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CAPIZ STATE UNIVERSITY
GRADUATE SCHOOL
MAIN CAMPUS
ROXAS CITY
EDM 216- FISCAL MANGEMENT IN EDUCATION
JOHNNY J. MAHINAY DR. L. VIPINOSA
Reporter Course Facilitator
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FISCAL PLANNING, PROGRAMMING BUDGETING ASPEC TS
PLAN- BUDGET LINKAGE: Doable or Not
The Code provides a clear linkage between approved Local Development Plans and the Budget that will
implement such a plan. A budget is a plan expressed in financial terms which describes the sources and
uses of funds. It is the blueprint of the financial and policy decisions that the local government will
implement during a fiscal year. It is also a document for establishing control over the direction of
change and determining the future.
A budget is a tool for development and a blueprint of strategic policy framework. Yes, plan-budget linkage is already being done by most LGUs.
1. Operationalization of Local Development PlansLocal Development plans shall be operationalized through the Annual or Supplemental Budgets.
Local budgets shall carry out the smooth execution of planned projects to pursue the attainment
of development objectives. LGU shall provide a window for evaluating and monitoring its
output on a periodic basis to determine whether expected results or goods and services
produced in the short term are getting closer to the predetermined objectives. This pan budget
linkage may be done as early to local executive budget.
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ACITVITY RESPONSIBILITY Timeframe Expected Output
1. Alignment of AIPwith LDP and
national goals
and strategies
Planning and
Developing Office,
Local Development
Council and Local
Sanggunian.
6 months before
budget preparation
(January to June of
current year)
AIP for the budget
year
2. Formulation offiscal policies and
directions for the
budget year
Expanded Local
Finance Committee &
Local Chief Executive
July of current year Local Budget Call for
the budget year
3. Review ofexisting
programs/
activities and
preparation of
budget proposalfor the budget
year
All Department Heads July of current year Budget proposals of
Department/Offices
4. Target setting foreach major final
output by
program/
project/activity
All Department Heads July of current year Performance
measures and
targets for the
budget year
2. Plan-Budget LinkThe linking of the plan to the budget is a must do. LGUs have to understand clearly the
objectives or purpose of the plan, analyze whether the programs, projects and activities to be
implemented are consistent with the purpose and determine the extent to which this purpose
can be achieved on the basis of available resources. The framework to which the plan-budget
link is easily cognizable is in the program structure.
3. Planning Annual/Supplemental BudgetsThe whole Annual/supplemental budgets shall be dedicated to sustainable human
development in order to achieve the twin goals of eliminating poverty and promoting economic
growth. Development planning shall not be limited to projects and activities to be funded by the
20 percent of IRA share.
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4. Mobilization of ResourcesLocal elective officials shall develop the capacity to mobilize resources and ensure program
sustainability. It is their responsibility to develop the capabilities of their people in the long-term
so that the well-being of the present and future generation is not undermined.
5. Policy FormulationLocal budgets shall be policy-driven. Policy formulation shall include the following:
. Explicit policy directions to eliminate poverty and employment.
. Policies on how the budget shall be financed in the medium-term and how it shall be
allocated among priority programs/projects/activities in the short/term. The LFC shall
recommend to the LCE alternative sources of financing the budget and rational criterion for
allocating available resources.
6. Review of Program StructureLocal budget shall have a periodic review and analysis of the program structure to determine
capacity to produce desired result. Performance indicators shall be identified in LGU budget
proposals to serve as basis in measuring annual performance. The review of existing program
shall challenge the relevance of present operation to the wider policy objectives of the LGU as
approved by the local Sanggunian.
7. Redesigning of Current Program Structure7.1Consistency with Strategic Policy Objectives
7.1.1 Current program structure found inconsistent with strategic policy objectives asplanned shall be redesigned following these steps:
STEP 1 Challenge the regular activities or projects being done at present for specific program.
What is the role/mission of the program? Are the projects/activities relevant to the mission? What are the output indicators of the program? Are the results consistent with program objectives? What activities/projects must be redesigned or abolished?
STEP 2 Designed the proper organization structure that will best carry out the mission.
What are tasks to be performed? What is the optimum number of personnel that can carry out tasks efficiently and effectively What are the duties/responsibilities of the personnel What qualification standards/specifications are required of personnel?
Step 3 Redesigned cost allocation and financial reporting systems to improve efficiency.
What projects/activities produce results relevant to the mission? What are the relevant costs/input that produce results? What is the cost (direct/indirect)on a per unit of output?
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What financial reporting systems are used for management decision-making purposes? What is the actual cost per activity/project for one semester? Are there variances between
budget and actual cost?
What is the actual output per activity/project? Are there variances between target output andactual results?
Is the output cost effective?7.2Importance of the Program Structure Review
7.2.1 The review of program structure shall ensure that there is a clear policy statement or objectives
that define the purpose of the program and the expected results to be used as basis assessing
performance.
8. Program PerformanceThe program structure is the primary link or the center between the
plan and budget. It should be understood, however, that the strength or weakness
Of this linkage depends on the efficiency, effectiveness, and quality of service delivery.
Performance of each program depends on the presence of the following performance
Framework:
PLANNING-BUDGETING PROCESS
(a) Procedures requiredThe Administrator shall establish procedures to ensure that the
Planning, programming, budgeting, and financial of the Administrator comport with
Sound financial and fiscal management principles. Those procedures shall, at a minimum,
Provide for the planning, programming, and budgeting of activities of the Administrator
using funds that are available for obligation for a limited number of years.
(b) Annual plan for obligation of funds(1) Each year, the Administrator shall prepare a plan for the obligation of the
Amounts that, in the Presidents budget submitted to congress that year
Under section 1105 (a) of title 31, are proposed to appropriate for the
Administration for the fiscal year that begins in that year (in this section
referred to as the budget year) and the two succeeding fiscal years.
(2) For each program elements and construction line item of the administration
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For the obligation of those amounts for that element or item for each fiscal
Year of the plan, expressed as a percentage of the total amount proposed to be appropriate
in that budget for that element or item.
(c) Submission of plan and reportThe Administrator shall submit to Congress each year, at about the time
That the Presidents budget is submitted to Congress under section 1105
(a) Of title 31, each of the following.(1) The plan required by subsection (b) of section prepared with respect to that budget(2) A report on the plans prepared with respect to the preceding years
Budget, which shall include, for each goal in those plans-
(A) The assessment of the administrator as to whether or not thatGoal was met; and
(B) If that assessment is that goal was not met-(i) The reasons why that goal was not met; and(ii) The plan of the administrator for meeting or, if necessary, adjusting that
goal.