Guidelines in the Use of Personnel Services Appropriations under the FY 2015 General Appropriations Act (GAA)

June 3, 2015

DBM NATIONAL BUDGET CIRCULAR NO. 557-15

 

1.0 Policy Statement

Appropriations for Personnel Services (PS) in the FY 2015 GAA shall be used to cover the original purposes for which these are appropriated, as well as any deficiency in authorized personnel benefits that may be determined during the year pursuant to General Provisions (GP) No. 46 of the FY 2015 GAA. Accordingly, use of PS appropriations for any PS deficiency will follow the rules provided herein and shall not be considered as a form of realignment.

2.0 Purpose

2.1 To provide guidelines in the use of PS appropriations authorized under R.A. No. 10651 (FY 2015 GAA), laws governing Retirement and Life Insurance Premium (RLIP) and earmarked revenues under Special Account in the General Fund (SAGF);

2.2 To set clear definition of relevant terms to be used in this Circular; and

2.3 To prescribe the submission of reports in the utilization of funds covered by this Circular consistent with budgetary, transparency, and accountability policies, rules and regulations.

3.0 Definition of Terms

The following terms shall be taken and understood in the sense indicated hereunder and as used in this Circular:

3.1 Agency Heads — refer to the heads of departments, attached agencies and Other Executive Offices under the Executive Branch, State Universities and Colleges, Constitutional Commissions, and Government-Owned and/or -Controlled Corporations maintaining Special Accounts in the General Fund and other similar entities and instrumentalities concerned.

3.2 Allotments — refer to the budget authorizations prescribed under National Budget Circular No. 556 — Release of Funds for FY 2015, issued to an agency permitting it to commit or incur obligations within the period of time, amount and purpose indicated therein.

3.3 Authorized Personnel Benefits — refer to compensation of government employees pursuant to law and those authorized by the President of the Philippines. Authorized compensation shall be as follows:

3.3.1 Basic Salaries, including Step Increments;

3.3.2 Standard Allowances and Benefits, which shall be limited to the following:

3.3.2.1  Personnel Economic Relief Allowance

3.3.2.2  Uniform or Clothing Allowance

3.3.2.3  Year-End Bonus and Cash Gift

3.3.3 Specific-Purpose Allowances and Benefits, limited to the following:

3.3.3.1  Representation and Transportation Allowances

3.3.3.2  Per Diem

3.3.3.3  Honoraria

3.3.3.4  Night-Shift Differential

3.3.3.5  Overtime Pay

3.3.3.6  Subsistence Allowance

3.3.3.7  Hazard Pay

3.3.3.8  Special Counsel Allowance

3.3.3.9  Overseas and Other Allowances for Government Personnel Stationed Abroad

3.3.3.10  Other allowances and benefits as may be authorized by law or the President of the Philippines.

3.3.4 Incentives, which refer to the following:

3.3.4.1  Loyalty Incentive

3.3.4.2  Anniversary Bonus

3.3.4.3  Collective Negotiation Agreement (CNA) Incentive

3.3.4.4  Productivity Enhancement Incentive

3.3.4.5  Productivity Incentive Bonus (until 2015 only)

3.3.4.6  Performance Based Bonus

3.3.4.7  Other existing benefits as may be categorized by the DBM as incentives.

3.3.5 Magna Carta Benefits as authorized by law and its Implementing Rules and Regulations.

3.3.6 Personnel benefits for military and uniformed personnel as authorized by law or the President of the Philippines.

4.0 PS Appropriations

4.1 Sources of appropriations for payment of authorized personnel benefits of government employees are as follows:

4.1.1 Department or agency specific appropriations for PS;

4.1.2 Miscellaneous Personnel Benefits Funds (MPBF);

4.1.3 Automatic Appropriations:

4.1.3.1  RLIP contributions; and

4.1.3.2  SAGFs such as: (i) Pre-need Fund and Insurance Fund for the Insurance Commission; (ii) Aviation Security Fees for the Office for Transportation Security; (iii) Verification Fees for Office of the Secretary of Department of Labor and Employment; and (iv) Contributions from Philippine Amusement and Gaming Corporation for the Early Child Care Development Council.

4.1.4 Allowable MOOE allotments for the payment of Collective Negotiation Agreement (CNA) incentive under GP No. 74 of the FY 2015 GAA.

4.2 Department or Agency Specific Appropriations for PS

4.2.1 Consistent with GP No. 46 of the FY 2015 GAA, the appropriations for PS shall be used for the payment of Authorized Personnel Benefits (as defined under item 3.3 hereof) to be given to National Government employees, computed based on information provided in the Government Manpower Information System of DBM.

