Program budgeting is the generic name given to a budgeting system that aggregates income and expenditures across programs (projects), in most cases, aggregation by program is in addition to, not instead of, aggregation by organizational unit. The project has its own budget. In the case of pure project organizations, the budgets of all projects are aggregated to the highest organizational level. When functional organization is used for projects, the functional department's budget will be arranged in whatever manner is standard for the organization, but the income/expense associated with each project will be shown. The physical arrangement of such budget reports varies widely, but usually takes the form of a spreadsheet with the standard budget categories listed down the left-hand side of the sheet and category totals disaggregated into "regular operations" and charges to the various projects. Project charges will be split out and spread across the page, with special columns devoted to each project. For example, the columns shown in Table 7-1 would be repeated for each project.

Two special forms of program budgeting have received considerable notoriety in the past. One is planning-programming-budgeting systems (PPBS) and the other is zero-base budgeting (ZBB). While neither PPBS nor ZBB is now widely used, both have influenced managerial thinking. We know of no organizations that currently use ZBB and only a few that have permanently adopted PPBS, mainly social service agencies. But we do know of several corporations that occasionally require PPBS-type cost-benefit analyses. We even know a few senior managers who considered preparing zero-base budgets, but none have actually done so yet. Again, because these concepts have influenced managerial thinking in ways that are important to PMs, they are briefly discussed here.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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