ACCOUNTING FOR BUDGETARY ACCOUNTS

This video presentation talks about accounting for budgetary accounts and aims to present the accounting
system in government, uphold fundamental principles of fiscal operations, shows the national budget, the
balance budget, and the different kinds of budget as to the nature, basis, approach, and technique as well
as the budget cycle. Budgetary accounts and its systems Monitoring of budget, fund release documents,
general guidelines on the release of funds, guidelines on the release of disbursement authorities, reporting
requirements, budget and financial accountability reports (BFAR), validity of appropriation, conduct of
agency performance review. Common fund system will also be discussed in this video presentation. ???
illustrations on recording to registry of appropriations and allotments and preparing obligation request will
also be integrated.

Before formally discussing the national budget and the process, let us first tackle about the set of
procedures pertaining to its manner of creation in the previous period covering the 8 th slide until to the 10th
slide. You will have to take a note on the old rules enveloping the budget process before knowing the
updated provisions. By doing so, you will somehow fully understand a particular topic by connecting the
dots.

Forms and Contents of the National Budget

Remember that this is only applicable to the previous periods. So, this is not the updated provision. But we
are the simply tackle this for purposes of additional lecture discussions.

Section 22, Article VII of the Constitution of the Philippines provides that “The President of the
Philippines shall submit to the Congress within 30 days from the opening of every regular session
as the basis of the general appropriation bill, a budget of expenditures and sources of financing,
including receipts from existing and proposed revenue measures.
The heads of departments may upon their own initiative, with the consent of the President, or
upon the request of either House, as the rules of each House shall provide, appear before and be
heard by such House on any matter pertaining to their departments.
So, I hope you know the branches of the government, as well as its sub-branches.

Written questions shall be submitted to the President of the Senate or the Speaker of the House
of Representatives at least three days before their scheduled appearance. Interpellations shall
not be limited to written questions, but may cover matters related thereto. When the security of
the State or the public interest so requires and the President so states in writing, the appearance
shall be conducted in executive session.”
The budget is presented to the Congress:
1. A budget message setting forth in brief the government’s budgetary thrusts for the budget
year, including their impact on development goals, monetary and fiscal objectives, and
generally on the implications of the revenue, expenditure and debt proposals; and
2. Summary financial statements setting forth:
a. Estimated expenditures and proposed appropriations necessary for the support of
the Government for the ensuing fiscal year, including those financed from operating
revenues and from domestic and foreign borrowings;
b. Estimated receipts during the ensuing fiscal year under laws existing at the time the
budget is transmitted and under the revenue proposals, if any, forming part of the
year’s financing program;
c. Actual appropriations, expenditures, and receipts and actual or proposed
appropriations during the fiscal year in progress;
d. Estimated receipts and expenditures and actual or proposed appropriations during
the fiscal year;
 e. 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, taking into account the adoption of financial proposals
contained in the budget and showing, at the same time, the unencumbered and
unobligated cash resources;
Thus, in preparation of the proposed national budget for fiscal year 2014, the DBM pushed for the adoption
of a new approach – budgeting.

Through the National Budget Memorandum (NBM) 117, the DBM introduced Performance-
Informed Budgeting (PIB) which required the government agencies to strengthen the link
between planning and budgeting and to simplify the presentation of the budget.
With the adoption of the PIB as a budgeting scheme, the government is changing the face of the budget.
previously a must of numbers and line items without a clear story on where funds are going.

The National Expenditure Plan and the General Appropriations Act beginning FY 2014 will show
the link between the funds allocated for the government programs and the projected results and
outcomes of these.
Therefore, the new face of the budget represents the continuing shift away from the dominance of
patronage politics and clientelistic relationships towards a more responsive, transparent, and accountable
public expenditure management system.

Performance-Informed Budgeting (PIB)

It is a budgeting approach that uses performance information to assist in deciding where the
funds will go. Performance information, both financial and non-financial information, is presented
in the appropriations document, which provides the context for the programs, activities, and
projects (PAPs) pursued by the different agencies of government. It typically includes the
following:
1. The purpose of the funds required;
2. The outputs that would be produced or the services that would be rendered;
3. The outcomes that would be achieved by the outputs and/or services; and
4. The cost of programs and activities proposed to achieve the objectives.
take note of the definition of PIB which states that it is a budgeting approach that uses
performance information to assist in the decision making of where the funds will eventually go.
Performance information can be used as a signaling device. Low performance or a decline and
performance can serve as an alarm to consider a closer look in determining the cause. According
to the Organization for Economic Cooperation and Development (OECD), the most common
response to low performance is holding constant the level of future funding and/or subjecting
future allocations conditional to improve and conditions related to performance. As mentioned
earlier, this new approach to budgeting introduced by the DBM through the 2013 National
Budget Memorandum 117 requires the government agencies to strengthen the link between
planning and budgeting and to simplify the presentation of the budget. This budgeting approach
differs from the traditional line item-based budgeting in a way that it focuses more on outputs
and outcomes and places less emphasis on the inputs. that is what we call outcome-based. it
links funding to results and provides a framework for more informed resource allocation and
management. this new phase of the national budget will no longer contain an excessively
detailed line-item document but a budget that presents performance information aligned to
planned resources that promises to be understandable and accessible to the people because of
its simplicity.
Accordingly, the new General Appropriation Act (GAA) will present non-financial performance
information together with the allocated resources for the different programs, activities, and
projects which were used by the DBM to evaluate department and agency proposals during the
budget preparation process. Instead of being immediately confronted with line item after line
item, PAPs will be grouped according to the Major Final Output (MFO) that department or agents
seek to achieve. In this way, the budget that goes into a particular PAP is linked directly to the
output it intends to achieve. In other words, performance-informed budgeting is an integral
process whereby agency performance information, for example, major final output and their
corresponding performance indicators under the Organizational Performance Indicator
Framework (OPIF) is presented hand-in-hand with the agency budget to ensure that the outputs
and outcomes on agencies committing to deliver in exchange for its budget are clear to the
public and the legislators.
Balanced Budget
 It is a budget where the proposed expenditures are equal or less than the estimated
revenues.
Currently, the government is operating with a budget efficiency. as such, it is serving government
priorities to achieve a balanced budget by increasing revenues and cutting on expenditures. It is
intended to balance out revenues and expenditures.
Section 29, Par. 1, Article VI of the 1987 Constitution provides, “No money shall be paid out of
the Treasury except in pursuance of an appropriation by law.”

