Excerpt from the Mindanao League of Local Budget Officers (MLLBO) 2023
Annual Convention among the Local Budget Officers and Financial
Management Practitioners from various LGUs of Mindanao
The committee convened in a three-day Convention at the Limketkai Luxe Hotel, Cagayan de
Oro City on October 24-27, 2023 themed “Empowering Mindanao and Uniting its Local Governments for
Sustainable National Development through Digital Transformation”, the following guest being present
and participating, to wit:
Attendees:
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Sec. Amenah F. Pangandaman – Secretary, Department of Budget and Management
Usec. Wilford Ong – Undersecretary, DBM
Usec. Goddes Hope Libiran – Undersecretary, DBM
Rudylia C. Parrel, CPA, CESO IV - Regional Director, DBM Region X
Atty. Dennis S. Santiago – Executive Director V Procurement Service, DBM
Akmad J. Usman, CPA, CESO III – Regional Director, DBM Region XII
Dir. John Aries S. Macaspac – Director, Systems and Productivity Improvement Bureau
Juan Romeo Nereus “Neric” Acosta – Former Congressman, Bukidnon 1st District
Atty. Ryan S. Lita – Director, Local Government and Regional Coordination Bureau
Asst. Sec. Achilles Gerard C. Bravo – DBM, Functional Group Head (FGH) of the Internal
Management Group
Hon. Rufus B. Rodriguez – Congressman, 2nd District of Cagayan de Oro City
Hon. Peter “Sr. Pedro” M. Unabia – Governor, Province of Misamis Oriental
Atty. Kenneth Tamala – City Legal Officer of Cagayan de Oro City
Atty. Percy G. Salazar – CBO of Cagayan de Oro City, MLLBO President
MLLBO Officers, Regional League Officers, Local Budget Officers and Financial
Management Practitioners from various LGUs of Mindanao
Agenda:
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MLLBO 2023 General Assembly
Technical Session 1: Updates on Full Devolution of Functions under EO 138
Technical Session 2: Procurement Policies and GPPB updates
Technical Session 3: Overview/Salient Features and Provisions of the Internal Audit
Manual
5. Technical Session 4: Embracing Your Potential; Unleashing the Power Within You
6. Technical Session 5: Overview/Salient Features of the 2023 Budget Operations Manual
7. Technical Session 6: Updates on PFM Competency Program
Conference Proceedings:
1. MLLBO 2023 General Assembly
The MLLBO (Mindanao Local Budget Officers) conference this year, themed "Empowering
Mindanao and Uniting its Local Governments for Sustainable National Development through Digital
Transformation," sheds light on the significance of digitalization in local governance and public financial
management.
In a statement, the Budget Secretary emphasized that being a budget officer is not a curse but a
talent, a gift to be proud of—one that not everyone possesses. This recognition highlights the unique
skills and intellect that come with the role.
Secretary Pangandaman also assured that the administration of President Ferdinand R. Marcos Jr.
is committed to embracing digital technology to enhance services for Filipinos. The commitment is
reflected in the allocation of P38.75 billion for digitalization in the proposed 2024 national budget,
expected to be approved in December.
Among the positive developments shared by the Budget Secretary is the expedited procurement
processes through the introduction of an "eMarketplace." This initiative is part of proposed reforms in the
Government Procurement Reform Act (GPRA), aiming to streamline and modernize the procurement
system. The Budget Chief also guaranteed the strengthening of public participation in the government
process through the Philippine Open Government Partnership. This indicates a commitment to
transparency and involving the public in decision-making processes.
In conclusion, Secretary Pangandaman assured attendees that the Department of Budget and
Management (DBM) stands behind them in implementing changes that will be felt by every Filipino,
reinforcing the government's dedication to progress and service delivery.
2. Technical Session 1: Updates on Full Devolution of Functions under EO 138
The Technical Session 1 during the convention, held on October 25, 2023, provided updates on
the Full Devolution of Functions under Executive Order 138, with Undersecretary Wilford Ong from the
Department of Budget and Management (DBM) serving as the lecturer.
