Financial Administration; Budgetary

process, parliamentary control over

finance, accounting and audit, pork
barrel
Reported by:
Rafael Delicano
Ma. Jocelyn B. Elpides
Maria Samantha Labrador
Porcunciula
Financial Administration
 Is the act of managing incoming and outgoing
monetary transactions and budgets for governments,
educational institutions, non Profit Organizations, and
other public service entities
 Budgetary Process

Sec. 22, article vii of the 1987 constitution sets the tone for the
budgetary process. Under this article, the president submits to
congress within 30 days from the opening of every regular
session, a financial plan of expenditures and sources of
financing, including receipts from existing and proposed
revenue measures as basis for a general appropriations bill.
 Four Major Phases in Budget
Process
Budget Preparation
this phase involves the formulation of
estimates of revenues and expenditures by
the Executive Departments and Agencies. In
preparing the annual budget proposal; the
said department makes an estimation of
government revenues. It then determines the
budget priorities within available revenues
and borrowing limits. Finally, it translates
these approved priorities into expenditures.
Budget Execution/ Implementation
Budget execution covers the allotment of
appropriations by the central budget
authority to and the incurrence of
obligations by, the spending departments
and agencies of government.
Budget Legislation/Authorization
this pertains to the whole range of legislative action on
the budget, leading to the enactment of a General
Appropriations Law for the year. The Philippine House
of Representatives first conducts hearings/debates on
the budget.
The House then approves the budget, for submission
to the Senate. Senate hearings and debates are
conducted on the budget, which is finally approved. A
Bicameral Conference Committee composed of
representatives of the Philippine House of
Representatives and the Senate is convened. After
approval by the Bicameral Conference Committee, the
President enacts the budget which is known as
the General Appropriations Act.
Budget Accountability/Review
This involved the reporting of actual performance
against plans or targets, and it involves the
Monitoring of agency budgetary performance,
Comparison and evaluation of actual performance
with the initially-approved work targets, A summary
list of checks issued is submitted on a monthly basis
and the Physical & Financial Report of operations is
submitted on a quarterly basis in the form of a trial
balance.
 PARL IAMENTARY CONT ROL OV ER F INAN CE,
ACC OU NT IN G AND A UDIT
• Generally, parliament plays an authorisation, oversight and supervisory role in the budgetary
process, thereby ensuring transparency and accountability. It thus scrutinises and approves
budget proposals and authorises the expenditures necessary to respond to these proposals,
and holds government to account for their implementation and the utilisation of the
corresponding resources.
• As the representative body of the people, parliament is the appropriate institution in which to
ensure that the budget best matches the nation’s needs with the available resources.
• Greater parliamentary input into the budgetary process contributes to better national
economic policy. It leads to greater government accountability and transparency; to substantial
national consensus regarding macro-economic policies; and to greater possibilities for
community-level input.
• Where the government informs the parliament of its intentions, it allows the latter to engage in

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healthy debate which helps to ensure that the policies subsequently adopted and implemented by
the government adequately reflect the wishes of the people. Involving parliament only in the final
stage of the process tends to foster sterile confrontation.
 PARL IAMENTARY CONT ROL OV ER F INAN CE,
ACC OU NT IN G AND A UDIT

• In some systems, parliament is given the opportunity to provide inputs at the budget formulation
stage in order to ensure that national and local priorities are fully incorporated.
• In that regard and in terms of national consensus building and building linkages at the community
level, parliaments and parliamentarians again can play a major role. Individual MPs can work at
Regional Seminar on the National Budget z 23 - 25 July 2002 24 Parliament and the Budgetary
Process, Including from a Gender Perspective both the national and constituency level to draw in
many civil society groups --- including those which represent the poor and the underprivileged --- and
thus counter traditional privileged access to public influence by the wealthy.
• The organisation of National Economic Forums and parliamentary committee hearings at the
community and district levels can also contribute to building public consensus around the budget.
• In some cases, parliaments even have access to alternative information and analysis and to
information and views from community groups and civil society organisations. Close work with
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various business and labour groups also helps build consensus and obtain public input on key policy
and budget issues.
 FINANCIAL
CRISIS
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Responsibility for ensuring transparency and accountability in the
budgetary process lies primarily with the parliament.

