Budgeting System for the Revenue Regional Offices

December 16, 1980 REVENUEMEMORANDUM ORDER NO. 01-81 SUBJECT : Budgeting System for the Revenue Regional Offices TO : Regional Directors and All Others Concerned 1. Purpose This Revenue Memorandum Order is issued to: 1.1 To harmonize the budget system in the revenue regional offices with the decentralized administrative structure of the Bureau as mandated by LOI 448 and implemented by RMO No. 23-80 dated June 11, 1980. acd 1.2 To provide guidelines, rules and procedures in the preparation and submission of revenue regional budget proposals, execution of regional budgets and monitoring of funds utilized by the regional offices. 2. General Guidelines 2.1 The regional budget proposals shall be prepared taking into account the goals, requirements and priorities of the regional offices and shall be submitted to the National Office in accordance with the budget calendar, form and content and such rules and regulations as may be prescribed by the Minister of the Budget and the Commissioner of Internal Revenue. 2.2 The National Office shall sub-allot the budget allocation of the regional offices released by the Minister of the Budget for various programs, projects and activities. In case realignment of expenditures is necessary, the Commissioner of Internal Revenue shall amend or modify the approved budgetary allocation of the regional offices, upon approval of the Commissioner of the Budget. To provide flexibility to the National Office, the Commissioner of Internal Revenue may withhold a portion of the allotments intended for the regional offices. 2.3 Expenditure data, work accomplishments expressed in terms of units of work measurement, manpower used and other items of information which are needed to monitor budget performance of regional offices shall be submitted to the Commissioner of Internal Revenue and the Minister of the Budget in the forms prescribed for the purpose. 3. Procedures and Forms 3.1 Budget Preparation 3.1.1 The Regional Director, assisted by the Assistant Regional Director, branch chiefs, and revenue district officers, shall plan and develop the objectives and work program of the regional office taking into consideration the following factors: (1) Current operations; (2) General development priorities; (3) Objectives and mission of the Bureau; (4) Major thrusts and funding priorities of the regional office; and (5) Changes in emphasis and goals for the budget year. This work program shall be the basis of the budget estimates. 3.1.2 The regional budget estimate shall be prepared in accordance with the Zero-Base Budgeting concepts as defined in P.D. No. 1177. 3.1.3 The regional director shall consider multi-year activities in the preparation of the budget estimate. These include the operating requirements of projects programmed to start but cannot be completed during the budget year, preparatory activities for future major projects and the like. aisa dc 3.1.4 The regional director shall submit to the National Office the budget proposal in the prescribed forms on or before January 31 every year or on the date fixed for the submission thereof as contained in the budget call issued by the National Office. 3.1.5 The Commissioner of Internal Revenue may conduct budget hearings in the regional offices during which the assumptions underlying the budget estimates shall be reviewed. Assumptions must relate to performance targets and priorities, staffing changes, wage structure, equipment requirements and relationship between revenue targets and expenditure estimates. 3.2 Budget Execution and Monitoring 3.2.1 The regional Director shall direct the preparation of the Work and Financial Plan showing the work goals together with the manpower and financial requirements of the regional office, upon receipt of the Sub-Notice of Obligation Ceiling from the National Office. The Sub-Notice of Obligation Ceiling represents the maximum amount of obligations that can be incurred for the budgetary programs and projects of the Regional Office as embodied in the General Appropriations Act. The Work and Financial Plan shall be submitted to the National Office within 15 days from receipt of the Sub-Notice of Obligation Ceiling. 3.2.2 Within 7 days from receipt of the approved Advice of Allotment from the M.O.B., the National Office shall issue, on a comprehensive basis, to the regional offices the sub-allotment advice and sub-notice of Cash Disbursement ceiling based on the approved regional distribution of expenditures except as herein provided. The Regional Offices shall be furnished the corresponding Request for Obligation of Allotment (ROA) in 3 copies. The sub-allotment advice shall serve as authority for the recipient regional offices to incur obligations within a specified amount while the sub-notice of cash disbursement ceiling will serve as authority for the regional offices to disburse funds within a specified amount for a specific period. The approved sub-allotment advice for permanent positions in the current year Personal Service Itemization (PSI) shall be the authority for the payment of salaries for itemized positions. However, Sub-notice of CDC for salaries may be issued only for record and control purposes. 3.2.3 The allotments released for Personal Service shall be sub-allotted on the basis of the organizational location of the positions authorized in the Personal Services Itemization. However, only such amount needed to pay the salaries of personnel actually assigned in the regional office shall be obligated thru the issuance of the Request for Obligation of Allotment (ROA). The amount corresponding to the salaries of vacant positions shall be withheld in the meantime by the National Office and shall be released to the regional offices concerned only, upon the filling thereof and subsequent assignment thereat of the appointee. cdt Except for the funds earmarked for accountable forms and non-accountable forms which shall be procured by the National Office, the allotments released for maintenance and other expenses shall be sub-allotted in full to the regional offices including the funds necessary for the purchase of common-use supplies and materials and maintenance of motor vehicles used for official travels of officials and employees of the regional offices. The allotment for equipment outlays intended for the regional offices shall be retained in the National Office and shall be used to defray equipment purchases on the basis of the approved equipment procurement program of the entire Bureau. However, in cases of urgent necessity, the equipment allocation may be sub-allotted to the regional offices at the discretion of the Commissioner of Internal Revenue. 