Budget Estimates/Proposals

Budget Estimates/Proposals

A Prelude to the Development of an Operating Program and Budget

Zero-based Budgeting

A Budget Approach


Zero-Based Budgeting is a technique of planning and decision-making which reverses the working process of traditional budgeting. In traditional incremental budgeting, departmental managers justify only increases over the previous year budget and what has been already spent is automatically sanctioned. No reference is made to the previous level of expenditure. By contrast, in zero-based budgeting, every department function is reviewed comprehensively and all expenditures must be approved, rather than only increases. ZBB requires the budget request justified in complete detail by each division manager starting from the Zero-base. The Zero-base is indifferent to whether the total budget is increasing or decreasing.

The term "Zero-Based Budgeting" is sometimes used in personal finance to describe the practice of budgeting every peso of income that you receive, and then adjusting some part of the budget downward for every other part that needs to be adjusted upward. It would be more technically correct to refer to this practice as "Active Balanced Budgeting"

"With zero-based processing one can forget about last year, pretend that the program is brand-new, and see if one can provide a detail of expenses for what one would need to fully accomplish the program. This technique will help one to develop a complete picture of what the program actually needs to cost and not just what it has been costing.“.


A method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a "zero base" and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.

ZBB allows top-level strategic goals to be implemented into the budgeting process by tying them to specific functional areas of the organization, where costs can be first grouped, then measured against previous results and current expectations.


Because of its detail-oriented nature, zero-based budgeting may be a rolling process done over several years, with only a few functional areas reviewed at a time by managers or group leadership.

Zero-based budgeting can lower costs by avoiding blanket increases or decreases to a prior period's budget. It is, however, a time-consuming process that takes much longer than traditional, cost-based budgeting. The practice also favors areas that achieve direct revenues or production; their contributions are more easily justified than in departments such as client service and research and development.

Modified ZBB

In zero-based budgeting, a great deal of effort can be devoted in documenting personnel and expense requirements that are readily accepted as necessary.

Modified zero-based budgeting can avoid this by starting at a base higher than zero.

An appropriate starting point might be 80 or 85 percent of the current spending level.

High priority requests above this level could be identified to restore part or all of the current year’s level.

Desirable new programs could also be considered for funding.

FORM SEPP

INDICATIVE TOTAL PROPOSALCEILING 5% 15% TOTAL INCREMENTS CY 2010

CY 2009 APPROP INFLATION COST ENHANCEMENT Col 2 + 3 Col 1 + 4(1) (2) (3) (4) (5)

TOTAL

SUMMARY OF ESTIMATES BY PROGRAM/PROJECTCY 2010

PROGRAM/PROJECT

INCREMENTS

FORM SEPPOC



SUMMARY OF ESTIMATES BY PROGRAM/PROJECT/OBJECT CLASSCY 2010

PROGRAM/PROJECT/OBJECT CLASS

INCREMENTS

FORM SEPPA



TOTAL

SUMMARY OF ESTIMATES BY PROGRAM/PROJECT/ACTIVITYCY 2010

PROGRAM/PROJECT/ACTIVITY

INCREMENTS

OPERATIONS PLAN AND BUDGETCONCEPTUAL FRAMEWORK

VISIONMISSION

OBJECTIVES

OPBPERIODIC

ACCOMPLISHMENTREPORTS

PROGRAMREVIEW AND

ANALYSIS

FISCAL YEAR’SPROGRAMTHRUSTS

FISCAL YEAR’SPROGRAMTHRUSTS

PERIODICACCOMPLISHMENT

REPORTS

PERIODICACCOMPLISHMENT

REPORTS

PROGRAMREVIEW AND

ANALYSIS

OPBOPBOPBOPB

The Medium-Term Development Plan

Established to initially set the direction towards the PNP’s aspirations for its organizations.

It consists of the Key Result Areas to guide the organization’s vision and mission.

Given the KRA’s, program thrusts are developed to be operationalized by the Operations Plan and Budget.

Challenges that brings about expectations of performance are important ingredients of the MTDP for they foster the lessons learned from the past vital for the reformulation and modification of operational priorities.

