Professional Documents
Culture Documents
BUDGETTING
Reported by: Go, Sarah G.
DEFINITION OF TERMS
FISCAL PLANNING
it is a continous process which involves decisions or choices about alternate
ways of using available resources with the aim of achieving particular goals
FISCAL POLICY
is the means by which government adjusts its spending levels and tax rates
to monitor and influence a nation’s economy
FISCAL YEAR
a year reckoned for taxing or accounting purposes; it is used in government
accounting, which varies between countries and for budget purposes.
CHIEF EXECUTIVE
highest ranking executive in the government. In a national level is the
president. In the local level is the city mayor.
LEGISLATIVE BODY
composed of the lawmaking body of the state. In the Philippines, the
congress is the country’s highest lawmaking body.
AUDIT
an official inspection of an individual’s or organization’s accountants,
typically by an independent body. (ex. Commision on Audit of the Philippines)
DEFINITION OF TERMS
REVENUES
items or amounts constituting a state’s income. A state’s
annual income from which public expenses are met
RESOLUTION
is a written motion adopted by a legislative body
ORDINANCE
a piece of legislation enacted by a municipal authority
BUDGETING
is an integral part of fiscal planning process after the basic economic research,
fiscal policy analysis, long-range fiscal planning, and programming have been
completed.
is often used to refer to the overall process of allocating resources as well
as to the preparation of specific documents
is the central element of public fiscal management as well as major
element in the overall process of local government
it is both a document and a complex, collective decision process
it can be defined as the financial articulation of the activities of a
governmental unit; at the local level it takes the form of an ordinance or
resolution that recognizes anticipated revenues, authorizes activities, and
appropriates expenditures for a one-year time period
Is an accounting process whereby revenue and expenditure information
are structures to facilitate continuous inspection, evaluation and
management control; it largely works at the local level of government but
varies depending on a governments specific needs and situation
BUDGET FORMULATION
is a complex process containing elements of
planning, politics, economics and accounting.
It is a planning process because it involves
making decisions that have consequences
for future time periods.
Goals and objectives must be formulated,
policies analyzed and comprehensive plans
and programs delineated before budget can
be formulated.
TYPICAL STEPS IN BUDGET PROCESSING
1. Executive Preparation
2. Legislative review, modification and
enactment
3. Executive implementation
4. Post audit
TYPICAL STEPS IN BUDGET PROCESSING
1. Executive preparation
The chief executive often is responsible
for preparing budget estimates and a
preliminary budget document.
Depending on the size of the city, the
executive alone may prepare the budget
or he or she may rely on a budget officer,
the finance department and the planning
department
TYPICAL STEPS IN BUDGET PROCESSING
2. Legislative review, modification and
enactment
The executive budget is presented to the
legislature and to the public before the fiscal
year begins. The legislative body reviews the
proposed budget, holds public hearings and
makes changes if necessary. The final budget
is adopted with a resolution or ordinance that
authorizes activities, appropriates monies and
sets tax rates.
TYPICAL STEPS IN BUDGET PROCESSING
3. Executive implementation
The chief executive then administers the
final budget. Changes maybe necessary
during budget year because of
differences between estimated and actual
revenues, expenditures, emergencies,
and shifting priorities. Typically, these are
effected through amendments to the
budget ordinance.
TYPICAL STEPS IN BUDGET PROCESSING
4. Post audit
is an external accounting of the actual
financial activities for a budget year,
which is presented to the legislative
body. Each of these general activities can
be broken down into a number of specific
activities and set in a time sequence of a
budget calendar.
BUDGET CALENDAR
1. Departmental Estimates
The chief executive issues a budget
memorandum to all department heads
and to others with expenditure
responsibilities. This communication lays
the groundwork for the detailed budget
requests of each department.
BUDGETING
It includes the following;
1.A. Anticipated fiscal policy
A summary of the overall fiscal situation with policies that will affect specific
accounts.
BUDGETING
Two (2) types of audit
1. Internal audit
Conducted quarterly or semiannually by city staff
or consultants to produce reports for internal
management purposes.
2. External audit
Normally required by the state law is conducted by
external certified public accountants after the fiscal
year has ended. Submitted to the legislative body and
the regulating state agency. The legislative body
reviews the audit to ensure that revenue and
expenditure activities were conducted according to
the intentions of the budget.