Implementing Guidelines on the Release and Use of Funds for Fiscal Year 2017

February 23, 2017

DEPED ORDER NO. 009-17

IMPLEMENTING GUIDELINES ON THE RELEASE AND USE OF FUNDS FOR FISCAL YEAR 2017

 

1. For the information and guidance of all concerned, the Department of Education (DepEd) issues the enclosed Implementing Guidelines on the Release and Use of Funds for Fiscal Year 2017.

2. This Order shall take effect immediately upon publication on www.deped.gov.ph. HTcADC

3. Immediate dissemination of and strict compliance with this Order is directed.

(SGD.) LEONOR MAGTOLIS BRIONES

Secretary

ATTACHMENT

I. RATIONALE

This DepEd Order aims to provide guidance on the policies, rules and regulations on the release and use of funds for FY 2017. It also aims to ensure timely and efficient utilization of resources, synchronize fund release with the implementation of DepEd's programs, activities, and projects (PAPs), and to institute mechanisms for transparency and accountability across the different DepEd offices.

II. SCOPE OF THE POLICY

This DepEd Order covers the release and use of funds for nationwide implementation in the DepEd Central Office (CO), Regional Offices (ROs), Schools Division Offices (SDOs), and Schools.

III. POLICY STATEMENT

The Department hereby issues this Order to provide guidance on the policies, rules and regulations on the release and use of funds for FY 2017.

These guidelines are based on Republic Act (RA) No. 10924 or the 2017 General Appropriations Act (GAA) and on the Department of Budget and Management's (DBM) National Budget Circular No. 567 dated January 3, 2017 or "Guidelines on the release of Funds for FY 2017."

IV. PROCEDURES

A. RELEASE OF FUNDS

1. Prevailing Policies

a. The effectivity date of the FY 2017 GAA is on 01 January 2017 per Section 1 of the General Provisions of the said law. FY 2017 Appropriations shall be valid for release and obligation for the purpose specified and subject to pertinent special and general provisions:

i. For Personnel Services (PS) — until December 31, 2017

ii. For Maintenance and Other Operating Expenses (MOOE) and Capital Outlay — until December 31, 2018

iii. For Financial Expenses (FinEx) — until December 31, 2018, considering that it is similarly treated as MOOE.

The President's Veto Message, however, directed all agency heads to ensure obligation of all PAPs funded under the GAA, including MOOE and CO, not later than December 31, 2017. Therefore, sub-allotted funds from Central Office are expected to be obligated on or before end of December 2017.

b. The aggregate allotment releases for the year from all appropriation sources shall not exceed the Allotment Release Program of each agency which is consistent with the Total Obligation Program as per approved Budget Execution Documents (BEDs). aScITE

c. The obligational authorities that will be issued by DBM for agencies/operating units to incur obligations include:

i. The GAA as Allotment Order (GAAAO) for those categorized as "For Comprehensive Release";

ii. Special Allotment Release Orders (SARO) to cover the release of budgetary items under "For Later Release" and releases from Special Purpose Funds; and

iii. General Allotment Release Order (GARO) to cover the comprehensive release of Retirement and Life Insurance Premiums (RLIP).

d. Release of funds shall be made directly to the operating units of Agencies. Funds specifically appropriated to ROs, SDOs, and school implementing units (IUs) shall be released to them directly except for centrally-managed items (CMI).

2. Manner of Release of Funds

FOR COMPREHENSIVE RELEASE (FCR)

 The budgetary allocations that are for comprehensive release in the DepEd's FY 2017 budget are listed in Annex A.

 This is to reiterate, however, that although there are budgetary allocations that are comprehensively released to the DepEd ROs and SDOs in pursuance to the policy of GAAAO, the implementation of certain PAPs is subject to the issuance of guidelines from the DepEd CO. A complete list of such PAPs, which include the School Based Feeding Program and Special Hardship Allowance, among others, shall be issued.

Further, there are budgetary items allocated to the ROs that are Centrally-Managed Items (CMIs), and therefore, they are transferred to the CO. Hence, these are not among the items directly released to the ROs.

