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2. OVERVIEW:Fiscal administration

zeros in on the management offinancial resources and those

activities and operations to generaterevenue, make those available, and

see to it that funds are wisefully,lawfully, effectively and efficiently

spent. The administration of

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finances is an intrinsic component of

management responsibility. There isan intimate linkage between

administering and funding. Anadministrative act has financial

implications.

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3. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONOVERVIEW:Adecision to increase taxes increases

revenue of government; Toimplement social amelioration

program creates a charge onrevenue earned while at the same

time distributes and disperses social

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benefits. Because administrative

activity is principally dependentupon availability of allocable

financial resources, themanagement of finances becomes a

very important administrativeresponsibility.

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ADMINISTRATIONORGANIZING FORFISCAL ADMINISTRATION:Fiscal

activity is present in all levels of theorganization, whether line or staff;

top management level throughmiddle management; the rank and

file. Top management is most

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interested in it; middle management

is deeply involved in it; the rank andfile is affected by whatever results

from it.5. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONORGANIZING FORFISCAL ADMINISTRATION:The

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principal agencies tasked with fiscal

functions:Congress, especially theLower House, Department of

FinanceDepartment of Budget andManagementCommission on Audit

6. PHILIPPINE PUBLIC FISCALADMINISTRATIONORGANIZING FOR

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FISCAL ADMINISTRATION:Functions

of the Finance Department:Revenuegeneration and collection,Fund

custodyDisbursements Keeping ofaccounts


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FISCAL ADMINISTRATION:Review of

estimates and fiscal policy studiesare done by the Department of

Budget and Management in closeconsultation with the National

Economic DevelopmentAuthority;The Central Bank and

other economic planning entities of

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the state to see to it that fiscal plans

and programs are geared towardsnational development.


FISCAL ADMINISTRATION:TheCommission on Audit conducts fund

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and performance audit to see to it

that expenditures are in accordancewith the Appropriation Law

approved Congress is responsible forrevenue and expenditure policies.

9. PHILIPPINE PUBLIC FISCALADMINISTRATIONFISCAL CONTROL

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MECHANISMSFOUR JUSTIFICATIONS

FOR EXPENDITURE CONTROLTHROUGH THE BUDGET:Prevent

Misappropriation of Fundsrequiresreview and approval by the

administrative official of the line oroperating agency, of all requests for

money releases and budgetary

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allotments, vouchers and similar

papers before payments are madeso that expenditures are in

accordance with policy and law andnot irregular, unnecessary,

excessive, extravagant andunconscionable.

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ADMINISTRATIONFISCAL CONTROLMECHANISMSFOUR JUSTIFICATIONS

FOR EXPENDITURE CONTROLTHROUGH THE BUDGET:Control to

Implement ProspectivePolicyproactive administration

inhibits governmental units from

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directly transacting and negotiating

money matters since such kind oftransaction is officially channeled

through the Department of Budgetand Management in the form of

budget estimates as endorsed bythe President.

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ADMINISTRATIONFISCAL CONTROLMECHANISMSFOUR JUSTIFICATIONS

FOR EXPENDITURE CONTROLTHROUGH THE BUDGET:Ensure the

Wisdom and Propriety ofExpenditureclaims for payment from

public funds, legality, prudence,

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reasonableness, the morality of the

claim or charge should beestablished. A review of existing

contracts and transactions should bemade.

12. PHILIPPINE PUBLIC FISCALADMINISTRATIONFISCAL CONTROL

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MECHANISMSFOUR JUSTIFICATIONS

FOR EXPENDITURE CONTROLTHROUGH THE BUDGET:Prevent

DeficitsFiscal supervision andcontrol may be useful but should not

unduly interfere with agencyprerogative to carry out programs

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mandated by the constitution and

the laws.13. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONBUDGETINGCONCEPTSBudgeting may be of the:

(1) Planning-Programming BudgetSystem (PPBS) typegives assurance

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that the budget will help achieve

desired agency resultsunit headdefends the budget, explains its

contribution to the realization ofagency goals, develops a cost

projection for each programsubmitsthis to top management which

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reviews the program and decides on

the final budget allocation.14. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONBUDGETINGCONCEPT(2) Zero-Base Budgeting

(ZBB) typethe agency justifies theentire appropriation request for the

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fiscal year as if the programs are

entirely new, instead of justifyingonly the increase requested above

the previous years appropriation.The agency is obligated to defend all

programs every year and rank thesein terms of priority using the ratio

between cost and benefit

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criterionprovides opportunity for

top management to re-evaluate theneed for on-going programs,

compare these with the proposedand the prioritized for

implementation.

