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    Department of Budget and Management ©'conse sony a Department of Finance %, 299 ya8® Joint Memorandum Circular No. 1 Series of 2016 November 18, 2016 To : All Officials of the Department of the Interior and Local Government (DILG), Department of Dudget and Management (DBM), Department of Finance (DOF) through the Bureau of Local Government Finance (BLGF), and the National Economic and Development Authonty (NEA), Provincial Governors, City and Municipal Mayors, Members of the Sanggunian, Local Development Councils, Local Finance Committees and All Others Concerned Susjiect Updated Guidelines on the Harmonization of Local Planning, Investment Programming, Resource Mobilization, Budgeting, Expenditure Management, and Performance Monitoring and Fiscal Oversight 1.0 STATEMENT OF POLICY In pursuit, of better convergence amona the Oversight Agencies throuah the institutionalization of the Coordinating Committee on Decentralization (CCD), the National Inter-Agency Team (NIAT) for Pulic Fnancial Management (PFIM) and the Regional Inter- ‘Agonoy Teams (RUATs) for PFM, a6 laid down in the DEM-DILG-DOF.NEDA Joint Memorandum Circular (JMC) No, 2015-1 dated 24 February 2015." we hereby adopt the provisions of this UMC to enable better coordination and improve the quality of Oversight Ageices Weulinicel @esistaive WW luval yuremiiett uns" (LOUs) publ Mancial menagement, and ensure that the different tools of the Oversight Agencies, including policy development, advice, guidance, manuals, guidelines, issuances, awards and others, complement each other. 2.0 PURPOSE To enhance the guidelines on the harmongation of local planning, investment programming, rescuree mobilization, budgeting, expenditure management, and performance monitoring and coordination in fiscal oversight by: 2.4 Establishing the formal structure and mechanisms for convergence emeng the Oversight Agencies at tne national and regional levels; T Adootion af the Local Government Unils Public Financial Management Reform Roadmap end Implementation Strategy XK os 22 23 Clearly identifying and delineating the roles and responsibilties of the Oversight Agencies, as well as the LGUs; and Prescribing the improved public financial management policies, systems and tools within the context of convergence through the dentificetion of their interdependencies and areas for complementation and integration. 3.0 COVERAGE 40 This JMC shall cover the areas of Local Planning, Investment Frogranming, Resource Mobilzation, Budgeting, Expanditure Management, and Performance Monitoring and Coordination in F'scal Oversight of D3M, DILG, OOF and NEDA over provinces, cities and municipalties. DEFINITION OF TERMS 44 42 43 44 4g 48 a7 438 Annuel Budget — refers to the finencial plan ombedying the cotimates of income and expenditures for one (1) fiscal year. (Section 306(e) of RA No. 7160) Annual Investment Program (AIP) ~ refers to the annual elice of the Local Development Investment Program (LDIF), which constitutes the total resource raquirements for all Programs, Projects and Activities |PPAs) consisting of the ‘enrual capital expenditure ard regular operating requirements of the LGU ‘Assessment Evaluation and Examination Manual (AEEM) — a manual by the DOF-BLGF for the evaluation of real oroperty assessment operations of tie lUcal assessu's' offce of all LGUs based on the Marual for Reel Property Appraisal and Assessment Operations (MRPAAO), Budget Operations Manual (BOM) for Local Govemment units — me definitive guide for LGUs on the entire budget process, including the preparation of annual end supplemental budgets of LGUs. For the purose of this JMC, the EOM referred to will be the 2016 Edition, Comprohoneive Development Plan (CNP) — the daciment that parting tn the mult-sectoral plan formulated at the city or municipal level, which embodies the vision, secioral gozls, objectives, development strategies and pulktes wiliby Ue tiie uf LOU wifi and Wie weUkwnicioun. The ODP contains: (1) Ecological Profle; (2) Sectoral Devetopment Plan; and (3) Implementing Instruments Comprehensive Davelopment Planning Guide (CDP Gulde) — the guidetook or instructional manual for the preparation of the CDP issued in 2010 by the DILG, Comprehensive Nevelanment Plan Raviaw Guide (CDP Review Guide) — a tool by the DILG for tho review of the CDPs of component cities and municipaities by their respective provinces issued with the Local Plenning Illustrative Guide: Preparing and Updating the Comprehensive Development Plan (CDP). ‘Gonvergence ~ an approach to the provision of technical asststencs to LGUs where Oversight Agencies work together at netional and regional levels for 2 & 49 410 412 Ate 416 the purpose of achieving the shared objective of stronger local government public financial management and better public services. Creditworthiness Ratina System (CRS) — 2 comparative measure of the LGU's ability to meet its debt obligatons on time constructed from the Local Government Financial Performance Monitcrirg System [LGFPMS) incicators for revenue generation capacty rigidity of expenditures; financial management capacity: investment and debt capecity; and repayment experience. Current Operating Expenses — te sum of Peisunel Seivives (PS). Maintenance and Other Operating Expenses (MOQE) for any given year, Delivering Collaborative