Realignment and Augmentation of SK Budgets to Provide Funds for Programs, Projects, and Activities (PPAs) Related to Coronavirus Disease 2019 (COVID-19)

April 14, 2020

DILG MEMORANDUM CIRCULAR NO. 074-20

 

In line with the issuance of Proclamation Nos. 922 and 929, Series of 2020, the National Government Agencies (NGAs) and the Local Government Units (LGUs) are enjoined to utilize appropriate resources to implement urgent and critical measures to curtail and eliminate the threat of COVID-19. Such declarations will, among others, afford the National Government, as well as LGUs, ample latitude to utilize appropriate funds, including the Quick Response Fund, in their disaster preparedness and response efforts to contain the spread of COVID-19 and to continue to provide the basic necessities, especially to the affected individuals and families.

In this light, the Department of Budget and Management (DBM) issued Local Budget Circular (LBC) No. 124 dated 26 March 2020, which provides policy guidelines to operationalize the "changes in annual budgets through supplemental budgets" by LGUs, in accordance with the pertinent provisions of RA 7160 and its Implementing Rules and Regulations (IRR).

Consequently, DBM, in its letter dated 02 April 2020 addressed to the National Youth Commission, opined that SKs may also adopt the pertinent provisions of RA 7160 and its IRR in affecting changes in their respective Annual Budgets, specifically by way of supplemental budget or use of savings for augmentation.

In realigning and/or augmenting SK Budgets for COVID-19-related PPAs, all SK Officials are directed to adhere to the policies and guidelines issued by the DBM and other government agencies concerned. Copies of DBM LBC No. 124 and DBM letter to NYC are hereto attached, for your guidance and reference.

All Regional Directors and BARMM Minister of Local Government are directed to cause the widest and immediate dissemination of this Memorandum Circular within their respective jurisdiction. CAIHTE

For guidance and strict compliance of all concerned.

(SGD.) EDUARDO M. AÑOSecretary

ATTACHMENT

DBM Local Budget Circular No. 124-20

REPUBLIC OF THE PHILIPPINESDEPARTMENT OF BUDGET AND MANAGEMENTGENERAL SOLANO STREET, SAN MIGUEL, MANILA

April 2, 2020

MR. RYAN R. ENRIQUEZChairperson and Chief Executive Officer

Dear Sir:

This pertains to your letter dated March 30, 2020 inquiring if the Sangguniang Kabataans (SKs) may also realign and augment their respective budgets to provide funds for programs, projects, and activities (PPAs) related to Coronavirus Disease 2019 (COVID-19), in relation to the guidelines prescribed under Local Budget Circular (LBC) No. 124 dated March 26, 2020. 1

At the outset, allow us to emphasize that LBC No. 124 was issued to guide the local government units (LGUs) in providing necessary funds for COVID-19-related PPAs, consistent with Section 3 of Proclamation No. 929, s. 2020, 2 which enjoins all government agencies and LGUs to render full assistance to and cooperation with each other and mobilize the necessary resources to undertake critical, urgent, and appropriate disaster response aid and measures in a timely manner to curtail and eliminate the threat of COVID-19.

The policies and guidelines on changes in the approved annual budgets (ABs) of LGUs as prescribed under the said LBC are mere reiteration of the pertinent provisions of the Local Government Code of 1991 (Republic Act [RA] No. 7160) and its Implementing Rules and Regulations (IRR), to wit:

1. Changes in the AB through supplemental budget/s (SB/s) pursuant to Section 321 of RA No. 7160 and Article 417 of its IRR, as amended by Administrative Order 47 3 dated April 12, 1993; and

2. Use of appropriated funds and savings to augment any item in the approved AB pursuant to Section 336 of RA No. 7160 and Article 454 (b) of its IRR.

In the case of the SKs, Sections 8 (b) and 20 (c) of the SK Reform Act of 2015 (RA No. 10742) provide that the SKs may, if funds allow, approve an SB. It is further provided under the said law that any changes in the AB shall be in accordance with existing applicable budget rules and procedures. DETACa

The pertinent provisions of RA No. 7160 and its IRR may be suppletory to the said provisions of RA No. 10742. Thus, the SKs may also adopt the pertinent provisions of RA No. 7160 and its IRR in effecting changes in their respective ABs, specifically by way of supplemental budget or use of savings for augmentation.

As regards the changes in the AB through SB/s, item 3.3.3.2 of Department of Budget and Management-Department of the Interior and Local Government-NYC Joint Memorandum Circular (DBM-DILG-NYC JMC) No. 1, s. 2019 dated January 23, 2019 provides that if funds allow, changes in the AB of the SK may be done through SB/s under the following circumstances: (i) when supported by funds actually available as certified by the SK treasurer; and (ii) if covered by new resources.

Anent the use of savings to augment any item in the approved AB, Section 336 of RA No. 7160 and Article 454 (b) of its IRR may apply, thus, the following conditions and requirements must be observed by the SKs:

a. The SK chairperson is authorized to use savings and augment items in the approved AB through a resolution passed by the SK (Note: The authority is in a form of resolution since the SK does not have the legislative power to enact an ordinance);

b. The authority granted to the SK chairperson covers the augmentation of any item in the approved AB, which upon implementation or subsequent evaluation of needed resources is determined to be deficient pursuant to Article 454 (b) (2) of the IRR of RA No. 7160;

c. The amount to augment the deficient item of the budget must be sourced from savings as defined under Article 454 (b) (1) of the IRR of RA No. 7160; and

d. The item/s of budget to be augmented and that from which the savings will be derived are within the same expense class in the approved AB of the SK.

It is understood that the pertinent provisions of RA No. 10742 and its IRR, DBM-DILG-NYC JMC No. 1, s. 2019, Handbook on the Financial Transactions of the SK as prescribed through Commission on Audit Circular No. 2020-003 dated January 28, 2020, and other applicable budgeting, accounting and auditing laws, rules, and regulations must also be observed and complied with by the SKs for this purpose.

We hope to have adequately addressed your concern. Thank you and God bless.

Very truly yours,

(SGD.) JOHN ARIES S. MACASPACOIC-Director IV

 

Footnotes

1. Policy Guidelines on the Provision of Funds by Local Government Units for Programs, Projects, and Activities to Address the Corona Virus Disease 2019 (COVID-19) Situation.

2. Declaring a State of Calamity throughout the Philippines Die to Corona Virus Disease 2019.

3. Amending Article 417 of the Rules and Regulations Implementing the Local Government Code of 1991 Approved and Adopted by Administrative Order No. 270 (1992).