FCR to CO or CMIs (Annex A-1):

• Implementation of the Redesigned Technical-Vocational High School Program

• Textbooks/Instructional materials (including PhP100M for children with Special needs)

• Science and Mathematics Equipment

• Department of Education Computerization Program

• Provision and maintenance of Basic Education Facilities

o Repair and/or rehabilitation of school buildings and Wat-San facilities

• Conservation and restoration of Gabaldon and other heritage school buildings

• Assistance to Students and Teachers in Private Schools and in Non-DepEd Public Schools HEITAD

o Education Service Contracting (ESC) Program

o Voucher Program for Private Senior High Schools

o Voucher Program for Non-DepEd Public Senior High Schools

In addition, the allocation for Grant of Cash Allowance under Implementation of the Grant of Cash Allowance, Hardship Pay, Equivalent Records Forms (ERF), Conversion to Master Teacher (MT), Reclassification of Positions and Payment of Step Increments lodged in the Central Office will now be directly released to the ROs, since the breakdown per region is already available. See Annex A-1.

Lastly, there are budgetary items that are lodged at the CO which will be sub-allotted later on for implementation of the field offices. Kindly note that OM-Finance BPM-2016 No. 126 and 127 state that the BEDs for such items shall be prepared by the CO. This means that release of these allotments require the field implementing units to request for release of additional Notice of Cash Allowance (NCA) for the cash requirement of such PAPs from their respective DBM ROs, supported by an accomplished Monthly Disbursement Program (MDP).

FCR to CO for sub-allotment to ROs/SDOs:

• General Administration and Support (GAS)

• Physical Fitness and School Sports Competition including Palarong Pambansa

• Development and Implementation of Education Programs

• Planning and Management Information Systems (PMIS)

• National Assessment Systems for Basic Education

• Support for Basic Education Research

• Human Resource Training and Development (HRTD)

• Health and Nutrition Services

• Basic Education Curriculum

• Continuing Education

• Pre-Service Education

• Indigenous Peoples Education (IPEd) Program

• Every Child a Reader Program

• Development and Promotion of Campus Journalism

• Implementation of Redesigned Technical Vocational High School Program

• Alternative Learning and Delivery Mode Programs, including requirement of Learning Centers ATICcS

• Textbooks and Instructional Materials

• DepEd Computerization Program

• Senior High School MOOE

• Madrasah Education Program

• Disaster Preparedness Program

FOR LATER RELEASE (FLR)

Budgetary allocations that are for later release are listed in Annex B. These items are subject to the submission of Special Budget Requests (SBR) by the DepEd CO to the DBM CO for DepEd-managed PAPs and by the DepEd CO and Department of Public Works and Highways (DPWH) CO for Provision and Maintenance of Basic Educational Facilities projects implemented by the DPWH.

FLR to DepEd CO and for sub-allotment to RO/DO/IUs:

• General Administration and Support (GAS) Capital Outlay

• Administration of Personnel Benefits

• Acquisition, Surveying, and Titling of School Sites Capital Outlay

• Alternative Learning System Capital Outlay

• Operations of Schools

o Creation and filling up of positions

• Provision and maintenance of Basic Education Facilities

o Repair and/or rehabilitation of school buildings and Wat-San facilities

o Acquisition of school desks, furniture, and fixtures

o Electrification of on-grid schools

• Conservations and restoration of Gabaldon and other heritage school buildings

o Site Development Plan

FLR to DPWH CO:

• Provision and maintenance of Basic Education Facilities

o New construction of classrooms and Wat-San facilities

o Technical-Vocational laboratories

B. USE OF FUNDS

1. Savings and Augmentation

1.1. Savings refer to portions or balances of any released appropriations in the GAA, which have not been obligated as a result of the following: TIADCc

i. Final discontinuance or abandonment of an ongoing PAP by the head of agency concerned due to causes not attributable to the fault or negligence of the said agency which would not render it possible for the agency to implement said PAP during the validity of the appropriations;

ii. Non-commencement of the PAP for which the appropriations is released. For this purpose, non-commencement shall refer to the inability of the agency or its duly authorized procurement to obligate the released allotment and implement the PAP due to natural or man-made calamities or other causes not attributable to the fault or negligence of the agency concerned during the validity of the appropriations;

iii. Decreased cost resulting from improved efficiency during the implementation or until the completion by agencies of their PAPs: Provided, that the agencies will still be able to deliver the targets and services as approved in the GAA; and

iv. Difference between the approved budget for the contract and the contract award price including any variations required for the project.

1.2. Note that programmed appropriations which have not been released or allotments not yet obligated due to the fault of the agency concerned shall not be considered savings.

1.3. Savings may likewise refer to available balances of appropriations arising from unused compensation and related costs pertaining to:

(i) Unfilled, vacant or abolished positions;

(ii) Non-entitlement to allowances and benefits;

(iii) Leaves of absence without pay; and

(iv) Unutilized pension and retirement benefits arising from death of pensioners, decrease in the number of retirees, or other related causes.

