MANILA, Philippines - A lawmaker has filed a bill in Congress which seeks to authorize local government units (LGUs), and offices of the national government to use their savings for other unprogrammed capital outlay projects.
Valenzuela City Rep. Magtanggol Gunigundo said House Bill 4787, or the proposed “Expenditure and Savings Incentive Act of 2014,” will authorize heads of LGUs and government agencies to retain savings from their Maintenance and Other Operating Expenses (MOOE) and Capital Outlay (CO) for purposes of providing services and equipment beyond the fiscal year such savings accrued.
He said these savings could be used for other unprogrammed capital outlay projects such as acquisition at bargain prices of equipment that would not be available all year round.
Gunigundo said his proposal encourages austerity and provides budget flexibility, cutting down red tape and corruption in the procurement process.
“This is an effective measure to reduce the budget deficit of the national government and likewise a good alternative for the national government to accelerate the disbursements for its intended programs,”Gunigundo said.
Gunigundo, a Deputy Majority Leader, said proper post-audit should be conducted to prevent abuse of the authority to retain and use government savings for unprogrammed capital outlay projects.
At present, he noted there is no incentive and motivation for LGUs and government agencies to implement belt-tightening measures since they have to return their savings to the national or to the local treasury at the end of the fiscal year.
House Bill 4787, now pending the House Committee on Appropriations, defines savings as the excess amount in the financial account of an agency for the appropriation year after spending for the intended and programmed projects.
It directs the Secretary of Budget and Management (DBM), in coordination with the Department of Interior and Local Government (DILG), to promulgate the necessary rules and regulations for the effective implementation of the Act within 30 days from its effectivity.
For more proposed measures in the House of Representatives, visit our Bill Tracker.