IRR on Co-Ficing Agreement for AFE Projects

Authorized Expenditure: Charges against funds released to LGUs following budgetary, accounting, and auditing guidelines
Co-Financing Agreement: Mutual consent between DA and LGUs for providing counterpart funds in AFE implementation
Department of Agriculture (DA): Includes bureaus, agencies, and regional units concerned with CFA
Extension Program/Project: Training, advisory, communication, demonstration, and production/post-production support services
Farm & Business Advisory Services: On-demand technical and financial advice that links producers to markets and resources
Farm Inputs: Materials and manpower used in farm production activities during extension services
Grant: DA money provided to LGUs as augmentation under income-class based co-financing scheme
IEC Support Services: Information sharing using conventional and electronic media
Local Government Units: Municipal and provincial government offices entering into CFA with DA
Technology Demonstration Services: Showcasing matured R&D technologies
Training Services: Capacity building and skills upgrading along the value chain

Shared responsibility among DA, LGUs, and stakeholders in AF modernization
CFAs based on equity, needs, priorities, and LGU income classification
Low-income LGUs (4th to 6th class municipalities/provinces) eligible for higher grants
Support socio-economic development via efficient and effective AFE planning

Department of Agriculture

Local Government Units

Must support national/regional priority programs (Agriculture and Fisheries Modernization Plans)
Must have municipality, city, or province-wide coverage
Support priority commodities or economic activities
Use environmentally sound technologies with climate change adaptation measures
Participate marginalized groups including women, youth, and farming households
Provide one or more extension services: training, advisory, demonstrations, IEC
LGU must commit official counterpart funds certified by local chief executive

Project Proposal Evaluation Committee established in each DA agency
All proposals endorsed by local chief executives must pass evaluation prior to DA approval
Information dissemination by DA about availability of CFCEP
LGUs submit endorsed proposals with hard and electronic copies

Equity-based cost-sharing determined by LGU income class:
- 5th-6th class: DA 80% / LGU 20%
- 3rd-4th class: DA 60% / LGU 40%
- 2nd class: DA 40% / LGU 60%
- 1st class: DA 20% / LGU 80%
Eligible costs limited to direct costs supporting extension categories: supplies, farm inputs, equipment, small-scale infrastructure
Salaries of extension workers are LGU counterparts, not part of project cost

Multi-year budgets treated as grants
Minimum of 1% of gross value added allocated for agriculture and fisheries extension
DA and LGUs provide financial and in-kind support such as personnel and facilities

Funds released in three tranches:
- 1st tranche: upon MOA signing
- 2nd tranche: mid-year implementation and report submission
- 3rd tranche: upon terminal report submission
Releases depend on project cost, duration, and approved plans
Subject to government accounting and auditing rules

Only direct program/project costs covered by DA funds
Classification at application time governs cost sharing even if LGU income classification upgrades

MOA specifies roles, funding, eligible expenses, management, reporting, monitoring, and evaluation
DA may terminate agreement for non-compliance and recover funds
Local Chief Executive holds overall accountability and leadership for project management and fund utilization
Grant funds are subject to government accounting and auditing standards

LGUs submit periodic progress reports
DA agency conducts quarterly or semi-annual monitoring and evaluation
Result validation and impact studies conducted three years post-project
Agriculture and Fisheries Councils participate in regular monitoring
Midstream and annual reviews assess economic impact and sustainability, led by ATI and DA agencies