FINANCIAL MANAGEMENT

OPERATIONS MANUAL

2016
 2

Message from Br. Armin A. Luistro FSC

Secretary
Department of Education (June 2010 – June 2016)

The effective delivery of public services continuously

faces challenges and a growing demand for good
governance. Consistent with the government’s
objectives in promoting equal access through the
delivery of better basic education services, the
Department of Education (DepEd) has embarked on
developing a manual that is very helpful in managing
education resources.

A financial management system that promotes transparency and accountability ensures

public trust and confidence. Notwithstanding labor-intensive activities of the Department of
Education (DepEd), financial management is assured to function efficiently when conveniently
leveraged by an operations manual.

The manual was developed largely through a joint effort between DepEd’s technical
working group on Financial Management Operations and the team of World Bank Financial
Management Consultants. The completion of the FMOM is a realization of the long-term need
of DepEd decision-makers and finance practitioners for an instrument to ensure standard and
uniformity of practice in managing financial resources.
3
Message from Reynaldo Antonio D. Laguda
Undersecretary for Finance and Administration
Department of Education (September 2015 – June 2016)

It is a welcome opportunity to strengthen the

financial management operations of the
Department of Education (DepEd) in order to
optimize the use of the agency’s limited resources.
In partnership with the World Bank, the
development of the Financial Management
Operations Manual (FMOM) meets the need for a
simple and clear guide on financial management
processes.

As such, this well-designed FMOM of DepEd serves as a guidebook for the uniform and
standard interpretation and implementation of Financial Management practice in all operating
units of DepEd particularly in the following areas:

▪ customization of national guidelines to DepEd’s unique characteristics and circumstances

concerning FM issues;
▪ latest issuances on prescribed policies, rules and regulations affecting FM practice; and ▪
financial transactions defining and describing procedures to be followed, forms to be used,
recording and reporting, and documentary requirements.
We are very thankful to World Bank for their full support and commitment to Philippine
Education in coming up with a timely and informative manual.

4
ACKNOWLEDGEMENT
The Department of Education (DepEd) would like to acknowledge the contributions given by
those who have made the development and completion of this manual a reality. This manual is
the result of a joint effort of many, the World Bank (WB) team of consultants including organic
personnel of the DepEd, whose valuable assistance has facilitated the completion of this
project.

To the late Undersecretary for Finance and Administration Francisco M. Varela who staunchly
supported the project recognizing its importance as a needed tool for FM practitioners in
DepEd at all levels of the hierarchy. He advised the team to make sure the manual developed
will complement and not duplicate other existing DepEd manuals that cross-relate with
financial management (e.g., Simplified Accounting Procedures for non-IU Schools,
Procurement, Asset Management, etc.).

To the former Undersecretary for Finance and Administration Reynaldo Antonio D. Laguda and
his staff who continued the support started by his late predecessor and encouraged the team
to see the project to its fruition. He also contributed his own ideas of what the manual should
include particularly for the benefit of school heads.

To the members of the Technical Working Group (TWG) formed by Undersecretary Varela who
actively participated in the endeavor, from DepEd Central Office (CO), Undersecretary for
Finance – Disbursement and Accounting, Victoria M. Catibog, Dir. Theresa Anne M. Menardo,
Dir. Armando C. Ruiz, Dir. Aida Carpentero, and Dir. Roger Masapol; Ma. Rhunna L. Catalan,
Molyn L. Dionela, Presentacion A. Salandanan, Cholita F. Tiong, of CO-Accounting Division;
Selwyn C. Briones, Ma. Belen D. Demonteverde, Gilbert Morong, Jesus Dela Merced and
Leonardo Guledew of CO–Budget Division; Gene Patrick Morales of CO - Cash Division. From
DepEd Regional Offices, Paulino Garcia – NCR, Arnold Vino - RO I, Antonio Arquero - RO III,
Maritess Gloria - RO IV-A, Nancy Dizon - RO IV-A, Teresa Arcayera - RO V and Mary Ann Neri -
RO X. From DepEd Schools Division Offices, Irene Fernandez - SDO Laguna, Rolando Bayocot -
SDO Bohol and Angelita Ranalan - SDO Misamis Oriental.

To the secretariat of the TWG, Ann Rayshelle G. Lachica, Ma.Rossana Cazandra V. de

Jesus-Eseo, Joey O. Tumaliuan and Noemi G. Badua, who took care of administrative and
coordinating requirements.

To the Project Management Service (PMS) – Project Management Division (PMD) staff, June
Romaella Pereña, Edgardo Palacol and Belen Javier who served as secretariat for the WB
consultants.

To Lynette Perez, former World Bank Learning Equity and Accountability Program Support
(LEAPS) Task Team Leader and her co-team leader Samer Al-Samarrai, who both saw the
importance of this manual and recommended that it is a good project for WB to give technical
support to.

To the Australian Aid for International Development (AusAid) who in collaboration with WB
gave funding support.

To others whose names may not be mentioned but who rendered support to the development
team.

Thank you and God bless.

TABLE OF CONTENTS
Introduction ...............................................................................................................................
7
Objectives.......................................................................................................................
8 Coverage
....................................................................................................................... 9 DepEd’s
Financial Management Structure ..........................................................................16

Planning, Budgeting and Procurement

..........................................................................................18 Overview
.......................................................................................................................18 Government
Planning System .....................................................................................................22 National
Government Budgeting System .......................................................................................23

Budget Preparation
.........................................................................................................26 Budget
Legislation ..........................................................................................................32
Budget
Execution............................................................................................................34
Budget
Accountability......................................................................................................39

National Government Procurement System ..................................................................................41

Preparation of the National Education Development Plan
(NEDP)......................................................42 DepEd Budgeting System
...........................................................................................................46 Procurement and Asset
Management ...........................................................................................63

Planning, Budgeting and Procurement: DepEd Triangulation Process ....................................65

Revenue/Receipts and Deposit Procedures ...................................................................................69
Overview ......................................................................................................................69
Accounting and Disbursement Procedures
....................................................................................82 Government Accounting
..................................................................................................82 Basic Concepts and Principles
..........................................................................................84 Modes of Disbursements
.................................................................................................85 Unified Accounts Code
Structure (UACS) – Chart of Accounts .......................................................119 Provident Fund
.......................................................................................................................121 School-based
Financial Management .........................................................................................126 Liability
Management ...............................................................................................................135
Financial Reporting System ......................................................................................................145
Scope .........................................................................................................................145
Answers to Frequently Asked Questions (FAQs)
...........................................................................159 Process Matrix
........................................................................................................................165 Matrix on
Financial Processes .........................................................................................165 Processes under
Budget Execution (Categorized based on UACS)........................................173 Summary of Financial
Forms and Reports ...................................................................................188 Table of Figures
......................................................................................................................192 List of Tables
..........................................................................................................................193 Acronyms
and Abbreviations ....................................................................................................194 Glossary
of Terms ...................................................................................................................202

INTRODUCTION
It is important to fully understand the existing financial management system of DepEd.
Vital to this system is the flow of funds within the rationalized governance structure of DepEd
that must be traceable following clear administrative procedures and accounting of funds and
the corresponding financial reports.

The development of the Financial Management Operations Manual (FMOM) is a DepEd

project with support from the World Bank (WB) that was completed on 31 March 2016. This
manual outlines the systems and procedures of financial operations and other related
management practices to be observed by DepEd Implementing Units (Central Office, Regional
Offices, Division Offices and Schools). It conforms to existing government standards, rules and
regulations as provided for by the Commission on Audit (COA), the Department of Budget and
Management (DBM), the Bureau of Treasury (BTr) and other government regulatory bodies.

This financial management operations manual is aligned with the recently released
Government Accounting Manual (GAM) covered by COA Circular No. 2015-007 dated 22
October 2015, providing clear implementation guides in accounting processes, which is the
implementing guidelines of the Philippine Public Sector Accounting Standards (PPSAS).

Innovative approaches in the agency’s delivery of basic educational services including

private sector partnerships and infrastructure financing require a simple and straightforward
financial processing. A codified FMOM will encourage operational efficiency. Clarity of the
financial management process, supported by the FMOM, will aid decision-makers in policy
formulation and in rightfully assessing the progress of the agency’s programs and projects as
it carries out its mandate.

OBJECTIVES

FMOM as
implementation guide
FMOM as an
Instrument for
Transparency and Accountability
This FMOM serves as a reference material for
Officials, Employees, and other interested
public and private stakeholders of the
FMOM as support for process DepEd. This is a big leap towards the
effectiveness and efficiency eventual integration and automation of
government financial systems. This intention
was expressed with the issuance of
FMOM as a tool for good governance Executive Order (E.O.) No. 55 dated 06
September 2011 (presently on temporary
suspension). The E. O. promotes reform the allocation of resources to priority needs
towards improving the system of is optimal.
safeguarding assets for optimum utilization.
____________________________________The FMOM clearly defines the appropriate
_________________ Maintaining a solid and financial systems and procedures, ensuring
operative Public Financial Management sound control mechanisms are in place.
system requires support for its continued
effectiveness and efficiency. DepEd has The quality of decisions made for the use of
embarked on creating this FMOM as a guide public funds must adhere to the precepts of
for their officers, employees, particularly its Transparency and Accountability that are
financial managers and staff, and other interdependent variables in quality
interested parties. decision-making.

Good governance entails proper fiscal The FMOM is DepEd’s leverage in its
discipline. There is an increasing realization commitment for transparency and
that PFM, as a measure for the government’s accountability to ensure the effective use of
overall fiscal discipline, should ensure that public internal and external resources.

COVERAGE

Fiduciary Processes Management decision-makers in DepEd need a comprehensive

support tool for an efficient and effective discharge of their
financial management functions. This FMOM is exactly the
complementary helping-hand to all various systems and
processes in the operations of DepEd (regions/divisions/districts,
schools and other learning centers).

The FMOM provides the basic processes and requirements in:

- Planning, Asset Management and Procurement

- Budget Preparation, Legislation, Execution, Accountability
and Reporting
 - Accounting and Disbursement procedures with illustrative
examples and flowchart of processes unique to DepEd
- Financial Reporting and Analysis

It also includes a special section on school-based financial

management and Provident Fund operations.
decentralization of essential services to the
Rules and Regulations on Public Financial field with the schools and learning centers as
Management the heart of the education system.

To operationalize decentralization as provided

under RA 9155, the hierarchical structure and
functions of DepEd across all services and
covering all levels is distinctly defined. The
DepEd’s Organizational structure based on RA structure depicts the line of authority and span
9155 (Governance of Basic Education Act of of control that identifies the responsibilities of
2001) and revised by EO 366 (Rationalization its personnel. It provides guidance and clarity
Plan of 2004) on the deployment and utilization of education
This FMOM complies with government resources. As specified in the law, it also
budgeting, procurement, accounting and “defines the roles and responsibilities of and
auditing standards through regulations, provides resources to the field offices which
policies, rules and procedures that guide the shall implement educational programs,
overall functions of a bureaucratic unit. Latest projects and services in communities they
circulars and issuances on various financial serve.” (refer to Figure 1)
management concerns are compiled as
attachments/references including the GAM CY A review of the operations and organizational
structure of government brought about the
2015, P.D. No. 1445 (State Audit Code) and
‘Rationalization Plan’ as directed in E.O. No.
E.O. No. 292 (Administrative Code of the 366 s.2004. To give more alignment
Philippines). throughout the organization, further review
and revision of DepEd’s Rationalization
RA No. 9155, the framework of governance for
basic education, mandated the
9
Plan was continued in CY 2011 until its approval on 15 November
2013 by DBM. DepEd Order No. 52 s. 2015 dated October 30, 2015
prescribed the new organizational structures (see Figure 2) of the
DepEd Central, Regional, and Schools Division offices.

5
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12URE
6

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14
FIGURE 6 - SAMPLE SECONDARY SCHOOL ORGANIZATION CHART
Note: Organization chart may vary from school to school depending on available positions and organization
sections and sub-sections.

15

DepEd’s Financial Management

 Structure
responsibility and accountability are inherent
in the key positions created to discharge
specific duties and tasks related to financial
management (see Figure 7).
Financial
Management
The Secretary exercises overall supervision
Structure
and control over the entire department.
Notwithstanding the primary authority of the
Secretary over all financial transactions,
delegation of financial signing authority
Signing Authority of financial transactions down to the lowest unit of the organization is
DepEd’s financial management structure properly laid down in DepEd Order No. 41
covers all of the Offices (Central, Regions, s.2009.
Divisions and Schools). Authority,

FIGURE 7 - DEPED FINANCIAL MANAGEMENT STRUCTURE AT CENTRAL

OFFICE

Secretary

Assistant Secretary for Finance and

Office of Strategic Administration
Management

Director for Administrative Service

Planning Service Director for
Procurement Service
Director for Finance Undersecretary for Finance and
Services Administration
Division Mgt Division Division Division Facilities
Budget Division Education Division
Accounting Asset Mgt Cash
Employee Account

16
FIGURE 8 - DEPED FINANCIAL MANAGEMENT STRUCTURE AT THE REGIONAL
OFFICE
 Office of the
Regional Director
Finance Division

Administrative
Division
Accounting Budget

Cash Payroll Personnel Property and Supply

FIGURE 9 - DEPED FINANCIAL MANAGEMENT STRUCTURE AT THE

SCHOOLS DIVISION OFFICE

Office of the Schools

Division Superintendent

Administrative

Cash Personnel Property and

Supply Schools(IUs/Non-IUs)
Finance

Accounting Budget
17

Planning, Budgeting and

Procurement
OVERVIEW
Effective financial management requires a strongly linked planning, budgeting and
procurement processes in an organization. Understanding the basic principles and
standards, as well as the policies and guidelines under each of the systems, facilitates the
implementation of the procedures to be undertaken. This section of the Manual presents
the general principles and concepts, and discusses the procedures both at the overall
government level and at the DepEd level. It starts with the linkages among the three
systems, followed by the sections on planning, budgeting and procurement at the national
government level. Succeeding sections discuss the systems at the DepEd level. The
planning activities at the Central Office, Regional, Division and School levels to produce the
national education development plan are presented, followed by the activities in every
phase of the budget cycle, also at all levels, and lastly the procurement procedures which
are basically in accordance with the Government Procurement Reform Act (RA 9184).
magnitudes of the budget are formulated
Plan and through close consultation among the
Budget Linkage planning and fiscal agencies of government.
The policy of Government to formulate and Budgetary priorities are those specified in
implement a National Budget that is an the approved national plan, which, every
instrument of national development, agency must support by way of budget
reflective of national objectives, strategies proposal during execution.
and plans has continuously been
implemented up to the present time, since Planning, budgeting and procurement
the enactment of the Budget Reform Decree interface is essential to ensure a successful
of 1977. The budget has always been implementation of Program/Activities/Projects
supportive of and consistent with the (PAPs). A plan without budget cover is
socioeconomic development plan, prepared meaningless, while a budget that has no plan
within the context of the long-term plan of a is a waste of resources.
long-term budget program. The aggregate
18
How is this linkage operationalized?

