Legal aspect of Budget, Principles, Constitutional provisions and Expenditures.

Legal aspect of Budget:

REPUBLIC ACT No. 992, June 04, 1954

 SECTION 1. Title of this Act.—This Act shall be known as "The Revised Budget Act."
 SEC. 2. Declaration of policy.—It is hereby declared the policy of Congress that the
whole budgetary concept of the Government be based on functions, activities, and
projects, in terms of expected results.
 SEC. 3. Definition of terms.—When used in this Act:

a. The term "Budget" means the budget required by section nineteen (1), Article VI, of
the Constitution, to be submitted by the President to Congress, and which is
referred to in section seven of this Act.

b. The term "Government" means the National Government as distinguished from the
different forms of local governments.

c. The terms "department and agency" and "department or agency" means any
department, bureau, office, board, or any establishment of the Executive Branch of
the National Government.

d. The term "current operating expenditures" refers to appropriations spent for the
purchase of goods and services for current consumption or within the fiscal year,
including the acquisition of furniture and equipment usually used in the conduct of
normal government operations.

e. The term "capital outlays" or "capital expenditures" refers to the purchase of goods
and services of a longer life-expectancy extending beyond the fiscal year and which
add to the assets of the Government, except furniture and equipment usually used
in the conduct of normal government operations.

f. The term "expected results" means a delineation of the services, and products, or
benefits that will accrue to the public, together with the estimated unit cost of each
type of service, and product, or benefit.

THE BUDGET COMMISSION

 SEC. 4. The Budget Commission.—There is hereby created an office to be known as
the Budget Commission under the executive control and supervision of the President.
There shall be in the Commission a Budget Commissioner and a Deputy Budget
Commissioner who shall be appointed by the President with the consent of the
Commission on Appointments. The Deputy Budget Commissioner shall perform such
duties as the Commissioner may designate, and during the absence or incapacity of
the latter, shall act as Commissioner.

 SEC. 5. Salaries.—The Budget Commissioner shall receive a compensation of twelve

thousand pesos per annum, and the Deputy Budget Commissioner, nine thousand pesos
per annum.
 SEC. 6. Functions and powers of the Commission.—The functions and powers of the
Commission shall be as follows:

a. To prepare the Budget and other appropriation proposals under such policies as the
President may adopt. To this end, the Commissioner shall have authority to
assemble, correlate, revise, reduce or increase the requests for appropriations of
the different departments and agencies of the Government, and to see how their
respective programs are related to each other and how they may be shaped into a
harmonious program and fiscal policy for the executive branch as a whole.

b. The Budget Commission, when directed by the President shall make a detailed
study of the departments and establishments for the purpose of enabling the
President to determine what changes, with a view to securing greater economy and
efficiency in the conduct of the public service, should be made in (1) the existing
organization, activities, and methods of business of such departments or
establishments, (2) the appropriations therefor, (3) the assignment of particular
activities to particular services, or (4) the regrouping of services. The results of
such study shall be embodied in a report or reports to the President, who may
transmit to Congress such report or reports or any part thereof with his
recommendations on the matters covered thereby.

c. Under such regulations as the President may prescribe, (1) every department or
agency shall furnish the Budget Commission such necessary information as the
Commission may from time to time require and (2) the Commissioner and Deputy
Commissioner, or any employee of the Commission when duly authorized, shall, for
the purpose of securing such information, have access to, and the right to examine,
any books, documents, papers, or records of any such department or agency.

d. To develop programs and to issue regulations and orders for the improved
gathering, compiling, analysis, publication, and dissemination of relevant and
necessary statistical information for any purpose by the departments and agencies.
Such regulations and orders shall be adhered to by said departments and agencies.

e. To furnish, at the request of any committee, of either House of Congress having

jurisdiction over revenue or appropriations, such assistance and information as
such committee may require.

THE BUDGET

 SEC. 7. Submission.—The President shall, in accordance with section nineteen (1),

Article VI, of the Constitution, submit within fifteen days of the opening of each regular
session of Congress a budget of receipts and expenditures which shall be the basis of
the general and other appropriation bills.
He may also, from time to time, transmit to Congress such proposed supplemental or
deficiency appropriations as, in his judgment, (1) are necessary on account of laws
enacted after the transmission of the Budget, or (2) are otherwise in the public
interest. He shall accompany such proposals with a statement of the reasons therefor,
including the reasons for their omission from the Budget. Whenever such proposed
supplemental or deficiency appropriations reach an aggregate which, if they had been
contained in the Budget, would have required the President to make a recommendation
as provided in section thirteen of this Act, he shall thereupon make such
recommendation.
 SEC. 8. Form and content.—The Budget shall consist of two parts—(1) the current
operating expenditures and (2) the capital outlays.—Each part of the Budget shall
comprise the general fund and all classes of special, operating trust funds, and bond
funds under the care and control of the different departments and agencies. The
Budget shall embody as appendices the proposed General Appropriation Act, the Public
Works Act, and other appropriation Acts to cover the budget proposals.

