THE USE OF PUNONG BARANGAYS CERTIFICATION ( PBC ) AND COA AUDITORS ADVICE TO BARANGAY DISBURSEMENT PROCESS.

Mel Reden B. Gonzales ( Master in Business Administration )

INTRODUCTION A barangay is a basic political unit of a nation and greatly expanded its role in governance and as viable partner in nation-building. Its major roles is to implement unit of government policies, plans, programs and activities. Its powers and functions are vested in Local Government Code. The following are the enforcement of the laws, maintaining peace and order, ensure delivery of basic services and promote the general welfare. With this roles, the barangay is provided with taxing powers, as well as to imposed service charges for barangay-owned facilities and utilities. Above all, the barangays are provided with substantial share of the local governments internal revenue allotment. The barangays are headed by a Barangay Chairman as a leader with over-all functions. To make this, he/she has seven(7) councilors as his/her staff. Each councilors are responsible for Education, Sports, Peace and Order, Environment and Health Sanitations, Agriculture and Appropriations. He assigned one(1) Barangay Treasurer and one(1) Barangay Secretary responsible for issuing Community Tax Certificate and Barangay Clearance. The barangays also establishes Sangguniang Kabataan as a stepping stone for the youth to leadership. Likewise, it has an SK Chairman as a leader and seven(7) SK Kagawads.

All barangay transactions as well as barangay checks are issued without the covering of Disbursement Voucher and Supporting Documents, thus, it is the cause of the delay of financial statement of accounting office.

STATEMENT OF THE PROBLEM The study was conducted in order to answer the following questions about barangays as well as the ethical standards regarding this. 1. What is Barangay? 2. Why does Barangays important? 3. What are the Income Source of Barangay? 4. How to Budget Barangay funds? 5. What are Barangay Disbursements and Expenditures?

DISCUSSION AND ANALYSIS The present administration now emphasized a local autonomy that can attributed Local Government Code. It is a fundamental principle that fiscal responsibility shall be a greatest extent, be shared by all those exercising authority over financial affairs, transactions and operations of the government agency. The responsibility to initiate, process, approve financial transactions under oath to government depository banks to honor/encash checks issued shall be the responsibility of the barangay officials. The income of the barangay is composed of Traditional Income Source and NonTraditional Source. Traditional Income Source classified into income internally generated by the
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barangay in its own authority, income due to barangay from external source such as statutory shares and other levels of government. These are the tax on stores and retailers, Barangay Fees and Charges, Public Utility Charges, Toll Fees and Charges, Soliciting Contribution from Residents and Fund Raising for Barangay Projects. Under the external generated are the Share in Internal Revenue Allotment, Share in Real Property Tax, Share in Sand and Gravel Tax, Share in Utilization of National Wealth and Grants- in- Aids and Subsidies. Non-Traditional Source includes loans, credits and other form of indebtedness. A Barangay Budget is the legal authority for the expenditure of public funds, also serves as basis for planning and policy adoption, program and project implementation, financial control and management information, concerning the utilization of barangay funds. It is important because without the barangay budget, no barangay funds may be spent or disbursed. A Barangay Budget is consist of (1)Annual Budget which is a financial plan from the estimates of income certified as a collectible by the city/municipal treasurer, and appropriation covering the proposed expenditures for the fiscal year and (2)Supplemental Budget which is the supplementary financial plan embodying changes during the year in the estimates of income or appropriation reflected in the approved Annual Budget. Disbursement refers to actual payment in cash or check . Expenditures is the incurring of a liability. The payment of cash or the transfer of property to the purpose of acquiring assets, service or setting a loss. Barangay Disbursement or expenditures in payment of barangay obligations, was made of checks drawn on a depository account of the barangay. The barangay can make payments in cash only from the following sources; (1)Petty cash fund for the purpose of certain expenditure and (2)Cash advances for the purpose of paying salaries and wages. Payments out of barangay
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funds shall be made only by a certified and approved vouchers and payrolls that constitute the evidence of disbursement made. The following procedures for approving disbursement voucher and payrolls are in form of Certification which are Chairman on Committee on Appropriation for the existence of appropriations, Barangay Treasurer for the availability of funds, approve the vouchers or payrolls as to validity, propriety, and legality of claimed involved, Punong barangay for the approval of supporting documents. The Punong Barangay and Barangay Treasurers are the one who is authorize to sign the checks of Barangay. All barangay payments can only be made on duly certified and approved vouchers whereas financial transaction of barangay governments accounted for. This is to provide evidence of the transaction which gave rise to the payment, to fix the accountability of the official who authorized to the payment, and to act as the accounting modium for taking up the transaction in the book of accounts.

CONCLUSION Due to National Government Accounting System (NGAS), all barangays financial transactions as well as the barangay checks were issued without the covering of Disbursement Vouchers and Supporting Documents due to lack of signatories. It is also the cause of the delay of financial statement to be submitted to Commission on Audit by the City/Municipal Accounting. Delay of financial statements also delay the encashment of checks that affects the barangay transactions and the projects regarding infrastructures. RECOMMENDATION
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Based on Fundamental Principles of fiscal administration, all claims against government funds shall be supported with complete documents. To comply with this, the Commission on Audit issued a Memorandum Circular prescribing the use of Punong Barangays Certification (PBC) and COA Auditor Advice (CAA). Barangay has the power to initiate, process, approve financial transactions and issue a Punong Barangays Certification (PBC) under oath to government barangay depository bank to honor/encash checks. The Punong Barangay has now the responsibility for the legality, propriety and validity of the transactions. With the submission of PBC to the Authorized Government Depository Bank, the Punong Barangay shall be primarily accountable for all the losses arising from its issuance and the Authorized Government Depository Bank shall honor/encash checks issued by the barangay only if the corresponding PBC is issued. Dishonesty on their their works may cause them for a different cases.

SOURCE: HOW TO MANAGE BARANGAY FINANCES Sufronio B. Ursal, Ll.B., M.P.A., C.F.E. 2001 COA MEMORANDUM CIRCULAR NO. 2012-005 Ma. Gracia M. Pulido-Tan, Chairperson Juanito G. Espino, Jr., Commissioner Heidi L. Mendoza, Commissioner 2012