PROGRAM BUDGETING IN THE DEPARTMENT OF DEFENSE,
RAND CORP SANTA MONICA CALIF
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The significant feature of the new planning and programing process that was initiated within the Department of Defense in early 1961 is the approach that is taken to decision-making and control in the vital area of defense expenditures. Planning is considered in long-range terms of missions, forces, and weapon systems, i.e., resource outputs, rather than in terms of the standard appropriation categories of procurement, construction, personnel, etc. In the course of budget review, the need for hurried decisions, with their obvious drawbacks, on major programs has been reduced considerably. The annual budget is now only a part of a longer-range plan. The new process incorporates an up-to-date, Five-Year Force Structure and Financial Program, expressed in terms of forces, manpower, and dollar requirements. Since this program requires a continuous type of budget review, a Program Change Proposal System was developed to aid in achieving this requirement. In this system, approval thresholds are established to concentrate attention on the major current or prospective issues, this being an obvious application of management by exception.