The Finance and Budget and Management departments have updated the standards for local governments’ reporting of receipts and expenditures as part of an effort to improve planning, budgeting, and promote administrative efficiency in managing local finances.
In a statement on Monday, the agencies disclosed the issuance of Joint Circular (JC) No. 2015-1 setting the guidelines for the adoption of the modified Statement of Receipts and Expenditures (SRE) format to be used in local government budgeting.
The SRE, which is installed in the local treasury offices in all provinces, cities and municipalities and maintained by the Department of Finance’s (DOF) Bureau of Local Government Finance (BLGF), is the official financial monitoring and reporting system of the DOF for local governments units (LGU).
Since 2008, the Department of Budget and Management had been using the SRE to determine the LGU Budget of Expenditures and Sources of Financing, which detail the LGU expenditure program covering the actual obligations for the past year, the actual and estimated expenditures for the current year, and the proposed budget program for the coming year.
Under the new circular, the SRE report to be submitted by LGUs to the DBM will now cover a three-year period which will be accomplished by the local treasurers for the past year, and accountants and budget officers for the current and proposed budget years.
“LGU financial reports must be consistent, comparable, and reliable across oversight agencies. We are working closely with DBM to achieve greater transparency and accountability in the local finance sector. This is to improve planning, budgeting, and promote administrative efficiency in local finance,” Finance Secretary Cesar Purisima said.
Purisima said that by streamlining the reporting format, the two agencies successfully developed an updated classification system to facilitate the uniform treatment of accounts.
“The fact that we’ve harmonized LGU financial reports also helps local treasurers, budget officers, and accountants work with greater efficiency and accuracy,” he said.
The agencies added that the joint circular also delineates the roles and responsibilities of the DBM and the DOF-BLGF, their respective central and regional offices, and the LGU officials in the preparation of the SRE reports.
In 2013, the DOF started analyzing and publishing the fiscal performance of the LGUs through the LGU Tax Watch and the Iskor ng ‘yong Bayan website based on official reports submitted by local treasurers.