Supplemental Guidelines on Revised Omnibus Regulations Governing the Fidelity Bonding of Accountable Public Officers

May 30, 2022 BTr TREASURY CIRCULAR NO. 1-2022 TO : All Heads of Departments, Bureaus and Offices of National Government Agencies and Local Government Units, Government Owned or Controlled Corporations, State Universities and Colleges, State Auditors, and All Others Concerned SUBJECT : Supplemental Guidelines on the Revised Omnibus Regulations Governing the Fidelity Bonding of Accountable Public Officers (Sections 313-335, Chapter 15, Revised Admi nistrative Co de of 1917) 1.0 BASIS This Treasury Circular is issued pursuant to Sections 313-335, Chapter 15, otherwise known as the Public Bonding Law, under the Revised Administrative Code of 1917, Executive Order (E.O.) No. 449, s. 1997 (Realigning the Organization of the Bureau of the Treasury) in relation to Government Auditing Code of the Philippines (Presidential Decree No. 1445), Chapter IX Book V of the Administrative Code of 1987 (E.O. No. 292, s. 1987), and the Local Government Code of 1991 (Republic Act (R.A.) No. 7160), SK Reform Act of 2015 (R.A. No. 10742), Anti-Red Tape Law (R.A. No. 9485), and Ease of Doing Business Act of 2018 (R.A. No. 11032). HTcADC 2.0 PURPOSE 1. This Treasury Circular (TC) supplements and revises certain provisions of TC No. 02-2019 dated 25 April 2019 and previous issuances pertaining to regulations promulgated for the effective bonding of accountable public officers pursuant to the provisions of the Public Bonding Law and to address other issues on fidelity bonding application/cancellation; 2. To streamline documentary requirements and re-engineer fidelity bonding procedures in compliance with the Anti-Red Tape Law (R.A. No. 9485) and in relation to the Civil Service Commission (CSC) Memorandum Circular No. 14, s. 2016; 3. To repeal Treasury Circular Nos. 01-2020 and 01-2021; 4. To provide enumeration of officers authorized to administer oath pursuant to Republic Act (R.A.) No. 10755; and 5. To prescribe the appeal fee payment form and provide the account name and account number for the deposit and payment of the appeal fee as a condition precedent to the final resolution of appeals related to the approval and/or disapproval of Fidelity Bonding application of bonded/accountable public officers through the Public Bonding Appeals Committee (PBAC) per TC No. 04-2021. CAIHTE 3.0 GENERAL PROVISIONS To efficiently and effectively implement the Public Bonding Law, the following general provisions of TC No. 02-2019 and related issuances are hereby further amended as follows: 3.1 Additional Sub-section in 4.1 of Treasury Circular No. 02-2019 is inserted to read as follows: "4.1.7 Public officers designated as Property Officers, Supply Officers, Disbursing Officers, Collecting Officers and Cashiers." 3.2 Section 4.7 of Treasury Circular No. 02-2019 is amended to read as follows: "4.7 Effectivity of Bond The fidelity bond of an accountable public officer whose application for bond has not been contested shall be valid and effective upon: 4.7.1 Over-the-Counter payment 4.7.1.1 For new application, the effectivity of bond shall commence on the date of payment of bond premium. 4.7.1.2 For renewal, if premium is paid one (1) month in advance, the effectivity date shall commence on the date of cancellation of previous year's/years' bond; or if premium is paid after the lapsing or automatic cancellation of previous year's/years' bond, the effectivity date of the bond renewed shall be on the date of payment of bond premium. 4.7.1.3 Bond applicants are enjoined to pay the premium immediately within the month of the issuance of the ATAP for accounting purposes. 4.7.2 Online/Electronic payment 4.7.2.1 The effectivity of the bond shall commence on the date indicated in the CL after evaluation of the submitted documents as to correctness and completeness. For advance payments in case of renewal, the effectivity shall be upon the maturity of existing fidelity bond. 4.7.3 Submission of Proof of Payment 4.7.3.1 The accountable public officer shall submit to the BTr DO/PO a copy of the AGDB validated deposit slip/LDDAP-ADA and ATAP or proof of online payment to evidence the payment of bond premium." 3.3 Provisions of Treasury Circular No. 01-2020 are hereby repealed and Section 4.8 of Treasury Circular No. 02-2019 is hereby reworded and amended to read as follows: aScITE "4.8 Effect of Approved Bond An approved fidelity bond shall be non-transferable and personal to the accountable public officer and shall remain valid and effective for a period of one (1) year, two (2) years or three (3) years at the option of the accountable public officer from the date of over-the-counter payment or approval date of CL for online payments. The fidelity bond shall be subject to renewal, before or 30 days prior to the expiration of the present bond coverage while the accountable public officer is holding such position for which he/she was bonded. Failure to renew shall consider such bond as automatically cancelled and shall have no legal effect." 