Local Government Units

Public Financial Management

Implementation Strategy

The LGU PFM Reform Implementation Strategy was developed under the European Union (EU) funded
project, “Support to the Local Government Units for More Effective and Accountable Public Financial
Management (LGU PFM 2 Project).”
 ©2014 by the LGU PFM 2 Project

Any part of this publication may be used and reproduced,

provided proper acknowledgment is made.
TABLE OF CONTENTS      

1.0 WHAT IS THE IMPLEMENTATION STRATEGY?•••••••••••••••••••••••••1

2.0 OPERATIONALIZING THE LGU PFM REFORM ROADMAP••••••••••••• 2

2.1 Core Approaches to Implementation of LGU PFM Reforms•••••••• 2

2.2 The LGU PFM Reform Implementation Strategies••••••••••••••••• 4

2.3 Prioritizing the Implementation Strategies•••••••••••••••••••••• 30

1.0 WHAT IS THE IMPLEMENTATION STRATEGY?
The Local Government Units Public Financial Management (LGU PFM) Reform Implementation Strategy
complements the LGU PFM Reform Roadmap, which is a stand-alone document.

While the Roadmap sets out the plan for LGU PFM reform from 2014 – 2022 by identifying the issues
to be addressed and laying down the related policy tools/interventions, the Implementation Strategy
provides the specific actions to carry out the policy tools/interventions that will, in turn, result to the
outcomes.

It also anticipates the risks associated with implementation of the reforms and how these are to be
managed and mitigated.

The Implementation Strategy guides the LGUs in preparing their respective PFM Improvement Plans
(PFMIPs). Based on the actions identified in the Implementation Strategy, LGUs can choose and tailor-
fit interventions that will suit the conditions and circumstances existing in their LGUs.

The Implementation Strategy also builds convergence among the Oversight Agencies (OAs) - Department
of Budget and Management (DBM), Department of the Interior and Local Government (DILG),
Department of Finance – Bureau of Local Government Finance (DOF-BLGF), and National Economic
and Development Authority (NEDA), by providing the measures for improving and harmonizing the
technical assistance they provide to LGUs.

Figure 1 below shows the relationship among the LGU PFM Reform Roadmap, Implementation Strategy
and PFMIP.
Figure 1: The LGU PFM Reform Roadmap, Implementation Strategy and PFMIP

1 IMPLEMENTATION STRATEGY
2.0 OPERATIONALIZING THE LGU PFM REFORM ROADMAP
2.1 Core Approaches This section presents the broad strategies for achieving the
desired directions of the PFM reform based on the results of
to Implementation of extensive regional consultations with LGUs and OAs conducted
LGU PFM Reforms from October 2013 to April 2014.

These approaches were identified by the stakeholders as essential to the implementation and
sustainability of LGU FPM Reforms:

2.1.1 Multiplying Sponsorship of the

Implementation of the LGU-PFM Reforms.
To facilitate the implementation of the LGU In addition, in order to sustain the implementation of
PFM reforms, stakeholders and champions the reform, an appropriate structure will have to be
shall be engaged across the three levels established.
of results of the Roadmap. LGUs will be
capacitated to assess their own PFM systems, Initially, however, the most practical structure to
analyze root causes of areas of strengths and jumpstart the implementation of the Roadmap is
weaknesses, and map out and implement the current Project1 set-up headed by the Project
PFM improvement programs based on their Steering Committee (PSC) consisting of high-level
own level of readiness. LGUs will also be representatives of OAs.
guided on how to implement PFM reforms
taking into consideration sound project and The PSC, as implementation overseer, is expected to
change management, as well as sustainability transition to a permanent set-up (Figure 2) to ensure
practices. the continuity of the reforms until they become part
of the LGUs’ way of doing things.

Figure 2: Emerging Structure for the Roadmap

1
Refers to the European Union (EU) – funded Project, “Support to the Local Government Units for More Effective and Accountable
Public Financial Management,” otherwise known as the LGU PFM 2 Project.
2
Refers to the LGU PFM 2 Project Technical Working Group

IMPLEMENTATION STRATEGY 2
National Inter-Agency Team (NIAT): Composed Regional Inter-Agency Teams (RIATs):
of representatives of the OAs at the National Composed of the Regional Directors of the
Level. different OAs.

Part of the sustainability strategy of the LGU PFM This shall be supported by a Composite PFM
reforms is to transition the functions of the PSC Team, consisting of technical personnel of each
to a NIAT. OA.
Being a high-level body, it is proposed
The RIATs will be tasked to support, and monitor
that this structure be supported by a NIAT
and evaluate the implementation of the PFM
Technical Working Group (TWG) composed of
reforms by their respective coverage LGUs.
representatives from the LGU policy units of the
OAs at the national level.
LGU PFM Teams: Composed of the Local Chief
Executives (LCEs) or their representatives, and
The NIAT, through the LGU policy units at the
Department Heads of the Offices of Planning
OA Central levels, shall prepare all the necessary
and Development, Treasury, Accounting, Budget,
capacity development interventions that will form
Internal Audit, General Services Office and/or
part of the LGU PFM reform agenda.
Bids and Awards Committee, among others.

2.1.2 Empowering LGUs to customize 2.1.3 Harmonize and coordinate

their PFM Improvement Plans Oversight Agencies’ Technical
(PFMIPs) Support to the LGUs.
LGUs will be the implementors of the PFM The Roadmap noted the lack of coordination and
reforms. As such, it is critical that they lead in harmonization among OAs, and between OAs
the conceptualization and implementation of and LGUs as a perennial problem that LGU PFM
PFM reforms needed by their respective LGUs. reform should address. The LGU PFM reform,
Although the Public Financial Management thus, seeks to institutionalize convergence among
Assessment Tool (PFMAT) is a diagnostic tool the OAs in providing technical assistance to LGUs
which aims to help LGUs identify the strengths on PFM.
and weaknesses in their PFM system as bases
for improvement measures, it does not always 2.1.4 Capacitate OAs and LGUs to
follow that the lowest ratings obtained in the Manage the Reform.
PFM assessments using the PFMAT require the
most significant capacity improvement (e.g., a The consultations conducted nationwide in 2013
low rating may be unavoidable, thus, justified and 2014 among LGUs and OAs presented a
in a given environment.) To ensure that PFM number of potential challenges and resistance
improvements are responsive and doable, LGU issues in the implementation of the PFM reforms.
sponsors and stakeholders will be capacitated Champions and implementors of the LGU PFM
to assess, design, plan and actualize their PFMIPs reforms at the national, regional and local levels
based on their own level of readiness. will also be capacitated on change management
to ensure that the target levels of results of the
PFM reforms are actualized.

3 IMPLEMENTATION STRATEGY
2.2 The LGU This section presents the LGU PFM Reform Imlementation Strategies
which basically contain capacity development interventions for both
PFM Reform OAs and LGUs. The interventions were determined by the LGUs and
Implementation OAs themselves during the nationwide consultations on the LGU
PFM Reform Roadmap. The results of earlier studies done by the
Strategies                          
LGU PFM2 Technical Assistance Team (TAT) during the project 3

inception phase were also taken into consideration.

The Implementation Strategy Matrix articulates the systems approach used in addressing the factors
affecting the PFMAT scores obtained by LGUs that assessed their PFM system. The interventions
identified address the needs of both LGUs and OAs along seven (7) capacity pillars: management
systems, structure, competency, enabling policies, knowledge and learning, convergence and leadership.
These pillars were mostly adopted from the SCALOG4 of the DILG, except for the convergence pillar,
which is determined as equally necessary given the recognized need for enhanced coordination among
OAs, and between OAs and LGUs.

