Department of Homeland Security Management Directives System MD Number: 1330 Issue Date: 02/14/2005 PLANNING, PROGRAMMING, BUDGETING AND EXECUTION

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1 Department of Homeland Security Management Directives System MD Number: 1330 Issue Date: 02/14/2005 PLANNING, PROGRAMMING, BUDGETING AND EXECUTION I. Purpose A. This directive establishes policy, procedures, and responsibilities relative to the Planning, Programming, Budgeting, and Execution (PPBE) process. The objective of PPBE is to articulate Department of Homeland Security (DHS) goals, objectives and priorities, align DHS programs to those goals, and develop and implement a program structure with time-phased financial resource and personnel requirements to accomplish goals and objectives. The system is a cyclic process consisting of planning, programming, budgeting and execution phases. PPBE is the means by which the Department develops its Future Years Homeland Security Program (FYHSP) and associated five-year program resource requirements. It also guides development of the Department's budget request and establishes parameters and guidelines for implementing and executing the current budget. B. PPBE establishes the framework and mechanisms for decision making for future programs and provides the opportunity to reexamine prior programmatic decisions in light of the present environment (e.g., evolving threat, changing economic conditions, etc.) This includes examining existing funding within base resources for use in funding higher program priorities across the Department. The PPBE process also emphasizes the importance of the Department's execution of the budget in both funds expenditures and program performance. This is necessary to ensure programs are expending funds appropriated and producing the expected results and benefits. C. PPBE will drive better resource allocation decisions, supporting the ultimate objective: provide the DHS Organizational Elements' (OEs) programs with the best mix of people, training, equipment, and support attainable within fiscal constraints to achieve DHS goals and objectives. II. Scope This directive applies to all DHS OEs, unless specifically exempted by statute

2 III. Authorities A. Public Law , 116 Stat , "The Homeland Security Act of 2002." B. Public Law , "The Department of Homeland Security Financial Accountability Act." C. Office of Management and Budget (OMB) Circular A-I 1, "Preparing, Submitting, and Executing the Budget." D. Management Directive 0000, "Organization of the Office of the Secretary of Homeland Security." E. Management Directive 1400, "The Investment Review Process." F. Management Directive 1405, "The Joint Requirements Council." IV. Definitions For detailed definitions and applicable terms, reference Appendix A. V. Responsibilities A. The Secretary and Deputy Secretary, assisted by their Policy advisors exercise centralized control of executive policy making and direction setting by defining planning goals, establishing Department priorities, issuing major policy decisions, and approving planned resource allocations and budget decisions to support DHS objectives and priorities, including joint, DHS-wide, or crossfunctional programs. B. The Office of Policy, Planning, and International Affairs will be responsible for the following: 1. Leading the "planning" portion of the PPBE process including risk assessments and management, unconstrained strategic assessment of operational capability requirements, and setting strategic policy planning priorities; 2. Leading the development of the DHS lntegrated Strategic Assessment Report and the Secretary's lntegrated Planning Guidance (IPG) with support from the DHS Operational Integration Staff (I-STAFF) and the Program Analysis and Evaluation (PA&E) office; - 2 -

3 3. Providing policy support to, and participating on, the Budget Review Board. C. Budget Review Board (BRB). 1. The Chair and board members shall be responsible for the following tasks relating to their area of responsibility: a. Reviewing and making recommendations on the Future Year's Homeland Security Program (FYHSP); b. Reviewing and making recommendations on the annual President's budget request; c. Reviewing quarterly and mid-year status of funds and performance with the objective of overseeing and ensuring program implementation consistent with the Secretary's goals and priorities; d. Minimizing the re-evaluation of decisions in the absence of new information or new factors. 2. Budget Review Board shall consist of: Chairperson: Vice Chair: Membership: Advisors: Deputy Secretary Under Secretary, Management Under Secretary, Border and Transportation Security Under Secretary, Emergency Preparedness and Response Under Secretary, lnformation Analysis and Infrastructure Protection Under Secretary, Science and Technology Commandant, U.S. Coast Guard Director, U.S. Secret Service Director, U.S. Citizenship and Immigration Services DHS Chief of Staff Office of Policy, Planning, and International Affairs (as designated by Secretary of Homeland Security) General Counsel Assistant Secretary for Legislative Affairs Chief Financial Officer (CFO) Chief Procurement Officer (CPO) Chief lnformation Officer (CIO) Director, Budget Division and Director, Office of Program Analysis & Evaluation, Office of the CFO

