Narrative Report on

School Finance

Prepared by: Jerald Kim O. Vasquez, MAED-EM Student

 Philippine National Budget
It is a financial plan to pursue priority
programs & projects of the government in line
with its economic growth & human
development thrusts.

It is an instrument for good governance, as

government agencies are accountable for the
delivery of measurable results through their
respective budgets.
Section 22,Article VII of the 1987 Constitution sets the tone for
the budgetary process.

The procedure in the preparation of the national budget is regulated

by law. On or before October 20 of each year, each department secret
ary submits to Department of Budget the estimated income and
expenditures of the bureaus and offices under his department for the
next fiscal year.

Upon receipt of all budget estimates of income and expenditures,

the Department of Budget and Management prepares the national b
udget.

Prior to this, however, the Budget secretary can investigate, revise,

examine, assemble, coordinate, and reduce or increase the budget es
timates of the different departments, bureaus and offices of the gove
rnment.
After preparing the budget, the Budget secretary submits it
to the President, who in turn submits it to Congress within
30 days before the opening of the regular session.

The 1987 Constitution specifically provides that the

President "shall submit to the Congress within thirty days
from the opening of every regular session, as the basis of
the general appropriations bill, budget of expenditures a
nd sources of financing, including receipts from existing
and proposed revenue measures" ( Sec. 22, Art. VI).
Congress uses the budget submitted by the president as
the basis for the annual appropriation.

According to the 1987 Philippine Constitution, Congress "

may not increase the appropriation recommended by the
President for the operation of the Government as specifie d
in the budget" (Sec. 25(1), Art. VI).
Proposed 2019 National Budget,
Top Departments

DEPARTMENT OF EDUCATION
 THE BUDGET CYCLE
Four Phases in Managing the National Budget:

Budget Preparation
Budget Legislation
Budget Execution
Budget Accountability

During the preparation phase, the Executive prepares the proposed National
Budget. This is followed by the legislation phase where the Congress
authorize the General Appropriations Act. In the execution phase, agencies
utilize their approved budgets and during the accountability phase the
executive phase, agencies utilize their approved, the executive monitor and
evaluate the use of the budget.

DEPARTMENT OF EDUCATION
1.BUDGET PREPARATION
This starts with the Budget Call and ends with the President’s
submission of the proposed budget to Congress.

DEPARTMENT OF EDUCATION
 Stakeholders
DBCC sets Budget
parameters Consultation
Call

Agency
Technical Budget
Executive
Budget Proposal
Review Hearings s

Consolidation,
Validation & C
Presentation The
To President
onfirmation & Cabinet President’s
Budget
 BUDGET PREPARATION

1. The Budget Call

At the beginning of the budget preparation year, the
Department of Budget and Management (DBM) issues the
National Budget Call to all agencies (including state univer
sities and colleges) and a separate Corporate Budget Call
to all GOCCs and GFIs.

The budget Call contains budget parameters (including

macroeconomic and fiscal and agency budget ceilings) as set
beforehand by the Development Budget Coordination

DEPARTMENT OF EDUCATION
Committee (DBCC); and policy guidelines and procedures in
the preparation and submission of agency budget proposals.
BUDGET PREPARATION
2. Stakeholder Engagement
A new feature in budget preparation which seeks
to increase citizen participation in the budget
process, departments and agencies are tasked to
partner with civil society organizations (CSOs) and
other citizen-stakeholders as they prepare their
agency budget proposals.

DEPARTMENT OF EDUCATION
This new process, which was piloted in the
preparations of the 2012 National Budget, is now
being expanded towards institutionalizations.

DEPARTMENT OF EDUCATION
BUDGET PREPARATION

DEPARTMENT OF EDUCATION
Department and GOCCs Mandated to Conduct CSO
Consultation

DEPARTMENT OF EDUCATION
BUDGET PREPARATION
3. Technical Budget Hearing
These are conducted after departments and
agencies submit their Agency Budget Proposal
to the DBM. Here, agencies defend their
proposal budget before a technical panel of DB
M, based on performance indicators on output
targets and absorptive capacity. DBM bureaus
then review the agency proposals and prepare
recommendations.