Under Section 17(a) of Republic Act No. 7160, also known as the "Local Government Code of
1991," local government units (LGUs) are urged to be self-reliant and continue exercising powers and
functions devolved to them. Section 17(b) outlines a list of basic functions and services to be developed at
different levels of LGUs. The Full Devolution of Basic Services and Facilities to LGUs, as mandated by
Executive Order No. 138 dated June 1, 2021, involves the transition of certain functions of the Executive
Branch to local governments. This aligns with RA No. 7160, and national government agencies (NGAs)
are expected to scale down or phase out certain programs, projects, and activities related to devolved
functions by Fiscal Year 2024. The Salient features of the Full Devolution Transition, as per EO No. 138,
include the delineation of roles between NGAs and LGUs, the creation of the Committee on Devolution,
preparation of transition plans, establishment of a Growth Equity Fund, capacity building for LGUs and
NGAs, and strengthening of planning, investment programming, budgeting linkage, and monitoring and
evaluation systems, along with a communications plan and strategy.
An update on the implementation of the Full Devolution Effort reveals that three National
Government Agency Devolution Transition Plans (NGA DTPs) have been approved, 15 are under review
and evaluation by DBM, and two are for submission. On the LGU side, according to the Department of
the Interior and Local Government (DILG), Barangays have a 99.99% completion rate, Cities and
Municipalities have 100% completion, and Provinces have a 99.12% completion rate, totaling 41,040 out
of 41,042 completed LGU DTPs, or 99.99% of the total completion.
In response to the President's directive to further study the devolution effort, there is an ongoing
review of the Full Devolution of Government. This includes the assignment of responsibilities, programs,
and projects between NG and LGUs based on the latter's absorptive capacity. Continued provision of
capacity development interventions for LGUs by NGAs is emphasized, along with the formulation of a
long-term capacity development strategy and program for LGUs. Policies provided under EO No. 138
that shall continue to be pursued include the performance of functions and services devolved to LGUs,
retention of Community Development and performance of its functions, continued provision of the
Growth Equity Fund, provision of capacity development by NG to LGUs, strengthening of planning and
budgeting linkage, and performance by NG of oversight and steering functions.
Looking ahead, the focus is on implementing full devolution in accordance with legal matters and
set standards, enhancing capacities to undertake devolved functions and services, and strengthening
collaboration and partnerships with NG, other LGUs, Civil Society Organizations (CSOs), the private
sector, and other stakeholders.
3. Technical Session 2: Procurement Policies and GPPB updates
The Technical Session 2 during the convention, held on October 25, 2023, focused on updates
regarding Procurement Policies and the Government Procurement Policy Board (GPPB), with Atty.
Dennis S. Santiago, Executive Director V of the Procurement Service at the Department of Budget and
Management (DBM), serving as the lecturer.
At the core of the discussion was the concept of procurement and the pursuit of best value for
money, which, according to Atty. Santiago, is not merely about selecting the lowest bid but rather
choosing offers that provide the optimum combination of factors and the best return on investment. The
optimal combination involves considering whole-life costs and quality to meet the customer's
requirements. Atty. Santiago outlined the five rights in public procurement, emphasizing the importance
of the right source, quantity, quality, price, and time/delivery.
The lecture delved into the Philippine Procurement Paradigm, which consists of four phases: 1)
Identification of needs through the Project Procurement Management Plan (PPMP), 2) Assessment by
consolidating the approved Annual Procurement Plan (APP), 3) Procurement through public bidding, and
4) Implementation of the procured projects. Recognizing public procurement as a government activity
susceptible to corruption, Atty. Santiago highlighted vulnerabilities and risk areas in the procurement
process. These include actors such as end-users, selection committees, suppliers, contractors, and
consultants, as well as risks associated with planning and selection processes and contract
execution/implementation. In the pre-bidding phase, common risks involve inadequate planning and
budgeting, poorly defined requirements, inappropriate choice of procedures, and insufficient timeframes
for bid preparation. During the bidding phase, risks include inconsistent access to information for bidders,
lack of competition, and potential conflicts of interest leading to bias and corruption. In the post-bidding
phase, risks include insufficient monitoring of contractors, lack of transparency in subcontractor and
partner selection, deficient separation of financial duties, and inadequate supervision of public officials.
