Decentralized Accounting System for Regional Offices

December 8, 1989 REVENUE MEMORANDUM ORDER NO. 52-89 TO : The Assistant Commissioner, Financial Service; All Regional Directors; Chief, Disbursement Accounting Division; Chief, Revenue Accounting Division; Chief, Budget Division; Chiefs, Fiscal Operations Branch; Chiefs, Administrative Branch; and All Others Concerned SUBJECT : Decentralized Accounting System for Regional Offices 1.0. PURPOSES 1.1. To provide the proper procedures for the operation of a decentralized accounting system in the Regional Offices. aisa dc 1.2. To devolve as much authority on fiscal matters as possible to the Regional Offices consistent with existing laws and regulations 1.3. To insure the timely submission of financial reports, data and other statements to fiscal agencies. 2.0. COVERAGE 2.1. This RMO shall cover the funds appropriated in the General Appropriations Act, specifically the General Fund. 2.2. All Regional Offices shall fall under the coverage of this system. 3.0. EXEMPTIONS 3.1. Collections and disbursements pertaining to Fund 151 (bank penalties imposed under EO 937); Fund 152 (BIR Special Fund under EO 1042 as amended; and Fund 153 (Revenue Labels Trust Fund). aisa dc 3.2. Collections received through accredited agent banks under the Payment thru Bank System as authorized under EO 937. 3.3. Fiscal Agency Service (FAS) transactions of the Bureau. 4.0. GENERAL GUIDELINES 4.1. The regional offices shall keep and maintain a complete set of books of accounts and accounting records to reflect the financial condition and results of operations of the regions, as follows. a. Journal of Collections and Deposits (JCD) b. Journal and Analysis of Obligations (JAO) c. Journal of Disbursements by Disbursing Officers ( JDDO) d. Journal of Checks Issued (JCI) e. General Journal f. General Ledger g. Subsidiary Ledgers 4.2. A separate set of books of accounts shall be maintained for General Fund Income (Fund 104), as follows: a. Journal of Collections and Deposits (JCD) b. General Journal c. General Ledger d. Subsidiary Ledgers 4.3. The regional offices shall also maintain accounting records to control internal revenue collections received through the Direct Payment System (ROR). 4.4. The National Office shall issue sub-allotment advice(s) to regional offices which shall serve as the extension of the obligation authority to each region. 4.5. Disbursement in the regional offices shall be carried on thru cash and use of commercial checks as provided under RMO No. 12-87 dated June 1, 1987 implementing the New Disbursement System in the BIR. Disbursements shall be made only against properly approved vouchers. 4.6. The regional offices shall prepare and submit periodic financial reports or statements to the National Office for consolidation purposes and subsequent submission to fiscal agencies and Congress. 4.7. Proper cut-off in the recording of transactions shall be set so as to delineate the respective responsibilities of the National Office and the regional offices. All current transactions shall be recorded in the regional offices. On the other hand, prior years' transactions shall be recorded in the National Office, e.g. payment of accounts payable as of December 31, 1989. Also, starting January 1, 1990, the regional offices shall maintain subsidiary ledgers to control the accountabilities of collecting officers and other accountable officers. 4.8. The procedures for reporting and recording of internal revenue collections made by collection agents, through the use of Revenue Official Receipts shall be modified in that all reports and documents which are being sent to the Chief Accountant, National Office shall henceforth be submitted to the Chief, Fiscal Operations Branch (FOB) for processing, review and/or recording in the books of account. acd 4.9. The regional offices shall use a separate agency code for deposits of internal revenue collections with the National Treasury. Monthly reconciliation statements shall be prepared by every regional office maintaining an account with the National Treasury. 