Technical Assistance as Regional Inter-Agency Team on LGU PFM: A Convergence Toolkit - 2 tookit that maps out a process for RIATS in providing technical assistance to LGUs. The provess follows the basic project management cycle: assessment, design, delivery, monitoring, evaluation and sustaining the gains. Each phase in the process cutlines the key oteps to be performed. Each step ie procontod with on explanation (1) why the step is needed: (2) who are involved; and (3) how it s done, The technical assistance management process refiected in the toolkit encourages RIATS to demonstrate convergence across the five (5) phases of providing technical assistance to LGUs. Development Sectors — pertains to the five (5) sectors of the CDP namely: (1) Social Development Sector, (2) Economic Development Sector, (3) Favironmenial and Natural Resources Management Sector, (4) Physical or Infrastructure Development Secior and (5) Insttutional Devetopment Sector. Ecological Profile — the more comprehensive replaccmert of the usual socioeconomic profile which gives equal coverage to the physical, biclogicel, socioeconomic, cultural and bull environments of a city or municipality Financing Plan ~ the sum total of resources comprised of external sources and the Local Resource Mobilization Program (LRMP) for the financing of a three-year cycle of the LOIP, Gnod Financial Housekeeping (GFH) - formary the Seal of Good Housekeeping (SGH), is a component of the Seal of Good Local Governance (SGLG) thal measures LGU compliance in the practice of transparency or Puriling publ. awvess Ws exouole and vomplete fnenciel records and compliance to Commission on Audit (COA) rules of audit or no adverse findings. Guidelines for the Updating of the Local Revenue Code (LRC) of LGUs — 2 joint publication by the DOF and DILG through the coordination between the DILG-BLGD and DOF-BLGF in relation to DOF-DILG JMC No. 2012-01 Updating Local Revenue Codes, dated 13 Jenuary 2012, prescribing the Gliifetnes. in updating and rationalizing the rate siuuctures of the LRC in pursuit oflocal economic development. Guidelines on Provineial/Looal Planning and Expenditure Management (PILPEM) — a five-volume comprehensive set of guidelines by the NEDA that serves as reference for provnces in planning, investment programming, revente generation, nudgeting and public expenditure management, and project evaluation and development, 418 419 4.20 424 423 428 4.28 Handbook of Civil Society Organizations Participation in the Local Budget Process (CSO Handbook) ~ a publication of the DBM for use by LGUs and accredited civil society organizatons (CSOs), tt is desicned 10 assist CSOs to better appreciate the five (5) phases of the local government budget process. The identified emerging roles of LGUs and CSOs in each budget phase are based on success stories and extensive consultations with LGUs and CSOs. Implementation instruments — refers w& the tuls vi doconients tial will support the implementation of the sectoral development plans in 2 CDP. “These include the LDIP, Legislative Requirements, Capacity Development Program and Noritoring and Evaluation Strategy Internat Audit Manual (IAM) for Local Government Units — ¢ IVanual issued by the DBM, which is primarily anchored on the Philippine Government Internal Audit Manual end customized to the needs and circumstances of the LGUs, It provides a primer on intornal controle and on how to orgarize tho infemel audit service/intemal audit unit (IAS/U). as well as how to plan, execute, report, and follow up on intemal audits. LGU Integrated Financial Tools (LIFT) — a veb-based system thal serves as 2 portal for three (3) major LGU financial and govemance appications. These three (3) major LGU financial and governance applicaion systems are the Elecironic Statement of Receipls and Expenditures (eSRE), the Local Gavamanca Performance Management Sysiem (| GPUS) and the Local Fees and Charges Estimation System (LFCES). Local Chief Executive (LCE) — for the purpese of thio JMC, the highest elected official in the LGU, namely, the mayor in the case of the city and municipality, orthe governor in the case ofthe province. Local Development Council (LDC) ~ the body mandated by law to assist the Sanggunian concemed in setting the direction of economic and social development and coordinatng development efforts within their respective {errtorial jurisdictions. Local Development Investment Program (LDIP) ~ a basic document linking the local development plan to the budget for cities and municipalities. It Larlaina @ piivilied list of PMS which are decived fram the CDP matshod with financing resources and 10 be implemented within a three to sicyear period Local Feo and Charges Estimation System (LFCES) — a web-based data management and computaton system which is a tool ‘or estimating the appropriate local fees and cherges based on the pertinent or relevent cost tems incurred by the LGU in providing the service and/or administrative sunnot fo the user or client. The system has an online and offine sub-system component to be used by the Central Office of the BLGF and LGUs, respectively. Local Finance Committee (LFC) ~ the body composed of the Local Planning anc Development Coordinator |LPDC), the local budget officer, and the local 427 428 4.29 4.30 431 408 433 treasurer, mandated by law to perform the duties and functions