All Member Community

 View Only
  • 1.  Programmatic Finance/Budget

    Posted 03-23-2023 14:03

    Hello, Fellow ASMC members. 

    I am trying to explain the difference between budget execution and program side of budget and finance to people with governmental/DoD budgetary/finance experience and while I know the difference, I am just having hard time to put it in simple English that non-finance people can understand as well.

    Please assist me how to explain the difference between budget execution and program side of budget and finance to non-finance/budget person.

    Thank you and have a good day.



    ------------------------------
    SahngWon Lee CDFM

    ------------------------------


  • 2.  RE: Programmatic Finance/Budget

    Posted 03-24-2023 08:26

    One way to explain to a broaid audience

    The Program is a strategy driven, resource informed requirements document which outlines and details the resource requirements of DoD.

    The Budget is is the submission of those requirement by the Administration to Congress for proposed funding.

    Clear as mud I am sure. . . 

    v/r

    Pat



    ------------------------------
    Patrick Reynolds CDFM-A

    ------------------------------



  • 3.  RE: Programmatic Finance/Budget

    Posted 03-27-2023 14:20

    The Difference between a Program and Execution

     

    I'm a retired Navy and OSD senior budget analyst and branch head who worked for the Assistant Secretary of the Navy (Financial Management) and the Under Secretary of Defense (Comptroller).  I've handled hundreds of program budgets across almost all appropriations (R&D, procurement, military construction, family housing, operation and maintenance, military personnel, base closure, contingency operations). I've worked with OMB, GAO, CRS and occasionally Congressional committee staff.  After retirement I was asked back to Navy to rewrite and expand their online Budget Execution course and wrote a new Budget Formulation course.  After that, as a contractor, I taught Planning, Programming, Budgeting and Execution (PPBE) to the Navy's OPNAV staff on a monthly basis for three years.  I occasionally give PPBE training to executive leadership programs.  So, I am surprised at the confusing responses to Sam Lee's request for help in explaining the difference between budget execution and the program side of budget and finance to non-budget/finance people.

     

    Sam, you are correct an explanation should be easy, but your request mixes apples and oranges.  Programs and their budgets are really two different things.  So let's walk through this forest and separate the two, but showing how they relate.

     

    First, after an assessment of challenges and threats, a whole-of-government National Security Strategy (NSS) is developed and articulated.  The DoD then formulates a National Defense Strategy (NDS), highlighting specific areas DoD needs to focus on, occasionally defining specific forces (program with a capital P) with which to perform or "execute" (with a capital E) those strategies.  Numerous programs (with a capital P) supporting that strategy are developed.  Execution (with a capital E) can be defined as the performance of all the activities necessary to achieve the goals and objectives supporting that strategy and specific programs (with a capital P).  At this level, a Program may be providing attack aircraft (fighter squadron) or fielding ground units (brigade combat team).  That Program will consist of everything needed to field and support that Program. There are four kinds of primary support for every Program: people, facilities, equipment and everything else.

     

    Money is required to finance all those support elements, and that money is called a Program Budget. The Program Budget spans from a program's inception to its conclusion.  Most programs continue forever, like personnel and base operations.  These are called on-and-on programs.  Other programs have defined, but sometimes long duration, life expectancies, such as specific acquisition programs (development, procurement, sustainment).

     

    Funding for National Defense programs must conform to two articles in the United States Constitution.  First, like all other federal programs, all programs must be authorized.  The House and Senate Armed Services committees oversee this approval.  Second, all money must be appropriated.  The House and Senate Appropriations committees perform this function on an annual basis.

     

    Programs (with a capital P) are broken into categories or types of funding.  While a program manager may find it easiest to manage a single pot of money, it's easier for Congress (and everyone in DoD) to segregate specific types of funding into specific categories, like personnel, R&D, procurement, operation and maintenance, construction, housing, etc.  These "shopping list" categories form the specific appropriations Congress reviews in its annual budget deliberation process.  These specific categories also result in specific Congressional subcommittees to review each category.

