Budgeting in National Govt.pptx

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BUDGETARY SYSTEM( Budget Process in the National Government )

The Budget Cycle

There are four phases in managing the National Budget:

Budget PreparationBudget LegislationBudget ExecutionBudget Accountability

During the preparation phase, the Executive prepares the proposed National Budget. This is followed by the legislation phase where the Congress authorizes the General Appropriations Act.

In the execution phase, agencies utilize their approved budgets and during the accountability phase, the executive monitors and evaluates the use of the budget.

Budget Preparation

This starts with the Budget Call and ends with the Presidents submission of the proposed budget to Congress

What is the Budget Call?What is Early Preparation?What is Stakeholder Engagement?What is Bottom-Up Budgeting?What are Technical Budget Hearings?What is the Executive Review?What is Consolidation, Validation, and Confirmation?What is a Presentation to President and Cabinet?What is the Presidents Budget?

1. The Budget Call

At the beginning of the budget preparation year, the Department of Budget and Management (DBM) issues the National Budget Call to all agencies (including state universities and colleges) and a separate Corporate Budget Call to all GOCCs and GFIs.

The Budget Call contains budget parameters (including macroeconomic and fiscal targets and agency budget ceilings) as set beforehand by the Development Budget Coordination Committee (DBCC); and policy guidelines and procedures in the preparation and submission of agency budget proposals.

Under the Aquino Administration, the DBM has established a new tradition of beginning the Budget Preparation phase earlier, to ensure that the National Budget is enacted on time. Under the new Budget Preparation Calendar, the Budget Call is issued in December (versus around April in the past); and the submission of the Presidents budget a day after the State of the Nation Address (in contrast to earlier practice where it is submitted during the late in the 30-day window that the Constitution prescribes).

2. Stakeholder EngagementA new feature in budget preparations which seeks to increase citizen participation in the budget process, departments and agencies are tasked to partner with civil society organizations (CSOs) and other citizen-stakeholders as they prepare their agency budget proposals.

This new process, which was piloted in the preparation of the 2012 National Budget, is now being expanded towards institutionalization.

Departments and GOCCs Mandated to Conduct CSO Consultations

Bottom-Up BudgetingFor the first time in history, the National Budget for 2013 will be prepared using a breakthrough bottom-up approach. As opposed to the conventional way of allocating resources from top to bottom, grassroots communities will be engaged in designing the National Budget.

The Aquino government, through the Cabinet Cluster on Human Development and Poverty Reduction, has identified 300 to 400 of the poorest municipalities and will engage these in crafting community-level poverty reduction and empowerment plans. This initial salvo of bottom-up budgeting will focus on rural development programs and the conditional cash transfer program, and will thus involve DA, DAR, DENR, DSWD, DepEd and DoH. These agencies will then include the community plans in their proposed budgets.

4. Executive Review

The recommendations are presented before an Executive Review Board which is composed of the DBM Secretary and senior officials. Deliberations here entail a careful prioritization of programs and corresponding support, vis--vis the priority agenda of the national government. Implementation issues are also discussed and resolved.

5. Consolidation, Validation and ConfirmationDBM then consolidates the recommended agency budgets and recommendations into a National Expenditure Program and a Budget of Expenditures and Sources of Financing (BESF). As part of the consolidating process, the deliberations by the DBCC will determine the agency and sectoral allocation of the approved total expenditure ceiling, in line with the macroeconomic and fiscal program. Heads of major departments are invited to this meeting.

6. Presentation to President and CabinetThe proposed budget is presented by DBM, together with the DBCC, to the President and Cabinet for further refinements or reprioritization. After the President and Cabinet approve the proposed National Expenditure Plan, the DBM prepares and finalizes the budget documents to be submitted to Congress.

7. The Presidents Budget

The budget preparation phase ends with the submission of the proposed national budget the Presidents Budget to Congress. The Presidents Budget consists of the following documents, which help legislators analyze the contents of the proposed budget:

Presidents Budget Message (PBM)This is where the President explains the policy framework and priorities in the budget.

Budget of Expenditures and Sources of Financing (BESF)Mandated by the Constitution, this contains the macroeconomic assumptions, public sector context (including overviews of LGU and GOCC financial positions), breakdown of the expenditures and funding sources for the fiscal year and the two previous years.

National Expenditure Program (NEP)This contains the details of spending for each department and agency by program, activity or project, and is submitted in the form of a proposed General Appropriations Act.Details of Selected Programs and ProjectsThis contains a more detailed disaggregation of key programs, projects and activities in the NEP, especially those in line with the national governments development plan.

Staffing SummaryThis contains a summary of the staffing complement of each department and agency, including number of positions and amounts allocated for the same.

Budget LegislationAlternatively called the Budget Authorization phase, this starts upon the House Speakers receipt of the Presidents Budget and ends with the Presidents enactment of the General Appropriations Act.

What are House Deliberations?What are Senate Deliberations?What are Bicameral Deliberations?What is Ratification and Enrollment?What is the Veto Message?What is Enactment?What are Reenacted Budgets?

1. House Deliberations

The House of Representatives, in plenary, assigns the Presidents Budget to the House Appropriations Committee. The Committee and its Sub-Committees then schedule and conduct hearings on the budgets of the departments and agencies and scrutinize their respective programs and projects. It then crafts the General Appropriations Bill (GAB).

In plenary session, the GAB is sponsored, presented and defended by the Appropriations Committee and Sub-Committee Chairmen. As in all other laws, the GAB is approved on Second and Third Reading before transmission to the Senate. (Note: In the First Reading, the Presidents Budget is assigned to the Appropriations Committee.)

2. Senate Deliberations

As in the House process, the Senate conducts its own committee hearings and plenary deliberations on the GAB. Budget deliberations in the Senate formally start after the House of Representatives transmits the GAB. For expediency, however, the Senate Finance Committee and Sub-Committees usually start hearings on the GAB even as House deliberations are ongoing.

The Committee submits its proposed amendments to the GAB to plenary only after it has been formally transmitted by the House.

3. Bicameral DeliberationsOnce both Houses of Congress have finished their deliberations, they will each constitute a panel to the Bicameral Conference Committee. This committee will then discuss and harmonize the conflicting provisions of the House and Senate Versions of the GAB. A Harmonized Version of the GAB is thus produced.

4. Ratification and EnrollmentThe Harmonized or Bicam Version is then submitted to both Houses, which will then vote to ratify the final GAB for submission to the President. Once submitted to the President for his approval, the GAB is considered enrolled.

5. The Veto MessageThe President and DBM then review the GAB and prepare a Veto Message, where budget items subjected to direct veto or conditional implementation are identified, and where general observations are made. Under the Constitution, the GAB is the only legislative measure where the President can impose a line-veto (in all other cases, a law is either approved or vetoed in full).

6. EnactmentWhen the GAA is not enacted before the fiscal year starts, the previous years GAA is automatically reenacted. This means that agency budgets for programs, activities and projects remain the same. Funding for programs or projects that have already been terminated is realigned for other expenditures. Because reenactments are tedious and prone to abuse, the Aquino Administrationwith the support of Congresshas committed to ensure the timely enactment of a new GAA every year.