as required under Section 316 of Republic Act (RA) No. 7160, Local Governance Performance Management System (LGPMS) — a sef- assessment, management and development tod that enables provncal, city and municipal govemments to determine their capabiliies and imitations n the delivery of essential public services. The LGPMS serves three primary purposes: a} supporting the development of a local government through the improved use of financial and human resources; b) benchmarking local government perfurnarce against established staidaius, and e) iniunning rational policymakers on the stele of development in local governments. Local Government Financial Performance Monitoring System (LGFPMS) = an eSRE builtin performance monitoring system for fiscal ané financial indicators covering revenue genefation. expenditure management. debt and investment management, and overall fancial management. The indicators can be clustered and used for measuring the creditworhiness of LGUs. Local Government Fiscal Sustainability Scorecard (Iskor ng ‘yong Bayan) ~ measures the annual performance of the LGU's ‘iscal and financial management through @ scorecard offcaily Issued by the DOF, through the BLGF, to all provinces, cites, and municpalities, Il rates the level of efficiency. innovativeness of LGUs in revenue generation and resource mokilization, and compliance with reportorial requirements of the DOF and the sialutory limitations on local expenditures. Local Planning Mlustrative Guide: Preparing and Updating the Comprehensive Development Plan (CDP Illustrative Guide) - a simplified Yersion of the COP Cuide which aloo updetes the COP Ouide with reepect to changes in polcies and operational provedures. preparation of the LDIP and other implementing tools, directing pianners to new tools such as the Ravonalizes Fanning indicator ano Data Set (RaPIDS), and includes a process for the review of the COP and the LDIP. Local Resource Mobilization Program (LRMP) ~ the total local resources. ‘comprsing of own source revenves, intergovemmental fiscal trarsfers and ccthar financing aptiens aver a thrae-year cycle or for financing the LDIP for three (3) years. Local Treasury Operations Manual (LTOM) the manuel ef oporations issued by the DOF-BLGF for the local treasury offices particularly local treasurers and their assistants and others concemed applicable to all levels of LGUs and serves as manuel of instruction in the implementation and discharge of duties and responsibilities of local treasurers and other treasury Personnel. Manual for the Evaluation of Local Treasury Operations (MELTO) - the basic reference of the BLGF and is Regional Offices and the pravinces in the conduct of the evaluaton of treasury operations of local governments within ther respective jursdctions to support the perfomance of the agency mandoto in cuporvicing local troacury aporations, 2 The Local Government Code of 1991 434 Manual for Real Property Appraisal _and Assessment Operations (MRPAAQ) — the manual issued by the DOF to guide the conduct of real propery appraisal and assessment by local assessor's offices and coniains the standards. rules and regulations for the proper classification. appraisal and assessment of real property, as issued by the Secretary of Finance. 4.35 Manuat on the Setting Up and Operations of Local Economic Enterprises ~ @ Manval issued by the DBM which provides guidance on how to determine the viebilly of proposed Local Economic Enterprises (LEEs}, how to set uo end operaie vabie LES, and the measures Wo be undertaken to acres existing nonviable LES, 4.36 Medium Term Forecasts of Current Operating Expenses ~ the three-year forecast of PS, MOOE, as well as other capital outlays (non-capital expentitiiras). 4337 Performance Standards for Local Treasurers and Local Assistant Treaourera a DOF policy that ccto the performance atandarde, motrioe, and appraisal system for local treasurers and assistant treasurers to support decisions on appointment, promotion, renewal of designation end extension of service, capacty buliding, awarcs ang recognition, 4.38 Provincial Development and Physical Framework Plan (PDPFP) — a document that identifies strategies and corresponcing PPAs thal serve as primary nputs to the provincial investment programming, budgeting and implamantainn The PDPFP alsa serves as a kay vedical influence in linking provincial development objectives with local, ragianal and national policies and prcrities, 4,39 Provincial Development Investment Program (PDIP) — a basic document linking the local development plan to the budget for provinces. It contains a prioritize Ist ot PAS which are denved ‘rom the POPFF matcnea win financing resources, and to be implemented within ¢ three to six-year period. 