FY2009

FY2010
!
!

!
!

FY2011

FY2012

Anong
Iskor ng
yong
Bayan?

LGU FISCAL SUSTAINABILITY SCORECARD

Financial Management Performance
Review for Local Government Units

Declining, <1%
locally sourced
income to GDP

0.91%

0.89%
0.86%
0.80%

2009

2010

2011

2012

Perspective
!

Supervision of

Assessment of scal

revenue operations

indicators necessary for

of all LGUs

exercise of mandate

Monitor and support

Agency has to have a

the implementation
of policies and
measures on local
revenue
administration

systematic, not
sporadic, process for
regular assessment of
scal performance of
LGUs

Protection of revenue integrity, data

analytics and metrics
Closer, thorough monitoring of
revenue performance of LGUs
Evidence- and policy-based
performance assessment of local
treasurers and assessors
General housekeeping of reports
Visit in BIR revenue regions / BOC
ports /LGUs

Directives
of the Secretary
of Finance

DOF Department Order No. 08-2011:

Statement of Receipts and Expenditures
Treasurer: eSRE System in the LGUs

Assessor: Quarterly Reports on Real

Property Assessments
LGU Fiscal Performance Monitoring System
BLGFs Local Revenue Targets
SMV Prole and Ordinances of LGUs

Basis for Evaluation

Local Government Unit

FISCAL SUSTAINABILITY

SCORECARD
Directive of the Secretary

Baselining the LGU performance

from FY2009 to FY2012
Validating the LGU data and testing
the integrity of BLGF reports
Compliance monitoring on DOF
directives and other relevant
regulations
Publication of LGU performance
Policy setting purposes

Indicators
Pass

Financial (Quantitative) - 90%

KRA 1 - Revenue Generation Capacity
KRA 2 - Local Collection Growth

Fail

KRA 3 - Expenditure Management

!

100%

Non-Financial (Qualitative) - 10%

KRA 4 - 6 - Reportorial Compliance

Financial Indicators
KRA 1. Revenue Generation Capacity
Indicator
1.1 Regular income level
1.2 Local revenue level
1.3 Local revenue growth

Benchmark

Initial Rating

Mean by Income
Class; Graduated

Very Good, Good,

Fair, Needing
Improvement, Poor

Actual Growth

+YoY% or -YoY%

Mean by LGU
Type; Graduated

% Share to Annual
Regular Income

1.4 Dependence on locally sourced income

1.5 Dependence on IRA
1.6 Dependence on Other Shares from
National Tax Collection
Maximum Score

60

TERMINOLOGIES
Annual Regular Income. Sum of locally sourced income (excluding
SEF), current years IRA and other shares from national tax collection.
Other income/receipts were not considered due to reporting errors.
Locally sourced income. Total of real property tax (basic), tax on
business, other taxes, regulatory fees, user charges, and business
income from economic enterprise
Tax Revenues. Total revenues collected from real property tax
(basic), business tax, other taxes
Non-Tax Revenues. Total of regulatory fees, user charges, and
income from economic enterprise. Other income/receipts were not
considered due to reporting errors

TERMINOLOGIES
Dependence on Locally Sourced Income. % share of local revenues
(excluding Other Receipts) to total regular income
Dependence on IRA. % share of current IRA (excluding monetised
IRA) to total regular income
Dependence on Other Shares from National Tax Collection. %
share of other shares from national tax collection (economic zone,
EVAT, national wealth, tobacco excise tax, PAGCOR/PCSO) to total
regular income
Per Capita. Based on 2010 Census, with 1.82% projected annual
growth for FY2011 and FY2012.

TERMINOLOGIES
Use of IRA for local development projects. At least 20% of IRA should
be utilized for local development projects (LGC Sec. 287)
Limitation on Expenditure for Personal Services. Not to exceed 45%
of the annual regular income for the next preceding scal year for 1st 3rd income class LGUs or 55% for 4th or lower income class LGUs (LGC
Sec. 325a)
Limitation on Debt Service Ratio. Expenditures for debt servicing not
to exceed 20% of the regular income for the scal year (LGC Sec. 324a)
RPT Collection Eciency. Ratio of current year collections of basic RPT
(including nes and penalties for current year only) with preceding
years collectible basic RPT, as reected in the QRRPA.

