Master Plan for the Sustained Implementation of the Local Government Code of 1991

October 11, 1994 PROCLAMATION NO. 481 DECLARING THE ADOPTION OF THE 1993-1998 MASTER PLAN FOR THE SUSTAINED IMPLEMENTATION OF THE LOCAL GOVERNMENT CODE OF 1991 WHEREAS, the Local Government Code of 1991 (LGC)aims to bring about viable self-reliant communities by instituting local autonomy as a development strategy through which local government units (LGUs) are given more powers, authority, responsibilities, and resources to allow them greater room for initiative, creativity, flexibility, and action; WHEREAS, the devolution of service delivery functions and regulatory powers of certain national government agencies (NGAs) to LGUs has been completed substantively in terms of transferred national personnel, assets, and other resources; WHEREAS, in pursuit of the LGC's decentralization goals, the Medium Term Philippine Development Plan (MTPDP) provides that a "greater portion of government resources shall be in support of the service delivery functions of LGUs"; WHEREAS, in conjunction with the development administration concerns of the MTPDP, the LGC has also provided for a responsive involvement of non-governmental organizations (NGOs), people's organizations (POs), cooperatives, and the private sector in providing for a better quality of life for every Filipino; WHEREAS, to sustain the momentum in setting up a decentralized structure of local governance and of promoting greater citizen and private sector participation in development processes, Memorandum Circular No. 188, s. of 1993, was issued directing the Department of the Interior and Local Government (DILG) to prepare a Master Plan to implement the LGC; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby declare the adoption of the 1993-1998 Master Plan for the Sustained Implementation of the Local Government Code of 1991, herein attached as "ANNEX A" as the basic framework for a more synchronized approach in preserving the gains and strengthening the momentum of decentralization. Pursuant to this Proclamation: 1. The Department of the Interior and Local Government (DILG) and the Oversight Committee for the Local Government Code shall promulgate necessary rules and guidelines to implement the preparations of NGAs decentralization/deconcentration plans and shall oversee and coordinate the over-all implementation of the Master Plan. 2. All government agencies, particularly those affected by the devolution of service delivery functions and regulatory powers, shall extend full support and assistance for the successful implementation of the Master Plan. 3. I hereby call upon all Local Government Units, non-government organizations (NGOs), peoples organizations (POs), private sector, and other concerned sectors and institutions to support the implementation of the Master Plan. DONE in the City of Manila, this 11th day of October, in the year of our Lord, Nineteen Hundred and Ninety-Four. ANNEX A MASTER PLAN FOR THE SUSTAINED IMPLEMENTATION OF THE LOCAL GOVERNMENT CODE OF 1991 (1993 - 1998) DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT BUREAU OF LOCAL GOVERNMENT DEVELOPMENT per Memorandum Order No. 188 dated December 14, 1993 Through the OVERSIGHT COMMITTEE on the Local Government Code Implementation BOOK I FIRST YEAR PRIORITY ACTIONS This Master Plan for the Sustained Implementation of the Local Government Code of 1991 is presented in three Books. Book I is the heart of the Master Plan . An Executive Summary highlights its main points. Book I covers three Chapters. Each is focused on a set of actions essential to Local Government Code (Code) implementation during the 1994-1996 period. It assigns high priority to recommend actions by the Oversight Committee for 1994. (YEAR ONE OF THE TRANSITION PHRASE). Book II compiles the Annexes providing details related to Book I. In particular, it presents the criteria governing the choice of the recommended priority Subject Matter Areas for action in Year One. These Subject Matter Areas appear as Chapter II in Book I. Book III presents the rationale and methodologies adopted when doing research on what should be in the Master Plan for the entire TRANSITION PHASE PERIOD, 1994-1996. This involved identifying Subject Matter Areas of Concern and examining them from four management perspectives: Policy, Operating Systems, Organizational Development, and Capability-Building. A total of six Subject Matter Areas of Concern were identified through workshops and field interviews. They are presented in Book III in Matrix Form and include: * Basic Services and Facilities Delivery * Inter-government Relations * LGU-NGO/Private Sector Relations * Development Planning and Budgeting * Revenue Mobilization and Budgeting * LGU Structures/Systems Regulatory functions cover an area of concern permeating each of the six above. These involve regulatory powers to be exercised by Local Government Units (LGUs) and/or national agencies and constitutional commissions, and regulatory bodies explicitly or implicitly affected by the Local Government Code. For that reason, regulatory powers are NOT treated as a separate, distinct, topic in the Matrix. However, their importance in implementing the Code is so great that they are treated as a specific high priority Subject Matter Area in Book I. TABLE OF CONTENTS EXECUTIVE SUMMARY CHAPTER I PHASES, BODIES, FUNCTIONS, MANAGEMENT STRUCTURES I Institutional Development under the Local Government Code of 1991 II Organizational Bodies and their Functions during Transition Phase III Management Structure for the Transaction Phase CHAPTER II RECOMMENDED PRIORITY SUBJECT MATTER AREAS OF CONCERN AND MANAGEMENT APPROACHES FIRST YEAR TRANSITION I Devolved Basic Services and Facilities Delivery Cluster II Planning and Budgeting Cluster III Revenue Mobilization and Fiscal Matters Cluster IV Devolved Regulatory Functions Cluster V Suggested Management Approaches VI Follow-on Year Priorities in Transition Phase CHAPTER III REQUIRED PLAN IMPLEMENTATION SUCCESS FACTORS BACKGROUND There is an urgent need for a Master Plan for implementing the Local Government Code of 1991. The devolution of function mandated by the Code is substantially complete in terms of transferring personnel, assets, and equipment. Now, the Local Government Units (LGUs) need assistance from National Government Agencies (NGAs), constitutional bodies (Commission on Audit-COA; and Civil Service Commission-CSC), and the private sector including Non-Government Organizations (NGOs), People's Organization (POs) and Cooperatives (Coops) to make devolved basic services delivered effectively on an expanding scale. The decentralization provision of the Code together with the principles of local autonomy also require implementation and clarification. Only the Oversight Committee, charged with responsibility for Code implementation, can provide the necessary guidance, encouragement, and clarifications to meet the above needs. Hence this Plan has been drafted as a guide on what needs doing during a TRANSITION PHASE for the next three years, 1994-1996. The Plan includes a recommended organization to support the Oversight Committee, a management approach on how to reinforce implementation, a First Year Plan (1994) for four Subject Matter Areas of Concern with prioritized recommendations for Oversight Committee action, and a Matrix showing all items that should be considered for action by the Oversight Committee during the entire 1994-1996 period. ORGANIZATION Immediate employment of a full time Secretariat is recommended to support the Oversight Committee. It may be assisted by a Technical Consultants Pool. Total cost, annually, is budgeted at P7,600,000.00. During Year One of the TRANSITION PHASE this organization will program its work into four prioritized Clusters (Subject Matter Areas of Concern). MANAGEMENT APPROACH Using field trips, interviews, studies, workshops and other like means the Oversight Committee and other parts of the organization divided into the four Clusters will concentrate on: * strengthening the capability as well as establishing a policy, organizational, systems, and regulatory environment through which LGUs can effectively deliver and expand devolved Basic Services including regulatory functions; * encouraging options for delivery of Basic Services and Facilities through cooperative undertakings with the national government, non-governmental organizations, and other LGUs or other service delivery or economic development functions; * providing an array of locally adapted technologies in planning, budgeting, participatory consensus-building, and management systems which are appropriate, transparent, and accountable; * assisting LGUs in their exercise of local revenue mobilization powers including long-term capital investments financed through varied means such as; municipal bonds, Build-Operate-Transfer arrangements, partnerships with the private sector, development authorities, cooperatives, and joint ventures with LGUs; and * expanded LGU utilization of non-governmental organization, people's organizations, co-operative, barangay association, and private sector resources in a number of programs including Basic Services delivery, and economic as well as social development. YEAR ONE PRIORITY AREAS OF CONCERN FOR OVERSIGHT COMMITTEE ACTION The four Clusters prioritized are: * Devolved Basic Services and Facilities Delivery: Six recommended actions in Year 1 * Planning and Budgeting: Four recommended actions in Year 1 * Revenue Mobilization and Fiscal Matters: Seven recommended actions in Year 1 * Regulatory Functions: Three recommended actions in Year 1 REQUIRED PLAN IMPLEMENTATION SUCCESS FACTORS These are identified in the Plan as: * Strong support from the President and Cabinet. * Adequate funding and early adoption of this Plan or a modified version of same. * An effective Secretariat backed up by a Technical Consultant pool with full participation by all four Leagues. * A strengthened DILG as the lead implementing agency supporting the Oversight Committee. * A strengthened monitoring and evaluation capacity. Estimated cost: P3,582,000 annually. CHAPTER I PHASES, BODIES, FUNCTIONS, MANAGEMENT STRUCTURES I INSTITUTIONAL DEVELOPMENT UNDER THE LOCAL GOVERNMENT CODE OF 1991 1. Phases There are three discernable PHASES in institutionalizing implementation of the Local Government Code of 1991 (Code). These are: CHANGEOVER: (1992-1993) This involves the turnover to LGUs from National Government Agencies (NGAs) of devolved functions and facilities, including personnel, assets, and equipment. This PHASE has been substantially completed during the 1992-93 period. The remaining problems are those on formally completed title changes concerning assets, as well as on the need to review transferred equipment adequacy in some instances. Assuming continued Oversight Committee attention to these matters, this PHASE should be concluded to the satisfaction of LGUs and NGAs by mid-1994. TRANSITION: (1994-1996) This is a period during which NGAs and their field offices, and the various constitutional commissions, and regulatory bodies and LGUs will have institutionalized their adjustments to the local autonomy principles of the Code. The Master Plan is focused on this TRANSITION PHASE. The Plan , as presented in detail in Book III, deals with six subject matter areas at four management levels. These latter include: policy, operating systems, organizational development, and capability-building. In order to concentrate implementation attention, four Subject Matter Areas are singled out for intensive, high-priority action by the Oversight Committee during Year I of this Plan . These are presented in Chapter II of this Book I together with suggested management approaches. This PHASE should require three years 1994 to 1996, for completion. STABILIZATION: (1997-ONWARDS) Assuming that the TRANSITION PHASE is well implemented by all concerned, the NGAs, LGUs, constitutional commissions, and regulatory bodies should have identified and overcome most major adjustment problems by the close of 1996. At that time, many LGUs will have acquired appropriate management and developmental capabilities, sustainable development by localities will be the operational mode, systems for mobilizing capital resources and local revenues will have been adopted, and participatory processes in local planning, development, and governance will be operational. Supportive NGA, constitutional commission and regulatory body policy advice, and technical assistance to LGUs will be operational and constant. Any amendment in the Code, which is mandated for review by Congress starting 1996, will have been enacted by that time. Barring major amendments to the Code, the STABILIZATION PHASE should continue onward indefinitely. II. ORGANIZATIONAL BODIES AND THEIR FUNCTIONS DURING TRANSITION PHASE OVERSIGHT COMMITTEE This Committee will be the national policy-making body for implementing the Code. As such, it will issue appropriate rules and regulations, modify same where necessary, and review the functions/operations of NGAs, constitutional commissions, and regulatory bodies in order to assure effective compliance with Section 5, Book I, 'Rules of Interpretation' of the Code. Also, in accordance with Rule XXXVIII of the Code's Implementing Rules and Regulations the Oversight Committee will rely upon a monitoring system to "hasten the decentralization process, support the Oversight Committee in the supervision of the transfer of powers and functions from the national government agencies to local government units and provide valuable information to promote local autonomy. . . ." Composition of the Oversight Committee, by office concerned, is listed in Book II, Annex 1 of this Plan. SECRETARIAT This body will continue to be based on the DILG as per past practice in the changeover Phase and shall contain a core group of permanently assigned, full-time, personnel. It shall perform the functions spelled out below, and shall be assisted, when necessary, by personnel provided by participating agencies, commissions, and regulatory bodies, such as the following: the Department of Health, Department of Agriculture, Department of Tourism, Department of Public Works and Highways, Department of Trade and Industry, National Economic and Development Authority, Cooperative Development Authority, Civil Service Commission, Commission on Audit, Housing and Land Use Regulatory Board, Public Estates Authority, Philippine Fisheries Authority, and the Local Water Utilities Administration. Functions * In line with the Cluster approach outlined elsewhere below, organize and operate field consultation, review, and monitoring activities designed to foster Code implementation; * Coordinate, monitor and evaluate NGA development of their TRANSITION PHASE (Medium-Term) Implementation Plans for the Code and compliance with details of same; * Propose policy or operational interventions needed to effectively address bottlenecks in Code implementation either by NGAs, constitutional commissions, regulatory bodies, or LGUs; * Coordinate with LGUs through the League representatives to generate data related to solutions of perceived problems in the field; * To the extent feasible given funding limitations, support implementation of Articles 466 (Organization and Responsibility), and 467 (Target Users and their Information Requirements) of Rule XXXVIII (Monitoring System for the Implementation of the Local Government Code of 1991) of the Implementing Rules and Regulations; and * To provide staff support services to the Oversight Committee. Administrative Staff An administrative staff shall be organized to perform the daily work of the Secretariat, and may be composed of the following: * Staff Head * Four Cluster Group Coordinators * One Secretary (clerical) * Two Administrative Support Staff (clerical) * One Utility Worker * And such other personnel as the Oversight Committee may deem necessary and appropriate. Location If physically feasible, the Secretariat may be housed, (with adequate equipment, telephone, FAX, file facilities) in the Presidential Management Staff of the Office of the President. If this is not feasible, then the Department of the Interior and Local Government (DILG), as the authorized agency under the Code, shall provide adequate facilities. Budget An annual budget of P4 million will cover the costs of the Secretariat operations, including field travel and per diem for all Oversight Committee, Secretariat and Technical Consultant Pool personnel assigned. A general outline of the proposed budget is presented in Book II, Annex 4 of this Plan . IT IS RECOMMENDED that the Secretariat be organized and placed in operation within the first quarter of the TRANSITION PHASE (January 1, 1994 to March 31, 1994). TECHNICAL CONSULTANT POOL This will be an adjunct to the Secretariat. It will comprise technical specialists on short-term contracts or knowledgeable persons assigned from the Leagues (on contract) in order to execute specific research or monitoring tasks. The tasks may relate to one or several of the functions of the Secretariat. III. MANAGEMENT STRUCTURE FOR THE TRANSITION PHASE Three Options are suggested for management structures in support of the Oversight Committee, Secretariat, and Technical Consultant Pool during the TRANSITION PHASE, (1994-1996). IT IS RECOMMENDED that Option One (Diagram next page) be adopted because it fits into past practice under the CHANGEOVER PHASE and can be most quickly staffed/organized. Details of the other two Options are stated in Book II, Annex 2 of this Plan . Option One features different from the CHANGEOVER PHASE (1991-1993) are: 1. Clusters The Oversight Committee, Secretariat, and Technical Consultant Pools will be divided into four Clusters. IT IS RECOMMENDED (based on an analysis of TRANSITION PHASE priorities as outlined in Book II, Annex 3 of this Plan) that the Clusters comprise the four areas of: * Devolved Basic Services and Facilities (DBSFs) * Planning and Budgeting (P&B) * Revenue Mobilization and Fiscal Matters (RM/FM) * Devolved Regulatory Functions (DRF) The content of these Clusters is presented (with management approaches essential to approaching each) in Chapter 2, Book I "Priority Subject Matter Areas and Management Approaches." * CLUSTER EFFECTIVITY Performance on the content of each of the above Clusters will require annual review by the Oversight Committee during the TRANSITION PHASE. Based upon the Cluster records of accomplishment/problems encountered/status, Cluster divisions may be continued, altered, augmented or reduced for the next year of Oversight Committee operations. IT IS RECOMMENDED that this annual review begin in the tenth month of each year. Cluster divisions and content for the next year should be adopted by the Oversight Committee in January of each year during the TRANSITION PHASE. * CLUSTER MEMBERSHIP Which NGAs, constitutional commissions, and regulatory bodies will participate in what Clusters either permanently or periodically must be determined by the Oversight Committee and the Secretariat. IT IS RECOMMENDED that the general policy should be to assign the same representative of any agency either permanently or on periodic tasks in order to assure continuity in perspective. Also, assigned personnel must have stature/influence within their respective agencies, commissions, and regulatory bodies. 2. Monitoring System DILG, under Rule XXXVIII of the IRR, continues to have responsibility for organizing and operating a Monitoring System for the Implementation of the Code. (See Annex 5, Book II.) IT IS RECOMMENDED that, with the assistance of the Oversight Committee, the Secretariat and the Technical Consultant Pool, the DILG support the development and operation of appropriate monitoring systems for implementation of the Code. CHAPTER II RECOMMENDED PRIORITY SUBJECT MATTER AREAS OF CONCERN AND MANAGEMENT APPROACHES FIRST YEAR TRANSITION PHASE (See Annex 3, Book II for Outline of Criteria Applied in Fixing Priorities) I. DEVOLVED BASIC SERVICES AND FACILITIES DELIVERY CLUSTER (DBSF) 1. Medium-Term Decentralization/Deconcentration Plans for National Government Agencies (NUAs) The NGA institutional and structural changes generated by devolution must be addressed now. National Government Agencies (NGAs) are mandated to undertake programs and adopt structures and systems that support devolved systems of Local Government Unit (LGU)'of basic services and facility delivery. IT IS RECOMMENDED that the Oversight Committee cluster concerned with Devolved Basic Services and Facilities delivery (DBSF) obligate: o Each NGA affected by devolution to prepare a Medium-Term Decentralization Plan by the first six months of 1994; and o NGAs mandated to deconcentrate must also prepare a Medium-Term Deconcentration Plan by the close of 1994. A detailed description of what is needed in a NGA Medium-Term Decentralization/Deconcentration Plan is presented in Annex 6. 2. Technical Assistance Technical assistance (TA) must be provided by NGAs to help LGUs immediately provide DBSFs of good quality. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with DBSF apply the following guidelines to NGAs in providing TA to LGUs: o Determine LGU-TA requirements. Each NGA shall accomplish this by assessing, through surveys, consultations or other means, the TA requirements and priorities, strengths, and weaknesses of LGUs; o The TA packages to be delivered should also include areas and extent of TAs, the conditionalities for its provision, and a set of criteria for prioritization; o Establish institutional linkages and install delivery mechanisms for TAs with the NGA regional offices serving as systems linkages; o Realign NGA current budgetary allocations to fund immediately much-needed TAs for LGUs, based on a set of criteria for prioritizing TA provision; o Prepare budgetary proposals for TAs to be provided to LGUs, which should be institutionalized later as new line items in the NGA's 1995 annual budget; and o Define the parameters and install trigger mechanisms for intervention in the delivery of DBSFs, with the regional offices providing timely inputs extracted from the monitoring system. 