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ADMINISTRATIONBUDGETINGCONCEPT*** Both are special

budgeting types to minimizedrawbacks of traditional method

wherein budget requires are basedon current projects continuing year

after year and where requests for

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new programs are made without a

clear idea of how it will contribute tothe achievement of overall agency

goals ***16. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONLINE ITEM versusPERFORMANCE

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BUDGETINGBudgeting may also

be:(1) Line-Itemobject of theexpenditure typeconsists of a

detailed listing of every position tobe filledgives the legislative body

tremendous discretion to strike outor to approve individual itemsfunds

appropriated may not be transferred

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from one category of expense to

another. Also known as rule ofthumb budgeting where figures of

past years are reflected but withoutincome indicators

17. PHILIPPINE PUBLIC FISCALADMINISTRATIONLINE ITEM versus

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PERFORMANCE BUDGETINGThree

columns of figures appear in eachbudget sheet:(a) actual expenditure

for each object during the previousfiscal year(b) estimated amounts to

be spent for the same objects forthe current fiscal year.(c) amount

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desired for the same objects for the

incoming or future fiscal year18. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONLINE ITEM versusPERFORMANCE BUDGETING(2)

Performance Budgetingis lump-sumbudgetingis program budgeting

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which spells out functions, activities

and projectsallow transfer of fundsfrom one organizational unit to

another, between work activitiesand objects to be spent for.There is

a difficulty in identifying what workunits perform or not perform, since

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context of a three-year planning

frameworkexpenditures mustachieve program targets and

support development strategy.20. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONNEW POLICYGUIDELINES FOR BUDGETINGAgency

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programs will be supportive of the

identified priority areas whichinclude the following:modernization

of the agricultural sector to augmentfarmer income, bolster production

and attain foodsecurityimprovement of the quality

of basic social services like health

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and sanitation, nutrition, education,

social welfare andhousingacceleration of countryside

infrastructure development21. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONNEW POLICYGUIDELINES FOR BUDGETINGAgency

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programs will be supportive of the

identified priority areas whichinclude the following:enhancement

of global competitiveness throughliberalization, deregulation, and

privatizationprovision formacroeconomic stability by instilling

fiscal discipline, prudent

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government spending and efficient

revenue generationreform ingovernance to make it responsive to

the current domestic and globalenvironment

22. PHILIPPINE PUBLIC FISCALADMINISTRATIONPRINCIPLES FOR

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AGENCY GUIDANCE (1) Prudent

Spendingcalls for rational fundallocationscaling down or phasing

out devolved or non-essentialactivitiesdoing away with duplicating

functions; moratorium on increasingpersonnel and setting up new

unitsadopting a system for

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reasonable use of supplies,

materials and facilities.23. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONPRINCIPLES FORAGENCY GUIDANCE(2)

Entrepreneurial Budgetingthisinvolves mobilization of government

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resources for development

programsimproving front-line publicservicesrequiring the agencies to

study their fee structure in order torecover expenditure for specific

services rendered.

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ADMINISTRATIONPRINCIPLES FORAGENCY GUIDANCE(3) Performance-

Based Budgetingkey results areas(KRAs) and commitment for specific

programs are indentified to optimizeeffective use of resources. (4)

Wholistic Budgetingexpenditure

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levels of regional units are provided

by the agency as guide for preparingthe regional budget.

25. PHILIPPINE PUBLIC FISCALADMINISTRATIONPRINCIPLES FOR

AGENCY GUIDANCE(5) Consistencywith Sub-Sectoral Development

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Objectiveslike that of the Technical

Education and Skills Act of 1994(TESDA)Research and Development

(R&D) in the material, technologicaland engineering sciences,

implementation of the SystemsDesignated Statistics pursuant to

Executive Order 352.

