How to budget for performance

Title

Language

English

Source

The Republic I (6) 1-31 December 1975

Year

1975

Subject

Budget -- Philippines

Program budgeting -- Philippines

Rights

In Copyright - Educational Use Permitted

Fulltext

1-31 December 1975 3 How to budget for performance The President's renewed demand for performance budgeting goes back to RA 992 of 1954 which requires all agency budgets to stress "functions, activities and projects in terms of ex pected results.” Yet most agencies still use simple “line item" budgets today. Tlfe following excerpts from Budget Circular 41 of August 1, 1956, remain authoritative on performance budgeting. PERFORMANCE budget is one em phasizing the program or services conducted. It is based on functions, ac tivities and projects which focus atten tion on the general character and nature of the work to be done, or on the services to be rendered, rather than upon the things to be acquired, such as personal services. Budgeting is essentially a planning process. It is the determination for a future period of time of: 1. What is to be done; 2. What is to be accomplished; 3. The manner in which it is'to be done;and 4. The cost of doing it. It requires that the broad objectives of the agency be broken down into de tailed work plans for each project and for each unit of the organization. Thus, each responsible official and supervisor in the agency will have a plan of action, which if successfully followed and combined with similar efforts in all organization units, should result in the agency meeting its over-all objectives. The budget, therefore, is a mone tary definition of the future plans of the agency. MODERN management concepts hold to the principle that mana gers, regardless of their level in the or ganizational structure, should participate in planning agency operations and then should be held responsible for achieving the goals set. The finally-established performance budget is in effect a contract between these responsible managers and the pre sident calling for specific perform ance for the funds appropriated. To achieve the broad participation of responsible officials and to secure the necessary supporting material for making budget estimates, a high degree of plan ning, coordinating, and scheduling the work of budget a preparation is required. THE budget process in government agencies has four phases: 1. Planning—Establishing perfor mance objectives; 2. Estimating—Determining the amount of personnel, materials, services and facilities required to meet these ob jectives and the amounts needed to pay for them; 3. Reviewing—Ascertaining that the basic objectives, resource require ments and amounts are accurate and conform to overall guides and limjts; 4. Operating—Accomplishing ap proved objectives within the amounts provided by the budget. Planning performance budgets is a management planning process which in volves all officials and supervisors of an agency. Satisfactory results can be ob tained only if: 1. All responsible officials and su pervisors participate in planning agency operations; and 2. Each official and supervisor ac cepts full responsibility for achieving the goals established. THE responsibilities for planning per formance budget are: OFFICE OF THE PRESIDENT 1. The President will normally issue a fiscal policy statement establishing broad budgetary limits, areas of major program emphases, and such other mat ters as he feels are necessary for the guidance of the agencies in planning their budgets. 2. The Budget Commission will, in the “Call for Estimates’*, set forth specific guides and policies to govern the preparation of agency budgets. THE DEPARTMENT 1. The Secretary will establish a broad program for his department in ac cordance with the President’s policies. 2. The Secretary will require each Bureau Chief to submit to him a sum mary of plans and objectives of his bu reau for the coming year, based upon the broad program established by the Secretary. 3. The Secretary will review these with the bureau director, and make necessary decisions regarding the objec tives, the emphasis desired relative to other department programs, and the limits governing bureau programs for the budget year. 4. The Department Budget Officer will assist the Secretary in planning and implementing. THE BUREAU 1. The Bureau Director will plan and develop with each division chief the detailed objectives and work pro grams to serve as the basis of estimates for the budget year. Consideration must be given to: a. Changes in emphasis and goals for the budget year; b. Reduction of specific backlogs; c. Changes in ra(e of work due to improved methods; d. Programs expanded in line with policy; e. Programs contracted in line with policy. 2. The Bureau Budget Officer as sists the director in planning, and is res ponsible for securing and presenting factual data on work progress, rates of production, cost information, and per sonnel data; 3. In assisting the director, each Division Chief is expected to have read ily available such information as: a. Analysis of the present status of work; b. Analysis of the rates of produc tion; c. Estimates of progress for the rest of the period; d. Projected work programs for the budget year; e. Statements to support his fore cast. ESTIMATING is that part of the bud get process during which the re sources required to carry out the plan are determined and the amounts to be requested are established. The Budget Officer is the key person responsible for the satisfactory prepara tion of the estimate. His responsibil ity includes the technical preparation of the budget and coordination and scheduling of all activities concerned with estimating. 