DBM-DILG-NYC Joint

Memorandum Circular No. 1, s.

2019 dated 23 January 2019

Guidelines on the
Appropriation, Release,
Planning and Budgeting
Process for the SK Funds
LEGAL BASIS

 Section 20(a) of SK Reform Act of 2015 (RA No. 10742)

* 10% of general fund of barangay be set aside for the SK

* Sangguniang Barangay to appropriate the SK funds in

lump sum in the Appropriation Ordinance.

* SK shall have financial independence in its operations,

disbursements, and encashment of their fund, income and
expenditures.
GENERAL GUIDELINES

 Appropriation of SK Fund by the Barangay

* Punong Bgy to include the 10% of the general fund accruing to
the SK in the Barangay Executive Budget.
** submitted to Sangguniang Barangay for budget
authorization;
** Sangguniang Barangay to appropriate said SK Fund in
lump sum in the Appropriation Ordinance.
GENERAL GUIDELINES

 Appropriation of SK Fund by the Barangay

* Bgy. Treasurer to inform, in writing, the

SK Chairperson and SK Treasurer, on or
before 15 September of the estimated 10% SK
fund for the ensuing year, supported by
Certification of income of barangay from
city/municipal treasurer.
GENERAL GUIDELINES

 Release of SK Fund by the Barangay

* As soon as the Barangay Budget is enacted and approved thru
an Appropriation Ordinance:

the SK Funds shall be automatically

**
released by the barangay to the SK; and
** shall not be subject to any lien or
holdback that may be imposed by the
barangay.
GENERAL GUIDELINES

 Release of SK Fund by the Barangay

* SK to open current account in name of SK, in a bank preferably
govt-owned, situated in or nearest to its jurisdiction.
** For efficiency and economy, same bank and branch of its
barangay;
** SK Chairperson and SK Treasurer as official signatories.
*** have to bonded pursuant to BTr guidelines.
** Strictly follow DOF Department Circular No. 1-2017 dated 11
May 2017.
GENERAL GUIDELINES
 Release of SK Fund by the Barangay
* Barangay shall deposit the SK Funds in the current account of
the SK, not later than 5 working days after crediting of monthly
IRA share of the barangay, consistent with COA rules and
regulations.
** all other income accruing to general fund of bgy- be
deposited not later than 5 working days after end of month.
*Barangay may opt to transfer/release the SK
Funds earlier than prescribed time, on an
annual, semestral or quarterly basis, subject to
written agreement b/w Bgy. and SK.
* Failure to release any amount of the SK Fund- erring officials be
subject to penalties under existing laws.
GENERAL GUIDELINES

 Release of SK Fund by the Barangay

*Barangays without elected SK officials,

Bgy. to transfer the 10% SK Fund to the
trust fund of the bgy.
** to be released only upon election of the SK officials
concerned.
GENERAL GUIDELINES

 Planning and Budgeting Process of SK Fund

* Planning Process
** In consultation with Katipunan ng Kabataan , to formulate 3-
year rolling plan- Comprehensive Bgy Youth Devt Plan
( CBYDP).
*** aligned with Philippine Youth Devt Plan and Local Youth
Devt Plans in provincial, city or municipal level.
GENERAL GUIDELINES
 Planning and Budgeting Process of SK Fund
* Planning Process
** CBYDP- basis in preparing the Annual Barangay Youth
Investment Program (ABYIP) which shall include:
*** specific p/p/as with project costs;
*** fund flows with reasonable timing of release of funds;
*** to reflect total resource requirement for the budget year.

ABYIP- prepared and approved by SK thru a

**
Resolution before start of preparation of SK
annual budget.
** Observe policies/guidelines issued by NYC.
GENERAL GUIDELINES
 Planning and Budgeting Process of SK Fund
* Budget Preparation by the SK

**Annual Budget- financial plan; estimates of

income and expenditures for one fiscal year, in
accordance with ABYIP.
*** SK Chairperson and SK Treasurer-
prepare annual budget
a. Estimates of Income; and
b. Expenditure Program
GENERAL GUIDELINES

 Planning and Budgeting Process of SK Fund

* Budget Preparation by the SK
** Priority to youth devt and empowerment programs:
1. equitable access to quality education;
2. environmental protection;
3. climate change adaptation;
4. disaster risk reduction and resiliency;
5. youth employment and livelihood;
6. health and anti-drug abuse;
7. gender sensitivity;
8. sports devt; and
9. capability bldg., emphasizing leadership training
GENERAL GUIDELINES
 Planning and Budgeting Process of SK Fund
* Budget Preparation by the SK

** All regular operating expenses for activities of SK;

** Expenses for celebration of Linggo ng Kabataan (
SK counterpart);
** Annual dues for Pederasyon ng mga
Sangguniang Kabataan ( per SK Internal Rules of
Procedures);
** Subject to budgeting, accounting and auditing rules and regulations.
** SK fund shall NOT be used to pay for personal services expenditures.
** Study tours/”lakbay-aral”- be subject to DILG-DBM JMC 02 dtd. 23 Sept.
2016.
NOTE: Budget cycle of SK be synchronized with that of the barangay.
GENERAL GUIDELINES

 Budget Authorization by the SK

** SK to deliberate on the proposed SK annual/supplemental
budget;

pass a RESOLUTION approving SK

***
annual/supplemental budget.
*** Resolution to be signed by SK Chairperson upon approval
by majority of all its members.
GENERAL GUIDELINES

 Budget Authorization by the SK

**All budgetary items to be included/ considered. If funds allow,
changes in annual budget may be done thru supplemental
budget, under following circumstances:
1. when supported by funds actually available as certified by
SK Treasurer; and
2. if covered by new revenue sources/s.

