LGR - BOM - 2016Edition-BUDGET REVIEW

BUDGET REVIEW
Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
BUDGET REVIEW
is the third phase of the local government
budget process.
Its primary purpose is to determine

whether the Appropriation Ordinance has
complied with the budgetary
requirements and general limitations set
forth in the Local Government Code of
1991, as well as provisions of other
applicable laws.
BUDGET REVIEW
It starts from the time the reviewing

authority receives the Appropriation
Ordinance for review and ends with the
issuance of the review action.

LEGAL BASES OF BUDGET REVIEW
The Department of Budget and
Management shall review ordinances
authorizing the annual or supplemental
appropriations of provinces, highly-
urbanized cities, independent component
cities, and municipalities within the
Metropolitan Manila Area in accordance
with Section 327 of RA No. 7160. (Section
326 of RA 7160)
LEGAL BASES OF BUDGET REVIEW
The Sangguniang Panlalawigan shall

review the ordinance authorizing annual
or supplemental appropriations of
component cities and municipalities in the
same manner and within the same period
prescribed for the review of other
ordinances. (Section 327 of RA 7160)

WHAT ARE TO BE REVIEWED?
APPROPRIATIONS ORDINANCE
• ANNUAL BUDGET
• SUPPLEMENTAL
BUDGET
KEY PLAYERS IN BUDGET REVIEW
•Secretary to the Sanggunian

•Sangguniang Panlalawigan
•Provincial Finance Committee
•Department of Budget and
Management Regional Office
•CSOs and Private Sector

• Secretary to the Sanggunian – Within three
(3) days after approval of the ordinance
authorizing annual or supplemental
appropriations, the Secretary to the
Sanggunian shall forward the said
ordinance to the DBM RO or Sangguniang
Panlalawigan for review (Section 56 in
relations with Sections 326 and 327, RA
7160).

WHO ARE THE REVIEWING BODIES
1. DEPARTMENT OF BUDGET AND
MANAGEMENT REGIONAL OFFICES
• provinces, highly-urbanized cities,
municipalities in Metro Manila
2. SANGGUNIANG PANLALAWIGAN
for component cities and
municipalities

3. The Sangguniang Panlungsod or Sangguniang
Bayan concerned shall have the power to
review the barangay ordinance authorizing the
annual appropriations to ensure that the
provisions of the RA 7160 are complied with
(Sec. 333, RA 7160).
Budget Review (Nov. 11 – Dec. 15)

• Provincial Finance Committee – shall
assist the Sangguniang Panlalawigan in
the review and evaluation of budgets of
component cities and municipalities and
recommend the appropriate action
thereon (Section 316 (f), RA 7160).

•CSOs and Private Sector: The
CSOs shall check the LGU
compliance with the review
following the Handbook on the
Participation of CSOs in the
Local Budget Process.

REGLEMENTARY PERIOD OF
REVIEW
•Within 90 days from receipt

of copies of such ordinances
(Section 327, RA No. 7160).

The Budget Review Flow Chart

Steps in Budget Review
Step 1 – CHECK THE AO WITH THE

APPENDED BUDGET DOCUMENTS
1.1 FOR ANNUAL BUDGETS

(use LBR Form No. 1A)

Steps in Budget Review
Step 1 – CHECK THE AO WITH THE
APPENDED BUDGET DOCUMENTS
1.2 FOR SUPPLEMENTAL BUDGET

(use LBR Form No. 1B)

All Appropriation Ordinance must
carry the seal of the LGU.
Incomplete Submission - Lacks

required documents or signatures

What to do with incomplete
Submission?
AO shall not be reviewed and shall be
officially returned, in writing, by the
DBM RO or Sangguniang Panlalawigan
to the LGU concerned through its
Secretary to the Sanggunian, requiring
the resubmission of the same with the
necessary budget documents and/or
signatures.
Step 2 – Review the Appropriation
Ordinance
Existing Salary vs. Maximum Rate Fixed
for the Position (Sec. 325(b) RA 7160)
No Local Fund Use for increase or

adjustment of Salaries/Wages of
National Government Employee (Sec.
325(c) RA 7160)

