The Local financial administration of the municipality of Tabaco, Province of Albay
Madrideo, Arnel Renato L
- March 2001
- pages 1-202
ABSTRACT
MADRIDEO, ARNEL REANATO L.” THE LOCAL FINANCIAL ADMINITRATION PERFORMANCE OF THE MUNICIPALITY OF TABACO, PROVINCE OF ALBAY’, (Unpublished Master’s Thesis, Aquinas University of Legazpi, 2001.)
Introduction
The study attempted to assess the performance of Tabaco, Albay in local financial administration for the period 1995-1999. It sought to answer four concerns: a) the level of performance of the municipality along the four aspects of generation, allocation and control/accountability in local financial administrations) the factors that affected the performance along these aspects’) the practices and strategies implemented along these aspects; and d) the problems, along these aspects, met by the municipality. The study was deemed important to government policy makers and executives, the municipal government of Tabaco Albay, the non-government organizations and the researchers and students of public administration.
To gauge the performance of the municipality in revenue generation, documentary analysis was conducted covering the following performance criteria/sub criteria: a) change in local revenue sources; b) tax collection efficiency for the current and the prior years; c) capability to access national/international resources; and the ratio between the locally generated sources and national sources. The same method was used to determine the performance in revenue allocation, which covered the following criteria/sub criteria: a) compliance with legal provision as regard the status of budget, submission of detailed income and expenditures, submission of executive budget, and the enactment of budget; b) effectiveness of budget planning in terms of the number of supplemental budgets enacted ,rate of allocation for development fund, rate allocation for personal services and then rate of allocation for basic services; c) functionally of the local finance committee and d) the actual duties and responsibilities performed by the local finance committee.
Meanwhile, the performance in revenue utilization was also determined by the same documentary analysis covering the following criteria: a) actual expenditures versus total estimated and b) the utilization of the development fund. On the other hand, the determination of the performance in revenue control/accountability considered the perception of the technical officers of the municipal treasurer’s office in regard to adherence to internal control standards on cash receipts /collection, cash disbursement, payroll preparation and on property and supply management. Also considered were the perceptions of the technical officers of the Accountants Office in regard to the adherence to internal control standards on government accounting. Document review was also conducted to check compliance with auditing rules and regulations, applications of the standard system and procedure on bids and awards and the posting of income and expenditures.
In related aspects, the perceptions of all Punong Barangay regarding the local financial administration performance of Tabaco Albay was taken using the interview schedule. The same was made to balance the results of the data generated to answer the first specific question.
Such scope was defined from the extensive review of related literature and studies. This study spanned the gap from the present state of research o the local financial administration performance in the province of Albay and for the years 1995 to 1999 of Tabaco Albay.
The framework by which the study proceed was based on the discussion of public finance and the concepts of fiscal centralization versus decentralization made by Musgrave in his work on the Theory of Public Finance. Discussion on decentralization and development made by Nigro Middeck, Dale, Cheema and Rondinelli; on the systems theory by Johnson, Kast and Rosenzweig; concepts on per by Drunker; financial administration by Nigro; evaluation by Weiss and information feedback by Weiner provided addition theoretical base to the study.
The study used the descriptive survey method of research, the means of securing involved documentary analysis, conduct of survey using three sets of questionnaires. These questionnaire were distributed for accomplishment to each of the respondents from the Treasures Office, the Accountant office and the Elective Officials, other Department Heads and the Technical Officers of the Assessor’s Office, planning and Development Office and Budget office. An interview was used to gather the perceptions of the Punong barangays on the performance of Tabaco Albay in local financial administration. The study had 103 respondents. The frequency count, percentage and mean were used to analyze the data.
Findings
The findings of the study indicated that the municipality of Tabaco, Albay had a “satisfactory” performance in local financial administration. The separate performance of each of its aspects was “fair” for revenue generation, the same “satisfactory “rating for revenue allocation and revenue utilization and “very satisfactory “ for the revenue control/accountability. The perception of the large number of the Punong Barangay on the performance of the municipality in local financial administration ranges from “satisfactory to very satisfactory”
The major factors that affected the performance of the municipality in revenue generation, included the negative attitude of the taxpayers ; poor operations and management of economic enterprises ;failure to enforce the law on tax compliance, under assessment of business taxes and the lack of efficient systems and procedures. On revenue allocation, the major factors included political interference; delay, if not absence of policy recommendation from the local finance committee; lack of awareness on the budgeting provisions and the lack of legislative support. Meanwhile revenue utilization was affected by the lack of system and procedures; delay in the release of fund; and the delay in the preparation of required documents. Finally, revenue control/accountability was effected by the lack of efficient system and procedures; lack or limited knowledge in accounting rules and regulations; lack of personal complement; and the failure of some personnel and official to comply with accounting rules and regulations.
