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BCLTE (Local Treasury Competency) study materials
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BCLTE (Local Treasury Competency) practice questions

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Question 1Local Government Finance and the Local Treasury

Under the Local Government Code, which body is constitutionally and statutorily mandated to enact the annual budget of a municipality?

  1. The Municipal Treasurer
  2. The Municipal Accountant
  3. The Sangguniang Bayan Correct answer.
  4. The Local Finance Committee

Explanation

The Sangguniang Bayan is the legislative body of the municipality and holds the power to enact the annual ordinance appropriating funds. The treasurer, accountant, and finance committee only prepare, certify, or support the budget; they cannot enact it.

Question 2Local Government Finance and the Local Treasury

A municipal treasurer receives a certified copy of the annual appropriation ordinance and the corresponding revenue ordinance. Which document authorizes the treasurer to disburse funds for the programs in the ordinance?

  1. The appropriation ordinance as enacted by the Sangguniang Bayan Correct answer.
  2. The certificate of net take-home pay of the mayor
  3. The budget preparation form submitted by the budget officer
  4. The annual audit report of the Commission on Audit

Explanation

The appropriation ordinance is the legal authority for expenditures, and the revenue ordinance provides the corresponding funding. Disbursements must trace back to a valid appropriation enacted by the sanggunian.

Question 3Local Government Finance and the Local Treasury

Which fund consists of money collected from taxes, fees, and charges that is available for appropriation to finance the general operations of the local government unit?

  1. The Special Account in the General Fund
  2. The Special Education Fund
  3. The General Fund Correct answer.
  4. The Trust Fund

Explanation

The General Fund holds unrestricted revenues available for general operations and appropriation. The Special Education Fund and trust funds carry legally restricted uses that cannot be diverted to general operations.

Question 4Local Government Finance and the Local Treasury

In the local treasury operation, which officer is primarily responsible for the safekeeping of local government funds and the collection of local taxes, fees, and charges?

  1. The local planning and development coordinator
  2. The local accountant
  3. The local assessor
  4. The local treasurer Correct answer.

Explanation

The local treasurer is the custodian of local funds and the officer charged with collecting local revenues. The accountant records transactions, the assessor values real property, and the planning coordinator prepares development plans.

Question 5Local Government Finance and the Local Treasury

A local treasurer receives real property tax payments. Within what period must the treasurer deposit the collections with the authorized depository bank or the provincial, city, or municipal treasurer as applicable?

  1. Within the same day of receipt
  2. Within the end of the fiscal year
  3. Within thirty days from receipt
  4. Within the period fixed by the Commission on Audit, generally the next banking day Correct answer.

Explanation

Local treasurers must deposit collections within the period prescribed by COA rules, which in practice means the next banking day to prevent funds from remaining undeposited. Holding collections for thirty days or until year-end would violate the deposit requirement.

Question 6Local Government Finance and the Local Treasury

Which of the following is the correct order of the budget process for a local government unit?

  1. Budget preparation, budget authorization, budget execution, budget accountability, budget review
  2. Budget review, budget preparation, budget authorization, budget execution, budget accountability
  3. Budget authorization, budget preparation, budget execution, budget review, budget accountability
  4. Budget preparation, budget authorization, budget review, budget execution, budget accountability Correct answer.

Explanation

The local budget cycle runs from preparation by the Local Finance Committee, to authorization by the sanggunian, to review by the reviewing authority, to execution, and finally to accountability through audit and reporting. Review follows authorization, not the reverse.

Question 7Local Government Finance and the Local Treasury

The Local Finance Committee of a municipality is composed of which set of officials?

  1. The budget officer, the treasurer, and the planning and development coordinator Correct answer.
  2. The accountant, the assessor, and the engineer
  3. The mayor, the vice mayor, and the treasurer
  4. The treasurer, the auditor, and the assessor

Explanation

The Local Finance Committee is composed of the local budget officer as chair, the local treasurer, and the local planning and development coordinator. This composition supports the committee's role in preparing and reviewing the budget.

Question 8Local Government Finance and the Local Treasury

A municipality's proposed budget exceeds the estimated revenues certified by the treasurer. What must the sanggunian do to comply with the balanced budget requirement?