4,40 Public Financial Management Assessment Tool (PFMAT) — a self. assessment, evidence-based instrument by the DBM which cescribes the characteristics of an open and orderly PEM cystam ising seven (7) ertical dimensions. It is a diagnostic tool which establishes the indicators that will help the LGUs identify the strengths and weaknesses in their PFM system. a5 batge fur iipioreiwen measurte, 4,41 Public Financial Management Improvement Plan (PFMIP) - the set of PPAs that will be undertaken by the LGU to address the areas in PFM that need to be further improved and/or sustained based on the assessment by the LGU of the different critical dimersions of an open and orderly PFM system provided under the PEMAT, 44? Public Financial Management (PFM) Tools Using the Electronic Statement of Receipts and Expenditures (eSRE) ~ te manual issued by the DOF-BLGF that provides the step-by-step process for generating annual ene medium-term revenue forceasta fer key own sourso rovenies (0.9.. collections from business taxes) and the process for reconciing these forecasts wth alternative forecasts from local treasury offices for purpose of establishing annual revenue tergets. The forecasis generated and the final ay 8 revenue targets will be used in the preparaton of the CDP, LDIP, AIP and Annual Budget 4.43 Rationalized Plannina Indicator and Data Set (RaPIDS) ~ a set of undat minimum and recommended socal, financial, expenditure, economic, and multi-sectoral indicators for the purpose of planning, investment programming. budgeling and plan-budget montorns, 4,44 Rationalizing the Local Planning System (RPS) ~ a source book deteiling the polty framework ard guiding principles for local planning. 4.45 Resources - the term used to refer to revenues, gross borrowings and free or unencumbered cash balances 4.48 Resource Mobilization ~ a orcoram for identifying. accessing and managing resources for the purpose of supporting local budgets and local public investments, 4,47 Resource Mobilization Manual (RMM) ~ 3 publication by the DOF-BLGF which refers to a set of guides for enhancing local own-source revenue generetion, dentiying and accessing traditional and non-traditional financing sources, and developing a plan for mabiizing, and managing a viable portfolio of these different resources for fnancing local development projects. 4.48 Revenue ~ for the purpose of this JMC, this refers to income generated from neal entrees sich as local taxes, fees and charges and income fmm the ‘operation of lacal economic enterprises. 4.49 Seel of Good Local Governance (GCLC) — © good governance measurement system that assess LGU periormance n good financial housekeeping, disaster preparedness, social protection, peace and order, environmental management, ousiness-frenaliness and compettivaness. 4.50 Sectoral Development Plans - refers to the structured lst of PPAs identified to address the gaps found for the five (5) development sectors of the CDP. 454 Statamant of Racaints and Fxpandituras (SRE) ~ the fnancial management reporting and monitoring system for LGUs which is prepared by the local treesury office at all levels. The SRE is a computerized system which is called Ue elevlunie ORE vy CORE ern! euvered ky appropriate DOF Department Orders, 4.52 Supplemental Budget — a budget that may be enacted aller the annual budget has been approved by the Local Sanggunian. Changes in the Annual Budget may be done through Supplemental Budgets enacted pursuant to Section $27 of RA No, 7160, ob / oa 5.0 IMPLEMENTING FRAMEWORK AND INSTITUTIONAL STRUCTURE St 52 53 55 56 57 58 59 To ensure the insitutionalization and sustainability of convergence among the Oversight Agencies at the national and regional levels, the Oversight ‘Agencies shall continue to maintain and strengthen the CCD. The CCD is an inter-agency body composed of the DIL. DBM, DOF-BLGF ‘and NEDA, which was created pursuant to the DILG-NEDADEM-DOF and LGU Leagues’ Memorandum of Understending (MOU) dated 8 November 2008, The COD was cizatal in jespunse ly Sevivn 4,7 of DILG-NEDA-DOM- DOF UMC No. 1 dated 8 March 2007? The CCD also invites representation fiom the League of Provinces of the Philppines (LPP), the League of Cities of the Phiippines (LCP), the League of ‘Municioalities of the Philippines (LMP), the Lica nq maa Baranaay sa Pilipinas (LnB), and the Union of Loca! Authorities of the Philippines (ULAP). The DILG shall act as the Chair of the CCD and. as such, shall convene the same quartorly and hall include in its regular budget the logietical support for the cep. The GD shal: 2) oversee the Impkmentalon of is JMC, b) recommend, updating of its provisions. as necessary: c) provide overall policy and operational oversight over maiters covered by their respective mandates, including but not limited to PFM: and d) review the progress of capacity develooment in the areas covered by this JMC for the purpose of coordination as wall as investment To further institutionalize ané sustain the convergence among the Oversight ‘Agenoics, the NIAT and the RIATe oro oroatod pureuant to the DILG:.NEDA DBI/-DOF and LGU Leagues’ MOU dated 6 November 2009 and pursuant to DBI/-DILG-DOF-NEDA JMC No, 2015-1 dated 24 February 2016. The NIAT fer PFM shall be the Technical Working Group on PFM under the CCD composed of two (2) representatives from each of the LGU Policy Units of the Oversight Agencies. ‘The NIAT for PFM stall: a) moniter the implementation of the LGU PFM Reform Roadmap and Implementation Strategy and report to the CCD on. achieverrents, problems encountered; and b) recommend appropriate Teeauree to the COD and imploment decisions of the latior eonoarning the LGU PFM Reform Roadmap and Implementation Strategy. The RIATs for PFM shall be composed of he Reyional Directors and at least two (2) technical staff cach from DBM, DiLG. DOF, through the BLGF, and. NEDA and created pursuant !o DBM-DILG-DOF-NEDA JMC No. 2015-1 dated 24 February 2016, The RIATs for PFM shall: 2) provide technioal