Vous êtes sur la page 1sur 43

BUDGETING, BUDGET

PROCESS, IMPLEMENTATION
& PERFORMANCE
EVALUATION & CONTROL

MR. ADONIS P.BESA - Presenter


Introduction and the Merits of
Budgeting
• Budgeting is an important tool in management. For a budget
to be meaningful, it has to be prepared with the
institutional plan as its basis; for, after all, the budget is a
reflection of the institutional plan.
• Included as a component of the institutional plan is the
definition and articulation of objectives that are convergent
with the institutional vision/mission that should be fully
appreciated by all the components of the academic
community.
• To operationalize the objectives contained in the
institutional plan are specific programs and projects the
implementation of which, by virtue of the funding provided
in the budget, will redound to the greater enhancement of
excellence in the educational operation of the institution.
Introduction and the Merits of
Budgeting
• In the financial and resource constraints, priorities will have
to be determined and the implementation of the budget
entails compliance with the priorities as contained in the
budget document.
• Periodic monitoring and coordination during budget
implementation is also desirable. When required, control
mechanisms may be instituted to direct financial operations
toward a desirable path consistent with the defined
objectives and priorities.
• As a result of the attainment of institutional objectives,
performance indicators will demonstrate the department or
officer responsible for project execution and the
instrumental in achieving high levels of institutional
productivity.
• With the institution cognizant of high productivity, then a
culture of excellence will prevail, which can be the basis for
a system of meritocracy in the institution.
Planning Function of Budgeting

• A starting point in the preparation of the budget is the knowledge


of the present state of the institution as contained in the
institutional plan. The institutional strengths and weaknesses as
well as threats and opportunities, have to be highlighted for the
provision of a budget.
• Having analyzed the existing situation, one has to be certain that
the objectives are doable, and that their implementation is within
the time frame of the budget while cognizant, all the time, of
resource and financial constraints. Thus, an important document is
a budget statement detailing the challenges faced by the
educational institution, and its concerns and desired future for the
educational institution.
• Having completed the budget statement, the financial projections
can be prepared with the identification of sources of revenues,
and the definition of all expenditure items.
Budget for Effective Coordination,
Monitoring and Control
• During the preparation of the budget, consultation with
the relevant and involved offices is necessary in order
for them to assist in the process, most especially in the
articulation of urgent concerns and challenges.
Budget as an instrument for Effective
Realization of Goals and Objectives
Within Financial and Resource
Constraints
• During the budget preparation, key performance
indicators are defined. For each budget item, there is a
corresponding indicator that the defined activity has
been achieved.
• There should also be a demonstration of the linkage of
the performance to the institutional mission, goals, and
objectives.
• Finally, the fact that these were all achieved within
the resource constraints of the institution should be of
prime importance. Such, is the test of good
implementation of the budget: that targets are
achieved within the limits of the institutional
resources. Achievements should be supported with
concrete indicators of performance.
Budget as a Basis in the Formulation of
Performance Indicators and the
Institution of an Effective Evaluation
and Merit System
• The budget document should contain performance
indicators corresponding to the key budgetary items.
• In education, the performance indicators for
instruction are the number of student served, or the
number of graduates who did well in the world of
work. Another indicator would be a high percentage of
graduates who pas their board examinations. In some
institutions and for the members of the faculty, the
performance indicators are the student contact hours,
participation as thesis adviser or attendance in thesis-
dissertation committees, and additional duties and
responsibilities as committee member or head of the
department.
The Budgeting Process in the Private
and Public Education Sector
• The budget process in the government is different from that
of the private sector.
• In the private sector, the Board of Trustees or Board of
Directors has the final approval of the budget.
• In the government, it is the House of Representatives and
the Senate of the Philippines that have the final say on the
budget. Once approved by both houses of the Congress of
the Philippines, the document is submitted to the Office of
the President for the budget to take effect as a law and
consequently for appropriate implementation by the line
agencies of the Executive Department of the government,
the Constitutional bodies such as the Commission on Audits,
the Commission on Elections, and the Judiciary and the
Legislative Department.
Private Education
Sector
Budget Framework and Process

