SYSTEMIC FAILURES: Barangay, SK budget crisis rooted in institutional gaps

By Rjay Zuriaga Castor

The widespread budget crisis that has left dozens of barangays and Sangguniang Kabataan (SK) councils without approved annual budgets stems from interconnected institutional deficiencies, a joint committee investigation by the Iloilo City Council found.

The committee report, released Wednesday, said the crisis was not caused solely by delayed submissions from barangays and SK councils but by broader systemic failures that have affected budget preparation and approval.

“The crisis is not merely a problem of delayed submission. It arises from interconnected deficiencies in developmental planning, technical capacity, preparation and processing of fiscal documents, inter-office coordination, records custody, processing timelines, administrative turnover, compliance monitoring, and accountability,” the report said.

The inquiry, conducted by the Committees on Appropriations, Barangay Affairs, and Youth and Sport Development, found that one of the primary challenges facing local officials is the highly technical nature of budget preparation.

Many officials struggled with complex planning methodologies, including ecological profiles and “problem tree analysis,” which the report described as too burdensome at the barangay level.

As of July 20, only 117 barangays and 73 SK councils had approved annual budgets for fiscal year 2026.

That leaves 63 of the city’s 180 barangays and 107 SK councils without approved spending plans more than halfway through the fiscal year.

The figures nonetheless mark a sharp improvement from February, when only 12 barangays and two SK councils had approved 2026 budgets — the shortfall that prompted the council to open the inquiry in the first place.

Barangays without approved budgets operate under reenacted budgets, which confine spending to mandatory and essential operating expenses and rule out new programs, capital outlays, and salary increases.

SK councils are affected in turn, because their allocations are drawn from 10 percent of the general fund of their respective barangays.

The report also found recurring confusion between the Barangay Development Plan (BDP), a medium-term development framework, and the Annual Investment Program (AIP), which identifies projects and activities for a specific fiscal year.

The committees said the absence of a properly prepared BDP left local officials without a basis for aligning annual expenditures with long-term development priorities.

The committees also flagged as a “serious concern” the reliance of some barangays and SK councils on private contractors or external service providers to prepare budget and financial documents.

In some cases, the report said, those contractors retained possession of vital government records, including Philippine Government Electronic Procurement System (PhilGEPS) accounts, checks, and passbooks.

The committees said the practice delayed the liquidation of public funds.

They added that it also deprived local officials of control over government records and financial accountability.

The report further found that the issuance of the Certified Statement of Income, a prerequisite for the approval of annual budgets, was frequently delayed because of incomplete financial reports from previous years.

It also cited the absence of a standardized system for tracking and date-stamping documents, which made it difficult to determine whether delays originated from the submitting barangay or the receiving city office.

Another recurring issue was the incomplete turnover of records and properties by outgoing officials, which forced their successors to reconstruct financial records before completing budget requirements.

“The recurring deficiencies cannot be adequately addressed through isolated directives, temporary interventions, or occasional training activities,” the report stressed.

“A permanent, coordinated, adequately funded, and legally defined institutional framework is necessary to provide barangays and SK councils with meaningful technical assistance while ensuring accountability for unjustified delay, incomplete submission, improper custody of official records, and repeated non-compliance,” it added.

To address the findings, the committees recommended passage of the proposed Barangay-SK Budgetary Reform Ordinance.

Among the measure’s key provisions are the simplification of development planning through district-based consultations and practical planning templates tailored to barangay needs.

The proposed ordinance also seeks to institutionalize technical assistance through the Barangay Academy, which would provide one-on-one coaching, professional support, and capacity-building programs for barangay and SK officials.

The measure aims to establish a permanent framework for improving local budget preparation, strengthening accountability, and ensuring the timely approval of annual budgets for barangays and SK councils in Iloilo City.