Vol5 LGU Budget And Expenditure Management Tools

TABLE OF CONTENTS
CHAPTER 1. APPROACHES AND TOOLS IN BUDGET PREPARATION 5-39
Budget Forum
Analyzing LGU Income Trend and Composition
Analyzing LGU Expenditure Trend and Composition
Formulating Multi-Year Revenue Estimates
A. Regular Income
B. Internal Revenue Allotment (IRA)
C. Non-Recurring Income
Setting Expenditure Ceilings
Approaches for Costing Regular Activities
Defining Performance Indicators Using the OPIF (with Table)
A. Clarify the link between PPAs, MFOs and department/office outcomes
B. Specify outcome/s of each LGU department/office
C. Specify the outputs of each LGU department/office
D. Formulate performance indicators
E. Agree on the performance target for each performance indicator
Guide Questions for Evaluating Targets for the Budget Year
Guidelines on Preparing the Local Expenditure Program (with 10 Forms)
Guidelines on Preparing the Budget Message
Guidelines on Preparing the BESF (with 6 Forms)
Summary List of Forms for the Budget Preparation Phase
Budget of Expenditures and Sources of Financing (BESF)
1. Summary of Financial Statement on Actual Receipts and Expenditures
2. Estimated Expenditure by PPA and by Sector
3. Actual and Estimated Expenditure Program by Sector/Office
4. Staffing Summary
5. Summary Statement of Statutory and Contractual Obligations and Budgetary
Requirements
6. Summary Statement of Long-term Obligations and Indebtedness
Local Budget Preparation (LBP) Forms
• LBP Form No. 1 - Certified Statement of Receipts
• LBP Form No. 2 - Certified Statement of Receipts and Expenditures
• LBP Form No. 3 - Programmed Appropriation and Obligation by Object of
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Expenditure
• LBP Form No. 4 - Personnel Schedule
• LBP Form No. 5 - Functional Statements, Objectives and Expected Results
• LBP Form No. 6 - Statement of Debt Service
• LBP Form No. 7 - Statement of Statutory/Contractual Obligations and
Budgetary Requirements
• LBP Form No. 8 - Statement of Fund Operation
Supplemental Budget Preparation Forms
• Supplemental Budget Preparation Form No. 1 - Certified Statement of Funding
Sources
• Supplemental Budget Preparation Form No. 2 - Statement of Supplemental
Appropriation
CHAPTER 2. APPROACHES AND TOOLS IN BUDGET AUTHORIZATION 40-47
Guide Questions for Deliberations
Checklist of Compliance with Budgetary Requirements
Checklist of Compliance with General Limitations
Budget Summary Table (with 2 Tables)
Budget Review Matrix for Budgetary Requirements (with Table)
Budget Review Matrix for Budgetary Limitations (with Table)
Local Budget Authorization Form (LBAF) No.1A and No.1B (Forms)
Summary List of Forms for the Budget Authorization Phase
Local Budget Authorization (LBA) Forms
• LBA Form No. 1A - Checklist on Documentary and Signature Requirements for
the Executive Budget (for Annual Budget)
• LBA Form No. 1B - Checklist on Documentary and Signature Requirements for
the Executive Budget (for Supplemental Budget)
CHAPTER 3. APPROACHES AND TOOLS IN CONDUCTING
BUDGET REVIEW 48-51
Checklists on Documentary and Signature Requirements (2 Forms)
Table Recapitulating the Findings and Possible Action (Form)
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Summary List of Forms for the Budget Review Phase
Local Budget Review (LBR) Forms
• LBR Form No. 1A - Checklist on Documentary and Signature Requirements
for the Annual Budget
• LBR Form No. 1B - Checklist on Documentary and Signature Requirements
for the Supplemental Budget
• LBR Form No. 2 - Table Recapitulating the Findings and Possible Action
CHAPTER 4. APPROACHES AND TOOLS IN BUDGET EXECUTION 52-65
Cash Flow Forecasting (CFF)
Statement of Cash Flow Forecast (SCFF) (with Table)
Cash Flow Analysis (with Table)
Summary Financial and Physical Performance Targets (SFPPT) (Form)
Detailed Financial and Physical Performance Targets (DFPPT) (Form)
Interpreting Cash Flow Forecasts
Local Budget Matrix (LBM) (Form)
Allotment Release Order (ARO) (Form)
Summary List of Tables and Forms for the Budget Execution Phase
Statement of Cash Flow Forecast
Cash Flow Analysis
Local Budget Execution Forms
• LBE Form No. 1 – Local Budget Matrix
• LBE Form No. 2 – Allotment Release Order
• LBE Form No. 3 – Summary of Financial and Physical Performance Targets
• LBE Form No.3A – Detailed Financial and Physical Performance Targets
CHAPTER 5. TOOLS AND APROACHES IN BUDGET ACCOUNTABILITY 66-80
Organizational Performance Indicator Framework (OPIF)
Best Practice in Local Budget Accountability
Tools Used for Conducting Performance Evaluation
A. Weights (with unlabeled Table)
B. Scoring System. (with unlabeled Table)
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C. Total Overall Weighted Score (TOWS) (with unlabeled Table)
D. Performance Review Report (PRR)
Accounting for the Local Budget
A. Local Budget Accountability (LBAc) Forms (4 Forms)
B. Local Budget Performance Evaluation (LBPE) Forms (3 Forms)
Summary List of Forms for the Budget Accountability Phase
Local Budget Accountability Forms
1. LBAc Form No. 1 – Quarterly Report of Income
2. LBAc Form No. 2 – Quarterly Financial Report of Operations
3. LBAc Form No. 3 – Quarterly Physical Report of Operations
4. LBAc Form No. 4 – Statement of Receipts and Expenditures
Local Budget Performance Evaluation Forms
1. LBPE Form No. 1 – Physical Performance Evaluation Form
2. LBPE Form No. 2 – Financial Performance Evaluation Form
(with sample presentation)
LBPE Form No. 3 – Income Performance Evaluation Form with sample
presentation)
List of Tables
1 Illustrative Outcome, Output and Performance Indicator Statements
2 Proposed Budget Summary – Part I (General Fund)
3 Proposed Budget Summary – Part II (General Fund)
4 Budget Review Matrix for Budgetary Requirements
5 Budget Review Matrix for Budgetary Limitations
6 Statement of Cash Flow Forecast
7 Cash Flow Analysis
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CHAPTER 1. APPROACHES AND TOOLS IN BUDGET PREPARATION
Budget Forum. A one-day forum on the budget call shall be initiated by the LCE
through the local budget officer for all LGU Department Heads to explain or clarify the following:
(a) specific objectives for the budget year, major thrusts and policy directions; (b) sources of
income for the past three (3) years; (c) major assumptions used in estimating the income for the
budget year; and (d) spending ceilings and budget strategies.
Analyzing LGU Income Trend and Composition1
. This tool analyzes the pattern of
LGU income and helps in determining realistic revenue estimates. The following indicators are
generated: (a) percentage share in total LGU income of each of its components - to show how
much the LGU relies on any given revenue source; and (b) annual increase in LGU income and
its components, as well as the compounded and geometric average annual growth in the last
five years – to show which of the various components of LGU revenues are increasing faster
than others during the period under study, thereby making the LGU more dependent on these
as revenue sources. One could also relate changes in the revenue policies of the LGU with the
movement in these growth rates.
Analyzing LGU Expenditure Trend and Composition. This analysis provides LGUs
with a better appreciation of past trends in local government spending priorities and allows them
to relate LGU spending levels with various outcome indicators. The following indicators are
generated: (a) percentage share of the different components of LGU expenditure which shows
the relative priority accorded by the LGU to the various sectors during the period in review; (b)
yearly increase and average annual growth rate in the last five years of total LGU expenditures
and its components, which, together with the movement in the budget shares show how
resources have been shifted from/to different sectors/offices during the period and enables one
to validate the consistency of these movements with the policies found in the local development
plans and investment programs; (c) per capita expenditure by sector2
which indicates whether
LGU spending has been able to keep up with the growth in population (using a population
estimate derived from the geometric average growth rate formula); and (d) real per capita
expenditure by sector using the GNP implicit price index as divisor of each expenditure item to
show whether LGU spending has been able to keep up with inflation as well.
Formulating Multi-Year Revenue Estimates. In formulating revenue estimates, the use
of simple extrapolation is prescribed because of the lack of data on the local tax base and the
absence of sufficient time series data in many LGUs. Estimates for each of these major
revenue categories are summed up for each year to arrive at the total resource envelope for the
1 This tool contains more computational details than a similar tool, Financial Capacity Analysis, described in Appendix 2.5, which presents
various approaches in determining an LGU's investment capacity.
2 Computed by dividing each spending component with a population estimate derived using the geometric average growth rate formula, e.g.
Estimated Population in 2001=Population in 2000*(1+Popngr/100), where Popngr is the geometric average growth rate between 1995 and
2000 population. Appendix 1.2 shows the geometric average growth rate formula.
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budget year and the two outer years3
:
A. Regular Income. The estimated revenue component in the current year is simply
grown by the average annual growth rate of the particular revenue component to arrive at the
estimated revenue component for the budget year. Specifically, this can be expressed as:
revenue component estimate for budget year = revenue component estimate for current year *
[1+average annual growth rate of revenue component/100]. The expression in brackets is
raised to the second and third powers when deriving revenue estimates for the next budget year
and the budget year after that, respectively. The growth rate applied for each of these years
may be the same or different depending on assessment of the LGU's specific situation.
Moreover, if new revenue measures will be introduced in the budget year, the estimated
revenue yield from such measures should be added to the estimate of the relevant revenue
component.
B. Internal Revenue Allotment (IRA). The IRA for any given year is based on BIR
collections three years back. For brevity, an illustrative example will be presented: Current year
is 2005 with an estimated annual IRA level. In preparing the annual budget for the budget year
2006 and forecasts for two outer years, 2007 and 2008, the IRA for 2006 may be estimated by
applying the actual growth rate of BIR revenues (actgrBIR) between 2002 and 2003 to the
estimated IRA level for 2005: IRA2006 = estimated IRA2005 * [1+ actgrBIR2003/2002].
Similarly, the IRA for 2007 may be estimated by applying the actual growth rate of BIR revenues
between 2003 and 2004 to the forecast value of the IRA for 2006: IRA2007 = forecasted
IRA2006 * [1 + actgrBIR2004/3]. On the other hand, the IRA for 2008 may be estimated by
applying the estimated growth rate of BIR revenues between 2004 and 2005. Projected BIR
revenues for 2005 (which in this case is the current year and thus without complete annual data
yet) may be obtained from the 2005 Budget of Expenditures and Sources of Financing (BESF)
of the national government. Thus, IRA2008 = IRA2007 * [1 + estgrBIR2005/4].
C. Non-Recurring Income. Forward estimates of non-recurring income for the budget
year and two outer years requires knowledge of the LGU's specific situation, e.g., plans to sell
property or capital assets during the period under consideration. On the other hand, forecasts
of revenues from the province’s share in national wealth, economic zones, tobacco excise tax,
EVAT, etc. are largely dependent on national government program for the years under
consideration.
Setting Expenditure Ceilings. Setting sectoral/departmental expenditure ceilings for the
budget year requires (a) determining the net amount of resources available for appropriation;
(b) estimating the amount of resources needed to meet budgetary requirements; (c) preparing
the estimate of the cost of regular programs and ongoing projects of each department/office to
arrive at the 'baseline' ceiling; (d) adding the resource requirements from the two preceding
steps; and (e) estimating the amount of available resources by subtracting the total resource
3 Formulas presented here may be skipped if using the worksheets accompanying PLPEM Volume 4 which have built-in formulas and
automatically computes forecast figures.
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requirement from the net amount of resource available.
The determination of the sectoral/departmental expenditure ceilings for the two outer
years of the multi-year expenditure program (similar to the concept of the Multi-year
Expenditure Framework or MTEF used in the national government) essentially follows the same
steps as those for the budget year. It should be emphasized that estimation of the cost of on-
going programs of the various departments should include the forward cost of programs
introduced during the budget year (i.e., the recurrent cost implied by investment projects and/or
policy changes programmed for the budget year). This ensures the predictability of future
funding for any new policy that is introduced in the present. The multi-year program does not
cost the implementation of new policies except those that are introduced during the budget
year. Thus, the ceilings for the outer years do not include the cost of future policies that are
already being considered but which are not yet put into effect in the budget year. [PLPEM,
pp.25-62]
Approaches for Costing Regular Activities. There are two approaches in costing
regular activities of the office/department: (a) Per capita cost is simply the total cost of doing an
activity (direct labor and direct materials + overhead or administrative expenses) divided by the
total number of beneficiaries or clientele served. For budgeting purposes, the per capita cost
becomes the benchmark in computing the cost of providing services whenever the number of
clientele served is changed; and (b) Fixed and Variable Costs are disaggregated from the
current operating expenditures. Their total should match the budgetary ceiling given a target
output. Distinguishing the fixed and variable costs enables the decision-maker to choose
among alternatives that works within the budgetary ceiling: increasing the target outputs,
maintaining the status quo, or increasing the target outputs but reducing (variable) costs to
optimize available resources. [RBOM pp.105-109]
Defining Performance Indicators Using the OPIF. The Organizational Performance
Indicator Framework describes the hierarchical link between what each LGU department/office
does and the goods and services it delivers (outputs) and their desired impact on the
community (outcomes). This framework helps foster a performance-oriented budget process as
it helps LGUs focus on what is important, i.e., the delivery of outputs that are relevant to its
goals. The tools and techniques provided below for the application of the OPIF are aimed at
helping LGU officials define more clearly the performance indicators that will be used to assess
how well their departments/offices have delivered their Major Final Outputs (MFOs).
A. Clarify the link between PPAs, MFOs and department/office outcomes. To help
the department/office heads and the PFC link outputs with desired outcomes, it is useful to
complete the following statement: “We should produce this output because such and such will
happen (desired outcome/s) which will contribute to the LGU’s goals and objectives in the
following way.” And/or answer the following questions: “What effect, impact, result or
consequence (outcome) does this output have on target clients or the community? How does
this outcome relate to the LGU’s goals and objectives?”. In turn, the guide questions found in
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Appendix 2.1 may help in screening PPAs and MFOs.
B. Specify outcome/s of each LGU department/office4
. Outcomes are conditions of