The strategies adopted by the municipality in revenue generation included tax information drives, revision of local tax ordinance, census listing of taxpayers and businesses, revenue target setting, conduct of inspection and examination of books of accounts. Om revenue allocation, the strategies included the conduct of budget hearing, participation of the Sangunian in the budget hearings; Prioritization of programs and projects; the regular conduct of meeting of the local finance committee. On the other hand, the strategies on revenue utilization included the disbursement based in prioritized P/P/As; participation of the Sangunian in project implementation; and the conduct of consultation meetings among barangays where projects are to be implemented.
The problems that were identified in the revenue generation aspects focused on the collection of taxes, lack of proper training and information of personnel, identification of tax bases and inadequate personnel and staff. On revenue allocation, the problems were funding, functionality of the local finance committee, and the conduct of consultation/budget hearings. The problems on revenue utilization on the total budget and the development fund. As the regard the revenue control/ accountability, problems identified involved the negative attitude of personnel, lack of efficient system and procedures and the lack of personnel complement.
Conclusions
From these findings, the study concluded that Tabaco, Albay was not able to use its taxing powers and resources to its optimum level as can be inferred in the relatively low performance in most of the aspects of local financial administration from 1995 to 1999. The positive perception of the Punong barangays on the performance of the municipality in the local financial administration puts the municipal government at an advantage. This could be used to maximize their involvement since, they easily be motivated given to proper orientation and skills.
The various factors identified that affected the performance in the various aspects local financial administration can be summed up in the lack of systems and procedure and the attitude and outlook of both the elective officials and functionaries. Furthermore, a substantial number of the respondents showed awareness on a number of strategies adopted and or practiced by the municipality. This was indicated by the fact that none of them answered that they do not have any idea in this regard. The researcher submitted that further developing the skills of the technical officers along this line is important. Familiarization among all other LGU personnel of these strategies is also encouraged for purposes of coordination.
Based on the number of problems raised by the respondents, the researcher concluded that there is a need to enhance the level of effectiveness and efficiency of the personnel involved in local financial administration. Concentration must be given to the problems where the perception of the greater number of the respondents clustered.
Recommendations
The researcher recommends intensifying a comprehensive tax campaign program, enhancing cooperation and teamwork among the department heads and employees, and the improvement of existing and procedures .It also recommends to revisit the manner in which target collections are set, explore other funds sources, and prepare true and realistic budgets and to work for an increased allocation for the development fund and the basic services.
ABSTRACT
MADRIDEO, ARNEL REANATO L.” THE LOCAL FINANCIAL ADMINITRATION PERFORMANCE OF THE MUNICIPALITY OF TABACO, PROVINCE OF ALBAY’, (Unpublished Master’s Thesis, Aquinas University of Legazpi, 2001.)
Introduction
The study attempted to assess the performance of Tabaco, Albay in local financial administration for the period 1995-1999. It sought to answer four concerns: a) the level of performance of the municipality along the four aspects of generation, allocation and control/accountability in local financial administrations) the factors that affected the performance along these aspects’) the practices and strategies implemented along these aspects; and d) the problems, along these aspects, met by the municipality. The study was deemed important to government policy makers and executives, the municipal government of Tabaco Albay, the non-government organizations and the researchers and students of public administration.
To gauge the performance of the municipality in revenue generation, documentary analysis was conducted covering the following performance criteria/sub criteria: a) change in local revenue sources; b) tax collection efficiency for the current and the prior years; c) capability to access national/international resources; and the ratio between the locally generated sources and national sources. The same method was used to determine the performance in revenue allocation, which covered the following criteria/sub criteria: a) compliance with legal provision as regard the status of budget, submission of detailed income and expenditures, submission of executive budget, and the enactment of budget; b) effectiveness of budget planning in terms of the number of supplemental budgets enacted ,rate of allocation for development fund, rate allocation for personal services and then rate of allocation for basic services; c) functionally of the local finance committee and d) the actual duties and responsibilities performed by the local finance committee.
Meanwhile, the performance in revenue utilization was also determined by the same documentary analysis covering the following criteria: a) actual expenditures versus total estimated and b) the utilization of the development fund. On the other hand, the determination of the performance in revenue control/accountability considered the perception of the technical officers of the municipal treasurer’s office in regard to adherence to internal control standards on cash receipts /collection, cash disbursement, payroll preparation and on property and supply management. Also considered were the perceptions of the technical officers of the Accountants Office in regard to the adherence to internal control standards on government accounting. Document review was also conducted to check compliance with auditing rules and regulations, applications of the standard system and procedure on bids and awards and the posting of income and expenditures.
In related aspects, the perceptions of all Punong Barangay regarding the local financial administration performance of Tabaco Albay was taken using the interview schedule. The same was made to balance the results of the data generated to answer the first specific question.
