FY2009 Ano’ng FY2010 Iskor ng FY2011 ‘yong � Bayan? � FY2012 � LGU F ISCAL S USTAINABILITY S CORECARD � Financial Management Performance Review for Local Government Units
Declining, <1% locally sourced income to GDP 0.91% 0.89% 0.86% 0.80% 2009 2010 2011 2012
Perspective � � Assessment of fi scal “Supervision of indicators necessary for revenue operations exercise of mandate of all LGUs” Agency has to have a “Monitor and support systematic, not the implementation sporadic, process for of policies and regular assessment of measures on local fi scal performance of revenue LGUs administration”
Directives � of the Secretary of Finance Protection of revenue integrity, data analytics and metrics Closer, thorough monitoring of revenue performance of LGUs Evidence- and policy-based performance assessment of local treasurers and assessors General housekeeping of reports Visit in BIR revenue regions / BOC ports /LGUs
DOF Department Order No. 08-2011: Statement of Receipts and Expenditures Treasurer: eSRE System in the LGUs ? Assessor: Quarterly Reports on Real Property Assessments LGU Fiscal Performance Monitoring System BLGF’s Local Revenue Targets SMV Pro fi le and Ordinances of LGUs Basis for Evaluation
Local Government Unit FISCAL SUSTAINABILITY S C O R E C A R D Directive of the Secretary Baselining the LGU performance from FY2009 to FY2012 Validating the LGU data and testing the integrity of BLGF reports Compliance monitoring on DOF directives and other relevant regulations Publication of LGU performance Policy setting purposes
Indicators Pass Financial (Quantitative) - 90% KRA 1 - Revenue Generation Capacity KRA 2 - Local Collection Growth Fail KRA 3 - Expenditure Management � Non-Financial (Qualitative) - 10% 100% KRA 4 - 6 - Reportorial Compliance
Financial Indicators KRA 1. Revenue Generation Capacity Indicator Benchmark Initial Rating 1.1 Regular income level Very Good, Good, Mean by Income Fair, Needing Class; Graduated Improvement, Poor 1.2 Local revenue level 1.3 Local revenue growth Actual Growth +YoY% or -YoY% 1.4 Dependence on locally sourced income Mean by LGU % Share to Annual 1.5 Dependence on IRA Type; Graduated Regular Income 1.6 Dependence on Other Shares from P National Tax Collection Maximum Score 60
TERMINOLOGIES Annual Regular Income . Sum of locally sourced income (excluding SEF), current year’s IRA and other shares from national tax collection. Other income/receipts were not considered due to reporting errors. Locally sourced income . Total of real property tax (basic), tax on business, other taxes, regulatory fees, user charges, and business income from economic enterprise Tax Revenues. Total revenues collected from real property tax (basic), business tax, other taxes Non-Tax Revenues. Total of regulatory fees, user charges, and income from economic enterprise. Other income/receipts were not considered due to reporting errors
TERMINOLOGIES Dependence on Locally Sourced Income. % share of local revenues (excluding Other Receipts) to total regular income Dependence on IRA. % share of current IRA (excluding monetised IRA) to total regular income Dependence on Other Shares from National Tax Collection. % share of other shares from national tax collection (economic zone, EVAT, national wealth, tobacco excise tax, PAGCOR/PCSO) to total regular income Per Capita . Based on 2010 Census, with 1.82% projected annual growth for FY2011 and FY2012.
TERMINOLOGIES Use of IRA for local development projects. At least 20% of IRA should be utilized for local development projects (LGC Sec. 287) Limitation on Expenditure for Personal Services. Not to exceed 45% of the annual regular income for the next preceding fi scal year for 1st - 3rd income class LGUs or 55% for 4th or lower income class LGUs (LGC Sec. 325a) Limitation on Debt Service Ratio. Expenditures for debt servicing not to exceed 20% of the regular income for the fi scal year (LGC Sec. 324a) RPT Collection E ffi ciency. Ratio of current year collections of basic RPT (including fi nes and penalties for current year only) with preceding year’s collectible basic RPT, as re fl ected in the QRRPA.
