Updates on DBM Regulations

Updates on DBM Updates on DBM RegulationsRegulations

(A Presentation for the 26th DepEd National Seminar/Workshop on the

Preparation and Reconciliation of the CY 2011 Year-End Financial Reports)

January 30, 2012Grand Astoria Hotel, Zamboanga City

By: Assistant Secretary Luz M. Cantor

Outline of PresentationOutline of PresentationA. DepEd FY 2012 Budget per RA 10155B. Budgetary Reforms

1. Budget Preparation2. Budget Authorization & Approval3. Budget Execution4. Budget Accountability

C. Reiteration of Existing Policies

1. Flexibilities allowed under CY 2012 GAA

2. Emphasizing the “No-Report, No-Release” policy

3. Important TimelinesD. Way Forward

1. Government Integrated Financial Management Information System (GIFMIS)

A.A. DepEd FY 2012 DepEd FY 2012 Budget per RA Budget per RA 1015510155

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A.A. DepEd FY 2012 BudgetDepEd FY 2012 Budget(FY 2012 GAA, RA 10155)(FY 2012 GAA, RA 10155)

* includes attached agencies, RLIP and SBP

a. Budget Level

FY 2011 FY 2012 % IncreaseGAA GAA

OFFICE OF THE SECRETARY 206,037,470 216,020,794 4.9%PHIL. HIGH SCHOOL FOR THE ARTS 56,435 59,537 5.5%NATL. COUNCIL FOR CHILDREN'S TELEVISION

6,343 6,605 4.1%

NATL. BOOK DEVT. BOARD 21,867 22,083 1.0%NATIONAL MUSEUM 148,903 244,666 64.3%SUB-TOTAL APPROPRIATION 206,271,018 216,353,685 4.9%SCHOOLBUILDING PROGRAM (SBP) 1,000,000 1,000,000 0.0%TOTAL 207,271,018 217,353,685 4.9%

PARTICULARS

a. Budget Level (in thousand pesos)

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A.A. DepEd FY 2012 BudgetDepEd FY 2012 Budget(FY 2012 GAA, RA 10155)(FY 2012 GAA, RA 10155)

B.B. Budgetary Budgetary ReformsReforms

Deepening of On-going PEM Reforms

Fiscal consolidation

Budgeting for 5 KRAs

Continuance of 3 Pillar Reforms: MTEF, OPIF, ZBB

Disaggregation of remaining lump sum funds

Expanding Participatory Budgeting

Greater CSO participation

Reviving RDC involvement

Introduction of Bottom-up Budgeting

Objectives of 2013 Budget Objectives of 2013 Budget PreparationPreparation

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I.I. BUDGET PREPARATIONBUDGET PREPARATION

Public Expenditure Management Public Expenditure Management ReformReform

Goal: Establish Performance-Based Budgeting

Aggregate Fiscal Discipline * Allocative Efficiency * Operational Efficiency

Goal: Establish Performance-Based Budgeting

Aggregate Fiscal Discipline * Allocative Efficiency * Operational Efficiency


Integrating OPIF into NEP(NBC Integrating OPIF into NEP(NBC 532)532)Refine MFOs to capture mandates/business

lines of departmentHave an integrated set of performance

indicators (PIs) w/c cover quantity, quality, timeliness, cost

Restructure PAPs to establish links with MFOs for better cost estimation and expenditure Prioritization

Develop standards for OPIF throughout government by applying common methodology to the exercise


Continue to Focus on the Social Continue to Focus on the Social Contract (E.O. No. 43)Contract (E.O. No. 43)

1. Transparency, accountability and open governance;

2. Poverty reduction and empowerment of the poor and vulnerable;

3. Rapid, inclusive and sustained economic growth;

4. Just and lasting peace and the rule of law; and

5. Integrity of the environment and climate change adaptation and mitigation


Target: All remaining lump-sum funds in departments are

fleshed out in the FY 2013 budget Rationale: Improve transparency & regional

distribution Facilitates early

implementation Strategy: Participative budgeting with - Poor municpalities - CSOs - RDCs

Fleshing out of Lump Sum Fleshing out of Lump Sum FundsFunds


• FY 2012 Budget Preparation (6 Depts. and 3 GOCCs)• Social Sector (DepEd, DOH, DWSD)• Economic/Infra (DA, DAR, DPWH) • GOCC (NFA, NHA and NHMFC)

• FY 2013 Budget Preparation (6 more Departments)• Social (DOLE)• Economic (DOTC, DOT, DENR)• Gen. Public Service (DOJ, DILG)• GOCCs (NEA, NIA, LRTA)

Participation of CSOs and Other Participation of CSOs and Other Stakeholders for M & EStakeholders for M & E


