format tends to keep managers honest.
A performance budget is, like the objects of expenditure budget, an incremental budget. A performance budget, in contrast to the objects of expenditures budget, emphasizes the functions of the organization (Lynden, & Lindenberg, 1983, p. 66). It is these functions which are budgeted, as opposed to the items required to perform the functions, which are funded in the objects of expenditure budget format. The functions of an organization are tied directly to its missions and objectives.
The advantage of the program budget format is that it places costs on functions. People are able to see