Guidelines on Release and Utilization of FY 2016 Local Government Support Fund-Financial Assistance to LGUs

March 17, 2016

DBM LOCAL BUDGET CIRCULAR NO. 109-16

 

1.0 Background

Local governments confront rising public expectations regarding the delivery of services. Despite two decades of implementation of Republic Act (RA) No. 7160 (Local Government Code of 1991),however, local governments still face the various challenges in the exercise of their devolved service delivery functions. Foremost among these is the raising of sufficient funds for local development. 1

Cognizant of the need to provide further support to the LGUs to enable them to fully carry out functions devolved to them while at the same time, building their capacity towards genuine fiscal autonomy, the National Government has scaled up its efforts to ensure meaningful devolution.

To this end, the LGSF was included in RA No. 10717 or the FY 2016 General Appropriations Act (GAA) to cover the following:

a. Financial Assistance to LGUs, which shall support priority programs and projects of LGUs;

b. Bottom-up Budgeting Projects; and

c. Rehabilitation and Upgrading of Provincial Roads.

2.0 Purpose

To prescribe the guidelines and procedures in the release and utilization of the LGSF-Financial Assistance to LGUs, and ensure its sound utilization and timely release.

3.0 Requirements for Use and Release of the LGSF-Financial Assistance to LGUs

3.1 The LGSF-Financial Assistance to LGUs shall be used to fund the priority programs and/or projects that are included in the Project Menu attached hereto as Annex A. DETACa

3.2 The local chief executive (LCE) shall submit a request for financial assistance to the DBM, supported by the following:

3.2.1 List of priority programs and/or projects to be implemented; and

3.2.2 Sanggunian Resolution endorsing the requested list of programs and/or projects.

The programs and/or projects to be funded from the LGSF-Financial Assistance to LGUs shall be implemented by the provinces, cities, municipalities and barangays themselves.

3.3 Disbursement and utilization by the LGUs shall be subject to pertinent provisions of RA No. 9184, as well as applicable accounting, budgeting and auditing rules and regulations.

3.4 Similar with the release procedure for LGU special shares under Section 93 of the General Provisions in the FY 2016 GAA, the LGSF-Financial Assistance to LGUs shall be released directly by the Bureau of the Treasury (BTr) to the LGU beneficiaries through authorized government servicing banks upon receipt of, and consistent with the purposes indicated under, the corresponding Special Allotment Release Order and Advice of Notice of Cash Allocation issued by the DBM to the BTr.

4.0 Prohibitions in the Use of the LGSF-Financial Assistance to LGUs

The amount received by the LGU from the LGSF-Financial Assistance to LGUs shall not be used:

4.1 For any purpose other than the programs and/or projects for which the fund was released;

4.2 To augment funding for programs and/or projects already covered by the Bottom-up Budgeting Projects and Rehabilitation and Upgrading of Provincial Roads under the FY 2016 GAA; and

4.3 For the payment of Personal Services expenditures (i.e.,payment of salaries, including honoraria, allowances, bonuses, and similar forms of compensation).

5.0 Posting and Reporting Requirements

The LGU-beneficiaries shall:

5.1 Prepare quarterly reports on fund utilization and status of program/project implementation using the attached format (Annex B),and post said reports on the LGUs' website, and in at least three (3) conspicuous public places in the locality within twenty (20) days from the end of each quarter, consistent with the Full Disclosure Policy of the Department of the Interior and Local Government; and

5.2 Comply with the posting requirements prescribed under RA No. 9184.

6.0 Responsibility and Accountability

The LCE and other local officials concerned shall be responsible and accountable in the proper disbursement and utilization of the LGSF-Financial Assistance to LGUs for the implementation of eligible programs and/or projects, including compliance with pertinent provisions of RA No. 9184, as well as accounting, budgeting and auditing rules and regulations.

7.0 Issues for Resolution

Interpretation of the provisions in this Circular, including cases not covered herein shall be referred to the DBM for final resolution.

8.0 Repealing Clause

All provisions in existing guidelines that are not consistent with this Circular are hereby revised, modified and/or repealed accordingly.

9.0 Effectivity

This Circular shall take effect one day after its publication.

 

(SGD.) FLORENCIO B. ABADSecretary

ANNEX A

Proposed LGSF 2016 Project Menu

Program/Project	Requirements
Health
Assistance to indigent Patients either	1.	Name of recipient government
Confined or Out-Patients (including		hospital
professional fees)
Social Services
Assistance to indigent individuals/	Project Profile/Proposal
families
1.	Medical		Type of Assistance/service to be
2.	Burial		rendered
3.	Transportation
5. n	Food assistance
6.	Cash for Work
7.	Educational Assistance
Disaster Risk Reduction and
Climate Change Adaptation
1.	Heavy Duty Rescue Vehicles	1.	Type/Specifications
		2.	Number of Units
		3.	Deployment
Public Infrastructure Projects
Construction/Rehabilitation/Repair/
Improvement of the following:	1.	Program of Works Certified by
			Municipal/DPWH Engineer
1.	Local Roads and Bridges	2.	Location
2.	Public Markets/Slaughterhouses/	3.	Detailed Estimates and Detailed
	Multi-Purpose Buildings/Multi-		Engineering Design
	purpose Pavements, Pathways/
	Trails	4.	For projects costing more than
3.	Flood Control-drainage canals/		P10.0 Million Certification from
	sea wall		DPWH DEO covering technical
			capability of LGUs
4.	Water Supply System-Level I/
	Stand alone water points (e.g.,	5.	For requests for Water Supply
	handpumps, shallow wells, rain		System, Certification from DILG
	water collector)		that the project is not included/
			funded from other fund source
			such as SALINTUBIG, BUB and
			PAMANA.

ANNEX B

Local Government Support FundFor the Quarter Ended _________

Instructions:

1. The report shall be prepared by the LFC in coordination with the other local officials concerned (e.g.,local accountant on the allotment, obligation and disbursements; local engineer on the status of infrastructure projects, as may be applicable).

2. The fund source shall be based on the NADAI issued to LGUs.

3. The type of program/project shall be identified consistent with the Project Menu in the Annex A of this Circular.

4. Amount received refers to the amount received by the LGU as its share. It is the amount indicated in the NADAI. Obligation refers to the total amount obligated by the LGU as of reporting period. Disbursement refers to the total amount paid by the LGU as of reporting period.

5. The estimated period of completion refers to the projected date (month and year) to complete the program/project.

6. The status of programs/projects refers to the percentage of physical completion as of reporting period.

Footnotes

1. Note from the Publisher: Missing footnote text. 

n Note from the Publisher: Copied verbatim from the official document.