Notes

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BARANGAY DUMOY, TALOMO DISTRICT
CITY OF DAVAO


Notes to Financial Statements


1. Profile


Barangay Dumoy was created when Davao City pronounced it as a distinct barangay. It is
located at the first congressional district of Davao City comprised by two administrative districts
which is the Poblacion and Talomo Districts. Barangay Dumoy is more or less 25 kilometers from
the point entry, Sasa Wharf and the Davao International Airport. Barangay Dumoy are bounded by
Barangay Baliok in the north, Toril Proper in the west , Davao Gulf in the south and Barangay
Bago Aplaya in the east.

Barangay Dumoy has a total land area of 519.84 hectares or 0.21% of the total land area of
Davao City with 23 puroks. The total land use distributions are 70.1% residential, 10.25%
commercial, 0.38% institutional zone. 2.09% easement zone, 7.33% protected water zone and
9.84% is protected planned unit development.

Topographically, Barangay Dumoy is generally flat. The land use classification is within
the stretch of the District Urban Centers (Poblacion) and Toril Urban Center. It is situated at the
biggest water reservoirs of Davao City, which are Calinan, Toril and Talomo Triangle whose
recharge point is the famous Mount Apo. It rests on top of the Davao City acquifier. Dumoy water
is one of the main sources of water of the Davao City Water District distributed at the household
and industrial level of Metro Davao.

Barangay Dumoy is headed by their Barangay Captain Jessie Mar Y. Culaste; Barangay
Councilors Jingo Adlawan, Rolando Concepion, George Y. Culaste, Fidel Masalunga, Judisa
Cabasan, Ernesto Baclaan, Jose Marie Bernardo Baluran and Sangguniang Kabataan Chairman
Joey Cabasan.

Role of the Barangay

As the basic political unit, the Barangay serves as the primary planning and implementing
unit of government policies, plans, programs, projects and activities in the community, and as a
forum wherein the collective views of the people may be expressed, crystallized and considered,
and where disputes may be amicably settled.

Manner of Creation

A barangay may be created, divided, merged, abolished, or its boundaries be substantially
altered, by law or by ordinance of the Sangguniang Panlungsod, subject to the approval of the
majority of the votes cast in the plebiscite to be conducted by the Comelec in the local government
units directly affected within such period of time as may be determined by the law or ordinance
creating such barangay.

Notes
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Fund Composition

General Fund (GF) is the only fund maintained by the barangay. It shall consist of monies
and resources of the barangay which are available for the payment of expenditures, obligations
or purposes not specifically declared by law as accruing and chargeable to, or payable from,
any other fund. Under this fund consists the Barangay Development Fund, Local Disaster Risk
Reduction and Management Fund, Sangguniang Kabataan Fund and the Gender and
Development Fund.

a. Barangay Development Fund (BDF) Section 287 of the Local Governent Code mandates
every local government unit to appropriate in its annual budget no less than
twenty percent (20%) of its annual internal revenue allotment for development
projects. The utilization of this fund is expressly stated in DILG-DBM Joint
Memorandum Circular No. 2011-1 dated April 13, 2011.

Unexpended balances and appropriation of the Development Fund from completed
or discontinued projects shall be reverted and be re-appropriated for the development
projects. However, Development Projects under BDF can be funded also from General
Fund Proper.

b. Local Disaster Risk Reduction and Management Fund (LDRRMF) Section 324d of
the Local Government Code mandated that five percent (5%) of the estimated revenue
from regular sources shall be set aside as an annual lump sum appropriation for
unforeseen expenditures arising from occurrence of calamities, provided the the
Barangay has been declared to be in the state of calamity by the Sangguniang
Panlungsod.

Stated under Section 21 of RA No. 10121 The Philippine Disaster Risk
Reduction and Management Act, thirty percent (30%) of this shall be appropriated as
Quick Response Fund (QRF) or stand by fund for relief and recovery
projects/activities, while seventy percent (70%) is for Mitigation Fund intended for
disaster preparedness and mitigation activities. Unexpended LDRRMF shall accrue to
a special trust fund solely for the purpose of supporting disaster risk reduction and
management activities of the LDRRMCs within the next five (5) years. Any such
amount still not fully utilized after five (5) years shall revert back to the general fund
and will be available for other social services to be identified by the local sanggunian.

