I.

CONTRAST THE FOLLOWING:

1. Management vs. Administration

 Management is an art of getting things done through others by directing their efforts towards

achievement of pre-determined goals. It is concerned with formulation of board objectives, plan

and policies, while administration deals with the activities of higher level/top level: setting up of

objectives and crucial policies of the organization. It is applicable to non-business concerns, i.e

clubs, schools, hospitals, etc. Administration can also be defined in terms of roles and

competencies needed to fulfill them. These roles would include direct setter, leader-catalyst,

planner, decision maker, organizer, change manager, coordinator. Administration is a complex

undertaking because administrators must work with people, resources, ideas, value system and

change. Management plays the executive role in organization. Unlike administration, whose role

is decisive in nature. Administration takes all the important decisions of the organization while

management makes decisions under the boundaries set by the administration. In short, it is the

act or function of putting into practice the policies and plans decided upon by the administration.

2. Appropriation vs. Allotment

 Appropriation is an authorization pursuant to the laws or other legislative enactment directing the

payment of goods and services out of government funds under specified conditions or for

specified purposes. Allotment is an authorization issued by DBM to an agency, which allows it to

incur obligations for specified amounts contained in legislative appropriation. Appropriation

represents the level of authority given by the government to its agencies, specified in certain

amount and purposes, usually corresponding to what has been proposed by the agency as its

annual budget, while allotment represent the amount already released by the DBM t the agency

out of the agency appropriation, whatever amount of appropriation that has not been released at

the end of the year will be reported in the agency’s books and registries as unrelease

appropriation.
 3. Current Operating Expenditure vs. Capital Outlay

 Current operating expenditures is the appropriation for the purchase of goods and services for

current consumption or for the benefits expected terminate to within the fiscal year, while capital

outlay is the appropriation for the purchase of goods and services, the benefits of which extend

beyond the fiscal year and which add to the assets of the Government, including investments in

the capital of the government owned or controlled corporation and their subsidies.

4. Program vs. Project

 Program can be defined as a framework of plans of work, which comprises of a set of projects

that are complementary one another and aligned in proper sequence to achieve economic scale.

A program implies a set of projects which are linked to one another, in a sequential manner to

attain the combined benefits, while project refers to the temporary activity, which is undertaken to

create a distinct product or service, that has certain objectives. A project compromises a set of

routine and interlinked activities, with a goal, which has definite goal requires to complete with

time a stipulated time and resources. The temporary activity, which is carried out to create a

distinct product or service, that has specified objectives, is called project. A bundle of projects

which linked are linked to one another, rationally to attain the combined benefits, called program.

The scope of program is wider comparison to the project, the project works on a single function

unit, while the program works on various function units. A project is distinct and is for specified

duration. On the other extreme, a program is everlasting and executed in the business to

continuously obtain the result of the entity.

5. Auditing vs Accounting

 Auditing is the act of examination of books of account and evidential documents so as to prove

the true and fair view of profitability and financial position. Auditing is also a systematic evaluation

of the financial position, operating system, and results of operations of an audited entity, while

accounting is the act of collecting, recording, analyzing and interpretation of financial transactions.
 The work of accounting begins when final transactions take place while work of auditing begins

when work of accounting ends. Auditing checks the books of accounts considering their fairness

as well as complying with the provision of company act or not, while accounting prepares profit

and loss account and balance sheet and other statements as per the instruction of auditor.

II. ENUMERATE AND DISCUSS EXTENSIVELY THE PHASES OF BUDGET

 BUDGET PREPARATION

The budget preparation phase starts with the Development DBCC Budget Call Agencies Budget

Coordination Committee (DBCC). It is headed by the DBM Secretary and its members are the

Secretary of Finance, the NEDA Director-General, and the Bangko Sentral Governor, with the

Office of the President for general oversight. In preparation of the DBCC approves the

parameters, makes a budget call, conducts hearing, makes a budget review then consolidates the

budget. It then validates and confirm the budget, which is finally approved by the president of the

Philippines and his cabinet. The president thereby submits the budget to congress for approval.

 BUDGET AUTHORIZATION

This starts upon the House Speaker’s receipt of the President’s Budget and ends with the

President’s enactment of the General Appropriations Act. The proposed budget is first reviewed

by the Committee on Appropriations of the House of Representatives. The Committee summons

the agencies to justify their budgets, with the DBM assisting and providing technical inputs. The

Appropriations Committee then presents to the House body the proposed budget and passes it at

the Third Reading. This then goes to the Senate Finance Committee for another round of

hearings and deliberations. The Committee presents the proposed amendments to the House

Budget Bill to the Senate for approval. Then a Bicameral Conference Committee, composed of

members of both Houses, is convened to resolve differences. The committee arrives at a

common version, and it is then submitted to the President. If there are items which he/she

disagrees with, then the President can exercise line-item veto power. The President then signs it

into law as the General Appropriations Act. The law contains the new appropriations in terms of
 specific amounts: for salaries, wages and other personnel benefits; for maintenance and other

operating expenses; for capital outlays, all authorized to be spent by the government for a given

year.

