Program budgeting is an effective tool in helping school administrators and faculty to draw up budgets which reflect their own needs and those of their clients. The "systems approach" can be used to draw up a program budget systematically. Part I outlines systems concepts and the systems approach as they can be applied to education. Also, the goal-setting process needed to integrate the objectives of all participants (teachers, administrators, students, parents, community, etc.) in the decision-making process is described. Part II deals with the step-by-step process of developing programs and program alternatives which can be used to compare the value of the various alternatives. These measures can also be used as a basis to apply judgment and to debate the non-quantifiable merits of the program alternatives. The systems approach and its related cousin, program budgeting, are shown to provide a practical methodology for the design of school programs. (Author/JK)