Delegation of Authority to Sign List of Due and Demandable Accounts Payable (LDAP) — Internal and External Creditors

November 14, 2013 REVENUE DELEGATION AUTHORITY ORDER NO. 007-13 TO : All Revenue Officials and Others Concerned SUBJECT : Delegation of Authority to Sign List of Due and Demandable Accounts Payable (LDAP) Internal and External Creditors In the exigency of the revenue service, the Chief, Accounting Division (AD), Assistant Chief, AD and Chief, Processing Section, AD are hereby designated as signatories to the List of Due and Demandable Accounts Payable External and Internal Creditors (Annex A & B of Department of Budget and Management Circular Letter No. 2005-2 dated January 28, 2005) to support the request for the release of Notice of Cash Allocations as required by the DBM in accordance with Attachment "A" hereto attached. This Order shall take effect immediately. (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ATTACHMENT A Bureau of Internal Revenue Authorized Signatories of Lists of Due and Demandable Accounts Payable Submitted to the DBM Documents Authorized Signatories Alternate Signatories 1. Annex A and B Lists of Due and Demandable Accounts Payable (External and Internal Creditors) a. Certified Correct Above P75,000.00 Assistant Chief Chief, Processing Section Accounting Division Accounting Division P75,000.00 and below Chief, Processing Section Assistant Chief Accounting Division Accounting Division b. Approved Chief, Accounting Division Assistant Chief Accounting Division January 28, 2005 DBM CIRCULAR LETTER NO. 02-05 TO : All Heads of Departments, Agencies/State Universities and Colleges and Other Offices of the National Government, Budget Officers; Heads of Accounting Units; and All Others Concerned SUBJECT : Modified Guidelines for Processing of Payment for Accounts Payable of National Government Agencies 1.0 Purpose 1.1 To expand the coverage of implementation of the revised payment procedure for A/Ps prescribed under Circular Letter (CL) No. 2004-3 (initially adopted for DPWH) to include the following departments/agencies: Department of Education (DepEd); Department of Health (DOH); State Universities and Colleges (SUCs); Commission on Higher Education (CHED); and, Technical Education and Skills Development Authority (TESDA). 1.2 To reiterate, clarify and amend certain provisions of the following issuances of the Department of Budget and Management (DBM) regarding A/Ps: CL No. 2004-2 Re Budgetary Treatment of Commitments/Obligations of the National Government; CL No. 2004-3 Re Revised Procedure for Payment of Accounts Payable of National Government Agencies; and, CL No. 99-2A/2004-3B Additional Guidelines in the Payment of A/Ps (re: Schedule of NCA Releases). 1.3 To prescribed the forms to be used in the implementation of the modified payment procedure for A/Ps. 2.0 Definition of Terms 2.1 The following terms as defined under DBM Circular Letter (CL) No. 2004-3 are hereby reiterated: 2.1.1 Accounts Payable refers to valid and legal obligations/commitments of national government agencies, for which, goods/services/projects have been delivered/rendered/completed and accepted. EHTADa 2.1.2 Advice to Debit Account (ADA) refers to the pre-signed authorization of the agency appearing in the lower portion of the List of Due and Demandable A/P for External Creditors (LDDAP-EC), which serves as instruction to the MDS-GSB to debit a specified amount from its available NCA balance under the special MDS sub account for payment of external creditors thru the Direct Payment System. 2.1.3 Common Fund Scheme refers to the budgetary policy whereby cash allocation released to agencies under the regular MDS sub account may be used to cover payment of current year A/Ps of internal creditors, after satisfying those obligations programmed to be paid during the month as reflected/considered in the Annual Cash Program. 2.1.4 Modified Disbursement Scheme-Government Servicing Bank (MDS-GSB) refers to the government servicing banks such as Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP) and Philippine Veterans Bank (PVB), where the NCA is issued by DBM, for credit to the MDS sub-account of the agency. 