The aforecited lays down the

legal bedrock for government
accounting, particularly for
budgetary accounts. It simply
means that no public fund may
be spent if there is no law
authorizing the payment of
money and specifying the
purpose for which the same will
be spent.
The aforecited lays down the legal bedrock for government accounting, particularly for budgetary
accounts. It simply means that no public fund may be spent if there is no law authorizing the
payment of money and specifying the purpose for which the same will be spent.
"An appropriation made by law" under the contemplation of Section 29(1), Article VI of the 1987
Constitution exists when a provision of law (a) sets apart a determinate or determinable amount
of money and (b) allocates the same for a particular public purpose. These two minimum
designations of amount and purpose stem from the very definition of the word "appropriation,"
which means "to allot, assign, set apart or apply to a particular use or purpose," and hence, if
written into the law, demonstrate that the legislative intent to appropriate exists. As the
Constitution "does not provide or prescribe any particular form of words or religious recitals in
which an authorization or appropriation by Congress shall be made, except that it be 'made by
law,'" an appropriation law may – according to Philconsa – be "detailed and as broad as Congress
wants it to be" for as long as the intent to appropriate may be gleaned from the same. As held in
the case of Guingona, Jr.
There is no provision in our Constitution that provides or prescribes any particular form of words
or religious recitals in which an authorization or appropriation by Congress shall be made, except
that it be “made by law,” such as precisely the authorization or appropriation under the
questioned presidential decrees. In other words, in terms of time horizons, an appropriation may
be made impliedly (as by past but subsisting legislations) as well as expressly for the current
fiscal year (as by enactment of laws by the present Congress), just as said appropriation may be
made in general as well as in specific terms. The Congressional authorization may be embodied
in annual laws, such as general appropriations act or in special provisions of laws of general or
special application which appropriate public funds for specific public purposes, such as the
questioned decrees. An appropriation measure is sufficient if the legislative intention clearly and
certainly appears from the language employed (In re Continuing Appropriations, 32 P. 272),
whether in the past or in the present.
Likewise, as ruled by the US Supreme Court in State of Nevada v. La Grave:
To constitute an appropriation there must be money placed in a fund applicable to the
designated purpose. The word appropriate means to allot, assign, set apart or apply to a
particular use or purpose. An appropriation in the sense of the constitution means the setting
apart a portion of the public funds for a public purpose. No particular form of words is necessary
for the purpose, if the intention to appropriate is plainly manifested.
Appropriation and allotment are usually used interchangeably so here is something that will clarify your
notion regarding appropriations and allotments. An appropriation in the sense of the constitution means
the setting apart a portion of the public funds for a public purpose. No particular form of words is
necessary for the purpose, if the intention to appropriate is plainly manifested.

Thus, based on the foregoing, the Court cannot sustain the argument that the appropriation must
be the "primary and specific" purpose of the law in order for a valid appropriation law to exist. To
reiterate, if a legal provision designates a determinate or determinable amount of money and
allocates the same for a particular public purpose, then the legislative intent to appropriate
becomes apparent and, hence, already sufficient to satisfy the requirement of an "appropriation
made by law" under contemplation of the Constitution.
Since we are already discussing the 1987 Constitution, particularly on Section 29 of Art. VI, Par. 1, we will
simply go over on the 2 sub-sections regarding how government money should be managed and for what
specific purpose it is being used.

Second is, we have here “No public money or property shall be appropriated, applied, paid, or
employed, directly or indirectly, for the use, benefit, or support of any sect, church,
denomination, sectarian institution, or system of religion, or of any priest, preacher, minister, or
other religious teacher, or dignitary as such, except when such priest, preacher, minister, or
dignitary is assigned to the armed forces, or to any penal institution, or government orphanage
or leprosarium.”
Third is, “All money collected on any tax levied for a special purpose shall be treated as a special
fund and paid out for such purpose only. If the purpose for which a special fund was created has
been fulfilled or abandoned, the balance, if any, shall be transferred to the general funds of the
Government.”
General Appropriations Act (GAA)
Accordingly, it may be said that accounting for budgetary accounts formally commences upon
enactment of the General Appropriations Act (GAA), which contains the legal authorization to use
public money for the various programs, activities and projects of the national government.
The approved appropriations are, in turn, the bases of the Department of Budget and
Management (DBM) for issuing allotments or the authority of government agencies to incur
obligations or enter into commitments to spend government funds. The level of allotments, on
the other hand defines the amount of cash allocations which shall be released by the DBM.
The General Appropriations Act (GAA) is one of the most important legislatio0ns that Congress
annually passes. It defines the annual expenditure program of the national government and all of
its instrumentalities.
In simplest terms, the GAA serves as the legal basis of the DBM for issuing allotments or authority to
government agencies to spend government funds.

General Accounting Plan (GAP)

The General Accounting Plan (GAP) shows the overall accounting system of a government
agency/unit. It includes the source documents, the flow of transactions and its accumulation in
the books of accounts and finally the conversion into financial information/data presented in the
financial reports. The following accounting systems are:
1. Budgetary Accounts System
2. Receipt/Income and Deposit System
3. Disbursement System
4. Financial Reporting System
This video presentation’s focus will be on Budgetary Accounts System which includes
appropriations, allotments, and cash allocations. These are the three things that mainly
constitute the budgetary accounts. The accounting of which will be discussed in detail through
this video presentation. However, I will give you an insight regarding each accounting system.
Budgetary Accounts System
The budgetary accounts system encompasses the processes of preparing the Agency Budget
Matrix (ABM), monitoring and recording of allotments received by the agency from the
Department of Budget and Management, releasing of Sub-Allotment Advices (SAAs) to Regional
Offices (RO) by the Central Office (CO), issuance of SAAs/LAAs to Operating Units (OU) by the
Regional Office, and recording and monitoring of obligations.
Observe that DBM usually has the main rule(?) when it comes to budgetary accounts system. This is so
because DBM is in charge with the release or appropriations, allotments, and authority to incur obligations
to government agencies or units.

