National Budget and Budgeting Techniques

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What approach does the Philippines primarily use for budget preparation?

Top-down budgeting

Incremental budgeting

Zero-based budgeting

Bottom-up budgeting (correct)

Which document explains the country’s fiscal policy and budget priorities?

President’s Budget Message (correct)

Budget Expenditure Summary Forecast (BESF)

National Expenditure Program (NEP)

Congressional Budget Approval Document

What is the term used for the budget once it has been approved by the President?

Final Budget Outline

President’s Budget (correct)

Approved Expenditure Plan

Congressional Budget Proposal

In the context of budget preparation, what does 'zero-based budgeting' involve?

Starting the budget discussion from zero each year (D) Signup and view all the answers

Which of the following documents details the proposed expenditures of government entities for the upcoming year?

National Expenditure Program (NEP) (A) Signup and view all the answers

What initiates the budget preparation process for government agencies?

The issuance of a budget call by the DBM (D) Signup and view all the answers

What does the national budget estimate include?

The sources and uses of government funds for the fiscal year (B) Signup and view all the answers

What is a key function of government accounting in relation to the budget?

To provide information for assessing the conformance of fund utilizations (C) Signup and view all the answers

What follows after agencies submit their budget proposals?

Conducting of budget hearings (B) Signup and view all the answers

What is the purpose of the National Expenditure Program (NEP)?

To consolidate deliberated budget proposals into a single document (D) Signup and view all the answers

Who reviews the proposed budget after it is submitted by the DBM?

The President and Cabinet members (A) Signup and view all the answers

What is one of the four stages of the budget cycle outlined in the content?

Budget Preparation (D) Signup and view all the answers

What is a required characteristic of government fund utilization according to the national budget?

It must be aligned with the national budget approved by legislation (C) Signup and view all the answers

What are revolving funds primarily derived from?

Receipts from business-type activities of agencies (D) Signup and view all the answers

Which of the following defines trust receipts in government accounting?

Receipts held in trust for fulfilling obligations (B) Signup and view all the answers

What does responsibility accounting primarily enable managers to do?

Evaluate their performance based on direct control areas (D) Signup and view all the answers

Which cost is considered controllable within responsibility accounting?

Costs a manager can directly incur within a time frame (A) Signup and view all the answers

How does responsibility accounting categorize costs?

According to whether they are controllable or non-controllable (D) Signup and view all the answers

What are retained income/funds used for in government accounting?

To directly support agency operations or specific purposes (A) Signup and view all the answers

What is a major characteristic of revolving funds?

They must be self-liquidating and offset their own expenses (A) Signup and view all the answers

What is the primary purpose of identifying responsibility centers in responsibility accounting?

To assess and enhance manager accountability and performance (D) Signup and view all the answers

What is a Cash Disbursement Ceiling (CDC)?

Authorization allowing agencies with foreign operations to use collected income (A) Signup and view all the answers

What is the purpose of Budget Accountability?

To ensure actual results conform with planned targets during budget execution (B) Signup and view all the answers

Which report outlines monthly spending and obligations?

Monthly Report of Disbursements (A) Signup and view all the answers

What are Continuing Appropriations?

Funds allocated for multi-year projects requiring obligations beyond one budget year (C) Signup and view all the answers

Which statement accurately describes the Unified Accounts Code Structure (UACS)?

A coding system for financial reporting of the National Government (D) Signup and view all the answers

What do Supplemental Appropriations authorize?

Authorization for incurring obligations different from the approved budget (B) Signup and view all the answers

What is the purpose of a Statement of Appropriations, Allotments, Obligations, Disbursements and Balances?

To present a detailed report of budget-related activities and balances (D) Signup and view all the answers

Which of the following best defines Appropriations?

Legal authorization by a legislative body to allocate funds for specified purposes (D) Signup and view all the answers

What happens when the proposed budget is not enacted before the fiscal year starts?

The last year's budget is automatically reenacted. (A) Signup and view all the answers

What is the primary function of the General Allotment Release Order (GARO)?

To authorize the spending of government funds by agencies. (C) Signup and view all the answers

Which of the following is NOT a component of a Budget Execution Document (BED)?

List of budget allocations for specific projects. (B) Signup and view all the answers

What is the primary purpose of the 'Incurrence of Obligations' phase in the budget execution process?

To authorize government agencies to enter into contracts and hire personnel. (B) Signup and view all the answers

What is the role of the DBM (Department of Budget and Management) in the 'Disbursement Authority' phase?

The DBM issues authorization allowing agencies to access funds. (A) Signup and view all the answers

What is the significance of the 'Modified Disbursement System (MDS) Checks' used in the disbursement process?

These checks are directly issued from the central government treasury. (C) Signup and view all the answers

Which of the following is NOT a major recipient of the budget in the Philippine government?

Private corporations engaged in public-private partnerships (PPPs) (A) Signup and view all the answers

What is the main function of the Notice of Cash Allocation (NCA) in the budget execution process?

It authorizes the disbursement of funds to government agencies. (C) Signup and view all the answers

What approach is used to formulate the current year's budget based on the previous year's budget?

Roll-over Approach (D) Signup and view all the answers

What is the purpose of the General Appropriations Bill (GAB)?

To provide legal backing for government fund disbursement (B) Signup and view all the answers

How often must the President submit the proposed budget to Congress?

