U Republic of the Philippines

U

DEPARTMENT OF FINANCE Roxas Boulevard Com evito Cruz Street Manila 1004

DEPARTMENT ORDER 1 - 05 JANUARY 20, 2005 DIRECTING THE REENGINEERING OF THE BUREAU OF LOCAL GOVERNMENT FINANCE AND CLARIFYING ITS FUNCTIONS AND RESPONSIBILITIES WHEREAS, the Bureau of Local Government Finance (BLGF) is an agency attached to the Department of Finance (DOF), established by virtue of Executive Order (EO) 127, series of 1987 and EO 292, series of 1987, which supervises local treasury and assessment operations and provides support on local taxation and tax administration, revenue generation, fund management, credit financing, and related' services to local government units (LGUs), for the purpose of transforming them into self sufficient and financially independent political subdivisions; WHEREAS, the BLGF is mandated under Section 43 of EO No. 127, series of 1987 to: (i) assist in the formulation and implementation of policies on local government revenue administration and fund management; (ii) exercise administrative and technical supervision and coordination over the treasury and assessment operations of local governments; (iii) develop and promote plans and programs for the improvement of resource management systems, collection enforcement mechanisms, and credit utilization schemes at the local levels; (iv) provide consultative services and technical assistance to the local governments and the general public on local taxation, real property assessment and other related matters; (v) exercise line supervision over its Regional Offices/field units within the Ministry Regional Administrative Coordination Office and the local treasury and assessment services; and (vi) perform such other appropriate functions as may be assigned by the Minister or Deputy Minister for Domestic Operations; WHEREAS, the Local Government Code (LGC) of 1991 has empowered LGUs by granting them genuine fiscal autonomy in creating and broadening their own sources of revenue and, in support thereof, has expanded the supervisory functions and advisory tasks of the DOF and the BLGF; WHEREAS, the issuance of the LGC in 1991 highlighted the importance of the LGU sector in national development efforts and changed national-local relations, adopted a policy of decentralization and expanded LGU powers, functions and responsibili ties. WHEREAS, the decentralization policy shifted the challenge for national government agencies to guide and accelerate the transformation of LGUs to self-sustaining communities and contributors to nation building; WHEREAS, financing became a major issue since the take-off of the LGC implementation and initial challenges of revenue collection and efficient financial management was further expanded to the area of non-traditional financing strategy such as credit and public-private partnership; WHEREAS, new players came into the picture as new concepts arose and LGUs became extraordinarily aggressive in finding funds for their development; WHEREAS, the DOF, particularly the BLGF, being the principal oversight agency in LGU finance, has to appropriately respond to the new trends and demands of the local government sector by modifying its organizational structure with an expanded mandate;

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WHEREAS, EO. 366 dated 04 October 2004, directs the strategic review of the operations and organization of the Executive Branch and transform it into an efficient and results oriented structure; WHEREAS, the rationalization program is further reinforced by the urgent need to modify and reorganize the BLGF to better serve the needs of the Local Government Sector; NOW, THEREFORE, I, JUANITA D. AMATONG, Secretary of Finance, by virtue of the powers, supervision and control over the BLGF granted to me by EO 127 and EO 366, do hereby order: Title. This Department Order shall be known as "Reengineering BLGF and Section 1. Clarifying the Functions and Responsibilities of the Bureau of Local Government Finance" Specific Functions. In order to carry out the mandate and without prejudice to the Section 2. performance of other functions that are or may hereafter be assigned by law, the Bureau shall have the following specific functions: 1.

Conduct policy researches focusing on local government fiscal and financial problems;

2.

Provide technical and policy advice to local and national government on the fundamentals of sound local government finance;

3.

Link fiscal planning functions of national and local governments through coordination of policies and programs;

4.

Develop adequate and appropriate incentive mechanisms for local government units;

5.

Develop an integrated performance monitoring system and assessment of results of fiscal operations;

6.

Establish uniform financial reporting systems for different levels of local government units;

7.

Provide accurate, timely, uniform and comparable local government fiscal and financial information;

8.

Undertake training and capacity building activities to support LGUs toward achieving efficiency and effectiveness in their fiscal operations; and

9.

Perform such other functions as may be assigned.

Organizational Structure. The BLGF shall be composed of a Central Office and Section 3. Regional Offices distributed in the 15 regions of the Republic of the Philippines. Section 4. The BLGF Central Office. - The BLGF Central Office shall ensure that the mandates of the Bureau, as stipulated in Section 3 of this Department Order, are successfully discharged and implemented. It shall formulate policies and directives for implementation by the BLGF Regional Offices in the interest of accomplishing these mandates and coordinate, monitor and supervise the operations of the BLGF Regional Offices to ensure that these are in accordance with the foregoing.