Financial Indicators
KRA 1. Revenue Generation Capacity
Indicator

1.1 Regular income level

Parameter

Rating

Mean + 50%

Very Good

Mean + 25%

Good

Mean

Fair

Mean - 25%

Needs Improvement

Mean - 50%

Poor

Maximum Score

Indicator

1.2 Local Revenue Level

Points

Parameter

Rating

Mean + 50%

Very Good

10

Mean + 25%

Good

Mean

Fair

Mean - 25%

Needs Improvement

Mean - 50%

Poor

Maximum Score

Points

10

Financial Indicators
KRA 1. Revenue Generation Capacity
Indicator

Parameter

1.3 Local Revenue Growth

Actual Growth
Total Local Collections

Rating

Weight

>20%

20

>10%

15

>5%

10

>0%

<0%

Maximum Score

20

Main Driver of Performance Assessment

Goal is to ensure stable or progressive collection growth

Financial Indicators
KRA 1. Revenue Generation Capacity
Indicator

1.4 Dependence
on Locally
Souced Income

Parameter

Rating

P >=20% & C>=50%

Very Good

10

Good

Fair

Needs Improvement

Poor

P >=15% but <20%

C>=40% but <50%
P >=10% but <15%
C>=30% but <40%
P >=5% but <10%
C>=20% but <30%
P>0% but <5%
C>0% but <20%

Maximum Score

Average Dependence on LSI

Provinces: 10% - 15%
Cities: 30% - 40%

Weight

10

Financial Indicators
KRA 1. Revenue Generation Capacity
Indicator

Parameter

1.5 Dependence
on IRA

P<75%
C<50%
P >=75% but <80%
C>=50% but <60%
P >=80% but <85%
C>=60% but <70%
P >=85% but <90%
C>=70% but <80%
P>90%
C>80%

Rating

Weight

Very Low

10

Low

Fair

High

Very High

Maximum Score

Average Dependence on IRA

Provinces: 80% - 85%
Cities: 60% - 70%

10

Financial Indicators
KRA 1. Revenue Generation Capacity
Indicator

1.6 Dependence
on Other Shares
from National Tax
Collection

Parameter

Rating

<10%

Low

>=10% but <15%

Fair

>=15% but <30%

High

>30%

Very High

Maximum Score

Weight

Financial Indicators
KRA 2. Local Collection Growth
Indicator

Benchmark

Actual Growth

2.1 Tax Revenues

Total Local Collections

Rating
>20%

>10%

>5%

>0%

<0%

Maximum Score

2.2 Non-Tax Revenues

Actual Growth
Total Local Collections

Points

>20%

>10%

>5%

>0%

<0%

Maximum Score

Main Driver of Performance Assessment

Goal is to ensure stable or progressive collection growth

Financial Indicators
KRA 3. Expenditure Management
Indicator
3.1 Expenditure Per
Capita

3.2 Use of IRA for

Local Devt. Project
3.3 Limitation on
Expenditure for PS
3.4 Limitation on Debt
Service

Parameter

Rating

Weight

Mean + 50%

Very High

Mean + 25%

High

Mean

Fair

Mean - 25%

Low

Mean - 50%

Very Low

>=20%

Passed

<20%

Failed

<= 45% (H); <= 55% (L)

Passed

>= 45% (H); >= 55% (L)

Failed

<=20%

Passed

>20%

Failed

Focusing on Actual Utilization, not Budget Appropriation

Statutory Obligations and Limitations

Non-Financial Indicators
KRA 4. eSRE
Indicator

Submission of
Timely and
Accurate eSRE

Parameter

Rating

Weight

Timely and No Rejection

Compliant

Timely with Rejection; No

Rejection but not Timely

Non-Compliant

No Report Submitted

No Report

Maximum Score

7 out of 10 Treasurers Did Not Submit SRE on Time

Non-Financial Indicators
KRA 5. SMV Updating
Indicator
Regular Updating
of SMV and
Conduct of
General Revision
of Property
Assessments

Parameter

Rating

Weight

SMV is Current & Eective

Compliant

SMV is Outdated by at
Least 3 Years

Non-Compliant

Maximum Score

15 Cities & Provinces have new SMVs eective 2014

But 130+ More Are Already DUE

Non-Financial Indicators
KRA 6. Quarterly Report on Real Property Assessments (QRRPA)
Indicator

Submission of
Timely and
Accurate
QRRPA

Parameter

Rating

Weight

Complete according to form

Compliant

Incomplete according to form

Non-Compliant

1.5

No Report Submitted

No Report

Maximum Score

Is the assessor correctly accomplishing the QRRPA?

