THE BUDGET CYCLE

WHEN IS THE START OF BUDGET

AUTHORIZATION PHASE

Under Section 318 of the

Code,
the
local
chief
executive shall submit the
executive
budget
to
the
sanggunian concerned not
later than the 16th of October
of the current fiscal year.

LIABILITY FOR FAILURE TO

SUBMIT AN EXECUTIVE BUDGET

Failure to submit such budget on
the date prescribed herein shall
subject the local chief executive to
such criminal and administrative
penalties as provided for under the
Code and other applicable laws.
(Sec. 318, RA 7160)

BUDGET AUTHORIZATION
(October 17 October 31)
What does the Local Code say?
Section 391 (a)(3)of the Code provides: the
Sangguniang
Barangay
shall
enact
annual and supplemental budgets in
accordance with the provisions of this
Code.
This stage of the budget process is the adoption
and enactment of a Barangay Budget into a
General Appropriations Ordinance (GAO).

STEPS IN BARANGAY
BUDGET AUTHORIZATION
1. Presentation/ Submission of
the
Executive Barangay
Budget to
the Sangguniang Barangay
2. Deliberation on the Budget.
3. Enact the General Appropriation
Ordinance.
4. Approval by the Punong Barangay.

Step 1:

Present the Executive

Barangay Budget to the
Sangguniang Barangay

* Deliver the State of the Barangay Address (SOBA)

* Follow Contents of Budget Message
* Calendar and Certify as urgent the proposed
Executive
budget

Contents of Budget Message

Policy thrusts for the Budget Year

Estimated Income for the Budget Year

Expenditure Program

Expected Results to be Accomplished

Effect of a Bill Certified as Urgent

Whether or not included in calendar
of business, the bill may be
presented and considered by the
body at the same meeting without
suspending the rules (Art. 107 (e))
It may be submitted for final voting
immediately
after
debate
or
amendments during 2nd reading
(Art. 107 (f), IRR)

STEP 2. Deliberate on the

Executive Budget

This is initiated by the Committee on

Appropriations
(Discuss the allocation of income.)

BUDGETARY
REQUIREMENTS
20%
of
IRA
for
Development Projects
5% of Regular Income
derived
from
regular/recurring
sources for Calamity
Fund
10% of the
General
Fund shall be set aside
for the Sangguniang
Kabataan.

2% of Real Property
Tax collection of the
next preceding year
for
Discretionary
Expenses
of
the
Punong Barangay
55%
of
Regular
Income
of
next
preceding year shall
be the PS limitation

Discuss the allocation of income to

other Priority Projects, Activities and
Purposes

Other Priority Projects/Services

Priority Projects over and above the
20% of the IRA
Basic Services Delivery
Expected Results/Output
Performance Indicators for each Major
Final Output

Discuss Sources of Income

IRA and National Wealth shares
Locally-generated Income
Income from Tax Revenue
Income from Operating and
Miscellaneous Revenue
Income from Other Sources

PERIOD OF BUDGET DELIBERATIONS

Regular Period
From submission of Executive Budget
up
to
enactment
of
General
Appropriation Ordinance but not to go
beyond December 31st. (Sec. 319)
Extension Period
From January 1st up to the passage of
the Appropriation Ordinance but not to
go beyond March 31st (Sec. 323)

GUIDELINES IN BUDGET AUTHORIZATION

Priority of Basic services

Appropriation of Shares from
national wealth
Appropriations for administrative
expenses
Inclusion of new items in the
Executive Budget
Transfer of Appropriation
Augmentation
of
items
of
appropriation
Appropriation for entertainment or
reception

PRIORITY IN THE USE OF FUNDS

Any fund or resource available
for the use of local government
units shall be first allocated for
the provision of basic services
and facilities enumerated in
subsection (b) hereof, before
applying the same for other
purposes,
unless
otherwise
provided in the Code (Sec. 17
(g), RA 7160).

SHARES FROM NATIONAL WEALTH

The proceeds from the shares of local
government units from the utilization
and development of national wealth
shall be appropriated to finance local
development and livelihood projects.
When the proceeds is derived from the
development
and
utilization
of
hydrothermal, geothermal, and other
sources of energy, 80% of it shall be
applied solely to lower the cost of
electricity in the LGU where such a
source of energy is located. (Sec. 294)

Changes in the Executive Budget

The Local Sanggunian may

not increase the executive
budget nor include new
items except to provide for
statutory and contractual
obligations
(Art
145,
IRR)

Prohibition against religious or

private purposes

No
public
money
or
property
shall
be
appropriated or applied for
religious
or
private
purposes. (Sec. 335)

Transfer of Funds
Funds
shall
be
available
exclusively
for
the
specific
purpose for which they have
been appropriated.
No ordinance shall be passed
authorizing
any
transfer
of
appropriations from one item to
another. (Sec. 336)

Augmentation of items of
appropriation
The Local Chief Executive or the
presiding officer of the sanggunian
concerned may, by ordinance, be
authorized to augment any item in
the approved annual budget for their
respective offices from savings in
other
items
within
the
same
expenses class of their respective
appropriations.

Prohibition Against Expenses for

Reception and Entertainment
No money shall be appropriated, used,
or paid for entertainment or reception
except
to
the
extent
of
the
representation allowances authorized by
law or for the reception of visiting
dignitaries of foreign governments or
foreign mission, or when expressly
authorized by the President in specific
cases. (Sec. 343)

Step 3. Enactment of the General

Appropriations Ordinance (GAO)

On or before the end of the

current
fiscal
year,
the
Sanggunian
concerned
shall
enact, through an ordinance the
annual budget of the LGU for the
ensuing fiscal year on the basis
of the estimates of income and
expenditures submitted by the
LCE (Sec. 319).