DEPARTMENT OF EDUCATION
BUDGET PREPARATION

4.Executive Review
The recommendations are presented before an
Executive Review Board which is compose d of
the DBM Secretary and senior officials.
Deliberations here entails a careful prioritization
of programs and corresponding support, vis-a
vis the priority agenda of the national
government.
DEPARTMENT OF EDUCATION
 Implementation issues are also discussed
andresolved.
BUDGET PREPARATION
5. Consolidation, Validation
and Confirmation
DBM then consolidate the recommended
agency budgets and recommendations into a
National Expenditure Program and a Budget of
Expenditures and Sources of Financing
(BESF).

DEPARTMENT OF EDUCATION
 As part of the consolidating process, the
deliberations by the DBCC determine the agency
and sectoral allocation of the approved total
expenditure ceiling, in line with the macro
economic and fiscal program. Heads of major
departments are invited to this meeting.
BUDGET PREPARATION
6. Presentation to President and Cabinet

The proposed budget is presented by DBM, to

gether with the DBCC, to the President and Ca
DEPARTMENT OF EDUCATION
 binet for further refinements of prioritization. Aft
er the President and Cabinet approve the prop
osed National Expenditure Plan, the DBM prep
ares and finalizes the budget documents to be
submitted to Congress.
BUDGET PREPARATION
7. The President’s Budget

The budget preparations phase ends with th

e submission of the proposed national budg et
–the “President’s Budget”-to Congress.

DEPARTMENT OF EDUCATION
 The President’s Budget consist of the following d
ocuments, which help legislators analyze the cont
ents of the proposed budget:
BUDGET PREPARATION
8. The President’s Budget
President’s Budget Message (PBM)

This is the President explains the policy framework and priorities

in the budget
Budget of Expenditures and Sources of Financing (BESF)

DEPARTMENT OF EDUCATION
Mandated by the Constitution, this contains the macroeconomic
assumptions, public sector context (including overviews of LGU
and GOCC financial positions), breakdown of the expenditures
and funding sources for fiscal year and the two previous year.

BUDGET PREPARATION
National Expenditure Program (NEP)
This contain the details of spending for each department and a
gency by program, activity or project and is submitted in the
form of a proposed General Appropriations Act.

Details of Selected Programs and Projects

DEPARTMENT OF EDUCATION
This contains a more detailed disaggregation of key programs
, projects and activities in the NEP, especially those in line wit
h the national government’s development plan.

Staffing Summary
This contains a summary of the staffing complement of each
department and agency, including number of positions and
amounts allocated for the same.

2.BUDGET LEGISLATION
- also called the “ Budget Authorization phase,”
this starts upon the House speaker’s Receipt of the
President’s Budget and ends with the President’s

DEPARTMENT OF EDUCATION
enactment of the General Appropriations Act

(GAA).

DEPARTMENT OF EDUCATION
 BUDGET LEGISLATION
The House of Representative, in plenary, assigns the President’s
Budget to the House Appropriations Committee. The Committe
e and its Sub-Committee then schedule and conduct hearing on
the budgets of the departments and agencies and scrutinize
their respective programs and projects. It then crafts the
General Appropriations Bill (GAB).

In plenary session, the GAB is sponsored, presented and defend

ed by the Appropriations Committee and Sub-Committee
Chairmen. As in all other laws, the GAB is approved on Second and
Third Reading before transmission to the Senate. (Note: In the First

DEPARTMENT OF EDUCATION
Reading, the President’s Budget is assigned to the Appropriations
Committee).

BUDGET LEGISLATION
1. House Deliberations
•As in the House process, the Senate conducts its own
committee hearing and plenary deliberations on the
GAB. Budget deliberations in the Senate formally start
after the House of Representatives transmits the GAB.
For expediency, however, the Senate Financing

DEPARTMENT OF EDUCATION
 Committee and Sub-Committees usually start hearings
on the GAB even House deliberations are ongoing.
•The Committee submits its proposed amendments to the
GAB to plenary only after it has been formally trans
mitted by the House.

