PART II – OBSERVATIONS AND RECOMMENDATIONS

Unsubstantiated PPE accounts balances

1. The correctness of the Property, Plant and Equipment amounting to
P995,920.00 for CY 2020 was not ascertained by management due to the continuous
failure of the barangay officials to conduct inventory of Property, Plant and
Equipment, absence of the Report on the Physical Count of PPE and the failure
maintain property ledger cards contrary to the Revised Barangay Financial Manual.

1.1. Section 7.2.5 of the Manual provides, among others, the following policies and
procedures:

7.2.5 Inventory Taking and Reconciliation

a. The Inventory Committee headed by the PB or his authorized

representative and the BT as his member shall conduct a physical count of
all property and equipment of the barangay at least once a year.

b. The Inventory Committee, upon the completion of the physical

count, shall prepare three copies of Report on Inventory of Property and
Equipment (RIPE), as shown in Annex 30 and shall be approved by the
PB. The RIPE shall be distributed as follows:

Original - to COA Auditor through C/M Accountant

Duplicate copy - to the C/M Accountant
Triplicate copy - to the BT

c. The RIPE shall be the basis of the C/M Accountant for reconciling
the results of inventory with the PPE accounts.

d. The RIPE shall be the basis of the BT for reconciling the

equipment covered by PAR and the PECs on file and the ICS for the small
tangible items.

1.2. Section 50 of COA Circular No. 2002-003 requires that property, plant and
equipment acquired through purchase or construction shall be recorded in the books of
accounts immediately as an asset. Section 114 of the NGAS Manual provides the
categories of assets to which the acquisitions should fall, while COA Circular No.2004-
008 further provides the proper classification of assets acquired.

1.3. Review of the financial statements of the barangay showed that PPE totaling
P995,920.00 for CY 2020 were recorded in the books. However, no physical inventory
was conducted by the management, thus, no Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) was submitted to this office putting into doubt the
existence and correctness of reported balance of depreciable assets.

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1.4. The non-submission of the Report on the Physical Count of PPE, non-
maintenance of Property/Equipment Ledger Card and other deficiencies noted rendered
the presentation of the account property, plant and equipment in the financial statements
doubtful.

1.5. We recommended that the inventory committee (a) conduct physical

inventory of PPE; (b) ascertain the correctness of the accounts for reconciliation
with the Accounting Office; and (c) provide depreciation for the assets.

Non-submission of Purchase Order, Contract and Notice of Deliveries

2. The Barangay failed to submit copies of purchase orders/contracts, delivery

receipts/charge invoices and acceptance and inspection reports within the prescribed
period as required under COA Circular No. 2009-001 and COA Circular No. 95-006
which resulted in the inability of the Auditor to perform timely review and evaluation
of the transactions.

2.1. Audit disclosed that copies of inspection report and purchase orders/notice of
deliveries were not submitted to the auditor pursuant to COA Circular No. 2009-001
dated February 12, 2009 and COA Circular No. 95-006. Pertinent portions of said
Circulars are hereunder quoted.

COA Circular No. 2009-001:

“3.1 Contracts

3.1.1. Within five (5) days from the execution of a contract by the
government or any of its subdivisions, agencies or instrumentalities,
including government-owned and controlled corporations and their
subsidiaries, a copy of said contract and each of all the documents
forming part thereof by reference or incorporation shall be furnished to
the Auditor of the agency concerned. In case of agencies audited on an
engagement basis, submission of a copy of the contract and its supporting
documents shall be to the Auditor of the mother agency or parent
company, as the case may be.

3.2 Purchase Orders

3.2.1 A copy of any purchase order irrespective of amount, and each and
every supporting document, shall, within five (5) working days from
issuance thereof, is submitted to the Auditor concerned. Within the same
period, the Auditor shall review and point out to management defects
and/or deficiencies, if any, xxx.”

COA Circular No. 95-006:

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 “The officials responsible for or in charge of accepting deliveries of
procured items shall, within twenty-four (24) hours from such acceptance,
notify the auditor of the time and date of the scheduled deliveries.”

