Statement of Functions of the Financial Service including the Divisions under It Down to Section Level

April 6, 1988 REVENUE ADMINISTRATIVE ORDER NO. 10-88 SUBJECT : Statement of Functions of the Financial Service including the Divisions under It Down to Section Level TO : All Internal Revenue Officers and Others Concerned I. Objectives : This Order aims to state the organization and functions of the Financial Service in accordance with the Bureau's reorganization under Executive Order 127. It further and specifically intends to formally transfer the Public Information and Assistance Division from the Financial Service to the Planning and Research Service; the PO/CR Monitoring Unit of the Collection Service which was elevated into a Division to the Financial Service; and the Statistical Analysis Division from the Planning and Research Service to the Financial Service. II. Organization : To attain these objectives, the Financial Service shall have the following Divisions and respective Sections: A. Budget Division 1. Central Office Budget Section 2. Budget Control Section 3. Regional Budget Section B. Revenue Accounting Division 1. Processing Section 2. Accountabilities Section 3. Tax Refund/Credit Verification and Allotment Section 4. Revenue Bookkeeping and Reconciliation Section C. Disbursement Accounting Division 1. Expense Control Section 2. Processing Section 3. Bookkeeping and Reconciliation Section D. PO/CR Monitoring Division 1. Receiving Section, CB Complex 2. Document Processing and Monitoring Section 3. Control Ledgers Section E. Statistical Analysis Division 1. Processing and Analysis Section 2. Statistical Research and Report Development Section 3. Revenue Forecasting and Evaluation Section III. Functions : The Financial Service shall have the following functions: 1. Perform staff, advisory and consultative functions relative to budgeting, financial control, revenue accounting, payments (PO/CR) monitoring, and statistical analysis; 2. Formulate and recommend policies and programs, set up guidelines, standards and procedures for financial services; 3. Review and evaluate activities of field offices for adherence to policies, procedures and standards; 4. Exercise technical supervision over field offices on financial matters; 5. Analyze tax and other data provided by the different offices/units in the Central and Regional Offices for use of top management and other agencies; 6. Recommend necessary tax legislations and regulations based on its own operations and experiences which shall serve as inputs to the tax planning and research efforts of the Planning and Research Service; and 7. Perform such other related functions as may be assigned to it. acd A. Budget Division 1. Develop, formulate and recommend policies and work programs and set up standards, guidelines, methods and procedures relative to the preparation, execution and control of the budget of the Bureau; 2. Schedule and coordinate the various steps of the budget process in the Bureau to meet prescribed time schedules and deadlines; 3. Prepare annual, supplemental, special and deficiency budgets of the Bureau in accordance with the prescribed guidelines; 4. Assist management in the presentation of BIR budgetary estimates before the Department of Budget and Management (DBM) and other governmental bodies; acd 5. Represent the BIR on routine budget meetings with the DBM and the Department of Finance; 6. Prepare annual work and financial plans and modifications thereof, whenever necessary; 7. Prepare budget and financial reports for management guidance and as required by higher authorities of other governmental bodies; 8. Maintain awareness of all developments affecting budgetary matters; 9. Allocate available funds to programs, sub-programs and activities on the basis of approved guidelines and priorities; 10. Provide fund support to the operations, plans and programs of the Bureau subject to budgetary ceilings; acd 11. Provide consultation and technical assistance to budget units in the regional offices and various organizational units of the Bureau on matters relative to budgeting; and 12. Perform such other related functions as may be assigned to it. A-1 Central Office Budget Section a) Plan and develop methods and procedures on budget preparation and accountability; b) Determine and analyze problems on budget preparation and accountability and recommend solutions thereto; c) Develop guidelines and instructions in the preparation of annual budget estimates indicating the materials to be prepared, the forms to be used and manner of submission; d) Monitor the preparation of budget estimates in the Central Office and ascertain problem areas and give assistance whenever necessary; e) Analyze, review and evaluate for completeness and conformity to instructions, budget proposals submitted including justification; f) Assist in budget hearings conducted by the Financial Service; g) Consolidate the budget proposals of various services, divisions and regional offices into one bureau budget proposal; securing basic materials from operating personnel; h) Prepare justifications and documents to accompany budget estimates including those needed in consultation meetings and hearings in the DBM and Congress; i) Prepare supplemental, special and deficiency budgets whenever necessary; j) Prepare original and modifications