Receipt/Income and Deposit System

This system covers the processes of acknowledging and reporting income/collections, deposits of
collections with Authorized Government Depository Bank (AGDB) or through the AGDB for the
account of Treasurer of the Philippines, and recording of collections and deposits in the books of
accounts of the agency.
All collecting officers shall deposit intact all their collections, as well as collections turned over to
them by sub-collectors/tellers, with authorized government depository bank (AGDB) daily or not
later than the next banking day.
They shall record all deposits made in the cash receipts record at the end of each business day.
The collecting officers shall accomplish the Report of Collections and Deposits (RCD).
Disbursement System
Disbursements constitute all cash paid out during a given period either in currency, cash, or by
check. It may also mean settlement of government payables or obligations by cash or by check.
It shall be covered by disbursement voucher (DV), or petty cash voucher (PCV), or payroll.
The disbursement system involves the preparation and processing of DV/Payroll; preparation and
issuance of checks; payment by cash; granting, utilization and liquidation/replenishment of cash
advances.
Financial Reporting System
Generally, there are eight steps in accounting cycle – analyzing the transactions; journalizing the
transactions; posting the journal entries; preparation of the trial balance; adjusting the accounts;
closing the accounts; preparation of the financial statements; and reversing the accounts.
Under the new accounting system, financial accounting includes the preparation and submission
of trial balances, financial statements, and other reports needed by fiscal and regulatory
agencies.
Fundamental Principles of Fiscal Operations
Budget activities are governed by legal provisions/fundamental principles relating to financial
transactions and operations of the government. The principles, as provided for by the law, are:
1. No money shall be paid out of the public treasury or depository except in pursuance of an
appropriation law or other specific statutory authority;
This is almost similar with Section 29, Art. VI, Par. 1 of the 1987 Constitution. However, it is stated in more
detailed manner. Simply put, no money shall come out of the government fund if it is not intended for
public purpose and it is not just enough that it is intended for the public but it must be legally authorized
at the same time. Meaning, there should have been a legal basis for the issuance of funds out of the public
treasury or depository.

2. Government funds or property shall be spent or used solely for public purposes;
The only purpose on why the fund is created and established is for the public. It must have this sole
purpose only and not for any individual preference or interest.

3. Trust funds shall be available and may be spent only for the specific purpose for which the
trust was created;
Simply put, a trust fund is made available for specific purpose and is usually restricted for that purpose
only. It has no other purposes unless it is used only for the purpose in which it was created. The point of
emancipation of trust funds is the point of its end also.
 4. Fiscal responsibility shall, to the greatest extent, be shared by all those exercising
authority over the financial affairs, transactions, and operations of the government
agency;
A new concept of “fiscal responsibility” needs to be embraced—one in which full employment and
equitable distribution in the economy are primary goals of fiscal policy.

All those granted with exercising authority shall have an agreed set of policies, processes, or
arrangements intended to improve fiscal outcomes, discipline, transparency, and accountability by
requiring governments to commit to monitorable fiscal policy objectives and strategies.

5. Disbursements or disposition of government funds or property shall invariably bear the

approval of the proper officials;
Any amount to be disbursed out of the government fund must be approved by authorized officials.

6. Claims against government funds shall be supported with complete documentation;

A claim towards something will never be honored without concrete proof or evidence.

7. All laws and regulations applicable to financial transaction shall be faithfully adhered to;
and
Handling government fund is indeed a critical issue for it requires not just an adherence, but a faithful one.
No money shall flow out of the government without due observance of the law and regulations attaching
to the financial transactions. All laws and regulations applicable to financial transaction must be duly
observed and faithfully adhered to.

8. Generally accepted principles and practices of accounting, as well as, of sound

management and fiscal administration shall be observed, provided they do not contravene
existing laws and regulations.
GAAP of accounting is also considered in application as long as these are not in conflict with the existing
laws and regulations. However, we can derive here a different acronym which is GAPP in government
accounting which stands for generally accepted principles and practices. If you can recall in your basic
accounting, we have GAAP which stands for generally accepted accounting principles. While as for
government accounting, we have generally accepted principles and practices. Apparently, sound
management and fiscal administration are not only based on generally accepted principles of accounting
but also of practices in accounting. The fundamental principles of fiscal operations consider GAPP of
accounting.

The National Budget (commonly known as the Government Budget)

A government budget is a plan for financing the government activities for a fiscal year prepared
and submitted by responsible executive to a representative body whose approval and
authorization are necessary before the plan can be executed.
It is a definite proposal of estimate or statement of receipts and expenditures that may be
approved or rejected. As such, it should present not only definite information regarding the
general character, purpose and amount of government expenditures, but also detailed data
regarding the cost entailed in maintaining particular units of organization and in performing
particular units of organization and in performing particular activities. In other words, it is the
financial blueprint of a country’s development plan.
The National (Government) Budget is a plan for financing the government activities for a fiscal year prepared and submitted by
responsible executive to a representative body whose approval and authorization are necessary before the plan can be executed. It
is a definite proposal of estimate or statement of receipts and expenditures that may be approved or rejected. As such, it should
present a detailed demonstration of the revenues and expenditures of the government for the past and ensuing years, and should
furnish not only definite information regarding the general character, purpose and amount of government expenditures, but also
detailed data regarding the cost entailed in maintaining particular units of organization and in performing particular units of
organization and in performing particular activities. In other words, it is the financial blueprint of a country's development plan.
Cognizant of its vital role in national development, the Department of Budget and Management
(DBM) has sought to ensure that public resources are managed more efficiently and with the
greatest degree of discipline. It is not only crucial to channel resources on programs that
accelerate economic growth, but more importantly, to redirect funds to programs that would be
responsive to the needs of the people especially those in regions beset by poverty.
May mga proyekto ang gobyerno na hindi nararamdaman ng mga taong mahihirap. So even if it’s really
beneficial, the progress or success of such project is hardly felt or realized by those people who are
experience or who are at the lowest of lows. Thus, its summative gist is that it is simply the financial
blueprint of the country’s development plan. Everything that is contained in this nation budget is intended
to give or provide benefits to help the people and its community.

In dealing with our daily lives, we normally devise a budget plan based on our means (?). It is undeniable
that we allot more of our money mainly on food and then again food.

We allot more of our money on the basic necessities. Aside from food, we have shelter and clothing and
other basic necessities we need in our daily lives. Hence, making a budget is somewhat a very strategic
way of handling finances. It is somewhat a tool of finance or wise or good financing. Creating a budget
plan is somewhat a very strategic tool or technique in handling finances in such a way that the money will
be used efficiently and at the same time, it is being spent in a way that it would suffice the purpose on
which it is being established. It is a practice of some or several people that they allot a certain portion of
their money in order to acquire a definite something. Just like for example, they provide or they simply
would allot Php. 10,000 for their clothing allowance or some, since they are KPop fanatics or they are so
into Korean dramas and they want to meet their idols or some Korean actors and actresses, they would
allot Php. 50,000 just to travel to Korea, China, or Thailand in order to meet their idol. That is only an
example.

