Bureau of Local Government Finance Opinion

December 19, 2010 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to the ICO-Regional Director, Bureau of Local Government Finance, Department of Finance, Region IX, F.S. Pajares, Oval Complex, Pagadian City, his preceding 1st Indorsement dated July 7, 2009, relative to the letter dated July 1, 2009 of the Municipal Treasurer of Ipil, Zamboanga Sibugay, requesting for clarification on the accountability of the Municipal Treasurer to deputize the Manager of the Public Economic Enterprise in the collection of fees and charges due therefrom, in aid of the formulation of rules and regulations for the proposed Public Economic Enterprise Code of subject municipality. In this connection, attention is invited to the following relevant provisions of the Local Government Code of 1991, 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. 305 . Fundamental Principles . This Title shall govern the conduct and management of financial affairs, transactions, and operations of provinces, cities and municipalities, and barangays . aIEDAC "xxx xxx xxx. "(f) Every officer of the local government unit whose duties permit or require the possession or custody of local funds shall be properly bonded , and such officer shall be accountable and responsible for said funds and for the safekeeping thereof in conformity with the provisions of law; "xxx xxx xxx. " SEC. 470 . Appointment, Qualifications, Powers, and Duties . "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: "(1) . . .; aIAEcD "(2) Take custody and exercise proper management of the funds of the local government unit concerned ; (Underscorings supplied) The foregoing provisions of R.A. No. 7160 or the Local Government Code of 1991, state clearly that the collection of local taxes, fees and charges is the duty and function of the local treasurer, thus, primarily accountable therefor. However, considering the multifarious duties and functions of the local treasurer and the impossibility of being able to attend to all taxpayers coming to the treasury office, the aforecited provisions of the same Code likewise allow the local treasurer to authorize deputies to perform such collection function. This goes without saying that the deputies to be authorized must be permanent appointees in the Local Treasury Office and properly bonded. It is very important that anyone deputized by the local treasurer to collect must be under the direct supervision of said local official being the ultimate accountable officer for local funds. For further information and guidance, Section 271 of the Local Treasury Operations Manual (LTOM) of this Bureau enumerated the role of treasurers in the operation of local government economic enterprise as follows: "Section 271. Role of Treasurers in Local Government Enterprise Operations . The Treasurer of the local government unit operating a public enterprise shall have the following functions in its establishment and operations: a) Advise the local chief executive, the sanggunian , and the management of the public enterprise on its financing aspects. b) Advise the sanggunian in the enactment of ordinances on public enterprises, especially in relation to their financial management. c) Take charge of the collections and take custody of funds of all government enterprises. IcSHTA d) Ensure that payments are made on duly certified and approved disbursement vouchers. e) Advise the local chief executive of delinquencies of government enterprise clientele for purposes of enforcing sanctions and taking the necessary remedial measures. f) Recommend qualified persons for designation as collectors. g) Maintain record of payments of market stall holders and of other government enterprise's lessors. h) Prepare periodic financial reports for each government enterprise as required by BLGF rules and regulations." The Manager of the public economic enterprise is not under the Local Treasury Office. The public economic enterprise is a separate entity established by authority of the sanggunian for a particular business purpose having its own business plan and budget. Consequently, the designation of the Manager of the public economic enterprise for the collection of taxes due therefrom will not be in keeping with the proper implementation of the aforecited provisions of law on the matter. THCSEA It is hoped that this clarifies matters. (SGD.) MA. PRESENTACION R. MONTESA, CESO III Executive Director