DEPARTMENT OF BUDGET AND MANAGEMENT

Budget Execution
Sec. 384 Role of the Barangay
As the basic political unit, the barangay
serves as the primary planning and
implementing unit of government
policies, plans, programs, projects and
activities in the community, and as a
forum wherein the collective views of
the people may be expressed,
crystallized and considered, and where
disputes may be amicably settled.
 THE LOCAL BUDGET
PROCESS
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AUTHORIZATION
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REVIEW

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 BUDGET EXECUTION
o The fourth phase of the
local budget process
o Involves the release of
N
EXECUTIO
allotments, the certification
of available appropriations
and cash, the disbursement
of funds and delivery of
goods in the most efficient,
effective, economical and
ethical way

Republic of the Philippines

legal basisDEPARTMENT OF BUDGET AND MANAGEMENT issue
 THE LOCAL BUDGET
PROCESS
EXECUTION

The responsibility for the

execution of the annual and
supplemental budgets and the
accountability therefor shall be
vested primarily in the LCE
(Sec. 320, RA 7160).

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
BUDGET EXECUTION (Jan. 1 – Dec. 31)
What does the Local Government Code say?
 

The LGC is clear and explicit on the effectivity of

Barangay Budgets. Section 332 provides that “the
ordinance enacting the annual budget shall take effect
at the beginning of the ensuing calendar year. An
ordinance enacting a supplemental budget, however,
shall take effect upon its approval or on the date fixed
therein.
 

  The responsibility for the execution of the annual and

supplemental budgets and the accountability therefor
shall be vested primarily in the punong barangay
concerned.”
RESPONSIBILITIES for BUDGET EXECUTION
 The Punong Barangay (PB) is
responsible for:
-the efficient, effective and
economical execution of
the budget of the
barangay, the purpose of
which is the welfare of its
constituents;
-ensuring that the
approved development
projects and basic services
are implemented and
delivered.
RESPONSIBILITIES for BUDGET EXECUTION

 The PB is responsible for:

-enforcement of all applicable
laws and ordinances relative
to the governance of the
barangay, the implementation
of approved policies and
programs;
-the generation of resources
and revenues and their
application;
RESPONSIBILITIES for BUDGET EXECUTION
 The Barangay Treasurer is
responsible for:
-the collection, custody,
disbursement and proper
management of funds of the
barangay;
-programming fund
disbursements such that
funds are made available as
and when needed;
-the preparation of forms and
other documents for
disbursements.
RESPONSIBILITIES for BUDGET EXECUTION

The Municipal or City

Accountant is responsible for:
-accounting and internal
control services for the
barangay;
-the preparation of financial
reports and other documents
for all funds received and
disbursed by the barangay.
RESPONSIBILITIES for BUDGET EXECUTION
Barangay funds are released and
disbursed in accordance with the
General Appropriations
Ordinance (GAO) and reviewed
Annual Barangay Budget and
through a Simplified Allotment
Release Order (SARO)

Actual disbursement is done

through a simplified cash
program, obligation slip and
disbursement voucher system. All
financial transactions of the
barangay shall follow accounting
and auditing rules.
 How is the Budget Executed?
Step 1 –
Prepare a Simplified Allotment Release
Order (SARO) for all basic services and
development projects.
The SARO is released comprehensively for
the entire year.

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Barangay Budget Execution Form No. 1

 
SIMPLIFIED ALLOTMENT RELEASE ORDER
Barangay : ______________
 (In 000 Pesos)
 

BASIC SERVICES AND APPROPRIATIONS THIS

DEVELOPMENT TOTAL RELEASE
PS MOOE CO RESERVE
PROJECTS (5) (7)=5-6
(4) (6)
(1) (2) (3)
             
 
 
 
 
 
 
 
 
 
 
             
  TOTAL
 
 
Prepared By: Approved By:
  
 ________________ _______________
 Barangay Treasurer Punong Barangay
 
 
 How is the Budget Executed?
Step 2 –
Prepare a Cash Program (CP) to support
the Simplified Allotment Release Order
(SARO).
The Cash Program (CP) is a financial
statement showing the expected income
and disbursement on a monthly basis
(January to December).

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Barangay Budget Execution Form No. 2.

