Local Government Budget Process Quiz
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Questions and Answers

What is the maximum time allowed to post the Appropriation Ordinance after its approval?

  • 10 days
  • 5 days (correct)
  • 1 week
  • 3 days

Which step should be completed within 3 days after the approval of the Appropriation Ordinance?

  • Enact the Appropriation Ordinance
  • Submit the Ordinance for Review (correct)
  • Post the Approved Ordinance
  • Authorize the Budget

What is the role of the Sanggunian in the budget process?

  • Evaluate the submitted budget documents (correct)
  • Authorize the budget directly
  • Enact the budget ordinance unchanged
  • Collect the budget documents from the public

When must the Appropriation Ordinance be approved in relation to the beginning of the ensuing year?

<p>On or before the beginning of the ensuing year (A)</p> Signup and view all the answers

Which of the following is not a step outlined in the enactment of the Appropriation Ordinance?

<p>Conduct a public referendum (B)</p> Signup and view all the answers

What percentage of the regular income of the LGU can be allocated for debt servicing?

<p>20% (D)</p> Signup and view all the answers

How much aid must be provided to each component barangay?

<p>One Thousand Pesos (P1,000) (A)</p> Signup and view all the answers

What minimum percentage of estimated revenue from regular sources should be allocated to the Local Disaster Risk Reduction Management Fund?

<p>5% (A)</p> Signup and view all the answers

For what purposes is the allocation from the Local Disaster Risk Reduction Management Fund utilized?

<p>For prevention, preparedness, response, and recovery (C)</p> Signup and view all the answers

What is the minimum percentage of the Internal Revenue Allotment (IRA) that must be set aside for development projects?

<p>20% (C)</p> Signup and view all the answers

What does the ruling in Quisumbing, et al. vs. Garcia highlight regarding contracts entered by the local chief executive?

<p>All contracts must have prior Sanggunian authorization. (A)</p> Signup and view all the answers

What was a key recommendation made by the COA audit report regarding the Provincial Governor's contracts?

<p>To secure prior authorization from the Sanggunian (A)</p> Signup and view all the answers

What is required for the Sanggunian to consider the budget as a priority measure?

<p>Certification as urgent by the LCE (A)</p> Signup and view all the answers

What happens if the aggregate amount appropriated exceeds the estimates of income for the LGU?

<p>The budget must be revised to align with income estimates. (C)</p> Signup and view all the answers

Who can provide inputs during the budget hearings when allowed by the IRP?

<p>Civil Society Organizations (CSOs) (D)</p> Signup and view all the answers

What should the Department Heads present to justify their budgets?

<p>Mandate and performance indicators (D)</p> Signup and view all the answers

What role does the Local Finance Committee (LFC) play in the budgeting process?

<p>They assist the Sanggunian by providing data (C)</p> Signup and view all the answers

Which of the following must the Sanggunian ensure compliance with in the proposed budget?

<p>Provisions on general limitations under RA No. 7160 (A)</p> Signup and view all the answers

What was the total contract amount between Philkonstrak and the Municipality of Corella?

<p>P15,997,732.63 (D)</p> Signup and view all the answers

Which of the following amounts did Philkonstrak incur for construction works before construction was suspended?

<p>P8,233,000.00 (B)</p> Signup and view all the answers

What principle did the court utilize to determine Philkonstrak's entitlement to payment?

<p>Quantum meruit (C)</p> Signup and view all the answers

Who was exonerated from liability according to the CIAC decision?

<p>Former Mayor Rapal (D)</p> Signup and view all the answers

What percentage of the construction work had Philkonstrak completed by December 2009?

<p>Over 50% (A)</p> Signup and view all the answers

What was the outcome of the Court of Appeals regarding Corella's Petition for Review?

<p>The petition was denied. (C)</p> Signup and view all the answers

Why did the incumbent Mayor Tocmo refuse to pay Philkonstrak?

<p>He did not recognize the contract's validity. (A)</p> Signup and view all the answers

What is not required when there is a sufficient appropriation ordinance?

<p>A separate Sanggunian bayan authorization (C)</p> Signup and view all the answers

What is the total membership required for a majority vote in the context mentioned?

