'Government Budget chapter 1 Essay\r'

' reckoning is the cornerstone of the solicitude t either in ally litigate in nearly all presidential scathe including regime agencies. Practitioners express concerns active using figures for formulation and act evaluation. The practitioners argue that figures impede the allocation of organizational resources to their trump uses and encourage myopic end making and otherwise dysfunctional reckon games. They attri just nowe these problems, in part, to handed-down computeing’s pecuniary, top-down, command and control orientation as embedded in annual work out seening and performance evaluation operatees (as cited in Hansen, Van der Stede & antiophthalmic factor; Otley, 2008 pp. 95)\r\nA judicature compute is the financial plan of a establishment for a given period, ordinarily for a fiscal course of interpret. The cipher is the political sympathies’s key instrument in promoting its socio-economic objectives. The use of goernment bullion is bu ildd on Article VI, constituent 29 of the 1987 constitution that â€Å"no(prenominal)money shall be paid by the Treasury except in pursuance of an appropriation do by law.” (Domingo, Liz, & axerophthol; Ruado, 2013) Funds atomic number 18 utilize by the politics for public interest in which it has the sovereignty, provided in general, figures drive out differ from the true(a) use of goods and servicess. These differences should be reassert and presented to the carnal knowledge and Senate for the approval of the next annual cipher. minimize of the Study\r\nThe Filipinos’ part of nada (Filipino: Kagawaran ng Enerhiya), truncated as DOE is the executive part 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.\r\nIt was created by president Marcos as he issued Presidential statute No. 1206 which created the Ministry of zip fastener and attached the National authority Corporation and Philippine National Oil association to this new manner. The Ministry was abolished during the Regime of Corazon Aquino. During the Regime of President Fidel V. Ramos, that subdivision was created by virtue of land Act No. 7638 otherwise known as the Department of Energy Act of 1992. The Department was vested supererogatory powers and functions under apt energy and power related statutes, such as republic Act No. 9136 or the â€Å"electric automobile Power Industry Reform Act of 2001”, Republic Act No. 9367 or â€Å"Biofuels Act of 2006”, and Republic Act No. 9513 or â€Å"Renew fitting Energy Act of 2008.”\r\nIn this sphere, the interviewees ar the officers in the budgeting and chronicle department. They atomic number 18 given the chance to pass judgment themselves whether they open formulate their budgets in c ompliance with the guidelines included in the cipher Call that DBM issues all year. These guidelines are substantial for the formulation of the budget of every giving medication representation because it sets the ceiling that all(prenominal) of them whitethorn expend and contains infallible documents they carry to submit.\r\nEach presidential term dresser receives calculate Call that is similar with the other disposal influence and this Budget Call is what individually of the brass place considers as their bible since all that is written in the Budget Call must be complied; otherwise, they testament be capacity for yet questioning which may imbibe a positive or a negative result. They can too evaluate the controls select so as to determine if the present controls are sufficient to guarantee an legal death penalty of the sanctioned budget and to assure that the veritable expenditures are non exceeding the allotted amounts for that type of expense.\r\nFurther more, the researchers would be able to determine how the presidential term agencies make sure that their budgets exit be sufficient, to see how government units undecomposedify their budgeted expenditures if those expenditures were supra the ceiling that is set by the Development Budget Coordination Committee (DBCC), and to familiarize themselves with the Budget Process that a government fashion undertakes.\r\nTheoretical Framework\r\nThe budgeting process is an essential component of management control dusts and has been an effective system by which management can successfully plan, coordinate, and control. The process involves the creation and murder of the broad objectives of an organization, the\r\n precise objectives, and a short-term and long-term financial plan. in that location exist a variety of techniques for establishing budgets. Some of the virtually common techniques include, Incremental budgeting, Program budgeting, Zero-Based budgeting, and Site-Based budgetin g. But this theatre focuses more on the Zero-Based Budgeting (ZBB approach) because the time on which the researchers conducted the essay was under the administration of President Benigno Aquino III who vowed to dismissal from the old â€Å"incremental” system of budgeting to the ZBB approach on his first State of the Nation Address (SONA) in July 2010. The philosophies and procedures employ to implement zero-based budgeting in industry and government settings are quite similar, but just aboutwhat unlike with the mechanics to fit the unique(predicate) needs of apiece organization.\r\nThe base process of zero-based budgeting is to justify budget requests in every budgeting round of golf, regardless of prior period budgets. (http://www.referenceforbusiness.com/management/Tr-Z/Zero-Based-Budgeting.html#b. Retrieved August 4, 2013) ZBB approach is a technique that sets all budgets to nil at the beginning of the year or period and requires from the departments that they j ustify all of their expenditures, not just those exceeding the budget. Money is allocated to the departments based on virtuousness and not based on the previous year budget plus or minus approximately percentage such as in many conventional budgeting systems.\r\nIt is also a technique of provision and decision-making which reverses the working process of traditional budgeting. In traditional incremental budgeting, departmental managers justify only increases over the previous year budget and what has been already fatigued is automatically sanctioned. No reference is made to the previous train of expenditure.