Budget Operations Manual For Barangays

Budget Operations Manual for
Barangays
BUDGET REVIEW
BUDGET REVIEW
 3rd phase in budget process
 Undertaken by Sangguniang Panlungsod or

Sangguniang Bayan to ensure compliance of
the Barangay Appropriation Ordinance with
all budgetary requirements and limitations
provided in the LGC (Sec 333, LGC; Art 424,
IRR)
 Starts from time reviewing Sanggunian

receives the AO
LEGAL BASES
“Within 10 days from its approval, copies of the
barangay ordinance authorizing the annual
appropriations shall be furnished the
sangguniang panlungsod or sangguniang bayan,
as the case may be, through the city or
municipal budget officer.
The sanggunian concerned shall have the power to

review such ordinance in order to ensure that
the provisions of this Title (Title Five – Local
Fiscal Administration) are complied with.” (Sec
333, LGC)
LEGAL BASES
“Within 10 days after its enactment, the

sangguniang barangay shall furnish
copies of all barangay ordinances to the
sangguniang panlungsod or
sangguniang bayan concerned for
review as to whether the ordinance is
consistent with law and city or municipal
ordinances.” (Sec 57, LGC; Art 111, IRR)
LEGAL BASES
“The sanggunian concerned shall review

the barangay ordinance to ensure
compliance thereof with all the budgetary
requirements and limitations provided in
this Rule (Rule XXXIV – Local
Government Budgeting).”
(Art 424 [b], IRR)
SANGGUNIANG
BAYAN
SANGGUNIANG
PANLUNGSOD
Thru
BUDGET REVIEW
SEC. 333 OF REPUBLIC ACT NO. 7160
What is REVIEWED?
AO
within
ANNUAL 10 DAYS
BUDGET after
SUPPLEMENT enactment
AL BUDGET
HOW IS THE BUDGET REVIEW DONE?
 Step 1 – Review the AO within 60 days

from receipt
Inaction by reviewing Sanggunian within 60

days from receipt –
SAID ORDINANCE SHALL CONTINUE TO BE IN
FULL FORCE AND EFFECT
(Sec 333, LGC; Art 424, IRR)
EFFECTS OF FAILURE TO
REVIEW BUDGET
If the Sanggunian fails to

review the Barangay Budget
within the sixty (60)-day
period, the budget is deemed
in full force and effect.
Sec. 333 of Republic Act No. 7160
BUDGET REVIEW
 Step 2 – Declare the review findings within
the same 60-day reglementary period
2.A Declare the AO operative –
If the GAO complied with all the budgetary

requirements and limitations prescribed
(under Sections 324 and 325, as well as
other applicable requirements, LGC)
BUDGETARY REQUIREMENTS – SEC 324
1. Aggregate amount appropriated shall not

exceed the estimates of income
2. Full provision shall be made for all statutory

and contractual obligations (e.g. Sec 287 –
no less than 20% of annual IRA for
development projects; Sec 329 – 10% SK
Fund); appropriation for debt servicing not
exceeding 20% of regular income
BUDGETARY REQUIREMENTS – SEC 324
3. 5% Local Disaster Risk Reduction and

Management Fund
- 30% Quick Response Fund,

and
- 70% for Disaster Prevention

& Mitigation, Preparedness,
Response, Rehabilitation and
Recovery
GENERAL LIMITATIONS – SEC 325
a. PS Cap – 55% for Barangays

(Sec 331 [b])
b. Abolition of positions and creation

of new ones from abolished
positions must be in accordance with
provisions of LGC and civil service
laws, rules and regulations
c. Salary rate within that fixed by

applicable laws, rules and regulations
d. No local fund to be used to

increase/adjust salaries of NG
employees/officials, except as may be
expressly authorized by law
e. Plantilla positions for career positions
occupied by incumbents holding
permanent appointments shall be covered
by adequate appropriations
f. No changes in designation and

nomenclature of positions resulting in
promotion/demotion or
increase/decrease in compensation shall
be allowed except if position is
actually vacant
g. Creation of positions, salary

increases/adjustments shall in no case
be made retroactive
2.B Declare the AO operative in its
entirety, subject to conditions
If certain items require prior clearance or

documentation;
If certain items require prior approval by
appropriate authorities;
If certain items are found to be deficient
from what is prescribed by law and need
to be increased
2.C Declare the AO inoperative in its entirety