<p>14 (A)</p> Signup and view all the answers

In a scenario where there are 12 members and the Presiding Officer present, how many votes are needed to pass a motion?

<p>7 (C)</p> Signup and view all the answers

If the Presiding Officer casts a vote to break a tie of 6 yes and 6 no in a meeting with 13 members present, what will be the total votes in favor?

<p>7 (B)</p> Signup and view all the answers

How many members must be present to meet the quorum requirement, as illustrated in the examples provided?

<p>8 (D)</p> Signup and view all the answers

In a situation where 10 members and the Presiding Officer are present and there are 5 yes votes and 5 no votes, is the vote sufficient to enact the Appropriation Ordinance?

<p>No, 7 votes are required (D)</p> Signup and view all the answers

What happens to the budget if the ordinance authorizing it is declared inoperative in its entirety?

<p>The budget is invalid until a new ordinance is enacted. (D)</p> Signup and view all the answers

What must happen to the budget following a review action if any appropriation items are declared inoperative?

<p>The budget should be revised to comply with laws. (D)</p> Signup and view all the answers

What form does the review action by the Department of Budget and Management (DBM) Regional Office take?

<p>A letter. (A)</p> Signup and view all the answers

What is the primary purpose of the review action conducted by the DBM?

<p>To determine compliance with laws and regulations. (B)</p> Signup and view all the answers

What should be included in the findings of the reviewing authority?

<p>An enumeration of infractions of budgetary requirements. (C)</p> Signup and view all the answers

What does the review action NOT do regarding the items of appropriation?

<p>It authorizes items prohibited by law. (C)</p> Signup and view all the answers

What must be done about deficiencies identified during the review action?

<p>They should be incorporated in the next supplemental budget. (A)</p> Signup and view all the answers

Which of the following statements is true regarding an ordinance's validity?

<p>It must not violate any law or statute. (C)</p> Signup and view all the answers

Flashcards

Approve AO

Authorize the Appropriation Ordinance before the start of the following year.

Post AO

Record the Appropriation Ordinance within 5 days of approval.

Submit AO for review

Present the Appropriation Ordinance for scrutiny within three days of its approval.

Enact Appropriation Ordinance

Formally establish the budget plan; a crucial initial step.

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Check Budget Documents

Verify the completeness and accuracy of the submitted budget documents.

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Evaluate Budget

Scrutinize the budget proposed for alignment with objectives.

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Deliberate on Budget

Thoroughly discuss and consider the budget proposal.

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Authorize Budget

Verify and formalize the budget's approval.

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Budgetary Requirements

Rules dictating the overall budget size and allocation.

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Estimated Income

Projected revenue for a given period.

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Statutory Obligations

Legal requirements that must be funded.

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Contractual Obligations

Financial commitments arising from contracts.

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Debt Servicing

Payments on debts.

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20% Debt Servicing Limit

Maximum proportion of regular income allocated to debt payment.

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Aid to Barangays

Minimum financial support per barangay.

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Local Disaster Risk Reduction Management Fund (LDRRMF)

A fund set aside for disaster preparedness and response.

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Philkonstrak

A construction company that won a bid for a waterworks project in Corella, Bohol.

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Local Disaster Risk Reduction Management Fund (LDRRMF) Allocation

30% for quick response fund and 70% for other disaster management activities.

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20% of IRA (NTA)

Percentage of Internal Revenue Allotment (IRA) allocated for development projects.

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Municipal Waterworks System Project

A project to improve and rehabilitate the water supply system of Corella, Bohol.

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Mayor Rapal

The mayor of Corella, Bohol, during the time the contract with Philkonstrak was signed.

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Sanggunian Authorization

Approval by the local legislative body (Sanggunian) for contracts.

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Mayor Tocmo

The subsequent mayor of Corella, who refused to pay Philkonstrak.

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Contract Validity

The legality and binding nature of the agreement between Philkonstrak and Corella.

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Quantum Meruit

A legal principle that requires Corella to pay Philkonstrak for the work done, even if the initial contract isn't valid.