Accounting and reporting guidelines for these funds is prescribed under COA
Circular No. 2012-002 dated September 12, 2012.

c. Sangguniang Kabataan Fund (SK) Section 329 of the Local Government Code mandated
that ten percent (10%) of the general fund of the barangay shall be set aside for
sangguniang kabataan. The said ten percent (10%) shall be appropriated and
administered by the sangguniang kabataan and shall be spent for the purposes provided
in Rule XXVII of the IRR.

Allocation of SK Funds should include mandatory appropriation for the following
with their prescribed percentages; Green Brigade 10%, Livelihood 10%, Capability
10%, and Anti Drug Abuse Campaign 10%. Two percent (2%) shall be automatically
appropriated for Annual Dues while Fifty eight percent (58%) are for programs
Notes
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designed to enhance the socio-political, economic, cultural, intellectual, moral,
spiritual, and physical development of the members.

d. Gender and Development Fund (GAD) consist of at least 5% of the total annual
appropriation for GAD-related activities that should be attributed in the existing
programs/projects/activities of the Barangays annual budget. This is a statutory
requirement that must be complied with by provinces, cities, municipalities and
barangays. The Philippine Plan for Gender-Responsive Development (PPGD), 1995-
2025 which was adopted through Executive Order No. 273, provided specific services
that must be implemented for women in relation to the services stipulated in Republic
Act 7160 or the Local Government Code. Republic Act 7192 and Executive Order 273
mandate agencies, including LGUs to institutionalize GAD in government by
incorporating the GAD concerns in their planning, programming and budgeting
process.

2. Summary of Significant Accounting Policies

2.1. Basis of Preparation

The financial statements have been prepared in conformity with generally accepted state
accounting principles and standards in accordance with the New Government Accounting System
for the Barangay.


Basis of Recording

a. Accrual Accounting-

A modified accrual basis of accounting is used. Under this method, all expenses
shall be recognized when incurred. Income shall be on accrual basis (e.g. Share from
Internal Revenue Collections) except for transactions where accrual basis is impractical or
when other methods may be required by law.

For income like other taxes, fees, charges and other revenues, cash basis of
accounting is used.

b. Chart of Accounts and Account Codes-

A new coding structure and a new chart of accounts with a three-digit account
numbering system shall be adopted.

Account Titles and Codes in the financial statements are in conformity with the
New Chart of Accounts prescribed under the Revised New Government Accounting
System Chart of Accounts.

Monetary Denomination Used

The financial statements have been prepared and valued in Philippine Peso.



Notes
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2.2. Accounting Policy Observed for each Account

a. Cash-

Cash includes the Petty Cash Fund, Payroll Fund, and Cash in Bank. The Petty
Cash Fund shall be maintained under the imprest system. This fund shall be sufficient for
the recurring petty operating expenses for one month and shall be replenished as soon as
disbursements reach seventy five percent (75%) or as needed.

b. Receivables-

Receivables include loans granted by the Barangay to duly authorized recipients in
accordance with existing agreement; advances granted to Officers and Employees for
official travels.

c. Plant, Property and Equipment-

Property, Plant and Equipment acquired through purchase shall include all costs
incurred to bring it to the location necessary for its intended use, like transportation,
freight, installation costs, etc. In the books of accounts, the purchase is immediately
recorded as asset.

Expenditures for repairs and maintenance are charged to expense as incurred.
When assets are retired or otherwise disposed of, their cost and related accumulated
depreciation are removed for the books of accounts.

d. Depreciation-

The straight-line method of depreciation is used. A residual value equivalent to ten
percent (10%) of the cost is set-up and depreciation starts on the second month after
purchase/ completion of the property, plant and equipment. Public infrastructures are not
charged of any depreciation.

Adjustments arising from the revision of the assets of useful life were charged to
the current and subsequent years depreciation expenses of the particular assets

e. Public Infrastructures-

Public infrastructures are assets for use of the general public, such as roads,
bridges, waterways, railways, plazas, monuments, etc. A Registry of Public Infrastructures
(RPI) shall be maintained according to classification to record all infrastructures for use of
the general public.

