MEMORANDUM CIRCULAR - Kagawaran ng Interyor at … · Republic of the Philippines ... and the National Anti-Poverty Commission ... amount of Php577.730 Million in the DILG Budget

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Republic of the PhilippinesDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT

DDILG-NAPOLCOM EDSA Corner Quezon Avenue, West Triangle, Quezon CityTelephone Number 925.11.48 • 925.88.88 • 925.03.32

www.dilg.gov.ph

MEMORANDUM CIRCULARNO. 2014-____

TO DILG REGIONAL DIRECTORS/PROVINCIAL DIRECTORS/CITYDIRECTORS, MUNICIPAL LOCAL GOVERNMENT OPERATIONSOFFICERS, AND GOVERNORS AND MAYORS OF CONCERNEDLGUs

SUBJECT POLICY GUIDELINESFOR THE 2014 SAGANA AT LIGTAS NATUBIG SA LAHAT (SALINTUBIG) PROGRAM UNDER THEPROVISION OF POTABLE WATER SUPPLY

I. LEGAL BASES

The Government has been implementing the Provision of Potable WaterSupply- Sagana at LigtasnaTubigsaLahat (SALINTUBIG) Program to providewater to the poor and waterless communities. The Program aims to contributeto the attainment of the goal of providing potable water to the entire country andthe targets defined in the Philippine Development Plan 2011-2016, MillenniumDevelopment Goals (MDG), and the Philippine Water Supply Sector Roadmapand the Philippine Sustainable Sanitation Roadmap.

In December 2010, a Memorandum of Agreement (MOA) outlining jointresponsibilities and accountabilities of partner agencies was executed by andbetween the Department of the Interior and Local Government (DILG), theDepartment of Health (DOH), and the National Anti-Poverty Commission(NAPC) to implement the administration’s priority water and sanitation programfor waterless municipalities, the Provision of Potable Water Supply-Sagana atLigtasnaTubigsaLahat (SALINTUBIG) Program. The Program has animplementation period from January 2011 to December 2016.

For FY 2014 implementation, the National Government has appropriated theamount of Php577.730 Million in the DILG Budget under Republic Act 10633-General Appropriations Act FY 2014.

II. BACKGROUND

The Program provides grant financing and capacity development to increaseaccess to water and sanitation services and improve capacities of the LocalGovernment Units (LGUs) and Water Service Providers (WSPs)in the planning,implementation and management of water supply facilities in a sustainablemanner.

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www.dilg.gov.ph




I. LEGAL BASES




II. BACKGROUND


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www.dilg.gov.ph




I. LEGAL BASES




II. BACKGROUND


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The Department of the Interior and Local Government (DILG) through the Officeof Project Development Services (OPDS) in partnership with the DILG RegionalOffices (ROs)and the target Provinces and Municipalities as implementingpartnersremains the lead agency for the 2014 SALINTUBIG. Under theGAA FY2014, the DILG has been appropriated a total of P 577,730,000.00 forSALINTUBIG allocated for the following: A. Infrastructure InvestmentsComponent -P 517,730,000.00 and B. Project Management and CapacityDevelopment Component -P 60,000,000.00.

III. PURPOSE

These Guidelines shall prescribe the policies, procedures, requirements and theroles and responsibilities of the stakeholders in the execution of thecomponents and various activities of the SALINTUBIG Program.

IV. COVERAGE

The 2014 Project Beneficiaries covers about 48Waterless Municipalities and 36Non-Waterless Municipalities with Waterless Barangays (Thematic Areas). Listof covered LGUs with corresponding budget allocation is attached as Annex A.

V. FUND SOURCES

A. DILG Fund

The National Government has allocated P 517,730,000.00in the DILGBudget under the 2014 GAA for the Provision of Potable Water Supply.The amount is intended for the capital investment requirements for theimplementation of water supply projects by the target LGUs.

B. LGU Counterpart

B.1 In case the subproject cost is more than the subproject allocation, theProponent LGU shall provide cash counterpart equivalent to the excess insubproject allocation. The counterpart to be provided must be sourcedfrom LGU funds. This shall be formalized and included by the LGU in itsAnnual Investment Plan (AIP) and Annual Budget. In such a case, theLGU counterpart shall be provided through an Appropriation Ordinance.

B.2 Proponent LGU may also provide counterpart equivalent to 10% of thetotal project allocation (in cash or in kind) to finance the preparatory andsubproject implementation activities mentioned in Section VI.F.1.b.

VI. GUIDELINES IN ACCESSING THE DILG-FUND

To ensure the smooth and efficient implementation of the projects, the followingguidelines shall be followed:

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A. ELIGIBILITY OF IMPLEMENTING PARTNERS

1. The Implementing Partner is defined as the LGU or any other entitythatwill be responsible in the procurement and implementation of thesubproject. The Implementing Partner shall also be responsible in thepreparation of the Detailed Engineering Design, the components ofwhich are enumerated in Item VI (B.5) of this Guidelines.

2. As a general rule, the LGU who has the jurisdiction over the proposedsubproject, including the operations and maintenance, shall be theImplementing Partner provided said LGU is capable to implement basedon the criteria stipulated in the following section.

3. Regional Offices shall conduct eligibility assessment of the proposedImplementing Partners based on the following:

3.1 Arecipient of the DILG’s SGH, based on latest available approvedassessment result from the Bureau of Local GovernmentSupervision (BLGS).

3.2 Has the capacity to implement the project based on the followingparameters.

a) Availability of qualified personnel who can manage thesubproject

b) Availability of funds for the administrative costsc) Previous experience in implementing similar subprojectsd) Capacity to implement subprojects through Competitive Bidding

or by Administratione) Capacity to monitor and evaluate subproject implementationf) Absorptive capacity (capacity to implement additional projects

especially if there are still on-going projects funded in previousyears and/or funded by other agencies)

g) Capacity to operate and sustain the subproject, particularly thecapacity to provide annual Operation & Maintenance (O&M)fund

4. DILG Regional Office shall complete the assessment and shall provideDILG Central Office the List of Eligible Implementing Partners not laterthan the end of May.