3. Technical Standards for Services and Facilities Delivery by LGUs NGAs must provide current or updated standards to LGUs for DBSFs in the form of guidebooks and other user-friendly manuals. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with DBSF stress the following to NGAs: o Identification of priorities, setting of goals, level of quality, and performance targets for DBSFs; o Applicability of NGA national plans and programs to local conditions; o The appropriate structure and staffing of devolved field activities taking into consideration the gap between the service demand and the available resources; and o Operating systems for DBSFs, particularly in the areas of management control, resource allocation, design, plans, specifications and testing of materials, procurement of equipment and materials, and systemic and communication linkages of devolved field activities with their respective counterpart NGAs. 4. Preparation by NGAs of "How-to" Manuals on LGU-Operated DBSF Systems NGAs must prepare user-friendly "how-to" manuals or guidebooks on LGU operating systems for the use of devolved NGA personnel. These manuals will illustrate the integration or interfacing of LGU operating systems with those of the devolved field activities. They will reorient devolved personnel into designing programs which are directly responsive to local needs and priorities. These user-friendly manuals will accord more importance to the operational dynamics of DBSF delivery rather than the legal obligations of LGUs and the NGA requirements. The manuals will be consistent with the operating procedures and processes of LGUs. IT IS RECOMMENDED that the Oversight Committee cluster concerned with DBSF concentrate on the following LGU operating systems: o Local Planning and Budgeting Processes o Supply and Property Management o Accounting Procedures o Policy-Making Criteria 5. Capability Building for LGUs in DBSF Activities Despite positive trends, LGUs still face a host of post-devolution concerns in regard to operational, organizational, management, and financial requirements of DBSF delivery. There is need for capability-building among LGUs as they begin to undertake their new tasks and responsibilities. NGAs have an obligation, both morally and legally, to ensure that these LGU concerns are addressed appropriately. They are mandated to ensure that devolution/decentralization contributes to the continuing improvement of LGU performance and quality of community life. As a consequence of devolution, it is now inherent in the mission of every NGA to assist LGUs in building their capabilities. But the traditional approach to capability-building, which is characterized by classroom-type training on a generic subject, has been proven not to be so effective. New approaches must be explored to ensure relevance and consistency with devolution imperatives. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with DBSF adopt the following integrated capability-building actions: o Support the activities of the Inter-Agency Capability Building Committee headed by the Local Government Academy (LGA) to plan, coordinate, develop, assess and/or implement all public and private training programs for LGUs; o The LGA Board of Trustees be reconstituted to include the Presidents of the Leagues of LGUs and thus provide the necessary local perspective for that LGA policy-making body; o Support for: (Details in Annex 7) * Innovative approaches to capability-building. * Demand-driven approaches to capability- building for DBSFs. * Design of models aimed at integrating capability-building programs of various NGAs, NGOs/POs/Coops, and public/private educational institutions. * Development of new institutional approaches to capability-building whereby the local functionaries associated with specific LGU concerns will be trained as a team to address such concerns. 6. LGU NGO/PO/Coops Private Sector Collaboration for DBSF Delivery The Code provides opportunities to NGOs, POs, Coops and the private sector (PS) to enter into partnership with LGUs in DBSF delivery. Such arrangements are expected to result in greater efficiency in service delivery. However, the potentials of this collaboration have yet to be explored fully considering that only a few collaborative undertakings have yielded positive results. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with DBSF guide and encourage the NGOs/POs/PS and Coops: o To exercise initiative in developing and applying with the assistance of NGAs and LGUs, cost- effective models for collaborative undertakings in DBSF delivery. o Together with the Leagues, develop an inventory of success stories in this field and disseminate the same to encourage similar joint undertakings. See SUGGESTED MANAGEMENT APPROACHES for all of above recommendations Section V (pages 29-32) II. PLANNING AND BUDGETING CLUSTER 1. Reconfiguring Budgeting Systems and Structures Among LGUs A. Operationalization of Local Development Plans by LGU Budgets As a fundamental management principle, the LGC requires the operationalization of local development plans by local budgets. Budget proposals of LGU departments shall be categorized according to such sectors as economic, social, and general services, in conformity with the local development plan and the budgetary ceilings prescribed by the local finance committee. Yet current field reports point to problems in the operationalization of local plans by local budgets as prepared and adopted by LGUs. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Planning and Budgeting focus on the operationalization of local development plans through the local budgets by emphasizing rules and support systems that locally provide the following information: o The correct allocation of local funds for each development activity with particular attention to sustainability and recurrent costs; o The appropriate tax and other revenue measures or borrowing appropriate to support the budget for current operational expenditures and development plans; o The amount to be allocated for capital outlay including the appropriate provision for maintenance under each development activity; o Transparency and accountability considerations; o The level and ceilings of annual expenditures for economic, social, and general services based on approved local development plans; o Determining the feasibility of planning/budgeting for municipality-consolidation projects on a shared basis for activities like; garbage collection and treatment; potable water resource development; bay and watershed management; road networks and maintenance, etc.; and o Support for an information campaign that will explain the organizational and systems requirements for the various planning-budgeting linkages. Various devices are suggested such as the issuance of a primer with process flow charts illustrating planning-budgeting linkages specially in the preparation stages of the planning-budget cycles. B. Completion of the Budget Operations Manual The Code assigns the promulgation of a Budget Operations Manual jointly to the Secretary of Budget and Management and the Chairman of the Commission on Audit within one year from the effectivity of the Code. The Manual, which shall be a comprehensive compendium of methods techniques, and procedures in budget preparation, authorization, execution and accountability adjusted to local autonomy principles, has yet to come out, but various memoranda and circulars have been issued governing the budget process. They are listed in Annex 8. The DBM says it has already drafted the Manual and submitted it to COA for review. Apparently, some differences in the interpretation of certain provisions in the proposed Manual have held back its issuance. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Planning and Budgeting make certain that the issued Manual contains the following requirements in budget preparation: o The budgets contain only what is essential in guiding local expenditures against planned operational and developmental outputs; o That DBM must give each LGU timely notice of the prospective amount of its share in the IRA and proceeds from national wealth taxes, fees and charges; o Submission of local annual development plans and multi-year investment plans to the local finance committee; o Submission of budget proposals by department heads to LCEs; o Submission by the local treasurer to the LCE of detailed statement of incomes and expenditures; o Submission of the budget to local sanggunian; budget authorization by the local sanggunian; o Preparation, review and approval of barangay budgets; and review of appropriations ordinances; and LGUs must be made aware that they will be monitored concerning the quality of their annual budget planning and operation. C. Policy Study for a Regional Block Fund Concept EO 505 allows Regional Development Councils (RDCs) to review and recommend to the national government allocation of agency regional budgetary ceilings among provinces and cities covered by a region. At the same time, the RDC endorses regional budget proposals of government agencies in accordance with the guidelines issued by the Development Budget Coordinating Committee (DBCC). EO 505 is a significant step in making sure that regional development plans get the funding support needed. However, the NGAs still wield substantial discretionary powers in the actual disposition of funds. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Planning and Budgeting consider: o The option of fostering further decentralization of the planning function by supporting allotment of funds to RDCs with accompanying authority in programming the actual use of funds for NGAs after consultation with LGUs within the area. Through this means NGAs will be made to faithfully adhere to the Regional Development Plan based on LGU consultation in each affected area; and o Commissioning a thorough study of this option as it entails extensive systems changes in current budgeting practice. Also, questions might be raised or the legal personality of the RDC to handle funds. 2. Retooling of Planning Systems and Structures A. LGU-Driven Planning System and Organization A development plan may range from being a conceptual framework for meeting basic needs and growth requirements within a given locality to a data-intensive framework plan that includes all the Code's requirements. This range of possible planning outputs indicates an unevenness in the planning requirements among LGUs. As such, an adjustment period (which may be from three to six years) may be required. This will allow time for LGUs and the central government to work out new relationships and methodologies concerning planning (both vertically integrated and local development) in line with the Code innovations. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Planning and Budgeting concentrate attention on the following: o In consultation with LGUs, encourage the DILG, the Leagues, and NEDA to develop varying menus of planning for local development and shared responsibilities for vertically integrated planning with appropriate strategies and operational criteria. These must be matched with varying LGU capacities measured according to indicators such as income, staff qualifications, planning orientation of elected local officials, and supervisory/legal authority tests in central/LGU powers. o Concurrently with the development of the above menus, formulate and implement a technical assistance program on development planning and budgeting by DILG, NEDA, DBM and the Leagues, with appropriate inputs from other NGAs and ODA on non-ODA organizations when justifiable and practicable. o Focusing this technical assistance program upon adapting planning models and technologies offered by academic centers, research and consultancy groups to the needs and capabilities of local governments. An illustrative list of approaches and principles in planning appears in Annex 9. See SUGGESTED MANAGEMENT APPROACHES for all of above recommendations Section V (pages 29-32) III. REVENUE MOBILIZATION AND FISCAL MATTERS CLUSTER 1. Revenue Mobilization A. IRA Equity Since the enactment of the Code, the IRA equity has been a thorny issue among LGUs. The IRA sharing by LGUs is being questioned on three points: a) Distribution of IRA to each level of LGU; b) Sharing formula at each LGU level (province, city and municipality); and c) Cost of devolved services. Code provisions on the IRA favor heavily the cities. They share the same amount as that shared by provinces although these are only 60 cities compared to 77 provinces. At the same time, provinces absorbed a greater number of devolved national personnel and hospitals than those absorbed by cities. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Revenue Mobilization and Fiscal Matters utilize the just-completed DOF/LDAP Monitoring/Policies Study Team Review of the IRA Allocation Formula to: o Improve the allocation formula of the IRA for equity and development purposes taking into consideration the cost of basic services each level of LGU has to sustain and expand; o Consider the effects upon the IRA of the creation of more LGUs, conversion of municipalities to cities, and the splitting of barangays, to get a share in the IRA; o Consider the issue of the Metro Manila Authority (MMA) sharing in the provincial allocation; and o Consider the idea of providing fiscal incentives or rewards in the IRA allocation formula based upon LGU fiscal management efficiency. B. Information on IRA Availability of timely information on the IRA for the local budgeting cycle remains a perennial problem of LGUs. This data is vital to LGU planning and budgeting and project implementation. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Revenue Mobilization and Fiscal Matters adopt the following actions: o Require DBM to strictly adhere to the Code provisions on the timely release of information on the IRA. To support better planning at the local level, the OSC may require DBM to submit at least two-year estimates for dissemination to LGUs (The estimates of IRA for individual LGUs for two incoming years are easy to compute given the official reports of the BIR of its gross collections for the last two years immediately preceding the fiscal year); o Periodically monitor the actual IRA releases to LGUs. C. National Wealth LGUs are entitled to an equitable share in the proceeds of the utilization and development of national wealth within their respective areas of jurisdiction. The Philippine constitution and the LGC mandates this sharing. This is another source of considerable funds for some local governments. However, this identified source has not been fully tapped due to some policy and operational issues. These are areas which need clarification. IT IS RECOMMENDED that the Oversight Committee cluster concerned with Revenue Mobilization and Fiscal Matters adopt the following actions: o Develop an operational definition of the types and limitations of national wealth. The IRR of the LGC generally defines national wealth as all natural resources situated in the Philippines territorial jurisdiction including lands of public domain, waters, minerals, coals, petroleum, mineral oils, potential energy sources, gas and oil deposits, forest products, wildlife, flora and fauna, fishery and aquatic resources, and all quarry products. There is still no common operational definition comprehensible and acceptable to both LGUs and national agencies and GOCCs on the above. o Develop a system of estimating LGU shares. The lack of clear operational definitions leads to the second area which must be addressed. This is the absence of a mutually understood (LGUs and central government) system for annual and quick estimation of the proceeds of national wealth. o Monitor the allocation of shares. The 1993 and 1994 figures for LGU shares of national wealth do not indicate the amounts of allocation to the respective local governments. This lack of information among local governments, especially during the budgeting period, hinders efficient LGU planning and operations. o Develop guidelines on the use of shares. Utilization of the proceeds now pose operational problems especially in the sharing among local governments. D. Local Taxation LGUs have the power to create their own sources of revenues subject to certain limitations provided for in the Code, consistent with the principles of local autonomy. These taxation powers should be used optimally, judiciously and prudently. Operationally, this can be achieved by LGUs through the equitable maximization of permissible tax revenues and the application of innovative local taxation schemes. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Revenue Mobilization and Fiscal Matters assist this entire process by: o Encouraging LGUs to conduct genuine consultations before the enactment of tax measures; o Providing technical advice, through the DOF, about the scope and limitations of local taxation including the development of specific guidelines on local taxation; o Supporting the documentation and dissemination of innovative local revenue mobilization schemes as well as published materials on the basics of Revenue Mobilization under the LGC (e.g. the LDAP Monitoring/Policy Studies booklet on "Essential Actions for LGU Revenue Mobilization"); and o Instruct the BIR, through the DOF Secretary who is a member of the OSC, and encourage the COA to promulgate the appropriate accounting guidelines to operationalize Code provisions on the situs of tax. E. Credit Financing/Local Government Bonds The Oversight Committee must help open this large and currently untapped funds source for LGUs. Estimates put this source, conservatively, at around $3 billion over the next five years out of the $700 billion potentially available in the Philippine capital market for bond flotation. Yet practically nothing yet has been done about this over the last two years since the enactment of the Code. The Bangko Sentral and Securities and Exchange Commission (SEC) are supposed to promulgate guidelines concerning LGU bond issuances that are not guaranteed by the national government. Those guidelines have not yet been issued. The absence of these are a hindrance to development of the LGU bond market. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Revenue Mobilization and Fiscal Matters take the following actions: o Formulate and implement an Action Plan for promotion of local government bond usages. Clearing up the present stoppages on guidance issuances should be the first order of business. The Action Plan should also include legislative and executive actions geared to designing developmental rather than regulatory policies i.e. policies designed to provide tax and other incentives to buyers or subscribers of local government bonds and other long-term securities This action plan can be executed in detail by an inter-agency committee composed of the DILG, SEC, Bangko Sentral, NEDA, the Leagues, and DBM. The Oversight Committee can also invite the Bankers Association of the Philippines (BAP), the Investment House Association of the Philippines (IHAP) and other like groups to participate. This inter-agency Committee should concentrate on local government bond usages only. Committee use of Philippines- based reference materials on this entire subject is vital. These include: The Local Government Credit Finance Study of May 27, 1992 and related four Information Papers (Local Development Assistance Program Monitoring Team). o Cause the issuance of a Presidential directive that will authorize DBM, upon prior consent of the LGU sanggunian, to deduct from the IRA share of the LGU the rightful claims of creditors for interest and principal payments on issued local government bonds according to stipulated condition in the bonds. (This process is already authorized in the Code; but a presidential directive can reinforce its effectivity). o Encourage the private sector to invest in local government bonds. This includes private small investors, school children savings, companies, large corporations, insurance companies, commercial banks, trusts, investment houses, and Filipino citizens abroad (the latter would be subject to Monetary Board Rules). o Sponsor research demonstrating the tax base building potentials of tax-exempt municipal bonds. F. BOT/BT Provisions for LGUs The BOT/BT scheme is another non-traditional option that is available to LGUs in the provision of services and facilities. The law is now under further revision to make it more liberal in usage. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Revenue Mobilization and Fiscal Matters take the following actions: o Encourage the Leagues and the DILG to work with CCPAP through a Memorandum of Agreement to design manuals and guidelines on local BOT project identification, packaging, evaluation and management and develop training programs for LGU personnel on those matters; o Develop ways to encourage LGUs to use the "One-Stop- Shop" facilities that CCPAP is now installing to further promote BOT applications to local needs; o Develop case studies demonstrating successful LGU usage of BOT practices. 