1. The Budget Officer will develop instructions specifically for the Division Chiefs and others concerned with the estimates, indicating the material each must prepare, and the form and manner in which it is to be submitted. 2. The Budget Officer will designate the portion of the work to be done by each responsible official. 3. The Budget Officer will prepare a detailed step-by-step schedule for ac complishing the work allowing time for necessary review and adjustment. 4. The Budget Officer will follow progress closely to make certain that schedules for the production of various types of data are adhered to. He will keep the Bureau Director informed of 5. The Budget Officer will check all material for completeness and con formance to instructions. He will guide and assist in any reworking of materials that may be necessary to integrate the various sections into the final submission. 6. The Division Chief and other supervisors as instructed will prepare material for detailed schedules and will draft justification statements covering their areas of responsibility. The ade quacy and soundness of material devel oped at this time is basic to the ac ceptance of the budget proposals during the reviewing phase. REVIEWING performance budgets is . that part of the budget process in which successively higher levels of the government management examine the results of the planning and estimating phases. These multiple reviews are the means whereby the final national budget is “shaped into a harmonious program and fiscal policy for the executive branch as a whole” as stated in the Revised Budget Act, Republic Act No. 992. Data are rechecked for accuracy and conformance to established guides and limits. Analyses are made to evaluate statements of resources required. Pro grams and projects are evaluated in terms of the over-all needs of the gov ernment and the resources available. RESPONSIBILITIES FOR BUREAU REVIEW 1. The Bureau Budget Officer will make detailed analyses and recommenda tions to the Bureau Director concerning estimates, pointing out any weaknesses, unrealistic estimates or non-conformance to plans or policies. The Budget Officer will schedule meetings between the Bu reau Director and the Division Chiefs for review and reconciliation of differ ences. At the conclusion of the Bureau Director’s review and upon approval of the final items to be included, the Bud get Officer is responsible for insuring that the bureau submission is technically sound, is mathematically accurate, and reflects the program and project deci sions made by the Bureau Director. 2. The Bureau Director reviews the entire estimate. The Division Chiefs will explain and defend their requests. The bureau Director will cause such changes as he believes necessary and will approve the bureau estimate for submission to the Department Secretary. RESPONSIBILITIES FOR DEPART MENT REVIEW / 1. The Department Budget Officer will analyze budgets and evaluate bureau budgets according to the Secretary’s policy guides or fiscal limitations. He will discuss questionable items with the bureaus, schedule hearings and reviews of each bureau’s budget by the Secre tary, make recommendations and prepare the transmittal document for the Secre tary to forward the department’s budgets to the Budget Commission. 2. The Secretary will conduct hear ings for each bureau’s estimates, decide on changes, and transmit the estimates to the Budget Commission together with a supporting statement covering the department’s program and explaining shifts in program emphasis. - 3. The Bureau Director and his Budget officer will explain the bureau’s budget in the scheduled hearings. The Bureau Director will accept responsibil ity for defending and carrying out the plans of the finally approved estimate submitted by the Secretary to the Bud get Commissioner. EXECUTIVE REVIEW ' The Secretary and Bureau Directors will explain and' defend the budgets to the Budget Commission. The Depart mental and Bureau Budget Officers will assist as requested and maintain liaison with the Budget Commission. OPERATING is that part of the bud get process during which action is taken to accomplish established objec tives within the approved resources. M^jor responsibilities in this phase are assigned as follows: THE BUREAU 1. The Budget Officer will realign amounts allotted and objectives agreed upon for bureau programs and projects into operating budgets for each respon sible organization unit. He will prepare periodic reports to the Bureau Director and Department Secretary on the status of the works and the funds utilized. 2. Division Chiefs will conduct operations so as to attain approved objectives in accordance with their operating budgets. 3. The Bureau Director will receive timely reports about the work in prog ress and through these reports identify problem areas. He will be responsible to the Secretary for significant deviations from planned accomplishments. THE DEPARTMENT The Secretary will receive reports on the work status and will take neces sary remedial actions. He will be respon sible to the President for significant deviations from planned expenditures and accomplishments. □

pages

3

Media