Capacity Building for Local Treasurers on the Statement of Receipts and Expenditures (SRE)

1. PHILIPPINES DEVELOPMENT FORUM Working Group on Decentralization and Local Government Capacity Building for Local Treasurers on the Statement of Receipts and Expenditures (SRE) DOF-BLGF Project Proposal DIALOG Trust Fund 12 August 2011

2. Background • Since early 2000s, BLGF’s Statement of Income and Expenditures (SIE) system generated financial reports on LGU income and expenditures that have been utilized for: • LGU financial analysis and forecasting • LGU debt certification • LGU monitoring (LGFPMS) • Over time, various government and private stakeholders have raised concerns about inconsistencies between SIE reports and COA’s NGAS reports in terms of: • Figures reported in the reports • Classification of accounts

3. Background • In response, ADB TA 4556 developed a new Statement of Receipts and Expenditures (SRE) system that: • Harmonizes with COA’s NGAS accounts • Captures new data required to examine LGU fiscal capacities, levels of debt, borrowing capacities, creditworthiness, and overall financial performance • Conforms to the International Financial Reporting Standards (IFRS) • Serves as an accountability report for LGU treasurers • However, the reforms require LGU treasurers to learn new processes, utilize data from other LGU fiscal offices, and maintain a comprehensive database to ensure accurate reporting under the new SRE system.

4. Project Development Objective • The objective of the project is to produce accurate, consistent, and timely LGU financial data through the SRE system for national government, local government, and non-government stakeholders by: • Capacitating local treasurers in accurately completing the quarterly SRE reports in a timely manner by utilizing local accounting and budgeting reports and by maintaining a systematic and supplementary database; and • Capacitating BLGF central and regional offices to effectively provide accurate and timely guidance to local treasurers in completing the quarterly SRE reports and to efficiently monitor the compliance of local treasurers with SRE reporting requirements (to be supported by ADB TA 7451).

5. Project Description • Component 1 – Knowledge Products • Reproduction of the training materials for local treasurers and BLGF central and regional offices. • Development of FAQs based on feedback from the capacity building activities. • Component 2 – Capacity Building of Local Treasurers • Training of provincial and city treasurers on completing the quarterly SRE reports.

6. Preliminary Cost Estimates • Component 1 – Knowledge Products • PhP 600,000 • Component 2 – Capacity Building of Local Treasurers • PhP 6,500,000

7. Alignment with DIALOG TF Objectives • This project is consistent with the development objectives of the DIALOG Trust Fund, specifically with regard to: • “Accelerating decentralization and local governance reforms in strengthening local public finance and management, improving overall LGU performance, and strengthening the legal and institutional environment for local governance; through capacity development and analytical activities; and • Intensify government and development partner support for decentralization and local governance reforms, through improved coordination and harmonization of resources and systems.