assistance to the LGUs in the piuvided in Seuion 7.0 of this UMC. " Gs a2 83 a4 85 86 a7 a8 89 8.10 All LPDGs, local budget officers and local treasurers shall update ther respective piamning databases that include, among others, the socioeconomic, physical resources. time series revenue and expenditure data and the datasets prescribed in the RaPIDS. The updated planning database should be ready by July of the election year in time for the pian preparation. All LDGs shall be recorstituted not later than ‘irst week of September of every election year based on the DILG Mamorandum Circular (MC) No. 2018-87 2010 Avureuiiatin of Cid Society Organizations and Selection of Representatives to the Local Special Bodies, dated 19 July 2016, and DILG MC No, 2016-02 Guidelines on the Preparation or Updating of Local Pins, dated 8 August 2016, he mechanism for choosing private sector and CSO representatives in the LDCs shall De govemed by DILG MC No. 2016-97 dated 19 July 2016 and based on the CSO Handbook The PDPFP and CDP shall be prepared following the PLPEM (Volume 2) and CDP Guide and CDP Ilistrative Guide, The LDCs shall alse prioritize and, in coordination with the LFCs, match the PPAs wit) available financing resources. In the process of formulating and completing the muttyear PDIP/LDIP, the forms in the CDP tlustrative Guise end Annex C LDP Summary Form shall be used by LGUs at all levels. The LEC. shall provide measures in the LRMP to generate additional revenues and identify ofnes financing resources to finance tne PDIP/LDIP. In formulating the mult year PDIP/LDIP ond LRMP, the LOCe may uco tho tools provided by other appropriate and applicable guidelines. These include, but not limited to, the resource mobilization guidelines, revenue forecasting end lerget seting guicelines, and eSRE forecasting module outputs of te ELGF in the estimation of available resources for francing projects in the PDIP/LDIP anc consequently, the AIP and procedures for generatng the Medium-Term Forecasts of Current Operating Expenses, inducing other capital oullays, as provided in the BOM for LGUs, 2016 Edition, ‘The LOCs shall cul out the AIP as the current slice of the PDIP for the provinces, end the LDIP for cities and municipalities, which upon approval by the Genggunion, shall serve a0 the basis for propering the oncoutive budget The LDCs shall endorse the AIP to the locel budget officer for budget preparation and in determining the annual budgetary allocations ‘or PAs vis- 2-vis allocations for olher purposes es indicaled in the allached Annex A AIP Summary Form In the event of the existance of lacal advisory councils or sectoral or functional committees, especially those created to impement national government programs. addtional steps shall be taken in the olanning process as provided in the CDP illustrative Guide to ensure tnat the projects of these planning bocies are integrated into the PDIP/LDIP and AIP as well as avold wasteful duplication of projects and programe. In succeeding years prior to the next preparation/updating of the PDPFP and CDP, the LB, in comsultaion wilh te LFC, sal upvate dhe PDIP for provinces and LDIP and LRMP for cites and municpalities anc cull out an AIP 12 att 8.13 as input to the annual budge! preparation. The PDIP and LDIP updating shall be on account cf outcomes of PPAs implemented in the previous year, changes in the olanning environment and financing conditons, among others. Local budgeting activities shall proceed folowing the DBM’ issuance of the Local Budget Memorandum providing, among others, the offcial Internal Revenue Allotment (IRA) shares of LGUs and other special shares or revenue sources, as well as the guidelines for the preparation of locel budgets. The local annual budgets should be based on the approved AIPs. To this end, the AIPs should be approved by the respective Sangguniars before the start of budget preparation. These aciivilies shall be in accordance with the steps, procedures, processes and forms prescribed in the BOM for LGUs, 2016 Ealition, and other issuances by the DBM, provided that in the AIP Summary Form (Annex A). the LGUs vision, strategic cirections, specific objectives and policy directions. shall be alled from the POPTP and CDP, and the PPAs shal be taken from the current slice of the approved or updated PDIPILDIP. ‘As part of the local budgeting process, local treasurers shall be required to set annual revenue targets based on the methodology end criteria set forth in DOF Department Order No. 008-2015 dated 20 January 2015 and the prescribed revenue target reconciliation process as descrbed in PFM Tools for the eSRE. 9.0 PROVINCE —CITYIMUNICIPALITY COMPLEMENTATION oA 92 93 oa During the preparation of the PDPFPICDP, the LPDCs of provineos and their component cities and municigalities shal coordinate with each olher, as may be necessary, following the SLPBC 2016 to ensure consistency of vision anc strategic directions end in order to faciliate the complementation of PPAs 2s necessary across LGU levels. (Please referto Annex B SLPC 2016). After the reconstitution of the Local Special Bodies, the Provincial Development Council (POC) shall convene in November of the election year 10 present the draft PDPFP and the Structured List of PPAs of the component cities and municipalities for purpose of harmonization and complementation of the PDPFP and CDPs, “The PDC in November of the election year shall reconvene to present the draft PDPFPs and Structured List of PPAs of cities and municipalities for the purpose of harmonization As ‘ar as practicable, the province may develop and undertake joint programs of augment the financial resources of its component cides and municpalilies in implemerting programs and projects that have significant impacis on the province as a whole by providing feedbacks based on the CDP Review Guide. Where feasible anc consisieni wth the CDP, the component cities and municioaliies may aiso provide coun‘erpart resources to implement programs and projects iniiated by the province. 