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(NAR) VOL. 6 NO. 1 / JANUARY - MARCH 1995
[ DBM NATIONAL BUDGET CIRCULAR NO. 437, January 02, 1995 ]
RULES AND REGULATIONS IN THE RELEASE OF FUNDS AND ISSUANCE OF NOTICE OF CASH ALLOCATION FOR CY 1995
Purpose
This Circular is being issued to:
1.1. prescribe guidelines in the incurrence of obligations pending the implementation of a Simplified Fund Release System;
1.2 provide guidelines in the issuance of Notice of Cash Allocation (NCA); and
1.3 reiterate the applicable provisions of DOF-DBM Joint Circular No. 1-90 dated February 27, 1990 and other issuances relative to the release of NCA.
2.0
Policy Direction
Pursuant to Section 56, General Provisions of RA 7845, the 1995 General Appropriations Act (GAA). The Department of Budget and Management (DBM) has been authorized to prescribe a new procedure for releasing funds under a Simplified Fund release System (SFRS). The SFRS will be designed to further rationalize and expedite the release of funds to various agencies of the government and thereby accelerate the implementation of critical programs and projects.
3.0
Guidelines on Incurrence of Obligations
3.1 Pending implementation of the SFRS, all agencies are initially authorized to incur obligations in an amount not exceeding three-twelfths (3/12) of their respective authorized appropriations programmed for the year under.
| a) | RA 7845, the 1995 General Appropriations Act for (i) General Administration and Support Services, (ii) Support to Operations, (iii) Operations, and (iv) Projects, both locally-funded and foreign-assisted; |
| b) | Agrarian Reform Fund; and |
| c) | Pinatubo Assistance, Resettlement and Development Fund. |
3.2 The obligations authorized to be incurred under Section 3.1 above shall consist of the following:
| 3.2.1 | Personal services of regular positions created or authorized by the DBM as of December 31, 1994; |
| 3.2.2 | Authorized salary adjustment of P1,000 per month pursuant to Executive Order No. 218, dated January 1, 1995 and the annual Productivity Incentive Benefit pursuant to Administrative Order No. 161, dated December 6, 1994; |
| 3.2.3. | Personal services of casuals/contractuals previously authorized by DBM whose positions are hereby authorized up to March 31, 1995 pending submittal of the Work and Financial Plan, provided, that specific appropriation in 1995 exists for the purpose, and provided further, that their services are deemed necessary by the head of agency; |
| 3.2.4 | Maintenance and other operating expenses that do not require specific approval by the President, the DBM, or other competent authority; |
| 3.2.5 | Regular equipment requirement previously approved by DBM during the preparation of the budget that do not require specific approval by the President (i.e., motor vehicles), the National Computer Center (i.e., computer facilities), and other competent authority; |
| 3.2.6 | On-going locally-funded and foreign-assisted projects, the 1994 Special Budget for which have been previously authorized; |
| 3.2.7 | Subsidy for operating requirements of government-owned or controlled corporations (GOCCs). |
4.0
Guidelines on the Release of NCA
4.1 The DBM shall automatically release the initial NCA to cover the first quarter obligational authority granted to agencies equivalent to three-twelfths (3/12) of agencies authorized programmed appropriations mentioned in Section 3.0 above, net of items to be released to other agencies. Subsequent NCAs shall be issued on a quarterly basis ten (10) days before the start of the quarter subject to Sections 4.3 and 4.4 below.
4.2 NCAs shall cover one quarter's disbursement requirements of agencies. However, agencies shall be allowed to use their balances in the previous quarter to augment their allocation in the succeeding quarters. In like manner, unpaid obligations of previous quarters may be paid out of NCA balances in subsequent quarters. All NCAs shall, however, be effective only up to December 31, of the calendar year.
4.3 The release of NCAs after the initial first quarter release shall be based on the submittal of the following documents:
| 4.3.1 | Work and Financial Plans, as prescribed under National Budget Circular 436, dated 28 December 1994. |
| 4.3.2 | Summary List of Checks Issued (SLCI), in accordance with the prescribed format shown in Annex "A", which shall be submitted within ten (10) days after end of each month. The SLCI shall be submitted in lieu of the Statement of Monthly Allocation and Utilization (SMAU) which shall no longer be required. |
4.4 For GOCCs. subsequent releases of NCAs shall be based on the submittal of their respective Corporate Operating Budgets and monthly Cash Flow Statements.
4.5 In case of deficiency in the quarterly NCA, agencies may request for additional NCAs subject to submittal of the documents prescribed under Sections 4.3 and 4.4 above.
4.6 In the case of grants and loan proceeds, the NCA request shall be supported by the following documents:
Nature of Request Supporting Document ________________________________________________________________________________________________ 4.6.1 Grants Proceeds Special Accounts in the General Fund) 4.6.2 For Loan Proceeds (with working fund) 4.6.3 For Loan Proceeds (without working fund)
4.7 No NCA beyond the initial NCA release shall be issued unless the required reports/supporting documents shall have been submitted.
4.8 The Common Fund System shall continue to be in operation. Agencies may therefore charge against the Common Fund all disbursements, including payment of accounts payables, subject to existing budgetary rules and regulations.
5.0
Other Reporting Requirements
Agencies are reminded to submit the following periodic accountability reports prescribed under existing guidelines, to assist DBM in the analysis of agency requests:
a) Quarterly Trial Balances
b) Quarterly Financial Report of Operations
c) Quarterly Physical Report of Operations
d) Quarterly Report of Actual Income
e) Quarterly Report on the Status of Project Implementation
f) Annual Statement of Accounts Payable
6.0
Repealing Clause
All circulars, memoranda or other issuances which are inconsistent with this Circular are hereby rescinded, repealed and/or modified accordingly.
7.0
Saving Clause
Cases not covered by this Circular shall be referred to the concerned Budget and Finance Bureau of the DBM.
8.0
Effectivity
This Circular shall take effect on January 1, 1995.
Adopted: 2 Jan. 1995
(SGD.) EMILIA T. BONCODIN
Acting Secretary