• The head of the institution, most likely with the approval of


the Board, promulgates the terms of reference contain the
parameters of the budget preparation.
• Such terms of reference contain parameters of the budget
preparation, the Budget Committee and its members, the
urgent concerns that the institution has to address in the
forthcoming budget period, some assumptions with respect
to enrolment level, faculty hiring, salary increases, merit
and promotion, acquisition of capital equipment and
physical plant expansion, procurement limitations and the
allocation of 70% of tuition fee increases for salaries and
wages and employee benefits, 20% for maintenance an
operating expenses and 10% return on capital.
• The schedule of budget preparation is also included in the
terms of reference, together with the schedule of
presentation to the Board of trustees or directors
Budget Preparation and
Programming
• With the assistance form the finance office of the
institution, the colleges and offices will prepare the
budget, which should contain the following:
• a.Situational Analysis
• Review of the past year’s performance, analysis of strengths
and weaknesses and threats and opportunities. Based on the
review, identification of concerns and the budget theme for
the forthcoming year. From the situation analysis, one will be
able to lay down the basis for the budget which will provide
resolutions to the challenges identified, a continuity of
excellent programs that have been on stream, and the
introduction of new programs consistent with the articulated
needs of the clientele.
Budget Preparation and
Programming
• B. Budget Projection
• The basis of budgetary
projection is the actual
results of financial operations
in the previous three
academic years, the current
year’s budget and the
projection for the next three
years. The projection is
across all offices, colleges
and departments. This is
shown as Form B.
• Before the consolidation of the budget as shown in Form B,
a subsidiary document is necessary, which is the Enrollment
Projection as shown as Form B-1 showing the past three
years actual enrolment, the current year’s enrolment and
the enrolment projection over the next three years. Present
actual revenues for the last three years and estimate of the
current year’s revenues in the space provided in Form B.
• Then, with the enrolment projection in Form B-1 as basis,
estimate the revenues for the next three years and place it
in Form B.
• In addition to Form B-1, there is also a need to fill in Form
B-2, the Individual Time Allocation Schedule, and B-4, which
is the Consolidated Time Allocation Schedule. Form B-2 and
B-3 are necessary to be able to fill in form salaries and
wages in Form B-3.
• When Form B-3 is completed, then Form B-4 can be
prepared.
• With the completion of Form B, the Pro Forma
Statement of Income and Expenses can be finalized, as
shown in Form B-5. Consequently, the pro-forma
Balance Sheet, as shown in Form B-6, can be prepared.
Budget Implementation

• Upon the approval of the budget by the Board of


Trustees/Directors, the head or the president of the
institution will issue a memorandum to all concerned
that the respective college or office budget is duly
approved for implementation. The corresponding
performance indicators should be identified consisting
of the following:
• Indicators of Quality Teaching
• Indicators of Quality Research
• Indicators of Quality Extension Services
Budgeting Monitoring and
Control
• Inflow of revenues and disbursements should be closely
monitored by the appropriate officer, and each department
should be properly informed of the results of the financial
operations of each college or department.
• There should not be any deviation from the approved
budget, except for deviations that are within the authority
granted to the dean, or head of the office, or to the
President of the institution.
• If there is any deviation, there should be an appropriate
explanation as to the reason or causes of such deviation. If
the deviation merits sanction, the head of the institution
may institute the corresponding action.
Public Education
Sector
Budget Framework and Process
in the DepEd, CHED & TESDA

• As early as November of each year,


the Department of Management
issues the Budget Circular for the
year immediately after the
succeeding year.
Budget Framework and Process
in the DepEd, CHED & TESDA
• At the end of each calendar year, i.e. December 31, DepEd,
TESDA, CHED, and state colleges and universities are provided
with their budget balance.
• All these offices will have to obligate said balance for any
activities or projects that have been contracted and, therefore,
the balance should already be obligated before December 31.
• If the funds have not been obligated, the balance will revert to
the central fund. If the budget balance has been obligated and
duly supported with a daily signed contract, said document has to
be submitted to the DBM.
• Once the obligated items are approved by the DBM, the agency
concerned is only given three months to disburse the obligated
balance. If a government unit is not able to disburse its budget for
the calendar year, it is taken as an indication of not being program
of activities or implement a project.
• This may be taken against the office concerned and thus minimize
the chances for this office to get an increase in budget.
Budget Framework and Process
in the DepEd, CHED & TESDA
• The basis of the budget is the National Plan as
prepared by the National Economic Development
Authority (NEDA). All programs and projects must be
consistent with the education section of the national
plan that contains the objectives and the strategies for
the education sector.
Budget Preparation