Step 4. Approval of the General

Appropriation Ordinance
by the Punong Barangay

Ordinance enacted by the

sanggunian
barangay
shall,
upon approval by the majority
of all its members, be signed by
the Punong Barangay (Sec. 54
(c)).

Effectivity of the Budget

The ordinance enacting

the annual budget shall
take
effect
at
the
beginning of the ensuing
fiscal year (Sec. 320)

Effectivity of the Supplemental Budget

x x x An ordinance
enacting a supplemental
budget, however, shall
take effect upon its
approval or on the date
fixed therein Sec. 320).

Effect of Failure to Enact the Budget

(1)

In case the Sanggunian fails

to
pass
the
ordinance
authorizing
the
annual
appropriations by January 1st,
the appropriation ordinance
of the preceding year shall be
deemed reenacted (Art. 415,
IRR).

Effect of Failure to Enact the Budget

(2)
If the Sanggunian fails to enact
the appropriation ordinance at
the beginning of the ensuing
fiscal year, it shall continue to
hold sessions for 90 days from
the beginning of the fiscal year,
until such ordinance is approved,
and no other business shall be
taken up. (Sec. 323)

Effect of Failure to Enact the Budget

(3)
Items
of
appropriations
deemed
reenacted (Sec. 323)
Honoraria of barangay officials
Salaries and wages of existing positions
Statutory and Contractual Obligations
Essential
operating
expenses
authorized
in
the
annual
and
supplemental budgets of the previous
year.

Effect of Failure to Enact the Budget

(4)

No ordinance authorizing
supplemental appropriations
shall be passed in place of the
annual
appropriations
Sec.323).

Recording of General Appropriations

Ordinance (GAO)
Each sanggunian shall keep a
journal
and
record
of
its
proceedings(Sec. 53 (e))
The barangay secretary shall
keep custody of all records of
the Sangguniang Barangay
(Sec. 394 (d)(1))

BARANGAY BUDGET AUTHORIZATION

FORM NO. 1

Barangay

________

City/Municipality ________
Province of
_________

_______Regular Session
Began and held in _____, ______ on
__th day of _____, ___.
Barangay Appropriation Bill No. ____

Barangay Budget Authorization Form No. 01

AN ORDINANCE APPROPRIATING FUNDS FOR BARANGAY
__________.
Be it enacted by the Sangguniang Barangay of _______ in
Council assembled:
Section 1. Source of Funds. The following income as
indicated hereof are hereby declared as sources of
funds particularly the Tax Revenue and Operating and
Miscellaneous Income, which are realistic and probable
to be collected and remitted to the Local Treasury,
necessary to finance the delivery of basic services and
implementation of priority development of Barangay
_________ from January one to December thirty-one,
Two thousand and ____, except otherwise specifically
provided herein:

Estimated Income for Budget Year

Share on Internal Revenue Collections

Share on Real Property Tax

Business Taxes (Stores and Retailers)
Share on Sand and Gravel Tax
Share on National Wealth
Share on EVAT
Miscellaneous Taxes on Goods and Services
Other Taxes
Other Specific Income
Subsidy fro Other LGUs
Total Available Resources

Barangay Expenditure Program

Section 2. Appropriation of Funds. The
following sums or so much thereof as
maybe necessary are hereby appropriated
out of Tax Revenue and Operating and
Miscellaneous
Income
and
any
unexpended balances thereof, in the Local
Treasury of the barangay not otherwise
appropriated for basic services delivery
and
implementation
of
priority
development projects.

Barangay Expenditure Program

P/P/A Description

Agricultural Services
Day Care Services
Health & Nutrition Services
Peace & Order Services
Administrative & Legislative Services
Development Projects (20% of IRA)

SK Projects (10% of GF)

Calamity Projects (5% of RF)

Personal
Services

Maintenance
and other
Operating
Expenses

Capital
Outlay

Total

Section 3. The appropriated amount is aimed to produce the

expected major final output (MFO) for the barangay and
are to be measured by performance or output indicators
per MFO. This serves as the rationale for the money spent
for the various services and development projects provided
by the Barangay, pursuant to section 17 of the Local
Government Code.
Budget Year
P/P/A Description
MAJOR FINAL OUTPUT

Performance
Indicator

Estimated
Output

Section 4. General Provisions. The following policies are

authorized for the fiscal year:
a. Income from operating and miscellaneous fees shall be
collected at maximum collection efficiency.
b. Priority in the use of income shall be for budgetary
requirements as mandated by the local code.
* 20% of IRA for development projects
* 5% for Unforeseen Events
* 10% for Sangguniang Kabataan (SK)
c. Strict compliance to the 55% Personal Services limitation
shall be observed.
d. Priority in the use of savings shall be for basic services,
augmentation of development projects and other
mandatory expenses provided under the Local Code.
e. All procurement shall follow strictly the provisions of R.A.
9184.

Section 5. Effectivity. This Ordinance shall take effect immediately

upon its approval.
Date Promulgated: ________
Carried Unanimously,
Name and Signature of Barangay Sanggunian Members.
__________________
__________________
I HEREBY CERIFY to the correctness of the above-quoted Local
Appropriation Ordinance.
____________________
Secretary to the Sangguniang Barangay

Attested:
Chairman, Committee on Appropriation

APPROVED
LCE, Punong Barangay

thank you