Atty. Santiago also discussed Management Integrity Risk through Contract Management,
emphasizing the systematic and efficient management of contract creation, execution, and analysis to
maximize operational and financial performance while minimizing risks. He outlined the seven stages of
contract management, from preparation to post-signature management, and shared the recipe for
successful contract management, including the avoidance of disputes and surprises.
The lecture concluded with an emphasis on avoiding integrity risks in the public procurement
process by adhering to principles, complying with laws and rules, avoiding discretion abuse, and ensuring
good contract management from start to finish. This comprehensive overview provided attendees with
insights into the complexities and challenges of public procurement, as well as strategies for mitigating
risks and ensuring successful outcomes.
4. Technical Session 3: Overview/Salient Features and Provisions of the Internal Audit Manual
The Technical Session 3 during the convention, held on October 26, 2023, focused on the
Overview, Salient Features, and Provisions of the Internal Audit Manual (IAM). Director John Aries S.
Macaspac, the Director of the Systems and Productivity Improvement Bureau, served as the lecturer.
The session began with a discussion on the principles of internal control, as outlined in DBM
Circular Letter No. 2008-8 dated October 23, 2008. This circular contains fundamental principles,
policies, and general standards to guide agencies in developing, implementing, and monitoring their
internal control systems. Atty. Macaspac highlighted the Most Common Control Policies and Procedures,
including delegation of authority, segregation of functions, access control, completeness and integrity of
transaction documents, verification of transactions, and reconciliation of records.
He emphasized that internal control is an integral process occurring throughout an entity's
operations, designed to regulate and guide operations, and subject to limitations influenced by external
and human factors. Atty. Macaspac discussed the effects of failure in internal control, such as inefficient
use of resources, loss of assets, unreliable financial and operational reports, non-compliance with laws,
rules, or regulations, and customer dissatisfaction.
The Five Objectives of Internal Control (CARES) were introduced: Comply with laws, rules, or
regulations; Adhere to managerial policies; Reliability of accounting data; Ensure economical, effective,
and ethical operations; and Safeguard assets. He highlighted the benefits of a strong internal control
system, including stronger accountability, the 4Es of operations (efficiency, effectiveness, economy, and
ethical behavior), improved risk management, better response to client needs, better quality of outputs and
outcomes, and effective governance.
The Framework of Internal Control and its components were explained:
1. Control Environment: The general framework serving as the basis for other internal control
components.
2. Risk Assessment: The process of identifying, analyzing, and evaluating risks affecting the achievement
of agency objectives.
3. Control Activities: Policies and procedures established to address risks and achieve the agency's
objectives.
4. Information and Communication: Vital components for attaining control objectives.
5. Monitoring and Evaluation: Ensures that controls are operating as intended and modified appropriately
for changes in conditions.
Atty. Macaspac introduced the legal basis and timeframes for Internal Auditing in Local
Government. He distinguished the Internal Audit Manual for Local Government Units (issued under
Local Budget Circular No. 110, 2016), the Revised Philippine Government Internal Audit Manual (issued
under DBM Circular Letter No. 2020-8, 2020), and the Internal Audit Manual for Local Government
Units (2023 Edition). Salient features of the IAM for LGUs (2023 Edition) include clearer guidelines on
establishing an Internal Audit Unit (IAU), delineation of the role of the local accountant, roles and
responsibilities of key players, comprehensive internal audit processes, templates, examples of non-audit
functions, and distinction between internal audit and internal quality audit.
The Internal Audit Functions were discussed, including advice to the Local Chief Executive
(LCE) or Presiding Officer of the Sanggunian, conducting management and operations audits, reviewing
and appraising systems and procedures, analyzing control deficiencies, and assisting top management in
problem-solving. Non-Internal Audit Functions were also outlined, such as conducting internal quality
audits, participation in procurement procedures, reviewing policies, guidelines, and standards, pre-audit of
vouchers, and involvement in various operational activities.
The role of the Accountant in relation to internal audit was clarified, emphasizing the separation
of internal audit from the regular functions of other units within the LGU.
