Professional Documents
Culture Documents
Chapter 1
General Accounting Instructions
Section 334(c) of RA 7160, otherwise known as the Local Government Code
of the Philippines, states that: The financial records of the barangay shall be kept in
the office of the city or municipal accountant in simplified manner as prescribed by
the Commission on Audit. (underscoring supplied)
The Manual prescribed in COA Accounting Circular No. 2006-002 dated
December 19, 2006 is revised to simplify the procedures and reporting of the
financial transactions of the barangays, to maintain and keep the accounting records
in accordance with the requirements of law and to prepare and submit the yearend
financial statements.
1.1 Fundamental Principles
The financial transactions and operations of the barangays shall be governed by
the following fundamental principles:
1.1.1. No money shall be paid out of the local treasury except in pursuance of
an appropriations ordinance or law.
1.1.2. Local government funds and monies shall be spent solely for public
purposes.
1.1.3. No public money or property shall be appropriated or applied for
religious or private purposes.
1.1.4. Disbursements or disposition of government funds or property shall
invariably bear the approval of the proper officials.
1.1.5. All claims against government funds shall be supported with complete
documentation.
1.1.6. Local revenues/income shall be authorized by ordinance or law and
collections thereof shall always be properly acknowledged.
1.1.7. All monies officially received by a local government officer in any
capacity or on any occasion shall be accounted for as local funds, unless
otherwise provided by law.
1.1.8. All collections shall be deposited intact with government depository
bank for the account of the barangay, except those collections to be
remitted to the City/Municipal (C/M) Treasurer.
1.1.9. Trust funds in the local treasury shall be paid out only for the purpose
for which the trust was created or the funds received.
1.1.10. Fiscal responsibility shall be shared by all those exercising authority
over the financial affairs, transactions, and operations of the barangays.
1.1.11. Local treasurers and other accountable officers shall keep personal
monies separate and distinct from local funds in their custody and shall
not make profit out of public money or otherwise make use of such fund
for purposes not authorized by law or ordinance.
1.1.12. Barangay accountable officers shall be duly designated and bonded.
1.2 General Accounting Policies
The following general policies shall be observed in the accounting for
barangay funds and property:
1.2.1. For accounting purposes, the fiscal year for the barangay shall start
on January 1st and end on December 31st of each year.
1.2.2. A record to monitor and control approved appropriations and
obligations shall be maintained.
1.2.3. Barangay accounts shall be kept under a double-entry bookkeeping
system.
1.2.4. The barangay financial transactions shall be recorded using the Chart
of Accounts prescribed by the Commission on Audit.
1.2.5. Barangay books of accounts shall consist of a Journal of Barangay
Transactions (JBT) Annex 1, General Journal (GJ) Annex 2,
General Ledger (GL) Annex 3 and Subsidiary Ledgers (SL)
Annex 4 which shall be maintained by the barangay bookkeeper
under the direct supervision of the C/M Accountant.
1.2.6. Cash transactions shall be recorded in the JBT and non-cash
transactions shall be recorded in the GJ through a Journal Entry
Voucher (JEV) Annex 5.
1.2.7. Records of Appropriations and Obligations (RAO) Annex 6 shall be
used to record, monitor and control appropriations and obligations
charged thereto. A Statement of Appropriations and Obligations
(SAOB) Annex 7 shall be prepared to report on the total
appropriations and obligations as at a certain period.
1.2.8. A Cashbook (Annex 8 ) shall be maintained and updated daily.
1.2.9. A modified accrual basis of accounting where income is recorded
when received and expenses recognized when incurred shall be
adopted.
1.2.10. All collections of the barangay shall accrue to the General Fund
unless otherwise provided by law.
1.2.11. All lawful expenditures and obligations incurred during a fiscal year
shall be taken up in the accounts of that year.
1.2.12. Liabilities shall be recognized at the time goods and services are
accepted or rendered and supplier/creditor bills are received.
