Daily Remittance and Deposit Intact of Collections

January 14, 2009 BLGF MEMORANDUM CIRCULAR NO. 003-09 TO : All Regional Directors of this Bureau; Local Treasurers of Metropolitan Manila; Provincial, City, and Municipal Treasurers; and All Others Concerned SUBJECT : Daily Remittance and Deposit Intact of Collections There have been reports of rampant practices by Local Treasurers, Liquidating Officers and Revenue Collectors of unreasonably withholding their collections for several days and using the same directly to pay certain obligations. Such practices cannot be tolerated as they expose to risks the safety of local funds, lure the commission of irregularities, and undermine the accountability and custodianship of local public funds by local treasurers who are directly responsible therefor. Existing accounting and local treasury operations rules and regulations implement and observe the general principles of the imprest system which requires the daily turnover of collections to Liquidating Officers and the daily deposit intact of collections with the depository banks; all payments to be effected in check; and only small amounts may be paid from the petty cash fund (Sec. 172, GAAM, Vol. 1) . For the proper guidance of all Local Treasurers, Liquidating Officers and Revenue Collectors, the Local Treasury Operations Manual promulgated through Department of Finance Order No. 10-08, dated March 26, 2008, provides: "Section 60. Daily Turnover and Verification of Collections . "A. Daily Turnover of Collections. At the close of the business day, Collectors/Tellers shall turn over all their collections intact to the Local Treasurer/Cashier. They shall accomplish the Report of Collections and Deposits (LTO Form 12) in four (4) copies. The original and two (2) copies, together with the duplicates of official receipts issued and the cash collected, shall be submitted to the Local Treasurer/Cashier. The fourth copy of the Report of Collections and Deposits shall be retained by the collector/teller concerned. Barangay Treasurers deputized to collect taxes imposed by provinces, cities, and municipalities shall follow the same procedure in submitting their collections to the Local Treasurer/Cashier concerned. "In case of collectors assigned to the field, where travel time from their places of assignment to the Local Treasury Office is more than one (1) day, turnover of collections shall be made at least once a week or as soon as the collections reach P5,000.00. (Sec. 26, COA Circular No. 92-382) SaDICE "B. . . . ." "Section 62. Procedures and Controls on Deposit of Collections with Authorized Depository Banks . "A. Depository Accounts of Local Government Units. Local Treasurers shall maintain depository accounts in the name of their respective local government units with banks, preferably government owned, located in or nearest to their respective areas of jurisdiction. . . . . (Sec. 311, LGC) "B. . . . . "C. Daily Deposit of Collections with the Banks. (a) The Local Treasurer/Cashier shall deposit intact all his collections, as well as all collections turned over to him by the Collectors/Tellers with the authorized depository bank daily or not later than the next banking day. He shall record all deposits made in the Cashbook-Cash in Treasury and Cashbook-Cash in Bank. "In the case of municipalities where travel time to the depository bank is more than one (1) day, deposit of collection shall be made at least once a week, or as soon as the collections reach P10,000.00. (Sec. 28, COA Circular No. 92-382) "(b) The Barangay Treasurer shall deposit all collections with the city or municipal treasury or in the depository account maintained in the name of the barangay within five (5) days after receipt thereof (Sec. 334 (a), LGC) . He shall likewise record all deposits in the Cashbooks maintained for Cash in Treasury and Cash in Bank. "D. Deposit of Field Collections. Collections of field collectors shall be remitted to the Cashier/designated Liquidating Officer of the field office of the local government unit. When travel distance from the field office to the local treasury may expose government funds to risk such as loss in transit, the Cashier/designated Liquidating Officer, upon authorization by the Local Treasurer, may deposit the collections in the authorized depository bank near the field office of the local government unit." "Section 64. Forms and Reports Used by Local Treasury Officials . "A. Report of Collections and Deposits . The Report of Collections and Deposits shall be prepared daily by the following: 1) Tellers/Collectors for collections received and remittances made to the designated Liquidating Officer, if any, or to the Cashier/Local Treasurer. 2) Liquidating Officers for collections received from Tellers/Collectors and remittances made to the Cashier/Local Treasurer. 