PARTICIPATIVE BUDGETING OF LOCAL GOVERNMENT

• Advocate by UNDP
LEGAL BASIS
• SEC. 1 R.A 7160
The participation of the private sector in local governance, particularly in the delivery of
basic services, shall be encouraged to ensure the viability of local autonomy as an alternative
strategy for sustainable development.
• SEC. 34 R.A 7160
Role of People’s and Non-governmental Organizations. - Local government units shall
promote the establishment and operation of people’s and non-governmental organizations to
become active partners in the pursuit of local autonomy
Sustainable Human Development is the new approach to Local Development.
Define as GOOD GOVERNANCE
Good governance is the process whereby public institutions conduct public affairs, manage
public resources and guarantee the realization of human rights in a manner essentially free of
abuse and corruption, and with due regard for the rule of law.
Basic Approach to GOOD GOVERNANCE
● Transparent/Accountability
● Equitable
● Effective & Efficient
● Uphold the rules of law
● Respect for human right
● Administrative
PURPOSE: To draw concerned citizens together to participate in DECISION MAKING.
Role of Stakeholders:
● Budget Preparation- The CSOs shall have the following functions based on the
Handbook on the Participation of Civil Society Organizations in the Local Budget
Process
● Budget Authorization-Should the Sanggunian allow the CSOs to participate in the budget
authorization phase, it may refer to the Handbook on the Participation of Civil Society
Organizations in the Local Budget Process.
 ● Budget Review-The CSOs shall check the LGU compliance with the review following
the Handbook on the Participation of CSOs in the Local Budget Process.
● Budget Execution-The accredited CSOs shall monitor the LGU compliance on the release
of allotments, the preparation of cash program and financial and physical performance
targets and corresponding adjustments, the postings as required under R.A. No. 7160 and
the Full Disclosure Policy of the DILG and the appropriate interventions and measures
taken up by the LGU on negative deviations and may assist LGUs in implementing said
interventions and measures.
● Budget Accountability-The CSOs shall perform their duties and responsibilities
prescribed under the Handbook on the Participation of Civil Society Organizations in the
Local Budget Process.

PRINCIPLE OF GOOD GOVERNANCE

1. Respect human right, including the right of woman and children
2. Respect for the rule of land, political openness, participative tolerance
3. Accountability transparency
4. Administrative and bureaucratic capacity and efficiency

PLAN-BUDGET CYCLE

 CDP- COMPREHENSIVE
DEVELOPMENT PLAN
 LOCAL DEVELOPMENT INVESTMENT
PROGRAM
 ANNUAL INVESTMENT PROGRAM
 BUDGET PREPARATION
 BUDGET AUTHORIZATION
 BADGET REVIEW
 BUDGET EXECUTION
 BUDGET ACCOUNTABILITY
PLAN-BUDGET LINKAGE
Provide specific guidepost in the application of the AIP (Annual Investment Plan) as tool to
convert the plan to the budget.
Harmonizing Plans with the Budget
 Development Plan for PROVINCE and HIGHLY URBANIZED CITIES
 Development Plan for CITIES and MUNICIPALITIES
 Annual Investment Plan
 Local development Investment program
LEGAL BASIS
SEC. 3O5 (h) R.A 7160
Local budget, plans and goals shall, as far as practicable, be harmonized with national
development plans, goals and strategies in order to optimize the utilization of resources and to
avoid duplication in the use of fiscal and physical resources
305 (i)
Local budgets shall operationalize approved local development plans
308 (g)
Every local government unit shall maintain a General Fund which shall be used to account
for such monies and resources as may be received by and disbursed from the local treasury. The
General Fund shall consist of monies and resources of the local government which are available
for the payment of expenditures, obligations or purposes not specifically declared by law as
accruing and chargeable to, or payable from, any other fund.
317 (b)
Budgets of LGUs shall include a brief description of the functions, projects and activities
for the ensuing fiscal year, expected results for each function, project and activity, and the nature
of work to be performed, including the objects of expenditure for each function, project and
activity
KEY PLAYERS:
1. LOCAL DEVELOPMENT COUNCIL (LDC)
Shall submit to the local finance committee a copy of the local development plan and
annual investment program prepared and approved during the fiscal year before the
calendar for budget preparation in accordance with applicable laws.
 2. LOCAL PLANNING AND DEVELOPMENT COORDINATOR (LPDC)

