Republic of the Philippines

PROVINCE OF PALAWAN
Provincial Legal Office
3F RVM, Jr. Memorial Building
Capitol Compound, Puerto Princesa City

1st Endorsement
PLC Nos. 2018-0004 and 2018-0005
February 20, 2018

Respectfully returned to MS. ANGELA RODRIGUEZ-PEÑA, Secretary to the Sanggunian,

Office of the Sangguniang Panlalawigan ng Palawan, the herein Municipal Resolution No. 157-
A, Series of 2017, Municipal Ordinance No. 155-A, Series of 2017 and Municipal Resolution
No. 156, Series of 2017 entitled,

1. MUNICIPAL RESOLUTION NO. 157-A, SERIES OF 2017

“A RESOLUTION FAVOURABLY ENDORSING THE REALIGNMENT OF

THE UNUTILIZED/SAVINGS OF 20% DEVELOPMENT FUND FROM CY 2013,
2014 AND 2016 AMOUNTING TO NINETEEN MILLION NINE HUNDRED
EIGHTEEN THOUSAND FOUR HUNDRED SEVENTY EIGHT AND 72/100
(PHP 19, 918,478.72) PESOS FOR THE FOLLOWING PROJECTS:

1. NAPUAGAN ELEMENTARY SCHOOL PHP

300,000.00
2. LELEBQUEN ELEMENTARY SCHOOL
400,000.00
3. CLAUDIO SANDOVAL ELEM. SCHOOL 200,000.00
4. MT. TAPYAS ENVIRONMENTAL VIEW DECK REHAB 1,500,000.00
5. SERVICE VEHICLE 500,000.00
6. MUNICIPAL BUILDING ANNEX (3 STOREY)
11,518,478.72
7. REPAIR AND MAINTENANCE OF ROADS…
2,000,000.00
8. LEGISLATIVE BUILDING ANNEX 2,500,000.00
9. CIRCUMFERENTIAL FENCING…. 1,000,000,00
-------------------
PHP 19,918,478.72
2. MUNICIPAL ORDINANCE NO. 155-A, SERIES OF 2017

“AN ORDINANCE APPROVING AND CONFIRMING THE REALIGNMENT

OF THE UNUTILIZED/SAVINGS OF 20% DEVELOPMENT FUND FROM CY
2013, 2014 AND 2016 AMOUNTING TO NINETEEN MILLION NINE HUNDRED
EIGHTEEN THOUSAND FOUR HUNDRED SEVENTY EIGHT AND 72/100
(PHP 19,918,478.72) PESOS FOR VARIOUS MUNICIPAL PROJECTS:

3. MUNICIPAL RESOLUTION NO. 156. SERIES OF 2017

“A RESOLUTION FAVOURABLY ENDORSING THE REALIGNMENT OF

THE AMOUNT OF FOUR MILLION (PHP4,000,000.00) PESOS FROM THE
BMONC PROJECT UNDER THE 20% DEVELOPMENT FUND CY 2017 TO
THE FOLLOWING PROJECTS:

1. CONST. OF BARANGAY HEALTH STATION (SAN JOSE) PHP

2,000,000.00
2. CONST. OF BARANGAY HEALTH STATION (TURDA) 2,000,000.00
---------------------
PHP 4,000,000.00

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The Local Government Code (LGC) empowers the Sangguniang Bayan to enact ordinances and
resolutions and appropriate funds for the general welfare of the municipality pursuant to its
Section 447 (a)(2)(i), and we quote:

“Section 447. Powers, Duties, Functions and Compensation. -

(a) The sangguniang bayan, as the legislative body of the municipality, shall enact ordinances,
approve resolutions and appropriate funds for the general welfare of the municipality and its
inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers
of the municipality as provided for under Section 22 of this Code, and shall:

(2) Generate and maximize the use of resources and revenues for the development plans,
program objectives and priorities of the municipality as provided for under Section 18 of
this Code with particular attention to agro-industrial development and countryside
growth and progress, and relative thereto, shall:

(i) Approve the annual and supplemental budgets of the municipal government
and appropriate funds for specific programs, projects, services and activities of
the municipality, or for other purposes not contrary to law, in order to promote
the general welfare of the municipality and its inhabitants.”