The approved budget becomes effective on the first day of the budget year concerned, or when it

is signed by the President, whichever comes later.

 BUDGET EXECUTION

Budget execution covers the allotment of appropriation by the central budget authority to and the

incurrence of obligations by, the spending departments and agencies of budget. This is where the

people’s money is actually spent. As soon as the GAA is enacted, the government can implement

its priority programs and projects. The budget execution phase begins with DBM’s issuance of

guidelines on the release and utilization of funds. Agencies are required to submit their BEDs at

the start of budget execution. These documents outline agency plans and performance targets.

These BEDs include the physical and financial plan, monthly cash program, estimate of monthly

income, and list of obligations that are not yet due and demandable. To ensure that releases fit

the approved Fiscal Program, the DBM prepares an Allotment Release Program (ARP) to set a

limit for allotments issued to an agency and on the aggregate. Allotments, which authorize an

agency to enter into an obligation, are either released by DBM to all agencies comprehensively

through the Agency Budget Matrix (ABM) and individually via Special Allotment Release Orders

(SAROs).

 BUDGET ACCOUNTABILITY

The accountability phase is the final phase of the budget process. This is when the agencies

report their actual physical and financial performance. The assessment of the physical

achievements of an agency is aided by performance indicators. These are yardsticks for

determining how well an agency has accomplished its objectives. They measure outcome, output,

process efficiency and client satisfaction. They may be quantitative or qualitative in nature. At this

phase, the Commission on Audit (COA) figures prominently in the assessment of agency
 performance. The COA is the government body tasked with looking at the legality, propriety and

accuracy of government financial transactions. The COA has auditors assigned to each

government agency and it has regional offices to review these transactions. Those that are

considered excessive, inappropriate or illegal are not passed in audit. COA can recommend

means for setting them right, if such is still possible.

Trial balances of agencies, which are submitted to DBM and COA on a quarterly and annual

basis, report how agencies use up their allotments and cash allocations.

III. ENUMERATE AND EXPLAIN EXTENSIVELY THE STEPST OF BUDGET PREPARATION

 STEP 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 universities 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 Committee (DBCC);

and policy guidelines and procedures in the preparation and submission of agency budget

proposals.

 STEP 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.

“Bottom-Up” Budgeting  The Bottom-up Budgeting program was set-up in 2013 to help the

Philippines to help the Philippines attain its Millennium Development Goals of inclusive growth

and poverty reduction. Now, two years later, the Department of Budget and Management is

holding a two-day summit to show how far the project has come.

Program Expenditure Classification (PREXC):  This approached is adopt by President

Duterte Administration.  A reform that restructures the current Budget by grouping activities and
 projects under major programs or key strategies. Through this innovation, the government will be

able to assign performance targets—both outputs and outcomes—at the level of programs. This

way, the direct link between strategies, budgets and intended results will be clearer and program

monitoring and evaluation can provide evidence-based assessments.

 STEP 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 DBM, based on

performance indicators on output targets and absorptive capacity. DBM bureaus then review the

agency proposals and prepare recommendations.

 STEP 4 (Executive Review)

The recommendations are presented before an Executive Review Board which is composed 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.

Implementation issues are also discussed and resolved.

 STEP 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).

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 macroeconomic and

fiscal program. Heads of major departments are invited to this meeting.

 STEP 6 (Presentation to President and Cabinet)

The proposed budget is presented by DBM, together with the DBCC, to the President and

Cabinet for further refinements of prioritization. After the President and Cabinet approve the

proposed National Expenditure Plan, the DBM prepares and finalizes the budget documents to be

submitted to Congress.
 STEP 7 (The President’s Budget)

The budget preparations phase ends with the submission of the proposed national budget –the

“President’s Budget”-to Congress.

The President’s Budget consist of the following documents, which help legislators analyze the

contents of the proposed 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) 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.

 National Expenditure Program (NEP) This contain the details of spending for each

department and agency by program, activity or project and is submitted in the form of a proposed

General Appropriations Act.

 Details of Selected Programs and Projects This contains a more detailed disaggregation

President’s Budget Message (PBM) This is the President explains the policy framework and

priorities in the budget

 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.
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-budget What's in the proposed 2017 national budget? Aika Rey Published 10:00 AM,

September 17, 2016

http://www.businessmirror.com.ph/duterte-admin-drops-aquinos-grassroots-budgeting-strategy/ http://business.inquirer.net/225157/govt-adopts-new-system-budget-setting Gov’t

adopts 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-the-philippines/

http://www.dbm.gov.ph/wp-content/uploads/Issuances/2017/National%20Budget%20Circular/NBC567.pdf

file:///D:/Download/budgetarysystembudgetprocessofthephilippinegovernment-170515164049.pdf