4 Martel Revenue Generation Utilization and Accountability

Revenue Generation, Revenue Generation,

Utilization and AccountabilityUtilization and AccountabilityUtilization and AccountabilityUtilization and Accountability

By: Dir. GARY R. MARTEL By: Dir. GARY R. MARTEL

DBM XIDBM XI

Section 17. Basic Services and Facilities. -

(a) Local government units shall endeavor to be self-

reliant and shall continue exercising the powers and

discharging the duties and functions currently vested

upon them. They shall also discharge the functions

and responsibilities of national agencies and officesand responsibilities of national agencies and offices

devolved to them pursuant to this Code. Local

government units shall likewise exercise such other

powers and discharge such other functions and

responsibilities as are necessary, appropriate, or

incidental to efficient and effective provisions of the

basic services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not

limited to, the following:

(1) For Barangay:

(i) Agricultural support services which include planting

materials distribution system and operation of farm

produce collection and buying stations; produce collection and buying stations;

(ii) Health and social welfare services which include

maintenance of barangay health center and day-care

center;

(iii) Services and facilities related to general hygiene

and sanitation, beautification, and solid waste

collection;

iv) Maintenance of katarungang pambarangay;

(v) Maintenance of barangay roads and bridges

and water supply systems;

(vi) Infrastructure facilities such as multi-(vi) Infrastructure facilities such as multi-

purpose hall, multipurpose pavement, plaza,

sports center, and other similar facilities;

(vii) Information and reading center; and

(viii) Satellite or public market, where viable;

DBM-DILG

Joint Memorandum Circular

No. 2011-1 No. 2011-1

Date: April 13, 2011

PURPOSES

1.1 To provide guidelines on the appropriation and utilization of no less than twenty percent (20%) of the Internal Revenue Allotment (IRA) for development projects.

1.2 To enhance transparency and accountability of local government units in undertaking development projects.

1.3 To include projects in addressing and responding to natural and man-made disasters and calamities.

GENERAL POLICIES

2.1 In accordance with Section 287 of the Local

Government Code, every LGU shall appropriate in its

annual budget no less than twenty percent (20%) of its

annual internal revenue allotment for development

projects. projects.

2.2 It may be utilized to finance the priority development

projects and programs, as embodied in the duly

approved local development plan that directly support

the Philippine Development Plan, the Medium-Term

Public Investment Program and the Annual Investment

Program.

2.3 All projects to be funded shall contribute to

the attainment of desirable socio-economic

development and environmental management

outcomes and shall partake the nature of outcomes and shall partake the nature of

investment or capital expenditures.

PROJECTS COVERED

The 20% of the IRA intended for development projects

may be utilized for the following priority programs and

projects:

3.1 Social Development 3.1 Social Development

3.1.1 Construction or rehabilitation of health

centers, rural health units or hospitals and

purchase of medical equipment;

3.1.2 Construction or rehabilitation of local

government-owned potable water supply

system;

3.1.3 Establishment or rehabilitation of

Manpower Development Centers; 3.1.4

Construction or rehabilitation of evacuation

centers;

3.1.5 Purchase or repair of area-wide calamity

related alarm or warning system;

3.1.6 Rehabilitation of cultural/historical sites;

3.1.7 Purchase or repair of appropriate calamity-

related rescue operations equipment such as

inflatable boats, breathing apparatus,

extraction tools, safe line rescue ropes, fire

extinguishers, chainsaws, two (2) way extinguishers, chainsaws, two (2) way

handheld radios and the like;

3.1.8 Purchase and development of land for the

relocation of informal settlers and relocation

of victims of calamities;

3.1.9 Construction or rehabilitation of facilities

such as multi-purpose hall intended to cater

out-of-school youths, women, senior citizens,

minors, displaced families, indigenous people minors, displaced families, indigenous people

and differently-abled persons; and

3.1.10 Installation and maintenance of street

lighting system except payment of electric

bills.

3.2 Economic Development

3.2.1 Construction or rehabilitation of

communal irrigation or water impounding

system and purchase of post harvest

facilities such as farm or hand tractor with facilities such as farm or hand tractor with

trailer, thresher and mechanical driers;

3.2.2 Construction or rehabilitation of local

roads or bridges and purchase of

appropriate engineering equipment such

as dump trucks, graders and pay loaders;

3.2.3 Capital expenditures related to the

implementation of livelihood

entrepreneurship/local economic

development projects; and or development projects; and or

3.2.4 Amortization of loans used to finance

development projects cited in this Joint

Circular, subject to the 20% debt service

cap.

