COMMISSION ON AUDIT
OFFICE OF BUDGET AND MANAGEMENT
COMMISSION ON AUDIT CIRCULAR NO. 82-122-B
NATIONAL BUDGET CIRCULAR NO. 359
January 18, l982
TO
:
All Heads of Ministries, State Universities and Colleges, Schools and Hospitals,
Chiefs of Bureaus, Offices, and Agencies of National Government, including All
Regional Directors; Chief Accountants/Heads of Accounting Unit; COA Managers
and Regional Directors; COA Unit Auditors and all Others Concerned.
SUBJECT :
Certificate as to Availability of Funds as provided for under Section 86 of PD
1445, LOI 968 and Section 46 of PD 1177.
1.0
PURPOSE
This Circular which shall apply to all contracts involving the expenditure of public
funds by National Government Agencies is issued to:
2.0
1.1
Consolidate all guidelines regarding funds certification when entering into
contracts as provided for under Section 86 of PD 1445 and LOI 968, as
supplemented by COA Circular No. 79-122 dated December 18, 1979.
1.2
Prescribe the form of the Certificate as to Availability of Funds (CAF) for the
different contract to be entered into by the national government.
1.3
Provide guidelines to implement the provisions of Section 46 of PD 1177.
DEFINITION OF TERMS
As used in this Circular, the following terms shall be understood in the sense
indicated hereunder:
2.1
Certificate as to Availability of Funds (CAF) refers to the certification made by the
proper accounting official of the agency concerned that funds have been duly
appropriated/allotted for the purpose of entering into a contract involving
expenditure of public funds and that the amount necessary to cover the proposed
contract for the current fiscal year is available for expenditure on account thereof,
as verified by the Auditor concerned, pursuant to Section 86 of PD 1445. The
CAF is required for purposes of entering into contracts for certain types of
expenditures and is an integral part of the contract. On the other hand, the
certification as to availability of funds contained in the Request for Obligation of
Allotment (ROA), is required for all types of expenditures and is the basis for
taking up all obligations incurred in the books of accounts but is not an integral
part of the contract.
3.0
2.2
Accounting Official refers to the Chief Accountant/Head of Accounting unit of any
national government agency, including state universities and colleges, schools
and hospitals.
2.3
Appropriation - an authorization under past acts of Congress, Presidential
Decrees or other legislative enactment for payments to be made with funds of the
government, under specified conditions and/or specified purposes. (Sec. 2(i)
PD1177)
2.4
Continuing Appropriation - an appropriation available to support obligations for a
specified purpose or project, even when these obligations are incurred beyond
the budget year. (Sec. 2(h) budget before it is used in the ensuing year pursuant
to existing rules and regulations.
2.5
Request for Obligation of Allotment (ROA) - is a document providing evidence for
each obligation incurred and facilitating ledger-keeping for its liquidation. (GAO
GC 40). Section C of the ROA is a subsidiary ledger where obligations incurred
and liquidations and balances are posted to support control accounts in the
General Ledger.
2.6
Multi-Year Contracts are contracts for major construction, rehabilitation,
betterment and improvement of projects under the Infrastructure Program for a
given year which will take more than one year to complete. They are funded thru
a Multi-Year release of allotment by the Office of Budget and Management.
2.7
One-Year Contract for Capital Projects covers a capital project prosecuted for a
period of one year.
One year duration would not necessarily mean
commencement on the first day to end on the last day of a current year. The
contract may start at anytime of one current year and may end in the ensuing
year. It is funded thru an Advice of Allotment issued for the current year by the
Office of Budget and Management.
2.8
One-Year Contract for Supply of Commodities/Services covers the supply of
commodities/services to be used/rendered during the current year and funded
thru an Advice of Allotment issued for the year by the OBM. Should the term of
contract of this nature extend beyond the current year, i.e., when the effectivity
date of the one-year contract is after the first day of January of the current year,
then only that portion pertaining to the current year shall be funded and
obligated.
2.9
Other Contracts refer to contracts that are neither multi-year nor one-year.
These include purchase orders, letter contracts, work orders and job orders.
COVERAGE AND EXCEPTIONS
3.1
Coverage
The following contracts entered into by heads of agencies shall be
supported by the CAF and obligated through the ROA:
a.
b.
c.
d.
3.2
Multi-Year contracts for capital projects
One-Year contracts for capital projects - 300
One-Year contracts for supply of commodities in excess of three (3)
months estimated consumption and service, including equipment and
maintenance contracts - 200
Other contracts requiring payments which are chargeable to agency
current operating or capital expenditure funds.
Exceptions
The following contracts entered into by heads of agencies need not be
supported by the CAF but shall be obligated through the ROA:
4.0
a.
Contracts for personal services
b.
