Budgeting Process Summary

The following learning objectives are covered in this lesson:

• Relate the following building blocks to the PPBE process: Future Year Defense Program (FYDP), Major Program (MP), Program Element (PE).
• Identify the key events in the budgeting phase, including the preparation, review and decision process associated with the three major documents of the phase:  Budget Estimate Submission (BES), Program Budget Decision (PBD), Reclamas.

1. The budgeting phase of the PPBE process focuses on program execution to determine near-term funding requirements. Budgeting is a calendar-driven process, resulting in the DoD portion of the President's Budget, which is submitted to Congress in February each year.

2. The services, in the even years, prepare their combined Program Objectives Memorandum (POM) and Budget Estimate Submission (BES).  The POM and BES update the Future Years Defense Program (FYDP).  The BES covers two years (such as FY 02 and FY 03). During the odd years, services only submit changes to the previous year's combined POM and BES. Changes to the POM are known as Program Change Proposals (PCPs), while changes to the BES are known as Budget Change Proposals (BCPs).

3. The BES is submitted to the OSD Comptroller.  Occasionally the OSD Comptroller will send a list of "Advance Questions" about specific areas of the budget.  In the Fall, after receiving responses to the advance questions, analysts from the OSD Comptroller and the Office of Management and Budget (OMB) hold hearings to review appropriations or specific programs. The analysts typically examine program pricing and phasing, compliance with funding policies, and budget execution. After reviewing these areas, the OSD Comptroller analyst may prepare a draft Program Budget Decision (PBD). The draft PBD is used to make adjustments to the BES, generally reducing the amount of funding.

The draft PBD is provided to the services and defense agencies for comment, at which point they are allowed to provide an alternate position, known as a reclama.
A reclama provides an opportunity to explain problematic areas in the budget and refute proposed budget cuts. Reclamas should always be based on fact and provide an objective evaluation of the implications of the proposed cuts.

After considering the reclama, the OSD analyst makes the decision whether to withdraw, amend, or submit the original version of the PBD. If not withdrawn, this final draft version of the PBD will include all information regarding the original PBD and the associated reclama. It is then sent to the DEPSECDEF, who ultimately makes the decision to sign off on : thus finalizing : the PBD.

While programming and budgeting are ongoing, the Execution Review phase is also ongoing. The results of execution review will be used to make decisions about how to best allocate resources.

The PBD and changes that occur during programming will be incorporated as part of the DoD portion of the President's Budget. The FYDP is then updated to reflect the President's Budget, thus ending the budgeting phase of the PPBE process.