  1. Approve the budget as proposed and borrow the shortfall without approval
  2. Approve the budget and defer the shortfall to the next fiscal year
  3. Reduce the proposed appropriations to the level of the certified estimated revenues Correct answer.
  4. Increase the certified revenues to match the appropriations

Explanation

The local budget must be balanced, meaning appropriations cannot exceed the estimated real income certified by the treasurer. When the proposal exceeds certified revenues, the sanggunian must reduce appropriations rather than assume unfunded spending.

Question 9Local Government Finance and the Local Treasury

A municipal treasurer is about to invest idle local funds. Which requirement must be satisfied before the investment is made?

  1. Approval of the COA auditor, with any instrument the treasurer selects
  2. Approval of the local chief executive and the sanggunian, with the investment limited to government securities or authorized instruments Correct answer.
  3. No approval is needed if the investment earns interest
  4. Approval of the local accountant alone, with any private bank of choice

Explanation

Idle local funds may be invested only in authorized instruments, and the investment requires the approval of the local chief executive and the sanggunian. Unilateral investment without these approvals, or in unauthorized instruments, exposes the treasurer to liability.

Question 10Local Government Finance and the Local Treasury

A taxpayer fails to pay the basic real property tax on time. Which consequence follows under the Local Government Code?

  1. The property is automatically transferred to the local government unit
  2. An interest at the rate prescribed by law accrues on the unpaid amount, and the delinquent property may be subject to administrative remedies Correct answer.
  3. The taxpayer is immediately imprisoned without notice
  4. The taxpayer is exempted from all future real property taxes

Explanation

Delinquent real property taxes accrue interest at the statutory rate, and the local government may pursue administrative remedies such as levy on real property. Automatic transfer of title or imprisonment without due process is not the consequence.

Question 11Local Government Finance and the Local Treasury

Which of the following best describes the 'special education fund' in local government finance?

  1. A fund created solely from the mayor's discretionary budget
  2. A fund created from the additional one percent real property tax and a share in the national wealth, used for education purposes Correct answer.
  3. A fund consisting of donations from private schools only
  4. A fund derived from fines collected by the local police

Explanation

The Special Education Fund comes from the additional one percent real property tax and the local government's share in national wealth proceeds, and it is used for education-related purposes through the local school board. Other collections do not automatically form part of this fund.

Question 12Local Government Finance and the Local Treasury

A local government unit wants to create a trust fund from a donation intended for a specific scholarship program. Which statement is correct?

  1. The donation may be used to pay salaries of regular employees
  2. The donation must be used only for the purpose stated by the donor and accounted for separately Correct answer.
  3. The donation may be used for any purpose once received
  4. The donation automatically becomes part of the general fund

Explanation

Trust funds are held and used strictly for the purpose for which they were received, and they must be accounted for separately from general revenues. Diverting trust money to other uses violates the fiduciary nature of the fund.

Question 13Local Government Finance and the Local Treasury

Under the Local Government Code, which of the following is a basic principle of local taxation?

  1. Taxes may be imposed retroactively to cover prior years
  2. Tax exemptions may be granted by the treasurer alone
  3. Local taxes may be imposed without any legislative authority
  4. Taxes, fees, and charges must be uniform and equitable and based on the taxpayer's ability to pay Correct answer.

Explanation

Local taxation must be uniform, equitable, and based on the taxpayer's ability to pay, among other principles. Retroactive imposition and unilateral exemptions by the treasurer are contrary to the statutory framework.

Question 14Local Government Finance and the Local Treasury

The local government unit collects fees for the issuance of permits and licenses. Which principle governs the setting of these charges?

  1. The fees must be zero for all businesses
  2. The fees must be the same as those charged by the national government
  3. The fees may be set at any amount to maximize revenue
  4. The fees must be commensurate with the cost of regulation and may not exceed what is necessary Correct answer.

Explanation

Regulatory fees and charges must bear a reasonable relation to the cost of regulation, inspection, and licensing. They are not a disguised revenue-raising tool and cannot be arbitrarily set to maximize income.

