LTOMbook3PArt1

• Accountable Officer:

  • Officer of any government agency whose duties permit or require the possession or custody of government funds or property
  • Mandated by law to render account to the COA
• Cash:

  • Money, the standard medium of exchange in business transactions
  • Includes money and other negotiable instruments payable in money and acceptable by the bank for deposit and immediate credit (e.g., checks, bank drafts, money orders)
• Check:

  • Negotiable instrument drawn against deposited funds to pay a specific entity a specific amount of funds on demand
• Current Assets:

  • Cash and other assets not earmarked for specific purposes other than the payment of a current liability or a readily marketable investment
• Fund:

  • Sum of money or other assets convertible to cash, set aside for specific activities or objectives in accordance with special regulations, restrictions, or limitations
  • Constitutes an independent fiscal and accounting entity
• Government Funds:

  • Include public moneys of every sort and other resources pertaining to any agency of the government
• Local Funds:

  • Consist of monies and resources available for the payment of expenditures, obligations, or purposes not specifically declared by law as accruing and chargeable to any other fund
• Special Funds:

  • Include the Special Education Fund (SEF) and Trust Funds
  • SEF: Proceeds of additional tax on real property for prescribed purposes
  • Trust Funds: Private and public monies officially in possession of the LGU for specific purposes
• Separation of Books and Depository Accounts:

  • Local accountants and treasurers maintain separate books and depository accounts for each fund under COA regulations
• Budget Preparation Phase:

  • Involves cost estimation per programs, projects, and activities (PPAs), preparation of budget proposals, executive review, Local Expenditure Program, and Budget Message
  • Starts with Budget Call and ends with submission of Executive Budget to the Sanggunian
• The Budget Authorization Phase is the second phase in the local budget process
• This phase starts when the Sanggunian receives the Local Expenditure Program (LEP) submitted by the Local Chief Executive (LCE)
• The Sanggunian deliberates on the budget, authorizes the annual budget through an Appropriation Ordinance (AO), and presents it to the LCE for approval
• The role of the Local Treasurer in Budget Authorization includes appearing before the Sanggunian to explain or justify proposals
• The Local Finance Committee (LFC), of which the Local Treasurer is a member, assists in analyzing and reviewing budgets for compliance with statutory and administrative requirements
• The Budget Review Phase is the third phase in the local budget process
• Its primary purpose is to determine if the Appropriation Ordinance (AO) complies with budgetary requirements and general limitations set forth in the Local Government Code (LGC) and other laws
• The Department of Budget and Management (DBM) reviews ordinances authorizing annual or supplemental appropriations of certain local government units
• The Sangguniang Panlalawigan reviews ordinances authorizing annual or supplemental appropriations of component cities and municipalities
• The Budget Execution Phase is the fourth phase in the local budget process
• It involves the execution of the budget in accordance with existing rules and regulations
• The Local Treasurer plays a crucial role in budget execution, including collection of revenues, disbursement of funds, and preparation of financial and physical performance targets
• The LFC, through the Local Treasurer, adjusts cash programs and financial targets based on performance analysis
• Continuing Appropriation:

  • Available to support obligations for a specified purpose or project, even beyond the budget year
  • Includes unexpended balances of the 20% development fund, capital outlay from the Local Disaster Risk Reduction Management Fund (LDRRMF), and capital outlay of different departments of the local government
• Reversion of Unexpended Balances of Appropriations:

  1. Unexpended balances revert to the unappropriated surplus of the general fund at the end of the fiscal year

  2. Appropriations for capital outlays remain valid until fully spent, reverted, or the project is completed
• Reversions of continuing appropriations are not allowed until obligations are fully paid or settled
• Balances of continuing appropriations are reviewed during annual budget preparation

  • Sanggunian may approve reversion of funds no longer needed for activities funded by continuing appropriations
• Supplemental Appropriation:

  • Adjusts the equilibrium of the first approved budget disturbed by economic, political, or social conditions
  • Provides additional amount to original appropriation if proved inadequate
  • Requires a statement of funding sources from the local treasurer and accountant
• Supplemental budget ordinance may be enacted when:

  1. Supported by funds actually available as certified by the local treasurer

  2. Covered by new revenue sources like new local taxes or higher remittances from the National Government
• Advance payments may not qualify as a source of funds for a supplemental budget

  • Advance collections remain a liability of the LGU and may not be used for a supplemental budget
• Budget Accountability Phase:

  • Involves tracking income/revenues and controlling expenditures
  • Provides continuous information on the implementation of PPAs funded by public funds
  • Includes monitoring financial transactions, recording budgetary accounts, and evaluating financial and physical performance
• Use of Appropriated Funds and Savings:

  • Funds must be used exclusively for specific purposes
  • No transfer of appropriations from one item to another is allowed without authorization by ordinance
• Expenditures:

  • Include charges against the agency's fund for operating expenditures, capital outlays, and provisions for long-term obligations
  • Current Operating Expenditures are for goods and services for current consumption
  • Capital Outlays are for goods and services with benefits extending beyond the fiscal year
• Prohibitions Against Expenditures:

  A. Public money or property cannot be used for religious or private purposes

  B. No payment for contracts with no services rendered or goods delivered

  C. No money for entertainment unless authorized by law or the President

  D. Disbursements must align with appropriations in the approved annual budget
• Disbursements in accordance with appropriations in the approved annual budget may be made from any Local Fund in the custody of the local treasurer
• Total disbursements from any local fund shall not exceed fifty percent (50%) of the uncollected estimated revenue accruing to such local fund in addition to the actual collections
• No cash overdraft in any local fund shall be incurred at the end of the fiscal year
• In case of emergency arising from a typhoon, earthquake, or any other calamity, the Sanggunian concerned may authorize the local treasurer to continue making disbursements from any local fund in his/her possession in excess of the limitations provided
• Irregular Expenditure:

  • Signifies an expenditure incurred without adhering to established rules, regulations, procedural guidelines, policies, principles, or practices
  • Incurred if funds are disbursed without conforming to prescribed usages and rules of discipline
  • No observance of an established pattern, course, mode of action, behavior, or conduct
  • A transaction conducted in a manner that deviates or departs from, or does not comply with standards set is deemed irregular
• Cases considered as "Irregular" Expenditures or Uses of Government Funds and Property include:

  • Payments of salaries, allowances, and other forms of additional compensation under specific cases
  • Hiring of private lawyers by the GOCCs without prior written conformity and acquiescence of the Solicitor General or the Government Corporate Counsel
  • Hiring of casual and probationary employees under job order with entitlement and benefits enjoyed by regular government employees
  • Hiring of consultants/retired employees