well-being that the LGU intends to achieve. Outcome statements are important because they
define the impacts expected from the goods/services the LGU produces or delivers (i.e., its
outputs).
C. Specify the outputs of each LGU department/office. Outputs are the goods and
services that any given department/office delivers to external clients for the achievement of
desired outcomes. The specification of outputs provides critical information for performance
measurement in terms of identifying, costing, and producing outputs in the most efficient and
effective manner.
D. Formulate performance indicators. Performance-oriented budgeting requires that
outcomes and outputs should be measurable. Performance indicators are the measures that
are used to judge success in achieving the outcomes or in delivering the outputs. Output
indicators focus on various aspects of efficiency: quantity, quality, timeliness, access and cost.
In contrast, outcome indicators focus on the overall state of the outcome and the effectiveness
of government’s contribution to the result.
The Budget Operations Manual specifically asks the province to define performance
indicators for each of their PPAs (outputs). In coming up with outcome indicators, it is helpful to
ask the following questions: How relevant are the goods/services provided by government to
the achievement of the stated outcomes? How well do these outputs contribute to the
achievement of the said outcome? Is government doing the right things? Is the output mix right?
In assessing efficiency through output indicators, the following questions serve as guide: Is
government doing things right? Is it combining resources in a manner that minimizes total input
cost to produce a given unit of output (or in a manner that maximizes the quantity of output
produced in relation to a given total cost of inputs)? Is the input mix right?
E. Agree on the performance target for each performance indicator. It is necessary
to determine and agree on the performance targets for each output measure during the budget
preparation phase as these will become the benchmarks against which actual performance will
be compared. Performance targets may be based on past performance of the province, a
benchmark derived from performance of other provinces, and/or standards set by the central
government.
Guide Questions for Evaluating Targets for the Budget Year. (1) What are the
mandated regular activities of the department? Activities that do not contribute to the mandate
of the office shall be subjected to further review for possible discontinuance or to challenge the
rationale for their continued implementation; and (2) What is the total service area of the
4 Diagnostic questions to help specify outcomes and outputs are enumerated in PLPEM Volume 4, pp. 50-51.
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office/department? This could be a people-based service area comprised of service
beneficiaries who are the main targets of poverty reduction efforts, or an asset-based area
comprised of natural physical assets that make up the LGU's growth promoting economic base.
Total service area less clientele served refers to the service gap. This reflects the unserved
area which could be reduced or served via a substantive increase in the budget. [technical
notes, p99]
Guidelines on Preparing the Local Expenditure Program. The LEP shall be the
material document for deliberation by the Local Sanggunian. It shall serve as part of the
“appropriations bill” once submitted to the Sanggunian for authorization or legislation.
The LEP consists of five parts: (1) For income estimates, the sources of income are
generated in Local Budget Preparation (LBP) Forms No. 1 and No. 2. Any proposed measure
to increase the LGU income shall be subject to the deliberation and approval of the local
Sanggunian. (2) Each department shall have the following presentation in its expenditure
program: (a) Functional statement, objectives and expected results presented by
program/project/activity using LBP Form No.5. The program structure shall reflect the expected
results or output indicators for each activity/project since it is the key result area and
responsibility center; (b) Proposed new appropriations language for the budget year presented
by program/projects/activities and corresponding budget requirements broken down by expense
class using LBP Form No.5. The number of personnel and their respective salaries shall be
disclosed to determine the overall salaries and wages of an office/department using LBP Form
No. 4; and (c) Special Provisions which pertain to policies on the use of funds, specific
purpose/s or results expected and measures to reduce cost. (3) The Special Purpose
Appropriations (SPA) shall be provided as mandated by the Local Government Code.
Presentation shall follow a similar sequence as the Office/Department expenditure program
except for the staffing and compensation profile. A special provision shall also be included to
provide guidelines in the use of the fund pursuant to existing accounting, budgeting and auditing
rules and regulations. For easy monitoring and evaluation of fund utilization, the Local Finance
Committee shall formulate the guidelines on the release and use of special purpose
appropriations under the needing clearance column of the local budget matrix5
. (4) The General
Provisions includes guidelines on receipts, income and expenditure policies of the local
government that shall be supported by rules and policies coming from oversight agencies like
the Commission on Audit, Civil Service Commission, Department of Budget and Management,
and the Department of the Interior and Local Government. (5) The last part is a Summary of
the Fiscal Year New Appropriations by Office/Department and Special Purpose
Appropriations which reflect the total proposed budget for the year.
Guidelines on Preparing the Budget Message. (a) Present the objectives, policies,
strategies, and priority programs/projects activities of the LGU for the budget year and relate
their consistency with the proposed revenue and expenditure structure; (b) Identify the “flagship
5 Local Budget Execution Form No. 1 in Appendix 4.4.
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projects” by sector and by program and relate how they are envisioned to carry out the
development goals for the next three years; (c ) Review, with the aid of simple graphs and
charts, the past five years revenue and expenditure patterns and disclose what basic services
and facilities were provided; (d) Discuss the current year’s income and expenditure
performance and disclose any improvements in the production of results as compared with
those during the past five years; (e) Any gap or inability of the LGU to provide basic services
delivery imply the urgency to fill in service gaps as a major justification for proposals to expand
the budget for a sector/office. Reflect on the policy decisions and the goods and services
designed to close the service gaps.
Guidelines on Preparing the BESF. Preparing the BESF requires the provision or
disclosure of the following information: (a) three-year comparative data of the receipts and
expenditure program by sector, office/department, and expense class; (b) extent of compliance
of the LGU with the budgetary requirements under the Local Government Code; (c) the LGU’s
compliance with its statutory and contractual obligations; (d) sources of financing the
expenditure program for the three-year period; (e) capacity of the LGU to service its long-term
obligations and indebtedness.
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Table 1. Illustrative Outcome, Output and Performance Indicator Statements
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SUMMARY LIST 4.1. FORMS FOR THE BUDGET PREPARATION PHASE
Budget of Expenditures and Sources of Financing (BESF)
1. Summary of Financial Statement on Actual Receipts and Expenditures
2. Estimated Expenditure by PPA and by Sector
3. Actual and Estimated Expenditure Program by Sector/Office
4. Staffing Summary
5. Summary Statement of Statutory and Contractual Obligations an Budgetary
Requirements
6. Summary Statement of Long-term Obligations and Indebtedness
Local Budget Preparation (LBP) Forms
• LBP Form No. 1 - Certified Statement of Receipts
• LBP Form No. 2 - Certified Statement of Receipts and Expenditures
• LBP Form No. 3 - Programmed Appropriation and Obligation by Object of
Expenditure
• LBP Form No. 4 - Personnel Schedule
• LBP Form No. 5 - Functional Statements, Objectives and Expected Results
• LBP Form No. 6 - Statement of Debt Service
• LBP Form No. 7 - Statement of Statutory/Contractual Obligations and
Budgetary Requirements
• LBP Form No. 8 - Statement of Fund Operation
Supplemental Budget Preparation Forms
• Supplemental Budget Preparation Form No. 1 - Certified Statement of
Funding Sources
• Supplemental Budget Preparation Form No. 2 - Statement of Supplemental
Appropriation
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BUDGET OF EXPENDITURES AND SOURCES OF FINANCING
BESF 1
Summary Financial Statement on Receipts and Expenditures
(In 000 Pesos)
Particulars
Account
Code
(NGAS)*
Past
Year
(Actual)
Current Year Budget
Year
(Estimate)
Total
(Actual) (Estimate) Total
(1) (2) (3) (4) (5) (6) (7) (8)
1.0 Beginning Cash Balance
2.0 Receipts
2.1 Tax Revenue
Internal Revenue Allotment
(IRA)
Real Property Tax (RPT)
Local Taxes
Total Tax Revenue
2.2 Non-Tax Revenue
Operating and Miscellaneous
Revenue
Capital Revenue
Grants and Aids
Loan Proceeds (Borrowings)
Extraordinary Receipts
Inter-Fund Transfer
Other Receipts
Total Non-Tax Revenue
3.0 TOTAL RECEIPTS
4.0 TOTAL AVAILABLE
RESOURCES (1.0 + 3.0)
5.0 Less Continuing Appropriations
6.0 Net Available Resources for
Appropriation (4.0 – 5.0)
7.0 Expenditures
7.1 Current Operating
Expenditures
A. Personal Services
B. Maintenance and Other
Operating Expenditures
7.2 Capital Outlay
7.3 Financial Expense
8.9 TOTAL EXPENDITURE
9.0 UNAPPROPRIATED BALANCE
* Please refer to COA Circular 2008-001 dated 29 January 2008
Instructions
BESF 1 summarizes actual and estimated receipts coming from all sources (tax and non-tax revenue) and
actual and estimated expenditures by allotment class (PS, MOOE, CO, and Financial Expense). This three-year
data reflect how the past, current, and budget year expenditures are financed. It also discloses balances in
receipts, if there are any that were not appropriated during the year. Data on this form shall be taken from Local
Budget Preparation Form No. 1
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BESF 2
Estimated Expenditure by PPA and by Sector
(In 000 Pesos)
Programs /Projects/Activities
Office/
Department
Budget Year
(Estimate)
(1) (2) (3)
1. General Public Services Sector
Program
Activity 1
Activity 2
Project 1
Project 2
Sub-Total
2. Economic Services Sector
Program 1
Activity 1
Activity 2
Project 1
Project 2
Program 2
Sub-Total
3. Social Services Sector
Program 1
Activity 1
Activity 2
Project 1
Project 2
Activity 1
Sub-Total
T O T A L
Instructions
BESF 2 shall reflect the proposed expenditures by program, project, activity within a sector and by
office/department. The classification of PPAs that should fall within a sector shall follow these guidelines:
1. General Public Services Sector- All PPAs that provide planning, financial, administrative, legal and
legislative services to the front-line services of the LGU shall be categorized within this sector.
2. Economic Services Sector- All PPAs directed towards promoting growth in the economy, using all factors
in production, like increasing productivity in agriculture and all other industries, generating employment and
other livelihood projects, shall fall within this sector.
3. Social Services Sector- All PPAs that promote the well-being and general welfare of constituents or
people like education, health, public safety, and protection of the marginalized and disadvantaged
members of society, shall be classified within this sector.
It is possible that a PPA may not be categorized under either social or economic services sector. In cases
like this, it is safest to classify it under the general public services sector.
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BESF 3
Actual and Estimated Expenditure Program by Sector/Office
2007-2009
(In 000 Pesos)
Sector/Office Past Year Current Year Budget Year
(1) (2) (3) (4)
Economic Services
______________
______________
______________
Social Services
______________
______________
______________
General Public Services
______________
______________
______________
TOTAL
Instructions
BESF 3 classifies expenditure by sector and the implementing offices within the sector using
BESF 2 as a guide. Data here show comparative figures in magnitudes for the past year
(Actual), current year (Actual and Estimated), and for the budget year (Estimated). It is possible
that an office or department may appear in two or more sectors, like the engineering office
where it provides infrastructure services to all sectors. It is all right for as long as the total
amount shall not exceed the appropriations for the whole office.
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BESF 4
STAFFING SUMMARY
Particulars
Past Year
(Actual)
Current Year
(Actual)
Budget Year
(Proposed)
No.
Salaries &
Wages
No.
Salaries &
Wages
No.
Salaries &
Wages
(1) (2) (3) (4) (5) (6) (7)
A. Permanent Positions (Filled)
1. Key Positions with RATA
2. Other Technical Positions
3. Administrative Positions
Total: Filled Permanent Positions
Add: Unfilled Authorized Positions
TOTAL: Permanent Positions
B. Non-Permanent Positions (Filled)
1. Contractual
2. Casual/Emergency
Total: Filled Non-Permanent Position
Add: Unfilled Non-Permanent Positions
TOTAL: Non-Permanent Positions
Total Permanent/Non-Permanent
Positions
Instructions
BESF 4 provides information on the staffing complement of the LGU. It segregates permanent
positions into key, technical, administrative positions. These data are important in evaluating
whether the LGU is under or over staffed as reflected in the number of non-permanent positions.
The comparative data for three (3) years will show the number and salaries and wages of
authorized and proposed positions for the current and budget years, respectively.
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BESF 5
Summary Statement of Statutory and Contractual Obligations
and Budgetary Requirements
(In 000 Pesos)
Particulars Basis of Computation
Computed
Amount
(1) (2) (3)
1. Statutory and Contractual Obligations
1.1 20% of IRA for Development Fund
1.2 5% Regular Income (MMDA Contribution
for LGUs in NCR only (R.A. No. 7924)
1.3 Prior Years’ Obligation (if any)
1.4 Terminal Benefits and Retirement Gratuities
(compulsory retirement age)
• IRA for the budget
Year X 20%
• Regular income only
X 5%
• Appropriation
Ordinance
• Service Record
2. Budgetary Requirements
2.1 20% Debt Service
2.2 5% Calamity Fund
2.3 Financial Assistance to Barangays (P1,000
minimum aid)
2.3.1 45%/55% PS Cap
1st
to 3rd
Class LGU
4th
to 6th
Class LGUs
2.3.3 2% Discretionary Fund
• Regular income for
BY X 20%
• Regular income for
BY X 5%
• No. of barangays in a
particular LGU X P1000
• Total income from
regular sources of next
preceding year X 45% or
55%
• RPT of next
preceding fiscal year X
2%
T O T A L
Instructions
BESF 5 shall disclose relevant data on the computation of mandatory obligations of the LGU.
Any deficiencies reflected in BESF 5 shall be corrected at once to show compliance with R. A.
No. 7160. A separate schedule to show actual computation may be done by the LGU to
advocate the principle of transparency.
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BESF 6
SUMMARY STATEMENT OF LONG-TERM OBLIGATIONS
AND INDEBTEDNESS
(In 000 Pesos)
Creditor
Date
Contracted
Term Amount
Previous Payment Amount Due BY Balance
Interes
t
Princip
al
Tota
l
Interes
t
Princip
al
Tota
l
Interes
t
Princip
al
Total
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
T O T A L
Instructions
BESF 6 shows the capacity of the LGU to service its debt, reflecting thereat the amount to be
paid as provided in R.A. No. 7160. The period covered includes previous payments for the
past and current years to show how much more is to be paid for the budget year and the next
coming years which are within the debt service cap.
19

