Certified in Public Health (CPH) Practice Exam

What is a primary disadvantage of incremental program budgeting?

1. It makes comparison from one year to another difficult.

2. It requires justification of all dollars allocated.

3. It requires more time and effort than zero-based budgeting.

4. It may not reflect the current programmatic priorities.

The correct answer is: It may not reflect the current programmatic priorities.

Incremental program budgeting builds upon the previous year's budget by making adjustments based on changes in funding levels rather than reevaluating the merits of the entire budget. This approach assumes that existing programs are still valid, and adjustments are made primarily for inflation or changes in funding. The primary disadvantage highlighted by the correct answer is that incremental budgeting may not accurately reflect current programmatic priorities. As organizational goals and community needs change, this budgeting method can perpetuate existing allocations that may no longer align with the organization’s strategic objectives. Consequently, resources might remain tied to outdated programs or activities that don’t address the most pressing needs of the time. Identifying the shortcomings of the other options helps to clarify why they are less pertinent. For instance, while incremental budgeting can indeed make comparisons from year to year challenging, it is not inherently problematic; the structure of such budgeting often allows for easy tracking of existing expenditures. Justification of allocated dollars occurs primarily in zero-based budgeting rather than in an incremental approach, which typically assumes prior budgets are justifiable unless specific cuts are proposed. Finally, while incremental budgeting may require a significant amount of time, it is often less demanding than zero-based budgeting, which necessitates a full justification of every item in the budget.