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Budget 101 (PFB) 022422
Budget 101 (PFB) 022422
Budgeting 101
28 February 2022
1
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Common Issues in Budget Preparation
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What Makes a Good Budget Proposal?
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Alignment with Priorities
Sustainable Development Goals
Philippine Development Plan
Sectoral Master Plans
Budget Priorities Framework
Presidential Directives
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Value-for-Money
Does the proposal have a clear logic
framework?
Is this the best strategy to deliver the
mandate or solve a pressing societal
problem?
Did the program managers and end-
users conduct market studies to
determine what best fits the
requirements of the program design?
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Value-for-Money
How are the agencies maximizing the
ceiling provided by the DBM in Tier 1?
Tier 1 Tier 2
+ =
Cost of on-going activities New Spending
and projects
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Comprehensive
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Example: Building Construction
Base Year: Cost of Construction of a Building
Year 1: Cost of furniture, equipment, security, utilities
Year 2: + Maintenance Costs
Year 3: + Renovation Costs
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Transparent & Participatory Process
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Implementation-Readiness:
Plan before Budget
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AGENCY
OO1 OO2
Program
Expenditure
Classification
Program
Sub-Program
Activity / Projects
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Understanding the Budget
Structure
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Common Issues in Budget Legislation
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Common Issues in Budget Execution
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Budget Release Documents
Obligation Authorities:
– GAA-as-Allotment-Order (GAAAO)
– General Allotment Release Order (GARO)
– Special Allotment Release Order (SARO)
Disbursement Authorities:
– Cash Disbursement Ceiling (CDC)
– Notice of Cash Allocation (NCA)
– Non-Cash Availment Authority (NCAA)
– Tax Remittance Advice (TRA)
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Role of End-Users in Budget Execution
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Role of End-Users in Budget Execution
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Why are BEDs Important?
It’s an overview of the financial and
physical plan of agencies.
Cash planning is important because it is
the basis of the Bureau of the Treasury
for it cash borrowing program
DBM releases the NCA in accordance
with the submitted Monthly
Disbursement Program of Agencies
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How do you financial planning?
1. Know what you will implement and
when.
2. Know when you will procure and for
how much.
3. Plot the procurement timelines.
4. Structure the contract to fit with the
availability of the cash as planned.
5. Actively manage your cash resources.
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Flexibilities in Budget Execution
Modification of Allotment
Within the same item of appropriation (PAP)
1. Across different Objects of Expenditure
within the same allotment class
2. From one allotment class to another
3. From one operating unit to another
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Flexibilities in Budget Execution
Declaration of Savings
Savings refer to portions of any release
appropriations which have not been
obligated as a result of:
a. Completion, final discontinuance, or
abandonment of the PAP, or
b. Cost saving measures
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Flexibilities in Budget Execution
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Obligation-based Budget
January December
Contracting (Obligations)
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Disbursement < Obligation
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Unfinished
Contracts
2018
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Obligation-based Budget
January December
Contracting (Obligations)
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Cash-based Budget
Contracting & Implementation
Extended
Payment Period
Payment
(Disbursements)
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What happens at the end of the
validity of the GAA?
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Multi-Year Contracting
1. Cannot be completed within the FY
2. Cost savings will be generated
3. Delivery of timely services would be
hampered if annual bidding will be
conducted
4. This will be advantageous to the
government
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Multi-Year Contracting
NGA: Multi-Year Contracting
Authority (DBM)
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Multi-Year Contracting
1. Total project cost
3. Commitment to include
funding requirements in the
annual budget proposal
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EXPENSE IMPLEMENTATION
FY OBLIGATION
CLASS & PAYMENT
PS 31 Dec 2021
PS 31 Dec 2022
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