1. 1 1 1 OTHER BUDGETARY REFORMS (A Presentation for the 27 th DepEd National Seminar/Workshop on the Preparation and Reconciliation of the CY 2012 Mid-Year Financial Reports) July 23, 2012, Tagaytay City By: Assistant Director Dante B. De Chavez, DBM BMB-B

2. 2 OUTLINE OF PRESENTATION National Budget Circular No. 532 Creation of an Account Management Team (AMT) Performance-Based Incentive System and Cascading of Performance Targets Improving compliance with BEDs and BARs 2

3. 3 3 National Budget Circular No. 532 Guidelines on the Review of Major Final Outputs (MFOs) and Performance Indicators (PIs) and Restructuring of Programs, Activities and Projects (PAPs) 3

4. 4 4 Integrating OPIF into NEP(NBC 532) Refine MFOs to capture mandates/business lines of department Have an integrated set of performance indicators (PIs) w/c cover quantity, quality, timeliness, cost Restructure PAPs to establish links with MFOs for better cost estimation and expn. Prioritization Develop standards for OPIF throughout government by applying common methodology to the exercise 4

5. 5 5 Creation of an Account Management Team (AMT) 5

6. 6 Goal of the AMT DBM as the expert on expenditure management should be able to nudge, in coordination with the departments/agencies, their spending levels and rates to align them to the DBCC quarterly disbursement targets to support growth target. 6

7. 7 Functions Come up with new initiatives to improve performance such as reviewing internal processes in formulating MCPs, and adjust MCPs for the rest of the year, in the context of DBCC targets ; Review and assist in improving internal processes in recording/consolidating financial reports from the lowest operating units to the central office for timely submission to DBM; Develop metrics, leading indicators (e.g., bidding schedules), to guide departments towards achieving monthly and quarterly disbursement targets; 7

8. 8 Functions Draw up strategy maps showing cause-effect linkages towards achieving financial targets (horizontal – internal workflow processes; vertical – top-down manner, i.e., top management down to middle management to offices at the regional /district/provincial/school) Assess regularly the financial performance of the departments; Update scorecards monthly: financial, nonfinancial, internal processes 8

9. 9 Expected Output Revised MCPs for Quarters 2 to 4 of the current year, with monthly breakdown and assumptions; Justification/s for below target performance during quarter 1 and factors affecting performance; Proposed measures or catch-up plans to improve financial performance for the rest of the year; and Summary of Observations, Findings, and Recommendations 9

10. 10 Schedule of Meetings and Reporting Meet regularly twice a month -first and last weeks of the month Submit report thru the BTS (re: progress of work of each individual department) 10

11. 11 Performance-Based Incentive System and Cascading of Performance Targets 11

12. 12 Inter-Agency Task Force on Harmonization of National Government Performance Monitoring, Information and Reporting Systems (Administrative Order No. 25, s. 2011) NEDADBMOPDOFPMS Government Oversight Partners: Task Force Members: GCG CHED Technical Secretariat: COAOmbudsmanNCC CESB CSC

13. 13 Outputs of the Task Force 1.Harmonized Results-Based Performance Management System (RBPMS) Using the Five KRAs, OPIF and the RM as underlying frameworks RBPMS as basis and transparency mechanism of the performance-based incentives 2.Performance-Based Incentive (PBI) System 13

14. 14 Organizational Outcomes Good Governance and Anti- Corruption Human Development & Poverty Reduction Economic Development Security, Justice, and Peace Climate Change Adaptation Societal Goals/Outcomes Sectoral Goals/Outcomes Financial StewardshipInternal Process Leadership, Learning and Growth Major Final Outputs (Citizen-focused Service & Product Results) SONA/ SER Socio- Economic Report P P ARC Priority Program Accountability Report Card MARC- I MFO Accountability Report Card MARC- II Management Accountability Report Card Harmonized Results-based Performance Management System (RBPMS) To quality for PBB, agencies must meet at least 90% of P P ARC and MARC-I, and satisfy MARC-II (good governance conditions) Strategic Performance Management System (Individual) 14

15. 15 Draft EO Directing the Adoption of a Performance-Based Incentive (PBI) System for Government Employees 15