4 D. The Joint Requirements Council (JRC) shall be responsible for the following tasks relating to areas of responsibility: 1. Overseeing mission requirement generation process; 2. Reviewing cross-functional and cross-agency needs and requirements; 3. Identifying and assessing future year investment alternatives and associated Departmental cross-cutting investments; 4. Prioritizing any over-target requests as received from the components in their FYHSP Resource Allocation Plans (RAPs). E. The Director, Operational Integration Staff (I-Staff) shall be responsible for the following tasks: 1. Managing the Department's integrated operational planning system to ensure operational integration and alignment with PPBE process; 2. Coordinating with the Office of Policy, Planning, and International Affairs and PA&E, in the development of the lntegrated Planning Guide (IPG); 3. Coordinating the operational input to the DHS lntegrated Strategic Assessment Report with the Office of Policy, Planning, and International Affairs 4. Providing guidance for strategic planning assessments, operational planning and resource allocation planning that supports DHS operational capabilities of any future DHS field-level operational integration structure; 5. Developing and coordinating a consolidated Regional Resource Requirements List for the Joint Requirements Council and providing regional inputs to FYHSP. F. Organizational Elements (OEs) shall be responsible for the following tasks: 1. Participating in the planning, programming, and budgeting process: including needs and risk assessments, strategic planning, operational plans and assessments, Resource Allocation Plans (RAPs), and budget estimates and justifications; 2. Providing advice and information as requested by the Secretary and CFO per established processes and guidelines; - 4 -

5 3. Developing and executing programs consistent with policy direction, the National Strategy for Homeland Security and the DHS Strategic Plan and lntegrated Planning Guidance; 4. Controlling and managing execution of the current-year budget and prior-year accounts and day-to-day management of the resources under their control to ensure efficient, effective execution of program plans; 5. Complying with DHS reporting requirements related to annual program and execution plans, budgets, performance goals, and measures. 6. Ensuring the appropriate resources are committed to joint, DHSwide, and cross-functional programs. G. The Chief Financial Officer (CFO) shall be responsible for the following tasks: 1. Overseeing the PPBE process in coordination with the Office of Policy, Planning, and lnternational Affairs; 2. Controlling and managing development, justification, and defense of the Department's annual FYHSP and President's request, Compliance with CFO Act and other regulatory financial management requirements such as Federal Financial Managers Improvement Act, etc.; 3. Overseeing and reviewing execution of the current-year budget and prior-year accounts. H. Director, Program Analysis and Evaluation (PA&E), under direction of the CFO, shall be responsible for the following tasks: 1. Managing the PPBE process, including management of meetings and creation of the PPBE calendar of key events and ensuring coordination with the Office of Policy, Planning, and lnternational Affairs; 2. Controlling and managing the RAP review process; 3. Managing the processes of the Investment Review Board (IRB) and Joint Requirements Council (JRC), in coordination with the Office of Policy, Planning, and lnternational Affairs; 4. Developing Resource Allocation Decisions (RADs) in coordination with the Budget Office, with supporting explanatory materials; - 5 -

6 5. Assisting the Policy Office with developing the Integrated Planning Guidance (IPG); 6. Coordinating development and submission of the FYHSP to OMB and Congress; 7. Providing the Deputy Secretary and executive leadership with quarterly performance and milestone report information; 8. Providing independent evaluations of program execution through resource and performance reviews and program assessments. I. Director, Budget Division, under direction of the CFO, shall be responsible for the following tasks: 1. Controlling and managing development of the Department's request/proposal for the President's budget and ensuring coordination with the Office of Policy, Planning, and International Affairs; 2. Managing apportionment and control of funds processes including transfers and reprogramming; 3. Conducting status of funds review and mid-year/mid-session reviews of OE operations; 4. Managing the process for preparing the Secretary for budget hearings including development of testimony and briefing materials; manage on-going liaison activities with appropriations staffers in the Congress; 5. Making recommendations to senior executives on program funding and initiatives; justify/defend program increases, decreases, starts or terminations; 6. Developing budget resource tables and charts. J. Office of Policy, Planning, and International Affairs shall be responsible for the following tasks: 1. Lead DHS Strategic Planning with support from the Office of the CFO, the I-STAFF and the OEs; 2. Coordinate with other Government agencies such as the Homeland Security Council, National Security Council, and Office of Management and Budget to ensure that departmental priorities align with the strategic goals of the administration

