Fiscal Admnistration

Fiscal administration

IS THE ACT OF MANAGING INCOMING AND OUTGOING MONETARY TRANSACTIONS AND BUDGETS FOR GOVERNMENTS, EDUCATIONAL INSTITUTIONS, NONPROFIT ORGANIZATIONS, AND OTHER PUBLIC SERVICE ENTITIES.

Fiscal administration
-systems, -structures, -processes, -Officials and personnel, - and the policy environment governing intergovernmental, and inter-local fiscal relations

Fiscal administration
March 17, 1897 -Revolutionary Government was founded in Naic, Cavite - Dir. Baldomero Aguinaldo, DOF 1901- the Department of Finance and Justice(CS) - William Howard Taft - Sec. Gregorio Araneta 1916 - Reorganization Act No. 2666 - DFJ split into two

Fiscal administration
1936 – DOF and Budget Commission 1949 – Central Bank of the Philippines was created 1970 – Minister Cesar A. Virata was appointed Secretary 1974- with the adoption of the parliamentary form of government, the Department was changed to a Ministry.

Fiscal administration
1980s- of inter-agency committees -Investment Coordination Committee (ICC) -Government Corporate Monitoring and Coordinating Committee (GCMCC) -1987-the Ministry of Finance was reverted to a Department following the ratification of the 1987 Constitution which provided for a presidential form of government.

Fiscal administration
1988- Value Added Tax was introduced and replaced a complicated sales tax structure. 1997 - Asia 's Newest Tiger - National Government recorded a budget surplus for the third consecutive year, and the public sector generated its fiscal surplus since the sector started to be monitored in 1985.

FISCAL ADMINISTRATION OVERVIEW
- ZEROS IN ON THE MANAGEMENT OF FINANCIAL RESOURCES AND THOSE ACTIVITIES AND OPERATIONS TO GENERATE REVENUE, MAKE THOSE AVAILABLE, AND SEE TO IT THAT FUNDS ARE WISEFULLY, LAWFULLY, EFFECTIVELY AND EFFICIENTLY SPENT. -THE ADMINISTRATION OF FINANCES IS AN INTRINSIC COMPONENT OF MANAGEMENT RESPONSIBILITY.

- THERE IS AN INTIMATE LINKAGE BETWEEN ADMINISTERING AND FUNDING.
- AN ADMINISTRATIVE ACT HAS FINANCIAL IMPLICATIONS.

Fiscal administration

PHILIPPINE PUBLIC FISCAL ADMINISTRATION

OVERVIEW

A DECISION TO INCREASE TAXES

INCREASES REVENUE OF GOVERNMENT

TO IMPLEMENT SOCIAL AMELIORATION PROGRAM CREATES A CHARGE ON REVENUE EARNED WHILE AT THE SAME TIME DISTRIBUTES AND DISPERSES SOCIAL BENEFITS.

FISCAL ADMINISTRATION ORGANIZING

TOP MANAGEMENT LEVEL (INTERESTED IN IT)

MIDDLE MANAGEMENT (DEEPLY INVOLVED IN IT) RANK AND FILE (AFFECTED BY WHATEVER RESULTS FROM IT)

FISCAL ADMINISTRATION ORGANIZING
THE PRINCIPAL AGENCIES TASKED WITH FISCAL FUNCTIONS: - CONGRESS, ESPECIALLY THE LOWER HOUSE, -DEPARTMENT OF FINANCE -DEPARTMENT OF BUDGET AND MANAGEMENT -COMMISSION ON AUDIT

Fiscal administration (Offices/agencies)
CONGRESS DEPARTMENT OF FINANCE (DOF) DEPARTMENT OF BUDGET AND MANAGEMENT COMMISSION ON AUDIT DEPARTMENT OF INTERIOR AND LOCAL GOV’T OFFICE OF THE PRESIDENT (OP Bureaus: Bureau of Internal Revenue (BIR) Bureau of Customs (BOC) Bureau of the Treasury (BTR) Bureau of Local Government Finance (BLGF) Offices: Privatization and Management Office (PMO) Agencies and Corporations Insurance Commission (IC) National Tax Research Center (NTRC) Central Board of Assessment Appeal (CBAA) Philippine Deposit Insurance Corporation (PDIC) Philippine Export-Import Credit Agency (PHILEXIM) Government Service Insurance System (GSIS) Social Security System (SSS) Public Estates Authority (PEA) Cooperative Development Authority (CDA) Regional Offices

