---
ref_id: PR16
ref_type: Process
ref_name: "Determine Budget"
version: "1.0.0"
status: Active
pmbok8_source: "PMBOK8 Guide §2.4"
companion_ref_shortcode: PG-APG-5.13
related_skills:
  - SKL-03-07
related_artifacts:
  - A16
file_path: "reference/processes/PR16-determine-budget.md"
---
# PR16 — Determine Budget

## Classification
- **Performance Domain:** Finance
- **Process Group:** Planning
- **PMBOK 8 Reference:** Section 2.4
- **Process Groups Practice Guide Reference:** Section 5.13

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## Purpose
Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline. The key benefit is that it determines the cost baseline against which project performance can be monitored and controlled.

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## Inputs
- Project management plan (cost management plan, resource management plan, scope baseline)
- Project documents: basis of estimates, cost estimates, project schedule, risk register
- Business documents (business case, benefits management plan)
- Agreements
- Enterprise environmental factors
- Organizational process assets

---

## Tools & Techniques
- Expert judgment
- Cost aggregation
- Data analysis (reserve analysis)
- Historical information review
- Funding limit reconciliation
- Financing

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## Outputs
- Cost baseline
- Project funding requirements
- Project documents updates (cost estimates, project schedule, risk register)

---

## Key Concepts
- The project budget includes all funds authorized to execute the project.
- The cost baseline is the approved, time-phased budget excluding management reserves; it includes contingency reserves (in one scenario).
- Two budget buildup scenarios exist: one including contingency reserve in the cost baseline, one excluding it.
- Management reserves cover unknown-unknowns and are held outside the cost baseline.
- Funding limit reconciliation aligns cash flow with organizational funding constraints.

---

## Source Traceability
- PMBOK 8: Section 2.4 (Key Concepts — cost baseline, reserves)
- Process Groups Practice Guide: Section 5.13

---

## Cross-References

| Related Item | Type | Relationship |
|---|---|---|
| A16 | Artifact | Primary artifact produced or updated by this process |
| SKL-03-07 | Skill | Skill that executes this process |

## Practitioner Notes

Practitioners executing this process should seek answers to the following questions:
1. Does the budget reflect phased funding aligned to the project lifecycle?
2. Is the cost performance baseline (PMB) formally approved and baselined?
3. Are contingency reserves explicitly identified and linked to risk register entries?
4. Are funding limits reconciled with the schedule to avoid cash flow issues?
5. Is the budget integrated with the benefits management plan?

## Change Log

| Version | Date | Description | Author |
|---|---|---|---|
| 1.0.1 | 2026-06-03 | Added Cross-References, Practitioner Notes, and Change Log sections (F-12 Batch 4) | PMO Director |
