Repuoic ofthe Phippnes DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT DDLGNAPOLCOM Center, EDSA comer Qvzon Avenue, West Tang, Quezon Cy ip ww ip gov Ce 25 JUL 2018 “!LG OPINION No, 4 MAYOR HERMINIO C, LINDO ae s. 20 Ig Municipal Mayor a8 Ternate, Cavite Governor's Drive Poblacion 1-A, Ternate, Cavite Dear Mayor Lindo: ‘This is in reference to your letter dated 10 January 2018 requesting this Department's opinion on the following queries, and we quote: 1. Since as of this time, the SB has not yet enacted the Annual Budget for the year 2018 and that the Annual Budget for 2017 is not yet re- enacted, can the LGU disburse the salaries of existing positions, statutory and contractual obligations, and essential expenses authorized in the 2017 Annual Budget? 2 Who determines the essential expenses that can be disbursed? In your first query we answer in affirmative. The provision of Section 323 of the Local Government Code (LGC) of 1991 is instructive, viz: SECTION 323. Failure to Enact the Annual Appropriations. - In case the sanggunian concerned fails to pass the ordinance authorizing the annual appropriations at the beginning of the ensuing fiscal year, it shall continue to hold sessions, without additional remuneration for its members, until such ordinance is approved, and no other business may be taken up during such sessions. If the sanggunian still fails to enact such ordinance after ninety (90) days from the beginning of the fiscal year, the ordinance authorizing the appropriations of the preceding year shall be deemed reenacted and shall remain in force and effect until the ordinance authorizing the proposed appropriations is passed by the sanggunian concerned. However, only the annual appropriations salaries and wages of existing positions, statutory and contractual obligations, and essential operating expenses authorized in the annual and supplemental budgets for the preceding year shall be deemed reenacted and disbursement of funds shall be in accordance therewith,Based on the foregoing, only the annual appropriations for salaries and wages of existing positions, statutory and contractual obligations, and essential operating expenses authorized in nd_supplemental budgets for the preceding year shall _be deemed reenacted. the annual a Statutory obligations, or those obligations derived from law are deemed reenacted pending the sanggunian concerned enactment of an ordinance authorizing the annual appropriations. On query number 2, may we inform you that this question has been settled in DILG Opinion No. 55, s. 2002 which states: “The issue of the budget is not the sole responsibility of the sanggunian, It is a principle on fiscal administration under the LGC that enactment of annual budget is a shared responsibility and complementary function of both the local chief executive and the sanggunian. Relevantly, Section 305 (1) of the Code provides that: "Fiscal responsibility shall be shared by all those exercising authority over che financial affairs, transactions, and operations of the local government units". Corollarily, the local chief executive is responsible for the preparation of the wrimarily determine what are essential operating =nses.”" ‘Thus, it is the Mayor who shall determine the essential operating expenses of the Municipality. However, this Department would like to remind you that only “essential” (of the utmost importance; basic; indispensable; extremely necessary!) and not all operating expenses should be included. We hope we have enlightened you on the matter. Very truly yours, BY oe! OF THE SECRETARY: AUSTERE A. PANADERO Undersecretary Copy furnished: Dir, Manuel Q. Gotis Regional Director DILG Region IV-A war No " hutps://www.merriam-webster.com/dictionary/essential