Budgetary Process

Beltran, Muega, Nardo, Serrano, Seeris

BUDGET PREPARATION

Step 1

BUDGET AUTHORIZATION
APPROVE OR REJECT?

Step 2

Article VI. Section 29.

No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

Appropriation
authorization made by law or other legislative enactment, directing payment out of government funds under specified conditions for specified purposes

General Appropriations Bill (GAB)

Legislative Process

Committee on Appropriations

Committee on Finance

Restrictions
1. Congress may not increase the appropriations recommended by the President. 2. The budget of the Judiciary, which enjoys fiscal autonomy, may not be reduced to a level below the amount appropriated for the previous year. 3. Education shall be assigned the highest budgetary priority.

Automatic Appropriations
Debt service-interest payments Internal Revenue Allotment (IRA) Retirement and Life Insurance Premiums (RLIP)

Bicameral Conference Committee

Bicam Committee

Bicam Report

Bicam Report

GAA

Veto Message
items to be vetoed are identified and the justification for such a veto is explained

Enactment
GAA not enacted at the start of current fiscal year, previous years GAA is reenacted

 operational aspects of budgeting

BUDGET EXECUTION
Release of Funds

Step 3

General Appropriations Act

Salaries/Wages Maintenance Programs/Projects National Treasury

Allotment
DBM issue an allotment to implementing agencies which authorizes them to incur obligations for specified amounts as stated in the GAA

Allotment
Agencies are required to submit documents for review and will be the basis for releasing allotments Agency Budget Matrix Budget Execution Documents

Budget Execution Document

1. Physical and Financial Plan 2. Monthly Cash Program 3. Estimate of Monthly Income 4. List of Not Yet Due and Demandable Obligations

Not all amounts appropriated 1. Quarterly Physical Report of to agencies are included in Operation 2. Quarterly Financial Report of one allotment.

Budget Accountability Reports

Operation 3. Quarterly Report of Income 4. Statement of Allotment, Obligations and Balances 5.Monthly Report of Disbursements

Obligations and Disbursements

Actual withdrawal of cash Liabilites legally incurred from the National Treasury and committed by the due to the encashment of government immediately or checks issued by the in the future agencies as payment for obligations

Why are total appropriations and disbursements not necessarily the same?

The need to come up with realistic macroeconomic assumptions and fiscal targets cannot be overemphasized as it has significant impact on budget execution.

Budget Accountability

BUDGET ACCOUNTABILITY

Step 4

Budget Execution

Budget Accountability DBM monitors the efficiency of fund utilization, assesses agency performance and provides a vital basis for reforms and new policies.

Budget Accountability Takes the form of management's review of actual performance or work accomplishment in relation to the work targets of the agency vis--vis the financial resources made available.

1. Performance and Target Outcomes

2. Budget Accountability Reports (BARs)

3. Review of Agency Performance 4. Audit 5. Performance-Based Incentive System

1. Performance and Target Outcomes

Prior Agencies are execution held accountable These measures toperformance the of the not for National how they use public areonly set alongside the enacted Budget, funds ethically, but also on how preparation of the National these performance targets are they attain performance targets Budget; up and during these are firmed the and outcomes using available indicated in the OPIF Book of preparation of BEDs. resources.

Outputs.

2. Budget Accountability Reports (BARs)

Submitted by agencies on a These include quarterly monthly and quarterly basis, BARs physical and financial reports are required reports that show of operations; quarterly income how agencies used their funds of reports, a monthly statement and identify their corresponding allotments, obligations and physical accomplishments. balances; and monthly report of disbursements.

No Report, No Release
Starting These funds to be 2012, thewithheld DBM are will only be withholding certain fund to limited to agencies MPBFreleases allotments agencies these the fail to submit their so that if only agencies are Budget Accountability Reports. the In penalized and that particular, these will be funds from the implementation of critical programs Miscellaneous Personnel Benefits Fund and projects will not be disrupted. (MPBF) for compensation adjustments Errant the and compliant agenciesLaw, will under Salary Standardization also be for posted online for public provisions unfilled positions and scrutiny. clothing allowances. employee

3. Review of Agency Performance

The An annual Budget Performance DBM regularly reviews the financial and physical performance of agencies. Assessment Review (BPAR) is Actual utilization of funds and physical conducted to determine each accomplishments, as indicated in the agencys accomplishments and agencies BARs, are evaluated against performance by thevia year-end. their targets as identified OPIF and in The DBM regularly reports results the agencies BEDs. Agency Performance Reviews (APRs) are to the President.
conducted quarterly or every semester, as the case may be.

4. Audit
New Accounting Auditing The Government DBM isuses not within COAs the audit DBMs System or NGAS - is sets the jurisdiction, reports in confirming and instead agency comprehensive guidelines for lodged performance, under the determining Commission agencies in accounting for on budgetary Audit (COA). levels Nonetheless, for agencies budgetary accounts, accounting auditing and addressing is critical issues in ensuring in fund for all its receipts and incomes, agency usage. accountability in the accounting for its disbursements, use public funds. andof the financial reporting system

Audit Scope
1. audit - conducted 2.Compliance auditlooks at the to 3. Financial Performance auditevaluates consistency offinancial the agencys ensure that reports in of the operations of the agency financial management practices agencies reflect a more-orterms of economy, efficiency with those prescribes by pertinent less realistic picture of the and effectiveness. laws, rules and regulations financial conditions of the agency

5. Performance-Based Incentive System

The Department of Budget and Management (DBM) is also in the process of establishing a performancebased incentive system which will recognize and reward good performance among government employees to help improve the efficiency of service delivery across all government institutions.

Budgetary Process
Thank You!

Beltran, Muega, Nardo, Serrano, Seeris