It is operationalized primarily by the Development Budget Coordination

Committee (DBCC), a cabinet level committee composed of the
Department of Budget and Management (DBM), as Chairman and the
National Economic and Development Authority (NEDA), Department of
Finance (DOF), Bangko Sentral ng Pilipinas (BSP) and Office of the
President (OP) as members, that set the fiscal and monetary policies of
the government. Through this Committee, the link between planning
and budgeting is established, and conformity of the budget with the
over-all development plan is assured. Specifically, the Committee
establishes the Budget level based on projected revenues and
manageable deficit level. It sets the sectoral targets and priorities,
provides guidelines on the proper allocation of resources in various
expenditure dimensions, with the end view of attaining the national
development goals and objectives. The sectoral targets and priorities,
among others, are contained in the Budget Call issued by the DBM
annually, as guide of all agencies in the preparation and submission of
their budget proposals.

At the level of DepEd, planning, budgeting and procurement processes

are synchronized through DepEd Order 25, s. 2010. Following the DBM’s
Budget Call, the Secretary prescribes the policy directions, which all
operating units must support to improve the quality of basic education.
The Central Office employs a set of clear procedures for these
processes. The DepEd regions, meanwhile, do their planning and
budgeting in close coordination with their respective Regional
Development Council (RDCs). Finally, the division and schools, prepare
their respective budgetary proposals following the guidelines set out in
the Division Education Development Plan (DEDP) and School
Improvement Plan – School-Based Management (SIP-SBM) developed
by DepEd.
 budgeting, “Budgeting Linkage- All
procurement should be within the approved
What is the significance of procurement in budget of the Procuring Entity and should be
planning and budgeting? meticulously and judiciously planned by the
Section 7 of R.A. No. 9184 (Government Procuring Entity concerned. Consistent with
Procurement Reform Act), recognizes the government fiscal
necessity of linking procurement planning and

19
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.

i. 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.

ii. The end-user units of the procuring entity

shall prepare their respective Project
Procurement Management Plan (PPMP) for their
How is different programs, activities, and projects
procurement planning and budget (PAPs). The PPMP shall then be submitted to
operationalized in the agency? the procuring entity’s Budget Office. The
discipline measures, only those considered procuring entity’s Budget Office shall evaluate
each end-user’s submitted PPMP and, if
crucial to the efficient discharge of
warranted, include it in the procuring entity’s
governmental functions shall be included in the budget proposal for approval by the Head of
Annual Procurement Plan.” the Procuring Entity.

In the Budget Call for FY 2016 (National iii. After the budget proposal has been
Budget Memorandum No. 123, dated 28 approved by the Head of the Procuring Entity
January 2015), it was mentioned that “slow and/or other oversight bodies, the procuring
entity’s budget office shall furnish a copy of
budget utilization and significant under-spending
the procuring entity’s budget proposal as well
afflicted the 2014 budget execution” (and this has as the corresponding PPMPs to the BAC
been so in the past years).The more significant Secretariat for its review and consolidation
part of the problem was attributable to weak budget into the proposed APP. The proposed APP shall
planning and program preparation (e.g., delays in be consistent with the procuring entity’s
procurement, poor coordination with budget proposal.
implementers, etc.). It is in this context, that
As soon as the GAA becomes final, the
the procurement system, activities, standard
end-user units shall revise and adjust the
procedures, as well as funding requirements
PPMP to reflect the budgetary allocation for
and timetable, should be linked with the
their respective PAPs. The revised PPMPs shall
planning and budgeting systems to help
be submitted to the BAC, through its
address the issue of slow disbursement and
Secretariat, for the finalization of the modes of
under-spending.
procurement under the proposed APP. The
Approved Budget for the Contract (ABC) as
No procurement shall be undertaken unless it
is in accordance with the approved APP of the reflected in the APP or PPMP shall be at all
times consistent with the appropriations for the notwithstanding Section 7.2 of the IRR of R.A.
project authorized in the GAA, continuing, and 9184, the Procuring Entity may undertake the
automatic appropriations. To facilitate the procurement activities short of award. No
immediate implementation of projects even award of contract however shall be made until
pending approval of the GAA, and the GAA has been

20
approved or enacted (Section 7.6 of IRR of R.A. 9184).

How is this operationalized?

Upon approval of the President of the National Government budget, or upon submission of the
National Expenditure Program to Congress, agencies are already advised to prepare their
Annual Procurement Plan (APP) for Commonly Used Supplies and Equipment (CSE) based on
their approved budget. This APP-CSE will be included as part of the Budget Execution
Documents (BEDs) which are required to be submitted to DBM and accordingly adjusted upon
enactment of the General Appropriations Act (GAA), per the Guidelines on Release of Funds
for 2015 issued by DBM (NBC No. 555 dated 18 October 2014). It serves as basis of the DBM-
Procurement Service in projecting inventory requirements, scheduling of procurement
activities and overall management of centrally procured common supplies and equipment.
21

GOVERNMENT PLANNING SYSTEM

The National Economic and Development Authority (NEDA) is the overall planning body of
Government. It assumes the central role of coordinating planning at the aggregate level and
overseeing overall implementation of government programs. It likewise coordinates
development policies and monitors project activities.

At the sub-national level, Regional Development Council (RDC), Provincial Development

Council (PDC), City Development Council (CDC) and Municipal Development Council (MDC)
have been organized for the region, province, city and municipality, respectively. The
councils are responsible for the development of their areas of jurisdiction. The NEDA
Regional Director chairs the RDC, while the respective governors/mayors chair the other
Councils. Memberships to the councils come from representatives of government agencies,
private organizations and other stakeholders.
which is a consolidation and integration of
the various development plans of the national
The Philippine Development Plan and sub national councils, is formulated
The Philippine Development Plan (PDP), covering a period of six years to coincide
with the term of national leadership The PIP also links the Plan particularly the
administration. For example, the current PDP Results Matrix to ensure effective
covers the period 2011-2016. implementation and monitoring of the
development initiatives therein.
The Plan is accompanied by a Results Matrix
(RM) and Public Investment Program (PIP). Annual updates are done to monitor the
The RM lists the specific programs/projects results and targets identified in the Plan.
against which the performance of the
implementing agencies shall be graded, and A midterm review is conducted to update the
provides the measurable outputs and targets PDP. The review is spearheaded by NEDA,
in line with the government agencies’ with the participation of all government
intended outcomes and strategies. The PIP, agencies and other stakeholders. The
on the other hand, identifies the budgetary updated Philippine Development Plan is
requirements of these programs and projects published for the consumption of the general
and their corresponding sources of funds. public and all stakeholders.

22

National Government Budgeting

System
Government budgeting is the critical exercise of planning for and allocating revenues,
borrowed funds and other receipts to attain the economic and social goals of the
country. The National Government, with limited resources, is responsible for the
efficient allocation of such resources among a variety of competing claims for purposes
of growth, productivity and economic stability.

What are the benefits derived from

budgeting?

What are the functions of the national

budget?
A number of benefits can be derived from 1. Tool for management;
budgeting, among which are the following: 2. Tool for accountability; and
3. Tool for economic intervention.
Activities within an organization are
coordinated through the involvement of all As a tool for management, the national
concerned to attain common objectives and budget specifies directly or indirectly, the
goals: cost, timing, nature and expected results of
government operations.
1. Awareness among members of
management and the organization of the
As a tool for accountability, the national
problems faced in implementing programs
budget makes a government agency
and projects is created;
accountable for its performance through the
2. Members of the organization are made
accounting of funds released to it.
conscious that there are limits to available
Accountability is shown through compliance
resources and there is a need to conserve
them; of reportorial requirements to oversight
agencies.
3. Accountability and responsibility is
specifically emphasized through obligation
accounting, i.e. maintenance of financial As a tool for economic intervention,
records and information for transparency; government spending provides any or a
and combination of the following:
4. The budget is used as a management tool
1. Equity or redistribution. The National
to evaluate its own performance and
Government promotes equity or wealth
measure its progress.
redistribution by providing funds to
It serves three functions, namely:
23
programs which directly benefit the people. Programs which
have long-term equitable redistribution effects are agrarian
reform, public education, basic health care and rural
infrastructure;

2. Stabilization. During period of recession and when private

sector activity is weak, the National Government can pump
prime the national economy through the following strategies:
a. Increasing government spending on direct purchases and
investments;
b. Ensuring that there are many activity-stimulating projects
funded in the budget; and
c. Timing budgetary releases during a period that has been
determined to have the most economic impact; or
d. By all three.

What are the LEGAL BASES underlying

Government budgeting?

The Philippine Constitution establishes the budget policy, fundamental principles

 and requirements of the budget process and the budget calendar, while the
details of the budget process are defined in various laws such as, starting from
Commonwealth Act No. 246, also known as the Budget Act of 1937, Republic
Act No. 992, which introduced the concept of performance budgeting,
Presidential Decree No. 1177 or the Budget Reform Decree of 1977. Book VI of
the Administrative Code of 1987 (E.O. No. 292) is the latest guide and is the
one currently being applied and followed. It provides the governing rules and
regulations on National Government budgeting, specifically, on budget policy
and expenditure of expropriated funds.

1.Budget preparation;
What is the BUDGET PROCESS? 2.Budget authorization or legislation;
The budget process is a cycle and involves 3.Budget execution or implementation; and
four phases, namely: 4.Budget accountability.

24
FIGURE 10 - BUDGET CYCLE

1.Preparation

2.Legislation
 Year-End Budget
Performance
Assessment Review

3.Execution

4.Accountability

Disbursements

Source: People’s Budget, www.dbm.gov.ph (wordings only)

25

Budget preparation is the first phase of the

budget process. It covers the formulation of
What are the the overall budget level, determination of
activities or events during Budget budgetary priorities and activities and the
Preparation? translation of these priorities and activities
into agency budgetary estimates.
How is the overall budget
formulated? The overall budget level is formulated on the
basis of the projected revenues of
BUDGET government and a manageable level of
domestic and foreign borrowings, which are
PREPARATION in turn consistent with the macroeconomic
assumptions and fiscal targets set by the
Development Budget Coordination
Committee (DBCC). revenue program, expenditure program and
the financing program are formulated and
The fiscal targets are based on the approved by the DBCC. The expenditure
macroeconomic assumptions, and program is the overall obligation budget
consistent with the fiscal targets, the ceiling.

What is the DBCC? The DBCC is the highest fiscal policy making body composed of the
Department of Budget and Management (DBM) Secretary as
Chairman. Among its members are the Secretary of the
Department of Finance (DOF), Director-General of the National
Economic and Development Authority (NEDA), Governor of the
Bangko Sentral ng Pilipinas (BSP), and a representative from the
Office of the President (OP).

The DBCC was created on 14 May 1970 through Executive Order

No. 232 with the following functions:

1. Reviewing and approving macroeconomic targets, revenue

projections, and borrowing level,
2. Aggregate budget level and expenditure priorities of government
3. Recommends to the President and the Cabinet the consolidated public
sector financial position and the national government fiscal program.
4. Assess the reliability of revenue estimates;
5. Recommend appropriate tax or other revenue measures and the
extent and type of the borrowings; and
6. Conducts periodic review and general examination of costs,
accomplishments and performance standards applied in undertaking
development projects.

26
FIGURE 11 - DBCC MEMBERSHIP
What are
macroeconomic assumptions?

After the overall budget is

formulated, what comes next?
Macroeconomic assumptions serve as guide
to government planners on the anticipated
performance of the economy, taking into
What are fiscal targets? consideration the actual performance in
previous years. These consist of:

1. Gross National Product (GNP) Real

 Growth Rate; 2. Gross Domestic Product contains the guidelines and procedures in
(GDP) Real Growth Rate; 3. Inflation Rate; the Budget preparation of budget
and proposals of the Departments, Agencies,
4. Foreign Exchange Rate (P/$). Bureaus, Offices, Commissions, State
Universities and Colleges, and other
On the other hand, the fiscal targets are: Instrumentalities of the Government - the
Budget Call. The overall estimates are
1. Revenue, Disbursement, and
Surplus/Deficit Levels; 2. Percent to GDP; reduced into budget proposals prepared by
and various agencies of the government.
3. Growth rates. Included in the Budget Call are the budget
framework, the macroeconomic and fiscal
1. Issuance of the Budget Call. Upon targets, the overall expenditure level
approval of the overall budget ceiling by allocated by sector, including the indicative
the DBCC, the Department of Budget and department ceilings, the forms
Management issues the Budget Call which

27
prescribed to be filled, and the schedule of budget preparation
activities.

2. Conduct Budget Forum. After the issuance of the Budget Call,

the DBM conducts a Budget Forum with the National
Government Agencies (NGAs) to explain and elaborate on the
contents of the Budget Call, entertain questions and clarify
issues raised, to ensure proper compliance by the NGAs and
facilitate the evaluation of proposals. A separate budget forum
are conducted at the regional level.

3. Conduct Planning Workshops. Agencies conduct annual planning

workshop to identify and prioritize their programs and projects
in support of the National Government goals and objectives as
indicated in the Medium Term Public Investment Plan. These are
preceded by an assessment as part of their past
accomplishments and performance as basis of plan preparation
for the succeeding years. The priority programs and projects
are ready for inclusion in the proposed budget when they
receive the Budget Call.

