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Chapter 5
TRAVEL EXPENSES
Chapter Overview
This chapter covers the guidelines for
government officials and employees
who are on official travel either local
or foreign as authorized in a number of
executive orders. The topics include
the types of travel, the authority for the
travel, the guidelines for the grant of
allowable travel expenses and the responsibilities of the officials
and / or employees who have been granted such travel
allowance.
Learning Objectives
At the end of the chapter, it is expected that you will be able to:
Name and describe the types of official travels;
Enumerate the allowable travel expenses for both local
and foreign travels;
Enumerate the documentary requirements for the
payment of these travel expenses.
Basic Concepts
TRAVELING EXPENSES
Traveling expenses include expenses incurred in the movement
of persons whether employed in the government or not, such as
transportation, subsistence, lodging and travel per diems, hire of
guides or patrol; transportation of personnel baggage or
household effects; bus, railroad, airline and steamship fares,
tips, transfers, etc., of persons while on official travel whether
foreign or local; charter of boats, launches, automobiles, etc.,
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non-commutable transportation allowances, road tolls; parking
fees and all other similar expenses.
COA Circular No. 2001-005 dated October 30, 2001 identifies
two sub-accounts to be used, as follows:
Traveling Expenses-Local
These are the expenses incurred in the movement of persons
within the Philippines such as: transportation, travel per diem;
hire of guides or patrol; ferriage; transportation of personal
baggage or household effects; bus, rail road, airline, and
steamship fares; tips, airport fees, porter fees, transfers, etc.
of persons while on official travel; charter of boats, launches,
cars, road tolls, parking fees and all other similar expenses.
Traveling Expenses-Foreign
These are the expenses incurred in the movement of persons
outside the Philippines such as: transportation of personal
baggage or household effects; bus, rail road, airline, and
steamship fares; tips, airport fees, porter fees, transfers,
passport fees, etc. of persons while on travel; charter of boats,
launches, cars, road tolls, parking fees and all other similar
expenses.
LOCAL TRAVEL
Nature of Travel
Travels and assignments under Sec. 2, Executive Order No. 248
as amended by EO 298 dated March 23, 2004, shall cover only
those that are urgent and extremely necessary, will involve the
minimum expenditure and are beneficial to the agency
concerned and/or the country.
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Approval of Travel
Under EO 298, official local travel shall be approved as follows:
Less than thirty (30)
days
Thirty (30) days or
more
Head of Office/Bureau or
equivalent
Department Secretary or
equivalent (to be construed as
Approval by Budget Secretary)
Approval of travel of officials and employees of governmentowned and/or controlled corporations and financial institutions
that will last for not more than one (1) calendar month shall be
subject to the policies, rules and regulations that will be adopted
by their respective governing Boards, and by the Secretary of
the Interior and Local Government in the case of officials and
employees of local government units. (Sec. 5, EO 248 as
amended by Sec. 3, EO 298)
Allowable Travel Expenses
Pursuant to EO 298, the allowable travel expenses are as
follows:
Total
Per day
P800.00
Hotel/
Lodging
50% - P400
Meals
30% - P240
Incidental
Expenses
20% - P160
Claims for reimbursement of actual travel expenses in excess of
the travel expenses authorized may be allowed upon
certification by the head of the agency concerned as absolutely
necessary in the performance of an assignment and presentation
of bills and receipts. Provided, that, certification or affidavit of
loss shall not be considered as appropriate replacement for the
required hotel/lodging bills and receipts.
Entitlement to travel expenses shall start only upon arrival at the
place of destination and shall cease upon departure therefrom at
the following percentage:
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Particulars
Arrival not later
than 12:00 noon
Percentage
100%
Arrival after
12:00 noon
80%
Departure before
12:00 noon
Departure at
12:00 and later
30%
40%
100
To Cover
Hotel/Lodging - 50%;
Meals - 30%
Incidental Expenses - 20%
Hotel/Lodging -50%
Dinner - 10%
Incidental Expenses - 20%
Breakfast - 10%
Incidental Expenses -20%
Breakfast - 10%
Lunch - 10%
Incidental Expenses - 20%
Specific Guidelines
Reference: COA Circular No. 96-004. Pertinent amendments
pursuant to EO 298 considered.
1.
The amount of transportation expenses allowable shall be
the actual rates of the authorized means of transportation
(land, sea and air) from the permanent official station to the
destination or place of work or assignment in the field and
back, plus other incidental expenses:
From the office or residence to the point of
embarkation;
From the point of embarkation to the point of
debarkation in the place of destination;
From the point of debarkation to the office or
destination or temporary residence in the place of
assignment in the field and return.
2.
The allowable transportation expenses shall not include
local or inland transportation and other expenses after
arrival in the office or temporary residence in the place of
assignment in the field which are contemplated to be
covered by the travel allowance.
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3.
Only ordinary public conveyance or customary modes of
transportation shall be used. Exceptions may be made in
meritorious cases as justified by prevailing circumstances.
For this purpose, the Department/ Agency Head concerned
or his equivalent shall determine and indicate in the travel
authority the mode or class of transportation and the kind of
hotel/lodging/ pension houses to be taken, which in all
cases shall be the most advantageous to the government
from the standpoint of economy and efficiency.
4.
Claims for payment of travel expenses
for
travel/assignment to places within the fifty (50) kilometer
radius from the last city or municipality covered by the
Metropolitan Manila Area in the case of those whose
permanent official station is in the MMA, or the city or
municipality wherein their permanent official station is
located in the case of those outside the MMA, shall be
allowed only upon presentation of proof, duly supported by
bills or invoices with official receipts of expenses incurred,
that they stayed in the place of their assignment for the
whole duration of their official travel.
If they commute daily from the place of their assignment to
the place of their residence or permanent official station,
they shall be allowed only the reimbursement of actual fare
at the prevailing rates of the authorized mode of
transportation from the permanent official station to the
destination or place of work and back, and a reasonable cost
for meals. The total actual fare and cost of meals and
incidental expenses shall in no case exceed four hundred
pesos (P400.00) per day.
5.
In cases where government vehicles are used for the travel,
the officials and employees concerned are not entitled to the
transportation expenses.
6.
To ensure that government funds and property are used
only for official purposes, no reimbursement of the cost of
gasoline and oil shall be allowed where a private vehicle is
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used. However, the officials and employees concerned
shall be entitled to the reimbursement of the equivalent cost
of the customary mode of transportation. Under no
circumstances should fuel be issued to privately owned
motor vehicles.
7.
To preclude double payment of expenditures, the travel
allowance prescribed shall not be allowed in cases where
the fare paid for transportation includes meals and quarters
en route, or where meals and lodging are paid for or
furnished by the government. Where the cost of meals and
lodging paid for by the government does not exceed
P800.00 per day or where either meals or lodging only is
furnished by the government, the difference shall be paid to
the official or employee concerned to take care of local or
inland transportation and other incidental expenses while in
the place of assignment. If the cost of meals and lodging
furnished by the government is equal to or exceeds P800.00
per day, no other travel expense shall be paid by the
government.
Documentary Requirements before the Trip
The cash advance voucher for official local travel shall be
supported by the following:
Travel Order properly approved in accordance with Section
5 of E.O. 248, as amended;
Approved itinerary of travel detailing the transportation
expenses and travel expenses to be incurred as basis for
determining the amount of cash advance. (COA Circular
Nos. 92-389 and 96-004)
Other Limitations on Payment of Travel Expenses
1.
No portion of the actual cost of the travel expenses allowed
to Department Secretaries, Under-Secretaries, Assistant
Secretaries, and their equivalent, and other government
officials shall cover the expenses of any staff accompanying
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said officials in the travel, otherwise, such staff shall not be
allowed any of the allowances authorized.
2.
Officials and employees whose permanent official station is
within the Metropolitan Manila Area shall not be allowed
the travel expenses for their travel/assignment to places
within the Metropolitan Manila Area. The same restriction
shall also apply to those in cities and municipalities outside
the Metropolitan Manila Area when assigned to places
within the city or municipality wherein their permanent
official station is located. (Executive Order No. 248)
General Guidelines on Cash Advances (Official Local Travel)
1.
Local travels shall be treated and accounted for as cash
advances. Under the NGAS the account to be used is “due
from officials and employees”. The Accountant shall
obligate all cash advances granted.
2.
No cash advance shall be granted to any official or
employee unless a proper accounting of the previous cash
advance given to him for travel is first made or the same is
first liquidated and/or settled.
3.
Proper accounting shall mean the receipt by the Accountant
of the prescribed liquidation documents although not yet
recorded in the books of accounts nor audited by the
auditor.
4.
Liquidation shall mean the recording of the liquidation
documents in the books of accounts by the accountant as a
credit to the cash advance account after verifying the same
although not yet audited by the auditor.
5.
Settlement shall mean the issuance of the Credit Notice by
the Auditor after the audit of the liquidation documents.
(COA Circular No. 96-004)
Liquidation of Cash Advance after the Trip
1.
The cash advance for local travel shall be liquidated by the
official/ employee concerned strictly within thirty (30) days
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after his return to his permanent official station as required
under Section 16 of Executive Order No. 248 as amended
otherwise, payment of his salary shall be suspended until he
complies therewith.
2.
The official/employee concerned shall draw a liquidation
voucher to be supported by the following documentary
requirements:
2.1 Certificate of Travel Completed.
Used ticket (plane, boat or bus tickets) covering the
actual transportation fare from the official station or
residence to the place of destination and back. A
certificate or affidavit of loss executed by the official
or employee concerned shall not be considered as
appropriate replacement for the required transportation
tickets.
Certification of the head of agency as to the absolute
necessity of the expenses together with the
corresponding bills and receipts, if the expenses
incurred for official local travel exceed the prescribed
rate of P800.00 per day. The presentation of a
certification or affidavit of loss in place of the bills and
receipts shall not be considered for this purpose.
Hotel room/lodging bills with official receipts in the
case of official travel to places within the fifty (50)
kilometer radius from the last city or municipality
covered by the Metro Manila Area, or the city or
municipality wherein the permanent official station is
located in the case of those outside the Metro Manila
Area, if the travel allowance being claimed includes the
hotel room/lodging rate.
Certificate of appearance or a copy of the report on the
accomplishment of the purpose of the travel duly noted
by the agency head or his authorized representative.
However, the certificate of appearance shall no longer
be required in the case of travels of agency heads
within their area of jurisdiction.
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3.
Where a trip is cancelled, the amount paid in advance shall
be refunded in full. In cases where the trip is cut short or
terminated in advance of the itinerary, the excess payment
shall likewise be refunded. These refunds shall be made
immediately upon cancellation or termination of the trip. It
shall be the primary duty of agency heads to enforce
promptly the refund.
4.
When a trip exceeds the approved itinerary, the additional
travel expenses due shall be paid upon satisfaction of the
following requirements:
Submission of a written justification satisfactory to the
agency head or his authorized representative and an
additional itinerary for the extension of the trip.
Foreign Travel
Nature of Travel per EO. 248-A, August 14, 1995
Travels and assignments under Sec. 7, Executive Order No.
248-A shall cover only those which are urgent and extremely
necessary, will involve the minimum expenditure and are
expected to bring immediate benefit to the country, and shall
refer only to those under the category of conferences, special
missions, and other non-study trips such as those undertaken for
the following purposes:
To attend conferences or seminars sponsored by foreign
governments or international government organizations to
which the Philippine Government is committed or invited to
send representatives or participants;
To attend conferences or seminars sponsored by private
organizations, whether international or not, invitations to
which have been sent through their respective governments
to the Philippine Government;
To conduct examinations or investigations of Philippine
Government agencies or affairs; and
To undertake any other official mission which cannot be
assigned to any other Philippine government official or
officials already abroad.
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Officials Required to Secure Authority for Foreign Travel
from the Office of the President
1.
Department Secretaries, Undersecretaries, Assistant
Secretaries, heads, senior assistant heads and assistant
heads of government-owned and/or controlled corporations
and financial institutions, and heads of local government
units like Provincial Governors and Mayors of highly
urbanized cities or independent component cities, and other
officials of equivalent rank whose nature of travel falls