Financial Indicators KRA 1. Revenue Generation Capacity Indicator Parameter Rating Points Mean + 50% Very Good 5 Mean + 25% Good 4 1.1 Regular income level Mean Fair 3 Mean - 25% Needs Improvement 2 Mean - 50% Poor 1 Maximum Score 5 Indicator Parameter Rating Points Mean + 50% Very Good 10 Mean + 25% Good 8 P 1.2 Local Revenue Level Mean Fair 6 Mean - 25% Needs Improvement 4 Mean - 50% Poor 2 Maximum Score 10
Financial Indicators KRA 1. Revenue Generation Capacity Indicator Parameter Rating Weight >20% 20 >10% 15 Actual Growth 1.3 Local Revenue Growth >5% 10 Total Local Collections >0% 5 <0% 0 Maximum Score 20 % Main Driver of Performance Assessment Goal is to ensure stable or progressive collection growth
Financial Indicators KRA 1. Revenue Generation Capacity Indicator Parameter Rating Weight P >=20% & C>=50% Very Good 10 P >=15% but <20% Good 8 C>=40% but <50% 1.4 Dependence P >=10% but <15% on Locally Fair 6 C>=30% but <40% Souced Income P >=5% but <10% Needs Improvement 4 C>=20% but <30% P>0% but <5% Poor 2 C>0% but <20% Maximum Score 10 Average Dependence on LSI Provinces: 10% - 15% Cities: 30% - 40%
Financial Indicators KRA 1. Revenue Generation Capacity Indicator Parameter Rating Weight P<75% Very Low 10 C<50% P >=75% but <80% Low 8 C>=50% but <60% 1.5 Dependence P >=80% but <85% Fair 6 on IRA C>=60% but <70% P >=85% but <90% High 4 C>=70% but <80% P>90% Very High 2 C>80% Maximum Score 10 Average Dependence on IRA Provinces: 80% - 85% Cities: 60% - 70%
Financial Indicators KRA 1. Revenue Generation Capacity Indicator Parameter Rating Weight <10% Low 5 1.6 Dependence >=10% but <15% Fair 4 on Other Shares from National Tax >=15% but <30% High 3 Collection >30% Very High 2 Maximum Score 5
Financial Indicators KRA 2. Local Collection Growth Indicator Benchmark Rating Points >20% 5 >10% 4 Actual Growth 2.1 Tax Revenues >5% 3 Total Local Collections >0% 2 <0% 0 Maximum Score 5 >20% 5 >10% 4 Actual Growth 2.2 Non-Tax Revenues >5% 3 Total Local Collections >0% 2 <0% 0 % Maximum Score 5 Main Driver of Performance Assessment Goal is to ensure stable or progressive collection growth
Financial Indicators KRA 3. Expenditure Management Indicator Parameter Rating Weight Mean + 50% Very High 5 Mean + 25% High 4 3.1 Expenditure Per Mean Fair 3 Capita Mean - 25% Low 2 Mean - 50% Very Low 1 >=20% 3.2 Use of IRA for Passed 5 Local Devt. Project <20% Failed 0 <= 45% (H); <= 55% (L) 3.3 Limitation on Passed 5 Expenditure for PS >= 45% (H); >= 55% (L) Failed 0 <=20% 3.4 Limitation on Debt Passed 5 Service >20% Failed 0 P Focusing on Actual Utilization, not Budget Appropriation Statutory Obligations and Limitations
Non-Financial Indicators KRA 4. eSRE Indicator Parameter Rating Weight Timely and No Rejection Compliant 4 Submission of Timely with Rejection; No Timely and Non-Compliant 2 Rejection but not Timely Accurate eSRE No Report Submitted No Report 0 Maximum Score 4 7 out of 10 Treasurers Did Not Submit SRE on Time
Non-Financial Indicators KRA 5. SMV Updating Indicator Parameter Rating Weight Regular Updating SMV is Current & E ff ective Compliant 3 of SMV and Conduct of General Revision SMV is Outdated by at Non-Compliant 0 of Property Least 3 Years Assessments Maximum Score 3 15 Cities & Provinces have new SMVs e ff ective 2014 But 130+ More Are Already DUE…
Non-Financial Indicators KRA 6. Quarterly Report on Real Property Assessments (QRRPA) Indicator Parameter Rating Weight Complete according to form Compliant 3 Submission of Incomplete according to form Non-Compliant Timely and 1.5 Accurate QRRPA No Report Submitted No Report 0 Maximum Score 3 Is the assessor correctly accomplishing the QRRPA? Are there properties with restrictions? Is the land area correct?
Final Rating KRA Max Score Quantitative 90 1. Revenue Generation Capacity 60 2. Local Collection Growth 20 3. Expenditure Management 10 Qualitative 10 4. Timely & Accurate eSRE 4 5. Current & Updated SMV 3 6. Timely & Accurate QRRPA 3
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