THEORIES OF BUDGET

ANDREENACTED

BUDGET

Presented by Joan J. PostradoUploaded by Anthony Duenas

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Theoretical Foundation of Budgeting

Budgeting Principles and Theories

Throwback Budget

Prof. Philip E. Taylor

Budget is the master plan of government.

Allan Schick

Budget is a process consisting of a series of activities relating to expenditures relating to set of goals.

Grooves and Bish

Budgeting is part of expenditure process rather than revenue-raising process.

Aaron Wildavsky

Budget is a document containing words and figures which proposes expenditures for certain items and purposes.

Eric Kohler

Financial plan which serves as the pattern for and a control over future operations

Systematic plan for the utilization of manpower materials or other resources

Modern Dimensions of Budgetingfor National Development

Dimension

Objectives:

1. strengthening administrative processes,

2. achieving more effective and severe fiscal control

3. securing efficiency and economy

4. effecting better utilization of resources

5. controlling inflation or improving economic conditions

6. broadening the awareness and understanding of budget control

Another Dimension

Robert Bangs

Fiscal policy cannot be divorced practically from the total structure of economic policy, which in turn is merely a part of the larger cosmos of general policy within which any government administration operations.

Toward a Practical and Operational Theory of the Budget for Developing Countries

V. O. Key Jr.

Budgeting is a matter of philosophy as can be gleamed in the divorce interests of the present government as well as in the interests of the future ones.

Verne Lewis

Budget decisions are undoubtedly influenced by a greater or lesser extent by such non-economic and non-rational factors as pride and prejudice, provincialism and politics

Principle 1:

Since resources are scarce in relation to demands, the basic economic test which must be applied is that the return from expenditure must be worth its cost in terms of sacrificed alternatives. Budget analysis, therefore, should be basically a comparison of the relative merits of alternative uses of funds.

Principle 2:

Incremental analysis (i.e. analysis of the additional values to be derived from an additional expenditure) is necessary because of the phenomenon of diminishing utility. Analysis of the increments is necessary and useful only at or near the margin; this is the point of balance at which an additional expenditure of any purpose would yield the same return.

Principle 3:

Comparison of relative merits can be made only in terms of relative effectiveness in achieving a common objective.

Dr. Jose Soberano

Theory of budget is based on “economies of abundance”

Requirements for “Economies of

Abundance”

1. Positive Government

2. Scientific Policies

3. Abundant Economy

4. Responsive Society

REENACTED BUDGET

When the GAA is not enacted before the fiscal year starts, the previous year’s GAA is automatically reenacted. This means that agency budgets for programs, activities and projects remain the same. Funding for programs or projects that have already been terminated is realigned for other expenditures. Because reenactments are tedious and prone to abuse, the Aquino Administration—with the support of Congress—has committed to ensure the timely enactment of a new GAA every year.

General Appropriations Act Fiscal Year 2014

Republic of the Philippines Republic Act No.10633

General Appropriations Act Fiscal Year 2014

Preliminary Provision, Section 1Appropriations by Agency and Fund and by Program, Project and Activity

VII. DEPARTMENT OF EDUCATION  A. Office of the Secretary  B. Early Childhood Care and Development Council  C. National Book Development Board  D. National Council for Children’s Television  E. National Museum

General Appropriations Act Fiscal Year 2014Republic of the Philippines 

Republic Act No.10633General Appropriations Act 

Fiscal Year 2014

Preliminary Provision, Section 1Appropriations by Agency and Fund and by Program, Project and Activity

VIII. STATE UNIVERSITIES AND COLLEGESE. Region III – CENTRAL LUZON

  E.4 Bulacan State University

References

• Briones, Leonor M., Philippine Public Fiscal Administration, Volume 2, 2nd ed., (Mandaluyong City: Fiscal Administration Foundation, Inc., 1996)

• www.budgetngbayan.com

• www.dbm.gov.ph