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(NAR) VOL. 10 NO. 2 / APRIL - JUNE 1999
[ DBM DEPARTMENT OF FINANCE - DEPARTMENT OF BUDGET AND MANAGEMENT JOINT CIRCULAR NO. 1-99, March 22, 1999 ]
GUIDELINES IN THE USE OF ADVICE/AUTHORITY TO DEBIT ACCOUNT BY NATIONAL GOVERNMENT AGENCIES
1.0 Purpose
1.1 To authorize the use of the bank debit system as a method of disbursement under the Modified Disbursement Scheme prescribed under Joint Circular No. 1-90 dated February 27, 1990;
1.2 To provide guidelines in the use of bank debit system for payment of Accounts Payable (A/Ps) and Retirement Gratuity and Terminal Leave (RG/TL) benefits; and,
1.3 To prescribe the disbursement document to be used by departments/agencies consistent with the bank debit system of the Modified Disbursement Scheme-Government Servicing Banks.
2.0 Definition of Terms
For the purpose of this Circular the following terms shall be construed to mean:
2.1 Bank Debit System refers to the system whereby national government agencies (NGAs) authorize their Modified Disbursement Scheme-Government Servicing Banks to deduct from their available Notice of Cash Allocation (NCA) balances the amounts to cover payment of A/Ps and RG/TL.
2.2 Advice/Authority to Debit Account (ADA) refers to the document which shall serve as notice to the bank to debit the agency's MDS sub-account for payments made for A/Ps and RG/TL.
2.3 Modified Disbursement Scheme-Government Servicing Bank (MDS-GSB) refers to the authorized government servicing bank where the NCA is issued by DBM, for credit to the MDS sub-account of the agency.
2.4 Bank Debit Advice is a document showing evidence of withdrawal of specific amount from the agency's MDS sub-account.
3.0 General Guidelines
3.1 The ADA shall be used as the disbursement document to cover payment of A/Ps to external creditors of the national government and RG/TL benefits to government employees. Initially, the use of ADA will be implemented by the following five (5) pilot departments effective April 1, 1999:
3.3 The ADA shall be considered as an accountable document. The ADA forms shall be accomplished by the agency.
4.0 Responsibilities
4.1 The DBM shall:
4.1.1 Issue the NCAs together with the list of creditors/retirees to be paid to cover payment of AP and RG/TL benefits of departments/agencies; and,
4.1.2 Provide the BTR with copies of signed NCAs on a daily basis.
4.2 The NGA shall:
4.2.1 Advise their external creditors/retirees to open a CA/SA with any branch of its MDS-GSB. To facilitate the opening of the CA/SA, Letters of Introduction (LOI) shall be issued addressed to the MDS-GSB;
4.2.2 Upon receipt of NCA from DBM, accomplish the ADA to cover payment of AP and RG/TL benefits;
4.2.2.1 The ADA shall be signed by the same officials authorized to sign MDS checks of the agencies.
4.2.2.2 If there is only one (1) payee to the transaction, the name shall be indicated in the ADA. However, if there are several payees, the list of external creditors/retirees to be paid shall be attached to the ADA. The list of creditors shall be consistent with the list provided by DBM.
4.2.3 Based on the validated debit advice from the MDS-GSB, confirm and reconcile the disbursements made through the ADA as recorded in their books of account and their MDS bank accounts;
4.2.4 Include the ADAs issued in the Advice of Checks Issued and Cancelled (ACIC) submitted to the MDS-GSB. The ACIC shall thus be renamed as Advice of Checks/ADA Issued and Cancelled; and,
4.2.5 Include the payments made through the ADA as part of their disbursements in the Monthly Summary List of Checks Issued and Cancelled, which shall hereby be renamed as Monthly Summary of List of Checks/ADA Issued and Cancelled.
4.3 The MDS-GSB shall:
4.3.1 Indicate in the lower portion of the LOI presented by the creditor/retiree, the assigned CA/SA number and bank branch and then return the same to the concerned agency for information;
4.3.2 Upon receipt of the duly accomplished ADA, perform the following:
4.3.4 See to it that the list of creditors/retirees together with the corresponding amounts which is attached to or contained in the ADA is consistent with the list prepared by DBM which is attached to NCAs issued. However, in instances where the amount per specific creditor/retiree is less than that in the list provided by DBM, the same shall be honored.
4.4 The Department of Finance Bureau of the Treasury (DOF-BTr) shall:
4.4.1 Replenish the MDS-GSB Head Office for the amounts authorized by NGAs to be paid through the ADA.
5.0 Accounting Guidelines/Procedures
The accounting guidelines shall be prescribed by the Commission on Audit.
6.0 Effectivity
This Circular shall take effect April 1, 1999.
Adopted: 22 March 1999
(SGD.) EDGARDO B. ESPIRITU
Secretary
Department of Finance
(SGD.) BENJAMIN E. DIOKNO
Secretary
Department of Budget and Management
1.1 To authorize the use of the bank debit system as a method of disbursement under the Modified Disbursement Scheme prescribed under Joint Circular No. 1-90 dated February 27, 1990;
1.2 To provide guidelines in the use of bank debit system for payment of Accounts Payable (A/Ps) and Retirement Gratuity and Terminal Leave (RG/TL) benefits; and,
1.3 To prescribe the disbursement document to be used by departments/agencies consistent with the bank debit system of the Modified Disbursement Scheme-Government Servicing Banks.