LOCAL BUDGET PREPARATION FORMS
LBP Form No. 1
CERTIFIED STATEMENT OF RECEIPTS
__________________________
Municipality / City / Province
General Fund
PARTICULARS
Account
Code
(NGAS)*
Income
Classification
A M O U N T
Past Year
(Actual)
Current Year
(Estimated)
Budget
Year
(Proposed)
(1) (2) (3) (4) (5) (6)
1. Beginning Balance
2. Receipts
2.1 Tax Revenue
2.2 Operating and
Miscellaneous Revenue
2.3 Capital Revenue
2.4 Grants and Aids
2.5 Extraordinary Receipts
2.6 Loan Proceeds (Borrowings)
TOTAL RECEIPTS
TOTAL AVAILABLE RESOURCES
3. Less Continuing Appropriations
4. Net Available for Appropriation
We hereby certify to the reasonable probability of collection of the estimated receipts for the Budget Year based
on the present economic conditions and existing tax ordinances.
__________________ __________________ ____________________ _______________
Local Budget Officer Local Treasurer Local Planning and Local Accountant
Development Officer
Approved by:
___________________
Local Chief Executive
20

21
CERTIFIED STATEMENT OF RECEIPTS
(Continuation)
INSTRUCTIONS:
This form is intended to reflect the following:
Column 1 – Indicate income by major categories of sources. Balances beginning shall
include the Cumulative Results of Operations (CRO) – Unappropriated
and the breakdown of continuing appropriations.
Column 2 – Indicate account code in each itemized receipts using the National
Government Accounting System (NGAS).
Column 3 – Indicate under income classification the letter “R” if the receipts is
classified as regular and “NR” if the receipts is classified as non-regular.
Column 4 – Indicate actual past year’s estimated receipts.
Column 5 – Indicate current year’s estimated receipts.
Column 6 – Indicate budget year’s estimated receipts.
The Budget Year’s estimate of receipts shall be the income from reasonably probable
collections during the ensuing calendar year to which the annual budget pertains as the Local
Finance Committee may determine.
A separate LBP Form No. 1 shall be prepared for each economic enterprise and public utility.

LBP Form No. 2
CERTIFIED STATEMENT OF RECIEPTS AND EXPENDITURES
__________________________
Municipality / City / Province
General Fund
PARTICULARS
Account
Code
(NGAS)*
Past
Year
(Actual)
CURRENT YEAR
TOTAL
First
Semester
(Actual)
Second
Semester
(Estimate)
(1) (2) (3) (4) (5) (6)
1.0 Beginning Balance
2.0 Receipts
2.1 Tax Revenue
2.2 Operating and Miscellaneous
Revenue
2.3 Capital Revenue
2.4 Grants and Aids
TOTAL RECEIPTS
TOTAL AVAILABLE RESOURCES
3.0 Less Continuing Appropriations
4.0 Net Available for Appropriation
5.0 Expenditures
5.1 Current Operating Expenditures
B. Maintenance and Other
5.2 Capital Outlay
Total Expenditure
6.0 Unappropriated Balance
22

Certified Correct: Approved by:
________________ ________________ _____________ _________________
Local Accountant Local Budget Officer Local Treasurer Local Chief Executive
23
CERTIFIED STATEMENT OF RECEIPTS AND EXPENDITURES
(Continuation)
INSTRUCTIONS:
Column 1 – Indicate receipts and expenditures by major categories. Beginning
balances shall include the Cumulative Results of Operations (CRO) –
Unappropriated and breakdown of continuing appropriations.
Column 2 – Indicate account code in each itemized receipts using the National
Government Accounting System (NGAS).
Column 3 – Indicate actual past year’s receipts and expenditure.
Column 4, 5 and 6 – Indicate current year’s estimated receipts and expenditure,
actual for the first semester, estimate for the second semester, and the
total of both.
A separate LBP Form No. 2 shall be prepared for each local enterprise and public utility.