2.2. The above-cited deficiencies could be attributed to agency officials’ lack of

familiarity with existing laws and regulations.

2.3. Non-compliance with the aforecited requirements precluded the Auditor from
conducting auditorial review and evaluation process, thus hampering the timely conduct
of inspection and monitoring of the projects/deliveries with a view of generating timely
and relevant audit results.

2.4. We recommended that the Punong Barangay direct the Barangay Treasurer
to furnish COA with copies of all purchase orders/contracts and all papers relative
thereto within five days after the perfection of the contract for evaluation and
review. Also, copies of delivery receipts and inspection reports should be submitted
to the Auditor on a timely basis to verify deliveries on a sampling basis.

Non-stamping of the supporting documents after payment

3. The agency failed to stamp “PAID” the supporting documents after payment
contrary to Section 2.Q of COA Circular No. 92-389 dated November 3, 1992.

3.1. Section 2.Q of COA Circular No. 92-389 provides:

“Paid vouchers, including its supporting documents shall be perforated

and conspicuously stamped “Paid” by the Cashier. The stamp shall
provide space for the number of the check issued and date of actual
payment and its size should be 2” x 3”.”

3.2. Post-audit disclosed that Disbursement Vouchers (DVs) only were stamped paid,
however, its supporting documents were not stamped “PAID” after payment.

3.3. Accordingly, the barangay treasurer was not aware of the aforecited provision.
Non-compliance with said provision may result in the possible re-use of documents to
other transactions.

3.4. We recommended that the Punong Barangay direct the Barangay Treasurer
to stamp “PAID” all Disbursement Vouchers and their supporting documents to
preclude the possible re-use of the same.

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Non-Preparation of Bank Reconciliation Statements

4. Monthly Bank Reconciliation Statements were not prepared and submitted to

the auditor for verification, contrary to the Accounting Systems Manual for Barangay
and COA Circular No. 96-011, thus affecting the accuracy and reliability of the bank
deposits, withdrawals and balances appearing in the books.

4.1. COA Circular no. 96-011 dated October 02, 1996 provides:

“The Local Accountants shall within ten (10) days from receipt of the
Bank Statements (BS), reconcile the same with the General Ledgers (GL)
and prepare the BRS in five (5) copies, distributed as follows:

1. Original - Bank Manager

Thru: The Resident Auditor

2. Duplicate - Provincial/City/Municipal Auditor

3. Triplicate - Provincial/City/Municipal Barangay

Treasurer

4. Quadruplicate - LGUs within Metro Manila

-LGAO Director

- LGUs outside Metro Manila

-COA Regional Director

5. Quintuplicate - Provincial/City/Municipal Accountant

The accountant shall draw journal vouchers to record all valid

reconciling items that require adjustment and correction in the GL.

The duplicate and quadruplicate copies of the BRS including the paid
checks, original copies of debit/credit memos, shall be submitted to the
Auditor concerned for verification within ten (10) days from receipt after
the end of each month.

The Auditor shall verify the duly certified BRS and supporting schedules
within ten (10) days from receipt of the same.”

4.2. This is reiterated in the Accounting Systems Manual which prescribed the format.
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4.3. The Municipal Accountant did not prepare and submit the bank reconciliation
statements covering the period CYs 2019 and 2020.

4.4. Failure of the Municipal Accountant to verify immediately the cash in bank
account affected the accuracy and reliability of the account.

4.5. We recommended that the Municipal Accountant prepare the monthly bank
reconciliation statements to ensure the reliability and accuracy of bank balances
appearing in the books of the Barangay.

