Admin sets 1-year validity for 2013 appropriations

MANILA, Philippines - The Aquino administration plans to set a one-year validity limit for 2013 appropriations.

The move is part of efforts to ensure that government agencies use their allotments as programmed, Budget Secretary Florencio Abad said.

He said lapsed allotments for government agencies would no longer be carried over to the next fiscal year.

Abad said the government intends to enforce policies that will expedite program implementation and budget execution.

As such, he said that by 2013, so-called lapses or unspent portions in the national budget would not enjoy carry-overs to the next year.

“This way, it will be easier for us to monitor the progress of funded programs and ensure efficiency in future budget preparations,” Abad said.

The usual practice is that the budgetary items are generally subject to a one-year lapse period.

However, Capital Outlays (COs) and Maintenance and Other Operating Expenses (MOOEs) are valid for two years.  

The so-called COs are used for goods and services with long-term benefits for the public, such as infrastructure, vehicles and equipment, and property.

MOOEs are directed to an agency’s day-to-day operational expenses, including supplies and utilities.

“By setting a one-year lapse period for allotments, we hope to encourage better agency performance and push departments to optimize their allocations,” Abad said.

 The proposed one-year lapse period would also increase transparency and accountability in public fund management.

“The one-year limit will help the Department of Budget and Management (DBM) keep a closer eye on the status of agency programs. It should also make budget preparations faster; once allocations are plotted out over a smaller time frame, an agency’s budget requirements will naturally be easier to determine,” Abad said.

 Aside from the proposed one-year lapse, the DBM has spearheaded other reforms for the 2013 national budget

New measures include the elimination of agency lump sums, suspension of releases for agencies without reports and the establishment of the General Appropriations Act as a release document.