The Republic of Serbia's Ministry of Defense (MoD) is attempting to implement a program-oriented, multi-year budgeting system in 2010. This paper reveals several challenges that threaten the success of this initiative. First, we find that the proposed budget system confuses organizations and programs. Second, there does not appear to be a centrally coordinated effort to implement program budgeting, leading to significant disparities in comprehension, organization, and implementation amongst the subordinate commands in MoD. Finally, there is a distinct lack of communication within the MoD regarding the necessity of a program budget and how the process should move forward. These issues inhibit the implementation of program budgeting in the MoD and diminish the possible gains associated with the multi-year, programmatic allocation of defense resources.