3.4 Additional Sub-section in Section 5 of Treasury Circular No. 02-2019 is inserted to read as follows: "5.1.3 Accountable public officers in the NGAs, GOCCs, and LGUs supervising multiple stations in concurrent capacity shall be bonded separately. The basis of accountability and the issuance of risk number is per station." 3.5 Section 7.1.1 of Treasury Circular No. 02-2019 is amended to read as follows: "7.1.1 The applicant shall accomplish the Fidelity Bond Application Form (FBAF) (Attachment 4: Annex D FBAF) through Online Fidelity Bonding System (OFBS). The FBAF shall be subscribed and sworn to before any officer authorized to administer oath, attaching therewith two (2) passport size identification pictures taken within the last three (3) months prior to the date of application. "Officers Authorized to Administer Oath. The following officers have general authority to administer oaths: President; Vice President; Members and Secretaries of both Houses of Congress; Members of the Judiciary; Secretaries of Departments; provincial governs and lieutenant-governors; city mayors; municipal mayors, bureau directors, regional directors, clerks of courts, registrars of deeds, other civilian officers in the public service of the government of the Philippines whose appointments are vested in the President and are subject to confirmation by the Commission on Appointments; all other constitutional officers; and notaries public. The punong barangay is authorized to administer the oath of office of any government official including the President of the Philippines." (R.A. No. 10755) Provided, that the BTr DO/PO shall not process the fidelity bond application and renewal of accountable public officers if the signatories for the applicant portion and administering officer portion are one and the same. DETACa 3.6 Item Nos. 13 (a) and 13 (b) of the Fidelity Bond Application Form (FBAF) under Sub-section 7.1.1 of TC No. 02-2019 which prescribes the use of FBAF shown as Form 3 Annex D is hereby amended to read as follows: TC No. 02-2019 Amendment Item No. 13. a. Have you ever been found guilty of any administrative offense? Item No. 13. a. Have you ever been charged of any administrative and/or criminal offense? Item No. 13. b. Have you ever been found guilty of any criminal case? Item No. 13. b. Have you ever been found guilty of any administrative and/or criminal case before any administrative body, tribunal, or court? For the revised FBAF see Attachment 1 and for the revised List of Bonded Accountable Public Officers see Attachment 2. 3.7 Provisions of Treasury Circular No. 01-2021 and Sub-section 7.1.1.2 (d) of Treasury Circular No. 02-2019 are hereby repealed and Sub-section 7.1.1.1 of TC No. 02-2019 is amended to read as follows: "7.1.1.1 List of Bonded Accountable Officer/s, to be generated from the Online Fidelity Bonding System (OFBS) certified by the agency head or his/her authorized representative or officer in charge of Administrative and/or Finance Department, Service Division or unit (Form 4: Annex E). The following are additional requirements for Barangay and SK Officials: 7.1.1.1.1 Approved Annual Budget and Barangay Appropriation Ordinance (Annual Barangay Youth Investment Program (ABYIP) in lieu of Ordinance); 7.1.1.1.2 Annual Inventory of Plant, Property, and Equipment and/or Annual Post-Closing Trial Balance with stamp received by COA; 7.1.1.1.3 Current monthly Inventory of Supply and Materials at the time of application; and, 7.1.1.1.4 LGU applicants who are not included in the List of LGU incumbent officials with BTr DO/PO shall secure any of the following documents: HEITAD 7.1.1.1.4.1 Certificate of Incumbency from the Department of Interior and Local Government (DILG) in their respective Regions; 7.1.1.1.4.2 Oath of Office by Barangay/SK Chairperson; 7.1.1.1.4.3 Duly notarized Resolution for Appointment of Barangay/SK Treasurer." 3.8 Sub-section 7.1.8.3 of TC No. 02-2019 is amended to read as follows: "7.1.8.3 Any valid and legal reasons for which shall render the accountable public officer an unsafe risk and of unquestionable integrity to hold public funds, properties or accountable forms, which shall be supported by proper documents. The person contesting the application should inform the BTr DO/PO concerned through a formal letter addressed to the CTOO II/OIC/ICO citing the reasons and attaching all supporting documents. Any contest not made within the prescribed period shall not be entertained by the BTr DO/PO concerned." 