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Introduction
Legal Basis of Budget Authorization
Key Players in Budget Authorization
The Budget Authorization Flow Chart
Steps in the Budget Authorization Phase
Changes in the Annual Budget
Starts Ends
with… with…
• Introduction
• Legal Basis of Budget
Sanggunian Enactment of Authorization
receives the the AO and • Key Players in Budget
LEP approval Authorization
submitted by thereof by • The Budget Authorization
the LCE the LCE Flow Chart
• Steps in the Budget
Authorization Phase
• Changes in the Annual
Budget
• Introduction
• Legal Basis of Budget
Authorization
On or before the end of the current fiscal year, • Key Players in Budget
the Sanggunian concerned shall enact, through Authorization
an ordinance, the annual budget of the local • The Budget Authorization
government unit for the ensuing fiscal year on Flow Chart
• Introduction
• Legal Basis of Budget
Authorization
shall submit the LEP to the Sanggunian for
authorization (Section 318, RA No. 7160) • Key Players in Budget
Authorization
shall approve or veto the Appropriation • The Budget Authorization
Ordinance after its enactment Flow Chart
• Steps in the Budget
(Sections 54 and 55, RA No. 7160)
Authorization Phase
• Changes in the Annual
Budget
SANGGUNIAN
• Introduction
Legal Basis of Budget
shall enact the annual & supplemental •
Authorization
budgets • Key Players in Budget
appropriate funds for specific programs, Authorization
• Introduction
• Legal Basis of Budget
Authorization
shall be responsible for conducting a
• Key Players in Budget
preliminary review & evaluation of the Local Authorization
Expenditure Program • The Budget Authorization
Flow Chart
shall submit its report & recommendation to
• Steps in the Budget
the Sanggunian proper Authorization Phase
• Changes in the Annual
Budget
Secretary to the Sanggunian
• Introduction
shall stamp the Appropriation Ordinance with the seal of the • Legal Basis of Budget
Sanggunian & record the same in a book kept for the purpose Authorization
shall affix his signature to the enacted Appropriation Ordinance • Key Players in Budget
& present the same to the Presiding Officer for his signature & Authorization
forward copies thereof to the LCE for approval (Section 469, RA • The Budget Authorization
No. 7160) Flow Chart
shall cause the posting of an ordinance or resolution in the • Steps in the Budget
bulletin board at the entrance of the provincial capitol & the city, Authorization Phase
municipal, or barangay hall in at least two (2) conspicuous
• Changes in the Annual
places in the local government unit concerned not later than
Budget
five (5) days after approval thereof (Sec. 59 (b), RA No. 7160)
Local Finance Committee
• Introduction
• Legal Basis of Budget
Authorization
shall assist the Sanggunian in the analysis & • Key Players in Budget
review of the annual & supplemental budgets Authorization
• Introduction
• Legal Basis of Budget
Authorization
Upon request of the Sanggunian through the • Key Players in Budget
LCE, Heads of Departments and Offices may Authorization
• Introduction
• Legal Basis of Budget
Authorization
Should the Sanggunian allow the CSOs to • Key Players in Budget
participate in the budget authorization phase, Authorization
Check:
Step 1: Enact the
BY’s aggregate estimated income vs. aggregate Appropriation Ordinance
expenditure program (Section 324 [a], RA No. 7160); Step 2: Approve the
Appropriation Ordinance
If the taxes & fees identified as sources of the Step 3: Post the
estimated income are in accordance with the Appropriation Ordinance
approved LRC; Step 4: Forward copies of the
approved Appropriation
If the estimated receipts from RPT correspond to the Ordinance to the reviewing
total amount of due and demandable RPT, including authority
delinquent accounts;
The Expenditure Program
Determine/Check/Verify
Overall level of appropriations by dep’t/office/unit & special Step 1: Enact the
purpose appropriations & the overall total; Appropriation Ordinance
Provisions for associated PS costs;
Step 2: Approve the
That the provision for debt services does not exceed the
Appropriation Ordinance
ceiling required by law - 20% of the regular income of the LGU
concerned (Section 324 (b), RA No. 7160); Step 3: Post the
That the provision for LDRRMF is not less than 5% of the Appropriation Ordinance
estimated regular income required by law (RA No. 10121); Step 4: Forward copies of the
That the provision from IRA for development projects is not approved Appropriation
less than 20% required by law (Section 287, RA No. 7160); Ordinance to the reviewing
That the provision for discretionary expenses, if any, does not authority
exceed 2% of the actual receipts derived from basic RPT in the
next preceding year (Section 325 (h), RA No. 7160); and
If the projects in the budget are consistent with the AIP.