3. LOCAL BUDGET OFFICER (LBO)

Generate medium-Term Forecasts of Current Operating Expenses and Capital
Outlays for administrative/support services.
4. LCE
Presents the Structured List of PPAs to the Provincial Development Council.
5. SANGGUNIANG BAYAN (SB)
6. NGO, CSO & OTHER STAKEHOLDERS
Shall provide LGUs all necessary information on projects already funded in their
respective budgets. Such information shall include specifically, among other things: name of
project, location, sources, and levels of funding for said projects. The same information must
be made available to the local finance committee concerned within the first quarter of the
year to avoid duplications in funding project proposals (Article 410, Implementing Rules and
Regulations [IRR], RA No. 7160).
BUDGET PREPARATION
INTRODUCTION
Involves cost estimations of budget proposals, executive review of budget proposal, and
the preparation of the 1. Budget message, 2. Local Expenditure Program, and the 3. BESF
The last 3 Documents compromises the EXECUTIVE BUDGET
LEGAL BASIS
SEC. 318
LCE shall submit said Executive Budget to the Sanggunian concerned not later than the 16th of
October of the current fiscal year
KEY PLAYERS
 LCE
The LCE shall prepare the executive budget for the ensuing fiscal year upon receipt of the
statements of income and expenditure from the treasurer, the budget proposals from the heads of
various departments and offices and the estimates of revenue and budgetary ceilings from the
Local Finance Committee.
 Local Treasurer (SEC. 315)
 Shall submit to the LCE a certified statement covering the income and expenditures of the
preceding fiscal year, the actual income and expenditures of the first two (2) quarters of the
current year, and the estimated income and expenditures for the last two (2) quarters of the
current year
 Local Budget Officer
The LBO shall review and consolidate the budget proposals of different departments and
offices of the LGU. The LBO shall also assist the LCE in the preparation of the budget and
during consultation meetings with stakeholders (Section 475, [b 2-3], RA No. 7160).
 LPDC
The LPDC shall analyze the income and expenditure patterns, and recommend fiscal plan
and policies for consideration of the local finance committee of the LGU (Section 476 [6], RA
No. 7160).
 Local Accountant
The Local Accountant, jointly with the Local Treasurer, shall certify all statement of
income and expenditure of the preceding fiscal year, the actual income and expenditures of the
first two (2) quarters of the current year and the estimated income and expenditure for the last
two (2) quarters of the current year (Article 411, IRR of RA No. 7160).
 Department Heads
The Heads of Departments and Offices/LEEs/PUs shall submit budget proposals for their
respective departments or offices to the LCE thru the LFC on or before the 15th of July of each
year. Said budget proposal shall be prepared in accordance with the approved AIP, guidelines
and spending ceilings as specified in the Budget Call, and the other general requirements
prescribed under Section 317 of RA No. 7160.
STEPS 1.
1. 1.Issue the Budget Call
2. Prepare and Submit Budget Proposal
3. Conduct Budget Hearings and evaluate Budget Proposal
4. Prepare the Local Expenditure Program
5. Prepare the Budget Message
BUDGET AUTHORIZATION
The Legislative Function of the ordinance authorizing the budget is in accordance with the
fundamental principle “NO MONEY SHALL BE PAID OUT OF TREASURY EXCEPT IN
THE PURSUANCE OF AN A.O (APPROPRIATION ORDINANCE) OR LAW
LEGAL BASIS
SEC. 319
On or before the end of the current fiscal year, the Sanggunian concerned shall enact, through an
ordinance, the annual budget of the local government unit for the ensuing fiscal year on the basis
of the estimates of income and expenditures submitted by the local chief executive
KEY PLAYERS
1. LCE (SEC. 54, 55)
The LCE shall submit the LEP to the Sanggunian for authorization (Section 318, RA No.
7160). After the enactment of the Appropriation Ordinance, the LCE shall approve or veto the
same
2. SANGUNIANG BAYAN (SEC. 447, 458)
As the legislative body of the LGU, the Sanggunian shall enact the annual and
supplemental budgets and appropriate funds for specific programs, projects, services and
activities, or for other purposes not contrary to law, in order to promote the general welfare of
the locality and its inhabitants.
3. COMMITTEE ON APPROPRIATION
The Committee on Appropriations/Finance, as one of the standing committees of the
Sanggunian, shall be responsible for conducting a preliminary review and evaluation of the Local
Expenditure Program. It shall submit its report and recommendation to the Sanggunian proper.
4. SECRETARY TO THE SANGUNIAN (SEC. 469)
The Secretary to the Sanggunian shall stamp the Appropriation Ordinance with the seal of
the Sanggunian and record the same in a book kept for the purpose. He shall affix his signature
to the enacted Appropriation Ordinance and present the same to the Presiding Officer for his
signature and forward copies thereof to the LCE for approval
5. LOCAL FINANCE COMMITTEE (SEC. 316 [g]
 The LFC shall assist the Sanggunian in the analysis and review of the annual and
supplemental budgets to determine compliance with statutory and administrative requirements