Table 1: Capacity Pillars (Definitions and Assesment Questions)

Capacity Pillar Definition Assessment Questions

Structure Appropriate set-up (office, committee Is the appropriate structure:
or work group) with defined authority • in place (formally established)?
and accountability for performing the • functional (with appropriate staffing,
necessary PFM reforms meeting regularly, producing required
outputs, provided with budget)?

Competency Knowledge and skills of people • Are the staff sufficiently

who need to perform their assigned knowledgeable, skilled and confident
functions in the implementation of to perform properly?
PFM reforms, including technical • Are there enough staff with broad
competencies, program management skills to cope with the workload?
competencies, planning / budgeting, • In what required technical and
designing, implementing, and program management competencies
monitoring and evaluation (M & E) are the people proficient, not proficient
or needing improvement?
• Are they motivated and productive?
Management Systems Systems, processes and procedures Are the systems, processes and
for managing local PFM programs, i.e., procedures:
planning and budgeting, design and • Documented (manuals, flowchart, plan,
development, implementation, and protocols, SOP)?
monitoring and evaluation • Approved for implementation?
• Implemented/used/practiced?
• Standardized?
• Streamlined?
• User-friendly/customer-focused?
• Participatory?
• Transparent?

3
The Technical Assistance Team (TAT) is a pool of technical experts established and provided by the EU to assist the DBM and other OAs in
implementing the LGU PFM 2 Project.

4
System on Competency Assessment for Local Governments (SCALOG) include tools which identify the organizations’ competency strengths to be
maintained and weaknesses to be addressed through capacity building efforts.

IMPLEMENTATION STRATEGY 4
Policies Laws, ordiannces, rules and Have directions been set using the right
regulations, and guidelines on PFM policy instrument?
(e.g., appropriation ordinance, Have the target results, objectives,
executive issuance) strategies, and activites been defined?
Have adequate resources been provided?
Are enabling policies:
• In place?
• Sufficient/effective/with gaps?
• Up to date?
• Disseminated?
• Enforced?
Knowledge and Mechanisms for generating, analyzing • Are knowledge and learning
Learning and using PFM data and information mechanisms in place and effective?
as bases for decision-making and • Are data or databases accessible to
continuous improvement and used by stakholders?
• Are M & E data used?
• Are citizens/stakeholders engaged to
provide feedback on service delivery?
• Is there continuous benchmarking with
good practices (documenting and
sharing good practices?)
Leadership Mechanisms for defining and setting • Are there clear lines of accountability?
PFM strategic directions at the LGU / • Are leadership mechanisms in place
OA levels; Ensuring transparency and and effective:
accountability in the LGU’s/Oversight ƟƟ Partnership with other OAs?
Agency operations; Instituting ƟƟ Active support for the LGUs?
participatory mechanisms for PFM ƟƟ Active and visible involvement in
reforms; and visible support to PFM PFM reforms?
reforms
Convergence Mechanisms for establishing and • Is there collaboration among OAs?
institutionalizing collaboration among • Is there harmonized and coordinated
OAs and other relevant stakeholders technical assistance?
• Is there coordination among OAs on
PFM policy setting?

The Implementation Strategy also presents the risk register which contains both risks and mitigation
strategies for the PFM reforms as reflected in columns 6 and 7 of the Implementation Strategy Matrix
presented in the next section. It will help in minimizing the impact of possible adverse or unwelcome
circumstances should they arise during implementation by anticipating possible challenges and
identifying measures to reduce or manage such challenges.

There are four types of risks that may impact on the Roadmap. These are the following:

Table 2: Types of Risks

Types of Risks Definition

Risks that have potential impact on the program’s or project’s ability to

Resistance Issues
operate effectively or efficiently

Risks that have potential impact on the program’s or project’s ability to

Financial
properly protect public funds as well as operate effectively and efficiently.

Risks that can hinder the partner organization from achieving its targeted
Development
outcomes and impact

Risks that have potential impact on the project’s ability to maintain the
Reputation
confidence of its stakeholders regarding fulfilling its mandate.

5 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 1: LINKING BUDGET PLANNING TO POLICY PRIORITIES

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

A. COORDINATION 1. Strengthen Policy 2016 Delays in signing CCD official

AMONG OVER- coordination • Issue enhanced JMC 1 • Improved coordination among of JMC endorsement
SIGHT AGENCIES mechanisms for on the harmonization OAs
(OAs) OAs efforts including Lack of consensus Consensus building
structure and strategies • Established Regional Inter- on coordination on identifying the
for harmonization Agency Teams (DBM, DILG, DOF- arrangements best structure to
BLGF, NEDA) to provide technical develop and maintain
Structure support to LGUs the harmonization
• Create inter-agency mechanisms
teams at national and • Enhanced sustainability of the
regional levels Coordinating Committee on Resistance of OAs Conduct regular
Decentralization to converge given dialogue amongst OAs
Convergence their respective at the national and
• Strengthen convergence 2019 assignments regional levels
mechanisms through the • Strengthened convergence of
CCD technical support activities of
OAs to LGUs

2022
• Institutionalized convergence of
technical support activities of
OAs to LGUs
B. SUSTAINABILITY 1. Institutionalize Policy Policy 2016 Delays in software Monitoring by DBM
OF PFM use of the • Continue making PFMAT • Issue Executive Order • PFMAT regularly used by development on the progress of the
ASSESSMENT PFMAT for a requirement for the directing conduct of PFM LGUs to generate basis for the Roll-out delays software developer
TOOL (PFMAT) monitoring Grassroots Participatory assessment using the preparation of the PFMIP and
LGU adherence Budgeting Process PFMAT for LGUs policy and decision making
to sound PFM (GPBP) Delays in Formal designation of
practices and Management Systems • Enhanced PFMAT Software consolidation and DBM LGU Policy Unit
processes Management Systems • Embed the PFMAT utilized by LGUs in conducting analyses of results to take charge of LGU
• Enhance the Software Software in the LGU’s their PFM assessments and PFM, including PFMAT
based on the revised/ financial management maintaining a database of PFM
updated PFMAT for information system results Close coordination
LGUs between DBM LGU
Structure • PFMAT results consolidated and Policy Unit, ROs and
Structure • Create and/or strengthen analyzed at regional and national LGUs
• Strengthen the LGU LGU PFM Team levels as bases for policy and
Policy Unit in DBM decision making

IMPLEMENTATION STRATEGY 6
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 1: LINKING BUDGET PLANNING TO POLICY PRIORITIES

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

B. SUSTAINABILITY OF Knowledge & Knowledge & Learning • Analytical Framework linking Lack of consensus Pilot test production
PFM ASSESSMENT Learning • Share the results and PFMAT, LGFPMS and LGPMS among OAs on of the consolidated
TOOL (PFMAT) • Establish consolidated analysis of results developed whether to develop outputs to demonstrate
analytical linkage the PFM tools with the analytical linkage benefits of the analysis
among PFMAT / different departments in 2019
LGFPMS/ LGPMS the LGU, including the • PFMAT regularly used by LGUs to
Local Sanggunian generate basis for the preparation
of the PFMIP and policy and
decision making

• Enhanced PFMAT Software utilized

by LGUs in conducting their PFM
assessments and maintaining a
database of PFM results

• PFMAT results consolidated and

analyzed at regional and national
levels as bases for policy and
decision making

• PFMAT and other PFM indicators

harmonized and considered in the
SGLG

2022
• PFMAT regularly used by LGUs to
generate basis for the preparation
of the PFMIP and policy and
decision making

• Enhanced PFMAT Software utilized

by LGUs in conducting their PFM
assessments and maintaining a
database of PFM results