under the categories prescribed in EO 248. A shall be
subject to the prior approval of the President of the
Philippines.
2.
Travel of all other positions that will last for more than one
(1) calendar month.
3.
Foreign trips of delegations or groups of two or more
persons regardless of the rank of participants.
Foreign Trips for Approval of Department Secretaries or
Their Equivalent
Official foreign travel that will last for one (1) calendar month
and below of other officials and employees of governmentowned and/or controlled corporations and financial institutions
shall be approved by the Department Secretaries or their
equivalent to which such government-owned/controlled
corporations and financial institutions are attached, and by the
Secretary of the Interior and Local Government in the case of
other officials and employees of local government units.
Allowable Expenses for Foreign Travel (Conferences,
Special Missions and Other Non-Study Trips)
1.
Pre-departure Expenses
Officials and employees authorized to travel abroad shall be
entitled to P1, 500.00 commutable pre-departure allowance
to cover miscellaneous/incidental expenses, such as taxi
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fare, passport photographs, immunization, visa fees, tips,
porterage, and airport terminal fees. (Sec. 9, EO No. 248)
Reimbursement of the payment of the airport terminal fee at
the point of embarkation to go back to the Philippines upon
completion of the official trip abroad is likewise authorized.
(Sec. 6, EO 298)
2.
Transportation
In case officials and employees authorized to travel abroad
are not provided with transportation by the host country or
sponsoring organization or agency, they shall be allowed
official transportation, which shall be of the restricted
economy class unless otherwise authorized by the President
of the Philippines. (Sec. 7, EO No. 298)
3.
Clothing Allowance
Officials and employees authorized to travel abroad shall be
granted clothing allowance to US$400.00.
It shall be granted once in every 24 months and a
certification shall be submitted to the effect that no clothing
allowance had been received during the next preceding 24
months. (Sec. 11, EO No. 248)
4.
Allowable Travel Expenses (EO 298)
Government personnel who travel abroad shall be entitled
to the Daily Subsistence Allowance (DSA) as provided
under the United Nations Development Program (UNDP)
Index, which can be secured from the Department of
Foreign Affairs. The DSA shall be apportioned as follows
unless otherwise stated in the UNDP Index: (a) fifty percent
(50%) for hotel/lodging; (b) thirty percent (30%) for meals;
and twenty percent (20%) for incidental expenses. When
the country of destination is not listed in the said Index, the
DSA for the nearest country shall be adopted.
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Subject to the approval of the President, claims for
reimbursement of actual travel expenses in excess of the
DSA authorized herein may be allowed upon certification
by the head of agency as absolutely necessary in the
performance of an assignment and presentation of bills and
receipts. Certification or affidavit of loss shall not be
considered as appropriate replacement for the required hotel
room/lodging bills and receipts.
Entitlement to DSA shall start only upon arrival at the
country of destination and shall cease upon departure
therefrom at the following percentage:
Particulars
Percentage
Arrival not later
than 12:00 noon
100%
Arrival
after
12:00 noon
80%
Departure before
12:00 noon
Departure
at
12:00 noon
30%
40%
To cover
Hotel/lodging -50%;
Meals - 30%;
Incidental expenses - 20%
Hotel/lodging-50%
Dinner – 10%
Incidental expenses- 20%
Breakfast – 10%
Incidental Expenses – 20%
Breakfast – 10%
Lunch – 10%
Incidental expenses – 20%
The DSA authorized shall be deemed the equivalent of the
per diems authorized under Section 75 of RA No. 7157,
otherwise known as the Foreign Service Act of 1991.
5.
Representation Expenses
Philippine delegations to international conferences,
conventions or special missions, as well as individuals
traveling on official business may, upon prior approval of
the President, be allowed non-commutable representation
expenses not exceeding US$1,000.00, duly supported by
bills or receipts, as shall be absolutely necessary to enable
them to uphold the prestige of the Republic of the
Philippines, to represent the country with dignity and
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distinction, and to carry out their functions and objectives
more effectively.
Representation expenses may be incurred for necessary
entertainment, contributions, flowers, wreaths, and the like,
when justified by circumstances and in conformity with the
generally accepted customs, usage and practices. (Sec. 13,
EO No. 248)
6.
Applicability to personnel stationed abroad
Officials and employees already posted abroad may avail
themselves of the allowances prescribed under this Order
when they travel officially outside of their post of
assignment, or to countries to which they are duly
accredited on a non-resident basis, or to countries over
which the post has concurrent jurisdiction; Provided, That:
funds therefor are chargeable to the post allotment and
no supplemental budget is requested for the purpose;
prior authority is secured from their respective
Department Secretaries and those officials of
equivalent rank;
the travel necessitates an overnight stay by reason of
distance and/or the non-availability of return
transportation; and
travel within the one hundred (100) mile radius from
the city or municipality wherein the official station of
such official or employee is located shall not be
allowed any of the allowances herein authorized.
Officials and employees who are either assigned from their
Home Office to a post abroad or cross-posted from one post
to another shall be entitled to the lodging portion of the
allowances herein granted during the month said personnel
arrived at the post; Provided, That the claim which shall
be supported by appropriate bills with receipts does not
commence until their actual arrival at the post; Provided,
Further, That, pursuant to Section 65 of R.A. No. 7157,
they shall not collect living quarters allowance until the first
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day of the month following their arrival at the post of
assignment; Provided, Finally, That, the lodging portion
of the allowances shall be granted on the basis of the
classification of the post as stated under E.O. No. 101,
series of 1993, in accordance with the fifty percent (50%)
entitlement for hotel/lodging rate provided in EO 298. (Sec.
14, EO No. 248 as amended by Sec. 13, EO No. 298)
7.
Payment of Allowance Differential
Where the official or employee traveling abroad is provided
by the host government or institution with per diem, or
allowance lower than that prescribed in this Order, he shall
be entitled to the difference only. (Sec. 15, EO No. 248)
8.
Insurance
Any official or employee on travel shall be allowed
reimbursement of premium for accident insurance coverage
not exceeding P200, 000.00 for the duration of his official
travel. Under no circumstances, shall the premiums on
insurance of personal or household effects belonging to any
official or employee on official travel be charged to
government funds. (Sec. 19, EO 248)
Allowable Travel Expenses for Scholarships, Fellowships and
Training or Study Grants
1.
Pre-travel Expenses
The grantee or trainee shall be provided allowance of
P600.00 for local transportation fares to and from or within
Metro Manila; medical examinations; processing for the
issuance of passport and travel tax exemption including
incidental expenses for photographs, affidavits, certificate
of birth and other related expenses; airport expenses
including fees for excess baggage; and local porterage at
customary rates. (Sec. 4, EO 367)
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111
Living allowance and per diem
Grantee or trainee irrespective of rank shall be
entitled to a monthly living allowance for the
duration of the training/grant including travel time
at rates not exceeding the following:
$250 -
In U.S., Canada, Japan, Guam,
Argentina, Venezuela and Brazil;
$200 - In European countries, Australia, New
Zealand, Korea, Taiwan, Okinawa,
Mexico, and Central and other South
African Countries;
$175 - In African and other Asian countries
In cases of ad hoc studies or observation trips of
not more than 30 days in connection with the
training, scholarship or fellowship, the grantee or
trainee shall be entitled to such per diem as may be
authorized by Department of Education (DepEd)
for basic education, to the Commission on Higher
Education (CHED) for degree courses, and to the
Technical Education for Skills and Development
Authority (TESDA) for non-degree courses, but
not exceeding $15.00. Should said ad hoc studies
or observations be at the same place for more than
thirty (30) days, the grantee or trainee shall receive
instead the monthly allowance herein provided,
effective as of the commencement of said studies
or trips.
Where the study or training program itself
involves travel from station to station, the grantee
or trainee shall be on travel status and shall be
entitled to per diem or living allowance, as the
case may be, in accordance with the next
preceding paragraphs, provided that the travel
status shall not be more than thirty (30) days
within a period of one (1) year. Travel status in
excess of thirty (30) days shall be subject to
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approval by DepEd, CHED and TESDA. (Sec. 5,
EO No. 129; Sec. 350, GAAM Vol. I; EO No. 402
dated January 24, 2005)
2.
Transportation
The grantee or trainee shall be entitled to transportation
next below the first class; Provided, that in case the host
country or sponsoring organization or agency provides a
lower class of transportation, the grantee or trainee
concerned may avail himself of the class of transportation
herein authorized, the additional cost to be borne by the
office concerned if funds are available therefor. [Sec. 6, EO
No. 129, supra; Sec. 350 (b), GAAM Vol. I]
3.
Tuition and matriculation fees, books and supplies
When the grant does not so provide, the grantee or trainee
shall be entitled to tuition and matriculation fees, as well as
books and supplies which are certified by school authorities
as necessary for his studies. The amount to be allotted for
books and supplies shall not exceed $150.00 per year. [Sec.
8, EO 129, supra; Sec. 50 (d), GAAM Vol. I]
4.
Medical and dental care
Where the grant does not so provide, the grantee or trainee
shall be entitled, during his stay abroad, to a reasonable
allowance for medical care and hospitalization if the illness
is contracted in line of duty. If the grantee or trainee
becomes seriously ill and his recovery cannot be expected
within a reasonable time, he shall be returned home as soon
as his physical condition permits. Allowance for dental
care shall be only for needed ordinary treatment, but shall
not include dentures, bridges, and other related services.
[Sec. 9, EO 129, supra; Sec. 350 (e) GAAM Vol. I]
Note:
1. Sec. 5, E.O. No. 367 dated August 21, 1989 provides that
the Special Committee on Scholarships, in coordination
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with the Department of Budget and Management, shall
conduct periodic review of the rates of allowances, per
diem and pre-travel expenses for its implementation
2.
E.O. No. 402 dated January 24, 2005 abolished the
Special Committee on Scholarships and transferred its
scholarship functions to the Department of Education
(DepEd) for basic education, to the Commission on
Higher Education (CHED) for degree courses, and to the
Technical Education for Skills and Development Authority
(TESDA) for non-degree courses. This E.O. provides that
the DepEd, CHED and TESDA shall jointly issue the
implementing rules and regulations.
Documentary Requirements Before the Trip
Travel Order properly approved in accordance with Section
8 of E.O. 248, as amended;
Itinerary of Travel detailing the transportation expenses and
travel expenses including clothing and pre-departure
expenses to be incurred. The commutable pre-departure
expenses shall cover miscellaneous/incidental expenses
such as passport, photographs, immunization, visa fees,
taxi fare, tips, porterage and terminal fees as provided for
under Section 9 of E.O. 248, as amended;
Where applicable, the authority from the Office of
President to claim Representation Expenses;
Certification of the official or employee concerned duly
verified by the Accountant to the effect that no clothing
allowance had been received during the next preceding
twenty-four (24) months, if clothing allowance is being
claimed.
Liquidation of Cash Advance (After the Trip)
Within sixty (60) days after his return to the Philippines
Documentary Requirements
Certificate of Travel Completed
Used transportation tickets
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Certificate of Appearance
Payment of the salary of any official or employee who fails to
liquidate the cash advance within the prescribed shall be
suspended until such time that the travel cash advance has been
fully liquidated.
Obligations of Officials and Employees Who Travel Abroad
1.
Every official or employee assigned or authorized to travel
shall within thirty (30) days after his return to his
permanent official station, submit a report with his
recommendations, if any, on the conference or seminar
attended, examination or investigation conducted, or
mission undertaken, to the head of his office. In case of
participation in an international conference or convention
abroad in which the Philippines is represented by a
delegation, a report of the delegation shall be submitted to
the President of the Philippines through the department
head concerned copy furnished the Department of Foreign
Affairs (DFA) not later than thirty (30) days after the
closing of the conference or convention. Any member of
the delegation may also submit a supplementary report.
Violation of the provisions of this Section 18, E.O. No. 248
shall subject the official or employee concerned to
disciplinary action. (Sec. 18, EO 248 as amended by Sec.
16, EO 298)
2.
Obligations of a Grantee or Trainee
In consideration of his acceptance of a foreign
scholarship/training grant, the grantee or trainee binds
himself to the following conditions:
a.
To live up to the terms and conditions of his grant;
b.
To conduct himself in such a manner as not to
bring disgrace or dishonor to himself or to his
country;
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c.
To keep up with the standards of scholarship or
accomplishments;
d.
To submit to the head of his office and the
Committee his official transcript of grades at the
close of each quarter, term or semester;
e.
To return immediately upon the termination of his
scholarship/training;
f.
To submit to the head of his office and the
Committee a report on his study/training within
sixty (60) days after his return to duty;
g.
To submit a re-entry plan or proposal for the
application of newly-acquired skills or expertise to
his Office and the Committee, upon completion of
at least six (6) months study/training; and
h.
