A Report Submitted to

ADELIA R. ROADILLA, PhD, RGC

Professor

in Partial Fulfillment of

MEM 641 EDUCATIONAL PLANNING, ORGANIZATIONAL AND MANAGEMENT

by

ANALEA P. GOMEZ
Student
OBJECTIV TOPIC REFERENCES
ES
Correlate BUDGETING: • Government Accounting by Angelito
budgeting with ITS IMPLICATION R. Punzalan
educational TO • Case Study: The Influence of the
planning EDUCATIONAL Budget Process on Governance
Gain knowledge Effectiveness by Emilia T. Boncodin
PLANNING
about the • http://www.dbm.gov.ph/wp-
phases of content/uploads/2012/03/PGB-
budgeting B2.pdf
Realize the • http://www.pfmp.org.ph/index.php?
importance of option=com_content&view=article&i
budgeting d=134:philippine-budget-
Discuss the clock&catid=7:events&Itemid=24
problems in • http://sc.judiciary.gov.ph/
budget-planning jurisprudence/2008/
correlation december2008/175527.htm
Gain • http://www.dbm.gov.ph/wp-content/
understanding uploads/Issuances/2015/National
on the different %20Budget%20Circular/
budget designs NBC559.pdf
• http://www.dbm.gov.ph/wp-content/
uploads/BESF/BESF2012/
GLOSSARY.pdf
• http://www.ombudsman.gov.ph/
UNDP4/wp-content/uploads/
2012/12/Chap4_FAQ.pdf
• http://www.coa.gov.ph/index.php/
2013-06-19-13-06-03/constitutional-
mandate
• http://www.teacherph.com/
guidelines-grant-performance-
based-bonus-fiscal-year-2016/
• PUP module
 Pia Ranada,Published 6:41 PM,
March 20, 2019,Updated 7:50 PM,
March 20, 2019
 WHAT IS BUDGETING?

Budgeting is the process of systematically relating expenditure to achieve

planned goals. It is providing (a sum of money) for a particular purpose from a budget.

The five phases of budgeting are as follows: Identification of

programs/projects/activities to be accomplished during the budget period (PHASE 1);
identification of resources in terms of manpower, money, machines and materials
(PHASE 2); costing of resources, which is the most important activity in budgeting since
the budget is fundamentally a financial statement (PHASE 3); presentation of the budget
in accordance with guidelines periodically issued by the proper authority (PHASE 4); and
obtaining the approval of the appropriate authority, which involves piloting of the budget
through a series of budget hearings. At this phase, the budget is subjected to review and
compromise and undergo adjustments.
Budgeting has three functions: Providing the operational cost-time framework for
activities; delegating implementation authority and controlling and evaluating
performance. To make it short, budgeting has three elements available in ready form
that will serve to control and evaluate. These are a rate of expenditure, output and its
cost.

Need for Effective Correlation between Budgeting and Planning in the Philippines

In previous years, there was lack of articulation/correlation between planning and

