2. BUDGET
is the legal authority and a financial plan for
the use of Barangay funds, embodying the
Estimates of Income and Expenditures for
the designated calendar year. No money shall
be paid out of the treasury except in
pursuance of a lawful appropriation
aside to its being a legal requirement under
the Local Government Code, it is one of the
basic requirements of the local governance
4. 1. BUDGET PREPARATION
The preparation of the Barangay budget
is provided in Article 423 of the Local Gov’t.
Code which states that “Upon receipt of the
Statement of Income and Expenditures from
the Barangay Treasurer, the Punong Barangay
shall prepare the Barangay Budget for the
ensuing Fiscal Year in the manner and within
the period prescribed and submit the Annual
Barangay Budget to the Sangguniang
Barangay for enactment.”
5. WHO prepares the budget?
The Punong Barangay with the assistance of
the Barangay Treasurer and in consultation
with the Sangguniang Barangay and Barangay
Development Council prepares the Barangay
Budget.
The Barangay Budget consist of the
following:
1. Estimates of Income
2. Total Appropriations as proposed by the
Punong Barangay
6. WHEN is the budget prepared?
The Punong Barangay prepares the
Barangay Budget for the coming Calendar
Year upon receipt of the detailed
Statement of Income and Expenditures
from the Barangay Treasurer on or before
Sept. 15 of each year.
7. WHAT are the contents of the
Barangay Budget?
The Annual Barangay Budget shall contain the
following:
- Budget Message
- Local Expenditures Program on Proposed
General Barangay Appropriations Bill
- Summary of Income and Expenditures
(Past Year, Current Year and Budget
Year)
- Summary of Actual and Estimated Output
8. * Indicative Budget Calendar
a. Issuance of Budget Call - Sept. 20
b. Preparation of Budget Proposals - Sept. 25
c. Budget Forum with Barangay Officials and
Stakeholders - Oct. 2
d. Finalization of Budget Proposals - Oct. 5
e. Preparation of Budget Message - Oct. 10
f. Submission of Executive Budget to the
Sangguniang Barangay - Oct. 16
9. * Provide funds pursuant to the provisions of
the local code for Mandatory Obligations:
Internal Revenue Allotment (IRA) share-
shall be used for basic services delivery
including administrative and legislative
services
1. 20% of the IRA- shall be used for priority
development projects
2. 10% of the General fund- shall be allocated for
the Sangguniang Kabataan (SK)
3. 5% of the General Income- shall be used for
unforeseen calamities
4. 55% of the Total Regular Income of the next
preceding year- intended for Personal Services
(PS)
10. PS Cap on Limitation Formula = Regular
Income of the Next Preceding Year x 55%
For Example:
Regular Income for:
Budget Year 2012 P1,000,000.00
Preceding Year 2011 900,000.00
Next Preceding Year 2010 700,000.00
Therefore:
P700,000.00 x 55% = P385,000.00
P385,000.00 is allocated for
Personal Services (PS)
11. 2. BUDGET AUTHORIZATION
This stage of the budget process is the
adoption and enactment of a Barangay
Budget into a General Appropriations
Ordinance (GAO).
This s provide is Section 391 (a) (3) of
the Local Gov’t. Code – “the Sangguniang
Barangay shall enact Annual and
Supplemental Budgt in accordance with the
Provisions of this code.
12. How the Barangay Budget is authorized?
Step 1- Present the Executive Barangay
Budget to the Sangguniang Barangay
Step II- Deliberate on the Executive Budget
Step III- Enact the General Appropriations
Act (GAO)
Step IV- Approved the GAO by the Punong
Barangay
13. Step 1- Present the Executive
Barangay Budget to the Sangguniang
Barangay
a. deliver the State of the Barangay
Address (SOBA)
b. follow contents of Budget Message
c. calendar and certify as urgent the
proposed executive budget
14. Step II- Deliberate on the Executive
Budget
* Budgetary Requirements:
a. 20% of the IRA is intended for Dev’t. Projects
b. 5% of the Regular Income for Calamity Fund
Regular Income – is derived from recurring
source like tax income and misc. and operating
income
c. 10% of the General Fund of the Barangay for
Sangguniang Kabataan
d. 2% of the Real Property Tax Collection of the
next preceding year – this is intended for
Discretionary Expenses of the Punong Barangay
e. 55% of the Regular income of the next preceding
year shall be the Personal Services (PS) Cap on
limitation
15. 3. BUDGET REVIEW
The GAO, authorizing the Annual or Supplemental
Budget is submitted for review within ten (10)
days after its enactment to the Sangguniang Bayan.