CASH PROGRAM
Barangay : ______________
(In 000 Pesos)

MONTH
Income from Taxes and
Operating and Miscellaneous TOTAL
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Income

A. Income from Taxes

B. Income from Operating and
Miscellaneous Income

C. (A + B)
TOTAL INCOME

LESS:
D. Disbursements
•Basic Services
•Development Projects
•10%SK
•5% CF
•Others

E. TOTAL DISBURSEMENTS

F. (C-E) ENDING BALANCE

G. BEGINNING BALANCE/SURPLUS/
DEFICIT (cumulative)

 
 Prepared by: Certified By: Approved by:

 ____________________ _____________________ _____________________

  Barangay Treasurer City/Municipal Accountant Punong Barangay
 How is the Budget Executed?
Step 3 –
Prepare the quarterly performance targets.
This is the major justification for the
release and disbursement of funds. The
expected results or output to be produced
by the financial transaction are shown in
the form.

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Barangay Budget Execution Form No. 3.
 

PERFORMANCE TARGETS, FY ____

Barangay : ______________

BASIC SERVICES/ QUARTERLY TARGETS

DEVELOPMENT PROJECTS (3) (4)
TOTAL
MFO PERFORMANCE INDICATORS Q1 Q2 Q3 Q4
(1) (2)

Day Care Pre-School Children Trained 20 22 23 20 85

Services Parent Beneficiaries 20 20 20 20 80

Peace & Order Conflicts Decided/Resolved 10 12 14 10 46

Services Persons apprehended 5 4 3 2 14

 
Prepared by: Approved by:
 ________________ ________________
  Barangay Secretary Punong Barangay
 How is the Budget Executed?
Step 4 – Procure goods and civil works projects.
– Prepare / Revise Project Procurement and
Management Plan (PPMP) for:
- Basic Services Delivery
- Development Project
– Prepare / Revise Annual Procurement Plan
(APP) for all PPMPs for:
- Basic Services Delivery
- Development Projects
– Implement APP through the Barangay Bids and
Awards Committee (BBAC) pursuant to RA 9184
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What is
Procurement?
Procurement is… the acquisition of goods, works
and services

Done by the
government to deliver
services to its
• PUBLIC
constituents following
the law, rules and
Procurement
procedures
established in the
country

Done by private
• PRIVATE
companies or Procurement
individuals
Section 5 (aa) of the IRR of RA 9184
Refers to the acquisition of goods, consulting
services, and the contracting for infrastructure
projects by the procuring entity (PE)
 PROCUREMENT ORGANIZATIONS
BAC of Barangays:
• At least five (5) but not more than
seven (7) regular members of the
Sangguniang Barangay;
• The Punong Barangay, as the
LCE, shall designate the members of
the BAC;
• The BAC members shall elect among
themselves who shall act as the
Chairman and Vice-Chairman;
Who cannot be LGU-BAC
members?
• The Local Chief Executives (LCEs),
such as the Mayor, Governor, and
Punong Barangay;
• The Vice-Governor and Vice-Mayor,
and the members of the Sangguniang
Bayan and the Sangguniang
Panlalawigan since their offices are not
regular offices under the Office of the
LCE;
• The approving authority of the LGU;
• Those not occupying “plantilla” positions
in the LGU; and
• The Chief Accountant or head of the
Accounting Department and personnel
of the accounting department/unit,
except as end-user representatives or
provisional members of the BAC.
GOVERNMENT PROCUREMENT
 General Rule:
◦ “All procurement shall be done through
COMPETITIVE BIDDING…” (Sec. 10)
 Exception:
◦ “…except as provided for under Article XVI of
this Act.”
◦ Sec. 48, Art. XVI: “Subject to the prior
approval of the Head of the Procuring Entity or
his duly authorized representative, and
whenever justified by the conditions provided in
this Act, the procuring entity may, in order to
promote economy and efficiency, resort to any
of the … ALTERNATIVE METHODS OF
PROCUREMENT.”

