Reforms and Innovations in Government Budgeting

ED 617 PROBLEMS, ISSUES AND TRENDS

IN GOVERNMENT BUDGETING

DR. RENATO DE LEMON PROFESSOR

MRS. GILDA C. GALANGUEStudent Ed.D.

REFORMS AND INNOVATIONS IN GOVERNMENT BUDGETTING

BUDGETING

GILDA GALANGUE

QUOTATION

QUOTATION

“Budgeting has only one rule: Do not go

over budget.” ― Leslie Tayne,

Life & Debt: A Fresh Approach to Achieving Financial Wellness

http://www.goodreads.com/author/show/13465231.Leslie_Tayne

http://www.goodreads.com/author/show/13465231.Leslie_Tayne

http://www.goodreads.com/work/quotes/44528930

http://www.goodreads.com/work/quotes/44528930

OBJECTIVE:

Find the meaning of the different acronym in budgeting.

Define budget reform.Determine the different reforms and innovations in government budgeting.

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ACRONYM IN BUDGETING

PFM Public Financial Management

PEPA

BTr

GIFMIS

M&E

Bureau of the Treasury Government Integrated Financial Management Information System

Monitoring and Evaluation

Philippine Government Electronic Procurement System

Public Expenditure and Financial Accountability

PhilGEPS

BUDGET REFORM - making the national budget more responsive to local needs

Public Financial Management (PFM)

The reform agenda is laid out in the Philippine Public Financial Management Reform Roadmap: Towards Improved Accountability and Transparency 2011-2015.

PFM is an essential part of the government’s plans to improve transparency, accountability, public institutions and participatory governance in pursuit of more inclusive growth and poverty alleviation.

GILDAGALANGUEREFERENCE: http://pfmp.org.ph/index.php/pfm-101

http://pfmp.org.ph/index.php/pfm-101

What is PFM all about?

PFM deals with all aspects of resource mobilization and expenditure management in government. It is about the way the government raises its income, in the form of taxes, customs duties and other revenues, and manages its expenditures to deliver essential services to its citizens such as education, healthcare and other social programs, roads and infrastructure, rule of law and security, and other areas that improve the lives of the citizens.



Why is PFM so important to the Philippines?

A sound PFM system helps reduce the opportunity for misuse of funds. It also aids decision-makers in the government to perform their functions and decide where to allocate funds that will do the greatest good. More importantly, it helps inform the citizen where and how the public funds are actually being spent.



How do we measure PFM performance in the Philippines?

One of the most common tools for measuring PFM performance is the Public Expenditure and Financial Accountability (PEFA) assessment. The PFM Performance Measurement Framework (or PEFA Framework) was developed as a contribution to the collective efforts of many international stakeholders to assess and develop essential PFM systems.

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REFERENCE: http://pfmp.org.ph/index.php/pfm-101


Public Financial Management (PFM) Reform Program

Philippine PFM Reform

Roadmap: Towards

Improved Accountability

and Transparency (2011-2016)


Philippine PFM Reform

Roadmap: Towards

Improved Accountability

and Transparency (2011-2016)

A comprehensive map that seeks to clarify, simplify, improve and

harmonize the government’s

financial management processes and information systems.

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http://pfm.gov.ph/ckfinder/userfiles/files/PFM%20Program%20Brief.pdf


Authorizes the PFM Committee composed of the Commission on

Audit (COA), Department of Budget

and Management (DBM),

Department of Finance (DOF) and Bureau of the Treasury (BTr)

To oversee and coordinate the

integration and automation of government

financial systems, and the implementation

of the PFM roadmap


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OBJECTIVES By 2016, it is

envisioned that the core Government

Integrated Financial Management Information

System (GIFMIS)) will be functioning

to provide decision makers

with the following benefits:

1. Real-time on-line monitoring and

control of budgetary accounts

and their direct links to cash

disbursements for more effective

financial control and accountability;

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2. Consolidated financial management

reporting requirements using

harmonized budgetary, treasury and accounting

classification with standardized

definitions for fiscal terminologies;

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OBJECTIVES

By 2016, it is envisioned that the core Government





3. A single treasury account that provides

BTr a more effective way of cash management, a

more economical system for cash disbursements,

and enables it to reconcile

bank balances and remove

revenue and expenditure floats;