3.3 Environmental Management

3.3.1 Reforestation and urban greening;

3.3.2 Construction or rehabilitation of sanitary

landfills, material recovery facilities and purchase

of garbage trucks and related equipment;

3.3.3 Implementation of flood and erosion control 3.3.3 Implementation of flood and erosion control

projects such as rehabilitation and construction

of drainage systems, de-silting of rivers, de-

clogging of canals; and

3.3.4 Other environmental management projects

that promote air and water quality, as well as

productivity of the coastal or freshwater habitat,

agricultural land and forest land.

EXPENDITURE ITEMS NOT COVERED

The following expense items that are not related to

and/or not connected with the implementation of

development projects, programs and activities shall

not be paid out of the 20% development fund:

4.1 Administrative expenses such as cash gifts, 4.1 Administrative expenses such as cash gifts,

bonuses, food allowance, medical assistance,

uniforms, supplies, meetings, communication,

water and light, petroleum products and the like;

4.2 Salaries, wages or overtime pay;

4.3 Travelling expenses, whether domestic or foreign;

4.4 Registration or participation fees in training,

seminars, conferences or conventions;

4.5 Construction, repair or refinishing of

administrative offices; administrative offices;

4.6 Purchase of administrative office' furniture,

fixtures, equipment or appliances; and

4.7 Purchase, maintenance or repair of motor

vehicles or motor cycles.

Principles and Rules to be Observed in the

Release & Disbursement of Brgy. 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 3. Trust funds in the barangay treasury shall not be paid out except in fulfillment of the

purpose for which that trust was created or the funds received.

4. Fiscal responsibility shall be shared by all barangay officials exercising authority over

the financial affairs, transactions and operations of the barangay.

5. Total disbursements shall not exceed actual collections plus 50% of the uncollected

estimated revenue.

6. No cash Advances shall be made to any barangay official or

employee unless the same is in accordance with accounting and

auditing rules and regulations.

7. The Barangay Treasurer may be authorized by the SB or Bids & Awards Committee

(BAC) to make direct purchases amounting to not more than P1,000 for the essential

needs of the barangay.

8. Financial records must be kept in custody of the Brgy. Treasurer and the Brgy.

Bookkeeper and/or City Accountant.

9. In case of revenue shortfall, the following courses of action shall be taken:

- Spend only what is necessary

- Intensify revenue collection

- Seek financial assistance

- Resort to borrowing

10. The PB may by ordinance or policy in the general provision be

authorized by the SB to augment any item in the approved annual

budget from savings in other items within the same expense class.

11. Unexpended Balances and Appropriations for Personal Services shall revert to the

General Fund.

12. Unexpended Balances and Appropriations for Capital Outlays shall form part of

Continuing Appropriations.

13. Unexpended Balances and Appropriations of the 20% Development Fund from

completed or discontinued projects shall be reverted; however, shall be re-appropriated

for other development projects.

14. The 10% Sangguniang Kabataan (SK) Fund is a statutory obligation considered as a

Trust Fund. Therefore, any unexpended balances shall be added to the 10% share of

the SK for the next year.

BUDGET ACCOUNTABILITY(January 1 – December 31)

Legal Basis

The second paragraph of Section 332 provides

that “the responsibility for the execution of thethat “the responsibility for the execution of the

annual and supplemental budgets and the

accountability therefore shall be vested primarily

in the punong barangay concerned.”

How is the Accountability of the Budget Done?Step 1. Record all collections from taxes, fees, charges and

contribution due or accruing to the barangay in theIncome Books of Account under the General Fund.

Step 2. Issue an official receipt for all taxes, fees, charges and contribution collected.

Step 3. Deposit all collections in the depository account maintained in the name of the barangay within 5 days maintained in the name of the barangay within 5 days after receipt.

Step 4. Collect Real Property Taxes and such other taxes asmay be imposed by province/city/municipality that aredue in the barangay only after being deputized for thepurpose by concerned Provincial/City/MunicipalTreasurer.

Step 5. Record all obligations and disbursements in the Expenditure Books of Accounts under the General Fund.

Step 6. Segregate all expenditure levels by sector.

Step 7. Post in a conspicuous place in the Barangay the

income earned for the quarter and where it was spent.

Step 8. Post in a conspicuous place the three Barangay Budget

Accountability Forms No. 1 to 3. The said forms shall

be prepared quarterly by the Brgy. Treasurer &

Secretary.Secretary.

Step 9. – Monitor and evaluate performance

- Monitor actual results of service delivery and

implementation of development projects.

- Compare actual results with planned targets.

- Provide corrective actions for negative deviations.

Persons Responsible for Reporting

• Punong Barangay

• Chairman, Committee on Appropriations of the

Sangguniang Barangay (SB)

• Barangay Treasurer• Barangay Treasurer

• Barangay Secretary

• Barangay Bookkeeper/Municipal/City

Accountant