Chapter I

General Accounting Instructions

Article IX-D Section 2(2) of the 1987 Philippine Constitution gives the Commission on Audit the authority to promulgate accounting rules and regulations.

Section 334(c) of RA 7160, otherwise known as the Local Government Code of the Philippines, states that: “The financial records of the barangay shall be kept in the office of the city or municipal accountant in simplified manner as prescribed by the Commission on Audit”. (Underscoring supplied)

COA Resolution No. 2014-003 dated January 24, 2014 requires the adoption of Philippine Public Sector Accounting Standards (PPSAS) by all government agencies, hence, the need for the alignment of the barangay accounting to the said standards.

1.1 Fundamental Principles

The financial transactions and operations of the barangays shall be governed by the following fundamental principles:

1.1.1. No money shall be paid out of the local treasury except in pursuance of an appropriations ordinance or law.

1.1.2. Local government funds and monies shall be spent solely for public purposes.

1.1.3. No public money or property shall be appropriated or applied for religious or private purposes.

1.1.4. Disbursements or disposition of government funds or property shall invariably bear the approval of the proper officials.

1.1.5. All claims against government funds shall be supported with complete documentation.

1.1.6. Local revenues are generated only from sources expressly authorized by law or ordinance and collections thereof shall at all times be acknowledged properly.

1.1.7. All monies officially received by a local government officer in any capacity or on any occasion shall be accounted for as local funds, unless otherwise provided by law.

1.1.8. All collections shall be deposited intact with government depository bank or other authorized depository bank for the account of the barangay, except those collections to be remitted to the City/Municipal (C/M) Treasurer.

1.1.9. Trust funds in the local treasury shall be paid out only for the purpose for which the trust was created or the funds received.

1.1.10. Fiscal responsibility shall be shared by all those exercising authority over the financial affairs, transactions, and operations of the barangays.

1.1.11. Every officer of the barangay whose duties permit or require the possession or custody of local funds shall be bonded, and such officer shall be accountable and responsible for the said funds and for the safekeeping thereof in conformity with the provisions of the law.


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