Ordinance
Abolition/creation vs. existing provisions
of RA 7160 and CSC rules (Sec. 325(d)
RA 7160)
All positions with incumbents covered with

adequate appropriations (Sec. 325(e)
RA 7160)

Ordinance
No changes in
designation/nomenclature of
position =
promotion/demotion/increase/de
crease in compensation (Sec.
325(f) RA 7160)

Step 2 – Review the Appropriation Ordinance
No retroactive effect on creation of

positions/salary increases/
adjustments (Sec. 325(g) RA 7160)
Projects in AO vs approved AIP (Sec.

325(i) RA 7160)
Items in AO vs existing laws

Step 2 – Review the Appropriation Ordinance
Use LBR No. 3A in determining

deficiency in budgetary requirements
and limitations and LBR No. 3B in
identifying compliance with the
provisions of Local Budget Circular
covering the BOM for LGUs, 2016
Edition.

Step 3 – Issue the Review Action
Prepare the Table Recapitulating

the Findings and Possible
Review Action (LBR Form No.
2)

____________________
Reviewing Officer
Review Actions
1. Declare the AO operative in its
entirety, or
2. Declare the AO operative in its entirety
subject to conditions, or
3. Declare the AO inoperative in its
entirety, or
4. Declare the AO inoperative in part.

Review Actions
1. Declare the AO Operative in its
OOperative in its entirety
When it fully complies with the

budgetary requirements and
general limitations set forth
under RA 7160 (Section 327, RA
No. 7160)

Review Actions
2. Declare the AO Operative in its Entirety
subject to conditions
Items require prior clearance or
documentation
Items require prior approval by appropriate
authorities
Some amounts deficient
Other similar conditions

Review Actions
3. Declare the AO Inoperative in its
Entirety
• Appropriation > Estimated Income
• Non-provision or insufficient
provision of the budgetary
requirements

Review Actions
3. Declare the AO Inoperative in its
Entirety
• Non-provision or insufficient
provision of the development
fund
• All projects in AO different from
AIP
Review Actions
3. Declare the AO Inoperative in its Entirety
• AIP is approved/adopted by the
Sanggunian after the enactment of the
Appropriation Ordinance for Annual
Budget
• No sufficient loan amortization

Review Actions
4. Declare the AO Inoperative in Part
• Amounts contrary to limitation (e.g. PS

limitation)
• Amounts in excess of the allowable
level (e.g. amount for a particular PPA is
higher than the amount in the AIP
• No legal basis for some items

Effects of the Review Action
1.AO Declared Operative in its
Entirety
AO continues to be in full
force and effect

2. AO Declared Operative in its Entirety
subject to conditions
Items not subject to conditions shall
continue to be in full force and effect
Items subject to conditions shall take
effect upon compliance

3. AO is declared Inoperative in its Entirety
• AO loses force and effect
• If annual budget > reenacted budget
• Local Treasurer stops disbursements
• Budget to be revised
• If supplemental budget, local
treasurer stops disbursements

4. AO Declared Inoperative in part
Local Treasurer stops disbursement on
funds declared inoperative,
disallowed or reduced
Unaffected items shall continue to be in
full force and effect

Principles in Budget Review
1. Reglementary Period of Review
2. Presumption of regularity
3. Doctrine of operative fact
4. Nature of the review action
5. Review actions and their effects
6. Forms of the review action/ Stamp of
review
Republic of the Philippines 52

Reglementary Period of Review
for appropriation ordinances of provinces,
cities and municipalities – 90 days
for appropriation ordinances of barangays –
60 days
if the budget submitted is officially returned
by the reviewing body for additional
documentation, the counting of the
reglementary period of review starts at the
time the budget is officially submitted.
Presumption of Regularity
An appropriation ordinance submitted for
statutory review carries with it a presumption
of regularity not only as to its contents but
also as to its enactment by the sanggunian.
Contents are proper until ruled otherwise in
the review
Appropriation ordinance regular on its face