The Sanggunian shall consider the LEP as a
Step 1: Enact the
priority measure, if certified as urgent by the Appropriation Ordinance
LCE, thus, shall take precedence over all other Step 2: Approve the
Appropriation Ordinance
pending and proposed measures. As a rule,
Step 3: Post the
all Sanggunian sessions shall be open to the Appropriation Ordinance
public, unless otherwise provided by law Step 4: Forward copies of the
(Article 105 [b], IRR of RA No. 7160). approved Appropriation
Ordinance to the reviewing
authority
1.3.2 Deliberation Proper
Rules prescribed in Sec. 54, LGC and Article 107 of Step 1: Enact the
Appropriation Ordinance
IRR, as well IRP adopted by the Sanggunian
Step 2: Approve the
Majority of all the members of the Sanggunian who Appropriation Ordinance
have been elected and qualified shall constitute a Step 3: Post the
Appropriation Ordinance
quorum to transact official business
Step 4: Forward copies of the
Proposed AO shall be accompanied by a brief approved Appropriation
explanatory note containing the justifications for its Ordinance to the reviewing
authority
approval
Rules Governing the Enactment of an AO
Proposed AO shall be signed by the author or authors
and submitted to the Secretary to the Sanggunian
If the proposed AO is certified as urgent by the LCE, it Step 1: Enact the
may be presented to & considered by the sanggunian at Appropriation Ordinance
the same meeting it was 1st reported Step 2: Approve the
Appropriation Ordinance
No ordinance shall be considered on 2nd reading in any
regular meeting unless it has been reported out by the Step 3: Post the
Appropriation Ordinance
proper committee to which it was referred, normally the
CA, or certified as urgent by the LCE Step 4: Forward copies of the
approved Appropriation
Secretary to the Sanggunian shall prepare copies of the Ordinance to the reviewing
proposed AO in the form it was passed during the 2nd authority
reading & shall distribute to each Sanggunian member a
copy thereof for the 3rd reading & final consideration
Rules Governing the Enactment of an AO
54(b), LGC]
Veto Power of the LCE
LCE may veto an ordinance on the ground that it is ultra Step 1: Enact the
Appropriation Ordinance
vires (“beyond the powers”), or prejudicial to public
Step 2: Approve the
welfare Appropriation Ordinance
Step 3: Post the
LCE, except the Punong Barangay, shall have the power Appropriation Ordinance
to veto: Step 4: Forward copies of the
any particular item or items of the AO, approved Appropriation
Ordinance to the reviewing
ordinance or resolution adopting local development
authority
plan and public investment program, or
ordinance directing the payment of money or
creating liability (Sec. 55, LGC)
Veto may be partial or total
Step 1: Enact the
Veto shall not affect the item or items that are not Appropriation Ordinance
objected to Step 2: Approve the
Appropriation Ordinance
Vetoed item or items shall not take effect unless the Step 3: Post the
Appropriation Ordinance
Sanggunian overrides the veto; otherwise, the item
Step 4: Forward copies of the
or items in the AO of the previous year approved Appropriation
corresponding to those vetoed, if any, shall be Ordinance to the reviewing
deemed reenacted authority
The Sanggunian may override the veto of the LCE Step 1: Enact the
Appropriation Ordinance
by 2/3 vote of all its members.
