Support to the Local Government Units for More Effective and Accountable

Public Financial Management (LGU PFM 2 Project)

WHAT IS SRE ?
(Statement of Receipts and
Expenditures)
- Formerly known as SIE (Statement of Income and
Expenditure)
“Income” replaced by “Receipts” – to broaden
coverage and include proceeds from loans, sales
of assets, etc.

“Expenditure” – classified into:

- operating To distinguish outright expense

- non- from capital and investing
operating outlay and loan payments

2
 Before SRE?
Prior to 2001 2001 2009 onwards
Budget Statement of Statement of
Operations Income and Receipts and
Statement (BOS)
The Budget
Expenditure (SIE) Expenditures (SRE)
Operations To monitor fiscal SRE - improved format of
Statement (BOS) performance of LGUs, SIE, harmonized with the
submitted by the the Bureau developed New Government Accounting
LGUs consolidated the Statement of System (NGAS) of COA-
by the Bureau served Income and presents the operating
as the primary data Expenditure (SIE) performance of LGUs, in
on the financial which terms of operating income
condition of LGUs The SIEsupersedes the
report includes
BOS. and expenditures, non-
additional accounts (i.e
income and receipts and non-
other taxes, regulatory
operating expenditures and
fees, service/user
the Fund Balance.
charges, tool fees, and
inter-local transfer) used SRE - includes the financial
in monitoring, policy performance indicators
making and research. serving as gauge in
assessing LGU fiscal and 3
 Brief Background of SRE

Version 2.1

Version 1.0 Version 2.0 plus

plus 1 Additional accounts

Receipts & Expenditure
and sub-accounts
Reporting
1. Fiscal Capacity Forecasting 2 SRE Reconciliation
2. LGU Creditworthiness Module
3. Debt Capacity Certification 3 Additional reports
 eSRE’s Main Purpose

Connecting LGU financial

data to the BLGF…
…while providing LGUs
with a tool to record
financial data for day-to-
day operations
 PURPOSES OF SRE
 LGU Monitoring System
LGU financial performance can
be evaluated through the data
inputted to the system based
from the reports submitted by
the LGUs
 PURPOSES OF SRE
 Development Policy
SRE offers sound financial
information to assist
policymakers and legislators in
drafting local and national
legislations
 PURPOSES OF SRE
 Forecasting and Planning
Consolidated data are useful in
planning, forecasting, debt
certification process,
creditworthiness rating system,
LGU income classification
system, etc.
 PURPOSES OF SRE
 Forecasting and Planning
Consolidated data are useful in
planning, forecasting, debt
certification process,
creditworthiness rating system,
LGU income classification
system, etc.
 PURPOSES OF SRE
 Statistics
 The SRE provides key data and
statistics like locally sourced
income, external sources and
expenditures and such other
financial or fiscal statistics on LGU
finance that can be used to draw
economic and fiscal capacity
models
USES OF SRE FOR THE LGUs
 The SRE serves as a basis of
financial information/data that
are significant in the decision-
making process of LGUs
 The SRE can be used as a tool

in forecasting revenues and

estimating expenditures during
the budget preparation process
 USES OF SRE FOR THE LGUs
 It can also be utilized to monitor
the fiscal and economic state of
a LGU
 The SRE is used by

Development Partners as a
precaution before grants are
given to LGUs
USES OF SRE FOR THE LGUs
 The SRE reports containing the
itemized monthly collections and
disbursements of the LGU
concerned may be posted and
published in compliance with
Section 513 of the LGC
 USERS OF SRE
Stakeholders Relevance of SRE
DOF Revenue collections
and borrowings,
decision making
DILG LGU performance
evaluation
MDFO Loan and grant
applications
 USERS OF SRE
Stakeholders Relevance of SRE
Senate and Financial reports in aid
Congress of legislation
NEDA/ Statistics, forecasting
NTRC/ and planning
DBM/BSP
(IMF)
 USERS OF SRE
Stakeholders Relevance of SRE
Potential Grants/Aids/
Donors Donations/Loans
(WB/ADB)
Financial Credit Applications
Institutions
Researcher Studies
s
 USERS OF SRE
Stakeholders Relevance of SRE
LGUs Financial position of
LGUs
 Vision and Mission