2. Revenue Utilization and Administration Measures for increased local revenues must be matched with increased effectiveness and efficiency of revenue utilization and administration for optimal use of resources. The need to provide revised revenue utilization and administration support mechanisms stems from the change in the scope and mode of service delivery. IT IS RECOMMENDED that the Oversight Committee Cluster concerned with Revenue Mobilization and Fiscal Matters focus on the following: A. Early Design and Application of : o Manuals for Treasurers and Assessors which will be promulgated by the DOF; o Control and review mechanisms for barangay funds which will be formulated by COA; and o Supply and property management system which will also be formulated by the COA. B. Encourage Collection of Existing Taxes with Focus On : o Eliminating administrative inefficiencies to lower transaction costs; o Improving records management including the setting up of integrated tax rolls to facilitate the tracking of tax bills and performance monitoring of collectors; o Defining collection norms for treasury personnel including costs of managing and collecting various types of taxes; o Developing and applying performance incentives for tax collection; o Development and applying "presumptive income levels" to help LGUs assess the gross annual receipts of business for tax purposes; and o Institutionalizing a system which will regularly publicize LGU tax evasion enforcement activities. See SUGGESTED MANAGEMENT APPROACHES for all of above recommendations Section V (pages 2932) IV. DEVOLVED REGULATORY FUNCTIONS CLUSTER Another important decentralization policy embodied in the LGC is the devolution of certain regulatory functions of NGAs to LGUs. This enhances the inherent powers of LGUs to promote the general welfare. Expanding the regulatory functions of LGUs is as important as devolving service delivery functions in achieving genuine local autonomy. This also implies that a number of national regulatory powers not specified in the Code may require modification/clarification. Unlike the DBSFs, the devolution of regulatory functions (DRF) does not entail the massive transfer of personnel and assets from NGAs to LGUs. DRFs also have a considerable impact on the general populace, although not directly as compared to DBSFs. Like the DBSFs, the devolution of regulatory functions requires much national policy and technical assistance support. In fact, many LGUs are hesitant to take actions on DRFs until specific guidelines are issued by the NGA concerned. LGUs remain overly dependent on central authority for guidance in these matters. On the other hand, some NGAs seem to resist or delay the devolution process by taking little action or no action at all in this regard. As a result, many issues on DRFs remain unsolved at the LGU level. NGAs concerned have not provided solutions to structural and other substantive problems surrounding this subject. IT IS RECOMMENDED that the Oversight Committee Cluster on Regulatory functions concentrate on identifying and breaking the choke points that slow down the full exercise by LGUs of DRFs. The following are a representative sample of problems relating to regulatory need for: (1) policy guideline issuances; and (2) clarification of existing regulatory policy practices. 1. Issuance of Policy Guidelines While a number of policy guidelines covering certain DRFs have been issued there are still a few for which guidelines have yet to be promulgated. Most of these functions are relatively straightforward and would only require clarifications as to the extent of LGU authority and the complimentary roles of NGAs concerned, consistent with the devolution principles laid down by the LGC. There is a need to issue clearcut guidelines on these functions; otherwise, jurisdictional conflicts between LGUs and NGAs will continue to hamper devolution initiatives. They include: A. Cockpit Operations Attention should be focused on the issuance of guidelines prescribing standards and procedures for licensing cockpits and cockfights. This could be achieved by simply restating or updating the guidelines issued pursuant to PDs 449 and 1802 as amended. B. Licensing of Tourism Establishments The LGC has specifically empowered LGUs to regulate the establishment, operation, and maintenance of hotels, motels, inns, pension houses, lodging houses, and other similar establishments, including tourist guides and transports, in their respective jurisdictions. Notwithstanding this specific LGC provision, jurisdictional conflicts remain between LGUs and the Philippine Tourist Authority (PTA) or the Department of Tourism (DOT) over licensing tourism establishments. C. Reclamation Projects Reclamation projects are among those infrastructure facilities devolved to cities and provinces. However, the Public Estates Authority based on presidential decrees and executive orders during the Marcos period claims total regulatory and supervisory powers over the development of such projects. Can this be modified through Memoranda of Agreement or other like arrangements with LGUs? D. Traffic Management Regulation of traffic in all streets and bridges have been devolved to cities and municipalities. These LGUs, are also empowered to prohibit and remove all encroachments or obstacles thereon. Despite the LGC provisions, devolution of the traffic regulatory function has not yet been devolved from the DILG. 2. Review of Existing Regulatory Policy Practices by National Bodies A number of policy guidelines dealing on DRFs have been issued since the enactment of the LGC. These were intended to set the stage for the full exercise of such functions by LGUs. Up to a certain extent, these issuances and practices have succeeded in achieving this objective. However, they have also produced a new set of policy questions and operational issues which must be resolved in order to ensure a smoother transition for DRFs. Below are some of those issuances and practices which must be reviewed to facilitate LGU actions under their local autonomy powers: A. EO 72 (1993) The Housing and Land Use Regulatory Board (HLURB) has initiated training pursuant to the directives of EO 72 providing for the preparation and implementation of the comprehensive land use plans of LGUs. But despite this training, many LGUs remain unprepared to assume full responsibility over this function. One reason for this condition may be the very high technical requirements of land use plans as prescribed by HLURB. The said EO has laid out the institutional and functional arrangements for land use planning. Unfortunately, it falls short in providing suitable guiding principles and general standards that consider the operational realities of land use planning at varying levels of LGUs. Instead, the EO has directed HLURB to come out with the specific standards which are actually a rehash of past guidelines prepared under different circumstances of local governance. The key issue on these guidelines includes: Are these practical and implementable at LGU levels? If not, what are the feasible modifications under local autonomy principles? B. MC 34 (1993) Per MC 34 (1993), HLURB will serve as a facilitator for all NGAs issuing certificates which are required prior to the reclassification of agricultural lands into non-agricultural uses by cities and municipalities. At first glance, it appears that this scheme will facilitate the seemingly complicated process of land reclassification. However, looking more closely into the scheme reveals inconsistencies with the provisions of EO 72. Under EO 72, the powers of HLURB to review and approve land use plans of component cities and municipalities are devolved to the province. On the other hand, MC 34 requires that all LGU applications for reclassification shall be submitted to the HLURB, which in turn shall review them to determine if the LGU concerned has an existing comprehensive land use plan reviewed and approved in accordance with EO 72. The certification process under MC 54 must be revised to conform with the review and approval mechanisms for land use planning of EO 72. Otherwise, LGUs might find the process circuitous and cumbersome. C. DENR's AO 30 as Amended by AO 37 (1992) The enforcement of laws on environmental protection is one DRF that LGUs seem less familiar with but actually poses more challenges to them. Although the DENR has completed the devolution of some of its functions, many LGUs have yet to understand the extent of their authority over environmental concerns. The DENR powers devolved to LGUs pursuant to AOs 30 and 37 are as open-ended as those provided in the LGC. While there are attempts to delineate LGU prerogatives over environmental protection in said AOs, DENR continues to exercise those powers supposedly devolved to LGUs. These circumstance demands early clarification. In fact, there are few environmental concerns which the LGUs cannot involve themselves in if they so choose. LGUs are directly assigned by the Code certain environmental management and regulatory powers, many of them subject to the caveat of "supervision, control and review of DENR." While this caveat may be viewed as restrictive, LGUs may choose to view it as permissive inasmuch as the sum total of various powers provided by the Code open the opportunity to enforce a good number of national laws on environmental management, protection and enforcement in the interests of sustainable development. LGUs have a legal duty anyway to enforce or conform to national laws. In particular, provinces are required to enforce environmental laws. Innovative provincial governments can use this to their advantage in all aspects of environmental issues: sustained management, protection, conservation, control, etc. At the same time, the Oversight Committee should review what clarifications could be issued to LGUs in relation to said caveat. Below is a partial list of environmental issues within the jurisdiction of LGUs: * Control and management of deforestation, soil erosion, flooding and situation problems; * Watershed protection and catchment areas; * Coastal areas and marine sanctuaries; * Woodlands and mangrove areas; * Point source pollution from urban activities; * Industrial and commercial pollution (slaughterhouses, wet market waste, medical waste, glass factories, petrochemical complexes, industrial toxins); * Urban run off (drainage, chemical "first flush" problems, etc.); * Sewage and sewerage system maintenance; * Garbage collection and solid waste disposal; and * Landfills (siting, design, operations). All of those matters on LGU environmental regulation and management require study and clarification at the national level by the Oversight Committee. D. Executive Order No. 226, Omnibus Investments Code of 1987 Article 65 of this Executive Order exempts regional or area headquarters of multinational corporations and other private foreign investment projects from all kinds of local taxes, licenses, fees, dues, or bureaus. There should be a review and clarification on how provisions of the Local Government Code of 1991 affect or are affected by this Executive Order. E. Existing Commission on Audit COA) rules, regulations, administrative procedures and overview on accounting/purchasing routines have tended to impede local efforts at providing Basic Services more effectively and exploring economic developmental opportunities opened to LGUs Code innovations. Examples of this condition are widespread, and they signal a need for a complete re-examination of how COA should operate when protecting the public money under local autonomy conditions. A good example on Basic Services delivery is that on current COA regional auditor interpretation of rules applying to location of accounting and cashier functions in hospitals now transferred to provincial governments. In the same area, difficulties on interpreting the rules on the acquisition of medical supplies and equipment tend to hold back local initiatives to innovate, which results in higher costs at the expense of taxpayers. F. Civil Service Commission rules and regulations affecting devolved personnel must be redesigned to open and expand career opportunities in all levels of government for those individuals and other employees of LGUs. The urgent need is for rules and practices that facilitate vertical advancement and lateral transfer of all local government employees, devolved or otherwise. G. A number of other regulatory powers exercised by various central agencies such as the Board of Investments, the Department of Tourism, the Department of Transportation and Communications, the Department of Public Works and Highways, the Department of Labor and Employment, the Department of Trade and Industry, the Export Processing Zone Authority (EPZA), the Local Water Utilities Administration, the Philippines Ports Authority, the Philippine Fisheries Development Authority, the Commission on Audit, the Civil Service Commission, etc. all require assessment and possible clarification as they relate to the new authority granted to LGUs. 3. Medium-Term Regulatory Deconcentration Plan to Implement the Code The transition from central control over DRFs to local one has begun as the policy structures are put in place. This transition will induce affected NGAs to institute fundamental changes in their strategic concerns, structures, and operating systems. NGAs will be assuming a new role as more and more LGUs are taxing on the DRFs. As they do so, the actions must be based on a set of common principles, concerns, and priorities to ensure responsiveness to devolution imperatives. The following NGAs must therefore prepare their respective medium-term plans to sustain the devolution of regulatory functions: o HLURB Land use planning and zoning; processing of subdivision plans o DENR Enforcement of environmental laws o DOH Implementation of the Sanitation Code and quarantine regulations o DPWH Implementation of the National Building Code o NMIC Meat inspection and regulation of slaughterhouses and public markets o GAB Licensing of cockpits and cockfights o PTA Regulation of tourism establishments o LTFRB Franchising of tricycles o Others not listed but to be determined by the Oversight Committee, Secretariat, and the Clusters. Proposed contents of the Medium-Term Decentralization and Deconcentration Plan are discussed in Annex 6. See SUGGESTED MANAGEMENT APPROACHES for all above and other regulatory operations Section V (pages 2932) V. SUGGESTED MANAGEMENT APPROACHES The foregoing four Clusters contain a total of 20 major Recommendations for action by the Oversight Committee. These are further sub-divided into 67 specific items within the major Recommendations. They are distributed according to the following pattern: Devolved Basic Services and Facilities Delivery Cluster : 6 Recommendations 20 Items within the Recommendations Planning and Budgeting Cluster : 4 Recommendations 14 Items within the Recommendations, Revenue Mobilization and Fiscal Matters Cluster : 7 Recommendations 20 Items within the Recommendation s Regulatory Functions Cluster : 3 Recommendations 20 Items within the Recommendations To address these matters successfully during the first twelve months of the TRANSITION PHASE, the Oversight Committee and each of the four Cluster Groups need to adopt the following: MANAGEMENT POLICIES o Internal to Cluster Groups and Oversight Committee Within the first 90 days of operation under the Implementation Plan, each Cluster Group, aided by the Secretariat, and Technical Consultant Pool, as the case may be, must determine which among the recommendations in its Cluster will be given priority. It must also determine which items within the prioritized Recommendations will be the object of prompt attention. This entire process of developing policy and setting internal priorities requires consultations with LGUs, the Leagues, and NGAs prior to requesting Oversight Committee approval of target priorities. The process also requires Cluster Group policy decisions on how each selected priority action is to be staffed, scheduled, and programmed in terms of field consultation/review, and inter-action with concerned LGUs, NGAs, and regulatory bodies, etc. o Substantive Within Subject Matter Areas The Cluster Groups have a decisive role to play within the general national and local policy parameters defined in the Code. The determination of those parameters are based on two tests. One concerns the supervisory powers as exercised at the national level, and by provinces, highly urbanized cities, and independent component cities; and supervisory powers as exercised by provinces over component cities, municipalities, and barangays. The other concerns proprietary and corporate powers given to LGUs by the Code and other national laws, and national powers shared by LGUs with national agencies. The Oversight Committee, assisted by the Cluster Groups, must develop these policy parameters. They must apply the same when assessing management policies of NGAs, regulatory bodies and LGUs, as these strengthen or impede performance related to pertinent Code provisions and intent. Where appropriate, the Oversight Committee should seek necessary management policy changes in lagging agencies (NGAs, regulatory bodies, and LGUs). In the same way, it should encourage appropriate policy management development by NGOs, POs, and Coops interested in working with LGUs. OPERATING SYSTEMS o Internal to Cluster Groups and Oversight Committee Developing or enhancing operating systems must be given critical attention as internal management policies are under development within each Cluster and the Oversight Committee as a whole. These have to assure timely and quality performance by each Cluster Group. Differences in subject matter content and work loads for each Cluster may demand the adoption of varied operating systems. Each, however, must have an internal discipline, scheduled performance, and defined outputs. o Substantive within Subject Matter Areas One of the critical functions of the Cluster Groups will be that of becoming familiar with the operating systems in use among NGAs, regulatory bodies, and LGUs within the priority subject matter areas. These usages will require assessment followed by modifications and substitutions. Where necessary, the IRAs may be altered or Executive Orders issued to support the installation of essential operating systems. In the same way, the Cluster Groups should encourage participating NGOs, POs, and Coops to develop appropriate operating systems. ORGANIZATIONAL DEVELOPMENT o Internal to Cluster Groups and Oversight Committee The Oversight Committee, the Cluster Groups, the Secretariat, and the Technical Consultant Pool must define and develop organizational missions (goals), structures, and linkages that will support their implementation of the Master Plan. Again, these may differ internally depending on the functions of each entity; but still these must be clearly defined in terms of authority, hierarchy, discipline, and relationships. o Substantive Within Subject Matter Areas Another critical function of the Cluster Groups is to observe or assess how the NGAs, regulatory bodies, and LGUs are organizing internally in order to adjust to new conditions in the light of the Code provisions on local autonomy, devolution, decentralization, and deconcentration. Again, the cluster Groups will generally play a supervisory and consensus-building role in supporting the efforts of NGAs, regulatory bodies, and LGUs at developing new organizational structures and practices that reflect the Code innovation. Where necessary, amendments to the IRR may be proposed or Executive Orders may be issued for the purpose. CAPABILITY-BUILDING o Internal to Cluster Groups and Oversight Committee It is important that Cluster Group personnel, the Secretariat Staff, and the Technical Consultants develop their capability to analyze the policies, systems, and organizations of NGAs, regulatory bodies, and LGUs in the context of Section 5, (Rules of Interpretation), Section 16, (General Welfare) and other related Code provisions. Staff personnel who are capable in these matters should be encouraged by the Oversight Committee to assist private and public training institutions on the same. o Substantive Within Subject Matter Areas Every NGA, regulatory body, and LGU must be encouraged to either develop internal, or access external, training capabilities that are focused on the analysis of their policies, systems, and organizational structures as these pertain to the priority Clusters, Rules of Interpretation, General Welfare, and other Code provisions on local autonomy. The Oversight Committee and its various elements have the responsibility to foster through many means, including capability. building, both the analysis activities and the adoption of remedial measures. At the same time, the Oversight Committee and its various elements must encourage private and public training institutions and specialized NGO, PO, or Coop training programs to develop curricula and methods aimed at strengthening such capabilities. VI. FOLLOW-ON YEAR PRIORITIES IN TRANSITION PHASE By the close of 1994, preparations for and the anticipation of the local elections of 1993 will increasingly affect the implementation of the Code. Thus, it may happen that the first-year Priorities of the TRANSITION PHASE may spill into the early part of 1993. New sets of priority Subject Matter Areas may probably not be established until after the local elections are over. IT IS RECOMMENDED that, in view of this probability, at least a preliminary new Master Plan Subject Matter Areas be identified by the Oversight Committee in the early months of 1993. Some of these might be implementable before and during the local elections. The design and adoption of a full-scale second year