Seven “Thou Shall Nots”

By JUAN L. MERCADO, juanlmercado@gmail.com
May 29, 2011

The 20% Local Development Fund (LDF) is the “most abused” budget item today, Interior and Local Government Secretary Jesse Robredo told local officials at a Cebu conference.

LDF’s are spent by 79 provinces. The Supreme Court, however, reversed itself on Dinagat Island’s status. So, make that 80.

This trust fund is also vital for 122 cities. That excludes 16 towns where the Court flipped, then flopped, on their cityhood ambitions.  A reconsideration motion is pending.  Add to that roster 1,512 towns.

Six out of every 10 local governments flunk “full disclosure” criteria on tax spending.  This fractures the General Appropriations Act of 2011 and Local Government Code.  Both require “full disclosure to ensure transparency and accountability”, adds Robredo.

This Magsaysay awardee’s candor causes some to fume. “Does DILG control all LGUs?”, snapped Dumanjug Mayor Nelson Garcia. He is League of Municipalities’ national vice-president. “The League will challenge DILG circular memo 2010-138 before the Supreme Court.

Robredo’s December 7 memo lists seven “Thou Shall Nots” in disbursing LDF. Bohol Gov. Edgar Chato, thus, flags a mayors’ manifesto that bucks curbs on their spending.

What is the LDF? How did this trust fund come about? And what is it’s track record?  “Thou shall not ration justice”, Justice Learned Hand once cautioned: Does Memo 2010-138 deny local officials equity?

Recall the 1972 UN Environment Conference in Stockholm. Delegates from 113 countries, including the Philippines, adopted an Action Plan that proposed a “20-20 Pact”.

Governments agreed to earmark 20% of resources for the poorest. Such fund would address needs of the most deprived, namely: nutrition, health care, medicine, potable water, sanitation, primary schooling, etc.

Human development relieves grinding poverty, the Stockholm consensus stressed. Curbing disease and death rates makes human development possible.  Unmet human needs usher more Filipino pre-school children to premature graves than it does in Egypt, Kenya or Tanzania, Asian Development Bank noted.

Sen. Aquilino Pimental wove that 20% vital safety net concept into the Local Government Code. Viewpoint noted (PDI/Oct 23, 2007) that politicians converted LDF into their mini-pork barrels, as successive COA audits found.

Davao Oriental Sanggunian officials ladled P669,892 as “financial assistance” – for themselves.  Dapitan doled P1 million for an “executive band.” San Carlos City allocated P110,000 for a Boy Scouts jamboree in Angeles. Northern Samar purchased seven brand-new vehicles, Cebu City Mayor Tomas’ Osmeña’s barangay leaders bought themselves high-powered motorcycles and handguns.

Plunder of the LDF does not stem from ignorance. Ruling after ruling underscores It’s “preferential option for the poorest”.

Could LDF supplement salaries of national high school teachers?, Mountain Province and Ifugao officials asked.  Could it patch funding deficits in other projects?  No way Jose, said DILG Opinion No. 5 on 10 August 1999.

That policy remains in force today.  But is it honored more in the breach than in practice?  Match some of Roberdo’s “Thou Shalt Nots” with specific cases.

Underwriting “salaries, wages or overtime pay” is verboten, the memo says. In contrast, COA’s annual report on local governments, has an unvarying gripe: “Regular expenses, such as salaries, wages, facilities maintenance, travel, celebration of festivities, etc are charged to LDF.”

In 2008, for example, 102 LGUs failed to implement development projects,” COA reported. The same sordid pattern persisted into the next year. It continues today.

Thou shall not underwrite “administrative expenses such as cash gifts, bonuses, food allowances, medical assistance, uniforms, supplies, meetings, communication, water and light, petroleum products, and the like,” Robredo’s memo tells LGUs.

Fifth class town Aloguinsan in Cebu splurged P540,000 for a live concert and a dance-breakout, COA said.  Borbon town granted P24,000 to each department head. Jagna, Bohol, fittered away P1.85 million in LDF resources for heavy equipment.

Cotabato City appropriated P55 million under it’s LDF for three development projects.  It spent P44.3 million – most of which went for creating jobs, not meeting basic human needs.

“Evaluation conducted by the Audit Team Leader disclosed that majority of programs, implemented by city government under the 20% (Fund) consist of augmentation of manpower requirements,” COA said. Some 480 workers were “assigned/detailed” at the 27 offices of the city. That chewed up P16.3 million.

Junkets or Lakbay Arals are out, Robredo says. “Travelling expenses, whether domestic of foreign” may not billed to the LDF. Neither may officials dip into the Fund for “registration fees in training, seminars, conferences or conventions.”

Minglanilla officials (Cebu) burned P5.6 million from LDF for two trips to join Palawan’s Kabunhawan festival. Lapu-Lapu city’s Association of Barangay Councils “misused" P550,000 for Christmas party and gifts over two years and P776,500 for honorarium of 30 barangay captains.

A new Performance Challenge Fund will provide half a billion pesos to 344 LGUs that provide counterparts from LDFs for essential projects. These range from rural health units, water and sanitation to post harvest facilities.