Revising The Budget Process In Order To Institutionalize The Budgetary Innovations Of The New Society

Case Overview and Summary

Summary of Presidential Decree No. 1177 (Budget Reform Decree of 1977)

Budgeting Policy and Approach
- The national budget is an instrument of national development, reflective of national objectives, strategies and plans. (Section 3)
- The budget shall be formulated as part of the planning-programming-budgeting continuum and linked to national development goals. (Section 4)
- The national resource budget shall analyze the aggregate of revenue, expenditure and debt of all government units. (Section 5)
- The budgets of national agencies shall consider regional development strategies and plans. (Section 6)
- Annual budgets shall be prepared as part of a long-term budget picture. (Section 7)
- The budget process shall formally consider the timing of major national projects. (Section 8)
- Agency performance and financial review, including cost per unit of work, shall be part of the budget process. (Section 9)
- A single compensation scheme for the government shall be a basis of the budget process. (Section 10)
- Contingent liabilities of the government shall be evaluated as part of the budget process. (Section 11)

Budget Preparation
- The fiscal year shall be from January 1 to December 31. (Section 12)
- The President shall submit the national government budget to the National Assembly. (Section 13)
- The budget shall include current operating expenditures and capital outlays. (Section 14)
- The budget levels shall be recommended by fiscal agencies and covered by revenue sources. (Section 15)
- Agency budget estimates shall include objectives, functions, financial sources, and other details. (Section 16)
- Regional offices shall originate agency budget proposals. (Section 17)
- Agency proposals shall be evaluated using a zero-base approach. (Section 18)
- Budgetary implications of foreign-assisted projects shall be explicitly considered. (Section 19)
- The budget may reflect approved organizational changes. (Section 20)
- Coordinating bodies' budgets shall be limited to planning and monitoring functions. (Section 21)
- Government-owned or controlled corporations' budgets shall be subject to review. (Section 22)
- All government units shall pay taxes and duties, unless subsidized. (Section 23)
- Appropriations for personal services shall not be itemized. (Section 24)
- Legislative proposals involving appropriations shall be approved by the President. (Section 25)

Budget Authorization
- The National Assembly shall focus on policy, budgetary levels, thrusts and strategy during budget discussion. (Section 26)
- The National Assembly shall complete budget debate within 21 consecutive session days. (Section 27)
- The National Assembly shall not increase any project or program appropriation. (Section 28)
- The National Assembly shall not add special provisions earmarking appropriations. (Section 29)
- The General Appropriations Act shall present appropriations by budgetary programs and projects. (Section 30)
- Certain expenditures shall be automatically appropriated. (Section 31)
- No supplemental appropriation shall be passed after the President's budget submission, unless supported by new revenue sources. (Section 32)
- Unexpended balances of appropriations shall revert to the General Fund, except for continuing appropriations. (Section 33)
- Loan proceeds shall not be used without a corresponding release of funds. (Section 34)
- Government agencies shall report on the status of obligations subject to government guarantees. (Section 35)
- Unauthorized revisions in the General Appropriations Act shall be null and void. (Section 36)

Budget Execution
- Appropriated funds shall be available solely for their specific purposes. (Section 37)
- Appropriations shall be allotted quarterly, subject to the Commissioner's approval. (Section 38)
- The President shall approve the year's program of expenditure for each agency. (Section 39)
- Expenditures from lump-sum appropriations shall be made through a special budget approved by the President. (Section 40)
- An operational cash budget shall be implemented to ensure cash availability for priority projects. (Section 41)
- The Commissioner may establish reserves against appropriations for contingencies. (Section 42)
- The President may suspend expenditure of funds allotted to any agency. (Section 43)
- The President may transfer funds between Executive agencies and augment appropriations from savings. (Section 44)
- Savings in appropriations may be used to cover deficits in other items, subject to conditions. (Section 45)
- No funds shall be disbursed without certification of availability of funds and allotment. (Section 46)
- Heads of agencies shall not incur expenditures or obligations in excess of allotments. (Section 47)
- Appropriation balances may be transferred when functions are reassigned between agencies. (Section 48)
- Expenditures in violation of the Decree shall be void, and officials liable. (Section 49)
- Income shall accrue to the General Fund, unless otherwise provided by law. (Section 50)
- Special rules shall govern Special, Fiduciary and Trust Funds. (Section 51)
- Agencies may charge fees for consultation, seminars or technical services. (Section 52)
- The Budget Commission shall administer Lump-Sum Funds. (Section 53)
- Agencies shall implement cost reduction programs. (Section 54)
- Savings may be used for certain purposes, subject to approval. (Section 55)
- Budget officers shall meet qualification requirements. (Section 56)

Budget Accountability
- The President shall evaluate agency performance on a continuing basis. (Section 57)
- The Commissioner shall prescribe a budget monitoring and information system. (Section 58)
- Expenditures shall be recorded to identify various classifications. (Section 59)
- The Budget Commission shall develop standard costs for units of work measurement. (Section 60)
- The Commissioner shall review the budgetary program and project structure of agencies. (Section 61)
- Agency heads shall submit semi-annual reports of accomplishments. (Section 62)
- Failure to submit required reports shall cause suspension of salaries. (Section 63)

Expenditure of Appropriated Funds
- Agencies may enter into contracts for specific services, subject to guidelines. (Section 64)
- Officials may receive additional compensation for concurrent service in another office. (Section 65)
- No salary increase shall be paid unless authorized by law or budget circular. (Section 66)
- Budgets may provide for a lump-sum for merit increases, subject to rules. (Section 67)
- Savings may be used to pay salaries for substitutionary service. (Section 68)
- No funds shall be used to pay salaries of officials or employees on strike. (Section 69)
- Officials and employees may be paid overtime compensation from salary savings. (Section 70)
- Persons receiving pension shall have the option to receive either the pension or compensation. (Section 71)
- Voluntary service with compensation below the hiring rate is prohibited. (Section 72)
- Faculty members may be paid additional compensation for teaching overloads. (Section 73)
- Laundry allowance may be granted to employees required to wear uniforms. (Section 74)
- Hazard pay may be allowed to employees assigned to danger areas. (Section 75)
- Subsistence allowance shall be provided only in specified cases. (Section 76)
- Subsistence for crew of government vessels shall be spent for conducting a mess. (Section 77)
- Officials and employees provided with furnished quarters shall be entitled to necessary furniture and equipment. (Section 78)
- Officials and employees on travel shall be entitled to per diems and allowances, subject to rules. (Section 79)
- Additional conditions for payment of travel expenses are specified. (Section 80)
- Transportation expenses shall be paid when an employee is transferred. (Section 81)
- Rules govern the purchase, use, operation and maintenance of motor transport equipment. (Section 82)
- Rental of motor vehicles shall be limited to 15 days, except as authorized. (Section 83)
- Stocks of supplies, materials and spare parts shall not exceed normal three-month requirements. (Section 84)
- Appropriations shall be available only for locally manufactured products, except when unavailable or more expensive. (Section 85)
- Appropriations for rental of buildings and grounds may be used for lease purchase arrangements. (Section 86)
- Misuse of government funds and property shall be penalized. (Section 87)
- The President may supplement or amend guidelines on the use of appropriations. (Section 88)

Final Provisions
- The Budget Commission shall issue rules and regulations for implementation. (Section 89)
- Inconsistent laws, decrees, orders and regulations are repealed or modified. (Section 90)
- If any provision is declared unconstitutional, other provisions shall remain in force. (Section 91)
- The Decree shall take effect immediately. (Section 92)