1.2.13. Property, plant and equipment (PPE) shall be recorded when actually
received.
1.2.14. PPE used in barangay operation shall be subject to depreciation
using the straight line method after deducting a residual value
equivalent to 10 per cent of the cost of the property and equipment.
1.2.15. All borrowings and secured loans shall be recorded in the barangay
books using the appropriate liability accounts.
1.2.16. Petty Cash may be authorized by the Sangguniang Barangay (SB) in
an amount not to exceed twenty percent of the funds available and to
the credit of the barangay treasury or the maximum amount of the
cash accountability under the bond that shall be determined by the
SB which shall not exceed ten thousand pesos (P10,000.00),
whichever is lower.
1.2.17. A monthly Bank Reconciliation Statement shall be prepared by the
C/M Accountant upon receipt of the bank statement.
1.2.18. Supplies and materials including drugs and medicines shall be
recorded using the expense method. The value of the inventory shall
be recorded at yearend based on the physical inventory report. At the
start of the year, the journal entry made at the end of the previous
year shall be reverted.
1.2.19. Grants and donations in kind shall be recorded at appraised value in
the absence of any cost at the time of receipt and shall be recorded to
the appropriate asset accounts and subject to depreciation as
provided in Item 1.2.13. Donations in kind shall be covered by a
Sanggunian Resolution accepting the donation and a Deed of
Donation.
1.2.20. The property and equipment used in the barangay operation shall be
subject to depreciation using the straight line method after deducting
a residual value equivalent to 10 per cent of the cost of the property
and equipment.
Chapter II
Appropriations and Obligations
The budget of the barangay shall be approved by the Sangguniang Barangay
(SB) and shall be known as barangay appropriation ordinance which shall serve as
the authorization for the barangay to incur expenditures and obligations. The
Chairman of the Committee on Appropriations (CCA) shall be responsible for the
proper monitoring and control of the barangay budget.
Hereunder are the specific policies and procedures related to barangay
appropriations and obligations.
2.1. Specific Policies and Procedures
2.1.1 The approved barangay appropriation ordinance shall be recorded in the
RAO that shall be maintained by the Chairman of the Committee on
Appropriations (CCA).
2.1.2 The RAO shall show the annual and supplemental appropriations and the
obligations charged against the said appropriations. It is used to monitor
the availability of appropriations to cover expenditures/obligations to be
incurred.
2.1.3 Expenditures/Obligations
appropriations.
shall
in
no
case
exceed
available
2.1.4 Charges against the appropriations shall be based on the obligations made
as shown in the Disbursement Voucher (DV), Payrolls, Contracts or
Purchase Orders.
2.1.5 Based on the RAO, the CCA shall certify as to the existence of
appropriation on the DV, Payrolls, Contracts or Purchase Orders. As
such, the CCA shall regularly update the RAOs by posting all obligations
to determine available balance of the appropriations and to serve as his
basis in certifying the DVs and other related documents.
2.1.6 The CCA shall report the charges to and balances of appropriations to the
Punong Barangay (PB) and the SB monthly through the SAOB. It shall
be certified correct by the CCA and duly noted by the PB and SB.
2.1.7 The PB and SB shall use the SAOB in the evaluation of the barangay
status of finances.
Chapter III
Collections and Deposits/Remittances
The Barangay Treasurer (BT) shall be responsible for the proper handling of
the funds of the barangay. For this purpose, he shall observe the following specific
policies and procedures pursuant to existing laws, rules and regulations:
3.1.
Specific Policies and Procedures
3.1.1 All collections, either in cash or in checks, shall be acknowledged
through the issuance of an Official Receipt (OR). At no instance shall a
temporary or provisional receipt be used to acknowledge collection.
Officially numbered receipts shall be issued in strict numerical
sequence. Strictly no erasures and alterations are allowed in preparing
the OR.
