Performance Based Budgeting

We recently read a chapter on College Budgeting  and the different types that Institutions use  through out the country. Of the different types was incremental budgeting, formula budgeting, program budgeting, zero based budgeting, performance budgeting and incentive budgeting. Of all the budgets, the one that stood out to me most was "Performance Based Budgeting".  Performance Budgeting stood out to me the most, because I instantly wondered to what lengths some people or departments would go to to see to it that they receive  that maximum budget possible for the following school year.  Do all schools have the proper policies in place to see to it that numbers aren't inflated?

If an investigation shows that a department knowingly reported false numbers is that department then required to pay back a portion of their new budget. With budgets as tight as they are and school departments fighting yearly to stay a float its not a far fetched idea to think that an inflation of numbers has to be a problem at some universities. I would like to think that all departments run an 100 percent morally and ethical department, but the fact remains that money cant make people do some crazy things, even if the money isn't gong directly into their pocket....