4. Submission of Proposed Budget. Agencies submit their budget

proposals to DBM. These are reviewed as to consistency with
the guidelines and conformance to existing policies of
Government and evaluated in relation to the public expenditure
management framework. Their performance is assessed in
terms of attaining fiscal discipline, allocative efficiency and
operational efficiency.

5. Technical Budget Hearing. DBM calls the agencies for a budget

hearing to explain and clarify their budget proposals.
 6. Approval of Agency Budgets. An iterative process of prioritization
takes place, until the final makeup of the budget is arrive at.

7. Information Dissemination. The agencies are informed of the

approved budgets, and are given the flexibility to align their
priority programs, activities and projects in support of the Major
Final Outputs (MFOs), within the approved budget.

8. Preparation and Approval of the National Expenditure Program

(NEP). After confirmation of the approved budget by the
respective Agency Heads, the NEP is finalized, and submitted to
the President for approval.

9. Submission to Congress. The President submits the NEP,

together with the other budget documents to Congress and

28
Senate within the timeframe set in the Constitution

What is the NEP? The NEP is the budget document submitted by the President to the
Congress of the Philippines. It presents the President’s Budget
Proposal by Department/Agency and by Special Purpose Funds. The
expenditure items are structured by program, activity and project,
grouped into Major Final Output of the Agency, by expense class
(personnel services, maintenance and other operating expenses,
financial expenses and capital outlays), in a three year period:
actual for the past year, and estimate for the current and budget
years. The NEP is the basis of the General Appropriations Bill and
eventually, the General Appropriations Act.

Starting FY 2013 the agency’s performance indicators as well as

performance targets and accomplishments were presented in the
NEP.
staffing structure of the agencies showing
What other budget documents are the number of permanent positions, the key
submitted to positions, number of other positions, vacant
Congress? and filled positions.
In support of the NEP submitted by the
President to Congress, the other documents
3. Details of Selected Programs and
are:
Projects, which lists the detailed activities
of a particular program or project.
1. Budget of Expenditures and Sources of
Financing (BESF) which presents the
4. President’s Budget Message which is the
various summaries and dimensions of
summary of the proposed budget. It reports
expenditures by department, and the
the thrusts of Government for the Budget
detailed income and sources of financing by
year, the strategies adopted in the allocation
department and agency.
of resources, the accomplishments,
innovations, etc.
2. Staffing Summary which presents the
29
The detailed activities, both at the national government level and at the department or
agency level are presented below:

TABLE 1 - BUDGET PREPARATION ACTIVITIES

Activities Responsibility Center

Formulation of the overall National DBCC

Government Budget

1. Setting of macroeconomic assumptions 2.

Projection of Tax and Non-Tax Revenues 3. NEDA
Determine manageable level of borrowing DOF
4. Allocation of expenditure ceiling
BSP

DBM

Issuance of the Budget Call DBM

1. Policy guidelines and reforms

2. Procedures
3. Forms
4. Budget calendar

Conduct of Budget Forum DBM

 Preparation of Budget Proposals at the Agency level Line Department/Agency

1. Issuance of internal Guidelines (internal PS-Program Planning Division/Budget Division

budget call) to Operating Units signed by the Department Secretary/Agency Head

2. Submission of proposals to Budget Division Bureaus/Offices/Operating units

Budget Division/Committee constituted for

3. Review and evaluate proposals, including an
the purpose
internal budget hearing within the
department

4. Consolidate proposal as evaluated Budget Division

PS-Program Planning Division/Budget Division

5. Presentation to Executive Committee for final
in-house review

Finalization and submission of proposed budget to Department Secretary/Agency Head

DBM

Evaluation of Proposals DBM

1. Conduct technical budget hearings

/consultation with agencies

30
2. Conduct executive review and recommend
final budget level

Prepare the Draft National Expenditure Program (NEP) DBM

Review and confirm NEP Department Secretary/Agency Head

Issuance of guidelines for the preparation of BEDs DBM/Agency Head

and submission to DBM

(Note: Adjustments will be made after the

enactment of the GAA)

Note: This step is done after the approval of NEP by

the President.

Submit Final NEP to President DBM

Approve NEP and submit National Government President

Budget (NEP, BESF, Staffing Summary, President’s
Budget Message) to House of Representatives
31

Budget Legislation
This is the second phase of the budget process. It involves the review of the
proposed NEP and enactment into law by the Legislature. In its review, Congress is guided
by the provision of law that it cannot increase the budget submitted by the Executive
Department. In implementing this provision of law, a realignment maybe effected by an
increase in a specific activity but offset by a corresponding decrease in other activity or
activities.
Representatives, the Bill is submitted to
What are the activities during Budget the Senate;
Authorization?
1. The Committee on Appropriations 6. The budget submitted by the House is
assigns the departments/agencies to the reviewed and evaluated by the Finance
various Sub-Committees for review and Committee;
evaluation;
7. Budget hearings are conducted to give
2. The Sub-Committees conduct budget opportunity to the department and
hearings with the agencies. Agencies are agencies to defend their proposals;
called to justify their proposals, clarify
and answer questions that may be asked 8. Based on the result of the hearings, the
by the Committee; Finance Committee submits its
recommendation for floor deliberation and
3. Based on the outcome of the hearings, debate until finally approved by the Body;
the Appropriations Committee submits its
recommendation in the form of a General 9. A joint Legislative Committee is formed
Appropriations Bill to the floor for to settle any discrepancy and come up
deliberation and debate. The head of the with the final version of the Budget
agencies are invited to act as resource
person during the deliberations; 10. When agreement is reached, the
approved Bill is forwarded to the
4. Just like any bill, the General President for signature;
Appropriations Bill is subjected to
approval from the first to the third 11. When the Bill is signed, it becomes a
reading; General Appropriations

5. Upon approval by the House of

32

What happens if the President does not fully What happens if the GAA is not passed
agree to the Bill approved by both Congress before the start of the fiscal year?
and Act, ready for implementation.
Senate?
The President can exercise his or her veto
power as provided in the Constitution. Items
that are directly vetoed by the President deemed re-enacted in accordance with the
cannot be implemented. If the veto is provision of the Constitution.
conditional, the implementation may be
done after compliance of the conditions. The activities during budget authorization are
in the succeeding Table.

The budget of the previous year shall be

TABLE 2 -BUDGET AUTHORIZATION ACTIVITIES

Activities Responsible Unit/ Entity

Receive budget submitted by the President Committee on Appropriations of the House of

Representatives (HoR) & Finance Committee of
the Senate

Review and evaluate budget Committee on Appropriations of the House of

Representatives (HoR) & Finance Committee of
the Senate

Conduct budget hearings with agencies and DBM Committee on Appropriations of the House of
as resource persons Representatives (HoR) & Finance Committee of
the Senate

Draft appropriation bill Committee on Appropriations of the HoR

Floor deliberations and approval HoR

Submission to Senate HoR

Floor deliberations and approval Senate

Joint Committee deliberation and approval HoR and Senate Representatives

Submission to President for signature Joint Committee

Final Approval President

33

Budget Execution
This is the third phase of the budget process. It is at this phase where
authorizations are issued by DBM to the departments and agencies in order that
implementation of the programs, activities, projects authorized for the year and
disbursement/accounting of funds takes place. As basis for the release of the
authorizations, DBM requires agencies to submit Budget Execution Documents (BEDs),
through the issuance of Guidelines on the Release and Utilization of Funds in the form of
a Circular.
categorization of the entity budget into FCR
What are these authorizations to be issued and FLR or the negative list. It also covers
by DBM? releases for items subject to Special Budget
With the adoption of the Unified Accounts Request, such as releases from the Special
Code Structure (UACS) and the Performance Purpose Funds and Use of Income.
Informed Budgeting (PIB), the following are
the fund release documents: c. General Allotment Release Order (GARO)
– covers automatically appropriated
1. Obligational Authority or Allotment – the
expenditures common to most, if not all,
following are the documents which
agencies without need of special clearance or
authorize the entity to incur obligations:
approval from competent authority, i.e.
Retirement and Life Insurance Premium. It
a. General Appropriation Act as Release
is defined as a comprehensive authority
Document (GAARD) - serves as the
issued to all national government agencies,
obligational authority for the comprehensive
in general, to incur obligations not
release of budgetary items appropriated in
exceeding an authorized amount during a
the GAA, categorized as For Comprehensive
specified period for the purpose indicated
Release (FCR) as indicated in the Guidelines
therein.
on the Release and Utilization of Funds
issued by DBM.
2. Disbursement Authority – the following
documents authorize the entity to pay
b. Special Allotment Release Order (SARO) –
obligations and payables:
covers budgetary items under For Later
Release (FLR) of the entity submitted
a. Notice of Cash Allocation - cash authority
Budget Execution Documents such as the
issued by the
Financial Plan (FP). The FP contains the

34
receive these
authorizations?

How are the

unreleased or
withheld items
released?

What is a special budget?

What are Agency Savings?

DBM to central, regional and division offices
and operating units to cover the cash
requirements of the agencies;

b. Non-Cash Availment Authority – authority

of agencies to liquidate their actual
obligations incurred chargeable against
What happens when the Agencies available allotments for availment of
 proceeds from loans/grants through direct made. The detailed activities are discussed in
payments; DepEd’s Budgeting Procedure.

c. Cash Disbursement Ceiling – authority The department/agency submits to DBM a

issued to Department of Foreign Affairs Special Budget Request (SBR) supported
(DFA) and Department of Labor and with the work and financial plan and other
Employment (DOLE) to utilize their income required documents for the later release
collected/retained by the Foreign Service items that need clearance.
Posts (FSPs) to cover their operating
It supports the request of a
requirements, but not to exceed the
department/agency for the release of
released allotment to the said post; and
lump-sum funds, use of income and other
requests for fund releases.
d. Tax Remittance Advice – constructive
authority to liquidate the obligations Savings is defined as the unutilized allotment
pertaining to taxes withheld by entity. after the completion of the activity/project
or final discontinuance or abandonment of
The agencies can now incur obligation,
the activity/project for which the said
undertake and implement the approved
allotment is authorized.
programs, activities, and projects.
Disbursement of funds can likewise be

35

What are the documents to support an

SBR?
1. The Work and Financial Plan
2. List of operating units

3. Other documents specified in the Special Provision for the purpose.

their own savings?

Are
departments/agencies authorized to use
 The most recent issuance by DBM on
realignment is NBC No. 559, dated 26 June
2015 – Guidelines in the Realignment of
What are the types of realignment that may Funds Under the FY 2015 GAA and Other
be allowed? Purposes. Although this is specifically for the
2015 Budget, it can serve as a guide.
Realignment can only be done within a PAP
and it covers change in:

1. Object of expenditure within allotment

class except PS, i.e., changes within MOOE
or changes within CO;
2. Implementing or operating units;
3. Project modifications as authorized in the
pertinent special provisions of agencies;
4. One allotment class to another, including
realignment for deficient allotment classes
pertaining to unreleased appropriation of
the following.
a. Within a Special Purpose Fund (SPF),
excluding those requiring prior approval of
the President of the Philippines; and
What is the procedure to effect b. Within purpose under the Unprogrammed
realignment? Appropriations (UA).

Realignment shall be effected with prior

What are the other releases that can be approval of either the Agency Head or the
made by DBM and what are the required DBM. The detailed procedures are presented
Department and agencies are authorized to in the Section on DepEd Budgeting
use savings for purposes provided in the Procedure below.
general provisions of the GAA. Savings
1. Use of excess income. There are agencies
generated may be realigned to other
that are by law, or as a Special Provision in
justifiable expenditure items subject to
the GAA, authorized to use the excess
approval by the DBM. A certification of
income actually collected over the estimate
savings department/agency is a requirement
as presented in the budget documents. In
to support to the request for realignment,
this case, a
together with the justification.

36
supporting
documents?
 and certification of income collected are the
required supporting documents.

3. Release from Special Purpose Funds.

Agencies eligible to claim from any of the
Special Purpose Funds should submit a
request, stating the legal basis, the
purpose, the work and financial plan
including the supporting documents
required for the release of such SPF.

Conduct of Agency Performance Review. A

performance review is conducted by DBM
during budget preparation time to assess
the agencies’ accomplishments for the past
What other activity is undertaken during year, which is taken into consideration in
budget execution? the formulation of the level of expenditure
for the budget year. Likewise, a periodic
monitoring and review of agency utilization
of funds in the production/delivery of
goods/services to the public vis-a-vis
plans/targets for a given period is
undertaken by DBM, thru review of the
submitted BEDs and quarterly BFARs.
Regular consultations for selected
departments are conducted to monitor their
fund utilization (in terms of actual
obligations and disbursements) and
accomplishment of targeted physical
outputs, as well as revenue generation
against targets. Where additional funds are
needed due to accelerated project or
activity implementation, additional funds
are released. On the other hand, where
released funds are not being utilized due to
issues/problems encountered that could not
be resolved immediately, withdrawal of
What are the uses of the results of APR? funds may be effected through issuance of a
request is submitted to the DBM in the form negative SARO. Addressing the
of a Special Budget for approval. A issues/problems identified is also the
certification of the actual income collected objective of the performance review.
and deposited with the National Treasury is
a required supporting document. The agency performance is assessed
vis-à-vis the Performance Targets indicated
2. Use of Income. There are agencies which, in the BEDs.
by law, or as a Special Provision in the
Results of the performance review will:
GAA, are authorized to use their income. In
such cases, the funds are released through 1. Provide information as to how much and
a Special Budget. A work and financial plan at what cost the government provides for
 goods and services to the public, if outputs implementation delays, determine factors
are accomplished as planned; influencing the level of performance and
identify necessary measures/improvement
2. Track resource leakages and plans to be
37
undertaken for the remaining period of the year;

3. Serve as guide in deciding whether reallocation of funds or

additional release is necessary during the year;

4. Serve as guide for analysis and preparation of reports on

the status of the budget for submission to the President;
and

5. Serve as inputs in the preparation of the budget for the

succeeding year.