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Construction Industry Arbitration Commission (CIAC)

The body that first heard the case and decided on the payment owed by Corella to Philkonstrak.

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Appropriation Ordinance (AO)

A document that authorizes the use of public funds for a specific project.

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Sanggunian Budget Deliberation

The process of discussion and consideration of the budget proposal by the Sanggunian (local government council).

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Budget Hearings

Meetings where the budget is discussed by committees (like Appropriations or Finance).

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Local Finance Committee (LFC)

A committee that gives information to the local government council (Sanggunian).

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Department Heads

Leaders of government departments who explain their budget requests.

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Budgetary Requirements

Rules and limitations on what a budget can include, set by law.

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Internal Rules of Procedure (IRP)

Specific rules that govern how the Sanggunian works, including processes for budget deliberation.

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Civil Society Organizations (CSOs)

Groups from the community that may be invited to share their ideas on the budget.

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Quorum for Majority Voting (10 Members)

Minimum number of members required to be present for a valid meeting to conduct voting on matters. For voting on an Appropriation Ordinance (AO), the required quorum is 8.

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Quorum for Majority Voting (14 Members)

Minimum number of members required to be present for a valid meeting to conduct voting on matters. For voting on an Appropriation Ordinance (AO), the required quorum is 10.

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Determining Majority - Voting

To determine if a vote is sufficient, the presiding officer (PO) is excluded from the count. The minimum votes required is 7 (when 10+ members are involved) or 8 (with 14 members).

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Appropriation Ordinance (AO) Enactment - 7/8 Votes (10/14 total members)

For an AO to be enacted, a minimum of 7 votes is required; the President must have a 'yes' vote when there is a tie.

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Appropriation Ordinance (AO) Enactment - Tie (Vote)

If the 'yes' and 'no' votes are equal, the presiding officer (PO) casts a vote to break a tie..

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Insufficient Votes for AO Enactment

If the 'yes' votes fail to meet the minimum required for enacting the AO, the measure does not pass - insufficient votes required.

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Determining Quorum (Province)

Determining if the minimum required number of members are present for a quorum to be achieved in order to conduct a meeting.

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AO loses force/effect

An Appropriation Ordinance (AO) that's deemed invalid or non-compliant with budgetary requirements.

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Re-enacted budget

The LGU uses the previous budget until the new AO is approved and enacted.

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Disbursement of Funds (AO)

Funds cannot be spent from items in an inoperative/disallowed/reduced AO.

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Revised Budget (AO)

A new AO must rectify any issues flagged by the review process by being reviewed and approved.

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AO inoperative in part

Only specific parts of an Appropriation Ordinance are deemed invalid.

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Review Action (AO)

Evaluation of the AO to ensure compliance with the law.

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Review Action Form (DBM/SP)

The DBM and Sanggunian's review are documented differently.

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Nature of review (AO)

Review only checks for legal compliance, not the act itself, and suggests adjustments.

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Review findings (AO)

The review highlights which budget requirements were ignored.

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Budget Deficiencies

Shortcomings requiring action in the next supplemental budget.

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Prohibited Appropriations (AO)

The review action cannot authorize items expressly forbidden by law.

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Study Notes

Appropriation Ordinance Timeline

  • The Appropriation Ordinance must be posted within 15 days after its approval.
  • The Sanggunian must complete the review and approval of the Appropriation Ordinance within 3 days after the approval.

Sanggunian Role in Budget Process

  • The Sanggunian plays a crucial role in the budget process, reviewing and approving the Appropriation Ordinance proposed by the Local Chief Executive.

Appropriation Ordinance Approval Deadline

  • The Appropriation Ordinance must be approved before the beginning of the ensuing year.

Steps in Enactment of Appropriation Ordinance

  • The prompt posting of the Appropriation Ordinance is not a step outlined in the enactment process.

Budget Allocations

  • 20% of the LGU's regular income can be allocated for debt servicing.
  • 10% of the total IRA (Internal Revenue Allotment) should be allocated to the **Local Disaster Risk Reduction Management Fund (LDRRMF)*.
  • At least 20% of the estimated revenue from regular sources must be allocated to the LDRRMF.