16. 16 PBI system consisting of the Productivity Enhancement Incentive (PEI) and the Performance-Based Bonus (PBB) shall be adopted in the national government beginning FY 2012. 1.PEI at P5,000 shall continually be granted across-the-board 2.PBB, which is a top-up bonus, shall be given to personnel of bureaus or delivery units in accordance with their contribution to the accomplishment of their Department’s overall targets and commitments Performance-Based Incentive System 16

17. 17 Adoption of a PBI System Flexibility shall be given to heads of departments to suit the PBB system to the nature of their operations Adoption of a communications strategy and publication of performance targets and accomplishments in the website to ensure transparency and accountability 17

18. 18 Criteria and Conditions to qualify for PBB 1.Achieved at least 90% of MFO targets and Priority Program targets agreed with the President under the five Key Result Areas of EO 43 2.Meet 2 to 3 good governance conditions/ requirements set by the AO 25 Task Force annually under the performance drivers of the RBPMS 3.Bureaus within the department meeting above conditions are forced ranked and the personnel within them 18

19. 19 Performance Categories (1) 19 Department Secretaries shall rank the bureaus or delivery units, including attached agencies, according to their performance following a normal distribution.

20. 20 Performance Categories (2) Below Satisfactory Rating – No PBB For 2012, the Bureau Heads shall rate employees using their respective Performance Appraisal Systems 20

21. 21 PBB Rates of Incentives 21

22. 22 All Departments/Agencies, other Offices of the National Government, State Universities and Colleges (SUCs), and Government-Owned or-Controlled Corporations (GOCCs) are covered. The Governance Commission on GOCCs (GCG) is encouraged to adopt the policies and principles in the EO and issue guidelines for GOCCs covered under RA 10149, pending formulation of a compensation system for GOCCs. Coverage 22

23. 23 Implementation Schedule Executive Briefings/ Orientations (July 2012) Cascading Workshops with Agencies (July 2012) Consultation/ Coaching of Agencies (July 2012) Submission of Cascaded Performance Targets (August 2012) Review/Approval of Agency Performance Targets (September) Submission of Accomplishment Reports (1 st week of December) Evaluation of Performance (2 nd week of December) Grant of Bonus (4 th week of December) 23

24. 24 (Proposed) Circular on the Cascading of Department Performance Targets to Bureau Level or Equivalent Offices 24

25. 25 Criteria for the Grant of PBB In order to be eligible for the PBB, the department/agency should cascade its MFO performance targets, as declared in the OPIF and those targets under the 5 Key Result Areas of the President’s Social Contract, into bureau or equivalent office-level targets. 25

26. 26 Guidelines in Cascading Department Targets (1) Review MFOs, PIs, and targets as declared in the OPIF Book of Outputs for CY 2012, and the key program/project targets related to the 5 Key Result Areas Select or prioritize at least 3 performance indicators for each MFO to capture the dimensions of quantity, quality, and timeliness Key programs/projects with performance targets for CY 2012 agreed with the President shall also be included 26

27. 27 Guidelines in Cascading Department Targets (2) Identify component bureaus/equivalent offices responsible for the delivery of the MFOs and those belonging to STO & GASS The department must submit to DBM the revised MFOs, PIs and PTs together with the original ones if there are adjustments needed in its specification 27

28. 28 Timelines in Cascading Department Targets Submission to the DBM of the accomplished templates not later than August 30, 2012 DBM shall review and approve submissions as to the consistency of identified bureau/office/unit targets with the overall department/agency performance targets Approved cascaded MFOs, PIs and PTs and quarterly accomplishments Department/agencies shall be published in department/agency websites or official publications for transparency 28

29. 29 Schedule of Activities (1) DateActivityTarget ParticipantsRole of Interagency Counterparts July 12 (am) Briefing with BMBs of DBM DBM BMBs July 12 (pm) Briefing of CSC, CESB, CHED, NEDA counterparts (who will join composite team) CSC Field Directors, sector staffs from NEDA, CESB, CHED participants Participants; identify their BMB counterparts July 16- 20 Executive Briefing by Cluster Heads of Departments and Undersecretaries Concerned Interagency counterpart to observe July 25- Aug 2 Workshop on Cascading Performance Targets for Agencies (by Cluster) Undersecretary for Finance and Admin, Planning Officer, Budget Officer, Finance Officer Counterparts to assist covered agencies in selecting strategic PIs, cascading PTs and to check consistency with Cluster targets, President’s directives, RM July 25 – August 25 Consultation/Coaching of Agencies (on need basis) Agencies needing assistance Counterparts to lend assistance, monitor progress and compliance of covered agencies 29

