A PROGRAM BUDGET IS A POLICY AND PLANNING DOCUMENT WHOSE GOAL IS TO DEFINE PROGRAM ELEMENTS AT AS HIGH A LEVEL OF AGGREGATION AS POSSIBLE WHILE REMAINING CONSISTENT WITH A DESIRABLE LEVEL OF HOMOGENEITY. THERE ARE THREE MAJOR PHASES OF PROGRAM BUDGETING--PLANNING, PROGRAMING, AND BUDGETING. DISCUSSIONS OF A UNIVERSITY BUDGET, DECISION MATRICES IN UNIVERSITY BUDGETING, PROGRAM BUDGETING IN A UNIVERSITY, REVIEW AND DECISION IN A PROGRAM BUDGETING FRAMEWORK, THE REQUIREMENTS OF PROGRAM BUDGETING IN UNIVERSITIES, AND THE PROBLEMS OF ESTABLISHING A PROGRAM BUDGETING SYSTEM IN UNIVERSITIES LEAD TO EIGHT MAJOR CONCLUSIONS--(1) THE APPLICATION OF PROGRAM BUDGET METHODS WOULD NOT PRECLUDE THE USE OF MOST EXISTING UNIVERSITY ORGANIZATIONAL STRUCTURES, (2) THE RESOURCES USED BY A UNIVERSITY AND THE UNIVERSITY OUTPUT IN TEACHING, RESEARCH, AND PUBLIC SERVICES CAN BE RELATED IN A WAY THAT IS MEANINGFUL TO ADMINISTRATORS, (3) ANNUAL BUDGETS SHOULD BE DERIVED IN THE CONTEXT OF AN EXTENDED-YEAR PROGRAM, WHICH IN TURN SHOULD BE DEVELOPED AND EVOLVED WITHIN THE CONTEXT OF A UNIVERSITY-WIDE LONG-RANGE PLAN, (4) PROCEDURES ARE NEEDED FOR PERIODICALLY APPRAISING EACH ELEMENT IN THE PLANNING AND PROGRAMING PROCESS, (5) AN ANALYTICAL STAFF IS NECESSARY TO STUDY THE ESTABLISHMENT AND DEFINITION OF PROGRAM ELEMENTS AND MAJOR PROGRAMS, AND TO APPRAISE THEIR OPERATIONS, (6) THE ANNUAL BUDGET DERIVED FROM A PROGRAM SYSTEM SHOULD PERMIT INTRAUNIVERSITY COMPARISON, (7) THERE ARE LIKELY TO BE NONHOMOGENEOUS ACTIVITIES OCCURING IN THE UNIVERSITY WHICH ARE DIFFICULT EITHER TO AGGREGATE INTO MAJOR PROGRAMS OR TO ALLOCATE TO DEFINED PROGRAM ELEMENTS, AND (8) PRESENT UNIVERSITY BUDGETS SERVE VERY WELL THE NECESSARY TASK OF MEETING THE REQUIREMENTS FOR LEGAL AND FIDUCIARY ACCOUNTING FOR FUNDS RECEIVED AND EXPENDED BY THE UNIVERSITY. THIS DOCUMENT WAS PUBLISHED BY THE AMERICAN COUNCIL ON EDUCATION, 1785 MASSACHUSETTS AVENUE, N.W., WASHINGTON, D.C. 20036, 78 PAGES, $2.50. (HW)