The+Budget+Process+(PDF)+-+Chapter+2.pdf - The Budget...

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The Budget Process
The National Budget Government accounting is primarily budgetary accounting Government accounting does not only aim to provide information on past events and transaction but also budget information . Government accounting is concerned with providing information useful in assessing the conformance of utilizations of government funds with the approved budget The national budget (government budget) is the government’s estimate of the sources and uses of government funds with in a fiscal year. This forms the basis for expenditures and is the government’s key instrument for promoting its socio-economic objectives.
The Budget Cycle 1. Budget Preparation - Philippines uses bottom- up” approach. Under “bottom - up” budgeting, several parties participation the budget preparation, starting from the lowest to the highest levels of the government. The opposite is the “top - down” budgeting wherein the budget preparation starts from the agency heads.
Incremental budgeting Zero-based budgeting The current year’s budget is formulated based on the previous year’s budget, which is just adjusted for any variances experienced in the past. Presumably, the proposed programs and expenditures in the previous year are automatically approved in the current year User a’ ’roll - over’’ approach. Prone to abuse. The current year’s budget is formulated without regard to the previous year’s budget. Government agencies are required to justify their current year’s proposed programs and expenditures, irrespective of whether these are new or carried over from the previous year. Uses a ‘’back -to- zero’’ or ‘’clean state’’ approach. Promotes efficient and utilization of funds.
1. Budget call The budget preparation starts when the Department of budget and management (DBM) issues a budget call to all the government agencies. Relevant Terms: Balanced Budget prepared in such a way that estimated revenues exceed estimated expenditures. If actual revenues exceeds actual expenditures, the government earns a surplus. If expenditures exceeds revenues, the government incurs a deficit. Annual Budget covers a period of one year and forms the basis for the annual appropriation. Special budget provides for items not adequately covered or not included in the general appropriations act. Line item budget focuses on specific expenditures such as salaries and wages, travel expense, freight, supplies, materials and equipment
2. Budget hearings are conducted after the agencies submit their budget proposals. Each agency defends its budget proposal before the DBM. The DBM deliberates on the budget proposals into the National Expenditure Program (NEP) and Budget of Expenditures and Sources of Financing (BESF). 3. Presentation to the Office of the President The President and the Cabinet members review the proposed budget. After the president approves the proposed budget, the DBM finalizes the budget documents to be submitted to the Congress. The proposed budget is referred to as the “President’s Budget.

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