PrE 8

• 1987 Philippine Constitution, Sec. 29 (1), Art. VI – "no money shall be paid out of the Treasury except in pursuance of an appropriation by law."
• Budgetary accounts


  Composed of appropriations, allotments, and cash allocations
• Accounting Systems


  • Budgetary accounts
  • Receipts/income and deposit system
  • Disbursement system
  • Financial reporting system
• Fundamental Principles of Fiscal Operations and Disbursements of Public Funds


  • No money paid out of treasury or depository except in pursuit of an appropriation law or statutory authority
  • Government funds to be spent or used solely for public purposes
  • Trust funds available and spent only for specific purpose
  • Fiscal responsibility shared by all exercising authority over financial affairs, transactions and operations of government agency
  • Disbursements shall bear approval of proper officials
  • Claims supported with complete documentation
  • All laws and regulations re financial transactions faithfully adhered to
  • Accounting principles and practices plus sound management and fiscal administration to be observed
• National government budget


  • Plan for financing fiscal year government activities
  • Detailed proposal of estimate or statement of receipts (revenues) and expenditures for the past and ensuing years
• Balanced budget


  Budget where estimated revenues equal proposed expenditures
• Performance-informed budgeting (PIB)


  • Uses performance information to assist in deciding where funds will go
  • Differs from traditional line item-based budgeting since it focuses more on outputs and outcomes with less emphasis on the inputs
  • Links funding to results
  • Provides a framework for more informed resource allocation and management
• Financial and non-financial performance information presented in appropriations document

  • Purpose of required funds
  • Produced outputs or services rendered
  • Achieved outcomes
  • Cost of programs and activities proposed
• Kinds of Budget (As to nature)

  • Annual – covers a period of one year
  • Supplemental – adjusts a previous inadequate budget
  • Special – submitted in special forms when itemizations are not adequately provided or amounts are not included int eh Appropriations Act
• Kinds of Budget (As to basis)

  • Performance – focus us in the general character and nature of work or services to be rendered
  • Line-item – based on the objects of expenditures
• Kinds of Budget (As to approach and technique)

  • Zero-based – activities are analyzed and presented in "decision packages" or key budgetary inclusions
  • Incremental – focuses on analysis of incremental changes in the budget done within the context of performance and program budgeting
• The Budget Cycle

  • Budget Preparation
  • Legislative Authorization (Budget Legislation)
  • Budget Execution and Operation
  • Budget Accountability
• Appropriation


  Authorization directing payment of goods and services out government funds under specific conditions or special purpose
• Allotment


  Authorization from DBM allowing the incurrence of obligations within the appropriation
• Obligation


  Commitment binding the government to the immediate or eventual payment of a sum of money
• Registries for Budget Monitoring


  • Registry of Revenue and Other Receipts (RROR)
  • Registry of Appropriations and Allotments (RAPAL)
  • Registry of Allotments, Obligations and Disbursements (RAOD)
  • Obligation Request and Status (ORS)
  • Registry of Budget Utilization and Disbursements (RBUD)
• Objects of Expenditures


  • Personnel services (PS)
  • Maintenance and other operating expenses (MOOE)
  • Financial expenses (FE)
  • Capital outlays (CO)
• GAA as the Allotment Order (GAAAO)


  Obligational authority for comprehensive release of appropriated budgetary items categorized as for comprehensive release (FCR)
• Special Allotment Release Order (SARO) or General Allotment Release Order (GARO)


  • Classified as for later release (FLR) and considered as withheld portion of the budget
  • SARO covers budgetary items in the submitted budget execution documents (BED)
  • GARO is an obligational authority to incur obligations not exceeding an authorized amount during a specified period and covers automatically appropriated expenditure common to most agencies without need of special clearance or approval
• Notice of Cash Allocation (NCA)


  Authority to pay operating expenses through modified disbursements systems (MDS) checks, authority to debit account (ADA) or other modes of disbursements
• Non-Cash Availment Authority (NCAA)


  Covers liquidation of actual obligations against allotments for availment of proceeds from loans/grants through supplier's credit/cash
• Cash Disbursement Ceiling (CDC)


  Authority to DFA and DOLE to utilize their income collected/retained to cover their operating requirements not exceeding released allotments
• Re-enacted budget – allows the use of public funds for regular operations pending approval of the GAA
• General Guidelines of Fund Release

  • Allotment release program (ARP) – may be established upon GAA's effective date (15 days following completion if publication in the Official Gazette or newspaper of general circulation
  • All programmed automatic appropriations shall be available for release, obligation and disbursement within the budget year; any deficiency may be proposed for inclusion in succeeding year's budget
  • Unprogrammed appropriations (stand-by) are funded form excess revenues or from new revenue sources or when additional foreign loan and proceeds are realized within the budget year
  • After the specified validity period, all unreleased appropriations or unexpended or undisbursed funds shall be reverted to unappropriated surplus of the General Fund and shall not be available for expenditure except by subsequent legislative enactment
  • Obligational authority for items of appropriations shall be released through GAAAO for FCR and SARO or GARO for FLR items
  • Funds are released directly to the regional office or operating unit
  • Obligational and disbursement authority shall be in accordance with targets set forth under DBM evaluated BED
• Modifications and Adjustments