of work and financial plans and request for changes in program and sub-program structures of the Bureau; k) Prepare requests for issuance of funding warrants and allotment for retirement gratuities, terminal leave and prior year's obligations; l) Prepare consolidated Physical Reports of Operations and status report on allotments and obligations as required by the DBM and Bureau officials; m) Keep and maintain records of communications regarding budget operations of the Bureau; and n) Perform such other related functions as may be assigned to it. A-2 Budget Control Section a) Plan and develop methods and procedures on budget execution; b) Prepare operating budget for each division, service and regional office such that workload to be performed and authorized manpower for Bureau programs and sub-programs are realigned to amounts allotted; c) Obligate allotments for all anticipated and actual expenditures of the Bureau; d) Review fiscal documents and accounts relating to expenditures of the Bureau; e) Keep and maintain control of appropriations, allotments and obligations of the Central Office and regional offices by program and sub-program and by expense objects, effecting through such controls, changes and adjustments in current work and financial plans; f) Compile and analyze data on obligations incurred by the Central office for possible transfer of reallotment of funds and for purposes as may be needed by management; and g) Perform such other related functions as may be assigned to it. A-3 Regional Budget Section a) Coordinate, advise and provide technical assistance to regional offices on budgetary matters; b) Monitor the preparation and submission of regional budget estimates, budget accountability reports and dissemination of budget instructions and circulars; c) Prepare and issue sub-notice of obligation ceiling to regional offices; d) Prepare and issue sub-allotment advice and Request for Obligation of Allotment (ROA) covering the financial requirements for each authorized program or sub-program to each regional office; e) Monitor and collate quarterly reports of regional offices on obligations, work performance and manpower used and initiate or suggest remedial action on sign significant problems and constraints reported; f) Assist in the conduct of regional budget hearings; g) Process, analyze and collate budget proposals of regional offices and submit recommendations; h) Process and analyze programming of funds and monthly status of funds; i) Estimate funding requirements of regional offices, including amounts needed for payment of prior year's obligations to serve as basis for request of monthly issuance of funding warrant with DBM; and j) Perform such other related functions as may be assigned to it. B. Revenue Accounting Division 1. Develop, formulate and recommend policies and work programs and set up standards, guidelines and procedures relative to the accounting of all incomes and revenues realized by the Bureau; cd 2. Design, develop and implement micro-computer-based applications for collection and revenue accounting operation systems; 3. Maintain accounting control for internal revenue collections and allotments to other agencies; 4. Maintain subsidiary ledgers to control the individual accountabilities of collecting officers on tax collections; 5. Determine internal revenue allotments and shares of certain government agencies in special funds and make reports and certification thereof; 6. Process all approved tax refund claims for individuals and corporations with overpayments, erroneous payments, tax credits and replenishments of petroleum products consumed by tax-exempt entities, informer's reward claims and certify that the payments thereof have been actually remitted to the Bureau and not dishonored, if paid in checks; acd 7. Evaluate revenue accounting activities in the field offices to determine adherence to guidelines and procedures; 8. Determine and analyze revenue accounting problems and recommend solutions thereto; 9. Prepare and submit financial reports to management and other government agencies as required by law and regulations; 10. Coordinate with other units of the Bureau on matters pertaining to internal revenue collections; 11. Coordinate with the PO/CR Monitoring Division regarding all reports of internal revenue taxes collected through the banking system; 12. Confirm and certify to the correctness of payment and other information verified from accounting records and documents; aisa dc 13. Act as custodian of all revenue accounting documents and records; 14. Prepare certified copies of documents requested by taxpayers from duly authorized officials of the Bureau; and 15. Perform such other related functions as may be assigned to it. B-1 Processing Section a) Control and process collection reports covered by the direct payment system (ROR) including collections from abroad and payments through authorized agent-banks; b) Generate and analyze computer reports and outputs on collections through agent-banks, collection agents and accountable officers; c) Prepare summary reports on payment through agent-banks by type of tax, deposits of collections and adjustments including advice for journal vouchers/entries needed as bases for entry into journals and ledgers; d) Act as liaison with the authorized agent-banks, Central Bank, Department of