LDRRMF Utilization

  • The LDRRMF is utilized for programs such as:
    • Disaster preparedness
    • Disaster response
    • Disaster rehabilitation
    • Disaster recovery

Development Projects Allocation

  • At least 20% of the IRA must be set aside for development projects.

Quisumbing vs. Garcia Ruling

  • The ruling in Quisumbing, et al. vs. Garcia emphasizes that contracts entered by the local chief executive must be supported by a valid appropriation ordinance.

COA Audit Report Recommendations

  • The COA (Commission on Audit) audit report recommended that the Provincial Governor seek approval from the Sanggunian before entering into contracts.

Budget Priority and Excess Appropriation

  • The Sanggunian must declare the budget as a priority measure for it to be considered.
  • If the aggregate amount appropriated exceeds the estimated income for the LGU, the Sanggunian must revise the budget.

Budget Hearings and Justification

  • Department Heads can provide inputs during budget hearings.
  • Department Heads must present justification for their budget requests.

Local Finance Committee (LFC) Role

  • The Local Finance Committee (LFC) plays a key role by reviewing and evaluating the proposed budget before it is submitted to the Sanggunian.

Sanggunian Compliance

  • The Sanggunian must ensure compliance with the following in the proposed budget:
    • Revenue estimates
    • Expenditure items
    • Debt servicing
    • LDRRMF allocation
    • Development projects funding

Philkonstrak Case

  • The total contract amount between Philkonstrak and the Municipality of Corella was PHP 24.1 million.
  • Philkonstrak incurred PHP 7.3 million for construction works before construction was suspended.

Principle of Entitlement to Payment

  • The court applied the principle of quantum meruit to determine Philkonstrak's entitlement to payment based on work completed.
  • The principle of quantum meruit states that a party should be paid a reasonable amount for services rendered.

Liability Exoneration

  • The CIAC (Construction Industry Arbitration Commission) decision exonerated the incumbent Mayor Tocmo from liability.

Construction Completion Percentage

  • Philkonstrak had completed 30.4% of the construction work by December 2009.

Court of Appeals Decision

  • The Court of Appeals reversed and set aside the ruling of the RTC (Regional Trial Court).

Reason for Refusal to Pay

  • The incumbent Mayor Tocmo refused to pay Philkonstrak due to allegations of irregularities in the contract.

Ordinance and Appropriation

  • A sufficient appropriation ordinance is not required when there is a valid contract.

Majority Vote

  • A majority vote requires more than half of the total membership present to pass a motion.

Voting Scenarios

  • In a meeting with 12 members and the Presiding Officer, 7 votes are needed to pass a motion.
  • In a meeting with 13 members and a tie of 6 yes and 6 no, the Presiding Officer's vote would result in 7 votes in favor.

Quorum Requirement

  • The quorum requirement in the illustrated examples is at least 7 members being present.

Appropriation Ordinance Passage

  • With 10 members and the Presiding Officer present, and a tie of 5 yes and 5 no, the vote is not sufficient to enact the Appropriation Ordinance.

Budget Inoperability

  • If the ordinance authorizing the budget is declared inoperative in its entirety, the budget becomes inoperative as well.
  • If any appropriation items are declared inoperative, those specific items must be removed from the budget.
  • The review action by the Department of Budget and Management (DBM) Regional Office takes the form of a formal review.

Purpose of Review Action

  • The primary purpose of the review action is to ensure the legality and propriety of the proposed budget.

Review Action Findings

  • The findings of the reviewing authority should include:
    • Compliance with relevant laws and regulations
    • Proper allocation of funds
    • Justification for appropriation items

Review Action Limitations

  • The review action does not invalidate the items of appropriation.

Deficiency Correction

  • Deficiencies identified during the review action must be corrected by the LGU.

Ordinance Validity

  • An ordinance is valid even if it is not reviewed by the DBM Regional Office.

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Test your knowledge on the local government budget process, including the Appropriation Ordinance and related procedures. This quiz covers key aspects such as the timeline for approval, roles of the Sanggunian, and funding allocations. Perfect for students and professionals in public administration.

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