Question 15Local Government Finance and the Local Treasury

A barangay treasurer collects taxes and fees on behalf of the municipality. What is the treasurer's duty regarding these collections?

  1. Use the collections to pay barangay officials' salaries directly
  2. Deposit the collections in a private personal account
  3. Remit the collections to the municipal treasurer within the period prescribed by law and issue the proper official receipt Correct answer.
  4. Retain the collections for barangay use without remittance

Explanation

The barangay treasurer acts as a collecting agent for the municipality and must remit collections within the prescribed period while issuing proper official receipts. Retention or personal deposit of collected public money is prohibited.

Question 16Local Government Finance and the Local Treasury

Which of the following is a source of revenue for a local government unit under the Local Government Code?

  1. The internal revenue allotment share Correct answer.
  2. The salary of the local treasurer
  3. The national defense budget
  4. The foreign affairs budget

Explanation

The internal revenue allotment is the local government's share in national internal revenue taxes and is a major source of local revenue. National defense and foreign affairs budgets are national expenditures, and an official's salary is not revenue.

Question 17Local Government Finance and the Local Treasury

A local treasurer receives a check payment for local taxes. What should the treasurer do to properly account for the payment?

  1. Accept the check and issue an official receipt, then deposit it in the authorized depository bank Correct answer.
  2. Return the check and require cash only
  3. Endorse the check to a private supplier to cover expenses
  4. Accept the check and keep it in the office safe until year-end

Explanation

Check payments for local taxes must be receipted and deposited in the authorized depository bank like other collections. Keeping the check undeposited or using it to pay suppliers bypasses the treasury and accounting controls.

Question 18Local Government Finance and the Local Treasury

Which officer certifies the availability of funds before a local government unit enters into a contract involving the expenditure of public funds?

  1. The local engineer
  2. The local accountant
  3. The local treasurer Correct answer.
  4. The local budget officer

Explanation

The local treasurer certifies the availability of funds for a proposed expenditure or contract. This certification ensures that the obligation is covered by an existing appropriation and available cash.

Question 19Local Government Finance and the Local Treasury

A local government unit fails to enact its annual budget before the start of the fiscal year. What is the practical consequence for the treasurer?

  1. The treasurer must stop all disbursements permanently
  2. The treasurer may disburse funds based on the previous year's budget without any ordinance
  3. The treasurer operates on the previous year's budget on a reenacted basis until a new appropriation ordinance is enacted, subject to the rules on reenacted budgets Correct answer.
  4. The treasurer may use the funds for any purpose the mayor approves

Explanation

When a new budget is not enacted on time, the previous year's budget is deemed reenacted to allow continued operations at the same levels, subject to applicable rules. Disbursements still require a legal basis and cannot be repurposed at will.

Question 20Local Government Finance and the Local Treasury

A local government unit's budget includes a supplemental appropriation to cover an unforeseen calamity. Which requirement applies to the enactment of a supplemental budget?

  1. It must be supported by available funds and enacted through a supplemental appropriation ordinance Correct answer.
  2. It may be enacted by the mayor alone through an executive order
  3. It may be enacted retroactively to cover expenses of prior years
  4. It may be enacted without identifying any source of funds

Explanation

A supplemental budget must be funded from available resources and enacted through a supplemental appropriation ordinance by the sanggunian. Executive action alone or unfunded appropriations do not satisfy the legal requirements.

Question 21Local Government Finance and the Local Treasury

A local treasurer discovers that a taxpayer has been under-assessed on real property tax due to an erroneous assessment. What is the proper course of action?

  1. Ignore the deficiency to avoid litigation
  2. Immediately seize the taxpayer's personal property without notice
  3. Collect the deficiency through the proper assessment and collection process, observing the prescriptive period Correct answer.
  4. Waive the deficiency because the error was the assessor's fault

Explanation

Deficiencies arising from erroneous assessment may still be collected through the proper assessment and collection process, subject to the prescriptive period. Waiver or summary seizure without due process is not the correct remedy.

Question 22Local Government Finance and the Local Treasury

Which of the following best explains why the local budget must be balanced?

