Question & AnswerQ&A (DAR ADMINISTRATIVE ORDER NO.10 S. 2011)
It is titled as the Implementing Rules and Guidelines (IRR) implementing the DA Administrative Order No. 11, Series of 2010 in adherence to rule 93.1 of RA 8435 concerning Co-Financing Agreements (CFA) with Local Government Units (LGUs) in financing Agriculture and Fisheries Extension (AFE).
The general objective is to establish a rational DA-LGU CFA as an incentive for LGUs to increase investments in AFE programs/projects. The specific objectives are to provide assistance to LGUs through CFA for AFE programs/projects, and to institute parameters, guidelines, and mechanisms on co-financing for authorized expenditures on AFE projects.
Authorized Expenditure refers to charges against funds released to the LGU for the implementation of approved extension program/project in accordance with budgetary, accounting, and auditing rules and regulations.
A Co-financing Agreement is a mutual consent and undertaking between the Department of Agriculture and the Local Government Unit to provide counterpart funds for the implementation of Agriculture and Fisheries Extension programs/projects.
The CFA is limited to extension programs and projects in the agriculture and fisheries sectors that include women, youth, indigenous peoples, and marginalized farmers and fisher clientele groups.
Principles include shared responsibility among the DA, LGUs, and stakeholders; CFA as a scheme for shared responsibility between national government and LGUs; equity in grant allocation based on income class and needs; and supporting socio-economic development with efficient planning and implementation.
The DA identifies priority areas, assesses projects, provides assistance, approves proposals, enters into MOAs, assists implementation, and conducts monitoring and evaluation of CFA projects.
Eligible programs/projects must support national and regional priorities as in the Agriculture and Fisheries Modernization Plans, correspond to municipal/city/province-wide coverage, support priority commodities, adopt environmentally sound technologies addressing climate risks, include participation of marginalized groups, and assure local government counterpart funding.
The co-financing scheme provides grants from the DA based on the income classification of LGUs: 5th-6th class LGUs get 80% DA share and 20% LGU counterpart; 3rd-4th class LGUs receive 60% DA and 40% LGU; 2nd class LGUs get 40% DA and 60% LGU; and 1st class LGUs receive 20% DA and 80% LGU counterpart.
Only direct costs of the extension program/project, such as supplies and materials, farm inputs (seeds, fertilizers, pesticides, livestock), farm or training equipment, and small-scale infrastructure are eligible. Salaries of extension workers are excluded and considered LGU counterparts.
Funds are released in three tranches: first upon signing the MOA, second after mid-year implementation and submission of reports, and third upon submission of terminal reports. The amount depends on project cost and duration, with approvals and releases based on submitted work and financial plans.
The Department of Agriculture has the right to terminate the contract and demand the return of the grant and/or remaining project funds.
The Local Chief Executive (LCE) is the overall person in charge and accountable for funds provided under the CFA and is responsible for coordinating and managing the project operations.
LGUs must submit periodic progress reports to the DA. The DA undertakes quarterly or semi-annual monitoring and evaluation. Result evaluations and impact studies are also conducted, including by external evaluators. Agriculture and Fisheries Councils at various levels participate in monitoring as well.