To serve his Office or any other government office
or instrumentality as the exigencies of the service
may require, for the specified period indicated
below:
Academic and Non-Academic Programs Including Extensions
Training/ Duration of Scholarship
Service Obligation
For every year or a fraction thereof not
less than 6 months
2 years
A fraction of a year less than 6 months
but not less than 2 months
1 year
A fraction of a year less than 2 months
6 months
Failure of the grantee or trainee to fulfill the
obligations provided under subparagraphs a, b, c and d
shall be sufficient cause for the cancellation of his
scholarship/training grant and for his recall.
Should failure in any of such cases be due to his own
fault or willful neglect, he shall refund all the expenses
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in accordance with the provisions of the succeeding
subparagraphs.
For failure to render the required length of service
referred to above, on account of voluntary resignation,
retirement, separation from the service through his own
fault or other causes within his control, the grantee or
trainee shall refund in full to his agency such amount
as may have been defrayed for expenses incident to his
scholarship/ training as determined by either the
DepEd, or CHED or TESDA (EO. No. 402 dated
January 24, 2005).
It is the policy of either DepEd, or CHED or TESDA
(EO. No. 402 dated January 24, 2005) to allow
proportionate refund of the monetary value of the
grantee’s or trainee’s service obligation, when he has
served at least 75% of the total service obligation in the
agency/department which sent him abroad.
The proportionate amount and mode of payment shall
be determined by the agency and confirmed by either
the DepEd, or CHED or TESDA (EO. No. 402 dated
January 24, 2005). In such cases, the amount shall be
paid within three (3) years from the effectivity of the
arrangement between the grantee or trainee and his
agency, and to the execution of the affidavit of
undertaking duly secured by a bond with his
agency/department.
A condonation of the agency/department concerned
may be allowed only in the following cases:
- Abolition of the Office or involuntary phase-out of the
trainee or grantee in a reorganized office; and
- Death or permanent disability. The Committee may
impose such other penalties as it may deem necessary
for failure of the grantee or trainee to fulfill other
obligations. (E.O. No. 367, August 21, 1989)
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Summary
In this chapter, we learned that official travel may be local or
foreign. For local travel the allowable travel expenses pursuant
to EO 298 is P800.00 per day while allowable travel expenses
for foreign travel will be in accordance with the DSA as
provided under the UNDP Index.
We also learned that the official/employee who has been granted
these travel allowances must liquidate the advances within 30
days after return to station for local travel and within 60 days
upon return to the country for foreign travel.
We further learned that there are certain service requirements to
be rendered after the completion of a scholarship.
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Chapter 6
PURCHASE OF INVENTORY ITEMS
Chapter Overview
This chapter defines “inventories” and
describes how they are taken up in the
books, the general procedures in
procurement,
the
documentary
requirements when payment is made,
the modes of procurement, and the
other activities undertaken after procurement.
Learning Objectives
At the end of the chapter, it is expected that you will be able to:
Define inventories;
Enumerate some inventory items;
State when and how the expense item is taken up in the
books;
Name the basic requirements for the payment of
inventory items
Identify the documents to support the expense;
Name and describe the modes of procurement; and
Name and describe the other activities undertaken after
procurement.
Basic Concepts
INVENTORIES DEFINED
Inventories are expendable commodities acquired or ordered for
immediate use in connection with government operations. They
include, but are not restricted to items normally consumed
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within one year after being put into use, or converted in the
process of manufacture or construction,
having a life
expectancy of more than one year but which shall have
decreased substantially in value after being put into use in only
one year.
Examples are: printed forms, cards, ledgers, journals, pencils,
cartridge, brooms, paint, brushes, nails, soaps, powder, inks,
pad, medical supplies, construction materials for instruction
purposes, spare parts, semi-expendable property having a value
that may be assigned by the Commission on Audit and other
expendable property consumed in a function, activity or office.
(Sec. 352, GAAM, Vol. II)
Please refer to Appendix 6 for the list of the inventory items
under the NGAS.
ASSET METHOD/PERPETUAL INVENTORY METHOD
Under the NGAS, the Asset Method will be followed in
recording disbursements when expenditures apply to more than
just the accounting period. Examples of these disbursements are
insurance, interest, and rent where the prepaid (asset) accounts
shall be debited.
The expense shall be recorded upon
utilization/consumption. However, when insurance, interest,
rent, etc., will be fully used up/consumed within the current
accounting period, the disbursement shall be taken up as
expense.
Purchases of supplies and materials for stock, regardless of
whether or not they are consumed within the accounting period
shall be recorded as asset using the inventory account following
the Perpetual Inventory Method: Under this method, the
moving average unit cost is used which provides a new unit cost
after each purchase and/or when items are issued/used. Like the
prepaid expenses, the expense shall be taken up upon
utilization/consumption.
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However, supplies and materials purchased out of the Petty
Cash Fund for immediate use or on emergency shall be taken up
as outright expense. In this connection, the petty cash shall not
be used to purchase supplies for stock.
As a review, when perpetual inventory method is followed,
detailed perpetual inventory records, in addition to the usual
ledger accounts, are maintained for each inventory item, and an
inventory control account is maintained in the general ledger on
a current basis. The perpetual inventory record for each item
must provide information for recording receipts, issues and
balances on hand, usually both in units and peso amounts. With
this information, the physical quantity and the valuation of
goods on hand at any time are available from the accounting
records.
Under COA Circular No. 2005-002 dated April 14, 2005 COA
prescribed the accounting policy that small tangible items with
estimated useful life of more than one year shall be recorded as
inventories upon acquisition and as expense upon issuance.
Other tangible assets not included in the list shall be classified
as Property, Plant and Equipment, subject to depreciation. (see
list on Appendix 9 &10)
Also under the NGAS, except for personal services, “Accounts
Payable” shall be taken up upon receipt of goods and services.
The account shall be debited when payment is made. Under the
matching principle however, the payable account for salaries
and wages will be taken up at the end of the year when expenses
are already incurred but not yet paid.
GENERAL GUIDELINES IN PROCUREMENT
1.
Agencies shall procure common-use supplies, materials and
equipment from the Procurement Service (PS) which is
attached to DBM, in accordance with Letter of Instructions
No. 755, Executive Order Nos. 285 series of 1987, 359
series of 1989.
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2.
Procurement of supplies, materials and equipment shall be
through competitive public bidding.
3.
Appropriated funds shall be
manufactured goods, provided –
available
for
locally
3.1 importation may be made when none of the desired
quality or standard is available in the market;
3.2 when the price of the local product or service is more
than fifteen percent (15%) of that of a similar product
offered by an enterprise other than a domestic entity
pursuant to Section 4 of the Flag Law;
GENERAL PROCEDURES IN PROCUREMENT
1.
Procurement Planning and the Preparation of the Annual
Procurement Plan (APP);
2.
Requisitioning or Preparation of Supplies Availability
Inquiry (SAI)
3.
Approval of Requisition
4.
Preparation of Obligation Request (ObR)
5.
Preparation, Approval and Delivery of Purchase Order/
Letter Order/ Contract
6.
Delivery, Inspection and Acceptance of the Items.
7.
Payment for the Items delivered.
Procurement Planning and the Preparation of the APP
The general policies on procurement planning are embodied in
Section 7 of the Implementing Rules and Regulations of RA
9184, the Government Procurement Reform Act.
1.
All procurement shall be within the approved budget of the
procuring entity and should be meticulously and judiciously
planned by the procuring entity concerned. Consistent with
government fiscal discipline measures, only those
considered crucial to the efficient discharge of governmental
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functions shall be included in the Annual Procurement Plan
(APP). For purposes of the IRR, a procurement project
shall be considered crucial to the efficient discharge of
governmental functions if it is required for the day-to-day
operations or is in pursuit of the principal mandate of the
procuring entity concerned.
The APP shall include
provisions for foreseeable emergencies based on historical
records. In the case of infrastructure projects, the APP shall
consider the appropriate timing/phasing of related project
activities, such as, engineering design and acquisition of
right of way, to reduce/lower project costs.
2.
No procurement shall be undertaken unless it is in
accordance with the approved APP of the procuring entity.
The APP shall bear the approval of the Head of the
Procuring Entity or second-ranking official designated by
the Head of the Procuring Entity to act on his behalf, and
must be consistent with its duly approved yearly budget.
3.
The APP shall be formulated and revised only in accordance
with the following guidelines:
3.1 At the start of every budget period, the procuring entity
shall prepare its proposed budget for the succeeding
calendar year, taking into consideration the budget
framework for that year in order to reflect its priorities
and objectives for the budget period.
3.2 The end-user units of the procuring entity shall prepare
their respective Project Procurement Management Plan
(PPMP) for their different programs, activities, and
projects (PAPs). The PPMP shall include:
a) Information on whether PAPs will be
contracted out, implemented by administration
in accordance with the guidelines issued by the
GPPB, or consigned;
b) The type and objective of contract to be
employed;
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c) The extent/size of contract scopes/packages;
d) The procurement methods to be adopted, and
indicating if the procurement tasks are to be
outsourced as provided in Section 53.6 of the
IRR of RA 9184;
e) The time schedule for each procurement
activity and for the contract implementation;
and
f) The estimated budget for the general
components of the contract.
For purposes of this Section, consignment refers to an
arrangement where the following requisites are present;
(a) delivery of goods by their owner (consignor),
without sale, to a government agency (consignee); (b)
consignee must try to sell the goods and remit the price
of the sold goods to the consignor; (c) consignee
accepts without any liability except for failure to
reasonably protect them from damage;
(d) no
disbursement of government funds is involved; and (e)
at terms not disadvantageous to the GOP.
3.3 The PPMP shall then be submitted to the procuring
entity’s Budget Office. The procuring entity’s Budget
Office shall evaluate each end-user’s submitted PPMP
and, if warranted, include it in the procuring entity’s
budget proposal for approval by the Head of the
Procuring Entity.
3.4 After the budget proposal has been approved by the
Head of the Procuring Entity and/or other oversight
bodies, the procuring entity’s budget office shall furnish
a copy of the procuring entity’s budget proposal as well
as the corresponding PPMPs to the BAC Secretariat for
its review and consolidation into the proposed APP.
The proposed APP shall be consistent with the
procuring entity’s budget proposal.
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3.5 As soon as the GAA, corporate budget, or appropriation
ordinance, as the case may be, becomes final, the enduser units shall revise and adjust the PPMP to reflect
the budgetary allocation for their respective PAPs. The
revised PPMPs shall be submitted to the BAC, through
its Secretariat, for the finalization of the modes of
procurement under the proposed APP. The APP shall
then be approved in accordance with Section 7.2 of the
IRR.
4.
Updating of the individual PPMPs and the consolidated
APP for each procuring entity shall be undertaken every six
(6) months or as often as may be required by the Head of the
Procuring Entity. The updating of the PPMPs shall be the
responsibility of the respective end-user units of the
Procuring Entities, while the consolidation of these PPMPs
into an APP shall be lodged with the BAC Secretariat,
subject to approval of the Head of the Procuring Entity.
5.
The ABC as reflected in the APP or PPMP shall be at all
times consistent with the appropriations for the project
authorized in the GAA, continuing, and automatic
appropriations, the corporate budget, and the appropriation
ordinance, as the case may be. For NGAs, to facilitate the
immediate implementation of projects even pending
approval of the GAA, the ABC shall be based on the budget
levels under the proposed national budget submitted by the
President to Congress.
Requisitioning
Requisitioning is the art of requiring that something be
furnished. In the procurement function, it is the submission of
written requests for supplies, materials and the like.
Under the NGAS, the request for inventory items is made
through any mode of determining availability of supplies and
other inventory items pursuant to GAFMIS Circular Letter No.
2003-006 dated November 24, 2003.
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The description and specifications of the supplies and
property called for in the requisition shall include only the
technical specifications, which will fill and satisfy the needs
of the requisitioner.
All measurements and weights shall be stated in the metric
system except those supply or property, which can be better
described in the English System.
Specification is the heart of any contract for the supply of goods
or services since they describe the supplies to be delivered and
the services to be rendered.
The property/supply officer with the assistance of a technical
specialist and/or the project officer shall determine the
specifications of the supplies and services needed to be
approved by the Head of the Procuring Agency concerned.
Types of Specifications:

Performance Specifications contain the performance
characteristics desired for the item, e.g. the item must weigh
no more than 20 pounds. The detailed design or exact
measurements are not stated.

Design Specifications contain precise measurements,
tolerances, materials in process and finished product tests,
quality control and inspection requirements and other
detailed information.

Purchase Descriptions, which should always allow for
competition.
Requirements for Requisition
Agencies may be allowed to enter into contracts for the
purchase of supplies and materials for one year subject to the
condition that deliveries shall be made on a staggered basis and
the agencies three (3) month’s supply requirements are not
exceeded and payments shall be made after each delivery only.
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Requisitions of drugs and medicines should comply with the
Generics Act of 1988 (RA 6675) which prescribes the use of
generic terminology or generic names in all transactions related
to purchasing, prescribing, dispensing and administering of
drugs and medicines. Requisitioning therefore of said items
should be in their generic names or the identification of drugs
and medicines by their scientifically and internationally
recognized active ingredients or by their official generic name
as determined by the Bureau of Food and Drugs of the
Department of Health.
Approval of Requisitions
The head of office or department within a reasonable time
approves requisitions after its submission.
The authority to approve requisitions depends on the agency’s
authority to enter into contract.
The department or agency head or the governing board of the
government-owned and or controlled corporation concerned
without the need of prior approval may enter into contracts for
public services or for furnishing of supplies, materials or
equipment by higher authorities. (Manual on Procurement)
Preparation of Obligation Request
An Obligation Request (ObR) is prepared showing the
certification of the Head of Accounting Unit/Authorized Official
as to the correctness and validity of obligations, and availability
of funds.
Preparation, Approval and Delivery of Purchase Order
(PO)/Letter Order (LO)/ Contract
Preparation
The PO/LO /Contract is the document evidencing a transaction
for the purchase of supplies and materials, usually prepared by
the Supply Officer (SO) or his/her equivalent
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It shall indicate:






Office to which account shall be charged
Requisition Number
Name & Address of the contractor/ supplier
Office from which payment shall be collected
Complete description and specifications of the supplies
Other information and data needed to enable agency
officials and all others concerned to determine:

Nature, Quality of the items purchased

Quantity and Unit Price of the items

Period of Delivery

Shipping terms and directions and other conditions of
delivery

Provisions on penalties for late or no delivery

Conditions regarding importation, if any

Date of effectivity and termination of contract
PO is prepared after the decision on the mode of procurement
has been made and the conditions pertaining thereto have been
met. Please refer to next topic for the modes of procurement
under RA 9184.
Approval of PO/LO/Contract
Pursuant to EO 109-A dated September 18, 2003, except for
contracts required by law to be acted upon and/or approved by
the President, the authorities shall be as follows:
Contracts Awarded Thru
Public Bidding
Contracts Entered Into Thru
Alternative Modes
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Full authority to Heads of
Procuring entities to enter into
contracts and/or give final
approval
Heads of Procuring Entities
may delegate in writing this
full authority.
For contracts involving P300
million, Head of the entity
shall have full authority after
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obtaining:
Opinion of the Justice
Secretary that contract
falls within the exceptions
to public bidding;
Approval from NEDA
Director-General or any
authorized
approving
official.
Contracts below P300 million:
Full authority to Head of
Procuring Entity.
He/She may delegate in
writing this full authority.
Delivery of PO/LO/Contract
The PO/LO/Contract is delivered by the agency personnel
concerned to the contractor/supplier within a reasonable time
after its approval.
Delivery, Inspection and Acceptance of the Items.
General Procedures in Conducting Inspection
1.
Upon receipt of the request for inspection, check the
following documents as to completeness and authenticity:

PO/LO/Contract or their equivalent – determine
completeness as to date, number, name and address of
supplier, suppliers acknowledgement or receipt
including date of receipt, nature and place of delivery,
accurate description of articles ordered, quantity, unit
price, availability of funds and approval by the head of
the agency or his authorized representative.

Supplier’s Invoice/Delivery Receipt –

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stamped or written separately
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


129
Check all dates indicated thereon
It should conform with those in the order/contract
and
Note “RECEIVED” portion. Receipt and date of
delivery should be duly acknowledged by the
property officer.
Other required papers necessary for a substantive
inspection such as catalogue/brochures/government
standard specifications, etc.
2.
Proceed to delivery site and conduct inspection and testing
procedures if applicable.
3.
If delivery is subject to test and samples are taken,
accomplish the certificate of sampling in accordance with
the prescribed guidelines on testing.
4.
Prepare inspection report immediately after inspection for
submission to the agency inspector’s supervisor.
Acceptance or Rejection of Deliveries
Where a trend of shortage in quantity, or deficiencies/ defects in
quality is established, the inspector may recommend for
rejection or reduction in price.
After consideration of tolerable allowance, the following
standards shall be observed by the inspector in the evaluation of
the result of the inspection.

Supplies or property tested and found to be in accordance
with the required specifications shall be accepted.

Supplies or property whose quality analysis shows a
deficiency of less than ten (10%) percent may be accepted,
provided they shall serve the purpose for which they were
purchased, the defect is minor and the contract price is
reduced according to the deficiency noted.