Programs and projects funded and implemented under the 20% Development Fund
mostly for MOOE

5. The total appropriation of P653,703.80 and P745,823.00 of the 20%

Development Fund for CYs 2019 and 2020, respectively, was appropriated and utilized
for projects/programs/activities (PPAs) classified as Maintenance and Other Operating
Expenses not in consonance with the Department of the Interior and Local
Government (DILG) and Department of Budget and Management (DBM) Joint
Memorandum Circular (JMC) No. 2011-1 dated April 13, 2011, thus limiting the fund
for its developmental intent. It also failed to undertake critical, urgent, and
appropriate disaster response aid and measures to curtail and eliminate the threat of
COVID-19 had it undertake and fully consider the amendments in the DILG MC No.
2011-1, resulting to partial response in containing the spread of COVID-19 and in
providing basic services to the affected population.

5.1. For the years 2019 and 2020, the barangay appropriated the total amount of
P653,703.80 and P745,823.00 for its 20% Development Fund comprising of the
following PPAs:

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 Appropriations
Program/Project/ Activities 2020 2019
A. SOCIAL DEVELOPMENT
1. Repair and Maintenance of Health Center - 40,000.00
2. Streetlights Repair and Maintenance 105,823.00 100,000.00
3. BCPC 50,000.00 32,685.19
4. Construction of VAWC Office 40,000.00
5. Construction of Breast Feeding Room 40,000.00

B. EONOMIC DEVELOPMENT
1. Rehabilitation of barangay roads - 121,018.61

C. ENVIRONMENTAL SERVICES
1. Solid Waste Management 200,000.00 50,000.00
2. Desilting/de-clogging of canals/creeks 160,000.00 120,000.00
3. Other Environmental Management Project 150,000.00 190,000.00

5.2. Some of the PPAs appropriated in the aforementioned plan are classified as
maintenance and other operating expenses.

5.3. The general policies in the appropriation and utilization of the 20% component of
the Annual Internal Revenue in Item 2.0 of the Joint Memorandum Circular No. 2011-1
dated April 13, 2011of the DILG and DBM provides that:

 In accordance with Section 287 of the Local Government Code, every

LGU shall appropriate in its annual budget no less than twenty
percent (20%) of its annual internal revenue allotment for
development projects.

 It may be utilized to finance the priority development projects and

programs, as embodied in the duly approved local development plan
that directly support the Philippine Development Plan, the Medium-
Term Public Investment program and the Annual Investment
Program.

 All projects to be funded shall contribute to the attainment of

desirable socio-economic development and environmental
management outcomes and shall partake the nature of investment or
capital expenditures.”

5.4. Item 3 of the same JMC specifies the projects on social development, economic
development and environmental enhancement programs covered for financing under the
20% Development Fund.

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5.5. Some of the projects in the 20% Development Fund Plan, like concreting and
construction are in the nature of capital expenditures. However, the appropriations of the
fund in CYs 2020 and 2019 were programmed for various projects in various locations of
the barangay with minimal amount of budget, thus limiting the benefits that have been
gained by the constituents.

5.6. In addition, the fund was appropriated and utilized for rehabilitation of Day Care,
repairs and maintenance of street lights, allowance of garbage collector, rehabilitation of
barangay roads, labor for declogging of canals and other expenses which are not in the
nature of investments or capital expenditures.

5.7. It is the responsibility of every Punong Barangay to ensure that the 20% of the
IRA is utilized to help achieve the objectives of the fund.

5.8. However due to the pandemic cause by the Covid-19, RA No. 11469 (the
Bayanihan to Heal as One Act) was crafted to grant the President the power to adopt
various temporary emergency measures to respond. Under Section 4 (g) thereof, the
President is empowered to ensure that all LGUs are acting within the letter and spirit of
all the rules, regulations and directives issued by the National Government pursuant to
the said law, and are implementing standards of Community Quarantine consistent with
what the National Government has laid down for the subject area, while allowing the
LGUs to continue exercising their autonomy on matters undefined by the National
Government or are within the parameters it has set, and are fully cooperating towards a
unified, cohesive and orderly implementation of the national policy to address COVID-
19.

5.9. Considering the foregoing, it is highly imperative to provide additional guidelines

on the use of the 20% DF to give the LGUs greater leeway and flexibility in the
utilization of funds for their disaster preparedness and response efforts to contain the
spread of COVID-19, and to continue to provide basic services to the affected population.

