GUIDELINES ON THE FY 2000 RELEASE OF FUNDS

1.1       To define the budgetary policies pertinent to the fund release system to be adopted in FY 2000;
1.2       To prescribed the required reports prior to the release of funds; and,
1.3       To provide the procedural guidelines on the release of the funds for FY 2000.

2.0       COVERAGE

The circular covers all government agencies, including government
owned or controlled corporations (GOCCs) and local government units
(LGUs), receiving budgetary support from the national government
pursuant to the General Appropriations Act (GAA) or such other duly
enacted appropriation measures.

3.0       GENERAL GUIDELINES

3.1       Appropriation items under the current year agency budgets
and those under the Agriculture and fisheries modernization Program,
Internal Revenue Allotment including the Local Government Empowerment
Fund and the Municipal Development Fund, as reflected in the 2000 GAA,
with the exception of the following shall be considered comprehensively
released:

3.1.1 Hiring of new/additional personnel whether permanent
contractual or casual, temporary, substitute or co-terminus, except
positions in agencies with fiscal autonomy as provided by law, key
positions, teaching positions in schools and educational institutions,
uniformed personnel of the Philippine National Police (PNP), Bureau of
Fire Protection, Bureau of Jail Management and Penology (BJMP), and
positions to be filled by personnel currently employed in the Executive
Branch, by transfer and promotion;

3.1.2 Confidential and Intelligence Funds which must be subject to prior approval from the Office of the President;

3.1.3 Built-in-Lump Sum within the agency for the following purposes:

3.1.3.1 Creation of new agencies and expansion of organizational units;
3.1.3.2 Creation of new positions;
3.1.3.3 Reclassification of positions;
3.1.3.4 Newly legislated schools;
3.1.3.5 Magna Carta for health workers;
3.1.3.6 Nationwide and regionwide lump sum for infrastructure projects;
3.1.3.7 Amount appropriated for the Equivalent Record Form and Master Teacher;
3.1.3.8 Terminal Leave and Retirement Gratuity benefits (TL/RG); and,
3.1.3.9 Police benefits administered by the NAPOLCOM.

3.1.4 Built-in agency appropriation for Special Accounts in the General Fund (SAGF);

3.1.5 Built-in items in the agency appropriation pertaining to the following:

3.1.5.1 FOREX differential;
3.1.5.2 Purchase of office furniture as well as motor vehicles, except ambulances, fire trucks, patrol vehicles, dump trucks;
3.1.5.3 Construction of new office buildings except those that have been contracted;
3.1.5.4 Foreign travels of government personnel, except those
associated with scholarships and training funded by grants and those to
be made in connection with negotiation of loans;
3.1.5.5 Attendance to conferences sponsored by private sector entities where the cost shall be charged to the government;
3.1.5.6 Conduct of training/workshop-seminars, except those conducted
by government training institutions, by agencies in the performance of
their regular functions, those that are funded by grants, and those
related to institutional strengthening and streamlining for effective
governance;
3.1.5.7 Conduct of cultural and social celebrations, except milestone celebrations; and,
3.1.5.8 Publication, media advertisements and the like, except those required by law.

3.1.6 Other appropriation items which involve budgetary
reallocations introduced by Congress resulted in the increase of
appropriations for programs, activities and projects of certain
departments, bureaus, offices and agencies.

3.2       The following built-in appropriation items under the
current year budget, although included in the comprehensive release, can
only be obligated by the agency subject to certain conditions hereunder
described and after compliance with specific requirements:

3.2.1 Appropriation Items/Activities which require prior clearance from other agencies, to wit:

3.2.1.1 Motor vehicles and motorized equipment not covered under
item 3.1.5.2 of this Circular such as ambulances, fire trucks, patrol
vehicles and dump trucks which need prior approval from the Office of
the President or in certain cases where delegation has been made, to the
DBM;
3.2.1.2 Computers and other information technology equipment which
need clearance from the National Telecommunication Commission;
3.2.1.3 Communication Equipment which require clearance from the National Telecommunication Commission;
3.2.1.4 Firearms which need the prior approval of the PNP; and,
3.2.1.5 Appropriation for research and development in the natural,
agricultural, technological and engineering sciences which was not
subject to prior approval of the Department of Science and Technology
and/or the Department of Agriculture.

