Which budgeting approach focuses on actual program needs and priorities?

Zero-based budgeting is a budgeting approach that requires each budget cycle to start from a "zero base," meaning that all expenses must be justified for each new period, regardless of previous spending. This approach essentially revolves around identifying and prioritizing actual program needs and resource allocation based on these needs rather than relying on historical spending.

In this method, all departments or programs evaluate their needs and funding requirements anew, which helps ensure that finances are allocated effectively to areas that require the most support. This prioritization helps in making informed decisions about which programs should receive funding, based on their current goals and objectives, rather than simply carrying forward budget amounts based on past expenditures.

In contrast, other budgeting methods, such as fixed budgeting, do not accommodate fluctuations in program needs as they typically assign a predetermined amount of funds based on past budgets. Variable budgeting adjusts based on changes in volume or activity but does not focus specifically on program needs from the ground up. The spending-reduction model emphasizes cutting back on expenses, which may not fully address the actual priorities or needs of a program.