The cost of public infrastructures such as roads, bridges and other infrastructures
for general public use are not carried in the books of accounts.

f. Other Assets-

Other assets include Breeding Stocks and Work/Other Animals which are
recognized at cost or appraised value upon purchased.

Notes
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g. Liabilities-

Liability shall be recognized at the time goods and services are accepted or rendered and
supplier/ creditor bills are received. .

h. Equity-

Equity represents the difference between the assets and liabilities. (Sec.167 of
Manual on the New Government Accounting System for Local Government Units Vol. III)

i. Correction of Fundamental Errors-

Fundamental errors of prior years are corrected by using the Prior Years
Adjustment Account. Errors affecting current years operation are charged to the current
years accounts.

3. Cash and Other Cash Accounts

Cash in Bank Local Currency, Current Account P 6,758,367.33

Barangay Dumoy maintains its account at the Land Bank of the Philippines, Matina Branch. As of
December 31, 2012, cash balances were reconciled with the bank balances through the preparation of Bank
Reconciliation Statement.

4. Property, Plant and Equipment

This account consists of:
Account Title
Estimated
Useful Life

2012

2011

Office Buildings [ Barangay Hall ] 20 years P 754,359.77 P 754,359.77
Electrification, Power, and Other Energy
Structures 10 years

188,394.60

188,394.60
Office Equipments 5 years 160,355.00 146,960.00
Furniture and Fixtures 10 years 333,720.00 314,220.00
IT Equipments and Software 5 years 425,604.40 425,604.40
Library Books 5 years 97,751.00 97,751.00
Communication Equipments 10 years 693,789.00 636,639.00
Communication Equipment-Disaster
Response and Rescue Equipment 10 years

47,700.00

-
Firefighting Equipment and Accessories 7 years 194,450.00 194,450.00
Sports Equipment 10 years 55,677.90 55,677.90
Motor Vehicles 7 years 919,600.00 919,600.00
Water Craft 10 years 49,960.24 49,960.24
Other Transportation Equipment 10 years 21,160.00 21,160.00
Other Property, Plant, and Equipment 5 years 813,192.00 774,192.00
Other Property Plant and Equipment-
Disaster Response and Rescue Equipment 5 years

91,000.00

-
Total Book Value P 4,846,713.91 P 4,578,968.91
Less: Accumulated Depreciation (2,991,025.70) (2,758,837.41)
Net Book Value P 1,855,688.21 P 1,820,131.50
Notes
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The straight-line method of depreciation is used. A residual value equivalent to ten percent (10%)
of the cost is set-up and depreciation starts on the second month after purchase/ completion of the property,
plant and equipment. Depreciation of these properties started from the conversion of Barangays from the
Old Government Accounting System to the New Government Accounting System during the fiscal year
2007.
However, adjustments to accumulated depreciation were made to properties acquired prior to 2007
to properly account the impairment of these assets, as mandated by COA Circular 2004-003 dated October
4, 2004.

Properties purchased before January 1, 2010 do not have Government Property Numbers.
However, the Barangay have already assigned Property Numbers to all properties acquired during the year.
Furthermore, the Barangay is in the process of doing their inventory of all properties on hand in which we
hope to hold Property Numbers thereafter as soon as a proper list would be readily available.

On the other hand, to have a basis for accounting of these properties with the minimum resources
we have, the City Accountants Office have adopted a Schedule of Property, Plant and Equipment. This
schedule is an initiative of the office to cater questions regarding these assets. In order to track these
properties, we have incorporated the date and check numbers of these purchased properties in replacement
of the property numbers.


5. Trust Liability-DRRM




Trust Liability-DRRM P 608,319.70

The Trust Liability-DRRM account is used to record transfer of unutilized LDRRMF as mandated
by COA Circular No. 2012-002 dated September 12, 2012. The amount of P 463,551.35 and P 144,768.35
represents the unutilized balance of the LDRRMF for the year 2011 and 2012, respectively.


