COA CIRCULAR 2009-008 November 9, 2009 Reinstitution of the use of the Accountants Advice for Barangay Check Disbursements

COA CIRCULAR 96-07 dated MAY 15, 1996 Prescribing the use of the Accountant's Advice of Local Check Disbursements. (This was suspended in November 20010)

TO: The City/Municipal Mayors and Punong Barangays; City/Municipal Accountants; Members of Barangay Sanggunian; Barangay Treasurers; COA Directors/Asst. Directors; Supervising Auditors; Provincial/City/Municipal Auditors; Heads of Depository Banks; and All Others Concerned

1. RATIONALE: The new government accounting system (NGAS) for barangays prescribes the processing of all the barangay financial transactions at their level. It has been noted however, that barangay checks were issued without the covering disbursement vouchers(DVs) and supporting documents (SDs) thereby violating the fundamental principle on fiscal administration that all claims against government funds shall be supported with complete documentation. Also, as a consequence, preparation of the barangay financial statements is delayed due to the absence of supporting documents

To ensure that barangays comply with the above fundamental principle, and the city/municipal accountants can prepare the barangay financial statements on time, the issuance of the Accountant s Advice (AA) for barangay check disbursements is hereby restored/reinstituted.

In consonance with the rule making function of the Commission on Audit (Art IX-D Sec. 2 (2) of the 1987 Phil. Constitution) and as provided in Sec. 334 (c) of the Local Government Code, this circular is hereby prescribed.

Sec. 334 (c) LGC : The financial records of the Barangay shall be kept in the Office of the City/ Municipal Accountant in simplified manner as prescribed by the COA. Representatives of the COA shall audit such accounts annually or as often as may be necessary and make a report of the audit to the Sanggunian Panglunsod or Sanggunian Bayan x x x

2. General Guidelines : 2.1 The government (barangay) depository banks shall honor/ encash checks issued by the barangays only if the corresponding AA is issued. Checks encashed without the AA or with falsified AA shall be the responsibility of the authorized government depository bank (AGDB).

2.2 The barangay officials shall continue to initiate, process and approve their financial transactions. This means that: (a) the DV shall originate from the concerned barangay officials;

(b) the DVs and its SDs shall be processed and certified by the barangay designated personnel as to availability of funds and completeness and propriety of SDs and (c) the punong barangay (PB) shall be responsible on the legality, propriety and validity of the transaction.

2.3 The city/municipal (C/M) accountants shall issue the AA to certify that : (a) the DVs are duly certified by the BT and approved by the PB and, (b) the supporting documents (SDs) are complete.

3. Procedures: 3.1.The barangay treasurer (BT) shall submit to the C/M accountant the approved DV and signed check together with the SDs for the preparation of the AA.

3.2. The C/M accountant shall review the DVs and its SDs and shall issue the AA if the requirements under 2.3 (a) and (b) above are satisfied. If the requirement is not complete, the C/M accountant shall return the DV to the barangay stating the deficiencies/additional requirement.

3.3 The C/M accountant shall issue the AA or return the DV to the barangay within two working days from receipt of the DVs. 3.4 The AA shall be numbered sequentially by year and by barangay, e.g. the first AA for barangay A shall be AA-No. 2009A-001.

3.5 The AA shall be prepared in three (3) copies, to be distributed as follows: Original copy to the depository bank to be released directly by the C/M accountant

Duplicate copy to the BT together with the original copy of the approved DV Triplicate copy - to be retained by the C/M accountant and attached to the duplicate copy of the DV and SDs

3.6 Within ten days after the end of the month, the BT shall prepare a transmittal list and submit to the C/M accountant the original copy of the DVs signed by the payee.

3.7 The sample formats of the AA, Return Memorandum and Transmittal List are shown in Annexes A-1, A-2 and A-3.

4. Penalty Clause: Any unjustified failure of the officials and employees concerned to comply with the requirements herein imposed shall be subject to the administrative disciplinary action provided in Section 127 of Presidential Decree No. 1445.

PD 1445 Section 127. Administrative disciplinary action. Subject to rules and regulations as may be approved by the President (Prime Minister), any unjustified failure by the public officer concerned to comply with any requirement imposed in this Code shall constitute neglect of duty and shall be a ground for administrative disciplinary action against the said public officer who, upon being found guilty thereof after hearing, shall be meted out such penalty as is commensurate with the degree of his guilt in accordance with the Civil Service Law.

Sec. 127 (Contd) Repeated unjustified failure to comply with the requirements imposed in this Code shall be conclusive proof that the public officer concerned is notoriously undesirable.

5. Saving Clause All issuances inconsistent herewith are hereby repealed or amended accordingly. 6. Effectivity This Circular shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.

PUBLICATION: PHILIPPINE STAR NOVEMBER 16, 2009 TO TAKE EFFECT DECEMBER 1, 2009

BARANGAY TREASURER
DV (1-2) SD CHK

PUNONG BARANGAY
DV (1-2) SD SGD CHK

CITY/MUN. ACCOUNTANT

BANK

DV (1-2) SD

DV (1-2) SD

2.3?
TO PAYEE

AA
ORIG

AA AA

N
CHK DV (1) DUP

AA
DUP TRIP DV (2) F

AA
F

F DV (1) TL DV (1) SD