Budgeting and Implementation Plan

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Electric Cooperative; Budgeting; Approaches in Budgeting, Budget Cycle in the Philippines, and Implementation;

Electric Cooperative; Budgeting; Approaches in Budgeting, Budget Cycle in the Philippines, and Implementation;

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  • 1. DR. JO BITONIO Professor JOYCE R. BASCOS Discussant
  • 2. TOPICAL OUTLINE • BUDGETING  Approaches in Budgeting  Budget Cycle in Government and PANELCO III  Expenditure by Class and Object  Budgeting Structure and Processes • IMPLEMENTATION OF THE PLAN  Structure and Governance  Institutional and Individual Accountability  Plan Financing  Plan Execution • EVALUATION AND PLAN UPDATE  Evaluation Framework  Stages and Levels of Evaluation
  • 3. BUDGETING THE PLAN BUDGETING - is the process of allocating financial resources for intended programs, projects, services, and activities to empower the organization to carry out stated goals and objectives (Briones, 1996)
  • 4. Want Need Budget BUDGETING THE PLAN CAN
  • 5. Three Major Orientation • process of enforcing or applying limitations and conditions that are set in the budget and in appropriation and at the same time securing compliance with the spending restrictions imposed by central authorities CONTROL • involves the use of budgetary authority at both agency levels to ensure the efficient use of resources in the conduct of authorized activities MANAGEMENT • process of determining public objectives and the evaluation of alternative programs. Authorities must have the information concerning the purpose and effectiveness to the program PLANNING
  • 6. APPROACHES IN BUDGETING 1. LINE ITEM BUDGETING - emphasizes listing of objects for itemized expenditure such as personnel, supplies, and equipment without much regard for the purpose of programs or projects for which such items are proposed. 2. PERFORMANCE BUDGETING - Performance budgets use statements of missions, goals and objectives to explain why the money is being spent. It is a way to allocate resources to achieve specific objectives based on program goals and measured results. (Carter)
  • 7. APPROACHES IN BUDGETING 3. PLANNING PROGRAMMING AND BUDGETING SYSTEM (PPBS) -The scheme requires agency managers to identify program objectives, develop measuring program output, calculate total program costs over the long- run, prepare detailed multi-year program and financial plans, and analyze the costs and benefits of alternative program designs. 4. ZERO BASED BUDGETING - a method of budgeting in which all expenses must be justified for each new period. Starts from a “zero base” and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period.
  • 8. BUDGET CYCLE IN GOVERNMENT There are four phases in managing the National Budget:
  • 9. BUDGET CYCLE IN GOVERNMENT During the preparation phase, the Executive prepares the proposed National Budget. This is followed by the legislation phase where the Congress authorizes the General Appropriations Act. In the execution phase, agencies utilize their approved budgets and during the accountability phase, the executive monitors and evaluates the use of the budget.
  • 10. PANELCO III BUDGET CYCLE Corporate Services Department • Inform all Departments and Areas thru writing the schedule of budget hearing, provide work plan format, costing and forecast sales, system loss, house connection. Departments/ Areas • Presentation of accomplishments for the first three quarters of the current year Budget Analyst • Analyze accomplishments as compared to actual expenses over budgeted. (variances) Departments/ Areas • Budget deliberation, justification, ratification Corporate Services Department • Prepares Consolidated final report, for presentation to the board together with representatives per Department. Board of Directors • Final Deliberation and Approval. • Approves Budget Supplementation.
  • 11. CURRENT OPERATING EXPENSES Nature of Expenditures 2008 2009 2010 2011 2012 Distribution 65,660,600 55,477,654 76,831,855 92,338,076 79,005,114 Consumer Accounts 42,013,831 49,407,977 85,845,916 86,521,192 77,770,469 Depreciation 44,137,376 46,455,188 47,975,918 53,393,067 54,894,901 General and Administrative 63,265,382 64,175,311 77,617,372 90,717,553 89,246,017 Interest Expense 1,936,963 1,745,681 1,346,739 618,815 305,306 EXPENDITURE BY CLASS AND OBJECT
  • 12. CAPITAL OUTLAYS Nature of Expenditu res 2008 2009 2010 2011 2012 Distributio n Plant 35,322,469 26,526,526 39,847,544 45,108,294 45,235,846 General Plant 18,938,957 4,900,981 12,281,385 7,551,839 13,898,008 EXPENDITURE BY CLASS AND OBJECT
  • 13. PANELCO III Calendar Year COE % Increase CO % Increase Total 2008 217,014,152 54,261,426 271,275,578 2009 217,261,811 0.11 % 31,427,507 (42.08) % 248,689,318 2010 289,617,800 33.30 % 52,128,929 65.87 % 341,746,729 2011 323,588,703 11.73 % 52,660,133 1.02 % 376,248,836 2012 301,221,807 (6.91) % 59,133,854 12.29 % 360,355,661
  • 14. IMPLEMENTATION OF THE PLAN This phase answers the following: 1. How do we execute the plan? 2. Who is responsible with which activity? 3. How do we determine whether plan are implemented as planned? IMPLEMENTATION - act of carrying out the plans, programs and projects in accordance with the strategic plan in order to attain set goals and objectives. (K. Mathur and Inayatullah, 1980). Strategy Quality Management - process by which an organization formulated plans, objectives and strategies, allocates resource for plans, programs and projects, identifies accountable entities, managers and front line workers, in the implementation, monitoring and evaluation of plan and programs.
  • 15. STRUCTURE AND GOVERNANCE Formal Structure – is the established patterns of relationships among the component units of the organization. Three basic functions: 1. Designates formal reporting relationships including the number of levels in the hierarchy and the span of control of managers and supervisors. 2. Identifies the grouping together of individuals into departments and of the different department’s into the total organization. 3. Structure includes across departments.
  • 16. Institutional and Individual Accountability - accountable executives, managers and administrative officers of major programs and projects should be identified and their functions and support staff in these activities.
  • 17. Plan Financing - Indicate in summary table the projected amounts by calendar year broken down into current operating expenses and capital outlay.
  • 18. PANGASINAN III ELECTRIC COOPERATIVE (PANELCO III) Urdaneta City 5 YEAR PERFORMANCE IMPROVEMENT PLAN FOR THE YEARS 2013-2017 TOTAL COST PLAN FINANCING 0 50000000 100000000 150000000 200000000 250000000 206708036.7 122003787.5 154988619.6 169480344.5 91502093.87 Funding Requirements 2013 2014 2015 2016 2017
  • 19. PLAN EXECUTION Requires: 1. Preparation of Annual Action Plans and Budget Estimates 2. Monitoring of Programs and Projects. 3. Evaluation and Plan Update.
  • 20. PANELCO III BUDGETARY and IMPLEMENTATION ISSUES 1. Inaccurate or unreasonable assumptions lead to Unrealistic Budget 2. Failure to follow up and analyze variances 3. Compliance Reports by Departments/Areas are not submitted to CSD. 4. Unaccomplished projects 5. CAPEX Prioritization 6. No ocular inspection and visitation of reported accomplishments. 7. Lack of Evaluation framework
  • 21. People at operations are in the best position to decide on the most effective and efficient use of resources to obtain the best value for money.