Determine Budget

Aggregates the estimated costs of activities into an authorized cost baseline and sets project funding requirements. The cost baseline is what spending is measured against.

Process Group Planning Knowledge Area Project Cost Management

Determine Budget rolls activity and work-package costs up through the WBS, adds contingency reserves, and produces the cost baseline — the time-phased budget against which performance is measured. Management reserves sit above the baseline. It also establishes funding requirements, since money is often released in stages.

Determine Budget: key inputs and outputs — The key inputs feeding Determine Budget and the deliverables it produces — full ITTOs are listed below.

Funding limit reconciliation aligns planned spending with the funding actually available, which can force rescheduling of work. The baseline excludes management reserves but includes contingency.

Common pitfalls. Confusing the cost baseline with the total budget, which also holds management reserve; a baseline that ignores funding limits and timing; and burying reserves so later variance analysis becomes meaningless.

Inputs, Tools & Techniques, and Outputs

Inputs

Project management plan
Project documents
Business documents
Agreements
Enterprise environmental factors
Organizational process assets

Tools & Techniques

Expert judgment
Cost aggregation
Data analysis
Historical information review
Funding limit reconciliation
Financing

Outputs

Cost baseline
Project funding requirements
Project documents updates