     

    While Programs are funded/financed throughout their life expectancies, ALL funding is approved annually.  Each year's funding request to Congress (the President's Budget Request) is considered that year's program budget (with a small p).  Most funding is appropriated for one year (what I call one-year's-worth-of-money-for-one-year's-worth-of-effort) and is replenished each year.  This is not to be confused with what's called an appropriation's fiscal year availability, which is the legal authority or permission to obligate funding across subsequent fiscal years.  That authority is extended because of Congress' need to see all costs for a given fiscal year's program budget (called the full-funding policy, and mainly includes R&D and procurement programs) displayed in a single fiscal year, regardless of when spent.  Once money is appropriated, it starts execution (with a small e).

     

    Execution (with a small e) tracks the real-time cash-flow (a word that you won't see in the DoD Financial Management Regulation), usually on a monthly basis, of how a given fiscal year's program budget is doing against its game plan.  That annual game plan is called an obligation phasing plan (which tracks the program's legal liabilities, or "obligations" against the government) to monitor the performance of program activities (payroll, procurements, contracts, utilities, etc.) for a given fiscal year.  Execution for a program monitors the receipt of goods and services.  Execution of a program budget monitors first the obligation of funds and then second the expenditures supporting that program.  While obligations are the primary tracking tool, expenditures are by far the more accurate measure of a program's performance.

     

    While annual program budgets when prepared are estimates, once funding is appropriated, execution of those budgets may differ depending on circumstances.  Staffing shortages, contract delays, labor strikes, supply delays, R&D technical difficulties, testing failures, delays in receiving funding from Congress, many things may change that annual obligation phasing plan.  These delays in spending usually create spillover impacts into a succeeding fiscal year(s), requiring changes to that succeeding year plan.

     

    Because of the appropriation rules-and the need to continue to execute programs in real-time-realignments of funding triggered by various types of delays and changes are permitted by Congress rather than waiting to adjust in a subsequent fiscal year.  These changes in plan are accommodated through reprogrammings, both below-threshold (specific amounts DoD can initiate) and above-threshold (those requiring prior Congressional approval).

     

    Execution (with a small p) across all programs is tracked and monitored proactively because, under existing rules, funding can be realigned between program budgets with funding shortfalls (more R&D, contracts higher than estimates, personnel overtime, emergent requirements, etc.) paid from programs experiencing "under-execution" (staff shortages, contract delays, costs less than estimates, cancelled programs, etc.).

     

    It's all pretty messy, but you have to again remember each year's program budget is an estimate and reality doesn't adhere to anyone's game plans.   Once you get the knack, you can manage programs pretty well both across their life expectancies and on an annual basis.  Hope this helps.

     

    John O. King

     

     

     






  • 4.  RE: Programmatic Finance/Budget

    Posted 03-29-2023 08:50

    Good Day Mr. King,

     

    This was an excellent way to describe the difference between budget execution and the program side of budget and finance to non-budget/finance people.

     

    I found your explanation easy to read, and understand.  As someone who finds this topic fascinating, I don't get to spend a lot of time digging into the weeds so to speak, however, I do take as many classes as I can find on Budgeting and Appropriation law. 

     

    Thank you for the detailed explanation, and I am sure I am not the only one who appreciates the time you spent breaking it down.

     

    Respectfully,

     

    Toni Vollmer

     

    Toni M. Vollmer, CDFM
    Accountant

    DFAS-Rome General Ledger

    315-709-6224
    DSN 742-6224

    1021 E
    Toni.M.Vollmer.civ@mail.mil

     

    D E F E N S E  F I N A N C E  &  A C C O U N T I N G  S E R V I C E  -  R O M E

    SHARE SOMETHING that you liked, loved, or loathed by filling out an ICE survey: http://go.usa.gov/xfk

     


     

     

     






  • 5.  RE: Programmatic Finance/Budget

    Posted 03-29-2023 11:08

    Thanks, Toni. 

     

    As a well-experienced practitioner at the top of the money food chain and PPBE trainer (starting early in my career I used to train the ASN(FM) junior staff and interns/rotatees just before each year's Navy/Marine Corps summer budget review), I find that a lot of what needs to be described in PPBE and the whole program and budget process is sometimes not as well defined or articulated as it should be.  I like to use my experience and knowledge to help fill in the gaps.

