DOF tightening LGU oversight to boost collection

MANILA, Philippines - The Department of Finance (DOF) is tightening its oversight on local government units to shore up state coffers as revenue collections from LGUs remain meager.

During the 81st Philippine Association of Local Treasurers and Assessors (PHALTRA) National Convention and Seminar Workshop, Finance Secretary Cesar Purisima said there is still room for improvement as revenue collections from LGUs remain below one percent of gross domestic product (GDP).

Aside from training people, streamlining processes and upgrading technology, the DOF is also looking at imposing sanctions on local treasurers and assessors for non-compliance with reportorial obligations, Purisima said.

Based on the 2012 LGU fiscal sustainability scorecard, there were certain lapses in the performance of reportorial duties to the DOF -- about 69 percent of the treasurers were not able to submit their reports on time while six provinces and eight cities did not approve the reports at the time of evaluation.

There were also treasurers who themselves were surprised at the reports they submitted.

Nevertheless, Purisima said the DOF is willing to give due recognition to local treasurers and assessors who have proven to be outstanding civil servants.

Provincial and municipal treasurers from the Cordillera Administrative Region had the highest compliance rate.

 â€œExpect that in the next three months, a similar performance assessment for all municipalities and newly created LGUs will be undertaken by the DOF, in coordination with the BLGF regional offices,” Purisima said.

 â€œBy June, we will begin analyzing the 2013 performance of LGUs and we will look at the official reports, as well as other third-party reports. All these will be published through the LGU portal called Iskor ng ‘yong Bayan, a website that will provide regular updates on local finance,” he added.

The DOF is also in the process of developing a scoring system for regular performance appraisal of LGU treasurers in terms of meeting operational goals and improving professional competence.

In addition, the DOF is considering conducting an examination for all local treasurers, as “fitness” test on their knowledge on basics in public finance, treasury operations, disbursement and fund management, ethics, and other matter.

Purisima said while international credit rating agencies have been issuing ratings to nations, the DOF is also looking into establishing an LGU credit-worthiness tool, wherein criteria go beyond net debt service ceiling and borrowing capacity.

“As exemplary fiscal managers of the nation, local treasurers and assessors are therefore duty-bound to uphold the virtues of professional competence, integrity, transparency, and accountability in their work,” he said.