Chapter 4 Flashcards by ANDREN ROSE CREDO

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

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Accounting for budgetary accounts formally commences upon enactment of the _______

General Appropriations Act (GAA)

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It contains the legal authorization to use public money for the various programs, activities and projects of the national government.

General Appropriations Act (GAA)

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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

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It defines the amount of cash allocations which shall be released by the DBM.

level of allotments

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These (3) mainly constitute the budgetary accounts, the accounting.

appropriations
allotments
cash allocations

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It shows the overall accounting system of a government agency/unit.

General Accounting Plan (GAP)

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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)

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What are the 4 accounting systems?

Budgetary Accounts System
Receipt/Income and Deposit System
Disbursement System
Financial Reporting System

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These are governed by legal provisions/fundamental principles relating to financial transactions & operations of the government.

Budget activities

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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

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It is the financial blueprint of a country’s development plan.

National Budget

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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)

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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)

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Who pushed for the adoption of a new approach to budgeting which is the Performance-Informed Budgeting (PIB)?

DBM

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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

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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

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It is a budgeting approach that uses performance info to assist in deciding where the funds will go.

Performance-Informed Budgeting (PIB)

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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

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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)

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Kinds of Budget as to:

Nature

a. Annual budget
b. Supplemental budget
c. Special budget

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Kinds of budget as to:

Basis

a. Performance budget
b. Line-item budget

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Kinds of budget as to:

Approach and Technique

a. Zero-based budgeting
b. Incremental budgeting

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A budget which covers a period of one year and is the basis of an annual appropriation.

Annual budget

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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

1. Budget Preparation 2. Budget Legislation 3. Budget Execution and Operation 4. 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

1. DBCC sets parameters 2. Budget Call 3. Stakeholders Consultation 4. Agency Budget Proposals 5. Technical Budget Hearings 6. Executive Review 7. Consolidation, validation & confirmation 8. Presentation to President and Cabinet 9. 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

1. President's Budget 2. House Deliberations 3. Senate Deliberations 4. Bicameral Deliberations 5. Ratification and Enrolment 6. 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:

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

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:

1. Release of Guidelines and Programs 2. Budget Execution Documents (BEDs) 3. Allotment and Cash Release Programming 4. Allotment Release a. Agency Budget Matrix b. Special Allotment Release Orders (SAROs) 5. Incurring Obligations 6. The GAA as Allotment Release (GAAAO) 7. Cash Allocation a. Notice of Cash Allocation b. Non-Cash Availment Authority (NCAA) c. Cash Disbursement Ceiling (CDC) 8. 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:

1. PERFORMANCE & TARGET OUTCOMES 2. Budget and Financial Accountability Reports (BFARs) 3. No Report, No Release 4. Review of Agency Performance 5. Audit 6. 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

Chapter 4 Flashcards

Until Budgetary Accounts