Question & AnswerQ&A (MEMORANDUM CIRCULAR NO. 2018-89)
Section 23, Article II of the 1987 Constitution states that the participation of non-governmental, community-based, and other sectoral organizations shall be encouraged by the State.
Section 67 of Republic Act No. 10964 (General Appropriations Act of 2018) allows national government agencies to partner with CSOs and transfer government funds, provided the CSO is accredited and selected according to applicable rules and regulations.
A CSO is defined as a non-state and non-profit association that works to improve society and the human condition, including NGOs, civic organizations, cooperatives, social movements, professional groups, and business groups.
Types of engagement include voluntary work without cost, voluntary work with cost (reimbursement for expenses), and engagement as a provider of goods and/or services with remuneration.
The NAC is chaired by the Secretary of the DILG, with the Vice-Chair being the Director of the Bureau of Local Government Supervision, and members from various DILG bureaus, Legal and Legislative Liaison Service, Internal Audit Service, Local Government Academy, Commission on Audit, and representatives from Bureaus and Project Management Offices.
The CSO must be composed of technical experts, have a good government track record, not have officers related within the fourth civil degree to any DILG official involved in accreditation or project funding, and must not be in default or delay in liquidating any government funds received.
Non-compliance with provisions of the engagement agreement or violation of laws, rules, or regulations involving the use and liquidation of government funds during validity may lead to revocation; revoked CSOs are barred from future engagements.
Partner CSOs shall keep and maintain financial and accounting records of government funds received, and comply with liquidation, utilization, and audit requirements as per COA Circular No. 2007-001.
The DILG requires regular reporting including submission of agreements, semester and quarterly reports on partnerships and funds transferred, with quarterly reports submitted to the House Speaker and Senate President, and posted publicly on the DILG website.