FISCAL CONTROL MECHANISMS
(FOUR JUSTIFICATIONS FOR EXPENDITURE THROUGH THE BUDGET) CONTROL

PREVENT MISAPPROPRIATION OF FUNDS REQUIRES REVIEW AND APPROVAL BY THE ADMINISTRATIVE OFFICIAL OF THE LINE OR OPERATING AGENCY, OF ALL REQUESTS FOR MONEY RELEASES AND BUDGETARY ALLOTMENTS, VOUCHERS AND SIMILAR PAPERS BEFORE PAYMENTS ARE MADE SO THAT EXPENDITURES ARE IN ACCORDANCE WITH POLICY AND LAW AND NOT IRREGULAR, UNNECESSARY, EXCESSIVE, EXTRAVAGANT AND UNCONSCIONABLE

REPUBLIC ACT NO. 7160 AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991

SEC. 315. SUBMISSION OF DETAILED STATEMENTS OF INCOME AND EXPENDITURES . (A) ON OR BEFORE THE FIFTEENTH (15TH) DAY OF JULY OF EACH YEAR, LOCAL TREASURERS SHALL SUBMIT TO THEIR RESPECTIVE LOCAL CHIEF EXECUTIVES A CERTIFIED STATEMENT COVERING THE INCOME AND EXPENDITURES OF THE PRECEDING FISCAL YEAR, THE ACTUAL INCOME AND EXPENDITURES OF THE FIRST TWO (2) QUARTERS OF THE CURRENT YEAR, AND THE ESTIMATED INCOME AND EXPENDITURES FOR THE LAST TWO (2) QUARTERS OF THE CURRENT YEAR.

REPUBLIC ACT NO. 7160 AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991

SEC. 353. THE OFFICIAL FISCAL YEAR.

THE OFFICIAL FISCAL YEAR OF LOCAL GOVERNMENT UNITS SHALL BE THE PERIOD BEGINNING WITH THE FIRST DAY OF JANUARY AND ENDING WITH THE THIRTY-FIRST DAY OF DECEMBER OF THE SAME YEAR.

REPUBLIC ACT NO. 7160 AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991

SEC. 354. ADMINISTRATIVE ISSUANCES; BUDGET OPERATIONS MANUAL. THE SECRETARY OF BUDGET AND MANAGEMENT JOINTLY WITH THE CHAIRMAN OF THE COMMISSION ON AUDIT SHALL, WITHIN ONE (1) YEAR FROM THE EFFECTIVITY OF THIS CODE, PROMULGATE A BUDGET OPERATIONS MANUAL FOR LOCAL GOVERNMENT UNITS TO IMPROVE AND SYSTEMATIZE METHODS, TECHNIQUES, AND PROCEDURES EMPLOYED IN BUDGET PREPARATION, AUTHORIZATION, EXECUTION, AND ACCOUNTABILITY.

FISCAL CONTROL MECHANISMS
(FOUR JUSTIFICATIONS FOR EXPENDITURE THROUGH THE BUDGET) CONTROL

CONTROL TO IMPLEMENT PROSPECTIVE POLICY PROACTIVE ADMINISTRATION INHIBITS GOVERNMENTAL UNITS FROM DIRECTLY TRANSACTING AND NEGOTIATING MONEY MATTERS SINCE SUCH KIND OF TRANSACTION IS OFFICIALLY CHANNELED THROUGH THE DEPARTMENT OF BUDGET AND MANAGEMENT IN THE FORM OF BUDGET ESTIMATES AS ENDORSED BY THE PRESIDENT

FISCAL CONTROL MECHANISMS
(FOUR JUSTIFICATIONS FOR EXPENDITURE THROUGH THE BUDGET) CONTROL

ENSURE THE WISDOM AND PROPRIETY OF EXPENDITURE CLAIMS FOR PAYMENT FROM PUBLIC FUNDS, LEGALITY, PRUDENCE, REASONABLENESS, THE MORALITY OF THE CLAIM OR CHARGE SHOULD BE ESTABLISHED. A REVIEW OF EXISTING CONTRACTS AND TRANSACTIONS SHOULD BE MADE.

