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COA Expenditure Analysis
- 1. MICHAEL A. VILLAREAL MPA505 | Public Fiscal Administration
- 2. Learning Objectives The COA Expenses Analysis of Detailed Report Introduction Operating Expenditures of the National Government Problems Commonly Encountered The COA Annual Financial Reports For the NGA, LGU & GOCC
- 3. Major Current Operating Expenditures of the National Government 1 Personnel Services Salaries, wages and other compensation, overtime pay, etc. 2 Maintenance and other operating expenditures traveling expenses, supplies and materials, water, power Services, rent, etc. 3 Interest Payments the cost of borrowing money 4 Allotments to LGU The National Tax Allotment (NTA) 5 Subsidies to GOCC cover the day- to-day operations of the GOCCs when revenues are insufficient
- 4. The Capital Outlays 3 capital goods or durable goods to be used for non-military and productive purposes, such as construction of roads and bridges, dams, power and irrigation works, schools and hospitals 2 infrastructure outlays, equity contributions to government corporations, capital transfers to local government units, and other capital outlays 1 the benefits of which extend beyond the fiscal year and which add to the assets of government
- 5. Category of Government Expenditures Support to Operations activities that facilitate the performance of the agency's mandated functions and services Gen. Administration & Support those that are normally considered as agency overhead which the agency will incur to exist as a unit. Operations those that go to regular activities directly addressing the agency's mandates
- 6. ANNUAL FINANCIAL REPORTS Local Government Units (LGUs) National Government Agencies Annual Reports on Allotments, Obligations and Disbursements Government- owned and/or Controlled Corporations
- 7. Legal Framework ● The Commission on Audit (COA) prepares the Annual Financial Report (AFR) for the National Government (NG) as mandated under the 1987 Philippine Constitution and in compliance with Presidential Decree (P.D.) No. 1445, otherwise known as the Government Auditing Code of the Philippines.
- 8. Legal Framework ● Section 4, Article IX-D of the 1987 Philippine Constitution states that the COA shall submit to the President and the Congress, within the time fixed by law, an annual report covering the financial condition and operation of the Government, its subdivisions, agencies, and instrumentalities, including government-owned or controlled corporations, and non- governmental entities subject to its audit, and recommend measures necessary to improve their effectiveness and efficiency.
- 9. Legal Framework ● Section 41 (1) of P.D. No. 1445 requires the Commission to submit the annual financial report on the financial condition and results of operation of all agencies of the government which shall include recommendation of measures necessary to improve the efficiency and effectiveness of these agencies.
- 10. Legal Framework ● The financial statements (FSs) were prepared using the prescribed accounts in the Revised Chart of Accounts (Updated 2019) issued under COA Circular No. 2020-001 dated January 8, 2020.
- 12. Net Assistance/Subsidy From/(To) NGAs, LGUs and GOCCs
- 16. The breakdown of Other Compensation by department/office is shown below:
- 19. MAINTENANCE AND OTHER OPERATING EXPENSES
- 20. The details of MOOE by department/office are as follows:
- 31. COA Total Appropriations for FY 2022
- 42. COA Total Appropriations for FY 2023
- 43. COA Total Annual Appropriations on Comparable Basis Personnel Services Maintenance and Other Operating Expenses Capital Outlays Total 2023 GAA 11,972,111,000 643,167,000 702,771,000 13,318,049,000 2022 GAA 12,577,960,000 619,767,000 793,710,000 13,991,437,000 Increase / Decrease (605,849,000) 23,400,000 (90,939,000) (673,388,000)
- 58. References ● http://www.dbm.gov.ph ○ https://www.dbm.gov.ph/wp-content/uploads/2012/03/PGB-B4.pdf ● http://www.coa.gov.ph ○ https://www.coa.gov.ph/reports/annual-financial-reports/national-government-agencies ○ https://www.coa.gov.ph/reports/annual-financial-reports/government-owned-and-or-controlled- corporations/#1989-5484-2021-1665034948 ○ https://www.coa.gov.ph/download/5484/2021/72858/2021-annual-financial-report-for-government- corporations.pdf
- 59. Thank you!
Editor's Notes
- Personnel Services (PS) refer to an expenditure category/expense class for the payment of salaries, wages and other compensation (e.g., merit, salary increase, personnel economic relief allowance, honoraria and commutable allowances, etc.) of permanent, temporary, contractual, and casual employees of the government. Maintenance and Other Operating. Expenses (MOOE). Refer to expenditures to support the operations of government agencies such as expenses for supplies and materials; transportation and travel; utilities (water, power, etc.) and the repairs, etc. Interest payments represent the cost of borrowed funds which form part and parcel of the cost of the items financed by the loan. It is also called as the Financial Expenses In short the cost of borrowing money. The borrower makes these payments in addition to paying back the principal on a loan. If you lend money with interest, the interest payment is the amount you are paid over and above the principal amount you lend. Hence, starting in the FY 2022 General Appropriations Act (GAA), in lieu of the term “Internal Revenue Allotment” (IRA) shall be “National Tax Allotment” (NTA) consistent with the SC Decision on the Mandanas Garcia Case. Section 6, Article X of the 1987 Philippine Constitution provides that, “local government units LGUs shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.” Section 284 of the Local Government Code of 1991 (Republic Act RA No. 7160 provides that LGUs shall have a forty percent (40%) share in the national internal revenue taxes (NIRT) based on the collection of the third fiscal year preceding the current fiscal year. Then GOCCs received from the government "subsidies" and "program funds". Subsidies cover the day-to-day operations of the GOCCs when revenues are insufficient while program funds are given to profitable GOCCs to pay for a specific program or project.