• PFMAT results consolidated and

analyzed at regional and national
levels as bases for policy and
decision making

• Harmonized PFM indicators utilized

in national government policy
making process

7 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 1: LINKING BUDGET PLANNING TO POLICY PRIORITIES

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY
AGENDA POLICY TOOLS
(INTERVENTIONS) OUTCOMES
(ISSUES)
OAs LGUs RISK MITIGATION

2. Institutionalize Policy Policy 2016 Inability of OAs to PFMIP tabled in

use of PFMIPs • Continue • LCEs issue directive • PFMIPs based on PFMAT results prepared by monitor and track Regional Inter-
to effect PFM making PFMIP a that PFMIP should be LGUs PFMIP preparation, Agency Team
improvements requirement for approved by both LCE implementation and regular meeting
the Grassroots and Sanggunian, and • Responsive Technical Assistance (TA) provided accomplishment agenda
Participatory should be embedded and policies issued by OAs based on PFMIPs
Budgeting Process in the LDIP and AIP if
PPAs require funding 2019
Management Systems • PFMIPs based on PFMAT results prepared by
• Enhance PFMIP Structure LGUs
templates to • Create and/or
reflect PFM-related strengthen LGU PFM • Responsive Technical Assistance (TA) provided
indicators of the Team and policies issued by OAs based on PFMIPs
other OAs (e.g.
revenue generation Competency 2022
plans, etc.) • Cascade within the • PFMIPs based on PFMAT results prepared by
LGUs and roll-out LGUs
• Prepare templates to component LGUs
and tools to monitor CapDev interventions • Responsive Technical Assistance (TA) provided
and track PFMIP received from and policies issued by OAs based on PFMIPs
accomplishments Regional Inter-Agency
Teams (RIATs) • PFMIP institutionalized and sustainable
Structure
• Clarify and clearly
delineate roles
of RIATs and the
LGU Policy Units at
the national level
in the validation
and monitoring of
PFMIPs

Competency / People
• Capacitate Regional
OAs on how to
coach LGUs in
improving and
tracking their
PFMIPs

IMPLEMENTATION STRATEGY 8
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 1: LINKING BUDGET PLANNING TO POLICY PRIORITIES

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

C. PFM CULTURE 1. Institutionalize LGU Policy Policy 2016 Non-approval of Intensive

AND LEADERSHIP PFM Leadership • Issue policy on the grant of LGU • Issue policy • Grant of LGU PFM Leadership the proposed LGU communication and
AT LGU LEVEL Award PFM Leadership Awards formalizing LGU Award encourage LGU PFM Leadership visibility activities
participation in the officials to support LGU PFM Awards with all stakeholders
LGU PFM Leadership reforms
Awards and directing
compliance with its 2019 Lack of support OAs to conduct
criteria • Grant of LGU PFM Leadership from organized dialogues and IEC
Award encourage more LGU PFM practitioners activities with these
officials to support LGU PFM (PHILLBO, organizations
reforms PHALTRA etc.)

2022
• Grant of LGU PFM Leadership
Award encourage more LGU
officials to support LGU PFM
reforms

• Culture of sound PFM

practices embedded
2. Institutionalize Policy 2016 Incentives are not Increasing grant
formal and • Review existing LGU • Integrated performance- sustainable incentives via
integrated system performance-based incentives based grant system increased lobbying
of performance- scheme (e.g. PCF, SGH, SGLG) developed and rolled-out in Congress for
based access an additional
to development • Grants or preferential performance-based
financing schemes Management Systems credit financing extended IRA
• Develop integrated performance- to LGUs based on financial
based grant system performance Low interest level Conduct intensive
among LGUs IEC activities with
2019 LGUs
• Grants or preferential
credit financing extended
to LGUs based on financial
performance

2022
• Grants or preferential
credit financing extended
to LGUs based on financial
performance

9 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 1: LINKING BUDGET PLANNING TO POLICY PRIORITIES

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

D. LINK BETWEEN 1. Strengthen linkage Policy Policy 2016 Capacities of Formal commitment
PDPFP/CDP-LDIP- between PDPFP/ • Enhance CDP/LDIP manual(s) • Issue policy reiterating • LGUs fully capacitated to technical personnel of OAs via
AIP1 AND BUDGET CDP-LDIP-AIP and including incorporation of GPBP compliance with the prepare and update their to provide TA enhanced JMC No. 1
Budget principles, and alignment of the updated / enhanced PDPFP / CDPs with matching support
CDP/LDIP with the PDPFP/PDIP CDP / LDIP manual(s) LDIPs from which AIPs are TA for capacitation
derived of OA ROs on PFM
• Issue policy mandating OAs Structure tools
(DILG, NEDA) to monitor and • Reconstitute the LDC 2019
review preparation of CDP/ based on the updated • PDPFPs / CDPs with Delay in BOM Constant
PDPFP and LDIP CDP / LDIP Manual matching LDIPs from which updating and roll- monitoring by DBM
AIPs are derived prepared out LGU Policy unit
• Issue policy making the PDPFP/ Management Systems and updated by LGUs
CDP and LDIP as requirements • Embed / integrate Absence of Provide support
in the preparation of the local the e-budget system 2022 technical team to and capacitate
budget in the LGU’s regular • Strong sustainable linkage capable of the RIATs to train a
financial information between PDPFP/CDP – LDIP capacitating the core group of PFM
Management Systems management system – AIP and budget ensured in LGUs teams across LGUs
• Revisit and harmonize planning, LGUs to do roll out to
budgeting, project prioritization Competency / People component LGUs
process and tools currently being • Cascade within the
used by DILG, DBM, BLGF, NEDA LGUs and roll-out
to component LGUs
• Harmonize BOM with the CapDev interventions
updated PDPFP/CDP and LDIP received from the
preparation process RIATs
• Develop e-Budget system based
on the enhanced BOM

Competency / People
• Roll out enhanced PDPFP/CDP/
LDIP manuals and provide inter-
agency TA support to LGUs

Convergence
• Develop and institutionalize
mechanisms at the OA regional
level to reinforce harmonization
of the planning-budgeting-
project prioritization process

1
PDPFP – Provincial Development and Physical Framework Plan; CDP – Comprehensive Development Plan; LDIP – Local Development Investment Program; AIP – Annual Investment Program

IMPLEMENTATION STRATEGY 10
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 1: LINKING BUDGET PLANNING TO POLICY PRIORITIES

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

E. VIABILITY OF 1. Promote financial Management Systems Policy 2016 Delays in the development, Develop policy consensus
LOCAL ECONOMIC self-reliance of • Develop a detailed • Issue policy on the • LGUs fully capacitated on pilot-testing and roll-out of
ENTERPRISES LEEs and PUs LGU guide for creation of LEEs/ setting-up and managing LEE guide
(LEEs) AND the setting up, PUs, making the LEEs and PUs
PUBLIC UTILITIES operations and conduct of feasibility
(PUs) divestment of LEEs studies a mandatory 2019 Absence of technical team Provide training / coaching
requirement • Only viable LEEs and
capable of providing training / to OAs to increase level of
• Roll-out guide with PUs are established /
inter-agency TA TA to LGUs knowledge on LEEs
Competency / People maintained
support to LGUs • Cascade within the
LGUs and roll-out 2022
Competency / People to component • Culture of good business
• Provide technical LGUs CapDev adopted in most LGUs
training on all interventions
aspects of the LEE received from the
Guide RIATs