4.2.2 Available PS allotments released to the department or agency at the start of the year shall be used for the (i) original purpose of appropriations; and (ii) to cover PS deficiencies in Authorized Personnel Benefits such as:

4.2.2.1  Deficiency in Magna Carta Benefits, subject to approval by the DBM Secretary for: (i) additional recipients arising from newly issued certifications or hiring of new employees; (ii) valid adjustments due to inadvertent omission or erroneous encoding in the System;

4.2.2.2  Award of Back Pay for cases with final and executory decision of a competent authority such as courts, CSC, and COA;

4.2.2.3  Deficiency in specific-purpose allowances and benefits, such as Overtime Pay, Honoraria, and Representation and Transportation Allowance, among others, subject to existing conditions in the grant of such benefits; and

4.2.2.4  Authorized Personnel Benefits in prior years, the approval for the payment of which is granted in the current year. Since PS benefits are mandatory in nature, actual services rendered or benefits allowed in prior years shall not be categorized as unbooked obligations. Thus, this may be considered as an exemption to the existing policy, rules and regulations on unbooked obligations (please see Appendix 1 — Letter of Commission on Audit to DBM dated March 7, 2014).

4.2.3 The available PS allotments referred to above may be realized from unspent compensation of employees due to the following:

4.2.3.1  Incurrence of leaves of absence without pay;

4.2.3.2  Vacant positions on account of termination, resignation, transfer, retirement or separation;

4.2.3.3  Delay in the actual assumption of duty from the date of appointment;

4.2.3.4  Suspension and other disciplinary sanctions;

4.2.3.5  Erroneous computations of PS benefits; or

4.2.3.6  Other similar instances

4.2.4 In case there is no available PS allotment, as defined above, at the time when payment of authorized PS deficiency mentioned in Item 4.2.2 shall be made, the department or agency may frontload such deficiency against the unobligated PS allotments comprehensively released pertaining to requirements for the remaining months of the year.

4.2.4.1  The use of PS appropriations to cover a PS deficiency shall be subject to approval of Agency Head.

4.2.4.2  It shall be supported with a Reallocation Advice for Use of PS Appropriations (RAPSA) duly accomplished and signed by the Agency Head or his designated representative, format shown in Annex A. In the case of SUCs, the approving authority shall be the President as Agency Head, unless approval of the board is necessary as required in the respective charter of SUCs.

4.2.4.3  Said adjustments shall be recorded or reflected in the Registry of Allotments and Obligations for PS and reported in the accountability reports to be submitted to DBM, i.e., SAAODB.

4.3 MPBF

4.3.1 The MPBF may be used to fund the following authorized PS deficiencies of government employees which cannot be accommodated within the available PS allotments of a department or agency:

4.3.1.1  Funding requirements for the filling of positions and creation of new positions; and

4.3.1.2  Other compensation common to all, such as Overtime Pay, Step Increment, Performance Enhancement Incentive, Performance-Based Bonus and other compensation for specific groups.

4.3.2 The department or agency shall submit a special budget request to DBM with the following supporting documents:

4.3.2.1  Justification for incurrence of deficiency; and

4.3.2.2  Latest Statement of Appropriations, Allotments, Obligations, Disbursements and Balances by Object of Expenditure (SAAODBOE), prescribed under DBM-COA Joint Circular No. 2014-1 dated July 2, 2014. The agency is encouraged to submit the SAAODBOE as of end of the month immediately preceding the request, if available.

4.4 Automatic Appropriations

4.4.1 Released allotment for RLIP cannot be reallocated to other objects of expenditures.

4.4.2 As a general rule, SAGFs shall not be used for payment of PS, unless expressly authorized in the law creating them, as in the case of those agencies enumerated under item 4.1.3.2 hereof.

4.5 CNA Incentives

4.5.1 The CNA Incentives shall be paid from the allowable MOOE allotments as identified under GP No. 74 of the FY 2015 GAA and at such rates determined by the DBM. The allowable MOOE allotments shall have resulted from cost-cutting and systems improvement measures undertaken by the agencies and their respective personnel, as identified in their respective "Agreements" and supplements thereto.

4.5.2 The department or agency shall submit a request to DBM for issuance of SARO to use such allowable MOOE allotments for payment of CNA, with the following supporting documents:

4.5.2.1  Certification reflecting the available MOOE allotments by P/A/P and specific object of expenditures; and

4.5.2.2  Agency's latest quarterly SAAODBOE. The agency is encouraged to submit the SAAODBOE as of end of the month immediately preceding the request, if available.