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Standardized Competitive/Public
Bidding Procedures

Pre-Procurement Pre-Bid
Advertisement
Conf. Conference

Opening of
Submission of Opening of 2nd
1st Env. - Eligibility
Bids Envelope – Financial
Docs & Technical
Proposal
Proposal

Bid Evaluation Award of

Post-qualification Contract
& Ranking
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Common Procurements in the Barangay
• Common-use Supplies and Equipment included in
the listing of Procurement Service – DBM (PS-
DBM)
Procurement Mode – PS DBM or Shopping
• Other Supplies and Equipment (not listed with PS-
DBM)
Procurement Mode – Small Value Procurement
• Small Infrastructure Projects
Procurement Mode – Public Bidding or Small
Value Procurement

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ADMINISTRATIVE ORDER NO.
17
AO 17, July 28, 2011
 Directs
the use of Procurement Service (PS) and
PhilGEPS Electronic Procurement System in
procurement activities in accordance with RA 9184
and improving the PS operation
 Appliesto all NGAs, including Military and Police
Units, GOCCs, GFIs, SUCs and LGUs
 Providesfor the expansion of the Product List and
improvement of Inventory Management through a
computerized system
DBM Circular Letter 2011-6
 All national government agencies are required to
submit their APP-CSE using the prescribed
format
(Section 4.1 of the DBM CL 2011-6)
 The accomplished APP-CSEs are due for
submission to the DBM on the following dates (as
amended by DBM CL 2011-6A):
 The APP-CSE for the ensuing years thereafter, on or
before 15 November of each year (e.g. FY 2018 APP-
CSE shall be submitted on or before 15 November
2017)

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 What Are Common – Use Supplies and
Equipment?

Section 5 (g) of the 2016 Revised IRR of RA 9184

 goods, materials and equipment that are used in a day-

to-day operations of Procuring Entities in the
performance of their functions
 those included in the Electronic Catalogue of the
PhilGEPS
Procurement thru PS - DBM

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Procurement thru PS - DBM

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ALTERNATIVE METHODS OF
PROCUREMENT

1. Limited Source Bidding

2. Direct Contracting
3. Repeat Order
4. SHOPPING
5. Negotiated Procurement

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 SHOPPING

Method where the procuring entity

simply requests for the submission of
price quotations for readily
available off-the-shelf goods or
ordinary/regular equipment to be
procured directly from suppliers of
known qualifications

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CONDITIONS [SHOPPING UNDER Sec. 52.1(b)]:
1. Procurement of ordinary or regular office supplies and
equipment NOT AVAILABLE in PS-DBM; and
2. Amount does not exceed the threshold.
 The BAC shall send the RFQs to at least three (3) suppliers
of known qualifications, and at least three (3) price
quotations must be obtained.
 The deadline for submission may be extended thrice, if none or
less than the required number of quotations are received.
 In case no supplier responded after the third extension, the BAC
shall conduct a mandatory review in accordance with Section
IV(K) of Annex H.

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APPLICABILITY [Sec. 52.1(a) AND Sec. 52.1(b)]:
 Goods

CONDITIONS [SHOPPING UNDER Sec. 52.1(a)]:

1. There is an unforeseen contingency requiring
immediate purchase; and
2. Amount does not exceed the threshold
 The RFQ may be sent directly to the supplier of known
technical, legal and financial qualifications. Sending of
one (1) RFQ will suffice.
 Posting of the RFQ may be dispensed with.

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THRESHOLD FOR UNFORESEEN CONTINGENCIES [Sec. 52.1(a)]
NGAs, GOCCs, GFIs, SUCs and Autonomous Regional
Government– PhP100,000 PhP200,000
LGUs :
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality

1st Class 100,000 200,000 100,000 200,000 50,000 100,000

2nd Class 100,000 200,000 100,000 200,000 50,000 100,000

3rd Class 100,000 200,000 80,000 160,000 50,000 100,000

4th Class 80,000 160,000 60,000 120,000 50,000 100,000

5th Class 60,000 120,000 50,000 100,000 50,000 100,000

6th Class 50,000 100,000 50,000 100,000 50,000 100,000

In the case of Barangays, the maximum amount is PhP50,000

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THRESHOLD FOR Sec. 52.1 (b):
 NGAs, GOCCs, GFIs, SUCs and Autonomous Regional
Government– PhP500,000 PhP1,000,000
 LGUs:
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality

1st Class 500,000 1,000,000 500,000 1,000,000 100,000 200,000

2nd Class 500,000 1,000,000 500,000 1,000,000 100,000 200,000

3rd Class 500,000 1,000,000 400,000 800,000 100,000 200,000

4th Class 400,000 800,000 300,000 600,000 50,000 100,000

5th Class 300,000 600,000 200,000 400,000 50,000 100,000

6th Class 200,000 400,000 100,000 200,000 50,000 100,000

In the case of Barangays, the maximum amount is PhP50,000

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Standard Form for RFQ
 There is no prescribed template or standard form
for the RFQ.
 The RFQ must indicate the specification, quantity,
ABC, and other terms and conditions of the item
to be procured pursuant to Section 3(a) of the
Guidelines.
 In addition, RFQ must prescribe the manner by
which price quotations shall be submitted i.e., by
sealed or open quotation.
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Section 52.2

The phrase “ordinary or regular office supplies” shall be

understood to include those supplies, commodities, or materials
which , depending on the Procuring Entity’s mandate and
nature of operations, are necessary in the transaction of its
official businesses, and consumed in the day-to-day
operations. of said Procuring Entity.

