LOCAL BUDGET PROCESS

2016 EDITION
PUBLIC FINANCIAL MANAGEMENT

ACCOUNTING
AUDITING

BUDGETING
REVENUE
GENERATION
PUBLIC REPORTING
ON PUBLIC SECTOR
FINANCIAL
OPERATIONS
DEBT CASH
MANAGEMENT MANAGEMENT
 LOCAL BUDGETING FRAMEWORK

within our means

PARTICIPATORY invests in the right priorities
delivers measurable results

POLICY-BASED

empowers citizens
PERFORMANCE-
INFORMED
 Spending within our means

Investing in the right priorities

Delivering measurable results

Empowering citizens
through fiscal transparency,
accountability & participation
 WHAT IS A BUDGET?

“A financial plan embodying the

estimates of income and
expenditures for a given period of
time (usually for one (1) fiscal
year).” (Section 306a, R.A. No. 7160)

BUDGET
THE LOCAL BUDGET PROCESS
 THE LOCAL BUDGET PROCESS

Budget Preparation is an executive function

pursuant to Section 318, RA 7160 which
mandates the LCE to prepare the executive
budget for the ensuing fiscal year.
 BUDGET PREPARATION
o The first phase in the local budget
process

o Involves the cost estimation per PPA,

preparation of budget proposals,
executive review of budget proposals, and
the preparation of the LEP and the
Budget Message

o Starts with the issuance of the Budget

Call, and ends with the submission of the
Executive Budget to the Sanggunian on
or before October 16 of each year
 THE LOCAL BUDGET PROCESS

The Sanggunian shall enact, through an

ordinance, the annual and supplemental
budgets of LGUs (Sec. 319, RA 7160).
 BUDGET AUTHORIZATION
o The second phase in the local budget
process

o Starts from the time the Sanggunian

receives the Local Expenditure
Program, and ends with the enactment
of the Appropriation Ordinance and
approval thereof by the Local Chief
Executive

o Anchored on the fundamental principle

– “No money shall be paid out of the
local treasury except in pursuance of an
Appropriation Ordinance or law.”
(Section 305 (a), RA No. 7160)

legal basis issue

 THE LOCAL BUDGET PROCESS

The Sanggunian shall review the AOs of

component cities, municipalities and
barangays as the case maybe. While the
DBM Regional Offices shall review the AOs
of provinces (Sec. 326, 327, RA 7160)
 BUDGET REVIEW
o The third phase of the local budget
process

o Primary purpose is to determine whether

the Appropriation Ordinance has complied
with the budgetary requirements and
general limitations set forth in the LGC, as
well as other laws

o Starts from the time the reviewing

authority receives the appropriation
ordinance and ends with the issuance of
the review action

legal basis issue

 THE LOCAL BUDGET PROCESS

The responsibility for the execution of the

annual and supplemental budgets and the
accountability therefor shall be vested
primarily in the LCE (Sec. 320, RA 7160).
The Vice-LCE shall sign all warrants drawn
on the treasury for all expenditures
appropriated for the operation of the
Sanggunian (Sec. 445(a)(1), 455(a)(1),
466(a)(1), RA 7160).
 BUDGET EXECUTION

o The fourth phase of the local budget

process

o Involves the release of allotments, the

certification of available
appropriations and cash, the
disbursement of funds and delivery of
goods in the most efficient, effective,
economical and ethical way

legal basis issue

 THE LOCAL BUDGET PROCESS

The responsibility for the execution of the

annual and supplemental budgets and the
accountability therefor shall be vested
primarily in the LCE (Sec. 320, RA 7160).

Fiscal responsibility shall be shared by all

those exercising authority over the financial
affairs, transactions, and operations of the
local government units (Sec. 305 (l), RA
7160).

pfm
 BUDGET ACCOUNTABILITY

o The last phase of the local budget

process - accounting for the budget

o Involves the use of management

control techniques to assist in
tracking receipts of income/revenue
and controlling expenditures

o Evaluation of financial and physical

performance

legal basis issue

Bureau of Local Government Finance