• Accountability and transparency in the budgetary process are TRANSPARENCY

prerequisites for a democratic budgetary process.
•, Accountability is the obligation on the part of the government to AND
answer for its actions, coupled with its ability to respond to queries ACCOUNTABILITY
from the parliament. More specifically, financial accountability is the
relationship between the executive and the legislature based on the
government’s fiduciary obligation to demonstrate and take
responsibility for performance in the light of agreed expectations
regarding the management and use of public funds.
• Parliament confers responsibility on the Executive, and, at the same
time, requires accountability reporting
Simple Portfolio from the Executive. At the same
Presentation
time, watchdog agencies --- Presentation
principally national audit offices ---
examine the performance of the Executive and in turn report to
Portfolio
Parliament.
Simple Portfolio
Portfolio Presentation
A transparent process requires that:
- The form and content of the budget and estimates be both
informative and understandable;
- Government reports be timely and give a fair presentation of the TRANSPARENCY
facts. It has been generally observed that budgets which are
, accompanied by multi-year frameworks allow for a greater
AND
understanding by parliament of the government's long-term ACCOUNTABILITY
economic strategy and vision and thus promote transparency in
terms of the government's intentions.
- Public audit reports be relevant and useful;
- Parliamentary oversight be open (in that it encourages public
participation), conclusive and make a difference.

• The bedrock of this system

Simple is the
Portfolio right to information. Access to and
Presentation
disclosure of information by government
Presentation
is crucial in the budgetary
process for efficient budgetary management and monitoring of
Portfolio
governmental action. The tradition of secrecy sometimes observed by
the government in budget Simple Portfolio
matters should be discouraged by
guaranteeing the right to Portfolio Presentation
information in the constitution and laws.
The national audit is a key instrument for ensuring accountability and
transparency in the budgetary process. It serves to ensure that all budget
expenditure has been duly authorised, effected for the purpose for which it
has been authorised and accounted for. It also ensures that the
information provided by the government thereon is accurate.
• In most countries, a supreme audit institution performs this function; it is
,
desirable that it be independent of the executive branch of government.
• For the supreme audit institution to function in an independent and
efficient manner, it should be headed by a competent professional who is
appointed independently (in many cases, he or she is appointed by the NATIONAL AUDIT
parliament and cannot be removed from office except with the authority of
the parliament). The institution should be adequately staffed (both in terms
of ability and numbers), should ensure quality control and should be able
to report to parliament in a timely manner.
• Greater efficiency in the audit function is further achieved when the audit
Simple Portfolio Presentation
report is publicised. There is therefore a need for the audit institution to
forge an alliance with the media Presentation
to ensure adequate media coverage of
the auditor’s report. Portfolio
• It is crucial that the parliament be empowered
Simple Portfolio to scrutinise, in a timely
fashion, the audit report Portfolio
and propose appropriate measures to arrest
Presentation
improprieties in budget management, including sanctions against officials
guilty of such practices.
 Pork Barrel
Is political parlance of American-English origin.
Historically,its usage may be traced to the degrading ritual of
rolling out a barrel stuffed with pork to a multitude of black slaves
who would cast their famished bodies into the porcine feast to
assuage their hunger with morsels coming from the generosity of their
well-fed master.
This practice was later compared to the actions of American legislators
in trying to direct federal budgets in favor of their districts.
While the advent of refrigeration has made the actual pork barrel
obsolete, it persists in reference to political bills that "bring home the
bacon" to a legislator‘s district and constituents. In a more technical
sense, "Pork Barrel" refers to
an appropriation of government spending meant for localized
projects and
secured solely or primarily to bring money to a representative's
district.
Some scholars on the subject further use it to refer to legislative
control of local appropriations.
 Pork Barrel
In the Philippines, "Pork Barrel" has been commonly
referred to as lump-sum, discretionary funds of
Members of the Legislature, although, as will be later
discussed, its usage would evolve in reference to
certain funds of the Executive.
 Pork Barrel
• Pork Barrel – Public funds, the disposition of
which rests on the the sole discretion of a public
official as to the amount, project and
beneficiaries

• What transforms a fund into pork is the

entitlement to choose the projects, the amounts
and their beneficiaries.
TYPES OF PORK BARREL FUND

1. Lump-Sum– funds allocated without being

broken down into detailed purpose/s, leaving
a great deal of discretion to the hands of the
head of the agency or department, most
especially the President.
TYPES OF PORK BARREL FUND

2. SAVINGS
1. The withdrawal of unobligated allotments when
the project is not finished/abandoned
2. Cross-border transfers
3. Non existent items-Funding of projects, activities,
programs not covered by appropriations in the GAA
TYPES OF PORK BARREL FUND

2. SAVINGS
1. The withdrawal of unobligated allotments when
the project is not finished/abandoned
2. Cross-border transfers
3. Non existent items-Funding of projects, activities,
programs not covered by appropriations in the GAA
TYPES OF PORK BARREL FUND

• 3. Off-Budget Funds – funds derived

from other sources not specified in the
Budget. Its use is under the sole
discretion of the President without need
of congressional approval such as
Malampaya, Presidential Social Fund,
etc.
TYPES OF PORK BARREL FUND

• 4. PDAF – lump sum appropriations in

the GAA Act to fund projects
considered a “priority” by a legislator.
It is also used for “patronage politics”
by the President to ensure the support
of members of Congress.
THANK YOU
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