609 target poor municipalities chosen by HDPR Cluster

Pilot the bottom up approach in budgeting in 300 municipalities with HDPR & NAPC

Foster convergence between the needs of 300 poor municipalities, funds available from LGUs and the programs to be delivered by NGAs

Assist departments to flesh out lump sum funds

Strengthen CSO participation in participative budgeting

Agencies to be included in the pilot are DA, DAR, DENR, DSWD, DOH, DEPED,

PHIC

Role of local planning committees as venue for LGU-NGA coordination

HDPR and Good Governance Clusters to resolve issues

Bottom-Up Budgeting to Consider Bottom-Up Budgeting to Consider Needs of Target Poor Needs of Target Poor CommunitiesCommunities

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Bottom-up BudgetingBottom-up BudgetingJanuary to March: Target municipalities to

develop & finish LGU plans, inputting poverty and gap studies & discussion with barangays, CSOs & reps from marginalized groups.◦ January- ACOs to issue participation guidelines to AROs

- DILG & DBM to brief target municipal core teams & AROs

- NAPC & DSWD to work with CSOs, municipal focal

persons to organize grassroot groups to engage with

LGU & NGAs◦ March- W/ DILG & DBM, Municipal Development Councils to

engage w NGAs

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April to May: AROs with HDPR to work for incorporation of projects requested by target municipalities in NGA budget for 2013. ARO can meet with other AROs to ensure convergence of service delivery.

May to July: HDRP to track decisions on projects. LDCs and grassroots orgs to ensure convergence of agreed projects with LGU AIPs

HDPR to establish tracking, alliance building & capacity building to keep target municipalities engaged in budget legislation & execution.

Bottom-up BudgetingBottom-up Budgeting


Timely approval of the budget

II.II. BUDGET AUTHORIZATION BUDGET AUTHORIZATION AND APPROVALAND APPROVAL

NBC No. 534 dated Dec. 8, 2011NBC No. 534 dated Dec. 8, 2011

AgencyAgency Preparation and Submission of Budget Execution Preparation and Submission of Budget Execution Documents (BEDs) – CY 2012 Plans/TargetsDocuments (BEDs) – CY 2012 Plans/Targets

NBC No. 535 dated Dec. 29, 2011NBC No. 535 dated Dec. 29, 2011

Guidelines on the Release of Funds for CY 2012Guidelines on the Release of Funds for CY 2012

CL No. 2011-15 dated Dec. 26, 2011CL No. 2011-15 dated Dec. 26, 2011

Validity of Notice of Cash AllocationValidity of Notice of Cash Allocation

DBM Issuances

III.III. BUDGET EXECUTIONBUDGET EXECUTION

Submission of CY 2012 Agency Plans/Targets

NBC No. 534 calls for the early submission by agencies/operating units (OUs) of the CY 2012 BEDs (with modified formats) containing their plans/targets, to wit:

* Financial Plan * Physical Plan* Monthly Cash Program * List of Not Yet Due and* Program of Monthly Income Demandable Obligations

FY 2011 FY 2012

Basis CY 2011 GAA level CY 2012 NEP level

Deadline February 15, 2011-- December 22, 2011-- January 16, 2012 (ext.)


CY 2012 Fund Release System per NBC 535

Budget Execution

• submission of BEDs by the agencies.

• issuance of spending

authorities (for obligation and disbursement) by DBM to agencies.

• implementation of programs and projects by the agencies, out of the authorities issued by DBM

Budget Accountability

• submission of budget accountability reports (BARs) by the agencies.

• review of agency performance by DBM.


FY 2012

R.A. 10147

Jan. 1 to Dec. 31, 2011

operations

1. Approval & Effectivity of the GAA

2. Appropriation Cover

Approval - December 27, 2010

Effectivity - January 1, 2011

Approval - December 15, 2011

Effectivity - January 1, 2012

R.A. 10155

Jan. 1 to Dec. 31, 2012

operations

3. Validity of Appropriation

Available for release and obligation up to December 31, 2012, with the exception of PS.

Available for release and obligation up to December 31, 2013, with the exception of PS.

FY 2011

Comparative Procedures in the Release of Funds


Authorized Appropriation =

Not Needing Clearance (NNC)

This Release PS MOOE = 100% CO

Needing Clearance (NC)

How is the Agency Specific Budget Disaggregated?

- thru the Agency Budget Matrix (ABM)

FY 2011 FY 2012Authorized Appropriation =

Not Needing Clearance (NNC)

This Release PS MOOE = 100% CO

Needing Clearance (NC)

same


Approval of ABM - Jan. 31, 2011

Pending approval of ABM, agencies WERE AUTHORIZED to incur overdraft in obligations for regular operating requirements.