5.10. Accordingly, JMC No. 01 dated March 27, 2020 was issued to enable the LGUs
to undertake critical, urgent, and appropriate disaster response aid and measures to curtail
and eliminate the threat of COVID-19, in cooperation with all government agencies
concerned.

5.11. In view of the foregoing, P100,000.00 of the 20% Development Fund was
realigned to respond against the Covid 19 pandemic.

5.12. We recommended that the Punong Barangay require the Barangay

Development Council to allocate the 20% development funds for development
projects in accordance with Joint Memorandum Circular No. 2011-1 dated April 13,
2011. The Barangay Council should ensure compliance of the plan with the
guidelines before approving the same.

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Non-compliance with the Reporting Requirement on the Utilization of Local Disaster
Risk Reduction Management Fund

6. The barangay did not comply with the reporting requirement on the utilization of the
Local Disaster Risk Reduction Management Fund (LDRRMF) in violation of COA
Circular 2012-002 dated September 12, 2012 and Revised Barangay Financial
Management Manual.

6.1. Section 5.15 A of COA Circular No. 2012-002 states that:

“5.1.5A Report on Sources and Utilization of DRRMF using format in

Annex B shall be prepared and certified correct by the Local Accountant.
The Local Disaster Risk Reduction and Management Officer (LDRRMO)
shall submit the report on or before the 15 th day after the end of each
month through the LDRRMC and Local Development Council (LDC) to
the COA auditor of the LGU.”

6.2. Paragraph 11.1.3 and 11.1.5 of Revised Barangay Financial Management Manual
states that:

“A Registry for Special Trust Fund (RSTF) – Annex 33 shall be maintained for
each Special Trust Fund (STF) until the STF is fully utilized.”

“Any unspent balance from the appropriation for current year appropriation for
LDRRMF shall at the end of the year be transferred to the STF.”

6.3. Concerned barangay officials were not aware of the reporting requirement on the
utilization of the said funds. The non-compliance with the said regulation precluded the
audit team from timely review and evaluation of the disbursements.

6.4. Pursuant to Local Government Code or RA 7160 and RA No. 10121, the total
amount of P189,505.75 and P166,475.95 was appropriated in CYs 2020 and 2019,
respectively, for the LDRRMF allocated under the following programs/
projects/activities:

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 Program/Project/ Activities Appropriations
2020 2019
A. Disaster Prevention and mitigation
1. Clearing/Declogging of canals 45,000.00 60,000.00
2. Buying of materials for calamity preparation 50,000.00 41,533.17
3. Anti-Dengue Campaign 15,000.00 15,000.00

B. Disaster Preparedness
1. Purchase of raincoats and rainboots. 22,654.00 0.00

C. 30 % Standby fund -Quick Response Fund

1. Relief Operation 56,851.75 49,942.78
TOTALS 189,505.75 166,475.95
6.5. The failure in formulating plan to address disaster risk reduction adversely
affected the utilization of the LDRRMF. As seen on the table, appropriation of the
LDRMMF was not fairly distributed to four thematic areas of disaster risk and
management, such as: disaster prevention and mitigation, disaster preparedness, disaster
response and disaster rehabilitation and recovery as further decreed under
NDRRMC/DBM/DILG Joint Circular No. 2013-001 dated March 25, 2013, provided as
follows:

“The LDRMMP shall be the basis in the allocation of LDRRMF. The

LGUs have to formulate and implement a comprehensive and integrated
LDRRMP in accordance with the national, regional and provincial
framework, and policies in disaster risk reduction in close coordination
with the local development councils (Section 12 (6) of RA 10121). It
should encompass the four (4) thematic areas of disaster risk reduction
and management such as disaster prevention and mitigation, disaster
preparedness, disaster response, and disaster rehabilitation and
recovery.”

6.6. Review of the transactions and verification of the Registry of Appropriation and
obligation disclosed that the fund was utilized for the purchased of goods for relief
operations, misting and fogging machine, and labor for spraying the disinfectant.