- What are the capital outlays of the national government? The capital outlays of the national government are appropriations spent for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of government, including investments in the capital stock of government-owned or controlled corporations and their subsidiaries. The capital outlays of the national government may be broadly classified as follows: infrastructure outlays, equity contributions to government corporations, capital transfers to local government units, and other capital outlays. Capital expenditures, particularly those classified as capital goods or durable goods to be used for non-military and productive purposes, such as construction of roads and bridges, dams, power and irrigation works, schools and hospitals, are generally desirable because of their high multiplier effect on the economy, i.e., they stimulate the growth and expansion of economic activities of the private sector and facilitate the integration of industries
- How are government expenditures categorized by cost structure? What is the significance of this categorization? The national government budget is broken down into the following cost categories: 1) general administration and support; 2) support to operations, and 3) projects or operations itself. Expenditures for general administration represent those that are normally considered as agency overhead (i.e. the cost of general supervision) which the agency will incur to exist as a unit. Examples of expenditures for general administration and support are those spent for general management and supervision, human resources development, and for productivity incentive benefits. Support to operations refers to those activities that facilitate the performance of the agency's mandated functions and services. Examples of expenditures under this category are those that are meant for policy formulation and planning services; for program/project coordination, monitoring and evaluation; and for information management support system. Expenditures for operations are those that go to regular activities directly addressing the agency's mandates. They include expenditures for programs involving the production of goods; delivery of public services; regulation of societal activities; conduct of basic governance; or provision of general management and supervision of the entire government bureaucracy. Project / Operations expenditures are those that fund activities which result in the accomplishment of identifiable outputs within a designated period. Project expenditures may be sourced from foreign assistance or from local funding. The categorization by functional cost components allows for a better analysis of government expenditures to focus on more priority needs thus improving the quality of government spending.
- This section contains the Annual Financial Reports (AFRs) of National Government Agencies, Local Government Units (LGUs), Government-owned and/or Controlled Corporations (GOCCs), and Annual Reports on Allotments, Obligations and Disbursements.
- Current Operating Expenses For FY 2021, the current operating expenses of the NG registered at P3.734 trillion, posting an increase of P47.76 or 1.30 percent compared to P3.686 trillion in FY 2020. The components were: personnel services (PS) – P1.302 trillion or 34.87 percent, maintenance and other operating expenses (MOOE) – P1.842 trillion or 49.33 percent, financial expenses (FinEx) ––P415.84 billion or 11.14 percent, direct costs – P31.56 billion or 0.85 percent, and non-cash expenses – P142.61 billion or 3.82 percent.
- Net Assistance/Subsidy From/(To) NGAs, LGUs and GOCCs Net assistance/subsidy from NGAs, LGUs and GOCCs of P3.56 billion consists of: net subsidy to national government of P1.26 billion, assistance from local government units of P4.77 billion, and assistance from government owned or controlled corporations of P48.93 million. The FY 2021 net assistance/subsidy of P3.56 billion registered an increase of P33.07 billion or 112.06 percent compared to the FY 2020 negative balance of P29.51 billion. Table I.B.5 shows the comparative assistance/subsidy from/(to) NGAs, and assistance from LGUs and GOCCs.
- Personnel Services (PS) refer to expenditures for the payment of salaries, wages and other compensation of permanent, temporary, contractual, and casual employees of the government. The details of PS are shown The Total PS Expenses for FY 2021 amounted to 1 Trillion, 301 Billion, 931 Million, 942 Thousand. As shown in the table below, the DepEd was the biggest spending department for PS followed by DILG and DND.
- Total Salaries and Wages constituted 52.00 percent of the total PS, of which 96.76 percent was paid to regular civilian employees and uniformed personnel, 3.11 percent to casual/contractual personnel, and the remaining balance to substitute teachers as shown in the following table: The DepEd-Proper reported the highest Salaries and Wages with P318.61 billion or 99.94 percent of the total DepEd. For DILG, the PNP reported P87.25 billion or 79.93 percent, and for the DND, PA reported P40.03 billion or 64.16 percent.
- Other Compensation
- Other Compensation For the DepEd, the DepEd-Proper reported P106.28 billion or 99.94 percent. For the DILG, the PNP recognized P73.75 billion or 85.26 percent, and for the DND, PA shared P34.21 billion or 65.66 percent.
- Personnel Benefit Contributions For the DepEd, the DepEd-Proper reported P44.88 billion or 99.94 percent. For the DOH, the DOH-Proper reported P5.12 billion or 99.87 percent, and for the DILG, PNP reported P3.52 billion or 78.35 percent.
- Other Compensation
- MAINTENANCE AND OTHER OPERATING EXPENSES Maintenance and Other Operating Expenses (MOOE) refer to expenditures to support the operations of government agencies such as expenses for supplies and materials; transportation and travel; utilities such as water and power; and repairs. The details of MOOE are as follow
- The details of MOOE by department/office are as follows:
- Other Compensation
- Of the total DepEd, the DepEd-Proper reported P36.45 billion or 99.91 percent. For the DOH, the DOH-Proper reported P36.37 billion or 99.82 percent, and for the DILG, the PNP reported P10.49 billion or 62.63 percent.
- Assistance to Local Government Units The DOF-BTr NG reported P189.09 billion or 82.05 percent of the total Assistance to LGUs. It consists of Special Shares of LGUs from the Proceeds of National Taxes – P40.92 billion, Local Government Support Fund – P148.13 billion, and Pension and Gratuity Fund – P37.74 million.
- Budgetary Support to Government-Owned or Controlled Corporations The DOF-BTr NG reported P195.30 billion or 98.58 percent of the total Budgetary Support to Government-Owned or Controlled Corporations while the remaining P2.81 billion or 1.42 percent was reported by other NGAs. The details are as follows:
- PERSONNEL SERVICES of LGU