Overdrafts in obligations were adjusted/charged against the comprehensive allotment released thru the ABM.

Comprehensive release of allotment by allotment class.

ABM (continuation)

Approval of ABM - Jan. 2, 2012

With the early approval of ABM, agencies ARE NOT authorized to incur overdraft in obligations for regular operating requirements.

Actual obligations shall be charged against the comprehensive allotment thru the ABM.

Comprehensive release of allotment by allotment class, broken down by sub-object of expenditure.

FY 2011 FY 2012


Comprehensive Release of Allotment - NNC of ABM

Filled Positions of NGAs

------------------- XX

Personal Services (PS)

Filled Positions of NGAs

Lump-sum for PS under DepEd Equivalent Records Forms Conversion to Master

Teacher Positions Reclassification of Positions Hardship Pay

FY 2011 FY 2012


Quick Response Funds

(DSWD, DND, DOH, DA, DepEd, DPWH)

Lump-sum for Repair and Maintenance of Schools Buildings of DepEd

CMIs of agencies -

(with list of implementing units)

FY 2011 FY 2012

------------------------- X

Comprehensive Release of Allotment - NNC of ABM

MOOE and Capital Outlay


Budget Items Comprehensively Released, but subject to Conditional Obligation

For DepEd:

Lump-sums for PS / Lump-sum for Repair and Maintenance of School Buildings

Procurement of motor vehicles and motorized equipment

Provisions for Supplies and Materials and Office Equipment Subject to submission to DBM, of the CY 2012 Annual Procurement Plan

for Common-Use Supplies and Equipment pursuant to CL 2011-6/6-A. Lump-sum appropriations or Centrally-managed Items Subject to identification of specific projects and other requirements per

Special Provision of their respective budgets, list of IUs and allocation per IU.

Research and Development Consistent with the Master Plan of the DOST and DA.

Others: Computers and IT equipment; Communication equip; firearms; books

procured other than TNL exceeding 5 copies; on-going FAPs; and grants, subsidies,

contributions- subject to clearances from agencies concerned & certain conditionalities.


Lump-sum appropriations or CMIs

Unfilled positions

Other budgetary provisions:

Additional amounts for existing programs and projects

New items in the budget

Items / provision for Conditional Implementation

NC portion of ABM – for Issuance of SARO

FY 2011 FY 2012 Lump-sum appropriations or CMIs

(w/o details as of ABM preparation)

----------------- X

Other budgetary provisions:

--------------------X

New items in the budget

Items/provisions for Conditional Implementation


NCAs for 1st semester regular operating requirements (Jan-June) - comprehensively released based on: tentative MCP prepared by DBM.

Tentative MCP is updated based on the submitted agency MCP as well as SARO releases made.

Succeeding comprehensive NCAs were issued based on the updated MCP.

NCAs for 1st semester regular operating requirements (Jan-June) - comprehensively released based on: MCP submitted by the agency

Succeeding NCAs for 3rd and 4th quarter requirements, shall be contingent on the submission of BEDs and Budget Accountability Reports by the agency/OU.

Disbursements – Issuance of NCAs

FY 2011 FY 2012


FY 2011 FY 2012

Regular MDS Account

1st to 3rd Quarter NCA programmed for a specific month is valid until the last working day of the said month.

4th Quarter NCA credited for the month shall be valid until the last working day of the quarter.

Validity of NCAs

Regular MDS Account

Effective Jan, 2012 per CL No. 2011-15

NCA programmed and credited for a specific month is valid until the last working day of the said month.


Use of Savings under Agency Specific Budget

Augmentation of any item under PS and MOOE, except CIF

Priority payment of PS deficiency.

Use of Fees and Excess Income

Fees collected from seminars, trainings and conferences;

Proceeds from sale of publications for cost of printing/dissemination;

Proceeds from sale of non-serviceable, obsolete & unnecessary equipment;

Service fees collected from BIR, GSIS, HDMF, PHIC and mutual benefits associations/cooperatives for the operation of a Provident Fund;

Excess Income realized and deposited with the BTR .

Flexibilities Allowed per CY 2012 GAAFlexibilities Allowed per CY 2012 GAA


GP No. 89 - Depts/agencies implementing infrastructure projects shall post in their websites, certain data/information prior to start of bidding for the project/s, such as:

Project title, detailed description for each project (nature & location)

Cost breakdown for materials, labor and overhead expenses

GP No. 93 – Agencies shall maintain a transparency seal to be posted in their websites which shall contain the following:

Agency’s mandate, functions, its officials w/ position/designation & contact information

Annual reports for the last three years

Respective approved budgets and corresponding targets

Major programs and projects categorized in accordance with the 5 Key Results Areas

Evaluation and/or assessment reports

Annual procurement plan, contracts awarded and the name of contractors/suppliers

Transparency - Disclosure in the Website

IV.IV. BUDGET ACCOUNTABILITYBUDGET ACCOUNTABILITY

What is the state of agency compliance to BEDs & BARs ?