5. DILG-RO shall notify the Proponent LGUs whether they are eligible ornot to implement the project immediately after the assessment but notlater than the end of May.

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6. If the reason for non-SGH compliance by the LGU is related to the FullDisclosure Policy (FDP), said LGU may still be considered as theImplementing Partner if it complies with the deficiencies in the FDP.Said LGU shall secure a certification from the DILG Central Office (DILG-CO) that the FDP has been complied with in accordance with DILGMemorandum Circular No. 2014-13. (Issuance of 2012 SGH Certificatesto Local Governments with “After Assessment Compliance” for purposesof accessing Loans or other National Program Windows).

7. The LGU who has the jurisdiction over the proposed subproject shall bethe Implementing Partner, except in cases where such LGU is ineligibleto implement the same, in which case, the DILG-RO shall implement thesubproject or may recommend the Provincial Government as theImplementing Partner, if eligible, based on Section VI.A.3 or any otherentity.

B. SUBPROJECT APPROVAL PROCESS

B.1 Preparation and Submission of Subproject Proposals andSupporting Documents

a. As a general rule, the preparation of subproject proposal including theDetailed Engineering Design or Technical Design, whichever isapplicable,and other supporting documents shall be the responsibilityof the LGU. In case the LGU is not the identified Implementing Partner,the preparation of the proposal shall be done by the LGU incoordination with the Implementing Partner.

b. The proposals shall be submitted to DILG-RO through thePD/MLGOO together with the following required documents notlater than the end of June:

(i) Official letter submitting the required documents(ii) Copy of Subproject Proposal/ Feasibility Study (See Annex B

for the Subproject Proposal Format)(iii) Water Potability Test results(iv) Application for Water Permit(v) Water Supply and Sanitation Sector Plan(vi) MOA signed by LCE with SB Resolution Authorizing LCE to

enter into MOA(vii) Appropriations Ordinance for LGU Counterpart to cover the total

subproject cost, as necessary(viii) Bank Certificate on LGU Trust Account in any Gov’t

Depository Bank or Application to Opening of Special Account(ix) Approved Work and Financial Plan/ Implementation Schedule(x) Certification or any form of evidence from Mines and

Geosciences Bureau, DENR (MGB) that the project is notlocated in “no-build” zone

(xi) Sustainability Plan (Operation and Maintenance). Annex C isa sample pro-forma of the Sustainability Plan

(xii) Certification on the compliance to SGH

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(xiii) Executive Order on the creation of WATSAN Council andWATSAN Team

c. The MLGOO shall ensure the completeness of the documents aslisted in Section VI.B.1.b above. In case there are lackingdocuments, the MLGOO shall immediately notify the LGU. TheMLGOO shall endorse said documents to the DILG ProvincialOffice within two (2) days upon receipt of the complete subprojectproposal documents.

d. The Provincial Office shall review the completeness of thedocuments submittedby the MLGOO and shall endorse to the DILG-Regional Offices within two (2) days after receipt of the proposals.

e. In case the Proponent LGU fails to submit the required documentswithin the prescribed period, the DILG-RO through the DILGreserves the right to recommend to DBM the transfer of the LGUBudget Allocation to other eligible LGU within the Region in need ofwater supply and with good record in implementing subprojects.

B.2 Review and Approval of Subprojects

a. TheProject Development and Management Unit (PDMU) of the ROshall review the subproject proposals and recommend to theRegional Director for approval/disapproval within fifteen (15) daysafter receipt of the proposals. Within two (2) days after receipt of therecommendation, the Regional Director shall approve/disapprovesubproject proposals.

b. As part of the Review/Approval Process, the PDMU shall conductwater source validation to verify the accuracy of submitteddocuments and to further assess the feasibility of the subproject/s.

c. Proposals that did not pass the PDMU review and approval shall bereturned to the LGU for revision to comply with thecomments/recommendations of the reviewing body.

d. After receipt of the official notice that the proposed subproject didnot pass the review, the LGU shall, within fifteen (15) days submitthe revised proposal. Review and approval shall follow the sameprocedure stated in Section VI.B.2.

e. In case the concerned LGU has not complied within the 15-dayperiod, the DILG reserves the right to recommend to DBM thetransfer of the LGU Budget Allocation to other eligible LGU withinthe Region.

f. All review and approval shall be completed on or before the 2nd

week of July.

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B.3 Signing of Memorandum of Agreement (MOA)

a. A MOA shall be forged between the DILG Regional Office and theImplementing Partner to formalize the implementation arrangement,among others. If the Implementing Partner and the Proponent LGUare not one and the same, a Tripartite MOA shall be executed amongthe Proponent LGU, Implementing Partner and the DILG RegionalOffice.

b. Upon verification of satisfactory compliance to all the requirements,the DILG, through the Regional Director, shall enter into a MOAcontaining the following provisions, among others:

Proponent LGU shall provide the counterpart fund as stipulatedin Section V.B of this Guidelines

Proponent LGU shall commit to identify an institution/WaterService Providers (e.g. BWASA, Water District, cooperative,private operator and community-based organization) to operate,manage and maintain in a sustainable manner the watersupplysystem.

c. All MOAs shall be signed on or before 2ndweek of July.

d. Copies of all perfected MOAs shall be submitted to both the Regionaland LGU Resident Auditors within five (5) days after signing.

e. The subproject cost to be reflected in the MOA shall not go beyondthe subproject allocation otherwise any excess shall form part of theLGU counterpart.

B.4 Issuance of Certificate of Availability of Funds (CAF)

a. Within five (5) days after the MOA signing, the DILG Regional Officeshall issue a Certificate of Availability of Funds (CAF) to theImplementing Partner with amount corresponding to the approvedsubproject allocation stipulated in the MOA, subject to the submissionof the following:

i. Bank Certificate on LGU Trust Accountii. Appropriation Ordinance to cover the LGU Counterpart, if needediii. LGU Certification that the bidding documents for procurement of

consultants for DED, Civil Works or procurement of Goods andServices, whichever is applicable, are complete and ready forissuance.

b. The CAF issued by the DILG Regional Office and the AppropriationOrdinance to cover the LGU Counterpart, shall be the basis of theImplementing Partner to issue the Certificate of Availability of Funds

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to proceed with the procurement process. Annex Dis a sample pro-forma for CAF.

c. In case the Implementing Partner will be the DILG RO, an appropriatedocument shall likewise be issued for the RO-BAC to proceed withthe procurement.