Atty. Macaspac introduced the Enhanced Public Financial Management Assessment Tool for
Local Government Units (ePFMAT for LGUs). It identifies seven pillars of a good PFM system,
including policy-based budgeting, comprehensiveness and transparency, credibility of the budget,
predictability and control in budget execution, accounting, recording, and reporting, internal and external
audit, and citizens' participation in the budget process.
Challenges in establishing an Internal Audit Unit were discussed, including limitations, lack of
support from local officials, technical knowledge, fund availability, and lack of information and unclear
guidelines. The session provided comprehensive insights into the principles, frameworks, and challenges
of internal audit in the context of local government units, offering attendees valuable information to
enhance the efficiency and effectiveness of their operations.
5. Technical Session 4: Embracing Your Potential; Unleashing the Power within You
The Technical Session 4 during the convention, held on October 26, 2023, centered on the theme
"Embracing Your Potential; Unleashing the Power within You," with Juan Romeo Nereus “Neric”
Acosta, Former Congressman of Bukidnon 1st District, serving as the lecturer.
To kickstart the afternoon session and ensure the audience's optimal engagement, Acosta initiated
a nerve conditioning energizer. This activity aimed to invigorate the participants and create a positive and
alert mindset, particularly beneficial given the consecutive lectures.
The focus of the session shifted towards Transformational Leadership, with Acosta delving into
key concepts. He touched on words like "Hinaharap" (future), "Hugot" (emotion or personal experiences),
"Self Doubt," "Unresolved issues," and the importance of factors such as health, hygiene, exercise,
nutrition, sleep, and heart. Acosta emphasized the significance of addressing unresolved issues and selfdoubt in the pursuit of personal and professional growth. He also underscored the importance of taking
care of one's physical well-being, including aspects like exercise, nutrition, and sufficient sleep.
The reference to "Hugot" suggests drawing strength from personal experiences and emotions,
indicating that emotional intelligence and self-awareness play crucial roles in effective leadership. The
discussion extended to the essential elements of maintaining a healthy lifestyle, including proper
nutrition, regular exercise, and adequate sleep. Acosta highlighted the interconnection between physical
well-being and overall effectiveness in professional and personal spheres. Incorporating a holistic
approach to leadership, the session aimed to inspire the audience to embrace their potential fully. Acosta's
emphasis on the role of emotions, self-awareness, and physical well-being reflects a broader perspective
on leadership—one that goes beyond traditional models and incorporates personal growth and resilience.
The session concluded with an encouragement for participants to share their experiences and
insights, fostering a sense of community and collective learning. Acosta's lecture aimed not only to impart
knowledge but also to ignite a sense of empowerment and motivation among the attendees, encouraging
them to tap into their full potential and become the best versions of themselves.
6. Technical Session 5: Overview/Salient Features of the 2023 Budget Operations Manual
Technical Session 5 of the convention on October 26, 2023, presented by Atty. Ryan S. Lita,
Director of the Local Government and Regional Coordination Bureau, offered a comprehensive overview
of the 2023 Budget Operations Manual (BOM) for Local Government Units (LGUs). Local Budget
Circular No. 152, dated August 2, 2023, served as the foundation for the discussion, focusing on the
enhancements and new features incorporated into the 2023 edition.
Key components of the manual include the Fundamental Principles Governing Local Taxation
and Fiscal Matters, rooted in Sections 130, 132, 133, and 305 of the Local Government Code of 1991
(RA No. 7160). Atty. Lita emphasized the significance of these principles as the backbone of the
budgetary framework, guiding LGUs in their revenue-raising endeavors. An innovative addition to the
manual is the introduction of the Cash Budgeting System (CBS). Atty. Lita highlighted CBS as a solution
to expedite the implementation of development projects, providing a contrast between obligation-based
budgeting and CBS. The benefits of CBS, including a focus on implementation-ready projects and a
decrease in administrative load, were elucidated, encouraging LGUs to adopt this approach.