o Sec 333, LGC – “ x x x that the ordinance
contains appropriations in excess of the
estimates of the income duly certified as
collectible, or that the same has not complied
with the budgetary requirements…”
1. When appropriation in exceeds estimates
of income (Section 324 (a), Ra 7160
2. Non-provision or insufficient provision for
any of the budgetary requirements under
Section 324 of RA 7160
3. No sufficient appropriation is provided for
payment of loans
4. Non-provision or insufficient provision of the
20% of the IRA for development projects
(Sec. 287, RA 7160)
5. When all the PPAs included in the AO are
different from those listed in the AIP
6. When the AIP is approved/adopted by the
Sanggunian after the enactment of the AO for
Annual Budget (Sec. 303, RA 7160)
2.D Declare the AO inoperative in part

o Sec 333, LGC – “ x x x Items of
appropriations contrary to, or in excess of,
any of the general limitations or the
maximum amount prescribed by RA 7160
shall be disallowed or reduced accordingly.”
2.D Declare the AO inoperative in part
1. When some items have no legal basis
2. When some PPAs not included in the Approved AIP
are funded under the annual/supplemental budget
3. When the amount appropriated in the AO is higher
than the amount provided in the AIP for the same PPA
 Step 3 – Check consistency of GAO with AIP
and ELA
 Sec 305 (i) – “Local budgets shall
operationalize approved local development
plans.”
DILG-NEDA-DBM-DOF JMC No. 1, s. 2007

dated 08 March 2007 – AIP as input to
annual budget preparation
 Step 4 – Return the reviewed AO
 Within the same 60-day reglementary period

 To the Punong Barangay (PB), through the
CBO/MBO
 With advice of review action in the form of
resolution or letter of review (Art 424 [d], IRR)
 Advice of review action and effect/s:
o AO Operative – continue to execute the
AO/budget
 Advice of review action and effect/s
o Inoperative in its entirety - for proper
adjustments or corrections
 Barangay to operate on reenacted budget until

such time that NEW ordinance authorizing
annual appropriations shall have met the
objections and disallowances raised by the
reviewing sanggunian –
(until new AO is declared operative [per
BOMB])
(Sec 333, LGC; Art 424 [d])
o Inoperative in part - for proper
adjustments or corrections
Upon receipt of advice, Barangay
Treasurer or the City or Municipal
Treasurer who has custody of the funds
shall not make further disbursement
from any item or appropriation declared
inoperative, disallowed or reduced
(Sec 333, LGC; Art 424 [d])
DURATION OF REVIEW
DAY 1 DAY 60
starts upon official last day budget can
receipt of budget be reviewed
Indicative timeline Nov 11 – Dec 15 of Current Year

CONFLICT IN BUDGET REVIEW
Where to
APPEAL FOR RECONSIDERATION
City/Municipal Legal Officer
- assigned to review and submit

recommendation on approved
ordinances and executive
orders issued
CONFLICT IN BUDGET REVIEW
Where to
APPEAL FOR RECONSIDERATION
DBM Regional Office XI
- for technical assistance

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Budget Operations Manual for

 Undertaken by Sangguniang Panlungsod or

 Starts from time reviewing Sanggunian

The sanggunian concerned shall have the power to

“Within 10 days after its enactment, the

“The sanggunian concerned shall review

 Step 1 – Review the AO within 60 days

Inaction by reviewing Sanggunian within 60

If the Sanggunian fails to

Sec. 333 of Republic Act No. 7160

2.A Declare the AO operative –

If the GAO complied with all the budgetary

1. Aggregate amount appropriated shall not

2. Full provision shall be made for all statutory

3. 5% Local Disaster Risk Reduction and

- 30% Quick Response Fund,

- 70% for Disaster Prevention

a. PS Cap – 55% for Barangays

b. Abolition of positions and creation

c. Salary rate within that fixed by

d. No local fund to be used to

f. No changes in designation and

g. Creation of positions, salary

If certain items require prior clearance or

2.C Declare the AO inoperative in its entirety

2.D Declare the AO inoperative in part

DILG-NEDA-DBM-DOF JMC No. 1, s. 2007

 Within the same 60-day reglementary period

 Barangay to operate on reenacted budget until

Indicative timeline Nov 11 – Dec 15 of Current Year

City/Municipal Legal Officer

- assigned to review and submit

DBM Regional Office XI

- for technical assistance

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