  1. It removes the need for an appropriation ordinance
  2. It allows the treasurer to spend without any limit
  3. It guarantees that all local taxes will be collected on time
  4. It prevents the local government unit from spending beyond its actual means and protects fiscal sustainability Correct answer.

Explanation

The balanced budget rule ties appropriations to actual estimated revenues, preventing deficit spending and protecting fiscal sustainability. It does not guarantee collection, replace the ordinance, or remove spending limits.

Question 23Local Government Finance and the Local Treasury

A local government unit receives a grant from a national agency for a specific infrastructure project. How should the grant be treated in the local budget and accounting?

  1. It must be deposited in the treasurer's personal account
  2. It must be recorded and used only for the purpose specified by the grant, with the corresponding appropriation and reporting Correct answer.
  3. It must be returned if not spent within one week
  4. It may be used for any local expense once received

Explanation

Grants are restricted funds that must be used for the purpose specified by the grantor, with proper appropriation and reporting. Free use of the grant or deposit into a personal account violates the terms and public fund rules.

Question 24Local Government Finance and the Local Treasury

Which of the following is a consequence of a local treasurer's failure to deposit public funds within the prescribed period?

  1. The treasurer is automatically promoted
  2. The treasurer may be held administratively and criminally liable for the undeposited funds Correct answer.
  3. The undeposited funds become the treasurer's personal property
  4. The local government unit is exempted from audit

Explanation

Failure to deposit public funds on time exposes the treasurer to administrative and criminal liability because it creates risk of loss or misuse. Public funds never become the custodian's personal property, and audit coverage is not removed.

Question 25Local Government Finance and the Local Treasury

A municipality wants to grant a tax exemption to a new business. Which statement is correct under local government finance rules?

  1. The mayor may grant the exemption through a memorandum
  2. The treasurer may grant the exemption verbally
  3. The exemption may be granted without any legal basis
  4. The sanggunian may grant the exemption through an ordinance, subject to the limits and conditions set by law Correct answer.

Explanation

Local tax exemptions must be granted through a valid ordinance of the sanggunian and must comply with the limits and conditions set by law. Verbal or executive grants without a legal basis are invalid.

Question 26Local Government Finance and the Local Treasury

Under the Local Government Code, which officer is primarily responsible for the custody and disbursement of local government funds?

  1. The local treasurer Correct answer.
  2. The local accountant
  3. The local budget officer
  4. The local planning and development coordinator

Explanation

The local treasurer is the official charged with the custody of local government funds and is responsible for disbursing them in accordance with law and ordinance. The accountant maintains accounting records, the budget officer prepares the budget, and the planning coordinator handles development planning, so none of them has custody of funds as their primary duty.

Question 27Local Government Finance and the Local Treasury

A municipal treasurer receives a real property tax payment in the form of a check drawn on a local bank. What is the proper action of the treasurer?

  1. Endorse the check to the municipal mayor for personal safekeeping
  2. Return the check to the taxpayer and require cash payment only
  3. Hold the check in the office safe until the end of the fiscal year
  4. Deposit the check in the name of the municipal treasurer and issue a receipt upon collection Correct answer.

Explanation

Under the Local Government Code, treasurers are authorized to accept checks in payment of taxes and must deposit them promptly in the name of the local government unit, issuing an official receipt upon collection. Retaining the check or requiring cash only would violate the duty to deposit public funds within the prescribed period.

Question 28Local Government Finance and the Local Treasury

A local government unit's budget includes a supplemental appropriation to cover an unforeseen calamity. Which requirement must be satisfied before the supplemental budget takes effect?

  1. It must be ratified by the Commission on Audit
  2. It must be approved by the sanggunian upon the recommendation of the local finance committee Correct answer.
  3. It must be approved by the Office of the President
  4. It must be published in a newspaper of general circulation

Explanation

A supplemental budget addressing an unforeseen calamity requires the sanggunian's approval upon the recommendation of the local finance committee, which reviews the availability of funds. Approval by the President, COA ratification, or newspaper publication is not a condition for the effectivity of a supplemental budget under the Local Government Code.

Question 29Local Government Finance and the Local Treasury

A local government unit fails to enact its annual budget before the start of the fiscal year. What is the practical consequence under the Local Government Code?