7 VI. Policy & Procedures A. Planning, Programming, Budgeting and Execution Overview. DHS uses the PPBE process to determine program priorities and allocate resources. The PPBE is a cyclic process consisting of four distinct but interrelated phases: planning, programming, budgeting, and execution. In Planning, risk assessments are conducted to determine and prioritize the capabilities necessary to meet the missions of the Department. In Programming, resources are allocated to best meet the prioritized needs within projected resource constraints. In Budgeting, detailed budget estimates are developed to ensure the most efficient use of limited funding and priorities are being met as effectively as possible. Finally, in Execution, program execution and output is assessed against planned performance to determine the best return on investment. PPBE ensures programs are planned and identified to meet operational requirements and align with DHS mission, goals, and objectives and priorities with measurable, meaningful performance outcomes to demonstrate the success of DHS. The PPBE produces planning guidance that reflects the Secretary's program planning priorities; a Future Year's Homeland Security Program (a fiveyear budget plan); the President's budget and annual executable program plans. The DHS budget and FYHSP are forwarded to the President for approval and Congress for appropriation. Appendix (A) provides a basic timeline of PPBE phases and products. PPBE establishes the framework and mechanisms for programmatic decision making for the future, and provides the opportunity to reexamine prior program decisions in light of the present environment (e.g., evolving threat, changing operating conditions, economic and technical realities, etc.). This includes examining existing funding within base resources for use in funding higher program priorities across the Department. The PPBE process also includes emphasis on the department's budget execution evaluating whether the programs funded are providing the expected results and benefits. Throughout the PPBE, the Secretary of Homeland Security, assisted by the proposed Office of Policy, Planning, and International Affairs, will provide centralized policy direction while placing program execution authority and responsibilities with the Organizational Elements or other structured DHS execution divisions as directed. The OEs will provide advice and information as requested by the Secretary and per established processes and guidelines

8 B. Future Years Homeland Security Program (FYHSP). 1. The vitality of the PPBE process is captured in the Future Years Homeland Security Program (FYHSP), summarizing all personnel, expenses, capital equipment, etc., associated with programs approved by the Secretary in support of the DHS Strategic Plan. The FYHSP contains funding information for the prior year, current year, budget year, and following four years (outyears). Program funding allocations must account for, but are not limited to, the following over the next five years: Annualizations; New investments; Operating costs of new systems; Disposal/termination costs; Attrition rates, hiring and training costs; and Facility requirements. 2. The FYHSP is updated three times during the PPBE cycle: in March to reflect OE RAP submissions; in August to reflect Departmental decisions for the OMB budget and FYHSP submission; and in January to reflect the President's Budget/FYHSP submission. It articulates the total DHS resources programmed by fiscal year. 3. In addition, the FYHSP includes program performance measures and targets, annual milestones information, and reflects alignment of programs and associated resources to the DHS goals and objectives in the Strategic Plan. 4. The FYHSP is an internal DHS working document. Since the FYHSP outyear estimates reflect internal planning assumptions, FYHSP data beyond the budget year is not released outside the Executive Branch without the permission of the DHS CFO. However, in response to the 2002 Homeland Security Act, congressional oversight committees receive a special publication of the FYHSP, containing prior, current, budget, and four outyears, with the submission of the President's Budget. 5. Within DHS, in addition to containing the official published results of the PPBE processes, the FYHSP is widely used as a data source for analysis and as input to alternative ways of displaying and reporting actual and programmed resources and associated program performance levels

9 C. Planning. 1. Planning is the first step in the DHS resource allocation process. This phase is unconstrained by resources. Long-term strategic and resource planning encompasses a 5-10 year extended planning period, while operational planning covers a shorter 1-5 year period. In the planning phase, the posture of the United States in the world environment is examined in the context of, considering homeland security objectives and priorities, and the need for efficient management of resources. The focus at the Department level will be on the following major objectives: a. Defining the projected homeland security operating environment including threat and vulnerability assessments and risk analysis; b. Developing and reviewing strategic and operational assessments of current capabilities, activities, and mission accomplishment across DHS; c. Defining the national homeland security program priorities necessary to achieve and maintain the highest level of homeland security missions capability; d. Planning balanced requirements (e.g., human capital and information technology) necessary to accomplish the Department's goals, objectives, and priorities; e. Reviewing and approving strategic and operational plans to ensure feasibility and consistency with homeland security policy, and doctrine and alignment with the strategic goals of the administration. 2. The first activity during planning is a review of previous and existing guidance. This review incorporates the evolution in required capabilities and changes in strategy and policy as contained in various strategy papers, Homeland Security Presidential Directives, and strategic plans

10 3. The Office of Policy, Planning, and International Affairs is responsible for developing the DHS lntegrated Strategic Assessment Report that provides strategy recommendations and operational needs and requirements input to the formulation of the Secretary's lntegrated Planning Guidance (IPG). The lntegrated Strategic Assessment Report is aggregated from the OE and regional headquarters' strategic assessments, then refined based on departmental threat/risk assessment and other operational considerations. The integrated report identifies cross-oe and cross-region shortfalls, gaps, and opportunities to maintain, enhance, and provide new operational capabilities for DHS. The lntegrated Strategic Assessment Report is published annually in October and provides input to the IPG. 4. The Information Analysis and Infrastructure Protection Directorate is responsible for developing a long-range threat and vulnerability assessment. This assessment provides the projected operating environment and risk analysis that will be used to guide long-term capability requirements and operational priorities and provide the basis for risk-based management to guide resource decisions. 5. The Operational lntegration Staff is responsible for overseeing the DHS integrated operational planning system. They execute horizontal and vertical coordination and integration of operational capabilities, and the exchange of operational information with the Department leadership, other Federal Agencies, and external stakeholders such as state, local, tribal, and private sector officials with homeland security roles. The Operational lntegration Staff maintains a working relationship with planners from DHS and other interagency federal partners to exchange information on capability assessments and operational planning as well as provide operational guidance input to the Strategic lntegrated Planning Process (SIPP) and PPBE processes. In addition, the I-Staff develops and maintains integrated DHS operational plans based on PPBE resource allocation and provides mobile training teams to educate DHS and other federal agencies on the operational planning process