LBP Form No. 3
PROGRAMMED APPROPRIATION AND OBLIGATION
BY OBJECT OF EXPENDITURE
OFFICE :
PROJECT/ACTIVITY :
FUND/SPECIAL ACCOUNT :
Object of Expenditure
Account
Code
(NGAS)*
Past
Year
(Actual)
Current
Year
(Estimated)
Budget
Year
(Proposed)
(1) (2) (3) (4) (5)
1.1 Personal Services
1.2 Maintenance and Other
2.0 Capital Outlay
(interest payments)
Total Appropriations
Prepared by : Reviewed by : Approved by :
_________________ ____________________ ____________________
Department Head Local Budget Officer Local Chief Executive
24

25
PROGRAMMED APPROPRIATION AND OBLIGATION BY OBJECT OF EXPENDITURE
(Continuation)
INSTRUCTIONS:
Column 1 – State the applicable “Objects of Expenditures” such as the following:
A. Current Operating Expenditures
1. Personal Services
2. Maintenance and Other Operating Expenditures
B. Capital Outlays
Under Financial Expense indicate whether it is bank charges, interest expense, commitment
charge, documentary stamp expense and other financial charges, losses incurred relative to
foreign exchange transactions and debt service subsidy to GOCCs consistent with NGAs.
Column 2 – Indicate account code using the National Government Accounting System (NGAS).
Column 3 – Indicate the actual amounts incurred in the Past Year per column (3) of LBP Form
No. 2.
Column 4 – Indicate the amounts for the current year per Column (5) of LBP Form No. 2.
Column 5 – Indicate the estimated amounts to be appropriated.
A separate LBP Form No. 3 shall be prepared for each economic enterprise and public utilities.
The review by the Provincial/ City/Municipal Budget Officer shall take into consideration the
budgetary ceilings prescribed by the Local Finance Committee.

LBP Form No. 4
PERSONNEL SCHEDULE
Budget Year : ______________
Municipality / City : __________
Province : _________________
OFFICE :
PROGRAM :
PROJECT / ACTIVITY :
Ordinance
/Item
Number
Position Title
Name of
Incumbent
Current Year
Authorized
Rate/Annum
Budget Year
Proposed
Rate/Annum Increase/
Decrease
Grade/
Step
Amount
Grade/
Step
Amount
(1) (2) (3) (4) (5) (6) (7) (8)
Prepared by : Reviewed by: Approved by :
_______________________________ __________________ _________________
Human Resource Management Officer Local Budget Officer Local Chief Executive
INSTRUCTIONS:
In appropriate columns, indicate:
Column 1 - The appropriation ordinance number and item number.
Column 2 and 3 - The position title and the name of the incumbent occupying each position. If the
position is unfilled, indicate the word “vacant”. If the position is proposed for abolition, bracket the
26

old item number, position title, and the authorized salary for the current year. If the position is
proposed for reclassification, bracket the previous position title and indicate the proposed position
title below it.
Column 4 and 5 - For the authorized salary for the current year. Indicate the circular implemented
and the salary grade/step and rate per annum of each position. For initial implementation/changes
in approved PAL, attach copy thereof.
Column 6 and 7 - For the proposed salary for the budget year. Indicate the salary grade/step and
rate per annum of each position.
Column 8 - The proposed salary increase/decrease is the difference between the old and new
rates of compensation per annum for the budget year.
A separate LBP Form No. 4 shall be prepared for each economic enterprise and public utilities.
27

LBP Form No. 5
INSTRUCTIONS:
Summarize briefly the function of the Office/Department in outline or capsulized statement. The
mandate of the office should be dearly described.
Specify the objectives of the office for the budget year.
Column 1 - Indicate the AIP Reference Code for the specific P/P/A to be implemented for the
budget year.
28
FUNCTIONAL STATEMENTS, OBJECTIVES and EXPECTED RESULTS
Office / Department:____________________
Budget Year_________________
I. FUNCTIONAL STATEMENTS
_____________________________________________________________________
_____________________________________________________________________
II. OBJECTIVES
_____________________________________________________________________
III. PROGRAMS/ PROJECTS/ACTIVITIES
Reference
Code
Program/Project /Activity
Description
Cost
(In 000 Pesos)
Performance
Indicator
Annual
Targets
Implementation
Schedule
FROM TO
(1) (2) (3) (4) (5) (6) (7)
Prepared by: Reviewed by: Approved by:
__________________ ___________________ _____________________
Department Head Local Budget Officer Local Chief Executive
Reviewed as to consistency with approved Annual Investment Program.

Column 2 - Describe briefly the project/activity to be implemented.
Column 3 - Indicate the proposed funding for the project/activity.
Column 4 - Specify the expected result of the project/activity in terms of performance or output
indicator, e.g., percent education or malnutrition number of children provided pre-education,
kilometers of road cemented, etc.
Column 5 - Specify the quantity, quality and timeliness of project/activity in terms of targets for the
budget year.
Column 6 and 7 - Indicate the expected start and completion of the project/activity.
29

LBP Form No. 6
STATEMENT OF DEBT SERVICE
Budget Year : _______________
Municipality / City : ___________
Province : __________________
FUND / SPECIAL ACCOUNT:
Creditor
Date
Contracted
Term Amount
Previous Payment
Made
Amount Due
(Budget Year) Balance
(5) (6)
(1) (2) (3) (4)
Principal Interest Total Principal Interest Total
(7)
T O T A L
Certified Correct : Noted by:
________________ ___________________
Local Accountant Local Chief Executive
INSTRUCTIONS:
Column 1 - Full name of creditors with their corresponding addresses under each fund/special
account and under each office.
Column 2 - Date of contracting/incurring the obligation
Column 3 - Term of payment
Column 4 - Total indebtedness (the gross obligations interest due each creditor)
Column 5 - Payments made prior to Budget Year, including payments made and to be made in
current year. Indicate also the total payments made both of the principal and interest
in the appropriate column.
30

Column 6 - Amounts due and budgeted for the budget year. Indicate in the appropriate column the
principal
obligation and interest.
Column 7 - Any balance due after December 31 of the current year
A separate LBP Form No. 6 shall be prepared for economic enterprises and public utilities.
31

LBP Form No. 7
STATEMENT OF STATUTORY/CONTRACTUAL OBLIGATIONS
AND BUDGETARY REQUIREMENTS
Budget Year : _______________
Municipality / City : ___________
Province : __________________
1. Statutory and Contractual Obligations
20% Development Fund
Prior Years’ Obligation
5% MMDA Contribution for LGUs in NCR only
(R.A. No. 7924)
Others
A m o u n t
2. Budgetary Requirements
20% Debt Service
5% Calamity Fund
P1,000 Financial Assistance to Barangays
45%/55% PS Cap
2% Discretionary Funds
A m o u n t
T O T A L
Certified Correct: Approved:
Local Finance Committee:
_________________ _____________ _______________ __________________
Local Budget Officer Local Treasurer Local Planning and Local Chief Executive
Development Officer
32

INSTRUCTIONS:
Indicate statutory and contractual obligations.
Budgetary requirements shall include provision for each devolved basic service/facility pursuant to
Section 17 of RA 7160.
A separate LBP Form No. 7 shall be prepared for economic enterprises and public utilities.
33

LBP Form No. 8
STATEMENT OF FUND OPERATION
Budget Year : ________________
Municipality / City : ____________
Province : ___________________
FUND/SPECIAL ACCOUNT:
PARTICULARS
General
Public
Services
Social
Services
Economic
Services
TOTAL
(1) (2) (3) (4) (5)
1.0 Beginning Balance
2.0 Receipts
2.1 Tax Revenue
2.2 Operating and Miscellaneous
Revenue
2.3 Capital Revenue
2.4 Grants and Aids
Total Receipts
Total Available Resources
Less Continuing Appropriations
Net Available Resources for Appropriations
3.0 Expenditures
B. Maintenance and Other Operating
Expenditure
3.2 Capital Outlay
Total Appropriations
Balance
Prepared by: Approved by:
__________________ ______________________
Local Budget Officer Local Chief Executive
34

35
STATEMENT OF FUND OPERATION
(Continuation)
INSTRUCTIONS:
The Statement of Fund Operation is a summary of the total estimates of revenues and other
receipts and appropriations covering the proposed expenditures of the budget year.
Under the income portion, fill in Column 5 (Total) based on the Certified Statement of
Receipts (LBP Form No. 1).
Under the expenditures portion, indicate all expenditures by sectors/services and the total.
Use Appendix 1 as guide for major categories of expenditures by sector/services.
Deduct from the total resources the total expenditures to arrive at the balances.
A separate LBP Form No. 8 shall be prepared for each economic enterprise and public utility.