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ADMINISTRATIONINCOMESOURCESTwo general sources of

government income :(1) TaxRevenueincome taxproperty

taxdomestic goods and servicestaxinternational trade and

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transactions tax , salesvalue added

tax (VAT).27. PHILIPPINE PUBLIC FISCAL


government income :(2) Non-TaxRevenueoperating and service

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income revenue from the

operations of national and localgovernment and government

corporationsincome from publicenterprises and investments

income received for the use offinancial assets dividends; net rent

for the use of government land and

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royalty for the use of copyrights and

patents owned by the government.28. PHILIPPINE PUBLIC FISCAL


government income :(2) Non-TaxRevenuemiscellaneous income

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revenues not classified under other

categories such as sale of goods andmerchandise confiscated, waste

materials; inventory adjustmentsand gains on exchange rate.capital

revenue income derived from thesale of capital assets like buildings,

equipment, machines, land and

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intangible assets like patent,

copyright and trademark29. PHILIPPINE PUBLIC FISCAL


government income :(2) Non-TaxRevenuegrantsnon-repayable

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transfers received from other levels

of the government, private sector orinternational

institutions.borrowings includesdomestic and foreign debts,

regardless of source, whether incash or in kind.

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ADMINISTRATIONAPPROPRIATIONSAND OBLIGATIONSThese are

estimates and projections of whatthe departments and agencies incur

or expect to incur. Theseinclude:New General Appropriations

as provided for in the General

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Fund, Fiduciary Fund or Special

Account in the GeneralFundSupplemental Appropriations

these are stand-by appropriationsauthorized by Congress apart from

the programmed appropriations fora given fiscal year.

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ADMINISTRATIONAPPROPRIATIONSAND OBLIGATIONSAutomatic

Appropriationsexpendituresauthorized by specific laws like

Commonwealth Act 186 andRepublic Act 660 for retirement and

insurance premiums of government

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employees; Presidential Decree

1234 and other laws for specialaccounts and funds; grant proceeds;

custom duties and taxes; proceedsfrom the sale of non-serviceable,

obsolete and unnecessaryequipment ; net lending; interest

payment for national debt;

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amortization for domestic and

foreign debts as per PresidentialDecree 1967 and Republic Acts 4860

and 245.32. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONAPPROPRIATIONSAND OBLIGATIONSContinuing

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Appropriations obligations

provided under Executive Order No.182 known as Public Works Act for

Multiyear infrastructure Projects;agrarian reform; unobligated

allotments for maintenance andother operating expenses and

unreleased appropriations for

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maintenance and other operating

expenses and capital outlays asprovided by RA 8250 and RA 8522.

33. PHILIPPINE PUBLIC FISCALADMINISTRATIONAPPROPRIATIONS

AND OBLIGATIONSBudgetaryAdjustmentstransfers to the

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reserve fund; transfer from the

agrarian reform fund; organizationaladjustment fund; general fund

adjustment; miscellaneouspersonnel benefits; contingency

fund; sale of military camps;countrywide development; Pinatubo

assistance resettlement and

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development and unprogrammed

projects.34. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONTHE BUDGET Thebudget is a management tool to

account for what has beenreceivedhow this will be spent at a

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given period of time. How a

government forecasts and allocatesits income and expenditures is

illustrated in the budget document.35. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONTHEBUDGETPHILIPPINE NATIONAL

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BUDGETThe National Budget

represents the estimate of expectedincome and projected expenditures

over a period of time referred to asthe fiscal year. It is what

government plans: (1) to spend forits programs and projects (2) where

the money will come from

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ADMINISTRATIONTHE PHILIPPINEBUDGETARY PROCESSSection 22,

Article VII of the 1987 Constitutionsets the tone for the budgetary

process. Under this Article, the

President submits to Congress

within thirty days from the opening

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of every regular session, a financial

plan of expenditures and sources offinancing, including receipts from

existing and proposed revenuemeasures as basis for a general

appropriations bill.

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ADMINISTRATIONTHE PHILIPPINEBUDGETARY PROCESSThe Philippine

Budget undergoes four stages: (1)Budget Preparation - the

determination of budgetary

priorities and activities guided by

the overall national development

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plan with the ceilings and

constraints imposed by availablerevenues and borrowing limits.