The session delved into the Budget Preparation Phase, particularly the Local Expenditure
Program (LEP). Atty. Lita outlined the changes, such as the removal of supporting documents through
supplemental budgets, streamlining the presentation of proposed budgets, and detailed rules for each
department/office. Noteworthy requirements, including the 20% allocation for development projects and
compliance with various regulations, were discussed to ensure comprehensive and compliant LEPs. The
presentation extended to the Budget Authorization Phase, where updates on Supreme Court rulings were
introduced. The intricacies of enacting an Appropriation Ordinance were explored, emphasizing the
importance of an affirmative vote of the majority of all sanggunian members. Further enhancements in the
Local Budget Review Form No. 2 were shared, providing a standardized format for the reviewing
authority. The Budget Execution Phase was also discussed, with a focus on the use of savings and
augmentation, as well as changes in the annual budget.
The session meticulously covered the intricacies of the Reenacted Budget and its limitations,
including the prohibition of new projects, positions, and non-recurring activities. Atty. Lita guided
attendees through the role of the Local Treasurer and Sanggunian in adjusting the budget to align with
revised income estimates. Allocation to LGUs took center stage, with a comprehensive discussion on the
National Tax Allotment (NTA), Share Value-added tax, Share in Tobacco Excise Taxes, and the newlyintroduced NTA Portability for newly-converted cities. Uses of funds from different sources, including
the 20% Development Fund, were elaborated upon.
In the continuation of the technical session, Atty. Ryan S. Lita shared vital insights into the
intricacies of the budgeting process, shedding light on crucial aspects of the Local Expenditure Program
(LEP) submission, budget preparation, authorization, review, execution, and changes in the annual
budget. The discussion underscored the significance of submitting the LEP to the Sanggunian by October
16 of the fiscal year, as mandated by Section 318 of the Local Government Code (LGC). Atty. Lita
emphasized the required accompanying documents, including the Budget Message, Plantilla of Personnel,
Statement of Indebtedness, Annual Operating Budget of Local Economic Enterprises (LEE), if applicable,
and the duly approved Annual Investment Program (AIP).
The session delved into the complexities of the Budget Preparation Phase, addressing the general
rule that supplemental budgets cannot be enacted once the executive budget has been submitted to the
Sanggunian. However, exceptions were noted, such as when supported by certified available funds,
covered by new revenue sources, or during public calamities. Atty. Lita guided the audience on preparing
supplemental budgets using specific forms. In the Enhancement of the Budget Authorization Phase,
updates on Supreme Court rulings were discussed, emphasizing the voting requirement to enact an
Appropriation Ordinance. The definition of appropriation as an authorization directing payment under
specified conditions was explored, highlighting the need for an affirmative vote of the majority of all
Sanggunian members.
The Local Budget Review Form No. 2 was presented as an expanded summary of findings and
recommended review actions. This enhanced form aimed to provide a standardized format for the
reviewing authority to assess budgetary requirements, general limitations, budgetary requirements by
attribution, and the review of Annual Operating Budgets of LEEs. Moving to the Budget Execution
Phase, Atty. Lita thoroughly covered the use of savings and augmentation, drawing distinctions between
the use of savings through supplemental budgets and savings and augmentation, per Sections 321 and 336
of the LGC. The discussion was further extended to the Reenacted Budget, its preparation, limitations,
and the role of the Local Treasurer and Sanggunian in making adjustments. Changes in the Annual
Budget, specifically the use of savings and augmentation, were elucidated. While the general rule
emphasized the exclusivity of funds for their appropriated purpose, exceptions were detailed, allowing the
Local Chief Executive or Presiding Officer to augment items within the same expense class from savings.
The session concluded with an in-depth exploration of the Reenacted Budget and its limitations,
ensuring a clear understanding of the restrictions on new projects, positions, non-recurring activities, and
supplemental appropriations during this phase. Atty. Ryan S. Lita also provided an updated discussion on
the allocation to Local Government Units, incorporating the Mandanas-Garcia Case and addressing the
use of the 20% Development Fund and NTA Portability. The legal bases and uses of the Share Valueadded tax and Share in Tobacco Excise Taxes were shared, along with the NTA Portability for newlyconverted cities.