TRANSITION PHASE should be completed within three months following the local elections. CHAPTER III The success of implementing the recommendations contained in Chapter II, Book I of this Plan rests crucially on certain basic actions that must be taken consistently and with vigor. These have to be done parallel to or prior to operationalizing the Plan. The Oversight Committee should ensure that all these key success factors are met. These factors include the following: SUPPORT OF THE PRESIDENT AND THE CABINET This is in terms of the political will to implement the provisions of the Code through the different action items identified in this report. The DILG, as the Lead agency in the implementing of the Code, can only coordinate and provide support to the proposed full-time Secretariat in implementing the Plan. All other directives and follow-on actions for horizontally implementing the Code at the national level will have to emanate from the Office of the President or the Office of the Executive Secretary. Essential directives in support of this Plan are outlined in Annex 10 of Book II of this Master Plan. FUNDS SUPPORT This is in terms of support to the Oversight Committee, the Secretariat, Technical Consultant Pool, and the full-time NGA decentralization teams that will produce the Medium-Term Decentralization and Deconcentration Plans. Funds are needed to support policy research and validation and monitor Plan implementation. The availability of funds is critical to the implementation of the Plan. During the CHANGEOVER PHASE, this factor was not given sufficient attention, thus resulting in delays in the NGA formulation and implementation of devolution and other related matters. STRENGTHENED LGU LEAGUES, FULL-TIME SECRETARIAT, AND TECHNICAL CONSULTANT POOL The Leagues, the Secretariat and the Technical Consultant Pool all play crucial roles, as can be gleaned from the action items in the Plan Matrix, Book III. The Leagues' inputs are recommended in the formulation of policies, operating systems and the design of the training programs. This presupposes the availability of capable technical people in the Leagues. The adaptability, practicality and quality of the local institutional mechanisms to operationalize the decentralization principles depend, to a great extent, on the effective participation of the Leagues in the stage of formulating policy and operating systems. The Secretariat should work full-time on the implementation of the Plan. The pace at which the Plan can progress will largely depend on the amount of its "completed staff work." It should also be able to monitor with DILG assistance the progress of Plan implementation, both quantitatively and qualitatively, based on the subject matter areas and management approaches recommended for action in the Plan. STRENGTHENED DILG AS THE LEAD AGENCY FOR LGC IMPLEMENTATION The role of the DILG in implementing the Plan will grow more in importance. It is the only national government agency in contact daily with LGUs down to municipality levels. Master Plan operations and monitoring will depend heavily upon the use of that network. The DILG, therefore, must be strengthened in terms of assignments and retrained staff. STRENGTHENED MONITORING AND EVALUATION CAPACITY The requirement to constantly monitor and evaluate the status of plan implementation stems from the Oversight Committee's need for information as a basis for policy decisions and to determine the critical issues and concerns which hinder the decentralization process. The lack of an operational monitoring and evaluation system during the CHANGEOVER PHASE of Code implementation contributed to the delay in the devolution of personnel and implementation of activities which should have been done during the first stage of LGC implementation. A strengthened Plan Implementation Monitoring System therefore has to be designed, installed, funded and operationalized. Among the recommended features of the system are: o The use of the Clusters and full-time Secretariat in their field trip activities, as monitors and observers of local conditions; o The use of the Leagues, including their local chapters, in the monitoring organization, with a DILG-operated system serving as the backbone of the monitoring structure; o The capacity to provide a quantitative and qualitative monitoring of the status of the Plan ; o The use of a computer-based system based on the already developed DILG approach, when appropriate, for faster data processing; o Modularizing of the monitoring system among the subject matter components and organizational clusters of the Plan ; and o Provision of funds for a monitoring system, in addition to those in the suggested budget of the Secretariat. A total of P3,582.000 would support such a system. Detailed budget is presented in Annex 11. BOOK II ANNEXES LIST OF ANNEXES Annex 1 Composition of the Oversight Committee Annex 2 Management Structure Options Two and Three Annex 3 Criteria Applied in Fixing Priorities for Subject Matter Area Selection - Year 1 TRANSITION PHASE Annex 4 Budget for Secretariat Annex 5 Contents of Rule XXXVIII of the IRR Annex 6 Contents of the Proposed Medium-Term NGA Decentralization/Deconcentration Plan Annex 7 Details of Integrated Capability-Development Annex 8 List of Budget Instructions Already Issued Annex 9 Illustrative List of Approaches and Principles in Planning Annex 10 Proposed Directives in Support of the Plan Annex 11 Budget for Local Government Code Implementation Monitoring System (LGCIMS) Annex 12 Definition of Terms ANNEX 1 COMPOSITION OF THE OVERSIGHT COMMITTEE Executive Secretary, Office of President, as Chairman Three members of the Senate, including the Chairman of Committee on Local Government Three members of House of Representatives, including the Chairman of the Committee on Local Government Secretary of the Department of the Interior and Local Government Secretary of Finance Secretary of Budget and Management Representative of League of Provinces Representative of League of Municipalities Representative of Liga ng mga Barangay ANNEX 3 CRITERIA APPLIED IN FIXING PRIORITIES FOR SUBJECT MATTER AREA SELECTION - YEAR 1 TRANSITION PHASE Given the total number of needs identified in the Master Plan (Book III), it is impossible to implement all of these simultaneously. A prioritization scheme was adopted. The following criteria were used to identify the priority subject matter areas of activity. They must: o be milestone activities on which rest the progress of other activities; o be expressed priorities of LgUs, NgAs, and the NGO/PO sectors; o deconcentrate NGA functions further; o have been done during the CHANGEOVER PHASE, but are still incomplete; o be implementable within the next 12 months; and o comprise solutions to field implementation "choke points. The activities chosen from the Master Plan matrix (Book III) were based on the above criteria and then grouped into four major clusters; (Presented with Recommendations in Book I) Devolved Basic Services and Facilities Cluster Devolved Regulatory Functions Cluster Planning and Budgeting Cluster Revenue Mobilization and Fiscal Matters Cluster The priorities for each cluster were defined during a consultation workshop during November 1993 conducted by the DILG together with the Leagues, NGOs and some participating national government agencies. each activity grouping has been assigned to the appropriate Oversight Committee cluster. ANNEX 4 BUDGET FOR SECRETARIAT Administrative Staff : Staff Head @ P24,000/mo. P288,000 Cluster Group Coordinators @ P20,000/mo. x 4 x 12 P960,000 Secretary (clerical) @ P12,000/mo. P144,000 Administrative Support Staff @ P5,000/mo. x 2 x 12 P120,000 Utility Worker @ P2,800/mo. x 12 P33,600 P1,545,600 Travel and Per Diem: Secretariat Staff, Oversight Committee members, Average of 10 Persons/Trip x 12 Trips/Year @ P12,000/Person P1,440,000 Supplies & Equipment @ P17,000/mo. x 12 P204,000 Communications (Tel. & FAX) @ P10,000/mo. x 12 P120,000 Allowances, Employment of Technical Pool Consultants @ P30,000/mo. x 12 P360,000 P684,000 Contingency P330,400 ________ GRAND TOTAL P4,000,000 ANNEX 5 CONTENTS OF RULE XXXVIII OF THE IRR MONITORING SYSTEM FOR THE IMPLEMENTATION OF THE LOCAL GOVERNMENT CODE OF 1991 ARTICLE 464. Mandate . Pursuant to the Code, the Oversight Committee shall supervise the transfer of such powers and functions mandated under the Code to the LGUs, together with the corresponding personnel, properties, assets and liabilities of the Offices or agencies concerned, with the least possible disruptions to existing programs and projects. The Committee shall likewise recommend the corresponding appropriations necessary to effect the said transfer. The Code likewise provides that the Congress shall conduct a mandatory review of the Code at least once every five (5) years and as often as it may deem necessary, with the primary objective of providing a more responsive and accountable local government structure. ARTICLE 465. Installation and Purpose of a Monitoring System . There shall be established a monitoring system for the implementation of the Code to hasten the decentralization process, support the oversight committee in the supervision of the transfer of powers and functions from the national government agencies to local government units and provide valuable information to promote local autonomy. ARTICLE 466. Organization and Responsibility . There shall be established from the national to the local levels an organization responsible for the operationalization of the monitoring system. For this purpose, the DILG shall be the lead agency of the said organization composed of the following: (a) National 1. Department of the Interior and Local Government 2. Department of Finance 3. Department of Budget and Management 4. Senate 5. House of Representatives 6. League of Provinces 7. League of Cities 8. League of Municipalities 9. Liga ng mga Barangay 10. Commission on Audit 11. Civil Service Commission 12. National Government Agencies affected by devolution (b) Regional All national government agencies represented at the national organization of the monitoring system. (c) Province, City, and Municipality All provincial, city, and municipal field offices of the DILG and NGAs affected by devolution. A National Secretariat for the monitoring system shall be created in the DILG. ARTICLE 467. Targets Users and Their Information Requirements . The target users to the monitoring system are the Oversight Committee, the NGAs concerned, the Congress, and the LGUs. The information requirements of the target users cover the following areas: (a) Transfer of personnel, assets, projects, funds, and records corresponding to the devolved functions; (b) Deconcentration of requisite authority and power of national government agencies from their central offices to appropriate regional and field offices; (c) Mandated fund allocations to LGUs; (d) Reorganization of LGUs and affected NGAs; (e) Formation and operation of local special, bodies; (f) Compliance with established standards, guidelines, systems and procedures; (g) LGU participation in the planning and implementation of national projects; (h) NGO-LGU joint ventures and cooperative programs or undertakings; (i) Grants, aids, and subsidies given to LGUs; and (j) Other relevant information. ARTICLE 468. Funding . Funds for the implementation of the monitoring system shall be taken from the appropriations of the DILG. Other national government agencies may augment funds out of their savings. Likewise, the LGUs may set aside funds for this purpose from any available local funds. ARTICLE 469. Implementation . The monitoring system shall be implemented upon approval of these Rules. The national organization shall provide the monitoring network with module specifications, implementation strategy, and timetable. ANNEX 6 CONTENTS OF THE PROPOSED MEDIUM-TERM NGA DECENTRALIZATION/DECONCENTRATION PLAN Below is a basic framework that may serve as a guide for NGAs in formulating their respective medium-term decentralization/deconcentration plans. A. Vision, Mission and Mandate B. Functional Linkages with LGUs C. Operating Systems D. Organizational Structure and Staffing Requirements E. Budgetary Allocations A. VISION, MISSION AND MANDATE The Plan must be founded on a set of post-devolution perspectives that is directionally correct and consistent with the LGC's decentralization policies. This can be achieved by: o reviewing the NGAs basic mandate as provided under the Administrative Code of 1987 in the light of the changes brought about by devolution; o refocusing the NGA's strategic thrust to one that is cognizant of the LGUs' prerogatives over DBSFs; and o articulating the new mandate and strategic thrust in a mission statement that recognizes the LGUs' primacy over DBSFs but at the same time is aware of the NGA's continuing responsibilities and authority. B. FUNCTIONAL LINKAGES WITH LGUs The Plan must provide for the establishment of new functional linkages with LGUs within the purview of the devolved/decentralized set-up of local governments. This can be achieved by: o installing the necessary mechanisms, both systemic and institutional, for the continuing update of technical standards for DBSFs; o defining the areas and extent of TAs and the conditionalities and mechanisms for the provision thereof; o refocusing the operational thrusts of NGA regional and sub- regional field offices with a view to operationalizing new mandates and serving as linkages to LGUs; and o operationalizing the consultative and coordinative mechanisms with LGUs for nationally-funded projects or projects with environmental impact. C. OPERATING SYSTEMS The shift towards a decentralized/devolved delivery of basic services has a profound effect on NGA operations, resource allocation, decision-making process, communication flow, etc. Each of these operational concerns has existing systems and procedures which must be modified as a consequence of devolution and new strategic priorities. The Medium-Term Plan must therefore include the design and installation of new operating systems responsive to decentralization/devolution imperatives. Below are functional concerns that will require new operating systems as a consequence of devolution and operational demands: o planning and budgeting this system must be sensitive to the inputs provided by the NGA's regional and other field offices and to the needs, requirements and priorities of LGUs; o management control for purposes of monitoring and evaluation, performance standards and indicators must consider LGU resources and capabilities vis-a-vis the demand for DBSFs; o information flow the NGAs' MIS must link up with the information base of LGUs, with the regional offices serving as systems linkages; o deconcentrating certain decision making authority of the central management to regional and sub-regional offices will be a viable alternative to fast track NGA responses to LGU needs; o field operations the operating systems at the regional and other field offices must be redesigned with a view to enabling them to respond to the varied and sometimes sporadic requests, demands and needs of LGUs. The NGA must install the following systems to strengthen their regional offices in facing new challenges: a system to allocate resources among its field offices in support of LGU devolved functions; a system to establish closer coordination and linkages between the devolved personnel and the NGA's various operating units; a monitoring system capable of providing feedbacks from LGUs to regional offices and vice-versa and from regional to field offices and developed personnel and vice-versa; a system of networking with LGUs, NGOs, and other NGAs which includes consultative and coordinative processes mandated in the Code. D. ORGANIZATIONAL STRUCTURE AND STAFFING REQUIREMENTS Undoubtedly, devolution has affected the structural mechanisms for service delivery functions of certain NGAs. But it has a greater impact on the overall structure of regional and other field offices inasmuch as the main bulk of NGA services were provided therein. As structures are based on functions, the organizational structure of affected NGAs must therefore reflect their residual functions and new operational thrusts. This must be presented in at least three (3) options for restructuring. Concomitantly, the staffing requirements for each option must also be prepared. The proposed restructuring must also consider the following: o the changes in the NGA's functional concerns brought about by devolution and other decentralization policies; o change or a reduction in clientele coverage; o new functional relationships between the national government and the LGUs; o new or redirected operational thrusts of regional and other field offices as well as the operating units affected by the overall shift in the NGA's strategic concerns; o the demand for TAs and capability-building of LGUs, based on a assessment conducted for the purpose; and o deconcentration of certain decision-making authority of the central office to the regional and sub-regional offices. On the other hand, the staffing requirements should be prepared taking into consideration the following: o the most effective ratio of personnel to services or activities; o manning requirements of NGA activities supportive of LGC implementation; o creation or reclassification of existing positions which are essential to the new operational thrusts; and o abolition and the transfer of positions in the regional offices as a consequence of downsizing their service delivery functions as mandated by the Code. In designing a new structure and staffing pattern, the NGA must also take into consideration the functional arrangements prescribed in the Administrative Code of 1987 which are not affected by the LGC, the presidential directives contained in Memorandum Order No. 27, 5 of 1992, and other pertinent CSC rules and regulations. E. BUDGETARY ALLOCATIONS As functions and organizational structures of affected NGAs will be changed as a consequence of devolution, their budgetary allocations should also be restructured to reflect new operational thrusts and priorities. The line items in the annual budgets of such NGAs must be revised to show the new budget structure. The Plan must therefore include a proposal for new line items in the NGA's annual budget which will be incorporated in the Expenditure Program. ANNEX 7 DETAILS OF INTEGRATED CAPABILITY DEVELOPMENT o Innovative approaches to capability building which: put greater emphasis on LGU-specific problems, identified local needs or priorities, participatory processes of local governance and management insight and operational dynamics of DBSF delivery. This means the veering away from generic training programs delivered through a series of live-in seminars; use the pre-devolution capability level of devolved NGA field offices as the minimum or benchmark standards in upgrading LGU capability to manage DBSFs; recognize the built-in advantage of LGUs for having better local perspectives on needs and conditions as compared to those of the regional and central offices; acknowledge the vantage position of NGA for possessing wider experience, national or inter-LGU perspective, and access to technology and research; and appreciate the complementarily of the roles of NGAs and LGUs in providing cost-efficient and effective DBSFs. o Demand-driven approaches to capability-building for DBSFs by: identifying specific LGU problems, needs, pr priorities in DBSFs delivery that may require training or assistance; developing models for matching training demands as articulated by LGUs to innovative TA or training programs on specific LGU concerns; identifying existing training facilities where such innovative training programs are offered; and prescribing standards to be net or maintained by such training facilities. o Development of models for integrating capability-building programs of various NGAs: delivery systems; training techniques course offering or content; and assessment or review mechanism to evaluate effectiveness of capability building programs. o Development of new institutional approaches to capability-building whereby the local functionaries associated with specific LGU concerns will be trained as a team to address those concerns. ANNEX 8 LIST OF BUDGET INSTRUCTIONS ALREADY ISSUED o Local Budget Memorandum No. 18 (25 February 1992) Guidelines for the Preparation and Submission of the Revised Annual Budgets for Fiscal Year 1992. o Local Budget Memorandum 18-A (17 March 1992) Amendments to the Local Budget Memorandum 18. o Local Budget Circular 52 (8 May 1992) Guidelines on the Review of Appropriations Ordinances of LGUs. o Local Budget Memorandum 19 Guidelines on the Preparation and Submission of the Annual General Fund Budgets for Fiscal Year 1993. o Administrative Order No. 42 Clarifying the Role of the DBM in the Compensation and Classification of Local Government Positions under RA 7160. ANNEX 9 ILLUSTRATIVE LIST OF APPROACHES AND PRINCIPLES IN PLANNING o Exploration/test/and use, at all times, of local participatory processes of planning related both to micro and macro levels of planning. o Emphasis upon determining (using various techniques) the sustainability of planned projects with reference to economic soundness, project design, cost/benefit ratios, recurrent costs, and maintenance requirements. o Where appropriate, emphasize consolidated or mutually cooperative planning for development projects which are most cost-effectively operated among LGUs and not just in a single one. o Use of the rural accessibility planning method of data-gathering and analysis (DILG project). o Use of Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in identifying key intervention areas. This process now used in planning by Philippine Council on Countryside Development (PCCD). o Rapid Appraisal Approach practiced by the NGO/PO community in social investigation as a method in situation analysis. o Socio-economic profiling on fundamentals with an option for comprehensive profiling where data are not too expensive to generate and maintain. o The style and content of a plan should be appropriate to the use of the Plan, for purely local purposes, NGA review, credit financing, or ODA funding. A plan should be suitable to the capability of an LGU and appropriate to the plan's intended use. o Use of basic or sophisticated technologies in planning should be determined not by the availability of funding or the availability of a qualified expert, but by the intended use of the plan. o Planning standards should be in keeping with LGU needs and funds (e.g. hospital bed to population ratio, etc.) o Plans may initially be for six years then renewable for a multiple of three years to coincide with the term of elective officials. o Scheduling of Multi-Year Local Development Investment Plans (LDIPs) could be: a. 1st year with "firm" estimates for budgetary purposes; b. 2nd year could be soft estimates; and c. 3rd year could be ballpark estimates. o Monitoring and evaluation indicators as well as goals achievement indicators should be area-sensitive. o Technical assistance should be available not only on plan formulation but also for implementation and monitoring/evaluation. o If feasible, there should be institutionalization of a local planning organization attuned to LGU capabilities and conducive to plan integration at higher LGU levels and at the RDC level. o Plan integration may be more feasible on a spatial rather than a sectoral basis alone. ANNEX 10 PROPOSED DIRECTIVES IN SUPPORT OF PLAN 1. Presidential Directives Upon its completion, the initial draft of the Plan will be presented to the OSC for its deliberation and approval. After it had gone through the Plan, the OSC will endorse the same to the President for issuance of the following: 1.1 A Proclamation adopting a Master Plan for the sustained implementation of the LGC of 1991 Prior to the promulgation of this Proclamation, the Master Plan should be presented to the Cabinet to solicit comments and support from its members. A presidential Executive Order reaffirming the importance of the Oversight Committee together with expressed support from the Cabinet is vital to ensure prompt actions on the critical concerns of the Master Plan such as - o the medium-term plan of affected NGAs; o the structure, functional arrangements, and resources for the Master Plan implementation; and o the restructuring of NGA organizations, systems, and budgets. 