CHAPTER II
Budget Process
Learning Objectives
• ENUMERATE THE STEPS IN THE BUDGET
PROCESS.
• DESCRIBE BRIEFLY THE PRINCIPLES OF
RESPONSIBILITY ACCOUNTING.
National Budget
The National Budget (Government Budget) is the
government’s estimate of the sources and uses of
government funds within a fiscal year.
This forms the
basis for expenditures and is the government’s key
instrument for promoting its socio-economic objectives.
Performance-Informed
Budgeting (PIB)
National Expenditure Plan (NEP) and GAA 2014
will show the link between the fund allocated for
government programs and the projected results and
outcomes of these.
National Budget
The 1987, Philippine Constitution and other laws require
government funds to be utilized in accordance with a
national budget that is duly approved by lower and
upper house. Government accounting, therefore, is
concerned with providing information useful in
assessing the conformance of utilization of government
funds with the approved budget.
National Budget
The information and eventual utilization of the
national budget are summarized in the Budget
Cycle.
Budget Cycle
Has four (4) phases, namely:
1.
2.
3.
4.
Budget Preparation
Budget Legislation
Budget Execution
Budget Accountability
BUDGET PREPARATION
1) Budget Call
2) Budget Hearings
3) Presentation to the Office of the President
BUDGET LEGISLATION
1) House Deliberations
2) Senate Deliberations
3) Bicameral Deliberations
4) President’s Enactment
THE APPROVED BUDGET
The approved budget consists of the following:
1. New General Appropriations
2. Continuing Appropriations
3. Supplemental Appropriations
4. Automatic Appropriations
5. Unprogrammed Funds
6. Retained Income/Funds
7. Revolving Funds
8. Trust Receipts
APPROPRIATION
 Appropriation – is the authorization made by a legislative
body to allocate funds for purposes specified by the legislative
or similar authority.
1.
New General Appropriations - annual authorizations for
incurring obligations, as listed in the GAA.
2. Continuing Appropriations - authorizations to support the
incurrence of obligations beyond the budget year (e.g.,
multi-year construction projects).
3. Supplemental Appropriations – additional appropriations to
augment the original appropriations which proves to be
insufficient.
4. Automatic Appropriations - authorizations programmed
annually which do not require periodic action by Congress.
APPROPRIATION
5. Unprogrammed Funds – standby appropriations which may
be availed only upon the occurrence of certain instances.
6. Retained Income/ funds - collections which the agencies
can use directly in their operations.
7. Revolving funds – receipts from business-type activities of
agencies which are authorized to be constituted as such.
These are self-liquidating and all obligations and
expenditures incurred by virtue of said business-type
activity shall be charged against the fund.
8. Trust Receipts- receipts by a government agency acting as
agent.
BUDGET EXECUTION
1) Release Guidelines and BEDs
 Major recipients of budget:
a. NGAs
b. LGUs
c. GOCCs
2) Allotment
3) Incurrence of Obligations
4) Disbursement Authority
Disbursement Authority
1.
Notice of Cash Allocation (NCA) – authority issued by the DBM to central,
regional and provincial offices and operating units to cover their cash
requirements. The NCA specifies the maximum amount of cash that can
be withdrawn from a government servicing bank in a certain period.
2.
Notice of Transfer of Allocation – authority issued by an agency’s Central
Office to its regional and operating units to cover the latter’s cash
requirements.
3.
4.
Non-Cash Availment Authority – authority issued by the DBM to agencies
to cover the liquidation of their actual obligations incurred against
available allotments for availment of proceeds from loans/grants
through supplier’s credit/constructive cash.
Cash Disbursement Ceiling – authority issued by the DBM to agencies
with foreign operations allowing them to use the income collected by
their Foreign Service Posts to cover their operating requirements.
BUDGET ACCOUNTABILITY
Thank You!