11 6. The planning phase ends when the IPG is issued. The IPG provides DHS OEs operational planning guidance and basic guidance for program development for the next FYHSP. The IPG defines DHS policies and priorities, outlines broad strategies and capabilities required to meet the mission and goals of DHS, provides operational planning guidance, and provides guidance for the upcoming programming phase. It dictates the criteria and assumptions for structuring capabilities and establishes priorities for committing resources for modernization, readiness, and sustainability initiatives. The Office of Policy, Planning, and International Affairs with support from I-STAFF and CFO's PA&E, is responsible for preparing the IPG. In November, the draft IPG is distributed to Homeland Security OEs for final coordination. The draft IPG also contains the schedule and directions for beginning Resource Allocation Plan (RAP) development. The Secretary issues the final version of the IPG in January. 7. The planning process does not identify specific activities to be funded; rather, it identifies the planning approach and priorities of the Department. The planning phase begins about three years in advance of the fiscal year for which budget authority will be requested. For example, in FY04 planning began to support the FY07 budget request and FY07-11 FYHSP, which will be submitted to Congress in FY06. D. Programming. 1. The purpose of programming at the OE and DHS level is to develop five year program plans and allocate resources to support Department mission, goals, objectives, and priorities. Policy, planning priorities, and risk assessments drive the program plans and eventually, the level of resources allocated to programs. 2. Programming translates planning decisions, DHS programming guidance, and congressional guidance into a detailed allocation of timephased resource requirements including investments, construction, human capital, IT, and other support and operating expenses. This is accomplished through systematic review and approval processes that estimate costs of programs, including personnel, expenses and follow on resource requirements or savings five years into the future. This gives the Secretary and the Administration an idea of the impact of present day decisions on future Homeland Security requirements and issues. The Director, PA&E, in coordination with the Office of Policy, Planning, and International Affairs and the Office of Budget, coordinates and manages the programming review

12 3. As part of the programming phase, OEs will annually develop and provide DHS with Resource Allocation Plans (RAP). The RAP is an OEs comprehensive expression of the requirements needed to achieve the objectives, commitments, and priorities of the Department. Proposed programs plans and requirements expressed in the RAP must be consistent with the IPG and reflect systematic identification of resources required to achieve missions, objectives, and priorities, and potential alternative methods of accomplishing them. OEs translate program and resource requirements reflected in their RAP into five-year funding requirements. 4. As a prelude to the programming phase and RAP development, each OE involved with PPBE needs to start with the following: a. An understanding of pertinent authorities, directives, and guidance; b. The listing of all goals, objectives, priorities, and other guidance; c. The programs that cover the mission and functions of the OE; d. And the internal priorities for those programs within individual organizations. 5. In RAP development, OEs, consistent with the IPG, review threat and vulnerability assessments, assess the status, performance, and capabilities of current programs, identify unresolved issues, and assess how they can best meet policy and planning priorities. OEs develop, propose, and prioritize programs and associated capabilities with cost estimates. OEs translate program and resource requirements reflected in their RAP into five-year funding requirements. RAP'S must identify what is affordable within fiscal constraints in addition to unfunded requests. 6. The RAP displays the prior year, current year, budget year, and four future years. RAPS must account for long-term resource requirements, including human capital, construction and investments, operations and maintenance, and potential disposal or termination costs, and program performance goals. In addition, a RAP must include the following: A Description/Purpose of the program. Alignment to and description of how it best supports achieving planning priorities (IPG)