11 IMPLEMENTATION STRATEGY
 Driver of change

Competencies
Roll-out enhanced PDPFP/CDP/LDIP
manuals and provide inetr-agency TA
Structure
support to LGUs
Create inter-agency teams at
Capacitate Regional OAs on how to coach
national and regional levels
LGUs in improving and tracking their PFMIPs
Create and strengthen the LGU
Provide technical training on LEE/feasibility
Policy Unit in DBM
studies based on the enhanced LEE Guide
Clarify and clearly delineate the roles
of RIATs and LGU Policy Units at the
national level in the validation and
monitoring of PFMIPs

Knowledge Management
Establish analytical linkage among
Policies PFMAT, LGFPMS and LGPMS
Enhance JMC No. 1 Systems
Enhance CDP/LDIP Manual Align PDPFP/CDP-LDIP-AIP with the
Mandate DILG and NEDA to Budget
monitor and review CDP/PDPFP Revisit and harmonize planning,
and LDIP preparation budgeting, project priortization
Institutionalize the PDPFP/ processes and tools used by OAs Convergence
CDP as requirements in the Harmonize BOM with the updated
preparation of the local budget Strengthen convergence mechanisms
PDPFP/CDP and LDIP process through the CCD
Develop and institutionalize
mechanisms at the OA-RO to reinforce
harmonization of the planning-
budgeting-project prioritiization
process

Crucial to this cluster is the strengthening and institutionalization of convergence and coordination
among the different OAs as planning and budgeting policies and tools fall under the coverage of not
just one but three different OAs. The enhancement of JMC No. 1 provides a very good starting point
for harmonizing the technical support being provided by OAs to LGUs.

Linking budget planning to policy priorities will be actualized by aligning the development plans
(PDPFP/CDP, LDIP and AIP) with the annual budget. This entails the development and roll-out of
an enhanced CDP/LDIP manual, which adopts a new planning paradigm, and recognizes the unique
characteristics of each LGU.

To sustain the gains of policy-based budgeting, the use of the PFMAT and PFMIPs shall be institutionalized
in the LGUs by continuing to make the conduct of PFM assessments using the PFMAT, and preparation
and implementation of PFMIPs as requisites for entitlement to funds under the Grassroots Participatory
Budgeting Process (GPBP).

Moreover, to gain more support for PFM reforms, appropriate policies on the adoption of PFM Leadership
Awards as well as performance-based incentives shall be developed and issued.

Finally, to ensure that the establishment and operation of LEEs and PUs become an integral part of the
LGU’s development and investment programming, a detailed guide on the setting-up, operation and
divestment of LEEs and PUs shall be developed and rolled-out to LGUs.

IMPLEMENTATION STRATEGY 12
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 2 : DEVELOPING RELIABLE AND PREDICTABLE BUDGETS

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

F. ACCESS TO 1. Regular Policy Policy 2016 Delays in LGU Policy Units in

BUDGET updating • Issue policy defining • Issue policy • Updated budget information dissemination OAs to ensure timely
INFORMATION of budget role of CSOs in reiterating regularly posted by LGUs in reportorial dissemination of
information enforcing the Full compliance with the changes reporting changes
to be publicly Disclosure Policy FDP • Compliance with the Full
posted by (FDP) of the DILG Disclosure Policy
LGUs Absence of Capacitate team
Management Systems technical team to train/coach
• Develop a Structure 2019 capable of LGUs in managing
“laymanized” system • Designate a Unit • Compliance with the Full training LGUs and sustaining
of reporting under the (under the LGU PFM Disclosure Policy on managing information and
FDP Team) to facilitate and sustaining communication
and coordinate • Increased public access to information and systems
• Monitor compliance to compliance with the budget information communication
the FDP FDP systems

• Enhance existing Management Systems Lack of Prepare training /

rewards system of OAs • Develop and 2022 knowledge on the coaching plan to
for compliance with institutionalize • Institutionalized culture of FDP increase level of
FDP “laymanized” system budget transparency knowledge on the
of reporting and full disclosure policy
sharing information • Full public access to budget of DILG across OAs
Competency / People to the public information
• Provide trainings
for managing and Loose monitoring Monitoring report
sustaining information of compliance tightly assessed by
and communication DILG
systems (e.g. webpage
development, network
management, etc.)

2. Expand Policy Policy 2016 Delays in system Speedy access to TA

budget • Issue appropriate • Issue directive • Barangay financial statements development and IT funds
information policy based on mandating electronically archived by roll-out
posted at the analysis of component cities / municipalities Close working
the LGU level consolidated barangay barangays to submit arrangements
to include financial statements the necessary • Barangay financial between BLGF and
a summary financial reports/ statements publicly DILG-NBOO
of Barangay information to accessible and posted by
financial the LGU (Cities / cities/ municipalities in their DILG-NBOO closely
operations Municipalities) websites monitor work
progress.

13 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 2 : DEVELOPING RELIABLE AND PREDICTABLE BUDGETS

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY
AGENDA POLICY TOOLS
(INTERVENTIONS) OUTCOMES
(ISSUES)
OAs LGUs RISK MITIGATION

Management Systems Structure 2019

• Develop system for • Formally identify / • Barangay financial
consolidating barangay designate unit / statements
financial statements at the personnel responsible electronically
LGU level (City / for consolidating archived by cities/
Municipal), and barangay financial municipalities
transmitting electronically information
to DILG and DOF-BLGF • Barangay financial
for sharing with other LGU statements publicly
PFM bodies accessible and
posted by cities /
municipalities in their
websites

2022
• Institutionalized
culture of budget
transparency
3. Electronic 2016
submission of • Barangay financial
consolidated statements
Barangay electronically
financial submitted by cities /
statements municipalities to DILG

2019
• Barangay financial
statements
electronically
submitted by cities /
municipalities to DILG

2022
• Institutionalized
culture of budget
transparency

IMPLEMENTATION STRATEGY 14
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 2 : DEVELOPING RELIABLE AND PREDICTABLE BUDGETS

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

H. LOCAL 1. Improve Policy Policy 2016 Delays in producing Constant monitoring

REVENUE revenue • Amend RA 7160 to expand • Update Local • LGUs capacitated on and rolling-out of BLGF LGU Policy
GENERATION generating tax base of LGUs (provinces) Revenue Code and revenue generation the updated Rev Unit
capacity of Schedule of Market tools Mob Manual/
LGUs • Issue updated guidelines Values Treasury Operations Hiring of additional
on updating of the Local 2019 Manual, Manual on personnel within the
Revenue Code and Schedule Management Systems • Increased local Examination of Local framework of the
of Market Values • Adopt and utilize revenue collections of Treasury Operations, DOF rationalization
revenue generation LGUs Assessment plan.
• Formulate policy guidelines tools - Revenue Examination/
on awards/ incentives for Mobilization 2022 Evaluation Manual,
increased local source Manual, Local • Improved revenue Guidelines on the
revenue collections Treasury Operations management of LGUs Updating of Local Tax
Manual, Manual Codes and Schedule
Management Systems on Examination of Market Values
• Review, enhance and roll-out of Local Treasury
revenue generation tools - Operations Delay in issuance of Prepare communica-
Revenue Mobilization Manual (MELTO), appropriate policy tion plan to increase
(RMM), Local Treasury Assessment on rewards and level of awareness on
Operations Manual (LTOM), Examination incentives for LGUs the value of explor-
Manual on Examination / Evaluation ing innovative ways
of Local Treasury Manual (AEEM to improve revenue
Operations (MELTO), -Computerized) collection
Assessment Examination /
Evaluation Manual (AEEM - • Customize revenue
Computerized) collection strategies
to the local culture
• Develop innovative ways of (e.g. name and
collecting RPT e.g. mobile shame works in
payments and billing; some LGUs but not
in others)
• Implement local treasurer’s
performance rating standard • Implement
along with a competency local treasurer’s
build-up programs performance rating
standard along
• Customize revenue with a competency
collection strategies to build-up programs
local culture( e.g. name and
shame works in some LGUS
but not in others)

