There are two main approaches to the formulation of an EMB budget: baseline (or incremental) and zero base (or zero-based) budgeting:

• baseline budgeting - takes as its basis the last funding period’s funding allocation and adjusts that for the next period. It is a budgeting tool suited to relatively static environments, rather then the dynamic electoral environment. For example, using baseline budgeting methods, it may be difficult to estimate what funds a permanent EMB might really need in a year following an election year.
• zero base budgeting - recognises that circumstances change from funding period to funding period and treats each funding period as a clean slate, and estimates funds required to achieve the strategic plan’s outcomes for that period. Past funding levels are not the relevant factor: instead, budgets are linked to the strategic plan by separately estimating and justifying the funds required to achieve each of the outcomes for the funding period defined in the EMB’s strategic and operational plans.

The decision on which budgeting system an EMB uses may be taken at governmental level if the EMB operates under government rules and regulations, or by the EMB itself if its legal framework allows it to determine its own rules and procedures for financial administration. An EMB’s approach to budgeting often tends to reflect that of the public sector in its country, especially if it is a Governmental or Supervisory EMB bound by general civil service financial rules.

Many EMBs still use baseline budgeting to prepare their election budget. There are a number of factors that make this approach less effective or even inappropriate for EMBs:

• as an EMB’s tasks may vary greatly from one year to another, depending on the electoral cycle, the resources needed for one funding period’s tasks tend not to be adequately predicted by the preceding funding period;
• attempting to estimate budgets for a current year election based on those for an election three, four, or even five years earlier runs risks of not adequately considering the effects of environmental, technological, or inflationary changes that occur over longer periods;
• the changing nature of electoral processes creates new tasks and new costs which may not be able to be estimated on the basis of past needs;
• there are likely to be substantial cost variations from year to year due to the increasing use of new technology for EMB tasks such as voter registration, information communication and management systems, voting, and the transmission of election results. As increasing use of technology changes EMBs’ working methods, costs in some areas may rise and in others may fall.

If the EMB uses a baseline budgeting approach, it will find it more difficult to meet the increasing demands for good governance, accountability, and sustainability. EMBs need to justify what will be achieved by the use of the funds requested, and why the level of funding requested is necessary.

Zero base budgeting encourages a ‘programme’ or ‘performance’ approach to budgets, whereby EMB activities are separately costed, and budgets are linked to specific output targets and outcomes, as is done by the Australian EMB. Thus, instead of having EMB-wide, generic budget categories of ‘staffing’, ‘forms printing’, ‘transport’, ‘security’, ‘regional office costs’ and the like, which makes it difficult to determine the cost of any EMB service or product, relevant costs are budgeted and attributed to a specific programme or project – such as ballot paper printing and distribution, staff training, or information programmes for political parties.

Zero base budgeting greatly improves the accountability of the EMB for its use of public and other funds, and assists the EMB to focus on providing cost-effective service delivery. It requires that all divisions within the EMB have individual work plans tailored to the EMB’s strategic goals, which identify the required outcomes, contain performance objectives based on measurable output targets, and specify verifiable indicators that these targets are being achieved. Each work plan aims to achieve a particular objective which contributes to the EMB’s overall strategic goals, and has a specific budget structure. Linking the budget to the strategic plan in this way makes it easier to determine how effectively funds have been expended to reach each objective, and to determine where and to what extent funding requests may be cut, or need to be increased.