Limitation on

Disbursement
Introduction
Budgetary Accounts
Legal Basis in Budget Execution

BBE Forms

OVERVIEW
Steps in Budget
Key Players
Execution
BUDGET EXECUTION
It is the fourth phase of the
barangay budget process. It
involves the implementation of
the enacted annual budget or
supplemental budget.
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 herein”
Section 305(a), R.A. No. 7160
“No money shall be paid out of the local
treasury except in pursuance of an
appropriations ordinance or law”

Section 336(a), R.A. No. 7160

“Funds shall be available exclusively for
the specific purpose for which they have

v
been appropriated”

v
Section 346(a), R.A. No. 7160
“Disbursements shall be made in
accordance with the ordinance
authorizing the annual or supplemental
appropriations without the prior approval
of the sanggunian concerned”
PUNONG BARANGAY CHAIRMAN, COMMITTEE
ON APPROPRIATIONS

BARANGAY TREASURER CITY/MUNICIPAL

ACCOUNTANT
 Did you know?

Fiscal responsibility shall be shared by all

barangay officials exercising authority over
the financial affairs, transactions and
operations of the barangay.
Punong Barangay
The Punong Barangay shall be responsible for the
execution of the annual and supplemental budgets of
the barangay.
1. The revenues as estimated are
realized.
2. The approved development
projects and basic services are
implemented and delivered.
Barangay Treasurer
➢ Keep custody of barangay funds and
properties;
➢ Collect and issue official receipts for
taxes, fees, contributions, monies,
materials, and all other resources
accruing to the barangay treasury and
deposit the same in the account of the
barangay;
➢ Disburse Funds in accordance with the financial procedures;
➢ Certify as to availability of funds whenever necessary; and
➢ Performs other functions as may be assigned by competent authority.
 What are the principles to be observed in the release and
disbursement of barangay funds

• No money shall be paid out of the barangay treasury except

in pursuance of an appropriation ordinance or law;
• Barangay funds and monies shall be spent solely for public
purposes; and
• 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.
Chairman, Committee on
Appropriations
➢ Certifies the Disbursement Voucher/Payroll as to the
existence of available appropriations to cover claim;
➢ Monitors the utilization of appropriations with the use of the
appropriate Record of Appropriations and Obligation (RAO);
➢ Monitors the utilization of special trust funds with the use of
appropriate Registry for Special Trust Fund (RSTF);
➢ Maintains the RAOs and RSTF; and
➢ Other duties as may be assigned by competent authority.
City/Municipal Accountant
➢ Maintains the books of accounts of each barangay under the
city/municipality; and
➢ Performs other duties as may be assigned by competent
authority.
What are the Financial records that must be kept in the custody of the
Barangay Treasurer and the City/Municipality Accountant?

• Books of accounts
• Statement of Income and Expenditures
• Balance Sheets
• Trial Balance
BUDGETARY ACCOUNTS IN BUDGET EXECUTION
The Budgetary accounts to be maintained in the implementation
of barangay budgets are :

Appropriations Allotment Obligations

Authorization made Authorization issued Specific amount
by ordinance, by the Punong committed to be paid
directing the payment Barangay which has by the Barangay for
of goods and been comprehensively any lawful act made
services from local released as per the by an accountable
government funds General Provision of officer for and in
under specified the Appropriation behalf of the
conditions or for Ordinance Barangay (Section
specific purposes 306(j), R.A. No.
(Section 306(b), R.A. 7160)
No. 7160)
STEPS IN
Records the duly
BUDGET EXECUTION 01 approved Appropriation
Ordinance
Prepare the Financial and
Physical Performance Targets
02 and Monthly Disbursement
Program (MDP)

Adjust PPMP and APP in

03 accordance with the
approved budget

Obligates and disburses

funds 04
 Records the duly approved
01 Appropriation Ordinance
STEP 1 Approved Appropriation
Ordinance

records the
Record of Appropriations and Obligation
(RAO) and/or Registry of Special Trust Fund
(Barangay Budget Execution Form No. 1)

Chairman of the Committee

on Appropriations
 What is a Record of Appropriations and Obligation (RAO?)