Within 30 days from the opening of each regular session (A) Signup and view all the answers

What is defined as an illegal action for a government entity regarding obligations?

To incur obligations without receiving an allotment (C) Signup and view all the answers

What is the role of the Bicameral Conference Committee?

To harmonize conflicts between Senate and House versions of the GAB (B) Signup and view all the answers

What must government agencies do regarding their current year's proposed budget?

They are required to justify their proposed programs (C) Signup and view all the answers

What document encompasses future liabilities based on current contractual agreements?

Obligational Authority (C) Signup and view all the answers

At what stage does the Senate begin its deliberations on the General Appropriations Bill?

After the Senate receives the GAB from the House (C) Signup and view all the answers

What must occur before the President can enact the budget?

The approval of the General Appropriations Bill by Congress (B) Signup and view all the answers

What is the purpose of the Cash Release Program (CRP)?

To set disbursement limits for government agencies (B) Signup and view all the answers

Study Notes

The National Budget

The Philippine Constitution mandates a national budget, approved by legislation, for government fund utilization.
Government accounting assesses adherence to the approved budget.
The national budget estimates government fund sources and uses within a fiscal year, forming the basis for spending and promoting socio-economic objectives.

The Budget Cycle (PLEA)

The budget preparation process follows a "bottom-up" approach, starting from the lowest government levels.
Agencies are involved in budget development and increasing citizen participation.
Bottom-up is contrasted with top-down, where budget creation begins at the highest levels.
In 2011, the Philippines shifted from incremental to zero-based budgeting, aiming to improve expenditure efficiency.

Incremental Budgeting

The current budget is based on the previous year's, adjusted for any variances.
This approach may be prone to overuse.

Zero-Based Budgeting

The current year's budget is formulated without reference to the previous year.
Agencies justify all proposed programs and expenditures.
Zero-based budgeting aims to promote efficient expenditure utilization.

Budget Call

The budget cycle begins when the Department of Budget and Management (DBM) issues a budget call.
This call includes fiscal year targets, budget ceilings, and guidelines for agency proposals.

Budget Hearings

Agencies present their budget proposals to the DBM.
The DBM reviews, makes recommendations, and consolidates proposals into the National Expenditure Program (NEP) and Budget of Expenditures and Sources of Financing (BESF).
The DBM sends the proposed budget to the President.

Presentation to the Office of the President

The President and Cabinet review the budget document.
The DBM compiles final documents, referred to as the President's Budget.
This budget document assists Congress in deliberation. (Includes President's Budget Message, NEP, and BESF).
The President submits the proposed budget to Congress within 30 days of the regular session's start.

Budget Legislation

Government funds are appropriated by law.
The appropriate process for budgetary approval must be followed.

House Deliberations & Senate Deliberations

The House of Representatives deliberates on the General Appropriations Bill (GAB).
The Senate deliberates on the GAB, typically after the House's work begins.
A Bicameral Conference Committee harmonizes House & Senate differences.

Presidents Enactment

The President enacts the budget, creating the General Appropriations Act (GAA), using the veto power as permitted.
If the budget is not enacted by the fiscal year start, the previous year's GAA is automatically reenacted.

Budget Execution

Government spending occurs during the execution phase.
The DBM issues guidelines for fund release and utilization of funds.
Agencies submit Budget Execution Documents (BEDs) summarizing fiscal year plans and targets, including various elements like physical and financial plans, monthly cash programs, and projected income. Major recipients of budget include NGAs, LGUs, and GOCCS.

Allotment

The DBM sets allotment limits through the Allotment Release Program (ARP).
Allotment serves as an authorization for agencies to incur obligated amounts.
Allotment authorization is further supported by documents like the Cash Release Program (CRP).

Obligation Incurrence

Agencies incur obligations by, for example, entering contracts or hiring personnel.
Government agencies receive disbursement authority from the DBM, which enables access to funds.
Disbursements are typically made through treasury checks.

Budget Accountability

Budget accountability is a concurrent process with budget execution.
Actual results are monitored for adherence to planned targets.
Reports are generated (monthly reports, quarterly physical report, statements of appropriations, etc.), aiding accountability and performance reviews.

Performance Reviews & Audit

Performance and budget accountability of agencies are reviewed periodically.
The Commission on Audit (COA) audits the performance of agencies..

The Approved Budget

Key elements composing the approved budget include its derivation from laws, ordinances, anticipated revenue & receipts, and its elements.
(e.g., New General Appropriations, Continuing Appropriations, Supplemental Appropriations, Automatic Appropriations, Unprogrammed Funds, etc.).
The budget is classified using a Unified Accounts Code Structure (UACS).

Retained Income/Funds, Revolving Funds, Trust Receipts

Funds generated from specific, authorized sources and operations.
Revolving funds are self-liquidating, business-type operations.
Trust receipts involve acting as a trustee, agent, or administrator for obligations.

Responsibility Accounting

An accounting system used to better evaluate responsibilities.
Information about costs and revenues is presented, enabling effective manager evaluation based on direct controllable aspects.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Explore the intricacies of the national budget as mandated by the Philippine Constitution. This quiz delves into different budgeting techniques such as incremental and zero-based budgeting, as well as the budget cycle process. Test your knowledge on government fund utilization and the importance of citizen participation in budget preparation.