5.0. SPECIFIC GUIDELINES 5.1. Sub-allotments and funding warrants a. The Chief, Budget Division shall continue to prepare the sub-allotment advice (SAA) for Personal Services (Salaries) for each revenue region on the basis of the payroll prepared by RISSI and summarized by the Disbursement Accounting Division. With respect to Maintenance and Other Operating Expenses, the Chief, Budget Division shall prepare the SAA based on the advice of allotment released by the DBM to the National Office. b. Upon receipt of the SAA from the Chief, Budget Division, the Chief Accountant (Disbursement Accounting Division) (DAD) shall draw a journal voucher for the amount of the sub-allotment, copies of which shall be sent to the regional offices concerned. c. On the basis of the SAA, the Chief, Fiscal Operations Branch shall draw a journal voucher to take up the sub-allotment in the books of the regional offices. d. The Chief Accountant (DAD) and the Chief, FOB shall also record the funding warrants issued and deposited by the DBM in the accredited depository bank of the National Office and the regional offices respectively, upon receipt of the credit advice from the bank. e. At the end of the calendar year, the Chief, FOB shall draw a journal voucher to revert to the Unappropriated Surplus all unobligated balances of allotments. The regional office(s) concerned, however, shall not remit the corresponding cash in the National Treasury but shall utilize the same to back up the allotments to be released in the ensuing year. 5.2. Disbursements a. The Chief, Administrative Branch shall use cash and commercial checks for regional office disbursements. Issuance of commercial checks shall be within the limits of the current account. b. Cash advances equivalent to the bimonthly net payroll of the region shall be drawn. Any remaining cash after 15th or end of the month in the possession of the disbursing officer shall be deposited with the servicing bank for credit to his cash advance. c. Within three (3) days after the 15th or end of the month, the Chief, Administrative Branch shall submit the Report of Disbursement of Disbursing Officers to the Chief, FOB with the Statement of Account Current, duly accomplished. The Report of Disbursement is then entered in the Journal of Disbursement of Disbursing Officer (JDDO). d. The Chief, Administrative Branch shall also submit the Report of Checks Issued to the Chief, FOB within three (3) days after the 7th, 15th, 22nd, and end of the month under report, together with the paid vouchers and supporting documents. e. Upon receipt of the Report of Checks Issued, the Chief, FOB shall make the necessary entries in the Journal of Checks Issued (JCI). 5.3. Accounting of Regional Accounts Payable by the National Office a. Accounts payable pertaining to the regional offices as of the effective date of decentralization shall remain in the books of the National Office. However, payments thereof shall be made in the region(s) concerned. b. A separate Report of Checks Issued shall be rendered, for submission to the Chief Accountant, DAD for recording in the books of account. 5.4. Miscellaneous Collections Miscellaneous collections pertaining to the current year such as refund of cash advance, salary overpayments, disallowances and others shall be deposited to the respective current account of the National Office and the regional offices. However, collections pertaining to prior year's transactions shall be deposited with the National Treasury. 5.5. Internal Revenue Collections and Remittances a. Collecting officers, including municipal treasurers acting as collection agents, shall continue to deposit their collections with the National Treasury either directly or through the nearest PNB, DBP, LBP or Amanah Bank branch office to the credit of the BIR regional office concerned. b. The collecting officers shall submit the duplicate copy of the Monthly Report of Collections, with supporting documents, within five (5) working days after the end of the month to the Revenue District Officer who shall in turn transmit the same to the Chief, FOB for recording through the Regional Auditor. The original copy of Summary of Internal Revenue Collections (Form 12.32) shall continue to be submitted to the Chief Accountant, Revenue Accounting Division (RAD) for reference and monitoring purposes. c. The Chief, FOB shall check the remittances made by the collecting officers as appearing in the Statement of Account Current of the Monthly Report of Collections against the validated remittance advices and abstract of deposits received from National Treasury. d. The Chief, FOB shall record in the Journal of Collections and Deposits (JCD) maintained by the FOB the collections and deposits of collections as reflected in the Monthly Report of Collections. e. Collections and remittances of internal revenue taxes pertaining to 1989 and prior years shall be recorded by the RAD. f. The Chief, FOB shall also cross-check the entries in the Monthly Report of Accountability for Accountable Forms (GF 16-A) submitted by the collecting officers against the data contained in the Monthly Report of Collections. g. Upon receipt of the Monthly Report of Distributed Checks, the Chief, FOB shall verify the entries therein against his copies of the Treasury Debit Voucher and Notice of Dishonor. He shall insure that proper adjustments are made in the Monthly Report of Collection and that necessary entries are reflected in the Journal of Collections and Deposits. 