Millennium Challenge Corporation - Policy Improvement Process

The GRP recognizes the need to enhance governance in the public sector by putting Anti- Corruption at the forefront of its priorities. In the MTPDP 2004-2010, the strengthening of financial accountability reforms, particularly the computerization and development of a Government Integrated Financial System, was identified. In 2008, however, the International Budget Partnership (IBP), through its Open Budget Index, gave the Philippines an overall score of 48% which means that the GOP “provides some information to the public in its budget documents during the year.” The 2008 Open Budget Index rating is three percentage points (3%) lower than the 2006 rating given by IBP.

In addition, in an analysis of Former DBM Secretary Emilia T. Boncodin of the national budgeting system,various opportunities for corruption in each step of the budget process were identified.

In 2009, the Public Expenditure and Financial Accountability Program (PEFA) identified the fractious Philippine public financial management system in oversight agencies as one of the weaknesses in budget execution and financial management reporting. These oversight agencies are: Commission on Audit (COA), Department of Budget and Management (DBM), and Department of Finance (DOF).

In an assessment of the Philippine Budget Process and Governance Effectiveness,former DBM Secretary Boncodin gave a rating of “Poor” to: (1) Predictability of Payments/ Responses, (2) Compliance to laws, and (3) Transparency among the performance indicators of governance effectiveness of the budget process (Annex E).

DBM is mandated to promote sound, efficient, and effective management and utilization of government resources. As the lead agency in PIP for improving transparency in the budget delivery process, DBM is intensifying its efforts in enhancing internal management towards transparency, equity, and accountability.

DBM operates under the principle that IT-based systems and improvements are effective anti-corruption tools in that these reduce discretion and direct contact between clients and process owners, while enhancing efficiency and transparency. Hence, the DBM is currently developing and/or enhancing the following: Electronic Lump-sum Appropriations Monitoring (eLAMP), and Document Tracking System (DTS). Annex F shows the detailed initiatives and reforms of the DBM in improving transparency in the budget delivery process.

C.1. The Electronic Lump-sum Appropriations Monitoring (eLAMP) System

The Electronic Lump-sum Appropriations Monitoring (eLAMP) system, the banner IT- based reform of DBM and part of the technical assistance provided by the USAID through the Economic Modernization through Efficient Reforms and Governance Enhancement (EMERGE), is a web-based application designed to streamline and automate the processing, releasing and tracking of lump-sum funds (LSF) which comprise 20% of total national government budget (2009). The system covers the processing of Special Allotment Release Orders (SARO) prior to the release of Notice of Cash Allocations (NCA) to DBM’s client agencies. NCAs are released depending on the cash position of the government and, upon issuance, allow agencies to draw cheques from accredited banks against the Internal Revenue Allotment (IRA) of local governments from national taxes, and the congressional allocations under the Priority Development Assistance Fund or PDAF, public works (for the Dept of Public Works and Highways or DPWH) and school building projects (SBP) nationwide.

Through the eLAMP, access of all stakeholders (LGUs, implementing agencies, beneficiary communities, the general public, etc.) to information on the release of funds will be enhanced. Moreover, eLAMP discourages possible corruption from any government official who may solicit bribes in exchange for supposedly facilitating the release of payments from DBM to suppliers even if the funds have actually already been released by DBM.

In addition, the system will enable the users to collate information on the SARO and NCA documents for generating reports, which can be used for internal or management decision purposes and for posting on the website.

The eLAMP’s specific objectives are:

1. Streamline and automate the preparation of Special Allotment Release Orders (SAROs) and Notices of Cash Allocations (NCAs) for the following lump-sum projects/funds: 
   1. Priority Development Assistance Fund (PDAF) 
   2. DPWH Congressional Allocation for Infrastructure (DPWH-CA) 
   3. Allocations to local government units (LGUs) covered by the Internal revenue Allotment (IRA) 
   4. School Building Program (SBP)
2. Automate the budget releasing process on a nationwide basis to complement the implementation of the electronic mode of transactions across government agencies; 
3. Upgrade the existing document management system to enable the storage of relevant data and provision of a secure and real-time inquiry for the public and DBM clients on the status of exchanges of documents between DBM, the LGUs, and other government units; and  
4. Enhance the capability of the DBM website with an efficient content management system for greater user satisfaction. 

On April 24, 2009, Asiagate Networks, Inc. completed and turned over the eLAMP system to DBM for implementation in selected operating units. However, prior to actual implementation, several issues, particularly some insufficient functionalities were discovered. Hence, implementation of the eLAMP was deferred until the resolution of the system issues. To date, the DBM and eLAMP’s developer are focused on the completion of enhancements for the eLAMP administrative system and four lump-sum modules.

In 2010, the modules for the electronic processing and releasing of the SAROs for PDAF, DPWH-CA, and SBP would be completed. Enhancements for the module on IRA, on the other hand, would be completed by the first quarter of 2011.

The DBM envisions that, by 2014, all lump-sum releases would be processed through the eLAMP. In the meantime, the DBM targets the gradual increase in the percentage of SAROs (in number and Peso value) processed through eLAMP from 50% in 2010 to 95% in 2013. This shall result in the overall reduction in processing time between request, release of SAROs and posting of information in the DBM website from the baseline of 5-10 days in 2009 to 3 days in 2012.

Aside from the system and module enhancements, the DBM and its private sector partners are currently developing the survey tools and methodology to determine the baseline and subsequent targets, on the level of user satisfaction for eLAMP. In addition, information, education and communication (IEC) activities shall be conducted to promote eLAMP and to determine the extent to which budget information on the lump-sum funds are being accessed by the public. The exact activities and performance indicators, however, are still being developed.

C.2. The Document Tracking System (DTS)

The DBM Document Tracking System (DTS) aims to prevent unnecessary delays in processing by keeping track of and managing action documents.

Upon completion of its enhancements, the DTS shall be the main system within the DBM to store and track SAROS, NCAs, requests, and other pertinent action documents.

By the end of 2010, the DBM envisions that 30% of NCAs processed shall be coursed through the DTS, resulting in a five (5) day reduction in response time on between request for the NCA and the response of DBM. Through the DTS, DBM also aims to reduce the processing time between request and release of the NCA. For instance, NCA releases for PDAF shall only be 40 days by 2011, from 55 days in 2009. NCA processing for IRA would be reduced to 5 days this year, from last year’s 10 days.