OVERVIEW IN

BARANGAY BUDGETING

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

THE BUDGET CYCLE

1. Budget Preparation2. Budget Authorization3. Budget Review4. Budget Execution5. Budget Accountability

1. BUDGET PREPARATIONThe 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.”

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 Income2. Total Appropriations as proposed by

the Punong Barangay

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.

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

* Indicative Budget Calendara. Issuance of Budget Call - Sept. 20b. Preparation of Budget Proposals - Sept. 25c. Budget Forum with Barangay Officials and Stakeholders - Oct. 2d. Finalization of Budget Proposals - Oct. 5e. Preparation of Budget Message - Oct. 10f. Submission of Executive Budget to the Sangguniang Barangay - Oct. 16

* 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)

PS Cap on Limitation Formula = Regular Income of the Next Preceding Year x 55%

For Example:Regular Income for:

Budget Year 2012 P1,000,000.00Preceding Year 2011

900,000.00 Next Preceding Year 2010

700,000.00Therefore:

P700,000.00 x 55% = P385,000.00P385,000.00 is allocated for

Personal Services (PS)

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.

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

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

Step II- Deliberate on the Executive Budget

* Budgetary Requirements:a. 20% of the IRA is intended for Dev’t. Projectsb. 5% of the Regular Income for Calamity Fund Regular Income – is derived from recurring source like tax income and misc. and operating incomec. 10% of the General Fund of the Barangay for Sangguniang Kabataand. 2% of the Real Property Tax Collection of the next preceding year – this is intended for Discretionary Expenses of the Punong Barangaye. 55% of the Regular income of the next preceding year shall be the Personal Services (PS) Cap on limitation

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.

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.

* HOW IS THE BUDGET REVIEW DONE?There are 6 STEPS:

1. Review within 60 days upon receipt2. Declare the Barangay Budget Operative

3. Declare the Barangay budget inoperative in its entirely4. Declare the Barangay budget inoperation in past5. Check consistency of GAO with AIP and ELA6. Appeal for consideration in case of Conflict in Budget Review

6 STEPS in the Budget Review

1. Review within 60 days upon receiptThe 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.

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

Incomeb. when there is not sufficient provision

appropriated for payment of loan

6 STEPS in the Budget Review5. Check consistency of GAO with AIP and

ELAMonitor 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 ReviewThe Barangay may make an appeal in case of conflict.

4. BUDGET EXECUTIONThe 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

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.

* How is the accountability of the budget done?1. Record all collections from taxes, fees and charges in the Income Books of Accounts2. Issue an Official Receipt3. Deposit all collections in the bank4. Collect Real Property Taxes and other taxes5. Record all obligation and disbursements in the Expenditure Booksof Accounts

END