MANILA -- The Budget Reform Bill, approved last Tuesday on third and final reading by the House of Representatives by a 158-8 vote, aims to ensure public spending integrity and accountability through greater transparency, fiscal responsibility, result orientation, efficiency and effectiveness.
Albay Rep. Joey Sarte Salceda, House appropriations committee vice chair, said reform breakthrough House Bill 7302 is expected to revolutionize the country’s budget management system and, among others, support the government’s push to substantially increase investments in infrastructures.
Certified urgent by President Duterte, Salceda steered the measure’s plenary deliberation to approval. Its strategic elements include the following: 1) It shifts from an obligation-based budgeting to an annual cash-based budgeting making the appropriations law the authority of agencies to contract out and disburse funds within the fiscal year;
2) It enforces a one-fund-concept wherein monies received by the national government shall accrue to the general fund and remitted to the national treasury; special funds shall be authorized by law and limited to trust fund, revolving and retained funds;
3) Special Purpose Funds shall be limited to National Disaster Risk Reduction and Management Fund, Contingent Fund, and the Statutory Shares of local government units (LGUs) the details of which could not be determined during the budget preparation stage;
4) Savings can be declared only due to completion, fiscal discontinuance or abandonment of an activity or project for which the appropriation is authorized;
5) In case fiscal discontinuance or abandonment of a project or activity, the same shall no longer be proposed for funding in the next two fiscal years, allotments not used due to fault of the agency shall also not be considered savings;
6) The Act authorizes constitutional officers to use savings to cover a deficiency in any existing item of appropriation within their respective offices;
7) It likewise provides integrated financial management information system, a single portal of all financial transactions and reports to be used by national government agencies, government-owned or controlled corporations (GOCCs) and LGUs to integrate budgeting, cash management and accounting processes.
The bill also provides sanctions and penalties for failure to comply with the reporting and posting of requirements, among which are: 1) The Department of Budget and Management will not approve any request for release of allotments under the negative list, modifications or use of savings; 2) The Commission on Audit may disallow any expenditure; and 3) Disbursements may be rendered void.
A substitute for 13 other proposals in the lower house, HB 7302 is titled “An Act to Reform the Budget Process by Enforcing Greater Accountability in Public Financial Management (PFM), Promoting Fiscal Sustainability, Strengthening Congress’ Power of the Purse, Instituting an Integrated PFM System, and Increasing Budget Transparency and Participation.”
Salceda said HB 7302 “ensures accountability and integrity in the use of public resources through transparency, fiscal responsibility, result-orientation, efficiency and effectiveness through an integrated system of planning, programming, budgeting, management, internal control, accounting, reporting and review of public finances.”
President Duterte’s ambitious “Build, Build, Build” program has identified at least 75 flagship projects worth about PHP180 billion to be undertaken over the next decade, which need the backing of a more transparent, result-oriented budgetary reforms, said Salceda, a noted economist.
He pointed out that the new measure “enforces the power of Congress to authorize all appropriations and hold government offices accountable in the use of public funds as well as the responsibility of all agencies to propose, execute and deliver results committed in the appropriations acts.”
It promotes “people empowerment in the management of public resources by enforcing their right to access to information on, and to contribute in the formulation and implementation of the financial affairs of the government,” he added.
The Budget Reform Act applies to the management of revenue, expenditure, financing arrangements, and assets and liabilities of national government agencies (NGAs), government-owned and –controlled corporations (GOCCs), and local government units (LGUs).
Salceda said HB 7302 strengthens Congress’ oversight power by monitoring and reviewing actual performance and results against targets and hold government agencies accountable for their financial and non-financial performance.
The measure “mandates the Office of the President to approve the Statement of Policy and Medium Term Fiscal Strategy for submission to Congress, as well as the Budget Priorities Framework to identify the priority areas of government spending,” he added. (Johnny C. Nunez/PNA)
