STYLES OF BUDGET PLANNING, SUCH AS THE PLANNING-PROGRAMMING-BUDGETING SYSTEM AND ZERO-BASE BUDGETING, CAN ONLY SUCCEED THROUGH THE DEVELOPMENT OF AN ACCOUNTING SYSTEM THAT CREATES ACCOUNT RECORDS ON A BASIS CONSISTENT WITH THE WAY THE BUDGET WAS DEVELOPED. THIS BUDGETARY ACCOUNTING HAS TWO DIMENSIONS: FINANCIAL ACCOUNTING, WHICH ACCUMULATES AND REPORTS FINANCIAL DATA WITHIN A FUND STRUCTURE IN COMPLIANCE WITH REQUIREMENTS; AND PROGRAM ACCOUNTING, WHICH DEVELOPS THE PROGRAM COST AND PERFORMANCE INFORMATION NEEDED FOR PLANNING, EVALUATING, AND MANAGING THE GOVERNMENT'S PROGRAMS, FUNCTIONS, AND ACTIVITIES ON A CONTINUING BASIS. MEANINGFUL BUDGET REFORM, WITH BUDGETARY ACCOUNTING PLACED IN THE PROPER PERSPECTIVE INVOLVES THE FOLLOWING KEY STEPS: (1) CREATE THE ACCOUNTING AND REPORTING FRAMEWORK NEEDED FOR EFFECTIVE PLANNING AND DECISIONMAKING; (2) DEVELOP THE BUDGET ON A COMPANION PROGRAM AND LINE-ITEM FORMAT; (3) DEVELOP A PROCEDURE WHERE THE ADOPTED LINE-ITEM BUDGET IS FORMALLY RECONCILED WITH THE PROGRAM BUDGETS; (4) FURNISH THE DEPARTMENT HEAD WITH BOTH THE LINE-ITEM AND PROGRAM BUDGETS; (5) REQUIRE EACH DEPARTMENT HEAD TO DETERMINE WHAT COST AND/OR PERFORMANCE MEASURES ARE NEEDED TO MANAGE PROGRAMS AND ACTIVITIES; (6) DETERMINE BY DEPARTMENT WHETHER THE PROGRAM COST ACCOUNTING AND PERFORMANCE MEASUREMENTS SYSTEMS SHOULD BE INTEGRATED WITH THE FINANCIAL BUDGETING, ACCOUNTING, AND REPORTING SYSTEM OR BE DEVELOPED INDEPENDENTLY; AND (7) MAKE SURE DEPARTMENT HEADS HAVE PROPERLY DEFINED ORGANIZATIONAL AND PROGRAM RESPONSIBILITIES. (RCB)