1.2 A Memorandum Circular directing NGAs whose service delivery functions were devolved to LGUs, to prepare their respective medium-term plan for the sustained LGC implementation, in accordance with the imperatives of a decentralized delivery of services This circular should also include an order for the designation of a full-time action officer on LGC implementation in every affected NGA. The designated officer should be holding a position not lower than the rank of an assistant secretary. 1.3 A Memorandum Circular directing NGAs whose regulatory functions were devolved to LGUs, to prepare their respective medium-term plan to support LGU actions on DRFs This circular should also include an order for the designation of an action officer on LGC implementation in every affected NGA. The designated officer should be holding a position not lower than the rank of Director III. 1.4 An Administrative Order providing for the overall structure to implement the Master Plan This Order must provide for the reconstitution of the OSC's Technical Staff and the setting up of the full-time Secretariat, the Technical Consultants Pool, and initially, four Clusters based on the action concerns proposed in the Master Plan. 2. OSC/Executive Secretary Issuances The concerns of the Executive Secretary (ES), as Chairman of the OSC, go beyond the requirements of policies in the Code implementation. They cover the area of operations as well. This includes using the powers and resources of his office to oversee NGA compliance with presidential directives. In this regard, the ES may have to issue memoranda to various NGAs directing them to submit reports and other documents pertinent to their directives on LGC implementation. He may require NGA action officers to update him on their progress from time to time. In addition, the ES may issue memoranda to clarify specific aspects of the directives or respond to any policy question on this regard. As chairman of the OSC, he may also issue memoranda clarifying certain points of OSC decisions and other actions. 3. NGA Issuances As an immediate response to the above presidential directives, the NGA concerned may form a team to prepare its mid-term plan, which should be headed by its action officer on Code implementation. 4. DILG Issuances As the lead agency in the Code implementation, the DILG, in coordination with the LGU leagues, must be directed to redesign and install an appropriate monitoring system for the Master Plan implementation so that it is in compliance with Rule XXX VIII of the IRR. ANNEX 11 BUDGET FOR LOCAL GOVERNMENT CODE IMPLEMENTATION MONITORING SYSTEMS (LGCIMS) 1 Reconfiguration of System 100,000.00 2 Re-training/Installation of System 494,000.00 Transportation and per diem 104,000.00 (2 persons/region at P4000/person for 13 regions) Materials (P1000/region for 15 regions) 15,000.00 Cost of Training (P25,000/region x 15 regions) 375,000.00 3 System Operations 2,988,000.00 Report Preparation, Processing and Transmission 2,934,000.00 (1,630 provinces, cities and municipalities x P150/LGU/month x 12 months) Supplies and Materials 30,000.00 (P2,500/month for 12 months at Secretariat) Equipment Maintenance (P2,000/month for 24,000.00 12 months at Secretariat Office) TOTAL 3,582,000.00 ASSUMPTIONS 1. The present LGCIMS will have to be reconfigured based on the proposed organization and information needs of the OSC at this TRANSITION PHASE. Existing hardware for LGCIMS will be used for the reconfigured system. 2. It is assumed that the system will be coursed through the Leagues of LGUs (LOP, LOC, and LOM) and that incremental costs to the LGUs are included in the computation for system operation costs. (Costs of report preparation and processing however can accrue to the LGUs and the sub-national offices of the Leagues which can further decrease the cost of operating the monitoring system.) ANNEX 12 DEFINITION OF TERMS AIP Annual Investment Program AO Administrative Order BAP Bankers Association of the Philippines BIR Bureau of Internal Revenue BOT/BT Build, Operate and Transfer/Build and Transfer CCPAP Coordinating Council for the Philippine Aid Plan COA Commission on Audit CSC Civil Service Commission DA Department of Agriculture DAP Development Academy of the Philippines DBM Department of Budget and Management DBCC Development Budget Coordinating Committee DBSF Devolved Basic Services and Facilities DECS Department of Education, Culture and Sports DENR Department of Environment and Natural Resources DILG Department of the Interior and Local Government DOF Department of Finance DOH Department of Health DOJ Department of Justice DOT Department of Tourism DPWH Department of Public Works and Highways DRFs Devolved Regulatory Functions DSWD Department of Social Welfare and Development EO Executive Order GAB Games and Amusements Board GFI Government Financial Institution GOCC Government Owned or Controlled Corporation HLURB Housing and Land Use Regulatory Board ICBP Integrated Capability Building Program IHAP Investment Houses Association of the Philippines ILGA Institute of Local Government Administration IRA Internal Revenue Allotment IRR Implementing Rules and Regulations (of the Local Government Code of 1991) LCE Local Chief Executive LDAP Local Development Assistance Program LDIP Local Development Investment Plan LGA Local Government Academy Leagues Leagues of Local Governments (League of Provinces, League of Cities, League of Municipalities and the Liga ng mga Barangay) LGC Local Government Code of 1991 (or RA 7160) LGUs/LGs Local Government Units/Local Governments LTFRB Franchising of Tricycles MC Memorandum Circular MMA Metro Manila Authority NEDA National Economic and Development Authority NGA National Government Agencies NGO Non-government Organization NMIC National Meat Inspection Commission ODA Official Development Assistance OSC Oversight Committee of the Local Government Code of 1991 PEA Public Estates Authority PD Presidential Decree PDAP Provincial Development Assistance Program PMS Presidential Management Staff PO People's Organization PTA Philippine Tourism Authority RDC Regional Development Council TS Technical Staff (of the Oversight Committee) BOOK III MASTER PLAN MATRIX CHAPTER I RATIONALE/METHODOLOGY/IMPLEMENTATION OF MASTER PLAN CHAPTER II OVERALL MASTER PLAN COMPONENTS CHAPTER III MASTER PLAN IMPLEMENTATION MATRIX CHAPTER I RATIONALE/METHODOLOGY/IMPLEMENTATION OF MASTER PLAN RATIONALE The Local Government Code of 1991 decentralized certain state powers and functions to LGUs. Its effect on the entire government structure and setup may be most constructive. Around 70,498 personnel have been devolved to LGUs to provide them with the personnel resources and technology to discharge basic services delivery functions. The Code also mandates the restructuring of regional offices of the four major devolved agencies as well as the deconcentration of other non-devolved agencies. Code implementation however, particularly on those functions pertaining to devolution, has encountered a myriad of problems. Implementation is staggered and uneven. National agencies and constitutional bodies are moving at their own pace and direction in providing support to LGUs. Policy gaps continue to exist. System changes necessary for a decentralized setup are not yet institutionalized. Organizations that are needed have not been created. The existing ones need fine-tuning. There is also a need to alter attitudes among national and local elected officials and professional staff. Generally, these problems can be described as policy, organizational, systemic, attitudinal, or political. They are attributable to several factors but most prominent among them is the absence of a clear and cohesive plan to guide the key actors in Code Implementation. At this stage of the Code's life, a basic question is: " What now, considering that the transfer of personnel is almost over? What should be done to further enable local governments to exercise the devolved functions and thereby strengthen local autonomy? " Obviously, implementation of the Code does not stop with the transfer of personnel. It only signals the start of local government exercise of the devolved functions. The challenge now is for both national and local governments to move forward and work on the substantive aspects of decentralization. This requires, among other things, a unified direction for the key actors towards pursuing operational, organizational and administrative changes, concomitant to the decentralization of powers. Such a network of cooperation needs a Master Plan identifying priority problems and setting a more consensus-driven path towards local autonomy. There is also a need to clear the way of remaining constraints that slow down Code implementation. This Master Plan contains action items at four management levels: Policy, Operating Systems, Organization and Capability-building. Action items under Policy address the policy gaps identified in the particular Subject Matter Areas of Concern, or suggest policies needed to support a strategy or objective. Operating systems and organization development innovations will operationalize these policies by defining systems and procedures and the institutional mechanisms needed to implement the policies. Capability-building aims at transferring to LGUs the technology and information to operationalize the systems and procedures. The purpose of the Plan is to sustain the implementation of the Code. The actions recommended therefore assumes that all Code provisions will be tried out and implemented first before taking any legislative action. Hence, the Plan has chosen to exclude proposals for legislative action. METHODOLOGY Three different kinds of action were undertaken to develop this Plan : 1. A Diagnostic Workshop held on August 4-6 1993 to identify the issues and concerns of the different actors in the implementation of the Code and identify recommendations. This was attended by representatives of national government agencies, foreign funding institutions and local government chief executives and functionaries. Output of the Diagnostic Workshop was then validated with an indicative sample of local governments in Regions I, III, IV, VI, VII, X, XI and NCR. The issues and concerns in the workshop were generally validated during his activity. 2. Rapid Field Appraisal 1 on decentralization and local development conducted nationwide last September, 1993 covering 12 regions and 520 local officials and personnel and 95 personnel of NGA field offices was another input into the Plan . This appraisal identified the trends and constraints of the implementation of Code from local perspectives. The appraisal also recommended actions to sustain the trends in implementation of the LGC. 3. Output of the Several NGO Conferences consisting of resolutions were also taken into account. More notable among these conferences are the LGU/GO-NGO/PO conference held in October, 1993 in Malolos (Bulacan), the National Conference on Decentralization and Local Governance held in Bacolod City last July, 1993, the National LDAP Consultation Workshops and the Sta. Catalina Forum. An analysis of all these inputs resulted in the creation of a Matrix Action Plan, which is part of Chapter II in this Book. IMPLEMENTATION PLAN The Matrix Action Plan was analyzed in several consultation workshops attended by the LGU Leagues between the last week of October and the first week of November 1993. The objective was to extract from the Matrix Action Plan those high priority Subject Matter Areas which require urgent attention by the Oversight Committee during Year One of the TRANSITION PHASE (1994). This was done, with recommended items defined. They are presented in Chapter II of Book I of the Master Plan . The analysis also covered needed organizational structure to back up the Oversight Committee. The recommended structure is presented in Chapter I, Book I of the Master Plan . CHAPTER II OVERALL MASTER PLAN COMPONENTS The general assessment affecting selection of the Subject Matter Areas appearing in the Action Matrix and identification of their content conveys the situation in the following terms. Current implementation of the Code at the local level is encouraging. Local governments continue to be responsive and display initiative in implementing Code mandates. The process of devolving personnel and assets has essentially been accomplished, setting the stage for the pursuit of organizational, administrative and operational changes needed to achieve local autonomy and decentralized delivery of services. In short, a very solid "enabling environment" for decentralized governance has now been established by virtue of enactment of the Code itself and the successful transfer of around 70,498 personnel and over P300 million worth of assets to LGUs. A TRANSITIONAL PHASE in the decentralization process has thus begun. LGUs are turning to the substantive aspects of local control, including reorganization, in the context of the new responsibilities devolved to them; enactment of policies such as tax ordinances and zoning codes enable local exercise of authorities; examining new methods of revenue mobilization; and most importantly learning the essentials of delivering the devolved health, agricultural extension, social welfare, environmental services. Some display extraordinary will in doing so, others are less aggressive, but overall, local governments are changing to meet the demands placed upon them. Major constraints to the momentum generated by the Code and the successful conclusion of the CHANGEOVER PHASE (Devolution) center in the areas of finance administration and complementation of roles between local governments and devolved national agencies. The IRA allocation formula continues to favor cities and barangays to the disadvantage of provinces and municipalities, the latter two carrying the major burden of devolved personnel and functions. Administrative systems designed by oversight agencies such as DBM, COA and DOF have not been readjusted to meet the challenges of decentralized management, thus severely constraining the local government's capability to flexibly respond to service delivery needs, especially in the area of hospital management, tertiary health services and budgeting. Devolved national agencies continue to be slow in responding to the new environment, remain focused on internal concerns and, except the Departments of Health and Social Welfare, have yet to reorganize in a manner that effectively support Basic Services delivery through local governments. It is at this juncture in the decentralization process that technical guidance from devolved national agencies within the framework of local autonomy needs concentration. Mindful of the foregoing, this overall Master Plan which covers the three-year TRANSITION PHASE (1994-1996) identifies general strategies and specific actionable items. These are aimed at supporting current favorable trends in implementation of the Code and eliminating constraints which hinder decentralization. These activities are categorized into six modules which comprise the six components of the entire TRANSITION PHASE Master Plan . They include: Basic Services and Facilities Delivery Inter-governmental Relations LGU-NGO/PO/Private Sector Relations Development Planning and Budgeting Revenue Mobilization and Fiscal Matters LGU Structures/Systems The strategies come from the clustering of recommendations in identified areas of concern/issues based on the three information sources cited in Chapter I. They appear in detail in the attached Matrix. 1. Devolved Basic Services and Facilities Delivery Activities included in this component are those that will promote LGU delivery of the mandated services and facilities, including national government actions to attain that goal. The Code has established conditions for scoring a significant impact on improved mechanisms for service delivery. Local governments are now in the forefront of the delivery of Basic Services. With this change in responsibility for delivery, policies, standards and operating systems have to be adapted to the local systems. National government support for the LGU delivery of the services is also mandated. This will require the promulgation of decentralized national systems to effectively support the delivery of the Basic Services. It is therefore essential that capabilities to manage and deliver the mandated services be built at the local levels in terms of personnel capability, technology and support mechanisms. On the national government side, what is essential is the realignment of the bureaucracy to support the decentralized mode of service delivery. Action items during the TRANSITION PERIOD will set up and institutionalize the delivery mechanisms at the local levels as well as realign national agency structures adapted to the decentralized system of service delivery. The action items focus on: o enhancing the capability of local governments to sustain and expand the provision of Devolved Basic Services and Facilities, plan, manage devolved services and facilities and exercise devolved regulatory functions; o augment LGU resources to enable them to cope with the demand for Devolved Basic Services and Facilities; o functional and systemic integration of Devolved Basic Services and Facilities into the LGU system; and o resolution of other post-devolution problems. The recommendations and action items in this Subject Matter Areas of Concern will be done with the assistance of the national agencies whose functions were devolved through the preparation and implementation of NGA Decentralization Plan or Deconcentration Plans for devolved agencies and non-devolved agencies respectively. Specific activities of this Plan component are presented in pages 11 to 13 of the attached Matrix. 2. Inter-Government Relations Actions centered on this component are those that will define the relationship between the national government and local governments as well as the relationships among the four levels of local governments. The necessity to define actions for inter-government relations arises from the need during the TRANSITION PHASE to: o transform the NGA approaches in the formulation of national policies, plans and priorities and delivery of services to a decentralized mode of delivery which are mandated by the Code; o provide LGUs another mode for local-based development initiatives; and o identify mechanics to resolve inter-LGU conflicts. The recommendations and action items in this Subject Matter Areas of Concern will be done with the assistance of the national agencies whose functions were devolved through the preparation and implementation of NGA Decentralization Plan or Deconcentration Plans for devolved agencies and non-devolved agencies respectively. 