3.9 Sub-sections 7.3.1 and 7.3.2 of TC No. 02-2019 are amended to read as follows: "7.3.1 The Head of Agency or his/her authorized representative shall immediately inform or notify the BTr DO/PO concerned on the bond cancellation undertaken through the Online Fidelity Bonding System involving accountable public officers who are no longer accountable by reason of retirement, separation from the service, promotion, transfer, suspension from office or for any other cause rendering them not bondable to their present position." "7.3.2 The CTOO II/OIC/ICO shall approve the request for bond cancellation and issue the corresponding CL. Likewise, the CTOO II/OIC/ICO shall immediately cancel the previously approved bond of an applicant if there is failure to declare or an intentional non-declaration of pending cases that resulted to a favorable evaluation and approval of such application. Intentional non-declaration of pending cases constitutes a dishonest act and thus, shall render the applicant an unsafe risk." 3.10 Section 8.5 of Treasury Circular No. 02-2019 is amended and re-numbered to read as follows: aDSIHc "9.5 Requirements for Payment of Adjudicated Claim The agency shall file a claim for payment from the Fidelity Fund with the BTr addressed to the Treasurer of the Philippines, attaching therewith the favorable findings of COA. The BTr shall process the claim in accordance with existing budgeting, accounting and auditing rules and regulations." 4.0 SUPPLEMENTAL PROVISIONS 4.1 Determination of Accountability and Amount of Bond Premium The amount of bond shall be based on the following accountabilities, provided, the total maximum amount of bond of each accountable officer shall not exceed Eleven Million Pesos (P11.0M): 4.1.1 Cash. This refers to money in its physical form, either on hand or in bank and shall be limited to nationally accepted currencies and legal tender (paper bills and coins), money orders, marketable securities, authority to debit account (ADA) and checks with face value. It may also include overdraft facility or line of credit. 4.1.1.1 National Collecting Officer (NCO). The accountability shall be based on the highest amount collected in a given day in the preceding year, which is the possible amount of accountability of the NCO exposed to risk. 4.1.1.2 Disbursing Officer (DO). The accountability shall be based on the highest amount held in custody and disbursed in the preceding year, which is the possible amount of accountability of the DO exposed to risk in a given day. Only permanently appointed officials shall be designated as disbursing officers, except for officers and employees who are given cash advances for official travel. (COA Circular 97-002, Item 4.1.4-5) 4.1.1.3 Special Disbursing Officer (SDO). The accountability shall be based on the amount of cash advance released for a given project or activity, which is the possible amount of accountability of the SDO exposed to risk. 4.1.2 Investments. These comprise investments in government securities or debt instruments or products issued or offered by the government in the form of Treasury bills, bonds, and notes, including stock certificates, placements in time deposits and high yield accounts and other forms of marketable investments. The accountability of the Investment Officer or any officer tasked to perform investment activities shall be based on the amount of outstanding investments of the preceding year. ATICcS 4.1.3 Plant, Property and Equipment . These are non-current assets which is expected to be used more than one accounting cycle/reporting period: machinery, equipment, vehicles, furniture and fixtures (excluding land and building) which shall be taken up at Net Book Value. Equipment or vehicles that are covered with other insurance shall also be included in the basis for the computation of accountability. These may also include gold and silver bullions. The total accountability of the accountable public officer is the net book value of such accountabilities as of assumption of position for new applicant/s or the current net book value for renewal applicant/s. 4.1.4 Inventories . These are goods/supplies and materials classified as current assets, expendable/semi-expendable and are held for consumption, distribution and/or for sale and shall be taken up at acquisition cost. 4.1.5 Accountable forms . These are documents that acknowledge the receipt of money or issued for value that uses a sequential number or a pre-numbered form such as Official Receipts, Invoices, and Purchase Orders including internal revenue stamp, postage and other standard stamp stock as well as checks without face value. The form shall be recorded/taken up at purchase/production cost. For the sample computation see Attachment 3. 4.2 Non-access to the OFBS. In cases where there is technical difficulty in accessing the OFBS or the system is down and in other exceptional cases, the BTr shall announce a business continuity measure including manual processing of fidelity bonding applications. 4.3 Responsibility of Authorized Government Servicing Banks (AGSBs) 4.3.1 The AGSBs shall require the transacting agency to submit the CL as part of the exercise of due diligence and to prevent the unauthorized disbursement of government funds. 4.3.2 The AGSBs shall require the presentation of ATAP for payment of bond premium. 