2. RECAPITULATED THE PROCESS, STEPS AND HOW A SCHOOL
PERSONNEL PARTICIPATE IN THE BUDGET MAKING INCLUDING BUDGET
EVALUATION
THE EDUCATIONAL BUDGET
Budget is the amount of money that you have, available to spend. The budget
for something is the amount of money that a person, organization, or country has
available to spend on especially in the Education of the Pilipino people.
This Budget was appropriated to the Department of Educations by the DBM
every year in different amount depending on the approved budget by the Senate.
General Appropriations Act (GAA) is the legislative authorization that
contains the new appropriations in terms of specific amounts for salaries,
wages and other personnel benefits; maintenance and other operating
expenses; and capital outlays authorized to be spent for the implementation of
various programs/projects and activities of all departments, bureaus and
offices of the government for a given year.
3. The Educational Budget is not just a fiscal planning documents, but
it is a deliverable of the district’s promises to the community. With the
help of the budget, the administrators can set their educational goals
for that year.
1.The Budget and the Educational Process
Budgeting for the National government involves four (4) distinct
processes or phases: (a) budget preparation, (b) budget authorization
(c) budget execution, and (d) accountability.
(a) Budget preparation is a process with designated organizations
and individuals having defined responsibilities that must be carried out
within a given timetable (see Figure 1 in Section 1 for a typical time
line). This process is normally established and controlled by a legal and
regulatory framework.
4. (b) Budget Authorization
The amount of money that federal law allows a budget item to be
funded at. This is determined by the Budget Committee, which is
called an authorizing committee because they determine the maximum
amount of money that can be spent, or authorized, in a budget.
(c) Budget Execution
Budget execution is the process by which the financial resources
made available to an agency aredirected and controlled toward
achieving the purposes and objects for which budgets wereapproved.
The process involves compliance with both legal and administrative
requirements.
5. (d) Accountability
The accountability phase is the final phase of the budget process.
This is when the agencies report their actual physical and financial
performance. The assessment of the physical achievements of an agency
is aided by performance indicators.
2. STEPS IN BUDGET PREPARATION
1. The accountability phase is the final phase of the budget process.
This is when the agencies report their actual physical and financial
performance. The assessment of the physical achievements of an agency is
aided by performance indicators.
6. 2. The accountability phase is the final phase of the budget process. This is
when the agencies report their actual physical and financial performance. The
assessment of the physical achievements of an agency is aided by performance
indicators.
3. Set Priorities for theTeam. The first two steps are important, but
they are completed internally. This step will need a team effort. Take
this time to allow the superintendent or their administrative team to
develop a statement of budgetary properties.
These priorities can include additional support for special education
students, reducing class size, adding emotional learning to the
curriculum, learning aftercare, or raising test scores. All of these factors
must be developed outside the business environment. However, the
business must keep the admittance to rank priorities, define them, and
keep expenditure discussions on track.
7. 4. Staff Those Priorities
Another vital part of the budget development process concerns
staffing. Once the administrative team sets and ranks their priorities,
the development team can assess those staffing needs.
5. Remember Staff Expenses
Getting accurate staffing composition costs can be challenging for
any budget development team. If you are within the contract terms for
your district’s collective bargaining agreement, the process can be
easier for you. By setting contracts, the only unknowns in your budget
are retirements, disability, or maternity leaves.
However, you can experience problems when there are unsettled
areas in a collective bargaining agreement. If that is the case, you
might have to use different tactics for your budget.
8. 6. Decide Who Gets the Bill
Some educational budgets are built by projecting the
revenue and then using that to tell the administrative side
what they can afford. While that is fine for most districts,
you will want administrative teams to identify and rank their
priorities first.
7. Finalize
Now that the expenditures match the revenues, you can
share the budget with the administrative team, board, staff
members, and the community. As priorities shift, there could
be some modifications to the budget.
9. 3. THE BUDGET CALENDAR
A budget calendar is a calendar that keeps track of
payment amounts and dates. It’s a helpful way to estimate
how much money will flow in and out in a given month. You
can use the traditional or digital calendar you already have,
or search for free apps and templates online.
A budget calendar looks just like a regular calendar, but
it’s used for the purpose of tracking your bills, due dates,
paychecks, and other important dates in your life. It’s a
helpful way to get an overview of how much money will flow
IN and OUT in a given month.
10. 4. LONG RANGE BUDGETING
A long-range budget is a financial plan that extends for more
than one year into the future. This type of budget typically covers
a five-year period and is focused on the strategic direction of the
business. The orientation of this budget is toward new product
planning, capital investments, acquisitions, and risk management.
Since budgeting allows you to create a spending plan for your
money, it ensures that you will always have enough money for the
things you need and the things that are important to you.
Following a budget or spending plan will also keep you out of debt
or help you work your way out of debt if you are currently in
debt.