3.1.2
3.1.3
3.1.4
3.1.5
3.1.6
3.1.7
3.1.8
3.1.9
The BT shall submit the RCD with the duplicate copies of the OR and
validated deposit slip to the C/M Accountant within five days after the
end of the month.
3.1.10 The C/M Accountant shall summarize all Credit Memos (CMs)
including Debit Memos (DMs) received from the Bank with the Bank
5
b. At the end of the day, prepare three copies of deposit slips for
banks validation.
Original
to Bank
Duplicate copy to be attached to the RCD for submission
to the C/M Accountant
Triplicate copy BT file
c.
d. Prepare the RCD in three copies based on the duplicate ORs and
validated deposit slips. In the RCD, fill in the box for the quantity
and serial numbers of accountable forms beginning balance,
received, issued and ending balance as of the report period.
e.
a. Upon receipt of the bank Credit Memo (CM) from the C/M
Accountant, record in the cashbook the amount of collection/deposit
appearing in the CM.
3.1.15 For collections received by the BT as deputized collector, the BT shall:
a. Upon receipt of cash/check, issue OR to acknowledge the amount
received. The BT shall use the ORs issued to him by the C/M
Treasurer.
b. Fill up the OR in triplicate copies to be distributed as follows:
Original
to payor
Duplicate copy to be attached to RCD submitted to the
C/M Treasurer
Triplicate copy BT file.
c. Prepare three copies of RCD based on the duplicate ORs.
Original
C/M Accountant
Duplicate copy C/M Treasurer
Triplicate copy BT
It should be emphasized that a separate RCD shall be prepared apart
from the RCD for regular collections of the BT for the barangay.
d. Remit daily the collections or once the collection reach P5,000.00
to the C/M Treasurer, together with two copies of RCD, and the
duplicate ORs.
e. Upon receipt of the collections, the C/M Treasurer shall fill out and
sign the acknowledgement portion of the RCD to signify receipt
thereof from the BT.
3.1.16 Requisitions for new accountable forms shall be made from the C/M
Treasurer and the used booklet shall be surrendered before issuance of
new booklet of OR.
3.1.17 Requisitions and issuances of accountable forms shall be reported in the
monthly Report of Accountability for Accountable Forms (RAAF).
Chapter IV
Disbursements
The Barangay Treasurer (BT) shall also observe the following specific policies
and procedures on disbursements of the barangay funds pursuant to existing laws,
rules and regulations:
4.1
4.1.2
4.1.3
4.1.4
4.1.5
4.1.6
4.1.7
4.1.10
4.1.13
4.1.14
4.1.15
Petty Cash
4.1.16
The BT/Petty Cash Custodian (PCC)
may be authorized by the SB to hold a petty cash in the maximum
amount of P10,000.00 which shall be maintained under the imprest
system where a sum kept on hand is used for small expenditures and
periodically replenished and shall be replenished when the total
expenses amounts to at least seventy five per cent or as needed. It shall
be fully liquidated at yearend and renewed in the ensuing year using the
current years appropriation.
4.1.17
4.1.18
Modes of Disbursements
4.1.19 Payment by Check
a. The BT shall:
(1) upon receipt of the DV/Payroll duly funded by the CCA,
verify/review the completeness and propriety of the supporting
documents and certify as to availability of funds;
(2) forward the DV/Payroll to the PB for approval;
(3) prepare and issue check in the name of the payee based on the
approved DV/Payroll. The check shall be signed by the BT and
countersigned by the PB; and
(4) submit to the C/M Accountant the approved DV and signed
check together with the supporting documents for the
preparation of the Accountants Advice (AA) Annex 16.
b. The C/M Accountant shall review the DV/Payroll and their
supporting documents and shall issue the AA if the requirements are
satisfied. If the requirements are not complete, the C/M Accountant
shall issue a memorandum to the barangay returning the DV/Payroll
and stating the deficiencies or additional requirements within two (2)
working days from receipt thereof.
c. The AA shall be prepared in three (3) copies to be distributed as
follows:
Original
10
11
4.1.21
(2)
(3)
(4)
(5)
4.1.22
(2)
(3)
(2)
12
Reporting of Accountable
Forms
4.2.1.
