1. PPBS Planning Programming Budgeting Systems

2. PPBS The Department of Defense is the only Agency to use this type of budget.budget

3. 1961, Robert McNamara becomes Secretary of Defense and reforms budget system to merge finance and military planning PPBS created by Rand Corporation New Goals set for DoD budget History

4. However, after 1961, PPBS is in constant state of evolution Depending on leadership, programming was suggested by SoD or Services themselves 1974 - Congressional Budget and Impoundment Act of 1974 1977, President Jimmy Carter introduced Zero-base budgeting into federal budget process (ended in 1981) History

5. After 1961, PPBS is in constant state of evolution (cont’d) 1979, the Defense Resource Board (DRB) (later called the Defense Planning and Resource Board – DPRB) was created 1986, Department of Defense Authorization Act of 1986 History

6. 2003 - PPBS renamed PPBES (Planning, Programming, Budgeting and Execution) History

7. Elements of a PPBS Budget Planning: Forecasting, strategic planning, cost estimating Programming: Determining Activities Budgeting: Allocating resources Systems: System analysis, operational study, cost/benefit analysis

8. Elements of the DoD Budget 1.Program Structure: a classification of the courses of action open to an organization for attaining its objectives 2.An approved program document that includes precise, qualitative data on needs, resources, inputs, and program outputs extending to a number of years in the future 3.A decision making process that establishes the functions, rules, and timetables for the actions required by the PPBS 4.An analysis process for measuring effectiveness and for weighing alternatives 5.An information system that supplies the data required to implement the system.

9. Pros Allows for long-term & multi-year strategies Divide funds among competing programs Upper management create budget Executive Budget Created

10. Cons Limited detail Limited input from legislators Limited input from the public Difficult to cleanly divide funds among crossover programs Limited accountability Expensive to create

11. Visible Priorities of Agency 1.Seek a Balanced Force 2.Prepare for Prolonged Readiness Challenges 3.Continue to Focus on Institutional Reform 4.Pursue Compensation Changes 5.Pursue Investments in Military Capabilities

12. 1. Seek a Balanced Force Restructure and Balance in order to save $12 billion over the next 5 years

13. 2. Prolonged Readiness Challenges The FY 2015 budget seeks to restore training and maintenance for the army, navy, and air force

14. 3. Institutional Reform The FY 2015 budget calls for a $93.6 billion dollars in reductions over the next 5 years. In order to achieve this goal, the DoD will control health care costs, modify weapon programs, reduce management staff, and consolidate infrastructure.

15. 4. Compensation Changes The DoD is reducing military pay and benefits budget by $7.2 billion dollars for FY 2015.

16. 5. Military Capabilities The DoD is making cost saving measures by terminating or restructuring programs that are inefficient or unsustainable

17. Recommendations Overall - PPBS works well incorporates long term budgeting allocates funds among competing programs However...

18. Recommendations PPBS Lacks: Transparency ex - Public Input ex - Overseas Contingency Operations Accountability ex - Littoral Combat Ship

19. Recommendations Zero-Base Budget defend budget annually budgets constructed from the bottom up aids transparency through public access New Programming Budget emphasis on evaluation hold contractors accountable

20. Final Thoughts Any questions? (Link)

21. Sample Line Items

22. Sample Goals The Department’s defense strategy emphasizes three pillars and, particularly in an era of reduced resources, the Department will redouble its efforts to protect capabilities that are most closely aligned to these pillars: Protect the homeland, to deter and defeat threats to the United States and to support civil authorities in mitigating the effects of potential attacks and natural disasters. This means making selective investments in missile defense, nuclear modernization, and cyber capabilities. It also means sustaining capacity to protect U.S. airspace, shores, and borders, as well as reshaping the ability of U.S. military forces to provide support to civil authorities when needed. Build security globally, to preserve regional stability, deter adversaries, support allies and partners, and cooperate with others to address common security challenges. In practice, this means continuing to rebalance our posture and presence to the Asia-Pacific while maintaining a focus on the Middle East. This also means working closely with our European partners to... (US DoD, 2014, p. 2-2)