The detailed activities during budget execution are presented below:

TABLE 3-BUDGET EXECUTION ACTIVITIES

Activities Unit/ Entity Responsible

Determination of the Overall Cash Program for DBCC

the year

Preparation of Guidelines on the Release DBM

and Utilization of Funds

Preparation and submission of BEDs (1-4) Department/Agency

Review and analysis of WFP and MDP DBM

Issuance of obligational and disbursement authorities DBM

Obligation or entering into contract Department/Agency

Implementation of programs, activities and projects Department/Agency

Payment of Obligations Department/Agency

Submission of requests for special budget in case Department/Agency

of appropriations categorized as FLR

Submission of requests for release from Department/Agency

Special Purpose Funds

Submission of request for adjustments Department/Agency

Action on Requests DBM

Conduct of Agency Performance Review Department/Agency/DBM

38

Budget Accountability
This is the final phase of the budget process and it involves the reporting of
physical accomplishments and funds utilization of agencies. Agencies report how much of
the funds released to them were utilized. Through these reports it can be checked
whether the funds were utilized for the purpose they are intended to. The efficiency and
effectiveness of the agencies are measured in terms of their performance as reflected in
their reports.
instructions to accomplish are in accordance
What are the Budget and Financial with DBM Circular Letter No. 2016-9 dated
Accountability 27 October 2016.
Report (BFAR)
Forms? The outcome of the budget accountability
phase is carried as input in the budget
preparation phase that is why the budget
phases constitute the budget cycle.

Statement of This shall be prepared based on the various

Comparison of registries maintained by the Budget
Budget and Actual Amounts (SCBAA) Division/Unit such as the Registry of
Revenue and Other Receipts (RRORs),
Registry of Appropriations and Allotments
(RAPAL), Registry of Allotments, Obligations
and Disbursements (RAOD), Registry of
Budget Utilization and Disbursements
(RBUD) and other supporting documents.
The data on Actual Amounts shall be
verified by the Accounting Division/Unit in
the Statement of Cash Flows (SCF).

The statement shall present the following:

1. The original (approved appropriations,

prior year’s not yet due and demandable
obligations) and final budget (continuing
appropriations, transfers, realignments and
withdrawals) amounts;
2. The actual amounts on a comparable
Reconciliation of Actual Amounts on a basis; and 3. By way of note disclosure, an
Comparable Basis (Budget) and Actual explanation of the material differences
Amounts in the between the budget and actual amounts,
Financial Statements which are not included in the financial
The reports required to be submitted to DBM statements. Further explanation shall be
by the agencies are discussed under DepEd made whether the changes between the
Budgeting Procedure below (forms and original and final budget are a consequence
of reallocations within the budget.
1. Basis Differences occur when the
The actual amounts presented on a approved budget is prepared other than the
comparable basis to the budget shall be accounting basis;
reconciled with the actual amounts 2. Timing Differences are budget period
presented in the FSs identifying separately which differs from the reporting period
the differences classified as follows: reflected in the FSs; and
39
Division for verification of the actual
amounts with the accounting records and
SCF, by the Budget Staff.
3. Signature on the Certified Correct
portion by the Head of Budget Division and
Procedures for the Preparation of SCBAA forwarded to Accounting Division. 4.
3. Entity Differences occur when the budget Verification of the receipts and payments
omits program or entities that are part of on the Actual Amount columns of the
the FSs are prepared. SCBAA with the inflows and outflows in the
SCF. Coordination with the Budget
The reconciliation shall be disclosed as part
Division/Unit on discrepancy discovered, if
of the Notes to the FSs.
any. Once verified, forwarded 2 copies of
1. Posting of data on budgeted and actual the SCBBA and SCF to the Head of
Accounting Unit/Chief Accountant.
amounts of revenue, appropriations,
allotments, obligations and 5. Signature on the Certified Correct
disbursements/utilization based on the portion by the Chief Accounting Division.
RROR, RAPAL, RAODs/ RBUDs and SDs in 6. Submission of the signed SCBAA to the
the appropriate columns of SCBAA form by Audit Team Leader, together with other
the concerned Budget Staff. FSs. Furnish one signed copy of the SCBAA
2. Preparation of the SBAA form in two to Budget Division/Unit for file.
copies, forwarded to the Accounting
40

National Government Procurement

System
Public procurement system in the Philippines constitutes one of the largest activities
the government is undertaking. The enormous fund outlay being put in the said activity
necessitates that it be systematized and simplified to assure the value for government’s
money is obtained. It is emphasized, however, that the concept of value for money is not
absolute in terms of lowest cost. The value for money is best achieved
as having the right quantity, best quality, at reasonable price and delivered timely within
the stipulated criteria and budgetary constraints.

RA 9184 and IRR Consistent with the Government’s commitment to good governance
and its effort to adhere to the principle of
transparency, accountability, equity, efficiency and economy in its
procurement process, all public procurement initiatives shall be
within the purview of Republic Act (R.A.) 9184 an “Act Providing
for the Modernization, Standardization, and Regulation of the
Procurement Activities of the Government and for Other
Purposes,”.’ The Governing Principles on Government
Procurement, when expressed in statutes, are generally
considered merely as guides for executive action in the
implementation and enforcement of the provisions of the law.
Pursuant to Section 75 of this Act, the companion Implementing
Rules and Regulations (IRR) was promulgated to cover all
procurement activities of government except those as specifically
 stated in Section 4.4 and 4.5.

The IRR shall apply to the procurement of Infrastructure Projects,

Goods, and Consulting services, regardless of source of funds,
whether local or foreign, by all branches and instrumentalities of
government, its department, offices and agencies, including
government-owned and/or controlled corporations and local
government units.
advantageous to the government resort to
Alternative Methods of Procurement any of the alternative methods of
As a general rule, all procurement shall be procurement provided in Rule XVI of the
through Competitive Bidding. However, IRR of R.A. 9184.
when justified by the conditions provided in
R.A. 9184 and its Revised Implementing Annex “H” of the 2016 Revised IRR of R.A.
Rules and Regulations (IRR), the Procuring 9184, provides the consolidated guidelines
Entity subject to the approval of the HOPE for the use of the alternative methods of
may, in highly exceptional cases, to promote procurement.
economy and efficiency, and at a price most
41
Procurement of Commonly used Supplies envelopes, etc., at DBM – Procurement
Current national government policy Service (per Letter of Instructions 755, s.
requires that all agencies of government 1978, Executive Order No. 359, s. 1989
procure/purchase commonly used and Administrative Order No. 17, s. 2011;
supplies, e.g., copy paper, , and DBM Circular No. 2011-06 and 2011-6A)

Preparation of the National

Education Development Plan
(NEDP)
The Education Development Plan is formulated in a participatory manner. All levels are
involved in the planning activity, which is spearheaded by the Planning Service at the
Central Office. The ROs, DOs and Schools have their own role. It is a combination of top
to-bottom and bottom-to-top planning. General policies and guidelines, which are
consistent with the thrusts and priorities under the Philippine Development Plan/Medium
Term Development Plan and Sectoral Plan, are provided by the CO to the field offices.

Each sector at all levels is responsible in the preparation of plans to be integrated

into the national/regional/provincial/city and/or municipal development plans. The
Education plan constitutes one component of these development plans. For the education
sector continuous coordination horizontally and vertically is done.
 Horizontal coordination and linkages mean that the educational system works with
other agencies/sectors in the region/provinces, etc. to formulate the plans. On the other
hand, vertical coordination and linkages mean that all the principals/school heads prepare
and submit their plans to the school division; division to regional office to the Planning
Service, DepEd. Subsequently, the DepEd’s plan becomes a part of the Philippine
Development Plan.

42

Early Planning Activities consist of:

1. Situational Analysis;
2. Review of Existing PAPs;
3. Review of Planning standards and assumptions;
4. Firming up of DepEd Thrusts and Directions;
5. Firming up of Program road maps;
6. Frontloading of Crucial Resources; and
7. Firming Up of DepEd Menu for Government Reform.

What is the
Education Planning Process at the
National Level?

How are the

 programs, projects and activities in the approval.
Plan implemented?
5. Then the Plan is submitted to the NEDA
for integration to the overall National
Development Plan.

Programs, activities and projects cannot be

What are the implemented without the necessary
procedures? resources and funds. There is therefore a
1. The DepEd Planning Service coordinates need to link planning and budgeting. An
with all DepEd’s offices, bureau, agencies, annual planning and budgeting exercise is
units and centers, and down to the conducted. Department Orders were issued
regional, division, and schools. for the purpose, the latest of which is DO
25, s. 2010 (Budget Strategy for Basic
2. The plans, programs and projects Education, FYs 2010-2015 Strengthening
prepared by these offices are submitted to the Planning, Implementation, and
the Planning Service for analysis and Coordination of DepEd Programs, Projects
integration in the National Plan of the and Activities), dated 08 March 2010.
DepEd.
1. Upon receipt of the Budget Call through
3. A Planning Workshop is conducted the Office of the Secretary, the Planning
annually to consolidate, coordinate, and and Budgeting processes kick off.
harmonize the activities, projects and
programs, and come up with the Education 2. Planning and Programming Division
Development Plan. (PPD), which acts as the Program
Committee (PROGCOM) Secretariat, and
4. The final draft of the DepEd plan is Budget Division (BD), which also acts as
submitted to the Education Secretary for the Finance

43
Committee(FINCOM) Secretariat, shall conduct orientation in
the Central Office (CO) and Regional Offices (ROs) on the
budget year’s Plans and Budget Proposals preparation.

3. PROGCOM calls for an in-house planning workshop for offices

within CO. The divisions and/or bureaus would do situational
analysis, identification of strategies, programs/projects and
activities, and estimation of resources. Each division or bureau
would review their plans, approved by their respective Chiefs,
and submit proposals to PPD- Office of Planning Service
(OPS). The budget proposals shall include the

a. Approved work and financial plan (WFP) with expenditure

matrix; and
b. Project profile for major programs and projects including
the budget year’s detailed list of proposed recipients,

4. The committee also conducts meetings with assigned offices

to plan for DepEd’s Basic Inputs with forward estimates. The
following offices would undertake data collection, preparation
and estimation of requirements for the respective input items:
 TABLE 4- DATA COLLECTION, PREPARATION, AND
ESTIMATION
Office Basic Inputs

Education Facilities Division Classrooms, Furniture, and

(formerly PFSED) under Water and sanitation
DepEd’s Administrative facilities
Service

Planning Service – Planning Teachers

and Programming Division

Bureau of Learning Resources Textbooks

(BLR)

Bureau of Learner Support Feeding Program

Services - Health and
Nutrition Center

ICT Service ICT package and internet

connectivity

BLR - National Science Science and math equipment

Teaching and Instrumentation
Centre (NSTIC)

Bureau of Learning Delivery TechVoc Equipment

Finance Service - Budget School MOOE

Division

Bureau of Learning Delivery – GASTPE

Student Inclusion Division

44

What is the process at the Division

What is the process at the Regional Level? Level?
 respective Directors, and submit to RO for
integration in the Regional Education
Development plan and subsequently
What is the Role of Schools? submitted to PS-PPD.
5. The submission of the outputs to the
Planning Service – Planning and The DOs shall do situational analysis,
Programming Division (PS-PPD) shall identify strategies, programs/projects and
include the following: activities, estimate resources, review plans
submitted by the schools, consolidate, and
a. Three year estimates of requirements
submit to the respective ROs
(physical and financial) starting from the
budgeting year (e.g. 2016- 2018);
At the school level, a School Improvement
b. Detailed list of proposed recipients; and Plan (SIP) is prepared. Refer to DO No. 44,
s. 2015, Guidelines on the Enhanced SIP
c. Project Profile including the Work and Process and the School Report Card (SRC),
Financial Plan (WFP).
dated 29 September 2015.
1. In the Regional Office, the Policy,
It is a must that SIP be crafted for a
Planning and Research Division (PPRD)
headed by its Chief, in coordination with the three-year cycle. The Annual
Assistant Regional Director analyze, and Implementation Plan (AIP), which identifies
prepare countryside development plan with the budgetary requirements of the
emphasis on the increasing demand in the activities and projects on an annual basis
operations of the region. PPRD was
shall be made out of the SIP prepared, any
established during the rationalization
program implementation. item not accomplished for the year shall be
included in the AIP of the following year.
2. The RO should also conduct their
respective operational planning. The The SIP of every school is included in the
divisions and/or units in ROs should do Division Education Development Plan,
situational analysis, identification of forwarded to the RO, for inclusion in the RO
strategies, programs/projects and Education Plan and finally submitted to the
activities, and estimation of resources.
CO for inclusion in the National Education
Each operating units within the RO would
review their plans, approved by their Development Plan.

45

DepEd Budgeting System

DepEd’s Budget Preparation

What are the steps in budget

preparation?
 Organizations (CSOs), Local Government
Units (LGUs), other private organizations
and Regional Development Council (RDC)
are conducted in line with the objective to
increase citizens’ participation in planning
and budget preparation.

3. Regional Offices also send out a Regional

Budget Memorandum to subordinate units.

4. Budget Meetings / Seminars / Workshops

are held at the Divisional level to explain the
current Budget guidelines and processes to
SUs and IUs.

5. SUs and IUs then prepare their Budget

estimates for Personnel Services;
Maintenance and Other Operating Expenses;
and Capital expenditures for the Budget
year and the two Forward Estimate years
and submit these in hard-copy form to their
Division Office / Regional Office for review
and consolidation. A Work and Financial Plan
covering the Budget year is also prepared
by each SU.