30. 30 Schedule of Cascading Workshops DateClustersResponsible Task Force Member (to be identified) Assigned BMB/ Oversight Agency July 25-Economic Development - Constitutional Bodies DOF Secretary/ NEDA Secretary BMB- A, C, D, CSC, CESB, NEDA July 26 July 27 -Security, Justice and Peace -Climate Change Adaptation and Mitigation - Human Development and Poverty Reduction DBM Secretary/ OES/OP/ CSC Chair BMB- A, B, D, E, F, CSC, CESB, NEDA, July 30OEOs (batch 1 and 2)OES/PMSAll BMBs, CSC, CESB, NEDA, GCG Aug 2OEOs (batch 3)OES/PMSAll BMBs, CSC, CESB, NEDA, GCG July 31SUCsCHED ChairCHED, BMB- B, DBM- ROs, CSC, CESB, NEDA 30

31. 31 Schedule of Activities (2) DateActivityTarget ParticipantsRole of Interagency counterparts On or before August 30 Submission of Cascaded Performance Targets of Agencies All agenciesGCG to receive the submission of covered GOCCs; furnish e-copy TF Secretariat; CHED to receive the submission of SUCs On or before September 15 First-pass Review Agency submission Interagency counterparts to join BMB review of covered agencies; CHED in consultation with DBM counterparts to review submission of SUCs for consistency with OPIF Book of Outputs FY 2012, HERA, Cluster targets; forward evaluation/recommendation to DBM GCG to review submission of GOCCs; forward evaluation/recommendation to DBM September 17-21 Second-pass Review of Agency Performance Targets By Task ForceBMBs, CHED, GCG to present evaluation to the Task Force September 22-30 Final-review and issuance of notices of approval By DBMBMBs, CHED, GCG to prepare notices; coordinate with covered agencies; monitor compliance re: posting 31

32. 32 Schedule of Activities (3) DateActivityTarget ParticipantsRole of BMBs OctoberConversion of Agency Performance Targets into Agency Scorecards All agenciesCounterparts to assist the TF Secretariat in checking the Scorecards for consistency 2nd week October Submission of Agency Accomplishment Report as of 3 rd Qtr All agenciesBMBs/CHED/GCG to evaluate agency accomplishments-to-date vis-à-vis targets; monitor compliance with deadlines 1 st week of December Submission of Agency Accomplishment Report as of EO November All agenciesBMB/CHED/GCG s to monitor submission 2 nd week of December Evaluation of Agency Performance By DBM and counterparts from oversight agencies Counterparts to evaluate accomplishments vis-à-vis targets of covered agencies 3 rd week of December Presentation of Evaluation to the TF and multi-sectoral review body Task Force, multi- sectoral review body BMBs/CHED/GCG to present evaluation 4 th week of December Grant of BonusQualified agenciesBMBs/CHED/GCG to prepare notices and coordinate release of bonus 32

33. 33 Improving compliance with BEDs and BARs 33

34. 34 BEDs/BARs Type of ReportForm No. Period of Submission A.ANNUAL BEDs Physical and Financial PlanBED 1 Monthly Cash ProgramBED 2On or before Estimate of Monthly IncomeBED 3Feb. 15 each List of Not Yet Due and Demandable ObligationsBED 4year B. BARs QUARTERLY Quarterly Physical Report of OperationBAR 1On or before Quarterly Financial Report of OperationBAR 2the 10 th day Quarterly Report of IncomeBAR 3ff. the qtr.

35. 35 BEDs/BARs Type of ReportForm No. Period of Submission B. BARs MONTHLY Statement of Allotment, Obligations andOn or before BalancesBAR 4the 10 th day Quarterly Report of IncomeBAR 5of the ff. month

36. 36 Improving agency compliance of BEDs and BARs to DBM  Remind agencies thru call-up letters / phone;  Encourage on-line submission of reports i.e. SAOB;  Close coordination with agencies and provide technical assistance, if necessary;  Post in the DBM website, the reports submitted by agencies and highlight the agencies with no submission;  Implement the “no-report, no-release” policy. 36

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