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System (GIFMIS)) will be functioning to

provide decision makers with the following benefits:

4. A predictable and streamlined allotment

and cash release program throughout the year to

support the operations of

implementing agencies based on

reliable cash forecasting and

programming by DBM and the BTr;

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5. Regular in-year reports on the status of budget execution, and timely year-end audit

reports of agency financial and

physical operations which will be used in the budget preparation process, the congressional debate on

agency budgets and performance, and the

public’s participation in the budget process; and http://pfm.gov.ph/ckfinder/

userfiles/files/PFM%20Program%20Brief.pdf

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System (GIFMIS)) will be functioning to

provide decision makers with the following benefits:

6. Systematic recording and

reporting of all liabilities of

government entities including

guaranteed and contingent liabilities to

enablenational government to

manage its financial exposure.


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KEY PROJECTS

1.Government Integrated Financial Management Information System (GIFMIS)


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KEY PROJECTS

2.Budget Reporting

and Performance Standards


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KEY PROJECTS

3.Accounting and Auditing Reforms


KEY PROJECTS

4.Improved Treasury

Cash Management Operations

VIDEO

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KEY PROJECTS

5.Liability Management


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KEY PROJECTS

6.Capacity Building

6


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As in the last five years, the Aquino Administration for 2016, will focus on the following

priority objectives:

1) Pursuit of good governance and anti-corruption measures (building constituencies for reform, strengthening planning, (M&E) and public financial management systems, streamlining frontline and bureaucratic processes , and implementing the LGU and ARMM reform programs) to create a better environment to attract investments and quality jobs.

REFERENCE: NATIONAL BUDGET MEMORANDUM #124 , MARCH 2015



2) Making growth inclusive (expansion of the 4Ps, universal health care, K to 12 Basic Education Program, and housing for informal settlers) in order to raise the quality of the Filipino workforce;




3) Creating more and better jobs and

livelihood by sustaining the growth momentum

(strategic infrastructure development,

strengthening tourism and agricultural

development, and reviving industrial

development); GILDAGALANGUE




4) Managing disaster risks (implementing

climate change adaptation measures

and risk reduction and management

programs) in order to prevent the loss of

lives , properties and livelihood;

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5) Establishing an enabling environment of just and lasting peace and the rule of law to promote and implement peace agreements and modernize the military and police.

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Reforms for Effective Public Expenditure

Presentation of Secretary Abad

For the Philippine

Development Forum - Plenary

PresentationFebruary 4,

2012

1.Effective public expenditure by

ensuring spending on the right priorities,

spending efficiently,

effectively, and with maximum

impact. GILDA

GALANGUE

Presentation of Secretary

Abad For the

Philippine Development

Forum - Plenary


2012

2.On budgetary prioritization,

the core framework: the Aquino Social Contract with the Filipino

People.


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Presentation of Secretary Abad

For the Philippine

Development Forum - Plenary

PresentationFebruary 4, 2012

3. Introduced the Zero-Base Budgeting

approach to eliminate

inefficient, ineffective, and

irrelevant programs and

projects, and to re-channel funds to

priority social programs.


Abad For the


Forum - Plenary


2012

4. Introduced reforms to

ensure the fast and efficient

implementation of the budget

and delivery of priority

programs and projects.


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4. Introduced reforms A. Policy for the disaggregation of lump-sum funds

into specific programs and

projects. Lump-sum funds have

not only begotten anomalies but

have also slowed down budget execution.

B. Introduced innovations to

speed up the

procurement process.

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C. Deployed Account

Management Teams in key

departments to address

bottlenecks in the implementation of

programs and projects.

D. All appropriations will have a life

span of one year. This improves the predictability of

budget execution and government operations, as

carry-over budgets will now become a thing of

the past.

4. Introduced reforms

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Abad For the


Forum - Plenary


2012

5. Ensure that each peso spent

will lead to measurable results via stronger

performance management

and performance budgeting.


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Abad For the


Forum - Plenary


2012

6.On the financial side, implement the roadmap for

Public Financial Management

Reforms together with DoF-BTr and

CoA.


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Technological innovations

Technological innovations are also being pursued not only to introduce more efficiency and speed in budget execution and to ensure quality delivery of programs and projects, but also to improve transparency. For instance, in procurement, the work of expanding the Philippine Government Electronic Procurement System (PhilGEPS) launched an electronic payment facility for the Virtual Store in PhilGEPS.

