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Chapter 2 - The Budget Process

The document outlines the key steps in the government budget process, including budget preparation, legislation, execution, and accountability. It describes the national budget as the government's estimate of sources and uses of funds for a fiscal year. The budget cycle involves preparation, legislation where the budget is approved, execution through release of funds via allotments and disbursement authority, and accountability reporting. Responsibility accounting is also briefly defined.

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409 views16 pages

Chapter 2 - The Budget Process

The document outlines the key steps in the government budget process, including budget preparation, legislation, execution, and accountability. It describes the national budget as the government's estimate of sources and uses of funds for a fiscal year. The budget cycle involves preparation, legislation where the budget is approved, execution through release of funds via allotments and disbursement authority, and accountability reporting. Responsibility accounting is also briefly defined.

Uploaded by

maria ronora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Government Accounting

&
Accounting for non-profit organizations
Chapter 2
The Budget Process
 

Learning Objectives
 Enumerate the steps in the budget
process.
 Describe briefly the principles of
responsibility accounting.
The National Budget

The national budget (government


budget) is the government’s estimate of
the sources and uses of government
funds within 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 

2. Budget Legislation
3. Budget Execution
4. Budget Accountability
 
Budget Preparation

 Bottom-up approach  

 Zero-based budgeting

1. Budget Call
2. Budget Hearings
3. Presentation to the Office of the
President
Budget Legislation

4. House Deliberations
 

5. Senate Deliberations
6. Bicameral Deliberations
7. President’s Enactment
The approved budget consists of the
The Approved Budget

following:
 

1. New General Appropriations


2. Continuing Appropriations
3. Supplemental Appropriations
4. Automatic Appropriations
5. Unprogrammed Funds
6. Retained Income/Funds
7. Revolving Funds
8. Trust Receipts
Appropriation 
 Appropriation – is the authorization made by a
legislative body to allocate funds for purposes
specified by the legislative or similar authority.
 
1. New General Appropriations – annual authorizations
for incurring obligations, as listed in the GAA.
2. Continuing Appropriations – authorizations to support
the incurrence of obligations beyond the budget year
(e.g., multi-year construction projects).
3. Supplemental Appropriations – additional
appropriations to augment the original appropriations
which proved to be insufficient. 
4. Automatic Appropriations – authorizations
programmed annually which do not require periodic
action by Congress.
Appropriation (continuation) 
5. Unprogrammed Funds – standby
appropriations which may be availed only upon
the occurrence of certain instances.
6. Retained Income/Funds – collections which the
agencies can use directly in their operations.
7. Revolving Funds – receipts from business-type
activities of agencies which are authorized to be
constituted as such. These are self-liquidating
and all obligations and expenditures incurred by
virtue of said business-type activity shall be
charged against the fund.
8. Trust Receipts – receipts by a government
agency acting as agent.
Budget Execution
 
8. Release Guidelines and BEDs

Major recipients of budget:


a. NGAs
b. LGUs
c. GOCCs

9. Allotment
10. Incurrence of Obligations
11. Disbursement Authority
Allotment 
 Allotment – is an authorization
issued by the DBM to government
agencies to incur obligations for
specified amounts contained in a
legislative appropriation in the form
of budget release documents. It is
also referred to as Obligational
Authority.
Disbursement Authority  
1. Notice of Cash Allocation (NCA) – authority issued by the
DBM to central, regional and provincial offices and operating
units to cover their cash requirements. The NCA specifies the
maximum amount of cash that can be withdrawn from a
government servicing bank in a certain period.
2. Notice of Transfer of Allocation – authority issued by an
agency’s Central Office to its regional and operating units to
cover the latter’s cash requirements.
3. Non-Cash Availment Authority – authority issued by the DBM
to agencies to cover the liquidation of their actual obligations
incurred against available allotments for availment of
proceeds from loans/grants through supplier’s
credit/constructive cash.
4. Cash Disbursement Ceiling – authority issued by the DBM to
agencies with foreign operations allowing them to use the
income collected by their Foreign Service Posts to cover their
operating requirements.

GOVT ACCTG & ACCTG FOR NPOs by: Z.B.Millan


Budget Accountability

12. Budget Accountability Reports


 

13. Performance Reviews


14. Audit
The Budget
Cycle

GOVT ACCTG & ACCTG FOR NPOs by: Z.B.Millan


Responsibility Accounting

 
 Responsibility accounting is a
system of providing cost and
revenue information over which a
manager has direct control of.
 It requires the identification of
responsibility centers and the
distinction between controllable and
non-controllable costs.

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