PROGRAMS/PROJECTS/ACTIVITIES

The specific objectives which aims to contribute in the attainment of the program thrusts and expectations set for the year by higher objectives will be achieved through the performance of certain programs/projects/activities or P/P/As.

These P/P/As enunciate the amount of money which will be provided in order to undertake the activities set forth in the P/P/As.

GENERAL PPA STRUCTURE

I. PROGRAM

I. 1. PROJECT

I. 1. A. ACTIVITY

I. 1. A. 1. SUB-ACTIVITY

PNP Program Structure

I. GENERAL ADMINISTRATION AND SUPPORT SERVICES

1. GENERAL MANAGEMENT AND SUPERVISION

A. PERSONNEL AND RECORDS MANAGEMENT

B. FISCAL MANAGEMENT SERVICES

C. INTERNAL AFFAIRS SERVICES

2. HUMAN RESOURCE DEVELOPMENT

3. PLANS SERVICES

II. SUPPORT TO OPERATIONS

A. MATERIEL DEVELOPMENT

B. HEALTH SERVICES

C. LOGISTICAL SERVICES

III. OPERATIONS

A. OPERATIONS SERVICES

B. INTELLIGENCE SERVICES

C. POLICE RELATIONS SERVICES

D. INVESTIGATION SERVICES

Programs Program Directors

I. GENERAL ADMINISTRATION AND SUPPORT SERVICES

1. GENERAL MANAGEMENT AND SUPERVISION

A. PERSONNEL AND RECORDS MANAGEMENT

B. FISCAL MANAGEMENT SERVICES

C. INTERNAL AFFAIRS SERVICES

2. HUMAN RESOURCE DEVELOPMENT

3. PLANS SERVICES

DPRM

DC

HRDD

DPL

II. SUPPORT TO OPERATIONS

A. MATERIEL DEVELOPMENT

B. HEALTH SERVICES

C. LOGISTICAL SERVICES

DRD

DPRM

DL

III. OPERATIONS

A. OPERATIONS SERVICES

B. INTELLIGENCE SERVICES

C. POLICE RELATIONS SERVICES

D. INVESTIGATION SERVICES

DO

DI

DPCR

DIDM

Sample P/P/As Matrix

P/P/AsOutput Indicator

Per Capita Target

I. Gen Admin and Support

I.1. Gen Mgt and Supervision

I.1.A. Personnel and Records Management

I.1.A.1. Personnel Transactions

I.1.A.1.a. Administration of Internal Discipline

Nr of Cases Received

P500 1000

P/P/AsOutput

IndicatorPer

CapitaTarget Cost

I. General Administration and Support

I.1. General Management and Supervision

I.1.A. Personnel and Records Management

I.1.A.1. Personnel Transactions

I.1.A.1.a. Administration of Internal Discipline

Number of Cases Received

P500 1000 P500t

Program

Project

Activity

On OutputOn Output

Indicated by more preventive, pro-active and

activities-based, and not just reactive and

results-oriented or “body count” influenced

indicators.

Indicators are units of measurement to

analyze the per capita cost of providing a

basket of goods and services identifiable in

terms of object classes say 02, 07, 29, etc.

A Proposal

For every major program, it is proposed to include an unprogrammed activity to capture all higher headquarters directed activities which are not anticipated in the OPB.

Likewise, it will serve as catchments basin for funds otherwise used for unperformed programmed activity, hence diverted to other activities directed by higher headquarters, thus, necessary to be undertaken.

OPB Format

A brief on the general situation and a prognosis.

A statement of vision and mission as indicated in the national strategic action plan.

Statement of the CY program thrusts. Statement of the general objectives as shown

by the expectations enunciated in the PNP proposed budget for.

OPB Format

Statement of the specific objectives of each program directors thereby defining the specific activities that are sought to be undertaken in order to achieve these specific objectives.

The matrix on the different activities and their corresponding budget is attached.

P/P/As

Key Result Areas/Program Thrusts/Expectations

Vision/Mission/Objectives

Documents

Budget Estimates/Proposals