How the cash-based budget affects DepEd

Education received the lion's share of funds in the proposed 2019 National Expenditure Program. What does the proposed shift to a cash-based budget system look like for the Department of Education?

Sofia Tomacruz

Published: 10:11 AM August 27, 2018

Updated: 10:32 AM August 27, 2018

MANILA, Philippines – Often cited by lawmakers as one of the agencies with supposed “deep cuts” in the proposed 2019 National Expenditure Program (NEP), the Department of Education (DepEd) said it would take on as a “game changer” the government’s first cash-based budget to finish backlogs of overdue projects implemented as far back as 2015.

DepEd Undersecretary Annalyn Sevilla said the department will also prioritize completing preparations needed for future projects to ensure that they ready to be implemented and can be included in the agency’s proposed budgets moving forward.

For 2019, the DepEd was allocated P527.714 billion or 72.1% of its P732.28 billion proposed budget. The 2019 allocation is 8.92% lower than its 2018 budget of P579.419 billion but Sevilla said this decline was to be expected with the shift to a cash-based budgeting system.

“That is the reality of limited negotiations and the reality of wanting to do more. At the end of the day we go back to the 3 constraints of budget: money, people, and time. If we push for our wishful list, it (the burden) will go back to us,” she said in Filipino during an earlier press briefing.

“The (DepEd) secretary (Leonor Briones) is saying okay na ‘yan, satisfied na kami diyan (that is okay, we are satisfied with that.) We need to finish all the overdue,” she added.

With the proposed 2019 NEP as the government’s first cash-based budget, agencies are mandated to spend their allocated funds and deliver projects within the year. If a government agency cannot guarantee completion of a project, it will be removed from its proposed budget. (READ: What is cash-based budgeting?)

“Now we’re changing the game, the budget is good for 2019 only. If we will not deliver then we will not pay you,” Sevilla said.

That may sound like the way things are supposed to be done but for many years now, agencies’ budgets have followed two-year, obligation-based budgeting. This means that payments are disbursed as obligations or commitments that may not necessarily be delivered within the same year. (Budget deadlock: Who's to blame?)

What does the proposed shift in budget system look like for the education department? Here are programs that take the biggest hits:

Among the programs with lower budgets, student journalists take the biggest hit as funds for the development and promotion of campus journalism decreased by 77.6% from P9.6 million in 2018 to P2.1 million in the 2019 NEP.

Indigenous peoples education also received a decrease in budget, with allocated funds 56.2% lower from P130 million in 2018 to P57 million in 2019, national assessment for basic education at 51.3% lower from P485 million to P236 million, and the department’s computerization program at 50.6% lower from P8 billion in 2018 to P4 billion in 2019.

LESS FUNDS. The DepEd says less funds for its basic education facilities program will translate to the construction of fewer classrooms and less school seat sets among others. Photo by Darren Langit/Rappler

Decreased fund allocations for basic education facilities was also 67.1% lower from P105 billion in 2018 to P34 billion in 2019. This means some proposals under this program were not fully considered in the agency’s 2019 budget proposal such as the construction of classrooms and laboratories or workshops, eletrification of schools, provision of school seats, and premlimenary engineering for planned projects.

Sevilla explained the lower allocation of for construction of classrooms would translate to about 4,089 new classrooms as opposed to 46,415 new classrooms, 43,200 sets of school seats as opposed to 80,000 sets, and 1,320 laboratories instead of 3,827. 

Less schools will also be included in its electrification program in 2019 with 1,710 sites up for electrification instead of 5,940 sites.

Meanwhile the school-based feeding program will reach over 1 million learners instead of the proposed over 2 million learners.

The Department of Budget and Management generally recommends funds based on an agency's absorptive capacity while funds are usually reduced due to underspending. 

Apart from this, the DepEd previously said additional and dedicated funds for its special education (SPED) programs were rejected. However, the request for more funds was only supplementary to the existing inclusive SPED program, which is ongoing and will continue.

On the other hand, the following programs were given higher allocations in the proposed 2019 budget:

Of the programs with additional funds, voucher programs for public schools not under the DepEd increased the most by 106.4% from P742 million to P1.5 billion. Voucher programs help cover the cost of education.

Aside from this, the budget for the repair of school buildings also saw an increase of 54.4% from P6.8 billion in 2018 to P10.5 billion in 2019.

'Big change'

For the agency with the one of biggest shares of funds in the proposed 2019 NEP, challenges are anticipated in implementing the cash-based budge. Sevilla said the department is gearing up for the “big change” that will require faster procurement, delivery, inspection, and payment for projects.

“In the meantime that we shift to cash-based, we will have to catch up with the ongoing program and project implementation and gear-up for the the one-year validity of funding,” she told Rappler.

“We see this as an opportunity to become more efficient, effective, and economical in the delivery of basic education services,” she added.

As more students are placed under the DepEd's watch with each new school year, how the department will balance the adjustment of shifting to a new budget system with the delivery of basic services remains to be seen.

The DepEd is scheduled to defend its budget at the House of Representatives on Tuesday, August 28. –