Pamantasan ng Lungsod ng Valenzuela

Graduate Studies
MAED – Sec. 2

Anicia B. Rivera Dr. Melinda Bautista

Maria Concepcion T. Sison Resource and Budget Management

January 29, 2011

Budgeting the Educational Plan

Budgeting and Planning
I. Budgeting

A. Definition and Functions

Budgeting is the translation of programs, projects and activities into their resource
requirements which are expressed in monetary financial terms. It allocates resources to
specific actions deemed necessary to achieve predetermined objectives. Additionally, a time
element is introduced within which resources are made available and activities are to be
carried out. Additionally, a time element is introduced within which resources are made
available and activities are to be carried out.

STEPS ON BUDGETING PROCESS

1. Identification of programs, projects and activities to be implemented during the

budget period. These are largely drawn from the planning process wherein specific
interventions are formulated to respond to problems and issues and/or to attain
specific targets.
2. Identification of resources – manpower, financial, physical and other resources
required to carry out the programs, projects, and activities and the quantities for
each resource.
3. Costing of resources which would translate the resource requirements into their
monetary values.
4. Preparation of the budget in accordance with the mandated form and content
spelled out in guidelines issued for this purpose.
5. Securing official authorization to allocate and use resources.

B. Planning and Budgeting Linkage

1. National Level
The implementation of the sectoral components of the multi-year development
plan is the responsibility of the different instrumentalities of government, with the
educator sector plan being the responsibility of DECS. In line with the annual
budget preparation process, the DECS annual agency plan is formulate, guided by
the policies and strategies embodied in the multi-year plan. It spells out the specific
activities to be implemented for the coming budget year, aimed at achieving the
targets set for that period. The annual budget allocated the resources needed for
these specific activities.
 2. Regional and Local Level

At the regional level, the planning-budgeting linkage is established through the

Regional Development Investment Program (RDIP). The RDIP is conceived as an
instrument for translating and operationalizing the objectives and strategies of the
regional plans into the area specific, viable and implementable packages of
programs and projects.

C. Major Types of Budgeting According to Bacani

1. Line-Item Budgeting
This used to be most widely used budgeting system. This system is ‘not goal-
oriented.” The budget merely consists of a listing of items every agency of the
government to be funded. It also contains statements of estimated receipts and
expenditures for the fiscal year for which it is intended based on the results of
operation during the preceding year.

2. Performance Budgeting
Performance budgeting is a management-oriented system of budgeting which
measures actual or estimated results in terms of benefits accruing to the public and
their unit costs.
In contrast to the line-system of budgeting, performance budgeting is based on
receipts and expenditures but also includes brief description of what is to be
achieved after each item of expenditure. It is a goal-oriented design.

II. National Budget Process

A. Budget Preparation

1. In the preparation of the budget, each department or agency of the government is

given a ceiling or budget level. The Development Budget Coordination Committee
(DBCC), a NEDA Board Committee, determines the budget level. It is composed of the
Secretaries of the Budget, NEDA, Finance and the Governor of the Central Bank of the
Philippines.

2. The DBCC estimates the anticipated revenues of the government on the basis of
historical performance projections of economic conditions in the incoming year and
revenue impact of proposed revenue measures. It likewise estimates the cost needed in
the implementing the projects that will achieve the established goals in the
development plan.
B. Budget Authorization

Congress discusses the budget with focus on policy, budget levels, thrusts and strategy.
The legislative body is prohibited from increasing the total appropriations submitted by the
President in the budget proposal.

1. All expenditures for (a) personal retirement premiums, government service insurance
and other similar fixed expenditures, (b) principal interest on public debt, (c) national
government guarantees of obligation which are automatically appropriated are
mandatorily provided for.
2. Unexpected balances of appropriations that are authorized in the General Appropriation
Act will be reverted to the unappropriated surplus of the General Fund at the end of
fiscal year and will not be available for exprenditure except by subsequence legislative
enactment.
3. However, appropriations for capital outlays will remain valid until fully spend or
reverted.
4. The balances of continuing appropriations will be reviewed as part of the annual budget
preparation process and the DBM may approve reversion of fund for a certain activitiy
provided and the Appropriation Act.

C. Budget Execution

Another major phase of the budget process is the budget execution. Authorized
appropriations can only be available after complying with established guidelines or
procedures, explains Bacani.

