Budget definition
According to the definition found in the Law of the National Budget System, “The budget constitutes the State's management instrument to achieve results in favor of the population, through the provision of services and achievement of hedging with efficiency and effectiveness by the Entities. Likewise, it is the quantified, joint and systematic expression of the expenses to be attended during the fiscal year, by each of the Entities that are part of the Public Sector and reflects the income that finances said expenses ”.
As can be seen from this definition, the budget has a dimension referring to the expenses to be attended in the fiscal year and their financing, and a second dimension referring to the results goals to be achieved and the product goals to be achieved with said budget.
The boss and the budget
Landing these concepts a bit with the work of a Boss, as the head of an organizational unit, who has established product and results goals that must be met and who has to try to provide his collaborators with the necessary tools to carry out their tasks normally., we will say that as part of this facilitation function, the Chief must coordinate with the support and support units (USA) the attention of the personnel, the goods and services, the funds, the infrastructure and the necessary equipment, in a timely manner, in the quantity and quality level required.
But, how and when do you inform the support and support units of these requirements? And, the support and support units, how do they know if they have the financing to carry out these contracts? Here we enter the scope of the budgeting process.
Budget process
Many Chiefs believe that the time to request their requirements from the USA is immediately they know them; and, that the USA must attend to them immediately after being communicated. This is not the case, neither here, nor in Peru, nor in Australia. There are several administrative systems that converge at the same time to meet these requirements: Budget System, Human Resources System, Contracting and Procurement System, Treasury System, Public Investment System, among others, each with processes, times, actors and different results.
It is important to highlight that for an Entity to be able to carry out any contractual obligation (execution), it must first ensure that it has the respective budget credits in the duly financed approved budget (programming). And this is done through the development of the phases of the budget process.
So every boss must have knowledge of said process, to be able to ensure that their requirements are going to be met.
In the following table, the phases of the budget process are mentioned and briefly described:
| Phases | Description |
| Programming | The Entities establish the goals to be achieved in an annual exercise, these goals are related to the
Institutional Operational Plan and this to the Institutional Strategic Plan; they project the income to be collected in the same period and estimate the demand for expenses to meet these goals. |
| Formulation | The budget structure is determined, based on the functions and programs of the specifications, the budget categories and the
established income and expenses classifier. |
| Approval | Actions are developed for the approval of the Annual Budget Law. |
| Execution | Income is received and expenditure obligations are met in accordance with the budget appropriations approved in the
annual budget. During this phase, the execution control is carried out, analyzing the deviations that may arise in the fulfillment of the goals and the approved budget and applying the necessary corrective actions. |
| Evaluation | The results obtained are measured and the physical and financial variations observed are analyzed in
relation to what is approved in the budget. |
This process is interactive, where the evaluation of a period serves as input for the programming phase of the next exercise. Likewise, since the budget is a flexible tool, in the execution phase, situations may arise that generate changes in goals and budget that cause changes in the initially approved budget.
With these concepts, the Chief can now approach the answer to the previous question.
- It is in the Programming stage where the bosses, considering the goals that are established there, must request all their needs for human resources, goods, services, equipment and infrastructure to meet those goals. The programming stage is carried out in the Public Entity during the months of May-June of each fiscal year, and it is in the Execution stage, where the USA, with the programming information and after approval of the institutional budget, carry carry out the procurement and contracting processes necessary to meet the requirements of the organizational units If, during the fiscal year, the Heads will be presented with new goals to meet and therefore require greater or new resource requirements, with the budget being a flexible tool,The bosses must request that the USA program larger budgetary credits, which will possibly lead to a modification in the institutional budget, so that as of its approval, the required procurement and contracting processes can be executed. Here, the times of the other systems that converge on said attention must be considered as a factor to determine the timing of the request.as a factor to determine the timing of the request.as a factor to determine the timing of the request.
This, which is easy to understand, requires an internalization by the Chief. In principle, you must accept that you are the owner of your budget; that it should be involved in its programming, not only in the goals to be achieved, but also in the resources with which it will achieve those goals; must follow up on the execution of the programmed; You must request the new requirements in good time; it must generate spending initiatives; And, you are responsible for meeting your budget.
In summary, programming is a phase of the Budget System, to which bosses must give great importance if they want their function of facilitating resources to their collaborators to allow them to meet their goals.
Likewise, a good budget programming carried out by the Chief greatly depends on the levels of effectiveness and efficiency that he achieves.
How is a good budget programming done? It is an answer that deserves more space, so I will leave it for another opportunity.