Step 2: Approve the
Appropriation Ordinance
Step 3: Post the
Such override will make the ordinance effective for Appropriation Ordinance
all legal intents and purposes even without the Step 4: Forward copies of the
approved Appropriation
approval of the LCE. Ordinance to the reviewing
authority
The secretary to the sanggunian concerned shall
cause the posting of an ordinance or resolution in
the bulletin board at the entrance of the provincial
capitol and the city, municipal, or barangay hall in Step 1: Enact the
Appropriation Ordinance
at least two (2) conspicuous places in the LGU
Step 2: Approve the
concerned not later than 5 days after the approval Appropriation Ordinance
thereof. (Section 59 (b), RA No. 7160) Step 3: Post the
The text of the ordinance or resolution shall be Appropriation Ordinance
disseminated and posted in Filipino or English or in Step 4: Forward copies of the
the language or dialect understood by the majority approved Appropriation
of the people in the LGU concerned, & the Ordinance to the reviewing
authority
secretary to the sanggunian shall record such fact
in a book kept for the purpose, stating the dates of
approval and postings.
In the case of HUC & ICC, the main features of the
ordinance or resolution duly enacted or adopted shall,
in addition to being posted, be published once in a local
Step 1: Enact the
newspaper of general circulation. (Section 59 (d), RA No. Appropriation Ordinance
7160).
Step 2: Approve the
The AO shall take effect after 10 days from the date a Appropriation Ordinance
copy thereof is posted in the bulletin board at the
Step 3: Post the
entrance of the provincial capitol and the city, municipal, Appropriation Ordinance
or barangay hall as the case may be, and in at least 2
Step 4: Forward copies of the
other conspicuous places in the government unit approved Appropriation
concerned. (Section 59 [a], RA No. 7160; DILG MC No. Ordinance to the reviewing
2010-149, 12/14/10) authority
In Tanada vs Tuvera, the SC declared that a law “which
have not been published has no force and effect” (136
SCRA 27, April 24, 1985).
Component cities & municipalities:
Secretary to the Sanggunian shall Step 1: Enact the
forward to the Sangguniang Panlalawigan within three Appropriation Ordinance
(3) calendar days after approval, copies of the Step 2: Approve the
approved AO for review in accordance with Sec. 327 of Appropriation Ordinance
the LGC (Sec. 56, LGC) Step 3: Post the
Appropriation Ordinance
Provinces, HUC, independent component cities and Step 4: Forward copies of
municipalities within Metro Manila: the approved
Secretary to the Sanggunian shall forward to the DBM Appropriation Ordinance
within three (3) calendar days after approval, copies of to the reviewing authority
the approved AO for review in accordance with Sec.
326 of the LGC (Sec. 56, LGC)
General Rule
All budgetary proposal shall be included and considered
in the budget preparation process • Introduction
After the LCE has submitted the executive budget to the • Legal Basis of Budget
Sanggunian, no ordinance providing for a supplemental Authorization
budget shall be enacted (Sec. 321, LGC) • Key Players in Budget
Authorization
Exceptions • The Budget Authorization
Changes in the annual budget may be done through Flow Chart
Supplemental Budget: • Steps in the Budget
When supported by funds actually available as certified Authorization Phase
by the local treasurer • Changes in the Annual
If covered by new revenue sources Budget
In times of public calamity (Sec. 321, LGC)
General Rule • Introduction
Funds shall be available exclusively for the specific • Legal Basis of Budget
purpose for which they have been appropriated Authorization
No ordinance shall be passed authorising any transfer of • Key Players in Budget
appropriations from one item to another (Sec. 336, LGC) Authorization
• The Budget Authorization
Exceptions Flow Chart
The LCE or the Presiding Officer of the Sanggunian may, • Steps in the Budget
by Ordinance, be authorized to augment any item in the Authorization Phase
approved annual budget for their respective officers from • Changes in the Annual
savings in other items within the same expense class of Budget
their respective appropriations
(Sec. 336, LGC)
The ordinance enacting the annual budget shall
take effect at the beginning of the ensuing calendar
year • Introduction
An ordinance enacting a supplemental budget shall • Legal Basis of Budget
Authorization
take effect upon its approval or on the date fixed
• Key Players in Budget
therein Authorization
The effectivity of budgets is subject further to • The Budget Authorization
compliance with the posting requirements. Flow Chart
• Steps in the Budget
Authorization Phase
• Changes in the Annual
Budget