The Budget shall also contain:

a. a budgetary message setting forth in brief the significance of the appropriations

proposed;

b. a brief summary of the functions and activities of the Government; and

c. summary financial statements setting forth:

1. the estimated expenditures and proposed appropriations necessary for

the support of the Government for the ensuing fiscal year;

2. the estimated receipts during the ensuing fiscal year under laws existing
at the time the Budget is transmitted, and under the revenue proposals, if
any, contained in the Budget;

3. the actual appropriations, expenditures, and receipts during the last

completed fiscal year;

4. the estimated expenditures and receipts and actual or proposed

appropriations during the fiscal year in progress;

5. balanced statements of the condition of the National Treasury at the end

of the last completed fiscal year, the estimated condition of the Treasury
at the end of the fiscal year in progress, and the estimated condition of
the Treasury at the end of the ensuing fiscal year, if the financial
proposals contained in the Budget are adopted, showing, at the same
time, the unencumbered and unobligated cash resources;

6. all essential facts regarding the bonded and other long-term obligations
and indebtedness of the Government; and

7. such other financial statements and data as are deemed necessary or

desirable in order to make known in all practicable detail the financial
conditions of the Government.

 SEC. 9. Change in the form of the Budget.—Whenever any change is made by law in
the form of the Budget, the President, in addition to the Budget, shall transmit to
Congress such explanatory notes and tables as may be necessary to show where the
various items embraced in the Budget of the prior fiscal year are contained in the new
Budget.
  SEC. 10. Submission of budget estimates by departments and agencies.—Each head of
department or agency shall submit his request for appropriations to the Budget
Commissioner on or before a date he shall determine and in accordance with such
regulations as he may issue in conformity with the general requirements of this Act.

Budget estimates for all operating departments and agencies shall be divided into two primary
categories— the current operating expenditures and the capital outlays —prescribed on the
basis of major functions, activities, and projects, so arranged as to show the general
character and relative importance of the work to be accomplished or the services to be
rendered, and the principal elements of costs involved. To this end, budget estimates shall be
supported by:

1. Personnel schedules showing in summary form the proposed employment of

personnel grouped by salary grades, without regard to job-title or designations,
except for key positions.

2. Brief narrative description of the nature of the work to be performed and

explanation of the significance and scope of each program by activity, service, end-
product or benefit, the unit cost involved, and whatever changes in emphasis there
may be over previous years, together with a comparable progress report of the work
accomplished and under way.

 SEC. 11. Departmental approval of proposed appropriations.—No legislative proposal

which, if enacted, would authorize subsequent appropriations shall be transmitted by
any department or agency to the Budget Commissioner, or to the President, without
the prior approval of the Secretary of the Department concerned. Nor shall any such
legislative proposal be transmitted to Congress without the approval of the President.

 SEC. 12. Designation of Budget Officers.—The head of each department or agency

shall designate an official thereof as Budget Officer who shall prepare the estimates
for all appropriations needed by such department or agency and perform such other
work as the head may assign to him to implement the provisions of this Act relating to
the control and execution of authorized appropriations.

 SEC. 13. Balanced Budget.—The ordinary income shall be used primarily to provide for
the current operation of the Government. Except in case of a national emergency or
serious financial stress, the existence of which has been duly proclaimed by the
President, the total authorized appropriations for the current operations shall not
exceed the ordinary income; and, unless extraordinary circumstances justify it, the
total estimated ordinary income shall not only cover the total estimated appropriations
for current operations and capital outlays but it shall leave a reasonable surplus
besides.

No appropriations for the current operations and capital outlays of the Government
shall be proposed, unless the amount involved is covered by the ordinary income, or
unless it be supported by a proposal creating an additional source of funds or revenue,
sufficient to cover the same. Likewise, no appropriation for any other expenditures, the
amount of which is not covered by the estimated income from the existing sources of
revenues or available current surplus, may be proposed unless it be supported by a
proposal creating an additional source of fund sufficient to cover the same.

The proposals creating additional sources of funds shall be prepared in the form of
 revenue bills which shall be appended to the Budget.

The provisions of this section shall not be construed as impairing in any way the power
of Congress to enact revenue and appropriation bills, nor the authority of the President
to propose special revenue and appropriation bills after the submission of the budget.