SUPPLEMENTAL BUDGET PREPARATION FORMS
Supplemental Budget Preparation Form No. 1
36
CERTIFIED STATEMENT OF FUNDING SOURCES
Fiscal Year _________
___________________________
Province/City/Municipality
___________________________
Fund/Special Account
Particulars
Account
Classification
(NGAS)*
Amount
(1) (2) (3)
1.0 New Revenue Sources
Tax Revenue
Loan Proceeds (Borrowings)
2.0 Savings
3.0 Realignment/Reversion
Total Estimated Income
I hereby certify to the reasonable probability of collection in the current year of
the above stated estimated receipts from new revenue measures enacted by the
Sanggunian.
________________ ___________________
Date Local Treasurer

INSTRUCTIONS
1. The column under new revenue source shall be filled for Supplemental Budget funded from
new revenue source.
2. The column under savings shall be filled for Supplemental Budget funded from savings.
3. The column under Realignment/Reversion shall be filled for Supplemental Budget funded from
reversion or realignment.
4. Indicate under column 2 the account classification using the NGAS.
5. Indicate under column 3 the appropriate amount for whatever funding source of the
Supplemental Budget.
6. The certification to be signed by the Local Treasurer shall depend on funding source (i.e. New
Revenue Source, Savings, Realignment/Reversion) of the Supplemental Budget to be
enacted.
37

Supplemental Budget Preparation Form No. 2
38
_________________________
Province/City/Municipality
SB-200__
STATEMENT OF SUPPLEMENTAL APPROPRIATION
Implementing
Office
Particulars/ Purpose
Object of
Expenditures
Account
Code
Amount
(1) (2) (3) (4) (5)
TOTAL
APPROPRIATION
P______
______________________ ______________________

INSTRUCTIONS
1. Indicate under Column 1 the implementing office of the item of appropriation.
2. Indicate under Column 2 the particulars/purpose of the appropriation and in Column 3 the
object of expenditures.
3. Indicate under Column 4 the appropriate account code using the NGAS.
4. Indicate under column 5 the amount per purpose and object of expenditures being
implemented by the office concerned.
39

CHAPTER 2. APPROACHES AND TOOLS IN BUDGET AUTHORIZATION
Guide Questions for Deliberations. These guide questions should help the LFC
prepare for budget hearing as the Sanggunian may use during deliberations: [UBOM pp. 119-
120],
 Is the budget consistent with the AIP?
 Does the budget adequately provide funds for the delivery of basic services and
maintenance of facilities enumerated under Section 17 of R.A. No. 7160?
 Are the requirements of component LGUs considered and equitably allocated for
in the budget?
 Is the proposed expenditure program within the recommended ceiling for
economic, social, and general services? Does the budget provide for a proper
balance among these various services? Were differences between essential and less
essential services taken into consideration?
 Are the existing/proposed organizational structure and staffing pattern in
accordance with the basic requirements and considerations as prescribed under R.A.
No. 7160? Are the minimum standards and guidelines of the Civil Service
Commission met? Does the existing/proposed complementary structure or staffing
have the capability to implement the plans and programs and to deliver basic public
services?
 Are there some expenditures that need to be reduced to ensure reasonable
economy in local government operations?
 Will some projects or activities need to be “fast-tracked,” and procedures to be
simplified to maximize utilization of resources?
 What is the estimated revenues and other receipts to be collected? Are the new
tax and other revenue measures proposed to finance the budget covered by
subsisting tax ordinances? Is the proposed borrowing or other credit financing
scheme within the capability of the LGU to pay?
Checklist of Compliance with Budgetary Requirements. The Local Government
Code provides for the following budgetary requirements: [PLPEM Vol 4,pp.66-67]
 The proposed total appropriation shall not exceed the estimates of income
(Section 324).
 Full provision shall be made for all statutory and contractual obligations, provided
that the amount to be appropriated for debt service shall not exceed 20% of the
regular income of the LGU (Section 324).
 Provinces, cities and municipalities shall provide aid to component barangays not
less than P1,000 per barangay (Section 324).
 Five percent of the estimated income from regular sources shall be set aside as
40

an annual lump sum appropriation for unforeseen expenditures arising from the
occurrence of calamities (Section 324).
 No less than 20% of the IRA must be appropriated for development projects
(Section 287).
 The proceeds from the share of the LGU in the utilization and development of
national wealth shall be appropriated for local development and livelihood projects,
provided that at least 80% of those coming from the utilization of hydrothermal,
geothermal and other sources of energy must be applied to lower the cost of
electricity in the LGU concerned (Section 294).
Checklist of Compliance with General Limitations. The Local Government Code also
provides the following general limitations on the budget: [PLPEM,pp.67-68]
 The total appropriations, whether annual or supplemental, for personal services
of an LGU for one fiscal year must not exceed 45% in the case of first- to third-class
provinces, cities and municipalities and 55% in the case of fourth- to sixth-class
provinces, cities and municipalities, provided that appropriations for salaries, wages,
and representation and transportation allowances of officials and employees of LGU
public utilities and economic enterprises shall not be included in the annual budget or
in the computation of the maximum amount for personal services (Section 325).
 No official or employee shall be entitled to a salary rate higher than the maximum
fixed for his or her position (Section 325).
 No local fund shall be appropriated to increase or adjust salaries or wages of
officials and employees of the national government except as expressly authorized by
law (Section 325).
 Positions in the official plantilla for career positions which are occupied by
incumbents holding permanent positions shall be covered by adequate appropriations
(Section 325).
 The annual appropriations for discretionary purposes of the LCE shall not exceed
2% of the actual receipts derived from the basic real property tax in the next
preceding calendar year (Section 325).
Budget Summary Table. A spreadsheet model that puts together the key elements of
the proposed executive budget to facilitate the verification of compliance with the budgetary
requirements enumerated above. The first part of this spreadsheet presents the estimates of
income and the total amount of resources available for appropriation. The second part presents
the allocation of the proposed budget to the different sectors/departments/projects.
Budget Review Matrix for Budgetary Requirements. A spreadsheet model that
automatically indicates whether the budget has complied or not complied with the above-cited
budgetary requirements, upon inputting of values from the Budget Summary Table.
41

Budget Review Matrix for Budgetary Limitations. A spreadsheet model that
automatically indicates whether the budget has complied or not complied with the above-cited
budget limitations, upon encoding of values of key decision variables pertinent to the checklist.
Local Budget Authorization Form (LBAF) No.1A and No.1B. Forms that serve
as checklists of documentary and signature requirements for the Executive Budget.
Table 2. Proposed Budget Summary – Part I (General Fund)
[Worksheet 6 of PLPEM4]
42

Table 3. Proposed Budget Summary – Part II (General Fund)
[Worksheet 6 Part II of PLPEM4]
43

Table 4. Budget Review Matrix for Budgetary Requirements
[Worksheet 7 of PLPEM4, p67]
Table 5. Budget Review Matrix for Budgetary Limitations
[Worksheet 8 of PLPEM4, p68]
44

SUMMARY LIST 4.2. FORMS FOR THE BUDGET AUTHORIZATION PHASE
Local Budget Authorization (LBA) Forms
• LBA Form No. 1A - Checklist on Documentary and Signature Requirements
for the Executive Budget (for Annual Budget)
• LBA Form No. 1B - Checklist on Documentary and Signature Requirements
for the Executive Budget (for Supplemental Budget)
45

LOCAL BUDGET AUTHORIZATION FORMS
LBA Form No. 1A
CHECKLIST ON DOCUMENTARY AND SIGNATURE
REQUIREMENTS FOR THE EXECUTIVE BUDGET
for Annual Budget
Document Signatory
Budget Message Local Chief Executive
Local Expenditure Program Local Chief Executive
BESF Local Finance Committee
AIP
(Approved by the
Sanggunian through a
Resolution)
Secretary to the Sanggunian
Presiding Officer
Personnel Schedule HRMO
46

LBA Form No. 1B
REQUIREMENTS FOR THE SUPPLEMENTAL BUDGET
for Supplemental Budget
Document Signatory
Funds Actually Available:
• Certified Statement of Additional
Realized Income
• Certification of Savings
Local Treasurer
Local Treasurer
New Revenue Measure/s:
• Certified Statement of Income from New
Revenue Measure/s
• Copy of duly enacted ordinance which
imposes new local taxes, charges, fees,
fines or penalties or which raises existing
local taxes, charges, fees, fines or
penalties
• Copy of official communication stating
that the LGU is a recipient of new or
higher remittances, contributions,
subsidies or grants in aid from the
National Government or from government
corporations and private entities
Local Treasurer
Realignment of Appropriations in Times of
Public Calamity:
• Certificate of Source of Funds Available
for Appropriations
Local Treasurer
Local Accountant
LCE
47

CHAPTER 3. APPROACHES AND TOOLS IN CONDUCTING A BUDGET REVIEW
Checklists on Documentary and Signature Requirements. Local Budget Review
(LBR) Form Nos. 1A and 1B serve as validation checklists of requirements when the
Appropriation Ordinance and supporting documents are submitted by the LGU for review.
Table Recapitulating the Findings and Possible Action. After reviewing the contents
of the Appropriation Ordinance and the accompanying budget documents, the DBM-RO or
Sangguniang Panlalawigan will prepare the LBR Form No. 2 which, as its name indicates,
summarizes the various findings of the reviewing authority and indicates the possible action that
may be taken.
SUMMARY LIST 4.3. FORMS FOR THE BUDGET REVIEW PHASE
Local Budget Review (LBR) Forms
• LBR Form No. 1A - Checklist on Documentary and Signature Requirements
for the Annual Budget
• LBR Form No. 1B - Checklist on Documentary and Signature Requirements
for the Supplemental Budget
• LBR Form No. 2 - Table Recapitulating the Findings and Possible Action
48

LOCAL BUDGET REVIEW FORMS
LBR Form No. 1A
REQUIREMENTS FOR THE ANNUAL BUDGET
_____________ _____________
Date Received Deadline
_________________________________________ _____
Local Government Unit Class
_________________________________ _______________________
Title General Fund
Check each item Signatory Remarks
a. Transmittal Letter Secretary to the Sanggunian
b. Budget Message Local Chief Executive
c. Appropriation Ordinance
Presiding Officer
LCE
d. Budget of Expenditures and
Sources of Financing.
Local Finance Committee
LCE
e. Annual Investment Program
Presiding Officer
f. Personnel Schedule
HRMO
g. Veto message, if any LCE
h. Sanggunian’s action on veto, if any Secretary to the Sanggunian
Presiding Officer
______________________
Reviewing Analyst
49

LBR Form No. 1B
REQUIREMENTS FOR THE SUPPLEMENTAL BUDGET
_____________ _____________
Date Received Deadline
_________________________________________ ______
Local Government Unit Class
_________________________________ _______________________
Title General Fund
Check each item Signatory Remarks
a. Transmittal Letter Secretary to the Sanggunian
b. Budget Message
c. Appropriation Ordinance Secretary to the Sanggunian
Presiding Officer
LCE
d. Funds Actually Available:
 Certified Statement of Additional Realized Income
 Certification of Savings
Local Treasurer
e . New Revenue Measures:
 Certified Statement of Income from New Revenue
Measures;
 Copy of duly enacted Tax Ordinance which
imposes new local taxes, charges, fees, fines or
penalties or which raises existing local taxes, charges,
fees, fines or penalties; and
 Copy of official communication stating that the
LGU is a recipient of new or higher remittances,
contributions, subsidies or grants in aid from the
National Government or from government
corporations and private entities
Local Treasurer
f. Realignment of Appropriations in Times of Public
Calamity
 Certified Statement of Additional Realized Income Local Treasurer
Local Accountant
LCE
g. Veto message, if any LCE
h. Sanggunian’s action on veto, if any Secretary to the Sanggunian
Presiding Officer
______________________
Reviewing Analyst
50

