Results-oriented Budget Practice in oecd countries odi working Papers 209

Annex 1: Glossary of Selected Terms 
Term Definition 
Source 
Accountability
The obligation to demonstrate and take responsibility 
for performance in light of agreed expectations. There 
is a difference between responsibility and 
accountability - responsibility is the obligation to act 
whereas accountability is the obligation to answer for 
an action 
Treasury Board of 
Canada Secretariat, 2001 
Accruals account 
A part of the accounting records which records 
liabilities. For example, if an organisation pays ECU 
100 000 annually in arrears at 30 June for services 
received, by 31 December it has therefore received 50 
per cent of those services for no payment and should 
make an accrual for a liability of ECU 50 000 at 31 
December. 
OECD (1999) 
Aim
A summary of the overall objectives. The aim provides 
a vision statement that embraces the desired future 
that the organisation is working towards. 
Ellis and Mitchell (2002) 
Cost
Expenses incurred by an agency for the delivery of 
agreed outputs. Cost is inputs-focused. 
Chan et al (2002) 
Cost effectiveness/ 
Value for money 
The relationship between the resources consumed and 
the outcomes achieved. Cost effectiveness measures 
highlight how well the costs of interventions have 
been translated into desired outcomes. Measures of 
cost effectiveness can indicate which set of 
interventions is best able to achieve the desired 
outcomes at the lowest cost. Ideally, cost effectiveness 
measures apply full economic costs against a clearly 
defined outcome. 
Ellis and Mitchell (2002) 
Costs
Costs are the expenses incurred using the inputs. 
Kristensen et al, 2002 
Economy
Relates to the cost of inputs being consumed. 
Economy measures can be used to indicate whether 
the right price was paid to acquire the necessary 
inputs.
Ellis and Mitchell (2002) 
Effectiveness 
The extent to which actual outcomes are achieved, in 
terms of the intended outcomes, via relevant outputs 
or administered expenses. An intervention's 
effectiveness should be distinguished from its 
efficiency, which concerns the adequacy of its 
administration.
Chan et al (2002)