Foreign Affairs, collection agents, and other accountable officers; e) Prepare summary reports of dishonored checks paid to agent-banks by type of tax; f) Communicate with the Collection Service, accredited agent-banks, collection agents and accountable officers regarding the non-submission of collection reports and other deficiencies; g) Compute for penalties incurred by authorized agent-banks for delayed submission of reports and remittances; h) Prepare collection reports for submission to management, Central Bank and Treasury as required under existing laws and regulations; and i) Perform such other related functions as may be assigned to it. B-2 Accountabilities Section a) Maintain accurate and updated subsidiary ledgers of all collection agents including Municipal Treasurers acting as Collection Agents, Revenue Attaches/Representatives Finance Officers, Accountable Forms Division Chief, Administrative Branch Chiefs, District Collection Supervisors, Accountable Forms Custodians, and other accountable officers; b) Reconcile, review, verify, and analyze entries in the subsidiary ledgers of officers and employees mentioned above for the purpose of issuing national clearance; c) Communicate with officers/employees concerned for the submission of the required reports and documents pertaining to clearances; d) Maintain and keep accurate subsidiary ledgers of all accredited banks' head offices and branches; and e) Perform such other related functions as may be assigned to it. B-3 Tax Refund/Credit Verification and Allotment Section a) Prepare advice for journal vouchers/entries as basis for entry into journals and ledgers; b) Prepare certification of monthly and annual BIR allotments, special funds and special accounts for transmittal to pertinent government agencies; c) Process all dockets of approved tax refunds and tax credits referred to the Division; d) Notify taxpayers to submit required documents relative to their claim for tax refunds; e) Verify and prepare Certificate of Taxes Paid by the taxpayers; and f) Perform such other related functions as may be assigned to it. cd B-4 Revenue Bookkeeping and Reconciliation Section a) Maintain revenue accounting records and books of accounts (journals, general and subsidiary ledgers) to reflect accurate and current financial information required by management, government agencies and existing accounting and auditing rules and regulations; b) Reconcile the Treasury/Agency accounts current of the Bureau; c) Analyze transactions and accounts in the revenue accounting books; d) Prepare monthly and annual trial balances, financial statements and supporting reports and schedules required by fiscal agencies and authorities concerned; e) Maintain a record of dishonored checks paid through the accredited agent-banks and through the collection agents and the redemption/settlement of the same; and f) Perform such other related functions as may be assigned to it. aisa dc C. Disbursement Accounting Division 1. Develop, formulate and recommend policies and work programs and set up standards, guidelines and procedures on the accounting of appropriation and disbursements incurred by the Bureau; 2. Process and review disbursement vouchers and payrolls in compliance with accounting and auditing rules and regulations; 3. Remit payments of salary deductions and withholding taxes to the proper entities concerned; 4. Prepare adjustments in the payroll of BIR personnel for computerization purposes; 5. Maintain books of accounts to reflect accurate and current financial information; 6. Issue and control Certification of Availability of Funds (CAF) as required by auditing regulations; 7. Prepare financial and other statements required by fiscal authorities; 8. Issue certification of payments to the Medicare, GSIS, NHMFC (Pag-ibig), etc., requested by employees; 9. Act as custodian of all accounting documents and records related to disbursement; 10. Prepare certified copies of documents requested by duly authorized officials of the Bureau; and 11. Perform such other related functions as may be assigned to it. C-1 Expense Control Section a) Maintain updated balances of Requests for Obligation of Allotment (ROA); b) Monitor all disbursements of the Bureau e.g. salaries, benefits, tax refund payments and other sundry expenses; cdt c) Keep and maintain subsidiary ledgers of all salary deductions, cash advances and uncomplied travel; d) Prepare lists of prior year's claims to support request for issuance of funding warrants pursuant to the new disbursement system; e) Prepare and submit schedule unliquidated obligations, cash advances and trust deposits; f) Process application for clearance of Disbursing Officers and other Bureau employees; g) Prepare a record of aging accounts payable; h) Review report of checks issued and reports of disbursing officers in the National Office and Revenue Regional Offices and post them against corresponding ROAs; i) Request for fund transfers to Revenue Regional Offices and advise all Revenue Regions of such transfers; and j) Perform such other related functions as may be assigned to it. cd i C-2 Processing Section a) Process, review and settle the following claims for compliance with accounting and auditing rules and regulations; a-1) salaries, travel expenses, leaves of absence and benefits of employees; a-2) Fiscal Agency Service (FAS) of revenue officials going abroad on official mission; a-3) those of private and government creditors; a-4) tax refunds on excess withholding taxes on wages, overpayments, erroneous payments, check replacements of lots or stale warrants, conversion of tax credit to cash refunds and payments of informer's reward claims; b) Process all types of salary deductions; c) Transmit to offices concerned suspended claims for compliance with audit requirements; aisa dc d) Process applications for national office clearance of revenue officials and employees for retirement, leave of absence of thirty (30) days or more, transfer, separation and other similar purposes; e) Prepare and transmit to RCC all changes in the payroll involving amounts of salary, salary deductions, transfer, and inclusion of newly-appointed personnel; f) Remit payments of deductions and withholding taxes to proper entities concerned; g) Issue certifications of deductions for loan applications of Bureau personnel with the GSIS, NHMFC (Pag-ibig) and other government and private agencies; and h) Perform such other related functions as may be assigned to it. C-3 Bookkeeping and Reconciliation Section a) Maintain accounting records and books of accounts (journal, general and subsidiary ledgers) to reflect accurate and current financial transaction required by management and existing accounting and auditing rules and regulations; cd b) Reconcile current accounts maintained with Land Bank of the Philippines (LBP); c) Prepare certifications of availability of funds; d) Reconcile the Treasury/Agency accounts current of the Bureau; e) Analyze and reflect journal adjustments in the books of accounts; f) Prepare financial statements and other periodic reports required by fiscal agencies and authorities concerned; and g) Perform such other related functions as may be assigned to it. D. PO/CR Monitoring Division 1. Formulate plans, standards, procedures and policies in consultation with the Central Bank of the Philippines for an effective, secure and economical method of accepting payments of internal revenue taxes through Accredited Banks (ABs); 2. Perform liaison activities with head offices of ABs; 3. Set up control registers showing the distribution of Confirmation Receipts given to ABs; 4. Account for every Confirmation Receipt (CR) received and issued as reflected in the reports submitted; cdt 5. Prepare or initiate action for the consideration of proper authorities to enforce compliance with the system, standard procedures and policies setforth under Executive Order No. 937 as implemented by Revenue Regulation No. 5-84 and other applicable issuances; 6. Check delayed reports of collections by maintaining a general control ledger; 7. Transmit to the Revenue Computer Center (RCC) copies of CRs with the respective Payment Order (PO) issued to taxpayer after the same were posted in the Control Register maintained by the Division; 8. Prepare and submit collection reports needed by top management; 9. Prepare agreement form on contract with accredited agent-banks authorized to accept tax payments; and 10. Perform such other related functions as may be assigned to it. D-1 Receiving Section, CB Complex a) Receive daily at the CB Complex the reports (with attached duplicate copy of PO/CR of the Head Offices of Accredited Banks; aisa dc b) Determine reports which are received after due date; c) Reconcile reports received (BIR Form 12.56, Consolidated Report of Daily Collection of Internal Revenue Taxes and BIR Form 12.57, Consolidated Abstract of Collection of Internal Revenue Taxes) with those received by the Accounting Department of the Central Bank and by the Bureau of Treasury; d) Transmit to the Document Processing and Monitoring Section of the PO/CR Monitoring Division at the National Office reports received from the head offices of ABs; e) Relay or transmit collection reports and other information and/or instructions to the representative of ABs; and f) Perform such other related functions as may be assigned to it. D-2 Document Processing and Monitoring Section a) Maintain CR Control Registers to account for each Confirmation Receipt issued to taxpayers as well as those returned by ABs; cd b) Check missing CRs and POs against the report made under BIR Form 12.56; c) Account and/or determine which distributed CRs to the ABs had remained unissued for more than six (6) months and recommend necessary action thereto; d) Prepare action documents requiring ABs to correct discrepancies discovered from reports submitted; e) Recommend penalties for the delayed submission of reports; f) Answer queries pertaining to and/or ascertaining the authenticity of CRs; g) Coordinate with different sections regarding reports on delayed or partial/incomplete collection reports and on discrepancies in the processing/auditing of CRs; h) Act as liaison between the BIR and the ABs to thresh out problems on compliance and discrepancies; cd i) Prepare transmittal of processed CRs to the Revenue Computer Center (RCC); and j) Perform such other related functions as may be assigned to it. D-3 Control Ledgers Section a) Maintain an individual subsidiary control ledger for each AB as reported under BIR Form 12.55 and BIR Form 12.57; b) Ascertain the number of days each daily collection report is delayed and the number of partial reports made daily; c) Prepare