dilg legal opinion 20 series of 2014

7/25/2019 Dilg Legal Opinion 20 series of 2014

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IReplrblic of the Philippines

DEPARTMEI{T OT THE INTERIORAND LOCAT GOVXruITTDlI,C-NAPOI-COM Building, EDSA comer Quezon Avenue, Quczm Ciiy

www.dilg.gov.ph

OFFICE OF THE UilDERSECRETARY FOR LOCAL GOVERNIiIEiIT

HON. MARILYNA. IIMENEZMunicipality of Libmanan, Carnarines Sur

Dear Mayor fimenez:

DILG Legal Opinion No.20,S.2OL4

0 3 JUN 2014

This refers to yow 25 April 2014 letter requesting this Department's guidance and leglopinion conceming Section 323 of the Local Government Code, namely:

"1. Can tfu sangguniang bayan take up resolutions, ordinaruvs nruL other matters tir tit'ses;ions duing the nitety (90) days (sic) ftom the beginning of the fscal year uthet tluyhaae not yet approoe (sic) the appropriations ordinance of the ctnent year? If the ansuteris in the negatiae, ahat are the pssible administtafuie liabllitics ol the concerncit oflrtiitlsof the sangguniang bayan?

2. Can the sangguniang bayan take up renlutions, orilinanczs and othq matters in itssessions after the 90 day peiod. from the beginning of the fiscal year uthnr they haae notyet aryroaed the aryroprintions ordinance of the cunent year and when the LGU is aheada,in a re-enacted budget? If the answer is in thc negatioe, what are the possible administratiueliabilities of the concenud olfcials of thz sangguniang bayan?

3. What are cor:ered by the term "additional rcmunerations" mentioned in Section 323 thatcannot be girten to mzmbers of thc sangguninng (sic) when tfu LGU is on a re<nacAdbudget?

4. Arc the " ", "L4sgc,arte_bsgfu_91hcalth workers" and "fonuep" pnrt of salaries and zoages anil,/or contractual and statutoynobligations of the LGU therclore couW be lawlully be ilisbursd and releavil to members ofthe sanggunian or other oficials while the LGU is on a re-enacted budget?

5. Hotrt is statutory and conbactual obligations of the LGU defnetl?

6. May a continuing inftastructure deuelopment project (completion canflot be fnishedutithin one fscal lear) of the LGU with funding and implementation requirements cooeredby a Memoranilum of Agreement (MOA) and/or contunct with other line agencies nnd stalcc

holders be considered as one of tht "antraetual obligations" of thz LGU?

7. May the budget for a continuing antractual obligation of the LGU (referring toin[rastructure project with MOA with othzr linc agencizs and stakzholders mentinaei.ivthc sftth query) funded from the 20% Economic Deaelopment Fund (EDF) of the LGU, be

lna,fully relea*d anrl the deaelopment project continued for the culrent year undn the



pinciple of "re-rn) b,uagrt", consideing thot the ,ongguln zoould not approve thtappropiations for both thc gencral fund nnd thz 20% EDF of the LGU?

8. In genetal, urhnt arc the possible remetlies of the local chief execatitu if majoity of the

nembers of the sangguniang bayan would not approoe the submitted etecutiue budget on

its meits and hnae continued opposition to said budget nlely becau* of political colourand affiliation? Said acts are clearly grossly inimical to public seruice and public interest.

9. May the LGU choov not to follout thc afore-cited DBM Regional Opiniona on uthnt are" essential operating expenvs" of the LGU uniln the re-enacted budget and disburse fands

follouing thc MOOE appropriations in the 2013 budget alreaily re<nacteil in the currentyear per Section 232 of the LGC?"

In your letter you alleged that despite the timely submission of the executive budget of theLGU for the current year, the Sangguniang Bayan (hereinafter referred to as "SB") failed toenact the 2014 budget ordinance of the LGU covering the General Furd, 20olo EconomicDevelopment Fund (EDF), 5% Catamity Fund and 296 Discretionary Fund for the current

year.

For failure of the SB to pass the budget ordinance for the current year, your localgoyernment unit (LGU) is now on a re-enacted budget effective April 2014 followingSection 323 ofthe Local Government Code (hereinafter, the "Code"), uiz.:

" Section 323. Failure to Etwct the Annual Appropiations. - In case lfusanggunian concerned fails to pass tht ordinance authoizing the anrutalappropriations at the begrnning of tfu ensuing fiscnl yea4 it slull continue toItold sssions, ttithout additional renruneration

forits memhers, until sucft

orditunce is approtsed, and no other business mny be taken up duing suchsessions. lf the sanggunian still fails to entct such ordinance after nineA Q0)days from the begtnning of tlu fiscnl vear, tfu ordinance authorizing thearyropiations of the preceding gear shallbe dtemed reetwcted and shall remninin force and e{ect until the ordinance authoizine the proposd appropriationsis passed by the sanwnian concerned. Hozoarcr, only the annualappropiations for salaies and wages of eisting positions, statutory andcontractual obligations, and. essential operating expenss authoized in theannual nnd supplementnl budgets for the preceding year shnll be deemed

reenacted and disburvmefi offunds shall be in accordance thereutith.

ln the implementation of such reenacted orilinance, tht local treasurerconcerned shall excludt from thc estimates of income for the preceding fscalyear tlnse rcalized from nonrecurring sources, lilce national aids, proceeds f'romloans, xle of asvts, prior year adjustments, and other atulogous rcurces ofincome, No ordinance authoizing supplemzntal appropiations shall be passed

in place of the annual appropriations.

