budgeting and implementation plan
DESCRIPTION
Electric Cooperative; Budgeting; Approaches in Budgeting, Budget Cycle in the Philippines, and Implementation;TRANSCRIPT
DR. JO BITONIO
Professor
JOYCE R. BASCOS Discussant
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
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)
Want
Need
Budget
BUDGETING THE PLAN
CAN
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
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)
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.
BUDGET CYCLE IN GOVERNMENT
There are four phases in managing the National Budget:
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.
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.
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
CAPITAL OUTLAYS
Nature of Expenditures
2008
2009
2010
2011
2012
Distribution 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
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
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.
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.
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.
Plan Financing
- Indicate in summary table the projected amounts by calendar year broken down into current operating expenses and capital outlay.
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
PLAN EXECUTION
Requires:
1. Preparation of Annual Action Plans and Budget Estimates
2. Monitoring of Programs and Projects.
3. Evaluation and Plan Update.
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
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.