BUDGET EXECUTION AND CONTROL

 SEC. 14. Use of appropriated funds.—All moneys appropriated for the various
functions, activities and projects in terms of expected results, shall be available solely
for the specific purposes for which appropriated, and for no other.

 SEC. 15. Allotment of appropriations.—To prevent the incurrence of deficits,

authorized appropriations shall be allotted in accordance with the procedure outlined
here-under:

a. No appropriation authorized for any department and agency of the Government shall
be available for expenditure until the head of each department or agency shall have
submitted to the Budget Commissioner a request for allotment of funds showing the
estimated amounts needed for each function, activity, or purpose for which the
funds are to be expended during the applicable allotment period and until the
request shall have been approved by the Commissioner as hereinafter provided. The
form of the request for allotment shall be prescribed by the Commissioner and shall
be submitted to him at least twenty-five days prior to the beginning of the fiscal
year showing the proposed quarterly allotments of the whole authorized
appropriation for the department or agency.

b. For purposes of the administration of the allotment system herein provided, each
fiscal year shall be divided into four quarterly allotment periods beginning,
respectively, on the first day of July, October, January, and April: Provided, That in
any case where the quarterly allotment period is found to be impracticable, the
Commissioner may prescribe a different period suited to the circumstances but not
extending beyond the end of the fiscal year.

c. Each request for allotment shall be reviewed by the Budget Commissioner and the
respective amounts therein shall be allotted for expenditures, provided the estimate
therein is within the terms of the appropriations as to amount and purpose, having
due regard for the probable future needs of the bureau, office or agency for the
remainder of the fiscal year or other term for which the appropriation was made,
and provided the bureau, office or agency contemplates expenditure of the
allotment during the period. Otherwise, the said Budget Commissioner shall modify
the estimate so as to conform with the terms of the appropriation and the
prospective needs of the bureau, office or agency, and shall reduce the amount to
be allotted accordingly. The Budget Commissioner shall act promptly upon all
requests for allotment and shall notify every bureau, office or agency of its
allotments at least five days before the beginning of each allotment period. The
total amount allotted to any bureau, office or agency for the fiscal year or other
term for which the appropriation was made shall not exceed the amount
appropriated for said year or term. The notification, which will be sufficient
authority for the Chief Accountant to enter the allotment in the books, shall include
an explanation for any decrease or increase in the request of the head of the
department or agency.
 d. At the end of each quarter, each department or agency must report to the
Commissioner the current status of its appropriations, the cumulative allotments,
obligations, expenditures, and unliquidated obligations and unobligated and
unexpended balances; and the results of expended appropriations. Such department
or agency may, at any time, initiate or request for a change in allotments order to
adopt its functions or activities to altered conditions.

e. The Commissioner shall have authority also at any time to modify or amend any
allotment previously made by him. In case he shall find at any time that the
probable receipts from taxes or other sources for any fund will be less than were
anticipated and that as a consequence the amount available for the remainder of
the term of the appropriations, or for any allotment period will be less than the
amount estimated or allotted therefor, he shall, with the approval of the President,
and after notice to the department or agency concerned, reduce the amount or
amounts to be allotted so as to prevent deficits.

f. The Commissioner shall promptly transmit records and modifications thereof to the
Auditor General, the Chairman of the Committee on Finance of the Senate and the
Chairman of the Committee on Appropriations and Chairman of the Committee on
Ways and Means of the House of Representatives and the Secretary of Finance.

g. The Commissioner shall maintain control records showing quarterly by funds,

accounts, and other pertinent classifications, the amounts appropriated, the
estimated revenues, the actual revenues or receipts, the amounts allotted and
available for expenditures, the unliquidated obligations, actual balances on hand,
and the unencumbered balances of the allotments for each agency of the
Government.

 SEC. 16. Creation of appropriation reserves.—The Budget Commissioner shall in

consultation with the head of the department or agency, establish reserves against
appropriations to provide for contingencies and emergencies which may arise later in
the fiscal year and which would otherwise require a deficiency appropriation.

The establishment of appropriation reserves should not necessarily mean that such
portion of the appropriation will not be made available for expenditure. All or a portion
of an appropriation may be reserved by the Budget Commissioner when he has
determined that the amounts Evolved may not be needed. Should conditions change
during the fiscal year which would justify the use of the reserve, the necessary
adjustment may be made by the Budget Commissioner when requested by the
Department or agency affected.

 SEC. 17. Certification of availability of funds.—No funds shall be disbursed, and no

expenditures or obligation chargeable against any authorized allotments shall be
incurred or authorized by any head of department or agency without first securing the
certification of the corresponding Chief Accountant as to the availability of funds and
allotment against which the expenditure or obligation may properly be charged.