3.2.4 The sub-allotment advice to be issued to the regional offices shall be for one fiscal year and shall be broken down by quarters and major expenditure classes such as Personal Services (01), Maintenance and Other Operating Expenses (02) and Equipment Outlay (03). Although the sub-allotment is released for the entire year, the sub-allotment for any given quarter shall become self-executory only at the beginning of that quarter. No obligation shall be incurred or authorized to be incurred during a quarter chargeable against the sub-allotment of subsequent quarters. As a general rule, obligations shall be charged against the sub-allotments released for the same expenditure group. 3.2.5 All disbursements of the regional offices shall be limited to the amount of quarterly CDC plus amounts for unused CDC carried over from previous quarters of the same year. CDC issued during a given year and intended for the 4th quarter shall be valid until the end of the 1st quarter of the succeeding year. Unused CDC issued in the 4th quarter of a given year may be used by the regional office for the payment of accounts payable incurred in the same year and outstanding as of December 31. Accounts payable not liquidated at the end of the year or paid out of the 4th quarter CDC shall be carried over into the next calendar year and liquidation thereof shall be subject to the issuance of a new CDC. Requests for issuance of new CDC for payment of prior year's obligations shall be supported by a list of creditors showing the obligations number, the corresponding amount for each obligation and account code duly certified and verified by the regional accountant and Regional Auditor, respectively. 3.2.6 The regional office shall disburse the fund in accordance with established procedures and existing rules and regulations. 3.2.7 Whenever the sub-allotments earlier released to the regional offices become inadequate to cover obligations incurred during the same calendar year, the regional office concerned shall submit to the National Office a request for additional funds, citing the justifications therefor. If the financial resources of the National Office will allow, the necessary advise of sub-allotment and cash disbursement ceiling shall immediately be released to the requesting regional office. 3.2.8 The regional offices shall submit to the National Office on semestral basis, revisions, and/or modifications of the original work and financial plan to serve as a basis for the National Office to request approval of transfer of allotment from one project/object class to another and to use savings to augment another appropriation item from the M.O.B.. When approved by the Minister of the Budget, these shall be released to the regional office concerned through separate supplemental advices of sub-allotment and sub-CDC. 3.2.9 The regional office shall keep records of receipt and utilization of sub-allotment and sub-CDC. For this purpose, control records of sub-allotments and obligations shall be maintained by fund, program, project, allotment, activity and key budgetary inclusion showing the breakdown by object classes of expenditures. Control worksheets for sub-CDC shall also be maintained to assure that CDC received/allocations will not be exceeded. 3.2.10 To meet the requirements of the Ministry of the Budget and to enable the National Office to carry out its responsibilities under the General Appropriations Act, the regional offices shall prepare and submit to the National Office the following forms not later than the 10th day of the 3rd month of the quarter covered by the report, except as otherwise provided: (a) Quarterly Report of Actual Cash Utilization (BF #134-A) This form shall be used to report the cash disbursement ceiling received, utilized and the balances of unused CDC as of the previous quarters and at the end of the quarter. This shall be prepared by the disbursing officer and submitted to the Chief Accountant, copy furnished the Chief Budget Division not later than 7 days after the end of the quarter. (b) Financial Report of Operations (BF #131) This form shall be used in reporting the monthly obligations incurred during a given quarter. It shall be prepared quarterly in 3 copies by the regional accountant and submitted to the Chief Accountant, copy furnished the Chief, Budget Division. The Accountant shall indicate the actual obligations for the first 2 months of the quarter and on the basis of the trend of expenditures of these 2 months, estimate the obligations to be incurred for the 3rd quarter. Input data shall come from the record of sub-allotments and obligations maintained by the regional offices. (c) Financial Report of Operations (Breakdown of Obligations under Maintenance and Other Operating Expenses) (BF #131-A) This form shall be used to report obligations on certain selected objects of expenditures. It shall be prepared quarterly in 3 copies by the regional accountant and submitted to the Chief Accountant, copy furnished, the Chief, Budget Division. The report shall reflect the actual obligations during the 1st and 2nd months of the quarter and an estimated amount during the 3rd months as computed realistically on the basis of the experience of the preceding 2 months. (d) Physical Report of Operations (Form No. BF 132) This form shall be used to report the units of work performed and the manpower used during each month of the quarter. It shall be prepared quarterly in 3 copies by the revenue budget examiner and submitted to the Chief, Budget Division. The report shall indicate the actual work performed and manpower used during the 1st and 2nd months of the quarter and a realistic estimate of the work to be performed and manpower to be utilized during the 3rd month. aisa dc 4. Repealing Clause The provision of any circular, memorandum order and other rules and regulations inconsistent herewith are repealed and/or modified accordingly. 5. Effectivity This revenue memorandum order shall take effect immediately. (SGD.) RUBEN B. ANCHETA Acting Commissioner TAN A5239-J1139-A-O