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    LGU Budgeting Process

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    Gina Lee Mingrajal Santos
    The document discusses local revenue generation tools and processes for Philippine local government units. It identifies various taxes, fees, and other revenue sources local governments can utilize. It also outlines the traditional budgeting cycle, including budget preparation by the executive branch, legislative authorization, review, execution through allotments, and accountability. Key challenges are understaffing, lack of records and collection issues that can hinder budget implementation and oversight.

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    Download as PPT, PDF, TXT or read online from Scribd

    LGU Budgeting Process

    Uploaded by

    Gina Lee Mingrajal Santos
    7K views35 pages
    The document discusses local revenue generation tools and processes for Philippine local government units. It identifies various taxes, fees, and other revenue sources local governments can utilize. It also outlines the traditional budgeting cycle, including budget preparation by the executive branch, legislative authorization, review, execution through allotments, and accountability. Key challenges are understaffing, lack of records and collection issues that can hinder budget implementation and oversight.

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    LGU Budgeting Process is a power point presentation I prepared for my report in my Ph.D. class

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    The document discusses local revenue generation tools and processes for Philippine local government units. It identifies various taxes, fees, and other revenue sources local governments can utilize. It also outlines the traditional budgeting cycle, including budget preparation by the executive branch, legislative authorization, review, execution through allotments, and accountability. Key challenges are understaffing, lack of records and collection issues that can hinder budget implementation and oversight.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    7K views35 pages

    LGU Budgeting Process

    Uploaded by

    Gina Lee Mingrajal Santos
    The document discusses local revenue generation tools and processes for Philippine local government units. It identifies various taxes, fees, and other revenue sources local governments can utilize. It also outlines the traditional budgeting cycle, including budget preparation by the executive branch, legislative authorization, review, execution through allotments, and accountability. Key challenges are understaffing, lack of records and collection issues that can hinder budget implementation and oversight.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 35
    At a glance
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    The key takeaways are that local government units have the power to generate their own revenue through various tools like taxes, fees, and charges on land and community activities. These revenues accrue exclusively to the local government.

    The different types of local revenue generation tools discussed are land-based tools, community activity-based tools, infrastructure-based tools, debt-based tools, and revenue sharing tools.

    Some factors affecting the collection efficiency of the local treasurer's office include limited personnel, inadequate record-keeping systems, political mediation, precarious peace and order conditions, low tax ethic, and lack of logistics.

    LOCAL REVENUE GENERATION

    SECTION 129. Power to Create Source of Revenue - Each local government unit shall exercise its power to create its own sources of revenue and to levy taxes, fees, and charges subject to the provisions herein, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue

    a. Land-based Tools b. Community Activity-based Tools c. Infrastructure-based Tools d. Debt-based Tools e. Revenue sharing Tools

    1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

    Basic Real Property Tax (Sec. 232). Special Education Fund SEF Real Property Tax (Sec. 235). Land Transfer Tax (Sec. 135). Idle Land Tax (Sec. 236). Public Land Use Tax (Sec. 235a). Land Sale of Foreclosed Real Properties (Sec. 257, 258 and 260). Land Investment Land Reclassification (Sec. 20). Land Development Permit Fee (557 and 558). Tax on Sand, Gravel and other Quarry Resources (Sec. 138).

    1. 2. 3. 4. 5. 6. 7. 8. 9.

    Business Tax (Sec. 143) Community Tax (Sec. 156) Franchise Tax (Sec. 137) Tax on Business of Printing and Publication (Sec. 136). Professional Tax (Sec. 139). Amusement Tax (Sec. 140). Annual Fixed Tax on Delivery Trucks or Vans (Sec. 141). Fishery Rentals, Fees and Charges (Sec. 149). Service Fees and Charges (Sec. 153).

    1.Special 2.Toll

    Levy (Sec 250) Fees or Charges (Sec. 155). Utility Charges (Sec. 155).
    6

    3.Public

    1)Debt

    302). 18

    Financing (Sec. 297Investment (Sec

    2)Financial

    1)Share

    in Mining, Fishery, and Forestry Taxes (Sec. 290). in the Gross Sales or Taxes of GovernmentOwned and Controlled Corporations (Sec. 291).
    8

    2)Share

    Traditional method: Estimates income on the basis of


    Past collections Newly enacted tax ordinances Amendments to existing tax or revenue ordinances Program of tax collection campaign

    Revenue

    forecasting

    Estimates income based on the

    average growth rate of the actual income for the last five years.
    Presumptive Income Levels (PIL) estimates tax bases for business and amusement tax
    Firms electric bill Number of employees Amount of inventory (countercheck the amount of gross receipts declared by the tax payer)

    Collection

    done mainly by the Treasurers office


    (all taxes, fees and charges shall be

    paid within the first twenty(20) days of January and of each subsequent quarter)

    Factors affecting the collection efficiency of the local treasurers office Limited personnel Inadequate records-keeping and management systems Political mediation Precarious peace and order condition in the locality Low tax ethic Lack logistics Revenue data bank

    Vertically

    integrated planning

    Provides local governments with the

    connection to the broader and longerterm framework of development


    Local

    development planning

    Identification of development programs

    and projects that are appropriate for credit financing Basis for budget proposals and reference in preparing work and financial plans. Basis of recommendation of spending for

    Local

    Government Budget Process


    Legal instrument which authorizes

    the expenditure of public funds Accounting framework for fixing the fiscal stewardship of public offers Management tool for planning the direction and magnitude for the utilization of government revenues and receipts

    Setting a local government budget involves three key decisions: 1) Allocation 2) Distribution 3) Stabilization/Growth The Allocation Decision is based in three criteria: 1) Economic efficiency 2) Technical efficiency 3) Net social benefits/costs

    Budgeting Cycle

    Executive Budget Local Chief Executive Local Finance Committee Done between July 15 and October 15 of the current year Transmitted to the Local Sanggunian not later than October 16

    Legislative discussion of proposed budget is done by the Sanggunian between October 16 and November 17 Enact annual budget by issuing an appropriation ordinance on or before the current fiscal year

    Submission of the budget for review is required within 10 days

    The review action by the reviewing authority may lead to either the declaration of the budget as to the following :

    This phase involves the release and actual disbursement of funds for the identified functions Work and Financial Plan and Request for Allotment

    Budget

    Preparation

    Expenditure items
    Mandatory contributions (required prior to the Codes effectivity) Social security and insurance benefits of employees Reserve money for earned leave credits of retiring employees Gratuities of employees that are optionally retiring Personal services

    Budget

    Authorization

    Conflicts between the executive and

    legislative branches of the local government cause the delay of the passage of the budget (opposing political camps/party)

    Budget

    Review

    Change in the process of review of

    appropriation led to non-conformity of review actions and decisions


    Some sanggunians would authorize anything appropriated by lower level of local units for political purposes Failure to submit supporting documents on time

    Budget

    Execution

    Non submission of work and financial

    plan and request for allotments by the heads of departments or offices Non submission of supporting documents for the request for allotments. Use of appropriated funds or savings

    Budget

    Accountability

    Delayed submission of financial

    statements to the local finance committee by the local accountant LGU failed to prepare development programs for the 20% Development Plan LGU appropriated funds for development projects less than the level of appropriation required LGUs failed to implement or complete

    Budget

    Accountability

    Incurrence of cash drafts due to

    improper use of trust funds Disbursements which lead to disallowances after audit Failure by LGUs t conduct periodic physical inventory or to maintain complete property records Failure to liquidate cash advances, thus making those advances accumulate through the years.

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