2.0 Definition of Terms
For the purpose of this Circular the following terms shall be construed to mean:
2.1 Bank Debit System refers to the system whereby national government agencies (NGAs) authorize their Modified Disbursement Scheme-Government Servicing Banks to deduct from their available Notice of Cash Allocation (NCA) balances the amounts to cover payment of A/Ps and RG/TL.
2.2 Advice/Authority to Debit Account (ADA) refers to the document which shall serve as notice to the bank to debit the agency's MDS sub-account for payments made for A/Ps and RG/TL.
2.3 Modified Disbursement Scheme-Government Servicing Bank (MDS-GSB) refers to the authorized government servicing bank where the NCA is issued by DBM, for credit to the MDS sub-account of the agency.
2.4 Bank Debit Advice is a document showing evidence of withdrawal of specific amount from the agency's MDS sub-account.
3.0 General Guidelines
3.1 The ADA shall be used as the disbursement document to cover payment of A/Ps to external creditors of the national government and RG/TL benefits to government employees. Initially, the use of ADA will be implemented by the following five (5) pilot departments effective April 1, 1999:
3.1.1 Department of Agriculture3.2 The duly accomplished ADA form shall be issued by the agency to its MDS-GSB to authorize the latter to debit its MDS sub-account and credit the Current Account/Savings Account (CA/SA) of the creditor/retiree.
3.1.2 Department of Education, Culture and Sports;
3.1.3 Department of Health;
3.1.4 Department of National Defense; and,
3.1.5 Department of Public Works and Highways.
3.3 The ADA shall be considered as an accountable document. The ADA forms shall be accomplished by the agency.
4.0 Responsibilities
4.1 The DBM shall:
4.1.1 Issue the NCAs together with the list of creditors/retirees to be paid to cover payment of AP and RG/TL benefits of departments/agencies; and,
4.1.2 Provide the BTR with copies of signed NCAs on a daily basis.
4.2 The NGA shall:
4.2.1 Advise their external creditors/retirees to open a CA/SA with any branch of its MDS-GSB. To facilitate the opening of the CA/SA, Letters of Introduction (LOI) shall be issued addressed to the MDS-GSB;
4.2.2 Upon receipt of NCA from DBM, accomplish the ADA to cover payment of AP and RG/TL benefits;
4.2.2.1 The ADA shall be signed by the same officials authorized to sign MDS checks of the agencies.
4.2.2.2 If there is only one (1) payee to the transaction, the name shall be indicated in the ADA. However, if there are several payees, the list of external creditors/retirees to be paid shall be attached to the ADA. The list of creditors shall be consistent with the list provided by DBM.
4.2.3 Based on the validated debit advice from the MDS-GSB, confirm and reconcile the disbursements made through the ADA as recorded in their books of account and their MDS bank accounts;
4.2.4 Include the ADAs issued in the Advice of Checks Issued and Cancelled (ACIC) submitted to the MDS-GSB. The ACIC shall thus be renamed as Advice of Checks/ADA Issued and Cancelled; and,
4.2.5 Include the payments made through the ADA as part of their disbursements in the Monthly Summary List of Checks Issued and Cancelled, which shall hereby be renamed as Monthly Summary of List of Checks/ADA Issued and Cancelled.
4.3 The MDS-GSB shall:
4.3.1 Indicate in the lower portion of the LOI presented by the creditor/retiree, the assigned CA/SA number and bank branch and then return the same to the concerned agency for information;
4.3.2 Upon receipt of the duly accomplished ADA, perform the following:
4.3.2.1 Immediately prepare the bank debit advice and provide the agency with a validated copy of the same; and,4.3.3 Provide DBM, BTR and the issuing agency with the Daily Report of Credits Made to the CA/SA of the creditor/retiree; and,
4.3.2.2 Credit the CA/SA of the creditor/retiree within twenty four (24) hours for on-line branches and forty-eight (48) hours for non on-line branches within Metro Manila, all capital towns and cities.
4.3.4 See to it that the list of creditors/retirees together with the corresponding amounts which is attached to or contained in the ADA is consistent with the list prepared by DBM which is attached to NCAs issued. However, in instances where the amount per specific creditor/retiree is less than that in the list provided by DBM, the same shall be honored.
4.4 The Department of Finance Bureau of the Treasury (DOF-BTr) shall:
4.4.1 Replenish the MDS-GSB Head Office for the amounts authorized by NGAs to be paid through the ADA.
5.0 Accounting Guidelines/Procedures
The accounting guidelines shall be prescribed by the Commission on Audit.
6.0 Effectivity
This Circular shall take effect April 1, 1999.
Adopted: 22 March 1999
Secretary
Department of Finance
(SGD.) BENJAMIN E. DIOKNO
Secretary
Department of Budget and Management