notices to ABs for delays and/or for partial/incomplete submission of collection reports; d) Monitor/process reports of head offices of ABs on their distribution of CRs to their respective branches and extension offices; and e) Perform such other related functions as may be assigned to it. E. Statistical Analysis Division 1. Develop and prescribe the nature and content of statistical reports and information on revenue administration and operation; 2. Collate, analyze and present relevant statistical data in an organized form for an effective management information system; 3. Supply top management with needed statistical data and information for the formulation of policies, plans and programs; 4. Generate revenue statistics and estimates required by other units of the Bureau and other government agencies; 5. Formulate forecasting methodologies and prepare revenue projections on a short term basis; 6. Allocate the annual revenue goal by organizational unit, geographic sub-division, by type of tax and by month, quarter and semester; 7. Monitor collection performance and prepare corresponding performance ratings of regions and districts; 8. Develop guidelines and techniques for the BIR operating units to understand and utilize statistical information; 9. Undertake researches to improve presentation of revenue collection, analysis, interpretation and utilization of statistical data; 10. Coordinate with National Economic and Development Authority (NEDA), National Census and Statistics Office (NCSO), National Tax Research Center (NTRC), Central Bank (CB), Bureau of Treasury on the reporting, estimation and on studies conducted for the improvement of revenue collection; and 11. Perform such other related functions as may be assigned to it. E-1 Processing and Analysis Section a) Develop and maintain a centralized recording and reporting system on revenue statistics; b) Consolidate, tabulate and analyze data on revenue collections (per RMO 4-88 and per PO/CR reports generated by the Revenue Computer Center) by revenue regions and revenue district offices, by kind of tax and in different organized forms to support the needs of top management; c) Monitor collection performance and prepare semestral and annual performance ratings of revenue regions and districts; cd d) Prepare revenue statistics required by other units of the Bureau and other government agencies; e) Coordinate with the Collection Service, Revenue Computer Center (RCC), Excise Tax Service, and Regional Offices in the preparation of relevant revenue statistics needed by the Bureau; f) Communicate with the Collection Service, Revenue District Offices (RDOs), International Tax Affairs Division (ITAD), and Accounts Receivable/Billing Division (AR/BD) regarding the non-submission of Consolidated Monthly Statistical Report of Revenue Collections (BIR Form 12.09); g) Undertake studies to come up with reliable indicators to measure revenue potentials of Regions and Districts for classification and target all locations; and h) Perform such other related functions as may be assigned to it. cd E-2 Statistical Research and Report Development Section a) Develop and prescribe the nature and content of statistical reports and information relevant to revenue administration and operations; b) Recommend standards and procedures in the proper reporting of revenue data from both National and Regional Offices for statistical purposes; c) Take charge of the reporting of internal revenue collections to the Commissioner of Internal Revenue (CIR), Department of Finance, President and other agencies; d) Coordinate with the Accounting Division, Bureau of Treasury, and Central Bank on the accurate reporting of revenue collections; e) Coordinate with other units of the Bureau for the improvement of reporting collections and other types of data relevant to the needs of top management; f) Provide data, analysis, and illustration materials on revenue collections for the Annual Report; g) Prepare, maintain and update statistical charts and graphs on revenue collections; and h) Perform such other related functions as may be assigned to it. E-3 Revenue Forecasting and Evaluation Section a) Formulate forecasting methodologies and prepare objections on a short term basis; b) Allocate the annual revenue goal by organizational unit, geographic subdivision and by type of tax, by month, by quarter and by semester; c) Generate revenue estimates required by other units of the Bureau and other Agencies of the government; d) Make periodic evaluation of actual revenue collections compared to estimated revenue and analyze observed deviations; e) Coordinate with National Economic and Development Authority (NEDA), National Census and Statistics Office (NCSO), Central Bank (CB) and other agencies to update economic variables affecting internal revenue collections; f) Estimate revenue effects of new tax measures; and g) Perform such other related functions as may be assigned to it. IV. Repealing Clause : This Order supersedes the provisions of Revenue Administrative Order No. 5-84 dated February 22, 1984 insofar as it pertains to the above-mentioned functions and all revenue issuances or portions thereof inconsistent with the provisions of this Order. V. Effectivity : This Order shall take effect immediately. BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue