MEMORANDUM CIRCULAR

NO. 2011- _______ TO : ALL CITY AND MUNICIPAL MAYORS, PUNONG BARANGAYS, SANGGUNIAN MEMBERS, SANGGUNIANG KABATAAN, MUNICIPAL, CITY, BARANGAY AND SK TREASURERS, DILG REGIONAL DIRECTORS AND FIELD OFFICERS, THE ARMM REGIONAL SECRETARY AND OTHERS CONCERNED GUIDE IN THE ALLOCATION AND UTILIZATION OF THE TEN PERCENT (10%) SANGGUNIANG KABATAAN (SK) FUNDS PER SECTION 329 OF THE LOCAL GOVERNMENT CODE OF 1991

SUBJECT

In view of the numerous requests and queries received by the Department concerning the allocation and/or utilization of the Ten percent (10%) general fund of the barangay reserved for the Sangguniang Kabataan (SK), the Department, in the exercise of its general supervision over local government units (LGUs), as delegated unto the DILG Secretary per Administrative Order No. 267 February 18, 1992 of the Office of the President, and applying analogously the pertinent provisions of the Commission on Audit (COA) Circular No. 93-396 re Barangay Accounting Manual issued on April 15 1993, issues this Guide not only to ensure that Section 329 of the Local Government Code (LGC) of 1991 is properly implemented and its legislative intent upheld, but also to provide a uniform process in the allocation, utilization and disbursement of the SK funds. I. Sources of SK Funds 1. Ten per cent (10%) of the general fund of the barangay set aside for the SK1 2. Proceeds from fund raising activities2 II. Ten Percent (10%) SK Funds and other sources The 10% of General Fund of the Barangay is earmarked for the SK. It shall be administered by the SK and shall be spent for the purposes provided in Rule XXVII of the IRR of the LGC, which is to initiate programs designed to enhance the social political, economic, cultural, intellectual, moral, spiritual and physical development of the members. [General Fund of the barangay refers to all monies and resources of the Barangay which are available for the payment of expenditures, obligations or purpose not specifically declared by law as accruing and chargeable to or payable from other funds]. The 10% SK fund shall not, in any way, be used for personal services. 3 Proceeds from fund raising activities shall be tax-exempt and shall accrue to the general fund of the SK, provided, that in the appropriation thereof, the specific purpose for which such activity has been held shall first be satisfied.4

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Section 329, 1991 Local Government Code (LGC) Section 426 (c) LGC 3 Article 424 (a) ph. 2, IRR of LGC 4 Section 426 (c) LGC

III.

Allocation of SK Funds 1. The SK funds may be allocated to programs, projects and activities designed to enhance the social, political, economic, cultural, intellectual moral spiritual and physical development of the members5 such as, but not limited to, the following: a. b. c. d. e. f. g. h. Barangay Council for the Protection of Children; Green brigade; Livelihood; Capacity building; Legislative work and involvement; Education Services and Adolescent Reproductive Health Program; Sports Development Activities; and Other Development Programs vital for the youth and children

IV.

Formulation and Submission of SK Budget Plan 1. The SK, in consultation with the Katipunan ng mga Kabataan (KK) and the youth organizations in the barangay, shall prepare an SK Budget/development plan for one fiscal year containing its programs, activities and projects, incorporating therein the corresponding fund requirements for the said undertaking. The SK development plan shall serve as the mother document and basis of the SK budget. 2. The SK development plan shall be approved by a majority vote of the SK members present during the session called for the purpose through an SK resolution. 3. The SK submits the plan and budget through a resolution to the Punong Barangay or Appropriations Committee of the Sangguniang Barangay. 4. The Punong Barangay or Appropriations Committee of the Sangguniang Barangay reviews SK Development Plan for inclusion in the over-all Barangay Development Plan. [In reviewing the SK Plan, the punong barangay merely checks if it exceeds or does not follow the prescribed allocation for activities and projects or if it needs to be attuned to make it supplementary and complementary to the barangay development plan] 5. The Punong Barangay, in the exercise of his supervisory function over the SK, may ask clarification or suggest/advise adjustments to improve the SK Development Plan, but the SK holds the final decision whether or not to revise the same. 6. The Barangay Appropriations Committee includes the SK Development Plan and Budget in the Barangay Development Plan. 7. The Sangguniang Barangay enacts appropriate Budget Ordinance for the purpose, and submits the same to the Sangguniang Panlungsod/Bayan for the latters review. 8. In case of failure of the Sangguniang Panlungsod/Bayan to review the Barangay Budget within 60 days, the budget shall be considered in full effect.