  • Modification – any changes within an activity or project, operating unit, allotment class, object of expenditure within an agency or department budget
  • Augmentation – use of savings in appropriations to cover actual deficiencies incurred for the current year
  • Savings – portion or balances or any released appropriation which have not been obligated due to completion, final discontinuance, abandonment of a program, activity or project, or implementation of measured resulting in improved system and efficiencies at a lesser cost
  • Deficiency – occurs when there is an unforeseen modification or adjustment in the P/A/P or reassessment in the use, prioritization and/or distribution of resources
• Government Agencies Authorized to Utilize their Income Collected

  • DOF – Insurance Commission - (PS, MOOE, CO)
  • DOTr - Office for Transportation Security - (PS, MOOE)
  • DOLE – Office of the Secretary (verification fees) – (MOOE)
  • DOJ – Land Registration Authority – (MOOE)
• Release of Disbursement Authorities Guidelines

  • Release of NCA - Initial comprehensive NCA issued directly to operating units covering one quarter (January to March) operating cash requirements excluding provision for prior year's' obligations, Succeeding NCAs issued to cover requirements for second quarter (April to June), Additional NCAs issued for second semester requirement (July to December), Agencies advised to use the ADA to settle payables, NCA shall be issued to three government servicing banks (LBP, DBP and PBV), Payment of mandatories such as PS, MOOE and Co requirements shall take precedence over accounts payable in the utilization of NCAs
  • Other disbursement authorities - Valid from the date of issuance until the last working day of the year, Release of non-cash availment authority (NCAA), Cash disbursement ceiling (CDC)
• Reporting Requirements


  • Budget Execution Documents (BED) - BED No. 1 – Financial Plan (FP), BED No. 2 – Physical Plan (PP), BED No. 3 – Monthly Disbursement Program (MDP), BED No. 4 – Annual Procurement Plan for Commmon-Use Supplies and Equipment (APP-CSE)
  • Budget and Financial Accountability Reports (BFARs) - Quarterly Physical Report of Operation (QPRO – BAR No.), Statement of Appropriations, Allotments, Obligations, Disbursements and Balances (SAAODB) – FAR NO. 1, Summary of Appropriations, Allotments, Obligations, Disbursements and Balances by Object of Expenditures (SAAODBOE) – FAR No. 1-A, List of Allotments and Sub-allotments (LASA) – FAR No. 1-B, Statement of Approved Budget, Utilizations, Disbursements and Balances (SABUDB) – FAR No. 2 (for Off-Budget fund), Summary of Approved Budget, Utilizations, Disbursements and Balances by Object of Expenditures (SABUDBOE) – FAR No. 2-A (for Off-Budget Fund), Aging of Due and Demandable Obligations (ADDO) – FAR No. 3, Monthly Report of Disbursements (MRD) – FAR No. 4, Quarterly Report of Revenue and Other Receipts (QRROR) – FAR No. 5
• Validity of Appropriations - PS – until Dec. 31 of the current year, MOOE and CO – until Dec. 31 of the ensuing year, Continuing appropriations of the previous year for MOOE and CO – until the end of the current year, Supplemental budget for MOOE and CO – until the end of the current year
• Conduct of mid-year and end-year agency performance review – by DBM
• Accountabilities/Timelines


  • November 15 – deadline for submission to DBM for request or release of SAROs and additional NCAs
  • Within 30 days after the end of each quarter – submission of BFARs
  • On or before the 10th day of the month immediately following the covered period: Monthly RAAOD, Monthly RD using FAR
• Disbursement


  All cash paid out during a given period either in cash or by check
• NCA


  May be net of amount of tax withheld, used for payments of all financial transactions
• Disbursements Basic Requirements and Certifications

  • Availability of allotment/budget – Budget Officer
  • Validity of supporting documents – Accountable Officer
  • Propriety of payment – Accountable Officer
  • Completeness of supporting documents – Accountable Officer
  • Correctness of computations – Accountable Officer
  • Availability of cash – Cashier
• Continuing appropriations


  • MOOE and CO - until the end of the current year
• Supplemental budget


  • MOOE and CO - until the end of the current year
• Conduct of mid-year and end-year agency performance review


  By DBM
• Deadline for submission to DBM for request or release of SAROs and additional NCAs

  November 15
• Submission of BFARs


  Within 30 days after the end of each quarter
• • Monthly RAAOD
  • Monthly RD using FAR

  On or before the 10th day of the month immediately following the covered period