Contracts for supplies for current consumption or to be carried in stock
not exceeding the estimated consumption for three (3) months.
GENERAL GUIDELINES
4.1
The accounting official shall record immediately in the books of accounts all
Advices of Allotments upon receipt thereof from the OBM in accordance with
existing rules and regulations.
4.2
Subject to the existing exceptions enumerated in item 3.2 of this Circular, an
Agency Head or his duly authorized representative before entering into any
contract which involves the expenditure of public funds must first secure the
Certificate as to Availability of Funds (CAF) from the accounting official that:
4.3
a.
funds have been duly appropriated/allotted for the purpose:
b.
the allotment necessary to cover the proposed contract for the current
fiscal year has been released and is available for expenditure on
account thereof, subject to verification by the Auditor concerned (Sec.
86, PD 1445):
c.
the sum certified as having been appropriated/allotted shall be
sufficient to cover the total cost of the contract.
The sum so certified shall not thereafter be made available for expenditure for
any other purpose until the obligation of the government agency concerned
under the contract is fully extinguished. (Sec. 86, PD 1445). In cases where the
sum so certified exceeds the actual cost of completed contract, the excess shall
be reverted to the Unappropriated Surplus.
5.0
4.4
In addition to accomplishing the CAF, the accounting official shall also sign the
contract as witness. Contracts not so witnessed or not supported by a CAF shall
be considered null and void. (LOI 968 and Sec. 87, PD 1445).
4.5
Simultaneously, the accounting official shall accomplish a Request for Obligation
of Allotment (ROA) to obligate the following:
a.
The amount pertaining to the current year for a Multi-Year contract
(item 2.6)
b.
Total amount of the contract for a one year contract for Capital Projects
and Other Contracts (item 2.7 and 2.9)
c.
The amount needed quarterly for a one year contract for supply of
commodities/services to be used/rendered (item 2.8)
GENERAL PROCEDURES
5.1
Section A of the ROA shall be accomplished on the basis of the Notice of Award
or its equivalent as approved by the Agency Head or his duly authorized
representative. The ROA, together with the Request for the Issuance of CAF,
shall be forwarded to the Accounting Unit.
5.2
The accounting official shall accomplish Section B of the ROA to obligate the
amount of the contract pertaining to any of the amounts specified in 4.5 hereof
and shall prepare the CAF. Thereafter, the CAF shall be forwarded to the COA
Auditor for verification.
5.3
The COA Auditor shall verify the CAF against his copy of the Advice of Allotment
and the corresponding appropriation act and the ROA. The CAF shall then be
returned to the accounting official.
5.4
The proposed contract shall be forwarded to the accounting official who shall
sign as on instrumental witness thereto. He shall then attach the CAF to the
proposed contract as an integral part hereof. Thereafter, the proposed contract,
together with the CAF, shall be forwarded to the Agency Head or his duly
authorized representative for approval, if the same is within his approving
authority. Otherwise, the contract shall be forwarded to higher or other
authorities if required under existing law and regulations.
5.5
Within five (5) days after the execution of the contract, copies of the approved
contract, together with all the supporting documents, shall be furnished the Unit
Auditor pursuant to COA Circular No. 76-34, as amended.
5.6
The CAF shall be prepared in six (6) copies to be distributed as follows:
Original
Duplicate
Triplicate
-
COA Auditor
Contractor/Supplier for his file
Accounting Official (to serve as a basis for controlling the
balances of the fund as indicated in Section C of the CAF)
Quadruplicate Quintuplicate Sextuplicate -
6.0
7.0
Attached to the contract to become an integral part thereof
Operating Unit for file
Regional Accountant if the contract has been entered into by
the District/City/Field Office
SPECIFIC PROCEDURES
6.1
In cases where the multi-year contracts will be implemented by other
gencies/operating units, the entire multi-year allotment shall be sub-allotted or
released to implementing agencies/units.
6.2
In cases of multi-year contract and one-year contracts for supply of
commodities/services, the accounting official shall furnish the Auditor the copy of
the succeeding ROAs and such information as to enable the COA Auditor to
update Section B of the CAF.
6.3
For other contracts (item 2.9), the certificate as to availability of funds may just be
stamped on the face of the contract.
6.4
If the source of funding of the contract is a trust liability account of the
implementing agency, then it should be so specified in the CAF in the space
provided for PPA.
REPEALING CLAUSE
All
memoranda/circulars/orders
modified/repealed accordingly.
8.0
inconsistent
herewith
are
EFFECTIVITY
This Circular shall take effect January 1, l982.
(SGD.) MANUEL S. ALBA
Minister of the Budget
Office of the Budget and Management
(SGD.) FRANCISCO S. TANTUICO, JR.
Acting Chairman
Commission on Audit
hereby