SOP Library
SOP NO:
FS-BC02
(List of Exhibits/Attachments)
Missi
on
:
Finance and Administration
Area:
Financial Services (FS)
Activity:
Budget and Control (FS-BC)
Title:
NFA Budgeting System
Date Approved/Issued:
05/27/1997
Date Effective:
01/01/1997
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
A. General Policies
1. NFA prepares two (2) sets of Budget, namely:
1.1
Budgetary Estimates (BE) -
budget prepared by NFA which is the projection of income and expenditures for the budget year. It is prepared for the purpose of requesting budgetary support or budget appropriation thru legislation as recommended by DBM. It involves three (3) phases of the budget process which are the budget planning, the budget preparation and the budget authorization. deadline of submission to the DBM is March preceding the budget year.
1.2
Corporate Operating Budget (COB) -
is the operational budget of the agency implemented in the current year. It involves the four (4) phases of the budget process which are the budget preparation, budget authorization, budget execution and budget accountability. It is the revised budget preapared based on the amount of budget support as finally incorporated in the General Appropriations Act (GAA). It is submitted to the DBM every January of the current year.
2. NFA has three (3) main sources of funds for its operations: these are the General Fund, Corporate Funds and the Borrowings:
2.1
General Fund -
fund releases from National Government eithter as subsidy/support for the NFA operations or equity contributions to its capitalization or net lending which refers to advances or payment made by the Bureau of Treasury for Guaranteed Loans of NFA.
2.2
Corporate Funds -
constitute the proceeds from NFA operations such as sales of grains, income from registration and licensing and other miscellaneous income like sales of by-products, and management facility assistance/service income.
2.3
Borrowings -
are proceeds of loans by NFA from government and private commercial banks.
3. The NFA Budget shall be prepared based on approved plans and programs and in accordance with the Budget Call provided by the Department for Budget and Management (DBM).
The guidelines formulated by the DBCC shall serve as the NFA budget call for a particular calendar year. This budget call shall discuss/contain the following:
a) Budget limitations/assumptions to be used;
b) The period or year to be covered for which the budget estimates shall be prepared;
c) Submission deadlines - adjusted accordingly to the schedule which may be set by the DBM;
d) Budget preparation format and contents;
e) Budget Calendar; and
f) Other pertinent data.
4. All departments/offices shall strictly observe the Planning and Budgeting Calendar an example of which is presented in ANNEX B.
5. Yearend unexpended fund balances for MOOE/PS/CPF shall form part of NFA savings the use of which may be authorized by DTBFM for the succeeding year.
B. Budget Process
I.
Budgetary Estimates
1.
Budget Planning
This is the first phase of budget process where the agency's objectives/goals/plans are developed. It is also where the national development plans are translated into corporate policies, programs and strategies.
The Department of Corporate Planning (DCP) is in-charge of coordinating and facilitating the planning activities of all the offices of the Agency starting from the EXCOM members to the Central Office and field office implementing units.
In this phase the DCP presents the NFA's five year development plan which shall serve as basis for the preparation of budgetary estimates.
The four types of plans being prepared by DCP are as follows:
1.1
The NFA Strategic Plan (Policy Agenda)
This will define the general policy which will guide NFA in carrying out its missions and regular activities. The policy directions are formulated and developed by the EXCOM Members, approved by the Administrator and confirmed by the Council in accordance with the overall national development plan and consistent with the sectoral goals.
1.2
The Medium Term Development Plan (MTDP)
The MTDP is a five-year plan drafted to outline the medium-term outlook of the Agency. It contains the objectives, policies and strategies, targets programs/projects as well as problems and issues confronting the Agency.
The Assistant Administrators who head the functional groupings of NFA are primarily responsible for coming up with the MTDP and assessing its progress of implementation. This is prepared and finalized by DCP to be presented to the Administrator for approval and to the NFA Council for confirmation. Upon confirmation, all departments/offices shall translate them into quantitative targets and implementable programs and projects for the next five (5) years.
1.3
The Corporate Budgetary Plan (CBP)
This is a plan formulated to serve as basis for determining the budgetary requirements of the agency and the support needed from the national government for the budget year. CBP includes the following documents:
Summary of accomplishments for the past and current year to indicate achievement trends of the Agency;
Projected physical targets for budget year to denote change in the desired level of performance;
Support services requirements; and
Financial requirements
The Assistant Administrators shall spearhead the preparation of programs requiring budgetary support in their respective groups by drawing the specific programs, projects and targets of the different offices of the agency including the field offices.
CBP is prepared to support the preparation of the Budgetary Estimates.
1.4
The Corporate Operating Plan (COP)
This is the Work Plan prepared to support the Corporate Operating Budget (COB) for a calendar year. It is generally quantitative and very detailed in terms of objectives, results and costs. It enumerates the specific work or activity to be undertaken for the current year on a quarterly basis.
