PamantasanngLungsodng Valenzuela Graduate Studies MAED Sec. 2 Anicia B. Rivera Maria Concepcion T. Sison January 29, 2011 Dr.

Melinda Bautista Resource and Budget Management

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 goaloriented. 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. 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. 1.

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.