2.2 The following terms defined under DBM CL No. 2004-3 are hereby modified: 2.2.1 Direct Payment System refers to the payment procedure for external creditors whereby the MDS-GSB shall, upon receipt of NCA and LDDAP-EC from DBM, pay the creditors included in the LDDAP-EC, not earlier than 24 hours but not later than 48 hours, thru: a. Direct credit to the creditor's current/savings/ATM account (CA/SA/ATM) maintained with the MDS-GSB; or, b. Bank transfer/issuance of a Manager's Check, if creditor's account is maintained outside the agency's MDS-GSB, where, corresponding bank charges shall be borne/paid by the creditor concerned. 2.2.2 Internal Creditor refers to the following: 2.2.2.1 Employees of the department or agency; 2.2.2.2 Utility companies (i.e., supplier of petroleum, oil and lubricants, water, illumination and power services, telephone/telegraph, internet and other communication services, insurance, and rents); 2.2.2.3 Other national government agencies; 2.2.2.4 Government corporations such as Government Service Insurance System, PHILHEALTH, Home Development Mutual Fund and others; 2.2.2.5 Local government units; and, 2.2.2.6 Others, such as: Government scholars; Rights of Way Claimants; Service providers i.e., janitorial security services, contracted services; and, Non-regular suppliers/contractors of the agency, with onetime transaction during the fiscal year costing P10,000 and below. ECaTDc 2.2.3 External Creditor refers to creditors of national government agencies not included in the enumeration under item no. 2.2.2. 3.0 General Guidelines 3.1 Upon effectivity of this Circular, the revised procedure for payment of A/Ps prescribed under CL No. 2004-3, initially adopted for DPWH, shall now be implemented by DepEd, DOH, SUCs, CHED, and TESDA. 3.2 The following budgetary policies provided under DBM CL No. 2004-2 are hereby reiterated: 3.2.1 A/Ps shall be categorized as follows, consistent with the New Government Accounting System: 3.2.1.1 Prior Years' A/Ps Unpaid obligations for which goods/services/projects have been delivered/rendered/completed and accepted in the immediately preceding year regardless of the year these were obligated, but remain unpaid up to the end of that year. 3.2.1.2 Current Year A/Ps Unpaid obligations, for which goods/services/projects have been delivered/rendered/completed and accepted during the current year , regardless of the year these were obligated. 3.2.2 Only valid and legal A/Ps (i.e., commitments/obligations committed or incurred by the agency within the prescriptive period of the covering allotment and covered by an approved contract with specific creditors/suppliers) shall be considered for payment. 3.2.3 Commitments/obligations, for which no goods/services/projects have been delivered/rendered/completed and accepted, shall not be treated as A/Ps at the end of the year. However, these commitments or obligations shall remain valid and binding up to the time the goods/services/projects shall have been delivered/rendered/completed and accepted by the concerned agency. 3.2.4 Request for release of NCAs to cover prior years' A/Ps (whether to external or internal creditors) as of the end of the year, shall be supported with separate list(s) of A/Ps to be submitted by agencies to DBM not later than January 31 of the immediately succeeding year. Formats of the LDDAP-External Creditors (LDDAP-EC) and LDDAP-Internal Creditors (LDDAP-IC) are shown in Annex A and B , respectively. 3.3 NCAs to cover payment of internal creditors and external creditors shall be credited to the regular and special MDS sub-accounts, respectively, of the agency. 3.4 Payment of internal creditors for prior and current year A/Ps shall be made thru MDS check while external creditors shall be paid thru direct payment system. 3.5 To facilitate payment to external creditors under the direct payment system, the agency shall issue a Letter of Introduction (LOI), format shown as Annex C , addressed to its MDS-GSB for the opening by the creditor of an account (those without an existing account with any branch of the agency's MDS-GSB), or, for the validation of an existing account of the creditor with the MDS-GSB. DcTaEH 3.6 Request for release of NCA to cover A/Ps of external creditors, whether prior years' or current A/Ps, shall be supported with the separate lists pursuant to item no. 3.2.4. 