Amended Guidelines for the Preparation of the Annual Budget Execution Plans

October 19, 2017

DBM CIRCULAR LETTER NO. 12-17

1.0 RATIONALE

The Department of Budget and Management (DBM) issued Circular Letter No. 2016-9 (dated October 27, 2016), prescribing the guidelines and formats to be observed starting FY 2017, for the Budget Execution Documents (BEDs) which are formulated based on the National Expenditure Program (NEP). The annual BEDs, which contain the agency plans, spending schedules, and physical targets, are regularly prepared by agencies and reviewed by the DBM, to facilitate the release of funds and enable prompt implementation of programs and projects, including the conduct of early procurement activities.

The adoption of performance-informed budgeting (PIB) structure for the NEP/General Appropriations Act (GAA) since FY 2014 makes both financial and non-financial agency performance information available, thereby informing Congress, the public and other stakeholders about the outputs and outcomes an agency is committing to deliver in exchange for its budget. Starting with the FY 2014 GAA, the PIB as a budgeting approach has been implemented, using performance information in the appropriations documents to link funding to results and to provide a framework for more informed resource allocation and management.

Pursuant to National Budget Circular No. 569 (dated February 8, 2017), the FY 2018 Proposed National Budget has adopted the PIB structure based on PRogram Expenditure Classification (PREXC), to facilitate the evaluation of the impact of agency strategies or interventions and provide better information for planning, prioritization, and the organizational management of agencies. The PREXC replaced the Major Final Outputs (MFO), which were central to the outcome-based PIB to shift the focus from agency outputs to programs or strategies. Under the PREXC-based PIB, recurring activities, and projects that contribute to a common organizational objective or outcome are grouped under a program under that outcome, providing performance information per program, instead of the agency-wide approach, thereby facilitating assessment of agency performance and trade-offs.

With the implementation of the PRogram Expenditure Classification (PREXC)-based Performance-Informed Budgeting (PIB), the BEDs formats need to be correspondingly modified.

2.0 PURPOSES

2.1 To modify the prescribed formats for BED nos. 1 and 2 consistent with the PREXC structure; and

2.2 To prescribe the schedule for departments/agencies' encoding or uploading of completed BED nos. 1, 2 and 3 at the Unified Reporting System (URS) to avoid network congestion and other system-related issues.

3.0 COVERAGE

All departments, bureaus, offices, agencies and Operating Units (OUs) of the national government including commissions/offices under the Constitutional Fiscal Autonomy Group (CFAG), State Universities and Colleges (SUCs), and other recipients of budgetary support, i.e., GOCCs and LGUs.

4.0 GENERAL GUIDELINES

4.1 In preparing the BEDs, the following, among others, shall be strictly considered for the timely implementation of programs/projects:

4.1.1 Coordination and synchronization of activities among planning, operations, budget and accounting offices in the program/project implementation;

4.1.2 Taking into consideration scheduling of procurement activities, projecting inventory requirements and overall management of central procurement of common used goods and services; and

4.1.3 Historical performance (absorptive capacity), seasonality (e.g., peak/slack periods) of activities and other factors that influence programming.

4.2 Agencies shall only encode their final and complete BEDs (except for BED no. 4 which is submitted to the PS IT Systems) through the URS strictly in accordance with the schedule shown in Annex A hereof. Encoding access at the URS by agencies shall be automatically disabled outside their respective scheduled dates. To facilitate accurate and timely compliance with the online submission of the BEDs, all departments/agencies are advised to prepare excel worksheet prior to final encoding at the URS.

4.3 It is reiterated that for departments with regionalized offices or lower operating units, the following shall be observed relative to the disaggregation of agency specific lump-sums or centrally-managed items (CMIs):

4.3.1 BEDs of Agency Central Office (CO) shall exclude the amount of CMIs which have already been determined to be downloaded to recipient OUs;

4.3.2 BEDs of recipient OUs shall include the amount of CMIs received from CO;

4.3.3 The sum total of the amount reflected in BEDs of the CO and the ROs including OUs should be consistent with the total approved budget of the department initially based on the NEP and subsequently adjusted consistent with the GAA, as applicable; and

4.3.4 Only the consolidated BEDs generated from the URS, duly signed by department/agency heads shall be deemed official compliance with this Circular. CAIHTE

5.0 SPECIFIC GUIDELINES

5.1 BED numbers 1 and 2 shall be prepared using the forms attached hereto as Annexes A and B, as modified, to facilitate monitoring/assessment/reporting of agency performance, specifically:

5.1.1 BED no. 1 — Financial Plan

• Replacement of "Major Final Output (MFO)" with "Program"

• Retention of "Part B — Major Programs/Projects"

5.1.2 BED no. 2 — Physical Plan

• Incorporation of "Part B — Major Programs/Projects"

5.2 BED number 4 (Annual Procurement Plan for Common Use Supplies and Equipment [APP-CSE]) shall be submitted to the DBM Procurement Service (PS), on or before November 30 of the present calendar year, in accordance with PS guidelines for the purpose.

5.3 In addition, to facilitate program/project implementation by the conduct of pre-procurement activities short of award and the prompt completion of procurement timelines, all concerned are reminded to ensure the consistency of the information reflected in the BEDs with the procurement schedules/specifications being required for submission by the Government Procurement Policy Board (GPPB), to wit:

5.3.1 Project Procurement Management Plan (PPMP).

5.3.2 Annual Procurement Plan (non-CSE) in the format prescribed under GPPB Circular No. 07-2015, as required under Section 7 of R.A. No. 9184 and its revised Implementing Rules and Regulations.

6.0 REPEALING CLAUSE

All provisions of existing circulars and other issuances inconsistent with this Circular are hereby rescinded/repealed and/or modified accordingly.

7.0 UNAFFECTED PROVISIONS

Except as expressly repealed, or by necessary implication, modified by this Circular, the existing provisions of DBM Circular Letter No. 2016-9 dated October 27, 2016, shall remain in full force and effect.

8.0 SEPARABILITY

If any provision of this Circular as now or later amended or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions that can be given effect without the invalid provision or application.

9.0 PENALTY CLAUSE

Failure to submit reports required under this Circular shall be subject to the provisions of Section 57, Chapter 6, Book VI of Executive Order No. 292 (Administrative Code of 1987).

10.0 EFFECTIVITY

This Circular shall be effective immediately and remain to be in force unless otherwise repealed/amended.

(SGD.) BENJAMIN E. DIOKNOSecretary

ANNEX A

Schedule of Encoding of Budget Execution Documents (BEDs)

BED No. 1

FY ________ Financial Plan

BED No. 2

FY ________ Physical Plan

Published in The Philippine Star on October 21, 2017.