When is an appropriation
ordinance regular on its face?
Requirements:
1. Attestation of the Secretary to the
Sanggunian
2. Approval of the Local Chief Executive by
affixing his signature on each and every
page thereof
3. Passed by a majority of all the members
of the Sanggunian

Doctrine of Operative Fact
An appropriation ordinance submitted for
review, that has a pending case in a judicial
court but where no restraining order has
been issued, will have to be acted upon by
the reviewing body. The reviewed budget
is deemed operative and shall continue to
be in full force and effect unless declared
otherwise by the court.

Nature of the Review Action
Does not amend the act of the Sanggunian as
embodied in the AO
Determines whether the Appropriation Ordinance
submitted has complied with the provisions of law
Findings are merely enumerations of infractions
of budgetary requirements, general limitations
and other provisions of RA 7160 and other
applicable laws

Recommendations of what specific actions
the lower Sanggunian will do to comply
with the provisions of law. The lower
Sanggunian shall take immediate action to
correct or remedy any identified infractions.
Provision for deficiencies to be acted upon
in the next supplemental budget

It does not authorize an item that is

specifically prohibited by law
Does not affect the effectivity of the

Appropriation Ordinance

Stamp of Review
To be affixed on every page of the
reviewed AO
Duly signed by the RD for DBM
Duly signed by the Secretary to the

Sanggunian and/or the Presiding Officer

Return of the Reviewed AO
Advise the Sanggunian

concerned through the LCE
within the 90-day reglementary
period

Failure to Review the AO
The AO is deemed to have been
reviewed in accordance with law.
The AO shall continue to be in full force

and effect.

Penalty for Enforcement of
Disapproved
Ordinances/Resolutions
Suspension or dismissal of
the official or employee

BUDGET OPERATIONS MANUAL
FOR LOCAL GOVERNMENT UNITS
2016 EDITION
Thank You!


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BUDGET REVIEW

Republic of the Philippines

Its primary purpose is to determine

It starts from the time the reviewing

Republic of the Philippines

The Sangguniang Panlalawigan shall

Republic of the Philippines

•Secretary to the Sanggunian

Republic of the Philippines

Republic of the Philippines

Republic of the Philippines

Budget Review (Nov. 11 – Dec. 15)

Republic of the Philippines

Republic of the Philippines

Republic of the Philippines

•Within 90 days from receipt

Republic of the Philippines

Republic of the Philippines

Step 1 – CHECK THE AO WITH THE

1.1 FOR ANNUAL BUDGETS

Republic of the Philippines

1.2 FOR SUPPLEMENTAL BUDGET

Republic of the Philippines

Incomplete Submission - Lacks

Republic of the Philippines

No Local Fund Use for increase or

Republic of the Philippines

All positions with incumbents covered with

Republic of the Philippines

Republic of the Philippines

No retroactive effect on creation of

Projects in AO vs approved AIP (Sec.

Items in AO vs existing laws

Republic of the Philippines

Use LBR No. 3A in determining

Republic of the Philippines

Prepare the Table Recapitulating

Republic of the Philippines

Republic of the Philippines

When it fully complies with the

Republic of the Philippines

Republic of the Philippines

Republic of the Philippines

Republic of the Philippines

• Amounts contrary to limitation (e.g. PS

Republic of the Philippines

Republic of the Philippines

Republic of the Philippines

Republic of the Philippines

Republic of the Philippines

Republic of the Philippines 52

Republic of the Philippines 54

Republic of the Philippines 55

Republic of the Philippines 56

Republic of the Philippines

Republic of the Philippines

It does not authorize an item that is

Does not affect the effectivity of the

Republic of the Philippines

Duly signed by the RD for DBM

Duly signed by the Secretary to the

Republic of the Philippines