The document outlines the budget process and preparation steps for the Department of Education in the Philippines. It discusses:
1) The budget preparation begins in December with a call from the Department of Budget and Management. Each department prepares estimates following DBM guidelines.
2) Departments must submit budget requests with objectives, expenditures, programs and projects, staffing plans, and other required information.
3) The budget undergoes legislative authorization through hearings and debates. It details issues that can arise like inaccuracy, rigid decision making, and a focus only on financial outcomes rather than other priorities.
2. BUDGET PREPARATION
■ This covers the estimation of government revenues, the
determination of budgetary priorities and activities within
the constraints imposed by available revenues and by
borrowing limits, and the translation of approved priorities
and activities into expenditure levels for a budget year.
3. 1.The budget preparation begins with the issuance of a
budget call by the department of Budget and
Management (DBM) in December of the year.
2. Budget estimates are prepared by each
department/regional office/division office at the start of
every year following the guidelines and format prescribed
by the Department of Budget and Management and the
approved program/activity/structure.The Financial
Management Service through the Budget Division
reviews/consolidates the budget estimates for submission
to the DBM
4. 3. DECS shall submit its request for appropriations to the DBM
in accordance with the budget calendar, format, and such rules
and regulations as may be issued. It shall include the following
information:
a. Objectives, functions, activities, programs and projects showing
the general character and relative importance of the work to be
accomplished or the services to be rendered, and the principal
elements of cost involved;
b. Linkage of the work and financial proposals to be approved
development plans;
c. Estimated current operating expenditures and capital outlays, with
comparative data for the preceding and current budget years;
5. d. Identification by region, pursuant to the policies on
the regionalization of government operation;
e. Financial sources, reflecting all revenue proceeds or
foreign and domestic borrowings, and other sources,
particularly those which accrue to the General Funds;
6. f. Brief description of the major thrusts and priority programs
and projects for the budget year, results expected for each
budgetary program and project, the nature of work to be
performed, estimated costs per unit of work measurement,
including the various objects of expenditures for each project;
and
7. g. Organization charts and staffing patterns indicating the list
of existing and proposed positions with corresponding
salaries and benefits, and proposals for position classification
and salary changes, duly supported by adequate justification.
8. 4. General Guidelines in the Preparation of the DECS Budget.
Budget proposals are expected to be cost-effective, focused and
integrated.Toward this end, the following general guidelines are
prescribed to support prudent government spending:
■ a. DECS shall continue to devise ways and means to rationalize further
the allocation of funds among various units under its jurisdiction, such
as regional, division, district offices and schools;
■ b. DECS shall identify the particular key programs, concerns, or
commitment of the national government, or target group, which a
specific program, activity or project will address;
■ c. Specific major outputs, which the DECS targets to complete, produce,
or reach – out during the budget year, shall be identified as well;
9. ■ d. DECS shall integrate in its budget proposals the
requirements of its regional and division offices, services,
bureaus, centers and other agencies and offices which, by
law, are attached to it;
■ e.The DECS regional budget shall be prepared taking into
consideration the opportunities and requirements of specific
regions of the country; and
■ f. the DECS Secretary shall identify by region the expenditure
programs of DECS in the national government budget, and
release funds to the regions with the approved regional
distribution of expenditures.
10. 5. Regional Consultation
DECS Central Office shall immediately provide indicative
expenditure programs of DECS in the national
government budget and release funds to the regions with
the approved regional distribution of expenditures.
11. 6. Budget Evaluation
■ The DECS proposals shall be reviewed on the basis of their own
merits and not on the basis of a given percentage of peso
increase or decrease from a prior year’s budget level. Proposed
activities, whether new or ongoing, shall be evaluated using a
zero-based approach and on the basis of
Relationship with the approved development plan,
Agency capability as demonstrated by past performance,
Complemental role with related activities of other agencies, and
Other similar criteria.