All p/p/as to be funded under

Note:
supplemental budget-be consistent with ABYIP
of SK.
GENERAL GUIDELINES

 Budget Authorization by the SK

**Posting of Resolution approving SK annual/supplemental budget
by the SK Secretary, not later than 5 days after approval:
*** In Barangay Bulletin Board; and
*** In at least 3 conspicuous places within jurisdiction of bgy.
Note: If possible use of traditional and non-traditional media.
SK
** secretary to submit SK
annual/supplemental budget to sangguniang
panlungsod or sanggunian bayan, thru City/Mun.
Budget Officer, within 10 days after approval.
GENERAL GUIDELINES

 Budget Review by Sang. Panlungsod/Sang. Bayan

** SP/SB to review SK annual/supplemental budget, within 60
days upon receipt.
*** on SK budget compliance with priority programs, projects
and activities per RA 10742, and other existing laws, rules and
regulations.
GENERAL GUIDELINES

 Budget Review by Sang. Panlungsod/Sang. Bayan

** Based on the findings, following are review actions:
1. Declared operative in its entirety- if fully complies with the
priorities per RA 10742 and other existing laws and R&R.
2. Declared operative in its entirety, subject to conditions- when
certain items of appropriations require prior
clearance/documentation and/or approval from appropriate
authorities.
GENERAL GUIDELINES

 Budget Review by Sang. Panlungsod/Sang. Bayan

** Based on the findings, following are review actions:
3. Declared inoperative in its entirety when:
a. expenditure program exceeds the estimates of income;
b. all p/p/as are not based on ABYIP or inconsistent with
priority p/p/as per RA 10742; and
c. the RESOLUTION approving the SK annual/supplemental
budget is passed BEFORE the approval of the ABYIP.
GENERAL GUIDELINES

 Budget Review by Sang. Panlungsod/Sang. Bayan

** Based on the findings, following are review actions:
4. Declared inoperative in part when:
a. there is/are item/s of appropriation contrary to budgetary
limitations ( e.g inclusion of PS expenditures);
b. there is/are item/s of appropriations that has/have NO LEGAL
BASIS;
c. there are p/p/as not based on approved ABYIP;
d. there are other p/p/as included before providing for all the priority
p/p/as per RA 10742 (Sec. 20(c); and
e. amount provided for a specific p/p/a is higher than amount
provided in ABYIP for same p/p/a.
GENERAL GUIDELINES

 Budget Review by Sang. Panlungsod/Sang. Bayan

**Failure to complete budget review within prescribed period-
renders the SK annual/supplemental budget deemed APPROVED.
**SP/SB to return the SK annual/supplemental budget with advice
of action, if any, for proper adjustment.
*** to the SK Chairperson thru the City/Mun. Budget Officer.
** Upon receipt, SK Treasurer not to make further disbursements
from any item declared inoperative, disallowed, or reduced.
GENERAL GUIDELINES

 Budget Execution by the SK

**SK Treasurer to certify availabilty of SK funds.

**All payments out of SK Fund to be made thru
Disbursement Vouchers.
**Disbursements thru checks drawn against SK
current account with SK Chairperson and SK
Treasurer as official signatories, who shall be
properly bonded, subject to BTr guidelines.
GENERAL GUIDELINES

 Budget Execution by the SK

** Unexpended balances of SK budget- be reverted to general fund of SK at end
of fiscal year.
*** not thereafter available for expenditure except by subsequent APPROVAL of
the SK.
*** reversions of such balances not allowed unless obligations therefor been
FULLY PAID or otherwise settled.
*** unexpended balance of Capital Outlay- continue to be valid until fully
spent, reverted or project is completed.
**** balances for capital outlay be reviewed as part of annual budget
preparation.
**** SK may approve the reversion of balances of capital outlay, upon
recommendation of SK Chairperson, if no longer needed in the activities funded
by said balances.
GENERAL GUIDELINES

 Budget Accountability by the SK

** SK Chairperson with the assistance of SK Treasurer and SK
Treasurer, to prepare budget accountability reports as prescribed
by COA.
Responsibility and Accountability

 The responsibility and accountability in the

utilization and disbursement of SK funds
shall rest upon the SK officials concerned.
It is also the responsibility of the said SK
officials to ensure that SK funds are utilized
strictly in accordance with applicable
budgeting, accounting, and auditing rules
and regulations, and the provisions of the
Government Procurement Reform Act (RA
9184) and other pertinent laws.
Transitory Provision

 Allundisbursed SK funds as of 31
December 2018 under custody of
Bgy, to be transferred to current
account of SK. Utilization thereof
be subject to planning and
budgeting by SK, in accordance with
subject JMC.
END