FISCAL CONTROL MECHANISMS
(FOUR JUSTIFICATIONS FOR EXPENDITURE THROUGH THE BUDGET) CONTROL

PREVENT DEFICITS FISCAL SUPERVISION AND CONTROL MAY BE USEFUL BUT SHOULD NOT UNDULY INTERFERE WITH AGENCY PREROGATIVE TO CARRY OUT PROGRAMS MANDATED BY THE CONSTITUTION AND THE LAWS.

PHILIPPINE PUBLIC FISCAL ADMINISTRATIONTHE BUDGET PHILIPPINE NATIONAL BUDGET

The National Budget represents the estimate of expected income and projected expenditures over a period of time referred to as the fiscal year.

(1) to spend for its programs and projects (2) where the money will come from

PHILIPPINE PUBLIC FISCAL ADMINISTRATIONTHE PHILIPPINE BUDGETARY PROCESSS

Section 22, Article VII of the 1987 Constitution sets the tone for the budgetary process. Under this Article, the President submits to Congress within thirty days from the opening of every regular session, a financial plan of expenditures and sources of financing, including receipts from existing and proposed revenue measures as basis for a general appropriations bill.

PHILIPPINE PUBLIC FISCAL ADMINISTRATIONTHE PHILIPPINE BUDGETARY PROCESSS

STAGES 1.Budget Preparation 2.Budget Authorization 3.Budget Implementation 4.Budget Accountability

FIVE MAJOR PHASES IN THE BUDGET PROCESS (UBOM)

1. BUDGET PREPARATION

2. BUDGET AUTHORIZATION

3. BUDGET REVIEW

4. BUDGET EXECUTION

5. BUDGET ACCOUNTABILITY
Fiscal administration

FUNCTIONS OF LOCAL OFFICIALS IN L.F.A
LOCAL SANGGUNIAN -Taxing Authority - Enactment of Policies, Implementing Rules and Regulations

LOCAL CHIEF EXEC. - Executive Direction and Control -Licensed and Issuing of Permits

COMPOSITION OF LOCAL FINANCE CLUSTER (Assessor; Accountant; Bidget Officer; Treasurer; Planning & Development Officer) -Income projections -Recommendations on Tax/Revenues Measures -Accounting of the Budget

Fiscal administration

SOURCES OF INCOME OF LGUS

EXTERNAL 1. Internal Revenue Allotment (IRA) 2. Share from the Utilization of national Wealth 3. Grants and Donations 4. Domestic Loans 5. Credit-Financing Schemes

INTERNAL 1. Taxes, Fees, and Charges 2. Income derived from the Investments, privatized and Development Enterprises, and Inter-Local Government Cooperation

Fiscal administration

II.LEGAL BASIS FOR LOCAL FISCAL ADMINISTRATION 1987 PHILIPPINE CONSTITUTION SECTION 2 Article X: “The territorial and political subdivisions shall enjoy local Autonomy.” REGION

PROVINCE

CITY

MUNICIPALITY

BARANGAY
Fiscal administration

the share of each province, city or municipality shall be cetermined on the basis of the ff. Formula (Sec. 285, RA 7160) -PROVINCES: 23, 81 PROVINCES -CITIES: 23%12, POPULATION 50%LAND AREA 25%EQUAL SHARING 25% -MUNICIPALITIES: 34%- 1,501 MUN. - BARANGAYS: 20%33,461 BARANGAYS

LOCAL TAXES Prepare Local Revenue Generation Plan Conduct Public Consultations on Update Local Code Taxes Provide Incentives to Tax Collectors

