Pangasinan State University BAYAMBANG CAMPUS Bayambang Pangasinan
NAME OF REPOTERS: ANTONETTE L. EDURIA JOHN ERIC P. GUNAY BPA II-2
MTW-2:00-3:00 MRS. MADLYN DV. TINGO
BUDGET AND THE BUDGETING SYSTEM BUDGET A detailed financial program anticipated expenditures and anticipated revenues including receipts from borrowing are eternized and exactly balance. It is prepared in advance of the fiscal year to which it applies. BUDGETING Is the process of systematically relating the expenditures of funds to the accomplishment of planned objectives Its ultimate goal is to produce a financial plan that achieve increasing development of the country with the optimum use of its available resources Basically, the budgeting system in the Philippines follows the performance budgeting approach. The innovations introduces in P.D No.117, otherwise known as the Budget reform Decree of 1977 such as zero-base budget analysis, long term and medium-term budgets, national resource budget are the approaches that have been develop to achieve a more effective allocation resources TWO TYPES OF BUDGETING PERFORMANCES BUDGETING A management oriented system of budgeting which measured actual or estimated results, in term of benefits accruing to the public and their unit costs. Although it was introduces in the Philippines as early as 1957, the government has not been able to fully implement it. ZERO-BASED BUDGETING A process which requires the budget estimates to be evaluated on zero-base approach rather on the incremental approach, as was customarily done, where only new activities and additional outlays to be justified. The national government of the Philippines operated on a legally established fiscal year. It operated on the fiscal year started, beginning July 1 and ending June 30 from 1946 to 1976. The change in the budget year was effected after 30 years through P.D No. 777, enacted on August 24, 1975. The new budget year incised with the calendar year beginning January 1 and ending December 31, while the process of making budgets is geared to a fiscal year or calendar year, it is continues. Also, every budget process carries with it the elements of Planning, Management and Control.
THREE STEPS OF BUDGETING Planning The process of deciding on the objectives of the government and organization, on changes in these objectives and the policies that are to govern the acquisition of disposition of these resources. Management The programming of approved goals into specific projects and activities, the design of organizational units to carry out the programs, staffing of these units and the procurement of resources. It is the link between the goals made and activities undertaken. Control The process of biding operating officials to the policies and plan set by the organization. It is predominant during the executing and accountability stages although the form of budget estimates and appropriation is often determined by control considerations CAPITAL OUTLAY BUDGET Requires borrowing for extraordinary necessities (like new school buildings) which are to be of long-time public benefits which can be afforded only through the spreading cost over several times. The concepts of national budgeting system in the country are as follows: 1. Concepts of Balances Expenditures shall not exceed receipts or resources 2. Concept of fiscal Control no money shall be paid out of the treasury except in pursuance of an appropriation. This is covered by a provision in the country s constitution. There are other provisions which govern the budget authorization. The specifies are established by P.D No. 1177. 3. Concept of Obligation this is analogous to private law of obligation and written contract. An obligation is a regal act a duly authorized official or representative which binds the government to an immediate or future payment from funds of the government for specific purposes 4. Concept of Appropriation an appropriation is a legislative authorization for a department or agency to obligate the government for specified purposes. All branches of government, including the legislature should observe a common budgeting procedure. As a procedure, the budget comprehends four definite and consecutive stages: 1. Budget Preparation first stages, involves the various steps in preparing the budget estimates and framing the financial plan 2. Legislative Authorization second ,the legislative authorization of the plan 3. Budget Executing third stages, stages the carrying out of the plan as authorized 4. Budget Accountability last stages, the accounting and audit and review of the financial operation.