Supplies or property whose quantity is short by volume,
weight, actual count, etc. shall be subject to reduction in
contract price at an amount equivalent to the shortage,
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provided said deliveries are acceptable to the agency or
unit.
Payment for the Items Delivered.
Basic Requirements in the Payment of Supplies and Materials
1.
Original copy of the dealer’s invoice showing the quantity,
description of the articles, unit and total value, duly signed
by the dealer or his representative;
2.
Indication of acceptance by a duly authorized
official/employee on the invoice or on a separate document;
3.
Requisition for equipment or supplies approved by the
agency head or a duly authorized official of the agency.
4.
Purchase order issued by the agency supported with:
Documentary evidence of public bidding, if any, or
Canvass from at least 3 bonafide dealers if emergency
purchase was resorted to, or
If procurement was from a sole distributor, duly
notarized certificate of exclusive distributorship of the
dealer/supplier, properly attested by his principal, and a
corollary certification by the Requisitioning Officer,
duly approved by the Agency Head, to the effect that
no suitable substitutes of the supplies/equipment, can
be obtained at more advantageous terms to the
government. (E.O. 298 s. 1940 as amended by E.O.
301 s. 1987).
5.
Acknowledgement Receipt for Equipment (ARE) shall be
used to acknowledge the receipt of property and equipment
for official use from the Property Officer.
6.
Where the supplies and materials delivered are subject to
test, the claims should be supported by the evidence of the
sampling made by the Technical Inspector of the article
subjected to test in the presence of the dealer or his
representative. The payment covering 80% of the purchase
value of the articles subject to test should not be released
unless accompanied by a certificate signed by the dealer or
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his authorized representative waiving his right to be present
in the sampling. (Sec. 365, GAAM, Vol. I)
Documentary Requirements
In the payment of supplies, materials and equipment delivered,
regardless of the mode of procurement, the following documents
shall be required:
1.
Purchase Request
Request for purchase or requisition of supplies, materials
and equipment or its equivalent shall be duly approved by
proper authorities.
2.
Purchase Order/Letter Order/Contract
It shall be duly approved by the officials concerned and
accepted by the supplier (date of acceptance must be clearly
indicated, especially when the date of delivery is dependent
on or will be counted from the date of acceptance of the
purchase/letter order/contract).
3.
Original copy of the Dealer’s/Suppliers Invoice:
showing the quantity, description of the articles, unit
and total value, duly signed by the dealer or his
representative, and
indicating receipt by the proper agency official of items
delivered
4.
Inspection and Acceptance Report (IAR)
The Property Officer (PO) or equivalent shall prepare the
IAR and shall sign the acceptance portion. The
department/agency property inspector signs the inspection
portion.
5.
Evidence of Availability of Funds, and/or copy of the
request for obligation of allotment of the National
Government agencies.
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Result of test/analysis by proper government agency if
articles are subject to test.
Examples are: Drugs, chemicals and medicines; paper and
paper products; G.I. sheets, pipes, reinforcing steel bars
and other alloys; cereals and animals feeds; textile, flags
and flag materials, canvass, gauge, and bandages; leather
and leather goods; soap and soap products; paint and paint
materials; wires, telephones, electric steel cables; canned
goods; inks and adhesives; lubricating oil, fuel oil,
grease; asphalt and asphaltum products. (COA Cir. No.
92-389, COA Cir. No. 97-004, GAAM Vol. I)
MODES OF PROCUREMENT
Section 10 of RA 9184 provides that all procurement shall be
done through competitive bidding, except as provided for in
Article XVI of the law. This article provides for the alternative
methods of procurement which are: limited source bidding,
direct contracting, repeat order, and shopping, negotiated
procurement.
Limited Source Bidding
Otherwise known as selective bidding, limited source bidding is
a method of procurement of goods and consulting services that
involves direct invitation to bid by the concerned procuring
entity from the list of pre-selected suppliers or consultants with
known experience and proven capability on the requirements of
the particular contract. The pre-selected suppliers or consultants
shall be those appearing in a list maintained by the relevant
Government authority that has expertise in the type of
procurement concerned. The list of pre-selected suppliers or
consultants shall be updated periodically. A copy of the list
shall be submitted to, and maintained updated with the GPPB.
The pre-selection shall be based upon the capability and
resources of the bidders to perform the contract taking into
account their experience and past performance on similar
contracts, capabilities with respect to personnel equipment or
manufacturing facilities, and financial position. Pre-selection
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shall be done in accordance with the procedures provided in the
GPM. The BAC of the concerned procuring entity shall directly
invite all the suppliers or consultants appearing in the preselected list. All other procedures for competitive bidding shall
be undertaken, except for the advertisement of Invitation to
Bid/Request for Expression of Interest under the pertinent
provisions of the IRR.
Limited source bidding may be employed by concerned
procuring entities under any of the following conditions:
1. Procurement of highly specialized types of goods (e.g.
sophisticated defense equipment, complex air navigation
systems, coal) and consulting services where only a few
suppliers or consultants are known to be available, such that
resorting to the public bidding method will not likely result
in any additional suppliers or consultants participating in the
bidding; or
2. Procurement of major plant components where it is deemed
advantageous to limit the bidding to known qualified bidders
in order to maintain uniform quality and performance of the
plant as a whole.
Direct Contracting
This single source procurement is a method of procurement of
goods that does not require elaborate bidding documents. The
supplier is simply asked to submit a price quotation or a proforma invoice together with the conditions of sale. The offer
may be accepted immediately or after some negotiations.
Direct contracting may be resorted to by concerned Procuring
Entities under any of the following conditions:
1. Procurement of goods of proprietary nature which can be
obtained only from the proprietary source, i.e. when patents,
trade secrets and copyrights prohibit others from
manufacturing the same item;
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2. When the procurement of critical components from a specific
supplier is a condition precedent to hold a contractor to
guarantee its project performance, in accordance with the
provisions of its contract; or
3. Those sold by an exclusive dealer or manufacturer which
does not have sub-dealers selling at lower prices and for
which no suitable substitute can be obtained at more
advantageous terms to the Government of the Philippines
(GOP).
Repeat Order
When provided for in the APP, is a method of procurement of
goods from the previous winning bidder, whenever there is a
need to replenish goods procured under a contract previously
awarded through Competitive Bidding.
Repeat orders shall likewise be subject to the following
conditions:
1. Unit prices of the repeat order must be the same as or lower
than those in the original contract, provided that such prices
are still the most advantageous to the Government of the
Philippines (GOP) after price verification;
2. The repeat order will not result in splitting of contracts,
requisitions or purchase orders, as provided for in Section
54.1 of the IRR of RA 9184;
3. Except in cases duly approved by the GPPB, the repeat order
shall be availed of only within six (6) months from the
contract effectivity date stated in the Notice to Proceed
arising from the original contract; and
4. The repeat order shall not exceed twenty-five percent (25%)
of the quantity of each item in the original contract.
Shopping
This is a method of procurement
procuring entity simply requests for
quotations for readily available
ordinary/regular equipment to be
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suppliers of known qualifications. This method of procurement
shall be employed only in any of the following cases:
1.
When there is an unforeseen contingency requiring
immediate purchase: Provided, however, That the amount
shall not exceed one hundred thousand pesos (P100,000); or
2.
Procurement of ordinary or regular office supplies and
equipment not available in the Procurement Service
involving an amount not exceeding five hundred thousand
pesos (P500,000). At least three (3) price quotations from
bona fide suppliers shall be obtained.
The phrase “ordinary or regular office supplies” shall be
understood to include those supplies, commodities, or materials
which, depending on the procuring entity’s mandate and nature
of operations, are necessary in the transaction of its official
businesses, and consumed in the day-to-day operations of said
procuring entity. However, office supplies shall not include
services such as repair and maintenance of equipment and
furniture, as well as trucking, hauling, janitorial, security, and
related or analogous services.
The above amounts shall be subject to a periodic review by the
GPPB. For this purpose, the GPPB shall be authorized to
increase or decrease the said amount in order to reflect changes
in economic conditions and for other justifiable reasons.
Negotiated Procurement
This is a method of procurement of goods, infrastructure
projects and consulting services, whereby the procuring entity
directly negotiates a contract with a technically, legally and
financially capable supplier, contractor or consultant only in the
following cases:
1.
Where there has been failure of public bidding for the
second time as provided in Section 35 of the Act and its
IRR;
After conduct of the mandatory review of the terms,
conditions, specifications, and cost estimates, as prescribed
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in Section 35 of the IRR, the BAC shall revise and agree on
the minimum technical specifications, and if necessary,
adjust the ABC, subject to the required approvals.
However, the ABC cannot be increased by more than
twenty percent (20%) of the ABC for the last failed
bidding.
1.2 The BAC shall invite and engage in negotiations with a
sufficient number of suppliers, contractors or consultants
to ensure effective competition.
1.2.1 In the case of infrastructure projects, bona fide
contractors licensed with the CIAP whose eligibility
documents are on file with the procuring entity
concerned or the Department of Public Works and
Highways (DPWH) Contractor’s Registry, as the case
may be, and who have been classified under the type
of contract/project where the subject contract fails are
eligible to be invited for negotiation.
Other
contractors not previously deemed eligible may also
apply for eligibility.
1.2.2 All Procuring Entities shall maintain a registry
of suppliers, contractors, and consultants as basis for
drawing up the short list and/or selecting the
suppliers,
contractors,
and
consultants
for
negotiations.
1.3 Any
requirements,
guidelines,
documents,
clarifications, or other information relative to the
negotiations that are communicated by the procuring
entity to a supplier, contractor, or consultant shall be
communicated on an equal basis to all other suppliers,
contractors, or consultants engaging in negotiations
with the procuring entity relative to the procurement.
1.4 Following completion of the negotiations, the
procuring entity shall request all suppliers,
contractors, or consultants remaining in the
proceedings to submit, on a specified date, a best and
final offer with respect to all aspects of their
proposals.
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1.5 The procuring entity shall select the successful offer
on the basis of such best and final offers which should
meet the procuring entity’s minimum technical
requirements and should not exceed the ABC.
1.6 In all stages of the negotiations, observers shall be
invited.
2
In case of imminent danger to life or property during a state
of calamity, or when time is of the essence arising from
natural or man-made calamities or other causes where
immediate action is necessary to prevent damage to or loss
of life or property, or to restore vital public services,
infrastructure facilities and other public utilities. In the case
of infrastructure projects, the procuring entity has the
option to undertake the project through negotiated
procurement or by administration or, in high security risk
areas, through the Armed Forces of the Philippines (AFP);
3
Take-over of contracts, which have been rescinded or
terminated for causes provided for in the contract and
existing laws, where immediate action is necessary to
prevent damage to or loss of life or property, or to restore
vital public services, infrastructure facilities and other
public utilities;
3.1
The contract may be negotiated starting with the
second lowest calculated/highest rated bidder for the
project under consideration at the bidder’s original bid
price.
3.2
If negotiations fails, then negotiation shall be done
with the third lowest calculated/highest rated bidder at
his original price. If the negotiation fails again, a
short list of at least three (3) eligible contractors shall
be invited to submit their bids, and negotiation shall
be made starting with the lowest calculated/highest
rated bidder.
3.3
Authority to negotiate contracts for projects under
these exceptional cases shall be subject to prior
approval by the Heads of the Procuring Entities
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concerned, within their respective limits of approving
authority.
4.
Where the subject contract is adjacent or contiguous to an
ongoing Infrastructure Project or Consulting Service where
the consultants have unique experience and expertise to
deliver the required service: Provided, however, That (a)
the original contract is the result of a Competitive Bidding;
(b) the subject contract to be negotiated has similar or
related scopes of work; (c) it is within the contracting
capacity
of
the
contractor/consultant;
(d)
the
contractor/consultant uses the same prices or lower unit
prices as in the original contract less mobilization cost; (e)
the amount involved does not exceed the amount of the
ongoing project; and (f) the contractor/consultant has no
negative slippage/delay: Provided, further, That
negotiations for the procurement are commenced before the
expiry of the original contract.
5.
Procurement of infrastructure projects, consulting services
and goods from another agency of the GOP such as the PSDBM, which is tasked with a centralized procurement of
Common-Use Supplies for the GOP in accordance with