2. Inter-Government Relations Actions centered on this component are those that will define the relationship between the national government and local governments as well as the relationships among the four levels of local governments. The necessity to define actions for inter-government relations arises from the need during the TRANSITION PHASE to: o transform the NGA approaches in the formulation of national policies, plans and priorities and delivery of services to a decentralized mode of delivery which are mandated by the Code; o provide LGUs another mode for local-based development initiatives; and o identify mechanics to resolve inter-LGU conflicts. For the TRANSITION PHASE, the activities call for NGAs and LGUs to jointly draw up the framework for such relations, then work to install and institutionalize the designed systems. The Oversight Committee is expected to direct the national agencies to design the necessary mechanisms to translate the NGA-LGU complementation requirement into policies and systems. NGAs are also expected to rationalize their field organizations to support the systems. On inter-LGU relations the mechanics for the resolution of inter-LGU conflicts have to be defined. Specific activities of this Plan component are presented in pages 14 to 18 of the attached Matrix. 4. Planning and Budgeting This Plan component presents the proposed activities during the TRANSITION PHASE that will help local governments to develop and financially operationalize relevant and useful local plans for development. Decentralized delivery of Basic Services calls for a coordinated and participatory approach in planning. Local concerns, aspirations and resources and constraints have to be included in the local plans as well as national plans. The actions during the TRANSITION PHASE center upon: o retooling systems of planning and budgeting for a decentralized setup; o establishing the framework for local planning based on participation, transparency and accountability and its integration into the national planning system; and, o institutionalization of a revised budgeting system during the period. Specified activities of this Plan component are presented in pages 22 in the attached Matrix. 5. Revenue Mobilization and Fiscal Matters Activities in this Subject Matter Area are classified into four sub-areas: revenue generation, revenue utilization, revenue administration, and equity. The capability of local governments to deliver on what has been mandated to them will be dependent on their ability to fund their activities. This places demand on the new revenue-raising powers stipulated in the LGC. These comprises areas (bonds, build-operate-transfer, etc.) uncharted before by both the national government, local governments and the private sector. Activities in this area therefore will set both the parameters for the taxation powers of LGUs and the use of credit financing and other alternative instruments for development financing. For revenue utilization and administration, what will be achieved during the TRANSITION PHASE is the setting up of systems that are supportive of effective and efficient utilization and administration of resources. Proposed activities call the national government to guide LGUs in the use of their taxing powers but under the general principles of local autonomy. It is proposed that the national government set developmental policies that will open up new sources of development financing for local governments. Focus is on the development of local government bonds and full use of build-operate-transfer or other modes of partnering with the private sector. The activities also point to the need to look into the equity of local government sharing of the IRA including sharing the proceeds from the utilization and development of national wealth. For administration and utilization, the Plan component identifies policies, systems and organizational development imperatives that need to be promoted, designed and developed for more effective utilization and proper management of funds. Specific activities of this Plan component are presented in pages 26 to 35 in the attached Matrix. 6. LGU Structures/Systems Under this component are activities which seek to develop responsible and accountable local governments. What is envisioned for the TRANSITION PERIOD by the action items under this component is that local governments develop effective and publicly responsive local structures and service delivery operations performed by trained local personnel. Activities therefore included are those that will serve to enhance the institutional capabilities of local governments in provision of participatory local government economic and social development. Specific activities of this Plan component are presented in pages 36 to 41 of the attached Matrix. IT IS RECOMMENDED that, with the assistance of the Oversight Committee, the Secretariat and the Technical Consultant Pool, the DILG support the development and operation of appropriate monitoring systems for implementation of the Code. CHAPTER III MASTER PLAN IMPLEMENTATION MATRIX (As developed by the Department of the Interior and Local Government, in consultation with the Departments of Finance, Budget and Management, Agriculture, Health, Social Welfare and Development, Environment and Natural Resources, Public Works and Highways, Civil Service Commission, Leagues of Provinces, Cities, Municipalities, and Barangays, Non-Governmental Organizations, and elected officials of local governments during the July-November 1993 interval.) ----------------------------------------------- Administrative authority OSC, in consultation OSC, with the NGAs, with the NGAs, in NGAs, with the of local chief with CSC, NGAs assistance of assistance of consultation with cooperation of executives (LCEs) and LGU Leagues, CSC, will define CSC, will adopt LGU Leagues, will CSC, will orient over NGA field shall recommend the LCE authority administrative design models for their field personnel issuance of an EO over NGA mechanisms institutional personnel and operationalizing field personnel. providing for the arrangements LCEs on the LGC mandate on Specifically, it exercise of LCE's between NGAs mechanics of LCE's administrative will recommend authority over and LGUs on such authority. authority over policy their field said administrative NGA field person- guidelines on the personnel. authority. nel. following LCE LGU Leagues powers over will encourage said personnel: the sharing of experiences require NGA on the exercise field personnel of such authority to report or over NGA make available field personnel. pertinent records to LCEs; initiate administrative or judicial proceedings against erring NGA field personnel: and require NGA field personnel to give notice to LCEs before leaving their stations. ----------------------------------------------- II. INTER-LGU RELATIONS Existence of disputes OSC shall promulgate OSC will recom- NGAs, concerned, DILG, through its DILG will between and among additional guidelines mend policies with the field offices, will orient/train its LGUs on the settlement of that provide assistance of set up desks to field personnel disputes among for - LGU Leagues, mediate inter-LGU on various LGUs. will recommend conflicts. schemes in the the appropriate mediating inter- intervention administrative LGU conflicts. mechanisms for systems and settling inter- procedures for DILG will LGU boundary setting inter-LGU orient LGUs on disputes; conflicts. policies regarding the delineation the settlement of responsibilities of inter-LGU conflicts. between the municipal and provincial assessors over real property tax administration; scope of LGU regulatory powers; and the extent of the review authority of higher LGUs over EOs and resolutions of lower LGUs. ----------------------------------------------- Lack of incentives to National Government OSC, in DILG, together DILG, together DILG, together encourage inter-LGU shall provide consultation with LGU Leagues, with LGU with LGU cooperation on incentives through with LGU shall adopt Leagues, will Leagues, shall development programs grants, TAs, and Leagues, will a simplified provide the orient/train and projects other non-fiscal prescribe the system for appropriate LGUs on the incentives. policy - processing institutional different incentive The private sector guidelines for applications for mechanisms for said schemes shall be encouraged the grant of said incentives. incentive schemes. for inter-LGU to provide incentives incentives to collaboration. for such encourage inter-LGU collaboration. collaboration. ----------------------------------------------- MASTER PLAN FOR THE SUSTAINED IMPLEMENTATION OF THE LGC OF 1991 NGO/PO PARTICIPATION COMPONENT ACTION PLAN AREAS OF RECOMMEN POLICY OPERATING ORGANIZATIONAL CAPABILITY CONCERN DATIONS SYSTEMS DEVELOPMENT BUILDING ----------------------------------------------- Information on and NGOs and LGUs In coordination LGU Leagues Where viable, ICBP will operationalization will work together with NGO/PO and NGO/PO/ LGUs may set include - of PO/NGO/private to immediately community and PS community up NGO/PO/PS sector (PS) - LGU operationalize LGU Leagues. will - coordination desks Orientation for collaboration LGC provisions OSC will update within its existing LCEs and local promoting col- implementing design a working structure and may functionaries laboration among guidelines on framework also be staffed by on - them. recommended with specific representatives areas for PO/ details pertaining from the PO/NGO NGO/PO/PS NGO/PS LGU to particular and business perspectives, collaboration areas of colla- sector. areas of col- such as, but not boration; laboration, limited to - identify areas DILG, in work methods of priority for consultation with and program DBSF delivery; collaboration; LGU Leagues thrusts; local development design a and NGO/ NGO/PO/PS planning; referral system PO/PS community, systems and public for community- will prescribe the processes enterprise based NGO, functions and such as local management; PO, and PS responsibilities of development capability- proposals to NGO affairs desk. planning, building national federations community revenue and LGU NGOs and LGU mobilization, mobilization; Leagues. Leagues will design participative delegation of organizational implementation regulatory DBM, in models for and functions; consultation enhanced evaluation; BOT/BT with COA, coordination between project projects; and will design an community-based development, policy accountability organizations and implementation, formulation system national federation monitoring for the handling of NGOs/POs, and Such guidelines of public funds the business sector evaluation. shall indicate - by POs, NGOs, and LGU Leagues. and the Orientation for preference for business sector. NGOs/POs/PS community- on - based NGOs/ POs in the LGU awarding of development programs and thrusts, projects; programs, and nature and projects; types of LGU operating partnerships systems, between such as fund NGOs/POs/PS disbursements and LGUs. project moni- toring and NGO/PO evaluation, community and and government LGU Leagues will accounting draft MOAs on and auditing; joint ventures, and delegation of legislative functions, cross process in subsidies, and LGUs. other related agreements. ----------------------------------------------- Adoption and full Work for sectoral OSC, with the DILG, in DILG, with the ICBP will include - implementation of representation in assistance of consultation with assistance of updated and com- the sanggunian DILG, will LGU Leagues, national federations information prehensive PO/NGO consolidate NGO/PO/PS of NGOs/ campaign on accreditation and Immediate convening standards of community and POs/PS and LGU updated selection system of the special procedure for NGAs concerned, Leagues, will accreditation bodies and the local special will design design organization and selection regularization of bodies. operating systems models for accre- systems; and their meetings for local ditation and training DILG will re- special bodies. selection systems at- courses on view and final- DILG, with the tuned to varying evaluation ize CODE- cooperation of LGU categories methods for NGO proposals LGU Leagues and requirements. NGO/PO/PS on guidelines and NGO/PO/ selection. for accreditation PS community, and selection in will design or local special update systems bodies. for - Verify whether NGO accre- the President ditation and has certified a selection; and bill on sectoral coordination representation between PO/ to Congress; if NGO/PS and not, OSC will and LGU endorse the Leagues. same to the President for certification as a priority legislative measure. ----------------------------------------------- Substantive Encourage increased DILG, with the DILG, with the NGAs and LGUs ICBP will participation of participation of assistance of assistance of will adopt include - POs and NGOs in NGOs/POs in the NEDA and in LGU Leagues organizational the local planning special bodies consultation and the NGO changes and orientation and budgeting process through their with NGO/PO/ community, will adjustments for courses on involvement in PS community promulgate - new planning and operational policy-making, and LGU budgeting systems guidelines for budgeting, and Leagues, will operational with appropriate LGU development funds mobilization issue updated guidelines on linkages with planning and simplified planning, NGOs/POs/PS. and budgeting; guidelines for monitoring, and exposure trips PO/NGO/PS evaluation for LCEs and participation in systems among functionaries local development LGU and NGO/ to familiarize planning PO/PS levels; them on NGO/ and budgeting. and PO planning policy and budget guidelines systems; and OSC will en- defining the skills development courage national specific roles of training federations of special bodies in on planning NGOs/POs to planning, and budgeting. extend budgeting assistance to and resource community-based mobilization. NGOs/POs. ----------------------------------------------- Strengthening link- Creation of an OSC will promote DILG, with the LGU Leagues and ICBP will ages between NGAs NGO/PO desk to continuing assistance of NGO/PO/PS include - and POs/NGOs/PS promote their policy formulation LGU Leagues community will in policy advocacy participation in local linkages and the NGO/ jointly establish exchange governance between LGUs PO/PS community, institutional link- programs and NGOs/POs will design ages for policy among LGUs Work for an NGO- through - corresponding advocacy at the for sharing of PO representation systems for - national and local experiences in the Oversight regular policy levels. on policy Committee and its workshops; continuing advocacy and Technical Working and policy dialogue; coordination; Groups (TWG) TWGs, whose synchronizing case studies members come program/project on policy from LGU development advocacy ex- Leagues and with policy periences for federations of advocacy dissemination; NGOs/POs/PS. processes; and on-the-job joint positioning exposure to OSC will review on policy policy advocacy existing issues of mutual in Congress, implementing concern. Office of the guidelines to President, determine breadth NGAs, think of NGO/PO/PS tanks, and participation business in policy centers; and evaluation. training by OSC, with the NGO/PO/PS assistance of network of DILG, will en- the staff of courage LGUs NGO affairs to create local desks. NGO/PO/PS desk, taking into account the LGU capability to fund its operations. ----------------------------------------------- MASTER PLAN FOR THE SUSTAINED IMPLEMENTATION OF THE LGC 1991 PLANNING AND BUDGETING COMPONENT ACTION PLAN AREAS OF RECOMMEN POLICY OPERATING ORGANIZATIONAL CAPABILITY CONCERN DATIONS SYSTEMS DEVELOPMENT BUILDING ----------------------------------------------- Retooling the planning, DILG, with the as- DILG, together DILG, together DILG, NEDA, ICBP will - programming, sistance of NEDA with with NEDA and and LGU Leagues and budgeting and DBM and in NEDA and in in consultation will institutional- provide TAs systems for a consultation with consultation with LGU ize the mechanisms on development decentralized set-up of LGU Leagues and with LGU Leagues, will for integrating planning; local governance NGO/PO community, Leagues and complete the lower level LGU provide skills- will promulgate NGO/PO manualization plans at provincial, directed training a revised and community, of the new local city, and regional such as, synchronized planning will develop planning systems levels. but not limited and budgeting simplified wherein - to - system designed for planning NEDA, together a decentralized set- guidelines that - planning stand- with DILG, will socio-economic up of local ensure the ards are updated design organizational- and governance. inclusion of the the manual models for physical more substantive is packaged pooled planning profile (SEPP) DILG, together with activities according to user's initiatives (e.g., preparation; NEDA, will provide in planning need (a manual IAD, biodistrict integrated TAs and upgrade the such as, but for functionaries planning, economic rural capabilities of LGUs not limited to may have district accessibility on planning and employment to be packaged management, planning; and budgeting. generation, differently from growth centers) definition of tourism that for LCEs); among LGUs. basic human LGUs will be development, planning needs. enjoined to fast track investment systems are de- DILG and NEDA the preparation of promotion, signed by LGU will set up field conduct comprehensive DBSF delivery, level and income reaction teams orientation development plans, capability class; at the regional seminars for land use plans, and -building, and appropriate level to assist LCEs and investment enterprise hardware and LGUs in preparing sanggunian programs based on the development; software, when- their members on revised guidelines. provide the ever feasible, comprehensive the new "minimums" for are utilized; development planning system; the preparation operating plans. reorient of AIPs, LDIPs, guidelines for formal planning physical and land AIP and LDIP courses toward use plans, and programming are content and other plans reoriented of new with reference toward local guidelines; to local development provide on- development needs and the-job training needs by LGU vertically and exchange level and income, integrated programs for class, and other planning; and local planning requirements NGAs inputs officers; for plan are integrated. set up linkage integration at DBM and COA with ODA higher LGUs will finalize the agencies for and RDC Budget Operations scholarships level; and Manual. on development integrate planning operational and budgeting; requirements of and NGAs. utilize NGO DILG shall and domestic/ encourage LDUs foreign donor to formulate models on their local development comprehensive planning. development plans. OSC will ICBP will recommend the include training issuance of an on development MC requiring planning, local DILG and financial assistance, NEDA to set community up regional mobilization, desks to provide and project TAs to development and LGUs in preparing packaging. the comprehensive development plans. ----------------------------------------------- Adoption and Installation of OSC will DILG, together NGAs include DILG, together with implementation of decentralized promulgate with NEDA, will local plan and budget NEDA, decentralized administrative systems a policy complete the assistance desks" will prepare administrative systems system for planning framework for manual on as part of their instructional and budgeting devolution and administrative reorganization materials continuing systems under a on new operating decentralization for planning and decentralized systems for on planning and budgeting such set-up. both NGAs and budgeting. as, but not LGUs. NGAs will limited to - regularly coordination LGU Leagues disseminate between NGAs will include in sectoral policies and LGUs for their "sharing as well as program consultation and programs" and project planning; information exchange thrusts synchronization component to all LGUs. of funding prio- concerning NEDA will rities of NGAs innovative regularly update and program/ systems on LGUs on area, project thrusts planning and geographic, and of LGUs; budgeting. national systems for priorities for fund releases to DILG to consideration LGUs on locally conduct orientation in local adapted NGA courses for development programs; and LCEs and sanggunian planning. computerization, members whenever feasible. on decentralized administrative systems in planning and budgeting. ----------------------------------------------- Vertical integration of NEDA and NGAs OSC, with the NEDA, together NEDA will form ICBP will local priorities into shall consider LGU assistance of with DILG, will special units to - include - national plans and priorities in NEDA, will prepare user- programs preparing the define the friendly manuals assist LGUs in briefing of national development parameters for for the preparation their planning local officials plan. the vertical of comprehensive activities; and and LDC Local development integration of development monitor the members on plans and budgets local priorities to plans, more local planning the Medium- shall be harmonized national particularly the activities to Term with national development economic sector ensure consistency Development Plan; development plans. plans, based on of local introduction to goals and OSC will define the economic priorities with the new strategies. the extent of re- agenda of the national planning systems, view authority National development with emphasis of the National Government. agenda. on the vertical Government integration of over local plans NEDA and DILG local concerns such as land will