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HONORARIA SOURCED FROM LGU SAVINGS

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HONORARIA SOURCED FROM LGU SAVINGS

Post by rvillon on Tue Feb 24, 2009 9:19 am

DBM Budget Circular No. 2007-3 provides that horaria of BAC members, BAC secretariat and Technical Working Group can be sourced from savings from the local budget approved by their respective sanggunian, subject to the pertinent provisions of the Local Government Code.

Sec. 322 of the Local Government Code provides that all unexpended balances of appropriations authorized in teh annual appropriations ordinance shall be reverted to the unappropriated surplus of the general fund at the end of the fiscal year and shall not be available for expenditure except by subsequent enactment.

As a result, COA requires the reversion of the savings and needs the enactment of a supplemental budget before the honoraria can be paid out of the LGU savings.

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Re: HONORARIA SOURCED FROM LGU SAVINGS

Post by RDV @ GP3i on Tue Feb 24, 2009 5:12 pm

Right, LGUs have to pass a Supplemental Budget during the year, sourced from savings. That is also advisable since, under the LGC, LGUs cannot take up the account in the next year since it is an obligation in the current year. Am I right? I am still a student as far as the LGC is concerned Very Happy
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Re: HONORARIA SOURCED FROM LGU SAVINGS

Post by engrjhez® on Thu Feb 26, 2009 8:38 pm

I would agree also. Just asking... was there a question with it? Very Happy
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Re: HONORARIA SOURCED FROM LGU SAVINGS

Post by shobe on Fri Apr 03, 2009 3:54 pm

DBM Budget Circular No. 2007-3 provides that horaria of BAC members, BAC secretariat and Technical Working Group can be sourced from savings from the local budget approved by their respective sanggunian, subject to the pertinent provisions of the Local Government Code.

Sec. 322 of the Local Government Code provides that all unexpended balances of appropriations authorized in teh annual appropriations ordinance shall be reverted to the unappropriated surplus of the general fund at the end of the fiscal year and shall not be available for expenditure except by subsequent enactment.

As a result, COA requires the reversion of the savings and needs the enactment of a supplemental budget before the honoraria can be paid out of the LGU savings.-rvillon



I think the confusion lies on the two (2) governmental issuances which affect the honoraria for procurement officers in LGUs. For although the DBM Circular states that honoraria can be sourced from the savings of the LGU, the cited LGC provision on the other hand, mandates the automatic reversion of the unexpended balances of appropriations (savings) to the general fund. In effect, there will be no savings, thus no honoraria.

I think another provision under the Local Government Code may be used to implement the DBM Circular re honoraria for procurement officers in the local government units.

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


This might be the more appropriate provision applicable for the grant of honoraria for LGU procurement officers. Note nonetheless that there must be an ordinance authorizing the Local Chief Executive to make use of these savings.

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Re: HONORARIA SOURCED FROM LGU SAVINGS

Post by RDV @ GP3i on Fri Apr 03, 2009 4:46 pm

shobe wrote:

I think the confusion lies on the two (2) governmental issuances which affect the honoraria for procurement officers in LGUs. For although the DBM Circular states that honoraria can be sourced from the savings of the LGU, the cited LGC provision on the other hand, mandates the automatic reversion of the unexpended balances of appropriations (savings) to the general fund. In effect, there will be no savings, thus no honoraria.

I think another provision under the Local Government Code may be used to implement the DBM Circular re honoraria for procurement officers in the local government units.

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


This might be the more appropriate provision applicable for the grant of honoraria for LGU procurement officers. Note nonetheless that there must be an ordinance authorizing the Local Chief Executive to make use of these savings.


Come to think about it, atty shobe, may be right again.

However, while augmentation from savings is allowed under Sec. 336, it is allowed only "augment any item in the approved annual budget for their respective offices." Honoraria for BAC members is not supposed to be part of the annual budget as its main source is from collections from procurement-related activities prior to award of contract. Therefore, not being part of the annual budget, there is nothing to augment really.

What do you think, atty.?
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Re: HONORARIA SOURCED FROM LGU SAVINGS

Post by engrjhez® on Fri Apr 03, 2009 6:00 pm

This topic may be drawn out from the fact that LGU savings may be used for Honoraria of BAC members. I may add a similar query:

  • If in the case where BAC's collection overshoots its allocation for Honoraria of its members and staff, can we use the excess fund for something else? Like additional supplies (other than bidding documents), equipment (like computers, fax and photocopying machine, etc.) and trainings? If yes, can this be drawn out directly or will have to return to the General Fund (from the Trust Fund) to be appropriated later?


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Re: HONORARIA SOURCED FROM LGU SAVINGS

Post by shobe on Fri Apr 03, 2009 6:09 pm

However, while augmentation from savings is allowed under Sec. 336, it is allowed only "augment any item in the approved annual budget for their respective offices." Honoraria for BAC members is not supposed to be part of the annual budget as its main source is from collections from procurement-related activities prior to award of contract. Therefore, not being part of the annual budget, there is nothing to augment really.

What do you think, atty.?


Yes Sir. But if we are to argue it that way, then the DBM Circular really has no basis for including in its circular the LGU savings as a source for the honoraria of LGU procurement officers. (I’ll try to go through the LGC again na lang po and see if there’s a more appropriate provision for this issue) My thinking is that the collections are but necessary and corollary consequences of the agency’s procurement activity, which purportedly is part of the approved annual budget. And since honoraria is a necessary consequence of said procurement activity, I think it would be safe to assume that the LCE, through an ordinance can then make use of these savings to augment the payment for honoraria of its procurement officers. This is just my opinion though.
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Re: HONORARIA SOURCED FROM LGU SAVINGS

Post by RDV @ GP3i on Fri Apr 03, 2009 6:23 pm

shobe wrote:

Yes Sir. But if we are to argue it that way, then the DBM Circular really has no basis for including in its circular the LGU savings as a source for the honoraria of LGU procurement officers. (I’ll try to go through the LGC again na lang po and see if there’s a more appropriate provision for this issue) My thinking is that the collections are but necessary and corollary consequences of the agency’s procurement activity, which purportedly is part of the approved annual budget. And since honoraria is a necessary consequence of said procurement activity, I think it would be safe to assume that the LCE, through an ordinance can then make use of these savings to augment the payment for honoraria of its procurement officers. This is just my opinion though.
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Then, probably, we, at DBM, have to really revisit our own Circular in order to address whatever confusion it has caused, in the light of the provisions of the LGC.

Maybe, this topic should be moved under the main topic "Guidelines" or in the "Forum's mitt"
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Re: HONORARIA SOURCED FROM LGU SAVINGS

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