12. 7. Foreign-Assisted Projects
■ The budgetary implications of foreign-assisted projects shall be explicitly
considered at the time of project design and financing negotiation.The project
study shall specify the cash flow requirements of the projects, among others,
for
1) payment of principal and interest,
2) peso component of capital costs and project preparation,
3) infrastructure and support facilities needed to be directly financed by
government,
4) operating and other expenditures which will be ultimately required for
General Funds support when the project is implemented, and
5) peso requirements needed as counterpart.The concurrence of the
DBM shall be obtained with respect to peso requirements and
implication on expenditure ceilings.
14. Budget Legislation/Authorization
■ The enactment of the General Appropriation Bill into
appropriation Act based on the budget of receipts and
expenditures”. A series of budget hearings/ debates id
conducted whereby the various heads of agencies would
explain to Congress the details of their respective budgets.
15. 1. Automatic Appropriations
■ All expenditure for
1) personnel retirement premiums, government service insurance
and other similar fixed expenditures,
2) principal interest on public dept,
3) national government guarantees of obligations which are drawn
upon,
are automatically appropriated.
16. 2. Supplemental Appropriations
■ All appropriation proposal shall be included and
considered in the budget preparation process. However,
supplemental or deficiency appropriations involving the
creation of new offices, programs or activities may be
enacted if accompanied and supported by new revenue
sources.
17. 3. Reversion of unexpected Balances of
Appropriations, Continuing
Appropriations.
■ Only unexpended balances for personal services are still
revertible to the General Fund at the end of the
fiscal/calendar year. Maintenance and Other Operating
Expenses (MOOE) and Capital Outlay (CO) are continuing
appropriations to the next calendar year, per General
Provision of the GAA for the particular calendar/fiscal year.
18. 4. Loan Proceeds
■ Expenditures funder by foreign and domestic borrowing shall
be included within the expenditure program of DECS. Loan
proceeds, whether in cash or in kind, shall not be used
without the corresponding release of funds through a Special
Budget as herein provided.
19. 5. Contingent Liabilities
■ Government Agencies such as DECS, shall periodically report
to the Secretary of Finance and the Secretary of Budget and
Management on the status of obligations they have entered
into and which are the subject of government guarantees.
21. 1. Inaccuracy
■ A budget is based on a set of assumptions
that are generally not too far distant from
the operating conditions under which it
was formulated.
22. 2. Rigid decision making.
■ The budgeting process only focuses the
attention of the management team on
strategy during the budget formulation
period near the end of the fiscal year. For
the rest of the year, there is no procedural
commitment to revisit strategy.
23. 3.Time required.
■ It can be very time-consuming to create a budget,
especially in a poorly-organized environment
where many iterations of the budget may be
required.The time involved is lower if there is a
well-designed budgeting procedure in place,
employees are accustomed to the process, and the
company uses budgeting software.
24. 4. Blame for outcomes
■If a department does not achieve its
budgeted results, the department
manager may blame any other
departments that provide services to it
for not having adequately supported
his department.
25. 5. Expense allocations
■ The budget may prescribe that certain amounts
of overhead costs be allocated to various
departments, and the managers of those
departments may take issue with
the allocation methods used.This is a particular
problem when departments are not allowed to
substitute services provided from within the
company for lower-cost services that are
available elsewhere.
26. 6. Use it or lose it
■ If a department is allowed a certain amount
of expenditures and it does not appear that the department
will spend all of the funds during the budget period, the
department manager may authorize excessive expenditures
at the last minute, on the grounds that his budget will be
reduced in the next period unless he spends all of the
authorized amounts.Thus, a budget tends to make
managers believe that they are entitled to a certain amount
of funding each year, irrespective of their actual need for
the funds.
27. 7. Only considers financial
outcomes.
■ The nature of the budget is numeric, so it tends to
focus management attention on the quantitative
aspects of a business; this usually means an intent
focus on improving or maintaining profitability. In
reality, customers do not care about the profits of a
business – they will only buy from the company as
long as they are receiving good service and well-
constructed products at a fair price.