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The BLGF Central Office shall have the following organization with corresponding functions as follows: Office of the Executive Director. The Executive Director will have an office from A. which he/she shall oversee the operations of the Bureau. It shall be supported by a Management and Technical Staff (MTS) which shall provide research, liaison and administrative assistance to the Executive Director. The MTS shall temporarily act as the National Capital Region (NCR) Coordinating Unit meantime that the full-blown Regional Office for the NCR has not been organized. The Deputy Executive Director for Operations. A Deputy Executive Director for B. operations shall supervise and manage the operational concerns of the Bureau. Under his/her Office will be the Local Finance Operations Services and the Local Fiscal Policy Monitoring and Evaluation Services The Local Fiscal Policy Research Monitoring and Evaluation Services Group. 1. The Local Fiscal Policy Monitoring and Evaluation Services shall be responsible for the formulation and development of policies, preparation and analysis of LGU financial statistics, setting of indicators and standards on local government finance, and development of adequate incentive mechanisms for the local government sector. 2. The Local Finance Operations Services Group. The Local Finance Operations Services Group shall be responsible for supervision of LGU fiscal and financial operations particularly resource mobilization. The Deputy Executive Director for Administration. C. A Deputy Executive Director shall supervise and manage the administrative concerns of the Bureau. Under his/her Office will be lodged the Finance and Administrative Services Group, Legal Services, and Information Technology Service. 1. The Finance and Administrative Services Group. The Finance and Administrative Services shall undertake Bureau-wide services relating to budget, accounting and cash management, personnel and human resource administration, property and supply management, records and reporting system, and general housekeeping. 2. . The Legal Services Group. The Legal Services Group shall be primarily responsible for all the legal concerns of the Bureau to include preliminary investigation and fact finding activities on complaints against local treasurers and BLGF personnel, prosecution and filing of legal suits if evidences exist and other routine legal advises 3. The Information Systems Service shall provide the information technology support to the units' organizations in the BLGF Central and Regional Offices. It will likewise support the information technology concerns of local assessment and treasury offices. Section 5.

The BLGF Regional Office. The BLGF Regional Office shall be responsible for implementing the policies and directives formulated by the Central Office in the interest of fulfilling the Duties and Functions of the Bureau. It shall report to the Central Office to ensure that the operations and activities of the Bureau are coordinated.

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The BLGF Regional Office shall have the following organization with corresponding functions as follows: The BLGF Regional Director shall The BLGF Regional Director. 1. oversee activities and operations of the regional office to ensure that these are consistent with the mandate of the Bureau as contemplated under Section 3 hereof, and in accordance with the targets and thrusts agreed with the Central Office. The BLGF Assistant Regional Director. The BLGF Assistant Regional Director 2. shall provide immediate technical support to the BLGF Regional Director. The Finance and Administration Unit shall be responsible for the accounting, 3. budgeting, cashiering, record keeping, property and supply management and human resource management functions of the Regional Office. The Local Finance Operations Division shall monitor the local finance operations 4. of local government units within the region, provide technical assistance and recommend measures deemed necessary to improve LGU performance. The Legal Unit shall be primarily responsible for the conduct of fact finding and 5. preliminary investigation of cases concerning the Regional Office and those that are related to the primary mandate of the Bureau as contemplated under Section 3 hereof. As may be appropriate and necessary, the division is also tasked to implement decisions on cases and suits related to the aforementioned concerns. The Executive Director of the BLGF, with the Reorganization Plan. Section 6. assistance of the Department of Finance representative is hereby directed to submit within ninety (90) days from the effective date hereof an integrated reorganization plan that aims to contain the organizational structure, statement of functions, staffing pattern, position and salary classifications, budgetary implications and all other requirements in compliance with applicable laws, rules and regulations. The reorganization plan shall also be submitted to the Department of Budget and Management and the Civil Service Commission, for review and approval. Affected personnel. Personnel who will be affected by this reorganization may avail Section 7. of the retirement/separation benefits as provided for under Executive Order 366. BLGF shall look into the possibility of sourcing interim funds Interim Funding. Section 8. to carry out the provisions of this Department Order within CY 2005. For CY 2006, the BLGF shall integrate funding requirements in the regular appropriations. The BLGF shall continue to exercise all powers, duties and functions previously Section 9. assigned to it by law that have not been otherwise transferred or revoked. Section 10.

Effectivity.

This Department Order shall take effect immediately.

Done in the City of Manila this 20`x' day of January 2005.

T'-Z N

L7^IVITA D. AMATON Secretary