On a personal note, however, I actually do not like to share this to you but for purposes of discussion, I
would simply share that I have established a bank account at BPI, Land Bank of the Philippines, BDO, and
also at China Bank. My colleagues are actually saying that I am somewhat collecting bank accounts. The
reason for doing so is that I would like to simply set or try managing my bank accounts at different banks
or financial institutions because I would like to also study their interest charges – the movement of the
interest. And in case if I have enough money, I would like to really invest. But actually, I haven't tried
investing yet. The reason is I do not have enough knowledge yet and time to monitor my investment
because I know that entering into investments is very risky. But, I am encouraging you to invest when you
have enough money or you have idle cash or exist cash that are not being used in a proper way. In a
proper way in a sense that it is only being stocked or being kept at your own place. I find it very effective
when it comes to saving because if you have many different bank accounts and you are not only relying
on one bank account, you are somewhat fooling yourself that you only have a very little amount of
savings. That is one strategic way in order to save because you are convincing yourself that you do not
have enough savings yet because you are looking at a portion only. At the end of the year, that is only the
time in which I would add up all the amounts in order to really find out the ending balance of my savings.
That is my very purpose or the reason why I enter or I have created many bank accounts. This personal
technique, I think, is very commendable for those who want to achieve their temporary and long-term
goals. Just imagine having many different or separate piggy banks wherein you would drop your money in
a piggy bank and that piggy bank is intended for your temporary goal while the other is for your long-term
goals. Your temporary goals may be clothing, food, or travel. Long-term goal would be your building your
home or house, acquiring car, and many other personal goals that you have.

Setting aside those personal notes or sharing, let us now discuss the kinds of budget that we have when it
comes to accounting for the government and mainly this topic's focus is on accounting for budgetary
accounts.

Kinds of Budget
The kinds of budget is classified or categorized into three: as to nature, as to basis, and as to
approach and technique.
As to Nature
 Annual budget
o A budget which covers a period of one year and it is the basis of an annual
appropriation. As the term implies it covers a period of one year. Annual equates to
one year or a period of 12 months.
 Supplemental budget
o A budget which supplements or adjust a previous budget which has deemed
inadequate for the purpose it is intended. It is the basis for a supplemental
appropriation. As the term implies, it simply is a budget that supplements or intends
to adjust a previous budget.
 Special budget
o A budget of special nature and generally submitted in special forms on account that
itemizations are not adequately provided in the Appropriation Act or that the
amounts are not at all included in the Appropriation Act.
As to Basis
 Performance budget
o A budget emphasizing the program or services conducted and based on functions,
activities, and projects, which focus attention upon the general character and
nature of work to be done, or upon the services to be rendered.
 Line-Item budget
o A budget of basis of which is the objects of expenditures such as salaries and
wages, traveling expenses, freight, supplies and materials, equipment, etc.
As to Approach and Technique
 Zero-Based budgeting
o A process which requires systematic consideration of all programs, projects, and
activities (PAPs) with the use of defined ranking procedures. In this approach,
activities are analyzed and presented in “decision packages” or key budgetary
inclusions.
 Incremental approach
o A budget where only additional requirements need justifications. It focuses analysis
of incremental changes in the budget and may be done within the context of
performance and program budgeting.
THE BUDGET PROCESS/CYCLE
If we have an accounting cycle in the basic accounting or fundamentals of accounting, we also
have the budget cycle for accounting for budgetary accounts. The budget cycle consists of the
budget preparation, legislative authorization, budget accountability, and budget execution and
operation.
They are being stated in a manner in which there is no particular order. These four phases of the
budget cycle overlap in continuing cycles every year. For instance, while the executive
implements the budget for the current year, it also prepares the budget for the next fiscal year or
defense it before the congress. Meanwhile, the execution and accountability phases are
implemented simultaneously year-round. Meaning, the budget execution and operation, as well
as budget accountability, are being implemented during the budget period simultaneously.
BUDGET PREPARATION
Budget preparation covers estimation of government revenues, the determination of budgetary
priorities and activities within the constraints imposed by available revenues and by borrowing
limits, and the translation of approved priorities and activities into expenditure levels. Meaning,
the approved priorities and activities are being converted or translated into amounts – monetary
amounts, which we can call as estimates.
Estimates are prepared by the various government agencies reviewed and finalized by the
president of the Philippines and then submitted to the legislative department as a basis for the
preparation of the annual Appropriation Act. It is not yet the final budget or annual budget but
only the preparation of the annual Appropriation Act. What the president will provide at the start
of budget preparation will only be estimates. The president would simply determine the revenue
estimates, as well as expenditure levels.
Most importantly in this budget preparation, the activities, programs, and projects are being
prioritized in the budget. The president therefore has the power and authority to set budget
priorities, in line with the vision, the president has for the Philippines of what it wants to achieve.
The support will be concentrated on this budget priorities identified or selected by the president.
We have here the following steps or key points in budget preparation.

Issuance of budget call by the DBM

It is not simply a phone call that you will receive from your messenger or from your contact number or
phone’s viber or even in instagram. The budget preparation begins but the budget call contains the
budget parameters as set beforehand by the Development of Budget Coordination Committee (DBCC) and
policy guidelines and procedures in the preparation and submission of agency budget proposals.

The budget preparation begins with the issuance of a budget call by the Department of Budget
and Management. the budget call contains the budget parameters (this include macroeconomic
and fiscal targets and agency budget sittings which are set beforehand by the DBCC). To ensure
that the national budget is enacted on time, the DBM, under the Aquino administration, has
established a new tradition of beginning the budget preparation phase earlier.
I guess under Aquino administration, if I could have a personal note on this, this one is indeed very useful.
I guess, as I go through readings, this is only the noteworthy or notable work by the Aquino administration.
This is only a personal note for me. I hope you will respect my opinion. My comment may be harsh but this
is my personal opinion regarding Aquino administration. I somehow like this provision or update or change
they made in the budget preparation because when you make or plan a budget, it must be created or
devised ahead of time or even before the activity will be conducted. Just like for example, the budget
period is 2021. There must have been a budget preparation that is being conducted on year 2020. That is
the point of conducting or issuing budget call earlier or ahead of time.

Under the new budget preparation calendar, the budget call is issued in December unlike in the
past where it was issued in April and the submission of the president's budget would happen a
day after the State of the Nation Address in contrast to earlier practice where it is submitted to
congress within 30 days from the opening of every regular session.
Take note here the submission period when it comes to president's budget. Earlier practice states that the
submission of the president's budget would only happen 30 days or simply within 30 days after the
opening of every regular session in the congress. The new update requires the president to submit his or
her budget after delivering his or her SONA.

Another new feature in budget preparations which seeks to increase citizen participation in the
budget process, departments and agencies are tasked to partner with Civil Society Organization
(CSOs) and other cities and stakeholders as they prepare their agency budget proposal. This new
process, which was piloted in the preparation of the 2012 national budget, is now being
expanded towards institutionalization.
Another breakthrough in budgeting as opposed to the conventional way of allocating resources
from top to bottom, grassroots communities will be engaged in designing the national budget
through the bottom-up budgeting approach. this bottom-up budgeting will focus on rural
development programs and the conditional cash transfer program (CTP) of the poorest
municipalities and will also involve Department of Agriculture, Department of Agrarian Reform,
Department of Environment and Natural Resources, Department of Social Welfare and
Development, Department of Education, and Department of Health. This government agencies
will then include the community plans in their proposed budgets.
After submitting their respective agency budget proposals to the DBM, government agencies
will have to defend their proposed budget before the technical panel of the DBM. The
DBM will then review the agency proposals and prepare recommendations based on performance
indicators on output targets and absorptive capacity. These recommendations are presented
before an executive review board composed of the DBM secretary and senior officials.
Deliberations entail a careful prioritization of programs and corresponding support through the
priority agenda of the national government. Implementation issues are also discussed and
resolved. The DBM then consolidates the recommended agency budgets and recommendations
into a national expenditure program and a Budget of Expenditures and Source of Financing
(BESF).
I forgot to mention or indicate that at the start of budget preparation, the president is usually the starting
point. What do we mean by that? The president has the power and authority to select activities, projects,
or programs that need to be prioritized. I forgot to mention also that through the existence of this budget
priorities made by the president, it is where the support will be concentrated upon. The president would
have to devise or make estimates on revenues and expenditures. That is how estimates are usually being
conducted. And then prioritize as the budget preparation will go through. However, you have to take note
that the budget or the estimate presented by the president is not yet the final budget. It is not yet the
annual or final budget in which projects, activities, and programs would be outlined .

After which, the DBM would have to consolidate the recommended agency budgets and
recommendation into a National Expenditures Program and a Budget of Expenditures
and Sources of Financing (BESF).
Afterwards, the proposed budget is presented by the DBM, together with the DBCC, to
the president and cabinet for further refinements or reprioritization and subsequent
approval of the NEP.
NEP stands for National Expenditures Program in which this program is were recommendations
and proposals made by different government agencies are being consolidated. This one is indeed
very important in the budget process.
Last but not the least is the submission of the proposed national budget, the President's
Budget, to the congress.
When is it submitted? if you can recall, I have made mention that it would be submitted, the updated
revision or submission period would indicate the submission of the president's budget a day after the
SONA being delivered by the president himself/herself.

The President’s Budget

1. President’s Budget Message (PBM)
 This is where the president explains the policy, framework, and priorities in the
budget. As I have mentioned also, the president has the authority and power to set
priorities in the budget process.
2. Budget of Expenditures and Sources of Financing (BESF)
 This budget is mandated by the constitution. It contains the macroeconomic
assumptions, public sector context, including overviews of LGU and GOCC financial
positions, breakdown of the expenditures, and funding sources for the fiscal year
 and the two previous years. In the budget of expenditures and sources of financing,
there is a need to consider for the two previous periods prior to the budget period.
3. National Expenditure Program (NEP)
 Also an important document. This contains details of spending of each department
and agency by program, activity, or project and is submitted in the form of a
proposed general appropriation act.
4. Detailed of Selected Programs and Projects
 This contains a more detailed disaggregation of key programs, projects, and
activities in the NEP. What is only being stated or presented in the NEP are only the
key PAP especially those in line with the national government's development plan.
What you can see on the next file or document are the details of selected programs
and projects or what we call key programs, projects, and activities or key PAPs in a
detailed manner. As the term implies, it is very detailed and it is where we can find
complete information regarding any program, activity, or project that needs to be
conducted or executed within the budget period.
5. Staffing Summary
 This contains a summary of the staffing complement of each department and
agency including member of positions and amounts allocated for the same.
LEGISLATIVE AUTHORIZATION
It is the second phase of the budget process relative to the enactment of the general appropriation bill
based on the budget of receipts and expenditures generally submitted by the president of the Philippines
within 30 days from the opening of its regular session as the basis of the general appropriation bill.
However, as I have mentioned earlier, in contrast, the submission of the president's budget is a day after
the SONA. This is to ensure that the national budget is enacted on time. This phase starts upon the receipt
of the president's budget by the house speaker and ends with the president's enactment of the general
appropriation act, commonly known GAA. Thus, the legislative authorization will be divided into three
parts.

House of Representatives assigns the president's budget to the House Appropriations Committee,
which conduct hearing and scrutinize their respective programs and projects.
It then crafts the General Appropriation Bill (GAB) and in plenary session, the GAB is sponsored,
presented and defended by the appropriations committee and subcommittee chairmen.
As in all other laws, the GAB is approved on the second and third reading before transmission to the
senate. Note, however, that in the first reading, the president's budget is assigned to the appropriations
committee because it would then conduct hearing and scrutinization of the respective programs and
projects indicated in the president's budget is conducted.

Normally, after receiving the GAB from the House of Representatives, the senate conducts its own
committee hearings and plenary deliberations on the GAB. For expediency, however the, senate finance
committee and subcommittee usually start hearings on the GAB even as house deliberations are ongoing.
The committee submits its proposed amendments to the GAB to plenary only after it has been formally
transmitted by the HR or House of Representatives.