5.6. Consolidation of Trial Balances The Chief Accountant, DAD and Chief Accountant, RAD shall consolidate the trial balances, supporting schedules and statements for Fund 101 and Fund 104 respectively of the National Office and the regional offices, for submission to fiscal agencies and Congress. 6.0. DUTIES AND RESPONSIBILITIES 6.1. The Chief, Budget Division shall: a. Consolidate Work and Financial Plan (WFP) and modifications thereof submitted by regional offices and the WFP of the National Office, for submission to DBM. b. Consolidate Physical Report of Operations (PRO) submitted by regional offices and the PRO of the National Office, for transmittal to DBM. c. Prepare and issue sub-allotment advice(s) to regional offices to cover the expenditures of the regions, copy furnished the Chief, DAD. d. Modify budget allocations of revenue regions in accordance with the changes made by the Regional Director/Commissioner or his authorized representative and the DBM. e. Maintain records sub-allotments released to regional offices and obligations charged thereon as shown in the Statement of Financial Operations (BF 301) submitted by regional offices. 6.2. The Chief Accountant (Disbursement Accounting Division) shall: a. Record the release of sub-allotments to regional offices. b. Prepare summaries of monthly payrolls, for purposes of issuance of SAA by Budget Division. c. Prepare requests for transfer of funds for Personal Services, for transmittal to LBP. cdt d. Effect adjustments in the payroll based on the requests of regional offices. e. Maintain control records of fund allocations received by regional offices. f. Consolidate Trial Balances, supporting schedules and statements as well as other financial reports submitted by regional offices for submission to fiscal agencies and Congress. 6.3. The Chief Accountant (Revenue Accounting Division) shall: a. Consolidate trial balances, supporting schedules and statements and other financial reports submitted by regional offices relative to income and revenues collected through the Direct Payment System (ROR), for submission to fiscal agencies. b. Maintain control records of collections received through the Direct Payment System (ROR) by revenue region, by kind of tax and by month. c. Issue national clearance to retiring, resigned and/or separated employees. 6.4. The Chief, Fiscal Operations Branch (Regional Offices) shall: a. Maintain basic accounting records and books of accounts relative to appropriations and disbursements as well as income and revenues collected under the Direct Payment System (ROR). b. Maintain index cards and/or subsidiary ledgers pertaining to deposits, payroll/voucher deductions, withholdings, salary refunds, unliquidated travels, remittances to other government offices and private parties and others. c. Maintain subsidiary ledgers for all collection agents including Municipal Treasurers acting as Collection Agents, Administrative Branch Chiefs, District Collection Supervisors, Accountable Custodians and other Accountable Officers for various accountabilities. d. Reconcile, review, verify and analyze entries in the subsidiary ledgers of accountable officers. e. Maintain index cards for dishonored checks paid thru the collections agents and the redemption/settlement of the same. f. Review reports of all accountable officers before recording in the special journals. g. Process vouchers, payrolls, requisitions and other claims and certify availability of funds. h. Remit salary deductions to government offices and private entities on or before the 10th day of the following month. i. Require national office clearance before effecting payment of retirement and/or separation pay benefits to retiring, resigned and/or separated employees. j. Prepare and submit Work and Financial Plan and modifications thereof to Chief, Budget Division, copy furnished the Regional Auditor. k. Maintain book controls of stocks, supplies and materials including issues therefrom. l. Follow-up the liquidation of cash advances, payables, and dormant accounts. m. Advise the Regional Director on the status of sub-allotments and such other financial matters as may be needed. n. Submit direct to DBM-NAFB a copy of the Monthly Status of Common Fund, copy furnished BTR and the National Office. o. Be responsible for the proper custody of vouchers and supporting documents until such time that they are transferred to the Regional Auditor for post-audit and safekeeping. p. Prepare and submit to the National Office periodic trial balances and other accounting reports or statements. q. Provide such data as may be required from time to time by BIR top management, DBM, COA, Congress and other government offices. cdt r. Perform other duties as may be assigned by the Commissioner or his authorized representative. 