An effective budget formulation process provides leadership the ability to allocate finite resources among competing programs, obtaining the best possible mix of capabilities to meet mission objectives.
Budget formulation begins during the programming phase of the Department of Defense Planning, Programming, Budgeting and Execution (PPBE) process and ends during the budgeting phase with the allocation of resources in accordance with mission priorities. Our analysis focuses on the first year of the six-year Future Years Defense Program.
The end products of this process, the Joint Staff Program Objective Memorandum (POM) and Budget Estimate Submission (BES), serve as a statement of the Chairman's priorities to both internal and external stakeholders.
The purpose of this article is to describe the Joint Staff's budget formulation process, which may be suitable for defense agencies. As a benchmark, the Joint Staff budget includes four appropriations (Operation and Maintenance, Research, Development, Test, and Evaluation, Procurement, and Military Construction), spanning 23 program elements with an annual topline of approximately $1.3 billion. Of that topline, $630M goes directly to a Combatant Commanders' exercise program managed jointly by the Joint Staff and Under Secretary of Defense, Personnel & Readiness, and another $100M goes to the National Defense University. That leaves a $520M Joint Staff portfolio, which is the subject of the process described in this article. In the Joint Staff, the program and budget branch within the Comptroller's office performs the budget formulation function.
Budget Formulation Objectives
The Joint Staff budget formulation process accomplishes five key objectives:
Realigns and adjusts program baselines: Provides Joint Staff directors with an opportunity to realign resources between appropriations and between programs to account for changing mission priorities within their directorates.
Defines and assesses "must-fund" programs: Identifies must-fund programs and resources them using low-risk assumptions to avoid unfunded requirements and perturbation in the year of execution.
Performs a "deep-dive" assessment of select/limited programs: Focuses analytic effort and time on a limited portion of the portfolio, recognizing that the majority of Joint Staff programs properly reflect leadership priorities.
Shifts resources between directorates: Facilitates shifting internal Joint Staff resources among the directorates as required to reflect Chairman, Joint Chiefs of Staff (CJCS) priorities.
Competes unfunded program requirements: Provides recommendations for senior leadership regarding unfunded requirements across the Joint Staff portfolio.
Budget Formulation Process Overview
We ask each directorate to identify a specified percentage of their funding for potential redistribution toward higher-priority requirements. Directors allocate remaining directorate funds across and within their respective portfolios. We do not question this allocation; our assumption is that directors are prudently managing their resources to maximize capabilities within their portfolios. We...