REVISED REGULATIONS GOVERNING THE FIDELITY BONDING OF GOVERNMENT OFFICIALS AND EMPLOYEES.

I           PURPOSE

This Treasury Order amends Treasury Memorandum Circular No. 1-71
pertaining to regulations promulgated for the effective bonding of
accountable government officials and employees pursuant to the
provisions of Section 50, Chapter IX of Book V of the Administrative
Code of 1987.

II          COVERAGE

2.1       Except as otherwise herein provided, all officials and
employees of National Government Agencies (NGAs), Government Owned
and/or Controlled Corporations (GOCCs), Local Government Units (LGUs),
Self Governing Boards and Commissions and all others concerned shall,
whenever the duties performed permit or require the custody of
funds/properly/accountable forms, be covered by a fidelity bond.

2.2       Accountable officials and employees discharging their duties in a foreign country.

2.3       Officials and employees accountable to others who are primarily accountable.

III         ACCOUNTABLE RISKS

3.1       When a bonded official or employee or applicant for
bonding is not, in the judgment of the Bureau of Treasury Fiscal
Examiner IV (BTr FE IV), a safe and conservative risk, owing to
character, associations, or habits, the fact shall be reported to the
respective head of departments, bureaus, offices, local government
units, self governing boards and commissions who shall cause the removal
or relief of the official or employee of such duties requiring, a bond.
The decision of the BTr FE IV may be appealed to the Treasurer of the
Philippines through the BTr Regional Director (RD), whose decision shall
be final.

3.2       Officials, having direct or general supervision over
accountable officials shall take steps to safeguard the interest of the
government.

3.3       Upon discovery of a shortage or total loss proper steps
shall be taken by the agencies and/or COA to proceed against the
accountable official or employee and his property, real or personal, on
which attachment and execution shall be levied as provided by law.

3.4       The office which uncovers a malversation or shortage
shall notify promptly the BTr FE IV by telegram, and keep BTr FE IV
advised on the status of the case.

4.0
PROCEDURE FOR BONDING

4.1       Appointment or lawful accession by any person to a
bonded or bondable position or office, shall be notified immediately by
the agency to the BTr FE IV of the province or region where the
appointee is assigned.

4.2       Three copies of General Form No. 57(A), shall be used in
the notification, request for application, increase, reduce, cancel or
transfer of a bond, duly signed by the head of agency concerned.

4.3       Every applicant for bond shall accomplish General Form
No. 58(A) in four (4) copies, which shall be subscribed and sworn to
before any officer duly authorized by law.

4.4       The duly accomplished General Form 58(A) with three (3)
photographs in affixed shall be endorsed by the head of agency, or
office concerned to BTr FE IV in the province or region together with
the request for bonding, General Form No. 57(A), for approval.

4.5       All applications for bonding shall be accompanied by the following:

4.5.1 Sworn Statement of Assets and Liabilities as of the date of applications and request for bonding.

4.5.2 Latest approved appointment to bondable position.

4.5.3 If the position of the applicant is not bondable but applicant is given bondable duties, Office Order or Designation.

4.5.4 Proof of payment of bond premium deposited with an Authorized Government Depository Bank (AGDB).

5.0
PROCEDURE FOR BOND CANCELLATION

5.1       Accountable officials/employees who are no longer
accountable by reason of retirement, separation from the service,
promotion, transfer to another position or agency, suspension from
office or for any other cause, shall submit immediately a request for
bond cancellation using General Form No. 57(A), items 14 to 18 only, to
the BTr Fiscal Examiner IV in the province or region of said accountable
official/employee.

5.2       No bonded official/employee shall be given clearance by
the agency from money and property accountability without proof of bond
cancellation as required in paragraph 5.1.

6.0
AMOUNT OF BOND

6.1       The BTr FE IV in the province and/or district in the
National Capital Region shall fix and approve the bonds in their
respective jurisdiction in accordance with the Schedule attached and
marked Annex A and make an integral part hereof.