Once both houses of congress have finished their deliberations, they will each constitute a panel
to the bicameral conference committee. This committee will then discuss and harmonize the
conflicting provisions of the house and senate versions of the GAB. A harmonized version of the
GAB is thus produced. The harmonized or “bicam” version is then submitted to both houses
which will then vote to ratify the final GAB for submission to the president. Once submitted to the
president for his approval, the GAB is considered enrolled.
It is called “bicam” because both houses will conduct simultaneous deliberations or will
contribute to the simultaneous deliberations of the GAB and would have to vote to ratify the final
GAB version. Ee can call now the final GAB for submission to the president as harmonized or
“bicam” version.”
Who will conduct the deliberations? We have the House of Representatives and the house of the
congress. They are the one who would contribute to the simultaneous deliberations and would
then vote to ratify the bicam version.
the president and the DBM then review the GAB and prepare a veto message were budget items
subjected to direct veto or conditional implementation are identified and where general
observations are made. Under the constitution, the GAB is the only legislative measure where
the president can impose a line veto in all other cases. A law is either approved or vetoed in full.
You can see the power of the president here under the constitution.
You may probably be wondering what will happen if there is delay as to the budget preparation
and its eventual execution and operation. When the GAA is not enacted before the fiscal year
starts, the previous year's GAA is automatically re-enacted. This means that agency budgets for
programs, activities, and projects remain the same. Funding for programs or projects that have
already been terminated is realigned for other expenditures. That would be the scenario that
could possibly happen if there is failure to enact the GAA before the fiscal year ends.
In case there are programs, activities, or projects that are terminated, I mean the funding for this
PAPs are being terminated, they are simply realigned. They are not eliminated from the budget
but are simply realigned for other expenditures or necessities of the government agencies or
local units. That is simply what we call realignment of expenditures.
Appropriations are approved by the legislative body in the form of:
1. A General Appropriation Law which covers most of the expenditures of the government;
2. Supplemental Appropriations laws that are passed from time to time, to augment or
correct an already existing appropriation; and
3. Certain automatic appropriations intended for fixed and specific purposes.
BUDGET EXECUTION AND OPERATION
The third phase of the budget process covers the various operational aspects of budgeting. Thus,
making budgeting as one of the principal tools of management control to ensure that public
funds are spent only for specific purposes for which they are intended. It includes the
development of the operating budget which indicates the program of work to be done or
undertaken, the time within which it should be done, the manpower and other resources needed
to carry out the work, and finally the peso amounts required to accomplish the proposed
programs. Thus, budget execution and operations serve as the medium through which plans for
operation can be implemented using available resources and funds.
This phase of the budget cycle begins with the DBM's issuance of guidelines on the release and
utilization of funds.
Agencies are required to submit BEDs or Budget Execution Documents at the start of budget
execution. These documents outline agency plans and performance targets.
BED is fully discussed in the succeeding sections of our chapter. We will discuss later the budget execution
documents.

The DBM will set a limit for allotments issued to an agency and on the aggregate by preparing an
Allotment Release Program or ARP. The ARP of each agency corresponds to the total amount of
the agency's specific budget under the GAA as well as automatic appropriations. A cash release
program is also formulated alongside to set a guide for disbursement levels for the year and for
every month and quarter.
Allotments which authorize an agency to enter into an obligation are originally released by DBM
to all agencies comprehensively through the agency budget matrix and Special Allotment
Release Orders or SAROs. However, as provided by government accounting manual or GAM, the
new obligational authority includes General Appropriation Act Release Document (GAARD),
Special Allotment Release Order (SARO), and General Allotment Release Order (GARO) which will
also be discussed on the latter parts of this video presentation.
You have to take note of the new obligational authority that we have – we have the GAARD,
SARO, and GARO. Previously we have only the ABM which stands for Agency Budget Matrix and
Special Allotment Disorders only. But now, the ABM is somehow eliminated and it is being
replaced by GAARD and GARO.
The purpose of these documents and release orders are to really intensify the number one or
simply, overall, the fiscal operations principles that we have when it comes to budgeting. These
documents intensify the fundamental principles of fiscal operations in a sense that no amount of
government fund would be released to government agencies without the release orders and
without any legal basis and without any intended public purpose for the release.
At the same time, if it has no legal authority or the government agency in which a fund is being
released to have no legal authority to a certain amount of that fund, therefore, there will be no
government fund to be released.
We have three things to consider here: we have the GAARD, the SARO, and the GARO. The
budget execution and operation focuses more on the release, as well as the authority for the
release or issuance of the funds, as well as the usage and the purpose for which the fund is being
used upon.
BUDGET ACCOUNTABILITY
The budget process, of course, does not end when the government agencies spend the public
funds but the privilege to spend the public funds is also accompanied with accountability. Each
and every peso must be accounted for to ensure that it is used properly contributing to the
achievement of social economic goals. This phase happens alongside the budget execution
phase. I have made mention as I introduced to you the budget cycle wherein budget execution
and operation and budget accountability are implemented simultaneously all year round.
Through budget accountability, the DBM monitors efficiency of fund utilization, assesses agency
performance and provides a vital basis for reforms and new policies.
Performance and Target Outcomes

Agencies are held accountable not only for how they use public funds ethically but also on how
this attain performance targets and outcomes using available resources. These performance
measures are set alongside the preparation of the national budget and this are indicated.
Organizational Performance Indicator Framework (OPIF) book of outputs. Prior to the execution of
the enacted national budget, this performance targets are firmed up during the preparation of
the Budget Execution Documents (BEDs).
Budget Accountability Reports

Submitted by agencies on a monthly and quarterly basis, budget and financial accountability
reports are required reports that show how agencies use their funds and identify the
corresponding physical accomplishments.
For failing to submit their BFARs, the DBM will have the power to penalize the agencies by
withholding certain fund releases. In particular, this will be funds from the Miscellaneous Personal
Benefits Fund for compensation adjustments under the Salary Standardization Law, provisions for
unfilled positions and employee clothing allowances. These funds to be withheld are only limited
to agencies’ MPBF allotments so that only the agencies are penalized and that the
implementation of critical programs and projects will not be disrupted. Errant and compliant
agencies will also be posted online for public scrutiny.
The DBM regularly reviews the financial and physical performance of agencies. Actual utilization
of funds and physical accomplishments, as indicated in the agencies’ BFARs, are evaluated
[against their targets] as identified via Organizational Performance Indicator Framework and in
the agencies’ budget execution documents. Agency performance reviews are conducted
quarterly or every semester as the case may be. An annual Budget Performance Assessment
Review (BPAR) is conducted to determine each agency’s accomplishments and performance by
the year-end. The DBM regularly reports results to the President.
Auditing is not within the DBM's jurisdiction, and is instead lodged under the Commission on
Audit (COA). Nonetheless, auditing is critical in ensuring agency accountability in the use of
public funds. The DBM uses COA's audit reports in confirming agency performance, determining
budgetary levels for agencies and addressing issues in fund usage.
The DBM is also in the process of establishing a performance-based incentive system - which will
recognize and reward good performance among government employees - to help improve the
efficiency of service delivery across all government institutions.
Budgetary Accounts System
According to National Budget Circular (NBC), the Allotment Release Program (ARP) shall serve as
the ceiling for the aggregate allotment releases during the year from all sources. The ARP of
each national government agency shall be an amount equal to its appropriations from the
following sources:
1. New Appropriations, such as: agency specific budget and allocations or additional releases
from Special Purpose Funds (SPFs); and
2. Automatic appropriations for Retirement and Life Insurance Premiums (RLIP), Special
Accounts in the General Fund (SAGFs), and other items classified as such.
3. Continuing appropriations, i.e., allotments chargeable against the unreleased
appropriations for the MOOE and CO in the prior year's GAA.
ARP would be the ceiling for aggregate allotment releases during the year but it would be based on the
following sources such as New Appropriations, Automatic Appropriations, and Continuing Appropriations.