However, office supplies shall not include services such as

repair and maintenance of equipment and furniture, as well as
trucking, hauling, janitorial, security, and related or analogous
services.

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 NEGOTIATED PROCUREMENT

a. Two Failed Biddings h. Defense Cooperation Agreement*

b. Take Over Contracts i. SMALL VALUE PROCUREMENT

c. Emergency Cases j. Lease of Real Property and Venue
d. Adjacent or Contiguous k. NGO Participation*
e. Agency-to-Agency l. Community Participation*
f. Scientific, Scholarly or Artistic Work, m. UN Agencies, International
Exclusive Technology and Media Organizations or International
Services Financing Institutions*

g. Highly Technical Consultants

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 NEGOTIATED PROCUREMENT -
SMALL VALUE PROCUREMENT

APPLICABILITY
 All types of Procurement

CONDITIONS:
1. Procurement does NOT fall under Shopping
under Sec. 52; and
2. Amount does not exceed the threshold

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 NEGOTIATED PROCUREMENT -
SMALL VALUE PROCUREMENT

 The BAC shall prepare and send the

RFQs/RFPs to at least three (3) suppliers,
contractors or consultants of known
qualifications.

 Receiptof at least one (1) quotation is sufficient

to proceed with the evaluation thereof.

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 NEGOTIATED PROCUREMENT -
SMALL VALUE PROCUREMENT
Award of Contract to a Lone Bidder in SVP

 In SVP, it is mandatory to send the RFQ to at least 3

prospective bidders/proponents and invite them to
submit proposals; but it is not necessary to actually
receive 3 proposals.

 It is enough that the PE receives at least one (1)

bid/proposal on the day of the deadline for submission
of quotations.
 Thus, if the lone proposal already complies with the
technical, legal and financial requirements of the
procuring entity, the contract can be awarded to the lone
offeror
 NEGOTIATED PROCUREMENT -
SMALL VALUE PROCUREMENT
THRESHOLD:
 NGAs, GOCCs, GFIs, SUCs and Autonomous Regional
Government– PhP500,000 PhP1,000,000
 LGUs:
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality

1st Class 500,000 1,000,000 500,000 1,000,000 100,000 200,000

2nd Class 500,000 1,000,000 500,000 1,000,000 100,000 200,000

3rd Class 500,000 1,000,000 400,000 800,000 100,000 200,000

4th Class 400,000 800,000 300,000 600,000 50,000 100,000

5th Class 300,000 600,000 200,000 400,000 50,000 100,000

6th Class 200,000 400,000 100,000 200,000 50,000 100,000

In the case of Barangays, the maximum amount is PhP50,000

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 SHOPPING AND SMALL VALUE PROCUREMENT

PROCEDURAL GUIDELINES:

Send RFQ to at least 3 Post in PhilGEPS, PE’s

suppliers website and
conspicuous place
Prepare RFQ *May be 1 in case of 52.1(a) *Except 52.1(a) and ABC 50k and
*Receipt of 3 RFQs for 52.1(b) is below
mandatory *Extend deadline if no quotation is
Receipt of 1 RFQ in SVP will suffice received

Award to LCB (for

Prepare Abstract of SHP & SVP) that
Quotations complies with
specs and ABC

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 How is the Budget Executed?
Step 5 –
Prepare the Disbursement Voucher for all
valid obligations found in the General
Appropriation Ordinance or Supplemental
Budget.
This forms are used in obligating and
disbursing of funds. Issue checks to
cover payments.