The same Code grants that every LGUs shall appropriate in its annual budget no less than twenty
percent (20%) of its annual IRA for development projects. Section 287 provides, and we quote:

“Section 287. Local Development Projects. - Each local government unit shall

appropriate in its annual budget no less than twenty percent (20%) of its annual
internal revenue allotment for development projects. Copies of the development plans of
local government units shall be furnished the Department of Interior and Local
Government.”

Also under its Section 322, it provides for the reversion of unexpended balances of
appropriations, and we quote:

“Section 322. Reversion of Unexpended Balances of Appropriations, Continuing

Appropriations. - Unexpended balances of appropriations authorized in the annual
appropriations ordinance shall revert to the unappropriated surplus of the general
fund at the end of the fiscal year and shall not thereafter be available for the expenditure
except by subsequent enactment. However, appropriations for capital outlays shall
continue and remain valid until fully spent, reverted or the project is completed.
Reversions of continuing appropriations shall not be allowed unless obligations therefor
have been fully paid or otherwise settled.”

Hence, the unexpended balances of appropriations for the previous fiscal year shall be reverted
to the unappropriated surplus of the current general fund and shall be made available for
expenditure through the enactment of a latest legislative measure.

Special accounts maintained in the general fund consist of development projects funded from the
share of the local government unit concerned in the internal revenue allotment. Section 313 (c) of
the LGC provides and we quote:

“Section 313. Special Accounts to be Maintained in the General Fund. - Local

government units shall maintain special accounts in the general fund for the following:

(c) Development projects funded from the share of the local government unit
concerned in the internal revenue allotment and such other special accounts
which may be created by law or ordinance.”

The Department of the Interior and Local Government (DILG) and the Department of Budget
and Management (DBM) issued a Joint Memorandum Circular (JMC) No. 2017-1 dated
February 22, 2017 for an updated guidelines on the appropriation and utilization of the Twenty
Percent (20%) of the annual internal revenue allotment (IRA) for Development Projects and to
enhance transparency and accountability in the local government units’ utilization of their
respective 20% Development Funds (DFs).

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The said JMC had enumerated the local projects which are not allowed to be charged against the
20% DF. Under its Item No. 4.0 the purchase, maintenance or repair of motor vehicles or motor
cycles, other than those specified in item 3.0 (allowable development projects) are not allowed to
be charged to the 20% DF.

Section 336 of the LGC provides that funds shall be available exclusively for the specific
purpose for which they have been appropriated. No ordinance shall be passed authorizing any
transfer of appropriations from one item to another. However, the local chief executive or the
presiding officer of the sanggunian concerned may, by ordinance, be authorized to augment any
item in the approved annual budget for their respective offices from savings in other items within
the same expense class of their respective appropriations.

The COA Circular No. 2012-003 dated October 29, 2012 is reminding us to use properly all
government funds and property, and we must always adhere to established rules, regulations,
procedural guidelines, policies, principles or practices that have gained recognition in laws. The
said circular prohibits irregular appropriations or expenditures, viz:

“3.1  Definition. The term “irregular expenditure” signifies an expenditure incurred

without adhering to established rules, regulations, procedural guidelines, policies,
principles or practices that have gained recognition in laws. Irregular expenditures are
incurred if funds are disbursed without conforming with prescribe usages and rules of
discipline. There is no observance of an established pattern, course, and mode of action,
behavior, or conduct in the incurrence of an irregular expenditure. A transaction
conducted in a manner that deviates or departs from, or which does not comply with
standards set is deemed irregular. A transaction which fails to follow or violets
appropriate rules of procedure is, likewise, irregular.”

Based from the foregoing, Municipal Resolution No. 156, series of 2017 appears to be valid;
however, it must be put in to an ordinance while Municipal Resolution No. 157-A, series of 2017
and Municipal Ordinance No. 155-A, series of 2017 must exclude the purchase of service vehicle
pursuant to DILG-DBM JMC 2017-1.

Respectfully submitted.

FOR AND BY THE AUTHORITY OF THE

OIC - PROVINCIAL LEGAL OFFICER

ATTY. ARIEL A. ABIS

Attorney IV

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