EXAM

Module Name: The Public Budget.

Nombres y Apellidos:Luz Celina Moreto Montalbán
Enrollment Code: UNT-0426-18
Place and Date: Bagua Grande, September 1, 2018

1. What is the Budget? What are the budgets of private companies like?
The budget is defined as a formal estimate of income and expenses for a
given period, both within the context of the operations of an organization or entity,
as well as the context of an entire State.

In private companies, budgets are instruments that are used to

to plan their peculiar productive, financial, and commercial policies.

2. What is the concept and importance of the General Budget of the Republic or
Public Budget?
The importance of the public budget is extraordinary: it constitutes the foundation of
tax order of a State and is, at the same time, the guarantee for citizenship
of what it will impose on it in tax terms the financing of the state, having as
counterpart for the execution of works and the production and provision of goods and services
public.
The public budget is an instrument of economic, social, and financial programming.
that enables the State to fulfill its functions.

3. Specify the concept and importance of the Public Budget from various points of view.
view.
As a Planning Instrument: it is a tool that allows for the realization of the
execution of the short, medium, and long-term plans that the state has.

As a Tool of Fiscal Policy: it encompasses the areas related to the level and
the expenditure structure, the level of income, the distribution of the tax burden and the
defects of taxes in the economic system.

As a Government Instrument: it constitutes one of the most important instruments and

appropriate to efficiently fulfill the function of government.

Como Instrumento de Administración:una vez fijado el programa de gobierno, es

it is essential to put it into practice, to turn it into actions, whereby one enters into the
field of management.

As a document: it is essential that the budget is based on a

appropriate methodology, in order to allow those who need to know and interpret it to do so
aprobarlo, administrarlo y difundirlo a la ciudadanía.
4. Identify the evolution and typology of the Public Budget from various perspectives.
View.
The idea of 'budgeting' has always existed in the mind of humanity, the Egyptians,
before Christ, they made estimates to predict the results of their harvests
wheat with the aim of preventing years of scarcity; the Romans estimated the
payment possibilities of the conquered peoples to demand tribute from them
corresponding. However, it was not until the 18th century that the budget began to
to be used as assistance in the Public Administration, when submitting the Minister of Finance of
England to the consideration of Parliament, its expenditure plans for the fiscal period
from the following year, including a summary of expenses from the previous year, and a program of
taxes and recommendations for their application. Since then to date has
evolved greatly.

Typology of the Public Budget from various viewpoints:

Traditional budget - it is the way of allocating public resources by taking

consider the acquisition of goods and services according to their nature or destination.
Budget by Programs.- It constitutes a way to reflect the issues of the
production of goods and provision of services carried out by the public sector.
Zero-Based Budgeting - It is defined as an operational planning process and
budgeting requires each executive or manager to justify their demands
budgetary from scratch, without considering previous periods.
Results-Based Budgeting.- Governments that adopt this strategy measure the
performance of public agencies and their workforce, set goals and reward the
that reach or exceed their goals.

{"text":"5. What is understood by traditional budget? Identify its structure, its advantages"}
and disadvantages.
Traditional budgeting is understood as the way of allocating resources.
public taking into account fundamentally the acquisition of goods and services
according to their nature or purpose, without offering the possibility of correlating such goods or
services with the objectives or goals that are intended to be achieved.

Structure: in most cases, the traditional budget is presented by

budget items in chapters associated with the organizational structure of the institution
considered public.

Advantages: it is easy to apply and does not require highly qualified personnel.
to do it, because it is based more on intuition than on reason.

Disadvantages: It employs a very rudimentary analysis methodology. It does not allow for definition.
the responsibilities for achieving institutional policies and objectives. Neither
It contemplates physical aspects regarding goals and real resources.

6. What are the most essential characteristics of Program Budgeting?

when is it applied?
The program budget is a way to reflect the problem of the
production of goods and provision of services carried out by the public sector.
 It is a form of allocation of public resources by objectives.