3) Local Treasurer/Cashier for collections received from Liquidating Officers, taxpayers and other sources, and deposits to the depository banks. aADSIc "The Report of Collections and Deposits shall include a report of accountability for accountable forms showing the name of the forms and number, beginning balance, received, issued and ending. It shall also contain a summary of collections and remittances/deposits and breakdown of collections to cash and details of checks received. "The Accountable Officer shall certify as to the correctness of the report. The Liquidating Officer/Local Treasurer shall verify the report and acknowledge receipt of collections and remittances. (Sec. 384, NGAS for LGUs) "For Real Property Tax payments, separate Report of Collections and Deposits shall be prepared for collections pertaining to the Basic Tax and the Additional Tax accruing to the Special Education Fund. In case of Real Property Tax payments in municipal treasuries, additional copies of Report of Collections and Deposits for the Basic Tax and SEF shall be prepared for submission to the Provincial Treasurer as reference in the computation of the province's share therefrom. The procedures to be followed in the filling-up of the form shall be the same. "The Report of collections and Deposits shall be distributed, as follows: Original - Auditor Duplicate - Local Treasurer Triplicate - Collecting Officer Quadruplicate - Liquidating Officer (in case one is designated) Additional Copy - Local Treasurer" All Provincial, City and Municipal Treasurers, Liquidating Officers and Revenue Collectors are hereby enjoined to observe the aforecited principles of the imprest system and the procedures for daily remittance or turnover and deposits of collections. Failure to observe the same shall be dealt with accordingly. All Regional Directors of this Bureau are hereby instructed to conduct the regular monitoring of local treasury offices within their respective jurisdictions to ensure that this circular is properly implemented. Likewise, Regional Directors are instructed to disseminate copies hereof to all local treasurers within their region for their proper information and guidance. For strict compliance. (SGD.) MA. PRESENTACION R. MONTESA Executive Director ATTACHMENT DOF ORDER NO. 010-08 March 26, 2008 SUBJECT : Local Treasury Operations Manual TO : All Regional Directors of the Bureau of Local Government Finance; Provincial, City and Municipal Treasurers and Assessors; and Others Concerned In pursuance of item 4.6 of the Joint Memorandum Circular No. 1, series of 2007, dated March 8, 2007 of the Department of the Interior and Local Government (DILG), National Economic and Development Authority (NEDA), Department of Budget and Management (DBM), and Department of Finance (DOF); and Article 456 of the Implementing Rules and Regulations of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, the Local Treasury Operations Manual is hereby promulgated, to provide local government treasurers with a single reference material and guide in the discharge of their duties and functions under the decentralized framework and environment of the Local Government Code of 1991, and introduce to them the new perspectives that they must adopt, as well as the new tools that they must acquire in order to support the expanded role that local governments have assumed in managing the development process in their respective jurisdictions. The Local Treasury Operations Manual herein promulgated consists of six (6) Books, as follows: BOOK ONE Fiscal Organization of Local Governments and the Local Treasurer Chapter 1. Fiscal Organization of Local Governments Chapter 2. Appointment, Qualifications, Powers and Functions of the Local Treasurer, Assistant Local Treasurer, and Barangay Treasurer Chapter 3. Administrative and Technical Supervision by the Bureau of Local Government Finance Chapter 4. Roles, Duties and Responsibilities of Local Treasurers Chapter 5. Other Roles of the Local Treasurer Chapter 6. Bonding of Local Treasurers and Other LGU Accountable Officers BOOK TWO Receipt and Collection of Local Income, Revenue and Other Fund Sources Chapter 1. Types of Local Income and Revenues Collected by Local Government Units Chapter 2. Collection of Revenue and Other Receipts Chapter 3. Examination of Books of Accounts and Pertinent Records of Businesses by the Local Treasurer BOOK THREE Expenditures and Disbursements Chapter 1. Concept of Funds Chapter 2. Concept of Appropriations, Allotment, Obligation/Expenditures Chapter 3. Disbursements of Local Funds Chapter 4. Barangay Appropriations, Commitments and Disbursements Chapter 5. Sangguniang Kabataan (SK) Budget BOOK FOUR Fund Management Practices, Accountability, Cash Examination, Shortages, Settlement of Accounts, and Liabilities of Local Treasurers in the Administration of Local Taxes, Fees and Charges Chapter 1. Fund Management Practices Chapter 2. Accountability, Responsibility and Liability of Local Treasurers for Funds and Property Chapter 3. Administrative, Civil and Criminal Liabilities of Local Treasurers in the Administration of Local Taxes, Fees and Charges BOOK FIVE Detailed Procedures on Real Property Tax, Business Tax, Fees and Charges and Other Resource Mobilization Chapter 1. Real Property Taxation Chapter 2. Business and Other Local Taxes Chapter 3. Fees and Charges Chapter 4. Government Enterprise Operations Chapter 5. Credit Financing and Alternative Sources of Funds BOOK SIX Local Treasury Operations (LTO) Annexes and Forms The Local Treasury Operations Manual is an exclusive issuance of the Bureau of Local Government Finance. It is intended to be a stand-alone reference for local treasurers. The relevant text of the laws, policies, regulations, issuances and court decisions are included. Hence, continuing improvement, enhancement and update thereof are necessary. Accordingly, Regional Directors, Provincial, City and Municipal Treasurers, and others concerned, are hereby enjoined to properly, efficiently and strictly implement the provisions of the Manual in their respective jurisdiction. (SGD.) MARGARITO B. TEVES Secretary