LBR Form No. 2
TABLE RECAPITULATING THE FINDINGS
AND POSSIBLE REVIEW ACTIONS
FINDINGS POSSIBLE REVIEW ACTIONS
51

CHAPTER 4. APPROACHES AND TOOLS IN BUDGET EXECUTION
Cash Flow Forecasting (CFF). CFF necessitates the conduct of the following: (a)
estimates of receipts from taxes (local and external sources) based on schedules of payments
and historical trends on payment of taxes imposed by the LGU; (b) estimates of other revenues
considering the seasonality of operations and past performances of the particular sources of
incomes; (c) a determination and a listing of all regular/recurring expenses or those that are
payable periodically; (d) a listing and assessment of all accounts payable and outstanding
obligations to determine when they may be paid legally; (e) estimates and schedule of project
costs which will be paid and disbursed during the year; (f) estimates of payments for debt
servicing taking into account maturity dates and adjustments for refinancing, if any; and (g)
consideration of other current costs of operations especially non-recurring/unforeseen
expenses. [PLPEM4 pp. 72-73] The corresponding matrix used is the Statement of Cash Flow
Forecast described below.
Cash flow forecasting enables LGUs to derive adjusted annual income estimates given
actual data on year-to-date collections of each major receipt item. A comparison of the adjusted
annual income estimate with the original annual income estimate indicates whether a shortfall
or surplus of collections is likely for the entire year. Following are the steps in coming up with
cash flow forecasts6
:
(i) Compute for the following indicators:
 share or contribution of collections in each month to total receipts for each year
under study (in this case, five years) using the formula: share of collections for
the period = collections for the period / total revenue for the year.
 year-to-date share of collections for a particular month to total collections for
the year, which can be generated by summing up the computed share of
collections for each month (up to that month in particular), e.g., adding up the
share of collections for January, February and March to get the share of the
January - March collections to total collections for the year.
 arithmetical average of the share of collections for a particular month in the last
five years, generated by getting the sum of the computed share of collections
for that particular month for each year under study and dividing this by 5 (given
five years).
 arithmetical average of the year-to-date share of collections for a particular
month in the last five years, generated by getting the sum of the computed
year-to-date share of collections for that particular month for each year under
6 These indicators are automatically computed when using the spreadsheet model accompanying Volume 4 of the PLPEM.
52

study and dividing this by five.
(ii) Forecast the following at the start of the budget year, given annual income estimates:
 monthly cash receipt and monthly year-to-date cash receipt. These are generated by
simply multiplying the given annual income estimate for the budget year by the
average share (or year-to-date share) of collections for a particular month (as
computed above).
(iii) Compute for adjusted annual income estimate given actual data on year-to-date
collections as the year progresses. Specifically, if actual monthly collections data are
available up to month k, the adjusted annual estimate of collections may be derived by
dividing the actual year-to-date collections for month k by the average year-to-date share
of collections for month k.
Statement of Cash Flow Forecast (SCFF). The SCFF is a schedule of anticipated
receipts and disbursements of the LGU for the fiscal year with a quarterly breakdown showing
the beginning and ending cash balances for each quarter. This enables the treasurer,
accountant and LCE to plan for effective cash management and utilization. The forecast is
prepared at the beginning of the year. [RBOM, p.180]
Cash Flow Analysis. This is a cash flow monitoring tool complementary to the
Statement of Cash Flow Forecast (see description above) and useful in determining the short-
term viability of the LGU, particularly its ability to pay its obligations. CFA's primary purpose is to
give up-to-date and relevant information on the LGU’s overall cash position, liquidity and
solvency. The CFA serves as a guide in the analysis of the variances between actual
collections and disbursements against estimates indicated in the SCFF, thus capturing the
feasibility of attaining collection and disbursement targets. [RBOM, p.180-181]
Summary Financial and Physical Performance Targets (SFPPT). The SFPPT reflects
the budget allocation for the budget year and the targeted performance indicators under each
major final output and PPA. These targets are based on historical data of actual output of
regular activities considering their average growth and the peculiar requirements of certain
PPAs. The targets are prepared for the entire calendar year for each department to serve as
basis in comparing actual level of accomplishment for the preceding year and knowing the
available resources for the budget year. The Local Budget Execution (LBE) Form 3 is used
for this purpose.
Detailed Financial and Physical Performance Targets (DFPPT). Department/Office
Heads in the Executive and Legislative branch shall support the SFPPT with a DFPPT. This
form presents the quarterly breakdown of the Financial Allocation that would be needed to
accomplish a specific level of target for each PPA for a particular quarter. This form also
contains key variables that serve as inputs for preparing a schedule of expenditures for the
53

SCFF. This is reflected in LBE Form 3A.
Interpreting Cash Flow Forecasts. The computed variance (or difference) of the cash
flow forecast from the outturns (or actual levels) both for the monthly/quarterly forecasts and the
year-to-date forecasts for each major income item indicate areas for corrective actions to
ensure that planned targets are achieved within the year and within available resources:
 If actual collections for any one item exceed monthly forecasts consistently from
month to month, the annual income estimate for that item may have been under-
estimated. Prospectively, the methodology for arriving at the annual income estimate
should be re-evaluated.
 If year-to-date actual collections in the aggregate exceed year-to-date forecasts
in the aggregate well into the budget year, then the LFC has basis for reviewing and,
perhaps, releasing all or part of the reserve towards the fourth quarter.
 If actual collections for any one item fall short of monthly forecasts consistently
from month to month, the LFC should revisit the revenue strategies of the province
and work to improve its collection efficiency.
 If actual disbursements for project expenses fall short of monthly forecasts, the
PFC should evaluate the situation. Is it because of realized savings relative to original
cost estimates? If so, then the LFC should duly note availability of cash for other
uses. Is it due to delays in implementation? If so, the LFC should identify cause of
delay and remedy the same.
 If actual year-to-date disbursements exceed year-to-date forecasts in the
aggregate, the LFC should consider the imposition of further reserves.
Local Budget Matrix (LBM). The LBM or Local Budget Execution (LBE) Form No.1
is the yearly overall financial plan of the LGU equivalent to its approved appropriations
disaggregated into components or categories. Through the LBM, a comprehensive authority is
issued to each department/office to incur obligations not exceeding a certain amount for a
specified period usually for regular/current operating expenditures.
Allotment Release Order (ARO). The ARO is specific authority to incur obligations not
exceeding a given amount for the specific purpose indicated. Budgetary items under the
reserve, needing clearance, and for later release columns shall be released with the use of the
ARO or LBE Form No.2.
54

SUMMARY LIST 4.4. TABLES AND FORMS FOR THE BUDGET EXECUTION PHASE
Statement of Cash Flow Forecast7
Cash Flow Analysis8
Local Budget Execution Forms
 LBE Form No. 1 – Local Budget Matrix
 LBE Form No. 2 – Allotment Release Order
 LBE Form No. 3 – Summary of Financial and Physical Performance Targets
 LBE Form No.3A – Detailed Financial and Physical Performance Targets
7 While the RBOM described the Statement of Cash Flow Forecasting as a necessary tool in budget execution, only PLPEM Volume 4
presented a table format using a monthly, instead of a quarterly, breakdown.
8 Also available only in PLPEM Volume 4.
55

Table 6. Statement of Cash Flow Forecast
56

Table 7. Cash Flow Analysis
57

LOCAL BUDGET EXECUTION FORMS
LBE Form No. 1
LOCAL BUDGET MATRIX
FY_________
Annual Budget
Supplemental Budget
LOCAL GOVERNMENT UNIT: ________________
FUND: ___________
PROGRAM/
PROJECT/ ACTIVITY
(DEPARTMENT/OFFICE)
AUTHORIZED
APPROPRIATION
RESERVE
NOT NEEDING CLEARANCE NEEDING CLEARANCE
PS
M
O
O
E
CO TOTAL PS
M
O
O
E
C
O
TOTAL
FOR
LATER
RELEASE
THIS
RELEASE
PS
M
O
O
E
CO TOTAL
(1) (2) (3) (4) (5)
a.
b.
c.
d.
TOTAL
Recommending:
___________________ ___________________
INSTRUCTIONS:
The LOCAL BUDGET MATRIX shall be accomplished as follows:
Local Government Unit Name of the Province/City/Municipality implementing the budget.
Source of Appropriation Indicate the appropriation source, i.e.either annual or supplemental
budget.
Fund Fund codes under the NGAs for Local Government Units
100 General Fund
200 Special Education Fund
300 Trust Fund
Col. 1 Program/Project/Activity Pertains to the functional grouping of appropriations and the services
rendered by the implementing units of the LGU to wit:
Executive Services Accounting and Internal Audit Services
Legislative Services Budget and Management Services
58

Delivery of Social Services Planning, Monitoring & Evaluation Services
Financial Services Delivery of Health Services
Legal Services Delivery of Veterinary Services
Assessment Services Delivery of Engineering Services
Delivery of Social Services Delivery of Agricultural Services
Col. 2 Authorized Appropriation This column pertains to the appropriations in the approved budget, or
from the supplemental budget.
Col. 3 Reserve This column shall reflect the amount set aside to provide contingencies and
emergencies which may later arise in the execution of the budget.
Col. 4 Not Needing Clearance This column shall include all other budgetary requirements that do not
fall under the NC column. This shall be separated into: “This Release”
and “For Later Release”
Col. 5 Needing Clearance This column pertains to the portion of the department’s budget which
can only be released upon clearance and/or compliance with
documentary requirements.
The last page of the LBM shall be machine-validated with an amount that shall tally with the amount of
the initial release.
The LBM shall be signed by the Local Budget Officer and Local Chief Executive.
59

LBE Form No. 2
ALLOTMENT RELEASE ORDER
For Fiscal Year_________
Local Government Unit Fund Code Appropriation Source
Annual Budget
Supplemental Budget
Department/Office
Purpose
Particulars
Object Class/
Account Code
Amount Authorized
Amount in Words
Notes
The allotments herein authorized shall be used solely for the purposes indicated and disbursements therefrom shall be
made in accordance with existing budgeting, accounting and auditing rules and regulations. It is the primary responsibility of
the head of the Department/ Office or Unit concerned to keep expenditures within the limits of the amount allotted.
__________________ _______________________________
Date of Issue Local Chief Executive
Page ___ of ___ page(s) ARO No. ________________
INSTRUCTIONS:
The Allotment Release Order (ARO) shall be accomplished by the Local Budget Officers as follows:
Caption
For the Fiscal Year This pertains to the current budget year
Local Government Unit Name of the province/city/municipality concerned.
Department /Office Name of the requesting department/office of the LGU.
Fund/Code Fund/code under the NGAs for Local Government Units
100 General Fund
200 Special Education Fund
300 Trust Fund
Appropriation Source Indicates the appropriation source, i.e. either annual/supplementary
budget.
Purpose Brief explanation of purpose or other information or details
60