15 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 2 : DEVELOPING RELIABLE AND PREDICTABLE BUDGETS

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

Competency / People Competency /

• Roll-out manuals and People
provide TA to LGUs • PFM team cascades
competency
Knowledge and improvements
Learning focused on revenue
• Link databases among generation to all
revenue offices (i.e., critical stakeholders
amongst the assessors, within the LGU
treasurers, accounting
office, LCEs) and OAs
(including BIR), and
among LGUs (Province
and Municipalities)

• Develop casebooks on
best practices of LGUs
with good collection
strategies

Leadership
• Develop rewards
system for
improvement in
revenue collection rate
I. CASH FLOW 1. Improve cash flow Policy Policy 2016 Unclear delineation of Delineate
FORECASTING forecasting and • Issue policy / • Issue directive • LGUs capacitated on responsibility for the responsibilities
management guidelines on adoption mandating the use cash flow forecasting development of tolls between DBM and
of the cash flow of the cash flow and templates for BLGF
forecasting tool forecasting tool 2019 cash inflows and cash
• Increased accuracy of outflows forecasting
Management Systems Structure cash flow forecasts of
• Develop standard • Institutionalize LGUs
templates for cash inter-departmental Absence of technical Strengthen LGU
flow forecasting coordination and 2022 team to assist LGUs in Policy Units of OAs
information sharing • Improved cash the areas of cash flow and RIATs
• Develop Software for amongst local management of LGUs forecasting, analyzing
cash flow forecasting finance offices revenue assignments
template and fiscal incentives

IMPLEMENTATION STRATEGY 16
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 2 : DEVELOPING RELIABLE AND PREDICTABLE BUDGETS

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

Competency / People Management

• Roll-out cash flow Systems
forecasting tool and • Adopt and utilize
software, and provide TA standard templates
to LGUs for cash flow
forecasting

• Embed software
for cash flow
forecasting in the
LGU’s IFMS

Knowledge &
Learning
• Share the LGU’s
cash flow forecast,
including updates/
revisions, with
the different
departments in the
LGU, including the
Local Sanggunian
J. COMPLIANCE 1. Enhance Competency / People Policy 2016 Resistance of LGUs Information
WITH RA NO. procurement • Capacitate DBM ROs • Issue policy • LGUs capacitated on Communication
9184 AND ITS capabilities in the use of the APCPI directing the the APCPI as basis for Education (IEC) to
IRR through training of assessment of preparing Procurement mobilize LGU leagues
trainers (TOT) compliance with Improvement Action as champions of the
the procurement Plans (PIAPs) APCPI
• Specific training support law and guidelines
for the Head of Procuring using the APCPI 2019 Lack of capacity Technical support
Entity (HOPE) and Bids • LGUs implementing of LGUs to prepare to LGUs to enable
and Awards Committee Knowledge & PIAPs plans on time and in production of PIAPs
(BAC) Members and LGUs Learning accordance with the according to the
on procurement policy, • Share the results 2022 required standard standard required
process and procedures and analysis of the • Compliance with RA No.
APCPI assessment 9184 as a result of PIAP
• Specific training with the different implementation by LGUs
support for staff (LGU departments in the
departments) in preparing LGU, including the
the Annual Procurement Local Sanggunian
Plan (APP)

17 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 2 : DEVELOPING RELIABLE AND PREDICTABLE BUDGETS

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

K. AVAILMENT OF 1. Increase Policy Policy 2016 Resistance of Information

COMMON-USE availment of • Issue policy mandating creation • Enter into a MOA with DBM- • LGUs availing LGUs to avail CSE Education
SUPPLIES AND CSE from the of more strategically located PS PS for the setting-up and CSE from DBM- from DBM-PS Communication
EQUIPMENT DBM-PS depots for ease of accessibility operation of a PS Sub-Depot PS (IEC) campaign
FROM THE DBM- in the LGU to mobilize LGU
PROCUREMENT Competency / People leagues support
SERVICE • Advocacy and communication • Issue policy reiterating 2019 for availment of
programs to show that recently compliance with RA No. 9184 • LGUs availing CSE from the
introduced enhancement and AO 17 on procurement of CSE from DBM- DBM-PS
measures have improved CSE from the DBM-PS PS
quality of CSE PS depots not Increase in PS
2022 established as depots to be
• LGUs availing planned prioritized by
CSE from DBM- DBM
PS

IMPLEMENTATION STRATEGY 18
 Competencies
Leadership/Change management
Implement competency improvements
Structure Provide rewards for improvement in focused on revenue and expenditure
revenue collection rate forecasting to all critical stakeholders
Institutionalize interdepartmental
coordination and information sharing Roll-out tools and manuals and
among local finance officers provide TA to LGUs
Strengthen LGU capacity to raise
revenues
Capacitate DBM ROs in the use of the
Systems APCPI
Policies Specific training support for LGUs
Develop a laymanized system of
Define role of CSOs in enforcing reporting under the FDP on procurement policy, process and
the Full Disclosure Policy (FDP) procedures
Monitor compliance with FDP
of the DILG Specific training support for staff (LGU
Enhance existing rewards System of OAs departments) in preparing the Annual
Policy on adoption of a
for compliance with FDP Procurement Plan (APP)
standard revenue and cash flow
forecasting tools and the MTEF Develop system for consolidating Advocacy and communication
Barangay financial statements at the LGU programs to show that recently
Amend RA 7160 to expand tax
level introduced enhancement measures
base of LGUs (provinces)
Develop a uniform revenue forecasting have improved quality of CSE
Update Local Revenue Code &
tool
Schedule of Market Values
Update the BOM to include MTEF and
Review BLGF’s Revenue
capital expenditure planning
Mobilization Manual(RMM),
Local Treasury Operations Harmonize reporting requirements Knowledge Management
Manual (LTOM), Manual on among oversight agencies relative to
Examination of Local Treasury Develop an automated database
expenditure management
Operations (MELTO), and system on revenue collections and
Assessment Examination/ Implement local treasurer’s performance expenditure management
Evaluation Manual (AEEM) rating standard along with a competency
Link databases among revenue offices
build-up programs
Formulate guidelines on awards and among LGUs (Province and
and incentives for increased Implement innovative revenue collection Municipalities) and the OAs (including
local source revenue collections strategies including tracking performance BIR)
of actual revenue collections of LGUs
Mandate creation of more Develop casebooks on best practices
strategically located PS depots Develop standard templates for cash flow of LGUs with good collection
for ease of accessibility forecasting strategies

The development of reliable and predictable budgets requires increased revenue generation and sound
expenditure management, complemented by full disclosure of and access to financial information.

The strategies for increasing revenue generation by LGUs include the following:
1. Development and roll-out of a standard revenue forecasting tool;
2. Enhancement and roll-out of revenue generation tools by the DOF-BLGF;
3. Issuance by OAs and adoption by LGUs of guidelines on the updating of Local Revenue Codes
and Schedule of Market Values;
4. Implementation of the Local Treasurers’ Performance Rating System; and
5. Formulation of policies / guidelines on awards / incentives for increased local revenue generation.

To ensure that funds will be used as intended in an efficient and sustainable manner, the adoption of
the Medium Term Expenditure Framework shall be considered and included in the enhancement of
local budget policies and tools (e.g., BOM). Tools for expenditure forecasting and cash flow forecasting
shall be developed and rolled-out to the LGUs.

