BUDGET

PROCESS FOR
BARANGAY
BARANGAY BUDGETING PROCESS
BUDGET
PREPARATION
WHAT IS THE BARANGAY BUDGET?
 Itis a document that enumerates costs for
expenditures in relation to the revenue earned by
the barangay in a given period of time.
WHO PREPARES THE BUDGET?
 The Punong Barangay, with the assistance of the Barangay
Treasurer, prepares the barangay budget consisting of: (a)
estimates of income; and (b) total appropriations as
proposed by the Punong Barangay.
BUDGETARY REQUIREMENTS
 According to Section 324 of the LG Code of 1991:
 The total amount appropriated shall not exceed the estimates of
income;
 Five percent (5%) of the estimated revenue from regular sources
shall be set aside as an annual lump sum appropriation for
unforeseen expenditures arising from the occurrence of calamities:
Provided, however, that such appropriation shall be used only in
the area, or a portion thereof, of the local government unit or
other areas declared by the President in a state of calamity
BUDGETARY REQUIREMENTS
 According to mandate of the law:
 5% of the General Fund is earmarked for Gender and Development (R.A. 7192, R.A.
9710, and PCW-DILG-DBM-NEDA JMC No. 2016-01);
 1% of the IRA is earmarked for Senior Citizens (R.A. 9994);
 1 % of the IRA is allocated for persons with disability (R.A. 7277);
 1% of the IRA is for the implementation of projects of the Barangay Council for the
Protection of Children (BCPC) (RA 9344);
 10% of the General Fund of the Barangay is allocated for the Sangguniang Kabataan (R.A.
10742);
 At least 20% of the IRA is allocated for development programs (DILG-DBM JMC No.
2017-01);
 Substantial portion of the annual budget to assist in or enhance the enforcement of R.A.
9165 or the Comprehensive Dangerous Drugs Act of 2002; and
 Necessary funds for the operation of the Barangay Peace and Order Council
GENERAL LIMITATIONS
 The Annual budget for personal services of the barangay
shall not exceed 55% of its annual revenue actually
realized from the local sources during the next preceding
fiscal year. (Section 331, LGC)
HOW IS THE BARANGAY BUDGET
PREPARED?
 1. Lay out the Budget Call indicating the following:
 A. The Goal and Objectives of governance for the year
covering the budget;
 B. Spending ceiling for basic services, development projects,
SK, calamities, etc.
 HOW IS THE BARANGAY BUDGET
PREPARED?
 2. Prepare Appropriation Ordinance
 It is a legislative document authorizing the barangay budget which
contains the following:
Funds allocated based on the mandatory and statutory obligations and on
general limitations as embodied in various laws.
Summary of the remaining balance from the previous budget, if any.
Guidelines on the proper utilization of the remaining balance that shall be
reverted to the General Fund of the Barangay.
HOW IS THE BARANGAY BUDGET
PREPARED?
 3. Draft a Budget Message which includes:
 Policy Directions for the Budget Year. Estimated
Income for the Budget Year.
 Income Allocation.
 Expected Results to be Accomplished.
HOW IS THE BARANGAY BUDGET
PREPARED?
 4.Submit the Barangay Budget to the Sangguniang
Barangay
 The Punong Barangay shall submit the proposed
Barangay Budget to the Sangguniang Barangay for
review and approval.
TIMETABLE FOR THE BUDGET
PREPARATION
CONTENTS OF THE BARANGAY
BUDGET
The Barangay Expenditure Program together with the following documents shall be prepared and
submitted by the Punong Barangay to the Sangguniang Barangay for budget authorization
purposes:
 Budget Message;
 List of Personnel (BBP Form No. 3)
 Statement of Indebtedness (BBP Form No. 4), if any
 AIP, duly approved by the Sangguniang Barangay through a resolution, and supported by the
following:
 Indicative Annual Procurement Plan;
 DILG-endorsed Gender and Development Plan and Budget; and
 Barangay Disaster Risk Reduction and Management Plan as reviewed by the appropriate
reviewing authority consistent with RA 10121, its IRR and pertinent issuances of the
NDRRMC.
BUDGET
AUTHORIZATION
WHAT IS BUDGET AUTHORIZATION?
 Itis the process of adopting and enacting the annual
Barangay Budget into an Appropriation Ordinance
pursuant to Section 391(a)(3) of the Local Government
Code of 1991, which provides that “the Sangguniang
Barangay shall enact annual and supplemental budgets in
accordance with the provisions of this Code”
WHAT IS BUDGET AUTHORIZATION?