Particulars This column shall include the following:
-Program/Activity/Project
-Allotment Class
-Object of Expenditure
Object Class/Account Code This pertains to the account code of the object of expenditure based on
the NGAs for LGUs. Please refer to COA Circular 2008-001 dated 29
January 2008.
Amount Authorized Amount of allotment to be released.
Amount in Words Amount in words of the total amount authorized.
Notes Legal bases for such release and/or the period of validity of the
allotment.
Date of Issue Date of the preparation of ARO
Approved by This shall include the name and signature of the LCE approving the
release of the allotment.
Page ___ of ___ page(s) Indicate the number of pages of the ARO.
ARO No. Assign ARO Number to the form.
61

LBE Form No. 3
SUMMARY OF FINANCIAL AND PHYSICAL PERFORMANCE TARGETS
LGU : _____________________________
Department/Office: _____________________________
MFO : _____________________________
Program/ Project/ Activity Total Cost
Performance
Indicator
Prior Year
(ACTUAL)
Physical
Targets
Remarks
(1) (2) (3) (4) (5) (6)
_________________________ _________________________
Department Head Local Chief Executive
INSTRUCTIONS:
The report on physical performance targets shall be accomplished as follows:
Department/Office Name of the implementing department/office, e.g. Governor's Office
Major Final Output Services provided by the different department and offices to external
clients, such as, but not limited to:
Executive Services
Agricultural Services
Legislative Services Social Services
Veterinary Services Engineering Services
Planning, Monitoring & Evaluation Services
Health Services Budget and Management Services
Services which are not directly consumed by the external clients
such as the following shall be subsumed under the executive
services:
Ex. MFO: Executive Services (Accounting and Internal Services)
P/A/P: Preparation and submission of reports
PI : 90% Financial report submitted on time
62

Procurement Services
Accounting and Internal Services
Financial Services
Legal Services
Assessment Services
(Col. 1) Program/Activity/Project Programs, projects and activities which are identifiable to the final
output.
Ex. MFO: Agricultural Services ; P/A/P; Swine dispersal program
(Col. 2) Budget Allocation Amount approved for the current year by allotment class
(Col. 3) Performance Indicators Performance standards/ criteria and indicators set that will be
accomplished by the LGU ( Ex. No. of beneficiaries of swine
dispersal program)
(Col. 4) Prior Year's Actual Accomplishment during the preceding year.
Accomplishments
(Col. 5) Current Year Targets Estimates/targets for each performance indicator to be
accomplished for the current year.
(Col. 6) Remarks Other information relative to the performance standards
* This document shall be signed by the appropriate signatories- the Department Head and the Local
Chief Executive
* This shall be submitted to the Local Budget Officer upon approval of the Annual Budget.
63

LBE Form No. 3A
DETAILED FINANCIAL AND PHYSICAL PERFORMANCE TARGETS
LGU : _____________________________
Department/Office: _____________________________
MFO : _____________________________
PROGRAM/ PROJECT/
ACTIVITY/Performance
Indicator/s
(1)
FINANCIAL ALLOCATION
(2)
PHYSICAL TARGETS
(3)
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
_________________________ _________________________
Department Head Local Chief Executive
INSTRUCTIONS:
The Detailed Financial and Physical Performance Targets shall be accomplished as follows:
Department/Office Name of the implementing department/office, e.g. Governor's Office
Major Final Output Services provided by the different departments and offices to
external
clients, such as but not limited to:
Executive Services Agricultural Services
Legislative Services Social Services
Veterinary Services Engineering Services
Planning, Monitoring & Evaluation Services
Budget and Management Services
Health Services
Services which are not directly consumed by the external clients such
as the following shall be subsumed under the executive services
Ex. MFO: Executive Services (Accounting and Internal Services)
P/A/P: Preparation and submission of reports
PI: 90% Financial report submitted on time
64

Procurement Services
Accounting and Internal Services
Financial Services
Legal Services
Assessment Services
(Col. 1) Programs, projects and activities which are identifiable to the final
output, example:
MFO: Agricultural Services ; P/A/P; Swine dispersal program
Indicate for each P/P/A the Performance Indicator/s
(Col. 2) Quarterly Financial Allocation based on the currently approved budget for the
department.
(Col. 3) Quarterly Physical Targets for each performance indicator per P/P/A.
* This should be submitted to the Local Budget Officer as an attachment to LBE Form No. 3
(SFPPT).
65

CHAPTER 5. TOOLS AND APPROACHES FOR BUDGET ACCOUNTABILITY
Organizational Performance Indicator Framework (OPIF). The application of the
OPIF as described in Appendix 4.1 is also useful for performance management as it provides
the context against which the implementation of the PPAs will be measured during the budget
accountability phase. This phase is also the appropriate period to revisit the definition of the
MFOs and the performance indicators employed using this framework. [PLPEM 4, pp.47-48]
Best Practice in Local Budget Accountability. Key elements of public participation in
budget accountability include: (a) a well-publicized description of services provided by the LGU
with their corresponding standard response time; (b) a system that citizens can use to provide
feedback on service delivery of LGU offices; (c) the development of an LGU report card system
showing how well the LGU has performed in delivering its MFOs, the gaps in LGU outcomes,
and report on budget appropriations and actual spending on various sectors vis-à-vis actual
outputs delivered and actual results attained; and (d) widespread dissemination of the report
card to the public. [PLPEM4 p.82]
Tools Used for Conducting Performance Evaluation9
A. Weights. Assignment of weights for each accomplishment is necessary to
differentiate the relative importance of an accomplishment to the overall performance of each
office/department and the entire LGU. The following are suggested weights for each
department/office:
For Department With Income
Collection
For Department Without Income
Collection
Absorption Capacity (Financial) 30% Physical Accomplishment 70%
Income Accomplishment 70% Absorption Capacity (Financial) 30%
Total 100% Total 100%
The following suggested weights may be used in evaluating departments/offices with
income and services (i.e., economic enterprise) and the overall performance evaluation of the
LGU:
Physical Performance 60%
Financial Performance 25%
Income Performance 15%
--------------------
Total 100%
9 The Revised Budgetary Operations Manual provides detailed steps and computations in evaluating LGU performance on pp. 203-205.
66

B. Scoring System. A scoring system will give points to the accomplishment of
the physical, financial and income variables. It may also be used in rating a department
performance. The maximum score is 15 points (without weights).
Rate of
Accomplishments
Physical Financial Income
Adj.
Rate Points
Adj.
Rate Points
Adj.
Rate Points
110 – 120 % O 5 P 1 O 5
100 – 109.9% VS 4 F 2 VS 4
90 – 99.9 % S 3 S 3 S 3
80 – 89.9% F 2 VS 4 F 2
Below 80 % P 1 O 5 P 1
Legend: O – Outstanding; S – Satisfactory; P – Poor; VS – Very Satisfactory; F – Fair
C. Total Overall Weighted Score (TOWS). The overall performance of the
office/department is computed using the total overall weighted score for physical, financial and
income accomplishments with corresponding adjectival ratings:
TOWS or Overall Score Performance Rating
4.0 – 5.0 Outstanding (O)
3.0 – 3.9 Very Satisfactory (VS)
2.0 – 2.9 Satisfactory (S)
1.0 – 1.9 Fair (F)
Below 1.0 Poor (P)
D. Performance Review Report (PRR). The PRR should be brief and concise and
should include a descriptive discussion of the department/office, overall LGU performance,
explanations for deviations, and measures undertaken or recommended to be undertaken for
negative deviations and further improve systems and procedures10
.
Accounting for the Local Budget. The forms described below are used in accounting
for the local budget which involves two steps: monitoring and performance evaluation.
A. Local Budget Accountability (LBAc) Forms. Accountability reports in the form of
LBAc Forms are imperative and useful documents and are, in fact, required for submission for
monitoring purposes. They establish the performance record of the various departments and
offices of the LGU.
10 A sample outline of the Performance Review Report is found on page 205 of the RBOM.
67

B. Local Budget Performance Evaluation (LBPE) Forms. LBPE Form Nos. 1 to 3
which reflect the physical and financial accomplishments of the LGU mid-year during the budget
year may be used for reviewing and re-evaluating the relevant contribution of the various
programs, projects and activities of the different departments of the LGU to its specific
objectives and strategies. [RBOM pp. 211-212]
SUMMARY LIST OF FORMS FOR THE BUDGER ACCOUNTABILITY PHASE
Local Budget Accountability Forms
• LBAc Form No. 1 – Quarterly Report of Income
• LBAc Form No. 2 – Quarterly Financial Report of Operations
• LBAc Form No. 3 – Quarterly Physical Report of Operations
• LBAc Form No. 4 – Statement of Receipts and Expenditures
Local Budget Performance Evaluation Forms
• LBPE Form No. 1 – Physical Performance Evaluation Form
• LBPE Form No. 2 – Financial Performance Evaluation Form (with sample
presentation)
• LBPE Form No. 3 – Income Performance Evaluation Form
(with sample presentation)
68

LOCAL BUDGET ACCOUNTABILITY FORMS
LBAc Form No. 1
QUARTERLY REPORT OF INCOME
For the Quarter Ending __________
Account
Title/
Description
of Income
Account
Code
Estimated
Income
Previous
Quarter
Estimated
Income This
Quarter
Total
Estimated
Income to
Date
Actual Income
for the Quarter
Total
Actual
Income to
Date
Variance
RemarksAmount %1st
Month
2nd
Month
3rd
Month
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
Prepared by: Certified Correct:
___________________ __________ ____________________ __________
LOCAL TREASURER Date LOCAL ACCOUNTANT Date
INSTRUCTIONS:
Column (1) shall refer to the appropriate account classification and nature of the actual income
generated during the period as appearing in Column (3) to (6) in accordance with the New
Government Accounting System (NGAS), i.e.,
Other Taxes
- Community Tax
- Share from Internal Revenue Collection
- Share from Expanded Value Added Tax
- Share from National Wealth
Column (2) shall denote the numerical code per NGAS of the income classification in Column (1).
Please refer to COA Circular 2008-001 dated 29 January 2008
69