DEPARTMENT OF EDUCATION
BUDGET LEGISLATION
2. Senate Deliberations
As in the House process, the Senate conducts its own
committee hearing and plenary deliberations on the
GAB. Budget deliberations in the Senate formally start
after the House of Representatives transmits the GAB.
For expediency, however, the Senate Finance
Committee and usually start hearings on the GAB even
as House deliberations are ongoing.

DEPARTMENT OF EDUCATION
BUDGET LEGISLATION
The Committee submits its proposed amendments to
the GAB to plenary only after it has been formally
transmitted by the House.

BUDGET LEGISLATION
3. Bicameral Deliberations

Once both House of Congress have finished their

deliberations, they will each constitute a panel to the

DEPARTMENT OF EDUCATION
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.
4. Ratification and Enrollment

The Harmonized or “Bicam” Version is then submit

ted to both Houses, which will the vote to ratify the
final GAB for submission to the President. Once

DEPARTMENT OF EDUCATION
BUDGET LEGISLATION
submitted to the President for his approval, the GAB
is considered enrolled.

DEPARTMENT OF EDUCATION
BUDGET LEGISLATION
5. The Veto Message

The President and DBM then review the GAB an

d prepare a Veto Message, where 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).

DEPARTMENT OF EDUCATION
BUDGET LEGISLATION
6. Reenactment

When the GAA is not enacted before fiscal year starts,

the previous years’s GAA is automatically reenacted.
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.

DEPARTMENT OF EDUCATION
Because reenactments are tedious and prone to
abuse

DEPARTMENT OF EDUCATION
BUDGET LEGISLATION

DEPARTMENT OF EDUCATION
 BATAS PAMBANSA BILANG 232
AN ACT PROVIDING FOR THE ESTABLISHM
ENT AND MAINTENANCE OF AN
INTEGRATED SYSTEM OF EDUCATION.

CHAPTER 5
School Finance and
Assistance
Section 33. Declaration of Policy - It is hereby declar
ed to be the policy of the State that the national gover
nment shall contribute to the financial support of educ
ational programs pursuant to goals of education as d
eclared in the Constitution. Towards this end, the
government shall:
1. Adopt measures to broaden access to
education through financial assistance and other
forms of inc entives to schools, teachers, pupils and
students; and
2. Encourage and stimulate private support to
education through, inter alia, fiscal and other
assistance measures.
A. FUNDING OF REPUBLIC SCHOOLS
Section 34. National Funds - Public school
shall continue to be funded from national
funds: Provided, That local governments
shall be encouraged to assume operation of
local public schools on the basis of national
fund participation and adequate revenue so
urces which may be assigned by the national
government for the purpose.
Section 35. Financial Aid Assistance to
Public Secondary Schools - The national
government shall extend financial aid and
assistance to public secondary schools
established and maintained by local gove
rnments, including barangay high schools
.
Section 36. Share of Local Government
Provinces, cities and municipalities and
barangays shall appropriate funds in their
annual budgets for the operation and
maintenance of public secondary schools
on the basis of national fund participation.
Section 37. Special Education Fund The
proceeds of the Special Education Fund accruing
to local governments shall be used excl usively
for the purposes enumerated in Section 1 of
Republic Act No. 5447, and in accordance with
rules and regulations issued by the Ministry of
Education, Culture and Sports and the Ministry of
the Budget. Said proceeds shall be considered a
local fund and shall be subject to Presidential
Decrees No. 477, Presidential Decree No. 1375
and other applicable local bud get laws and
regulations.
Sec. 38. Tuition and other School Fees
Secondary and post-secondary schools may
charge tuition and other school fees, in
order to improve facilities or to
accommodate more students.
B. FUNDING OF PRIVATE SCHOOLS
Section 40. Funding of Private Schools -
Private schools may be funded from their
capital investment or equity contributions
, tuition fees and other school charges,
grants, loans, subsidies, passive
investment income and income from
other sources.
Sec. 41. Government Assistance. — The
government, in recognition of their
complementary role in the educational
system, may provide aid to the programs of
private schools in the form of grants or
scholarships, or loans from government
financial institutions: Provided, That such
programs meet certain defined educational
requirements and standards and contribute to
the attainment of national development go
als.
Sec. 42. Tuition and Other Fees. — Each
private school shall determine its rate of
tuition and other school fees or charges.
The rates and charges adopted by schools
pursuant to this provision shall be
collectible, and their application or use
authorized, subject to rules and regulations
promulgated by the Ministry of Education,
Culture and Sports.
Section 43. Income from Other Sources Any
private school duly recognized by the go
vernment, may receive any grant and legacy,
donation, gift, bequest or devise from any
individual, institution, corporation, foundation,
trust of philanthropic organization, or
research institution or organization as may b
e authorized by law.
Furthermore, private schools are authorized to
engage in any auxiliary enterprise to generate
income primarily to finance their educational
 operations and/or to reduce the need to
increase students' fees.
Section 44. Institutional Funds - The
proceeds from tuition fees and other school
charges, as well as other income of
schools, shall be treated as institutional
funds. Schools may pool their institutional
funds, in whole or in part, under joint man
agement for the purpose of generating ad
ditional financial resources.
Procedures followed in Financing Education by
 the Municipal, City, Provincial, and National
Governments

