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Public fiscal adm pwrpt

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  • 1.
  • 2. OVERVIEW:
    • Fiscal administration zeros in on the management of financial resources and those activities and operations to generate revenue, make those available, and see to it that funds are wisefully, lawfully, effectively and efficiently spent.
    • 3. The administration of finances is an intrinsic component of management responsibility. There is an intimate linkage between administering and funding. An administrative act has financial implications.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    OVERVIEW:
    • A decision to increase taxes increases revenue of government;
    • 4. To implement social amelioration program creates a charge on revenue earned while at the same time distributes and disperses social benefits.
    • 5. Because administrative activity is principally dependent upon availability of allocable financial resources, the management of finances becomes a very important administrative responsibility.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    ORGANIZING FOR FISCAL ADMINISTRATION:
    • Fiscal activity is present in all levels of the organization, whether line or staff; top management level through middle management; the rank and file.
    • 6. Top management is most interested in it; middle management is deeply involved in it; the rank and file is affected by whatever results from it.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    ORGANIZING FOR FISCAL ADMINISTRATION:
    The principal agencies tasked with fiscal functions:
    Congress, especially the Lower House,
    Department of Finance
    Department of Budget and Management
    Commission on Audit
  • 7. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    ORGANIZING FOR FISCAL ADMINISTRATION:
    Functions of the Finance Department:
    Revenue generation and collection,
    Fund custody
    Disbursements
    Keeping of accounts
  • 8. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    ORGANIZING FOR FISCAL ADMINISTRATION:
    • Review of estimates and fiscal policy studies are done by the Department of Budget and Management in close consultation with the National Economic Development Authority;
    • 9. The Central Bank and other economic planning entities of the state to see to it that fiscal plans and programs are geared towards national development.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    ORGANIZING FOR FISCAL ADMINISTRATION:
    • The Commission on Audit conducts fund and performance audit to see to it that expenditures are in accordance with the Appropriation Law approved
    • 10. Congress is responsible for revenue and expenditure policies.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    FISCAL CONTROL MECHANISMS
    FOUR JUSTIFICATIONS FOR EXPENDITURE CONTROL THROUGH THE BUDGET:
    Prevent Misappropriation of Funds
    • requires review and approval by the administrative official of the line or operating agency, of all requests for money releases and budgetary allotments, vouchers and similar papers before payments are made so that expenditures are in accordance with policy and law and not irregular, unnecessary, excessive, extravagant and unconscionable.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    FISCAL CONTROL MECHANISMS
    FOUR JUSTIFICATIONS FOR EXPENDITURE CONTROL THROUGH THE BUDGET:
    Control to Implement Prospective Policy
    • proactive administration inhibits governmental units from directly transacting and negotiating money matters since such kind of transaction is officially channeled through the Department of Budget and Management in the form of budget estimates as endorsed by the President.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    FISCAL CONTROL MECHANISMS
    FOUR JUSTIFICATIONS FOR EXPENDITURE CONTROL THROUGH THE BUDGET:
    Ensure the Wisdom and Propriety of Expenditure
    • claims for payment from public funds, legality, prudence, reasonableness, the morality of the claim or charge should be established.
    • 11. A review of existing contracts and transactions should be made.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    FISCAL CONTROL MECHANISMS
    FOUR JUSTIFICATIONS FOR EXPENDITURE CONTROL THROUGH THE BUDGET:
    Prevent Deficits
    • Fiscal supervision and control may be useful but should not unduly interfere with agency prerogative to carry out programs mandated by the constitution and the laws.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    BUDGETING CONCEPTS
    Budgeting may be of the:
    (1) Planning-Programming Budget System (PPBS) type
    • gives assurance that the budget will help achieve desired agency results
    • 12. unit head defends the budget, explains its contribution to the realization of agency goals, develops a cost projection for each program
    • 13. submits this to top management which reviews the program and decides on the final budget allocation.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    BUDGETING CONCEPT
    (2) Zero-Base Budgeting (ZBB) type
    • the agency justifies the entire appropriation request for the fiscal year as if the programs are entirely new, instead of justifying only the increase requested above the previous year’s appropriation.