• The Budget Officer and the Planning Officer of DBM,


usually with the Rank of Director or Assistant Secretary,
coordinates with the Budget Account Officer of DepEd
or TESDA or CHED for any documentation, data, or
information necessary for the preparation of the
budget, while all units of the DepEd, TESDA, and CHED
are given the necessary instructions with respect to the
budget documents to be prepared, data to be
generated, performance indicators, and justifications
for any new project.
Budget Preparation

• With respect to personnel services, the heads of the


offices are not so involved in the qualification. These
are readily available in the accounting office. What
will be subject matter for discussion with the
Secretary, Undersecretaries, Chairman and
Commissioners of CHED, or Director-General and
Deputy Director-General of TESDA are the following:
• Creation of Additional Teacher Items, Principals, and
Superintendent
• Developmental Intervention in the Continuing Education of
Teachers
• Foreign-Assisted Projects
• Capital Expenditures
Consultation Within the
Respective Offices
• Once all the offices have finalized their respective budgets, the
Secretary, together with all the undersecretaries, assistant
secretaries, assistant secretaries, and directors will discuss the
budget. Questions may be raised to evaluate whether the
estimates are quite realistic with respect to the three
components: (1) Personal Services, (2) Maintenance and Other
Operating Expenses, and (3) Capital Expenditures. Usually, the
focus of the discussion is one various programs and projects of the
various bureaus and offices.
• After some revisions as agreed upon during the Department
deliberations, the budget is presented to the DBM. There may
be some suggestions on various aspects of the budget. If found to
be in order, adjustments are accepted. In the meantime, the DBM,
together with the Treasury, evaluates the feasible limit of the
total budget of the government. Once the absolute figure is
already arrived at, the DBM will issue a circular to all concerned
on the budget limit of each department. The Department will have
to present a revised budget to comply with the limits imposed by
the DBM.
Consultation with DBM

• Having complied with the budgetary limits set


by the DBM, the final department budget is
presented to the DBM. After that, the DBM and
the Presidential Management Staff will conduct
a meeting with the representatives of all the
departments.
Consultation with the Regional
Development Council (RDC)
• The regional component of the budget of each
line agency is discussed in the Regional
Development Council in all the 16 regions of
the country. The members of the RDC are the
city mayors, governors, all regional directors of
various national offices, representatives of the
business sector, the Presidential Assistant on
Regional Concerns, and others.
Cabinet Discussion on the
Budget
• The consolidated Department budget is
presented to the President who is the
Chairperson of the National Economic and
Development Authority in the presence of all
cabinet secretaries. The deliberations usually
involve aligning various department budgets to
national concerns in order to create greater
synergistic impact as a result of the
implementation of the budget.
Presentation of the Budget to
Congress and Budget Hearings
• Immediately after the State-of-the-Nation Address
(SONA) of the President, the National Budget is
presented to the Speaker of the House of
Representatives and the Chairman of the
Committee on Appropriation.
• With the budget duly submitted, the Chairman of
the Committee on Appropriation schedules a
hearing of the budget of various departments.
During the hearing, the members of the
Appropriation Committee ask all kinds of
questions.
• These are mostly focused on the thrust of the
budget and how the national and local concerns of
the congressmen are reflected in the budget.
Budget Presentation in Plenary
Session
• After the Committee hearing in the Appropriation
Committee of the Congress of the Philippines and the Senate
Education and Finance Committee, the budget is presented
in a plenary session of both houses.
• Only the Chairman of the Committee on Appropriation or, in
the case of the Senate, the Chairman of the Finance
Committee of the Senate, will answer all the questions of
any of the Senators or Congressmen. However, officers of
the DepEd , TESDA and CHED, and state colleges and
universities should be present in their assigned places to
provide some answers to questions raised, and the officer of
the office concerned will give the answer to the Chair for
the Chair to convey said answer to the body in plenary
session.
• Once the budget is approved on second reading, the
document is presented to the Bicameral Committee
consisting of 24 members with an equal number from the
Senate and Congress of the Philippines.
Deliberation in the Bicameral
Committee
• The Bicameral Committee is a very powerful
committee. While they are deliberating, one
should be around for any possible data or answers
to questions raised, or else some items in the
budget may be deleted.
• The deliberation in the Bicameral Committee can
sometimes time-consuming most especially if there
are some intramurals between the majority and
minority.
• However, once there is a vote in the Bicameral
Committee for submission of the budget for third
reading, the action by the Congress of the
Philippines and the Senate of the Philippines is
final.
Presentation for Final Approval