9 ~ 13, Gs 10.0 NGA- 410.1 104 LGU Interface ‘The LPDCs may coorcinate with national/regional ine agencies (N/RLAS) for technical inouts and quidance for the ourpose of dovetailing sectoral targe’s n the PDPFP, CDP, PDIP and LDIP. Such coordination may be institutionalized through the participation of N/RLAs in the LOC sectoral or functional committees. To reduce the number of plans, LGUs shall integrate secioral requirements into the PDFFP, CDP, PDIP and LOIF. LGUs are enjoined to provide venues for N/RLAS' interface in local planning, investment programming, resource mobilization, budgeting, expenditure management, and performance monitoring and coordinaton in fiscal oversight during the various stages of the olannina cycle as follows: 10.3.1, Preparation of the PDPFP and CDP (3"quarter of the election year) and spproval (no later than 1® quarter of the following year): 10.3.2. Approval of the PDIP and LDIP (no later than March of the fllowing yea), 10.3.3. Approval of AIP (on orbefore 7 June of every year), and 10.3.4, Budget Preparation, Authorization and Review (June to December of every year) All LGUs, in coordination with National Goverament Agencies (NGAs), Coyemment Owned and Controlled Corperatone (GOCCe) and Government Financial Institutions (GFls), shall adhere to the provisions of law and principe cof complementation and paricipation between and among LGUs and CSOs, 25 defined in the CSO Handbook in the preparation of Wieit plans and budgets. 14,0 OVERSIGHT AGENCY AND PROVINCIAL GOVERNMENT SHARED OVERSIGHT 44 2 13 In fuifiment with the various provisions of RA No. 7160 on the oversight function of the province over its component cities and municipalities, the Oversight Agencies within the context of RA No. 7760 and other relevant law, engegs the provinese in joint evaraight over olfiae and munisipalitice in key: areas of public financial management In operation, Oversight Agencies ‘oversee provinces and provinces oversee cities end municipalites. Pursuant to Section 328 of RA No. 7160, the DBM shall review the appropriation ordinances of provinces, highly-urbanized cties, independent component cities and municipalities within the metropolitan manila area using the BOM for LGUs, 2016 Edition, as the basis for the review. Pursuant to Section 327 of RA No. 7160, the provinces shall review the ‘appropriation ordnances of component cites and municipailties using the BOM for LGUs, 2016 Ecition, ac tho basic for the reviow. The DBM shall provide guidance to province on the use of the seid manual. iy relation ty Swutlon 305 uf RA Ny. 7100, Ure DILG shell courdinete with provinces in the conduct of the review of the approved CDPs of their Yt 8 116 component cities and municipalities using the CDP Review Guide. The DILG shall provide capacity development to te provinces in the use of the CUP Review Guide, The DOF-BLGF shall issue the MELTO and, with the DOF-BLGF Regional Cffices, coordinate with provinces in the conduct of the evaluation of local treasury operations using the MELTO. The BLGF and the BI GF Ragional Offices shall provide cepacity development to the provinces in the use of the MELTO and the conduct of the evaluation, ‘The DOF-BLGF shall issue the AEEM and, with the DOF-BLGF Regional Offices, coordinate with provinces in the conduct of the evaluation of real properly assessment operations using the AEEM. Ine DOF-BLGt end the DOF-BLGF Regional Offices shall provide capacity development to the provinces in the use of the AEEM and the conduct of the evaluation 42.0 PERFORMANCE MONITORING, MEASUREMENT AND DIAGNOSTIC TOOLS. 42.4 122 123 124 125 In order to promote excellence in public fnencial management, local public sevice Uelivary and uveral yoverniaiice, Wie Cversighit Aenties shal nainiain and make avaiable ‘o all LGUs the outputs of their official LGU performance ‘monitoring systems and whe‘ever appropriate link the provision of grants and related transfers to outstanding performers based on these measures. In order to support good performance in overall aovemance and local service delivery, the DILG shall provige the following performance mezsurement systems: 12.2.1 LGPMS; and 12.22 SaLc. In order to promote good fiscal ard finencial management, the DOF through the BLGF shall provide the following measurement sysiems: 12.3.1 LGFPMS. administered by the DOF-BLGF. which s intended to helo LGUs in improving revenue generation and management 12.9.2 Local Government Ficeal Custainability Coerosard (leker ng ‘yong Bayan); 12.3.3. Local Treasurers Performance Standards; and 12.3.4 CRS. To mainstteam performance management sysiems currently being implemerted by the Oversiahi Aaencies into local public fnancial management, the