Procurement improvement measures shall likewise be adopted and implemented. These include:
1. Capacitating DBM ROs and LGUs on the use of the APCPI;
2. Provision of specific training support to LGUs on procurement policies and procedures, including
the preparation of the Annual Procurement Plan (APP); and
3. Establishment of more PS depots to increase LGU access to CSE.

19 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 3: INTEGRATING TRANSPARENCY AND ACCOUNTABILITY INTO FINANCIAL AND PERFORMANCE MANAGEMENT

POLICY AGENDA POLICY TOOLS IMPLEMENTATION STRATEGY RISK REGISTER

(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

L. CSO 1. Standardize Policy Policy 2016 Resistance of IEC campaigns

ACCREDITATION CSO • Issue harmonized policy on • Issue directive for LGU • Increased CSO some LGUs to demonstrate
PROCESS accreditation CSO accreditation to comply with policy on accreditation by the value of CSO
process CSO accreditation LGUs in accordance Reluctance of participation
Structure with harmonized some CSOs in the budget
• Establish and maintain Management Systems guidelines process
national database of • Ensure that DILG
accredited CSOs participating requirements for CSO 2019 Preference of Strict adherence
in LGU PFM accreditation are met: • Full CSO some LGUs to to Section 108
(a) annual financial accreditation by accredit only of the 1991 LGC
Convergence statement; (b) list of LGUs in accordance selected CSOs that the local
• Present and discuss issuance members; and (c) sector with harmonized Sanggunian shall
at CCD experience guidelines accredit CSOs
before their
2022 representatives
• Institutionalized chosen from
CSO accreditation among the
CSOs become
member of Local
Development
Council (LDC)
M. CSO 1. Capacity Policy Policy 2016 Handbook written Presenting the
PARTICIPATION development • Issuance of “Handbook on Issue policy formally • Accredited CSOs in technical Handbook in a
IN THE BUDGET support for CSO Participation in the adopting the “Handbook oriented on the language and more readable
PROCESS CSOs Budget Process” designed for on CSO Participation in the budget process difficult for many if manner and
use by both CSOs and LGUs. Budget Process” in the LGU not most CSOs to with appropriate
2019 understand illustrations
Competency / People Knowledge and Learning • Actual participation
• RIATs to orient CSOs on the Work with RIATs to design of CSOs in the
”Budget Operations Manual” suitable orientation program budget process
for LGUs for CSOs
2022
• TOT for RIATs to orient LGUS Competencies • Sustained genuine
and CSOs on the “Handbook PFM Team to cascade and constructive
on CSO Participation in the “Handbook on CSO participation of
Budget Process” Participation in the Budget CSOs in budget
Process” to all critical process
• RIATs to orient LGUS and stakeholders in the LGU
CSOs on the “Handbook
on CSO Participation in the LGUs to sustain CSOs
Budget Process” orientation on BOM and
CSO Handbook as and when
Convergence required and to include such
• Draft “Handbook on CSO activity in their PFMIP
Participation in the Budget
Process“ to be presented and
discussed at CCD

IMPLEMENTATION STRATEGY 20
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 3: INTEGRATING TRANSPARENCY AND ACCOUNTABILITY INTO FINANCIAL AND PERFORMANCE MANAGEMENT

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

N. LGU 1. Advocate to Competency / Competency / People 2016

PARTNERSHIP LGUs Citizens’ People • Conduct IEC • CSO participation allowed by the
WITH participation in the • Support to LGUs activities with LGUs
ACCREDITED budget process to intensify accredited CSOs in
CSOs awareness of the the LGUs 2019
policy on CSO • CSO participation allowed by the
participation and • Assist with LGUs
the importance of orientation of
its implementation accredited CSOs on 2022
their participation in • CSO participation in the budget
Knowledge and the budget process process institutionalized by LGUs
Learning
• Establishment
of a database on
good practices
of LGUs on CSO
participation

• Public access to
database via portal
on DILG website

O. CSO ACCESS TO 1. Enforce timely Policy Structure 2016

INFORMATION release of • Issue policy on the • Identify and • Relevant and accurate information
information to role of CSOs in designate a unit is released in a timely manner
CSOs by LGUs enforcing the FDP (under the PFM
Team) to manage 2019
Management and maintain • Relevant and accurate information
Systems financial information is released in a timely manner and
• Develop a being disclosed to utilized by CSOs
“laymanized” the public, including
system of CSOs 2022
reporting under • Relevant and accurate information
the FDP Management Systems is released in a timely manner and
• Adopt and utilized by CSOs
institutionalize
“laymanized” system
of reporting financial
information

21 IMPLEMENTATION STRATEGY
 Convergence
Issuance to be presented and discussed at
CCD
Draft “Handbook on CSO Participation in Management System
the Budget Process“ to be presented and Develop a “laymanized” system of
discussed at CCD reporting under the FDP
Structure
Establishment and
maintenance of national
database of accredited
CSOs participating in
LGU PFM

Knowledge
Learming
Establishment
Policies of database on
good practises
Harmonized policy on CSO of LGUs on CSO
Competencies accreditation participation
RIATs to orient CSOs on the ”Budget “Handbook on CSO Participation in Public access
Operations Manual” for LGUs to database via
the Budget Process” designed for portal on DILG
TOT of RIATs to orient LGUS and use by both CSOs and LGUs. website
CSOs on the “Handbook on CSO
Participation in the Budget Process” Policy on the role of CSOs in
enforcing the FDP
RIATs to orient LGUs and CSOs on
the “Handbook on CSO Participation
in the Budget Process”
Support to LGUs to intensify
awareness of the policy on CSO
participation and the importance of
its implementation

To complement strategies for increasing disclosure of and access to financial information, full and
genuine CSO participation in the planning and budget processes shall be nurtured as the primary
means of integrating transparency and accountability into financial and performance management.

The specific strategies for this cluster include the following:

1. Issuance of a harmonized policy on CSO accreditation with the LGUs;

2. Issuance and roll-out of the Handbook on CSO Participation in the Budget Process;

3. Capacity Development support to both CSOs and LGUs on the budget process and the extent
of CSO participation in the same;

4. IEC activities for CSOs and LGUs on the benefits of citizens’ participation in local governance;
and

5. Issuance of a policy on the role of CSOs in enforcing the FDP of the DILG.

IMPLEMENTATION STRATEGY 22
 LGU PFM IMPLEMENTATION STRATEGY MATRIX

CLUSTER 4: HOLDING MANAGERS TO ACCOUNT

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

P. ACCOUNTS 1. Enforce timely Policy Policy 2016 Lack of CapDev

RECONCILIATION accounts • Issue policy for • Issue policy directing • Timely bank reconciliation understanding interventions to
reconciliation regular review of bank regular review of bank of methods and raise awareness,
statements (online if statements (online if • Timely reconciliation of cash procedures train users and
hard copy has not yet hard copy has not yet advances strengthen
been sent by banks), been sent by banks) supervision and
and guidelines on and adopting LGU 2019 management
reporting discovery of guidelines on reporting • Timely bank reconciliation
irregular transactions discovery of irregular
transactions • Timely reconciliation of cash
advances