 SEC. 18. Adjustment of appropriations for reorganization.—When, under authority of

law, a function or an activity is transferred or assigned from one agency to another
agency, the balances of the appropriations which are determined by the head of such
department to be available and necessary to finance or discharge the function or
activity so transferred or assigned may, with the approval of the President, be
transferred to and be available for use by, the agency to which said function or activity
 is transferred or assigned for any purpose for which said funds were originally
available. Balances so transferred shall be credited to any applicable existing
appropriation account or accounts or to any new appropriation account or accounts
which are hereby authorized to be established, and shall be merged with funds in the
applicable existing or newly established appropriation account or accounts and
thereafter accounted for as one fund.

 SEC. 19. Prohibition against use of appropriations for the payment of salaries and
wages of officers or employees engaged in a strike against the Government. —Subject
to existing civil service rules and regulations and the proper administrative
proceedings, no part of the funds of, or available for expenditures by, any department
or agency of the Government shall be used to pay the salaries or wages of any officer
or employee who engages in a strike against the Government of the Republic of the
Philippines or who is a member of an organization of government employees that in the
opinion of the Secretary of Justice asserts the right to strike against the Government
of the Republic of the Philippines or who in the opinion of said secretary of Justice
advocates the overthrow of the Government of the Republic of the Philippines by force
or violence: Provided, That for the purposes hereof an affidavit shall be considered
sufficient evidence that the person making the affidavit has not contrary to the
provisions of this section engaged in a strike against the Government of the Republic
of the Philippines, is not a member of any organization of government employees that
asserts the right to strike against the Government of the Republic of the Philippines, or
that such person does not advocate and is not a member of an organization that
advocates the overthrow of the Government of the Republic of the Philippines by force
or violence.

 SEC. 20. Prohibition against the incurrence of overdrafts.—All heads of departments

and agencies shall not incur or authorize the incurrence of expenditures or obligations
in excess of the amounts appropriated by law for their respective departments and
agencies. Parties responsible for the incurrence of overdrafts shall be held personally
liable therefor.

 SEC. 21. Liability for illegal expenditures.—Every expenditure or obligation authorized

or incurred in violation of the provisions of this Act or of the general and special
provisions contained in the annual general or any other Appropriation Acts shall be
void. Every payment made in violation of said provisions shall be illegal and every
officer or employee authorizing or making such payment, or taking part therein, and
every person receiving such payment shall be jointly and severally liable to the
Government for the full amount so paid or received.

If any officer or employee of the Government shall knowingly incur any obligation or
shall authorize or make any expenditure in violation of the provisions herein referred to
or take part therein, it shall be ground for his removal by the officer appointing him,
and if the appointing officer be other than the President and shall fail to remove such
officer or employee, the President shall exercise such power of removal after giving
notice of the charges and opportunity for hearing thereon to the accused officer or
employee and to the officer appointing him.

 SEC. 22. Accrual of income to unappropriated general fund.—Unless otherwise

specifically provided by law, all income accruing to the departments and agencies by
virtue of the provisions of existing laws, orders, and regulations shall be deposited in
the National Treasury or in any duly authorized depositary of the Government by the
 officers or employees receiving them, and, except receipts pertaining to special and
trust funds shall accrue to the unappropriated general fund of the Government.

 SEC. 23. Reversion of unexpended balances of appropriations.—The unexpended

balances of appropriations authorized in any annual General Appropriation Act shall
revert to the unappropriated general fund in the National Treasury at the end of the
fiscal year for which such appropriations are authorized, and shall not thereafter be
available for expenditure except by subsequent legislative enactment.

The Auditor General may transfer at any time from moneys appropriated for a specific
purpose to the unappropriated general fund any surplus balances standing to the credit
of any appropriation or fund when the officer having administrative control thereof
shall certify to the Auditor General that there is a surplus in excess of the
requirements, or that the work or purpose for which the appropriation was made has
been completed or indefinitely postponed, and that there are no outstanding
obligations to be paid therefrom.

 SEC. 24. Saving Provision.—The provisions of Commonwealth Act Numbered Two

hundred forty-six, otherwise known as the Budget Act, and other existing laws,
policies, procedures, and directives pertaining to functions covered by, or otherwise
inconsistent with the provisions of this Act, are hereby repealed.

 SEC. 25. This Act shall take effect and be fully operative beginning with the fiscal year
nineteen hundred and fifty-six to nineteen hundred and fifty-seven: Provided, That as
far as practicable a partial implementation may be made in the budget for fiscal year
nineteen hundred and fifty-five to nineteen hundred and fifty-six.