Are there properties with restrictions? Is the land area correct?

Final Rating
KRA
Quantitative

Max Score
90

1. Revenue Generation Capacity

60

2. Local Collection Growth

20

3. Expenditure Management

10

Qualitative

10
4. Timely & Accurate eSRE

5. Current & Updated SMV

6. Timely & Accurate QRRPA

Final Rating
Weighted
Score
>=80

>=70 but <80

>=60 but <70

>=50 but <60

>=40 but <50

<40

Grade
A
B

Rating
Excellent
Very Good

Remarks
All revenue and expenditure indicators are strong; full
compliance with reportorial requirements
Most of the revenue and expenditure indicators are met
very satisfactorily; high compliance with reportorial
requirements

Good

Most of the revenue and expenditure indicators are above

average performance; minimum level of compliance with
reportorial requirements

Average

Revenue and expenditure indicators have not signicantly

changed and are generally on the average; minimum level
of compliance with reportorial requirements

Needs
Improvement

Almost all of the key revenue and expenditure indicators

need to be improved and validated; minimum reportorial
requirements are not complied with

Poor

All revenue and expenditure indicators are way below the

benchmarks; key reportorial requirements are incomplete/
not submitted and/or require further validation

METHODOLOGY
Utilized the BLGF SRE of all provinces, cities, and municipalities, and
the QRRPA of provinces and cities from FY2009-FY2012
Run date of SRE: 15 August 2013
Processed individual SRE elds per LGU (initially cities and provinces)
through pivot tables
Benchmarking and national comparison through DOF income
classication as of 2008
One-on-one data- and process- validation with LGUs and BLGF regions

Sample Preliminary Scorecard

xxx

Sample Preliminary Scorecard

RPT Collection Eciency

& YoY Collection Performance

Adjustments in the Municipal Scorecard

No rating on QRRPA due to limited data (only consolidated QRRPA from the
province is submitted to BLGF)

No rating on SMV (for provinces only, but this is noted in the scorecard)
Instead of 3 indicators for Qualitative, only SRE is rated
10% for Compliant SRE: Timely and without Rejections
5% for Non-Compliant: Incomplete, With Rejections, Not Timely
0% for No Report: No approved/submitted report as of 15 Aug 2013
Automatic 5 points on assessment for PS Limitation in 2010

1. Region 1 (Ilocos) - 30 Aug

9. Region 10 (North Mindanao) - 27 Nov

2. Region 3 (Central Luzon) - 5 Sep

10. Region 13 (Caraga) - 3 Dec

3. Region 7 (Central Visayas) - 9 Oct

11. Region 9 (Zamboanga) - 3 Dec

4. Region 4A (Calabarzon) - 22 Oct

12. Region 2 (Cagayan) - 4 Dec

5. Region 6 (W Visayas) - 23 Oct

13. CAR - 6 Dec

6. Region 5 (Bicol) - 19 Nov

14. ARMM - 26 Nov (w/ R12) & 3 Dec (w/ R9)

7. Region 11 (Davao) - 26 Nov

15. NCR - 13 Dec

8. Region 12 (Soccksagren) - 26 Nov

16. R8 & R4B - 3 Feb & 5 Feb

Completed
LGU
Meetings
&
Discussions
Completed LGU Meetings & Discussions

In the pipeline
Launching of Iskor Ng Yong Bayan website, to be linked with
Open Data Initiative
Release by 1st Quarter of FY2014; LCEs and DILG will be informed
Credit rating for LGUs will be next
Continuous monitoring and improvement of SREs integrity
Linked with improved income classication
Municipalities are next by April 2013
Regional BLGF sta to be trained on LGU FSS

2
0
1
3

P
E
R
F
O
R
M
A
N
C
E

Local revenue targets/budget estimates

LBP Form No. 2 pursuant to DBM LBM No. 67

Summary of real property tax delinquencies

By Barangay for Cities

By Municipality for Provinces

Detailed QRRPA, including properties with

restrictions

Existing Local Revenue Code and other relevant

tax or revenue ordinance

Compliance Report on Department Order No. 9-08

Thank You!

!
!

LGU FISCAL SUSTAINABILITY SCORECARD

Financial Management Performance
Review for Local Government Units