. ln reference to he atdl€d 20 February 2014 opinbn of oBli,lRegbn V wtiich was r€ndoEd in resods€ b I'hyor Jimene.'s 16 F€bruary m11 eoqestfo. ophi{rn



In case the ,)*n ,n*r* estimates be less than ,n"Qg*gr* reenactedapprcpiations, the local treasurer concenud shall accordingly adztise thesanggunian conczrned which shall, uithin ten (10) days frcm tfu reuipt of suchadoice, malce the necessary adjustments or reductions. The reuisedappropriatians authoized by the sanggunian concerned shnll then be the basis

for disbursements. " [Underscoring ours]

Considering the limitations set forth in Section 323 of the Code, your LGtlsirnplementation of development plans and the delivery of the essential and basic senhcesto its constituents for the year is severely affected.

Hence, this request.

li and 2pd Qrrerie$

The first sentence ofSection 323 ofthe Code needs no lirrther elucidation as it clearly statesthat if the SB fails to pass an ordinance authorizing the annual budget, it shall continue to

hold sessions, until such ordinance is approved and no other businegs may be taken upduring such sessions.

It is al elementary rule in statutory construction that when the words and phrases of a

statute are clear and unequivocal, their meaning must be determined from the languageemployed and the statute must be taken to mean exacdy what it says.s

The above-mentioned provision further provides that "if the s'nqgunian still fa s to enactsuch ordinance after ninery (90) days from the beginning of the fiscal year, the ordihanceauthorizing the appropriations of the preceding year shall be deemed reenacted and shallremain in force and

effect untjl the ordirrance authorizing the appropriations is passed bythe sanggunian concerned"6. Hence, by necessary implication, the SB can take up othermatters after the lapse ofthe 90-day period considering that the LGU is already operatingon a reenacted budget subject to certain lirnitations.

Anent the possible liabilities of the concerned officials of the SB in the first irstance,reference should be made to Section 60 of the Code to determine the applicable ground/sfor disciplinary action.

3d & 4r ercie:.AdditionalRemunerations" and Disbunement

ofBenefits Authorized by Iaw Under aReenacted Budpet

The matter being within the administrative experlise of the Department of Budget ano'Management (DBM), this Department deems it proper to refer the same for an authoritativeinterpretation of said agency. (Please see attached copy of letter to the DBM.)

5 8a.arda, et d., 16. G|j$b, €t al. (G.R. No. 81 163. 26 S€ptenber 1908)6 ?n Sentsncs, Sedion 323



o5d & 6d Oueries: .9rarurorJr, &Con tnc tual O bligations

As defined under Section 306 (j) ofthe Code, obligations refer ro an amount committed tobe paid by the local governmetrt unit (LGLI) for any lawfirl act made by an accountableoffrcer for and in behalf of the local government unit concerned. Under Section 323 oftheCode only "statutory obligations," or those demandable obligations derived fiom an e.:rpressprovision of law7, and "contractual obligations," or those obligations incurred by virtue ofcontracts entered into by the local chief executive pursuant to Section 22 (c'f ol fneCohe,that were authorized in the annual and supplemenal budgets of the preee<llsgJcel shallbe deened reenacted and disbursements shall be in accordance therewith.

Clearly, a continuing infrastructure development project of the LGU which was allegedlycovered by a validly executed Memorandum of Agreement (MOA) and authorized in theannual or supplemental budget of the preceding year is among those deemed reenacted^

76 Qaery:, Coatinuing Appropria tions

Inliastructure projects already authorized in the preceding year's appropriations ordinanceare classified as "conthuing appropriations"e and are available to support obligationsincurred pursuant to the implementation of the infrastructure proiect even when theseobligatioru are incurred beyond the budget year. By express provision of Section 32210,reversions of continuing appropriations shall not be allowed unless obligations thereforhave been fully paid or otherwise setded.

Clearly, following Section 322 in relation to Section 323 of the Code, appropriarions for

contractual obligations of LGUs, such as the infrastructure project funded from the 20oloeconomic development fund that were authorized in the budget of the preceding )'ear asin this case, may be lawfirlly disbursed until the project is completed. What ulv-,ha-'prohibits is the implementation of new projects or the incurring of new obligations undera reenactd budget, as well as the disbursement of furlds not authorized in theannuaVsupplemental budgets for the preceding year.