4.4 Payment of Appeal Fee. In cases of appeal, an appellant or a party with interest to the Fidelity Bonding application shall accomplish the Appeal Fee payment form and pay the amount of One Thousand Pesos (Php1,000.00) to be deposited/credited to the account of the Treasurer of the Philippines with the following details: Account Name BTr Regular Fund Account Number 3402-2844-20 For the Appeal Fee payment form see Attachment 4. ETHIDa 5.0 REPEALING CLAUSE All Circulars, Orders and/or Memoranda inconsistent herewith are hereby repealed and/or modified accordingly. 6.0 EFFECTIVITY This Circular shall take effect immediately. (SGD.) ROSALIA V. DE LEON Treasurer of the Philippines ATTACHMENT 1 Fidelity Bond Application Form ATTACHMENT 2 List of Bonded Accountable Public Officer/s ATTACHMENT 3 Sample Computation-Bond Premium For NGAs and GOCCs: Example 1 : Cash Accountability (Disbursing, Collecting and Signing Officer) A Public Officer was designated as Special Disbursing Officer with authority to hold cash advance in the total amount of P750,000.00 to defray expenses from June 2021 to May 2022. Amount of Accountability : P750,000.00 Amount of Bond : P350,250.00* Bond Premium (P350,250.00 x 1.5%) : P5,253.75 Example 2 : Property Accountability (Property, Supplies Custodian) In line with the Policy Guidelines on Procurement, Property and Inventory Management, a Public Officer was designated as property officer effective January 24, 2022. As such, she shall be in charge of the overall accounting, Safekeeping and maintenance of the properties of the company. With accountability as follows: TIADCc Supplies and Materials: P750,000.00 Equipment: P5,000,000.00 Amount of Bond Supplies and Materials - (750,000.00 x 50%) = P375,000.00 Equipment - (5,000,000.00 x 30%) = 1,500,000.00 Total P1,875,000.00 Bond Premium (P1,875,000.00 x 1.5%) = P28,125.00 =========== Example 3 : Cash Accountability and Property Accountability A Public Officer was designated as Collecting Officer and Property Custodian. With Accountability as follows: Cash Accountability : P500,000,000.00 Supplies and Materials : 2,400,000.00 (if total accountability exceeds the maximum amount of bond, the Head of Agency may assign to other accountable officers the excess accountability for which a separate Fidelity Bond shall be secured. Otherwise, the said excess accountability will not be covered.) Equipment : 10,000,000.00 Amount of Bond Cash Accountability - P8,000,000.00* Supplies and materials - (2,400,000.00 x 50%) = 1,200,000.00 Equipment - (6,000,000.00 x 30%) = 1,800,000.00 Total P11,000,000.00 Bond Premium (P11,000,000.00 x 1.5%) = P165,000.00 ============= For LGUs Barangay Chairman Annual Budget : (P32,827,320.00 x 90%)** = P29,544,588.00 Property/Inventory : 6,575,680.99 Amount of Bond Cash Accountability - (P29,544,588.00/12mos) = P2,462,049.00 P750,000.00* Property/Inventory - (P6,575,680.99 x 30%) rounded off to the nearest hundred = 1,972,700.00 Barangay Treasurer Amount of Bond P10,000.00*** Total P2,732,700.00 Bond Premium (P 2,732,700.00 x 1.5%) = P40,990.50 =========== Barangay Treasurer with KALAHI (with separate computation and Risk Number) Amount of Bond Cash Accountability - P15,000,000.00 P3,500,000.00* Bond Premium (P3,500,000.00 x 1.5%) = P52,500.00 =========== SK Chairman and Treasurer Annual Budget: (P32,827,320.00 x 10%)** = P3,282,732.00 Amount of Bond Cash Accountability (P3,282,732.00/12mos) = P273,561.00 per table P225,000.00 Bond Premium (P225,000.00 x 1.5%) x 2 persons** = P6,750.00 ========= Note: * The amount of Bond shall correspond to the bracket/range wherein the cash accountability fall under the revised schedule. cSEDTC ** One twelfth of the Approved Annual Budget of the Barangay shall be the basis of the Cash Accountability, whereby 90% shall be for the Barangay Chairman and 10% shall be for the SK Chairman and SK Treasurer. *** Per Local Government Code of 1991 the maximum accountability of Barangay Treasurer is P10,000.00 (RA No. 7160). The OFBS generates a unique risk number for each accountable public officers with approved fidelity bond application. The system-generated risk number corresponds to the region and district/provincial area code, calendar year, number of approved bonds and suffix (N) for new applicants and (R) for renewal. For fidelity bond renewal, a new risk number will be generated through OFBS, and the old risk number will be automatically cancelled. Example: For District Offices 13D1-2022-00001N or 13D1-2022-00002R Where: 13 stands for NCR D1 stands for District 1 2022 Calendar Year 00001N 1st application in the year-new application 00002R 2nd application but renewal For Provincial Offices 0421-2022-00001N or 0421-2022-00002R Where: 04 stands for Region IVA 21 stands for area code for Cavite 2022 Calendar Year 00001N 1st application in the year-new application 00002R 2nd application but renewal ATTACHMENT 4 Authority to Accept Payment