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Program and Budget Management Flashcards

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  1. What is the 'Estimate at Completion (EAC)' in EVM and how is a common formula for it calculated?

    Answer: EAC projects the final total cost; a common formula is EAC = Actual Cost to Date + (Budget at Completion - Earned Value) / CPI

    This EAC formula assumes future work will be performed at the same efficiency as work to date (indexed by CPI), making it a widely used performance-based forecast of final cost.

  2. What is the difference between 'obligations' and 'outlays' in Army program budget management?

    Answer: Obligations are commitments to spend (e.g., signed contracts); outlays are actual cash disbursements made to contractors

    An obligation occurs when the government legally commits funds (e.g., by awarding a contract); an outlay occurs when those funds are actually paid out, often in a later fiscal year.

  3. What is 'budget authority' and how is it different from appropriations in Army cost planning?

    Answer: Budget authority is the legal authority to obligate funds; appropriations are the specific acts by which Congress provides budget authority

    Appropriations are one form of budget authority; Congress provides budget authority primarily through annual appropriations acts, but also through contract authority, borrowing authority, and other mechanisms.

  4. What is a 'Program Budget Decision (PBD)' and how does it affect Army programs?

    Answer: A PBD is an OSD decision document that adds, reduces, or realigns funding in a program's budget submission, directly changing what funds are available

    PBDs are issued during OSD budget review and can significantly change program funding profiles; cost analysts must track PBDs to maintain accurate budget baselines.

  5. What is the purpose of a 'Budget Estimate Submission (BES)' in the Army PPBE process?

    Answer: The BES is the Army's formal budget request submitted to OSD that translates the POM into the President's Budget request, with detailed cost justifications for each program

    The BES represents the Army's refined budget position submitted to OSD after POM review, incorporating any changes and providing the cost basis for the President's Budget submission.

  6. What is 'reprogramming' and when does it require congressional approval in Army budget execution?

    Answer: Reprogramming moves funds between programs or accounts; transfers above statutory thresholds require prior approval from congressional defense committees

    Below certain dollar thresholds, the DoD can reprogram funds with only a notification to Congress; above those thresholds, prior approval from the relevant committees is required before execution.