2022
• Timely bank reconciliation

• Timely reconciliation of cash

advances
Q. LIQUIDATION OF 1. Enforce timely Competency / People Policy 2016 Lack of CapDev
CASH ADVANCES cash advance • Coach LCEs and local • Issue policy on • Stricter observance of policies understanding interventions to
liquidation officials on PFM basics process for monitoring and rules pertaining to cash of methods and raise awareness,
and accountabilities, cash advances and advances procedures train users and
particularly on enforcing liquidation of strengthen
liquidation of cash cash advances • Timely liquidation of cash supervision and
advances advances management
Management Systems
Management Systems • Adopt M&E 2019
• Strengthen M & E mechanisms on grant • Stricter observance of policies
mechanisms on grant and liquidation of cash and rules pertaining to cash
and liquidation of cash advances advances
advances
Knowledge and 2022
Knowledge and Learning Learning • Stricter observance of policies
• Conduct regular • Conduct regular and rules pertaining to cash
dialogues amongst dialogues amongst advances
local financial officers local financial officers
with RIATs (including with RIATs (including
COA) COA)

23 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 4: HOLDING MANAGERS TO ACCOUNT

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

R. FINANCIAL 1. Harmonization Enabling Policies Management 2016 Each OA CCD

REPORTS of prescribed • Review, revise and Systems • Harmonized financial reports prescribed wants to endorsement
financial harmonize OA • Adopt affordable by OAs retain current of proposed
reports and reporting requirements IFMS in LGU reporting new reporting
templates 2019 requirements requirements
Management Systems Competencies • Harmonized financial reports prescribed
2. Sharing of • Reengineer PFM • Develop by OAs
financial systems at both the sustainable
records within national and local level CapDev program 2022
LGU Offices and harmonize financial for financial • Integrated Financial Management
report requirements of management System (IFMS) developed
OAs and development personnel to ensure
partners, including that LGU will
linking of financial have competent
databases personnel to
operate and
• Develop an FMIS that manage the IFMS
is compliant with
UACS / COA Chart of Knowledge and
Accounts, aligned with Learning
the International Public • Develop a
Sector Accounting Personnel
Standards (IPSS), and Succession Plan
harmonized with the to ensure that the
National Government FMiS will continue
Integrated Financial to be managed
Information System by competent
(GIFMIS) personnel

S. INTERNAL 1. Operationalize Policy Structure 2016 Lack of Orientation

AUDIT UNIT/ IAU / IAS • Issue definitive policy • Establish IAS as a • IAU / IAS operationalized appreciation of and
INTERNAL on the establishment of Unit attached to the relevance awareness
AUDIT SERVICE the IAS the Office of the • Year on year increase in operational IAS of IAS raising on the
(IAU/IAS) LCE reflected in improved quality, frequency role of IAS
Leadership and distribution of reports
• Recognize LCEs who
visibly support the
implementation and
operations

IMPLEMENTATION STRATEGY 24
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 4: HOLDING MANAGERS TO ACCOUNT

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

2019
• IAU / IAS operationalized

• Year on year increase in operational IAS

reflected in improved quality, frequency
and distribution of reports

2022
• IAU / IAS operationalized

• Year on year increase in operational IAS

reflected in improved quality, frequency
and distribution of reports
T. INTENAL AUDIT 1. Capacitate Policy Management Systems 2016 Non-use of Monitor
REPORTS LGUs to • Develop and issue • Adopt the Internal • IAS of LGUs capacitated to conduct the Internal compliance
conduct Internal Audit Audit Manual (IAM) for internal audit and prepare internal audit Audit with the
internal audit Manual for the LGUs LGUs as basis for the reports Manual for preparation of
and prepare preparation of internal LGUs internal audit
internal audit Competency / People audit reports 2019 reports
reports • Conduct TOT for • IAS of LGUs capacitated to conduct
the DBM ROs on Competency / People internal audit and prepare internal audit
the Internal Audit • Cascade the IAM for reports
Manual LGUs to all critical
stakeholders in the 2022
• Capacitate LGUs on LGU • IAS of LGUs capacitated to conduct
the Internal Audit internal audit and prepare internal audit
Manual reports

Convergence
• Present and discuss
draft Internal Audit
Manual at the CCD

25 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 4: HOLDING MANAGERS TO ACCOUNT

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

U. MANAGEMENT 1. Advocate Enabling Policies Policy 2016 Weak LGU Intensify

ACTION ON actions on • Share information • Issue policy on the • Actions are taken on internal audit support for communication,
INTERNAL AUDIT internal audit on audit rules and conduct of regular findings and recommendations addressing consultation and
findings and guidelines / management internal audit dialogue with
recommendations processes / conferences on 2019 findings LGUs
procedures internal audit • Actions are taken on internal audit
findings findings and recommendations
• Increase
management • Increase in audit recommendations
awareness of acted upon by management
the importance
of internal audit 2022
findings • Actions are taken on internal audit
findings and recommendations

• Increase in audit recommendations

acted upon by management

V. EXTERNAL AUDIT 1. Advocate Management Structure 2016 Resistance Orientation

RECOMMENDATION and develop Systems • Institute • Increased compliance with audit from LGUs and awareness
capacity on • Develop mechanisms recommendations raising for LGUs
applicable mechanisms to increase
COA rules and to increase stakeholders’ 2019
regulations stakeholders’ access to timely • Increased compliance with audit
access to timely and accurate recommendations
and accurate external audit
external audit findings 2022
findings • Increased compliance with audit
Knowledge and recommendations
Knowledge and Learning
Learning • Regularly conduct
• Regularly conduct conference on
conference on findings between
findings between end-user and COA
end-user and COA ensuring that
ensuring that audit opinions are
audit opinions are consistent and
consistent and understood by
understood by end-user
end user

IMPLEMENTATION STRATEGY 26
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 4: HOLDING MANAGERS TO ACCOUNT

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

W. ADDRESSING 1. Advocate and Competency / Policy 2016 Resistance Orientation

ADVERSE COA develop capacity People • Issue internal • Increased settlement of disallowances from LGUs and awareness
FINDINGS on applicable • Conduct series guidelines on raising for LGUs
COA rules and of orientations settlement of COA 2019
regulations and coaching / disallowances • Increased settlement of disallowances
mentoring on rules
and regulations Management 2022
and need for Systems • Increased settlement of disallowances
compliance • Institute
mechanisms to
operationalize
internal guidelines
on settlement of
COA disallowances

Competency /
People
• Cascade the rules
and regulations
on settlement of
COA disallowances
to all critical
stakeholders in the
LGU

X. UACS FOR LGUs 1. Establish UACS Policy 2016 Delay in policy Policy dialogue
for LGUs • Issue policy on • UACS established and rolled-out decision on at CCD level
adoption of UACS adoption of
and/or Chart of 2019 UACS for
Accounts for LGUs • UACS adopted by LGUs LGUs

Convergence 2022
• Present to and • UACS adopted by LGUs
discuss issuance
at CCD

27 IMPLEMENTATION STRATEGY
 LGU PFM IMPLEMENTATION STRATEGY MATRIX
CLUSTER 4: HOLDING MANAGERS TO ACCOUNT

IMPLEMENTATION STRATEGY RISK REGISTER

POLICY AGENDA POLICY TOOLS
(ISSUES) (INTERVENTIONS) OUTCOMES
OAs LGUs RISK MITIGATION

Y. BUDGET 1. Institutionalize Policy Policy 2016 Delay in BOM Constant

PERFORMANCE budget • Issue policy • Issue policy • LGUs capacitated on budget updating and monitoring by
MONITORING performance institutionalizing institutionalizing performance monitoring roll-out DBM LGU Policy
monitoring budget budget Unit
performance performance 2019
monitoring monitoring and • Budget performance monitoring
through the BOM evaluation in the implemented by LGUs
LGU
Competency/ 2022
People Structure • Budget performance monitoring
• Capacitate DBM • Formally designate implemented by LGUs
ROs on budget the body/unit that
performance will be responsible
monitoring for budget
performance
• Capacitate monitoring and
LGUs on budget evaluation (LFC)
performance
monitoring Management
through the roll- Systems
out of the BOM • Implement the
BOM, particularly
Management the procedures/
Systems mechanisms
• Update the for budget
Budget performance
Accountability monitoring and
portion of the evaluation
BOM to integrate
the framework
and mechanics
for budget
performance
monitoring