B.5 Preparation, Submission and Approval of Technical Design/DetailedEngineering Design (DED)

a. The Implementing Partner shall prepare the DED which may beundertaken through any of the following:

By Contract, throughCompetitive Bidding pursuant to RA 9184(Government Procurement Reform Act)

Partnership agreement with any of the following:- LWUA/Water District- Provincial Government- State Universities/ Academes- National Agencies

By administration or in-house, provided that the ImplementingPartner has the capacity to prepare DED.

Upon the request of the Implementing Partner, the DILG-ROmay directly engage the services of consultants or governmentagencies in the preparation of DED.

b. In cases where the Implementing Partner will contract out or out-source the preparation of DED as mentioned in Section VI.B.5, Itema, the DED provider shall be engaged within 30 days after theissuance of CAF but not later than 3rdweek of August.

c. The preparation and submission of completed DED to DILG-POthrough the MLGOO shall be within two (2) months but not later than3rd week of October. The DED to be submitted shall comprise butnot limited to the following documents:

Detailed designs, plans and drawings (signed and sealed bythe approving authorities)

Detailed design reports (water demand projection, hydraulicanalysis including network diagram, pump, structural,electrical design)

Bill of Quantities, including detailed computations Technical Specifications Geodetic Survey Report Geotechnical Report (geo-resistivity report, if necessary)

d. The MLGOO shall ensure the completeness of the documentssubmitted as listed in Section VI.B.1.b above and shall be endorsedto the DILG Provincial Office within two (2) days upon receipt of theDED

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e. The DILG PD shall, upon receipt, endorse within two (2) days the DEDto the DILG Regional Office through the PDMU, for review andapproval. Within ten (10) days, the PDMU shall complete the reviewand recommend approval/disapproval of the DED to the RegionalDirector. Within two (2) days after receipt of the recommendation, theRegional Director shall approve/disapprove the DED.

f. In case the Implementing Partner fails to submit the requireddocuments within the prescribed period, DILG-RO through the DILG-CO shall recommend to DBM the transfer of the LGU BudgetAllocation to other eligible LGU within the Region in need of watersupply and with good record in implementing subprojects. In thiscase, the Implementing Partner shall return any balance of thereleased fund for the DED within one (1) month.

g. DED that did not pass the DILG PDMU approval shall be returned tothe Implementing Partner for revision to comply with thecomments/recommendations of the reviewing body.

h. After receipt of the official notice that the proposed subproject did notpass the review, the Implementing Partner shall, within seven (7)days submit the revised DED. Review and approval shall follow thesame procedure stated in Section VI.B.2.

i. In case the Implementing Partner has not complied within the seven(7)-day period, DILG-RO through the DILG-CO shall recommend toDBM the transfer of the LGU Budget Allocation to other eligible LGUwithin the Region in need of water supply and with good record inimplementing subprojects.

j. All review and approval shall be completed on or before the 1st weekof November

C. MODE OF IMPLEMENTATION FOR CIVIL WORKS AND/OR ACQUISITIONOf GOODS

C.1 The mode of implementation for all SALINTUBIG subprojects may bedone through any of the following:

a. By Administrationb. By Contractc. Design and Build

C.2 Subprojects to be Implemented By Administration

a. Implementing Partner who passed the eligibility assessment mayimplement the subprojects by administration.

b. In areas where there are issues on peace and order or security, AFPEngineering Brigade may be tapped as the Implementing Partner.

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c. Procurement of materials/goods shall strictly follow RA 9184 and itsIRR

C.3 Subprojects to be implemented by Contract

a. Implementing Partner shall strictly follow the Implementing Rules andRegulation on Competitive Bidding pursuant to RA 9184(Government Procurement Reform Act).

b. The Implementing Partner shall start the posting and advertisementof Invitation to Bid (ITB) within 5 days after issuance of the CAF bythe DILG Regional Office. The Implementing Partner shall submit tothe DILG-RO through the PD a copy of the ITB as published on thenewspaper and PhilGEPs, within two (2) days after publication andposting. The Implementing Partner shall complete the biddingprocess following the timelines stipulated in RA 9184.

c. The Implementing Partner shall invite the DILG Provincial Director orhis duly authorized representative as Observer during the bidopening. The DILG-RO may also be invited as Observer.

d. In the event of a failed bidding, the Implementing Partner shallimmediately start the re-bidding process within five (5) days after theBAC has issued a resolution declaring a failure of bidding, inaccordance with the timelines set-forth in RA 9184. Within the sameperiod, the Implementing Partner shall submit to DILG-RO a revisedPhysical and Financial Plan (PFP) indicating the revised target datesfor the bidding.

e. In the event the Implementing Partner will have to resort to negotiatedprocurement after two (2) failed biddings, the Implementing Partnershall commence the negotiation within five (5) days after the BAC hasissued a resolution declaring a failure of bidding and complete thenegotiation within 15 days.

f. In case of negotiated procurement, the Implementing Partner shallseek clearance from the DILG-RO to implement the subproject byAdministration. In such a case, the procurement of materials/goodsshall adhere to RA 9184. Likewise, the Implementing Partner shallsubmit a revised Program of Works that excludes Contractor’s Profit,Taxes and Overhead Contingencies and Miscellaneous (OCM)expenses; with unit price derivations per item of work, for review,validation and approval by the DILG Regional Office.

g. All procurement shall be completed on or before 3rd week ofDecember. The bidding process is deemed completed upon theissuance of the Notice to Proceed (NTP) by the ImplementingPartner.

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C.4 Subprojects to be Implemented through Design and Build

The Implementing Partner may also implement the subproject throughDesign and Build modality following the Guidelines for Procurement andImplementation of Contract for Design and Build Infrastructure, Annex G.of RA 9184, subject to the review of DED by the DILG ROs.