budgeting within the education department/ministry because the two functions were
assigned to different offices. Although these offices were required to observe certain
rules governing plan-budgeting correlation, several difficulties persisted.
The lack of articulation/correlation between educational plans and budgets
resulted in: inequities in resource allocation, poor implementation of plans due to lack of
financial support and, non-implementation of many good plans.
Example of this is the budget documents submitted by the past Presidents, the
budget for fiscal year 1955 fails to satisfy the principles and objectives of current needs
and requirements in fiscal planning and programming under modern public
administration (Yoingco, A.)
Problems were met in budget plan-correlation. Less freedom to act and to
innovate due to limited funds available; costing and change in policy in-between
planning and budgeting.
In many countries, about 80% of the annual budget in education is committed to
the following: a) continuing services, i.e., programs and projects in operation; b)
personnel services, including medicate, life insurance and retirement benefits; and c)
obligations already raised through contracts or orders for services, goods or facilities.
The remaining 20% is left for planning. Because of this, the plan most frequently has to
be scaled down, unless more resources or substantial savings through cost-reduction
strategies are raised.
Planning needs to use standard unit costs, worked out on the basis of past
trends. Actual costs are often grossly estimated. But the budget has to be based on the
actual operational costs; hence, in-between planning and budgeting, costing must be
refined. This refinement involves not only revision of costs to make them conform to
fluctuations in wages and prices, but also detailed analysis of cost items for the purpose
of grouping under convenient operational units, e.g., institutions, programs, projects, etc.
When the appropriate authority decides to vary the policy in-between planning
and budgeting, the objectives as well as the priorities assigned to some activities at the
planning stage necessarily change. This change, in turn, affects plan provisions and
targets. When this happens, the budget has to supersede the plan. But the person/s
preparing the budget must take steps to ensure that the change made is consistent with
the rest of the activities and testing them for internal efficiency.
In solving each of the foregoing problems, the budgeting process entails
continual revision of the plan. This may discourage or even demoralize the planners.
But the “rolling plan” technique may be adopted as a remedy to this problematic
situation. It permits the plan for a given number of years to be readjusted as well as
made consistent with every revision in the budgeting stage.
From the practical point of view, the conversion of a development plan into a
series of annual budgets is likely to be the most important stage in the planning process.
By examining the link between plan and budget, one can tell whether or not the
government could carry out such a plan.
The budget is a key element between a medium-term plan and an annual
budget. It is prepared on the basis of an annual plan. An annual plan should reach its
conclusion after due consideration of all resources available in the country, including
man, material, money, management and market.
BUDGET DESIGNS
Two principal budget designs are line-item budgeting and performance
budgeting.
Line-item budgeting is the most widely used budget design; it is also referred to
as conventional or traditional budgeting. It is the design that the Philippine government
adopted upon approval of Commonwealth Act No. 246, dated December 17, 1937.
Although CA 246 was amended by Republic Act (RA) 992, dated June 4, 1954,
which mandated the use by the government of performance budgeting instead of line-
item budgeting, the latter continued to be used until the promulgation of P.D. No. 1177
on July 30, 1977.
Line-item budgeting is expenditure-oriented, not goal-oriented. The budget
merely consists of a listing of items of every government agency to be funded. It also
contains statements of estimated receipts and expenditures during the current fiscal year
based on the results of the preceding year’s operation.
Performance budgeting is goal and management-oriented. It measures actual or
estimated results in terms of benefits accruing to the public and their unit costs.
Unlike line-item budgeting, performance budgeting is based on functions.
It includes not only a statement of receipts and expenditures but also brief
description of what is to be achieved after each item of expenditure.

According to Congqin (2007),through the comparison between the two kinds of

budget management and practice, the traditional input budget management mode is
unsuccessful in many aspects. With the development of government management mode
under market economy system and the strengthening of public expenditure
management, new performance budget mode becomes the very choice of financial fund.
It is not only a kind of innovation of the method to the budget, but also a revolution of the
governmental management method. The new budget mode is built on the basis of
performance. It is oriented in consequence, in other words, it emphasizes the
responsibility and efficiency, and strengthens the connection between budget resource
distribution and governmental performance. It is helpful to promote the efficiency of
financial expenditure. For the government department, the concerns from mass about
the public service quality and cost, contribute to promoting government decision
procedure standardization and democratization. The establishment of the performance
goal, the execution of the performance and the publicity of estimate result, all contribute
to strengthening the responsibility of the government department. The performance
budget, which has entrusted larger right of execution of budget to the department,
contributes to impelling the government department to distribute resources reasonably
according to the efficiency principle of the cost and improves the validity of the financial
fund. To the financial department, the performance budget reform helps to impel the
financial management style to be innovated and improved, and to improve the validity of
the financial fund.
The 1973 National Budget is the first performance budget of the Philippine
government. Although the use of performance budgeting was approved in 1954
pursuant to RA 992, its implementation was made possible only through the
promulgation of PD No. 1177. This budgetary decree, in effect, amended the previous
laws on budgeting.
In the 2008 National Budget, programs, projects and ongoing work measurement
unit of different agencies are indicted, so that easy reading and evaluation are facilitated.
BUDGETING AT THE DEPED
The budgetary proposals of the Department of Education are supportive of and
consistent with the country’s socio-economic development plan. They are oriented
towards achieving explicit objectives and expected results. Funds are properly utilized,
controlled, and conducted; thus, effective, economical and efficient management
operation is ensured.
At present, budgeting at the DepEd follows the concept of decentralization. That
is, the DepEd derives its fiscal plan from the plans of its 13 regions; it takes full
consideration of regional goals, policies, strategies, programs and projects. This fiscal
plan covers all offices under the DepEd proper.
The Planning Service and the Financial Management Service of the DepEd
coordinate with each other in studying the proposals of the regional offices for possible
integration in the national, educational and fiscal plans of the DepEd. The DepEd
forwards its overall plan to the Department of Budget and Management, through the
NEDA, for approval.
One of the passed budget of the recent administration including the DepEd is
allowing the salary hike.
According to the news from MANILA, Philippines (Ranada, 2019) – President
Rodrigo Duterte issued an executive order (EO) allowing the salary hike for government
workers, military, and uniformed personnel despite the reenactment of the 2018 national
budget.

Executive Order No. 76, signed on March 15 by Duterte, allots funds for the
salary adjustment of government staff scheduled for implementation in 2019.