Budgetary Accounts
Budgetary accounts consist of the following:
1. Appropriation - an authorization made by law or other legislative enactment, directing
payment of goods and services out of government funds under specific conditions or for
special purpose.
2. Allotment - an authorization issued by the Department of Budget and Management to the
government agency, which allows it to incur obligations, for specified amounts, within the
legislative appropriation.
3. Obligation - a commitment by a government agency arising from an act of duly
authorized official which binds the government to the immediate or eventual payment of a
sum of money.
Monitoring of the Budget
The budget shall be monitored by the Budget Department of National Government Agencies
through the maintenance of registries for that purpose, such as:
 1. Registry of Revenue and Other Receipts (RROR)
 In order to monitor the revenue and other receipts budgeted, collected, and
deposited, this registry shall be maintained for different fund clusters in accordance
with the Unified Accounts Code Structure (UACS). A separate registry for the
summary for each fund cluster shall also be maintained. (See appendix 1)
2. Registry of Appropriations and Allotments (RAPAL)
 This registry shall be maintained by National Government Agencies to monitor
appropriations and allotments charged thereto. The balance is extracted every time
an entry is made to prevent incurrence of overdraft in appropriations. Separate
registry shall be maintained by fund cluster and by Major Final Output
(MFO)/PAP/Appropriation Acts.
3. Registry of Allotments, Obligations and Disbursements (RAOD)
 This registry shall be maintained to record allotments, obligations and
disbursements. It shows the allotments received for the year, obligations incurred
and the actual disbursements made. The balance is extracted every time an entry is
made to prevent incurrence of obligations in excess of allotments and overdraft in
disbursements against obligations incurred. It shall be maintained separately
according to objects of expenditures, such as: Personnel Services, Maintenance and
Other Operating Expenses, Financial Expenses, and Capital Outlays. (See appendix
3)
The obligations incurred by a certain government agency/unit shall not exceed the allotments received for
a certain year or budget period. As such, as overdraft shall not exceed when it comes to actual
disbursements made versus or against the obligations incurred by the government agency/unit.

4. Obligation Request and Status (ORS)

 The incurrence of obligations shall be made through the issuance of ORS. (See
detailed discussions in the succeeding section of this chapter.)
The counterpart of ORS in commerce accounting is Purchase Requisition Slips. A purchase would never
happen or emanate without a purchase requisition slip being filled up by the production department which
will then be submitted/provided to the purchasing department. The purchasing department, after receiving
the purchase requisition slip, shall then immediately make/create a purchase order to be submitted to the
accounts payable department. This manner of acquisition of items and materials needed for production of
goods and services would never happen without a purchase requisition slip which would come from the
production department because the department truly in need of the items and materials are the
persons/individuals working at the production of these goods and services and the purchase requisition
slip would simply be an initial document only in order to make way for an obligation. I made mention of the
accounts payable department because that department is simply the one in charge for recording the
incurrence of obligations. But before pushing through with the accounts payable department, the purchase
order shall be, of course, served/sent to the supplier which is allowing credit purchases. Supplier, which is
somehow a partner of a certain entity or company that allows credit purchases. Upon sending an invoice
for that purchase, that is only the time in which the accounts payable department would recognize/record
that an obligation has been incurred. But the very source of the incurrence of the obligation then is the
purchase requisition slip.

Just like here, in the monitoring of the budget, wherein the issuance of ORS is deemed important for the
incurrence of an obligation. Without it, it will no longer be recognized by the DBM and the proponent
agencies. Even COA would question the presence of such obligation without ORS.

11:42 to 18:33 – personal experience daw nya

5. Registry of Budget, Utilization and Disbursements (RBUD)

 This registry shall be used to record the approved special budget and the
corresponding utilizations and disbursements charged to retained income
authorized under RA 8292 for State Universities and Colleges (SUCs) and other
 retained income collections of a National Government Agencies with similar
authority. It shall be maintained separately according to objects of expenditures,
such as: personnel Services, Maintenance and Other Operating Expenses, Financial
Expenses, and Capital Outlays. (See appendix 4)
Take note that RAOD and RBUD shall be maintained separately according to the objects of expenditures
such as PS(?), MOOE, FE, and CO. They are the two registries requiring the observance of these four
objects of expenditures.

Fund Release Documents

According to Government Accounting Manual, with the adoption of the Unified Accounts Code
Structures (UACS) and the Performance-Informed Budgeting (PIB), the following are the fund
release documents:
1. Obligational Authority or Allotment - the following are the documents which authorize
the entity to incur obligations:
a. General Appropriation Act Release Document (GAARD)
 This serves as the obligational authority for the comprehensive release
of budgetary items appropriated in the General Appropriation Act (GAA),
categorized as For Comprehensive Release (FCR). This will abolish the lengthy
process of releasing allotments to departments and agencies; thereby,
enhancing the operational efficiency of all agencies across the bureaucracy,
allowing the DBM to speed up government disbursements and fast-track the
implementation of programs and projects set for the year.
b. Special Allotment Release Order (SARO)
 This covers budgetary items under For Later Release (FLR) (negative
list) in the entity submitted Budget Execution Documents (BEDs), subject to
compliance of required documents/clearances. Releases of allotments for
Special Purpose Funds (SPFs) (e.g., Calamity Fund, Contingent Fund, E-
Government Fund, Feasibility Studies Fund, International Commitments Fund,
Miscellaneous Personnel Benefits Fund, and Pension and Gratuity Fund) are
also covered by SAROs.
Anything that is under the special fund ???. And if GAARD is For Comprehensive Release, SARO is
For Later Release.
c. General Allotment Release Order (GARO)
 This is a comprehensive authority issued to all national government
agencies, in general, to incur obligations not exceeding an authorized amount
during a specified period for the purpose indicated therein. It covers
automatically appropriated expenditures common to most, if not all, agencies
without need of special clearance or approval from competent authority.
These three release orders and documents are very important to signify that an obligation can
be incurred with proper and legal authorization.
2. Disbursement Authority – the following documents authorize the entity to pay
obligations and payables:
When we use the term entity in government accounting, it refers to the government agencies (national or
local), and also the local government units and offices.