It allows to show, in addition to the amount spent, the actions that are carried out in the
public sector and the products that are obtained.

In general terms, it applies to any process of combining inputs that results in

products.

7. What contributions do we find from the application of this budgeting technique?

Try to determine how, what, and why it should be spent, aside from the mere
consideration of the total amount of expenditure.

In addition, the definition of responsible parties for each stage of the budgeting process,
constitutes another significant advance, as it allows to identify who should
respond and account for the degree of compliance with the established goals and the
deviations produced if there were any.

Pay special attention to the objectives that must be achieved through the execution of the
budget the total costs that this implies.

Its aim is to guarantee the production of goods or the provision of services in the
the way in which the responsible institutions have planned it.

Seeks to overcome the shortcomings of the traditional budget through formulation and
execution of the budget based on work plans and allocation
resources for meeting the goals set in them.

8. When and where does Zero-Based Budgeting appear? What does it consist of?
Methodology? What do the following steps of the PBC involve, how is the creation?
of the decision packages and their rating in order of
priorities?
It appears in the year 1973 in some federal entities of the North American government.

This methodology aims to determine whether the actions developed by the different
organs that make up the State are efficient. It is defined as an operational process
of planning and budgeting, which requires each executive or manager to justify
his budget requests from scratch, without considering previous periods.

Decision packages are documents that identify and describe an activity

specifically so that management can:
Evaluate it and classify it according to the other activities that compete for
obtain resources.
Decide whether to approve or not.
One of the key elements of this step is the identification and evaluation of different
alternatives to carry out each activity. Another relevant step is the classification of
the decision packages. For this, it is necessary to conduct a cost analysis and
benefits or if a subjective evaluation is necessary.
9. Regarding the difficulties presented by the PBC. How does it manifest itself?
interior of the companies?
Fears among the officials and agents themselves stand out, problems
administrative challenges and difficulties in the formulation of decision packages and in the
classification process.

Many times administrators feel pressure during any process that they
forced to make decisions, and in the case of the PBC they are required to clearly identify
each of its activities, establish costs and performance levels, at the same time
time to classify and decide among a set of priorities.

Another factor that may contribute to the failure of this system is the lack of support from
from the upper management.

10. Develop your comments on the most advanced reforms related

with the implementation of performance-based budgeting in public enterprises
del país.
The most advanced reforms related to the budget system are related to
with the so-called Results-Based Budgeting, a characteristic tool of the new
public management that structures the budget cycle based on results
expected and the goods and services required to achieve them, granting a greater
flexibility in the use of resources when changing the control scope of inputs to the
products and results.

The Results-Based Budget goes beyond the mere allocation of public resources and
expense control, to become a management tool when evaluating products and
results related to the users or end beneficiaries.

The PpR must include appropriate criteria, processes, and incentives in its conception.
it's enough to have the right tool since the products might not be there
resolving political issues, so it is necessary to integrate this tool into
public management and using information to make better decisions.

11. What is the scope of application of the 2 types of public budgets that
it frames the Budget of the Peruvian Public Sector.
The scope of application of the two types of public budgets is the Public Sector.
Peruvian, where the General Budget can be clearly distinguished
Republic (PGR) and the Institutional Public Budgets.

12. Indicate the structure of the Institutional Public Budget.

The Institutional Public Budget, according to budgetary regulations
understand
The expenses that, at most, can be incurred by the Entities during the fiscal year,
based on the approved budgetary credits and the revenues that finance
such obligations.
The objectives and goals to be achieved in the fiscal year by each of the Entities with
the budget credits that the respective budget approves.
13. What is the destination of the country's public funds?
Within the public sector, funds are directed towards covering the expenses incurred.
el cumplimiento de sus fines, independientemente de la fuente de financiamiento de
where they come from. The funds are directed efficiently and with attention to the
priorities for the development of the country.