C.5 Per COA Circular No. 2009-001, Section 3.1.1 dated February 12, 2009,within five (5) working days from the execution of the contract, theImplementing Partner shall submit to the Local Auditor a copy of the saidcontract together with all the documents forming part thereof, byreference or incorporation.

C.6 All procurement activities must be included in the Annual ProcurementPlan of the Implementing Partner.

D. ADHERENCE TO NATIONAL GOVERNMENT STANDARDS AND POLICIES

D.1 The Implementing Partner shall abide by the standards and policies setby the National Government which are applicable to all phases ofsubproject preparation and implementation.

D.2 The DILG-RO shall ensure that these standards and policies areconsidered during appraisal and are being observed during actualimplementation by the Implementing Partner.

“No-build” zone in accordance with FY 2014 GAA –Certification/anyform of evidence

Philippine National Standard for Drinking Water pursuant to DOHAO 2007-0012

Rainwater Collection Facilities pursuant to RA 6716 Code on Sanitation of the Philippines pursuant to PD 856 Clean Water Act of 2014 pursuant to RA 9275 The Water Code of the Philippines (P.D. 1067)

D.3 Infrastructure subprojects shall provide architectural and structuralfeatures, design or facilities that will reasonably enhance mobility, safetyand welfare of persons with disability pursuant to B.P. 344 and RA 7277.

D.4Infrastructure subprojects shall integrate energy-savings solutions in theplanning and implementation to mitigate the effect of climate changepursuant to RA 9729.

E. SUBPROJECT IMPLEMENTATION

E.1 For Implementing Partners

a. The Implementing Partner shall designate a full-time ProjectEngineer/Supervisor to supervise the construction/implementation ona day to day basis

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b. The Implementing Partner shall conduct a Pre-ConstructionConference with the Contractor immediately after the acceptance ofthe Notice to Proceed (NTP) to discuss the following:

Technical aspects of the Contract

Specific subproject timelines including the advice to Contactor tomobilize within seven (7) days after the receipt of the NTP

Agree on the regular conduct of coordination meetings

The nature and thrust of the subproject in relation to theSALINTUBIGProgram to ensure that the Contractor appreciatesthe Project

The participatory monitoring approach of the SALINTUBIGProgram Compliance of the Contractor to pertinent policiesand guidelines

c. Consistent with RA 6685 dated 12 December 1988, the ImplementingPartner shall ensure that the Contractor hires at least fifty percent(50%) of the unskilled and at least thirty percent (30%) of the skilledlabor requirements from the available bonafide residents in theprovince, city or municipality where the subproject is located. TheImplementing Partner shall ensure that the following are strictlyobserved: (1) adoption of the standard labor salary rate, (2) adoptionof rotation process, as possible, to accommodate as manycommunity members in the labor force, (3) transparency in the criteriafor selection, and (4) prioritizing those from the community with nocurrent employment and are abled.

d. The Implementing Partner shall cause the Contractor to submit amonthly report on the labor force employed within the subprojectbased on the format shown in Annex E, as part of theMonthlyPhysical Accomplishment Report stipulated in Item E.1.f below.

e. The Implementing Partner shall cause the Contractor to observe thefollowing:

i. Construction materials are available on site in accordance withthe approved plans and specifications

ii. Material Engineer is present on site

iii. Appropriate equipment are on site, in accordance with theEquipment Schedule

iv. Actual implementation/construction is in accordance with theapproved Plans and Technical Specifications

v. Quality control tests are conducted consistent with the frequencyand number specified in the Technical Specifications for each

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item of work. The tests are conducted by accredited testingcenter/laboratory

vi. Waste disposal is done in accordance with prescribed standards

vii. Health and Safety standards set by DOLE are implemented

f. The Implementing Partner shall require the Contractor to submit aMonthly Physical Accomplishment Report withinfive (5) days after theend of each month using the report form shown in Annex F –Statement of WorkAccomplished.Copy of the report shall besubmitted to the PD and PDMU within two (2) days after submissionof the Contractor.

g. In case there is noted/observed delay, the Implementing Partner shallimmediately issue a Warning Letter to the Contractor and require thesubmission of a catch-up plan to complete the works within theapproved contract period. In case the delay is due to unforeseenevents or force majeure,the Contractor shall immediately be advisedto submit a request within thirty (30) days from the occurrence ofsuch circumstances/events leading to the delay, for either suspensionof works or extension of contract time. Any Contractor’s requestsubmitted beyond the said period shall be denied. The ImplementingPartner shall act on the Contractor’s request within three (3) daysupon receipt of the request.

h. In case there is stoppage of work for unknown reasons or theContractor has abandoned the subproject, the Implementing Partnershall immediately assess/evaluate the situation, including thedetermination of the accomplished and remaining works, and officiallynotify the Contractor to explain the reason for abandonment and theconsequence of its action. If warranted, Implementing Partner shallforfeit the Performance Security Bond in favor of the ImplementingPartner and recommend blacklisting of the Contractor and revocationof the PBAC License. In such a case, the Implementing Partner shalltake over the work or immediately rebid the remaining works.

i. The Implementing Partner shall invite the presence of DILG-MLGOO/PD/RD during major activities such as, but not limited to:

Well drilling Pumping test Pipe laying Leakage/hydro testing/commissioning Water sampling for potability (before, during and after

construction)

j. The Implementing Partner shall request inspection from DILG-RO orProvincial Office when the subproject reaches 95% physicalaccomplishment for Punchlisting. Immediately after inspection, the

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Implementing Partner shall inform the Contractor to rectify the noteddeficiencies, if any, and to complete the works within the remainingcontract duration.

k. Within one (1) week upon submission of the Contractor’s request forFinal Inspection of the subproject, the Implementing Partner shallconduct joint final inspection with representatives from DILG-RO and tothe extent possible with the participation of the PartnerCSOs.

l. Within one (1) week upon submission of the Contractor’s request forFinal Inspection of the subproject, the Implementing Partner shall alsorequest COA inspection.

m. The Implementing Partner shall organize ceremonial inauguration toofficially turn-over the completed subproject to the LGU who willoperate and maintain the subproject.

n. The Implementing Partner shall prepare and submit to DILG RegionalOffice the Subproject Completion Report (SPCR), within one (1)month after completion, which should include the followingdocuments:

i. Certificate of acceptance of the project issued or signed bythe recipient or beneficiaries

ii. COA certification of Liquidation of 100% of the project fundand COA Inspection Report

iii. Others, as deemed necessary.