jointly set to national use plans, up monitoring priorities; and development system to en- orientation on plans, etc. sure consistency the linkage of of said plans with national national economic agenda development to local goals. development concerns. ----------------------------------------------- Institutional Operationalize the DILG, together The user-friendly Said guidebooks ICBP will put framework for local institutional with NEDA, guidebooks or must also define more emphasis planning process framework for local will define the manual for the functional on hands on planning process level of planning and linkages of the training for local as mandated participation budgeting different planning by the LGC. required from the must include participants in the wherein the following in methodologies planning process. participants will the local and working be tasked to planning process: arrangements of work on their the different specific Local planning participants in the responsibilities and planning process. in the planning development process. office; Sectoral or functional committees of the local development councils (LDCs); Executive committees of the LDCs; Other local functionaries; NGA field offices; Sanggunians; and Local chief executives. ----------------------------------------------- Regional block fund Adopt the regional OSC will - NGAs will adopt NEDA field ICBP will block fund concept funds programming offices will firm conduct - advocate a and allocation up functional regional block system at linkages with orientation fund system tuned to a regional the Executive courses for to be allocated block fund, Committee of LCEs and by RDCs; with corresponding the RDC. sanggunian and criteria and members on examine the indicators for the proposed feasibility of distribution regional block integrating the among regional fund; and CDF into the NGAs and orientation proposed LGUs. and skills training regional block for local fund, even in planning and terms of programs budget officers prioritization. on the systems and procedures for a regional block fund. ----------------------------------------------- Simplifying coordination Installation of a DILG, together DILG, NEDA, DILG, NEDA, DILG will conduct mechanisms for vertically integrated with NEDA and and LGU and LGU Leagues orientation local planning and planning system in consultation Leagues will adopt will review field courses on budgeting with LGU Lea- operating systems experiences of planning coordination gues, will incor- to enhance LGUs that suc- for punong porate in the coordination ceeded in working barangay, revised planning between - out coordination sanggunian and budgeting problems members, and guidelines provincial with their newly-designated proposed planning and component units with municipal mechanics for plan development an eye toward planning and integration, officers and designing development officers. taking into municipal/city operational models consideration the planning coordination. upward officers; and LGU Leagues integration from - municipal and will sponsor city planning exposure trips barangay to and development for local plan- municipal or officers planning and city planning and barangay development officers levels; development to selected municipal or councils. LGUs that city to provincial have set up planning DILG and DBM, workable levels; and with the assistance coordination province or of NEDA mechanisms. highly and Liga ng mga urbanized and Barangays, will independent design a planning component and budgeting cities system for to RDCs. barangays. ----------------------------------------------- MASTER PLAN FOR THE SUSTAINED IMPLEMENTATION OF THE LGC OF 1991 REVENUE MOBILIZATION AND FISCAL MATTERS COMPONENT ACTION PLAN AREAS OF RECOMMEN POLICY OPERATING ORGANIZATIONAL CAPABILITY CONCERN DATIONS SYSTEMS DEVELOPMENT BUILDING ----------------------------------------------- I. REVENUE GENERATION A. INTERNAL REVENUE ALLOTMENT (IRA) Timely release of IRA Fully implement Pursuant to the DBM will - DBM regional DBM will - estimates, advice of Art. 409 of the IRR provisions of offices will be allotments (AAs), and Arts. 383 and design a system strengthened and conduct notice of cash Study proposals to 385 of the IRR, for the their functional training on the allocations (NCAs) amend MO 97 OSC will direct timely release linkages to LGUs decentralized -1992 DBM to release of IRA estimates defined. disbursement on time - to LGUs, system for its Ensure that the preferably field personnel correct amount of information on before the start and local the mandated 40% IRA estimates; of the budget budget officers; IRA for LGUs is comprehensive process; and included in the AAs; design and im- disseminate annual GAAs. NCAs; and plement a information checks. decentralized materials on system for IRA computation OSC will review disseminating to LGUs. DBM proposals information on on IRA before IRA estimates their integration and schedule of to the AA/NCA Expenditure releases; Program for computerize the the ensuing preparation of fiscal year. IRA estimates and checks; and ensure the availability of funds and the timely release of IRA share directly to all LGUs including barangays. ----------------------------------------------- More equitable Recommend OSC will direct distribution of IRA favorable Executive DOF to conduct action on HB 6346 a study on and SB 1257 improving the IRAs allocation formula, taking into account the development needs and service delivery requirements of LGUs. ----------------------------------------------- B. NATIONAL WEALTH Entire mechanics of DOF, in consultation OSC will direct Said studies will DOF, with the as- ICBP will the LGU share from with LGU Leagues, the appropriate include the sistance of DBM, include training the proceeds in the shall draft guidelines agencies to operating systems DILG and LGU, of local utilization and on GOCC remittance conduct studies necessary to im- will set up the officials on the development of of LGU share from on - plement fully appropriate concepts and national wealth the national wealth the LGC mandate institutional systems and proceeds. the operational on LGU shares mechanisms to procedures on definition in the national monitor compliance LGU sharing DOF, with the as- of national wealth, including with said sharing from the national sistance of DILG, wealth; the release of scheme. wealth shall assist LGUs in a system of reliable data on proceeds. assessing and collecting estimating taxable revenues DILG, with the their shares in LGU shares of GOCCs assistance of the utilization and in the national concerned. DBM, will set- development of wealth; up follow-up national wealth. the allocation BIR, through the mechanism, at scheme for DOF, will install the regional and said LGU a mechanism to national level, to shares; and inform LGUs of assist LGUs in the remittance taxable income of promptly obtaining scheme for private firms eng- their shares such shares. aged in the utili- from the national zation and wealth proceeds. development of . national wealth. ----------------------------------------------- C. LOCAL TAXATION Mechanics on conflict OSC will encourage OSC will - DOF, with the LGUs, in DOF, with the resolution the design of systems assistance of consultation assistance of allowing LGUs enjoin LGUs, DILG, LGU with the DILG, will Tax revenues to be more creative, especially the Leagues, the private sector, conduct general flexible, and adaptable sanggunians, private sector, will create tax and specialized Scheme of forecasting and the national to conduct and other app- committees training on revenue revenues government to more effective ropriate NGAs, to study administration be supportive and consultations will design - local taxation. and facilitative, within with the DOF, with the guidelines on the framework of private sector effective assistance of LGU taxing fiscal autonomy. and other consultation DILG, shall set powers. concerned sectors mechanisms for up a tax information LGU will optimize before enacting proposed reve- center to assist the use of their taxing tax measures; nue measures; LGUs in powers. recommend schemes for exercising their the issuance of resolving local taxing powers. policy guidelines tax conflicts; defining and more clearly monitoring system the taxing for LGU powers of LGUs, tax impositions. within the framework of fiscal autonomy; study the reorganization of the local board of assessment appeals to cover not only real property tax but all local taxes as well; promulgate guidelines to clarify and re- solve inter- LGU conflicts on local taxation Direct DOF to conduct studies on tax estimation and revenue forecasting as applied to local taxation; and direct DOF, together with LGU Leagues, to develop and distribute specific guidelines and manuals to assist LGUs in using their new taxing powers. ----------------------------------------------- Administrative fees Review existing OSC will DOF, together LGUs will designate DOF will conduct and user charges guidelines on LGU encourage the with LGU a coordinator, training fees and charges conduct Leagues and in preferably a key for local of studies on - consultation with personnel in the officials on - the types and the private sector, local treasury office, indicative or will evolve for the collection guidelines on guide rates for indicative or of regulatory fees and regulatory and guiding rates for fees such as building charges; service fees local fees and permits, Mayor's- revenue generation; imposed by charges. permit, etc. and LGUs; and management making LGUs will be Where viable, of economic optional the enjoined to use LGUs may create enterprises. conduct of said indicative an office to mana- public hearings or guide rates ge their economic DILG, together for the in imposing enterprises. with LGU Leagues pricing of fees and and goods and charges. NGOs, will services of document and economic circulate cases of enterprises. innovative approaches to revenue mobilization by LGUs. ----------------------------------------------- Situs of tax Assist LGUs in im- To operationalize BIR and COA, as BIR and COA will Key personnel plementing Sec. 150 Sec. 150 of the case may be, enjoined to create of local treasury of the LGC. the LGC, will design the a special unit or and accounting OSC will enjoin necessary designate key personnel the following accounting personnel in their will be trained agencies requirements to central and field on the mechanics to promulgate determine the sales offices to monitor of assessing new accounting and tax allocation compliance with and collecting guidelines for allocation said accounting gross receipts business entities accruing to procedures. of business maintaining different entities branches, LGUs. Where viable, subject to the plants, or local treasury and situs of tax. plantations in accounting offices different LGUs. may create a special unit or designate the BIR, key personnel through the to monitor business DOF, in case entities subject of the private to the situs sector; and of tax for purposes the COA, in of assessment the case of and collection. GOCCs eng- aged in the development of the national wealth. ----------------------------------------------- D. ALTERNATIVE SOURCES LGU bond issuances Review existing and OSC will - OSC will enjoin - OSC will NGAs concerned proposed policies on encourage the will - LGU bond issuance develop an CB, SEC, and organization of private action plan COA to issue sector-government disseminate designed to development- technical advisory information provide tax and oriented bodies to assist regarding the other incentives guidelines on LGUs in identifying, use of revenue to buyers bond flotation evaluating, and general or subscribers and issuance and packaging, obligation of LGU bonds of long term LGU bonds. bonds of and other long securities by LGUs; of LGUs; and term securities; CB to design Where viable, train private enjoin NGAs and offer LGUs may create sector and concerned to services to LGUs an inter-office or national and to adopt in producing department unit to local officials on development non-counterfei- explore the mechanics rather than table bonds and opportunities of LGU bond regulatory other long-term for bond flotation. policies on LGU security flotation. bond issuances; certificates; The technical encourage BAP and IHAP capabilities of private sector to develop special LGU Leagues and LGU programs will also be cooperation in on LGU bonds strengthened to the development and simulation enable them to of LGU bonds; models; provide and COA to develop member-LGUs with direct the special the support services DOF to study guidelines necessary the deferment facilitating the for bond of taxes on issuance of LGU floatation. LGU bonds. bonds as well as protecting the investors; and LGUs to conduct a referendum for the issuance of LGU bonds. ----------------------------------------------- Loans, credits, and LGUs will avail of OSC, in OSC will OSC will ICBP, with the other forms of indebt- loans, credits, and consultation encourage - encourage - inputs of BAP edness other forms of in- with the incorporated debtedness as alter- private banking LGU Leagues BAP to establish therein, will native sources of community, to develop re- LGU loan/credit include training revenues. shall develop ference materials windows as part programs on - policy advisory on the use of of the regular guidelines LGU bank de- banking services loan/credit for LGUs on posits as basis of private banks; analysis; the use of loan/ for securing private and public identification, credit markets. concessional banks to open evaluation, treatment on and operate and packaging bank loans; and advisory services to of projects for BAP and LGU LGUs on matters credit financing; Leagues to regarding loans and develop LGU and other credit incentives on cash flow facilities. the use of analysis and financial loans and models as other long- basis for term credit attracting bank facilities. credits. OSC will encourage private banks to train their officers on LGU credit finance. ----------------------------------------------- BOT schemes and Issue specific OSC will direct CCPAP, with the DILG, with the Local officials other variants guidelines on BOT the CCPAP to cooperation of assistance of will be trained schemes applicable to draft policy LGU Leagues, CCPAP, will set on BOT/BT LGUs guidelines on will design up a TA delivery schemes including BOT-BT manuals and system to support the operation schemes guidelines on LGUs in and management applicable to identification, implementing said of BOT LGUs. packaging, schemes. projects. evaluation, and management Where viable, of BOT projects LGUs may create by LGUs. an inter-department unit to explore opportunities for BOT schemes. ----------------------------------------------- Non-traditional Issue clearcut OSC will DOF, together LGUs may LGU personnel sources guidelines to recommend the with DILG, will establish offices or concerned will operationalize issuance of document and units to raise be given Sec. 186 of LGC Presidential disseminate revenues from non- adequate training directives - information on traditional sources, on non-traditional non-traditional subject to the revenue- authorizing revenue activities limitations raising schemes LGUs to raise of LGUs for prescribed by law. funds for replication by development other LGUs. projects from allowed gaming activities; difining non- traditional sources of revenues for LGUs; and defining LGU powers to impose other taxes, fees, and charges, pursuant to Sec. 186 of the LGC. OSC will also encourage the conduct of studies on joint ventures in strategic programs and projects among LGUs such as the creation of development corporations. ----------------------------------------------- GFI policies on Study current GFI OSC will GFIs will be en- GFIs will be GFIs will extending loans policies on loans encourage - joined to adopt enjoined to set up disseminate and other forms and other credits to common policies the institutional information in of indebtedness LGUs GFIs to open and requirements mechanisms to regard to their to LGUs lending for LGU loans. support their policies and windows for lending programs mechanics on LGUs, which for LGUs. credit financing provide loans for LGUs. at concessional Where viable, rates and tech- LGUs will be LGU Leagues nical assistance encouraged to will enhance at lower cost to create a special the capabilities less developed unit or designate of member- LGUs; key personnel- LGUs in availing the conduct of to explore loans from a study to opportunities for GFIs. include LGU availing loans and loans in the other forms of "agri/agra" re- indebtedness. serves of banks. ----------------------------------------------- Inter-LGU Prepare benchmark OSC will COA will be en- LGU Leagues may LGU officials borrowings and and guidelines for encourage inter- joined to issue create a special will be oriented subsidies LGUs LGU borrowing guidelines on unit within their on the as a non- inter-LGU secretariats to importance and traditional LGU borrowings and facilitate inter- mechanics of fund source. subsidies. LGU transactions. inter-LGU borrowings and financial assistance ----------------------------------------------- II. REVENUE UTILIZATION Property and supply Recommend changes OSC will OSC will LGUs will adopt The following management to COA Circular enjoin - enjoin DBM and structures for LGU officials 92-386 COA to finalize effective will be trained COA to adopt the Budget management on supply and Issue the Budget policies on Operations of supply and property Operations Manual supply Manual, pursuant property. management: pursuant to LGC management to Sec. 354 mandate. responsive to of the LGC. key personnel the efficient COA will be of the local delivery of enjoined to issue general services DBSFs; a user-friendly office; DBM to adopt manual on and budget systems property and members of and procedures supply management. the local pursuant to finance LGC mandate. committee and chairpersons of the committees on ways and means and appropriations; key personnel of the office of the local accountant; and members of the sangguniang barangay. ----------------------------------------------- Control and review Issue a simplified OSC will - COA will be Barangays will Cities and mechanisms to barangay financial enjoined to design provide the ap- municipalities, for barangay funds operation manual enjoin COA to accounting and propriate structure in coordination issue guidelines auditing systems responsible for with appropriate on the review for barangay fiscal management. NGAs, and control funds. The following city will train and of barangay or municipal assist barangay funds; and COA will be offices will assist treasurers in encourage the enjoined to issue barangays in managing the conduct of a a circular directing managing their financial af- study making the city or funds: fairs of the the position of municipal barangay and barangay accountant to Accounting preparing financial treasurer a supervise the office; reports. career one. financial records Treasury of the barangay, office; and pursuant to Sec. Budget office. 