All departments and field offices are required to prepare their respective Work Plan following the prescribed format. Each department and field office is appraised in terms of achieving its desired perforrmance level (for a given period depending on the nature of activity) vis-a-vis its resources and other identified variables.
2.
Budget Preparation
This is the projection of income and expenditures for the budget year, using as framework NFA's national work program covering one year of operations. it is computed based on established programs and priorities, existing conditions, trends analysis and past year's operation using the macro-economic assumptions, policies and limitations provided by the Corporate Affairs Group of Department of Finance (DOF-CAG) or the Department for Budget and Management (DBM) through the Budget Call.
Preparation of budgetary estimates shall be done as follows:
2.1 Based on the budget call issued by NFA-DBCC, each division in every Central Office Department and unit in every Provincial/Regional Office shall prepare their individual budget estimates supported by Work and Financial Plan covering one year of operation.
2.2 Budget estimates shall include all expenditures classified as follows:
a) Cereal Procurement Cost - estimated budget for the cereal procurement fund (e.g. palay, corn, etc.) which is based on approved marketing plan;
b) Capital/Equipment Outlay - estimated budget for the purchase/construction of fixed assets necessary for NFA operations (e.g. land, building, equipment, repairs and maintenance of warehouses, etc.). It is presented per major asset classification per Chart of Accounts, e.g. Land and Land Improvement Outlays, Building and Structure Outlays, Machineries and Equipment.
c) Personal Services - estimated budget for employees' salaries, bonuses, allowances, overtime pay, medicare, GSIS premium contributions and other related fixed expenditures.
d) Maintenance and Other Operating Expenses (MOOE) - estimated budget for travelling, supplies and materials, light and water, rental, interest payments, tax payments, communication expenses, repairs and maintenance and other operating expenses.
e) Loan Amortization - schedule of loan payments due for the year (e.g. bank amortization).
2.3. All expenditures shall be presented per program/project/object of expense in accordance with the existing NFA Responsibility Accounting System and existing Chart of Accounts. The peso estimates for each object of expense as well as projected revenues to be generated shall be reflected.
2.4. The Department Manager/Regional Manager/ Provincial Manager shall evaluate the budget estimates submitted by each division/unit/section vis a vis their worik plans and performance targets, accomplishment reports and statement of expenditures for the prior years' operations. Existing economic conditions and budget limitations specified in the budget call shall be considered in the evaluation for the budget to be realistic.
The Regional Manager shall call for a budget hearing to discuss the budgetary estimates submitted by the different provinces under his jurisdiction.
The Provincial Manager shall conduct budget meeting to discuss the preparation of the provincial budget.
2.5. The respective Executive Assistant I for C.O. departments, Budget Officer III of the Regional Office and Sr. Accounting Specialist of the provincial offices shall consolidate the budgetary estimates submitted by the different divisions/units/sections of their departments/offices after these had been scrutinized by the Head of Office.
2.6. The consolidated budgetary estimates shall be presented in the prescribed format as provided in the budget call. The budget form shall be prepared in three copies to be distributed as follows:
Copy 1 - DTBFM - Budget Division
2 - Department/Regional file
3 - Provincial file
2.7. Budgetary estimates for Capital/Equipment Outlay shall be submitted by C.O.departments/regional offices (consolidated reports of provinces) to the following lead department for evaluation and consolidation:
TSD -
Repairs and/or Capital Outlay for NFA infrastructures and post-harvest facilities.
GSD -
Equipment Outlay and major repairs of service motor vehicles/aircraft/trucks.
MSD -
Computer requirements based on approved Information Systems Plan (ISP) endorsed by National Computer Center (NCC).
TRDD -
Equipment Outlay for Research and Development and Pest Control requirements and meteorological equipment.
Lead departments shall consolidate capital/ equipment outlay of their concern and shall submit same to DBCC for recommendation to the Administrator.
All capital/equipment outlay approved by the Administrator shall be included in the Budgetary Estimates.
2.8. The DTBFM-Budget Division as the Secretariat of the DBCC shall consolidate the DBCC approved budget requirements submitted by each department/office into a national budget proposal.
3.
Budget Authorization
Budget Approval and Confirmation
3.1. The proposed NFA Budget shall be submitted to the Administrator for approval, and to the NFA Council for confirmation.
3.2. Upon approval of the Administrator, and confirmation by NFA Council, it shall be submitted to the Budget and Finance Bureau for government Corporation, Department of Budget and Management copy furnished the Department of Agriculture, Department of Finance - CAG and COA.
3.3 The National Government's budget support to NFA General Fund (GF) as recommended by DBM becomes part of the President's Budget which undergoes the usual congressional review. Once a common budget bill is agreed upon, the bill becomes the General Appropriations Act. (GAA).
II.
