Bureau of Local Government Finance Opinion

April 13, 2012 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned to the ICO-Regional Director, Bureau of Local Government Finance, Department of Finance, Region IX, F. S. Pajares Avenue, Oval Complex, Pagadian City, his letter dated February 23, 2012, relative to the letter dated February 15, 2012, of the Municipal Treasurer of Dimataling, Zamboanga del Sur, referring Memorandum No. 8, current series, dated February 7, 2012, of the Mayor of said municipality, ordering the Municipal Treasurer to refrain from receiving local income, and directing the Assistant Municipal Treasurer of same municipality to receive and deposit all local income collections starting from the date of issuance of the said memorandum. The memorandum was issued on account of the alleged missing Land Bank of the Philippines (LBP) Check Nos. 16857951 and 686833, in the amount of P465,000.00 and P270,000.00, respectively, under the accountability of the Municipal Treasurer. However, upon verification by that level, the aforementioned checks were found to have been deposited in Account Number 0522112046, of the Municipality of Dimataling with the LBP-Pagadian City Branch, as evidenced by the deposit slips dated September 13, 2011. Moreover, the amounts corresponding to the checks were entered in the Municipal Treasurer's Trust Fund Cashbooks on the same date, September 13, 2011, under Official Receipt Nos. 5639973 and 5639971. In this regard, attention is invited to the relevant provisions of the Local Government Code of 1991 (R.A. 7160), as follows: "SEC. 170. Collection of Local Revenues by Treasurer. All local taxes, fees, and charges shall be collected by the provincial, city, municipal, or barangay treasurer, or their duly authorized deputies. xxx xxx xxx." "SEC. 247. Collection of Tax . The collection of the real property tax with interest thereon and related expenses, and the enforcement of the remedies provided for in this Title or any applicable laws, shall be the responsibility of the city or municipal treasurer concerned. IcTaAH xxx xxx xxx." The above provisions of the 1991 Local Government Code state clearly that the duty to collect taxes, fees, and charges, belongs to the Local Treasurer which in the instant case, the Municipal Treasurer. Needless to say, the duty to deposit such collections belongs to the Municipal Treasurer. The following relevant provisions of the same Code must be noted: "SEC. 470. Appointment, Qualifications, Powers, and Duties . (a) The treasurer shall be appointed by the Secretary of Finance from a list of at least three (3) ranking eligible recommendees of the governor or mayor, as the case may be, subject to civil service law, rules and regulations. xxx xxx xxx. "(d) The treasurer shall take charge of the treasury office, perform the duties provided for under Book II of this Code, and shall: xxx xxx xxx; "(2) Take custody and exercise proper management of the funds of the local government unit concerned; xxx xxx xxx." Conformably, Sections 32 and 33, on accounting policies of the Manual on the New Government Accounting System (NGAS) for Local Government Units, provide that all local collections must be deposited intact in the depository account in the name of the local government unit which the local treasurer opened and maintained, viz. : "Sec. 32. Deposit of Collections . The 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 and prepare the RCD. The barangay treasurer shall deposit all collections intact with the city/municipal treasurer, or in a depository bank account maintained in the name of the barangay , within five (5) days from receipt thereof. ICHcTD "Sec. 33. Deposit of Field Collections . Collections by field collectors shall be remitted to the Cashier or designated liquidating officer of the field office of the LGU. When travel distance of the field office to the local treasury may expose government funds to the risk of loss while in transit, the cashier or designated liquidating officer, upon authorization by the Treasurer, may deposit the collection in the authorized depository bank near the field office of the LGU. The procedures in reporting collections and deposits prescribed in this Chapter shall be observed. On the other hand, Section 470 (a) as quoted above provides that the Local Treasurer is an appointee of the Secretary of Finance. Consequently, the power to issue any order relieving the Local Treasurer belongs to the Secretary of Finance. In the same manner, the Assistant Local Treasurer is an appointee of the Secretary of Finance pursuant to Section 471 (a) of the Local Government Code of 1991, with the duty to assist the Municipal Treasurer and perform such duties as may be assigned by the former, viz. : "SEC. 471. Assistant Treasurer. (a) An assistant treasurer may be appointed by the Secretary of Finance from a list of at least three (3) ranking, eligible recommendees of the governor or mayor, subject to civil service law, rules and regulations. xxx xxx xxx. "(c) The assistant treasurer shall assist the treasurer and perform such duties as the latter may assign to him. He shall have authority to administer oaths concerning notices and notifications to those delinquent in the payment of the real property tax and concerning official matters relating to the accounts of the treasurer or otherwise arising in the offices of the treasurer and the assessor." In light of the foregoing, this Bureau concludes that subject Memorandum No. 8 has no legal and factual basis, hence, of no force and effect. DAETHc Be guided accordingly. (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director