• There is no special education tax fixed by law in the

Philippines.
• Municipalities, municipal elementary education by vi
rtue of Commonwealth Act No. 586 which placed th
e responsibility of support for elementary education
on the National Government.
• Local entities may set aside sums from their genera l
fund income if they can afford, but it is optional.
Procedures followed in Financing Education by
 the Municipal, City, Provincial, and National
Governments

• The National Government has assumed the greater

burden of support for:
– Elementary schools in the whole country
– Regional normal schools, vocational schools,
specials schools and partially even provincial se
condary schools.
– Chartered colleges and universities
• The construction and repair and improvement of s
chool buildings remain the
 legal responsibilities of provinces, municipalities and
cities
Financial Aspects of Educational Planning

Running schools and improving them cannot take

place without the proper resources, and it all star
ts with money.

Finance is the lifeblood of any education system,

making it possible to build schools, hire and train
teachers, and equip classrooms with learning
materials and technology.
Financial Management Objective

This FMOM (Financial Management Objective)serves as

a reference material for Officials, Employees, and other i
nterested public and private stakeholders of the DepEd.
This is a big leap towards the eventual integration and
automation of government financial systems.

DEPARTMENT OF EDUCATION
Financial Management Objective

A. Support for process effectiveness and efficiency

Maintaining a solid and operative Public Financial

Management system requires support for its continued
effectiveness and efficiency. DepEd has embarked on
creating this FMOM as a guide for their officers, employees,
particularly its financial managers and staff, and other interest
ed parties.
B. A tool for good governance

Good governance entails proper fiscal discipline.

There is an increasing realization that PFM, as a measure

DEPARTMENT OF EDUCATION
Financial Management Objective

for the government's overall fiscal discipline, should ensure

that the allocation of resources to priority needs is optimal.

The FMOM clearly defines the appropriate financial

systems and procedures, ensuring sound control mechanis
ms are in place.
C. An Instrument for Transparency and Accountability

The quality of decisions made for the use of public

funds must adhere to the precepts of Transparency and
Accountability that are interdependent variables in quality
decision-making.

DEPARTMENT OF EDUCATION
 Financial Management Objective

The FMOM is DepEd's leverage in its commitment for

transparency and accountability to ensure the effective use
of public internal and external resources.
DepEd's Organizational structure based on RA 9155(Govern
ance of Basic Education Act of 2001) and revised by EO 366
(Rationalization Plan of 2004)

To operationalize decentralization as provided under RA 9

155, the hierarchical structure and functions of DepEd across all
services and covering all levels is distinctly defined. The structure
depicts the line of authority and span of control that identifies the
responsibilities of its personnel. It provides guidance and clarity
on the deployment and utilization of education resources. As
DEPARTMENT OF EDUCATION
 Financial Management Objective

specified in the law, it also "defines the roles and responsibilities

of and provides resources to the field offices which shall
implement educational programs, projects and services in
communities they serve