4.5.3 The SARO to be issued for payment of CNA shall be attributed to General Administration and Support. Payment for the purpose shall be recorded in the agency books under the PS — Other Bonuses and Allowances — "Collective Negotiation Agreement Incentive-Civilian." 

5.0 Repealing Clause

All circulars, memoranda, rules, regulations and other issuances inconsistent herewith are deemed repealed and superseded accordingly.

6.0 Effectivity

This Circular shall take effect immediately upon its publication.

(SGD.) FLORENCIO B. ABADSecretaryDepartment of Budget and Management

ANNEX A

Department of ___________________

Agency/Operating Unit ____________

Address ________________________

Reallocation Advice for use of PS Appropriations (RAPSA) No. 2015-03-XXXXDated: ________________

 

Funding Source:	Regular Agency Fund-General Fund-New General Appropriations-
	Specific Budgets of National Government Agencies
Legal Basis:	RA 10651 Regular 2015 CURRENT

 

 

APPENDIX 1

Republic of the PhilippinesCommission on AuditCommonwealth Avenue, Quezon City, Philippines

March 7, 2014

Honorable Florencio B. AbadSecretary

Dear Secretary Abad:

This refers to your letter dated October 2, 2013, pertaining to Paragraph 2, General Provision (GP) No. 15 of the 2013 General Appropriations Act (GAA)(RA No. 10352), requesting the Commission's official position relative to the settlement of prior year's unbooked obligations, as well as the formulation of a joint circular that will prescribe/update the guidelines on unbooked obligations.

As stated in your letter, the DBM is reviewing the following existing budgetary policies laid out for the settlement of prior years' unbooked obligations:

a) The use of the current year budget for payment of prior years' transactions/obligations is consistent with Section 49, Book VI of Executive Order 292 Re: Authority to Use Savings for Certain Purposes;

b) The payment of unbooked obligations incurred prior to 1990 shall be charged against the 1990 savings of agencies where funding to cover unbooked obligations from 1990 onwards should be authorized in the General Appropriations Act/s (GAAs) as provided for under National Budget Circular (NBC) No. 416 (series of 1990);

c) The GAAs for FY 2007 and 2008 provided the authority for DBM to approve payment of valid prior years' obligations as certified by the Commission on Audit, chargeable against agency savings during said year's appropriations (i.e., 2007, 2008). However, with the removal of COA's conduct of pre-audit, the general provision was revised in the GAAs for FY 2009 and 2010 to authorized utilization of funds, subject to COA's post-audit validation. A COA certification is no longer a pre-requisite in the issuance of SARO or letter authority for unbooked obligation; and

d) The GAAs for FY 2011 to 2012 did not include a provision on prior years' unbooked obligations. The provision on use of current year savings for prior years' unbooked obligations was restored in the 2013 GAA.

After an evaluation hereof, this Commission notes that the authority to use savings pursuant to Section 49, Book VI of E.O. 292 is limited to certain purposes as enumerated therein which include the payment of valid prior year's obligations of government agencies with any other government office or agency including government owned or controlled corporations.

As to the provisions in the 2007 and 2008 GAAs relative to payments of prior years' obligations, this Commission, through then Acting Chairman Reynaldo A. Villar, in a letter dated 28 March 2008 to then Secretary Rolando G. Andaya, Jr., Department of Budget and Management (copy attached), summarized the position of COA, in this wise:

". . . the Commission Proper, this Commission, in its meeting on 27 March 2008, was of the considered view that the proposed circular violates Section 29 (1), Article VI of the Constitution which provides that "no money shall be paid out of the Treasury except in pursuance of an appropriation made by law." Section 19 of the General Provisions of Republic Act No. 9401, the 2007 General Appropriations Act, therefore, has no constitutional and legal bases as it gives the Department of Budget and Management blanket authority to disburse funds to pay prior years' unbooked obligations without specific appropriations. . . . ."

In the same letter, then Chairman Villar reiterated his earlier representation that the provision on unbooked obligations be deleted in subsequent General Appropriation Acts.

This Commission shares the view that payment of unbooked obligations violates Section 29 (1), Article VI of the Constitution; hence, our auditors cannot certify as to their validity. The claimants may file their individual money claims with this Commission pursuant to the general audit jurisdiction of this Commission to settle "all debts and claims of any sort due from or owing to the Government" under Section 26 of Presidential Decree No. 1445, and following the procedure outlined under Rule VIII of the 2009 Revised Rules of Procedures of the Commission on Audit. It is, likewise, reiterated that the provision on unbooked obligations be deleted in subsequent GAAs.

Thank you for coordinating this matter with us.

Very truly yours,

Ma. Gracia M. Pulido-Tan