13
:
Original
2nd copy
3rd copy
4th copy
4.2.3.
to COA Auditor
to C/M Accountant
to C/M Treasurer
BT File
14
Chapter V
Supplies, Property and Equipment
Management and accounting for the procurement, issuance and
utilization/location of supplies and materials; and property, plant and equipment is
necessary for the proper documentation, monitoring and control. The BT shall act as
the Supplies and Property Officer of the barangay and shall be responsible for the
receipt, upkeep, issuance and physical inventory of barangay property.
5.1
5.1.3
5.1.4
5.1.5
The ICS for supplies with more than 1 year life span shall be
automatically cancelled upon expiration of the estimated useful life.
5.1.6
15
5.1.7
5.1.10 Property/Equipment Card (PEC), see Annex 26, shall be maintained for
all property and equipment of the barangay.
5.1.11 Requisition of PPE shall be supported with an approved PR.
5.1.12 Purchases shall be covered by PO/Contract.
5.1.13 All deliveries shall be covered by Acceptance and Inspection Report
(AIR) as shown in Annex 27.
5.1.14 The purchase, construction and other forms of acquisition of supplies,
property and equipment shall be governed by the implementing rules
and regulations of RA 9184, an act providing for the modernization,
standardization and regulation of the procurement activities of the
government and for other purposes.
5.1.15 Procurement of construction materials for infrastructure projects
implemented by administration shall be governed by the revised
guidelines under GPPB Resolution No. 018-2006 dated December 6,
2006.
5.1.16 All costs incurred during the construction of infrastructure assets shall
form part of the cost of the project. Expenses incurred after its
completion shall be charged to the appropriate expense accounts.
5.1.17 Repairs and maintenance shall be charged to appropriate repairs and
maintenance expense account of the specific assets.
5.1.18 The disposal of property and equipment shall be governed by COA
Circular No. 92-386 dated October 20, 1992.
5.1.19 The barangay shall conduct an annual physical inventory of all
supplies, property and equipment of the barangay.
5.1.20 The PAR shall be renewed annually. In case of transfer of property to
another AO, the PAR shall be cancelled and a new one shall be issued
16
to the new AO. The name of the old AO shall be cancelled and the new
AO shall be recorded both in the PEC.
5.1.21 Report on the results of physical inventory of property/equipment shall
be reconciled with the accounting records.
5.1.22 Property and equipment which have become unserviceable or no longer
needed shall be disposed or sold, whenever applicable at public auction,
subject to applicable rules and regulations.
5.2
Procedures
5.2.1
b. based on the AIR, record the supplies in the SC and the property and
equipment in the PEC.
5.2.2
Issuance to end-users
a. Supplies
(1) The person requesting for supplies shall prepare three (3)
copies of RIS for approval by the PB.
(2) The BT shall:
17
(2)
The BT shall:
prepare the PAR in two (2) copies. Require receiving staff
to sign the receipt portion of the RIS and the PAR. The
PAR and the RIS shall be distributed as follows:
Original
to BT
Duplicate copy to end-user
Triplicate copy C/M Accountant
issue the property or equipment; and
record the property or equipment in the PEC based on
signed copy of the RIS and PAR.
5.2.3
The BT shall
prepare three (3) copies of Returned and Receipt of
Property/Equipment (RRPE) as shown in Annex 28;
18
b.
c.
d.
The
COA
or
its
authorized representative shall approve the disposal if the
acquisition or transfer cost of the obsolete, unserviceable or not
needed property and equipment is more than P25,000.00 and is
disposed thru negotiated sale. In case of real property, the disposal
shall be subject to the approval of the COA regardless of the value
or cost involved. (Sec. 380 of the Local Government Code)
e.
f.
g.
h.
