OPERATION AND MAINTENANCE (O&M)

PUBLIC INFRASTRUCTURES AND INCOME-GENERATING SUBPROJECTS

O and M

• Operation is defined as making use of the completed infrastructure so that it becomes an economically and socially productive community facility.

• Maintenance is purposely to keep the infrastructure in its original form as far as possible to maintain its serviceability.

O and M

• All completed sub-projects shall be turned over by the KALAHI-CIDSS Barangay Management Committee (BSPMC) to user groups within the community who will take over the actual operation and maintenance of the sub-project.

• The community shall implement the O&M plan agreed upon during the proposal preparation stage.

Public Infra O&M

KC Manual of Operations

• SPs that are income-generating (IGPs) shall have a separate financial management systems to ensure project sustainability.

• The Community shall organize and form an association for the primary purpose of generating funds to carry on the various operational and maintenance activity of the IGPs.

IGP O&M Associations

KC Manual of Operations

• The Association shall open a bank account separate from the community bank account for the SP implementation which shall have at least two co-signatories for control purposes.

• The Collector/Cashier shall issue a pre-number OR or AR or equivalent receipt in two copies for all cash collections.

O&M FINANCIAL MANAGEMENT SYSTEM

• Organizational Structure and FM Roles of Officers

• Cash Receipts/Collections• Cash Disbursements/Payments• Recording and Filing• Determining Non-cash Transactions• Preparation of Financial Reports

ORGANIZATIONAL STRUCTURE

FM ROLES OF OFFICERSOperation In-charge

• In-charge of the day operation of the facility• Shall see to it that all revenues generated from the facility/SP are

properly and accurately accounted for• The association shall assign replacement in OIC’s absence in order

not to hamper the operations

Treasurer • Takes custody of the funds coming from day to day collections• The association shall assign replacement in Treasurer’s absence in

order not to delay collection of revenues

Cashier • In-charge of collecting fees from beneficiaries/customers• Shall remit to the Treasurer the total amount collected at the end

of the day• The association shall assign replacement in Cashier’s absence in

order not to delay collection of revenues

Bookkeeper • Records the financial transactions of the Association (collections and disbursements) and prepares Financial Report or Income Statement when required

CASH RECEIPTS/COLLECTIONS• Cashier shall issue a pre-numbered OR or AR or equivalent receipt in

2 copies for all cash collections– Original copy to customer– Duplicate copy to file

• Cashier shall accomplish List of Collection in 3 copies every day– Original copy to Treasurer– Duplicate copy to Bookkeeper– Triplicate copy to file

• Treasurer shall verify cash remittances with List of Collection; record in the Treasurer’s Journal and keep cash in the Cash box for deposit the next banking day

• Bookkeeper records transaction in the Cashbook

OR / AR• Color-coded: white for original copy and

other color for duplicate copy• Use carbon paper to produce duplicate

copy• In no case shall both copies be prepared

separatelyDate Particular Amount OR/AR No.

LIST OF COLLECTIONList of Collection

Date ________________No: ________________

No. Particular Amount OR/AR

1

2

3

4

5

Prepared by:

Cashier

Verified by:

Bookkeeper

Recorded by:

Treasurer

TREASURER’S JOURNALDate Ref Particular Receipt Disbursement Cumulative

Balance

CASH DISBURSEMENTS/PAYMENTS

RECORDING AND FILING• Daily recording is greatly recommended• Safekeeping the books of accounts, records,

accounting forms and reports are major responsibilities of the Bookkeeper

• All records and documents should be locked and subjected to limited access

• Association Officers should agree on report to be prepared, who received the report and how frequent is the submission

RECORDING AND FILING

DETERMINING NON-CASH TRANSACTIONS

FINANCIAL REPORT PREPARATION

Procedures to prepare Income Statement:

POST-AUDIT FINDINGS• Non-compliance by concerned LGUs on the

allocation of funds for the operations and maintenance of SPs, affected the functionality and utilization of SPs. (Mutual Partnership Agreement)

• Sustainability of some IGPs are uncertain due to failure of the Barangay Committee to comply with the requirements pertaining to the completed SPs. (KC Manual of Operations)