p.d. 1177

67
PRESIDENTIAL DECREE NO. 1177 Arnie Rodriguez Marjun Palma Ruby Lynn Vallespin

Upload: jun-mar

Post on 23-Nov-2015

28 views

Category:

Documents


0 download

DESCRIPTION

Important sections of the decree

TRANSCRIPT

PowerPoint Presentation

Presidential Decree No. 1177Arnie RodriguezMarjun PalmaRuby Lynn VallespinWhat is a fund?The word "fund" in government has taken several meanings or connotations. It is sometimes used to refer an appropriation which is a legislative authorization to spend or an allotment which is an authorization by the Department of Budget and Management (DBM) to obligate, or as actual cash available.What is a government budget?In general, a government budget is the financial plan of a government for a given period, usually for a fiscal year, which shows what its resources are, and how they will be generated and used over the fiscal period. The budget is the government's key instrument for promoting its socio-economic objectives. The government budget also refers to the income, expenditures and sources of borrowings of the National Government (NG) that are used to achieve national objectives, strategies and programs.Why does the government prepare a new budget every year?The preparation of the government's budget every year is in accordance with the provision of the Constitution which requires the President to submit a budget of expenditure and sources of financing within 30 days from the opening of every regular session of Congress.The yearly preparation of the budget is also in consonance with the principle which requires all government spending to be justified anew each year. This principle ensures that government entities continuously evaluate and review the allocation of resources to project/activities for cost efficiency and effectiveness.What is the "one-fund" concept?The "one-fund" concept is the policy enunciated through PD 1177 which requires that all income and revenues of the government must accrue to the General Fund and thus can be freely allocated to fund programs and projects of government as prioritized.Why is the "one-fund" concept important?The "one-fund" concept is a fiscal management policy requiring that as much as possible, all revenues and other receipts of the government must enter the General Fund and their utilization and disbursement subject to the budgeting process. The one-fund concept is significant in that it serves as an avenue through which fiscal authorities may properly allocate scarce government resources in accordance with the priorities in the over-all program of economic development.It likewise provides a mechanism to control drawdown on pooled resources. Regularly, the level of funds disbursed is monitored against the level of revenues generated. This way, we are able to stick to the targeted level of disbursement for a given period and avoid incurring a deficit. It also alerts us of possible revenue shortfalls.Florencio Abad

Amendments to PD No. 11771. AN ACT FURTHER AMENDING CERTAIN SECTIONS OF P.D. NO. 1177, AS AMENDED, ENTITLED "REVISING THE BUDGET PROCESS IN ORDER TO INSTITUTIONALIZE THE BUDGETARY INNOVATIONS OF THE NEW SOCIETY" Effective January 14, 1981

2. REPUBLIC ACT NO. 6670 - AN ACT FURTHER AMENDING CERTAIN SECTIONS AND TERMS USED IN PRESIDENTIAL DECREE NO. 1177, AS AMENDED, IN ORDER TO INSTITUTE A MODIFIED PERFORMANCE BUDGET SYSTEMEffective August 4, 1988

Presidential Decree No. 1177REVISING THE BUDGET PROCESS IN ORDER TO INSTITUTIONALIZE THE BUDGETARY INNOVATIONS OF THE NEW SOCIETY

Budget Reform Decree of 1977

BUDGET POLICY AND APPROACHSection 3. Declaration of Policy. It is hereby declared the policy of the State to formulate and implement a National Budget that is an instrument of national development, reflective of national objectives, strategies and plans. The budget shall be supportive of and consistent with the socio-economic development plan and shall be oriented towards the achievement of explicit objectives and expected results, to ensure that funds are utilized and operations are conducted effectively, economically and efficiently. The national budget shall be formulated within the context of a regionalized government structure and of the totality of revenues and other receipts, expenditures and borrowings of all levels of government and of the government-owned or controlled corporations. The budget shall likewise be prepared within the context of the national long-term plan and of a long-term budget program.Section 5. National Resource Budget. The finances of government shall be analyzed and determined as the aggregate of revenue, expenditure and debt of all units of government, including the national government and its agencies and instrumentalities, local government units and government-owned or controlled corporations. The national government budget shall be evolved within the framework of the total impact of government activity on the national economy. The budgets of government corporations and local governments shall be consistent in form and timing with that of the national government, to facilitate comprehensive evaluation.The budget calendar, format and procedure for the preparation and approval of the operating budgets of local government units and government-owned or controlled corporations shall be governed by such rules and regulations as may be issued by the President in order to implement the declared policy on national resource budget enunciated in this section.

