Legal basis and related issuances
- Presidential Decree No. 1445 establishes the State policy that government resources must be managed, expended, or utilized in accordance with law and regulations, and safeguarded against loss or wastage through illegal or improper disposition to ensure efficiency, economy, and effectiveness.
- Section 375 of Republic Act No. 7160 (Local Government Code of 1991) sets primary and secondary accountability for government property, where the Punong Barangay is primarily accountable for government properties assigned or issued at the barangay level, and persons entrusted with possession or custody are immediately accountable to the Punong Barangay.
- Section 376 of Republic Act No. 7160 requires proper use and care of government property by concerned local officials in actual physical possession or entrusted with custody and control.
- Republic Act No. 10952 postpones the October 2017 Barangay and Sangguniang Kabataan elections to the second Monday of May 2018 (RA 10952, Section 1).
- Republic Act No. 10952 mandates that the term of office of elected barangay and Sangguniang Kabataan officials commence at noon of June 30, 2018 (RA 10952, Section 2).
- The circular references Article 443 of RA 7160 for money and property clearance requirements.
- It cites DILG Memorandum Circular No. 2002-122 dated August 5, 2002 for the specific clearance sequence and includes references to N-GAS Manual on Financial Management of Barangays, Item 7.4.3, Chapter VII (for accounting-related guidance embedded in the circular’s clearance and inventory context).
Policy, purpose, and transition goal
- The circular implements a systematic transition from outgoing barangay officials to incoming newly elected or re-elected officials effective June 30, 2018.
- It requires Punong Barangays and concerned barangay officials to prepare documents and inventories of all barangay financial records, reports, finances, and properties issued, assigned, entrusted, or under custody from the start of their terms up to the present.
- It sustains transparent and accountable local governance at the barangay level by requiring due diligence in proper use, care, utilization, and safekeeping of barangay funds, financial records and documents.
- It ensures a structured inventory and turnover process for BPFRDs and money accountabilities so that accountabilities are properly accounted and transferred.
Scope and coverage of offices
- The circular applies to all Provincial Governors.
- The circular applies to City and Municipal Mayors.
- The circular applies to Punong Barangays.
- The circular applies to Liga ng mga Barangay Chapter Presidents.
- The circular applies to DILG Regional Directors and Field Officers.
- The circular applies to ARMM Regional Governor.
- The circular applies to all others concerned involved in inventory and turnover of BPFRDs and money accountabilities at the barangay level.
Core inventory and turnover process
- The circular requires the preparation and conduct of inventory and turnover of all barangay properties, financial records, documents (BPFRDs), and money accountabilities before the incoming officials assume office.
- The inventory must cover BPFRDs including legislative and administrative records, transcript or minutes of meetings, list and status of complaints filed before the Lupong Tagapamayapa, updated Registry of Barangay Inhabitants (RBIs), list or inventory of current local or international development assisted projects (if any), and all other documents and/or logbooks containing barangay transactions.
- Barangay properties and supplies, including finances/money in actual possession or entrusted to concerned barangay officials and employees, must be properly accounted for, turned over, and listed in the prescribed Inventory and Turnover Forms.
- The process requires reporting of damaged or lost items and repairs made to properties for proper accounting and turnover.
Barangay Inventory Team (BIT) creation and duties
The Barangay Inventory Team (BIT) must be created through an Executive Order issued by the Punong Barangay not later than February 23, 2018.
The BIT must include these members:
- Chairperson: Punong Barangay
- Members: at least two (2) Kagawads
- Barangay Secretary
- Barangay Treasurer
- Bookkeeper or City/Municipal Representative
- at least two (2) CSO Representatives, preferably from the faith-based organization and/or members of the BDC
The Punong Barangay must furnish the DILG City Director or the City/Municipal Local Government Operations Officer a copy of the Executive Order not later than February 26, 2018.
The BIT must conduct the following inventory and turnover steps using the prescribed forms and within the timelines:
Initial Inventory (Form No. 1)
- The BIT must conduct an initial inventory of all BPFRDs using Inventory and Turnover Form No. 1 not later than March 9, 2018.
- The BIT must furnish the City/Municipal Accountant, local COA, and the concerned DILG CD/C/MLGOO copies of the accomplished Form No. 1 not later than March 12, 2018.
Final Inventory (Form No. 2)
- The BIT must conduct the final inventory of BPFRDs and money accountabilities using Inventory and Turnover Form No. 2 not later than May 30, 2018.
- The BIT must furnish the City/Municipal Accountant, local COA, and the concerned DILG CD/C/MLGOO copies of the accomplished Form No. 2 not later than June 3, 2018.
Posting, turnover ceremony preparation, and turnover itself
- The BIT must post the final Inventory and Turnover Form No. 2, as approved by the C/MATT, in three (3) conspicuous places within the barangay premises and/or in the barangay’s official website or facebook account, if any, and must make it available to the public upon approval of the C/MATT.
- The BIT must plan and organize the formal turnover ceremony not later than June 23, 2018.
- The Punong Barangay must notify the City/Municipal Mayor, local officials, local COA, the concerned DILG City Director or C/MLGOO, and newly elected barangay officials for the turnover ceremony.