6. DEPARTMENT HEADS
Upon request of the Sanggunian through the LCE, Heads of Departments and Offices
may appear before the body or the Committee on Appropriations/Finance to explain or justify
their proposals.
STEPS
1. Enact the Appropriation Ordinance
2. Approve the A.O
3. Post the A.O
4. Forward the copies of approved A.O to the REVIEWING AUTHORITY

BUDGET REVIEW
To determine whether the ordinance has complied with the budgeting requirements and general
limitations set forth in the LCE as well as provisions of other applicable laws
LEGAL BASIS
(Section 326 of RA No. 7160)
The Department of Budget and Management shall review ordinances authorizing the annual or
supplemental appropriations of provinces, highly-urbanized cities, independent component cities,
and municipalities within the Metropolitan Manila Area in accordance with Section 327 of RA
No. 7160
(Section 327, RA No.7160).
The Sangguniang Panlalawigan shall review the ordinance authorizing annual or supplemental
appropriations of component cities and municipalities in the same manner and within the same
period prescribed for the review of other ordinances
KEY PLAYERS
1. Secretary to the Sangunian (SEC. 56)
Within three (3) days after approval of the ordinance authorizing annual or supplemental
appropriations, the Secretary to the Sanggunian shall forward the said ordinance to the
Department of Budget and Management Regional Office (DBM RO) or Sangguniang
Panlalawigan for review (Section 56 in relation with Sections 326 and 327, RA No. 7160).
2. Sangguniang Panlalawigan
The Sangguniang Panlalawigan shall review the ordinance authorizing annual or supplemental
appropriations of component cities and municipalities within the province (Section 327, RA No.
7160).
3. Provincial Finance Committee
The Provincial Finance Committee shall assist the Sangguniang Panlalawigan in the review and
evaluation of budgets of component cities and municipalities and recommend the appropriate
action thereon (Section 315 [f], RA No. 7160).
4. Department of Budget and Management Regional Office
The DBM RO shall review the ordinance authorizing the annual or supplemental appropriations
of provinces, highly-urbanized cities and independent component cities within its jurisdiction,
and municipalities within the Metropolitan Manila Area (Section 326, RA No. 7160).
STEPS
1. Check the A.O with the appended budget documents
2. Review the A.O
3. Issue the Review Action