6.7. The non-compliance with the said regulation precluded the audit team from
timely review and evaluation of the disbursements.

6.8. We recommended that the Punong Barangay (a) require the Barangay
Development Council to prepare LDRRMFIP to be more effective in addressing
disaster risk reduction and management system. The Plan should be patterned in
accordance with the NDRRMF and/or PDRRM Framework as required by RA
10121 and to be validated and accustomed to the local needs for prevention and

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mitigation, preparedness, response, rehabilitation and recovery which should be
prepared in presenting the 30% allocation for QRF in lump-sum appropriation and
a separate allocation for disaster mitigation, prevention, and preparedness with
details of projects and activities to be funded; (b) require the concerned personnel to
prepare monthly the Report on the Utilization of LDRRMF. The report shall be
submitted through the LDRRMC and LDC to the Auditor.

Some SK projects not for Youth Development

7. The Sangguniang Kabataan Funds was appropriated and utilized on some

programs/projects/activities (PPAs) not responsive to the goals and objectives for youth
development contrary to Article 203 (B) of the Local Government Code and
Implementing Rules and Regulations (IRR) of RA 10632, thus, depriving the intended
beneficiaries of the enjoyment of the benefits they could have gained therefrom.

7.1. Article 203 (B) of the Implementing Rules and Regulations (IRR) of the Local
Government Code of 1991 provides that:

“Sangguniang Kabataan Funds should be used for programs or projects

designed to enhance the social, political, economic, cultural, intellectual,
moral, spiritual and physical development of the youth.”

7.2. The IRR of RA 10632, also known as “An Act to Postpone the SK Elections on
October 28, 2013, amending for the Purpose Republic Act No. 9340, and for Other
Purposes provides that SK Funds shall be used by the sangguniang barangay solely for
youth development programs or projects until the new set of SK officials have been duly
elected and qualified.

7.3. It is also provided in the IRR that the SK Funds shall be allocated as follows:

a. Youth Development programs and Projects such as, but not limited to:
1. Capacity Building
- Leadership Training/Youth Camp Program
- Employability Skills Training
-Value Formation, Citizenship/Nation-Building Seminar
2. Health Services and Adolescent Reproductive Health Program
3. Out of School Youth Programs
4. Socio-Cultural and Sports Development
5. Disaster Preparedness and Climate Change Adaptation
6. Other similar youth-related development programs and projects

7.4. Verification of the barangay’s annual budget for CYs 2020 and 2019 disclosed
that the total required budget for SK was set aside by the management amounting to
P372,915.50 and P332,951.90, respectively. However, some of the
programs/projects/activities (PPAs) appropriated under the SK Fund such as were not for

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youth development and not listed among those PPAs mentioned above. Apparently, the
fund was utilized for labor for color fun run, basketball and volleyball league,
miscellaneous fees for students, school supplies for distribution, seminar for training and
leadership, anti-bullying campaign, tree planting, installation of trash bins, fire and
earthquake drill and lingo ng kabataan.

7.5. Failure to formulate a plan pursuant to the objectives of the fund deprived the
intended beneficiaries from the enjoyment of the benefits they could have gained
therefrom.

7.6. We recommended that the SK Funds be appropriated and utilized for PPAs
for the enhancement and development of the youth sector.

Gender and Development

8. The GAD PPAs included in the GAD Plan and Budget were not subjected to the
Harmonized Gender and Development Guidelines (HGDG) test contrary to JMC No.
2013-01, thus, the cost of GAD interventions attributed to the PPAs could not be
readily established and compliance to the five percent mandatory allocation to the
activities supporting GAD PPAs could not be determined.

8.1. MC No. 2013-01 requires that, “all government and other instrumentalities
should formulate a GAD plan designed to address gender issues within the context of
their mandates to mainstream gender perspectives in their policies, programs and
projects. GAD planning should be integrated in the regular activities of the agencies, the
cost of implementation of which shall be at least 5% of their total budgets.”