13 Justifications for all program increases and unfunded requests, and links to changes in performance. Justification for year-to-year program/project resource changes. A five (5) year investment plan, with investments linked to programs and performance. Program performance goals and measures. A description of how changing resources/funding will affect performance and best accomplish planning priorities. 7. Each program must have long-term performance goals that meaningfully reflect the objective of the program. Each program must also have performance measures reflecting the outcomes of the long-term performance goal and supporting DHS strategic objectives. Performance goals included in the FYHSP will be supported by milestones and performance measures that accurately reflect program progress and cost and help identify cost differences resulting from changes to performance goals. Program justifications must integrate Program Assessment Rating Tool (PART) criteria and explain how PART results affected program requirements and performance measures. 8. OEs and DHS use program performance measures to inform senior management during resource allocation and budget decisions. Progress on current year program and department-wide performance goals is reported to Program Analyis and Evaluation (PA&E) two weeks after the completion of each quarter. In addition, programs will be regularly reviewed to assess progress towards meeting goals. The Under Secretary for Management provides summary level information on performance progress to the Secretary and OE heads. 9. The results of the PART, performance outcomes, and execution data will continue to be used for informing budgeting decisions, supporting management, identifying problems, and promoting performance measurement and accountability. The scope and breath of Department level program evaluations will vary year-to-year based on Department priorities. Organizational Elements will be notified if evaluations result in significant issues or findings

14 10. In March, each Department OE and Office submits a RAP to the Secretary through the Office of PA&E, which will coordinate review of the documents by the PPlA Policy Office and the Budget Office. The RAP covers the 5-year FYHSP and presents the OEs proposal for a balanced allocation of all available resources within specified funding constraints. Program resource allocations must be balanced to best meet the IPG priorities. In addition, unfunded program requests should be identified. Significant program/project and personnel level (FTE/FTP) changes, as well as major new starts must be identified. Likewise, program imbalances and unfunded requests in meeting IPG and OE objectives are highlighted. 11. Recommendations for program or policy and planning changes are made through draft Resource Allocation Decisions (RADs). PA&E program analysts and Budget Office desk officers review OE RAP submissions comparing each to the objectives and priorities established in the IPG. Overarching policy or planning decisions may also be developed by or coordinated with the Policy Office and issued in a draft RAD. The draft RADs represent alternatives or changes to the RAPs and evaluate the implications of different alternatives including cost and personnel changes. 12. The BRB, as guided by the Secretary's priorities and supported by the JRC, identifies and assesses future year investment alternatives and special Departmental cross-cutting issues and makes recommendations on unfunded requests. Issues are developed, staffed, compiled, and presented to the Secretary, who makes the final decisions. The results are formally issued in the final RADs. RADs set program funding levels and/or policy decisions for the FYHSP and become the basis for the budget. In late April or early May, the DEPSEC issues the final RADs for the OEs and DHS Offices which summarize program decisions for the current cycle. These RADs approve the OE RAPs with changes. E. Budgeting. 1. The DHS budgeting phase of the PPBE (OE budgeting activities begin concurrently with the DHS RAP review) begins upon issuance of the RAD and budget guidance in May. In the budgeting phase, the OEs develop detailed budget estimates for the budget year for the programs approved during the programming phase. Budget estimates/submissions are required to integrate the PART criteria into budget justifications. As part of the Departmental budget submission, OEs may appeal their top priority issues from the final RAD issued as part of the budget guidance. Only a limited number of appeals will be considered and OE justifications must be overwhelming and support specific priorities from the IPG

15 2. Upon receipt of the OEs budget submissions, desk officers in the CFO Budget Office conduct a review and analysis of each budget justification. Emphasis of the review is on adequate budget justification and current execution. The desk officers also ensure program changes necessitated by congressional action, changes in policy or planning priorities, or other fact-of-life issues are incorporated in the budget. Resolution of any final appeals to RADs, relative to program issues are incorporated into decisions made during the budgeting phase. These decisions will be coordinated with the Policy Office, PA&E, and reflected in the FYHSP. The budget request also includes adjustments for pay and pricing policies developed between DHS and OMB. 3. The Budget Division, in coordination with PA&E, issues draft Program Budget Decisions (PBDs). OEs may appeal draft PBDs prior to the issuance of the final PBD. Coordinated by the CFO, the Budget Review Board (BRB) will review OE budgets and RAD appeals and provide recommendations to the Deputy Secretary and Secretary. The results are formally issued in the final PBDs. DHS then forwards the resulting budget to OMB for review. The DHS portion of the President's Budget request and FYHSP are finalized and sent to Congress as the final output of the PPBE. F. Review Issues 1. Program resource plans and budgets must clearly support DHS objectives and priorities. However, during the program and budget review five areas are considered by the DHS: program pricing, program phasing, operational impact, funding policies, and budget execution. a. Program pricing examines whether the specific program is priced properly (e.g., that the budget was prepared on the basis of "most likely cost" of the work to be done and that the proper escalation index has been applied to the constant-year budget estimate to determine the then-year funding requirement). b. Program phasing examines the compatibility between the approved acquisition strategy and the funding necessary to pay for the requirements shown in that strategy (e.g., have procurement funds been phased properly to coincide with program plans for production). c. Operational impact examines the program in the context of operational needs and requirements to ensure that operational capability is maximized