E.2 For DILG-ROs, Provincial/City Directors or MLGOOs

a. The DILG-RO, through the PDMU, shall take the lead in monitoringall aspects of subproject implementation.

b. During monitoring visits, the DILG-RO, through the PDMU, shallobserve/check the following, among others:

i. Availability of construction materials on site, in accordancewith the approved plans and specifications

ii. The presence of Materials Engineer on siteiii. Availability of appropriate equipment on site, in accordance

with the Equipment Scheduleiv. Quality control tests results conducted whether they are

consistent with the frequency and number specified in theTechnical Specifications, and whether the tests wereconducted by accredited testing center/laboratory

v. Waste disposal is done in accordance with prescribedstandards

vi. Health and Safety standards set by DOLE are beingimplemented

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vii. Works are in accordance with the approved Plans andSpecifications

The DILG-RO, through the PDMU, or the City/Provincial Director andMLGOO shall immediately advise the Implementing Partner for anynoted deviations and to cause the Contractor to initiate correctiveactions.

c. The DILG-RO, through the PDMU, City/Provincial Director andMLGOO shall validate reports submitted by the Implementing Partneron the Contractor’s compliance with the provisions of RA 6685regarding the hiring of skilled and unskilled labor. If the Contractor isnot compliant with the said provisions, the Implementing Partner shallimmediately be advised to cause the Contractor to comply.

d. The DILG-RO, through the PDMU, shall evaluate all submittedreports by the Implementing Partners. For the following cases:

Physical Works not in accordance with the Approved Plansand Specifications - The DILG-RO, through the PDMU,Provincial/City Director and MLGOO shall advise theImplementing Partner to immediately issue notice toContractor to implement corrective measures on noteddefects. Implementing Partner shall be advised to monitorContractor’s corrective actions.

Inconsistency between the reported and actual workaccomplished, PD and/or PDMU shall advise the ImplementingPartner to conduct a joint inspection with the Contractor withinthree (3) days, to resolve inconsistences

Any delay in subproject implementation, PD or PDMU shalladvise the Implementing Partner to issue Warning Letter to theContractor and require immediate submission of catch-up planto complete the works within the approved contract period.

e. Poor quality of works - The PDMU shall check/review the actual workaccomplished against the approved design.

f. The DILG Regional Office shall conduct a separate potability testprior to turn-over or acceptance of the water supply system by theProponent LGU.

g. In case there is a reported stoppage of work for unknown reasons orthe Contractor has abandoned the subproject, the DILG-RO, throughthe PDMU, P/CD and MLGOO shall advise the Implementing Partnerto immediately assess/evaluate the situation and recommendappropriate action.

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h. The DILG-RO, through the PDMU, Provincial/City Director andMLGOO shall closely monitor the subproject. Advise theImplementing Partner to:

i. Before the subproject reaches 95%, organize the joint inspectionfor Punchlisting

ii. Before the subproject reaches 100% physical, organize the jointfinal inspection and to request COA for final inspection.

E.3 All subprojects shall be completed within the approved contract duration.In case the LGU cannot comply with this provision, the DILG shallrecommend to DBM the transfer of the LGU Budget Allocation to othereligible LGU within the Region in need of water supply and with goodrecord in implementing subprojects.

E.4 The DILG-CO, through the DILG-RO shall ensure that the followingCapacity Development Programs be conducted for the WATSANCouncils/Teams and Water Service Providers:

1) Pre-implementation Phasei. Program Advocacy-Orientation and Feasibility Study Preparationii. Detailed Engineering Design (DED) Preparation and

Procurementiii. Construction Supervision and Fund Managementiv. Water Supply and Sanitation Sector Plan Preparation

2) Implementation Phasev. Community Organizing and Skills Enhancementvi. Human Rights-Based Local WATSAN Governance and Strategic

Communication

3) Sustainability Phasevii. Operations and Maintenance

LGU-Managed Water Supply Systems BWASA-Managed Water Supply Systems

viii. Ring-fencing and Business Planning for LGU-managed WaterSupply Utilities

ix. Monitoring and Evaluation

F. FUND ADMINISTRATION

In general, all applicable provisions of COA Circular No. 94-013 datedDecember 13, 1994 re “Rules and Regulations in the Grant, Utilization andLiquidation of Funds Transferred to Implementing Agencies” and all otherexisting COA rules and regulations shall be followed.

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F.1 Fund Utilization

a. The DILG Fund shall be used exclusively for the following:

a.1 To finance the implementation of subprojects reflected in theMOA.

a.2 The DILG-Fund may also be used to finance the preparation ofthe Detailed Engineering Design (DED). The DED Cost to becharged under the Fund shall not be more than 6% of thesubproject allocation. Any excess shall be borne by theProponent LGU as equity/counterpart.

a.3 Any balances or savings shall be returned to the DILG RegionalOffices within fifteen (15) working days after subprojectcompletion.

a.4 In no case shall the Implementing Partner use the DILG-Fund tocover administrative costs (e.g. office supplies, local travellingexpenses, communication, honoraria, meetings andconsultations, salaries, and any other related monitoring andconstruction supervision expenses) of Implementing Partnerpersonnel overseeing and monitoring the subproject. Suchexpenses shall be borne by the Implementing Partner.

b. The Implementing Partner counterpart funds shall be used to financethe following:

b.1 Partly for the implementation of subprojects

b.2 In-house preparation of Technical Design/Detailed EngineeringDesign

b.3 Preparatory activities (Feasibility Study/Subprojects Proposalpreparation, survey/validation, social preparation activities,cost/fees for permits, tests, and etc.)

b.4 Construction Supervision

b.5 Administrative cost (e.g. M&E of subprojects, office supplies,local travelling expenses, communication, meetings andconsultations, salaries, and any other related monitoring andconstruction supervision expenses)

b.6 Implementing Partner shall appropriate at least 20% of the 10%counterpart for sanitation related activities such as behaviouralchange communication, barangay consultation on water,sanitation and hygiene and Community Led Total Sanitation(CLTS).