6.5. The Chief, Administrative Branch (Regional Offices) shall: a. Prepare annual procurement program for supplies and materials. b. Review payrolls for accuracy. c. Prepare and submit the following reports to Chief, FOB for recording in the books of accounts: a. Report of Commercial Checks Issued b. Report of Disbursement by Disbursing Officers c. Report of Collections of Special Collecting Officers. d. Supplies Adjustment Sheet e. Monthly Report of Requisitions and Issuances of Accountable Forms, Monthly Report of Accountabilities for Accountable Forms (GF 16-A) with Requisition and Issue Vouchers (GF 33-A) and Invoice and Receipts of Accountable Forms (GF 45-A) 6.6. The Regional Director shall: a. Direct the preparation and submission of Work and Financial Plan of the revenue region. b. Initiate request for modification of budgetary allocations pertaining to the region. c. Insure the proper safeguarding and controlling of funds sub-allotted to the region. d. Ensure that the proper procedures in the reporting of collections by collection agents concerned as outlined herein are complied with. e. Be responsible for the timely submission of financial reports to the National Office and fiscal agencies. f. Exercise administrative supervision and control over all regional personnel involved in budgeting and accounting operations under his jurisdiction for which he shall be directly responsible to the Commissioner. g. See to it that adequate personnel have been provided to man the Fiscal Operations Branch which is charged with the new responsibilities enumerated in Section 6.4. hereof. 6.7. The Assistant Commissioner (Financial Service) shall: a. Approve, by authority of the Commissioner, the Advice of Sub-Allotments intended for regional offices. b. Sign the request for fund transfer from the servicing LBP branch for the affected current accounts of the regional offices. c. Require the timely and accurate preparation and submission of financial reports and statements. d. Exercise technical supervision over all regional personnel involved in budgeting and accounting operations. 7.0. SUBMISSION OF REPORTS AND STATEMENTS The Regional Offices shall submit to the National Office the following financial reports and statements: KIND OF REPORT TO WHOM DEADLINE SUBMITTED MONTHLY Fund 101 Trial Balance Chief, DAD Not later than 7th day after the end of each month Statement of Allotment -do- -do- Expenditures and Balances Analysis of Accounts -do- -do- 8-99-000 8-99-100 Statement of Trust Deposits -do- -do- Schedule of Account Balances -do- -do- 8-70-500 8-70-400 8-72-700 8-72-600 Statement of Internal Revenue Collections -do- -do- (Miscellaneous Income) Fund 104 Trial Balance Chief, RAD -do- Monthly Statement of Income -do- -do- QUARTERLY Fund 101 Statement of Financial Operations (BF 301) Chief, DAD Not later than the Chief, Budget 10th day of the month Division following the end of (copy) quarter Quarterly Charges to Accounts Payable Chief, DAD -do- Quarterly Financial -do- -do- Report of Operations (By Function, Activity, Purpose and Project) Quarterly Financial -do- -do- Report of Operations (By Expense Class) Physical Report of Operations Not later than 10th (BF 132) Chief, Budget day of the 3rd month Division of the quarter covered by the report ANNUALLY Fund 101 Preliminary Trial Balance Chief, DAD Not later than Jan. 20 of the succeeding year Statement of Operations -do- -do- Balance Sheet -do- Not later than Feb. 4 of the succeeding year Cash Flow Statement -do- -do- Statement of Accounts Payable -do- -do- Aging of Accounts Payable -do- -do- Final Trial Balance -do- -do- Fund 104 Preliminary Trial Chief, RAD Not later than Jan. 20 of the succeeding year Statement of Operations -do- -do- Balance Sheet -do- Not later than Jan. 31 of the succeeding year Cash Flow Statement -do- -do- Final Trial Balance -do- -do- Work and Financial Plan Chief, Budget Not later than Jan. 15 Division of the succeeding FY Modification of Work Not later than June 15 and Financial Plans -do- of the FY 8.0 ILLUSTRATIVE ACCOUNTING ENTRIES The accounting entries to be followed by the National Office and the Regional Offices are provided under Annex "A" hereof. cd 9.0 REPEALING CLAUSE Provisions of the following revenue memorandum orders and such other circulars, orders inconsistent herewith are hereby revoked or modified accordingly. Revenue Memorandum Order No. 12-87 dated June 1, 1987 Revenue Memorandum Order No. 1-81 dated December 16, 1980 10.0 EFFECTIVITY This Revenue Memorandum Order shall take effect January 1, 1990. (SGD.) JOSE U. ONG Commissioner of Internal Revenue