• Both houses of Congress in plenary session take


the final action of the budget and upon passage
of the budget on its third reading by both
houses of congress, it is submitted to the
President of the Philippines.
• The President may veto some items of the
budget and send the reply to both houses of
the items vetoed.
Budget Programming and
Implementation
• After the approval of the budget by the President
of the Philippines, who signs the Budget into
appropriation Act, the DBM will identify the
programmed items in the budget that will surely be
funded in view of the revenue target of the
Government.
• The unprogrammed items are subject to
availability of funds, which may only be released
once there is a significant improvement in the
revenue collection of the government. If the
anticipated collection is not attained, the DBM may
even issue 10% reserved for savings.
Budget Monitoring, Evaluation,
and Control
• With the approved budget, DepEd, TESDA, and
CHED monitor the implementation of the
budgets of all offices under their jurisdiction.
• The preparation of a cash flow statement is
used as an instrument of monitoring.
Budget Monitoring, Evaluation,
and Control
• With the approved budget, DepEd, TESDA, and
CHED monitor the implementation of the
budgets of all offices under their jurisdiction.
• The preparation of a cash flow statement is
used as an instrument of monitoring.
Performance
Budgeting System,
Zero-Based
Budgeting, PPBS and
Strategic Budgeting
Performance-oriented budgeting

• is a way to focus more on the expected


outcome for the financial resources being
provided. Thus, the analysis is not so much of
various items of the budget, but on how a
certain budget being allocated will generate
the expected outcome or performance
expressed in terms of key budget indicators.
Zero-based budgeting

• is a system where the focus of the presentation


is the full justification of the funding being
provided.
• In many instances, it is only the incremental
budget being proposed that is provided with
justification.
• In zero-based budgeting, there has to be
rationale for the whole project as a basis for its
budgetary provision, and not only the
incremental amount being proposed.
Planning, Programming,
Budgeting System (PPBS)
• is a technique wherein all budgets must be based on a
carefully prepared plan.
• The plan should contain situation analysis or prevailing
environment.
• With a fully articulated plan analysis of the situation,
programs, projects, and activities are identified with
their rationale, objectives, processes and activities,
schedules of implementation, priorities and the
expected outcome of the project of the office.
• The carefully prepared plan is the basis for the budget
being proposed. With a budget based on a carefully
prepared plan, programming is formulated in order to
maximize the use of resources that will redound to the
production of expected institutional outcomes.
Strategic budgeting
• is an amalgamation of good features of
performance budgeting, zero-based budgeting, and
PPBS.
• Strategic budgeting, just like PPBS, requires in-
depth analysis of the environment and the
operation of the institution in such an
environment.
• In a way, strategic budgeting is like a zero-based
budgeting because the whole project being
proposed has to have an all-encompassing
orientation in its rationale, so that the project
being proposed for funding will redound to the
achievement of performance that will satisfy the
clientele being served.
CONCLUSIONS

• The budget is also a means of instituting effective coordination,


monitoring, and control in the financial operations of the
institution.
• The budget is also used as a basis for formulating performance
indicators that can be used in instituting an effective evaluation
and merit system. Performance indicators may be in terms of the
extent the institution has performed its teaching function, the
quality of research, and community and extension services.
• Budget processes in both public and private sectors are different
from each other.
• For effective budget monitoring and control, a cash flow
statement should be followed.
• A full understanding of the effective use of budgeting as a
planning instrument for effective monitoring and performance
evaluation leads to the attainment of the mission/vision and
objectives for which the education sector has been established.