6.2       An official/employee who has both money and property
accountability, shall be bonded only once to cover both
accountabilities, but the amount of the bond shall be in accordance with
the Schedule, provided however, that the amount of bond shall not
exceed P4,000,000.00.

6.3       When the maximum amount of the bond is exceeded, the
accountable officer and his immediate Supervisor shall take immediate
step to have the excess accountability transferred to another
official/employee who shall then be covered by another bond.

7.0
BOND PREMIUM

7.1       Effective January 1, 1996, all applications for bonding
shall be immediately issued an Authority to Accept Payment (ATAP) by the
BTr FE IV for the payment of the bond premium.

7.2       The premium of a fidelity bond shall be one per centum (1%) of the amount of bond.

7.3       The premium shall be paid for one full year equivalent to twelve months.

7.4       Cancellation of a bond during its validity shall not make the premium refundable to the agency.

7.5       Bond premium shall be deposited by applicant agency with
an Authorized Government Depository Bank (AGDB). The ATAP shall be
accompanied by a list of bondable officials/employees accomplished in
accordance with the form herein prescribed, marked Annex B and made an
integral part of this Order.

7.6       Proof of deposit of premium shall be presented to the FE
IV of the province of NCR district where the bond applicant is
assigned. Proof of deposit is the AGDB validated ATAP and list of
bondable officials/employees. Only upon presentation of proof of deposit
of premium shall the bond application be processed.

7.7       Approved fidelity bonds are valid for one (1) year,
Premium of expired bonds whose bondable official/employee continue to be
accountable, if not paid on or before expiry date, the corresponding
bond shall be automatically be cancelled. The bond shall be renewed only
upon filling of the General Form 57 (A) and 58(A) and the attachments.

7.8       Payment of premium which is centralized in the agency’s
Head Office shall be notified by said H.O. to the BTr FE IV of the
province or NCR district where the bonded official/employee is assigned.

7.9       A bond is personal and therefore not transferable.

7.10    Any increase in the amount of accountability which
increases the amount of the bond shall be subject to increase premium
which shall be payable for one year, therefore the appropriate
application forms shall be filed.

7.11    Overpayment of bond premium shall be credited to subsequent premium payments due.

8.0
THE FIDELITY FUND

8.1       All bond premium collected by the Bureau of Treasury shall constitute the Fidelity Fund.

8.2       The Fidelity Fund shall answer for defalcations,
shortages and unrelieved accountability after all possible means of
recovery the amount from the accountable official/employee has been
exhausted or her/his insolvency declared by a competent court.

8.3       The Fidelity Fund shall be available for the payment of
court fees incident to civil proceedings to recover sum lost.

8.4       The Fidelity Fund shall not be used in the following:

(a)     To replace fines imposed on a bonded official/employee
as a result of criminal conviction for violation of the Revised Penal
Code or any penal law; (b) To answer for liability of a bonded
official/employee convicted Estafa through falsification of public
documents in the capacity as a private individual; (c) To refund the
accountability of a bonded official employee found short in his
accountability but was not removed or relieved of the duties.

9.0
ADJUDICATION OF CLAIM AGAINST THE FIDELITY FUND

9.1       Any and all claims against the Fidelity Fund together
with all the evidences relating thereto shall be filed with the Bureau
of Treasury Regional Director who shall recommend appropriate action to
the Treasurer of the Philippines. Approval of a claim shall constitute a
legal claim against the Fidelity Fund.

9.2       Only approved claims shall be paid from the Fidelity Fund.

10.0
REPEALING/SAVINGS CLAUSE

All Circulars, Orders and/or Memoranda, issued by this Office
which are inconsistent with this Order are hereby repealed and/or
modified accordingly.

Situations not covered by the Order shall be referred to the Bureau of Treasury Regional Director for appropriate resolution.

11.0   
SANCTIONS

Failure to comply with the requirements and provisions of this
Order shall subject the responsible official/employee to criminal and/or
administrative action.

12.0
EFFECTIVITY

This Treasury Order shall take effect on 1 January 1996.

Adopted: 5 Dec. 1995

(SGD.) CARIDAD VALDEHUESA
Treasurer of the Philippines