The Record of Appropriations and Obligations (RAO) shall be

maintained by the Chairman on Committee on Appropriations
(CCA) to record the annual and supplemental appropriations
for the expenditures stated in the Appropriation Ordinance
made by the Committee on Appropriations of the Sangguniang
Barangay (SB). Each obligation incurred shall be recorded as
a deduction to the annual appropriation of the corresponding
expenditures. (Annex 6, COA Circular No. 2015-011 dated December 1, 2015)
Annex 6, COA Circular No. 2015-011 dated December 1, 2015

Shall be based on latest

Revised Chart of Accounts
for LGUs

REMINDER:
• Each part shall be totalled monthly to facilitate
the preparations of the Statement of
Appropriations, Obligations and Balances
(SAOB).
• This record shall be the basis for the preparation
of the SAOB.
• The RAO shall be certified correct by the CCA
and duly noted by the PB and SB.
The following are the Specific Policies and Procedures related to
barangay appropriations and obligations:
• Expenditures/Obligations shall in no case exceed available
appropriations.
• The duly approved barangay appropriation ordinance shall be
recorded in the Record of Appropriation and Obligations (RAO) as
shown in Annex 6 that shall be maintained by the CCA. Separate
RAO shall be maintained for the following: a) 10% percent share of
the Sangguniang Kabataan; b) 5% Local Disaster Risk Reduction
Management Fund (LDRRMF); c) 20% Development Fund, and d)
Continuing Appropriations.
(Chapter III, 3.1.2, COA Circular No. 2015-011 dated December 1, 2015)
The following are the Specific Policies and Procedures related to
barangay appropriations and obligations:
• The RAO shall show the annual and supplemental appropriations
and the obligations charged against the said appropriations. It shall
be used to monitor the availability of appropriations to cover
proposed expenditures/obligations.
• Charges against the appropriations shall be based on the obligations
made as shown in Contracts or Purchase Orders (POs) and in the
Disbursement Voucher (DV), and Payrolls..

(Chapter III, 3.1.2, COA Circular No. 2015-011 dated December 1, 2015)
The following are the Specific Policies and Procedures related to
barangay appropriations and obligations:
• Based on the RAO, the CCA shall certify as to the existence of
appropriation on the Contracts or POs, DV or Payrolls. As such, the
CCA shall regularly update the RAOs by posting all certified
obligations to determine available balance of the appropriations.
• The CCA shall report the charges to and balances of appropriations
to the Punong Barangay (PB) and the SB monthly through the
Statement of Appropriations, Obligations and Balances (SAOB)
(Annex 7). It shall be certified correct by the CCA.
• The PB and SB shall use the SAOB in the evaluation of the status of
barangay finances.
(Chapter III, 3.1.2, COA Circular No. 2015-011 dated December 1, 2015)
 What is a Registry for Special Trust Fund (RSTF)?

The Registry for Special Trust Fund will be used when the
barangay is a recipient of specific purpose funds granted by
other levels of government and donors. (Chapter XI, COA Circular No.
2015-011 dated December 1, 2015)
Annex 33, COA Circular No. 2015-011 dated December 1, 2015

REMINDER:
• This registry shall be maintained for each STF
until the STF is fully utilized.
• Any unspent balance from the appropriation for
the current year appropriation for LDRRMF shall
at the end of the year be transferred to the STF.
• The Chairman of the Commission of
Appropriation shall regularly update the RSTFs
by posting all certified obligations to determine
the available balance of the funds.
 Prepare the Financial and

02 Physical Performance Targets

and Monthly Disbursement
Program (MDP)
STEP 2 Financial and Physical Performance
Targets (BBE Form No. 2)

prepare

Barangay Barangay
Treasurer Secretary

Monthly Disbursement
Program (BBE Form No. 3)
 What is Financial and Physical Performance Targets?

The Financial and Physical Performance Targets Form is used

to determine what can be done given the available funds. This
Form shall be prepared every beginning of the semester since
the Barangay Officials will be reporting their performance to
the Barangay Assembly every semester.
Share in RPT P1,000,000.00 Percentage of
amount Collected
100% -
and Received

Personal Services
Honoraria P50,000.00 Percentage of Administrative100% 100%
and House Keeping support
services provided

Health and Nutrition

MOOE
Drugs and Medicine P50,000.00 Number of Patients
served in health
P50,000.00 30
Center
 What is Monthly Disbursement Program?

The Monthly Disbursement Program Form is used to ensure

that cash is available to meet the expenditure requirements per
month.
NOTE:
The Total Full Year Program shall not exceed the
estimated receipts for the year.
 Adjust PPMP and APP in
03 accordance with the
approved budget
STEP 3 Adjusted Project
Procurement
Management Plan

prepare

End-user

consolidates approve

Barangay Final Annual Punong

Treasurer Procurement Plan Barangay
Obligates and
disburses funds 04
 STEP 4

goods
procure

Approved Final Annual

services
Procurement Plan
equipment
Punong
Barangay
civil works
 Allotment Release Order
STEP 4 (BBE Form No. 4)

prepares

Decrease in Barangay
Revenue Treasurer

approve

Punong
Barangay
NOTE:
This form will be used only when there is a
substantial shortfall in revenues, e.g. the NTA
share of the barangay has been reduced due
to overall adjustments. The issuance of a
negative ARO will reduce the amounts of
some items of appropriation.
 Mabato
Municipality of San Jose
Oriental Mindoro
001-2024
January 20, 2024

Current Operating Expenditures

Maintenance and Other Operating Expenses (MOOE)
Fuel, Oil and Lubricant Expenses (10,000)
Agricultural Support Services
Maintenance and Other Operating Expenses (MOOE)
Supplies and Materials (5,000)
(15,000)
 What are the courses of action in case of revenue shortfall?

• Prioritize expenditures or spend only what is necessary;

• Intensify revenue collections;
• Seek financial assistance; and
• Resort to borrowings
Limitations on
Disbursements
1. Disbursement in accordance with appropriations in the approved annual
budget may be made from any local fund in the custody of the Barangay
Treasurer, but the total disbursements from any local fund shall in no case
exceed fifty percent (50%) of the uncollected estimated revenue accruing to
such fund in addition to the actual collections provided, however, that no
cash overdraft in any local fund shall be incurred at the end of the fiscal year
(Section 337, R.A. No. 7160)

Illustration:
Actual collections at any point P5,000
Uncollected from the total
Estimated revenue (P10,000 x 50%) P5,000
Limit on Disbursement P10,000
2. No money shall be paid
on account of any
contract under which no
services have been
rendered or goods
delivered (Section 338,
R.A. No. 7160)
3.
No cash advance shall be granted to any local budget
official or employee, elective or appointive, unless made
in accordance with the rules and regulations as the COA
may prescribe (Section 339, R.A. No. 7160)
4. No procurement
shall be
undertaken unless
it is in accordance
with the approved
APP (Section 7,
R.A. No. 9184)

v
5. No disbursements shall
be made unless the
procurement of goods
and services has
complied with the
requirements of R.A. No.
9184 (Government
Procurement Reform Act)
 What are the principles to be observed relative to Unexpended
Balances?
• Unexpended Balances and Appropriations for Personal Services
shall revert to the General Fund;
• Unexpended Balances and Appropriations for Capital Outlays shall
form part of continuing appropriations;
• 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;
and
• 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.
 Points to Remember
• The appropriation ordinance is an indispensable
requirement for disbursement of barangay funds.
• Disbursing barangay funds without a covering
appropriation ordinance is misappropriation or
malversation of funds punishable under Art. 217 of the
Revised Penal Code.
• The use of appropriated funds for a purpose different
from that stated in the appropriation ordinance is illegal
use of public funds (technical malversation) punishable
under Art. 219 of the Revised Penal Code.