3.2.2 Appropriation items which are subject to certain limitations/documentation requirements:

3.2.2.1 Prohibition on the procurement of more than five (5)
copies per title of books with the exception of schools and the National
Library;
3.2.2.2 New foreign assisted projects (FAPs), which, for its first
year of implementation, must be covered by a signed loan/grant document
and must have been declared effective by the lending/donor institution;
3.2.2.3 On-going FAPs which specify the attainment of certain conditionalities prior to any release of funds;
3.2.2.4 Appropriation for new programs and locally funded projects
which did not result from budgetary reallocations introduced by Congress
(as specified under 3.1.6 of this Circular), the implementation of
which should be covered by a profile; and,
3.2.2.5 Grants, subsidies and contributions which must be supported by
details indicating among others, the purpose, amount intended for each
beneficiary and the list of recipients.

3.3       Agencies are required to prepare their overall budget plan
using the Agency Budget Matrix (ABM). The said form, which must be
signed by the Department Secretary, shall be prepared by
appropriations/financing sources to support expenditures during the
year, to wit:

3.3.1 Current year agency appropriations under the FY 2000 GAA;
3.3.2 Automatic appropriations such as SAGF, Retirement and Life
Insurance Premiums (RLIP) and other items classified as such; and,
3.3.3 Continuing appropriation:

3.3.3.1 Released allotment in FY 1999 for Maintenance and Other
Operating Expenses (MOOE) and Capital Outlays (CO) but which have
remained unobligated as of December 31, 1999:

• Chargeable against the 1998 GAA, R.A. No. 8522; and,
• Chargeable against the 1999 GAA, R.A. No. 8745.

3.3.3.2 Unreleased appropriation under R.A. Nos. 8522 and 8745.

3.4       Agencies are authorized to effect the
realignment/augmentation of the “Not Needing Clearance” portion of the
ABM without seeking DBM approval in the following instances:

3.4.1 Augmentation of a budgetary program from other programs
within the same fund, limited however to the total amounts indicated in
the summary by object of expenditures;

3.4.2 Augmentation of MOOE items in an amount not exceeding
one-third (1/3) of the amount to be augmented, using as basis for the
computation, the overall summary of the agency’s object of expenditures
as appearing in the GAA;

3.4.3 Realignment/relocation of capital projects in cases of
imbalanced allocation of projects, duplication and funding overlaps
pursuant to Section 59, R.A. No. 8760;

3.4.4 Realignment from one FAP to another FAP pursuant to Section
60, R.A. No. 8760 provided that the Loan Proceeds (LP): GOP counterpart
is not changed;

3.4.5 Allocation for electronic interconnection through the internet pursuant to Section 61, R.A. No. 8760; and,

3.4.6 Activities directly linked to the agencies’ organizational targets under the Medium Term Philippine Development Plan.

3.5       Agencies are hereby reminded that realignment of
unobligated allotment for MOOE and CO on its second year of validity
shall only be allowed until June 30 of FY 2000.

3.6       The Common Fund System shall continue to apply to Notices
of Cash Allocation (NCAs) for regular operations. However, the policy of
having separate MDs accounts for retirement benefits and prior years’
A/Ps as well as trust liability accounts (under E.O. No. 338) shall be
maintained.

3.7       Agencies shall prepare an Annual Cash Program which shall
serve as the basis of DBM in determining the cash allocation requirement
of the agency vis-a-vis available obligational authority.

3.8       The deadline for the submission of Special Budget Requests
for the release of funds i.e., Special Allotment Release Order (SARO)
and NCA shall be on November 30, 2000.