Letters of Instruction No. 755 and Executive Order No.
359, series of 1989. Further, in order to hasten project
implementation, Procuring Entities which may not have the
proficiency or capability to undertake a particular
procurement, as determined by the Head of the Procuring
Entity concerned, may request other GOP agencies to
undertake such procurement for them, or at their option,
recruit and hire consultants or procurement agents to assist
them directly and/or train their staff in the management of
the procurement function;
6.
In the case of individual consultants or partnerships hired to
do work that is (a) highly technical or proprietary; or (b)
primarily confidential or policy determining , where trust
and confidence are the primary consideration for the hiring
of the consultant or partnerships shall, at the most, be on a
six month basis, renewable at the option of the appointing
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Head of the Procuring Entity, but in no case shall exceed
the term of the latter.
7.
Upon prior approval by the President of the Philippines, and
when the procurement for use by the AFP involves major
defense equipment or material and/or defense-related
consultancy services, when the expertise or capability
required is not available locally, and the Secretary of
National Defense has determined that the interests of the
country shall be protected by negotiating directly with an
agency or instrumentality of another country with which the
Philippines has entered into a defense cooperation
agreement or otherwise maintains diplomatic relations:
Provided, however, That the performance by the supplier of
its obligations under the procurement contract shall be
covered by a performance security in accordance with
Section 39 of the IRR.
8.
Where the procurement does not fall under Shopping in
Section 52 of the IRR and the amount involved does not
exceed the thresholds prescribed in Annex H of the IRR.
8.1 The procuring entity shall draw up a list of at least
three (3) suppliers, contractors, or consultants of known
qualifications which will be invited to submit proposals, in
the case of goods and infrastructure projects, or curriculum
vitae, in the case of consulting services.
8.2 The thresholds prescribed in Annex H of the IRR shall
be subject to the periodic review by the GPPB. For this
purpose, the GPPB shall be authorized to increase or
decrease the said amount in order to reflect the changes in
economic conditions and for other justifiable reasons.
9.
Lease of privately owned real property and venue for
official use.
10. When an appropriation law or ordinance earmarks an
amount to be specifically contracted out to NonGovernmental Organizations (NGOs), the procuring entity
may enter into a Memorandum of Agreement with an NGO.
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11. Where, in the interest of project sustainability or to achieve
certain social objectives, it is desirable in selected project
components to call for participation of local communities in
the delivery of services, the procuring entity shall propose
the procedures, specifications, and contract packaging.
12. Procurement from specialized agencies of the United
Nations of any of the following: (a) small quantities of offthe shelf goods, primarily in the fields of education and
health; and (b) specialized products where the number of
supplies is limited, such as vaccines or drugs.
OTHER ACTIVITIES AFTER PROCUREMENT
1.
Property Records to be Maintained
The Property Officer (PO) or his staff, as the case may be,
shall number each type of supply and maintain Stock Cards
per stock number. He shall or his staff likewise maintain
Property Card per category of property, plant and
equipment.
Deliveries of supplies or property shall be immediately
recorded in the property records on the basis of the IAR and
other supporting documents. The IAR and other supporting
documents shall be forwarded to the Chief Accountant for
the preparation of the DV and recording of deliveries in the
appropriate ledger cards.
Stock Card is kept for each class of article. All receipts and
issues of supplies and the balance on hand are recorded
currently on this card. This form serves as a guide in
preparing the estimates of the quantity and description of
articles needed and in guarding against overstocking of
supplies and materials. It also facilitates physical inventory
taking.
2.
Recording of Deliveries of Supplies or Property in the
Books of Accounts
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The Chief Accountant shall maintain a Supplies Ledger
Card per stock number, a Property, Plant and Equipment
Ledger Card for each category of assets; and Real Property
Ledger Card for land.
Upon receipt of the IAR and other supporting documents,
the Chief Accountant shall record the deliveries in the
appropriate ledger cards.
Upon completion of the
disbursement process pertaining thereto the Chief
Accountant shall prepare the JEV taking up in the books the
procurement made. Thereafter, the Chief Accountant shall
reconcile the JEV with the appropriate ledger cards.
A Supplies Ledger Card shall be kept for each type of
supply to record all acquisitions, issues and disposals.
Transactions shall be posted promptly from source
documents, such as delivery receipts, invoices, etc.
An Equipment Ledger Card shall be kept for each class of
equipment to record the acquisition, description, custody,
estimated life, depreciation, disposal and other information
about the equipment, based on the source documents of the
transactions.
3.
Report of Supplies and Materials Issued (RSMI)
At the end of the month, based on the RSMI, the JEV shall
be prepared to record the issuance of stock.
MEASURE OF LIABILITY OF PERSONS
ACCOUNTABLE FOR SUPPLIES OR PROPERTY
The person in possession of or having custody or control of
supplies or property is immediately accountable therefor and
shall be liable for its money value in case of illegal, improper or
unauthorized use or misapplication thereof, by himself or any
other person for whose acts he may be responsible.
He shall likewise be liable for all losses, damages or
deterioration due to negligence in the keeping or use of
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property, whether or not it be, at the time of such loss, damage
or deterioration, in his actual custody.
Unless he registered his objection in writing, an accountable
officer shall not be relieved from liability by reason of his
having acted under the direction of a superior in using supplies
or property with which he is chargeable. However, the officer
directing such acts shall be first required to answer therefor.
RETURN OF EQUIPMENT ISSUED
When the equipment issued to an officer or employee is no
longer needed by him, said equipment shall be returned to the
Property Officer. Upon receipt of the returned equipment, the
Property Officer shall cancel the original Acknowledgement
Receipt for Equipment (ARE) and shall surrender the same to
the concerned employee.
The return of the equipment shall be posted by the Property
Custodian in the equipment card, either for reissuance, repair or
disposal. A new ARE shall be accomplished and issued to the
new user of the equipment.
RETURN OF UNUSED SUPPLIES AND SCRAP
MATERIALS
Unused supplies previously issued from stock or directly
delivered in the project site, when no longer needed for further
official use because of the completion of the project, shall be
returned to the Property Custodian. He shall acknowledge
receipt thereof on the RIS indicating thereon “Returned to
Stock”.
The Return Receipt can be an improvised form designed by the
agency, which shall contain the complete description of the
returned Property, its property number, the name of the person
returning the same or the person to whom this was originally
issued.
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Scrap materials which may still be used in the future shall be
returned to the Property Officer on a RIS plainly marked “Scrap
materials returned to the Property Officer/Custodian”.
PROPERTY CLEARANCES
Whenever an officer or employee of the government shall be
transferred to another government office, retired, resigned,
dismissed, or separated from the service, he shall secure
clearance from property accountability.
Summary
In this chapter, we learned that under the NGAS the asset
method is followed so the inventory items purchased are
recorded as assets. The expense is recorded upon
utilization/consumption. We learned the general procedures in
the procurement of these items and we learned that the needed
items must be included in the procurement plan to be prepared
by the agency. We also learned of the necessity of inspecting the
items before they are accepted to ensure that they are in
accordance with specifications.
Further, we learned that some of the documentary requirements
for payment are the purchase request, the PO, the invoices, the
IAR, etc. and that although procurement must be through
competitive bidding there are alternative methods of
procurement in government. Finally, we learned that for control
purposes, the PO must maintain his stock cards and must submit
a report on the issuance of his stock, while the accountant uses
the subsidiary ledgers for recording the items received and
issued.
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Chapter 7
OTHER MOOE ACCOUNTS & FINANCIAL
EXPENSES
Chapter Overview
This chapter covers other maintenance
and other operating expenses that are
frequently incurred by a government
agency, such as Training and Seminar
Expenses; Water; Electricity; Cooking
Gas; Telephone/Internet; Postage and Deliveries; Subscription;
Advertising;
Rent;
Insurance; Fidelity Bond Premium;
Accountable Forms with Face Value.
We will discuss the general rules, restrictions, requirements for
payment and other applicable laws related to the expense
accounts.
Learning Objectives
At end of the chapter, it is expected that you will be able to:
Name some basic requirements for each expense account;
List the documents to support the expense; and
Identify the situation when the expense is necessary and
economical.
Basic Concept
TRAINING AND SEMINAR EXPENSE
The head of the agency shall be responsible for approving the
training and development programs of their respective agencies
as well as the accreditation of such programs for purposes of
personnel actions.
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All government agencies may conduct in-house training
programs for the development and productivity of agency
personnel with minimal expenses for:
-
Supplies and Materials;
-
Materials Reproduction (hand-outs);
-
Rental
for
training
venues/
facilities
offices/agencies which do not have any;
-
Resource Persons’ services; and
-
Communication and Transportation Expenses
for
Training programs shall refer to those activities involving
instruction and strategies whereby participants are required to
undergo manual or practical exercises and action learning, as a
means of strengthening work and job related skills. In all
instances of training administration, efforts shall be exerted in
utilizing available resources and government facilities.
In-house training programs shall, as much as possible, be
conducted on a non-residential basis and without any provision
for participant’s meals or snacks.
WATER, ELECTRICITY, COOKING GAS
Requirements for Payment of Claims – Water, Electricity
and Cooking Gas
1.
Bills shall be attached. The previous meter readings in the
current bill shall be checked against readings in the
preceding bill.
2.
Rates are those allowed under existing regulations.
3.
Any significant increase in consumption is caused by
operations and not by any defect in the service.
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TELEPHONE/TELEGRAPH/INTERNET
General Rules and Restrictions
1.
Phone Rentals
Telephone rentals must conform to the prevailing rates.
The telephone numbers indicated in the bill must be
checked against the telephones installed in the office.
2.
Long-distance Calls
Long distance calls for official business shall be
limited to urgent and absolutely necessary business of
the Government. The use of long distance messages
shall be strictly limited and shall be resorted to only
under extreme and exceptional circumstances, such as
messages principally dealing in matters of vital
importance and matters which affect the security of life
and property.
All officers placing long distance calls should certify to
the official nature of the conversation including the
name and address and the official designation of the
party called.
The corresponding number of days during which there
has been an interruption in the telephone service should
be recorded and reported to the unit preparing the
payment of claims in order that the corresponding
charges may be deducted from the telephone bills
presented.
Unless authorized by law or regulation, no government
official is entitled to telephone service at his residence
and payment of bills relative thereto. (Sec. 357,
GAAM, Vol. I)
3.
Telegrams, cables and wireless charges
Charges must conform to the prevailing rates supported
by invoices/receipts and a copy of the message sent.
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Telegrams, radiograms, cablegrams and all other
wireless messages official in nature shall be used only
for matters of urgent importance which cannot be
transacted effectively through the mails.
The message transmitted must be brief and concise.
All unnecessary words and phrases shall be eliminated.
Any personal matter contained in an official message
which has no bearing thereon should be charged
against the sender.
Messages covering request or authorization for leave of
absence, personal business or greetings for birthdays,
anniversaries, etc., are personal in nature and should
not be charged to the government funds. (Sec. 358,
GAAM, Vol. I)
SUBSCRIPTION EXPENSE
Subscription to periodicals and magazines may be done under
these rules:
1.
The agency head or his authorized representative shall
approve the subscription.
2.
Library materials such as technical magazines, periodicals,
documents and other reading matters may be ordered
provided the funds are available therefor and that these are
kept in the agency’s library or research center for reference.
RENT EXPENSE
Basic Requirements for Payment of Claims
1.
Contracts of lease shall be in accordance with the
guidelines formulated by the Department of Public Works
and Highways [COA Circular 88-282(a)].
2.
As a general rule, contracts of lease should be co-extensive
with the period for which the appropriation is provided with
a prohibition to pay rentals in advance.
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However, a deposit made under a lease contract shall not be
considered as advance payment. The deposit may be
applied to the payment of rentals in anticipation of or
negotiation for the termination of the contract. (COA
Circular No. 85-55A, supra)
3.
The lease agreement should be signed by the contracting
parties duly authorized to execute the contract and the
witnesses thereto and acknowledged before a Notary
Public; and its terms and conditions are fixed and must not
be disadvantageous to the government.
Limitations and Use of Appropriation for Rentals
1.
No appropriations shall be used for renting motor
transportation equipment for a continuous period of more