    • 14. The agency is obligated to defend all programs every year and rank these in terms of priority using the ratio between cost and benefit criterion
    • 15. provides opportunity for top management to re-evaluate the need for on-going programs, compare these with the proposed and the prioritized for implementation.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    BUDGETING CONCEPT
    *** Both are special budgeting types to minimize drawbacks of traditional method wherein budget requires are based on current projects continuing year after year and where requests for new programs are made without a clear idea of how it will contribute to the achievement of overall agency goals ***
  • 16. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    LINE ITEM versus PERFORMANCE BUDGETING
    Budgeting may also be:
    (1) Line-Item
    • object of the expenditure type
    • 17. consists of a detailed listing of every position to be filled
    • 18. gives the legislative body tremendous discretion to strike out or to approve individual items
    • 19. funds appropriated may not be transferred from one category of expense to another.
    • 20. Also known as “rule of thumb” budgeting where figures of past years are reflected but without income indicators
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    LINE ITEM versus PERFORMANCE BUDGETING
    Three columns of figures appear in each budget sheet:
    (a) actual expenditure for each object during the previous fiscal year
    (b) estimated amounts to be spent for the same objects for the current fiscal year.
    (c) amount desired for the same objects for the incoming or future fiscal year
  • 21. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    LINE ITEM versus PERFORMANCE BUDGETING
    (2) Performance Budgeting
    • is lump-sum budgeting
    • 22. is program budgeting which spells out functions, activities and projects
    • 23. allow transfer of funds from one organizational unit to another, between work activities and objects to be spent for.
    • 24. There is a difficulty in identifying what work units perform or not perform, since its most important concern is the overall performance of the agency.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    NEW POLICY GUIDELINES FOR BUDGETING
    Based on this agenda:
    • the formulation of the national budget must be in the context of a three-year planning framework
    • 25. expenditures must achieve program targets and support development strategy.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    NEW POLICY GUIDELINES FOR BUDGETING
    Agency programs will be supportive of the identified priority areas which include the following:
    modernization of the agricultural sector to augment farmer income, bolster production and attain food security
    improvement of the quality of basic social services like health and sanitation, nutrition, education, social welfare and housing
    acceleration of countryside infrastructure development
  • 26. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    NEW POLICY GUIDELINES FOR BUDGETING
    Agency programs will be supportive of the identified priority areas which include the following:
    enhancement of global competitiveness through liberalization, deregulation, and privatization
    provision for macroeconomic stability by instilling fiscal discipline, prudent government spending and efficient revenue generation
    reform in governance to make it responsive to the current domestic and global environment
  • 27. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    PRINCIPLES FOR AGENCY GUIDANCE
    (1) Prudent Spending
    • calls for rational fund allocation
    • 28. scaling down or phasing out devolved or non-essential activities
    • 29. doing away with duplicating functions; moratorium on increasing personnel and setting up new units
    • 30. adopting a system for reasonable use of supplies, materials and facilities.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    PRINCIPLES FOR AGENCY GUIDANCE
    (2) Entrepreneurial Budgeting
    • this involves mobilization of government resources for development programs
    • 31. improving front-line public services
    • 32. requiring the agencies to study their fee structure in order to recover expenditure for specific services rendered.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    PRINCIPLES FOR AGENCY GUIDANCE
    (3) Performance-Based Budgeting
    • key results areas (KRA’s) and commitment for specific programs are indentified to optimize effective use of resources.
    (4) Wholistic Budgeting
    • expenditure levels of regional units are provided by the agency as guide for preparing the regional budget.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    PRINCIPLES FOR AGENCY GUIDANCE
    (5) Consistency with Sub-Sectoral Development Objectives
    • like that of the Technical Education and Skills Act of 1994 (TESDA)
    • 33. Research and Development (R&D) in the material, technological and engineering sciences, implementation of the Systems Designated Statistics pursuant to Executive Order 352.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    INCOME SOURCES
    Two general sources of government income :
    (1) Tax Revenue
    • income tax
    • 34. property tax
    • 35. domestic goods and services tax
    • 36. international trade and transactions tax , sales
    • 37. value added tax (VAT).
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    INCOME SOURCES
    Two general sources of government income :
    (2) Non-Tax Revenue
    • operating and service income– revenue from the operations of national and local government and government corporations
    • 38. income from public enterprises and investments – income received for the use of financial assets dividends; net rent for the use of government land and royalty for the use of copyrights and patents owned by the government.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    INCOME SOURCES
    Two general sources of government income :
    (2) Non-Tax Revenue
    • miscellaneous income–revenues not classified under other categories such as sale of goods and merchandise confiscated, waste materials; inventory adjustments and gains on exchange rate.
    • 39. capital revenue – income derived from the sale of capital assets like buildings, equipment, machines, land and intangible assets like patent, copyright and trademark
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    INCOME SOURCES
    Two general sources of government income :
    (2) Non-Tax Revenue
    • grants –non-repayable transfers received from other levels of the government, private sector or international institutions.
    • 40. borrowings– includes domestic and foreign debts, regardless of source, whether in cash or in kind.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    APPROPRIATIONS AND OBLIGATIONS
    These are estimates and projections of what the departments and agencies incur or expect to incur.
    These include:
    New General Appropriations – as provided for in the General Fund, Fiduciary Fund or Special Account in the General Fund
    Supplemental Appropriations – these are stand-by appropriations authorized by Congress apart from the programmed appropriations for a given fiscal year.
  • 41. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    APPROPRIATIONS AND OBLIGATIONS
    Automatic Appropriations –expenditures authorized by specific laws like Commonwealth Act 186 and Republic Act 660 for retirement and insurance premiums of government employees; Presidential Decree 1234 and other laws for special accounts and funds; grant proceeds; custom duties and taxes; proceeds from the sale of non-serviceable, obsolete and unnecessary equipment ; net lending; interest payment for national debt; amortization for domestic and foreign debts as per Presidential Decree 1967 and Republic Acts 4860 and 245.
  • 42. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    APPROPRIATIONS AND OBLIGATIONS
    Continuing Appropriations – obligations provided under Executive Order No. 182 known as Public Works Act for Multiyear infrastructure Projects; agrarian reform; unobligated allotments for maintenance and other operating expenses and unreleased appropriations for maintenance and other operating expenses and capital outlays as provided by RA 8250 and RA 8522.
  • 43. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    APPROPRIATIONS AND OBLIGATIONS
    Budgetary Adjustments –transfers to the reserve fund; transfer from the agrarian reform fund; organizational adjustment fund; general fund adjustment; miscellaneous personnel benefits; contingency fund; sale of military camps; countrywide development; Pinatubo assistance resettlement and development and unprogrammed projects.
  • 44. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    THE BUDGET
    The budget is a management tool
    • to account for what has been received
    • 45. how this will be spent at a given period of time.
    How a government forecasts and allocates its income and expenditures is illustrated in the budget document.
  • 46. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    THE BUDGET
    PHILIPPINE NATIONAL BUDGET
    The National Budget represents the estimate of expected income and projected expenditures over a period of time referred to as the fiscal year.
    It is what government plans:
    (1) to spend for its programs and projects
    (2) where the money will come from
  • 47. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    THE PHILIPPINE BUDGETARY PROCESS
    Section 22, Article VII of the 1987 Constitution sets the tone for the budgetary process.
    Under this Article, the President submits to Congress within thirty days from the opening of every regular session, a financial plan of expenditures and sources of financing, including receipts from existing and proposed revenue measures as basis for a general appropriations bill.
  • 48. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    THE PHILIPPINE BUDGETARY PROCESS
    The Philippine Budget undergoes four stages:
    (1) Budget Preparation - the determination of budgetary priorities and activities guided by the overall national development plan with the ceilings and constraints imposed by available revenues and borrowing limits.
