Which budgeting approach is most concerned with justifying costs and effectiveness?

Zero-Based Budgeting is focused on justifying costs and effectiveness because it requires each department or function to start from a "zero base" at the beginning of each budgeting period. This means that every expense must be justified for each new period, rather than simply adjusting previous budgets. As a result, it fosters a thorough analysis of all expenditures and encourages a rigorous evaluation of each program's necessity and effectiveness.

This method shifts the focus from merely continuing existing financial practices to actively assessing their value and contributions towards the organization’s goals. By scrutinizing all budget components, leaders are compelled to consider the effectiveness of their programs and how resources can be allocated more efficiently, making it a significant tool for increasing financial accountability and ensuring that funds are directed towards the most impactful initiatives.