1. The Head of an agency should submit a request for allotment and funds to the
Secretary of Budget showing the estimated amounts needed for each function,
activity, purpose for which the funds are to be expanded, during the applicable
allotment period using the forms prescribed by the DBM.
2. Based on the allotment system, the fiscal system is divided into four quarters, with
the quarters starting on the first day of January, April, July, and October.
3. Request for allotment will be approved by the Secretary of the Budget after
determining that such amount will be spent for the purpose as approved.
4. At the end of every quarter, the head of each department, office or agency will
report to the Budget Secretary the current status of its appropriation, cumulative
allotments/obligations incurred/liquidated, total disbursement, and unliquidated
obligation, unobligated and unexpended balances and the results of expended
appropriations.
5. The Budget Secretary is authorized to modify and amend any allotment previously
issued if funds are less than the anticipated receipts from taxes or other sources.
6. The approved expenditures programs will be the basis for fund releases during the
fiscal period subject to the policies, rules and regulations.
7. The DBM may authorize the use of savings realized by an agency during a given year
to meet non-recurring expenditures in a subsequent year.
 D. Budget Accountability
The concept of accountability in budgeting gives emphasis to the results of expenditures
allocated and incurred. It refers to the evaluation of the quantitative and qualitative measures
of an agency performance as reflected in the units of work measurement and other indicators of
agency performance.

1. The Commission on Audit (COA) conducts a continuing review of the budgetary

program and project structure of each agency or ministry.

2. Heads of ministries or agencies of the government submit a semi-annual report of

their accomplishments to the Secretary of Budget and to COA on both work and
financial results. These reports will be used for the following:

a. Monitoring the efficiency and effectiveness with which the fund are being
utilized, and
b. Verifying the attainment of goals established in the budget.

3. Accountability constitutes:

a. Periodic reporting by agencies of performance under their approved

budget.
b. Tope management review of government activities and the fiscal and policy
limitations thereof.
c. Actions of the COA in assuring fidelity of officials and employeesin carrying
the intent of the Legislative Body and the President with regard to the
handling of receipts expenditures.

III. Budgeting for the Education Sector

A. Peculiarities of the Education Budget

1. A sizeable portion of the education budget is already predetermined by fixed
expenditure commitments. For instance, 70-75 percent of the budget is allocated to
salaries and wages and other personnel benefits. This characteristic is applicable at
the institutional level as well as at aggregation on the government level.
2. Considerable pressure is exerted on the education budget by inflation and
enrollment growth. Ideally real levels of expenditures should be maintained, not
just for the current student population but also for the expected growth in the
student population
3. The Constitutional mandate for free public elementary and secondary education
dictates that government should aim to provide schooling for the population in
these school age groups. Access to elementary and secondary education can
therefore be considered a basic human right which must be respected by the state.
4. The law on assistance to private education further exerts additional pressure on the
education budget. Not only should the education budget provide for the
requirements of the public school system but also for the requirements of private
schools meeting the criteria for assistance.
B. General Principles and Considerations in Preparing the Education Budget

1. The budget has a maintenance as well as developmental function. While the

bulk of the education budget is allocated to personnel benefits and a minimum
level of maintenance expense to sustain the operation for the school system,
the uncommitted portion should be utilized for development programs and
projects identified through the planning process.
2. Maintaining real per capita expenditures at the same levels should be targeted
as a minimum. This means that adjustments for inflation and provisions for
enrollment expansion should be factored into the budget proposal and that the
growth rate in the proposed budget should at least be equal to the sum of the
inflation rate and the public school enrollment growth rate.
3. The recurrent component of the education budget should be an aggregation of
the estimated cost of operating the individual schools in the area plus the cost
of overhead and supervision. Budget proposals coming from the lower
administrative levels can be consolidated to obtain an initial approximation of
the budget proposal of the country, region or province, as the case may be.
4. The various educational resource requirements, e.g., teachers, school buildings,
desks, instructional materials and equipment, should be provided for in the
budget estimate ideally as a package in order to prevent imbalances in the
supply of these resources.
5. In line with the policy on Education for All and other mandates to give greater
attention to education and training provided outside the formal school setting ,
education plans and budges must necessarily allocate resources to nonformal
education delivery schemes to reach out-of-school youth and adult illiterates
and unemployed.
6. Budgetary resources to support assistance programs for private education
should be integrated in the budget proposal at the central and regional elvels,
even in the midst of financial inadequacy of the public school system.
7. Local government budgeting should substantiate the provisions on education of
the Local Government Code through both the General Fund budget and the
Special Education Fund budget.

C. Procedures and Steps in Preparing the Educational Budget

For purposes of presenting the detailed procedures in preparing the

education budget, the education budget will be divided into two components –
(i) the recurrent budget which consists primarily of the cost of operating the
school system, and(ii) the development plan budget which includes the cost of
expanding and/or improving the school system through development programs
and projects.