Abstract

The research presents the hybrid budgeting methodology and the capsule model as a new methodology for financial planning. The research aims to enhance the performance of governments and achieve excellence and leadership. Governments face challenges when formulating financial plans, particularly those with long-term implications.

Traditional methods often fail to provide sufficient clarity, do not guarantee flexibility in resource allocation and do not ensure efficiency in resource allocation. Therefore, strategic goals are not achieved effectively. Wherever possible, clearer and more flexible approaches should be adopted.

The hybrid budget and the capsule model offer a comprehensive solution. It integrates the advantages of line-item budgets, program and performance budgets, planning and programming budgets, zero-based budgets, contractual budgets, and activity-based budgets. This integration helps allocate resources more efficiently. It also helps increase transparency and effectively achieves strategic goals.

To implement the hybrid budget, the operational budget is prepared using the line-item and zero-based approaches, prepare project and developmental initiative budgets through the planning and programming approach, add a portfolio of partnership projects using the contracting approach, and prepare the revenue budget using the activity-based approach. All these steps follow the structure of the Quality-of-Life Capsules.

The model also seeks a balance between daily tasks and the development of new projects and initiatives. Balance supports sustainability and entrepreneurship.

The capsule model is presented as a comprehensive framework that includes multiple government objectives and programs. The framework helps achieve clear results that contribute to improving the quality of life. Despite the expected benefits, such as improved long-term planning and increased flexibility, the main challenge is the need for intensive training.

The research presents a theoretical and practical framework that outlines the step-by-step implementation of the methodology in government institutions. It is found that the results indicate that the hybrid budget and the capsule model enhance financial efficiency, strengthen sustainability, and promote comprehensive development, thereby improving the quality of life.

The research concludes by providing practical recommendations for adopting the methodology in governments that seek to improve financial and administrative performance, wherever possible.

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