6. The consolidated Regional Budget

proposal is then submitted to DepEd Central
Office for further consolidation into the
How are budget proposals DepEd Budget proposal for submission to
DBM.
prepared?
Proposals are based on the result of the
What are the planning and budgeting workshop conducted
Budget Preparation Forms? earlier, and prepared in accordance with the
1. Following the issuance of the Budget Call guidelines in the Budget Call issued by DBM,
Circular by DBM, DepEd Central Office presented by accomplishing the Budget
through the Budget Division in collaboration Preparation Forms.
with Planning and Programming Division (as
These are the forms required by DBM to be
decided by DepEd ExeCom) releases the
submitted by Departments and Agencies,
parameters for the budget preparation to all
and are specified in the Budget Call. There
Spending Units (SUs) and Implementing
may be variations from year to year, but the
Units (IUs).
forms enumerated below are those required
under the 2017 Budget Call
2. Engagement of stakeholders takes place.
Consultations with Civil Society

46
(refer to NBM No. 125 dated 15 January 2016). The copies of the
 forms, including the instructions on how to accomplish them are
shown in Annex D of the said circular. Likewise, the specific
guidelines on PS, MOOE and CO are also shown in Annex C.

1. BP Form A - Major Final Output (MFO) Budget Matrix

This presents the agency budgetary requirements by P/A/P

statement, reflecting the actual obligations of the immediately
preceding year (e.g. 2015), the approved budgets of the
current year’s programs (e.g. 2016), and the proposed
programs for the budget year (e.g. 2017). All P/A/Ps of the
immediately preceding year and of the current year are listed
down and identified as to whether still On-going (OG) or to be
Terminated (T). The P/A/Ps to be proposed for the budget year
are then added to the list and tagged Proposed (P)
accordingly.

2. BP Form B - Agency Performance Measures

This presents the three-year presentation of the performance

measures of DepEd based on the Organizational Performance
Indicator Framework (OPIF) agreed with DBM. It details the
accomplishments, targets, and the corresponding budgetary
allocation that specifically relate to every MFO of DepEd as the
provider of the national education services.

3. BP Form C - Summary of Regional Development Councils (RDCs)

(Feedback on Agency Major On-going Projects and Activities)
Inputs and Recommendation on Agency New and Expanded
Programs and Projects.

A consolidated report shall be prepared containing the inputs

and recommendation of the RDCs on agency programs,
Activities and Projects (PAPs)

4. BP Form D – Reports of CSOs’ Inputs on Ongoing and new

Spending Project and Activities

A consolidated report from various consultations with CSOs,

private sector, and other stakeholders shall be prepared
containing the feedbacks on their assessment and evaluation
of the ongoing PAPs as well as proposed PAP. The ROs in their
summary reports shall give priority in the budget allocation,
the requested education-related priority projects of LGUs as a
result of Bottom-Up-Budgeting (BUB). DepEd shall ensure
complementation between national and LGU Projects, identify
and present them in the forms (BP Forms 201-A, 201-B, 201-
C, 201-D) for tracking and monitoring purposes.

47
 5. BP Form 100 - Statement of Revenues (General Funds)

This form reflects all revenues collected by agencies for the

budget year which are deposited in the National Treasury.
Information generated from this form will be deposited as tax
and non-tax revenues of the agency.

6. BP Form 100-A - Statement of Revenues and Expenditures –

Special Account in the General Fund

This form reflects all revenues collected and which are

deposited in the National Treasury under the General Fund,
which are authorized by law to be used for specific purpose.

7. BP Form 100 – B - Statement of Other Receipts/Expenditures

This form reflects all receipts which are authorized by law to

be retained/held and used for specific purposes that do accrue
to the General Fund and its corresponding expenditures.

8. BP Form 100 – C - Statement of Donations and Grants

This reflects all non-repayable transfers, in cash or in kind,

received from other levels of government, from private
individual, or institutions, foreign or domestic, including
reparations of gifts given for particular project or programs, or
for general budget support.

9. BP Form 200 – Comparison of Appropriation and Obligations

This form reflects a comparison of appropriations, (all types,

such as the appropriations under GAA, continuing
appropriations, and supplemental appropriations) and the
corresponding obligations.

10. BP Form 201 - Summary of Obligations and Proposed

Programs/Projects

This form reflects the summary of obligations and proposed

programs/projects by expenditure class. It is a summary of BP
Form 201 (A, B, C and D). It also includes the
programs/activities/projects (PAPs), or components thereof
that address specific commitment of the government, including
appropriate justification as may be necessary.

11. BP Form 201-A – Obligations for Personnel Services (PS)

12. BP Form 201-A.1 – Multi-Year Requirements for FY __ Tier 2

Proposals – Obligation for Personnel Services (PS).
48
13. BP Form 201-B – Obligation for Maintenance and Other
Operating Expenses (MOOE)

14. BP Form 201-B.1 – Multi-Year Requirements for FY ___ Tier 2

Proposal – Obligations for Maintenance and Other Operating
Expenses (MOOE).

15. BP Form 201-C - Obligation for Financial Expenses (FINEX)

16. BP Form 201-C.1 - Multi-Year Requirements for FY __Tier 2

Proposals - Obligation for Financial Expenses (FINEX).

17. BP Form 201-D - Obligations for Capital Outlays (CO)

18. BP Form 201-D.1 - Multi-Year Requirements for FY __ Tier 2

Proposals – Obligations for Capital Outlay (CO).

19. BP Form 201-E - Program Expenditure Plan

This form reflects the priority programs by Key Result Area

cluster and the corresponding implementation plan.

20. BP Form 201-F – Climate Change Expenditures

DepEd shall identify and tag PAPs that relate to climate

change adaptation and mitigation.

21. BP Form 202 – Profile and Requirements of – Locally-Funded

Projects

22. BP Form 203 – Requirements of Foreign-Assisted Projects

(FAPs)

23. BP Form 203-A – Profile of On-going (FAPs)

24. BP Form 204 – Staffing Summary of Non-Permanent Positions

25. BP Form 205 – List of Retirees

26. BP Form 206 – New or Expanded Program/Project Proposal for

Locally-Funded Projects and FAPs

27. BP Form 206-A – Profile and Requirements of New LFPs

28. BP Form 206- B – Requirements of New FAPS

29. BP Form 206-B.1 – Profile of New FAPs

 30. BP Form 300 – Proposed Special Provisions

49
submission of relevant forms to CO is a
consolidation of DOs submissions and own
RO requirements, DOs submission of
relevant forms to respective ROs include
data from the Schools’ (both IU and non-IU
schools) SIP and AIP.

1. BP Form 100 – Statement of Revenues

(including sub-tables)

2. BP Form 201 – Summary of Obligations

and Proposed Programs/Projects (including
Which of these forms should be filled up by
sub-tables)
the IU Schools, DOs and ROs?
31. BP Form 400 – Annual Gender and
3. BP Form 204 – Staffing Summary of
Non-Permanent Positions
Development Plan 32. BP Form 400-A –
4. BP Form 205 – List of Retirees
Annual GAD Accomplishment Report
The forms shall be accomplished by the
ROs, DOs, IU Schools as may be applicable
All these forms are to be submitted by the to them.
DepEd CO to DBM, with data consolidated
from the ROs and attached agencies. ROs

DepEd’s Budget Legislation / Authorization

concerns of Congressmen and Senators.
What is DepEd’s role at Budget
Legislation? Planning Service and Budget Division take
The Secretary makes a presentation of the charge of preparing/consolidating the
proposed budget to Congress and Senate documents/materials to answer questions
and address Congressmen’s and Senators’
Officials and concerned staff attend the concerns. (Refer to the Briefing Kit for the
Budget Hearing sessions conducted by both list of documents)
Houses to answer queries, questions,

DepEd’s Budget Execution / Implementation

days after opening of every Congress
What are the (fourth Monday of July). DepEd (all
activities at Budget Execution Stage? implementing units with consolidation at
1. Preparation of and submission of BEDs. every level) prepares the documents for
Upon submission of the NEP by the submission to DBM, in accordance with the
President to Congress, which per guidelines issued for the purpose.
constitutional provision, should be within 30
50

a. BED 1 – Financial Plan (FP) which shows

the overall financial plan of the agency for
the year with quarterly breakdown.

b. BED 2 – Physical Plan (PP) which shows

the physical targets for the year with
quarterly breakdown.

c. BED 3 - Monthly Disbursement Program

(MDP) which reflects the monthly
disbursement requirements by type of
disbursement. It is the basis for the
issuance of the disbursement authority
(e.g., NCA, NCAA, TRA).

d. BED 4 – Annual Procurement Plan for

Common Use Supplies and Equipment
(APP-CSE) which projects the monthly
procurement in terms of quantity and cash
requirement, categorized into items
available and those items not available at
the Procurement Service, DBM.

The BEDs are accordingly updated upon

enactment of the GAA, to effect any
modifications/changes (if any) made by
both Houses of Congress on the NEP.

2. Receipt of Obligational Authority or

Allotment. The three forms of obligational
authority are the GAARD, GARO and
SARO. (Allotment is defined in the
Glossary of Terms).
How does DepEd obtain the
obligational 1. Under GAARD, upon enactment of the
authority? GAA, DBM issues the Guidelines on the
The forms are shown as Annexes to DBM Release and Utilization of Funds. The
Circular Letter No. 2016–9 dated 27 appropriations for the programs, activities
October 2016 including the instructions and projects (PAPs) are deemed released,
for filling up. These are submitted on-line except for such items that are classified
through the Unified Reporting System as “For Later Release” (FLR) in the Table
(URS) on or before 15 of November of attached to and part of the said
each year or as may be indicated in the Guidelines. The Table is based on the BED
Guidelines to be issued by the DBM No. 1 (FP), where the PAPs are
annually. A generated hard copy is categorized as “For Comprehensive
likewise submitted after completing the Release (FCR) or FLR.
submission on line.
 part of Basic Education Services
Also covered by GAARD are Transferred appropriations are transferred to ARMM
Appropriations from one Department to and part from RO to CO. Likewise, the
Another or within a department appropriations for Government Assistance
categorized as FCR in the referred Table
above, as a separate Annex. For DepEd,
51
operate?
to Students and Teachers in Private
Education (GASTPE)are transferred from RO
to CO.

2. On the other hand, the SARO is issued to

cover the FLR items upon submission of a
Special Budget Request (SBR), as discussed
above, to DBM, including the required
supporting documents. The FLR items
include the following:

a. For Centrally-Managed Items (CMls) or

lump-sum appropriations under the GAA
within the Agency Specific Budgets,
supported with the list of specific OUs which
shall implement the project and amount
allocated to each OU. For DepEd, part of
Basic Education Services appropriations are
transferred to DPWH and some part from RO
to CO. For example, the list for the 2015
budget is shown as Annex B to the
Guidelines on the Release of Funds for 2015
under NBC No. 556 dated 05 January 2015.

b. For charges against multi-user Special

Purpose Funds (SPFs), such as the
Miscellaneous Personnel Benefits Fund
(MPBF) which is used to fund PS deficiencies
of employees who are still in the
How is the regional budget of DepEd government service such as salaries,
released? bonuses (including performance-based
bonuses and performance enhancement
incentive), allowances, associated
premiums and other personnel benefits, if
cannot be accommodated within agency
savings.

3. Covered under the GARO is the annual

requirement for Retirement and Life
Insurance Premium (RLIP) of both personal
How does the sub allotment procedure and employers’ shares.
 Schools, are also sub-allotted to them by
The regional budgets specified in the GAA ROs.
are released directly to the Regional Offices.
However, there are budgets pertaining to Allotments that pertain to the regional Field
the regions, which are centrally managed. Offices which are not directly released by
There are also regionalized activities but DBM to the Regions are transmitted to them
presented as lump-sum in the GAA because through the issuance of the Sub-allotment
the allocation by region could not be release order (Sub ARO) by the Budget
determined during budget preparation Division of the Central Office. The Sub-ARO
period. In these cases, the sub-allotment is based on the guidelines approved by the
procedure is adopted. Department Secretary. The RO/DO/IU
receives the Sub-ARO, which is its
Allotment directly released to ROs for the
Division Offices and Implementing Units

52
maintained by fund cluster and by Major
Final Output (MFO)/PAP/Appropriation Act.

TABLE 5 - PROCEDURES IN
RECORDING
What is the first thing to do upon receipt
APPROPRIATIONS AND ALLOTMENTS
of the
allotment? Area of
Responsibility
What are these records that should be in
Designated Staff 1. Receives
place?
release
authority to incur obligation or enter into
Records
contract. It is recorded in the appropriate
and fo
Registry and reported in the SAAODB. The
the Bu
DOs/IUs likewise receive the Sub-ARO from
the RA
the RO, recorded in the appropriate
Registry and reported in the SAAODB.
Budget Staff 2. Record
allotme
In order to properly and effectively monitor,
columns
account, and report the receipt of
RAOD.
allotment, it should be recorded in the
allotme
appropriate registries as prescribed under
Account
the Government Accounting Manual (GAM).
Note:
1. The Registry of Appropriations and
Allotments (RAPAL) (Appendix 8 of the The amou
GAM), shall be maintained to monitor exceed th
appropriations and allotments charged in the GA
thereto. It shall show the original, the ap
supplemental and final budget for the year actions s
and all allotments received charged against
the corresponding appropriation. The
balance is extracted every time an entry is
made to prevent incurrence of overdraft in 2. The other record is the Registry of
appropriations. Separate RAPAL shall be Allotments, Obligations and Disbursements
 (RAOD) which is maintained by the Budget
53

b. Registry of Allotments, Obligations and

Disbursements – Maintenance and Other
Operating Expenses (RAOD-MOOE) is
used to record the allotments received,
obligations incurred and disbursements
classified under MOOE.

c. Registry of Allotments, Obligations and

Disbursements – Financial Expenses
(RAOD-FE) is used to record the
allotments received, obligations incurred
and disbursements classified under
Financial Expenses.

d. Registry of Allotments, Obligations and

Disbursements – Capital Outlays
(RAOD-CO) is used to record the
allotments received, obligations incurred
and disbursements classified under CO.

With the receipt of the obligational

authority or allotment, and after
entering the allotment in the RAPAL,
incurrence of obligation or entering into
contract can now be done.

