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DEPARTMENT OF BUDGET & MANAGEMENT
General function::
The President shall submit a budget to Congress within 15 days of the opening of each
The proposed Budgets for 2012 to regular session. The general appropriation bill shall be based on this budget. Congress
2016 had been consistently may not increase the appropriations recommended by the President for government
submitted one working day after operations except those for Congress and the Judicial Department.
the opening of the regular The general appropriations bill shall not include any provision unless related specifically
session. to some particular appropriation in it, and any such provision shall be limited in its
operation to such appropriation.
The Treasury shall not release any money unless appropriated by law.
- Senate Deliberation
Sep to Nov of Prior FY
- Unlike normal legislation, the Constitution first requires the
House to approve the GAB before the Senate considers the
same. However, to expedite the process, the Senate
Committee on Finance usually starts hearings on the
President’s Budget well before the House formally transmits
the GAB.
- Like in the House, the Committee on Finance sponsors the
GAB in plenary, which then approves the Senate version of the
GAB.
- Bicameral Deliberation
Nov-Dec of Prior FY
- Once both Houses of Congress have finished their
When the GAA is not enacted deliberations, they will each constitute a panel to the Bicameral
before the fiscal year starts, the Conference Committee. This committee will then discuss and
previous year’s GAA is harmonize the conflicting provisions of the House and Senate
automatically reenacted. This
means that agency budgets for Versions of the GAB. A Harmonized Version of the GAB is thus
programs, activities and projects produced.
remain the same. - Ratification & Enrollment
Dec of Prior FY
Funding for programs or projects - The Harmonized or “Bicam” Version is then submitted to both
that have already been terminated Houses, which will then vote to ratify the final GAB for
is realigned for other expenditures submission to the President. Once submitted to the President
for his approval, the GAB is considered enrolled.
- Enactment
Dec of Prior FY
VETO MESSAGE - Budget legislation ends when the President signs the GAA into
where budget items subjected to law. Prior to this, the President may veto or set conditions for
direct veto or conditional
implementation are identified, and implementation of certain items in the GAA, which are then
where general observations are specified in the President’s Veto Message. Unlike other
made. Under the Constitution, the legislation, the President may effect a “line item veto” of
GAB is the only legislative specific provisions of the GAB.
measure where the President can - If in case Congress fails to pass the GAB on time, the
impose a line-veto (in all other President may re-enact the previous year’s GAA until such
cases, a law is either approved or time that the fresh Budget is passed. The Budgets from 2011
vetoed in full)
to 2016 have all been enacted on time.
BUDGET EXECUTION
- Early Procurement Activities
Oct to Dec of Prior FY
- Agencies are required to prepare their Annual Procurement
Plans and other bid documents before the new fiscal year
starts.
- Moreover, the government adopted a policy of allowing
agencies—such as the DPWH and others which implement
infrastructure projects—to bid their projects before the GAA is
enacted.
- Early bidding allows agencies to award their approved projects
as soon as the new GAA takes effect.
- Budget Program
Oct to Dec of Prior FY
- Agencies submit Budget Execution Documents (BEDs) to
outline their financial plans and performance targets for the
year. The DBM consolidates these plans into the budget
program, which breaks down the allotment and cash releases
for each month of the year.
- Allotment Release
Jan (Comprehensive) and Throughout FY
- The DBM issues allotments to agencies to authorize the latter
to incur obligations.
- With the GAA-as-Release Document, the enacted Budget itself
Allotment Release Orders
serves as the allotment release for all budget items except
(SAROs) Items identified as
“needing clearance” are those those contained in a negative list that are issued the Special
which require the approval of the Allotment Release Orders (SAROs) after agencies comply with
DBM or the President, as the case the documentary requirements.
may be (for instance, lump sum - THE GAA as Allotment Release (started in 2013
funds and confidential and budget)
intelligence funds). For such - The annual General Appropriations Act as the
items, an agency needs to submit
comprehensive allotment release document
a Special Budget Request to the
DBM with supporting documents. itself. This is to significantly speed-up the
Once approved, a SARO is process of releasing the Budget and
issued. implementing the programs and projects that it
funds.