6. Other Payables




Other Payables P 67,500.00

Other payables are funds entrusted to the Barangay by different government/private agencies for
the on-going projects/programs, broken down as follows:

a) P 2,000.00 financial assistance from Vice Mayors Office for their Araw ng Barangay
celebration,

b) P 5,500.00 consolation/participation prize for Gulayan sa Barangay competition from
the City Government of Davao,

c) P 50,000.00 Priority Development Assistance Fund (PDAF) from Cong. Luzviminda C.
Ilagan of Gabriela Party List for implementation of livelihood programs/projects,

d) P 10,000.00 Local Government Service Equalization Fund (LGSEF) granted during the
year 2004 which remained unutilized.
Notes
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7. Government Equity

Changes in Government Equity is presented below:

2012

2011
Government Equity Beginning P 7,019,057.46 P 8,189,134.54
Add: Retained Operating Surplus
Net Income 2,149,606.49 1,464,987.80
Prior Years Adjustments - (2,047,480.57)
Total P 9,168,663.95 P 7,606,641.77
Add/Deduct: Transfer from (to)
Less: Transfer of Completed Projects to Registry
Public Infrastructures (4,207,979.33) (587,584.31)
Reforestation Project - -
Other Adjustments
Receipt of Completed Trust Projects from DPWH 3,437,482.52 -
Transfer of Prior Year Unexpended/unobligated
LDRRMF to Account Code 438 Trust Liability- DRRM (463,551.35) -
Government Equity, Ending Balance P 7,934,615.79 P 7,019,057.46


8. Income Account

The Income account is broken down as follows:

Local Sources
Community Tax P 67,762.53
Real Property Tax 1,250,182.17
Subsidy Income from Other LGUs [City Aid] 1,000.00
Clearance and Certification Fees 61,730.65
Garbage Fees 12,084.00
Other Income 41,867.64
Internal Revenue Allotment 7,162,367.00
Total P 8,596,993.99

The amounts of P 1,250,182.17, P 67,762.53, and P 12,084.00 represent the 30%, 50%, and 20%
shares of the barangay from the City Governments collections of RPT, CTC, and Garbage Fees,
respectively.

P 1,000.00 Subsidy Income from Other LGUs is receipt of aid from the City Government of Davao
(Section 324c of the Local Government Code).

Clearance and certification fees are income collected from issuance of clearance/certificates to
individuals/organizations/groups/agencies/corporations by the barangay as part of their taxing power as
provided in Article 4, Section 152 of the Local Government Code.

Other income comprises the interest earned on bank deposits, and other miscellaneous income
earned and received by the barangay.

Notes
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The Internal Revenue Allotment (IRA) is a share in the national internal revenue collections
directly credited on a monthly basis to the authorized government depository bank of the barangay, which
represents the main source of funds for their Annual/Supplemental Budget. The total amount of P
7,162,367.00 were Allotments for the month of December 2011 to November 2012. IRA for the month of
December 2011 was received on the 15
th
of January 2012.


9. Expenditure Account

The Expense Account is broken down as follows:

Personal Services P 4,429,161.50
Maintenance and Other Operating Expenses 2,018,226.00
Total P 6,447,387.50

Expenditures include all charges against the fund of the agency for current operating expenditures.

10. Local Disaster Risk Reduction Management Fund (LDRRMF)

The LDRRMF represents the amount set aside by the LGU to support its disaster risk management
activities pursuant to R.A. No. 10121 otherwise known as the Philippine Disaster Risk Reduction and
Management Act of 2010. The amount available and utilized during the year totaled P 876,219.70 and
P 267,900.00, respectively, broken down as follows:


Particulars Amount
Available Utilized Balance
Current Year Appropriations:

Quick Response Fund (QRF) P 123,800.50 P - P 123,800.50
Mitigation Fund (MF)
MOOE 20,967.85 - 20,967.85
Capital Outlay 267,900.00 267,900.00 -
Total 412,668.35 267,900.00 144,768.30
Continuing Appropriation:
P
- P - P -
Special Trust Fund

CY 2011 463,551.35 - 463,551.35
Total 463,551.35 - 463,551.35
Total P 876,219.70 P 267,900.00 P 608,319.70




PREPARED BY:


RIZALINA N. JUSTOL
City Accountant