     

    For example, I'm contrarian in lots of things so I'm also not a fan of static training and testing.  When I took over the OPNAV PPBE course for the Navy's N80 program and its mid-grade (CDR, LCDR and Major) officers and civilian staff, I threw out all the quizzes, pop-up quizzes and unit/chapter/test and final exam questions.  Like the Maginot Line, such knowledge check-points have no real value and contribute nothing or very little to our need to be prepared to do our jobs better.  An example, many training programs about budget or execution will ask questions at the end of each chapter/unit and have a final exam.  Many of those questions use true/false, correct/incorrect (wrong), or multiple choice selections.  In checking/validating your answers, the correct answer is confirmed, and the incorrect (wrong) answers uses the correct answer as confirmation.  There's not much value added to why an incorrect answer is incorrect.  When I wrote the Navy's online Budget Formulation course (one didn't exist before then), after explaining all the process, policies and mechanics of budget formulation I then spun-off into the separate types of appropriations, each with it's own characteristics. Instead of a static Q/A approach, I set out a selection of multiple choices, one of which was correct and one incorrect, but also with some choices being partly correct and partly incorrect.  In checking/validating your answers, you would be informed as to correct, partly correct, partly incorrect and incorrect, with explanations WHY for each.  I used that approach to explain why some things are partly/mostly correct or partly/mostly incorrect (wrong) because occasionally/often that's the way the world works. It's not black and white like our current training programs define, but actually shades of gray/grey that a program or budget analyst has to make an assessment of and a decision about to address/resolve some issue or problem.  Our current PPBE and certification programs don't provide this increased flexibility and adaptability, and therefore limit our ability to learn.

     

    A real example of being a contrarian is a discussion a few years ago I started about both Execution with a big E (getting done what needs to be done to get what you need) and Budget Execution a little e (spending money in a specific fiscal year to contribute to that big E goal).  It was about the reality of Continuing Resolutions (CRs).   When Congress doesn't act by 30 September each year to pass the new budget, everyone from the President and Secretary of Defense all the way down to program managers start whining about all the negative effects - and start writing letters to Congress and the press.  I see that as political commentary.  If you look at how money is actually passed along from OMB to the departments and agencies – "at the same rate" as last year; and occasionally front-loaded based on appropriation annual histories – and cross check that the four primary types of appropriations (personnel, operations, procurement/construction and R&D) two of those (personnel and operation and maintenance) will basically spend at that same rate with NO negative impact.  And two others (R&D and procurement/construction) will only be MINIMALLY impacted.

     

    Sure, if the budget request is slightly higher because of requesting additional funding for inflation or increasing staff there's a minor impact (which is resolved when funding is subsequently approved), but not at the level that you can't do you job.  For R&D and procurement, any increase in funding is also only a minor problem (resolved when funding is finally passed).  NOTE: There is nothing that says what order you spend your program's money in!

     

    The issue of "new starts" is real, but manageable. In fact, while the DoD Financial Management Regulation started including a definition of "new starts" for Operation and Maintenance programs a few years ago, Congress makes NO such legal distinction and describes "new starts" as only applying to R&D and procurement appropriations.  Adding substantially increased funding to an existing operation and maintenance budget may draw attention but that's part of the normal "budget review and approval" process within DoD and later by Congress.

     

    True "New Starts" constitute only a few percent of each year's new budget request but seem to suck all the political air out of the room.  While true new starts are delayed, other new R&D efforts may fit within a more broadly-defined description in the basic justification document (budget exhibit).  (That's especially true for "projects" which are sub-elements of an RDT&E "program" (which is a specific budget line item)).  So, basically half the budget (people and operations) are not negatively impacted, and the other half (R&D and procurement/construction) is minimally impacted.  So, I'd estimate about only 2 to 5 percent of a new budget is impacted while we complain about the whole process.  Instead of expecting Congress to change it's behavior, WE need to be more flexible by being less restrictive in our program descriptions, as well as being more adaptive.  After all, isn't THAT our charter in national defense?  To adapt to win the war?  Yet WE program and budget managers can't adapt our processes and own cash-flow to get the job done?  