- The turnover ceremony must be conducted by the Punong Barangay not later than 12 noon of June 30, 2018.
Roles of outgoing officials and supervisors
Outgoing barangay officials must submit to the BIT the list of all barangay properties entrusted to them or under their possession.
Outgoing barangay officials must liquidate or settle all money accountabilities or other financial concerns.
Outgoing barangay officials must turn over all BPFRDs to the BIT before the expiration of their term of office.
Outgoing barangay officials must secure money and property clearance pursuant to Article 443 of RA 7160, following a clearance sequence:
- The outgoing barangay official must secure clearance from the Barangay Treasurer.
- The Barangay Treasurer must secure clearance from the Punong Barangay.
- The outgoing Punong Barangay must secure clearance from the City/Municipal Mayor after turning over all BPFRDs to the incoming Punong Barangay.
City/Municipal Mayors, under general supervision over barangays, must ensure smooth and orderly turnover and must:
- direct barangay officials to adhere to the circular;
- provide necessary support to all BITs to let them perform their duties efficiently and effectively;
- create through an Executive Order a City/Municipal Audit and Transition Team (C/MATT) for barangays not later than 28 February 2018;
- ensure BPFRDs and money accountabilities subject of final inventory are intact for turnover to incoming officials; and
- monitor compliance by barangay officials, BIT and C/MATT.
The C/MATT must be composed as follows:
- Chairperson: City/Municipal Accountant
- Members: DILG City Director/C/MLGOO
- Liga ng mga Barangay Chapter President
- Selected staffs of the C/M Accounting Office
- Representatives from the Faith-Based Organization/CSO/NGO/PO
The C/MATT must:
- supervise the BIT in inventory and turnover of BPFRDs and money accountabilities;
- conduct audit, verification, and checking of actual physical count versus accomplished Inventory and Turnover Forms prepared and submitted by the BIT not later than 15 June 2018;
- ensure BPFRDs and money accountabilities assigned or entrusted are completely listed and turned over before turnover ceremony;
- submit to the City/Municipal Mayor, Office of the Ombudsman, COA, and DILG a list containing names of accountable barangay officials who failed to turnover BPFRDs and money accountabilities, if any;
- assist the City/Municipal Mayor to ensure smooth transition and successful turnover ceremony;
- post the accomplished Final Inventory and Turnover Form No. 2 of component barangays within City/Municipal Hall premises and/or in the official website of the City/Municipality.
DILG regional/provincial/city implementation reporting
DILG Regional Directors and the ARMM Regional Governor must:
- cause the immediate and widest dissemination of the circular to local government units under their jurisdiction;
- ensure compliance by concerned local officials;
- provide appropriate assistance to Field Officers;
- direct Field Officers to implement the circular within their areas of responsibility; and
- submit Regional Consolidated Reports to the DILG Secretary through National Barangay Operations Office (NBOO) via gmail at nboo.dilgco@gmail.com using prescribed monitoring forms, on the following schedule:
- On or before 15 April 2018: Regional Consolidated Report on the creation of C/MATT for barangays and Barangay Inventory Team
- On or before 15 July 2018: Regional Consolidated Report on the conduct of initial and final inventory of BPFRDs and money accountabilities, and conduct of turnover ceremony
DILG Provincial Directors must:
- provide necessary assistance to concerned C/MLGOOs;
- ensure smooth and orderly transition and successful turnover ceremony;
- consolidate monitoring reports using prescribed templates (Annexes aFa and aGa) and submit them to the concerned Regional Director, and to the ARMM Regional Secretary for provinces in ARMM.
DILG City Directors and City/Municipal LGOOs must:
- provide a copy of the circular to concerned City/Municipal Mayor and all Punong Barangays within the city/municipality;
- discuss pertinent provisions of the circular to the concerned LCEs;
- collaborate with the City/Municipal Accountant to convene the C/MATT for barangays;
- perform duties and functions as C/MATT members;
- ensure compliance by all concerned local officials within their area of responsibility; and
- submit monitoring reports using prescribed templates (Annexes aHa and aIa) to the concerned Regional Director (for Highly Urbanized Cities and Independent Component Cities) or to the concerned Provincial Director (for component cities and municipalities).
Sanctions for failure to turnover
- Failure by the concerned barangay official to turnover BPFRDs and Money Accountabilities assigned to the official or under the official’s custody may be a ground for filing criminal charges under the Revised Penal Code and other existing laws.
Forms and posting references
- The inventory and turnover process uses Inventory and Turnover Form No. 1 for initial inventory of BPFRDs.
- The inventory and turnover process uses Inventory and Turnover Form No. 2 for final inventory and turnover of BPFRDs and money accountabilities.
- Posting of the final inventory turnover results must be done in three (3) conspicuous places within barangay premises and/or on the barangay’s official website or facebook account, if any, and must be made available to the public.
Contact and administrative support
- The National Barangay Operations Office provides clarification and inquiries through telephone numbers 925-1137 and 925-0328, or via gmail address nboo.dilgco2018@gmail.com.