DEPARTMENT OF EDUCATION
 A review of the operations and organizational structure
of government brought about the 'Rationalization Plan'
as directed in E.O. No. 366 s. 2004. To give more align
ment throughout the organization, further review and
revision of DepEd's Rationalization Plan was continued
in CY 2011 until its approval on 15 November 2013 by
DBM. DepEd Order No. 52 s. 2015 dated October 30,
2015 prescribed the new organizational structures of the
DepEd Central, Regional, and Schools Division offices.

Central Office

DEPARTMENT OF EDUCATION
Regional Office
DEPARTMENT OF EDUCATION
DEPARTMENT OF EDUCATION
Division Office

DEPARTMENT OF EDUCATION
DEPARTMENT OF EDUCATION
Financial Management Structure

DEPARTMENT OF EDUCATION
Division Office Accounting Unit

DEPARTMENT OF EDUCATION
Financial Management Structure

The Secretary exercises overall supervision and

control over the entire department. Notwithstanding the
primary authority of the Secretary over all financial
transactions, delegation of financial signing authority
down to the lowest unit of the organization is properly
laid down in DepEd Order No. 67, 2016.

DEPARTMENT OF EDUCATION
DepEd reports increased budget utilization, closes gap
of underspending in education

A three-year comparison of DepEd’s budget utilization s

hows a massive decline in underspending—from 12% i
n 2015, to 10% in 2016, and finally, to only 3% in 2017.

Year Allotment Unutilized Allot Underspending

ment Rate
2015 351,113,569,961 42,977,602,361 12%

2016 412,434,829,282 42,999,708,837 10%

2017 471,982,544,896 15,734,573,153 3%

Source: COA-AOM dated April 24, 2018

Transparency is the state in which all relevant
informati on is fully and freely available to
the public. It is the responsibility of all
agency heads to make sure that the
general public is well informed especially
when it comes to financial matters.

“ An informed citizenry will help strengthen our

democratic life, but an uninformed citizenry
will break our freedom”
 References:
http://www.gov.ph/2015/08/25/bottom-up-budgeting-summit-shows-
programs-progress/ Bottom-up Budgeting summit shows
program’s progress August 25, 2015 http://www.rappler.com/move-
ph/issues/budget-watch/145988-proposed-2017-national-b udget
What's in
the proposed 2017 national budget? Aika Rey Published 10:00 AM,
September 17, 20
16
http://www.businessmirror.com.ph/duterte-admin-drops-aquinos-
grassroots-budgeting-str ategy/
http://business.inquirer.net/225157/govt-adopts-new-system-budget-
setting Gov’t adop ts new system in budget setting Philippine
Daily Inquirer / 12:22 AM February
25, 2017
http://www.dbm.gov.ph/wp-
content/uploads/2016/PREXC/PREXC.pdf
https://jfvambrosio.wordpress.com/2010/05/17/government-budgeting-
experience-in-thephilippines/
http://www.dbm.gov.ph/wp-
content/uploads/Issuances/2017/National%20Budget%20
Circular/NBC-

References:
http://www.gov.ph/the-philippine-constitutions/the-1987-
constitution-of-the-repu blic-of-the-philippines/”b. Book VI,
Executive Order No. 292 series 1987 entitle d National
Government Budgeting
http://www.gov.ph/1987/07/25/executive-order-no-292/
https://prezi.com/ocejherccx2m/source-of-funds-in-philippine-
education/ https://www.dbm.gov.ph/wp-
content/uploads/Executive%20Summary/2016/Bud
get%20Cycle.pdf https://www.dbm.gov.ph/wp-
content/uploads/2012/03/PGB-B2.pdf
file:///C:/Users/SummerWinter/Downloads/budgetarysystembu
dgetprocessofth ephilippinegovernment-170515164049.pdf
https://hrepreflibrarian.wordpress.com/2013/03/07/the-budget-
process-the-phili