The BLGF of the DOF is the focal agency and the authority in
local finance that aims to be at the forefront of local economic
growth leading the way towards national development.
The DOF-BLGF is committed to institute
transparency in revenue collections and
expenditures for a more robust financial
climate in local government.
 The SRE System
Basic
Basicfinancial
financialreport
reportto
tomonitor
monitorLGU’s
LGU’s
financial
financialperformance
performance
Electronic-based
Electronic-basedreporting
reportingsystem
system(eSRE)
(eSRE)
Generates financial performance indicators
Generates financial performance indicators
ofofLGUs
LGUs
AAtool
toolininforecasting
forecastingrevenues
revenuesand
andestimating
estimating
expenditures
expendituresduring
duringbudget
budgetpreparation
preparation
Data retrieved from the system are processed and
analyzed to supply the DOF and other agencies
with LGU fiscal information for their own utilization.
 The SRE System
Enables
Enablesits
itsusers
usersto
toeasily
easilygenerate
generatetimely
timelyand
and
accurate
accuratefinancial
financialand
andfiscal
fiscaldata
data

Ensures
Ensurescompetent
competentmoitoring
moitoringofofthe
thegains
gainsofof
decentralization
decentralization
Realiable
Realiabledata
datagenerated
generatedthrough
throughthe
theSRE
SRE
System
Systemmakes
makesititeasier
easierfor
forLGUs
LGUstotodecide
decideon
on
where
wheretotoallocate
allocatetheir
theirresources
resources
Data retrieved from the system are processed and
analyzed to supply the DOF and other agencies
with LGU fiscal information for their own utilization.
Development of LGU Financial Performance Monitoring System

Transform LGUs into

Transform LGUs into
financially sustainable
financially sustainable
institution
institution
+
Enhance the financial Statement of
Enhance the financial Statement of
viability of the LGUs Receipts and
viability of the LGUs Receipts and
Expenditures
Expenditures
+
Monitor the financial
Monitor the financial
performance of LGUs
performance of LGUs
 System Design

Internet

National Level

Province Regional Level

City

Municipality Provincial Level

*Simplified illustration.
 Benefits
Daily
Monthly
Quarterly
1. Record Revenue and Expenditure data.

2. Generate forecasts based on scenarios.

3. Assess the creditworthiness of an LGU based on SRE

data.

4. Issue official debt certificates based on SRE data.

 Reports Generated
37
Mission critical report
in one click.
 Statement of Receipts Sources  Quarterly Report on Real
(SRS)
 Statement of Expenditure (SOE) Property Tax Collections (QRPT)
 SOE Recapitulation  Quarterly Report on Real
Property Assessment (QRRPA)
 Statement of Receipts and
 SRS Trust Fund (SRS-TF)
Expenditures (SRE)

 SRE Fund Balance Statement  SOE Trust Fund (SOE-TF)

of Financial Operations (SFO)
 Single Page Report

 Consolidated Report
 FINANCIAL PERFORMANCE
INDICATORS
 Assessing the LGUs
the indicators provide good rating
criteria in determining LGUs
financial progress and position
Indicators can assess whether an
LGU is financially weak
Effectiveness in decision-making
 LGU FINANCIAL PERFORMANCE
MONITORING
OBJECTIVE
 To monitor and track the financial

health of LGUs and to render

sound and technical analysis as
basis for the formulation of
policies that meet the increasing
demands of LGUs
HOW?