Corporate Operating Budget
1. Preparation of the Corporate Operating Budget (COB)
Based on the GAA passed by Congress, NFA shall prepare the COB which will be submitted to the NFA Council and DBM for approval.
2.
Budget Authorization
It is the Council's approval to implement the Corporate Operating Budget.
3.
Budget Execution
Refers to that phase of the budget process which place a previously prepared Budget in operation. It is here wherein Advice of Sub-Allotment (ASA) are issued and obligations are incurred. It is the actual distribution and spending of funds in accordance with a predetermined course indicated in the Work and Financial Plan prepared by all offices.
The allotment system shall be controlled by DTBFM-BD which shall process allotment papers and request for funds. There are, however, transactions that will require for the issuance of the Advice of Sub-Allotment as the need arises.
3.1. DBCC shall issue budget ceilings to be approved by Deputy Administrator for Finance and Administraion to each Department/Regional Offices as bases for the preparation of the Work and Financial Plan (Exhibit 1) for the ensuing year.
a) Based on budget ceiling, a summary of the work and financial plan per program/activity of each responsibility cost center covering one year of operation shall be prepared. The summary shall indicate the quarterly physical targets and quarterly budgeted expenditure of the office and shall show further details of each project/activity and corresponding objects of expenditure. It shall be accompanied by 2 summaries to wit::
Summary of Programs and Activities
Summary of Budgeted Expense Classification per program/object
of expenditures
b) The work and financial plan shall be prepared by the Regional Budget Officer/Accountant IV/ SAS for the field offices and Executive Assistant I for C.O. departments. It shall be approved by the Department Manager/Head of Office. Consolidation of provincial reports shall be done by the Accountant IV/Regional Budget Officers.
c) The Work and Financial Plan for the current year shall be submitted to DTBFM-BD not later than January 31 of the said calendar year, e.g. Work and Financial Plan for 1997 shall be submitted to DTBFM-BD not later than January 31, 1997.
Distribution of copies shall be as follows:
Provincial Officers:
Copy 1 - R.O. Finance Section
2 - P.O. Finance Section
3 - Provincial Office file
Regional Offices:
Copy 1 - R.O. Finance
2 & 3 - Regional Office file
Regional Office (Consolidated)
Copy 1 - DTBFM - BD
2 - DCP
3 - R.O. Finance
Central Office:
Copy 1 - DTBFM - BD
2 - DCP
3 - Department File
d) The Work and Financial Plan shall be analyzed and reviewed by DTBFM - BD. In no case shall the estimates exceed the budget ceiling issued. Copy of the Workplan shall be forwarded to DCP for monitoring.
3.2
Release of Funds/Allotment
a) Advice of Sub-Allotment shall be issued in accordance with the approved budget reflected in the Work and Financial Plan submitted by the different Departments/Regional/ Provincial Offices.
b) An Advice of Sub-Allotment approved by the Assistant Department Manager of DTBFM shall be issued to the department/regional offices by DTBFM-BD ten (10) days before the beginning of each quarter. The advice shall cover the major classifications of budget items with breakdown per project/per object of expense for all types of funds for all offices to wit:
Personal Services
Maintenance and Operating Expense
Capital Outlay
Loan Amortization
Procurement Cost
The advice of allotment shall be prepared and distributed as follows:
To Central Office Departments:
Copy 1 - Department concerned
2 - DAS - Claims and Processing Division
3 - DAS - General Accounting Division
4 - COA
5 - DTBFM - Budget Division
To Regional Offices:
Copy 1
& 2 - R.O. concerned
3 - COA
4 - DTBFM - Budget Division
c) An Advice of Sub-Allotment (ASA) shall be issued by the Regional Office to its provincial offices. It shall cover an advice on the amount of allotment for the provincial office for disposition per program/object of expense. Copy distribution for ASA shall be as follows:
Copy 1
& 2 - P. O. concerned
3 - COA (Provincial Office)
4 - R.O. Finance Section
d) For Capital Outlay Budget, the lead department prepares request for appropriation of funds. Same is forwarded to DTBFM for funds availability and is submitted to the Administrator for approval.
e) Based on the approved Advice of Sub-Allotment and the Monthly SRDF reports, DTBFM shall allocate/recommend remittance of funds for Personal Services and Maintenance and Other Operating Expenses.
f) Bases of fund releases shall be as follows:
Cereal Procurement Fund -
based on DMO's recommendation as requested by R.O.
Marketing Operations Expenses -
based on DMO's recommendation as requested by R.O. (Procurement, Importation, Drying, Milling/Remilling, Dispersal/Transfer-In, Distribution, Warehousing).
Regular Operating Expenses (PS and MOOE) -
based on remittance thru R.O. as evaluated by Budget Division.
Security Services -
based on approved contract/request of R.O.