3.6.1 The LDDAP-EC shall be arranged on a "first-in, first-out" basis, that is according to the date of receipt by the agency of creditors billings with complete supporting documents. 3.6.2 Separate LDDAP-EC shall be prepared for external creditors with CA/SA/ATM maintained with other banks outside the agency's MDS-GSB. Example: The agency's MDS-GSB is LBP, but some of its creditors are maintaining accounts with DBP, PVB and private banks. One LDDAP-EC shall be prepared for all creditors with LBP accounts and separate LDDAP-EC shall be prepared for those with accounts outside LBP. 3.6.3 The following coding structure shall be adopted by the agency in batching the LDDAP-EC. 3.6.4 Each page of LDDAP-EC shall be taken as an independent list, duly totalled and certified by agency officials concerned, as follows: Agency Head "I hereby assume full responsibility for the veracity and accuracy of the listed claims, and the authenticity of the supporting documents as submitted by the claimants. We hereby release the DBM from any liability, whether civil or criminal, arising from fictitious accounts, excessive disbursements and other anomalous transactions." Head of Agency Accounting Unit "I hereby warrant that the above List of Due and Demandable Accounts Payable was prepared in accordance with existing budgeting, accounting and auditing rules and regulations." 3.7 At the start of each year, agencies shall submit to DBM, a List of Not Yet Due and Demandable Obligations (format shown in Annex D ) by fund, by allotment class and creditor as of December 31 of each year, not later than January 31 of the immediately succeeding year. Said report shall serve as basis in determining the monthly NCA level to be released under the agency's regular MDS sub account, to cover prior years' obligations to internal creditors, for which, goods/services/projects shall be delivered/rendered/completed and accepted during the current year. 3.8 Release by DBM of NCAs for A/Ps to external creditors shall be within the available cash program of the government and in accordance with the schedule shown as Annex E of this Circular. 3.9 MDS-GSB shall pay the external creditors included in the LDDAP-EC thru the direct payment system not earlier than twenty-four (24) hours but not later than forty-eight (48) hours after receipt of the NCA from DBM. However, the MDS-GSB shall not effect payment to any creditor included in the LDDAP-EC if there is/are inconsistency(ies) in information (i.e., bank branch, account name/number) between bank records and LDDAP-EC. 3.10 NCAs issued for A/Ps to external creditors shall be valid up to 48 hours after receipt of the same by the MDS-GSB from DBM. The portion of the NCA corresponding to non-payments made by the MDS-GSB as cited under item 3.9 shall automatically lapse after the 48-hour validity period. TAEcSC 4.0 Specific Guidelines 4.1 Request for payment of A/P shall be submitted by national government agencies to the DBM-Central Office (CO). However, for SUCs and ROs of DPWH, DOH, DepEd, CHED and TESDA, their requests shall be submitted to the DBM ROs concerned. 4.2 Payment Procedures 4.2.1 Internal Creditors 4.2.1.1 Prior Years' A/Ps 4.2.1.1.1 DBM shall issue NCA corresponding to the amount as indicated in the LDDAP-IC submitted by the agency pursuant to item no. 3.2.4. 4.2.1.1.2 Upon receipt of NCA, agency shall, within 24 hours, issue MDS-check to the internal creditors. 4.2.1.2 Current year A/Ps 4.2.1.2.1 Every month, DBM shall issue NCA equivalent to the estimated requirements for settlement of prior years' obligations indicated in the List of Not Yet Due and Demandable A/P-IC submitted by the agency pursuant to item no. 3.7. 4.2.1.2.1 Agency may request the release of additional NCA during the month, whenever the available balance of its regular MDS sub account is at its critical level (i.e., when available NCA balance per agency books is not sufficient to cover existing A/Ps programmed for the month. The request shall be supported with a disbursement report showing the level of disbursements vis-a-vis NCAs issued under the agency's regular MDS sub account. 