1.0       PURPOSE

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 œNot 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 œno 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 œNot Needing Clearance  (NNC) portion thereof. These œNNC  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 œNeeding Clearance  (NC) portion. These œNC  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 œNC  and the œNNC  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 œNC  and œNNC  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 œNNC  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 œNNC  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 œNC  and œNNC  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 œNNC  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 œNC  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;

5.1.1   For NGAs
Report	Due Date
5.1.1.1            Summary List of Checks Issued and Cancelled (SLCIC)	On or before the 10th day of the following month.
5.1.1.2            Statement of Allotment, Obligations and Balances	-do
5.1.1.3            Monthly Trial Balance	-do-
5.1.1.4            Monthly Statement of Charges to Accounts Payable	-do-
5.1.1.5            Quarterly report of Actual Income	On or before the 20th day of the month following the quarter reported
5.1.1.6            Quarterly Report of Actual Income	-do-
5.1.1.7            Quarterly Physical Report of Operations	-do-
5.1.1.8            Preliminary and Final Trial Balance	On or before Feb. 28 of each year
5.1.1.9            Master List of Accounts Payable	-do-
5.1.2   For GOCCs:
5.1.2.1            Cash Flow Statement	On or before the 10th day of the month following the quarter reported
5.1.2.2            Balance Sheet	-do-
5.1.2.3            Profit and Loss Statement	-do-

These guidelines shall take effect immediately.

Adopted: 21 March 2000

(SGD.) BENJAMIN E. DIOKNO
Secretary