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SIGNATORIES IN THE CHECKS, OBLIGATION
REQUEST and the DISBURSEMENT VOUCHER

• Checks issued by barangays are jointly signed by

the Barangay Treasurer and the Punong Barangay.
• The Obligation Request are signed by:
1) The Barangay Chairman
2)The Chairman of the Committee on
Appropriations of the SB, to certify as to
the existence of the appropriation;

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SIGNATORIES IN THE CHECKS, OBLIGATION
REQUEST and the DISBURSEMENT VOUCHER

• The Disbursement Voucher is signed by:

1) Chairman of the Committee on
Appropriation of the SB, to certify as to the
existence of the appropriation
2) Barangay Treasurer, to certify as to the
availability of funds
3) Punong Barangay, to certify as to validity,
propriety and legality and approval of the
voucher.
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COA CIRCULAR NO. 2012-005
dated December 7, 2012
• The responsibility to initiate, process, approve
financial transactions and issue a Punong
Barangay’s Certification (PBC) under oath to
government depository banks to honor/encash
checks issued shall be the that of the barangay
officials.
• PB shall be responsible or the legality, propriety and
validity of the transaction.
• Submission requirements to the Accountant and
Auditor of supporting documents within ten (10)
days after the end of each month.
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COA CIRCULAR NO. 2015-009
dated December 1, 2015
• Revised Chart of Accounts for Local Government
Units (LGUs)
• LGUs shall record their financial transactions in
accordance with the revised Chart of Accounts
effective January 1, 2015
• Conversion of balances of accounts as of
December 31, 2014 as beginning balances for CY
2015
• Account Code Structure consisting of eight (8)
digits
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The budget is based on estimated income and
program of expenditures for the budget year. It
specifies annual expenditures ceilings. Actual
releases of funds and disbursements, however,
depend to a large extent on the actual collection
and receipt of funds by the barangay. Since funds
will have to be committed and disbursed even as
revenues are being collected, a system should be in
place to ensure that obligations and payments will
not exceed the amount that will ultimately be
collected and become available.
PRINCIPLES AND RULES TO BE OBSERVED
IN THE RELEASE AND DISBURSEMENT
OF BARANGAY 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 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.

Example
Estimated Revenue
for the month 8,000
Actual Collections for the month 5,000
50% of 3,000 =1,500
----------------
Total Disbursement P6,500

Provided there is no cash overdraft at the end of the

year.
Barangay Disbursements
 No disbursement shall be made directly from
the collections
 Barangay disbursements shall generally be

made by drawing checks against the

depository account of the barangay.
 Disbursements in cash may only be made

from petty cash funds and/or from cash

advances.
 Payments shall be made only on duly certified

and approved vouchers.

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.
Barangay Cash Advance
 The barangay cash advance is a relatively
bigger amount of money, as compared to
petty cash, given to regular or special
disbursing officers (D.O.) for specific public
purposes.
 Regular cash advance includes expenses for

honoraria and other similar payments.

 Only duly appointed or designated D.O. who

are bonded may perform disbursing

functions.
Barangay Cash Advance
 Only one disbursing officer shall be
assigned/designated for a specific purpose
 Transfer of accountability for cash advance

shall not be allowed

 A cash advance for a particular year shall not

be used to pay for expenses made in other

years.
 All cash advances shall be fully liquidated at

the end of each year

Barangay Petty Cash Fund
 The barangay petty cash fund is a small
amount of cash on hand available from time to
time and replenished through reimbursements
that is equal to the sum expended. The
Barangay Treasurer may be authorized to hold
a petty cash fund not exceeding 20% of the
funds available to the credit of the Barangay
Treasury. It is to be replenished when
disbursements reached at least 75% of the
petty cash fund or as needed. Only a maximum
amount of P1,000 can be charged against the
barangay petty cash fund for direct purchases
at any one time for the ordinary and essential
administrative needs of the barangay.
7. The Barangay
Treasurer may be
authorized by the SB or
Bids and 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
Barangay Treasurer
and the Barangay
Bookkeeper and/or
Municipal Accountant:
(Book of Accounts,
Statements of Income
and Expenditures,
Balance Sheets and
Trial Balances).
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. Use of
savings through
augmentation of funds is
allowed without creating a
supplemental budget.
11. Unexpended
Balances and
Appropriations for
Personal Services
and MOOE shall
revert to the
General Fund at the
end of the year.
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,
may 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.
Importance of a Sound Internal Control
• To ensure that resources are used
consistent with laws, rules and regulations
and existing policies,
• To safeguard resources from loss, wastage
and misuse,
• To provide reliable; accurate and timely
financial and non-financial information, and
• To ensure economical, efficient and effective
operation

69
 THANK YOU!!!

DEPARTMENT OF BUDGET AND MANAGEMENT

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