* Legal basis for the review of brgy. Budget under
Article 424
a. copies of the Brgy. Ordinance authorizing
the Annual Appropriation shall be furnished the
Sangguniang Bayan through the Municipal Budget
Officer
b. the Sanggunian concerned shall review the
Barangay Ordinance to ensure compliance thereof
with all the budgetary requirements and
limitations provided in this rule.
16. 3. BUDGET REVIEW
* Purposes in the Budget Review
a. to ensure that the budgetary
requirements and general limitations
provided in the Code are complied with
b. the Budget does not exceed the
Estimated Receipts or Income of the
Barangay
c. the items of Appropriations are not
more than those provided by existing laws.
17. * HOW IS THE BUDGET REVIEW
DONE?
There are 6 STEPS:
1. Review within 60 days upon receipt
2. Declare the Barangay Budget Operative
3. Declare the Barangay budget inoperative in its
entirely
4. Declare the Barangay budget inoperation in
past
5. Check consistency of GAO with AIP and ELA
6. Appeal for consideration in case of Conflict in
Budget Review
18. 6 STEPS in the Budget Review
1. Review within 60 days upon receipt
The Sangguniang Bayan, through the
Municipal Budget Officer shall review the
Barangay Budget within 60 days upon receipt
of the appropriation ordinance.
2. Declare the Barangay Budget Operative
There is no substantial change in the budget,
it is declared operative in its entirely. The
Punong Barangay right away execute the
authorized budget.
19. 6 STEPS in the Budget Review
3. Declare the Barangay budget inoperative in its entirely
A Barangay budget that is declared inoperative in its
entirely shall be returned to the Punong Barangay for
proper adjustments/ revisions. The Barangay Treasurer shall
not make any further disbursements from the inoperative
budget.
4. Declare the Barangay budget inoperation in past
A Barangay Budget maybe declared inoperative in past
when it has not complied with some budgetary
requirements or general limitations.
A budget is declared inoperative in its entirely if:
a. when Expenditure is greater than the Estimated
Income
b. when there is not sufficient provision appropriated for
payment of loan
20. 6 STEPS in the Budget Review
5. Check consistency of GAO with AIP and
ELA
Monitor projects for implementation. See
to it that the AIP and ELA projects are
funded in the 20% Dev’t. Fund and the
activities undertaken in the delivery of basic
services.
6. Appeal for consideration in case of Conflict
in Budget Review
The Barangay may make an appeal in case
of conflict.
21. 4. BUDGET EXECUTION
The local Government Code is clear and explicit on
the effectivity of Barangay Budget.
Section 332 provides that “ the ordinance enacting
the Annual Budget shall take effect at the beginning of the
ensuing calendar year. However, an ordinance enacting a
Supplemental Budget shall take effect upon its approval or
on the date fixed herein.
The Punong Barangay shall be primarily responsible
for the execution of the Annual and Supplemental Budget
of the Barangay.
He ensures the following:
1. that the revenues as Estimated are realized
2. that the approved dev’t. projects and basic
services are implemented and delivered
22. 5. BUDGET ACCOUNTABILITY
Section 332 of the Local Government
Code provides that “the responsibility for
accountability of the Annual and
Supplemental Budget vested primarily in
the Punong Barangay.
23. * How is the accountability of the budget
done?
1. Record all collections from taxes, fees and
charges in the Income Books of Accounts
2. Issue an Official Receipt
3. Deposit all collections in the bank
4. Collect Real Property Taxes and other
taxes
5. Record all obligation and disbursements in
the Expenditure Booksof Accounts