Capital Outlay/RMT Funds -
based on R.O.'s request/approved capital/ equipment outlay per approved appropriations.
g) The Field Offices shall see to it that fund request for marketing operations expenses shall be submitted way ahead of time and Central Office for its part, shall facilitate the processes for speedy actions.
h) Field Offices are not authorized to use funds earmarked for a specific purpose unless authorized by Central Office.
i) Failure to account their funds/transactions for a given period and non-submission of reports would mean non-remittance of funds, no RATAHA/Rice Allowance per AO-95-05-041.
3.3.
Fund Control
a) All expenditures/incurrence of obligations shall be controlled by the accountants of respective offices.
b) Fund Control ledgers shall be maintained per Fund/per object of expenditures. Same shall be updated immediately as funds availability are certified on disbursement vouchers, Purchase Orders, Letter Orders and Contracts.
c) If fund balance is not sufficient, the concerned departments/accounting section shall request for realignment of fund/Supplemental Budget if necessary.
d) At the end of the month DAS-CIAD/Accounting Section shall issue an updated SRDF to concerned departments/offices for them to monitor their expenses.
3.4.
Realignment of Funds
a) All departments/offices shall spend within the limits of the budget submitted and approved.
However, to maintain the smooth flow of operations, realighment/reallocation of the budget maybe allowed provided that the following conditions are considered:
That the circumstance is unavoidable and that the realignment will not have an adverse effect on the accounts/objects of expenses/office affected, provided total obligations incurred do not exceed total allotment issued.
That the realignment is within the limits of a particular fund and within the major classification of expenditure, i.e. Personal Services, MOOE, CPF, Capital Outlay.
E.g.
Transfer from personal services to maintenance and other operating expenses shall not be allowed and vice-versa.
Request for authority to use the current allotment for project not within the Work Program should be properly justified by the headof office/ department and submitted to the DTBFM Department Manager thru the Budget Division for proper action.
b) If the above conditions are met, the Heads of Office shall submit to DAS/ Accounting Unit a Letter Request to realign the fund allocation. Any realignment/ reallocation of fund must be disclosed on the report submitted to DTBFM-Budget Division.
3.5.
Withholding/ /Deduction of Funds from the Allotment
a) The Budget Division of the DTBFM/ RO- Finance may withhold/ deduct the remittance if there is still an unexpended balance from previous allotment which may be used to cover-up expenditure for the next quarter. In this case, DTBFM-BD shall issue the authority to use the unexpended balance approved by DTBFM Department Manager.
b) A portion of an allotment may also be withheld/ deducted if it can be determined that such amount is not needed.
3.6.
Request for Supplemental Budget
Department Managers/ Heads of Office may request for a supplemental budget with proper justification for approval by the Deputy Administrator for Finance and Administration and with certification of funds availability from the DTBFM-BD.
4.
Budget Accountability
This is the final phase of the budget process which calls for the reporting of actual performance against plans. Through Monthly/ Quarterly reports, each office entrusted with the fund shall account to management not only his stewardship of the fund but also the effective implementation of the NFA programs under his jurisdiction.
The Heads of Office shall have the sole/ full responsibility on the utilization of the entire budget allotted to them.
Budget accountability shall be monitored by DTBFM-BD thru the following reports:
4.1.
Statement of Obligation Incurred (SOI)
A report which summarizes all the expenses incurred per program/ activity/ object of expense compared vis-a-vis the allotment for the same period. The SOI shall be prepared quarterly for all major expenditure classification such as Personal Services, Maintenance and Other Operating Expenses, Cereal Procurement Cost, Capital Outlay and submitted not later than the 20
th
of the following month. Preparation, consolidation and distribution of copies for the said report shall be in accordance with the existing NFA structure (Exhibit 2).
4.2.
Statement of Receipt and Disposition of Funds (SRDF)
A report showing the monthly cash position per fund account/ expense classification. The SRDF per province shall be submitted not later than the 10
th
day of the following month for consolidation at the regional office. The consolidated regional SRDF shall be submitted to C.O. by the R.O. not later than the 20
th
day of the succeeding month (Exhibit 3):
Non-consolidated SRDF:
Copy 1 & 2 - Regional Office
3 - P. O. Office
Consolidated SRDF:
Copy 1 & 2 - DTBFM - Budget Division
3 - R. O. file
4.3.
Reconciliation Statements of SOI vs SRDF
This reconciles disbursements per SRDF as against the items reflected in the Consolidated Statement of Obligations Incurred. (Exhibit 4)
The foregoing SOP supersedes FOM SOP Numbers 06.01, 06.02, and 06.03 issued and made effective January 1, 1977.
All rulings and/or issuances inconsistent herewith are hereby superseded.
This SOP shall take effect on the 1
st
day of January, 1997.
Date Approved :
May 27, 1997
III. RESPONSIBILITIES
IV. FLOW CHART
Top Page
EXHIBITS
No documents found