Oversight Agencies shall endeavor to harmonize and complement the various performance systems through the LIFT. The DBM in coordination with the DILG, DOF and NEDA shall cortinually support LGUs in the preparation and implementation of heir PFMIPs. To this, en, the said Oversighi| Ayetivies still Uevelup, 1wluut and capacitaie LGUs ‘on PFM enhancement tools. While each Oversight Agency is primarily aS responsible for a specific toolls) consistent with its mandate, the effectiveness, efficiency and success of the use of each tool in strenginening LGU PEM S dependent on the Oversight Agencies working together at natonal and reaional levels. This converence among Oversiaht Agencies works to the benefit of LGUs, with the RIATs, in particular, providing dedicated technical and change management assistance ‘o LGUs PFM. 12.6 As a consequence, in preparing their PFMIPs, the LGUs shall make use of the following 12.8.1. PFMAT, which Is intended to help LGUs identify strengths. and weaknesses in thelr PFM systems as bases for mprovement measures; 12.6.2. LGPMS administered by DILG. which is intended to help LGUs determine their capabilties and limitations in the delivery of pubic services; 12.6.3. LGFPMS; and 12.6.4, AS necessary and appropiiale, We fharicial and governance applications systerns comprising the LIFT 12.7 While these tools differ in puroose and methadologies, they provide inputs 10 the RIATs to help LGUs ‘o identify what areas of PFM are working well and what are working less. Thus. enabling the preparation of enhancec PFMIPs, which contain the measures that shall be underiaken by the LGU to address, the areas in PFM that need to be further improved andior sustained based on the resulta of the diagnostic aczecoment provided undor tho PFMAT and tho performance indicators of the LGPMS and LGFPMS. 12.8 In order 10 Suppor LGUs In continually Improving PFI systems, the DBM, in coordination with the RIATs for PFM, shall continue ‘o monitor and evaliaie the implementation of PEMIPs. 130 SUPPLETORY EFFECT The contents and specific provisions of the documents cited in this circular that are Consistent, supperive, one complemsntary to the provolone sated herein ahall become perl and parcel ofthis JMC. 14.0 SEPARABILITY CLAUSE IF any clause, sentence or provision of this JMC shall be deemed invalid or tuncenstittional, ts remaining parts shall no: be attected thereby. 15.0 REPEALING CLAUSE Al orders, rules and regulations inconsistent or contvary tothe provisions of this JMC are hereby repealed or modified accordingly. 16 “ or Ge 16.0 EFFECTIVITY = This JMC shall take effect fifteen (15) days after its publicaton, : Socret Deparment of ihe Inverior aid Loval Government aN re CARLOS G. DOMINGUEZ Secretary Department of Finance, ERNESTO MW. PERNIA Secretary Oe Natiunal Eeonuinic and Development Authority Ca BENJAMIN E. DIOKNO Secretary Dopartmant of Budget and Management 7 Annex A AIP Summary Form poner ‘AUP form and structions CF __Anmuat invoatment Brogrom (AIP) Sy roenereesien/ Act by tar * rronnerOMmancpy [L_] no cman cong: ome Pas ea yo dom i trey Sat crys min) it | fit oi xfs Paro L Prepated by: Acwested by Bisamina Otteor Sige Officer Teel Chet Becutive Date; Date: Dare: 18 ‘Annex B SLPBC 2016 SYNCHRONIZED LOCAL PLANNING AND BUDGETING CALENDAR (SLPBC 2016) eles Seas omnis Rett fens aN Ty MANUALS, TOOLS, NG OVERSIGHT roel Se Pane aang Cte AA ‘Year 1~ July 1 7 1 1 3 T 2 RPS: Sourcebook (DILe) CDP Guide and lMlustative Guide (Election Year) Reconstitution of Local Planning Team ¥ (Election Year) Reconstitution of Local Planing Team (OIL) DILG Poky | 7 Sating of planning Y Preparation of Guidelines on ‘uidalines for updating workplan for Updating of planning database updatinalpeparation Local Plans of CDP PLPEM and ‘Assessment of other reference implementation of documents current PDPFP (NEDA) PLPEM and 7 BLGF ¥ Updating of pianning other reference generaies/upcates database documents financial indicators (NEDA) and transmits to oSRE (B.CF) Provinces through LGrpas the DILG BLGF} = RPS 7 RaPIDSILDIS ¥ Updating of Sourcebook financial indicators RaPIDS/LDIS (OIL) from BLGF made CDP Guide and ayailabe to cities ¥ Updating of Mustative Guide and municipalities Ecological Prefile 19 Noo ran Ree eae) NG OVERSIGHT pray PN} Ceo laa nag MANUALS, TOOLS, Ae (DILG) by DILG 3. LGPMS (DILG) 4, RaPDS (DG) | ae Year 1— August to 1. PLPEM and Formulation of POPFP November other reference Analysis of the documents planning environment; (NEDA) Formulation of goals, stratogios and objectives; identification of priority programs, projects and actvities) 1. RPS. ¥ Formulation o* goals, ‘Sourcebook strategies and (DLs) objectives based on 2. CDP Guide and the review and Mlustrative Guide analysis in order to (OILS) make hemmore | 3. RaPIDS Guide responsive to the | (o1Ls) ‘ourrent situation and | to make them consistant with higher | | level plans Y Identifeation of priority PPAs ‘0 achieve the goalslobjeativas for the next sic years (structure list of PPAS) 20 STC oh Year 1—September | 1 Year 1 Novameer Decomber Poco (easy Mom DANO lol Ysa) DILS Guidelines ‘on Reconstitution of Local Specal Bocies 2. C80 Handbook DIL Policy Guidelines or Undaticg of Local Plans PLPEN (NELA} RIMM (BLGF) _ RPS NG OVERSIGHT rere 9 Eve PROVINCE {Electon Year! Reconstitution of Local ‘Special Bodkes (Local Development Council, Peace