Section 9. Performance and Financial Review. The analysis of agency operating performance, the evaluation of performance relative to costs incurred and the review of agency operating systems and procedures are inherent parts of the budget process. Agencies shall therefore design and implement (a) management information systems yielding both performance and financial information which will adequately monitor and control budget implementation, and (b) improvements in operating systems, procedures and practices, so as to ensure that the targets approved in budget authorization are in fact attained at minimum cost.Section 11. Contingent Liabilities. The contingent liabilities of government shall be evaluated as part of the budget process, subject to such limits and guidelines as may be approved by the President.BUDGET PREPARATIONSection 13.Submission of the Budget.- The President shall, in accordance with Section 22, Article VII of the Constitution, submit to the Congress within thirty (30) days from the opening of every regular session, as the basis of the General Appropriations Bill, a budget of expenditures and sources of financing, including receipts from existing and proposed revenue measures. Additional appropriations proposals may be submitted which correspond to part of the expenditure estimates submitted as part of the budget proposal:provided,that continuing appropriations may be enacted for public works, highways and other infrastructure projects which require more than one year for construction. [][] In such cases, revenue estimates for the future years shall be used in the evaluation of funding availability.The President may transmit to Congress, from time to time, such proposed supplemental or deficiency appropriations as are, in his judgment, (a) necessary on account of laws enacted after the transmission of the Budget, or (b) otherwise needed in the public interest.Section 14. Form and Content of the Budget. The budget proposal of the President shall include current operating expenditures and capital outlays. It shall comprise such funds as may be necessary for the operation of the programs, projects and activities of the various departments and agencies. The proposed General Appropriations Act and other Appropriations Acts necessary to cover the budget proposals shall be submitted to the National Assembly to accompany the President's budget submission. The budget shall be presented to the National Assembly in such form and content as may be approved by the President and may include the following:

(a) a budget message setting in brief the government's budgetary thrusts for the budget year, including their impact on developing goals, monetary and fiscal objectives, and generally on the implications of the revenue, expenditures and debt proposals; and(b) summary financial statements setting forth:(1) estimated expenditures and proposed appropriations necessary for the support of the Government for the ensuing fiscal year, including those financed from borrowings;(2) estimated receipts during the ensuing fiscal year under laws existing at the time the budget is transmitted and under the revenue proposals, if any, forming part of the year's financing program;(3) actual appropriations, expenditures, and receipts during the last completed fiscal year;(4) estimated expenditures and receipts and actual or proposed appropriations during the fiscal year in progress;(5) statements of the condition of the National Treasury at the end of the last completed fiscal year, the estimated condition of the Treasury at the end of the fiscal year in progress and the estimated condition of the Treasury at the end of the ensuing fiscal year, taking into account the adoption of financial proposals contained in the budget and showing, at the same time, the unencumbered and unobligated cash resources;(6) essential facts regarding the bonded and other long-term obligations and indebtedness of the Government, both domestic and foreign, including identification of recipients of loan proceeds; and(7) such other financial statements and data as are deemed necessary or desirable in order to make known in reasonable detail the financial condition of the government.Section 15. Budget Levels. The ordinary income of government shall be primarily to provide appropriations for current operations, except in case of a national emergency or serious financial stress, the existence of which has been duly proclaimed by the President. The level of aggregate revenue expenditure and debt shall be jointly recommended to the President by the Budget Commission, the Department of Finance, the National Economic and Development Authority and the Central Bank of the Philippines, acting within the Development Budget Coordination Committee of the National Economic and Development Authority. No appropriations for current operations and capital outlays of the Government shall be proposed unless the amount involved is covered by the ordinary income, or unless it is supported by a proposal creating additional sources of funds or revenue, including those generated from domestic and foreign borrowings, sufficient to cover the same. [][] Likewise, no appropriation for any expenditure, the amount of which is not covered by the estimated income from the existing sources of revenue or available current surplus, may be proposed, unless it is supported by a proposal creating an additional source of funds sufficient to cover the same. Proposals creating additional sources of funds shall be prepared in the form of revenue bills. The provisions of this section shall not be construed as impairing in any way the power of the National Assembly to enact revenue and appropriation bills, nor the authority of the President to propose special revenue and appropriation bills after the submission of the budget.Section 18. Budget Evaluation. Agency proposals shall be reviewed on the basis of their own merits and not on the basis of a given percentage or peso increase or decrease from a prior year's budget level, or other similar rule of thumb that is not based on specific justification. Proposed activities, whether new or ongoing, shall be evaluated using a zero-base approach and on the basis of (a) relationship with the approved development plan, (b) agency capability as demonstrated by past performance, (c) complementarity with related activities of other agencies, and (d) other similar criteria. The realization of savings in a given budget year and the consequent non-utilization of funds appropriated or released to a given agency shall not be a negative factor in the budget evaluation for a subsequent year.Section 19. Foreign-Assisted Projects. The budgetary implications of foreign-assisted projects shall be explicitly considered at the time of project design and financing negotiation. The project study shall specify the cash flow requirements of the project, among others, for (a) payment of principal and interest, (b) peso component of capital costs and project preparation, (c) infrastructure and support facilities needed to be directly financed by government, (d) operating and other expenditures which will be ultimately required for General Fund support when the project is implemented, and (e) peso requirements needed as counterpart. The concurrence of the Budget Commission shall be obtained with respect to peso requirements and implication on expenditure ceilings.Section 22. Budgetary Requirement of Government-Owned or Controlled Corporations. The internal operating budgets of government-owned or controlled corporations and of chartered institutions shall be approved by their respective governing boards in accordance with a budget calendar and format as may be approved by the President: provided, that such budgets shall be subject to review and approval as part of the budget process in cases where national government budgetary support is needed, in terms of (a) capital or equity inputs, (b) operating contributions to support specific activities undertaken by the institution as part of its regular functions, and (c) guarantee of the national government for obligations or contracts entered into by the corporations: provided, further, that the submission of interim financial statements may be required by the Commissioner.Section 23. Tax and Duty Exemptions. All units of government, including government owned or controlled corporations, shall pay income taxes, customs duties and other taxes and fees as are imposed under revenue laws: provided, that organizations otherwise exempted by law from the payment of such taxes/duties may ask for a subsidy from the General Fund in the exact amount of taxes/duties due: provided, further, that a procedure shall be established by the Secretary of Finance and the Commissioner of the Budget, whereby such subsidiaries shall automatically be considered as both revenue and expenditure of the General fund.Section 24.Appropriations for Personal Services.- Appropriations for personal services shall be considered as included in the amount specified for each budgetary program and project of each department, bureau, office or agency, and shall be itemized. The itemization of personal services shall be prepared by the Secretary for consideration and approval of the President as provided in Section 30 hereof: provided,that the itemization of personal services shall be prepared for all agencies of the Legislative, Executive and Judicial Branches and the Constitutional bodies down to the division chief level and in the case of the Armed Forces of the Philippines and the Integrated National Police down to the rank of second lieutenant, except as may be otherwise approved by the President for positions concerned with national security matters:provided, further, that appropriations for casual and/ or temporary employees shall be in lump-sum based on the number of man-hours to be rendered.Section 25. Department Approval of Proposed Appropriations. No legislative proposal which, if enacted, would authorize subsequent appropriations, shall be transmitted to the President by any bureau or agency, without the prior approval of the Head of the Department concerned or by the Chairman or Chief Executive Officer of a Cabinet level body which coordinates the multi-sectoral formulation and implementation of a particular program of expenditure involving one or more departments. No legislative proposal involving the appropriation of funds shall be transmitted to the National Assembly without the approval of the President.Budget authorizationBudget AuthorizationAlternatively called the Budget Legislation, this starts upon the House Speakers receipt of the Presidents Budget and ends with the Presidents enactment of the General Appropriations Act.

