Dear Attorney,

I served as a Barangay Treasurer before resigning due to the pressures of the role. I am seeking your legal guidance regarding an incident that occurred during my tenure.

During my time as treasurer, there were instances when certain funds were withdrawn from the barangay’s bank account by recipients or their representatives. However, one particular instance has raised concerns. After withdrawing funds for a recipient, they failed to come to me to claim the amount. Consequently, I redeposited the unclaimed funds back into the barangay’s bank account.

Now that I am no longer in the position, I am concerned about potential liabilities regarding this matter. Specifically, am I liable for any complications or issues arising from my actions related to the withdrawal and redepositing of funds? I want to understand if there is any risk of administrative, civil, or criminal liability and whether I have fulfilled my legal and fiduciary obligations in handling public funds.

I appreciate your guidance on this matter.

Respectfully,
A Concerned Former Barangay Treasurer

Understanding the Liability of a Barangay Treasurer in Handling Undisbursed Funds

A Barangay Treasurer’s role is integral in ensuring the proper handling of barangay funds and resources. The situation described raises questions about accountability, proper procedures for managing unclaimed funds, and the potential legal liabilities a former barangay treasurer might face. To address these concerns comprehensively, we will examine the legal framework, fiduciary responsibilities, and potential remedies or defenses available under Philippine law.

I. Legal Framework Governing Barangay Treasurers

Barangay Treasurers are guided by several laws and regulations, including but not limited to:

The Local Government Code of 1991 (Republic Act No. 7160):
- Section 389 outlines the duties and responsibilities of Barangay Treasurers, emphasizing custody, safekeeping, and disbursement of barangay funds in accordance with applicable laws.
- Section 340 underscores accountability for public funds, holding treasurers personally liable for any loss or misuse of government resources under their control.
The Revised Penal Code (RPC):
- Articles on malversation (Article 217) and failure to account for public funds (Article 218) penalize public officials for misappropriation or failure to disburse or return funds.
Commission on Audit (COA) Rules and Circulars:
- COA Circular No. 97-002 details the accountability of public officers in handling government funds, requiring proper documentation, prompt liquidation, and adherence to lawful procedures.

II. Fiduciary Responsibilities of a Barangay Treasurer

As a fiduciary of public funds, a Barangay Treasurer is entrusted with the following duties:

Proper Disbursement of Funds:
- Treasurers are required to disburse funds only to authorized individuals or entities, supported by complete and accurate documentation.
Reporting and Transparency:
- All financial transactions must be accounted for and reflected in the barangay’s official records.
Safekeeping of Funds:
- Treasurers must ensure that unspent or unclaimed funds are properly safeguarded, usually by redepositing them into the barangay’s official account.

Failure to adhere to these duties may result in administrative, civil, or criminal liability.

III. Addressing Specific Concerns

A. Liability for Redepositing Unclaimed Funds

Based on your account, you withdrew funds for a recipient who did not claim them, and you subsequently redeposited these funds into the barangay’s bank account. This action appears to demonstrate due diligence in safeguarding public funds. Let us assess potential liabilities:

Administrative Liability:
- Administrative liability could arise if the redeposit was not properly documented or reported. The redeposit must be reflected in the barangay’s official financial records, supported by deposit slips, and reconciled during audits. Failure to follow these steps may result in charges of neglect or inefficiency.
- Defense: If you have documentation proving the redeposit and compliance with reporting requirements, administrative liability is unlikely.
Civil Liability:
- Civil liability involves restitution for damages caused by mismanagement or loss of public funds. Since the funds were redeposited, no loss occurred. However, any discrepancy in the records or disputes from the intended recipient could lead to claims.
- Defense: Clear records showing that the funds were returned to the barangay account mitigate civil liability.
Criminal Liability:
- Malversation charges under the Revised Penal Code may arise if there is evidence of misappropriation or intentional failure to account for the funds. However, the act of redepositing the unclaimed amount demonstrates an intent to fulfill fiduciary duties.
- Defense: Absence of intent to defraud or personal gain, coupled with proof of redeposit, strongly counters allegations of criminal liability.

B. Risk of Complaints from the Intended Recipient

The recipient could file a complaint alleging non-receipt of funds. In such cases:

You must present evidence (e.g., withdrawal and redeposit slips) to prove that you acted in good faith and that the recipient failed to claim the funds.
The barangay, not you personally, may be liable for any procedural lapses in notifying the recipient.

IV. Procedural Safeguards to Minimize Liability

To protect yourself, consider the following:

Secure and Preserve Documentation:
- Maintain copies of all deposit and withdrawal slips, official receipts, and related correspondence. These records are critical in defending against any claims.
Audit Compliance:
- Ensure that the redeposit was reflected in the barangay’s financial records and reported during audits conducted by COA or local officials.
Communication with the Barangay:
- Inform the incumbent treasurer or relevant officials about the redeposit to clarify responsibilities and minimize confusion.

V. Legal Remedies and Options

If allegations arise, you have the following legal options:

File a Motion for Reconciliation:
- Request an official review or audit of barangay accounts to establish that the redeposit occurred.
Invoke Good Faith:
- Philippine jurisprudence emphasizes that good faith negates liability in cases involving unintentional lapses. Present evidence showing that you acted with due diligence and without malice.
Consult a Lawyer or COA:
- Seek legal advice or a COA advisory opinion to clarify your responsibilities and ensure compliance with accounting standards.

VI. Conclusion

In summary, your act of redepositing unclaimed funds into the barangay’s bank account demonstrates prudence and compliance with fiduciary duties. Liability is unlikely if the transaction was properly documented and reported. To further safeguard yourself, ensure that records are intact and notify relevant officials of the transaction.

Should disputes arise, you may rely on the defense of good faith and procedural compliance. Consult a lawyer to navigate any legal challenges effectively.

By understanding the responsibilities and potential liabilities associated with handling public funds, you can address concerns confidently and mitigate risks.