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b.7 Participation of the LGU officials in the seminar-workshops andother administrative expenses that may be incurred by the LGUsfor Program implementation at the local level

But in no case, the LGU counterpart fund shall be used for staffsalaries and other compensations; international scholarship,procurement of vehicles, equipment and other fixtures; and land/roadright-of-way acquisition.

F.2 Mechanics for DILG Fund Releases

a. Release of Funds shall be done by the DBM direct to the DILGRegional Offices through their Regular Accounts (Fund 101). DILGRO shall book-up the Notice of Cash Allocation (NCA) as “Subsidyfrom National Government - 4-03-01-010” while the fund transfer shallbe taken up as “Due from LGUs – 1-03-03-030 (Account receivable)”.The DILG Regional Office shall immediately obligate the wholeamount allotted for the subproject. The DILG Regional Officeconcerned shall maintain a subsidiary ledger of the fund transferpertaining to the subproject/s.

b. Implementing Partner may opt to open a Special Trust Account for theFund or may use the existing Trust Account or maintain a separatesubsidiary ledger for each subproject to facilitate tracking of fundutilization and liquidation. The transferred funds shall be taken up as“Due to NGAs” by the Implementing Partner.

c. The release of funds for subprojects shall be in two tranches

First tranche - 50% of total subproject allocation

Second tranche - remaining 50%

d. Requests for fund releases shall be submitted to the concernedRegional Office with the required supporting documents.

e. The DILG RO, thru the PDMU, shall review the submitted documentsand conduct field inspection to validate the claimed physicalaccomplishment prior to the release of funds.

f. DILG RO shall release the funds within seven (7) days uponsatisfactory compliance of the requirements. It shall issue the checkin the name of the Implementing Partner for deposit to theImplementing Partner’s Trust Account maintained for the purpose.For its part, the Implementing Partner shall issue the correspondingofficial receipt in acknowledgment.

g. Regional Directors are given the authority to act on, sign and/orapprove contracts, disbursement vouchers, checks, liquidationreports with amounts equivalent to the approved subproject costsstipulated in the MOAs with the Implementing Partners, and all other

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related documents pertaining to the implementation of the Projects,subject to the usual accounting and auditing rules and regulations.

h. The DILG RO shall officially inform the concerned Regional and LocalResident Auditors that a check has been issued to the ImplementingPartner, immediately after issuance of the check.

F.3 Documentary Requirements for Fund Releases

In consideration of the time needed to secure the necessary permits,licenses, certificates, clearances, and other documentary requirementsfrom other National Government Agencies (NGAs), except for the (i) “nobuild’ zone certification, and (ii) first water potability test (during sourcevalidation), which shall be submitted together with the project proposal,copies of applications may suffice as basis for the initial release of funds.Such requirements, however, shall be complied with prior toimplementation. Indicated below are the related requirements thatneed to be complied with:

i. Prior to the Release of the First Tranche to Implementing Partnersthe following have to be secured:

Proof that the Certificate of Land Ownership or any applicablelegal instrument/s allowing the use of land or property for thesubproject (where applicable) is being secured

Proof thatEnvironmental Compliance Certificate (ECC) orCertificate of Non-Coverage (CNC) whichever is applicable, isbeing secured.

Copy of the application for the issuance of Water Permits fromdeputized agencies of National Water Resources Board(NWRB).

Pursuant to RA 8371, for subproject areas with IPs that will beaffected, a certification that the area affected does not overlapwith any ancestral domain needs to be secured from the NCIP.

ii. Prior to the Release of the Second Tranche, ImplementingPartners shall submit the required documents, permits andclearances stated above.

F.4 Reporting and Liquidation

a. Liquidation of Fund Transfers

a.1 The Implementing Partner shall liquidate the funds and submit tothe DILG Regional Office, either in print or by way of electronicdocuments, reports on the liquidation of the fund transfer.

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a.2 The Implementing Partner shall submit to DILG Regional Officethe Report of Disbursement/Liquidation (ROD) including thesupporting documents as evidence of the actual utilization offunds, within 10 days after the end of each month. The RODshall be duly signed by the Local Accountant and Treasurer andapproved by the Local Chief Executive and stamped-received bythe concerned COA Auditor. This shall serve as the basis for thesubsequent fund releases. See Annex G for the Pro-FormaReport of Disbursement/Liquidation (ROD). The supportingdocuments shall include but not limited to the following:

Disbursement Voucher (DV) Checks Issued to Creditors Official Receipts by Creditors Creditor’s Billings

a.3 The ROD duly audited by the Local Auditor shall be submittedbefore the end of the month as the basis for recording theliquidation of the Implementing Partner.

a.4 Within fifteen (15) days after the end of each month, the DILG-RO shall submit to DILG Central Office the RegionalConsolidated Report on Fund Utilization and Liquidation. Pleaserefer to Annex H for the pro-forma Regional ConsolidatedReport on Fund Utilization.

a.5 The DILG Regional Accountant or any authorized representativeshall conduct spot checks of fund utilization, proper recording ofbook of accounts, and overall financial management of theImplementing Partner.

a.6 Within one (1) month after the end of each year, theImplementing Partner shall submit to DILG-RO copy of theAnnual Audited Report for both the completed and on-goingsubprojects reflecting all fund deposits and actual fundutilization. DILG-RO shall furnish DILG-CO of such report.

a.7 The Implementing Partner shall return to the DILG RegionalOffice any unutilized fundwithin fifteen (15) working daysaftersubproject completion.

a.8 All fund transfers shall be liquidated one (1) month after thecompletion of each subproject. The Implementing Partner shallsubmit Summary Report showing all fund deposits and actualdisbursements provided that the Implementing Partner hassubmitted all the Audited Monthly Reports. In case theImplementing Partner failed to submit such reports, an AuditedConsolidated Report including a separate opinion from the

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Auditor, as to whether the fund has been used for the purpose,shall be submitted to the DILG RO.

a.9 The DILG RO shall officially notify the Implementing Partners onthe need to submit the required liquidation reports.

b. Liquidation of Regional Operational Fund

Within 10 days after the end of each month, the Regional Office shallsubmit to DILG Central Office the ROD on the utilization of the fundstransferred for operational expenses.