What are the procedures for the

Incurrence of Obligation incurrence of obligation? The following

Unit to record allotments, obligations and
disbursements. It shows the allotments are the steps:
received for the year, obligations
1. Preparation and issuance of Obligation
incurred against the corresponding
Request and Status (ORS) (see
allotment and the actual disbursements
Appendix 11 of GAM) by the
made. The balance is extracted every
Requesting/Originating Office supported
time an entry is made to prevent
by valid claim documents like payrolls,
incurrence of obligations in excess of
disbursement vouchers, purchase/job
allotment and overdraft in disbursements
orders, itinerary of travel, etc.
against obligations incurred. The RAOD
is maintained by appropriation act, fund
2. Certification/Signature of the Head of
cluster, MFO/PAP and allotment class.
the Requesting/Originating Office or his
authorized representative in the Section
a. Registry of Allotments, Obligations and
A of the ORS as to the necessity and
Disbursements – Personnel Services
legality of charges to the budget under
(RAOD-PS) is used to record the
his supervision and the validity,
allotments received, obligations incurred
propriety and legality of supporting
and disbursements classified under PS.
 documents.

54
claim.

As mentioned in the Section Overview

above, the four (4) types of
Disbursement Authority are NCA, NCAA,
CDC and TRA. CDC is not applicable to
DepEd while NCAA pertains to loan
proceeds under foreign-assisted projects.
Upon receipt of the NCA and TRA,
disbursement follows.

It is released monthly or quarterly or

semi-annually or annually (relative to the
nature of the budget source), taking into
account the actual availability of cash in
Receipt of the National Treasury. The initial release
Disbursement Authority covers the total requirement for the
month or the quarter or for the semester,
as the case may be. Succeeding releases
take into account the performance of the
How is the NCA released? agency in terms of disbursements.

The NCA shall be the authority of an

agency to pay operating expenses,
purchases of supplies and materials,
acquisition of PPE, accounts payable, and
other authorized disbursements through
Notice of Cash Allocation the issuance of MDS checks, ADA or other
3. Certification/Signature by the Head of modes of disbursements.
the Budget Unit/Designated Budget
Officer in Section B of ORS as to the 1. No MDS check/ADA shall be issued
availability of allotment. The signature without the covering NCA. Hence, the
implies that funds are obligated. total MDS checks/ADA issued shall not
exceed the total NCA received. To
4. Any adjustments in the ORS, must be maximize the available NCAs of the
covered by a corresponding Notice of agency, the Common Fund System policy
Obligation Request Status Adjustment shall be adopted whereby cash allocation
(NORSA) prepared by Accounting Division. balances of agencies under the Regular
MDS Account may be used to cover
5. A subsidiary record to monitor a payment of current year’s accounts
particular obligation shall be maintained payable i.e., goods and services which
by the Budget Unit in Section C of the have been delivered and accepted during
ORS. It shall contain the original amount the year charged against appropriations
of obligation, payable (goods delivered of prior year/s, after satisfying their
and services rendered) and the actual regular operating requirements as
amount paid after the processing of the reflected in their Monthly Disbursement
 Program.

55
Accounting Division/Unit shall monitor the
NCA through the maintenance of the
Registry of Allotments and Notice of Cash
Allocation (RANCA) (see Appendix 30 of
GAM).

3. NCA issued and credited to the Special

MDS Accounts for Trust to cover payments
of authorized claims shall be valid within
the period prescribed under existing
regulations.

4. For NCA issued for foreign assisted

projects such as grants from foreign
country with a separate Current Account
maintained by the spending agency with
Government Servicing Banks of the
Philippines (GSBPs), checks shall be issued
only for specific purpose until full
implementation of the project, subject to
pertinent DBM issuances prescribing the
validity of the NCA or NCAA (relative to the
How is the Receipt of NCA Recorded?
funding institution requirements).
2. NCA issued and credited to the Special
MDS Accounts of agencies for payment of
The CO/ROs/IUs shall record in the RANCA
retirement gratuity/terminal leave benefits all NCAs received and the amount
as well as prior years’ accounts payable disbursed to control and monitor unfunded
shall be valid within the period prescribed allotments and the balance of
under existing rules and regulations. The disbursement authorities.

TABLE 6 - PROCEDURES FOR RECORDING OF RECEIPT AND

UTILIZATION OF NCA
Area of Activity
Responsibility

CO/RO/OU
Accounting Division/Unit

Designated Staff Receives copy of the GAARD, SARO, and GARO, and
posts the allotment in the ‘Allotment Received’ column
of the RANCA.

Receiving/ Receives copy of NCA from DBM/Agency’s Central

Releasing Staff Office and records in the logbook. Forwards NCA to
 the Designated Staff for recording in the RANCA.

Designated Personnel Records the receipt of NCA in the RANCA.

Designated Personnel Records the amount disbursed/utilized in the RANCA

based on processed DVs/Payroll.

Designated Personnel Indicates the balance of the Unutilized NCA and

Unfunded Allotment.

How is the NCA covering sub-AROs or IUs depending on the instructions of the
released? department or agency CO.
The NCA is released directly to the RO, DO

Budget Monitoring The budget shall be monitored by the Budget Units of DepEd

56
and Reporting (CO/RO/DO) through the maintenance of RAPAL and RAOD as
discussed above.
Disbursements – Personnel Services
What other (RBUD-PS) shall be used to record the
registries are required to be maintained budget utilizations and disbursements
and what are the procedures?
classified under PS.
1. Registry of Revenue and Other Receipts
(The Registry of Revenue and Other
b. Registry of Budget, Utilization and
Receipts) (Appendix 7) shall be
Disbursements – Maintenance and Other
maintained to monitor the revenue and
Operating Expenses (RBUD-MOOE) shall
other receipts estimated/budgeted,
be used to record the budget utilizations
collected and remitted/deposited.
and disbursements classified under
MOOE.
2. Registry of Budget, Utilization and
Disbursements (The Registry of Budget,
c. Registry of Budget, Utilization and
Utilization and Disbursements) (RBUD)
Disbursements – Financial Expenses
shall be used to record the approved
(RBUD-FE) shall be used to record the
special budget and the corresponding
budget utilizations and disbursements
utilizations and disbursements charged to
classified under FE.
Revolving Funds and Trust
Receipts/Custodial Funds. It shall be
d. Registry of Budget, Utilization and
maintained by legal/authority, fund
Disbursements – Capital Outlays
cluster, MFO/PAP and budget
(RBUD-CO) shall be used to record the
classification.
budget utilizations and disbursements
classified under CO.
a. Registry of Budget, Utilization and

Table 7 - Procedures in Recording and Monitoring Budget, Utilizations and

Disbursements charged to Revolving Funds and Trust Receipts/Custodial Funds

Area of Activity
Responsibility
 1. Budget Unit Receives the approved budget (AB) from the concerned
Designated Staff entity official. Records the same in the logbook and
forwards the AB to the Budget Staff for recording in the
appropriate RBUD.

2. Budget Staff Records the AB in the budget columns of the RBUD

and forwards copies of the budget documents to the
Accounting Unit for reference.

What happens when there is an Unit shall be made through the use of Notice
adjustment of of Obligation Request and Status
Adjustment of obligation incurred after the Adjustment (NORSA) (see
processing of the claim by the Accounting
57
obligation? Appendix 12 of GAM). The adjustment shall be effected thru a
positive entry (if additional obligation is necessary) or a negative
entry (for reduction) in the ‘Obligation’ column of the ORS and
RAOD.
What is the NORSA? Notice of Obligation Request and Status Adjustment is prepared by
the Accounting Unit after the processing of the claim which
shall be used in adjusting the original amount obligated to the
actual obligations incurred in the RAOD. The following transactions
shall need adjustments of obligations:

1. Refund of cash advance granted during the year;

2. Over/Underpayment of expenses during the year; and
3. Disallowances/Charges which have become final and
executory.

Certified copies of official receipts for the overpayments/refunds,

copies of bills for overpayments of expenses and notice that the
disallowances are final and executory shall be attached to the
NORSA and shall be forwarded by the Accounting Unit to the
Budget Unit to take up the adjustments of obligation in the RAOD.

What is the procedure for realignment?

For change in object of expenditure, implementing or operating unit and
project modifications (items a to c above), the approving authority is the
Agency Head and the procedure is as follows:

1. Realignment Advice Form (RAF) shall be filled up by the requesting

unit indicating the change requested;
2. Head of the Budget Division recommends and signs the Form;
3. Agency Head approves and signs the Form;
4. Budget Division registers the change in the appropriate RAO;
5. Accounting includes in the SAAODB report as adjustment; and
 6. Planning Division reflects in the Physical Report of Operation.

For change from one allotment class to another, the approving authority is
DBM:

1. the department/agency submits request to DBM indicating what is

to be realigned, properly supported with the required documents;
and
2. DBM evaluates and approves if request merits approval, then issues
the necessary document authorizing the realignment.

58

What are the required supporting

documents for ‘Request for Realignment’?
1. Work and financial plan;
2. Justification of request;
3. Certification of savings by the department/agency Accountant if
source of realignment is savings;
4. Certification of department/agency head of priorities for
realignment of program and projects; and
5. Confirmation of concerned representatives for realignment or
relocation of infrastructure and other capital outlays.

DepEd’s Budget Accountability

Reports and Forms The BFARs required to be submitted by DepEd to DBM and COA in
compliance to COA-DBM Joint Circular No. 2014-1, dated July 2,
2014 are the following:

1. Quarterly Physical Report of Operation (QPRO) – Budget

Accountability Report (BAR) No. 1 (Vol. II, Appendix 16 of
the GAM). This report shall reflect the
Department’s/Agency’s actual physical accomplishments at
a given quarter, in terms of the performance measures
indicated in its Physical Plan (BED No. 2)

2. Statement of Appropriations, Allotments, Obligations,

Disbursements and Balances (SAAODB) – Financial
Accountability Report (FAR) No. 1 (Vol. II, Appendix 17 of
the GAM). This report shall reflect the authorized
appropriations and adjustments, total allotments received
including transfers/adjustments, total obligations, total
 disbursements and the balances of unreleased
appropriations, unobligated allotments, and unpaid
obligations of a department/office/agency by fund cluster.
It shall be presented by:

a. Fund Authorization;
b. Major Final Output (MFO);
c. Program/Activity/Project (PAP); and
d. Major Programs/Projects - Identify by KRA

3. Summary of Appropriations, Allotments, Obligations,

Disbursements and Balances by Object of Expenditures
(SAAODBOE) – FAR No. 1.A (see Appendix 18 of GAM).This
report shall be prepared by Fund Cluster and shall reflect
the summary of appropriations, allotments, obligations,
disbursements and balances detailed by object of
59
expenditures consistent with the COA Revised Chart of
Accounts per COA Circular No. 2013-002 dated 30 January
2013 and the Conversion from the Philippine Government
Chart of Accounts to the Revised Chart of Accounts,
additional accounts/revised description/title of accounts per
COA Circular No. 2014-003 dated 15 April 2014.

4. List of Allotments and Sub-Allotments (LASA) – FAR No. 1.B

(see Appendix 19 of GAM). This report shall reflect the
allotments released by the DBM and the sub-allotments
issued by the Agency Central Office/Regional Office, their
corresponding numbers, date of issuance, and amounts by
allotment class and by Fund Cluster. The total allotments
per this report should be equal to the total allotments
appearing in the SAAODB (FAR No. 1)

5. Statement of Approved Budget, Utilizations, Disbursements

and Balances (SABUDB) – FAR No. 2 (for Off-Budget Fund)
(see Appendix 20 of GAM). This report shall reflect the
approved budget, the utilizations, disbursements and
balances of the agency authorized by law to use their
income, such as OWWA/SUCs and approved by the Board of
Trustee/Regents.

6. Summary of Approved Budget, Utilizations, Disbursements

and Balances by Object of Expenditures (SABUDBOE) – FAR
No. 2.A (for Off-Budget Fund) (see Appendix 21 of GAM).
This report shall reflect the details of the approved budget,
utilizations, disbursements and balances of the agency
authorized by law to use their income presented by object
of expenditures consistent with the COA Revised Chart of
 Accounts.

7. Aging of Due and Demandable Obligations (ADDO) – FAR

No. 3 (see Appendix 22 of GAM). This report shall be
prepared by Fund Cluster and shall reflect the balance of
unpaid obligations as indicated in the Obligation Request
and Status (ORS) and the ADDOs as at year-end.