Section 426(b) , LGC

V.

Access to Funds 1. After the Barangay Budget has been approved and allocated, the SK can begin accessing funds for its planned projects and activities. a. Based on the approved SK Development Plan, the SK shall prepare individual activity design for each of the projects/activities included in the plan, signed by all the SK members, detailing the process involved in the planned project/activity. b. The activity designs will be attached to the resolution that the SK will pass. The said SK resolution shall state the funds to be used in the planned projects/activities. c. The Punong Barangay, the Barangay Appropriations Committee and the Barangay Treasurer shall be provided copy of the activity designs and the SK resolution by the SK. 2. After the SK have complied with the above, there is no reason for anyone to delay, hinder or withhold the release of the SK funds for the implementation of its programs, projects or activities. The 10 % SK Fund is a statutory obligation considered as a Trust Fund. Trust Fund is funds in the barangay treasury that shall not be paid out or used except in fulfillment of the purpose for which that trust was created or the funds received. Any unexpended balances therefore shall be added to the 10% share of the SK for the next year.6 3. Obligate and Disburse Funds. On behalf of the SK, the Punong Barangay prepares the Obligation Request in the form as required by the COA and corresponding Disbursement Voucher for valid obligations found in the General Appropriation Ordinance or Supplemental Budget. 7 a. Signatories to the Obligation Request (ObR) 8 Chairman of the Committee on Appropriations of the Sangguniang Barangay certifies as to the existence of the appropriation; The Barangay Treasurer certifies as to the availability of funds; and The City/Municipal Accountant certifies as to the obligation of allotment

b. Signatories to the Disbursement Voucher (DV) 9 The Punong Barangay (PB); Barangay Treasurer; and the City/Municipal Accountant 6

The PB, on behalf of the SK, shall prepare the Disbursement Voucher (DV) to which the activity design shall be attached; The SK Chairman shall affix his/her initial under the punong barangays name approving claims chargeable against the SK fund; All budget claims shall be approved by the Punong Barangay

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Sulong Kabataan! The SK Guide to Child and Youth Participation, p.85 Sulong Kabataan! The SK Guide to Child and Youth Participation, p.85

DBMs Budget Operations Manual for Barangays, p. 71, July 2006 DBMs Budget Operations Manual for Barangays, p. 64, July 2006

VI.

Accountability 1. The Punong Barangay (PB) a. The responsibility for the execution of the annual and supplemental budgets and the accountability therefor shall be vested primarily in the punong barangay concerned 10, as such, he/she shall ensure the following: that the revenues as estimated are realized; and that the approved development projects and basic services are implemented and delivered

b. The PB is tasked to approve vouchers relating to the disbursement of barangay funds.11 Since the 10% SK fund is part of the barangay fund, he/she is accountable and answerable for the proper use of the said funds. 2. The Sangguniang Kabataan, on the other hand, needs to account responsibility for the funds (10% SK fund) released to them and proceeds from fund raising activities. Therefore the SK Chairman, through the SK Treasurer, shall: a. Disburse fund in accordance with the approved budget of the SK; b. Submit annual and end-of-term reports to the sangguniang barangay on their projects and activities for the survival and development of the youth of the barangay; and c. Submit to the Sangguniang Kabataan and to the Sangguniang Barangay certified detailed statements of actual income and expenditures at the end of every month.12 3. Failure of the SK to account the funds spent may be a ground for administrative, civil or criminal proceedings against the erring SK Official(s). For the information and guidance of all concerned.

JESSE M. ROBREDO
Secretary

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Section 332 (paragraph 2) , LGC Section 389 (b)(8),LGC 12 Section 433, LGC