334(c) of the LGC; in areas where there are no city or municipal accountants, the local treasurers will assist barangays in managing their financial affairs. ----------------------------------------------- Guidelines on the Issue guidelines on OSC will DPWH will DPWH, together DPWH, with implementation of the implementation request COA, develop a with DILG, will the assistance infrastructure of local infrastructure with the system to prescribe the of the projects projects assistance of vide TAs to appropriate contractors DPWH, to LGUs in structures for local associations, will issue guidelines designing and PBACs and en- train LGU on the implementing gineering officers, engineers on implementation their based on said project of infrastructure infrastructure policy guidelines management. projects by projects. and operating LGUs. DPWH, based systems. DILG will on COA policies, document The private will design the PDAP sector will be operating systems experience on encouraged to for local PBACs infrastructure assist LGUs in and their technical projects and implementing committees. disseminate the their same including infrastructure related technical projects. materials to LGUs. ----------------------------------------------- IIII. REVENUE ADMINISTRATION Support mechanisms Design training OSC shall direct OSC will - BLGF-DOF will - ICBP will - for effective revenue programs and revenue DOF, in administration administration models consultation with direct DOF to be strengthened train local LGU Leagues, to issue a new to efficiently treasury and Prepare treasury promulgate manual for trea- provide TAs to accounting operations manual standards and surers and revise LGUs including personnel on guidelines for a the real property barangays; and local treasury, model revenue assessment reorient local accounting, code; administration manual treasurers and and budgeting of local for assessors; assessors on new operations; taxes fees, and enjoin DBM revenue-raising train barangay charges; treasury and COA to powers and needs officials and assessment finalize the of LGUs. on fiscal operations; Budget Operations planning, and barangay Manual; DILG field management, and revenue-raising enjoin COA, personnel will be taxation; powers and in consultation reoriented to develop treasurer's with LGU focus on the school handbook. Leagues, to financial operations curricula on prepare user- of LGUs. local taxation; OSC will friendly manuals and encourage - on local fiscal LGUs will rationalize encourage the administration; the organizational use of such the and structures curricula by development of encourage of the assessor's DECS. local revenue DILG, NEDA and the treasurer's programs; and and LGU offices. Universities formulation of Leagues to and special broad design jointly LGUs will create groups like the guidelines a local the offices of the Philippine on local development accountant and Association of taxation by planning general services Treasurers and provinces. system linked as mandated in Assessors will to revenue the LGC. be encouraged administration. to develop program mate- rials and special training on local tax administration ----------------------------------------------- Organizational DOF, with the OSC will en- OSC will en- LGUs may re- ICBP will include models on revenue assistance of CS, courage CSC, in encourage the organize their training administration will prepare orga- consultation adoption of assessment and programs on nizational models with LGU innovative treasury offices revenue mobilization for revenue Leagues, to - approaches to to - that put administration. revenue more emphasis issue administration eliminate on specific LGUs will review guidelines on by LGUs. administrative problems such and revise staffing local pay plan; inefficiencies; as improving pattern of assessment and design install an tax collection and treasury models for LGU improved tax efficiency, offices based on organizational records defining collection income and structure management norms, etc. administration and staffing system;and requirements. patterns, improve tax particularly collection for treasury efforts. and assessment offices. ----------------------------------------------- Use of information Promote the auto- OSC will en- OSC will en- Where viable, NGAs concerned technology mation of the tax courage LGUs courage NGAs LGUs may will records management to make use of concerned to - create a special train LGU system the computer unit charged personnel on - technology in study the with applying revenue application of the computer the application administration. of information technology in and technology to revenue advantages of local revenue administration. computers; administration; and assist LGUs in DILG and DOF, software acquiring com- with the assistance application to puter hardware of LGU Leagues, local revenue at lower cost; will strengthen administration. and their institutional develop software capability to ICBP will for local support LGU include training revenue requirements for programs on administration, computerization. the application with the of information assistance of the technology to private sector. local fiscal administration. ----------------------------------------------- IV. REVENUE EQUITY Equitable IRA Conduct a policy OSC will direct DOF, with the DOF may form a OSC, with the allocation that takes study to ensure a DOF to study assistance of technical group to assistance of into account the just and equitable IRA distribution LGU Leagues, study the existing DBM, DOF, development needs allocation of IRA formula and its may design an allocation formula DILG and of LGUs and the effect on local operating system of the IRA. LGU Leagues, cost ofDBSFs government that provide will conduct a development. for the field vali- a series of dation of policy consultation on recommendations. IRA allocation scheme. ----------------------------------------------- IRA share of newly- Study the impact OSC will Same as above Same as above Same as above created LGUs of creating new support DOF LGUs on the IRA study on IRA shares of existing distribution scheme. LGUs ----------------------------------------------- Linkage of Issue supplemental OSC will direct DILG, with the LGUs will be NGAs development plan guidelines on Arts. DILG, with the assistance of enjoined to concerned, with and revenue program 182, 397, 400, 409, assistance of NEDA, DBM, strengthen the the participation and 410 of the IRR. NEDA and DOF and LGU capabilities of of LGU DOF, to - Leagues, will local finance Leagues, will prepare planning committees, train LGUs on issue guidelines manuals which local development development providing provide, among councils, planning and for the linkage other things - and sanggunians. revenue of revenue mobilization. programs linkage of fiscal to local program to local development development plans;and plan; and assist promote capital LGUs in investment in implementing LGUs. said guidelines. ----------------------------------------------- Models to measure Conduct studies on OSC will NTRC, through DOF, together NGAs concerned tax elasticity and elasticity and equity enjoin - DOF, will with DILG, will will equity indicators for local design simplified organize a pool of train LGU taxes appropriate models on local local tax experts officials NGAs and the taxation. who will serve as including business sector tax consultants sanggunian to conduct of LGUs. members on local studies on taxation, elasticity and particularly on equity indicators tax elasticity for local taxes; and equity and models. independent entities to assist LGUs in relating taxes on business to the prices of goods and services. Debt relief Fully implement OSC will DBM, together DOF, with the Key personnel Sec. 531 of the direct - DOF, will report assistance of LGU of debtor- LGC on the utilization Leagues, will form LGUs will be DOF to of the P500 mil- a technical staff to trained to submit a list of lion allotted for assist LGUs in enhance their LGUs with debt relief of achieving performance in outstanding LGUs in the efficiency in fiscal revenue debts to 1992 GAA. Said management to collection. NGAs, GFIs, NGAs will enable them to GOCCs and determine avail of incentives DOF will public utilities additional funding provided for un- disseminate as of 31 Dec. requirements for der the debt relief information on 1988 and this purpose. program. the debt relief unremitted program of the national taxes, DOF, with the LGC. fees and charges assistance of as of 31 Dec. DBM and LGU 1991; and Leagues, will DBM to install mechanisms deduct the debts allowing assumed by debtor-LGUs the National to avail of the Government incentives from the IRA provided for in share of Sec. 531(e) of debtor-LGUs. the LGC. ----------------------------------------------- MASTER PLAN FOR THE SUSTAINED IMPLEMENTATION OF THE LGC OF 1991 ACTION PLAN AREAS OF RECOMMEN POLICY OPERATING ORGANIZATIONAL CAPABILITY CONCERN DATIONS SYSTEMS DEVELOPMENT BUILDING ------------------------------------------------------------------------------------------------------------------------------------------ Capability of elective Skills and capability OSC will DILG will DILG, through In line with and appointive local development for enjoin - compile and LGA and in ICBP, DILG, officials LGU officials, both disseminate all consultation with in consultation elective and LGU officials issuances relative LGU Leagues, with LGU appointive: elected or to the LGC will - Leagues, will - appointed for implementation. Barangay (including the first-time strengthen the prepare a SKs) to undergo DILG, with the ILGA and NGO special orientation assistance of training network; curriculum for Basic management/ training on local NGAs concerned, organize a pool local officials local governance government will review and of trainors who elected or skills/techniques in administration; harmonize the come from LGUs, appointed for the such areas as LGU officials the manuals on NGOs, and the first time; budgeting, planning, experienced LGU operations academe and are conduct general and accounting, in local issued by various experts in local and specialized legislation; administration to NGAs. Such government training take a refresher manuals will then development; for local Municipality course or serve as integrate and sim- officials and orientation administrative plify training staff in planning Upgrading of skills seminar on guidelines for materials on the and budgeting, in management and the new LGC; LGUs. LGC and IRR accounting, strategic planning; DILG to LGU Leagues will including legislation, reconstitute the design and operate issuances and project Province/City LGA Board of information on LGC management; Trustees to network/database implementation; improve the Strategic planning; include the and information conduct content of the Project presidents of exchange system institutional inter-agency development; LGU Leagues; on LGU internship and catalogue on Inter-LGU sharing LGUs to experiences exchange training training program (observation include (sharing program). programs for LGUs; opportunities tours/piloting); allocations for strengthen the and distribute to and Big Brother/ career and staff OSC will training network LGUs on a Sisterhood Area development in promote the for local officials. regular basis; Programs; their annual sisterhood/ Establishment of budgets; brotherhood CSC, in consultation conduct junior information NGAs program with LGU executive network/database, involved in among LGUs. Leagues, will training for ex change and systems LGU capability conduct a study on section and on LGU experiences building to local career divisions chiefs in devolution; and coordinate their executive service of LGUs. Manualization of efforts through system. conduct basic skills/ the LGAs senior executive techniques in local ICBP; Higher LGUs will training governance. DAP, SUCs, assist lower LGUs in for assistant private planning, budgeting, chief and universities and accounting, chief of colleges, procurement, credit offices; NGOs, and the financing, and encourage private sector legislation. inter-local and to develop training foreign training programs on local and methodologies government; in support encourage of the foreign ICBP; and participation in CSC to training seminars develop incentive to enrich scheme for LGU the knowledge performance, of local training, participants on and upward or LGU policies lateral and practices movement of abroad; local personnel. promote access to foreign financial and technical assistance; and give preference to local officials for training abroad. Policy guidelines on OSC will encourage encourage a capability-building NGAs, private regular and which include - institutions, year-round and NGOs training on Developing involved in LGU local government curriculum based on capability building administration LGU inputs; to realign for Utilizing LGU officials their operational elective and as instructors/ thrusts, linkages, appointive local trainors; methodologies, officials; Promoting the and management design training brotherhood/ criteria to meet programs sisterhood program LGU needs. in consultation among LGUs; with LGU Simplifying Leagues; procedures on - put more emphasis Planning and on applied budgeting; results- Accounting; oriented, and Civil service; and immediately Procurement. measurable Encouraging internship training program for systems and LGU officials and methodologies; key personnel - and Inter-LGU; revise, if not Foreign exposure; abandon, and traditional, public Private sector/ administration NGO ala "Corporate centered, Citizenship theoretical Program". and short- term approaches to LGU training. ----------------------------------------------- Quality of elective Information/ OSC will OSC will OSC will OSC will encourage LGU officials education encourage encourage - encourage LGU journalism competency COMELEC DILG Leagues, NGOs, schools Advocacy and NGOs to the regular POs, LGU employees, and similar launch information publication of associations, institutions to Recall and drives to such qualities professional offer special initiative enlighten the and criteria in groups, and media courses on electorate on the which the associations to such concerns ideal qualities electorate can provide the as the qualities and performance base heir choices information, education and performance criteria for for elective local and communication criteria elective local officials; requirements for elective local officials and the the publication for upgrading the officials, recall, recall and of information quality of elective and initiatives. initiative processes and experience- LGU officials. provided for in on recall the LGC. and initiatives; the orientation of media people as to the qualities and performance criteria for elective local officials; the conduct of public forums sponsored by COMELEC wherein candidates may show their qualifications for the position they are seeking. ----------------------------------------------- Role of LGUs Where feasible, OSC will NGAs, with LGUs will be en- Higher LGUs, higher LGUs may recommend the LGUs serving as couraged to create through the serve as support issuance of their partners, an LGU affairs ICBP, will - institutions to guidelines will design systems office that will lower LGUs on - delineating the for the provision- cater to the needs of provide training supervisory of financial, their component assistance Technical and authority and technical and units. and financial assistance; support services administrative opportunities Organization of higher assistance to Higher LGUs will to officials of development; LGUs to LGUs. ensure that the or- lower LGUs; NGA standards component units, ganizational extend field and guidelines; specifically in Where viable, structure, personnel assistance to Cooperation bet- such concerns higher LGUs will complement and component ween LGUs and brought about involve pay plan of units; and NGAs; and by the LGC component units component provide funds NGA support implementation in designing and units are for training to services. such as, but not implementing in accordance set component limited to the programs and forth by law, units. complementation .projects. NGA issuances, in the and other Higher LGUs DBSF delivery, pertinent policies. may extend administrative financial assistance, tech- assistance, loans, nical and or loan guarantees administrative to lower LGUs. support of NGAs in DBSF delivery. ----------------------------------------------- Classification of A policy study on OSC will DILG, in DILG will set up ICBP will barangays, e.g., urban classifying all LGU encourage the consultation with the institutional include training or rural, income class levels for the conduct of LGU Leagues, mechanisms to modules for purpose of delineating research on - will install a implement said barangays - Upgrading the and expanding their monitoring monitoring capabilities of functions and the income system for - system. management barangays responsibilities. classification systems; of barangays classification development An incentive for purposes of barangays; planning; scheme based on of setting the and fiscal specific standards of budgetary provision of administration; accomplishment, limitation on incentives to local legislation; competence, and personal barangays and efficiency of LGUs services, credit community limits, etc.; and mobilization. an incentive scheme for NGOs, LGU good Leagues, and performance. public/private training institutions will be encouraged to develop special training programs for barangay officials. ----------------------------------------------- Mechanism for Guidelines on the DILG, in DILG, with the Barangays will be Barangays, barangay assemblies conduct of barangay consultation assistance of enjoined to hold with the assemblies including with the Liga, will NEDA and upon barangay assistance of timetable and scope issue guidelines consultation with assemblies cities and of responsibilities on the conduct the Liga ng mga as provided for municipalities, of barangay Barangay, will in the LGC. will inform Organization of assemblies and design a system residents as to puroks or sitios in the institution- to institutionalize their obligations in barangays alization of pu- the participation in the barangay roks and sitios. of barangay assembly. assembly members OSC will in the adoption recommend the of barangay issuance of development plans supplemental and the selection guidelines, on - of members of the lupong taxing powers tagapamayapa. of barangays; compensation for barangay officials; and corporate powers of barangays. ----------------------------------------------- Filling-up of Promote the salary OSC will enjoin DILG will LGU CSC will conduct standard positions sharing arrangement the CSC to reactivate the reorganization training between LGUs and issue a circular monitoring system will include on qualification NGAs especially for relaxing the rigid to keep track, the creation standards vital services educational among other and staffing of for all local qualifications things, the mandated positions. Easing-up/review of forcertain local creation positions qualification positions there- and filling up pursuant to DILG will requirements by allowing the of mandated theprovisions reorient its field substitution of positions. of the LGC offices on the Clustering of academic andpertinent reactivated provincial staff/ requirements issuances. monitoring system. pooling of with training and personnel. job experience. OSC, upon consultation with LGU Leagues, will recommend the issuance of guidelines for the clustering of provincial staff or pooling of LGU personnel. OSC will request COA CSC to formulate guidelines prohibiting the designation of non-bonded personnel to mandated positions charged with fiscal responsibilities. OSC will discourage the appointment of OICs and contractual personnel to mandated positions. ----------------------------------------------- Implementation of Augmentation OSC will study DBM and CSC nationally-mandated from the National and recommend through the wage and non-wage Government appropriate ICBP, will benefits such as issuances on the - conduct training Magna Carta for Applicability of programs on Public Health the provisions on applicability the new guidelines Workers, PERA, etc. personnel benefits of the Magna for upgrading of the Magna Carta Carta for of salaries for PHWs Health Workers and the revision to LGU health of position personnel; indices applicable creation of to LGU salary subsidy personnel. fund for salary increases initiated by the National Government OSC shall enjoin DBM, with CSC assistance, to conduct a study on resolving pay pay distortions between local and developed personnel. ----------------------------------------------- Sectoral Congressional OSC will representation in action recommend the the sanggunian revision of COMELEC Resolution No. 2515. ----------------------------------------------- Exercised of devolved Issuance of OSC will direct OSC, through LGUs, in exercising NGAs concerned regulatory functions supplemental affected NGAs the DILG devolved will by the LCE, guidelines on to facilitate the monitoring , regulatory functions, train LGUs sanggunian, and other the scope of devolution of systems procedures will create in the exercise local officials responsibilities and regulatory and standards for appropriate of devolved concerned powers of LGUs powers to LGUs devolved offices or assign regulatory regarding approval as mandated by regulatory personnel to functions. of subdivision plans the LGC. functions handle such (EO 71) prescribed by functions. Enjoining the affected NGAs provinces to create are consistent the Provincial Land with devolution Use Committee imperatives. (EO 72, OSC will direct s. of 1993) HLURB to issue supplemental guidelines to EO 71 ----------------------------------------------- Personnel actions Issuance or review OSC will enjoin CSC, in CSC in consultation CSC, through on positions created of CSC rules CSC to update consultation with with LGU the ICBP, will as a result of providing flexibility to its rules and LGU Leagues, will Leagues, will be train its field devolution to LGUs in the guidelines on be enjoined to enjoined to staff and LGU hiring of personnel LGU reorgani- upgrade develop further personnel taking into account zation to allow reorganization the appropriate regarding new prevailing local LGUs to procedures for staffing pattern organizational conditions. effectively LGUs. for each LGU models and respond to their DILG, together level. current Expanding the role mandated with LGU issuances. of LGU Leagues as functions. Leagues, will advocates and disseminate to training support LGUs the centers. current CSC organizational models and studies. ----------------------------------------------- Extent of authority Streamline the OSC will NGAs concerned, ICBP will of higher LGUs in procedures under Sec. recommend the in consultation with include training reviewing the 468 1(i) of the LGC, issuance of LGU Leagues, will for LGUs development plans and which pertain to the guidelines on - design systems and including sanggunian budgets of lower review of procedures on the members on LGUs - development plans of the review review and monitoring monitoring and lower LGU by higher and approval of planning reviewing of delays of action LGUs (e.g., land of plans and and budgeting plans and or approval; use plan, budgets of activities of component budgets. abuse of authority development plan, component LGUs or provinces, by certain and budget) LGUs by HUCs and provincial officials. higher LGUs; ICCs by higher Simplify the review and LGUs or NGA, powers to mere the monitoring as the case may be. issuance of opinions. of planning and budgeting Encourage appropriate activities of officials of component LGUs higher LGUs to to ensure monitor the planning immediate and budgeting action by activities of compo- higher LGUs. nent units. 1. This Rapid Field Appraisal (RFA) is the third in a series of appraisals conducted by the LDAP. The first RFA was conducted in June 1992 and the second was in January, 1993 six months and one year respectively upon the effectivity of the Code.