than 15 days, except as may be authorized by the Secretary.
2.
Any appropriation authorized in any act for rental of
buildings and grounds for any department, bureau, office or
agency shall be available for expenditure only when
authorized by the Department Head concerned.
3.
With the concurrence of the Secretary of Budget and
Management and the Secretary of Finance, the Head of the
Department may contract with any government financial
institution for loans intended for the acquisition of land, or
for the construction of an office building for any of the
agencies under the department. Annual amortization of the
loans shall be taken from the appropriation for rental
authorized under any Act for the department, bureau, or
office concerned. (Sec. 367, GAAM, Vol. I)
FIDELITY BOND PREMIUMS
General Provisions
Employees accountable for funds/and or property in the
amount of P5,000 or more shall be bonded with the Fidelity
Fund of the Treasury of the Philippines. The Agency to
which the insured officers pertain shall pay the whole
premium on his bond. When an official is acting in a
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bonded capacity for two or more government agencies the
premiums on his bond shall be paid by respective agencies
in such proportion and in such manner as the COA
Chairman shall determine. For property responsibility, the
schedule is as follows:
Supplies and Materials – 50% of their total value
Equipment
– 30% of their total value provided
that the resulting amount is increased to round figure to
be divisible by exactly 100.
While the maximum bond is fixed at P5,000,000 no
limitation is fixed for the maximum cash and property
accountability.
The premium rate shall be ½ of 1% per annum, payable
annually.
When the bondable employees are relieved of their
accountability, the cancellation of their bonds shall be
effected immediately.
(Treasury Order No. 01-99)
OFFICE SUPPLIES EXPENSE
This is the cost of all expendable commodities used in
connection with government operations. It includes but is not
restricted to items: (1) normally consumed within one year after
being put into use; (2) converted in the process of manufacture
or construction, having a life expectancy of more than one year
but which shall have decreased substantially in value after being
put into use in only one year; (3) whose value is below the
capitalization benchmark assigned by the Commission on Audit.
PRINTING AND BINDING EXPENSES
The National Printing Office (NPO) shall have exclusive
printing jurisdiction over the following:
Printing, binding and distribution of all standard and
accountable forms of national provincial,
city and
municipal government, including government operations
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Printing of official ballots
Printing of public documents such as the Official Gazette,
General Appropriations Act, Philippine Reports
Development information materials of the Philippine
Information Agency, etc.
The office may also accept other government printing jobs,
including government publications, aside from those
enumerated above, but not on an exclusive basis. (Sec. 6, E.O.
285, July 25, 1987; COA Circular No.88-290. Sept. 5, 1988)
For accountable forms with money value and those being used
on a nationwide basis which also fall within the exclusive
printing jurisdiction of the National Printing Office but which
are not printed by NPO, exemption from the operation of
Executive Order No. 285 is to be secured from the President
upon endorsement by the Office of the Press Secretary or a
certification by NPO that printing said forms is not within its
production capacity (NPO Memo Circular No. 2-90, supra).
Any requirement for printing services outside of the exclusive
jurisdiction of the NPO can be awarded by the requiring agency,
subject to government accounting and auditing regulations, to
any private printer or may be undertaken at the printing facilities
of government agencies without the necessity of securing
waiver or certification covering the same from the NPO. (NPO
Memo Cir. 2-90, supra, Sec. 413, Chapter 24, GAAM, Vol. I)
LEGAL EXPENSE
The legal expense incurred by public officers and employees
may be recovered under these rules:
Public officers and employees acting in good faith may be
indemnified for legal expenses incurred in suits brought
against them for acts committed in the performance of their
official duties. Thus, in order that an officer or employee
may be reimbursed for any amount spent in connection with
his defense in suits filed against him, the offense with
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which he is charged must have a direct relation or
connection with the discharge of his duties and in the
absence of a causal relationship, he is not entitled to
reimbursement.
Claims shall be supported by:
1.
An application of the official or employee concerned
giving facts of the offense he was charged with and
approved by the proper Department Head concerned
and passed upon by the COA Chairman.
2.
Copies of decisions exonerating
administrative or criminal liability.
3.
Receipts of actual and related expenses incurred.
4.
Certificate of availability of funds.
him
from
As a general rule, government officials and employees who are
criminally prosecuted for acts committed in the performance of
their duties may be allowed reimbursement of reasonable
attorney’s fees including the bail bond premiums incurred in
connection with their defense, only upon their acquittal from
such criminal cases.
Government-owned and/or controlled corporations, which have
special powers vested in them, may during the pendency of the
case against their employees, provide legal service and pay
premiums for bonds filed to effect the temporary release of their
employees prosecuted for acts committed in the performance of
their duties.
For a government corporation to use its funds in employing
counsel, paying costs, or otherwise rendering assistance in the
prosecution or defense of action or other legal proceedings
which do not affect its own right or privileges, is clearly a
diversion of its funds to a purpose which is foreign to the
objects of its creation, and is ultra vires. Some cases have
suggested that the true test of the right of the political
subdivision to reimburse an official for legal expenses in
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connection with the defense of a suit is whether the acts of the
officer complained of relate to matters in which the public
agency has an interest.
AUDITING SERVICES
These are the expenses incurred by any government agency or
the amount due to the Commission on Audit for auditing
services rendered. The latter shall consider the following:
The cost of regular audit services rendered by the COA
shall be based on the cost of the audit function in the
agency concerned plus ten percent (10%) thereof to cover
overhead expenses.
The actual audit cost shall include personal services,
maintenance and other operating costs, depreciation and
out-of pocket expenses.
Other than the cost of audit billed by the COA, the
government agency shall not make any direct payments for
the COA’s operation and personnel costs, unless such costs
pertain to special audits or related services.
Personnel Services refer to salaries and mandatory
allowances/fringe benefits for the COA personnel involved
in the audit of the government corporation as expressly
authorized by law and/or other administrative issuances,
including statutory contributions related thereto.
Maintenance and Other Operating Expenses refer to rents,
traveling expenses, communication services, freight and
delivery charges, supplies and materials, water, illumination
and power, maintenance of motor vehicles, authorized
discretionary and representation.
Depreciation refers to depreciation allowance for the
COA’s capital assets and equipment used in the audit of the
government corporations.
Out-of-Pocket Expenses refer to all other expenses incurred
directly related to or connected with the audit engagement.
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Guidelines in the Assessment and Payment
The COA shall prepare the assessment for the cost of
regular audit services for the ensuing year for each
government-owned and/ or-controlled corporation and its
subsidiaries, with copy furnished the corporation
concerned, DBM and the Bureau of the Treasury (BTr), in
time for the preparation of the corporate operating budgets.
The government corporation shall include an amount
equivalent to the cost of regular audit as determined by the
COA in its corporate operating budget for the succeeding
year.
The DBM shall provide for the full implementation for the
cost of audit services for government corporations in the
COA’s appropriation for the succeeding year. Such
appropriation shall be released regularly and automatically
in accordance with the Work and Financial Plan approved
for the year.
The DBM shall ensure that the corporate operating budgets
include the cost of audit services as determined by the
COA.
The government corporations shall remit to the BTr the said
cost of audit services in six (6) equal installments to fall due
on or before the 15th day of the months of January, March,
May, July, September and November of the calendar year,
and shall furnish the DBM and the COA each with copy of
proof or certificate of remittance made to the BTr.
BTr shall follow-up/demand in writing the remittance of
delayed installments five (5) days after the same has
become due.
The BTr may request the DBM to withhold from the
national government equity contribution or subsidy due the
government corporation concerned, if any, such amount
equivalent to the unremitted corporate audit cost.
Upon request of BTr, the DBM shall withhold from the
national government equity contribution or subsidy due to
government corporation concerned, if any such amount
equivalent to the unremitted corporate audit cost.
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The difference between the assessments billed the
government corporation for auditing services as
incorporated in the corporate operating budget and the
actual cost incurred for the same year shall be adjusted in
succeeding year’s assessment. This applies as well to cases
of government corporations audited by the COA for the
first time where no budgeted appropriation for the cost of
audit has been provided.
CONSULTANCY SERVICE
This is the cost of services of individual private companies hired
to undertake a specific work or job requiring special or technical
skills not available in the concerned agency. The contract of
services is not covered by Civil Service Law, rules and
regulations but by COA and the rules and regulations issued by
the NEDA, as the circumstances may warrant.
A consultant is one who is contracted to render professional
service requiring highly specialized or technical expertise in a
field of special knowledge or training which cannot be provided
by the regular staff of the agency. He is hired as a professional
on a part-time or full-time basis.
Contracts of consultancy services shall refer to the following:
The contract creates a professional-client relationship
between the parties;
The position is not found in the index of position titles
approved by DBM; and
The duties enumerated in the consultancy contract are
mainly advisory in nature.
Services rendered pursuant to consultancy contract shall not be
considered government services and therefore are not covered
by Civil Service laws, rules and regulations.
Consultancy contracts do not have to be submitted to the Civil
Service Commission for approval. (M.C. No 27, s. 1993)
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(CSC Res. No. 93-1881 dated May 25, 1993/CSC OM No. 55)
Guidelines on the Hiring of Individual Consultants/Experts
Heads of agencies may hire consultants or experts provided
there are funds in their respective appropriations specifically
for the purpose, as certified by the Agency Chief
Accountant;
The consultant to be hired shall be a known expert in his
field as manifested by his work experience and/or training;
The service of the consultant shall be engaged for a limited
period only;
The consultant shall be hired to perform specific vital
activities or services which cannot be provided by the
regular staff of the agency.
Remuneration of Consultants
Consultants shall be paid remuneration of not more than
120% of the minimum basic salary of their equivalent
position in the agency based on the position allocation list
duly approved by the DBM. However, in case of those
working on a part-time basis, the remuneration shall not
exceed 50% of that received by a full-time consultant of
equivalent responsibility.
Consultants’ remuneration shall be inclusive of all benefits
accruing for the services rendered. Thus, they shall not be
entitled to any other benefits otherwise accruing to regular
personnel of the government.
Hiring Authority
When a specific appropriation for the hiring of consultants
has previously been authorized by the DBM in the budget
of the agency, the head of the agency may proceed to hire
consultants without need for authority from the DBM,
subject to the provisions of NBC No. 433 and of the
guidelines that may be prescribed by the CSC. Without
such specific appropriation, no hiring shall be allowed.
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A copy of the services contract of a consultant shall be
furnished the DBM through the Compensation and Position
Classification Bureau (CPCB) for post-audit in compliance
with the above-mentioned Circular.
Policy on Hiring/Employment
Contractual Basis:
of
Consultants
on
The heads of Department/ Agency need not secure prior
authority of the Civil Service Commission as required under
existing laws, rules and regulations to effect employment of
consultants falling under these categories:
Persons who are 57 years old or over; and
Persons who were previously retired from the government
service under retirement laws. (MC No. 26 s. 1990)
TAXES, DUTIES AND FEES
These are the payments and provisions for all taxes, duties, fees
and licenses except income tax.
Obligation for Payment
All units of government, including government-owned orcontrolled corporations, shall pay income taxes, customs duties,
and other taxes and fees as are imposed under revenue laws:
Provided, That organizations otherwise exempted by law from
the payment of such taxes/duties may ask for a subsidy from the
General Fund in the exact amount of taxes/duties due:
Provided, further, That a procedure shall be established by the
Secretary of the Budget,
whereby such subsidies shall
automatically be considered as both revenue and expenditure of
the Fund. (Sec. 20, GAAM Vol. I)
BUILDING MAINTENANCE
This is the cost of repairing and maintaining buildings owned by
the government.
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Rules Before Prosecution of Work by Administration or by
Contract
There must be:
1.
2.
3.
A certificate of availability of appropriations, free from
other obligations, issued by the Chief Accountant of the
agency concerned pursuant to Section 86 of P.D. No. 1445.
A program and estimate of work prepared by the project
engineer; and
Prosecution by contract shall follow the requirements of
“Contracts”. (Sec. 360, GAAM, Vol. I)
MOTOR VEHICLES MAINTENANCE
This is the cost of repairing and maintaining motor vehicles
owned by the government.