3.9       Consistent with the thrust to monitor the agencies’
performance, the midyear review of the financial and physical
performance of the agencies shall continue to be conducted. The result
of this review shall serve as basis for either providing the agency with
additional allotment from any available funding source; withdrawal of
the allotment already issued to the agency; and/or approval of
realignment requests to enable the agency to meet its performance
commitments.

3.10    In this connection, agencies shall provide DBM with its
quarterly performance targets and the indicators used to measure said
targets. These targets should be duly approved by the Department
Secretary or Governing Boards, in the case of GOCCs, to signify their
commitment to attain the same. As additional input to DBM evaluation of
agency performance, agencies are also required to submit their Annual
Estimate of Income considering the increase of fees and charges
authorized under E.O. No. 197.

3.11    Agencies shall submit to DBM their ABM, Annual Cash Program
Quarterly Performance Targets and Annual Estimate of Income (ANNEXES A
to D of this Circular) on or before April 3, 2000.

3.12    Agencies are hereby remained that the “no report, no release” policy shall strictly be enforced.

4.0       PROCEDURAL GUIDELINES

4.1       For the release of the Obligational Authority

4.1.1 Agencies, in coordination and consultation with DBM, are
required to prepare their respective ABMs, broken down by allotment
class i.e., PS, MOOE, CO, and operating unit (N.B. operating unit
pertains to the agency receiving their NCA directly from DBM). A
separate ABM shall be prepared for each appropriation/financing source
enumerated under items 3.3.1 to 3.3.3 of this Circular.

4.1.1.1 The ABMs shall reflect the amounts released
comprehensively which is categorized as the “Not Needing Clearance”
(NNC) portion thereof. These “NNC” items are the following:

• Portion of agency appropriation under the FY 2000 GAA which are
not included in the enumeration under items 3.1.1 to 3.1.6 of this
Circular;
• RLIP which is computed at 12% of the comprehensively released itemized salaries; and,
• Released allotment in FY 1999 for MOOE and CO chargeable against
R.A. Nos. 8522 and 8745, treated as Continuing Appropriation as of
December 31, 1999.

4.1.1.2 Likewise, the ABM should reflect the items that will be
released through the issuance of a SARO, categorized under “Needing
Clearance” (NC) portion. These “NC” items are the following:

• Agency appropriation under the FY 2000 pertaining to items 3.1.1 to 3.1.6 of this Circular; and,
• Unreleased FY 1998-1999 appropriation under MOOE and CO

4.1.2 The total of the “NC” and the “NNC” columns of the ABM
pertaining to the current year agency appropriations shall be equal to
the appropriated amounts under the FY 2000 GAA.

4.1.2.1 The classification of the appropriated amounts into “NC”
and “NNC” columns shall be verified before the DBM approval of this
document is made.

4.1.2.2 The DBM approval of the total comprehensive release
corresponding to the “NNC” portion of the agency’s ABM shall be
evidenced by the machine validated amount on the last page of the ABM.

4.1.2.3 Pending the receipt of the approved ABM, agencies can
already obligate the amounts corresponding to the “NNC” portion of the
ABM and shall book up the same as overdraft in appropriations. The rules
and regulations pertinent to the appropriate accounting entries are
prescribed under COA Circular 99-001.

4.1.2.4 Once the ABM has been approved, the DBM shall provide the
agency and COA with a copy of the same. The validated amount shall be
the basis of COA and the agency to book up the allotment comprehensively
released by DBM. Approval of the ABM also implies that the amounts
classified under the “NC” and “NNC” columns, can only be revised
thorough issuance of a SARO.

4.1.3 Agencies are hereby reminded that the procedures prescribed
under Circular Letter No. 99-4 pertinent to payment of TL/RG benefits
shall continue to be maintained. Thus, issuance of a SARO for TL/RG
chargeable against the Miscellaneous Personnel Benefits Fund shall only
be made once the built-in appropriation of the agency for the purpose
has been fully released and upon determination that the agency does not
have available savings to cover these benefits.