The
original
and
triplicate copies of IIAR shall be submitted to the C/M accountant
as basis in drawing the JEV for recording in the GJ.
19
20
21
Chapter VI
General Accounting Plan
Books of Accounts, Financial Reports and Statements
6.1 Barangay Accounting Plan
The barangay accounting plan presented in Appendix A shows the
accounting cycle of barangay transactions from the approved budget to
incurrence of obligations/expenditures; collections of monies; payments of
obligations/disbursements of cash; recording of transactions in the books of
accounts; and preparations of the financial reports and statements. Initially,
the source documents, accounting forms and reports shall be the basis for
recording the transactions in preparing reports by the Barangay Treasurer.
These reports together with the source documents are the basis of recording the
transactions in the books of original entry. These are the JBT and the GJ.
Journal entries based on reports and the JEV are recorded in the JBT and the
GJ and posted to the GLs and SLs. Based on the GL, Trial Balances are
prepared and the financial statements are prepared. All of these accounting
processes are undertaken by the Office of the C/M Accountant.
The Accounting Plan presents the following types of transactions:
a.
Appropriations and Obligations
b.
Collections and Deposits
c.
Disbursements
d.
Procurement of Supplies, Property, Equipment
and Infrastructures
6.2 Books of Accounts
22
6.3.2
6.3.3
6.3.4
6.3.5
6.3.6
6.3.7
6.4.2
6.4.3
At the start of the ensuing year, the recorded balance of supplies and
materials inventory at the end of year shall be reverted. A JEV shall be
drawn for this purpose.
23
6.5
6.6
6.6.1. Balance Sheet (Annex 32). This financial statement shows the assets,
liabilities and equity normally at the end of the fiscal year.
6.6.2. Statement of Income and Expenses (Annex 33). This statement shows
the income and expenses of the barangay at the end of a particular
period.
6.6.3. Statement of Cash Flows (Annex 34) This presents all cash
transactions of the barangay classified under operating, investing and
financing activities.
6.6.4. Notes to the Financial Statements (Annex 35) is an integral part that
explains the items or accounts in the financial statements. It includes
additional information to enhance the value of the financial data in the
financial statements.
6.6.5. Statement of Management Responsibility. A Statement of Management
Responsibility (Annex 36) showing the agencys responsibility for the
preparation and presentation of the financial statements. This statement
shall be signed by the Punong Barangay and the C?M Accountant
which shall be submitted together with the year-end financial
statements.
6.7 Illustrative Accounting Entries
6.7.1. Collections and Deposits
The RCD and RBDCM shall be the bases in recording collections
and deposits of the barangay. The following are the pro-forma entries
for collections and deposits:
a.
Collections in cash/check
Account
Title
Cash in Local
Treasury
24
Dr.
xx
Cr.
Income account
Liability account
Asset account
To record collections based on
Report of Collections and Deposits
b.
xx
xx
xx
c.
Account
Dr. Cr.
Cash in BankLocalTitle
Currency
xx
Current Account
Internal Revenue Collections
xx
Real Property Tax
xx
To record collections through the bank based on
Bank Credit Memo/RBDCM
6.7.2. Disbursements
a.
Disbursements by checks
Account Title
Dr.
Asset/Expense account
Due to BIR
Cash in Bank-Local Currency Current
Account
To record payment of expenses/
acquisition on of assets
b.
Cr.
xx
xx
xx
Dr.
Cr.
xx
Dr.
xx
25
Cr.
Honoraria
xx
Advances for Payroll
xx
Due to BIR
xx
To record payment of salaries
and honoraria to officers and
employees
d.
Dr.
Cr.
e.
xx
Dr.
Travel Expenses
xx
Advances to Officers and Employees
To record the liquidation of cash
advance for travel
f.
xx
Cr.
xx
g.
Dr.
Cr.
Training Expenses
xx
Advances to Offices and
xx
Employees
To record the liquidation of cash advance
for training
h.
