Budget

Execution
FOR BARANGAYS
 Brgy. Budget Execution

• Who is primarily
responsible for the
execution of the barangay
budget?
 LEGAL BASIS
R.A 7160. Sec. 332. Effectivity of Barangay Budgets.
The ordinance enacting the annual budget
shall take effect at the beginning of the ensuing
calendar year. An ordinance enacting a
supplemental budget, however, shall take effect
upon its approval or as date fixed therein.
The responsibility for the execution of the
annual and supplemental budgets and the
accountability therefor shall be vested primarily in
the punong barangay concerned.
 The Punong Barangay (PB)

Is responsible for the execution of the Barangay

budget and shall ensure the following:

* That the revenues as estimated are realized

* That the approved development projects

and basic services are implemented and
delivered
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 How is the Budget Executed?

Step 1 –
Prepare a Simplified Allotment Release Order
(SARO) for all basic services and development
projects.
The SARO is released comprehensively for the
entire year.

(Barangay Budget Execution Form No. 1-

Simplified Allotment Release Order)
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 How is the Budget Executed?

Step 2 –
Prepare a Cash Program (CP) to support the
Simplified Allotment Release Order (SARO).
The Cash Program (CP) is a financial statement
showing the expected income and disbursement
on a monthly basis (January to December).

(Barangay Budget Execution Form No. 2-

Cash Program)
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 How is the Budget Executed?

Step 3 –
Prepare the quarterly performance targets.
This is the major justification for the release and
disbursement of funds. The expected results or
output to be produced by the financial
transaction are shown in the form.

(Barangay Budget Execution Form No. 3-

Performance Targets FY ____ )
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 How is the Budget Executed?

Step 4 –
Prepare the Disbursement Voucher for all valid
obligations found in the General Appropriation
Ordinance or Supplemental Budget.
This forms are used in obligating and disbursing
of funds. Issue checks to cover payments.

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 SIGNATORIES IN THE CHECKS, OBLIGATION
REQUEST and the DISBURSEMENT VOUCHER

• Checks issued by barangays are jointly signed by

the Barangay Treasurer and the Punong
Barangay.

• The Obligation Request are signed by:

1) The Barangay Chairman
2)The Chairman of the Committee on
Appropriations of the SB, to certify as
to the existence of the appropriation;

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 SIGNATORIES IN THE CHECKS, OBLIGATION
REQUEST and the DISBURSEMENT VOUCHER

• The Disbursement Voucher is signed by:

1) Chairman of the Committee on
Appropriation of the SB, tocertify as to
the existence of the appropriation
2) Barangay Treasurer, to certify as to the
availability of funds
3) Punong Barangay, to certify as to validity,
propriety and legality and approval of
the voucher.
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 How is the Budget Executed?
Step 5 – Procure goods and civil works projects.
– Prepare / Revised Project Procurement and
Management Plan (PPMP) for:
- Basic Services Delivery
- Development Project
– Prepare / Revised Annual Procurement Plan
(APP) for all PPMPs for:
- Basic Services Delivery
- Development Projects
– Implement APP through the Barangay Bids and
Awards Committee (BBAC) pursuant to RA 9184 11
Principles and Rules to be Observed in the Release
and Disbursement of Barangay Funds
1) No money shall be paid out of the barangay
treasury except in pursuance of an
appropriations ordinance or law.
2) Barangay funds and monies shall be spent solely
for public purposes.
3) Trust funds in the barangay treasury shall not
be paid out except in fulfillment of the
purpose for which that trust was created of
the funds received.
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Principles and Rules to be Observed in the Release
and Disbursement of Barangay Funds

4) Fiscal responsibility shall be shared by all

barangay officials exercising authority over
the financial affairs, transactions and
operations of the barangay.
5) No Cash Advances shall be made to any
barangay official or employees unless the
same is in accordance with accounting and
auditing rules and regulations.

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Principles and Rules to be Observed in the Release
and Disbursement of Barangay Funds

6) In case of revenue shortfall, the following courses

of action shall be taken: -Spend only what’s
necessary, Intensify revenue collection, Seek
financial assistance and resort to borrowing.

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Principles and Rules to be Observed in the Release
and Disbursement of Barangay Funds
7) The PB may by ordinance or policy in the
general provisions be authorized by the SB to
augment any item in the approved annual
budget from savings in other items within the
same expense class. Use of savings through
augmentation of funds is allowed without
creating a Supplemental Budget.
8) Unexpended Balances and Appropriations for
Personal Services and Maintenance and
Other Operating Expenses shall revert to the
General Fund at the end of the year. 15
Principles and Rules to be Observed in the Release
and Disbursement of Barangay Funds
9) Unexpended Balances and Appropriations for
Capital Outlays shall form part of continuing
appropriations.

10) Unexpended Balances and Appropriations of

the 20% Development Fund from completed
or discontinued projects shall be reverted to
the un-appropriated surplus and shall
thereafter be re-appropriated for other
development projects. 16
Principles and Rules to be Observed in the Release
and Disbursement of Barangay Funds

11) Total disbursements shall not exceed actual

collections plus 50% of the uncollected estimated
revenue
Example:
Actual Collections for the month = P 5,000.oo
Estimated Revenue for the month = 10,000. oo
Uncollected estimated revenue = P5,000.oo
50% of 5,000.oo = 2,500.oo
-------------
Maximum Total Disbursements = P 7,500.oo
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Principles and Rules to be Observed in the Release
and Disbursement of Barangay Funds

12) The 10% Sangguniang Kabataan (SK) Fund is

a statutory obligation considered as a Trust
Liability. To use this fund, a work program
or a plan reflecting the projects that they
intend to fund for the year shall be
developed. Any unexpended balances shall
be added to the 10% share of the SK for the
next year.

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 Barangay Cash Advance

• It is a relatively bigger amount of money given

to regular or special disbursing officers
depending on the bond secured for specific
public purposes.

• Regular cash advance includes expenses for

salaries, wages, commutable allowances,
honoraria and other similar payments.

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 Rules in the Grant, Use and Liquidation of
Cash Advances (CA)
• Only duly permanently appointed officials /
employees shall be granted CA.

• Only duly appointed or designated Disbursing

Officers (DO) may perform disbursing functions.

• Only one DO shall be assigned/designated for a

specific purpose.

• Transfers of accountability for CA shall not be

allowed. 20
 Rules in the Grant, Use and Liquidation of
Cash Advances (CA)
• The accountable officer shall maintain an
official cashbook to record transactions of each
cash advance made.

• Under no circumstances shall cash advances be

used for the encashment of checks or
liquidation of previous CA

• A cash advance for a particular year shall not

be used to pay for expenses in other years.
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 Rules in the Grant, Use and Liquidation of
Cash Advances (CA)
• The CA shall be sufficient for the recurring
expenses for one month and shall not used for
payments of regular expenses (i.e. rents,
subscriptions, light water, etc.

• The CA may be returned or deposited with the

collection officer when no longer needed or has
not been used for 2 months.

• All CAs shall be fully liquidated at the end of

each year. 22
 Importance of a Sound Internal Control
• To ensure that resources are used consistent
with laws, rules and regulations and existing
policies,

• To safeguard resources from loss, wastage and

misuse,

• To provide reliable; accurate and timely

financial and non-financial information, and

• To ensure economical, efficient and effective

operation 23
 THANK YOU!!!

DEPARTMENT OF BUDGET AND MANAGEMENT

and

ASSOCIATION OF LOCAL BUDGET

OFFICERS IN CENTRAL VISAYAS
(ALBOCV), INC.
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