September 11, 2012

JOINT DOF-DBM-COA CIRCULAR NO. 04-12

RULES AND REGULATIONS IMPLEMENTING

SECTION 1.0. Purpose.

These Rules are promulgated to prescribe the procedures and guidelines for the implementation of DTEAHI

SECTION 2.0. Rationale.

2.1 It is hereby declared policy of the State that unless otherwise specifically provided for by law, all income collected by agencies of the government by virtue of the provisions of law, orders and regulations shall be deposited in the National Treasury, and shall accrue to the unappropriated surplus of the General Fund of the Government;

2.2 It is also the policy of the State that receipts of agencies authorized by law to be recorded as a Special Account in the General Fund, Fiduciary or Trust Fund or a fund other than the General Fund shall 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 the Department of Finance (DOF) as Chairman, and the Secretary of the Department of Budget and Management (DBM) and the Chairman of the Commission on Audit (COA),as members;

2.3 Reports of COA show that there are huge cash balances being maintained by government agencies deposited in authorized government depository banks (AGDBs) and other institutions, which may include dormant accounts or unnecessary special and trust funds; and

2.4

SECTION 3.0. Definition of Terms.

For the purpose of these Rules, the following terms shall be construed to mean as follows:

3.1 Authorized Government Depository Banks (AGDBs) refer to financial institutions/banks authorized by the Bangko Sentral ng Pilipinas to accept deposits from government agencies. IHaCDE

3.2 Dormant Accounts refer to collections authorized by law to be deposited with an AGDB but have remained inactive for more than five (5) years.

3.3 Unauthorized Accounts refer to:

Cash account balances maintained by agencies without specific authority or legal basis; or

Cash account balances with a specific authority but maintained with non-AGDBs.

3.4 Unnecessary special and trust funds refer to authorized special and trust funds maintained by government agencies with AGDBs but which are no longer necessary for the attainment of the purposes for which said funds were established i.e., specific projects/programs, the implementation of which have been completed or abandoned.

SECTION 4.0. Responsibilities of the Permanent Committee in the Implementation of

4.1 Prepare an inventory of the cash accounts and balances of each and every department, bureau and agency of the National Government;

4.2 Coordinate with the heads of agencies concerned to inform them that the Permanent Committee and its authorized representatives shall conduct inspection of their books of accounts in order to examine, look into and evaluate all existing cash deposits of whatever nature, whether in foreign or local currency maintained with AGDBs and other institutions;

4.3 Review and determine the legal basis for the maintenance of said cash account balances with AGDBs or other institutions where the funds are deposited; and DCASEc

4.4 Recommend to the President the transfer thereof to the National Treasury where no legal impediment exists pursuant to the provisions of Sections 44 and 45, Chapter 5, Book VI of the

SECTION 5.0. Procedural Guidelines.

5.1 COA shall submit to the Permanent Committee the status of the cash account balances of each department/agency of the national government with AGDBs and other institutions (both local and foreign) as reflected in the Annual Financial Report as of December 31, 2010.

5.2 DOF, through BTr, shall provide the Department Secretaries a copy of the report cited under Section 5.1 above covering agencies/bureaus/offices under their jurisdiction. These cash account balances shall be the reference point in preparing the report required under Section 1 of the

5.3 Agencies shall include any cash account balances not included in the COA report for the preparation of the report required under

5.4 BTr shall submit a report to the Permanent Committee highlighting its findings relative to the following:

5.4.1 If the cash account balances are maintained in AGDBs.

5.4.2 The legal basis for the maintenance of the cash accounts balances outside of the Bureau of Treasury.

5.5 Permanent Committee shall:

5.5.1. Require the immediate transfer to the National Treasury of the cash balances of unauthorized accounts as defined in Item 3.3 maintained with AGDBs and other banks. For those bank accounts which are authorized under existing laws including dormant accounts as defined under Item 3.2, the Permanent Committee shall evaluate their legal bases to determine if their continuing existence is still necessary and make a recommendation to the President for the purpose. cEITCA

5.5.2. Request the agency head for further inspection of its books of accounts, if found necessary.

5.6 COA shall prescribe the necessary accounting entries and supporting documents for the transfer of the cash balances of unauthorized accounts to the National Treasury.

5.7 Agencies, upon the directive/instruction of the Permanent Committee, shall immediately effect the closure of the cash balances of their unauthorized accounts and transfer the same to the National Treasury. They shall prepare the adjusting entries as maybe prescribed by COA under Item 5.6. If there are accounts which will affect the books of the National Treasury, they shall furnish the BTr with the Journal Voucher pertaining thereto.

SECTION 6.0. Responsibilities of Departments, Bureaus and Agencies of the National Government.

The heads of departments, bureaus and agencies of the National Government shall have the following responsibilities:

6.1 Cooperate, open their books of account and assist the Permanent Committee and its authorized representatives in the conduct of inspection and review of their cash balances; and

6.2 Provide the Permanent Committee with the required information and instruct their officials concerned to effect the smooth and efficient transfer to the National Treasury of the cash balances of unauthorized accounts.

SECTION 7.0. Monitoring of Compliance.

The COA shall monitor compliance of the guidelines stated above and shall report to the Permanent Committee.

SECTION 8.0. Administrative Sanction.

Heads of the departments, bureaus and all other agencies of the National Government along with the Permanent Committee shall ensure the strict implementation of CHATcE

SECTION 9.0. Repealing Clause.

All circulars, memoranda and other issuances or parts thereof which are inconsistent with the provisions of this issuance are hereby rescinded/repealed/modified accordingly.

SECTION 10.0. Effectivity.

These Rules shall take effect immediately.

(SGD.) CESAR V. PURISIMA
Secretary of Finance
Chairman Permanent Committee

(SGD.) FLORENCIO B. ABAD
Secretary of Budget and Management
Member

(SGD.) MA. GRACIA M. PULIDO-TAN
Chairperson, Commission on Audit
Member