  1. The local government unit must cease all operations until a budget is passed
  2. The national government automatically takes over the local government unit's financial administration
  3. The local government unit may operate under the previous year's budget on a month-to-month basis until a new budget is enacted Correct answer.
  4. The local treasurer may disburse funds without any appropriation

Explanation

When a local government unit fails to enact its annual budget on time, it may continue to operate under the preceding year's budget on a month-to-month basis until a new budget is approved. This prevents a shutdown while ensuring that expenditures remain within authorized levels.

Question 30Local Government Finance and the Local Treasury

A local treasurer discovers that a taxpayer has been under-assessed on real property tax due to an erroneous assessment. What is the treasurer's proper course of action?

  1. Collect the correct tax due and any applicable penalties retroactive to the date the error was made Correct answer.
  2. Cancel the assessment and waive the deficiency
  3. Wait for the taxpayer to voluntarily pay the difference
  4. Refer the matter to the Commission on Audit for resolution

Explanation

The local treasurer has the duty to collect the correct taxes due; if an error results in under-assessment, the deficiency may be collected retroactively with penalties as provided by law. Waiving the deficiency or awaiting voluntary payment would result in loss of revenue.

Question 31Laws, Rules and Regulations on Local Treasury Operations

Under the Local Government Code, which official is vested with the authority to maintain a separate bank account for each special fund of a local government unit?

  1. The local treasurer Correct answer.
  2. The local budget officer
  3. The Commission on Audit representative
  4. The local accountant

Explanation

The local treasurer is the custodian of local funds and is authorized to open and maintain bank accounts, including a separate account for each special fund created by the sanggunian. The accountant's role is to keep books and records, not to hold or deposit funds.

Question 32Laws, Rules and Regulations on Local Treasury Operations

A municipality collects real property taxes beyond the amount projected in its approved budget. What is the required treatment of this excess collection?

  1. It accrues to the general fund and may be appropriated in the next budget cycle Correct answer.
  2. It is placed in a trust fund controlled by the mayor
  3. It must be returned to the taxpayers proportionally
  4. It is automatically transferred to the national treasury

Explanation

Excess collections of locally imposed taxes and revenues accrue to the general fund of the local government unit and become available for appropriation in the succeeding budget. They are not refunded to taxpayers simply because collections exceeded projections.

Question 33Laws, Rules and Regulations on Local Treasury Operations

Which body is empowered to prescribe the form, content, and manner of preparation of the annual budget of a barangay?

  1. The Sangguniang Barangay Correct answer.
  2. The Sangguniang Panlungsod
  3. The Department of Budget and Management
  4. The Department of the Interior and Local Government

Explanation

Each sanggunian prescribes the form and content of the budget for its own level of local government, so the Sangguniang Barangay governs barangay budget preparation. Higher sanggunians and national agencies do not dictate barangay budget form.

Question 34Laws, Rules and Regulations on Local Treasury Operations

A local treasurer receives a notice of garnishment from a court against an LGU account held for a special education fund. What is the correct initial action?

  1. Verify the nature of the fund and seek legal guidance before releasing any amount Correct answer.
  2. Honor the garnishment because court orders override local fund restrictions
  3. Refer the matter to the local accountant for recording only
  4. Immediately transfer the account balance to another bank

Explanation

Special funds are restricted by law to specific purposes, and public funds generally cannot be garnished absent clear legal authority. The treasurer must verify the fund's character and obtain legal advice rather than automatically releasing restricted money.

Question 35Laws, Rules and Regulations on Local Treasury Operations

Which of the following is a basic principle governing local fiscal administration under the Local Government Code?

  1. Unappropriated balances may be spent with verbal approval of the mayor
  2. Local treasurers may advance funds for any urgent private need
  3. Local funds shall be spent only for public purposes as approved in the budget Correct answer.
  4. Revenues may be diverted to projects outside the LGU's jurisdiction

Explanation

Local fiscal administration rests on the principle that no money shall be paid out of the local treasury except in pursuance of an appropriation ordinance or law. Public funds must serve public purposes authorized in the budget.

