BUDGETING
PROCESS IN
MUNICIPALITY
GROUP
4
Budgeting
Process
• The budgeting process is crucial for a
municipality because it acts as a
fi nancial roadmap, ensuring responsible
resource allocation, enabling eff ective
service delivery, and promoting
accountability to the public.
1. Financial Planning
and Resource
Allocation:
• LEGAL FRAMEWORK:
The budget is a legal document that
outlines how a municipality will raise and
spend money, ensuring compliance with
local and national laws.
• PRIORITIZATION:
It allows the municipality to prioritize which
services and programs receive funding, aligning
spending with community needs and goals.
• RESOURCE ALLOCATION:
The budget allocates resources (money) to
diff erent departments and programs, ensuring
that each area has the necessary funding to
operate eff ectively.
2. Effective Service
Delivery
• OPERATIONAL PLANNING:
The budget provides a framework for
planning and implementing various
municipal services, such as public safety,
infrastructure, education, and social
services.
• SERVICE IMPROVEMENT:
By allocating resources strategically, the budget
enables the municipality to improve the quality and
effi ciency of its services.
• LONG-TERM PLANNING:
The budget process helps in making long-term
fi nancial plans, ensuring the municipality can meet
its fi nancial obligations and invest in future projects.
five common
strategic priorities
• economic development
• environmental stewardship
• good governance
• capacity building
• public safety
MUNICIPAL FINANCE
• Municipal fi nance is about the revenue
and expenditure decisions of municipal
governments. It covers the sources of
revenue that are used by municipal
governments – taxes (property, income,
sales, excise taxes), user fees, and
intergovernmental transfers.
What are the key criteria for selecting projects to receive
funding?
the key criteria for selecting projects to receive funding
include:
1.Projects should be part of the annual investment plan
2.Projects should align with the three-year or six-year
investment plan
3.Projects need to be included in the annual budget
What steps are taken to prevent misappropriation and misuse
of funds within the organization?
To prevent misappropriation and misuse of funds, the
organization implements several critical steps:
1.Strict Approval Process
• Funds can only be spent with proper
appropriation
• No unauthorized spending allowed
• Each expenditure requires explicit approval
• Clear documentation for every fi nancial
transaction
2. Regulatory Compliance
• Adhere to accounting rules and regulations
• Follow government fi nancial management guidelines
• Systematic checks at multiple levels
• Ensure all spending aligns with approved budget
3. Oversight Mechanisms
• Municipal administrator provides fi nancial supervision
• Department heads validate expenses
• Provincial budget offi ce reviews fi nancial activities
• Union-level budget approval and monitoring
4. Transparency Measures
• Maintain detailed fi nancial reports
• Use trial balance and allotment statements
• Regular fi nancial reporting
• Clear tracking of fund allocation and
spending
5. Preventive Controls
• Multiple review stages before fund
disbursement
• Comprehensive documentation
requirements
6. Accountability Framework
• Clear consequences for fi nancial
misconduct
• Regular internal and external audits
• Continuous monitoring of fi nancial
activities
• Emphasis on responsible fi nancial
management
How does the organization ensure
transparency and accuracy in its
fi nancial reporting?
1. Comprehensive Reporting Tools
• Trial balance reports
• Statement of allotment and obligation
• Detailed accounting statements
• Ratio analysis to detect fi nancial discrepancies
2. Strict Documentation Processes
• Every fi nancial transaction requires proper
documentation
• Funds can only be spent with appropriate
authorization
• Adherence to accounting rules and regulations
• Systematic tracking of all expenditures
What are the key mechanisms used to
ensure responsible use of the annual
budget?
1. Budget Approval Process
• Annual budget is approved by the union
• Submitted to the provincial budget offi ce
• Strict adherence to the approved budget
amount
2. Spending Controls
• Cannot spend beyond the approved annual
budget
• Funds must have proper appropriation
• Follow accounting rules and regulations
• Each expenditure requires proper
• The Annual Budget Calendar Year 2025 of the
municipality of Baggao amounting to
606,656,293
• The Annual Budget is Appropriated for
salaries, other benefits and priority program,
project and activities of the municipality.
• Appropriation Ordinance no. 2024-180 an
ordinace approving the annual budget.
The Annual Budget CY 2025 of the
municipality is programmed as
follows :
• Personal Services
207,209,718.00
• MOOE
220,557.038.00
• Capital Outlay
20,162,500.00
• 20% development Fund
113,868,222.00
• 5% calamity fund
National Tax Allotment 93.85
%
Economic Transfer
1.67%
Hospital income
0.00%
Local Taxes
2.81%
Borrowings
0.00%
Operating Misc. Revenue
1.68%
LOCAL SOURCES
1.TAX REVENUE 2. NON TAX REVENUE
A. Real property tax A. Regulatory Fee
• Basic RPT B. Service/user Charges
• Discount on Real Property Tax C. Receipt from economic
Basic Enterprises
• Special education tax D. Other Income Receipt
B. Business Tax E. Interest income
C. Other Local Tax
3. EXTERNAL SOURCES 4. INTERNAL SOURCES
• NATIONAL TAX ALLOTMENT • INTER- LOCAL TRANSFER
(NTA) • extra ordinary receipt/grants/
• Share from GOCCs donations
• Other share from national tax
collection
a. Share from ecozone
b. share from EVAT
c. Share from National Wealth
d. Share from tobacco excise tax
THANK YOU FOR LISTENIING!!