1.4. In the case of sub-allotted funds from Central Office, any savings generated from the situations listed in Section B.1.1 which is requested to be used for the same PAP may be considered as modification of allotment and shall be subject to the guidelines on the same per Section B.2.

1.5. Meanwhile, any savings generated from the situations listed in Section B.1.1. which is requested to be used for or added to another PAP is considered as "augmentation." The particulars of the expenditures to be funded from savings should be within the scope of, or covered by an existing PAP. But the existence of a PAP regardless of the availability of allotment class/object of expenditure is sufficient for the purpose of the augmentation, which may result from: AIDSTE

i. Unforeseen modifications or adjustments in the PAP; or

ii. Re-assessment in the use, prioritization, and/or distribution of resources.

Note that the use of savings and augmentation of a deficient PAP is subject to the approval of the President of the Philippines per the General Provisions of the GAA.

1.6. NBC No. 567 also reiterates that in the use of savings, priority shall be given to the payment of compensation, year-end bonus and cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans, CNA incentives and other personnel benefits authorized by law and in the FY 2017 GAA.

2. Modification of Allotment

2.1. As a general rule, agencies shall spend what is programmed in their respective appropriation in the GAA. In exceptional circumstances, agencies may modify the allotment issued within a PAP, subject to the approval of the following:

i) The heads of agencies for changes in the object of expenditure (Salaries, Wages, Travelling Expenses, or Investment Outlays) within an allotment class (PS, MOOE or CO). This covers the use of savings discussed in Section B.1.4.

ii) The DBM for the following modifications: (i) for the payment of Magna Carta benefits authorized under Section 42 of the 2017 GAA General Provisions; (ii) from one allotment class to another; (iii) from one operating unit to another; (iv) within a special purpose fund; and (v) within the purpose authorized under the Unprogrammed Appropriations; and

iii) The President of the Philippines for the payment of intelligence funds within the Executive Branch.

2.2. For changes in the object of expenditure within an allotment class within the same PAP, the delegated approving authorities are as follows:

i. For CO, the Undersecretary for Finance-Budget and Performance Monitoring;

ii. For ROs, including sub-allotted funds from Central Office, the Regional Directors;

iii. For SDOs and school IUs, including sub-allotted funds from Central/Regional Office, the respective Schools Division Superintendents. AaCTcI

 In the case of sub-allotted funds from Central Office, although authorities have been delegated to field officials to approve modifications of allotment, the concerned ROs, SDOs and school IUs shall provide the Central Office Budget Division a copy and summary of their Realignment Advice Forms (RAF) at the end of each quarter.

 Moreover, in the case of savings generated from training activities which are proposed to be used for other training activities within the same PAP but which is/are not cited in the face of the Sub-Allotment Release Order, clearance from the Undersecretary for Finance — Budget and Performance Monitoring shall be secured prior to obligating said funds.

2.3. Note that all modifications within Capital Outlays may only be made until June 30, 2017, except if due to the occurrence of calamities.

2.4. All modifications in the allotment shall not entail any increase in the total amount appropriated for a PAP. In the case of program with several activities, modification may be done only within each activity.

3. Personnel Services Allotments

3.1. All offices shall comply with the requirements and instructions of the DBM in NBC No. 567 pertaining to PS allotments.

3.2. All offices should also note the issuance of DBM's NBC No. 568 on the "Implementation of the Second Tranche Compensation Adjustment for Civilian Personnel and Military and Uniformed Personnel in the National Government" which prescribes the guidelines, rules, and regulations for the implementation of the second tranche compensation adjustment stipulated under Executive Order No. 201, series of 2016.

4. Clarification on Capitalization Threshold of Assets Recognized as Plant, Property and Equipment

4.1. As prescribed in the new Government Accounting Manual issued by the Commission on Audit, the capitalization threshold of P15,000 represents the minimum cost of an individual asset recognized as Plant, Property and Equipment.

4.2. Therefore, notwithstanding the School Capital Outlay budget lodged under Operations of Schools — Elementary Education, public elementary and also public Junior and Senior High Schools may use their school MOOE budgets to procure small capital expenditure items worth below P15,000 or costing P14,999 and below. This amends the provision on the same in DepEd Order No. 13, 31 and 75, s. 2016.

5. DepEd Plan Implementation Documents — Activity Request and Authority to Conduct EcTCAD

5.1. To support the optimal and timely implementation of plans, the Department uses two modes of plan execution, depending on the compliance of proposed plans/activities to the approved Work and Financial Plan.

