Budget Preparation

BUDGET FORUM
BUDGET CALL
BUDGET CY- 2025
JUNE 11, 2024

STEPS IN THE BUDGET PREPARATION PHASE
Step 1. Issue the Budget Call?

The budget call signals the start of the budget preparation phase. This
executive directive is issued based on the approved AIP, the LGC, and
this manual.
What is a Budget Call?

A budget call is a directive from the LCE specifying the objectives, policy
decisions,
strategies, financing requirements, and prioritized PPAs sector/office as
reflected in the AIP. It provides clear guidelines in the preparation of
individual budget proposals.
This directive shall be disseminated not later than June 16 to allow more
time for the Department Heads to submit reasonable proposals for the
budget year.
What are found in the Budget Call?

1. Spending ceilings by major expenditure (PS, MOOE, FE, and CO);
2. Resource allocation scheme or fiscal policy decisions;
3. Objectives, strategies, and priority PPAs;
4. Expected results;
5. Calendar and budget preparation forms; and
6. Other administrative guidelines.
All these elements are explained in budget preparation workshops prior

to the preparation of budget proposals for the budget year.
Departments and offices of the LGU shall be guided by the policies,
ceilings, and targets embodied in the budget call.
Budget proposals are reviewed as to their consistency with the AlP and
budget call policies.
Why is the Budget Call important?
• It emphasizes the policy objectives of the budget;
• It emphasizes the guidelines to be observed in the preparation of
budget proposals;
• It focuses on the output aimed to be produced during the budget year;
• It firms up policy decisions on how the budget shall be financed; and
• It prescribes the budget preparation schedule and forms.
How is the budget forum conducted?

1. Invite all stakeholders to a one-day budget forum to explain and
discuss the following:
• Objectives for the budget year, major thrusts, and policy decisions;
• Sources of income for the past three (3) years;
• Income estimates and corresponding assumptions;
• Spending ceilings and budget strategies;
• Timelines of activities; and
• Forms to be used.
2. Use focused group discussion to engender group participation.
3. Close the forum by summarizing all issues raised.
Step 2. Prepare and Submit Budget Proposals

The budget proposals of various departments and offices shall be
prepared using uniform templates to ensure the completeness and
comprehensiveness of budget information, as well as to facilitate the
consolidation of all proposals in an accurate and timely manner.
A. Firm up MFOs, Identify Pls, and Set Targets

The MFOs identified for the programs under the AlP shall be firmed up to
ensure their alignment with the Department's/Office's organizational
outcome, mandate, vision, and mission.
Thereafter, the corresponding Pls shall be identified. Pls are the means
to measure how well the goods or services were delivered. This is where
we measure the quantity, quality, and timeliness of service delivery to the
clients.
Annex B of this Manual contains the proposed MFOs and their
corresponding Pis of the different mandatory offices in LGUs.
Taking into consideration resource availability vis-à-vis what should be
delivered by the Department/Office, set the target/s for the budget year.
B. Estimate Costs for the Budget Year

There are three (3) types of costs that may be reflected in the budget: (i)
COE;
(i) FE; and (iii) CO.
Current Operating Expenditures refer to appropriations for the
purchase of goods and services for the conduct of normal local
government operations within the fiscal year, including goods and
services that will be used or consumed during the budget year.
These are expenses allocated to mandatory PS and other associated
PS costs. These include salaries and wages, Personnel Benefit
Contributions, Mid-Year Bonus, Year-End Bonus and Cash Gift,
Representation Allowance and Transportation Allowance, among others.
The other costs, which are variable, are the MOOE. These include
Travel Expenses Office Supplies Expenses, Rent, Water, Electricity,
Fuel, Telephone Expenses, Internet Expenses, Security Services, Repair
and Maintenance Expenses, Confidential Expenses, Printing Expenses,
Extraordinary and Miscellaneous Expenses, Representation Expenses,
among others.
Financial Expenses are expenses which are not used in the actual
operation of the LGU. These expenses include bank charges, interest
expense, commitment fees, and other financial charges.
Capital Outlays refer to appropriations for the purchase of goods and
services, the benefits of which extend beyond the fiscal year and which
add to the asset of the LGU concerned, including investment in public
utilities (PUs) such as public markets and slaughter houses.
C. Prepare the PPMP for the Budget Year
The PPMP shall be prepared by all Departments/Offices for all PPAs
with proposed procurement of goods, civil works, and consulting
services. This shall be done by firming up the PPMP prepared based on
the approved AlP, taking into consideration the available resources,
particularly the budget ceilings of the Department/Office concerned.
D. Consolidate PPMPs into APP
The consolidation and evaluation of PPMPs will be made much faster
and economical through the BAC. This means that decisions on the
mode of procurement, type and specifications of items to be procured,
when to procure, and costs have been considered.
E. Review and Consolidate Budget Proposals
The budget proposals by various Departments/Offices shall be reviewed
by the LBO using the following criteria:
• Consistency with policies set forth in the budget call;
• Compliance with budgetary requirements, general limitations and other
provisions under the LGC; and
• Accuracy of horizontal and vertical computations.
Budget proposals not in conformity with policies and guidelines shall be
returned for revision.
All budget proposals shall be consolidated by the LBO for submission to
the
LFC to be used in the conduct of budget hearings.
Step 3. Conduct Budget Hearings and Evaluate Budget Proposals

The hearing and evaluation of budget proposals shall follow this
procedure:
A. Conduct technical budget hearings
A technical budget hearing is conducted to:
• Review the rationale of the Department/Office;
• Review the PPAs by Department/Office;

Budget Preparation

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BUDGET FORUM

JUNE 11, 2024

Step 1. Issue the Budget Call?

What is a Budget Call?

What are found in the Budget Call?

All these elements are explained in budget preparation workshops prior

How is the budget forum conducted?

Step 2. Prepare and Submit Budget Proposals

A. Firm up MFOs, Identify Pls, and Set Targets

B. Estimate Costs for the Budget Year

Step 3. Conduct Budget Hearings and Evaluate Budget Proposals

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