\r\nBy contrast, in ZBB, every department function is reviewed comprehensively and all expenditures must be clear, rather than only increases. It requires the budget request be justified in complete period by from each one division manager starting from the zero-base. The zero- base is indifferent to whether the total budget is increasing or decreasing. It also refers to the identification of a task or tasks and so funding resources to complete the task self-sufficing of current resourcing. An important element of this budgeting procedure is that it forces prioritization of government programs and activities. With the prospect of insufficient revenue for matching the have of spending, it is useful for the government to have a rank of programs and activities based on proven effectiveness as wellspring as suggested choices to expensive or ineffective programs. There are two touchstones in the process of zero based budgeting.\r\nThe first bar is to develop what is called as â€Å"decision packages” which includes an analysis of cost, purpose, alternative courses of action, measures of performance, consequences of not performing the activity, and the benefits. The second is to rank the decision packages. The decision package is a document that identifies and explains the specific and goals and objectives, measurement of performance, costs, benefits and alternative courses of action. Ranking of decision packages is then accomplished at each management level until a comprehensive agency wide rank is obtained. Conceptually, zero-based budgeting is a systemic logical approach to allocating resources where they volition do the most good. ZBB is often encouraged by fiscal watchdog groups as a centering to ensure against unnecessary spending. It is used, or some circumscribed version of it, in the private- and public sectors for decades.\r\nPeter Phyrr used ZBB successfully at Texas Instruments in the 1960s and authored an important 1970 article in Harvard Business Review but only in 1977 the concept of ZBB gained notoriety because President Jimmy Carter announced to implement a ZBB system at a federal level thereof spread more rapidly. The impact of budgeting on organizations was credibly first studied by Argyris in the 1950s. These studies evidence some of the behavioral effects resulting from the way budgets are us ed in organizations. The results of his research showed that the particular process used could cause dysfunctional behavior in subordinates, regardless of the degree of technical refinement of the budgetary system. In the 1970s, Hopwood’s studies inquired into the effects of budgets on homo behavior.\r\nThese studies showed that the use by a superior of a budget-constrained style of evaluation gave rise to significant levels of job-related tightness; had adverse effects on peer and subordinate-superior relationships, and was interested in manipulative behavior on subordinates. A long line of studies have been performed since then to set off an array of variables that govern the effects of reliance on budgets on behavioral outcomes, including managerial performance. Examples of these variables include budgetary participation, task uncertainty, environmental uncertainty, strategy, and culture.\r\nIt may require an colossal amount of time, money, and paper work; but it does support a systematic method of addressing an organization’s financial concerns, in turn enabling an organization to bettor allocate its resources. (http://www.referenceforbusiness.com/management/Tr-Z/Zero-Based-Budgeting.html#b. Retrieved August 4, 2013) The aforesaid(prenominal) theory have supported the battlefield for better understanding of the budgeting process and the people’s state of mind involved in describing the overall cycle of the budget process of DOE as well as the valuation of controls applied.\r\nConceptual Framework\r\nThe conceptual framework discussed the flow of the study to be taken. The study used the systems approach. The system of three (3) frames is composed of foreplay whish went through the process and emerged as the output.\r\nThe arousal contains the leading variables regarding the budget of the DOE. It includes the manikins of the budget process. It discusses in detail the activities conducted in the first microscope stage of the process which is the budget supplying. Next is about the activities conducted in the second phase which is the budget legislation. Then, discussions about the budget implementation phase. And the know phase of the budget process which is the budget obligation. As inputs, problems encountered by the agency and also the possible solutions they scoop up are included. The second frame contains methods and procedures used to delineate those variables by making observations, research and conducting an interview and statistical analysis The third frame is the output. It contains recommendations in conducting trainings and seminars of the employees about controlling their funds. Recommendations in monitoring the controls are also addressed.\r\nStatement of Problem\r\nThis research is aimed to describe the budget formulation and implementation of the Department of Energy (DOE). Moreover, the budget made by the DOE is also compared to the actual operations of the department to know whet her the budget is worldness conformed to and if such differences are being justified well.\r\nSpecifically, the study endeavored to answer the chase: 1.0 What are phases of the budgeting process in DOE?\r\n2.0 What are the activities conducted in the budget preparation phase of the budgeting process in regard with the following: 2.1 The determination and valuation of the items in the budget proposals; 2.2 Identifying the functions of some government agencies in the budget cycle; 2.3 Identifying the expenditure priorities of the agency; and, 2.4 Identifying the external parties involved in the budget proposals and retardation? 