     

    Military construction is a special case, and requires specific authorization in addition to appropriations.

     

    So, what I'm saying when it comes to Continuing Resolutions is STOP WHINING AND MANAGE YOUR PROGRAMS!

     

    So, Toni, these are the kinds of discussions I hope we can really Engage in!

     

    John






  • 6.  RE: Programmatic Finance/Budget

    Posted 03-24-2023 13:31

    Sam, easiest explanation of difference is execution is current year and program is out years. Dave



    ------------------------------
    Philip Weinberg CDFM
    Oak Hill VA
    ------------------------------



  • 7.  RE: Programmatic Finance/Budget

    Posted 03-24-2023 16:45

    Hello Fellow Members

    • Let start from Strategy: Public Agency define and craft out Plans to achieve its mission statements and Objectives--the plans or strategic priorities is fact-based of the public needs.
    • Programme is to direct, coordinate, control and oversee implementation of the agency sets of projects to achieve changes and benefit to Agency strategic priorities or objectives
    • Program spring up from Agency strategical plans listed 
    • Budget which is the forecast of income and spending for government---but knows as spending of the agency will be developed base on the program spending or cost and submitted to OMB.
    • Appropriations will be release base on budget submitted which consist of programs that spring up from our public agency plans.
    • Project is a change---it is just an events or activities from start to finish to achieve the program that was included in Budget which align with strategic priority. so It is delivering of a specific output or sets of output to make changes to agency capability.
    •  So after the budget approval by legislative, the Budget execution will spring up---it is the spending of public money and delivery of projects and services that come from program and programs come out of the plans. Budget Execution process  start  from Authorization to Commitment to Receipt and Verification then to Payment then to Accounting. Every Projects link to a program and every program link to Budget and Budget link to Public Agency Strategy and Strategy link to strategic need analysis from citizens or the populace. Hope it explicit enough to have the knowledge in DOD and Non DOD sectors of US government.

    Popoola Olusegun CDFM, CM

    NRCS-USDA



    ------------------------------
    Olusegun Popoola, CDFM, Dip Forensic Acct
    Accountant
    USDA/USFS
    Albuquerque, NM
    77036916678
    ------------------------------



  • 8.  RE: Programmatic Finance/Budget

    Posted 03-26-2023 19:16
    Hello Sam, 

    Simple Terms: Programming in PPBE is like making a plan for how to spend money, while execution is actually spending that money according to the plan.


    More details:  Programming and execution are distinct phases in the budgeting process.


    Programming is the process of developing a plan to allocate resources in support of DoD objectives. During this phase, the DoD identifies and prioritizes its goals, evaluates alternative strategies, and determines the resources required to achieve its objectives. The programming phase typically results in the development of a Future Years Defense Program (FYDP), which is a projection of the DoD's planned resource allocation over a period of five years.


    Execution, on the other hand, is the actual implementation of the plans developed during the programming phase. During execution, the DoD allocates resources in accordance with the FYDP and carries out the activities necessary to achieve its objectives. Execution involves tracking performance, managing risks, and adjusting plans as necessary to ensure that objectives are met.


    In summary, programming is the process of developing a plan to allocate resources, while execution is the process of implementing that plan.

     


    Best Regards 


    Tony I.  






  • 9.  RE: Programmatic Finance/Budget

    Posted 03-30-2023 07:34

    I am really appreciated for all these very informative yet easy to comprehend response. 

    This helps me to make my office understand better on what they are talking about.

    Thank you everybody and I am really glad to be a member of ASMC.

    This is truely a great resource we can be depend on as a DoD Finance/Budget personnel.

    v/r



    ------------------------------
    Sahngwon Lee CDFM
    Aberdeen MD
    ------------------------------



  • 10.  RE: Programmatic Finance/Budget

    Posted 03-31-2023 11:45

    Sam,
    There are lots of great discussions as well as advice!



    ------------------------------
    Felicia Jackson CDFM
    Fairfax VA
    ------------------------------