IMPLEMENTATION STRATEGY 28
 Competencies
Coach LCEs and local officials on PFM basics Knowledge and Learning
and accountabilities, particularly on liquidation Conduct regular dialogues amongst
of cash advances local financial officers with Regional
Conduct TOT for the DBM ROS on the Internal Inter-Agency Teams (including COA)
Audit Manual Share information on audit rules and
Capacitate LGUs on the Internal Audit Manual guidelines / processes / procedures

Conduct series of orientations and coaching/ Increase management awareness

mentoring on COA rules and regulations and of the importance of internal audit
need for compliance findings

Capacitate DBM ROs on budget performance Regularly conduct conference on

monitoring findings between end user and COA
Leadership/ Change ensuring that audit opinions are
management Capacitate LGUs on budget performance consistent and understood by end
Recognize LCEs who monitoring through the roll-out of the BOM user
visibly support the
implementation and
operations of IAS

Structure
Establish IAS as
Policy a Unit attached
Systems to the Office of
Issue policy for regular review of the LCE
bank statements and guidelines Strengthen M & E mechanisms
on reporting discovery of irregular on grant and liquidation of cash
transactions advances
Review and harmonize OA reporting Reengineer PFM systems at both the
requirements national and local level and harmonize Convergence
Develop and issue Internal Audit financial reporting requirements of OAs and
development partners including linking of Present to
Manual for the LGUs
financial databases and discuss
Issue policy on adoption of UACS / issuance on
Chart of Accounts for LGUs Develop mechanisms to ensure stakeholders’ IAS at CCD
access to timely, accurate and external audit
Issue policy institutionalizing budget findings Present and
performance monitoring through the discuss Draft
BOM Update the Budget Accountability Internal Audit
portion of the BOM to integrate Manual at the
the framework and mechanics CCD
for budget performance
monitoring

Cognizant that an excellent accounting system becomes ineffectual if internal controls are not in
place, the strengthening of internal and external audits are likewise primary policy agenda in the
Roadmap. To operationalize these policy agenda, the following strategies are provided:

1. Issuance of a definitive policy on the establishment of IAS in the LGUs;

2. Development and roll-out of an Internal Audit Manual for LGUs;
3. Capacity Development support to and IEC activities for LGUs on internal audit; and
4. IEC activities for LGUs on pertinent COA rules and regulations.

To institutionalize the culture of utmost accountability in the LGUs, budget performance

monitoring shall be institutionalized by including the framework and mechanics therefor in the
BOM.

29 IMPLEMENTATION STRATEGY
2.3 PRIORITIZING THE
IMPLEMENTATION STRATEGIES

With the state of LGU PFM reflected by the PFMAT results, the proposed implementation strategies
for the Roadmap will have to be prioritized (what is most important) and sequenced (in what order
should priorities be implemented) in terms of the potential contribution of each strategy to improving
PFMAT ratings for each of the seven (7) critical dimensions.

Having identified the required activities, tasks should be categorized into long-term (2022), medium-
term (2019), and short-term (2016).

The next step is to identify what is feasible and will have the highest value in terms of visible impact
in the shortest time.

Key questions to ask are:

1. Do we have the resources to implement and sustain in terms of people, time and expertise?
Not everything can be done at once as this will result in administrative overload. Strategic
choices, therefore, have to be made.
2. In what order do actions need to be taken? What should we do first, second, third and so
forth?
3. What are the dependencies in our clusters? and
4. What is the local capacity to absorb change? If the pace of a particular activity is a
function of capacity development how long will the proposed activity take before it yields
visible benefits? What is technically most important may not be tactically feasible.

The prioritization and sequencing will have to balance technical with tactical considerations. The
following will therefore have to be taken into weight:

• Technical aspects – what needs to be done to improve PFM, as established in terms of core
LGU PFM issues presented in the Implementation Strategy and the details as to the degree
of importance to potential change in PFMAT ratings.

• Resources – in terms of personnel, financial and other logistics; and

• Political demand – what is wanted and can be supported by key stakeholders most notably
Local Chief Executives and Oversight Agencies Regional Offices.

IMPLEMENTATION STRATEGY 30
 DEPARTMENT OF BUDGET AND MANAGEMENT

TASKFORCE ON THE DEVELOPMENT OF THE LGU PFM REFORM ROADMAP

AND IMPLEMENTATION STRATEGY

Taskforce Leader : Director Julian Ll. Pacificador, Jr. (DBM RO IV-A)

Members : Director Isabel C. Taguinod (DBM RO II)

Director Alfonso B. Bedonia, Jr. (DBM RO VI)
Director Achilles Gerard C. Bravo (DBM RO XIII)

Technical Working Group /

Secretariat : LGU PFM 2 Project Technical Assistance Team
(headed by Mr. Ian Collins)

Project Task Force Support Staff

(headed by Atty. Leila Magda G. Rivera)

31 IMPLEMENTATION STRATEGY
 LGU PFM 2 PROJECT ORGANIZATION
PROJECT STEERING COMMITTEE

Chair Secretary Florencio B. Abad, DBM

Undersecretary Mario L. Relampagos, DBM (Alternate, December 2012 – May 2014)

Assistant Secretary Janet B. Abuel, DBM (Alternate, May 2014 – present)

Undersecretary Jeremias N. Paul, DOF

Executive Director Salvador M. del Castillo, DOF-BLGF (Alternate)
Members
Undersecretary Austere A. Panadero, DILG
Director Anna Liza F. Bonagua, DILG (Alternate)

Deputy Director General Margarita R. Songco, NEDA

Director Remedios S. Endencia, NEDA (Alternate)

Mr. Hans Farnhammer, European Union

Ms. Brenda Candries, European Union (Alternate)

Imprest Administrator Imprest Accounting Officer

Director Julian Ll. Pacificador, Jr. Director Ruby R. Esteban

AGENCY PROJECT TEAMS

PROJECT TASK FORCE
DBM : Ms. Nympha R. Manalastas
PROJECT TASK FORCE PROJECT TECHNICAL WORKING GROUP Ms. Carmencita S. Marasigan
SUPPORT STAFF Mr. John Aries S. Macaspac
TECHNICAL ASSISTANCE TEAM DBM : Director Carmencita N. Delantar
Deputy Imprest Administrator Assistant Director Ruby P. Muro DOF-BLGF : Ms. Ma. Pamela P. Quizon
Atty. Leila Magda G. Rivera Ms. Anabelle C. Garrido
Team Leader DOF : Director Divina M. Corpuz
Mr. Ian D. Collins Administrative Officer Ms. Maria Paz Javier DILG : Mr. Edward T. Templonuevo
Ms. Rowena M. Marte Ms. Melanie P. Angulo
Decentralization Expert DILG : Director Anna Liza F. Bonagua
Dr. Norman R. Ramos Accounting Specialist Assistant Director Dennis D. Villaseñor NEDA: Mr. Orville Edcarson Cardenas
Mr. Ryan Joseph E. Dagdag
Institutional Development Expert NEDA: Director Remedios S. Endencia
Ms. Mary Geraldine C. Naraja Cashier Mr. Alih Faisal Abdul
Ms. Mary Joy M. Ciriaco

Administrative Assistant
Mr. Lemuel Dizon

Administrative Assistant
Ms. Ma. Gina C. Manuel IMPLEMENTATION STRATEGY 32