1 Account Management Teams: Strengthening the Linkage Between Agency Planning, Budgeting and Operations to Promote Quality Spending By TERESITA M. SALUD OIC-Director Department of Budget and Management Budget and Management Bureau - E Philippine Association for Government Budget Administration (PAGBA) Sarabia Manor Hotel, Iloilo City Sarabia Manor Hotel, Iloilo City April 3-5, 2015

2 National Policy Budgeting and Financial Planning for Results National Budgets Expenditure Management Results

3 “that state or ideal in which people have free reign to determine their destinies … (and) a process of meaningfully devolving power, both political and economic, to those historically in the margins and deprived of such power, from those sectors which have monopolized this power for their own benefit” Secretary Florencio B. Abad at Ateneo de Manila University School May 7, 2013 President Aquino Administration’s Agenda for Empowerment

4 1.Restoring public trust in the democratic system 2.Dividends of good governance 3.Strengthening the constituency of reforms Public Expenditure Management (PEM) Reform (Imperatives)

5 1.Aggregate fiscal discipline or spending within means 2.Allocative efficiency or spending on the right priorities 3.Operational efficiency of spending with measurable results Public Expenditure Management (PEM) (Objectives)

6 Development Budget Coordination Committee (DBCC) Department of Budget and Management (DBM) - Chair - resource allocation and management (budget & management) Department of Finance (DOF) - revenue generation and debt management (taxes & borrowings) National Economic and Development Authority (NEDA) - overall economic policy (GNP, GDP) Bangko Sentral ng Pilipinas (Resource Institution) - monetary measures & policies (interest rates, inflation, etc.) Office of the President (OP) - Presidential oversight

7 Major Functions of the DBCC  Establish the level of annual government expenditure programs  Determine the proper allocation of expenditure  Allocate the amount set for each activity  Assess the reliability of revenue estimate  Recommend appropriate tax or other revenues measures and the extent and type of borrowings  Conduct periodic review and general examination of costs, accomplishments and performance standards

8 1.Operational efficiency 2.Prudent fiscal management Role of DBM in Expenditure Management

9 NG Disbursement Performance per BTr Cash Operation Report As of March 31, (In Million Pesos) Source: BTS Paper on AMT

10 1.Deficient agency MCP submissions 2.Disconnect between the DBM programming/NCA release schedule and the agency-formulated MPC. 3.Difficulty in setting clear target outputs for the current budget year, given the extended validity of continuing appropriations/ allotments, spilling over to the next year/from the previous year General Findings on Causes of Underspending During First Quarter 2012

11 4.Unawareness of agencies, as well as the BMBs, of the relevance/significance of MCPs on the formulation of the DBCC disbursement program and its impact on economic growth and borrowing targets. 5.Apparent need for enhanced coordination among the BMBs and BTS/FPB in the finalization of MCPs for purposes of DBCC decision-making. General Findings on Causes of Underspending During First Quarter cont.

12 1.Identification and proposal of new initiatives to improve financial performance; 2.Development of measures/leading indicators (e.g., bidding schedules) as general guide in achieving disbursement targets; 3.Laying down strategies to facilitate linkages (internal workflow processes and top-to-bottom operating links) in order to attain financial targets; AMT Functions

13 4.Institutionalization of regular (bi-monthly) assessments of agency financial performance; 5.Updating of financial, non-financial, internal processes scorecards of departments/agencies. AMT Functions cont.

14 (In Million Pesos) Source: BTS Paper on AMT

15 1.Policy Issues 2.Internal processes, systems and procedures 3.Communication 4.Organization (Supervisory/manpower concerns) AMT-Classified Factors Affecting the Underspending

16 THE CHALLENGES How can AMTs ensure that Department disbursements in CY 2013 are aligned with DBCC quarterly and year-end targets ?  Setting of early deadline for the submission of MCP (November 30, 2012 for current budget and January 31, 2013 for PYs & continuing allotments, per NBC 543)  Reforms Initiated  For DBM AMT members to acquire better functional knowledge of selected major operations of departments  Agency confirmation of the approved MCP prior to submission to DBCC  Posting in the DBM/agency website the approved cash disbursement program How can AMTs ensure that CY 2014 Budget Proposals are submitted on time  Deadline on April 15, 2013  Restructuring of PAP  “no submission, no TBH”, ( agency budget shall be limited to agency indicative ceiling)

17 MADAMO GID NGA SALAMAT ( Maraming Salamat)