5.2. If the proposed activity is in accordance with the approved WFP or the approved revised WFP of the office, then an Activity Request (AR) may be used to trigger funds release for the conduct of the said activity. Note that offices may have the opportunity to revise their WFPs at the end of every quarter, after the Program Implementation Review. See Annex C for the template, process and workflow involved in the approval of an AR.

5.3. If the proposed activity is not included in the approved WFP, an Authority to Conduct (ATC) must be secured prior to plan execution. The office must provide legal basis or documentation of directives to implement such activity to support the ATC. This is being contemplated in cases wherein the Department is tasked by the Cabinet or other oversight agencies to implement activities that are not included in the original WFP. Moreover, the office must also identify other activities in the WFP which will be reprogrammed or deferred for implementation, to give way for the proposed new activity.

5.4. If the proposed activity is included in the approved WFP, but has major deviations from the original plan, an ATC must be secured prior to plan execution. The variations which are covered by this requirement include: increase in budget requirement for the activity costing P100,000 and above; change in the nature of the activity; or change in scope of the activity. See Annex C for the template, process and workflow involved in the approval of an ATC.

5.5. Notwithstanding its inclusion in the approved Work and Financial Plan, transactions involving procurement of capital outlay items and hiring of contracts of service or consultants shall be subject to an Authority to Procure or an Authority to Hire (whichever applies) process.

5.6. Lastly, the conduct of training activities or activities charged against the HRTD fund shall be subject to the ATC process and shall be subject to the issuance of guidelines on the use of the HRTD fund.

6. Operations of DepEd Negros Island Region (NIR)

6.1. Pending any issuance on the contrary, the DepEd Negros Island Regional Office shall continue operations in FY 2017 through the Division of Negros Occidental and the Division of Negros Oriental. DepEd Regions VI and VII are authorized to transfer FY 2017 MOOE allocated for DepEd NIR Proper, in the form of cash advance, based on the computation below. As in FY 2016, the transfer of funds shall be done alternately, first by Region VII then by Region VI. HSAcaE

DepEd Regional Office Proper	Recipient Schools Division	Amount
Region VI	Negros Occidental	PhP21,752,000
Region VII	Negros Oriental	13,832,000
TOTAL		PhP35,584,000

6.2. For Capital Outlay requirements, DepEd NIR shall submit its list of necessary furniture, fixtures and equipment to be procured for appropriate action of the Central Office.

7. Some Procurement Reminders

7.1. Procurement may commence without the issuance of the Sub-Allotment Release Order (sub-ARO) but short of award, per DBM Circular Letter 2010-9 on the "Guidelines Directing Agencies to Expedite the Implementation of their Procurement Activities;

7.2. Awarded contracts are deemed obligated only upon the end user's submission of the Obligation Request and Status (ORS) and the notarized contract;

7.3. Procurement of venues and facilities

i. Disbursement vouchers should include not only the signed contract but also the appropriate Bids and Awards Committee (BAC) resolution and documents, (e.g., Agency to Agency procurement or Lease of Real Property or Venue);

ii. To ensure that resources are maximized, using DepEd facilities, such as the Regional Education Learning Centers (RELCs), ECOTECH Center, National Educators Academy of the Philippines (NEAP) and Baguio Teachers Camp (BTC), and other government-owned venues is highly encouraged.

7.4. For other procurement-related matters, please refer to the Implementing Rules and Regulations of Republic Act 9184 otherwise known as the Government Procurement Reform Act.

V. Monitoring and Evaluation

A. All offices shall comply with the reporting requirements contained in NBC No. 567 including the submission of Budget and Financial Accountability Reports as prescribed under COA-DBM Joint Circular No. 2014-1 and DBM Circular Letter No. 2016-1.

B. The new Program Management Information System (PMIS) shall be rolled out starting FY 2017. It shall serve as a tool for the Department to closely monitor the progress and implementation of various programs, activities and projects. A separate policy will be issued in this regard.

C. Any related concerns not covered by the provisions above may be referred to the Central Office Finance Service — Budget Division at (02) 637-6203 or (02) 637-4214 and/or Central Office Planning Service — Planning and Programming Division at (02) 633-7216. HESIcT

VI. Effectivity

A. This Order shall take effect immediately upon issuance.

ANNEX A

Department of EducationFY 2017 GAA

ANNEX A-1

Department of EducationFY 2017 GAA

ANNEX B

Department of EducationFY 2017 GAA

ANNEX B-1

Department of EducationFY 2017 GAA

ANNEX C

Activity Request (AR) Process Flow, CO

Authority to Conduct (ATC) Process Flow, CO

Activity Request (AR) Process Flow, RO & SDOS

Authority to Conduct (ATC) Process Flow, RO & SDOs