11. 5. PARTICIPATION IN BUDGET MAKING
Participative budgeting is a budgeting process in which the
people who are in the lower levels of management are involved in
the budget preparation process. Unlike the imposed budgeting
process, participative budgeting shares the responsibility with
lower-level managers to give them a sense of ownership in the
business.
Participative budgeting also tends to produce budgets that are
more achievable since lower-level employees are better
positioned to inform their supervisors where funds need to be
allocated. When an organization implements participative
budgeting, it shows the top management’s confidence in its staff.
The employees’ sense of ownership gives them the motivation to
work hard and attain the goals that they helped prepare.
12. How It Works
A budget faces a higher chance of being achievable if the
people preparing the budget are knowledgeable about the costs
that are incurred within the organization. While the top
management may possess the necessary information about the
running of the company, they may not be privy to the costs
incurred at the departmental level. It means that they may
underestimate the costs or overestimate the projected revenues.
It will eventually affect the running of the department due to
cash shortfalls. However, involving the subordinate managers to
coordinate the budget preparation process will benefit the
company since these managers have better information about the
running of their respective departments.
13. A participative budgeting process will be more effective when
the organization adopts a system of checks and balances to
prevent unruly managers from abusing their power. Since the
budget moves from the lower managers to the middle and then to
the top management, the budget draft can be reviewed at each
level of management, with the top managers having the final say.
At each managerial level of review, the managers are
interested in identifying any costs that may result in wastage and
inefficiencies in the company. Before any changes are made to
the budget draft, the lower-level managers must be involved to
give their reasons for making certain suggestions in the budget.
This will result in the effective use of funds when the managers
work hand-in-hand with the accounting staff.
14. Advantages of Participative Budgeting
The following are some of the benefits of implementing a
participative budgeting approach in an organization:
1. Transfer of information upwards
One of the advantages of participative budgeting is the sharing of
information from departmental-level managers to top
management. It means that subordinate managers are given the
opportunity to present their views on certain organizational issues.
The managers also get a chance to discuss the difficulties that
they encounter in budget preparation and brainstorm ways of
solving the problems. Both the top managers and the subordinates
are also able to share their points of view on certain issues of
interest.
15. 2. Employee motivation
When employees are involved in the budget preparation
process, they get to own a part of the budgeting process. It
gives them a sense of ownership when their suggestions are
taken into account by senior management. They also feel
appreciated by management when they are given an
opportunity to sit down with the top managers and share
their views on certain points of interest. Employee
involvement in the process improves their morale, providing
them with a greater urge to work harder towards the
attainment of the goals that they helped set.
16. 3. Goal congruence
Goal congruence refers to the agreement between the
employee’s goals and the overall company goals. In order for
the company to create a budget that is achievable, both the
management and the staff must set goals that move in the
same direction.
For example, if the goal of the company is to double the
production capacity in the next year, it should be shared with
the employees since they are the people tasked with
implementing the proposal. If there is no agreement between
the company’s goals and the subordinate managers’ goals, it
will be impossible to attain the set targets.
17. Disadvantages of Participative Budgeting
1. Time-consuming
The most common limitation of a participative budget is
that it is time-consuming compared to an imposed budget.
Since the budget preparation starts from the department
level to the top, too much participation may occur that may
derail the process. Involving all employees in each
department will mean that the negotiations may take too
long before the staff reaches an agreement. If there is no
agreement, the management will need to make the final
decision, which means that the staff will need to accept an
imposed decision.
18. 2. Budgetary slack
The other limitation is budgetary slack. The employees
may overestimate the costs and/or underestimate the
revenue projections as a way of manipulating the budget to
their advantage. It means that the subordinate managers will
set targets that they are sure to achieve and even exceed in
the next financial year. This mostly happens when the
manager’s performance is measured on the basis of the
attainment of the budget. By making the budget easy to
achieve, the managers will be seen as exceeding their
targets.
19. 6. BUDGET EVALUATION
Budget evaluation is the process of comparing prepared
budgets with actual. l results to generate more accurate
budgets in the future.
The budget evaluation process measures the degree of
discrepancy and tries to identify inaccurate assumptions so
you can forecast more accurately in the future. Benefits of
Budget Forecasting and Evaluation Creating a budget helps
you to anticipate cash-flow shortfalls and plan for major
expenditures.
20. Budget Evaluation Methods
To evaluate your budget, you compare what you spent against
what you planned to spend. At the close of each month, you
should review your budget and utilize the information to create
your budget for the following month. At least once per year, you
should evaluate your current budget and financial objectives. It
takes a few steps to evaluate your budget, but it’s a low-effort
procedure that doesn’t take as long as creating your initial
budget.