Question 36Laws, Rules and Regulations on Local Treasury Operations

A city treasurer deposits collections in a private bank not designated as a government depository. Which rule is most directly violated?

  1. Only the mayor may choose where collections are deposited
  2. Collections must first be remitted to the Bureau of the Treasury
  3. Deposits of local funds must be made in banks designated by the proper authority, generally including a government depository Correct answer.
  4. All local funds must be kept in the treasurer's vault at all times

Explanation

Local funds must be deposited in banks duly designated, and the law contemplates depositories including government banks such as the Land Bank. Placing public money in an undesignated private bank exposes the treasurer to liability.

Question 37Laws, Rules and Regulations on Local Treasury Operations

What is the maximum period within which a local treasurer must deposit collections intact in the authorized depository bank, absent a shorter period fixed by ordinance?

  1. Within one month
  2. Within one week
  3. Within the next banking day Correct answer.
  4. Within the quarter

Explanation

Collections must be deposited intact with the authorized depository bank within the period fixed by law, which is the next banking day unless a shorter period is prescribed. Keeping collections undeposited beyond that period creates a presumption of misuse.

Question 38Laws, Rules and Regulations on Local Treasury Operations

A treasurer issues a receipt for taxes paid in cash but records a lower amount in the official register and keeps the difference for personal use. Which offense is most accurately described?

  1. Unauthorized disbursement
  2. Malversation through misappropriation of collections Correct answer.
  3. Failure to render an account
  4. Illegal exaction of taxes

Explanation

The treasurer receives public money in an official capacity and keeps part of it for personal use. That explicit misappropriation supports malversation. Technical malversation instead involves applying appropriated public funds to a different public purpose; merely recording a lower amount would not establish either form of diversion.

Question 39Laws, Rules and Regulations on Local Treasury Operations

Which document primarily authorizes a local treasurer to disburse funds for a specific purpose?

  1. A memorandum from the local accountant
  2. A disbursement voucher supported by an appropriation and obligation Correct answer.
  3. A verbal instruction from the sanggunian presiding officer
  4. A resolution of a barangay assembly

Explanation

Disbursements require a properly approved disbursement voucher supported by an appropriation and an obligation, plus supporting documents. Verbal instructions, memoranda, or assembly resolutions alone cannot authorize payment.

Question 40Laws, Rules and Regulations on Local Treasury Operations

A local government unit wants to avail of a loan for infrastructure. Which requirement must be satisfied before the loan may be contracted?

  1. Approval by the local accountant
  2. Approval by the sanggunian through an ordinance and compliance with the statutory debt ceiling and purposes Correct answer.
  3. Approval by the local treasurer alone
  4. Approval by the barangay captain

Explanation

Loans and other borrowings require sanggunian authorization by ordinance and must comply with statutory limitations on debt service and the purposes for which loans may be contracted. The treasurer alone cannot bind the LGU to a loan.

Question 41Laws, Rules and Regulations on Local Treasury Operations

Under the Local Government Code, what is the primary fund into which all income not otherwise classified as a special fund accrues?

  1. The calamity fund
  2. The special education fund
  3. The general fund Correct answer.
  4. The trust fund

Explanation

The general fund receives all local income not specifically allocated by law to a special fund or trust fund. Special funds such as the SEF and calamity fund are exceptions carved out by statute.

Question 42Laws, Rules and Regulations on Local Treasury Operations

A treasurer receives a check payable to the LGU for business taxes. What is the proper handling?

  1. Hold the check until the taxpayer requests a refund
  2. Cash the check personally and remit the amount later
  3. Deposit the check intact to the authorized depository account and issue the corresponding official receipt Correct answer.
  4. Endorse the check to a supplier to pay an obligation

Explanation

Checks received for local taxes must be deposited intact in the authorized depository account and properly receipted. Cashing or endorsing a taxpayer's check to a third party would violate custody and deposit rules.

Question 43Laws, Rules and Regulations on Local Treasury Operations

Which is the correct order of the local budget cycle?

