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Budget Process

The budget process involves four phases: budget preparation, budget legislation, budget execution, and budget accountability. Budget preparation involves government agencies developing spending plans. The proposed budget is then reviewed by Congress and passed into law. Agencies implement spending during budget execution. Finally, agencies report on spending and performance is assessed during budget accountability.

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37 views2 pages

Budget Process

The budget process involves four phases: budget preparation, budget legislation, budget execution, and budget accountability. Budget preparation involves government agencies developing spending plans. The proposed budget is then reviewed by Congress and passed into law. Agencies implement spending during budget execution. Finally, agencies report on spending and performance is assessed during budget accountability.

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Jcel Jcel
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According to the module and video discussion from last week, summarize the

budget process.

According to the video discussion and lesson material, Budgeting for the national
government involves four process or phases which is budget
preparation, budget legislation, budget execution and accountability.

Budget preparation is a process with designated organizations and individuals


having defined responsibilities that must be carried out within a given timetable. It
can be the guide of a management or government authorities on how, when and where
they are going to spend the money or budget properly. Government agencies are also
tasked to increase the participation of citizen-stakeholders in the budget preparation.

Second, is Budget legislation, The President submits to Congress the National


Expenditure Program (NEP), the Budget of Expenditures and Sources of Financing
(BESF), and the President's Budget Message. The BESF is the document which
reflects the annual budget and the estimates and sources of financing. The document
is presented by the Executive branch to the Legislative branch. The proposed budget
is first reviewed by the Committee on Appropriations of the House of
Representatives. The Committee summons the agencies to justify their budgets, with
the DBM assisting and providing technical inputs. The Appropriations Committee
then presents to the House body the proposed budget and passes it at the Third
Reading. This then goes to the Senate Finance Committee for another round of
hearings and deliberations. The Committee presents the proposed amendments to the
House Budget Bill to the Senate for approval. Then a Bicameral Conference
Committee, composed of members of both Houses, is convened to resolve
differences. The committee arrives at a common version, and it is then submitted to
the President. If there are items which he/she disagrees with, then the President can
exercise line-item veto power. The President then signs it into law as the General
Appropriations Act. The law contains the new appropriations in terms of specific
amounts: for salaries, wages and other personnel benefits; for maintenance and other
operating expenses; for capital outlays, all authorized to be spent by the government
for a given year. The approved budget becomes effective on the first day of the budget
year concerned, or when it is signed by the President, whichever comes later.

Third, is the Budget Execution, at the budget execution stage the expenditure
program is implemented. Allotments are issued, chargeable against the regular agency
budgets. It is also at this stage where agencies may submit requests for availment
from SPFs. Agencies are often required to submit additional reports and documents to
support their requests. Cash releases are made to agencies to cover obligations that are
current or carried over from the previous year. However, not all allotment releases
require the issuance of Notice of Cash Allocation releases or NCAs. Examples of
these are debt service, customs duties and taxes, the conversion of liability to equity,
or the subsidy to government corporations. The Cash Release Program is also based
on actual obligations of an agency, as reported in the quarterly trial balance submitted
to DBM. Hence, it will not issue NCAs for unobligated balances of allotments.

And lastly, the Budget accountability, this is when the agencies report their actual
physical and financial performance. The assessment of the physical achievements of
an agency is aided by performance indicators. These are yardsticks for determining
how well an agency has accomplished its objectives. They measure outcome, output,
process efficiency and client satisfaction. They may be quantitative or qualitative in
nature. At this phase, the Commission on Audit (COA) figures prominently in the
assessment of agency performance. The COA is the government body tasked with
looking at the legality, propriety and accuracy of government financial transactions.
The COA has auditors assigned to each government agency and it has regional offices
to review these transactions. Those that are considered excessive, inappropriate or
illegal are not passed in audit. COA can recommend means for setting them right, if
such is still possible. Trial balances of agencies, which are submitted to DBM and
COA on a quarterly and annual basis, report how agencies use up their allotments and
cash allocations.

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