 Monitor fiscal and financial

performance of the LGUs
through the use of financial
performance indicators to
determine financial health of the
LGUs
Revenue Revenue Level/
Potential Revenue Growth
Revenue • Locally Sourced Revenue
Stability and • Revenue per Capita (RC)
Reliability • Growth in Locally Sourced
Revenue Per Capita
• % Locally Sourced to Total
LGU Revenue
• % Regular Revenues to
Total Revenue
Revenue Revenue Level/
Potential Revenue Growth
Revenue • Total Revenue
Mobilization Collection Cost to Total
Efficiency Revenues Collected
(TRCC)
• Real Property Tax
Accomplishment Rate
(RPTAR)
Revenue Revenue Level/
Potential Revenue Growth
Expenditure • Total Expenditures per
Indicators Capita
• Personnel Services
Expenditure Rate (PSER)
• Debt Service Expenditure
Ratio (DSER)
• Social Expenditure Ratio
(SER)
• Economic Expenditure
Ratio (EER)
Revenue Revenue Level/
Potential Revenue Growth
Debt and • Debt Service Ratio(DSR)
Capacity • Gross Operating Surplus
to Debt Service Ratio
Indicators (GOSDSR)
• Debt to Net Asset Ratio
(DAR)
• Capital Investments to
Total LGU Revenue Ratio
(CITRR)
Revenue Revenue Level/
Potential Revenue Growth
Financial • Net Operating
Management Surplus to Total LGU
Capacity Revenue Ratio
Indicators (NOSTRR)
• Uncommitted Cash
Balance to Total LGU
Expenditure Ratio
(UCBTER)
Zero Cost
to the LGU
Uses of the SRE System
LGU Financial Performance Monitoring System
- To evaluate LGU financial performance 1
Policy Development
- Gives financial information to policy makers
and legislators in drafting local and national 2
legislations

Forecasting and Planning

- Useful in planning, forecasting, debt 3
certification process, creditworthiness rating
system, LGU income classification system, etc.

Good Source of Local Fiscal Data and Statistics

4
-Provides fiscal statistics on LGU finance
Benefits of the SRE Reporting System
Compliance
Complianceto:to:
Sec 352:: Posting
Sec352 Postingthe
theSummary
Summary
of
ofIncome
Incomeand
andExpenditures
Expenditures Compliance to Sec 470
(d): Duty of the Treasurers
Sec 315 : Submission of Detailed
Sec 315: Submission of Detailed to maintain and update the tax
Statement
Statementof ofIncome
Incomeand
and information system of the LGU
Expenditures
Expenditures
Sec
Sec513
513:Failure
:Failureto
toPost
Postand
and
Publish
Publishthe
theItemized
ItemizedMonthly
Monthly
Collections
Collectionsand
andDisbursement
Disbursement
SRE System
Compliance to DILG’s Full On-line computation of the
Disclosure Policy as pre- LGUs borrowing capacity
requisite to Seal of Good
Housekeeping Credit worthiness
certification and debt
Compliance to JMC 01 of management
2007
BLGF Circulars Pertaining to SRE
BLGF Memorandum Circular No. 18-2008 – requires the
accurate and timely submission by all local treasurers of
the Statement of Receipts and Expenditures and its
accompanying Annexes.
BLGF Memorandum Circular No. 19-2008 – requires the
submission of the Statement of Receipts and Expenditures
(SRE) Reports prescribed in the SRE Manual, of all
provincial, city and municipal treasurers.

BLGF Memorandum Circular No. 02-2010 – Provides

additional guidelines on the implementation of the
Electronic Statement of Receipts and Expenditures (eSRE)
Report Submission.

37
 DOF/BLGF Pronouncements and
Issuances on SRE
•DOF Department Order No. 8-2011. Adoption of the SRE as
the Official Reporting Systems of Local Government Fiscal
and Financial Operations.

• OSEC Memo dated May 31, 2013. Quarterly Data and Performance
Reports to the Office of the Secretary and LGU Compliance on the
Submission of eSRE pursuant to Department Order 8-2011
• Formal quarterly memorandum detailing technical observations on
the eSRE
• List of LGUs and local treasurers who are NOT compliant with the
reporting requirements in timeliness and completeness
• Quarterly update on the compliance of LGUs

• Annual Press Releases of the DOF on SRE on newspaper of

general circulation (SRE on Cities published on April 6, 2013)
 BLGF and SRE
SRE Data

1
BLGF as Provider of LGU Financial Data
2
Official repository of LGU’s fiscal financial data
3
Local government financial data are made transparent and
available to the public thru the SRE reporting system
 LET’S MAKE THE MOST
OUT OF THIS SEMINAR 