BUDGET EXECUTION
Involves the release of allotment and certification of available cash and appropriations. The
recording of actual obligations and disbursement of funds for authorized PPA’s to procedure
goods and services that will benefice the General Public
LEGAL BASIS
(Section 305 of RA No. 7160)
The fundamental principles governing all financial transactions in local governments are covered
in Section 305 R.A 7160
(Section 320 of RA No. 7160)
The responsibility, however, for the execution of authorized annual and supplemental budgets
shall be vested upon the Local Chief Executive
KEY PLAYERS
1. Local Chief Executive (LCE) (Section 320, RA No. 7160)
The LCE shall be responsible for the execution of the Annual Budget or Appropriations
Ordinance and all subsequent supplemental budgets. He/she is the Head of the Procuring Entity
2. Vice Governor/ Vice Mayor (Sections 466, 456, and 445, RA No. 7160).
The Vice Governor/Vice Mayor shall sign all warrants drawn on the provincial/
city/municipal treasury and for all expenditures appropriated for the operations of the
Sanggunian Panlalawigan/ Panglungsod/Bayan.
3. Local Budget Officer (LBO) (Section 475, RA No. 7160)
The LBO shall be responsible for:
(1) the preparation of release documents (Allotment Release Order) for COE and CO;
(2) the certification on the availability of appropriations for obligation requests; and
(3) the preparation and submission of annual reports or Statement of Allotments, Obligations and
Balances.
The LBO shall coordinate with the Local Treasurer, Local Accountant and the Local
Planning and Development Coordinator in the release of appropriations and allotments pursuant
to Section 475, RA No. 7160.
4. Local Treasurer (Section 470 of RA No. 7160)
The Local Treasurer shall be responsible for the custody and proper management of the funds of
the LGU concerned. He takes charge of the collection of revenues and disbursement of local
government funds and such other funds the custody and proper management of the funds of the
LGU concerned of which is entrusted to him by law or other competent authority and the
maintenance and updating of tax information system of the LGU. The Local Treasurer also
certifies as to the availability of funds prior to any disbursements.
5. Local Planning and Development Coordinator (LPDC) (Section 476, RA No. 7160)
The LPDC shall be responsible for the formulation of an integrated economic, social, physical,
and other development plans and policies for consideration of the local development council; the
monitoring and evaluation of the implementation of the various development programs,
activities, and projects in the LGU concerned, in accordance with the approved development
plan, the analysis of income and expenditure patterns; and the formulation of fiscal plans and
policies for consideration of the Local Finance Committee.
6. Local Treasurer (Section 470 of RA No. 7160)
The Local Treasurer shall be responsible for the custody and proper management of the funds of
the LGU concerned. He takes charge of the collection of revenues and disbursement of local
government funds and such other funds the custody and proper management of the funds of the
LGU concerned of which is entrusted to him by law or other competent authority and the
maintenance and updating of tax information system of the LGU. The Local Treasurer also
certifies as to the availability of funds prior to any disbursements.
 7. The Department Head
Shall be responsible for the preparation of financial and physical performance targets and
obligation requests for authorized programs, activities, and projects of department/ office
concerned; implementation of programs, activities, and projects to deliver goods and services to
target clients; monitoring and evaluation of actual performance of PPAs to ensure smooth and
proper implementation.
STEPS
1. Release Allotments
2. Prepare the Summary of Financial and Physical Performance Targets and Cash Program
3. Obligate and Disburse funds
4. Adjust cash program for shortages and overages
5. Implement corrective measures as proposed by LFC and Approved by the LCE
BUDGET ACCOUNTABILITY
Accounting for the performance of the LGU in terms of income/revenue generation and resource
utilization due to implementation of its PPA’s for the Year
1. Department Heads
The Heads of Departments/Offices shall: l Monitor the implementation of all PPAs under his
supervision to ensure adherence to plans, targets and performance indicators; l Monitor physical
and financial performance of major final outputs identified with his department using
performance indicators as basis of evaluating performance; and l Prepare and submit periodic
reports to the LFC and LCE in such forms as prescribed under this Manual.
2. Local Finance Committee
The LFC shall: l Conduct a semi-annual review and general examination of expenditures and
actual accomplishments against performance standards in undertaking development projects
(Section 316 [h], RA No. 7160);
and l Post the semi-annual and general examination report in conspicuous and accessible places
in the LGU and furnish a copy of this report to the LCE and the Sanggunian concerned (Section
316 [h], RA No. 7160).
3. LCE (Sections 444 [b] [3] [iii]; 455 [b] [3] [iii], 465 [b] [3] [iii], RA No. 7160)
Ensure that all taxes and other revenues of the LGU are collected, and that local government
funds are applied to the payment of expenses and settlement of obligations, in accordance with
law or ordinance.
4. Local Treasurer
 Collect all local taxes, fees and charges (Section 170, RA No. 7160);
  l Report regularly to the LCE on the tax collection efforts in the LGU (Section 470 [b],
RA No. 7160);
 l Advise the LCE, the Sanggunian, and other local and national government officials
regarding the disposition of local government funds and on such other matters relative to
public finance (Section 470 [d] [1], RA No. 7160)
 Take custody and exercise proper management of the funds of the LGU (Section 470 [d]
[2], RA No. 7160);
 Exercise such other powers and perform such other duties and functions as may be
prescribed by law or ordinance (Section 470 [e], RA No. 7160)
5. Local Accountant

 The Local Accountant shall: l Prepare and submit financial statements to the LCE and
to the Sanggunian (Section 474 [b][2], RA No 7160);
 l Apprise the Sanggunian and other local government officials concerned on the
financial condition and operations of the LGU (Section 474 [b] [3], RA No. 7160);
6. Local Budget Officer
The LBO shall: l Certify as to the availability of appropriations and allotments to which
expenditures and obligations may be properly charged (Section 344, RA No. 7160);
7. Planning and Development Coordinator

 Monitor and evaluate the implementation of development programs and projects of the
various departments/offices in accordance with the approved development plan (Section
476 [b] [4], RA No. 7160);
 Analyze the income and expenditure patterns, and formulate and recommend fiscal plans
and policies for consideration of the LFC (Section 476 [b] [6], RA No. 7160)
STEPS
1. Monitoring receipts and expenditures
2. Submit accountability report
3. Evaluate Performance each department and offices