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Local Government Unit as a corporate entityLocal Government can own and managed public enterprises.According to Manasan and CastelLocal Economic Enterprise- LEEs are local government owned economic entities that generate the bulk of their revenues from selling goods and services.LGU, inc.Examples:MarketsSlaughterhouses CemeteriesHospitalTertiary schoolsMuniciipal HospitalsIf an enterprise turns in a profit, the money can be used for improvement and repairs, and pay advances or loans. Any excess goes automatically to the General fund.

Local Government Code Sec. 297

A local government unit may contract loans, credits, and other forms of indebtedness with any government or domestic private bank and other lending institutions

Local Government Code lists infrastructure and socio-economic development projects, equipment, renovation of city and town halls, and purchase of lots as eligible for loans.Loans by the Local GovernmentThe project to be covered by a loan appears in the local development plan and annual investment plan.The mayor or governor secures authority from the Sanggunian to apply for a loan. The council must pass an ordinance.The debt service ceiling does not exceed 20% of the local governments annual regular budget.Loan transaction with a bank passed the proper procedure if:Local Governments are allowed to put up the following as security or collateral such as:Its income including the IRA or net profit from the project being financed by the loan;Chattel mortage or equipment financed by the loan andBank DepositsLocal Governement can borrow from other LGUs that have surplus funds.LGU can also apply for Official Development Assistance or foreign aid obtained from government agencies through diplomatic channels and official representations.Bonds is an instrument bearing obligation issued by LGUs to finance operating or capital cost and special projects.Local Government also become borrrowers whenever they issue bonds. Parties who purchase the bonds become investors; they can be individuals, corporations or financial institutions.They should be revenue bonds and not general obligation bonds.Bonds to boost RevenuesIn recent years, a number of local governments have also been successful in getting the private sector to participate financing, building, operating and maintaining roads, bridges, public markets and infrastructure projects under the Build-Operate-Transfer Scheme.Build, Operate and Transfer SchemeBuild-and Transfer: The private sector finances and constructs an infrastructure or development facility. After its completion, the private sector turns it over to the LGU, which pays the contractor and the total investments on the project.Build-Lease-Transfer: The private sector finances and builds the facility. When completed, the facility is leased by the local government for a fixed period after which ownership is transferred to the LGU.

Types of Build-Operate-Transfer SchemesC . Rehabilitate-Operate-and-Transfer: A facility is turned over to the private sector to refurbish, operate and maintain for a franchise period, at the expiry of which the facility is turned over to the government.D. Build-Own-Operate: The project propanent finaces, contracts, owns, operates and maintains the facility, and collect tolls, fees, rentals or other charges from users.General Public Services, Economic Services, Health Services, Education, Culture, Sports, Manpower Development, Community Development, Social Welfare Services.General Fund, Special Education Fund and Trust FundWhere the Money Goes?While a Local Government can spend on school children and support livelihood program of the NGOs,it is prohibited from spending for religious or private purposesSec. 309(b) Trust Funds shall consist of private and public monies which have officially come into the possession of the local government or of a local government official as trustee, agent or administrator, or which have been received as a guaranty for the fulfillment of some obligation. A trust fund shall only be used for the specific purpose for which it was created or for which it came into the possession of the local government unit. The Program, prepared by the Local Chief Executive is based on the annual procurement plans handed in by the heads of departments.COA requires separate plans and programs for supplies or property; non expendable supplies or articles that are not consumed in use such as weapons, vehicles, machines, tools and instrumentsThe general services officer in the provinces and city, or the treasurer in the municipality and barangay, buys on the local government behalf, But no order can be placed without a written requisition of the department head, who certifies the supplys necessity for official use.Local Procurement ProcessBefore the local chief executive approves the requisistion, there must first be a string of certifications.The code specifies public bidding as the primary mode of procurement. It is also mandates the creation of committee on bids and awards, which will decide the winning bids and question of awards on procerement and disposal of supplies or property.

The call or invitation for bids must be posted in at least 3 publicly accessible and conspicous places at least 10 days before the opening of the bids.The general services officer or treasurer is required to maintain the list of the bidders in the locality.Bids submitted in sealed envelopes. Bidders may be required to submit a sample as well.

The lowest complying and responsible bid that meets all the terms and condition of the contract is declared winner by the committee on bids and award.The winning bidder is then issued a purchase orderThe committee on awards or its representatives foes the canvass and prepares an abstract of the canvass. The Local Chief executive, upon the recommendation of committee, decides and awards the contract which then goes to the Sanggunian for approval.Items must be delivered within seven days after the order is placed.