4.2       For the Release of NCA

4.2.1 Initially, agencies shall prepare the Annual Cash Program
for the following items which shall be submitted together with the ABM:

4.2.1.1 Current year agency appropriations under the FY 2000 GAA
specifically the amounts released comprehensively under the “NNC”
portion of the ABM;

4.2.1.2 RLIP computed at 12% of the comprehensively released itemized salaries; and,

4.2.1.3 Released allotment in FY 1999 for MOOE and CO but which
have remained unobligated as of December 31, 1999 chargeable against the
1998 and 1999 GAA i.e., R.A. No. 8522 and R.A. No. 8745, respectively.
(In this instance, the corresponding Journal Voucher should be submitted
as supporting document).

4.2.2 This initial Annual Cash Program should be broken down by
allotment class i.e., PS, MOOE and CO. Identification/segregation should
also be made as to Locally Funded Projects (on a by project and
allotment class basis) as well as, FAPs (on a by project and allotment
class basis with breakdown by GOP/LP components and a further
identification of cash and non-cash under LP).

4.2.3 The following issues must be considered when preparing the initial Annual Cash Program of the agency:

4.2.3.1 The program for PS should fully provide for all filled
positions inclusive of fixed expenditures; and, must take into
consideration the timing of the grant of mid-year and year-end benefits.

4.2.3.2 MOOE should consider seasonal periods or peak and slack
times when agencies’ activities/work program require more operating
expenses or lesser amounts under the same.

4.2.3.3 CO must likewise be programmed in accordance with their
scheduled work targets e.g., initial construction activities will only
entail mobilization fees at the start. Likewise, equipment, will require
cash only on the expected delivery date and not at the bidding and
procurement stages.

4.2.3.4 FAPs should consider the GOP counterpart and LP component.
(The cash portion of the LP component shall be released only upon
receipt of the BTr certification on the availability of LP from the
foreign lending institution).

4.2.4 Separate Annual Cash Programs shall be prepared whenever the following items are requested by the agencies:

4.2.4.1 Unreleased appropriation under R.A. Nos. 8522 and 8745;

4.2.4.2 Current year agency appropriations under the FY 2000 GAA
specifically the amounts requested for release under the “NC” portion of
the ABM;

4.2.4.3 Actual claims against SPFs under the FY 2000 GAA; and,

4.2.4.4 SAGF.

4.3       Performance review

4.3.1 A mid-year review of agency performance shall be undertaken by
DBM. This review shall take into account the agency’s quarterly
performance target commitments, using as starting point, Budget
Preparation (BP) Form No. 206, a document submitted to DBM to support
the FY 2000 budget proposal.

4.3.1.1 The actual level of funding provided to the agency during
Budget Execution shall determine the adjustments and revisions to be
effected on their original performance targets committed under BP 206.

4.3.1.2 Thus, the initial quarterly performance targets shall be
based on the available obligational authority as identified under
4.1.1.1 of this Circular.

4.3.1.3 Subsequent releases to the agency shall imply the
submission of additional performance targets which the agency is
committed to accomplish.

4.3.1.4 Agencies must provide a substantial justification in case performance targets are revised or reduced accordingly.

4.3.2 The actual physical accomplishment shall be compared and
measured against the aforecited performance targets. Thus, the cost
involved in the attainment of these targets, the resources made
available to the agency i.e., releases from all sources as well as any
authority granted to them to use its income, shall be considered.

4.3.3 The agency’s performance, as gauged during the review, shall
serve as basis for either providing for additional allotment from all
sources, withdrawal of the allotment already issued, and/or approval of
request for realignment of funds by the agency so as to improve their
performance.

5.0       REPORTING REQUIREMENTS

5.1       Agencies are required to submit the following accountability reports on the due dates hereunder prescribed;

These guidelines shall take effect immediately.

Adopted: 21 March 2000

(SGD.) BENJAMIN E. DIOKNO
Secretary