opinion

1. DILG OPINION NO. 52, SERIES OF 2009
The requirement on the part of the Punong Barangay to affix his signature is only a
ministerial one, meaning the Punong Barangay cannot refuse in affixing his signature
once the majority of the members of the sanguniang Barangay has already approved the
barangay budget. In the event that said Punong Barangay Refuses to affix his signature,
we are of the view that the barangay budget as approved by the sangguniang barangay
may already be forwarded to the Sanguniang Panlungsod in accordance with Section
333(a) of the Local Government Code of 1991.
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 Preparation
2. Budget Authorization
3. Budget Review
4. Budget Execution
5. Budget Accountability
. 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 Barangayshall
prepare the Barangay Budget for the ensuing Fiscal Year in the manner and within the
period prescribed and submit the AnnualBarangay Budget to the SangguniangBarangay
for enactment.”
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 theBarangay Budget?The Annual Barangay Budget shall
contain the following:
1. Budget Message
2. Local Expenditures Program on Proposed General Barangay Appropriations
3. Bill - Summary of Income and Expenditures (Past Year, Current Year and Budget
Year)

2. 4. Summary of Actual and Estimated Output
a. Issuance of Budget Call - Sept. 20
2. Indicative Budget Calendar
Preparation of Budget Proposals - Sept. 25
a. Budget Forum with Barangay Officials and Stakeholders - Oct. 2
b. d. Finalization of Budget Proposals - Oct. 5
c. e. Preparation of Budget Message - Oct. 10
d. 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 service 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 BarangayBudget into a General Appropriations Ordinance (GAO).
This s provides is Section 391 (a) (3) of the Local Gov’t. Code – “the
SangguniangBarangay shall enact Annual and Supplemental Budget 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
SangguniangBarangay
a. deliver the State of the Barangay Address (SOBA)
b. follow contents of Budget Message

3. c. Calendar and certify as urgent as 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
a 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
Copies of the Brgy.
a. An ordinance authorizing the Annual Appropriation shall be furnished
theSangguniang been through the Municipal Budget Officer
b. The Sanggunian concerned shall review theBarangay 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.
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 in operation in the 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.

4. 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
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.
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.
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 Books of Accounts