Government Budget chapter 1
CHAPTER 1
THE PROBLEM AND ITS BACKGROUND
Introduction
Budgeting is the cornerstone of the management control process in nearly all organizations including government agencies. Practitioners express concerns about using budgets for planning and performance evaluation. The practitioners argue that budgets impede the allocation of organizational resources to their best uses and encourage myopic decision making and other dysfunctional budget games. They attribute these problems, in part, to traditional budgeting’s financial, top-down, command and control orientation as embedded in annual budget planning and performance evaluation processes (as cited in Hansen, Van der Stede & Otley, 2008 pp. 95) A government budget is the financial plan of a government for a given period, usually for a fiscal year. The budget is the government’s key instrument in promoting its socio-economic objectives. The use of government funds is based on Article VI, section 29 of the 1987 constitution that “No money shall be paid by the Treasury except in pursuance of an appropriation made by law.” (Domingo, Liz, & Ruado, 2013)
Funds are used by the government for public interest in which it has the sovereignty, but in general, budgets can differ from the actual expenditures. These differences should be justified and presented to the Congress and Senate for the approval of the next annual budget.
Background of the Study
The Philippines' Department of Energy (Filipino: Kagawaran ng Enerhiya), abbreviated as DOE is the executive department of the Philippine Government responsible for preparing, integrating, coordinating, supervising and controlling all plans, programs, projects and activities of the Government relative to energy exploration, development, utilization, distribution and conservation. It was created by President Marcos as he issued Presidential Decree No. 1206 which created the Ministry of Energy and attached the National Power Corporation and Philippine National Oil
THE PROBLEM AND ITS BACKGROUND
Introduction
Budgeting is the cornerstone of the management control process in nearly all organizations including government agencies. Practitioners express concerns about using budgets for planning and performance evaluation. The practitioners argue that budgets impede the allocation of organizational resources to their best uses and encourage myopic decision making and other dysfunctional budget games. They attribute these problems, in part, to traditional budgeting’s financial, top-down, command and control orientation as embedded in annual budget planning and performance evaluation processes (as cited in Hansen, Van der Stede & Otley, 2008 pp. 95) A government budget is the financial plan of a government for a given period, usually for a fiscal year. The budget is the government’s key instrument in promoting its socio-economic objectives. The use of government funds is based on Article VI, section 29 of the 1987 constitution that “No money shall be paid by the Treasury except in pursuance of an appropriation made by law.” (Domingo, Liz, & Ruado, 2013)
Funds are used by the government for public interest in which it has the sovereignty, but in general, budgets can differ from the actual expenditures. These differences should be justified and presented to the Congress and Senate for the approval of the next annual budget.
Background of the Study
The Philippines' Department of Energy (Filipino: Kagawaran ng Enerhiya), abbreviated as DOE is the executive department of the Philippine Government responsible for preparing, integrating, coordinating, supervising and controlling all plans, programs, projects and activities of the Government relative to energy exploration, development, utilization, distribution and conservation. It was created by President Marcos as he issued Presidential Decree No. 1206 which created the Ministry of Energy and attached the National Power Corporation and Philippine National Oil