  • 49. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    THE PHILIPPINE BUDGETARY PROCESS
    The Philippine Budget undergoes four stages:
    (2) Budget Authorization – the President submits the overall budget to Congress in the form of detailed Expenditure Program accompanied by the Budget of Expenditures and Sources of Financing; the Budget Message of the President, and the Regional Allocation of the Expenditure Program.
  • 50. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    THE PHILIPPINE BUDGETARY PROCESS
    The Philippine Budget undergoes four stages:
    (3) Budget Implementation – after the President signs the General Appropriations Act into law, the Department of Budget and Management requires the different agencies of government to submit their respective work and financial work plans.
  • 51. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    THE PHILIPPINE BUDGETARY PROCESS
    The Philippine Budget undergoes four stages:
    (4) Budget Accountability – evaluation of actual performance and initially-approved work targets, obligations incurred,
  • 52. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    THE PHILIPPINE BUDGETARY PROCESS
    • Personnel hired and work accomplished by comparing all these with the targets set at the time agency budgets were approved.
    • 53. Performance and cost effectiveness of agencies are evaluated since no results can be obtained if agency efficiency is slow and funds are wastefully spent
    • 54. Detailed examination of the agency’s book of account is undertaken to ensure that all expenses have been disbursed for the purpose for which the funds have been authorized.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    LOCAL FISCAL MANAGEMENT
    FUNDAMENTAL PRINCIPLES
    • The Local Government Code of 1991 requires local governments to formulate sound financial plans.
    • 55. Local budget plans and goals must harmonize with national development plans, strategies and goals to optimize utilization of resources, fiscal or physical.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    LOCAL FISCAL MANAGEMENT
    FUNDAMENTAL PRINCIPLES
    • Local government units should incorporate the needs and requirements of their component units and equitably allocate resources among said units.
    • 56. The most basic limitation is the requirement that all local government units should endeavor to have balanced budget for every fiscal year of its operation.
  • PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    BUDGET FORM AND CONTENT
    Two parts Of Local government budget
    estimate of income
    total appropriations covering the current operating expenditures and capital outlays
  • 57. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    BUDGETARY REQUIREMENTS
    The budget of local government units for any
    fiscal year shall comply with the following:
    (a) the aggregate amount appropriated shall not exceed the estimates of income
    (b) full provisions shall be made for all
    statutory and contractual obligations of the
    local government unit concerned, provided
    the amount of appropriations for debt
    servicing shall not exceed twenty percent
    (20%) of the regular income of the local
    government unit concerned.
  • 58. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    BUDGETARY REQUIREMENTS
    The budget of local government units for any
    fiscal year shall comply with the following:
    (c) aid to component barangays shall be provided in amounts of not less than one thousand pesos (P1,000.00) per barangay.
    (d) five percent (5%) of the estimated revenue from regular resources shall be set aside as an annual lump-sum appropriation for unforeseen expenditures arising form the occurrence of calamities
  • 59. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    BUDGETARY PROCESS AT THE LOCAL GOV’T LEVEL
    The stages of are analogous to that of the national level of government.
    Four basic steps are also observed.
    (1) Budget Preparation
    (2) Budget Authorization
    (3) Budget Implementation
    (4) Budget Review
  • 60. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    AUDIT OF FUNDS
    • Accounting of Funds as a management tool is best ensured by the audit function.
    • 61. It is a component of the budgetary process since it is a mechanism for determining whether the expenditures are legal and desirable.
    TWO TYPES OF AUDIT:
    Pre-Audit
    Post-Audit
  • 62. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    TWO TYPES OF AUDIT
    Pre-Audit –
    This is audit performed before money is actually spent and takes place before payment of an obligation or before the expense is incurred.
    Post-Audit –
    This is audit after money has been spent in order to find out whether funds are spent in accordance with the approved appropriation.
  • 63. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    End of Presentation
  • 64. PHILIPPINE PUBLIC FISCAL ADMINISTRATION
    Reference:
    AvelinoP. Tendero

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