Additionally, the Uses of Fund were highlighted, emphasizing the importance of setting aside no
less than 20% of the annual NTA for development projects. Prohibited expenditure items and specific
allocations for education, health insurance, environmental conservation, agricultural modernization, and
tobacco excise taxes were discussed in detail. To further strengthen local finances, Atty. Lita concluded
by delving into the Additional Levy on Real Property for the Special Education Fund, enabling provinces,
cities, and municipalities to levy and collect an annual tax of 1% on the assessed value of real property for
the exclusive benefit of the Special Education Fund.
In summation, Atty. Ryan S. Lita's technical session provided a comprehensive understanding of
the nuanced processes and legal frameworks governing local government budgeting, equipping attendees
with the knowledge needed for effective financial management and compliance. Moving forward, the
DBM Regional Office will organize roll-out activities and training on the Budget Operations Manual
(BOM) for Local Government Units (LGUs), specifically focusing on the 2023 edition. This initiative
will be carried out in collaboration with both the DBM-Local Government and Regional Coordination
Bureau. Additionally, copies of the BOM, 2023 edition, will be made available at the Regional Office for
reference and distribution.
7. Technical Session 6: Updates on PFM Competency Program
The Technical Session 6 of the convention on October 26, 2023, provided a deep dive into the
theme "Updates on PFM Competency Program," with Assistant Secretary Achilles Gerard C. Bravo from
the Department of Budget and Management (DBM) serving as the distinguished lecturer. As the
Functional Group Head (FGH) of the Internal Management Group, Asst. Sec. Bravo shed light on the
Public Financial Management Competency Program (PFMCP), aiming to empower PFM practitioners in
oversight and spending agencies.
The PFMCP is structured to comprise a Foundation Course, namely the PFM Foundation, and
five specialized tracks, namely Budgeting and Performance, Procurement, Accounting, Auditing, and
Cash Management. The overarching goal of the program is to enhance the technical competencies of PFM
practitioners, fostering ongoing training and learning opportunities to bolster effective job performance
and career growth. Simultaneously, the program aligns with broader PFM reforms, emphasizing
transparency, accountability, and efficient service delivery.
A pivotal aspect of the PFMCP is its competency framework, encompassing the behaviors,
attitudes, skills, and knowledge expected of PFM employees for optimal job effectiveness. The
competency model consists of a Common PFM Competency Framework and five distinct
Functional/Technical Competency Frameworks. Asst. Sec. Bravo highlighted the imperative for a
systematic and ongoing training and development program linked to performance and career growth. The
PFM Competency Program serves as a catalyst for collaboration and networking across PFM functions,
aiming to create a community of practice. The emphasis is on fostering development in the workplace
through action learning, laying the groundwork for comprehensive competency development.
The competency-based approach is underlined by studies indicating that employees learn most
effectively when confronted with real-life problems and issues in the workplace, applying tools and
principles acquired in training, and reflecting on the process (action learning). Eligibility for the program
is extended to personnel engaged in key PFM functions, such as Budgeting, Planning, Accounting,
Procurement, Cash Management, Internal Audit, and Project Implementation. The training is facilitated
by learning service providers, including PHILLBO and the Department of Budget and Management, with
the Association of Local Budget Officers (ALBO) yet to decide on a training fee. The mode of delivery
emphasizes synchronous learning through face-to-face and joint training sessions.
Asst. Sec. Bravo's session not only elucidated the structure and objectives of the PFM
Competency Program but also emphasized the importance of ongoing learning, collaboration, and
competency development in the realm of Public Financial Management.
On the concluding day of the convention, participants wrapped up the event with an insightful
benchmarking session at various tourist destinations in Cagayan de Oro City and the Province of Misamis
Oriental. This practical exposure to successful tourism practices in Cagayan de Oro City and Misamis
Oriental would have been a fitting conclusion to the convention, offering a tangible and memorable way
for participants to apply the knowledge gained during the various technical sessions.
Photos taken during the MLLBO 2023 Annual Convention:
Prepared by:
CLAIDE VENCENT C. DESIERTO
Administrative Aide VI
Noted by:
LEAH P. DUHAYLUNGSOD
Provincial Budget Officer