I O rcry: Nature of the SBbAuthorization of the Budget

The action of the SB in authorizing the annual appropriations is legislative in nature anhrequires the collective exercise of judgment or discretion by the members thereof as

opposed to the exercise of a purely ministerial function as distinguished, tn Roble A,rzastre

7 Anicle 1 157 & 1 158, Civil Code of t|e Fhiippinos3 (c) Unless otle ise pro ,iled in bb Cod€, no coitsacl nEy be onM hb by h6 l@l d&l €x€cutiv€ in bddf of he loc€l go\rernfibnt lihqrt p|kraulhorizElion by he sangguni oncem€d. x[' (e) 'Conlinuiry Arprwialion' rde|s b an app.lprialirl a/ailable b suppod fio obliratiorF for a spcifred puD6e o. prjei1, such as hc€ llr hecdrsfuc{on of plrysical stu(trfrs or ir be acquiriltuo of rBal prop€dy o. equirrrrl elco slEn hese obtEalixE a|e nured beyord tle brdge{ ye.r.10 S€clion 322. RetroFlon of Une4sded Baldlc6 ofApFopriations, Co. inuhg ADproFiatims. -Unoeonded balanc€s of appropdaliois aufp.ized h tleannual appro9dali(lrg ordirance shdl G'/€rtb t16 omlpropdabd surpuls o{ h€ggle(al fund at ho erd of Ee 6saa,rearad shail rrot tE ee&lr.bp-a..jldJcfor exp€rdifure ercspt by subs€quer enaafnent. Ho*v€a, ooroodatirts foacdilalo al|s shal codinie and lElnahvatd unilfully soant tsvtrtd oatEorciecl is comoletsd. Reve6bns of contnuino aoorcorialionr shall cor$rue ard r€mah valid until fu[y s06nl letreied or fis orci€ct b comotetld. m



Inc. vs.Hon ruAo)un"aoneral (G.R. No. 128509. o"r0rr,2006), the suprerne

Court ratiocinated:

"Discretion," when applied to public functionaies, means a poTtler oright confened upon thzm by law or acting offcially, unils certaincircumstances, uncontrolleil by the judgment or conscience ofothers. A purelyministerial act or duty in contradiction to a discretiorul act i6 oflc which an

fficer or tribunal performs in a giuen state offacts, in a prescitted manner, inobedience to the mandnte of n legal authority, without regard to or the exercisof his ozm jwlgment upon the prcpriety or impmprizty of the act dorc. If thelaat imposes a duty upon a public fficer anil giaes him thz ight to decide hoator when the duty shnll be peforncd, such duty is disctetionary and notministeial. The duty is ministeinl only when tht ilischarge of thz umerequircs neither the exercise of officinl discretion or judgmmt.

Notably, Republic Act No. 9,185, otherwise known as t}lle Anti-Red Tape Act of 2(M7,

excludes from its coverage those ofEces perforrning legislative functions, among others, asit covers offices exercising purely rninisterial fi:nctions.rl

Nonetheless, disciplinary action agairst erring members of the SB may be commencedbased on the applicable ground,/s as enumerated under Section 6O of the Code.

9\ Qtery. DBM Interpretation of"Essen tial O oera tin s ExDe Dses "

The interpretation of the DBM of "essential operating expenses" is persuasive and deserves

respect urder the "Doctrine of Respect for Admiaistrative or Practical Construction" asexplained by the Suprerne Court 2'd Division tn Pffiippiae A-au*meat and GamiagCorpontion w. Pffiippine Geming /urisdiction lacorpond, et al (G.R t\b. lTfit A'April 2009), uiz.:

"ln applying said doctrine, courts often refer to seaeral factors uhichmay be regarded as ba*s thereof - factors leading the courts to giue the pinciplecontrolling weight in particular instances, or as inileryndent ruIes inthemslues. The* factors incluile the respect ilue the goaetnmmtal agencieschargeil with ailministration thcir contpetet ce, expeftness, ex?erimcelanil informeil judgmmt anil the

factthat they

lrequentlyare the ilrafterc

of the lau they interpref, that the agmcy is the one on zahich thelegislature must rely to ailoise it as to the practical anrking out of theetatute, and practical application of the statute ptesents the agency witbunique oVportunity and exryricnces for discoaeing defciencies, inaccuracies,or improoements in the statute."

I' Seclion 1 14 (a), M 7160



In view oithe *t"glg pronouncemmt of the Court, tn" iotQ*t"tioVopirrion of theDBM on the subject is controlling, hence, should be accorded weight and respect.

Norwithstanding the foregoing opinion, the Municipality of Libmanan is not precludedfrom seeking the DBM of the DOJ's opinion should it find the foregoing opinioninsufrcient.

AUSIEREA. PAT{ADEROUnderrccretary : (D o*Jt -r*a; Ir*'hd r ARDELOItrS T, PASIOR, OlC, D|LG R€gbi V

Very uuly yours,

dilg legal opinion 20 series of 2014

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