and Order Council, Local Health Boara and Local Schoo! Boara) Claes Lag (Election Year) Reconstitution of Local Special Badies (Local Developmen Counci, Pease ana Order Council, Local Health Board and Local Schoo! Boara) Convering of PDC to prasent draft PDPFFs. and Structured List cf PPAs of Cities and Municipailties ‘or the purpose of hammonization 7 Mayorto present Structured List of PPAS ‘Approval of PDPFE Y BLGF to provide Medium Term Forecasts to Local Treasurers (November) ‘Medium-fem Revenue (Qwn-Source and External) Ferecasis “or Planning Purposes genoratad (latest yoar Ysa) by Local Treasurers: Tam ~*~ Madiuin-Term Medium-Tem Forecasts for Current Opzrating Expenses. prepared by Local Fi sommittes 7 Maduumn-Term Revenue (Own- ‘Source and External) Forecasts for Plarning Purposes generated (latest yoar Yia) by Local Treasurers Forecasts for Current Operating Expenses preparad ty -ocal Finanos Committee or. Trea ron SCG] reset) NG OVERSIGHT prey Econ) Tate al nea CT ea fool AA Sourcebook Development Plans {DILG) completed (Ranked 2. SDP Guide and Listof PPAS llustrative Guide completed) ‘Dey Preparation of First Draft of LDIP: New Development Jovestment Financing Potontia; component Yaar Dasamber— BLPEM (NEDA) 7 Formulation of FDIP Year 2 Feorvary au Year? - January 1. CDP tlustraive ¥ Finalizaton of LDIP: Suide Finalization of L 2 RMM (BLGF) Resource ‘Moollization Program end Mechim Terra Financing Pian ¥ Drafting of Implemertation Insiruments: Lecislatire | Reauirements, | CapDev Agenda and ] ‘Monitoring and Evaluation Strategy Year2— February CDP Ilustraive Y Finalizaton of Guide (01.6) Inaction fisiruments Ce NG OVERSIGHT Rota CM Tsan Ty Daa Ae NG OVERSIGHT [oN ary reas Pen lane aad ‘Year 2— arch Year 2— May" Year 2— June 7* COP tilustrative Conduct review of 7 Approval of CDP to Guide (DILG) approved CDP and include the provide feedbacs to Implementation Component LGUs, Instruments (LDIP, Legislative Requirements, CapDev Program and MBE Strategy) ¥ Submission of CD? to the Province for , re¥i PLPEM and Approval of PDIP other reference documents (NEDA) mi 1. RPS Preparation of AIP by 7 Preparation of AIP by Sourcebook the Local Fnance the Local Finance (DLs) Commitios Committee CDP Guide and llastrative Guido (iL) RMM (BLGF) BOM (DBM) PLPEM (NEDA) | CDP Guile and Illustrative Guide (OILS) BOM (DBM) ‘Approval of AIP by the Local Sanggunian Approval of AIP by the Local Sanggunian 23 Nera rans a Posie) NG OVERSIGHT GUIDELINES, Reel CoN CITYIMUNICIPALITY rT AAG Year 2— June 15" ‘BOM (DBM) ¥ Issuance of Local Budget Memorandum on IRA level for ensuing year by I _DaM —— Year 2— June 16" BOM (DBM) 7 Issuance of Budget Cal | 7 Issuarce of Budget Call | Year Jay 5° BOM (DBM) 7 Conduct of Budget Y Conduct of Budget Fonm Forum Year 2— July 1° BOM (DBM) % Prepare and submit Y Prepare and submit Budget Proposals Budget Proposals a | eparment Heads) | __(Depatment Heads) _| Year 2— Auaust* BOM (DBM) ¥ Conduct of Budget ¥ Conduct of Budget - Hearing (Augus! 15 Hearirg (August 15 Year 2— October™ BOM (DBM) ¥ Preparation of |__~ Preparation of Executive Budget Executive Budget (Cctober 10) {Gctober 10) Y- Submission of ¥ Submission of Executive Budget to Executive Budget to Local Sanggunian for Local Sanggunian for approval (not later than approval (not later 2 __ October 161 than October 16) Year 2— Gelober 17 BOM (DBM) ¥ Enactment of an 7 Enactmers ofan onwars* App-opriation Approatiation Ordinance authorizing Ordinance authorizing aoe the Annual Budget the Arnuai Budget Year 2— Within BON (DBM) ¥ Submission of 7 Submission of throe (3) days aller a Appropriation Approstiation 24 CO NG OVERSIGHT try GUIDELINES, DU Aaa Aes NG OVERSIGHT ro Nery ACTIVITIES ena LaLa tg ‘CDP Guide and Illustrative Guide ‘approval othe Ordinance to DBM for Ordinance to Ordinance: review Province for review authorzing the ‘Annual or ‘Supplemental Appropriations” : Year 2— Within ‘BON (DBM) ¥ Review of 7 Review of Appropriation | 7 Review of ninety (90) days ‘Appropriation Ordinance of ‘Appropriaton from the rocsipt of Ordinance of ‘Component Cities and Ordinence of the submitied Provinces, Municipalities Barangays Annual or HUCSIICCs and ‘Supplemental Municipality of Budgets for review Pateros | of Provinces, Cities | and Municipaiitias* a Year 3— January- BOM (DBM) 7 Budget Execution v December 7 Budget Accountabiit ¥_ Budget Accountatitty Year 3— January- PUPEM (NEDA) ~ Monitoring of December implementation of the PDPFP and PDP 1 RPS 7 Monitoring oF Sourcebook implementation of the (pile) cor 2. COP Guide and Hustrative Guide _| (oie) _ April® | PLPEM (NEDA) ¥ Adjustment of PDIP 7 Adjustment of LDP 25 aC NG OVERSIGHT etna) Cena Ten MANUALS, TOOLS, Sua (OILG) eres conta ren aes CITYIMUNICIPALITY “Year, - May’ Year, — June 7 racuring every ye: 4. PLPEM (NEDA) 2, CDP Gude and Iustratve Guide (DULG; _ 7. CDP Gude and Ikistratve Guide ¥ Proparalion of AP 7 Approval of AIP Y Preparation of AIP ¥ Approval of AIP 26 Annex C LDIP Summary Form Cov esncton Tempe em 1DP Sar yinursgatey LOCAL DEVELOPMENT INVESTMENT PROGRAM. ron nt your dowe nethawe any dime chans wines) Schaef mpementzen Amount Tosa Pe) ae inte ie Instemering nang ou strona] Toeanvroicnamy | oe someone [re 5 mie enna pron Trent an ote | capa ciate | ore vet ame assy | Comsetion frees emery | acs | hones |

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