8. Monthly Report of Disbursements (MRD) – FAR No. 4 (see

Appendix 23 of GAM). The report shall reflect the total
disbursements made by department, office or agency and
operating unit by fund cluster from the following
disbursement authorities:

a. Notice of Cash Allocation (NCA);

b. NCA for Working Fund issued to BTr as an advance
funding from loan/grant proceeds in favor of an

60

Submission of
Budget and Financial Accountability
Reports What is the
procedure in the preparation and
submission of these reports?
agency;
c. Tax Remittance Advice issued;
d. Cash Disbursement Ceiling (CDC) issued
by departments with foreign-based agencies
or units; e. Non-Cash Availment Authority;
and
f. Others, e.g. Customs, Duties and Taxes
(CDT), BTr Documentary Stamps.
 f. SABUDBOE – FAR No. 2.A
The report shall track the actual g. QRROR – FAR No. 5
disbursement of the departments/agencies
against their Disbursement Program. The 2. On or before 30th day following the end of
reasons for over or under spending shall be the year ADDO – FAR No. 3
indicated.
3. On or before 30th day of the following
9. Quarterly Report of Revenue and Other
month covered by the report MRD – FAR No.
Receipts (QRROR)– FAR No. 5 (see Appendix
4
24 of GAM). This report shall reflect the
actual revenue and other receipts of the
4. On or before February 14 of the following
agency/operating units (OUs) for the current
calendar year – Consolidated Statement of
year presented by quarter, and by specific
Allotments, Obligations, and Balances per
sources consistent with the COA Revised
Summary of Appropriations under Fund
Chart of Accounts
Cluster, GAA, GARO, and SARO
All departments/agencies shall observe the
The Instructions on how to accomplish the
following timelines in submitting the
forms are indicated in the COA- DBM Joint
required BFARs to COA-GAS and DBM:
Circular No. 2014-1 as mentioned above and
1. Within thirty (30) days after the end of so with the following procedure:
each quarter
1. The field offices (Schools Implementing
Units and DOs) shall prepare and submit the
a. QPRO – BAR No. 1
reports directly to their COA Audit Team
b. SAAODB – FAR No. 1
Leader and DBM RO concerned. The DO shall
c. SAAODBOE – FAR No. 1.A
prepare
d. List of Allotments/Sub-Allotments - FAR
No. 1.B e. SABUDB – FAR No. 2

61

Agency Performance Review Other Performance Monitoring Report

Required by DBM
consolidated report of the division and
submit it to RO. They shall furnish the
respective ROs and CO copies of the reports
within 5 days after the end of each quarter
for consolidation purposes;
 results of its evaluation.
2. The Agency RO (ARO) shall prepare
consolidated report covering the report of The Performance Based Bonus (PIB) to
the Region and its lower operating units and government personnel is also based on the
submit to ACO and COA-GAS within 10 days result of the performance review.
after the end of each quarter; and
The Full-time Delivery Unit (FDU) is required
to submit a flash performance monitoring
3. The ACO shall prepare an overall
report which is derived from the Budget and
consolidated report and submit to the CO of
Financial Accountability Reports (BFARs). It
DBM and COA-GAS within 30 days after end
summarizes the agencies’ monthly
of each quarter.
cumulative absorptive capacity, i.e.
Performance review should be a concern of obligation and disbursement rates, by
DepEd as it is of DBM. For DepEd, to know appropriation source and allotment class
where it stands, and basically identify only, without accomplishing at length the
necessary measures to improve performance information by Major Final Output (MFO),
if need be. For DBM, to aid in its decision for Program/Activity/Project (P/A/P) and by
recommending budget levels and succeedingobject of expenditure. Said report shall be
fund releases. Performance review is accompanied by a supporting document
conducted by DBM during budget citing the reasons for the underperformance,
preparation time when it reviews the budget if any, as well as action plan outlining the
proposals submitted by DepEd. The review necessary delivery and execution strategies
covers DepEd to address the reasons of the
performance for the past year and current underperformance. Submission of the report
year, and the result of said review has a shall be made to DBM every tenth day of the
bearing on the recommended budget level following month, copy furnished the NEDA
for the incoming year. On the other hand, and the Office of the Cabinet Secretary (see
the review conducted at midyear determines DBM Circular 2015-9 – Submission of
succeeding fund releases or withdrawal of Summary Performance Monitoring Report).
already released funds, depending on the

62

Procurement and Asset

Management
Overview Managing physical assets is a constant balancing act for operational
efficiency. Understanding the true requirements of the different
offices requires a holistic view of the entire supply chain to
minimize cost without compromising quality. Considering the
significant investment of public funds in procuring these resources,
they have to be properly managed, controlled and recorded.

Organizational units (Central, Regions, Divisions/Districts and

 Schools) of DepEd are constantly faced with significant fluctuations
in demand, supply and movement of resources that require swift
action based on determined priorities. Likewise, uncertainty in
transportation (e.g., most especially in far flung and mountainous
areas of the country) leads to higher inventory costs as the units
try to buffer their stock to meet demand.
with a view to ensuring efficiency,
Basic Concepts, Principles and economy and effectiveness in the
Procedures operations of government.”
Effective resources allocation based on
implementation priorities rests on Section Strength and stability are very important
2 of Presidential Decree No. 1445 where it ingredients of how proper implementation
is the “declared policy of the State that all of strategic initiatives leads to successful
resources of the government shall be delivery of expected outcomes. These two
managed, expended or utilized in ingredients keep decision-making
accordance with law and regulations, and transparent and consultative in the face of
safeguarded against loss or wastage big and tough calls.
through illegal or improper disposition,

Procurement Manual
DepEd has developed the Customized Agency Procurement Manual
(CAM) which is a generic procurement manual to systematize the
procurement process, ensure transparency and avoid confusion. This
was subsequently approved by Government Procurement Policy Board
(GPPB) through GPPB Resolution No. 01-2008 dated May 30, 2008 for
Volumes I-IV, and GPPB Resolution No. 01-2010 dated January 29,
2010 for Volume V, in compliance with the provisions of Section 6 of
R.A. 9184 and its IRR.

CAM roll-out Through DepEd Order No. 69 s.2008 and its

 nationwide roll-out,

63
attached agencies for its adoption and
official use.

Note: Although some of the significant

changes have been discussed/presented
during the Roll Out Training of Trainers
(RTOT), DepEd’s Customized Agency
Procurement Manual needs updating in
accordance with the 2016 Revised IRR of
RA 9184.

Public procurement system, being

forward-looking, is always at the
forefront in government’s effort to fight
corruption and bribery in most financial
transactions. As an initiative to tighten
control of operational activities,
Commission on Audit has issued COA
Circular 2013-001 on January 2013 (see
Process Matrix) prescribing revised
Documentary requirements guidelines and documentary
the CAM consists of: requirements for common government
transactions. Such initiative supports a
1. Volume 1 - Establishment of strategy of embracing good governance
Procurement Systems and Organization; in the area of procurement.
2. Volume 2 - Manual of Procedures for
the Procurement of Goods and Services; Section 6 IRR of RA 9184 likewise,
3. Volume 3 - Manual of Procedures for prescribed the use of Generic
the Procurement of Infrastructure Procurement Manuals, the Philippine
Projects; and Bidding Documents (PBDs) and other
4. Volume 4 - Manual of Procedures for standards forms as approved by the
the Procurement of Consulting Services. GPPB including the revised 2015 format
of the PPMP and APP (GPPB Circular 07-
The use of the manual is mandatory to all 2015).
procuring entities as it was rolled-out to
regions, divisions, schools and other

Property Manual To effectively operationalize policies and procedures based on this

concept of strength and stability, DepEd has come up with a
handbook that details everything about “procurement, delivery,
inspection, acceptance, recording and reporting up to disposal of
properties from Central Office to the School Level.” This is the
Handbook on Property and Supply Management (Note: the processes
illustrated in the manual still apply except for the threshold on items classified
 as semi-expendable, forms and other relative provisions effected by the new
GAM and other COA/DBM issuances) that ensures optimum utilization
of resources of end
users in an effort to spread the principles of good governance in all
operational levels of DepEd bureaucracy.

In an effort to capacitate supply officers, property custodians, and

other end-users in the different levels of DepEd organization,

64
appropriate trainings/seminars/workshops were conducted in the
use of the Manual (see DepEd Memorandum Nos. 394 and 106 s.
2010 respectively).

Planning, Budgeting and Procurement: DepEd

Triangulation Process
The issuance of DO No. 25 s. 2010 – Budget Strategy for Basic
Education FYs 2010-2015 (Strengthening the Planning, Implementation and
Coordination of DepEd Programs, Projects and Activities) further strengthened
the linkages of planning, budgeting and procurement activities in all levels of
the Department. Specifically, new procedures for processing financial
transactions are defined. These new procedures aim to further synchronize
program planning, budgeting and procurement activities of DepEd offices at
the central level, ensure their coherence with the stated policy directions, as
well as facilitate monitoring and reporting of progress achieved over time. The
process is as shown in the flowchart below:

A. Planning/Budget Preparation
START

1. Situational Analysis;
2. Review of existing PAPs;
P DBM directly
5. Firm up program road
C S
P
& directions; F
3. Review of planning
R
S
maps;
I
R N
Standards & assumptions; 6. Frontloading of crucial
E E
E
E
Resources; and
D
DepEd receives Budget Call from DBM 7. Firm up DepEd menu for
DepEd CO farms out Government reform
O MOOE Component
the Budget Call to
4. Firm up DepEd priorities
D all SUs and IUs Capital Outlay Component
 - DO proposal to RO
OU/SUs submit WFP & PPMP:
sends out the Budget Call to RO and
- School SIP to DO
PS Component IUs; RO informs the DO
consolidates and submits budget
- RO/SUs to CO
BEIS

DepEd CO
Act (GAA) National
Expenditure Program (NEP)
Physical plan extracted & END
END
submitted to NEDA
B. Budget Legislation proposal to DBM
Philippine
Development Plan
General
Appropriations Congress deliberates the

65
C. Budget Execution: Submission of Budget Execution Documents

Orientation on Budget Execution

•Presentation of the NEP
•Discussion on Budget Execution Plans and Targets

Plan and Budget Adjustment

•Finalization of WFPs, MDP & PPMP
based on DepEd
Strategic Directions
•Confirmation of Recipient IUs for Major PPAs

Triangulation Plans
•Review/synchronization & consolidation of
WFP, MDP and
PPMP by PS, Budget Division and
Procurement Mgt
Service

Executive Committe Deliberation

•Presentation of adjusted plans and budget
for major PAPs
Submission to DBM

•Confirmation of items for released and later

release
•Transmittal of BEDs to DBM
National Government Fund Release System

Note: This section is based on DBM Circular as of {date}

66
C. Budget Execution: Release of
NCA
DepEd CO release lump sum
allotments thru sub ARO to RO/DO
DBM releases •DepEd Co release Funding Check to RO/DO/IUs
GAARD/SARO to
RO/DO/IUs

DepEd Submits Monthly Cash

Program (MCP)
DBM releases NCA to
CO/RO/DO/IUs

D. DepEd Budget Utilization Process to Draw CA/ Conduct Training

67
E. DepEd Budget Utilization Process to Conduct Procurement
68

REVENUE/RECEIPTS AND DEPOSIT

PROCEDURES
OVERVIEW

Pursuant to the adoption of GAM, which took effect on January 1, 2016, the following
accounting standards apply for revenue and receipts of government entities:

1. Revenue includes only the gross inflows of economic benefits or service potential
received and receivable by the entity in its own account. (PPSAS 9);

2. Receipts/Collections refer to all cash actually received from all sources during a given
accounting period;

3. Gifts and donations shall consist of voluntary transfers of assets including cash or other
monetary assets, goods in-kind and services in-kind that one agency makes to another,
normally free from stipulations. (PPSAS 23);
 4. Goods in-kind are tangible assets transferred to an agency in a non-exchange
transaction, without charge, but may be subject to stipulations. External assistance
provided by multilateral or bilateral development organizations often includes a
component of goods in-kind. (PPSAS 23); and

5. Transfers are inflows of future economic benefits or service potential from non exchange
transactions, other than taxes. (PPSAS 23).

Basic Rules and Regulations on Collections and Deposits

the General Fund (GF) of the NG. (Sec.
65(1), P.D. No. 1445);
What are the fundamental principles
governing
2. Except as may otherwise be specifically
revenues and other receipts?
provided by law or competent authority, all
1. Unless otherwise specifically provided by
moneys and property officially received by
law, all revenues accruing to an entity by
a public officer in any capacity or upon any
virtue of the provisions of existing law,
occasion must be accounted for as
orders and regulations shall be
government funds and government
deposited/remitted in the National
property. (Sec. 42, Chapter 7, Title I(B),
Treasury (NT) or in any duly authorized
Book V, E.O. No. 292);
government depository, and shall accrue to

69
3. Amounts received in trust and from business-type activities of
government may be separately recorded and disbursed in
accordance with such rules and regulations as may be
determined by a Permanent Committee composed of the
Secretary of Finance as Chairman, and the Secretary of
Budget and Management and the Chairman, COA, as
members. (Sec. 65(2), PD No. 1445);

4. Receipts shall be recorded as revenue of Special, Fiduciary or

Trust Funds or Funds other than the GF, only when authorized
by law as implemented by rules and regulations issued by the
Permanent Committee. (Sec. 66, PD No. 1445);

5. No payment of any nature shall be received by a collecting officer

without immediately issuing an official receipt in
acknowledgement thereof. The receipt may be in the form of
postage, internal revenue or documentary stamps and the like,
officially numbered receipts, subject to proper custody,
accountability, and audit. (Sec. 68(1), P.D. No. 1445);

6. Where mechanical devices (e.g. electronic official receipt) are

used to acknowledge cash receipts, the COA may approve,
upon request, exemption from the use of accountability forms.
(Sec. 68 (2), P.D. No. 1445);
 7. At no instance shall temporary receipts be issued to acknowledge
the receipt of public funds. (Sec. 72, GAAM Volume I);

8. Pre-numbered ORs shall be issued in strict numerical sequence.

All copies of each receipt shall be exact copies or carbon
reproduction in all respects of the original. (Sec. 73, GAAM
Volume I);

9. An in-officer charged with the collection of revenue or the

receiving of moneys payable to the government shall accept
payment for taxes, dues or other indebtedness to the
government in the form of checks issued in payment of
government obligations, upon proper endorsement and
identification of the payee or endorsee. Checks drawn in favor
of the government in payment of any such indebtedness shall
likewise be accepted by the officer concerned; and at no
instance should money be in the hands of the Collecting Offices
be utilized for the purpose of cashing private checks. (Sec.
67(1) and (3), P.D. No. 1445).

10. Under such rules and regulations as the COA and the
Department of Finance (DOF) may prescribe, the Treasurer of
the Philippines and all AGDB shall acknowledge receipt of all
70

Revenues from exchange

transactions
 Affiliation Fees, Examination Fees,
Seminar/Training Fees, Rent/Lease Income,
Communication Network Fees,
Transportation System Fees, Road Network
Fees, Waterworks System Fees, Power
Supply System Fees, Seaport System Fees,
Landing and Parking Fees, Income from
Hostels/Dormitories and Other Like
Facilities, Slaughterhouse Operation,
Income from Printing and Publication,
Sales Revenue, Hospital Fees, Share in the
Profit of Joint Venture and Other Business
Income.

2. Use by other entity of assets yielding

interest, royalties and dividends or similar
distributions:

a. Interest income – charges for the use of

cash or cash equivalents, or amounts due
to the entity;

b. Royalties – fees paid for the use of

entity’s assets such as trademarks,
patents, software, and copyrights; and

c. Dividends – share of the National

Government from the earnings of its
capital/equity investments in Government.

