The Department of Budget and Management (DBM) clarified today that the funds for Bottom-up Budgeting (BuB) projects in local government units (LGU) that failed to comply with the Good Financial Housekeeping requirement were not released to unqualified LGUs. This is the department’s response to reports last Saturday that the Commission on Audit (COA) has asked the DBM to explain why 133 unqualified LGUs were given more than P1.278 billion in projects under the BuB program last year.
“This was an audit observation as contained in the Audit Observation Memorandum of COA dated April 27, 2016, to which the DBM responded promptly. We provided our state auditors the objective evidence to clarify that no funds were released to cities or municipalities that were non-compliant with the prescribed governance conditions under the General Provisions of the 2015 General Appropriations Act and pursuant to the Joint Memorandum Circular on the guidelines for the implementation of the BuB,” said DBM Assistant Secretary for Monitoring and Evaluation Maxine Tanya M. Hamada.
“The BuB oversight agencies have consistently made it clear to implementing agencies and LGUs that LGUs that fail to comply with set governance conditions cannot receive BuB funding and implement BuB projects themselves,” Hamada added.
Hamada said the DBM’s response to COA dated May 6, 2016 states that of the P1,278,156,698 funding, a total of P66,825,515 has not been released.
The amount of P1,098,855,098 was released to various national government agencies for the implementation of 750 projects to be implemented in the identified LGUs in accordance with the local poverty reduction action plans (LPRAPs) submitted by beneficiary communities.
The amount of P106,476,085 for the implementation of 25 projects was released to the qualified provincial governments of the cities and municipalities that did not comply with the Good Financial Housekeeping requirement. Also, the amounts of P5 million and P1 million were released to the municipalities of San Agustin in Romblon and Candijay in Bohol, respectively, after they have complied with the Good Financial Housekeeping requirement.
This is consistent with the DBM-DILG-DSWD-NAPC Joint Memorandum Circular no. 6 or the Policy Guidelines and Procedures in the Implementation of the Bottom-up Budgeting Projects for FY 2015, according to Hamada.
Sections 4.3.1 to 4.3.4 of the guidelines provide that non-compliant LGUs will be given until March 2015 to comply with the BuB governance conditions. If a city or municipality fails to comply, national government agencies may release the funds to its provincial government provided that the provincial government is compliant with the Good Financial Housekeeping requirement and the concerned Local Poverty Reduction Action Team (LPRAT) agrees to have the project implemented by the provincial government.
If both the city/municipality and province are non-compliant, national government agencies may implement the projects subject to budgeting rules and the capacity of the agency to implement the projects.
Hamada said the program strives to ensure that services intended for communities are delivered, even as LGUs are compelled to comply with set governance conditions. This is because BuB oversight and participating agencies are tasked to ensure the implementation of identified priority poverty reduction projects to attain the program's objective of increasing citizens' access to local service delivery.
She also emphasized that the program is also designed to encourage LGUs to comply with governance conditions as seen in the improvement of compliance to Good Financial Housekeeping from 78% in 2015 to 91% in 2016.
“This shows that LGUs prefer to implement BuB projects on their own, rather than have NGAs or provincial governments implement the projects on their behalf. They are compelled to work on complying with the governance conditions to become eligible to receive the funds,” she said.
"We welcome observations, whether from our oversight institutions, development partners, academe, media, civil society and the public at large as it enables us to further clarify the program's mechanisms, engage stakeholders in policy improvement and practice transparent and accountable governance, “ she added.