THE vital importance of and the need for good governance and the institutional arrangements of checks-and-balances have been highlighted by the well-publicized Commission on Audit (COA) findings of deficiencies and irregularities in the use of public funds by some government agencies.
In this brief discussion, we hope to alert our readers about two things:
1) The full devolution of basic functions and services to local government units (LGUs), accompanied by their greater access to and power of public spending (from their greater share of national taxes) deserves our attention – to strengthen the observance of good governance practices at the LGU level. Access to public funds always present temptations to abuse and should be prevented by check-and-balance arrangements and other good governance mechanisms.
2) The Local Government Code of 1991 (Republic Act 7160) already provides the legal framework for the enforcement of good governance in LGUs’ operations, and its provisions should be more effectively enforced, because they have not been so faithfully observed.
Let us remind ourselves about what good governance is all about. It is the process by which decisions are made and implemented. The United Nations has outlined the characteristics of good governance: participatory; consensus-oriented; responsive; transparent; accountable; equitable and inclusive; effective and efficient; and, marked by the rule of law.
I submit that the opportunities for abuses in the use of public funds are as present at the local as well as national levels. After all, 40 percent of national taxes, the computational basis for which has been expanded by the Mandanas ruling of the Supreme Court, is a huge chunk of government revenues. Let us, therefore, be concerned that the institutional arrangements of checks-and-balances and other good governance practices are reinforced, protected, upheld and maintained.
Let us note how the full devolution of functions to LGUs calls for our joint efforts to work with LGUs for their capacity-building and fidelity to good governance principles.
Says the implementing rules and regulations (IRR) of the Executive Order directing devolution:
The functions, services and facilities identified shall be fully devolved from the National Government (NG) to the LGUs not later than the end of Fiscal Year 2024. To clarify, “local governments shall be primarily and ultimately responsible and accountable for the provision of all basic services and facilities fully devolved to them in accordance with the minimum standards for service delivery prescribed by the NG.” (Underscoring supplied)
“… the basic service and facilities fully devolved shall be funded from the just share of the LGUs in the proceeds of national taxes and other local revenues. Local executives shall ensure that any fund or resource available for the use of their respective LGUs shall be first allocated for the provision of basic services or facilities devolved, before applying the same for other purposes, consistent with relevant laws and budgeting and auditing rules and regulations.” (From Section 5, Rule III, IRR of Executive Order 138, S. 2021)
From these excerpts of the IRR, we need to recognize that this devolution and allocation of share in national taxes, has significantly shifted ample spending and political power to LGUs which in turn requires vigilance in upholding good governance.
As to the legal framework to enforce good governance in practical terms at the LGU level, we already have this in the Local Government Code. Specifically, local development councils are mandated to be created—at provincial, city, municipal and barangay level—which have the pivotal function “to assist the corresponding sanggunian in setting the direction of economic and social development, and coordinating effort within its territorial jurisdiction.” (Section 106, Local Government Code). This apparently general provision has an operative specific provision when in Section 107, it is required that “non-governmental organizations operating (in the LGU territory) shall constitute not less than one-fourth (1/4) of the members of the fully organized council (the LDC).” This is participatory and promotes transparency, accountability and responsiveness. When you have non-government representatives in fully functioning LDCs, consensus-oriented decisions are better generated, and the checks-and-balance arrangements are more effectively maintained.
Good governance should not be just a good concept idealized, but a system actualized.
Santiago F. Dumlao Jr. past president of the Finex, is the current Secretary-General of the Association of Credit Rating Agencies in Asia. His views here are personal and do not necessarily reflect those of Finex and the BusinessMirror.