Frequently Asked Questions about Local Government Budget Preparation

The budget preparation process is a critical phase for Local Government Units (LGUs) as it sets the financial blueprint for the coming year. 

The Frequently Asked Questions (FAQs) section in the Budget Operations Manual provides essential clarifications regarding the steps and requirements for preparing an LGU’s budget. Here’s a simplified guide addressing some of the key questions:

1. Does the Local Chief Executive (LCE) need to approve the Sanggunian Resolution approving the Annual Investment Program (AIP)?

Yes. The Local Chief Executive (LCE) must approve the Sanggunian’s resolution on the AIP. According to the Local Government Code (LGC), all ordinances or resolutions related to appropriations must be submitted to the LCE for approval.

2. Should projects with continuing appropriations be included in the current year’s AIP?

No. Projects that have continuing appropriations from previous years do not need to be included in the current year’s AIP. These projects are already covered by earlier ordinances and funding.

3. Does the AIP only cover the 20% Development Fund?

No. The AIP covers the total resource requirements for the entire LGU budget, including current operating expenses and capital outlays. It’s not limited to just the 20% Development Fund but should encompass all budgetary needs for the year.