8.2. Item C.4 of the same circular further provides the guidelines on the attribution to
the GAD Budget, to wit:

“5.a To gradually increase the gender-responsiveness of LGUs programs

and projects, the LGU may attribute a portion or whole of their budgets to
the GAD budget supporting gender-responsive PPAs. To facilitate this,
the LGU shall conduct a gender analysis of their programs and projects
through the administration of HGDG.

5.b If the LGU……

5.c The administration of the HGDG will yield a maximum score of 20

points for each program or project. Based on the HGDG score, a
percentage of the budget of the LGUs existing and proposed regular
flagship program/project may be attributed to the GAD budget. The
attribution is guided as follows:

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 Corresponding Budget for the Year of
HGDG the Program that may be Attributed to
Score Description the LGU GAD Budget
Promising GAD 25% of the budget for the year of the
prospects program/project may be attributed to the
4.0 - 7.9 (conditional pass) GAD budget
50% of the budget for the year of the
program/project may be attributed to the
8.0 - 14.9 Gender Sensitive GAD budget
75% of the budget for the year of the
Gender- program/project may be attributed to the
15.0 - 19.9 responsive GAD budget
100% of the budget for the year of the
Fully gender- program/project may be attributed to the
20.0 responsive GAD budget

5.d Based on its initial result in the HGDG, the LGU will set its target
score for a particular program or project……..

5.e During the preparation of its GAD AR, the LGU will again administer
the HGDG test to determine the extent that the targeted HGDG score is
attained. This score will be the basis in determining actual expenditure
that can be attributed to the GAD budget.”

8.3. On the other hand, among the guidelines on the preparation and submission of the
LGU GAD AR as provided for in the above JMC is, “in case the LGU attributes a
portion or whole of the budget of its major programs/project to the GAD Budget, it shall
subject the same the HGDG test to determine the actual expenditures that may be
attributed to the GAD Budget and as required, the HGDG test results may be presented
to the DILG Regional Office or to the GAD funds auditor as evidence that the GAD Plan
was duly implemented and the GAD Budget judiciously utilized.”

8.4. Review of the documents revealed that the GAD programs/projects of the
barangays were seminars and trainings, feeding and giving vitamins, allowance to
barangay health workers, and groceries for senior citizen and PWDs.

8.5. Apparently, the Barangay did not conduct HGDG tests on the PPAs to determine
if they were gender-responsive. A total of P212,901.15 for CY 2020 for GAD were
attributed by the barangay to its PPAs.

8.6. Without administering the HGDG test on GAD PPAs, there was no reasonable
basis to estimate the cost of GAD interventions that could be attributed to the PPAs.
Similarly, there was no concrete evidence that the GAD plan was duly implemented and
that the GAD Budget was judiciously utilized.

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8.7. As such, compliance to the five percent mandatory allocation to the activities
supporting GAD PPAs could not be determined.

8.8. We recommended that the Punong Barangay administer the HGDG test on
its GAD PPAs, the results of which shall be the basis in estimating the cost of gender
mainstreaming and administer the HGDG test on its GAD PPAs during the
preparation of the GAD AR as basis in determining the actual expenditure that can
be attributed to the GAD Budget pursuant to JMC No. 2013-01.

Inadequate Supporting Documents

9. The operational and internal control systems covering disbursements such as

honoraria, travelling expenses and other disbursements projects of the barangay were
weak resulting in incomplete/unsubmitted, and improperly accomplished supporting
documents, contrary to the Systems and Procedures Manual in the Management of
Barangay Funds and Property, Section 4 of PD 1445 and RA 9184 which rendered the
validity of the transactions doubtful.

9.1. The Systems and Procedures Manual in the Management of Barangay Funds and
Property states that “all disbursements of public funds shall be supported by documents
necessary to prove their validity, propriety and legality.”

9.2. Section 4 of PD 1445 provides the fundamental principles governing the financial
transactions and operations of any government agency. It states that:

“Fiscal responsibility shall, to the greatest extent, be shared by all those

exercising authority over the financial affairs, transactions and operations of the
government agency.”

