The 20% DF appropriation amounting to P302,602.40, P336,254.60 and P378,322.

00
for CYs 2018, 2019 and 2020 were not optimally utilized or a utilization rate of only
46%, 89% and 57%, respectively, while a total of P240,000.00 of PPAs were found
not chargeable against the 20% DF as per Sections 3.0 and 5.0 of the DILG-DBM
JMC No. 2017-1 series 2017, defeating the purpose of the fund to help achieve the
desirable socio-economic development and environmental outcomes for the
barangay.

Sections 3.0 and 5.0 of the Department of Interior and Local Governance (DILG)
and Department of Budget and Management (DBM) Joint Memorandum Circular No.
2017-1 dated February 22, 2017 states the following:

3.0 ALLOWABLE DEVELOPMENT PROJECTS CHARGEABLE

AGAINST THE 20% DF

3.1 Social Development

3.1.1 Construction or rehabilitation of health centers, rural

health units or hospitals, including purchase of lot for the
purpose;
3.1.2 Purchase of ambulance and medical equipment;

3.1.3 Construction or rehabilitation of local government-owned

potable water supply system;

3.1.4 Establishment or rehabilitation of Manpower

Development Centers;

3.1.5 Construction or rehabilitation of evacuation centers,

including purchase of lot for the purpose;

3.1.6 Construction of Special Drug Education Centers, and

Drug Treatment/Rehabilitation Centers, including
purchase of lot for the purpose;

3.1.7 Rehabilitation of historical sites classified as such by the

National Historical Commission of the Philippines;

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 multi-purpose halls,

including purchase of lot for the purpose; and

3.1.10 Installation of street lighting system.

 3.2 Economic Development

3.2.1 Construction or rehabilitation of communal irrigation or

water impounding system;

3.2.2 Purchase or lease of post-harvest facilities, such as farm or

hand tractor with trailer, thresher and mechanical driers;

3.2.3 Construction or rehabilitation of local roads or bridges,

including purchase of appropriate engineering equipment,
such as dump trucks, graders and pay loaders;

3.2.4 Capital expenditures related to the implementation of

livelihood or entrepreneurship/local economic
development projects;

3.2.5 Development of alternative power or energy sources, such

as, but not limited to, renewable energy power plants; and

3.2.6 Amortization of loans used to finance development

projects cited in this JMC, subject to the 20% debt service
capital prescribed under Section 324 (b) of RA No. 7160.

3.3 Environmental Management

3.3.1 Reforestation and urban greening;

3.3.2 Construction or rehabilitation of sanitary landfills and

materials recovery facilities;

3.3.3 Purchase of garbage trucks and other equipment for

environmental management and protection purposes;

3.3.4 Implementation of flood and erosion control projects, such

as rehabilitation and construction of drainage systems, de-
silting of rivers, and de-clogging of canals; and

3.3.5 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,
such as, but not limited to, treatment of wastewater for
conservation/re-use purposes, and installation of air
pollution control devices.

5.0 RESPONSIBILITY OF THE LOCAL CHIEF EXECUTIVE

 It is the responsibility of every local chief executive to ensure that the
20% DF is optimally utilized to help achieve the desirable socio-
economic development and environmental outcomes of the LGU.

Appropriation for 20% DF for CYs 2018, 2019, and 2020 amounted to
P302,602.40, P336,254.60 and P378,322.00. The Report on Utilization of DF disclosed
that the fund was not optimally utilized over the 3-year period. The utilization of the fund
was 46%, 89% and 57%. This is shown in Table 1:

Table 1

Amount Status of
PPAs Appropriated in the Amount Utilized Implementation
Annual Budget of PPA
CY 2018
Maintenance of FMR 12,000.00 -
Improvement of Barangay Hall 15,000.00 -
Improvement of Brgy. Health 6,000.00 -
Center
Improvement of Tanod Outpost 8,000.00 -
Construction of Foot Bridge 30,000.00 30,000.00 100% Complete
Rehabilitation of Water System 4,000.00 4,000.00 100% Complete
Improvement of Streetlighting 30,000.00 22,080.00 100% Complete
Concreting of Circumferential 50,000.00 50,000.00 100% Complete
Road
Climate Change Program 5,000.00 -
Improvement of Covered Court 10,000.00 19,200.00 100% Complete
Solid Waste Management 5,000.00 -
Program
Drug Rehabilitation Program 10,000.00 -
Marine Protected Areas 10,000.00 -
Maintenance
Construction of Box Culvert 50,000.00 -
Installation of Trumpa 10,000.00 -
Maintenance of Health Center 5,602.40 -
Improvement of Lupon Bldg. 42,000.00 14,400.00 50% Complete
Subtotal 302,602.40 139,680.00
Utilization rate 46%
CY 2019
Construction of Multi-purpose 50,000.00 50,000.00 100% Complete
Building
Construction of Seawall Phase 1 100,000.00 99,950.00 100% Complete
Construction of Tanod Outpost 50,000.00 50,000.00 100% Complete
Phase 1
Maintenance of FMR 20,000.00 -
 Amount Status of
PPAs Appropriated in the Amount Utilized Implementation
Annual Budget of PPA
Improvement of Brgy. Hall 46,000.00 46,000.00 100% Complete
Maintenance of Brgy. Health 10,000.00 10,000.00 100% Complete
Center
Improvement of Water Supply 30,000.00 28,380.00 100% Complete
System
Maintenance of Marine Protected 5,000.00 -
Area
Maintenance of Streetlighting 15,254.60 15,254.00 100% Complete
Solid Waste Management 5,000.00 -
Program
Climate Change Program 5,000.00 -
Subtotal 336,254.60 299,584.00
Utilization rate 89%
CY 2020
Construction of Multi-purpose 50,000.00 50,000.00 100% Complete
Building Phase 2
Improvement of Auditorium 35,000.00 34,222.50 100% Complete
Improvement of Water Supply 40,000.00 37,544.00 100% Complete
System
Construction of Tanod Outpost 50,000.00 50,000.00 100% Complete
Phase 2
Purchase of PPEs 5,930.00 -
Purchase of Relief Goods 197,392.00 45,120.00 100% Complete
Subtotal 378,322.00 216,886.50
Utilization rate 57%
Grand Total 1,017,179.00 656,150.50

Moreover, from the above-mentioned PPAs, the following are not allowable
development projects chargeable against the 20% Development Fund:

Table 2

PPAs Amount
Improvement of Barangay Hall 15,000.00
Improvement of Tanod Outpost 108,000.00
Construction of Foot Bridge 30,000.00
Improvement of Covered Court 10,000.00
Improvement of Lupon Bldg. 42,000.00
Improvement of Auditorium 35,000.00
Total 240,000.00
 The appropriation and implementation of projects not chargeable against the 20%
DF is not in consonance with JMC No. 2017-001. Further, the non-implementation of all
the approved PPAs under 20% DF defeated the purpose of the fund to help achieve the
desirable socio-economic development and environmental outcomes for the barangay.

We recommend that:

a. The Sangguniang Barangay plan, approve and appropriate projects chargeable

against the 20% DF; and

b. Optimally utilize the 20% DF by implementing the approved PPAs in

accordance with the prescribed rules and regulations, so as to help achieve the
desirable socio-economic development and environmental outcomes in the
barangay.

May we have your comments on the foregoing audit observations within five (5)
calendar days from receipt hereof.