 Before the Sangguniang Barangay enacts the Appropriation Ordinance, it performs the following:
 1. Examines the Annual Barangay Budget
 2. Scrutinizes the sources of barangay revenues such as:
 IRA and national wealth shares
 Locally generated income
 From taxes (i.e. Real Property Taxes)
 From fees and charges for services provided
 From other assets and properties of the Barangay
 3. Carefully evaluates the budget according to the prioritized and obligated programs or projects such as the
following:
 Priority projects out of the 20% IRA
 Basic services delivery
 Performance indicators for each Major Final Output
Appropriation Ordinance
 It is a legislative instrument authorizing the budget, the primary aim of
which is to appropriate local funds for purposes allowed by existing laws.
 It becomes effective at the beginning of the budget year upon the approval
of the majority of the Sangguniang Barangay members and shall be signed
by the Punong Barangay.
 In case the sanggunian fails to pass the appropriation ordinance, the
approved budget of the previous year shall be deemed reenacted and shall
remain in force and effect until the ordinance is approved.
Approval and Submission of Barangay
Budget
 The process of budget authorization begins on October 17 and continues until
November 16. Once the Sangguniang Barangay receives the proposed barangay
budget, which is based on the Statement of the Certified Estimated Income and
Budget Proposals by the Punong Barangay, it undergoes scrutiny and study to
verify whether it should be approved or not.
 If the Sangguniang Barangay does not encounter any problem or issue, they will
approve it through the enactment of an Appropriation Ordinance. Within 10 days
from the date of approval, they shall submit the same to the Sangguniang
Panlungsod/Bayan through the City/ Municipal Budget Officer for review.
BUDGET REVIEW
What is Budget Review?
 Itis a process of examining the barangay appropriation
ordinance by the Sanggunian Bayan or Panlungsod to
ensure compliance of the barangay on all requirements and
limitations provided by laws
When and how is budget review done?
 Within 60 days from receipt of the Appropriation Ordinance from the
Sangguniang Barangay, the Sangguniang Panlungsod/Bayan through the
City/Municipal Budget Officer scrutinizes and reviews the barangay budget .
 Should the Sangguniang Panlungsod/Bayan fails to act within the said
number of days, the barangay budget shall be deemed approved and
effective.
 Should the Sangguniang Panlungsod/Bayan finds the appropriation
ordinance in order, the same shall continue to be in full force and effect
BUDGET
EXECUTION
Who is responsible for the execution of the
barangay budget?
 The Punong Barangay is primarily responsible for the execution of the barangay
budget to include the following:
 Realization of estimated barangay income for the year;
 Implementation of the development projects based on the approved
development plan and annual budget, and delivery of the basic services;
 Proper utilization of the funds in accordance with approved Appropriation
Ordinance and other implementing guidelines on budget utilization; and
 Proper utilization of funds in accordance with accounting and auditing rules
How is the Barangay Budget executed?
 The Barangay Treasurer prepares the following documents for the implementation of the
Appropriation Ordinance:
 Cash Program (CP) – This is a financial statement that contains the monthly barangay income and
expenses.
 Quarterly Performance Targets – This is a document that states the expenditures and their
corresponding results or benefits.
 Obligation Request Form, Disbursement Voucher – These are required documents by the
Commission on Audit (COA) that refers to the implementation of identified projects contained in the
Appropriation Ordinance and Supplemental Budget, if any; and
 Project Procurement Management Plan (PPMP) – This is a document that is required in the
procurement of commonly-used supplies under Basic Services Delivery and all development projects.
BUDGET
ACCOUNTABILITY
What is budget accountability?
 Through this, the capability of the barangay to utilize their
budget is measured.
 Itdetermines if the activities and projects are consistent
with the objectives stated in the development plan.
How is the accountability of the budget
done?
 The responsibility for the execution of the annual and
supplemental budgets and the accountability therefore
shall be vested primarily in the punong barangay
concerned pursuant to Section 332 of the 1991 Local
Government Code.
How is the accountability of the budget
done?
 The Punong Barangay, together with the Barangay Treasurer shall ensure the following:
 Record all collections from taxes, fees, charges and contributions due or accruing to the barangay
in the Income Books of Account under the General Fund.
 Issue an official receipt for all taxes, fees, charges and contributions collected.
 Deposit all cash collection in a bank where the barangay has its own account or account name
within 5 days after receipt.
 Collect real property taxes and such other taxes as maybe imposed by the Province,
City/Municipality that are due in the barangay only after being deputized for the purpose.
 Record all obligations and disbursements in the Expenditure Books of Accounts under the General
Fund.
 Segregate all expenditure levels by sector.
How is the accountability of the budget
done?
 The recording of all income from barangay transactions is necessary to:
 Ensure that the funds used to pay for barangay debts are included in the
approved ordinance;
 Ensure that all payments or expenses, whether from the present or past year
and other debts incurred before the end of the current year, are duly recorded;
 Inform the public of all transactions and income generating activities of the
barangay, preferably during Barangay Assembly Day; and
 Utilize all recorded information or transactions as basis of the next barangay
budget preparation.