16 d. Funding policies examines the compliance of the budget request with the proper policy for each specific appropriation category. e. Budget execution examines the efficiency with which an organization has executed (i.e., obligated and expended) currently available funds and the effect of current year execution on budget year submissions. As an example, has the organization met established goals for obligations and expenditures during the current fiscal year? If not, can those "excess" funds from the current fiscal year be allowed to slip into a future year and, therefore, allow a decrease in the funding requirement in that future year? 2. Of the five review areas above, funding policies and budget execution are primary concerns during the budget review portion of the process; this focus is intended to stretch the limited number of dollars available to satisfy as many requirements as possible. G. Oversight Budget Review 1. OMB normally conducts a review of the Budget and FYHSP from October to early December. OMB retains the authority to submit separate decisions on the reviews. The OMB budget examiners usually issue questions to DHS to obtain written responses from the program offices and/or OEs. After reviewing these responses, the OMB budget examiners may hold hearings to review appropriations or specific programs. Appropriate OE functional staff and DHS program advocates provide information as necessary during those hearings. 2. The President's budget request is then transmitted to Congress in February, where it again undergoes review. The Secretary of Homeland Security testifies before the House and Senate Appropriations Committees during March and April. Individual OE heads may also testify. Congressional appropriations staffs engage DHS and the OEs on the budget, including briefings and questions for the record and other informal exchange of information. Congressional decisions on appropriation levels are anticipated by October

17 H. Execution 1. The final activity of PPBE is execution. Following the enactment of an appropriation by Congress, several actions are taken to monitor accountability and execution of budget authority. Monitoring involves administratively controlling funds; reporting actual results; assessing the applicability of those results to the preparation of future plans, programs, and budgets; and supplying financial information to DHS managers. The centerpiece of the execution process is the annual apportionment of appropriated funds to the Directorates/Organizational Elements. Resource requirements are reconsidered, revised allocations made, and funds released or withheld based on administrative or technical considerations. Funds are subsequently obligated and expended in accordance with apportionment guidelines. 2. Execution reviews occur concurrent with, and are integral to, the program and budget reviews. The purpose of the programming is to prioritize the programs and determine the order of magnitude for resource allocations which best meet DHS strategic goals and objectives. The purpose of the budget is to provide details on, justification for, and support the execution of DHS programs. The purpose of the execution review is to assess how well OEs executed the program plan and budget plan (commitments, obligations, expenditures) and what is received for the money spent (i.e., actual output versus planned performance). Performance Metrics will measure program achievements and attainment of performance goals. Over time, these metrics are analyzed to ascertain whether resources are appropriately allocated and executed and if the program is properly priced. I. PPBE Schedule 1. Timely publication of the PPBE documents is critical to the management of DHS. Since the success of PPBE requires a healthy dialogue among the participants, the relevant documents are issued to allow adequate time for analysis and response. Therefore, PA&E will issue a schedule of significant events in the PPBE process for the upcoming calendar year in November. Appendix (A) provides a basic timeline of events

18 J. lnvestment Review Process (IRP) and PPBE lnterface 1. The IRP is a systematic process for review and approval, visibility, and accountability to senior management for acquisition oversight of major investments throughout their life cycle, and portfolio management to achieve budget goals and objectives. Interface between the IRP, as defined in DHS MD 1400, and the PPBE occurs through PA&E and Budget Office coordination with the lnvestment Review Board (IRB), Joint Requirements Council (JRC), Enterprise Architecture Board (EAB), and BRB. 2. As the Department's executive board for investment review, the IRB reviews major investments for the proper management, oversight, accountability, and alignment to strategic objectives and priorities. The IRB, with support and recommendations from the JRC and the EAB, reviews investments at key decision points, before approving their proceeding to the next phase of acquisition. lnvestment goals and objectives, milestones, progress, issues, and problems are discussed during these reviews. The IRB's decisions and program guidance regarding new investments are reflected to the extent possible in any iteration in the FYHSP or budget, as appropriate. K. PPBE Document Sensitivity and Dissemination. 1. To maintain the integrity and confidentiality of the Executive Branch deliberative process, and to assist in maintaining the effectiveness of competition in the contract awards process, PPBE documents and supporting databases will not be disclosed outside DHS. However, OEs are not precluded from discussing out year planning considerations with other non-departmental program partners such as other Federal agencies or state and local representatives. 2. However, since the FYHSP outyear programs reflect internal planning assumptions, FYHSP data beyond the budget year may not be released outside the Executive Branch of the government prior to submission to Congress without the express written consent of the CFO. 3. Organizational Elements will only provide briefings or representations of their programs and budgets that represent the Department's and Administration's approved requests and FYHSP. For example, only programs and resource levels approved by the Secretary will be discussed with OMB and only the programs and resource levels approved by the President will be discussed with Congress

