Spearheading the

Budget Preparation
WHAT IS A BUDGET?
“A Financial Plan embodying
the estimates of INCOME
and EXPENDITURES for a
given period of time (usually
for one (1) fiscal year).”

(Section 306 (a) of RA No. 7160)

PART II:
THE LOCAL BUDGET PROCESS
Budget Preparation Phase
Accountability Preparation
Budget Authorization Phase
Budget Review Phase
Execution Authorization Budget Execution Phase
Budget Accountability Phase
Review
 LEGAL BASIS

Upon receipt of the statements of

income and expenditures from
the Barangay Treasurer, the
Punong Barangay shall
Accountability Preparation prepare the Barangay Budget
for the ensuing fiscal year in
the manner and within the
period prescribed and submit
Execution the Annual Barangay Budget to
Authorization
the Sangguniang Barangay for
legislative enactment.
Review
-Section 331 of RA. No. 7160
BUDGET PREPARATION
 PUBLIC FINANCIAL MANAGEMENT
Spend within our means

Invests in the right priorities

Delivers measurable results

Empowers citizens
BUDGET PREPARATION PHASE
Budget Preparation is the first phase of the local budget
process. It involves cost estimation per PPA, preparation of
budget proposals, executive review of budget proposals, and
preparation of the Barangay Expenditure Program
(BEP) together with the budget message.

STARTS upon receipt ENDS with the submission of

of the Statement of the Executive Budget to the
Income and Expenditures, Sanggunian on or before
which is on or before October 16
Sept. 15
KEY PLAYERS IN BUDGET PREPARATION

Punong Barangay Barangay Treasurer

Barangay Development Council

Barangay Secretary
 KEY PLAYERS IN BUDGET PREPARATION

The Punong Barangay shall prepare the

Barangay Budget for the ensuing fiscal year in
the manner and within the period prescribed in
Punong Barangay this Title. (Section 331 of RA No. 7160)

Based on the City/Municipal Treasurer’s Certified

Statement (jointly with the Accountant), the Barangay
Treasurer shall submit, on or before the 15th day of
September of each year, to the Punong Barangay a
statement covering the Estimates of Income and
Expenditures for the past, current and ensuing fiscal Barangay Treasurer
years. (Article 423.b of the IRR of RA No. 7160)
 KEY PLAYERS IN BUDGET PREPARATION

The secretariat of the Barangay

Development Council shall be headed by
the Barangay Secretary. (Section 113 of
RA No. 7160).
Barangay Secretary

The Punong Barangay shall, in coordination

with the Barangay Development Council
prepare the Annual Executive and
Supplemental Budgets of barangay funds. Barangay Development
(Section 389.b of RA No. 7160) Council
 BUDGET PREPARATION FLOWCHART

Barangay Treasurer Sangguniang

Punong Barangay
Barangay

Prepare and Submit the

Prepares the Annual
Statement of Income and
Barangay Budget by
Expenditure based on the
determining and allocating
Certified Statement
the resources available for
issued by the
appropriation
City/Municipal Treasurer
and Accountant
( Sept. 15)

Submits the proposed

Annual Barangay Budget or Budget Authorization
Barangay Expenditure Phase
Program (October 17 to
(October 16) December 31)
 BUDGET PREPARATION PHASE

Indicative NTA for

FY 2024 and
Guidelines on
Budget Preparation
 BUDGET PREPARATION PHASE

Final NTA
for FY
2024
BUDGET PREPARATION PHASE
Priorities in the use of the NTA and other Local
Resources
• Cover the cost of providing BASIC SERVICES and
facilities enumerated under Section 17 (b.1) of RA
No. 7160:
• Agricultural support services;
• Health and social services;
• General hygiene and sanitation;
• Maintenance of Katarungang Pambarangay;
• Infrastructure facilities;
• Information and reading center; and
• Satellite or public market.
 BUDGET PREPARATION PHASE
Basic Services - Agricultural Support Services which
include planting materials distribution system and
operation of farm produce collection and buying
stations
 BUDGET PREPARATION PHASE
Basic Services – Health and Social Welfare Services which include
maintenance of barangay health center and day-care center.
 BUDGET PREPARATION PHASE
Basic Services – Services and facilities related to general hygiene
and sanitation, beautification, and solid waste-collection.
 BUDGET PREPARATION PHASE
Basic Services – Maintenance of katarungang pambarangay;
and maintenance of barangay roads and bridges and water
supply systems.
 BUDGET PREPARATION PHASE
Basic Services – Infrastructure facilities, such as multi-purpose
hall, multi-purpose pavement, plaza, sports center.
 BUDGET PREPARATION PHASE
Basic Services – Information and reading center; and satellite
or public market, where viable.
BUDGET PREPARATION PHASE
Priorities in the use of the NTA and other
Local Resources

• Provision of no less than 20% of the

annual NTA for Development Projects;

• Provision of not less than 5% of the

estimated revenue of LGUs from regular
sources to be set aside as Local Disaster
Risk Reduction and Management Fund;

• Provision of 10% of the General Fund of

the Barangay for SK Fund.
BUDGET PREPARATION PHASE
Priorities in the use of the NTA and other
Local Resources

• Full provision shall be made for all

statutory and contractual obligations of
the LGU;

• Provision for budgetary requirements that can be

Attributed and Built-in within the Budget such
as 5% GAD, 1% LCPC, SC/PWD, Combatting
AIDs,
• Provision for other budgetary requirements such
Anti-Drug Abuse Program,
Steps in Preparing the Barangay
Annual Budget

Brgy. Treasurer submits the detailed

Statement of Income and Expenditure

PB prepares the Barangay Budget

PB submits the proposed Annual

Budget (Barangay Expenditure
Program)
Steps in Preparing the Barangay
Annual Budget