VII. IMPLEMENTATION ARRANGEMENTS

A. Project Management Office (PMO)

The Water Supply and Sanitation-Project Management Office (WSS-PMO)under the Office of Project Development Services (OPDS) shall beresponsible for the overall-project management. Specifically, the PMO shallbe responsible for the following:

Formulation/updating of Operational Guidelines and Strategies foreffective implementation

Over-all physical and financial planning Over-all fund management Development and implementation of monitoring and evaluation

systems Conduct of periodic monitoring on the subproject implementation and

fund utilization. Development and maintenance of databases for the Projects Preparation and submission of monthly and quarterly reports to the

DILG Management and other partner agencies. In accordance with Section 64 of GAA FY 2014, preparation of status

report of all the SALINTUBIG projects to be submitted to DBM, HouseCommittee on Appropriations and Senate Committee on Finance,either in print or by way of electronic document through the DILG-FMS.

Provision of advisory and technical assistance to DILG Field Officesand Implementing Partners, in the development, implementation,operation and management of subprojects

Development and implementation of capacity development programsfor DILG Field Offices and Implementing Partners.

Conduct of regular consultations/dialogues with DILG-ROs and LGUs

B. Regional Offices

The Regional Offices shall take the lead and be responsible for the efficientand effective implementation of the Projects at the local level, and shall takeappropriate measures to ensure that the Funds transferred to ImplementingPartners are used for the intended purpose.

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B.1 The Regional Director shall:

On behalf of the DILG, enter into a MOA with the ImplementingPartners for the implementation and release of funds for thesubprojects

Enter into Partnership Agreement with service providers for the DEDpreparation and implementation of capacity development activities incase that the LGU is non-SGH compliant

Approve/disapprove subproject proposals and DED Sign and/or approve contracts, disbursement vouchers, checks,

liquidation reports relative to Project implementation

B.2 The Regional Offices, thru the Project Development and ManagementUnits (PDMUs) shall take the lead and be responsible for the efficientand effective implementation of the Projects at the local level. ThePDMUs shall be responsible for the following:

Regional fund management, which includes among others, review ofdocuments submitted by Implementing Partners prior to release offunds, and verifying satisfactory compliance of requirements

Regional physical and financial planning; Review, assessment and validation of the proposed subprojects; Eligibility assessment of LGUs Review, evaluation and approval of subproject proposals and DED; Implementation of subprojects, as necessary Provision of advisory and technical assistance to DILG

Provincial/Municipal Offices and Implementing Partners, in thedevelopment, implementation, operation and management ofsubprojects

Ensuring the compliance to requirements of Implementing Partners Provision of capacity development assistance to Implementing

Partners; Provision of support to the Provincial and Municipal Offices in the

monitoring and evaluation of subprojects Preparation and submission of Physical and Financial

Accomplishments of all SALINTUBIG projects to DILG Central Officethru FMS and OPDS

Preparation of regular alert status reports that will provide managementadvance information on what is happening on the ground that will guidein addressing possible bottleneck

Regular consultations/dialogues with LGUs and other stakeholders Conduct of separate potability tests

C. DILG Provincial/City/Municipal Offices

The Provincial/City Directors and MLGOOs shall assist the DILG RegionalOffice in overseeing the implementation of the Projects at the local level. TheDILG Provincial/City Directoror his/her duly designated representativeshall actas the SALINTUBIG-Focal Person in the Province/City. The MLGOO shall

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serve as the SALINTUBIG-Focal Person in the municipality. TheProvincial/City Director and MLGOO shall be responsible for the following:

Facilitation in the conduct of the capacity development activities at theprovincial/city/municipal level, as the case may be

Briefing to Implementing Partners and Proponent LGUs of the ProjectGuidelines and Timelines

Monitoring and providing reports/feedback to Regional Office on theprogress of activities in all phases of project implementation to includebut not limited to the following:- Status of the preparation of subproject proposals, DED/Technical

Design and other required documents- Progress of the preparation of Bidding Documents- Issuance of the Sangguniang Bayan Resolution authorizing the

Mayor to sign the MOA- Status of Procurement- Status of Subproject Implementation

Review the completeness of the relevant documents submitted by theImplementing Partners

Facilitation in finalizing the documents required in MOA signing. Providing feedback whether Implementing Partner has issued CAF to

BAC as a requirement to commence procurement process. Monitoring and providing advice during the bidding process. Act as an Observer during the Bid Opening. Ensuring timely submission of accomplishment reports (including

pictures) and upon subproject completion, attest to the existence of thesubproject.

Ensuring that Implementing Partner install and regularly update theSubproject Community Billboard in compliance with the COA issuanceNo. 2013-004 dated January 30, 2013 and other relevant guidelines

Participation in the conduct of punchlisting and final inspection andsubmit report within 2 days after inspection to DILG-RO

Ensuring that the DILG-Funds are utilized for the intended purpose Assistance in the conduct of spot checking on the book of accounts

and ledgers of the Implementing Partners

D. Proponent LGU/Implementing Partner

Assessment of the eligibility of the Proponent LGU as the ImplementingPartner shall be in accordance with Section VI.A of this Guidelines and shallbe further validated during Subproject Review Process. The ImplementingPartner may be the Provincial Government or the City/Municipal Governmentor any other entity as may be designated by the DILG Regional Director.