  1. Budget preparation, budget authorization, budget execution, and budget accountability Correct answer.
  2. Budget authorization, budget preparation, budget accountability, and budget execution
  3. Budget accountability, budget preparation, budget execution, and budget authorization
  4. Budget execution, budget preparation, budget authorization, and budget accountability

Explanation

The local budget cycle begins with preparation by the executive, followed by authorization through the sanggunian's appropriation ordinance, then execution, and finally accountability through reporting and audit.

Question 44Laws, Rules and Regulations on Local Treasury Operations

A treasurer is asked to pay a claim that has a valid appropriation but no certification of availability of funds from the budget officer. What should the treasurer do?

  1. Pay half of the claim as a compromise
  2. Pay immediately because the appropriation exists
  3. Refer the claim to the taxpayer for approval
  4. Withhold payment until the required certification is obtained Correct answer.

Explanation

Disbursement requires not only an appropriation but also certification that funds are available for the purpose. Without that certification, the treasurer should not release public money.

Question 45Laws, Rules and Regulations on Local Treasury Operations

What is the effect of a sanggunian's failure to enact an appropriation ordinance before the start of the fiscal year?

  1. The national government takes over the LGU's finances
  2. The treasurer may spend without any budget
  3. All local operations automatically stop
  4. The LGU operates on the previous year's budget on a reenacted basis as provided by law Correct answer.

Explanation

When a sanggunian fails to enact a new appropriation ordinance, the previous year's budget is deemed reenacted and continues in force, subject to statutory conditions. Local operations do not halt, and the treasurer still cannot spend without an operative budget.

Question 46Laws, Rules and Regulations on Local Treasury Operations

A local treasurer must render an account of collections and disbursements. To whom is this accountability primarily directed?

  1. The taxpayer association
  2. The Commission on Audit and the sanggunian, as prescribed by law and ordinance Correct answer.
  3. The local chamber of commerce
  4. The barangay assembly only

Explanation

The treasurer renders accounts to the Commission on Audit and reports to the sanggunian as required by law and ordinance. These reports support audit and legislative oversight of local funds.

Question 47Laws, Rules and Regulations on Local Treasury Operations

A taxpayer pays real property tax after the deadline. Which amount may the treasurer legally collect in addition to the basic tax?

  1. A donation to the LGU's trust fund
  2. A fee for the treasurer's personal time
  3. The statutory interest and penalties prescribed by the code and ordinance Correct answer.
  4. An arbitrary surcharge set by the treasurer

Explanation

Delinquent taxes carry interest and penalties at rates fixed by law and ordinance, and the treasurer may collect only those prescribed amounts. The treasurer cannot impose ad hoc surcharges or personal fees.

Question 48Laws, Rules and Regulations on Local Treasury Operations

Which fund is sourced from an additional one percent real property tax and is restricted to the operation of public schools?

  1. The trust fund
  2. The Special Education Fund Correct answer.
  3. The calamity fund
  4. The general fund

Explanation

The Special Education Fund is derived from an additional real property tax and is earmarked by law for the operation and maintenance of public schools. It cannot be used for unrelated local projects.

Question 49Laws, Rules and Regulations on Local Treasury Operations

A treasurer discovers that a previous administration used calamity funds for a sports festival. What is the most appropriate characterization?

  1. A lawful use because the fund was in the treasury
  2. A valid realignment because the mayor approved it
  3. An allowable expense if receipts exist
  4. A diversion of a special fund to an unauthorized purpose Correct answer.

Explanation

Calamity funds are special funds restricted to disaster-related purposes, and using them for a sports festival diverts them from their legal purpose. Approval by the mayor or the existence of receipts does not cure the misuse.

Question 50Laws, Rules and Regulations on Local Treasury Operations

Which of the following best describes the treasurer's duty regarding idle local funds?

  1. Idle funds may be invested in accordance with law and guidelines to generate additional income for the LGU Correct answer.
  2. Idle funds must be transferred to the national government
  3. Idle funds must remain in a non-interest-bearing account indefinitely
  4. Idle funds may be lent to local officials

Explanation

Local treasurers are authorized to invest idle funds in lawful instruments under guidelines issued by the proper authority, with the income accruing to the LGU. Leaving funds idle or lending them to officials is not permitted.