Sections 26-36Process of Budget AuthorizationHouse DeliberationsSenate DeliberationsBicameral DeliberationsRatification and EnrollmentThe Veto MessageEnactmentSection 26The Congress shall concentrate on policy, budgetary levels, thrusts and strategy. Specific details of expenditures of the different agencies shall be of the concern of the Executive Branch.Section 27The Committee on Appropriations shall report the general appropriations bill to the National Assembly within seven consecutive session days after the bill has been referred to it.Debate shall be terminated on or before the eighteenth consecutive session day from the beginning of the discussions. Sections 28Alterations especially those that increase the appropriation of any project and program are not allowed to be made by the Congress.Special provisions as to the use and increase of the amounts specified in the budget shall not be added by the Congress.Section 30The GAA shall be in the form of budgetary programs and projects for each agency of the government.It shall contain itemization of personal services and these services shall be prepared by the Secretary before enactment of the GAA.

Section 31The following expenditures are automatically appropriated:personnel retirement premiums, government service insurance, and other similar fixed expenditures, principal and interest on public debt, national government guarantees of obligations Section 32All appropriation proposals shall be included and considered in the budget preparation process. After the President shall have submitted the Budget, no supplemental appropriation measure supported from existing revenue measures shall be passed by the National Assembly.Section 34Borrowings whether foreign or domestic shall be included in the appropriation of each agency.Proceeds of these borrowings can not be used unless a Special Budget is prepared and approved.Section 36Unauthorized revision of any figure, text or provision in the GAA and other budget-related documents shall be considered unlawful.Persons altering these documents shall be criminally liable for falsification of legislative documents.The changes made whether addition, modification or deletion shall be considered null and void.Budget executionBudget ExecutionThis is where the peoples money is actually spent. As soon as the GAA is enacted, the government can implement its priority programs and projects.

Sections 37 56 Section 37All moneys appropriated for functions, activities, projects and programs shall be available solely for the specific purposes for which these are appropriated.Section 38Authorized appropriations shall be allotted in accordance with the following procedures:Appropriations authorized for any department, office or agency of the Government may be made available for expenditure when the head of each department, office or agency submits to the Commissioner a request for allotment of funds.Allotment system is divided into four quarterly allotment periods beginning on the first day of January, April, July and October respectively.

