Fundamental principles for revenue 7.
Fund Clustering
1. Unless otherwise specifically provided by Budget Cycle
law, all accruing revenues of an entity shall
1. Budget Preparation
be deposited/remitted to the national
a. Budget Call- issued by DBM to all got
treasury or in any duly authorized gov’t
agencies, this consists of next fiscal yr’s
depository and shall be accounted as general
target, budget ceiling of agencies, and
funds.
other guidelines.
2. Except for the provision by law, all money
i. Balance Budget- where the
and property received by a public officer in
estimated revenue shall exceed
any occasion must be accounted as govt
expenditure (surplus) if the
fund and property.
revenue < expenditures=
3. Amounts received from trust and business-
(deficit).
type activities of govt may be separately
ii. Annual Budget- Est fund that
recorded/disbursed in accordance w/ such
cover’s the year’s appropriation.
rules and regulations.
iii. Specific Budget- for budget not
4. Any payments received by a public officer
covered for general.
shall immediately be issued with an official
iv. Line-Item Budget- focus on
receipt to acknowledge the payment.
specific expenditures such as;
Fundamental Principles for Disbursements salary and wages, supplies,
freight, travel exp & etc.
1. No money shall be paid out of public
v. Performance Budget- Focuses on
treasury/ depository except in pursuance of
work to be done or services to be
appropriation law.
rendered.
2. Gov’t funds and property shall be used
vi. Obligation Budget- funds for
solely for public purposes.
expenditures incurred during the
3. Trust funds shall be available and be spent
year to be paid whether in current
only for specific purposes for which the trust
year or next year.
was created or the funds received.
b. Budget Hearing- Agencies submit their
4. Claims against govt funds shall be supported
budget proposals and defend to the DBM
with complete documentation.
which is deliberated to the National
Basic Govt Accounting & Budget reporting Expenditure Prgram (NEP) and Budget
Principles Expenditure Sources of Financing
(BESF) then, to be submitted to the
1. Generally Accepted Govt Accounting president.
Principles (GAGAP) in accordance with c. Presentation to the Office of the
Philippine Public Sector Accounting President- the budgets are checked and
Standard (PPSAS) in pertinent laws, rules, approved by the president and cabinet
and regulations. members then called the “president’s
2. Accrual basis accounting in accordance with budget” which will be submitted to the
PPSAS. Congress by DBM.
3. Budget basis for presentation of Budget 2. Budget Legislation
Information in the FS in accordance with d. House Deliberation
PPSAS 24. The house of Representatives then
4. RCA prescribed by COA. scrutinized the budget and expenditures
5. Double Entry Bookkeeping of agencies then prepares the General
6. Financial Statements Based on Accounting Appropriation Bill (GAB).
and Budgetary Records e. Senate Deliberation
Senate conducts deliberation the GAB subject for compliance of required
but sometimes it happens even during docs.
House Deliberations. iii. General Allotment Act Release
f. Bicameral Deliberation Documents. GAARD
There function is to harmonize conflicts A comprehensive authority used to
between two deliberations. The ALL NGAs, in general, to incur
harmonized GAB (Bicam Ver) obligations not exceeding the
submitted to the two parties for authorized amount for the specific
ratification then presented to the purposes.
president for enactment. j. Incurrence of Obligation
g. President’s Enactment Incurred obligations of agencies.
The president now exercised his veto k. Disbursement Authority
power then, GAB becomes a General The point where govt agencies gain
Appropriation Act (GAA) access to the govt funds after DBM
3. Budget Execution (The funds are spent) issues DA.
h. Released Guidelines and Budget Documents used for disbursement
Execution Documents (BED). DBM authority.
issue guidelines on the release funds. Notice of Cash Allocation NCA.
The agencies submit their BED Issued by DBM to the central,
(summary of FY plan and performance regional, and provincial offices
of each agency.) and operating units to cover their
Major recipients of budget. cash requirements.
i. LGUs NCA is based on the
ii. NGAs agencies submitted
iii. GOCCs monthly cash program.
i. Allotment (obligational authority) Notice of Transfer of Allotment
Authorization from DBM to the Authority from central officer to
agencies to incur obligations (must its regional and operating units.
be after allotment). Non-Cash Availment Authority
DBM formulates the allotment Authority from DBM to agencies
release program (ARP) used as to cover their liquidation for
control device to ensure that the actual obligations incurred
release conform with the national against available allotment for
budget. availment from the proceeds of
grants/loans from supplier’s
Docs used in releasing allotment to NGAs:
credit/constructive cash.
i. General Appropriation Act Release Cash Disbursement Ceiling
Document. GAARD Authority issued by DBM to
An obligational authority for the agencies with foreign operations,
comprehensive release of budgetary allowing them to use the income
item appropriated in the GAA, to cover their operating
categorized as Comprehensive Release. requirements.
ii. Special Allotment Release
Documents. SARO Checks charged against the
Allotments for special purposes account of the Treasury of the
(emergencies, calamities, etc.) Philippines called modified
Covers budget “for later release” disbursement system MDS check
4. Budget Accountability
The phase of regular monitor if the funds are
being managed, expended, and used
effectively.
l. Budget Accountability Reports
1.
m. Performance Reviews
n. Audit
Approved Budget- The expenditure authority
derived from appropriation laws and other decisions
related to the anticipated revenue for the budgetary
period.
Appropriation- authority from legislative body for
the allocation of funds
1. New General Appropriation
Annual authorization for obligations
incurred during the budget year.
2. Continuing Appropriation
Authorization to support obligations for
specific purposes/project beyond the budget
period.
3. Supplemental Appropriation
Additional funds authorized by legislature
for main budget used for urgent situations
such as unforeseen events/emergencies.
4. Automatic Appropriation
Authorization of funds set aside for specific
purposes that does not require congressional
approval.
BUDGET CYCLE
1. BUDGET PREPARATION
Bottom-up Approach- from
lowest to highest
Top-down Approach- from
agencies to lowest
Incremental Approach- budget
method that adjust the budget
because it includes the previous
year’s budget.
Zero-based Approach- method
used to formulate budget
regardless of the previous year’s
budget.
a. Budget Call- DBM issued BC to the
agencies for the budget preparation. This
contains the next fiscal years’ target,
plans, and other guidelines for the
budget preparation.
Kinds of Budget
1. Annual Budget- Budget
formulated for the year’s
b. Budget Hearing
This stage is where the agencies defends
their budget proposals
c. Presentation to the Office of the
President
2. BUDGET LEGISLATION
d. House Deliberation
e. Senate Deliberation
f. Bicameral Deliberation
g. President’s Enactment
3. BUDGET EXECUTION
h. Released Guidelines and Budget
Execution Documents
i. Allotment
j. Incurrence of Obligations
k. Disbursement Authority
4. BUDGET ACCOUNTABILITY
l. Budget Accountability Reports
m. Performance Reviews
n. Audit