Georgina Anthony
Antonella Demartini
Chanell Fletcher
Jacob Lile
Serenay Usta
Overview of PPBS & PPBE
• PPBS was developed in 1961 by the Department of Defense
• Designed to improve efficiency through long-term
planning and cost-benefit analysis of alternative programs
• Not expenditure driven, not limited to a single year
• Linked policies and priorities with available financial
resources
• PPPS became PPBE in 2003 to streamline connection
between priorities and decisions
• PPBE is a high-level multi-year continuous budgetary
process
• Used by DoD, NASA and NOAA
Four Phases of PPBE (Planning)
• Provides strategic rationale for agency programming and
budgeting
• Articulates long-range goals superimposed over ever-changing
conditions and trends
• Forecasting is conducted from a cost-benefit perspective
• Relates resource allocation to alternative uses of capabilities
and capacities
• Produces the Strategic Planning Guidance which provides
overall policy and strategy guidance to be used in program
development
• Example: DoD forecasts the number of troops/
equipment/services required for specific military operations and
approaches
Four Phases of PPPB (Programming)
• Aligns resources with specific actions to achieve department
goals
• Programs are the actual activities, supporting equipment, goods
and services purchased/developed
• Translates planning into action
• Compares current capability with needed future capability
• Evaluates existing programs for efficiency and guideline
development
• Example: DoD FY 2012 Budget Request includes a 374
page document addressing programming changes/terminations
i.e. promoting joint service solutions to address strategic needs
Four Phases of PPBE (Budgeting)
• Budget Estimate Submission (BES) four years: Last completed,
current, next two years
• Goal of BES is to estimate, formulate, justify, document to
support and implement directives
• Using categories to associate programs to each objective, the
budget phase clearly connects budget decisions and strategic
planning
• Example: DoD FY 2012 Budget Request includes a 87 page
section: “Program Acquisition Costs by Weapon System”
reporting FY 10 and 11 quantity and cost detail for the
military’s combined weapon system
•DoD uses this data to forecast cost estimates for maintaining
required programs for strategic compliance
Four Phases of PPBE (Execution)
• The real world manifestation of the budget (where the rubber
meets the road)
• A critical element of PPBE’s core strategic purpose
• Matches planned programs with actual resources
•Measures performance
•Provides feedback for more efficient and effective future
execution
• Example: DoD FY 2012 Budget Request features the
Department of Defense Efficiency Initiatives, including reviews
of program costs, discussion of reduced overlap, emerging best
practices and potential for program reductions
Advantages to PPBE
• Allows for long-term forecasting
• Provides the ability to connect budgetary decision
making with strategic outcomes
• Allows visualizing trade-off options as needs and
costs are considered simultaneously
• Provides prioritization by conducting gap and
excess analysis
• Offers flexibility, continual revision and ease of
program performance tracking
Challenges to PPBE
• High financial and administrative costs (requires a
high number of specialized analysts over an extended
period of time)
• Requires a high level of management and department
acceptance and participation
• Limits creativity (long-term projection could lead to a
“uniform approach” to treating an evolving issue
• PPBE is only useful when units of an agency perform
similar tasks
• Despite the multi-year approach, the link between
expenditure and revenue may not be transparent
Recommendations
• PPBE should only be used in highly structured agencies
with considerable capital and human resources such as
DoD.
• Performance measurement should be integrated into
the budgetary cycle
• The form of PPBE lends itself to performance
measurement in each phase of the cycle
• As budget justification rests upon performance results,
justification is necessary to receive public support
• The DoD could act more responsibly in their budgeting
process
Questions?