Column (3) shall indicate the estimated income of prior quarter(s).
Column (4) shall indicate the estimated income of the current quarter reported.
Column (5) shall refer to the estimated income from January to the end of the quarter reported.
Columns (6) to (8) shall refer to the actual income realized during the three months of the quarter
reported, while Column (9) shall indicate the cumulative total of each income category from January 1
to the end of the quarter reported. Said total should tally with the income account per Trial Balance
as of even date.
Column (10) shall indicate the difference between the estimated income and actual income to date
(Col.10 – Col.5).
Column (11) shall indicate the percentage increase/(decrease) in the income (10/5).
Column (12) shall refer to additional information/reasons for material increase or decrease of actual
income realized during the period from those previous quarters.
This report shall be submitted directly to the Local Finance Committee through the Local Budget
Officer on or before the 20th day of the month following the quarter reported.
70

LBAc Form No. 2
QUARTERLY FINANCIAL REPORT OF OPERATIONS
For the Quarter Ending ______________
P/P/A
Implementing
Unit
Appropriation Allotment Released Balance of
Appro-
priation
Obligations Incurred
Unobligated
Allotment RemarksContinuing Current Total
Previous
Quarters
This
Quarter
Total
Previous
Quarters
This
Quarter
Total
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (`11) (12) (13) (14)
Certified Correct:
_______________________ ____________
LOCAL BUDGET OFFICER Date
INSTRUCTIONS:
Column (1) shall refer to the P/P/A Code of the activity as listed down in the General Fund Budget.
Column (2) shall refer to the implementing unit (i.e. General Services Department, Accounting
Department, etc.).
Column (3) shall refer to the released appropriation of the past year/s which can still be utilized
beyond the budget year.
Column (4) shall indicate the current year's appropriation in the approved budget, whether from the
annual budget or from supplemental budgets.
Column (5) shall refer to the total appropriation (3 + 4).
Column (6) shall refer to the allotment released in the previous quarters during the year.
71

Column (7) shall refer to the allotment released during the quarter being reported.
Column (8) shall refer to the total allotment released as of end of the quarter being reported (6 + 7).
Column (9) shall refer to the unreleased appropriation (5 - 8) as of end of the quarter being
reported.
Column (10) shall refer to the obligations incurred in the previous quarters during the year as
recorded in the Registry of Allotment and Obligation (RAO).
Column (11) shall refer to the obligations incurred during the quarter being reported as recorded in
the RAO.
Column (12) shall refer to the total obligations incurred as of end of the quarter being reported (10 +
11).
Column (13) shall refer to the unobligated allotment (8 - 12) which shall equal the balance shown
in the Statement of Allotments, Obligations, and Balances as of end of the quarter being reported.
Column (14) shall cover the other relevant information for which no appropriate column is provided.
This report shall be submitted directly to the Local Finance Committee on or before the 20th day of
the month following the quarter being reported.
72

LBAc Form No. 3
QUARTERLY PHYSICAL REPORT OF OPERATIONS
For the Quarter Ending ___________
Department/Office: __________________
P/P/A
Major Final
Output
Performance
Indicator
Target Output Actual Performance Variance
Previous
Quarters
This
Quarter
Total
Previous
Quarters
This
Quarter
Total Output % Remarks
(1)
(2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
Prepared by:
_______________________ ___________________________________ ____________
DEPARTMENT HEAD LOCAL PLANNING & DEVELOPMENT OFFICER Date
INSTRUCTIONS:
Column (1) shall refer to the P/P/A Code of the activity as listed down in the General Fund
Budget.
Column (2) shall refer to the Major Final Output (MFOs) - goods and services that a department is
mandated to deliver to external clients through the implementation of the P/P/A.
Column (3) refers to the performance indicator - predetermined measure of the results of an
activity against a standard of performance required to achieve set policy objectives within a given
period.
Column (4) refers to the cumulative target output as of the previous quarter.
Column (5) refers to the target output during the quarter being reported.
Column (6) shall refer to the total target output ( 5 + 6 ) as of end of the quarter being reported.
Column (7) refers to the actual performance as of the previous quarter.
73

Column (8) refers to the actual performance during the quarter being reported.
Column (9) refers to the total actual performance ( 8 + 9) as of end of the quarter reported
Column (10) refers to the variance between the target and actual accomplishments
Column (11) refers to the variance expressed in percentage
Column (12) shall cover other relevant information/reasons for increase or decrease in actual
performance vis-à-vis target performance.
This report shall be submitted to the Local Finance Committee thru the Local Budget Officer on or
before the 20th day of the month following the quarter reported. Consolidated report shall be
prepared by the Local Budget Officer.
74

LBAc Form No. 4
STATEMENT OF RECEIPTS AND EXPENDITURES
For the Fiscal Year Ending __________
Province/City/Municipality: ______________
Particulars
Amounts Variance
Remarks
Estimate Actual Amounts %
(1) (2) (3) (4) (5) (6)
Beginning Cash Balance
Receipts:
Tax Revenue
Internal Revenue Allotment (IRA)
Real Property Tax (RPT)
Local Taxes
Total Tax Revenue
Non-Tax Revenue
Operating & Misc. Revenue
Capital Revenue
Grants
Extraordinary Income
Borrowings
Inter-Fund Transfers
Other Receipts
Total Non-Tax Revenue
Sub-total Receipts
Total Available Resources
Expenditures
General Services
Economic Services
Social Services
Total Expenditures
Ending Cash Balance
Certified Correct:
_______________________ _______________________
LOCAL TREASURER LOCAL ACCOUNTANT
INSTRUCTIONS:
Column (1) shall refer to the details of the receipts and expenditures.
Column (2) shall refer to the estimated receipts and expenditures for the fiscal year being reported.
75

Column (3) shall refer to the actual receipts and expenditures for the fiscal year reported.
Column (4) shall refer to the variance between the estimated and actual receipts and expenditures for the
fiscal year reported (3 - 2).
Column (5) refers to the variance, expressed in percentage (4 / 2).
Column (6) shall cover other relevant information/reasons for increase or decrease in actual vis-à-vis
target receipts and expenditures.
This report shall be submitted to the Department of Budget and Management thru the Local Budget Officer
within 30 days from the end of the fiscal year reported, copy furnished the Local Finance Committee.
76

LOCAL BUDGET PERFORMANCE EVALUATION FORMS
LBPE Form No.1
PHYSICAL PERFORMANCE EVALUATION FORM
As of the 1st
Semester Ending, _______
Office/Department: __________
MFO/
Activity
%
Weight
Actual
Output
Target Variance Absorptive Capacity Points
Weighted
Score
(1) (2) (3) (4) (5) (6) (7) (8)
Total 100%
INSTRUCTIONS:
Column (1) refers to the MFO of the various P/P/As of the Office/Department.
Column (2) refers to the percentage (%) weight of each MFO.
Column (3) refers to the actual output for the semester being reported.
Column (4) refers to the target output for the semester reported.
Column (5) refers to the difference between col.3 and col. 4 (Col.3 – Col.4).
Column (6) refers to the accomplishment expressed in percentage (Col.3/Col.4)
Column (7) refers to the point score based on the physical accomplishment shown in Column (6) using
the scoring system.
Column (8) refers to the weighted score (Column 2 x Column 7).
This Report shall be submitted to the LCE by the LFC on or before September 30 of each year.
77

LBPE Form No. 2
FINANCIAL PERFORMANCE EVALUATION FORM
As of the 1st
Semester Ending, _______
Department/Office:__________________
MFO/
Activity
%
Weight
Actual
Obligations
Incurred
Allotment
Released
Variance
Absorptive
Capacity
Points
Weighted
Score
(1) (2) (3) (4) (5) (6) (7) (8)
TOTAL
INSTRUCTIONS:
Column (1) refers to the MFO of the various P/P/As of the Department/Office.
Column (2) refers to the percentage (%) weight of each MFO.
Column (3) refers to the actual obligations incurred as reflected in the Registry of Allotment and
Obligation (RAO) for the semester being reported.
Column (4) refers to the allotment released for the Department/Office for the semester being
reported.
Column (5) refers to the difference between Columns 3 and 4 (Col.4 – Col.3).
Column (6) refers to the financial accomplishment expressed in percentage (Col.3/Col.4).
Column (7) refers to the point score based on the financial accomplishment shown in Column 6
using the scoring system.
Column (8) refers to the weighted score (Column 2 x Column 7).
This report shall be submitted to the LCE by the LFC on or before September 30 of each year.
78

LBPE Form No. 3
INCOME PERFORMANCE EVALUATION FORM
As of the 1st
Semester Ending______
Department/Office :_____________
Actual
Collections
Target
Collections
Collection
Efficiency Rate
Point Score
Overall Income
Performance
(1) (2) (3) (4) (5)
INSTRUCTIONS:
1. Column (1) refers to the actual collections made during the semester.
2. Column (2) refers to the target collections for the semester.
3. Column (3) refers to the income accomplishment (1/2).
4. Column (4) refers to the point score based on the income accomplishment shown in
Column 3 using the scoring system.
5. Column (5) refers to the overall income performance (Column 4 x 30% if income
performance is by an office/department and 15% if income performance being measured is
LGU-wide).
This report shall be submitted to the LCE by the LFC on or before September 30 of each year.
79

SAMPLE PRESENTATIONS
Office/Department Performance Evaluation
Financial Accomplishment
LBPE Form No. 2
FINANCIAL PERFORMANCE EVALUATION FORM
As of the 1st
Semester Ending June 30, 2007
Department/Office: OFFICE OF THE TREASURER
MFO/
Activity
%
Weight
Actual
Obligations
Incurred
Allotment
Released
Variance
Absorptive
Capacity
Points
Weighted
Score
(1) (2) (3) (4) (5) (6) (7) (8)
Local Revenue
Generation Services
75% 5,800,000 7,000,000 1,200,000 83% 4 3.00
Program
Implementation
Monitoring Services
25% 2,400,000 2,500,000 100,000 96% 3 0.75
Total 100% 8,200,000 9,500,000 1,300,000 3.75
Income Accomplishment
LBP Form No. 3
INCOME PERFORMANCE EVALUATION FORM
As of the 1st
Semester Ending June 30, 2007
Department/Office: OFFICE OF THE TREASURER
Actual
Collections
Target
Collections
Collection
Efficiency Rate
Point Score
Overall Income
Performance
(1) (2) (3) (4) (5)
21,800,000 25,000,000 87.2% 2 1.4
80

Sources
Budget Operations Manual for Local Government Units (An Updated Version of the June 2005
Edition), April 2008
Harmonization of Local Planning, Investment Programming, Revenue Administration, Budgeting
and Expenditure Management, Joint Memorandum Circular (JMC) No. 001, Series of 2007
(JMC)
Physical Development & Physical Framework Plan, Volume 4. Tools and Techniques on
Budgeting Public Expenditure Management
81

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