38. PHILIPPINE PUBLIC FISCALADMINISTRATIONTHE PHILIPPINE

BUDGETARY PROCESSThe PhilippineBudget undergoes four stages:(2)

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Budget Authorization the

President submits the overall budgetto Congress in the form of detailed

Expenditure Program accompaniedby the Budget of Expenditures and

Sources of Financing; the Budget

Message of the President, and the

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Regional Allocation of the

Expenditure Program.39. PHILIPPINE PUBLIC FISCAL


Budget undergoes four stages:(3)Budget Implementation after the

d h l

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President signs the General

Appropriations Act into law, theDepartment of Budget and

Management requires the differentagencies of government to submit

their respective work and financial

work plans.

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Budget undergoes four stages:(4)Budget Accountability evaluation

of actual performance and initially-

approved work targets, obligations

incurred,

C SC

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ADMINISTRATIONTHE PHILIPPINEBUDGETARY PROCESSPersonnel

hired and work accomplished bycomparing all these with the targets

set at the time agency budgets were

approved.Performance and cost

effectiveness of agencies are

l d i l b

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evaluated since no results can be

obtained if agency efficiency is slowand funds are wastefully

spentDetailed examination of theagencys book of account is

undertaken to ensure that all

expenses have been disbursed for

h f hi h h f d

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the purpose for which the funds

have been authorized.42. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONLOCAL FISCALMANAGEMENTFUNDAMENTAL

PRINCIPLES The Local GovernmentCode of 1991 requires local

f l d

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governments to formulate sound

financial plans. Local budget plansand goals must harmonize with

national development plans,strategies and goals to optimize

utilization of resources, fiscal or

physical.

43 PHILIPPINE PUBLIC FISCAL

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ADMINISTRATIONLOCAL FISCALMANAGEMENTFUNDAMENTAL

PRINCIPLES Local government unitsshould incorporate the needs and

requirements of their component

units and equitably allocate

resources among said units. The

t b i li it ti i th

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most basic limitation is the

requirement that all localgovernment units should endeavor

to have balanced budget for everyfiscal year of its operation.

44. PHILIPPINE PUBLIC FISCALADMINISTRATIONBUDGET FORM

AND CONTENT T t Of L l

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AND CONTENT Two parts Of Local

government budget estimate ofincometotal appropriations covering

the current operating expendituresand capital outlays

45. PHILIPPINE PUBLIC FISCALADMINISTRATIONBUDGETARY

REQUIREMENTSTh b d t f l l

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REQUIREMENTSThe budget of local

government units for anyfiscal yearshall comply with the following:(a)

the aggregate amount appropriatedshall not exceed the estimates of

income(b) full provisions shall be

made for all statutory and

contractual obligations of the local

t it d

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government unit concerned,

provided the amount ofappropriations for debt servicing

shall not exceed twenty percent(20%) of the regular income of the

local government unit concerned.


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ADMINISTRATIONBUDGETARYREQUIREMENTSThe budget of local

government units for anyfiscal yearshall comply with the following:(c)

aid to component barangays shall be

provided in amounts of not less than

one thousand pesos (P1,000.00) per

b (d) fi t (5%) f th

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barangay.(d) five percent (5%) of the

estimated revenue from regularresources shall be set aside as an

annual lump-sum appropriation forunforeseen expenditures arising

form the occurrence of calamities


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ADMINISTRATIONBUDGETARYPROCESS AT THE LOCAL GOVT

LEVELThe stages of are analogous tothat of the national level of

government. Four basic steps are

also observed. (1) Budget

Preparation (2) Budget

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of the budgetary process since it is a

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of the budgetary process since it is a

mechanism for determining whetherthe expenditures are legal and

desirable. TWO TYPES OF AUDIT:Pre-AuditPost-Audit

49. PHILIPPINE PUBLIC FISCALADMINISTRATIONTWO TYPES OF

AUDITPre Audit This is audit

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AUDITPre-Audit This is audit

performed before money is actuallyspent and takes place before

payment of an obligation or beforethe expense is incurred. Post-Audit

This is audit after money has been

spent in order to find out whether

funds are spent in accordance with

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funds are spent in accordance with

the approved appropriation.50. PHILIPPINE PUBLIC FISCAL

ADMINISTRATIONEnd ofPresentation


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ADMINISTRATIONReference:AvelinoP. Tendero

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Documents