Request for allotments shall be approved by the Commissioner who shall ensure that expenditures are covered by appropriations both as to amount and purpose.At the end of every quarter, each department, office or agency shall report to the Commissioner the current status of its appropriations.Releases of funds appropriated for a given agency may be made to its Regional Offices.The Commissioner shall have authority to modify or amend any allotment previously issued.The Commissioner shall maintain control records showing quarterly by funds, accounts, and other suitable classificationsSection 41An operational cash budget shall be implemented to ensure the availability of cash resources for priority development projects and to establish a sound basis for determining the level, type and timing of public borrowings. Secretary of Finance Commissioner of the Budget Chairman of the Commission on Audit.Section 42The Commissioner may establish reserves against appropriations to provide for contingencies and emergencies which may arise later in the fiscal year.Section 44The President shall have the authority to transfer any fund appropriated for the different departments, bureaus, offices and agencies of the Executive Department which are included in the General Appropriations Act, to any program, project, or activity of any department, bureau or office included in the General Appropriations Act.Section 46No funds shall be disbursed, and no expenditures or obligations chargeable against any authorized allotment shall be incurred or authorized in any department, office or agency without first securing the certification of its Chief Accountant or head of accounting unit.Section 47Heads of departments, bureaus, offices and agencies shall not incur nor authorize the incurrence of expenditures or obligations in excess of allotments released by the Commissioner for their respective departments, offices and agencies. Section 48When under authority of law, a function or an activity is transferred or assigned from one agency to another, the balances of appropriations which are determined by the head of such department to be available and necessary to finance or discharge the function or activity so transferred or assigned may, with the approval of the President, be transferred to and be made available for use by the agency to which said function or activity is transferred or assigned for the purpose for which said funds were originally available.Section 49Every expenditure or obligation authorized or incurred in violation of the provisions of this Decree or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Section 50All income accruing to the departments, offices and agencies by virtue of the provisions of existing laws shall be deposited in the National Treasury or in and duly authorized depository of the Government and shall accrue to the unappropriated surplus of the General Fund of the Government.Section 52Agencies are authorized to charge fees, including honoraria and other reasonable allowances, as compensation for consultation, seminars or training programs, or technical services rendered to other government agencies or private parties. Section 54Each head of department, bureau, office or agency shall implement a cost reduction program for his department, bureau, office or agency for the purpose of reducing cost of operationsSection 55Savings in the appropriations provided in the General Appropriations Act may be used for the settlement of the following obligations:a) Claims of officials, employees and laborers who died or were injured in line of dutyb) Commutation of terminal leaves of employees due to retirement, resignation or separation from the service through no fault of their own c) Payment of retirement gratuities or separation pay of employees separated from the service due to government reorganizationd) Payment of salaries of employees who have been suspended or dismissed as a result of administrative or disciplinary action through no fault of their own and who have been subsequently reinstated by virtue of decisions of competent authoritye) Cash awards to deserving officials and employees in accordance with the civil service lawf) Salary adjustments of officials and employees g) Peso support to any undertaking that may be entered into by the government with international organizations, including administrative and other incidental expensesh) Covering any deficiency in peso counterpart fund commitments for foreign-assisted projects, as may be approved by the Presidenti) Priority activities that will promote the economic well-being of the nationj) Repair, improvement and provision of government buildings and infrastructure and other capital assets damaged by natural calamitiesk) Expenses in connection with official participation in trade fairs, civic parades, celebrations, athletic competitions and cultural activities, and payment of expenses for the celebration of regular or special official holidaysl) Payment of obligations of the government or any of its departments or agencies as a result of final judgment of the Courtsm) Payment of valid prior year's obligations of government agencies with any other government office or agency, including government-owned or controlled corporations.

Section 56No person shall be appointed as budget officer in any department, bureau, office or agency unless he meets qualification and/or training requirements established by the Budget CommissionBudget AccountabilitySections 57 - 63BUDGET ACCOUNTABILITYEvaluation of Agency Performance- qualitative & quantitativeBudget Monitoring and Information Systems

Monitoring of Expenditures(a) agency incurring the obligation (b) program, project and activity (c) object of expenditure, including personal services, operating and maintenance expenditures, equipment, and capital outlays

BUDGET ACCOUNTABILITYMonitoring of Expenditures(d) region or locality of use, (e) economic or functional classification of the expenditure, (f) obligational authority and cash transactions arising from fund releases, and such other classifications as may be necessary for the budget process.

BUDGET ACCOUNTABILITYStandard CostReview of Budgetary ProgramsSemi-Annual Report on Accomplishments of Government Agencies

EXPENDITURE OF APPROPRIATED FUNDSPD 1177, sec. 64 88

EXPENDITURE OF APPROPRIATED FUNDSAuthority to Receive Additional Compensation

Restriction on Salary IncreasesMerit IncreasesSalary for Substitutionary Services

EXPENDITURE OF APPROPRIATED FUNDSProhibition Against Payment of Salaries or Wages of Officials and Employees on Strike Against the GovernmentAdditional Compensation for Overtime ServicesCompensations of Persons receiving PensionProhibition of Voluntary ServicesEXPENDITURE OF APPROPRIATED FUNDSAdditional Compensation for School Faculty MembersLaundryHazard PaySubsistenceFurnished QuartersEXPENDITURE OF APPROPRIATED FUNDSPer Diems of Government Officials and EmployeesTransportation of Members of Family of an Employee Transferred from one Station to AnotherPurchase, Use, Operation and Maintenance of Motor Transport Equipment.

EXPENDITURE OF APPROPRIATED FUNDSLimitation of Rental or Motor Vehicles.Limitation of Purchase of Supplies, Materials, and Equipment Spare Parts.Purchase of Locally Manufactured Products.FINAL PROVISIONSPD 1177, sec. 89-92FINAL PROVISIONSRules and Regulations-The Budget CommissionRepealing ClauseSeparability ClauseEffectivity

Office of the Ombudsman Budget 2014