The Proponent LGU shall:

Prepare subproject proposal/s based on the identified priorities as aresult of the Regional/Provincial Programming

Provide counterpart funds, as necessary

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Adhere to existing national standards/guidelines, laws and policiesstipulated in Section VI.D.2, among others

If not eligible as Implementing Partner, enter into a MOA with DILG andImplementing Partner

If not eligible as Implementing Partner, jointly monitor theimplementation of subproject with the Implementing Partner

Commit to provide annual operations and maintenance funds through aSangguniang Resolution

For water supply subprojects, identify appropriate institution to manageand operate the subproject

The Implementing Partner shall:

Enter into a MOA/Tripartite MOA, whichever is applicable, with theDILG and/or Proponent LGU for the implementation of subproject

Open and maintain a Trust Account for the transfer of funds Designate a focal person/appropriate focal unit/department in the

organization which will manage and coordinate the implementation ofsubproject/s, including financial transactions

Designate a full time Project Engineer/Supervisor to oversee thephysical implementation of the subprojects to ensure that it is inaccordance with the plans and specifications

Adhere to existing national standards/guidelines, laws and policiesstipulated in Section VI.D.2, among others

During procurement, adhere to and implement all provisions of RA9184 and its Implementing Rules and Regulations (IRR)

Consistent with Sections VI.E.1 and VI.F of this Guidelines, ensurethat subproject is implemented in accordance with the approvedschedule, within the approved budget and in accordance withacceptable standards

Submit monthly financial and physical accomplishment reports to theDILG-Regional Office.

In accordance with Section 64 of GAA FY 2014, submit a status reportof all the SALINTUBIG projects, either in print or by way of electronicdocument, to DBM, House Committee on Appropriations and SenateCommittee on Finance

Be responsible for the liquidation of funds transferred to theImplementing Partner

Return to DILG-RO any of the unexpendedfunds within fifteen (15)days after subproject completion

VIII. MONITORING AND EVALUATION

A. Progress Monitoring

A.1 DILG-PMOs

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a.Conduct regular site visits and spot checks in all phases ofsubproject implementation, whenever necessary

b. In accordance with the special provisions of General AppropriationsAct of FY 2013 and 2014, the DILG PMOs shall submit aconsolidated quarterly monitoring report to DBM through DILG-FMS.

c. Conduct semestral Project Implementation Reviews

A.2 DILG Field Offices

DILG Regional Offices shall take the lead in the progress monitoring ofall SALINTUBIG subprojects funded by DILG.

a. Consistent with Section VI.E.2, progress monitoring shall beconducted by DILG Regional/Provincial/City/Municipal Offices andshall cover but not limited to the following:

physical status and accomplishment financial status to include utilization/disbursement rates problems encountered and recommended solutions; assumption/risk analysis

b. Monitoring and reporting of progress of subproject implementationwill be done monthly and quarterly using M&E forms prescribed byDILG PMOs with photos attached.

A.3 Alert Mechanisms shall be established to ensure timely resolution ofissues that may arise before, during and after subprojectimplementation.

B. Transparency and Accountability Mechanisms

The following Transparency and Accountability Mechanisms shall beoperationalized in the implementation of subprojects:

B.1 Implementing Partners shall install subproject billboards on thesubproject sites to provide information including the period ofimplementation, fund allocation and status of fund utilization consistentwith COA Circular No. 2013-004 dated 30 January 2013 – Informationand Publicity on Programs/Projects/Activities of Government Agencieson subproject reporting and monitoring of subproject/s.

B.2 Implementing Partners shall post in their respective websites, withinthirty (30) calendars days from entering into Contract with the winningcontractor/bidder, the following information per subproject:

a. Subproject title and detailed description which shall include thenature and location

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b. The detailed estimates in arriving at the Approved Budget for theContract

b. The winning contractor and the detailed estimates of the bidawarded.

B.3 Implementing Partner shall also post in their respective websites withinthirty (30) calendars days from the issuance of subproject completionthe following:

Detailed actual cost of the sub-project; and Variation orders, if any

B.4 DILG-PMOs and ROs shall post subproject implementation status ontheir respective websites. Full disclosure of subproject information andstatus of implementation is encouraged through tri-media.

C. Project Evaluation

Data on specific social and economic indicators shall be regularly collectedin SALINTUBIG project sites to aid in outcome evaluation.

D. Information Dissemination and Institutional Learning

DILG PMO and ROs shall establish processes and mechanisms for theregular sharing of findings from monitoring and evaluation initiatives. Thiswill include sharing of information on challenges encountered, goodpractices and lessons learned from program implementation. These areenvisioned to feed into planning and programming to facilitate institutionallearning.

IX. TIMELINES TO BE OBSERVED

The DILG and the Implementing Partners shall adhere to the timelines stipulatedin the GAA FY 2014 and in this Guidelines, summarized in Annex I.

X. PENALTIES AND SANCTIONS

The Regional Director is authorized to:

A. Terminate/ cancel the implementation of the subproject in the followinginstances:

Implementing Partner’s non-compliance to subproject processes,standards and requirements

Corruption and fraudulent practices

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When situations/circumstances would make it improbable for thesubproject to continue to be carried out

Upon request of the Implementing Partner

In case the subproject is partially or fully cancelled due to the fault of theImplementing Partner, the Implementing Partner shall be obliged to returnthe unexpended balance of the released portion of the funds or the pertinentportion related to the cancelled component of the subproject, whicheverapplies.

B. Suspend/withhold the release of the final tranche if any of the followingoccurs:

The DILG, during the conduct of review and monitoring activitiesdetermines that: (i) the procurement of any contract is inconsistent withRA 9184 provisions (ii) Implementing Partner is performingunsatisfactorily in the implementation and execution of the subproject orin the event that substantial slippage in implementation is incurred

extraordinary conditions such as force majeure, fortuitous events and thelike which shall make it necessary to suspend the implementation of thesubproject

Implementing Partner will be given a period of one month to resolve theissue, improve performance or remedy the situation. However, terminationwill be resorted to only, if Implementing Partner, having been duly notified,does not make any effort to institute measures that will address issues athand.

XI. EFFECTIVITY

This Memorandum Circular shall take effect immediately.

MAR ROXASSecretary