14. Identify and define the types of Institutional Budget specified in the Law
General of the National Budget System.

The Initial Institutional Budget (PIA).-It is the initial budget of the entity
public approved by its respective Head of the Budget, charged to the Credits
Budgetary provisions established for the entity by the Annual Sector Budget Law
Public, which considers the properly balanced forecast of Income and Expenses for
a fiscal year.
The Modified Institutional Budget (PIM) - It is the updated budget of
report, as a consequence of the budgetary modifications, at the institutional level as
at the programmatic level, carried out during the fiscal year based on the PIA.
The Executed Institutional Budget (PIEJ) - It is the one that will ultimately be executed.
coordinate and control in the fiscal year, once the PIA is approved, with which the bids
budgetary can execute the expenditure, make the modifying notes that are
necessary at the programmatic functional level, capture and collect the revenues, in accordance with
the current budget regulations and monitor the execution.
Participatory Budgets (PB) must align with the Plans.
of Concerted Development of the region or locality where they are prepared, coordinated and
approved.

15. What is the National Budget System?

The national budget system is the set of organs, norms, and procedures.
which lead the budgeting process of all entities in the public sector in
all its phases (Programming, formulation, approval, execution, and evaluation).

16. Specify the importance of the principles of the National Budget System,
that frame the State's budget management.
The principles that govern the National Budget System are based on the
following rules:
The Political Constitution of Peru
The General Law of the National Budget System
Decree of the Law of Fiscal Responsibility and Transparency - Law No. 27245, approve
por el DS N° 066-2009-EF, y la Ley de Descentralización Fiscal - Decreto Legislativo
No. 955
Law No. 27444, Law of General Administrative Procedure.

It is important to align the Principle of Legality with Article 31 of Law No. 28411
that provides that the General Comptroller of the Republic and the Internal Control Bodies
the Entities supervise the legality of the execution of the public budget,
understanding the proper management and use of state resources and assets;
according to the provisions of the Organic Law of the National Control System of the Comptroller's Office
General of the Republic - Law No. 27785. The Congress of the Republic oversees the
ejecución presupuestaria.
17. Indicate the sequence of the budget process in the Public Sector.
The phases of the budgeting process in the Public Sector are:
Programming
Formulation
Approval
Execution
Assessment

18. Evaluate the most important points that you would highlight from the sequence of each
one of the phases that comprise the budgeting process in the public sector.

Programming Phase.- In this phase, the projected income and expenses will be outlined.
the public sector entities, during the following fiscal year.
Projected expenses must be established according to the priority scale and the
spending policies prioritized by the head of the budget.

Formulation Phase.- Here, the functional and programmatic structure is determined.

each entity, the budgetary goals, the expenditure chains, the amounts of income and
expenses and sources of financing.

Approval Phase.-In this phase, the draft budget laws are

Public Sector, Debt and Financial Balance reports prepared by the Ministry of Economy and Finance are
subject to the approval of the Council of Ministers. Subsequently, the President of the
The Republic sends the draft laws to the Legislative Power (Congress of the Republic)
for your approval according to the established procedures and deadlines
by the political constitution of Peru.

Execution Phase.- This phase must adhere strictly to what is established in the
budget and the regulations that govern this administrative system. The provisions
legal and regulatory, administrative acts and administration, contracts
y/agreement as well as any action by the entities that affects public expenditure,
must be subject to the authorized budget credits.

An important concept in the budget execution stage is the calendar of

commitments, as it constitutes the authorization for the execution of the credits
budgetary.

The accrual is the budgetary act through which an obligation is recognized.

payment, derived from an approved and committed expense; which occurs prior to
documentary accreditation of the provision or the right of the creditor.

The payment act by which the amount is extinguished, partially or totally,

recognized obligation, which must be formalized through the official document
corresponding.

Evaluation Phase.- In this phase, the measurement of the obtained results is carried out and
the analysis of the physical and financial variations observed. This assessment constitutes
source of information for a new phase of budget programming.