3. Shares, Grants and Donations

a. Share from National Wealth

b. Share from Philippine Amusement and
Revenue from Non-Exchange Transactions Gaming Corporation (PAGCOR)/ Philippine
funds received by them, the Charity Sweepstakes Office (PCSO) c.
acknowledgement bearing the date of Share from Earnings of GOCCs
actual remittance or deposit and indicating d. Income from Grants and Donations in
from whom and on what account it was Cash
received. (Sec. 70, P.D. 1445). e. Income from Grants and Donations in
Kind

Revenues received by NGAs may arise from

exchange and non exchange transactions: 4. Revenue from non-exchange
transactions may also arise when, in
1. Sale of goods or provisions of services to respect of an inflow of resources from a
third parties or to other NGAs; and non-exchange transaction, the entity
satisfies a present obligation recognized as
a. Business Income – School Fees,
 a liability which may be as follows: Payable and

a. Trust Liabilities – Customers’ Deposits

71
Guaranty/Security Deposits Payable
b. Deferred Credits – Deferred Finance Lease Revenue and Other
Deferred Credits
c. Unearned Revenue – Investment Property and Other Unearned
Revenue

Other Receipts Other receipts of NGAs shall be composed of, but not limited to, the
following:

1. Receipt of NCA. The NCA specifies the maximum amount of

withdrawal that an entity can make from a government bank for
the period indicated. The Collecting Officer shall not issue an OR
for the receipt of NCA;

2. Non-Cash Availment Authority (NCAA);

Tax Remittance Advice. This shall be used to recognize: (1) in the

books of national government agencies, the constructive
remittance to BIR and BOC of taxes and customs’ duties withheld,
and the constructive receipt of NCA for those taxes and customs
duties;

3. Receipt of Subsidy/Assistance from other NGAs, LGUs, GOCCs and

Other Funds. The Collecting Officer shall issue OR upon receipt of
cash subsidy/assistance;

4. Refund of excess cash advances granted to officers and employees.

Cash advances may be classified into:

a. Advances to Officers and Employees – for official travels;

b. Advances for Operating Expenses – granted to regular

disbursing officer for operating expenses of operating/field
units and foreign post not maintaining complete set of books;

c. Advances for Payroll – for payment of salaries, wages and other

personnel benefits; and

d. Advances to Special Disbursing Officer (SDO) – for special

purpose/time-bound undertakings

5. Performance bond/security deposits. Receipts of performance bond

posted by contractor or supplier to guaranty full and faithful
performance of their contract. It may be in the form of cash or
certified checks;
 6. Refund of overpayment of expenses. Receipts of refunds from
officers, employees and suppliers/creditors resulting from
overpayment of expenses;
72
7. Collections made on behalf of another entity or non
government/private organizations. Receipts of income,
receivables or trust funds for the account of other NGAs, LGUs,
GOCCs or non-government/private organizations. These
collections are later remitted to the government agencies or non
government/private organizations concerned; and

8. Intra-agency and inter-agency fund transfers. Cash received from

central office/regional office/operating units of an entity and from
another entity for the purposes of implementing specific projects.

9. Inter-agency fund transfers. Cash received from an entity outside

of DepEd for the purpose of implementing specific projects.

DepEd’s Sources of Revenues and

Other Receipts
a. Business income
(ex. Fines and Penalties)
b. Income from Grants and Donations
c. Subsidy from the National Government (covered by NCA)
d. Other Receipts
(ex. Gains on FOREX, Other Gains)

during a given accounting period.

What are the Accounting Standards for 3. Fines shall include economic benefits or
Revenue and Receipts? service potential received or receivable by
The following accounting standards shall a public sector agency, as determined by a
apply for revenue and receipts of court or other law enforcement body, as a
government entities: consequence of the breach of laws or
regulations. Fines and penalties, either on
1. Revenue includes only the gross inflows tax revenue or other specific income
of economic benefits or service potential account, shall be recognized as income of
received and receivable by the entity in its the year these were collected.
own account. (PPSAS 9)
4. Gifts and donations shall consist of
voluntary transfers of assets
2. Receipts/Collections shall refer to all
cash actually received from all sources
73
including cash or other monetary assets, goods in-kind and
services in-kind that one agency makes to another, normally free
from stipulations. (PPSAS 23)

5. Goods in-kind are tangible assets transferred to an agency in a

non-exchange transaction, without charge, but may be subject to
stipulations. External assistance provided by multilateral or
bilateral development organizations often includes a component
of goods in-kind. (PPSAS 23)

6. Taxes are economic benefits or service potentials compulsory paid

or payable to public sector agencies, in accordance with laws
and or regulations, established to provide revenue to the
government. Taxes do not include fines or other penalties
imposed for breaches of the law. (PPSAS 23)

7. Transfers are inflows of future economic benefits or service

potential from non-exchange transactions, other than taxes.
(PPSAS 23)

Accounting Entries 1. The Accounting entries to recognize receipt of NCA are as follows:
Account Title Account Code Debit Credit

Regular

Cash-Modified Disbursement 10104040 P100,000

System (MDS), Regular

Subsidy from National Government 40301010 P100,000

To recognize receipt of NCA for Regular Agency Fund

Special Account

Cash-Modified Disbursement 10104050 P100,000

System (MDS), Special Account

Subsidy from National Government 40301010

P100,000

To recognize receipt of NCA for payment for terminal leave

Cash-Modified Disbursement 10104060 P100,000

System (MDS), Trust

Cash-Treasury/Agency Deposit, Trust 10104030 P100,000

 To recognize the receipt of NCA for Trust Receipts Fund

74
2. The accounting entry to recognize the receipt of NCAA is as follows:
Account Title Account Code Debit Credit

Accounts Payable 20101010 P950,000

Subsidy from National 40301010 P950,000

Government

To recognize the receipt of NCAA

3. The accounting entries for TRA are as follows:

Account Title Account Code Debit Credit

Tax Withheld by NGAs

NGAs’ (withholding agency) Books

Cash-Tax Remittance Advice 10104070 P100,000

Subsidy from National 40301010 P100,000

Government

To recognize constructive receipt of NCA for TRA

Due to BIR 20201010 P100,000

Cash-Tax Remittance Advice 10104070 P100,000

To recognize constructive remittance to BIR of taxes withheld through TRA

75
Account Title Account Code Debit Credit

Cash-Collecting Officers 10101010 P100,000

Subsidy from Other NGAs 40301020 P50,000

Assistance from LGUs 40301030 25,000

Assistance from GOCCs 40301040 25,000

To recognize receipt of subsidy/assistance from other government agencies.

Cash-Treasury/Agency 10104030 P100,000

 Deposit, Trust

Cash-Collecting Officers 10101010 P100,000

4. The accounting entry for Receipt of Subsidy/Assistance from other NGAs, LGUs,
GOCCs and Other Funds.

5. Accounting entry for Refund of excess cash advances granted to officers and
employees.

Account Title Account Code Debit Credit

Cash-Collecting Officers 10101010 P100,000

Advances for Operating 19901010 P50,000

Expenses

Advances for Payroll 19901020 25,000

Advances to Special Disbursing 19901030 25,000

Officer

or Advances to Officers and 19901040

Employees

To recognize collection of refund of excess cash advances

Cash-Treasury/Agency Deposit, 10104010 P100,000

Regular
or

Cash-Treasury/Agency Deposit, 10104020

Special Account
or

Cash-Treasury/Agency 10104030
Deposit, Trust

Cash-Collecting Officers 10101010 P100,000

76
To recognize remittance of collections to BTr

6. Accounting entry for Performance bond/security deposits.

Account Title Account Debit Credit
Code
 Cash-Collecting Officers 10101010 P10,000

Guaranty/Security 19901010 P10,000

Deposits Payable

To recognize collection of performance bond/security deposits

Cash-Treasury/Agency 10104010 P10,000

Deposit, Trust

Cash-Collecting Officers 10101010 P10,000

To recognize remittance of collections to BTr

7. Accounting for Refund of overpayment of expenses. Receipts of refunds from

officers, employees and suppliers/creditors resulting from overpayment of
expenses.

Account Title Account Debit Credit

Code

Cash-Collecting Officers 10101010 P10,000

Specific Expense account P10,000

To recognize collection of refund of overpayment of expenses.

Cash-Treasury/Agency Deposit, 10104010 P10,000

Regular
or

Cash-Treasury/Agency Deposit, 10104020

Special Account or

Cash-Treasury/Agency Deposit, 10104030

Trust

Cash-Collecting Officers 10101010 P10,000

To recognize remittance of collections of refund of overpayment of expenses to BTr

8. Intra-agency and inter-agency fund transfers.

Cash received from central office/regional office/operating units of an entity and

from another entity for the purpose of implementing specific projects.

Account Title Account Code Debit Credit

Intra-entity Fund Transfer

77
Cash-Collecting Officers 10101010 P5,000

Due to Central Office 20301010 P5,000

or

Due to Bureaus 20301020

or

Due to Regional Offices 20301030

or

Due to Operating Units 20301040

or

Due to Other Funds 20301050

To recognize receipt of intra-entity fund transfer

Cash-Treasury/Agen 10104030 P5,000

cy Deposit, Trust

Cash-Collecting Officers 10101010 P5,000

To recognize remittance of collections to BTr

What are the basic rules and AGDB within the day of receipt. All
regulations on Collections and Deposits? undeposited receipts should be kept in a
1. All collection activities shall be done by vault whose lock combination is known only
personnel duly authorized/designated by to a specified level of authority;
the Head of the Unit;
5. Collecting Officers should also be provided
2. Based on COA regulations, all employees with safety deposit boxes in order for them
entrusted with the handling of cash are to store cash/check recently received.
required to be bonded under the Fidelity Before the end of the banking day, the
Fund. The amount of cash in the hands or contents of these safety deposit boxes
under the custody of the accountable should be deposited in the AGDBs.
employee shall be limited within the amount Cash/checks that are not deposited within
covered by the bond to render protection to the banking day because of unavoidable
the full extent; circumstances should be kept in the vault;

3. Physical barriers should be established to 6. Cash records and accountable forms

prevent misappropriation of cash; should also be stored in a

4. All receipts should be deposited in the

78
 Collecting Officers shall prepare the Report
of Collections and Deposits (RCD) (Appendix
26) for submission to Accounting Office/Unit.
The report lists all the ORs issued in
numerical sequence including cancelled
ones;

2. The RCD shall be supported by

documentary evidence such as duplicate
copies of ORs and validated deposit slips;

3. The Collecting government entity issuing

electronic Official Receipt (eOR) should
generate and submit daily to the Auditor a
copy of the RCD. In case the collection
Reporting of Collections and Deposits
system is not integrated with the accounting
secured vault within the Cash Office;
system, the Accounting Division/Unit shall
recognize the collections and deposits based
7. Accountable officers are required to
on the generated reports duly certified by
prepare and submit to the Accounting Office
the Collecting Officer/Cashier/Head of
a periodic report on collections and deposits,
Cash/Treasury Unit;
supported by copies of ORs and validated
deposit slips;
4. Field Offices (FOs)/Operating Units (OUs)
without complete set of books shall record
8. When mechanical devices are used to
their collections of income chronologically in
acknowledge cash receipts, exemption from
the Cash Receipts Register (CRReg)
the use of the standard official receipts shall
(Appendix 17). The certified copy of the
be duly authorized by the COA/BIR;
CRReg together with the required supporting
documents, duplicate copies of ORs and
9. Cash Receipts Record should be kept
updated daily; Deposit Slip (DSs) shall be submitted within
five (5) days after the end of each month to
10.At no instance should the money in the the concerned mother unit
hands of the Collecting Officers be utilized to (central/regional/division office) by the FOs
encash employees and private checks. (a unit under the central/regional/ division
office) for review and recording of the
Receipts and deposits shall be reported as transactions in the CRJ by the Chief
follows: Accountant.

1. At the close of the business day, the

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Detailed Procedures for Collections and Deposits through the Collecting Officer
Area of Responsibility Seq. Activity
No.
Cash/Treasury Unit Daily processes

Collecting Officer 1 Receives cash/check from payor representing collection based on the
Order of Payment (OP) (Appendix 28) prepared by the Accounting
Division/Unit.

2 Issues OR to acknowledge receipt of cash/check.

Note 1 –The OR shall be prepared in three copies and distributed as

follows: Original – Payor
Copy 2 – To be attached to the RCD/CRReg
Copy 3 – Cash/Treasury Unit file

3 Records collections in the Cash Receipts Record (CRRec) (Appendix 29).

4 Prepares DSs in three copies.

Note 2 –The DSs shall be distributed as follows:

Original – AGDB
Copy 2 – To be attached to RCD/CRRec
Copy 3 – Cash/Treasury Unit file

5 Deposits collections with AGDB for the account of the National Treasurer.

6 Based on the duplicate copies of ORs on file and validated DSs from the
AGDB, prepares the RCD in three copies. Initials on the RCD and forwards
the same together with Copy 2 of the ORs and validated DSs to the Head of
the Cash/Treasury Unit for review and signature.

Head of 7 Reviews and signs the RCD. Forwards original of RCD, Copy 2 of the ORs
Cash/Treasury Unit and validated DSs to the Collecting Officer/Designated Staff for submission
to the Accounting Division/Unit.

Designated Staff 8 Records the RCD in the logbook maintained by the Cash/Treasury Unit and
forward the same with the copy 2 of the ORs and validated DSs to the
Accounting Division/Unit for recording in the books of accounts.

Accounting Division/Unit

Accounting Staff 9 Receives original of RCD with Copy 2 of the ORs and validated DSs from the
Cash/Treasury Unit. Records receipt in the logbook maintained for the
purpose and forwards the same to the Bookkeeper for review and
preparation of the JEV.

Bookkeeper 10 Based on the RCD, prepares JEV in two copies and signs "Prepared by"
portion of the JEV. Forwards the JEV and documents to the Head of the
Accounting Unit for review and signature.

Head/Chief Accountant 11 Reviews and signs ‘Certified Correct by’ portion of the JEV.Forwards the
JEV and documents to the Bookkeeper for recording in the CRJ.
 Note 3 –For the succeeding activities, refer to the Chapter on Financial
Reporting for the preparation and submission of Trial Balances, Financial
Statements and Other Reports.

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