a. Notice of Cash Allocation (NCA)

 This is the authority issued by the DBM to central, regional, and
provincial offices and operating units to pay operating expenses, purchases of
 supplies and materials, acquisition of PPE, accounts payable, and other
authorized disbursements through the issue of Modified Disbursements
System (MDS) checks, Authority to Debit Account (ADA) or other modes of
disbursements.
This NCA will be authorized for issue by the DBM so it will somehow be distributed to central, regional, and
provincial offices and operation units in order to pay operating expenses. This simply means that there has
been a cash allocated for those certain expenses up to a limited amount depending on the portion of fund
allocated to certain central, regional, and provincial offices.

b. Non-Cash Availment Authority (NCAA)

 This is the authority issued by the DBM to agencies to cover the
liquidation of their actual obligations incurred against available allotments for
availment of proceeds from loans/grants through supplier's
credit/constructive cash.
The same set up with NCA. However, what is the purpose? This is to cover the liquidation of their actual
obligations incurred. NCA and NCAA are the same in a sense that the one who will authorize the issue of
such will be the DBM. But, they are different as to the purpose.

c. Cash Disbursements Ceiling (CDC)

 This is the authority issued by the DBM to the Department of Foreign
Affairs (DFA) and Department of Labor and Employment (DOLE) to utilize their
income collected/retained by their Foreign Service Posts (FSPs) to cover their
operating requirements, but not to exceed the released allotment to the said
post.
d. Notice of Transfer of Allocation (NTA)
 This is the authority issued by the Central Office to its regional and
operating units to pay their operating expenses, purchases of supplies and
materials, acquisition of PPE, accounts payable, and other authorized
disbursements through the issue of MDS checks, ADA or other modes of
disbursements
You can see here the manner of the issuance of authority under NTA. The issuance would come from the
central office to its regional and operating units. There is simply a transfer of allocation within a certain
government agency/unit from central to regional or local offices.

These fund release documents are really important in order to execute the budget and also in order for the
PAPs of different government agencies to proceed. Thus, we can therefore say that fund release
documents belong to the budget execution and operation phase of the budget cycle.

Objects of Expenditures
Expenditures of National Government Agencies shall be classified into categories as may be
determined by the Department of Budget and Management. These include the four major objects
of expenditures, such as:
1. Personnel Services (PS) (e.g., salaries and wages, other compensation/personnel benefits,
etc.)
By the term itself, without any idea or background in government accounting, you may somehow think of
it as if it is related, when it comes to commercial accounting, it is somewhat related to employee benefits.
If that is your idea regarding personnel services, you are right. Because personnel services, as an object of
expenditure, includes salaries and wages, other compensation/personnel benefits. It pertains to the
compensation and other benefits a personnel or a government employee may have or may receive.
Thus, we can therefore say that personnel services pertains to income, compensation, or benefits a
government personnel could receive or could have working in the government agency or a local
government unit.

2. Maintenance and Other Operating Expenses (MOOE) (e.g., travelling expenses, supplies
and materials expenses, training and scholarship expenses, utility expenses,
communication expenses, rent expenses, repairs and maintenance expenses, general
services, etc.)
In a commercial point of view, it is somewhat likened or its counterpart will be repairs and maintenance in
commerce accounting. However, when it comes to government accounting, it includes or it pertains to
traveling expenses, supplies and materials expenses, training and scholarship expenses, utility expenses,
communication expenses, rent expenses, repairs and maintenance expenses, general services, and
others.

However, when it comes to government accounting based on the cited examples of maintenance and
other operating expenses, the repairs and maintenance in commerce accounting is somewhat combined
with other operating expenses of the company. This is how the government would maintain an object of
expenditure. The government had it combined the maintenance expense and the other operating
expenses of the government.

3. Financial Expenses (FE) (e.g., interest expenses, bank charges, guarantee expenses,
commitment fees, other financial charges, etc.)
Financial expenses pertains to expenses that would affect acquisition or disbursement or outflow of money
from a certain unit to another unit or from and entity to another entity. Therefore, it includes interest
expenses, bank charges, guarantee expenses, commitment fees, and other financial charges.

4. Capital Outlays (CO) (e.g., Property, Plant and Equipment, Investments, etc.)
It pertains to property, plant, and equipment and investments. The concept that we have here on capital
outlays is that is pertains to major acquisitions of the government for the betterment and improvement of
its operations. Just like for example, acquisition of land, of property, and engagement of the government
unit or agency and to investments.

General Guidelines on the Release of Funds

Pending the effective date of the new General Appropriation Act (GAA), national government
agencies are authorized to incur overdraft in allotment for obligations corresponding to the
actual requirement of their regular operations chargeable against the GAA, as re-enacted.
A re-enacted budget pertains to the budget of the preceding year which, by operation of laws,
becomes re-enacted and shall remain in force in effect until the general appropriation bill for the
current year is passed by Congress. The re-enactment of the budget is a mechanism sanctioned
by the constitution to allow the use of public funds for regular operations pending the approval of
the GAA. All unutilized allotments of agencies immediately before the effective date of the new
GAA out of the SAROs issued chargeable against the re-enacted GAA shall no longer be available
for obligation.
Upon the GAA's effective date, which is after fifteen days following the completion of its
publication in the Official Gazette or in a newspaper of general circulation, the Allotment Release
Program (ARP) may already be established.
The Allotment Release Program (ARP), which determines the level of allotment releases for a
given fiscal year, is composed of the following:
1. Obligations incurred,
2. Obligations authorized as overdraft,
 3. Special allotment release order (SAROs) issued from the beginning of current fiscal year to
the effectivity date of the current General Appropriation Act, and
4. Releases from the unprogrammed fund (UF). Allotment releases from the multi-user
Special Purpose Funds (SPFs) such as: Calamity Fund, Contingent Fund, E-Government
Fund, International Commitment Fund, Miscellaneous Personnel Benefit Fund, National
Unification Fund, Priority Development Assistance Fund, and Pension and Gratuity Fund
shall be over and above the agency Allotment Release Program.
Guidelines on the Release of Disbursement Authorities
1. Release of Notice of Cash Allocation (NCA)
 The National Budget Circular provides that an initial comprehensive NCA shall be
issued directly to the Operating Units (OUs) covering the first semester requirement
(i.e., January to June) chargeable against the current year budget. This shall be
based on the submitted Monthly Disbursement Program (MDP), which shall include
current year requirements and prior years' accounts payables.