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20 APPENDIX A Planning (Long Range) Assess operating environment Strategic assessments Threat and Vulnerability / Risk Assessment Develop strategy and policy for planning guidance Unconstrained prioritization of needs vs risk PPBE Overview Programming (Five-year) Allocate resources to programs and projects/initiatives Support policy and planning priorities Balance programs within fiscal constraints Budgeting (Annual) Executabiity and pricing accuracy Implements decisions with detailed justifications Develop execution plan Strategic Assessment Report Threat and Vulnerability Assessment Integrated Planning Guidance Resource Allocation Decision Budget Guidance Incorporate near-term changes in policy or priorities Program Budget Decision DHS Budget and FYSHP to OMB S O N D J F M A M J J A S Perform and monitor the plan Funding adjustments to correct resource imbalances Execution Feedback PPBE- Overlapping cycles FY05 Budget Programming Budgeting Execution FY06-10 FYHSP FY06 Budget Planning Programming Budgeting Execution FY07-11 FYHSP FY07 Budget Planning Programming FY08-12 FYHSP FY08 Budget Planning JAN 03 Oct 03 JAN 04 Today JAN05 Oct 04 Oct 05 JAN A-1

21 APPENDIX B ABBREVIATIONS BY Budget Year CFO Chief Financial Officer CY Current Year BRB Budget Review Board DHS Department of Homeland Security EAB Enterprise Architecture Board FYHSP Future Years Homeland Security Program IRB Investment Review Board IRP Investment Review Process JRC Joint Requirements Council KDP Key Decision Point MNS Mission Needs Statement OE Organizational Element / Directorate OMB Office of Management and Budget PA&E Program Analysis and Evaluation PART Program Assessment Rating Tool PBD Program Budget Decisions PM Program/Project Manager PPBE Planning, Programming, Budgeting and Execution IPG Integrated Planning Guidance (formerly Program Planning Guidance, PPG) PY Prior Year RAD Resource Allocation Decision B-1

22 APPENDIX B RAP Resource Allocation Plan USM Under Secretary for Management B-2

23 APPENDIX C GLOSSARY Appropriation. An act of Congress that permits Federal agencies to incur obligations and make payments from the Treasury. An appropriation usually follows enactment of authorizing legislation. An appropriation act is the most common means of providing budget authority. Appropriations do not represent cash actually set aside in the Treasury; they represent limitations of amounts, which agencies may obligate during a specified time. Budgeting. The process of translating resource requirements into a funding profile. Budgeting is the third phase of the PPBE where the Directorates/ Organizational Elements develop detailed budget estimates for the budget year. DHS Office of Budget reviews and analyzes budget estimates during the DHS Budget Review, and issues the decision results in PBDs. The DHS request to OMB reflects the PBDs. OMB decisions on the DHS request are finalized as the President's Budget and sent to Congress for appropriation. Budget Review Board (BRB). The senior oversight and review board responsible for overseeing the DHS PPBE process. The BRB reviews and makes recommendations on the Future Years Homeland Security Program (FYHSP) and the President's budget request; reviews quarterly and mid-year status of funds and performance with the objective of overseeing program implementation consistent with the Secretary's goals and priorities; and minimizes the re-evaluation of decisions in the absence of new information or new factors. DHS Strategic Plan. Written guidance that establishes the goals and objectives for DHS and outlines the strategies to achieve those goals and objectives. More specifically, the plan will: establish the Department's view of the next 5-10 years future planning environment; provide the Directorates/Organizational Elements priorities and specific program direction and objectives for the planning period; provide guidance to align the Department's organization and budget structure with its mission and objectives; establish performance goals based on the missions of DHS; guide formulation and execution of the budget; and communicate the Department's goals and objectives, both internally and externally. Future Years Homeland Security Program (FYHSP). The official DHS document summarizing DHS programs and associated resources (investments, construction, human capital, IT, and other support and operating expenses) for the budget year plus four years in support of strategic goals, objectives, and planning priorities. The Secretary of Homeland Security approves the FYHSP. Goals. Goals define the outcomes that represent the end toward which the Department's effort is directed. The DHS Strategic Plan outlines the seven DHS strategic goals and supporting objectives: Awareness, Prevention, Protection, Response, Recovery, Service, and Organizational Excellence. C-1