General Rules and Requirements for Payment
1.
Requests for repair and/or servicing of vehicle should be
approved by proper authorities.
2.
If the repair involves replacement of spare parts, a Report
of Waste Materials should be prepared upon submission of
the worn-out spare parts.
3.
Certificate of the Property Officer must state that the
vehicle belongs to or is used by the agency, and the repair is
necessary, and that the defect in the vehicle is incurred
through normal wear and tear and not due to the fault or
negligence of any official or employee.
4.
In the case of a major repair such as general reconditioning,
overhauling, repainting, etc., the following are required in
addition to the foregoing requirements:
Canvass from at least three (3) repair shops or public
bidding if the amount involved is more than P50, 000.
In the local government units, repair services shall be
acquired through competitive public bidding except as
otherwise provided in the Local Government Code.
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The repair shop to which the contract is awarded
should be duly accredited by the Department of Trade
and Industry, except in places where there is no
accredited shop in the locality or where the accredited
shop does not have sufficient facilities or where the
cost of services of the accredited shop is relatively high
or completion of repairs will suffer delays as certified
by the head of the agency or his duly authorized
representative.
The job contract should be very clear as to the specific
job to be undertaken, the specifications of materials to
be used, the period within which the job is to be
completed and other details in accordance at least with
the specifications in the bid offer.
Warranty certificate of the repair shops shall be clear as
to coverage and period.
The certificate of acceptance by the Property Officer
should be clear that the work or service done is in
conformity with the specifications of the contract and
accomplished within the specified period of time. (Sec.
362, GAAM, Vol. I)
AWARDS AND INDEMNITIES
These are the indemnities for destruction of property or injury to
persons, awards by courts or by administrative bodies.
Examples are indemnities for persons injured or killed or
property destroyed through military action, indemnities for
property taken by the government through civil action, awards
and compensation provided by laws.
Examples are:
Indemnities for persons injured or killed or property
destroyed through military action.
Indemnities for property taken by the government through
civil action, awards and compensation provided by laws.
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For this purpose, hospital fees include hospital laboratory fees,
fees for professional services of the hospital physicians,
operating or dressing room fees, cost of medicines furnished by
the hospital and accommodation and subsistence.
Basic Requirements for the Settlement of Claims
1. The claim should be submitted to, passed upon and
approved by the Department Head concerned.
2. The claim should be supported by evidence showing that
the death, sickness or injury, as the case may be, occurred
or was contracted or sustained in line of duty.
3. Determination of service connection of the causative
sickness or injury shall be done by a committee in each
department created for the purpose. The Committee should
consider the following:
Nature and extent of the sickness or injury incurred or
sustained by the officer or employee concerned.
Position held and nature of official duties including
duration of daily duty, regularity and frequency of
exposure to the elements and other general conditions
obtaining during the performance of duty.
Physical condition upon entrance into the service and
at the time of separation therefrom, as may be
established by reports of physical examination, clinical
records, certificate of discharge and other official
records or reports, if any.
4.
Where death or hospitalization occurred after separation
from the service, no determination of service connection
shall be made unless warranted by clinical records, reports
of physical examination, certificate of discharge, or other
official records and reports existing at the time of
separation from the service clearly indicating that the
employee was suffering from the causative sickness,
disease or injury while in the government service.
The following documents shall be given weight insofar as
they corroborate facts and statements appearing in the
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official records and reports existing on or before his
separation from the service plainly and unmistakably
showing the causal relation of the performance of his
official duties to injuries, wounds, or disease-producing
sickness or death.
- Affidavits
- Certificates
- Clinical records
- Medical reports
- Other documents of similar nature
Claims based purely on such affidavit, certificate and
clinical records, medical reports or other documents of
similar nature shall not be entertained.
5.
Before the final approval, each claim shall further be
supported by a definite finding by the proper Department
Head that sickness, disease or injury:
was not the proximate result of the officer’s or
employee’s abuse of authority, misconduct, willful
failure, gross negligence, indiscriminate use of drugs,
alcoholic liquor or vicious or immoral acts or habits;
was not contracted prior to his entry into the service or
after his separation therefrom; and
was not incurred or contracted during his absence
without authority from his assigned place of duty.
6.
Payment of an approved claim, whether it be for death
benefit or for payment of medical attendance, necessary
transportation, subsistence and hospital fees shall be subject
to availability of funds and the usual accounting and
auditing requirements. In especially meritorious cases,
should it be deemed necessary to make exception to the
policy laid down, prior approval of the President shall be
obtained.
7.
Where a claim is disapproved, the decision which shall be
in writing addressed to the claimant, through channels in
proper cases, shall clearly state the facts upon which the
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decision is based and the reasons for the disapproval. From
the adverse decision, the claimant may, within thirty days
from receipt of copy, appeal to the Supreme Court on
certiorari. (Sec. 371, GAAM, Vol. I)
Limitations to Payment of Claims
1.
Medical aid and other expenses reimbursable to a
government official or employee shall be those incurred for
the actual duration of the treatment of his sickness or injury
which shall in no case exceed six months reckoned from the
time it was incurred regardless of whether or not the
employee concerned has been separated from the service or
whether the injury or sickness has been cured or not.
2.
Compensation shall not be allowed for injuries caused by
the following:
the voluntary intent of the employee to inflict
injuries upon himself or another person;
drunkenness on the part of the laborer who had the
accident;
notorious negligence of the official or the
employee.
GRANTS AND DONATIONS
These are the non-repayable transfers given to other levels of
government, private sector, non-government organizations, or
international institutions. Grants encompass reparations and
gifts given for particular projects or programs, general budget
support or for any other purposes.
Examples are:
Aids for educational purposes
Grants for public health and sanitation
Grants for construction, maintenance and operations of
hospitals and puericulture centers
Aid to cultural minorities
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Contributions to economic development projects to the
United Nations and other international organizations
Requirements for Payment of Claims
1.
2.
3.
4.
5.
There must be a specific appropriation provided therefor.
Grants, subsidies and contributions must be for the public
interest dependent on the essential character of the direct
object of the expenditure which must determine its validity,
and not the magnitude of the interest to be affected.
There must be an expressed authority by constitutional
provision, by statute or by the charter of the agency or
instrumentality to provide appropriations.
The contemplated results should be advantageous to the
agency concerned. If the benefits to accrue to the agency
are indirect or merely incidental and to come by reaction
rather than as an immediate result, then the transaction is
ordinarily not within the powers of the government entity.
Financial assistance in the form of grants-in-aid for
scientific and technological research as well as grants to
upgrade research capability through fellowships,
scholarships, workshops, seminars, symposia, etc. and to
promote research results dissemination, are allowed,
provided the agency making the grants is authorized by law.
EXTRAORDINARY AND MISCELLANEOUS EXPENSES
These are the expenses incurred for or during meetings,
seminars,
and conferences, official entertainment of a
government official or through his authorized representative,
public relations, educational, athletic and cultural activities,
contributions to civic or charitable institutions, membership
fees in government associations and in national professional
organizations duly accredited by the Professional Regulation
Commission, membership in the Integrated Bar of the
Philippines, subscription to professional technical journals and
informative magazines, library books and materials, other
similar expenses not supported by regular budget allocation,
provided, that no portion of the amounts authorized thereon
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shall be used for the creation of positions, nor for salaries,
wages, allowances, intelligence or confidential expenses.
Guidelines for Payment of Extraordinary and Miscellaneous
Expenses
The officials concerned shall be guided by the following rules:
The amount fixed by the General Appropriations Act for
the offices and officials authorized shall be the basis for
control in the disbursement of these funds.
No portion of the amounts authorized and fixed by law shall
be used for salaries, wages, allowances, and intelligence
and confidential expenses which are covered by separate
appropriations.
The entitlement to the benefit shall be on a strictly noncommutable or reimbursement basis. The corresponding
claim for reimbursement of such expenses shall be
supported by receipts and/or other documents evidencing
disbursement, if these are available, or, in lieu thereof, by a
certification executed by the official concerned that the
expenses sought to be reimbursed have been incurred for
any of the purposes contemplated under the law or
regulation in relation to or by reason of his position. In the
case of miscellaneous expenses incurred for an office
specified in the law, such certification shall be executed
solely by the head of the office. (COA Circular No. 89-300,
March 21, 1989)
Extraordinary and Miscellaneous expenses may be taken
from any authorized appropriation but shall not exceed the
ceiling set forth in the Appropriations Act. To allow said
expenses to be charged to the item of expenditure “Other
Services” would open the flood-gates to the use of
extraordinary/miscellaneous expenses beyond the limit set
by law (COA Decision 563, June 30, 1988).
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BAD DEBTS EXPENSE
Under the NGAS, the determination of the bad debts expense
shall be based on the aging of accounts receivable as follows:
Age of Accounts
1-60 days
61-180 days
181-one year
More than one Year
Percentage
1%
2%
3%
5%
There are three stages in adjusting accounts receivable:
1st
2nd
3rd
Taking up of the allowance for bad debts
Writing off of the account and transferring it to the
Registry of Accounts Written-Off (RAWO) to clear the
books, however the liability of the person still exists.
Condoning the account on the request of the liable person
as approved by proper authorities, where liability is
removed.
DEPRECIATION EXPENSE
Depreciation accounting is followed in the new accounting
system. Depreciation, or the gradual allocation of the cost of
the use of the property, plant and equipment for the accounting
period, shall be recorded in the books as expense and is credited
to the accumulated depreciation account. The latter account is a
contra asset account and is shown in the balance sheet as a
deduction from the asset account to which it relates.
Three factors are involved in the computation of depreciation:
1.
2.
3.
Asset Cost – Purchase amount of the asset.
Estimated Salvage Value – estimated amount that the asset
can be sold at the end of its estimated life.
Estimated Useful Life – estimated period that the agency
can make use of the asset.
Please refer to Appendix 9 for estimated useful life.
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The straight line method is followed in determining
depreciation, where Annual Depreciation equals Asset Cost less
Estimated Salvage Value over estimated number of years of
useful life.
Annual =
Depreciation
Asset Cost – Estimated Salvage Value
Estimated no. of yrs. of useful life
Asset Cost
- Purchase or Acquisition
Value of the Asset
- 10% of the Asset Cost
Estimated
Salvage Value
Estimated
Useful Life
- as determined by the COA
Example:
Motor Vehicle
Date of Purchase
Salvage Value
Estimated Useful Life
Annual Depreciation
P10, 000.00
07-01-2001
P1, 000.00
10 years
P900.00
P10, 000.00-1,000 = P900.00/12 = 75 x 6 mos.
10
= 450 (2001 Year-end Depreciation
Expense)
Please refer to Appendix 9 for the table on estimated useful life
of agency assets.
OTHER EXPENSES
Loss on Foreign Exchange
This is the loss incurred in converting foreign currencies to
Philippine peso. Losses in exchange rates include:
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For foreign loan proceeds, it is the resulting difference
when the prevailing exchange rate is lower than the fixed
rate of exchange.
For remittances or repayments of foreign loans by the
National Government, it is the resulting difference when the
prevailing exchange rate is higher than the fixed rate of
exchange.
FINANCIAL EXPENSES
These are the expenses which are not used in the actual
operation of the agency such as Bank Charges, Interest Expense,
Commitment Charges, Other Financial Charges, Foreign
Exchange (FOREX) Loss, Debt Services Subsidy to GOCCs,
and Loss on Guaranty. These expenses shall be separately
classified from Maintenance and Other Operating Expenses
(MOOE)
Bank Charges
These are the expenses incurred for the amounts levied by a
bank for various services, such as charges for encashed checks,
charges for maintaining current account, cost of check booklets,
charges for bouncing checks, over withdrawals, cost of
stoppage of payment, etc.
Interest Expense
This is the expense incurred for the charges imposed as a
consequence of the use of money belonging to others, such as
interest on bonds, loans, advances, treasury bills, treasury notes,
certificate of indebtedness, and other interest bearing financial
obligations.
Summary
In this chapter, we discussed the different accounts of MOOE
and the general rules, restrictions/limitations and requirements
for payment. These will serve as a guide in the processing of
the claims for MOOE.
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