4.2.2 External Creditors 4.2.2.1 Prior years' A/Ps 4.2.2.1.1 DBM shall issued NCA corresponding to the required amount as indicated in the LDDAP-EC, submitted by the agency pursuant to item no. 3.2.4 of this Circular. 4.2.2.1.2 Upon receipt of NCA, the MDS-GSB shall, not earlier than 24 hours and not later than 48 hours, pay the external creditors thru the Direct Payment System. 4.2.2.2 Current year A/Ps 4.2.2.2.1 Within 24 hours after receipt of the supplier's/contractor's billing duly supported with complete documents, agencies shall submit to DBM, requests for payment of current year A/Ps to external creditors together with the properly accomplished LDDAP-EC, on a regular basis (e.g. daily). 4.2.2.2.2 The DBM shall issue the NCA to cover the requirements of current year A/Ps to external creditors consistent with the schedule of releases provided under Annex E. The NCA issued (supported by the agency-submitted LDDAP-EC accommodated within the available cash program for the month) for credit to the special MDS sub account of the agency shall be released to its MDS-GSB. Inclusion of the LDDAP-EC within the available cash program shall be based on a "first-in, first-out" policy i.e., chronological order of the LDDAP-EC batching submitted by agencies to DBM. cSIADH 4.2.2.2.3 DBM, in lieu of the Advice of NCA Issued or ANCAI, shall officially notify agencies concerned of the release made and provide them with a copy of the NCA issued and LDDAP-EC covered by said release. 4.2.2.2.4 The MDS-GSB shall, upon receipt of the NCA credit the same to the agency's special MDS sub-account. Consistent with the creditors indicated in the LDDAP-EC attached to the NCA, the MDS-GSB shall effect payment thru the Direct Payment System consistent with item nos. 2.2.1 and 3.9 of this Circular. 4.2.2.2.5 On payment thru issuance of a manager's check (MC), the concerned MDS-GSB shall only issue the MC upon demand by or personal appearance of the external creditor within the 48 hours validity period upon receipt of NCA. 4.2.2.2.6 The MDS-GSB shall, on the next banking day from effecting the direct payments in favor of creditors indicated in the LDDAP-EC, provide the agency concerned, copy of the duly validated/posted ADA (i.e., machine validation shown in the lower portion of the LDDAP-EC and the non-payments to external creditors indicated under "remarks" column). 4.2.2.2.7 The DBM shall post in its Website (www.dbm.gov.ph) the list of creditors covered by the NCA released for A/Ps. This will serve as notice to external creditors concerned and provide viewing access for verification of the status of their claims. 4.3 Procedures to be followed in case of inconsistencies on information between the LDDAP-EC and MDS-GSB records. 4.3.1 In the event where the MDS-GSB cannot effect the direct payment to the external creditor included in the LDDAP-EC which is attached to the NCA (as cited under item 3.9 of this circular), due to inconsistency of information (i.e., creditor's CA/SA/ATM number/name) between the LDDAP-EC and bank records, the MDS-GSB shall, on the next banking day, report the same to DBM. The report shall be supported with copy of the validated LDDAP-EC indicating under "Remarks" column, such non-payments made. 4.3.2 DBM, upon receipt of the report from the MDS-GSB, shall inform the agency concerned, thru a letter, about the non-payment to the external creditor. 4.3.3 The agency concerned shall re-submit to DBM the claim of the concerned creditor after making the necessary adjustments/corrections. The date when the request was resubmitted/received by DBM shall be the reckoning date for the purpose of prioritization in the release of NCA. SCaTAc 5.0 Repealing Clause Provisions of existing circulars, which are not consistent with these guidelines are hereby repealed and/or modified accordingly. 6.0 Effectivity These guidelines shall take effect immediately. TcDAHS (SGD.) EMILIA T. BONCODIN Secretary