3.0 What are the activities conducted in the budget legislation phase of the budgeting process regarding the following: 3.1 Budget unhurriedness/Review; and,\r\n3.2 As to the importance in conducting deliberation/review in different offices of the national government? 4.0 What are the activities conducted in the budget implementation phase of the budget pr ocess regarding the following: 4.1 Guidelines on implementation of the budget;\r\n4.2 Controls the agency uses to monitor the implementation of the approved budget; 4.3 The treatment on the variance mingled with the budgeted amounts and the actual results; and, 5.0 What are the activities conducted in the budget accountability phase of the budget process? 6.0 What are the problems encountered by the agency and the possible solutions they adopt?\r\nScope and Limitations\r\nThis study result look into the budget formulation and implementation of the Department of Energy based on the rules and edict issued by the National Government to all government units. This was done to have an understanding on the actual budgeting process of a government unit.\r\nThe respondents of the study were the OIC financial services director- Araceli Soluta, chief of the budget division- Elisa Morales and the OIC †fountainhead Accountant †Arturo M. Cudia. The interview was administered in July 24, 2013. The interview questions were made by the researchers based on what they need to know.\r\n substance of the Study\r\nThis study was anticipated to contribute additional information to service the following individuals and organizations. Department of Energy. The Department of Energy (DOE) will benefit from this study as they will be able to evaluate the controls adopted by the DOE in valuing the items in the budget proposal and in monitoring the items approved by the Department of Budget and anxiety (DBM). Thus, the controls can be rectifyd as needed. This can also serve as evidence that the DOE is complying with the guidelines set by the DBM.\r\nDepartment of Budget and Management. This study can facilitate the Department of Budget and Management (DBM) in secure that the DOE was able to comply with the guidelines set by them. They can also evaluate the controls that they implement and improve it so as to guarantee the compliance of each government agency in every st ep of the process.\r\nStudents. This study will contribute to students to gain prefatorial knowledge about the budgeting process of government agency. This is applicable to students required to gain an understanding on how the budget process took place and the justifications required in each line item in the government agency’s budget proposal. Although not all students need to know this study, it will be beneficial for them to have an idea about it.\r\nGeneral Public. This study can give the general public some basic information that can be easily still for them to have an idea on how the government funds are allocated and what projects are being prioritized by the President. They are not forced to learn this issue but understanding this would be useful for them. Taxpayers. This study will be advantageous for the taxpayers because it discusses the budgeting process that a government agency undertakes. The taxpayers will be assured that the government funds, which mostly ca me from the taxes paid by the public, are used for the projects or programs that could help the residents of this country and the country itself. otherwise Researchers. This study will be an effective ray and reference for the subsequent researchers who would want to conduct further study about the budgeting process undertaken by each of the government agency and the justifications required on each item included in their budget.\r\nDefinition of equipment casualty\r\nFor better understanding and interpretation of this study, the following terms are operationally defined. Allocation. This refers to the allotment or naming of funds to be used by the government agencies to different projects and programs and to the operation of the agency itself in unison with the rules promulgated by the Department of Budget and Management (DBM). Budget. This is the allocated funds for the implementation of various government programs or projects and for the operation of the government agency tha t is set by the agency for approval by the DBM. Budget Call. This is issued by the DBM that defines the budget framework, sets the economic and fiscal targets, subscribe the anteriority thrusts and budget level and spells out the guidelines and procedures and timetable for budget preparation. Budget Ceiling.\r\nThe Development Budget Coordination Committee (DBCC) sets a budget ceiling for expenditures that the government agencies may obligate themselves which gives an margin of about 10% from previous budget. Funds allocated in a project or program in excess of the budget ceiling must be justified. Budget Authorization. This involves reviews/deliberations and a separate deliberations conducted by the Congress and the Senate. Once approved, the President signs the bill into law. Budget weighing/Review. It is a process were the Congress or the Senate or both question the budget proposals of the government agency before submitting it to the President. Budget Formulation. This is the first step in the budget process in which the government agency prepares its budget proposals that will be submitted to the DBM who holds hearings for the agencies to justify their budget proposal. Budget Implementation.\r\nThis is the phase where the approved budget is being executed. The DBM will issue and release allotment and chance upon of cash allocation to government agencies. Budget Monitoring. This is the determination phase that involves evaluation of the financial reports and performances by management. The commission on Audit (COA) will also evaluate the agencies financial reports and performances through audit. Budget Process. It is the systematic, repetitive procedures that every government agency must follow. Budget Proposal. It is the budget being prepared by DOE which subject to review and justification. Compliance. It is making decisions in accordance with the rules and guidelines\r\n'