• Based on the Statement of

Income and Expenditure,
identify and classify the Income,
Revenue and Receipts,
according to Account Code and
Type of Fund (Regular or Non-
Regular).
Steps in Preparing the Barangay
Annual Budget
• Income refers to all revenues and receipts collected or
received forming the gross accretions of funds of the LGU
(Sec. 306.i of RA7160);

• Revenue refers to income derived from the regular system

of taxation enforced under authority of law or ordinance
and, as such, more or less regularly every year (Sec. 306.m
of RA7160);

• Receipts refers to income realized from operations and

activities of the local government or are received by it in the
exercise of its corporate functions (Sec. 306.l of RA7160)
Steps in Preparing the Barangay
Annual Budget
• Note: Based on the BLGF Circular No. 16-2015,
regular revenues refer to taxes, fees, and receipts
actually realized, including the IRA and other shares
provided for in Sections 284, 290, and 291 of RA No.
7160;

• But exclusive of non-recurring receipts such as

national aids, grants, financial assistance, loan
proceeds, sales of assets, miscellaneous
income/receipts and other similar receipts.
Steps in Preparing the Barangay
Annual Budget
• Compute and Allocate for the Budgetary Requirements
such as: 20% DF, 5% BDRRMF, 10% SK Fund, and Debt
Service to determine free resource available for
appropriation;

• Available free resources will be allocated further for

existing honoraria and recurring MOOE, then to other basic
services that can be attributed to 5% GAD, 1% LCPC,
SC/PWD, Combatting AIDs, Anti-illegal Drugs, Anti-VAWC;
and Additional Honoraria for barangay officials, etc.

• Fill-out the Budget Preparation Forms and consolidate the

same into a Barangay Expenditure Program
Steps in Preparing the Barangay
Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Steps in Preparing the Barangay Annual Budget
Barangay Budget Preparation Forms

• BBP Form No. 1 – Budget of Expenditures and Sources of

Financing;

• BBP Form No. 2 – Programmed Appropriation by PPA,

Expense Class, Object of Expenditure and Expected
Results;

• BBP Form No. 2-A – List of Projects Chargeable Against the

20% DF;

• BBP Form No. 3 – Plantilla of Personnel; and

• BBP Form No. 4 – Statement of Indebtedness

Shall be net of amounts earmarked
for specific purposes (continuing
appropriations, 20% DF, BDRR
Fund, SK Fund, Accounts Payable)
Presented by Allotment/
Expense Class and Object of
Expenditure; and SPA
Income classification
column is not applicable
to Expenditures
Indicate the account
code based on COA
Circular No. 2015-011
AIP Ref. Code pertains to PPA
and not by Expense Class or
Object of Expenditure
Pertains to PPAs and not by
object of expenditures
LBC No. 149 –
4th Tranche
Honoraria of SK
Chair charged to
Brgy. Funds
Based on BBP Form No. 1
Based on BBP Form No. 2
Steps in Preparing the Barangay
Annual Budget
• Prepare the Budget Message and submits the
proposed Annual Budget (Barangay Expenditure
Program) together with the following:
• List of Projects chargeable against the 20% DF (BBP
Form No. 2-A);
• Plantilla of Personnel (BBP Form No. 3);
• Statement of Indebtedness, if any (BBP Form No.
4); and
• AIP, duly approved by the Sangguniang Barangay
through a Resolution; and
• Indicative Annual Procurement Plan (APP)
 Supplemental Budget
GENERAL RULE

All budgetary proposals shall be included and considered in

the budget preparation process. After the LCE concerned
shall have submitted the executive budget to the
sanggunian, NO Ordinance providing for a supplemental
budget shall be enacted (Section 321 of the LGC).
 Supplemental Budget
EXCEPTIONS: Changes in the annual budget may be done through
supplemental budget under the following circumstances (Art. 417 of
the IRR of the LGC, as amended by Administrative Order No. 47):

● When supported by funds actually available as certified by the local

treasurer;

● If covered by new revenue source/s; and

● In times of public calamity

 Supplemental Budget – AO No. 47
FUNDS ACTUALLY AVAILABLE:

● Refers to the amount of money actually collected, as certified by the Local

Treasurer, at any given point during the fiscal year, which is over and above
the estimated income collection for that point in the year;

● When there are savings, it refers to portions or balances as of any given point
in the fiscal year or any programmed or allotted appropriation which remain
FREE of any obligation or encumbrance and which are still available after
satisfactory completion or the UNAVOIDABLE discontinuance or
abandonement of the work, activity or purpose for which the appropriation
was originally authorized.
 Supplemental Budget – Section 322
FUNDS ACTUALLY AVAILABLE:

● Likewise, prior year’s excess collections may be utilized to fund a

supplemental budget pursuant to Section 322 of the LGC which
provides in part that, “unexpended balances of appropriations
authorized in the annual appropriations ordinance shall revert to
the unappropriated surplus of the general fund at the end of the
fiscal year and shall not thereafter be available for the expenditure
except by subsequent enactment.”
 Supplemental Budget – AO No. 47
NEW REVENUE SOURCE/S:

● Refers to money measure NOT otherwise considered during the preparation

and enactment of the annual budget. Such new revenue measures include
ordinance passed by the sanggunian during the fiscal year but after the
annual budget had already been enacted into law which imposes NEW local
taxes, charges, fees, fines or penalties, or which RAISES EXISTING local taxes,
charges, fees, fines or penalties.

IN TIMES OF PUBLIC CALAMITY, by way of budgetary realignment to set aside

appropriations for the purchase of supplies and materials or the payment of
services, which are exceptionally urgent or absolutely indispensable to prevent
imminent danger or loss of, life or property.
Thank you!