Contracting operation and, maintenance activities to irrigators associations in national irrigation systems is the Agency ™s policy directed at enhancing their participation in improving and sustaining improved performance of irrigation systems.

Towards furtherance of this objective, please be informed that pursuant to M.C. 41, s. 1990, it is further advised that:

1. Irrigation service fees (ISF) directly paid by farmers to the NIA staff or systems offices for irrigated areas within the area under contract with the IA shall be included in the gross collections from which the IA ™s share is determined.

2. For new and renewal of Type II contracts with Irrigators Associations (IAs), the following should be provided in the new agreements:

Obligations of the IAs

1. All IA Collectors/Treasurers shall be required to post an appropriate bond to ensure satisfactory performance of financial duties and responsibilities.
   
   
2. ISF collections made by the IAs shall be recorded in a Cash Book by the respective IA Collectors and Treasurer which is separate and distinct from the books of account being maintained by the IA for its operations.  A monthly Report of Collections shall be submitted by the IA to NIA for monitoring and recording purposes.
   
   
3. Pay a one (1) percent penalty per month of delay of payments of ISF collections, if there are any, reckoned from the ISF payments deadlines or cut-off for the irrigation system.
   
   
4. Abide by existing NIA policies on the grant of ISF discounts and penalties for delayed payments of ISF.
   
   
5. Provide NIA access to IA Cash Books and other financial records.

Obligations of the NIA

1. Closely monitor ISF collections and remittances undertaken by the IAs.  During periods of peak and non-peak ISF collections, monitoring shall be done weekly and monthly, respectively.
   
   
2. Grant a ten (10) percent discount to IAs for prompt payments of ISF.
   
   
3. Deduct from the IA incentives or shares all ISF collections made by the IAs but not turned over to NIA, if there are any, subject to a one (1) percent penalty per month of delay computed from the date of collection to the time of payment of IA shares/incentives.
   
   
4. Conduct periodic comprehensive audit on the IA Cash Books and other financial records.

3. Furthermore, existing policies providing incentives to NIA collectors shall cease to be effective and applied to ISF payments from irrigated areas under contract with the irrigators associations; and

4. All NIA personnel are also hereby directed to fully support the policy on enhancing farmers participation in improving performance of irrigation systems thru the irrigators associations.

For your guidance.

Adopted: 15 Jan. 1991