A government budget is a plan for financing

the government activities of a fiscal year prepared

and submitted by responsible executive to a

representative body whose approval and

authorization are necessary before the plan can be

executed. It is more than mere estimate or

statement of receipts and expenditures; it is a

define proposal to be approved or rejected.

1.Action is based on study.

2. Cooperation is secured in the entire organization.

3. Policies are established.

4. Programs of activities are related to expected or available resources and economic conditions.

5. Balanced Programs are developed.

6. Coordinated effort is attained.

7. Operations are controlled.

8. Weaknesses in the government are revealed.

9. Wastes are prevented.

I. As to Nature

A. Annual Budget- a budget which covers a period of one

year. It is the basis of an Annual appropriation.

B. Supplemental Budget- a budget which purports to

supplemental or adjust a previous budget which is deemed to inadequate for the purpose for which is

intended.

C. Special Budget- a budget of special in nature and submitted in a

special forms on account of the fact that itemizations are not

adequately provided in the Appropriation Act or that amounts are

not included in the Appropriation Act.

II. As to Basis

A. Performance Budget- a budget emphasizing the programs

or services conducted and based on functions, activities and

projects which focus attention upon the general character and

nature of work to be done upon services to be rendered rather than

the things to be acquired such as personal services, supplies and

equipment.

B. Line Item Budget- a budget the basis of which are the objects

and expenditures such as salaries and wages, travelling expenses,

freight, supplies, materials, equipment etc.

III. As to Approach and Technique

A. Zero-Based Budgeting- a process which requires

systematic consideration of all programs, projects and

activities with the use of the defined ranking

procedures.

IV. Other Forms of Budget

A. Regional Budgeting- is a budget prepared consistent

with the regional organization of the National

Government, wherein the DBM identifies by

region the expenditures of government agencies

and releases of funds also on a regional basis.

B. Long-Term-Budget- is a budget prepared for four or

five year period or longer; longer range estimate

revenue and expenditures requirements.

C. Key Budgetary Inclusions- refer to financial

commitments of agencies pertaining to budget

year. KBIs are maintained for the purpose of

1. controlling major financial

commitments so that funds are not

misappropriated or to prevent juggling of funds.

2. to disclose the funds and have clear

picture of the expenditures; and . To track down

mandatory obligations and insure funding of

priority projects

1. The formulation of the budget that supports the national development plan and reflects the objectives and strategies of the plan.

2. The preparation of budget within the context of the total resources of government, including revenues and receipts, expenditures and borrowings of national and local government units, including government and controlled corporation.

3. The preparation of the annual budget as an integral part of a long-term plan and long-term budget program

4. The specification of multi-year requirements in each state of the budget process.

5. The preparation of the budget at the regional level, consolidation and review at the department and central levels, taking into consideration the goals, plans and requirements of the regional offices in the interest of full government response to local thinking and initiative.

6. The implementation and timing of major development projects which may affect the infrastructure program, debt ceilings, domestic credit, balance of international payments and determination of expenditure levels to insure the observance of established fiscal, monetary, international payment and other constraints.

7. Analysis of budget estimates on a zero-base approach rather than on percentage or incremental approach.

8. Basis for legislative discussion of the budget, limiting the time allotted for debate on the budget by the legislative body, thereby ensuing that the budget is approved before the start of the fiscal year.

9. Adoption of a management information system for effective performance monitoring and financial evaluation and the development of standard costs for units of work measurement, in order to efeectively evaluate agency programs.

It is the government’s estimate of its income and

expenditures. It is what the government plans to

spend it for programs and projects and where the

money will come from.

Two major sources of money for our National Budget:

1. Revenues

2. Borrowings

Four Process of Budgeting

• Budget Preparation- this place covers

the estimation of government revenues,

the determination of budgetary

priorities and activities and the

translation of these priorities and

activities into budgetary estimates.

• 2.Budget Authorization- this phase

includes the legislative body reviews

the budget proposals of the President

and formulates an appropriation act

in accordance with the process

specified in the Constitution.

3. Budget Implementation/ Execution-

This phase covers the various operational

aspects of budgeting. This is the point

where the agency can make use of the

approved appropriation.

• Budget Accountability- this phase of

the budget process is concerned with

tracking and monitoring of actual

expenditures, revenues, assets and

liabilities of government agencies. It

is particularly involved in the

evaluation of expenditures and

performance.

It is allocated for the implementation

of various programs and projects, the

operation of government offices,

payment of salaries of government

employees and payment of public debts.

•

• Expenditures by expense class show how

much is much is provided:

• 1. Current Operating Expenditures-

appropriations for the purchase of goods

and services for conduct of normal

government operations within a budget

year; such as the salaries, maintenance

and operating expenses, interest payment

etc.

• 2. Capital Outlays- appropriations of

goods and services the benefits of which

extent beyond the budget year and which

add th the assests of the government

including investments in the capital stock

of government oend or controlled

corporations.

• 3. Net Lending- net advances by the

national government for the servicing

of government guaranteed corporate

debt and loans outlays by the national

government corporations

• 4. Debt amortization- contribution to

the sinking fund which is utilized for

principal repayments of our loans