- This entails the disaggregation of all budget
items into full detail, as well as the elimination
of all lump-sum funds, save for a few
exceptions such as the Calamity Fund. In
other words, this reform significantly reduces
the need for SAROs.
- Old ways: Allotment Release Program (ARP) to set a
limit for allotments issued to an agency and on the
aggregate and Cash Release Program (CRP) is also
formulated alongside that to set a guide for
disbursement levels for the year and for every month.
- Obligations
Throughout FY
- Agencies incur liabilities that the national government will pay
for, as they implement programs, activities, and projects.
- Agencies incur obligations when they hire new staff or enter
into a contract with suppliers of goods and services that are
subject to a transparent and competitive procurement process.
- Cash Allocation
Throughout FY
- The DBM issues disbursement authorities, such as the Notice
of Cash Allocation (NCA), to authorize an agency to pay the
obligations it incurs.
- To ease budget execution, the DBM issues comprehensive
NCAs to cover the cash requirements of agencies for the first
semester.
- In special cases, the Non-Cash Availment Authority (NCAA)
and Cash Disbursement Ceiling (CDC).
- Notice of Cash Allocation (NCA)
- This is a cash authority issued periodically by
the DBM to the operating units of agencies to
cover their cash requirements.
- The NCA specifies the maximum amount of
cash that can be withdrawn from a
government servicing bank for the period
indicated.
- The release of NCAs by DBM is based on an
agency’s submission of its Monthly Cash
Program and other required documents.
- Other Disbursement Authorities
- In contrast to NCAs, Non-Cash Availment
Authority (NCAA) are issued to authorize non-
cash disbursements.
- Cash Disbursement Ceiling (CDC) are
meanwhile issued to departments with
overseas operations, allowing them to use
income collected by their foreign posts for their
operating requirements.
- Disbursements
Throughout FY
- This is the final step of the budget execution phase, where
government monies are actually spent. The Modified
Disbursement Scheme is mostly used, where disbursements of
national government agencies chargeable against the Treasury
are made through government servicing banks, such as the
Land Bank of the Philippines.
- To ease the payments process, the DBM introduced checkless
and cashless disbursement schemes. The DoF-BTr also
implemented the TSA to improve the management of the
government’s cash resources.
BUDGET ACCOUNTABILITY
- Performance Target
Jan of FY
- Budget accountability starts with the setting of targets that
agencies are to be held accountable for.
- With the Performance-Informed Budget, the GAA now
contains the targeted outcomes, outputs and performance
indicators of each agency.
- These targets are also reflected in agencies’ BEDs (see
“Budget Program” under Budget Execution), which effectively
serve as the agencies’ plans for the year.
- Citizen Engagement
Throughout FY
- To empower citizens during Budget Accountability, the
government ensures transparency--agencies disclose their
budgets, reports, and other relevant information through the
Transparency Seal; and make available data in open format.
- In addition, the government also publishes the People’s Budget
along with other technical documents and reports.
- Citizens participate formally in the monitoring of programs and
projects through BPAs, BUB, and other mechanisms. In
addition, CSOs participate in the audit process through the
COA’s Citizens’ Participatory Audit
- Audit
Within the Following Year
- The COA reviews the accounts of each agency to ascertain if
public funds are used properly, according to the law and
standards, and with value-for-money.
- The COA produces audit reports for each agency; a
whole-of-government Annual Financial Report; as well as
Special Audit Reports. The DBM uses COA’s Audit Reports in
confirming agency performance, determining budgetary levels
for agencies, and addressing issues in fund usage.
Additional Notes:
No Report, No Release
Starting 2012, the DBM will be withholding certain fund releases to agencies if
these fail to submit their Budget Accountability Reports. In particular, these will
be funds from the Miscellaneous Personnel Benefits Fund (MPBF) for
compensation adjustments under the Salary Standardization Law, provisions
for unfilled positions and employee clothing allowances.
These funds to be withheld are only limited to agencies’ MPBF allotments so
that only the agencies are penalized and that the implementation of critical
programs and projects will not be disrupted. Errant and compliant agencies will
also be posted online for public scrutiny.
References: