Chapter 4 Flashcards
Until Budgetary Accounts
Legal basis that states:
“No money shall be paid out of the Treasury except in pursuance of an appropriation by law”
Section 29 (1), Article VI of the 1987 Constitution
Accounting for budgetary accounts formally commences upon enactment of the _______
General Appropriations Act (GAA)
It contains the legal authorization to use public money for the various programs, activities and projects of the national government.
General Appropriations Act (GAA)
These are bases of the Department of Budget and Management (DBM) for issuing allotments or the authority of government agencies to incur obligations or enter into commitments to spend government funds.
Approved appropriations
It defines the amount of cash allocations which shall be released by the DBM.
level of allotments
These (3) mainly constitute the budgetary accounts, the accounting.
- appropriations
- allotments
- cash allocations
It shows the overall accounting system of a government agency/unit.
General Accounting Plan (GAP)
The General Accounting Plan (GAP) includes:
(3)
- source documents
- flow of transactions and its accumulation in the books of account
- conversion into financial info/data (financial reports)
What are the 4 accounting systems?
- Budgetary Accounts System
- Receipt/Income and Deposit System
- Disbursement System
- Financial Reporting System
These are governed by legal provisions/fundamental principles relating to financial transactions & operations of the government.
Budget activities
It is a plan for financing the government activities for a fiscal year prepared and submitted by responsible executive to a representative body whose approval and authorization are necessary before the plan can be executed.
National (Government) Budget
It is the financial blueprint of a country’s development plan.
National Budget
It has sought to ensure that public resources are managed more efficiently and with the greatest degree of discipline.
Department of Budget and Management (DBM)
An approach to budgeting which requires government agencies to strengthen the link between planning & budgeting & to simplify the presentation of the budget.
Performance-Informed Budgeting (PIB)
Who pushed for the adoption of a new approach to budgeting which is the Performance-Informed Budgeting (PIB)?
DBM
These two show the link between the funds allocated for government programs and the projected results and outcomes of these.
National Expenditure Plan
General Appropriations Act
It is a budget where the proposed expenditures are equal to or less than the estimated revenues. The government is operating with a budget deficiency.
Balanced Budget
It is a budgeting approach that uses performance info to assist in deciding where the funds will go.
Performance-Informed Budgeting (PIB)
Performance information includes the following (4):
POOC
- Purpose for the funds required.
- Outputs that would be produced or the services that would be rendered.
- Outcomes that would be achieved by the outputs/services
- Cost of the programs & activities propose to achieve the objectives
According to ________, the most common response to low performance is holding constant the level of future funding and/or subjecting future allocations conditional to improve in conditions related to performance.
Organization for Economic Cooperation and Development (OECD)
Kinds of Budget as to:
Nature
a. Annual budget
b. Supplemental budget
c. Special budget
Kinds of budget as to:
Basis
a. Performance budget
b. Line-item budget
Kinds of budget as to:
Approach and Technique
a. Zero-based budgeting
b. Incremental budgeting
A budget which covers a period of one year and is the basis of an annual appropriation.
Annual budget
A budget which supplement or adjust a previous budget which is deemed inadequate for the purpose it is intended.
Supplemental budget
A budget of special nature and generally submitted in special forms on account that itemizations are not adequately provided in the Appropriation Act or that the amounts are not at all included in the Appropriation Act.
Special budget
A budget emphasizing the programs/services conducted and based on functions, activities, and projects
Performance budget
A budget the basis of which is the objects of expenditures such as: salaries and wages, traveling expenses, freight, supplies and materials, equipment, etc
Line-item budget
A process which requires systematic consideration of all programs, projects and activities with the use of define ranking procedures.
Zero-based budgeting
A budget where only additional requirements need justifications
Incremental Approach
The budget cycle:
PLEA
- Budget Preparation
- Budget Legislation
- Budget Execution and Operation
- Budget Accountability
Budgetary Accounts System encompasses the processes of:
- preparing the budget released document
- monitoring and recording of allotments received by the agency from the DBM
- releasing of sub-allotment advices (SAAS) to regional offices (RO) by the central office (CO)
- issuance of SAAS to operating units (OU) by the RO
- recording and monitoring of obligations
Acknowledging and reporting income/collections, deposits of collections with authorized government depository bank (AGDB) or through the AGDB for the account of treasurer of the PH
Receipts/Income and Depository System
Recording of collections and deposits in the books of accounts of the agency
Receipts/income and Depository system
It constitute all cash paid out during a given period either in currency (cash) or by check
Disbursement
the settlement of government payables/obligations by cash or by check
Disbursements
It involves the preparation and processing of disbursement voucher, preparation and issuance of check; payment by cash; granting, utilization, and liquidation/replenishment of cash advances
Disbursement System
It 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.
National Budget
(Phase)
Executive prepares the proposed National Budget
Budget Preparation
(Phase)
Congress authorize the General Appropriations Act
Budget Legislation
(Phase)
Agencies utilize their approved budgets
Budget Execution
(Phase)
Executive monitor and evaluate the use of the budget
Budget Accountability
9 Steps of Budget Preparation
- DBCC sets parameters
- Budget Call
- Stakeholders Consultation
- Agency Budget Proposals
- Technical Budget Hearings
- Executive Review
- Consolidation, validation & confirmation
- Presentation to President and Cabinet
- The President’s Budget
Under what administration DBm has established a new tradition of beginning the Budget Preparation phase earlier, to ensure that the National Budget is enacted on time
Aquino Administration
When is budget call issued?
December
When is the President’s budget submitted?
a day after the state of the Nation Address
A reform that restructures the current Budget by grouping activities and projects under major programs or key strategies.
Program Expenditure Classification (PREXC)
It is conducted after departments and agencies submit their Agency Budget Proposal to the DBM
Technical Budget Hearing
Recommendations are presented before an Executive Review Board which is composed of the (2):
DBM Secretary
Senior Officials
6 Steps of Budget Legislation
- President’s Budget
- House Deliberations
- Senate Deliberations
- Bicameral Deliberations
- Ratification and Enrolment
- Enactment of GAA
Who assigns the President’s Budget to the House Appropriations Committee?
House of Representative
What is crafted in Budget Legislation?
General Appropriations Bill (GAB)
This committee will then discuss and
harmonize the conflicting provisions of the
House and Senate Versions of the GAB.
Bicameral Deliberations
This is prepared by the President and DBM after reviewing the GAB, this is where budget items subjected to direct veto or conditional implementation are identified and where general observations are made.
Veto Message
The Approved Budget consists of the following:
- New General Appropriations
- Continuing Appropriations
- Supplemental Appropriations
- Automatic Appropriations
- Unprogrammed Funds
- Retained Income/Funds
- Revolving Funds
- Trust Receipts
is the authorization made by a
legislative body to allocate funds for purposes
specified by the legislative or similar authority.
Appropriation
annual authorizations for incurring obligations, as listed in the GAA.
New General Appropriations
authorizations to support the incurrence of obligations beyond the budget year (e.g., multi-year construction projects).
Continuing Appropriations
additional appropriations to augment the original appropriations which proved to be insufficient.
Supplemental Appropriations
authorizations programmed annually which do not require periodic action by Congress.
Automatic Appropriations
standby appropriations which may be availed only upon the occurrence of certain instances.
Unprogrammed Funds
collections which the agencies can use directly in their operations.
Retained Income/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.
Revolving Funds
receipts by a government
agency acting as agent.
Trust Receipts
8 Steps of Budget Execution:
- Release of Guidelines and Programs
- Budget Execution Documents (BEDs)
- Allotment and Cash Release Programming
- Allotment Release
a. Agency Budget Matrix
b. Special Allotment Release Orders (SAROs) - Incurring Obligations
- The GAA as Allotment Release (GAAAO)
- Cash Allocation
a. Notice of Cash Allocation
b. Non-Cash Availment Authority (NCAA)
c. Cash Disbursement Ceiling (CDC) - Disbursement
Major recipients of budget:
a. NGAs
b. LGUs
c. GOCCs
These documents outline agency plans
and performance targets, monthly cash program, estimate of monthly income, and list of obligations that are not yet due and
demandable.
Budget Execution Documents
(BEDs)
DBM prepares this which corresponds to the total amount of the agency-
specific budget under the GAA
Allotment Release
Program (ARP)
Released by DBM to all agencies
comprehensively through the ABM
and individually via SAROs
Allotment Release
Comprehensive allotment release
document for appropriations which
do not need clearance, or those
which have already been itemized
and fleshed out in the GAA
Agency Budget Matrix
(ABM)
Issued for items identified as
“needing clearance” after approval
of the agency’s Special Budget
Request
Special Allotment Release Orders (SAROs)
Adopted to ensure the immediate
implementation of programs,
projects and activities.
The GAA as Allotment Order
(GAAAO)
DBM issues a disbursement
authority to an agency to pay the
obligation it incurs.
Cash Allocation
Issued for non-cash
disbursements
Non-Cash Availment
Authority (NCAA)
- A cash authority issued
periodically by the DBM - Specifies the maximum amount
of cash - Based on agency’s submission
of Monthly Cash Program
Notice of Cash Allocation
(NCA)
Issued to departments with
overseas operations, allowing
them to use income collected by
their foreign posts for their
operating requirements.
Cash Disbursement Ceiling
(CDC)
Government monies are
actually spent mostly through
the
Modified Disbursement
Scheme
6 Steps of Budget Accountability:
- PERFORMANCE & TARGET
OUTCOMES - Budget and Financial Accountability
Reports (BFARs) - No Report, No Release
- Review of Agency Performance
- Audit
- Performance-Based Incentive System
Required reports that show how
agencies used their funds and
identify their corresponding physical
accomplishments
Budget and Financial Accountability
Reports (BFARs)
is conducted to determine
each agency’s accomplishments and
performance by the year-end
Annual Budget Performance Review
(BPAR)
Recognizes and rewards good
performance among government
employees
Performance-Based Incentive System
an authorization made by
a legislative body to allocate funds for
purposes specified by the legislative or
similar authority
Appropriation
an authorization issued by the
DBM to government agencies to incur
obligations for specified amounts
Allotment
a commitment by an agency
arising from an act of duly authorized
official binding the government to the
immediate or eventual payment
Obligations
