Name: JEAN ROSE T.

BUSTAMANTE BSMA -3

1. Billing of revenue or income

Accounts Receivable 300,000
Rent/Lease Income 30,000
Waterworks System fees 50,000
Power supply system fees 100,000
Seaport system fees 45,000
Landing and parking fees 75,000
*To recognize billing of income

2. Collections
Cash-collecting officers 10,000
Accounts Receivable 10,000
*To recognize collection of prior year’s billed income

3. Receipt of allotment from the DBM

PS 650,000
MODE 750,000
CO 1,000,000
TOTAL 2,400,000
*Posting to the appropriate RAPAL and RAOD

4. Receipt of notice of Cash of Allocation from DBM (net of tax)

a. Cash-modified disbursement regular 1,200,000
Subsidy from National Government 1,200,000
*To recognize receipt of NCA from the DBM

b. Cash-modified disbursement regular 1,000,000

Subsidy from National Government 1,000,000
*To recognize receipt of NCA from the DBM

5. Set up of payables to officers and employees upon approval of payroll

Salaries and Wages Regular 510,000
Personnel Economic Relief Allowance 55,000
Due to BIR 51,000
Due to GSIS 15,300
Due to PAG-IBIG 10,200
Due to PhilHealth 510
 Due to officers and employees 489, 990
*To recognize liabilities to officers and employees upon approval of payroll

6. Grant of cash advance for payroll

Advance for payroll 487, 990
Cash-modified disbursement system, regular 487, 990
*To recognize grant of cash advance for payroll

7. Issuance of supplies and materials to end users

Office supplies expenses 12, 420
Office supplies inventory 12, 420
*To take up issuance of supplies and materials based on monthly report

8. Payments of MOOE and accounts payable

*To recognize issuance of MDS checks based on the RCI

9. Remittance of the GSIS, PAG-IBIG and PhilHealth

Due to GSIS 15, 300
Due to PAG-IBIG 10, 200
Due to PhilHealth 510
Cash-modified disbursement system, regular 26, 010
*To recognize remittance to GSIS, Pag-IBIG and PhilHealth

10. Adjustment for unused NCA

Subsidy from National Government 132, 196
Cash-modified disbursement system, regular 132, 196
*To recognize reversion of unused NCA

11-20 Budgeting Process for Government

Budget planning, budget authorization, budget implementation, and budget

transparency are the four (4) distinct mechanisms or stages of budgeting for the
national government. Both mechanisms converge in the execution of a fiscal year,
despite the fact that they are different. Government budgeting is the allocation of
public funds to attain the economic and social goals of the country. It also entails
the management of government expenditures to create the most impact from the
production and delivery of goods and services. Budget preparation is the first
phase of the local budget process. It involves cost estimation per PPA, preparation
of budget proposals, executive review of budget proposals, and preparation of the
LEP and the Budget Message. This phase starts with the issuance of the Budget
Call, and ends with submission of the Executive Budget to the Sanggunian on or
before October 16 of each year. Legal Basis of Budget Preparation – Upon receipt
of the statements of income and expenditures from the treasurer, the budget
proposals of the heads of departments and offices and the estimates of income
and budgetary ceilings from the local finance committee, the local chief executive
shall prepare the executive budget for the ensuing year in accordance with the
provisions of [Title V, Book II of RA No. 7160] (Section 318, RA No. 7160).
Budget Legislation Authorization of the budget is done through an
Appropriation Ordinance enacted by the Local Sanggunian in accordance with the
fundamental principle that, “No money shall be paid out of the local treasury except
in pursuance of an Appropriation Ordinance or law” (Section 305 (a), RA No. 7160).
Legal Basis of Budget Authorization On or before the end of the current fiscal year,
the Sanggunian concerned shall enact, through an ordinance, the annual budget
of the local government unit for the ensuing fiscal year on the basis of the estimates
of income and expenditures submitted by the local chief executive (Section 319,
RA No. 7160). Key Players in Budget Authorization (a) Local Chief
Executive - The LCE shall submit the LEP to the Sanggunian for authorization
(Section 318, RA No. 7160). (b) Sanggunian - The Sanggunian may, by ordinance,
authorize the LCE or the Presiding Officer of the Sanggunian to augment any item
in the approved annual budget for their respective offices from savings in other
items within the same expense class of their respective appropriations (Section
336, RA No. 7160; Article 454[b], IRR of RA No. 7160). (c)Finance –shall be
responsible for conducting a preliminary review and evaluation of the Local
Expenditure Program. It shall submit its report and recommendation to the
Sanggunian proper. (d) Secretary to the Sanggunian – The Secretary to the
Sanggunian shall stamp the Appropriation Ordinance with the seal of the
Sanggunian and record the same in a book kept for the purpose. (Section 469, RA
No. 7160) and (Sec. 59 (b), RA No. 7160). (e) Local Finance Committee - The LFC
shall assist the Sanggunian in the analysis and review of the annual and
supplemental budgets to determine compliance with statutory and administrative
requirements (Section 316 [g], RA No. 7160). (f) Heads of Departments and Offices
– explain or justify their proposals. (g) CSOs and Private Sector Groups – Should
the Sanggunian allow the CSOs to participate in the budget authorization phase, it
may refer to the Handbook on the Participation of Civil Society Organizations in
the Local Budget Process.
Budget Review is the third phase in the local budget process. Its primary
purpose is to determine whether the Appropriation Ordinance has complied with
the budgetary requirements and general limitations set forth in the Local
Government Code of 1991, as well as provisions of other applicable laws. It starts
from the time the reviewing authority receives the Appropriation Ordinance for
review and ends with the issuance of the review action. Legal Bases of Budget
Review the Department of Budget and Management shall review ordinances
authorizing the annual or supplemental appropriations of provinces, highly
urbanized cities, independent component cities, and municipalities within the
Metropolitan Manila Area in accordance with Section 327 of RA No. 7160 (Section
326 of RA No. 7160).
The execution of the budget in accordance with existing rules, laws and
regulations is the fourth phase of the budget process in local governments. After
the usual recording of appropriations in the proper registries, the execution of the
budget involves the release of allotments, the certification of available
appropriations and cash, the recording of actual obligations and disbursements of
funds for approved PPAs and the delivery of goods and services to target clients
in the most efficient, effective, economical and ethical way. The fundamental
principles governing all financial transactions in local governments are covered in
Section 305 of RA No. 7160. The responsibility, however, for the execution of
authorized annual and supplemental budgets shall be vested upon the Local Chief
Executive (Section 320 of RA No. 7160).The use of appropriated Funds pursuant
to Section 336 of RA No. 7160 shall be exclusively for the specific purpose for
which they have been appropriated. Another legal basis in Budget Execution is the
Certification requirement before local funds are utilized. Section 344 of R.A.
No.7160 provides that “No money shall be disbursed unless the local budget officer
certifies to the existence of appropriation that has been legally made for the
purpose, the local accountant has obligated said appropriation, and the local
treasurer certifies to the availability of funds for the purpose.
Budget Accountability, in simple terms, is accounting for the budget. It
involves the use of a management control techniques to assist in tracking receipts
of income/revenues and controlling expenditures. The five (5) phases of the budget
is incomplete without accountability. An integral part of accountability is the
evaluation of the financial and physical performance of the LGU. This review and
assessment of performance is necessary to introduce improvements and reforms
to make the budget more transparent to the people and stakeholders. Other local
officers, who, though not accountable by the nature of their duties, may likewise be
held accountable and responsible for local government funds through their
participation in the use or application thereof.