“Claims against government funds shall be supported with complete

documentation

9.3. COA Circular No. 2012-001 dated June 11, 2012 prescribes the list of
documentary requirements for common government transactions.

9.4. Review of disbursements of the barangay revealed the following deficiencies:

9.4.1. Payment of honoraria of barangay officials for CYs 2020 and 2019 was
not supported by minutes of the meeting and attendance sheets of
barangay officials.

9.4.2. The following deficiencies were noted in the payments of labor payrolls
and other projects of the barangay.

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 a. Some of the labor payroll lacks the Programs of Work, did not
indicate the exact location, scope of the work, and measure of the
project to be done, and dates of implementation.

b. There were no plans and drawings attached to the projects.

9.5. Lack of monitoring on compliance with laws, rules and regulations, particularly
the required documentation to support claims for payment caused the above deficiencies.

9.6. As a result, the validity, propriety, and legality of the transactions were
considered doubtful.

9.7. We recommended that the Punong Barangay (a) submit the mandatory
supporting documents on various disbursements to establish the validity and
propriety of the transactions and payments made; and (b) require the Barangay
Treasurer to ensure the completeness of mandatory supporting documents before
payment is made to substantiate the regularity of the claims.

Compliance with Tax Laws

10. Barangay San Antonio has complied with its duties and responsibilities as a
withholding agent of the Bureau of Internal Revenue (BIR) in CYs 2019 and 2020,
pursuant to Revenue Memorandum Circular No. 23-007 dated March 23, 2007.

10.1. Revenue Memorandum Circular No. 23-2007 dated March 20, 2007 mandates the
withholding of taxes on certain government transactions and the remittance of the same
on or before the 10th day of the following month in which the withholding was made.
This will enable the government to raise more revenues needed to finance government
projects.

10.2. Records showed that for CYs 2019 and 2020, the barangay complied with BIR
regulations in the withholding and remittance of taxes.

10.3. Apparently, the taxes withheld were being remitted within the prescribed period,
which is before the 10th day of the following month.

10.4. We recommended that the Punong Barangay continue being compliant in the
withholding of taxes from payments to suppliers and the remittance thereof within
the prescribed period.

Non-Compliance with R.A. No. 9344

11. The Barangay failed to comply with Section 15 of RA 9344 and DILG
Memorandum Circular No. 2012-120 dated July 4, 2012 on the allocation of 1% of the

27
Internal Revenue Allotment (IRA) for the strengthening and implementation of the
programs, projects and activities of the local council for the protection of children.

11.1. R.A. No. 9344, otherwise known as the “Juvenile Justice and Welfare Act of
2006”, was established to cover the different stages involving children at risk and
children in conflict with the law from prevention to rehabilitation and reintegration.

11.2. Section 15, Chapter 1 of the Act provides the following:

“1. Local Councils for the Protection of Children (LCPC) shall be

established in all levels of local government, and where they have already
been established, they shall be strengthened within one (1) year from the
affectivity of this Act. Membership in the LCPC shall be chosen from
among the responsible members of the community, including a
representative from government and private agencies concerned with the
welfare of children.

2. The local council shall serve as the primary agency to coordinate with
and assist the LGU concerned for the adoption of a comprehensive plan
on delinquency prevention, and to oversee its proper implementation.

3. One percent (1) of the internal revenue allotment of Municipalities shall

be allocated for the strengthening and implementation of the programs of
the LCPC. Provided, that the disbursement of the fund shall be made by
the LGU concerned.”

11.3. In consonance with the foregoing provision, the Barangay failed to appropriate
the amount of ₱29,293.15 for its BCPC programs which was 1% of the Internal Revenue
Allotment of ₱ 2,929,315.00 for the budget year 2020.

11.4. We recommended that the Punong Barangay allocate 1% of the Internal

Revenue Allotment for the strengthening and implementation of the programs,
projects and activities of the local council for the protection of children.

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