Budget Evaluation Method 1: Comparison of Actual
vs. Planned Expenditures
*Following the creation of a monthly budget, you should log your
expenditure in a budget spreadsheet or an application like You Need
a Budget on a regular basis.
21. *Assess if you overspent, underspent, or remained on budget
for the month with your budget and cost tracking in front of
you.
*If your expenses surpassed your budget, you might be able to
cut back on any spending areas that were usually higher than
you had planned.
*Alternatively, if you spent less than you had budgeted, you
may be able to raise your expenditures for the next month in
any areas where you spent less than you had expected.
*You’re on the right course if you spent what you expected to
spend, but based on the financial situation for the following
month, your budget may need to be adjusted.
22. Budget Evaluation Method 2: Assessment of
New Income And Expenses
Because a budget reflects your monthly spending plan, it’s critical to
ask yourself at the close of the month what your income and costs will
be for the next month. These might be the same as last month’s or
drastically different.
A lifestyle change might result in an increase or decrease in income or
spending, which should be reflected in the next month’s budget. A loss
of employment, for example, might result in a decrease in income.
Food, utilities, and personal care goods, to mention a few, may all see
an increase in expenditures if you’re getting married or starting a
family.
23. Budget Evaluation Method 3: Reviewing
Financial Goals
Your financial objectives may change from month to month, in addition to
changes in income and spending.
If you just paid off debt, for instance, you may have a lot of additional
money in your budget to allocate to other areas.
It’s critical to incorporate your goals into your budget in order to attain
them.
24. Budget Evaluation Method 4: Modifying Budget Based
on Needs
Adjust your budget to reflect the new income, spending, and
financial objectives you’ve established for the coming month.
This might be as easy as reducing wasteful expenditures and
shifting funds from one area to another. However, if any of these
financial factors have changed dramatically, you may need to re-
allocate funds to each expenditure area.
You can make changes to one, only some, or all of your spending
categories. For example, if you are debt-free and have hundreds of
dollars more each month, you may allocate all of that money to a
few specific spending areas or divide it evenly across all areas.
25. Budget Evaluation Method 5: Identify And Fill
Any Loopholes in Your Budget
The process of assessing your budget may discover hidden flaws in your
expenditure, known as budget leaks or loopholes, in addition to changing
your budget to suit your financial situation. You’ll need to put extra
expenditure limitations in place to fix them.
For instance, you could perhaps discover that you used your credit card
too often or plunged into your savings account, in which case you should
shift to a cash-only spending plan, start leaving your credit card at home
(and even freeze it in a chunk of ice), or put your savings in a certificate
of deposit (CD) to make accessing the money extra hard.
26. Setting these self-imposed spending restrictions will help you stay on
track all across the month.
Similarly, if allocating money for multiple spending categories has
proven difficult, try moving to an envelope approach, in which cash is
divided into individual envelopes for distinct spending categories.
Budget Evaluation Method 6: Monthly And
Annual Budget Review
At the end of the month, review your revised budget to ensure that the
modifications are effective.
It won’t take much time to complete this monthly financial check-up on
a regular basis, and it will help you improve your budget over time.
27. Allocating time once a year to review your annual budget, which is a plan
for how you will spend your money over the following year based on your
yearly income and spending, can also be useful.
A yearly budget, unlike a monthly budget, covers non-recurring items (such
as auto insurance and healthcare bills) and exposes larger spending habits.
This form of budget enables you to track where your money goes over
time, which can help you prioritise your expenditures in order to meet
your long-term financial objectives.
Budget Evaluation Method 7: Put Your Budget
On Paper
There are a plethora of options for budgeting, whether you’d like to use an
excel spreadsheet, write it down on paper, or utilise a budgeting pdf
template.
28. You have alternatives, from the budgeting applications available today to
all of the fantastic tools available online.
What matters is that you maintain track of your spending by making a
detailed budget plan that you can return to.
Budget Evaluation Method 8: Hold Yourself
Accountable
The final and most crucial task is to hold yourself accountable. Even if you
accomplish steps one to seven, you won’t be likely to maintain your
budget if you don’t hold yourself accountable.
Creating a budget is excellent, but you’ll lose track of your final objective
if you don’t remind yourself why you’ve been budgeting in the very first
place.
29. Your ultimate objective might be to save for a house, pay off debt, or just
take another step toward financial independence. You earned it,
whatsoever your “why” is. You put forth a lot of effort to earn this money.
Maintain accountability by checking in with your budget on a frequent
basis. Develop a habit to examine the budget you created in step 2 at least
once a month.
Do it on a weekly basis if you’re down for it. This is where you’ll see your
short-term expenditures mount up, enabling you to keep track of before it
is too late at the end of the month.
In conclusion, we will look at budget evaluation methods and how we can
regain control of our finances. It also explores budget evaluation to help us
create our budget in a way that help us meet our financial goals.