Improving agency compliance of BEDs and BARs to DBM

Remind agencies thru call-up letters / phone;

Encourage on-line submission of reports i.e. SAOB;

Close coordination with agencies and provide technicalassistance, if necessary;

Post in the DBM website, the reports submitted by agencies

and highlight the agencies with no submission;

Implement the “no-report, no-release” policy.


Non-compliance by the agency of Budget Accountability Reports (BARs) shall cause the withholding of additional releases from the MPBF, to wit:

Accountability -“No-Report, No-Release” Policy

- Provision for unfilled positions/ creation of positions

SARO/ NCA for:Sept. 30, 2012

(3rd Quarter)

- Provision for unfilled positions/ creation of positions

- July to Dec. 2012 requirement for 4th tranche compensation adjustment under SSL 3 programmed in July

SARO/ NCA for:

June 30, 2012(2nd Quarter)

- Provision for unfilled/ creation of positions.

- Additional clothing allowance of P1,000 per employee programmed in April

SARO/ NCA for:

March 31, 2012(1st Quarter)

- Provision for unfilled/ creation of positions

- Annualized requirements for 3rd tranche compensation adjustment under SSL 3

SARO for:Dec. 31, 2011(Year-end)

Budget ItemsBARs as of

HU R R Y

Up


Why ?What ?

How?

When ?

Review of Agency PerformanceReview of Agency Performance


Performance review shall :

be based on the following documents/reports of

agencies:- BEDs for plans/targets;- BARs for accomplishments;- Monthly flash reports (consolidated by dept.)

cover financial utilization, physical accomplishments and revenue generation;

serve as guide of DBM in deciding whether reallocation of fund or additional release is necessary and basis in reporting the status of the budget to the President, on a monthly basis.


Performance review will determine: Budget Execution and Accountability

HOW much and WHAT cost the govt. provides for goods and services to the public?

WHAT is the level of department/agency performance, in terms of physical outputs and financial accomplishment ?

In case performance is below target

WHY are the targets/plans not attained and what factors and events influence the level of performance?

HOW to catch-up and What necessary/improvements shall be undertaken to catch-up with or even surpass the dept./agency plan?

Budget Preparation

How much is the appropriate level of agency budget, based on actual performance?


Submission of BEDs December 22, 2011 / January 16, 2012 (extension)

Submission of BARs On the dates prescribed under NBC 507/507A;

Consolidated Flash Reports (Financial and Physical Reports) Every 10th day of the month

Submission of request for realignment of released

allotment under the FY 2011 budget June 30, 2012

Submission of requests that will require issuance of SARO and NCA in FY 2012

November 15, 2012

Important Dates to RememberImportant Dates to Remember


C.C. Way ForwardWay Forward

PFM Reforms RoadmapsPFM Reforms Roadmaps

GIFMIS Committee Resolution 01-2011

Signed by the PFM/GIFMIS Committee on January 19, 2011.

Approved by the PFM/GIFMIS Principals by February 9, 2011.

Presented the PFM Reforms Roadmap to the President during the Philippine Development Forum (PDF) Meeting on February 26, 2011.

I. I. Government Integrated Financial Management Information System (GIFMIS)

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Executive Order No. 55Executive Order No. 55

Directing the Integration and Automationof Government Financial ManagementSystems

Signed by the President on September 6, 2011


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Executive Order No. 55Executive Order No. 55

Salient Provisions: Installation of PFM systems within the term of the President (2011-2016), including:

o GIFMISo Treasury Single Account (TSA)o Efficient budget release systemo Regular in-year budget execution reporting systemo Timely year-end audit reportingo Systematic recording and reporting of liabilities of government


GIFMIS TRACK 1GIFMIS TRACK 1

Objective and Time Frame To meet the government’s immediate

need for a functioning GIFMIS with minimum changes in or slightest reengineering of PFM business processes and reassignment of roles and responsibilities over financial transactions.

To be completed in 8 months from PMO establishment.


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GIFMIS TRACK 2GIFMIS TRACK 2

Objective and Time Frame To support fundamental reforms of PFM

business processes, reassignments of roles and responsibilities over financial transaction processing, oversight and reporting, and corresponding organization structural changes.

To be done in 5 years.


On Reforms…,

“Only accountants can save the world!

--- through peace, goodwill

and reconciliation”

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Department of Budget and ManagementDepartment of Budget and Management3rd Flr., Boncodin Hall, General Solano St.San Miguel, Manila 1005Philippineswww.dbm.gov.ph