24 APPENDIX C Integrated Planning Guidance (IPG). The final output of the planning phase, which serves as an authoritative statement directing homeland security policy, strategy, and operational and resource planning. The IPG provides guidance, direction, and prioritization for both long-term resource and near-term operational planning. The IPG consists of the following elements: near- and long-term risk assessment; policy and strategy guidance and program priorities; operational planning guidance; long-term resource planning and fiscal guidance; and unresolved issues requiring further study. The IPG is published annually in November. Integrated Strategic Assessment Report. Provides strategy recommendations and identifies operational needs and requirements for formulation of the Secretary's lntegrated Planning Guidance. The lntegrated Strategic Assessment Report is aggregated from the component headquarters and regional headquarters strategic assessments, a threat and vulnerability assessment, and other operational considerations. The integrated report identifies cross- component and cross-region shortfalls, gaps, and opportunities to maintain, enhance, and provide new operational capabilities for DHS. The lntegrated Strategic Assessment Report is published annually in August. Investment Review Board (IRB). The DHS forum that provides senior management the proper visibility, oversight, and accountability for Level 1 investments. The primary function of the IRB is to review and approve Level 1 investments at key decision points (KDPs). The IRB conducts systematic reviews of investment preparations and progress to support key decisions (See Management Directive 1400 for further information). Joint Requirements Council (JRC). The JRC is a senior requirements review board. The JRC conducts program reviews to oversee the requirements generation process, validate mission needs statements, review cross-functional needs and requirements, and make programmatic recommendations to the IRB on proposed new programs. The JRC reviews Level 1 investments prior to KDP 1 to validate mission needs and review proposed programs for cross-functional applications, and/or to determine if existing capabilities can meet the need. The JRC makes a recommendation to the IRB and BRB as appropriate for each program (See Management Directive 1400 and 1405 for further information). Key Decision Point (KDP). Critical milestones in the life cycle of an investment that require senior management review and approval before an investment can proceed to the next acquisition phase. KDPs are either required or discretionary and typically follow the specific phases of the acquisition process. Operational lntegration Staff (I-Staff). As established by the Secretary, the Operational lntegration staff assists the DHS leadership team in horizontal coordination and integration of Department programs and operations at the Federal/ headquarters level, as well as vertically at the State and Local level. They will work to ensure full integration of headquarters-level operational planning, training, and exercises, as well as enable executive decision making during crisis situations. C-2

25 APPENDIX C Operational Planning. Operational Planning is a collaborative and coordinated approach where operational stakeholders from multiple jurisdictions and disciplines contribute to the maximization of DHS preparedness and response capabilities. Operational Planning supports the PPBE processes and is an effective and efficient operational planning system of processes and procedures that ensure the development of DHS integrated operational plans (scenario-based contingency plans and missionrelated operations plans) based on validated risk assessments and current threat analysis. Outcomes. Outcomes are the effects of activities and outputs that result in changes or benefits. These are specific changes in program participants' behavior, knowledge, skills, level of functioning, etc. There can be multiple sequential outcomes. These are usually a restatement of program goals and objectives. Outputs. The products, goods, and services provided to direct customers (products of program activities). Planning. The first phase of the PPBE, which encompasses a 5-10 year extended strategic planning period (long-term) and a near to mid-term operational planning period. In the planning phase, the posture of the United States in the world environment will be examined in the context of considering homeland security goals, objectives, and the need for efficient management of resources. The end product of the planning phase is the issuance of the IPG, which also reflects the Secretary's management and planning priorities. Program. An organized set of activities directed toward a goal or particular set of goals or objectives for which the program is accountable; a distinct set of activities and strategies organized toward achieving a specific purpose. In government, a program is a representation of what is delivered to the public. Programs usually operate for indefinite or continuous periods, but may consist of several projects or initiatives. Programming. The second phase of the PPBE, which projects the five-year program plans and estimates the resources required to meet the planning priorities and objectives of the Department. In the programming phase, DHS planning decision and guidance are translated into a detailed allocation of the time-phased resource requirements, including investments, construction, human capital, IT, and other support and operating expenses. Program Assessment Rating Tool (PART). A series of questions designed to provide a consistent approach to rating programs across the Federal government. The PART is a diagnostic tool that relies on objective data to inform evidence-based judgments and to assess and evaluate programs across a wide range of issues related to performance. C-3

26 APPENDIX C Program Budget Decisions (PBDs). The Secretary's decision documents which affirm or change dollar amounts or personnel allowances in the budget estimate submissions. Resources. Personnel, equipment, buildings, operational support, training, infrastructure, and equipment as well as other inputs required to support the program. Resource requirements may subsequently translate into funding needs. Partnerships and alliances might also be included here. Resource Allocation Decisions (RADs). The Secretary's formal approval of Directorates/Organizational Elements' RAPs. The RAD is issued after the BRB deliberates on the RAP. RADs will set resource allocation targets for Directorates/Organizational Elements for the FYHSP and become the basis for the budget. Resource Allocation Plan (RAP). In the programming phase, the Directorates/Organizational Elements annually develop proposed programs consistent with the IPG. These programs, expressed in the RAP, reflect systematic allocation of resources required to achieve missions, objectives, and priorities, and potential alternative methods of accomplishing them. Resource requirements reflected in RAPs are translated into time-phased funding requirements. RAPs must account for longterm requirements and resources including human capital, construction and investments, operating and maintenance, and potential disposal or termination costs, and program performance goals. C-4