The health officer must secure adequate funds to provide high-grade public health services for his community. He must, therefore, have a knowledge of the financial implications of his administrative decisions. Such knowledge will help him to secure the funds he requires from appropriating bodies, and to spend them wisely. A study aimed at the development of such a system was established, on a trial basis, at a state tuberculosis hospital under the New York State Department of Health. This program-accounting and performance-budgeting system was described, as well as some of the important implications of this system to health administrators. During this era of changing priorities in public health, it is suggested that this method will be of considerable value to public health planning, operations, and evaluation.