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REFERENCE :Pursuing the Aquino Administration’s Agenda for Empowerment Through Public Expenditure Management Reform Florencio B. Abad

Technological innovations PhilGEPS is also about to pilot an

online bidding system. Moreover, the DBM, together with the Commission on Audit (CoA) and the Department of Finance-Bureau of Treasury (DoF-BTr), is in the midst of developing a Government Integrated Financial Management Information System (GIFMIS). This System, envisioned for completion by 2016, will automate and streamline the processing and flow of funds and information among the Public Financial Management oversight agencies and, eventually, among the implementing agencies.

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2013-2016: Pursuing Inclusive and Sustained Growth and Irreversibility of Reform

Economy’s strength continues to come largely from the services sector. Indeed, this sector, particularly BPO, needs to be sustained. However, it is those from the educated middle class who are able to leverage on opportunities in this sector.

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First, fiscal discipline: we are on track to meeting our fiscal consolidation goals, particularly the target to bring the deficit-to-GDP ratio down to 2 percent by this year.

In ensuring allocative efficiency, the Budget priorities from this year to 2016 should reflect this intention to further strengthen the domestic economy.

Lastly, to support operational efficiency, the Budget’s face will change starting 2014, literally and figuratively. Two key developments move us to this direction.

2013-2016: Pursuing Inclusive and Sustained Growth and Irreversibility of Reform

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PROBLEMSThe Government’s economic managers believe that a Medium-Term Expenditure Framework (MTEF), is the key to achieving fiscal discipline, more strategic prioritization of resources, and better operating efficiencies over the medium term.This explains problems and weaknesses that the government hopes to address by installing the MTEF, also called a multi-year budgeting system. It also enumerates elements of the MTEF, explains anticipated benefits, and outlines how the Government has been setting them in place during the country’s ongoing budgeting process. Lastly, this report mentions achievements that have already been registered since the MTEF’s initial installation. GILDA

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PROBLEMSThe problem with the Philippines’ current one-year budgeting system is that it provides no mechanism for the Government to control its budget and expenditure beyond a two-year time horizon. It provides no systematic way of projecting or managing the expenditure requirements of ongoing and new programs of government agencies GILDA

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PROBLEMSOne problem in many countries is that responsibility has been devolved from the central level to the district level, the province level, or further down. A number of countries are facing the difficulties of human resource development at the grassroots level. These countries have worked to improve governance through legal provisions. GILDA

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ISSUES Declining Global Peace Index (GPO Rank from 130th in 2013 to 134th in 2014. Despite the collective efforts to maintain a safe and secure environment, the Philippines has remained among the least peaceful countries in the 2014 Global Peace Index Report of the Institute for Economics and Peace. The slide in rank was attributed to the persistence of internal conflict, crime incidents, terrorism and territorial dispute with China.

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ISSUES Delay in the completion of the peace process amidst recent developments. After 17 years of negotiation, the Comprehensive Agreement of Bangsamoro between the government and Moro Islamic Liberation Front was signed in March 2014. In anticipation of the enactment of the Basic Bangsamoro Law (BBL), initial funding support has been provided for socio-economic programs and Annex on Normalization of the Framework Agreement on the Bangsamoro.

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ISSUES Limited capacity of LGUs

and Regional Line Agencies (RLAs) to

implement programs in conflict-stricken and

vulnerable areas. GILDAGLANGUE

Reaction

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In line with the medium-term goal of digitizing the bidding process, develop additional features of PhilGEPS (The Philippine Government Electronic Procurement System) within 360 days, particularly: a facility to enable the online submission of bid documents; a module for CSOs to monitor tenders online; an electronic fee payment system; an expanded supplier registry; and a module for agency posting of their annual procurement plans.

Reaction

GILDAGALANGUE

To better manage government manpower requirements and improve accountability in the disbursement of funds for personal services, the Government will complete its Government Manpower Information System (GMIS) and develop a central payroll system within 360 days, in accordance with Executive Order No. 31 series of 2011.

Stakeholders said they knew that an effort to rid the Government of ghost employees ,private software will be able to handle the national payroll system .

QUOTATION