Notwithstanding the devolution of many basic services to LGUs, basic education is still largely the responsibility of the central government and is delivered through the Department of Education (DepEd). However, LGUs do provide supplementary funding support to public basic education because they have access to a sustainable source of financial resources that are earmarked for the basic education subsector, the Special Education Fund (SEF).
The monies in the SEF come from an additional 1% tax on real property that LGUs are mandated by the Local Government Code (Republic Act 7160 of 1991) to impose and collect. In addition to education expenditures funded out of the SEF, LGUs also provide some budgetary support for education from the General Fund (GF). Thus, LGUs are considered major partners of the national government in the delivery of basic education services.
Republic Act 5447. The Special Education Fund was originally created under Republic Act (RA) No. 5447, entitled “An Act Creating a Special Education Fund to be Constituted from the Proceeds of an Additional Real Property Tax and a Certain Portion of the Taxes on Virginia-Type Cigarettes and Duties on Imported Leaf Tobacco Defining the Activities to be Financed, Creating School Boards for the Purpose, and Appropriating Funds There from,” which took effect in 1969. In the case of provinces, 50% of the collections from the additional 1% real property tax imposed under RA 5447 went to the SEF of municipality where the property subject to tax is situated, 20% to the SEF of the province and 30% to the Bureau of Treasury (BTr). In the case of cities, 60% of the collections from the additional 1% tax on real property went to the SEF of the city while 40% went to the BTr. The amounts remitted to the BTr were meant to be expended exclusively for stabilizing the SEF in municipalities, cities and provinces.
Under RA 5447, the allocation and utilization of the SEF was largely under the control of the Department of Education. To wit, the SEF was meant to be expended exclusively for the following activities of the Department of Education: a. the organization and operation of extension classes that may be needed to accommodate all children of school age desiring to enter Grade I; b. the construction and repair of elementary school buildings, and the acquisition of sites; c.the payment and adjustment of salaries of public school teachers; d. the preparation, printing and/or purchase of textbooks, teachers' guides, forms and pamphlets, approved in accordance with existing laws to be used in all public schools; e. the purchase and/or improvement, repair and refurbishing of machinery, laboratory, technical and similar equipment and apparatus, including spare parts needed by the Bureau of Vocational Education and secondary schools offering vocational courses; f. the purchase of teaching materials such as workbooks, atlases, flip charts, science and mathematics teaching aids, and simple laboratory devices for elementary and secondary classes; g. the implementation of the existing program for citizenship development in barrio high schools, folk schools and adult education classes; h. the undertaking of education research, including that of the Board of National Education; i. the granting of government scholarships to poor but deserving high school graduates who intend to enroll in priority courses in higher education institutions; and (x) the promotion of physical education, such as athletic meets.
RA 5447 called for the creation of Local School Boards (LSBs) at the provincial, city and municipal levels which were composed of the provincial/city division superintendent/district supervisors as chairman and the representative of the governor/ city mayor/ municipal mayor, the local treasurer, the representative of the local council and the representative of the League of Parents-Teachers Associations as...