Such scope was defined from the extensive review of related literature and studies. This study spanned the gap from the present state of research o the local financial administration performance in the province of Albay and for the years 1995 to 1999 of Tabaco Albay.
The framework by which the study proceed was based on the discussion of public finance and the concepts of fiscal centralization versus decentralization made by Musgrave in his work on the Theory of Public Finance. Discussion on decentralization and development made by Nigro Middeck, Dale, Cheema and Rondinelli; on the systems theory by Johnson, Kast and Rosenzweig; concepts on per by Drunker; financial administration by Nigro; evaluation by Weiss and information feedback by Weiner provided addition theoretical base to the study.
The study used the descriptive survey method of research, the means of securing involved documentary analysis, conduct of survey using three sets of questionnaires. These questionnaire were distributed for accomplishment to each of the respondents from the Treasures Office, the Accountant office and the Elective Officials, other Department Heads and the Technical Officers of the Assessor’s Office, planning and Development Office and Budget office. An interview was used to gather the perceptions of the Punong barangays on the performance of Tabaco Albay in local financial administration. The study had 103 respondents. The frequency count, percentage and mean were used to analyze the data.
Findings
The findings of the study indicated that the municipality of Tabaco, Albay had a “satisfactory” performance in local financial administration. The separate performance of each of its aspects was “fair” for revenue generation, the same “satisfactory “rating for revenue allocation and revenue utilization and “very satisfactory “ for the revenue control/accountability. The perception of the large number of the Punong Barangay on the performance of the municipality in local financial administration ranges from “satisfactory to very satisfactory”
The major factors that affected the performance of the municipality in revenue generation, included the negative attitude of the taxpayers ; poor operations and management of economic enterprises ;failure to enforce the law on tax compliance, under assessment of business taxes and the lack of efficient systems and procedures. On revenue allocation, the major factors included political interference; delay, if not absence of policy recommendation from the local finance committee; lack of awareness on the budgeting provisions and the lack of legislative support. Meanwhile revenue utilization was affected by the lack of system and procedures; delay in the release of fund; and the delay in the preparation of required documents. Finally, revenue control/accountability was effected by the lack of efficient system and procedures; lack or limited knowledge in accounting rules and regulations; lack of personal complement; and the failure of some personnel and official to comply with accounting rules and regulations.
The strategies adopted by the municipality in revenue generation included tax information drives, revision of local tax ordinance, census listing of taxpayers and businesses, revenue target setting, conduct of inspection and examination of books of accounts. Om revenue allocation, the strategies included the conduct of budget hearing, participation of the Sangunian in the budget hearings; Prioritization of programs and projects; the regular conduct of meeting of the local finance committee. On the other hand, the strategies on revenue utilization included the disbursement based in prioritized P/P/As; participation of the Sangunian in project implementation; and the conduct of consultation meetings among barangays where projects are to be implemented.
The problems that were identified in the revenue generation aspects focused on the collection of taxes, lack of proper training and information of personnel, identification of tax bases and inadequate personnel and staff. On revenue allocation, the problems were funding, functionality of the local finance committee, and the conduct of consultation/budget hearings. The problems on revenue utilization on the total budget and the development fund. As the regard the revenue control/ accountability, problems identified involved the negative attitude of personnel, lack of efficient system and procedures and the lack of personnel complement.
Conclusions
From these findings, the study concluded that Tabaco, Albay was not able to use its taxing powers and resources to its optimum level as can be inferred in the relatively low performance in most of the aspects of local financial administration from 1995 to 1999. The positive perception of the Punong barangays on the performance of the municipality in the local financial administration puts the municipal government at an advantage. This could be used to maximize their involvement since, they easily be motivated given to proper orientation and skills.
The various factors identified that affected the performance in the various aspects local financial administration can be summed up in the lack of systems and procedure and the attitude and outlook of both the elective officials and functionaries. Furthermore, a substantial number of the respondents showed awareness on a number of strategies adopted and or practiced by the municipality. This was indicated by the fact that none of them answered that they do not have any idea in this regard. The researcher submitted that further developing the skills of the technical officers along this line is important. Familiarization among all other LGU personnel of these strategies is also encouraged for purposes of coordination.
Based on the number of problems raised by the respondents, the researcher concluded that there is a need to enhance the level of effectiveness and efficiency of the personnel involved in local financial administration. Concentration must be given to the problems where the perception of the greater number of the respondents clustered.
Recommendations
The researcher recommends intensifying a comprehensive tax campaign program, enhancing cooperation and teamwork among the department heads and employees, and the improvement of existing and procedures .It also recommends to revisit the manner in which target collections are set, explore other funds sources, and prepare true and realistic budgets and to work for an increased allocation for the development fund and the basic services.