Dr.
xx
26
Cr.
special
xx
Dr.
Cr.
xx
Dr.
Cr.
b.
27
Cr.
xx
xx
xx
c.
Dr.
xx
Cr.
xx
Dr.
xx
Cr.
xx
Dr.
xx
Cr.
xx
28
c.
d.
29
Dr.
xx
Cr.
xx
(1)
Account Title
Dr. Cr.
Cash in Local Treasury
xx
Loss of Assets
xx
Other Assets
xx
To record sale of unserviceable transportation equipment
at less than net book value.
Disposal thru sale (above net book value)
(2)
Account Title
Dr.
Cash on Local Treasury
xx
Gain on Sale of Assets
Other Assets
To record sale of unserviceable
equipment above net book value
Cr.
xx
xx
transportation
(3)
Account Title
Dr. Cr.
Other MOE - Donation
xx
Other Assets
xx
To record disposal thru donation of transportation
equipment.
30
Dr.
xx
Cr.
Accumulated Depreciation xx
Transportation Equipment
Transportation Equipment
xx
To record loss of transportation equipment
of the Barangay per recommendation of the PB.
(2)
Dr. Cr.
xx
xx
(4)
Account Title
Dr. Cr.
Cash in Treasury
xx
Due from Officers and Employees
xx
To record the receipt of payment for lost
transportation equipment
31
Dr.
xx
Cr.
Accounts Payable
xx
To record receipt of the first progress billing
(2) Payment of accounts payable to contractor per progress
billing
Account Title
Dr. Cr.
Accounts Payable
xx
Due to BIR
Cash in Bank Local Currency
xx
Current Account
To record payment for the first billing of the
per billing
contractor
32
assets
Account Title
Dr. Cr.
Buildings
xx
Construction in Progress
xx
To record completion and acceptance of
Barangay hall
(5) Repairs and Maintenance
Account Title
Repairs and Maintenance- Buildings
Cash in Bank Local Currency
Current Account
To record the cost of repairs of
Barangay hall
Dr. Cr.
xx
xx
Punong Barangay
33
a.
b.
c.
d.
e.
f.
7.1.2
g.
h.
i.
Certifies the RAO and submits the SAOB at month end and year
end to the M/C Budget Officer for consolidation and eventual
submission to the COA Auditor.
34
a.
Keeps custody of
barangay funds and property and ensure the safety of cash, cash
items and barangay records;
b.
c.
d.
collections
and
Renders
deposit
report
on
made.
Disbursements
e.
Certifies
availability of cash for the DV/Payroll presented;
f.
to
the
g.
h.
k.
7.2
7.2.2
35
Copy of the fidelity bond with the appointment and oath of office of
each accountable officer shall be furnished to the local auditor
concerned for record purposes.
36
d. Outgoing BT
e. C/M Accountant
f. COA Auditor
7.5 Rendition of Accounts
7.5.1 The PB and BT shall be responsible for the timely submission of the
reports and accounts to the C/M Accountant. Observance to the
provision of Article 218 of the Revised Penal Code that Any public
officer, whether in the service or separated therefrom by resignation or
any other cause, who is required by law or regulations to render
account to the Insular Auditor,* or to a Provincial Auditor and who
fails to do so for a period of two months after such account shall be
rendered shall be punished by prision correccional in its minimum
period, or by a fine ranging from 200 to 6,000, or both. (* now
Commission on Audit)
7.5.2 The BT shall submit the RCDs, LR, ORs/DVs/Payrolls and Monthly
RAAF to the C/M Accountant on or before the 5th day of the succeeding
month.
7.5.3 The C/M Accountant shall submit to the local auditor concerned the
collections and disbursements accounts of each month on or before the
10th working day of the succeeding month.
7.5.4
The PB shall submit to the C/M Accountant and the local auditor
concerned the Reports on the Property Inventory and Supplies
Inventory at year-end, not later than the 10th day of January of the
following year.
37