Revenues measures

REAL PROPERTY TAXES Engage Participation of other Stakeholders Computerize records of Assessor’s and Treasures Office Strengthen tax collection enforcement Conduct Tax Mapping Operations for the Real Property

LOCAL BUSINESS TAXES Use info. from databases of other gov’t agencies Establish one stop shop for tax payments and business permit applications Conduct tax mapping – inventory of business

Fiscal administration

FUNDS MAINTAIN BY LGUS
A. GENERAL FUND - AVAILABLE FOR ANY PURPOSE TO WHICH THE LEGISLATIVE BODY MAY DECIDE TO APPLY IT.

B. SPECIAL FUNDS B.1 SPECIAL EDUCATION FUND B.2 TRUST FUND - PRIVATE AND PUBLIC MONIES WHICH
HAVE OFFICIALLY COME INTO POSSESSION OF THE LOCAL GOVERNMENT.
Fiscal administration

BUDGETARY PROCESS AT THE LOCAL GOVERNMENT

FOUR BASIC STEPS:
(1) BUDGET PREPARATION (2) BUDGET AUTHORIZATION (3) BUDGET IMPLEMENTATION (4) BUDGET REVIEW TYPES OF AUDIT A. PRE-AUDIT B. POST-AUDIT
Fiscal administration

Levels (Php Billion) PARTICULARS 2012 Prog. 2013 Proposed

Percent Share 2012 Prog. 2013 Proposed

Increase/(Decrease) Amount Percent

Economic Services Social Services Defense

439.0

511.1

24.2

25.5

72.1

16.4

613.4 87.2

698.8 89.7

33.8 4.8

34.8 4.5

85.4 2.5

13.9 2.9

General Public Services Net Lending Debt Service Total

320.3 23.0 333.1 1,816.0

346.1 26.5 333.9 2,006.0

17.6 1.3 18.3 100.0

17.3 1.3 16.6 100.0

25.7 3.5 0.8 190.0

8.0 15.2 0.2 10.5

Particulars

2012 Program Level Rank (Php Billion)

2013 Proposed Level Rank (Php Billion) 292.7 152.9 121.6 121.1 74.1 56.8 56.2 37.1 33.2 3/ 1/ 2/ 1 2 3 4 5 6 7 8 9

DepEd (incl. MPBF and SBP) DPWH (incl. PSEPF and BSGC) DND (incl. MPBF and PGF) DILG (incl. MPBF and PGF) DA (incl. PSEPF and BSGC) DOH (incl. MPBF, PSEPF and BSGC) DSWD DOTC (incl. MPBF, PGF, PSEPF and BSGC) DOF (incl. MPBF and BSGC)

238.8 126.4 108.1 99.8 61.4 45.8 48.8 34.7 23.6

1 2 3 4 5 7 6 8 9

DENR (incl. MPBF and PGF) Notes: 1/ Gross of School Building Program
2/ Net of School Building Program 3/ The corporate funds of DOTC attached corporations (MIAA, MCIAA, CIAC and CAAP) amounts to P2.6B in 2013

17.5
Legend:

10

23.7

10

MPBF- Miscellaneous Personnel Benefits Fund
SBP – School Building Program PGF – Pension and Gratuity Fund PSEPF – Priority Social and Economic Projects Fund BSGC – Budgetary Support to Government Corporations

REFERENCES: Public Administration in the Philippines Running a Bureaucracy http://www.scribd.com/doc/37770745/Local-Fiscal-Administration http://en.wikipedia.org/wiki/Department_of_Finance_%28Philippines%29 http://www.gov.ph/2012/07/24/president-aquino-submits-p2-006-t-2013empowerment-budget-to-congress/

References: Public Administration in the Philippines Running a Bureaucracy http://www.scribd.com/doc/37770745/Local-Fiscal-Administration http://en.wikipedia.org/wiki/Department_of_Finance_%28Philippines%29 http://www.gov.ph/2012/07/24/president-aquino-submits-p2-006-t-2013empowerment-budget-to-congress/