Local Fiscal Administration Decree

Disbursements require lawful appropriation or statutory authority.
Public funds must be spent solely for public purposes.
Revenue sources strictly authorized by law.
Accountability for all funds received by public officers.
Trust funds disbursed only for their designated purposes.
Government officers handling funds must be properly bonded and accountable.
Local governments to prepare sound financial plans and budgets based on functions, activities, and expected results.
Fiscal responsibility shared by all financial authorities.

Exercise general supervision over local government financial affairs and authorized investment funds.
Formulate fiscal policies promoting local financial stability and growth.
Provide policy guidelines for sound financial plans and budget review.
Enforce measures to improve local treasury operations and financial management.
Ensure proper use, custody, and safekeeping of public funds.
Secretary of Finance exercises direct supervision over local treasury officials and personnel.

"Fund" is a monetary sum/resource earmarked for specific activities or objectives, constituting an independent fiscal entity.
Public officers must account for all government monies received.
Government collections must be remitted to the appropriate government treasury.

Two local funds: General Fund and Infrastructure Fund.
General Fund covers expenditures not assigned to other specific funds and may augment other funds by appropriation.
Infrastructure Fund used exclusively for:
- Repair, maintenance, and construction of roads, bridges, and highways.
- Maintaining wharves, piers, docks, water transportation.
- Other public improvements: parks, lighting, irrigation, flood control, sewerage, land acquisition.
Transfers between funds require Secretary of Finance approval for urgent needs.

Special Education Fund created from one percent additional real property tax proceeds for educational purposes.
Trust Funds consist of monies held as trustee or guaranty, disbursed only for their specific purpose.

Special accounts for public utilities, economic enterprises, Barrio Development Fund, loans, bonds, interest, and other specific purposes.
Barrio Development Fund funded by contributions from provinces, cities, and municipalities, used solely for community development projects.
Profits from public utilities reinvested into those enterprises.

Definitions clarified for annual budget, supplemental budget, income, revenue, receipts, appropriations, continuing appropriations, current operating expenditures, capital outlays, and budget documents.
Budgets include:
- Certified income estimates.
- Appropriations for current operating expenses and capital outlays.
- Budget message and summary financial statements.
Annual submission deadlines and procedural requirements mandated.
Heads of offices must submit detailed expenditure proposals.

Local chief executives prepare budgets and submit to legislative bodies by May 16 annually.
Approval requires majority vote of all members.
City mayors hold veto power with provisions for override and final review by Secretary of Finance.
Approved budgets become operative at the start of fiscal year.
Supplemental budgets allowed once a month; more in emergencies.

Salaries and wages capped at 45% or 55% of income depending on classification.
Exemptions apply for certain sectors (public schools, hospitals, utilities).
Secretary of Finance may authorize limited salary increases.
Salaries must conform with existing laws; reductions or changes regulated.
Developmental projects require at least 20% of revenues from national internal revenue allotment.
Reserve funds of 2% for emergencies mandated.
Provincial and city budgets reviewed by Secretary of Finance; municipal budgets by provincial treasurer.
Non-compliant budgets declared inoperative.

Barrio budgets prepared similarly; municipal treasurer certifies income estimates.
Barrio councils enact appropriation ordinances.
Review by municipal treasurer; budgets may be declared inoperative if non-compliant.

Development project appropriations released only after Secretary of Local Government review.
Secretary of Finance issues implementing rules and budget manual.

Funds disbursed only per lawful appropriation.
Public funds prohibited for religious or private use.
Appropriated funds used exclusively for designated purposes; transfers require legislative approval.
Disbursement limits based on actual collections and estimated revenue with emergency exceptions.
Advance payments prohibited without Presidential approval.
Cash advances regulated by Commission on Audit rules.

Custodians of government funds fully accountable and bonded.
No pecuniary interest in local government contracts allowed for treasurers or accountable officers.
Liability extends to officers directing or participating in misapplication of funds.
Prohibition against expenditures for entertainment except authorized representation allowances or special cases.
Certification and approval required on all vouchers and payrolls.
Checks drawn by provincial/city treasurers and countersigned by auditors.
Monthly financial statements to legislative bodies; year-end statements within sixty days.
Accounts rendered as prescribed by Commission on Audit.
Auditorial visitation authorized anytime; authority to seize office upon detection of shortages.

Provincial/City Treasurer offices established; appointments made by President upon recommendation.
Treasurers are chief financial officers with duties including advising government bodies, collecting taxes, custody and disbursement of funds, supervising markets and public utilities, and acquiring supplies.
Secretary of Finance may designate acting treasurers temporarily.
Qualification standards include citizenship, education, civil service eligibility, and experience requirements.
Compensation fixed by law.
Subprovincial and assistant treasurers appointed with specified qualifications.
Administrative deputies maintain discipline and coordinate treasury divisions.
Municipal treasurers appointed by provincial treasurers; serve as deputies in collection and fund administration.
Assistant municipal treasurers appointed similarly.
Treasury personnel appointments and career service regulated with training and promotion programs.

Secretary of Finance to promulgate implementing rules; Commission on Audit to prescribe accounting rules.
One-year transition period for budget form changes and infrastructure fund establishment.
Provision for substitution of experience for educational requirements during transition.
Severability clause ensuring validity of remaining provisions if any part is invalidated.
Repeal of inconsistent laws and regulations.
Decree effectivity upon approval.