The fate of the 4th tranche of compensation adjustment had been uncertain
given the reenactment of the 2018 budget after Congress failed to pass the 2019
General Appropriations Act in December 2018.

But Duterte's EO allows for the salary increase to take place despite this. It
amends EO No. 201, which laid out the schedule for salary adjustments.

The funds for the 2019 salary hike "shall be charged against any available
appropriations under the FY 2018 GAA, as reenacted, to be determined by the
[Department of Budget and Management], subject to existing budgeting, accounting, and
auditing rules and regulations," the EO read.

THE NATIONAL BUDGET PROCESS

The process in budgeting are budget preparation; legislation/authorization;

Execution and accountability.

Article VIII, Section 16 of the 1973 Philippine Constitution provides that

only funds governed by an appropriation may be disbursed from the Treasury. In
the preparation of the budget, each ministry/agency is given a ceiling or budget
level determined by the Development Budget Coordination Committee (DBCC), a
NEDA sub-committee composed of the Ministers of the Budget, NEDA and
Finance and as well as Governor of the Central Bank of the Philippines.

The DBCC estimates the anticipated revenues of the government on the

basis of historical performances and projections of economic conditions in the
coming year. It likewise estimates the costs needed to implement the projects that
will achieve the goals of the development plan.

The National Assembly/legislative body discusses the budget with focus on

policy, budget levels, thrusts and strategies. It is prohibited from increasing the
appropriation for any projects or programs of any ministry, bureau/agency or office
of the government that was submitted by the Prime Minister/President in his
budget proposal.

Expenditures include a) personal retirement premiums, government

service insurance and other similar fixed expenditures, b) principal interest on
public debts and c) national government guarantees of obligations automatically
appropriated upon approval of the budget.

Unexpected balances of appropriations authorized in the General

Appropriations Act will be reverted to the unappropriated surplus of the Central
Fund at the end of the fiscal year and will not be available for expenditure except
by subsequent legislative enactment.

However, appropriations for capital outlays will remain valid until fully spent or
reverted. The Prime Minister/President may authorize the use of savings realized by an
agency during a given year to enable the agency to meet non-recurring expenditures in
the subsequent year.

The balances of continuing appropriations will be reviewed as part of the

annual budget preparation, process, and the Prime Minister/President may
approve revision of funds for a certain activity provided in the General
Appropriations Act.

An agency head should, within the prescribed period, submit a request for
allotment of funds of the Budget Minister. Using the forms prescribed by the
Budget Ministry, he should indicate the estimated amounts needed for each
function or activity and the purposes for which the funds are to be expended.

Based on the allotment system, the fiscal year is divided into four quarters:
1) January 1-March 31; 2) April 1-June 30; 3) July 1 – September 30; and 4) October 1-
December 31.

The Budget Minister will approve the request for allotment after
determining the amount to be spent for the approved purpose. In some instance,
 however, he is authorized by the President to approve amounts different from
agency estimates, he is authorized to conform with the term of the appropriation
and the prospective needs of the ministry, office or agency.

At the of every quarter, the head of each ministry, office or agency will
report to the budget ministry the current status of its appropriations, cumulative
allotment/obligations incurred/liquidated total disbursements, unliquidated
obligations unobligated and unexpected balances and results of expended
appropriations. He can request for a change of allotments in order to adjust or
alter conditions, subject to such regulations as may be issued by the Budget
Minister.

The Budget Minister is authorized to modify and amend any allotment

previously issued if funds are less than the anticipated receipts from taxes or other
sources.

The approved expenditure program will be the basis for fund releases
during the fiscal period subject to policies and regulations.

The terms “budget accountability” stresses results of allocated and incurred

expenditures. It refers to the quantitative and qualitative evaluation of an agency’s
performance, as reflected in the measurement of work by units and other performance
indicators.

The Commission on Audit (COA) conducts a continuing review of each

agency’s /ministry’s budgetary program and project structure. Results of the review will
serve as basis of program or structure modification.

Each ministry/government agency head submits copies of the semi-annual report

of the accomplishments of his ministry/agency to the Ministry of the Budget and to the
COA. In the report, he should specify both work and financial results. This report will be
used for a) monitoring the efficiency and effectiveness of funds utilization and b)
verifying attainment of goals established in the budget.

The following constitute accountability:

1. periodic reporting by agencies of their respective performance under their approved
budgets;
2. top management review of government activities and the fiscal policy implications
thereof; and;
3. actions of the COA insuring fidelity of officials and employees in carrying out the intent
of the Legislative Body and the President/Prime Minister in regard to their handling of
receipts of expenditures.