Policies and Guidelines for the Use of Income, Special Trust Fund and Programs of Receipts and Expenditures of the SUCs

August 4, 2011

CHED MEMORANDUM ORDER NO. 020-11

 

In accordance with the pertinent provisions of Republic Act (R.A.) No. 7722, otherwise known as the "Higher Education Act of 1994," and by virtue of the Commission en banc Resolution No. 102-2010 dated May 12, 2010, the following guidelines are hereby issued for the guidance of all SUCs: SDTIaE

ARTICLE I

Introduction

SECTION 1. Purpose. — This manual seeks to establish and institutionalize uniform fiscal policies that will serve as guidelines in the use and disposition of all internally generated funds accruing to the SUC, as well as to integrate a system of accountability for all fund administrators.

SECTION 2. Scope of Application. — The policy and guidelines shall be observed by the SUC for all receipts and collections accruing to the general income for use in operations, fiduciary funds, income generating or self liquidating operations or activities (i.e., dorm rental, spaces for rent, service fees and charges, and the like), and regular trust funds (i.e., NSTP, Publication, PTA, SSG fund, and the like). SUC constitutes the main campus, satellite or branches and external campus and any other extension which is directly under the supervision of the President or his duly authorized representative or designee.

SECTION 3. Definition of Terms. — The following terms are hereby defined in accordance with its operational meaning, as follows:

a) Accumulated savings — refer to funds available for appropriation — computed as follows:

Fund balance at the end of the year, then deduct the following:

1) Projects still to be implemented and paid out of the general fund;

2) Funds being accumulated for an Approved Project to be financed out of Student Trust Fund;

3) Accounts payable properly booked or obligated in the books of accounts;

4) Purchase Requests obligated in the current year but not yet liquidated within the year or delivery was made in the next calendar year; and

5) Fund balances of self-liquidating entities (e.g., graduate school in some SUCs, and the like) auxiliary services or IGPs.

b) Campus Executive Director/Administrator — the person authorized to manage the administrative operations of the campus. He/she is also tasked to coordinate the plans, programs, projects and activities of the campus in accordance with the overall vision, mission, goals and objectives of the SUC.

c) Capital Outlay Capital Expenditures — 1) are expenditures which exceed the established threshold, and in this case, P10,000 unit cost; 2) expenditures involving investment outlay embodied in an Annual Investment Plan or 5-year Investment Plan or such similar documents requiring a significant amount or funding; 3) expenditures which involve infrastructure projects such as road or building construction, bridges, communication or electrification system, traffic management and networking systems, and the like.

d) SUC-wide Common Fund — refers to the fund which was created out of the contribution of each unit on the basis of their pro rata share in the total tuition fee collection of the SUC to defray administrative costs to serve or benefit the whole college. This is usually managed in the main campus for administrative convenience. Implementations of the projects taken from this fund are implemented by the campus director authorized or tasked to do so. HSaEAD

e) Fiduciary Fund — funds to which collection of fees intended for a specific purpose shall accrue. This fund shall be used solely for the purpose for which it was authorized to be collected. This includes athletic fee, cultural fee, computer fee, laboratory fee, shop fee, development fee, library fee, and the like. The listing of what is classified as fiduciary fund, as well as the college, office or unit accountable for its utilization shall be stated in the report of collections which is submitted to the Board of Regents/Trustees (BOR/T) for approval.

f) Fund Administrator — one who is responsible for financial management, preparation of the budget and its execution to implement the various programs, projects or activities under his direct supervision.

g) Fund Balance at the End of Year — refers to the balance found in the bank statement and the cash book after the accounts have been reconciled. The reconciliation statement to be used shall be that which has been received by the Commission on Audit (COA) and duly certified as correct.

h) Funds Reserved for Approved Projects — refer to the funds to be continuously reserved until the amount is sufficiently accumulated to sustain the implementation of the project until its completion. A viable source of funding of these kinds of projects are the Mandatory Reserve or what was previously referred to as Priority Projects which is usually left to the discretion of the President as head of the agency, and is the accountable officer therein. Other units may earmark a portion of their income to be accumulated for a certain period of time in order to finance BOR/T approved projects.

i) Funds Reserved for Ongoing Projects — refers to those enumerated in the previous paragraph wherein the implementing units who submitted the project proposal and made a written manifestation of their intent to implement the project out of their accumulated funds. At this point the project is now being implemented.

j) Income Generating Projects (IGPs) — refer to activities which generate additional revenues for the specific purpose for which it was created. Administrative costs contribution of the said projects shall be made to the extent of twenty-five percent (25%), to be automatically remitted for the use of the Administration. However, arrangements other than this may be made as long as it is duly authorized in the approved project proposal, memorandum of agreement, or by virtue of the direct act of the BOR/T through a resolution.

k) Income Generating Units (IGUs) — refer to the fund classification of entities in the SUC which undertakes the management of IGPs which has become a regular part of the operations and activities of the SUC.

l) Investment Outlay — refers to the object of expenditure which is intended to generate income for the entity for which the funding was provided. Implication of this is that additional classrooms for a tertiary institution will mean the institution can accommodate more students who will pay tuition fees or provide access to education to non-paying or educational scholarship grantees. Construction of a commercial building will generate additional source of revenue to augment national subsidy and other internally generated income of the agency or institution. STADIH

m) Monthly Savings or Quarterly Savings — refers to the unexpended portion of the obligated funds in budget at the end of the budget period. This balance is the amount still remaining after obligation was liquidated upon payment of actual amount due to claimants, either internal or external creditors.

n) One Fund Concept — only one depository account for one type of fund will be maintained for all collections made by the SUC. It shall be deposited in the official depository bank, government bank or a government accredited commercial or depository bank. (COA Circular # 2000-02, s. 2000)

o) Other Income — are collections which cannot be classified under any of the categories of receipts and collections identified. These collections shall be for the use of the Administration.

p) Project — an initial activity which is undertaken with the end of determining its viability and in most cases, its profitability or benefits to the community, on a short term or long term basis. It is operated for a limited period of time until it is either finally put in place as an office or as a regular activity or operation. Its operation is to be terminated after the viability, profitability or benefits have been determined to be impossibility or its continuation has become impractical.

q) Project Procurement and Management Plan (PPMP) — refers to the program wherein the projects that a unit has scheduled for implementation including the supplies, materials and services required are contained. The project shall be properly identified or named so that it may properly be identified in the Annual Procurement Plan (APP) as such without enumerating all over again the project components (supplies, materials and services listed in the PPMP). (RA 9184-Government Procurement Reform Act)

r) Regular Trust Funds (RTF) — refers to a fund which is governed by law such as NSTP (NSTP Law), ROTC (ROTC Law), Publication, SSG and Alumni Funds and the like provided under R.A. 8292. However, the funds for NSTP and ROTC are integrated in the depository account of the Special Trust Fund as it cannot create an organic structure which provides for accountable officers, unlike the Publication, SSG, and Alumni Funds, which have accountable officers to manage the fund and are allowed to open their own depository account.

s) Savings — refer to such portion or balance of the SUC's released allotment for the year, free of any obligation or encumbrance and which are no longer intended for specific purpose/s such as but not limited to 1) Unexpended balance after completion of the work/activity/project for which the appropriation is authorized; or 2) unexpended funds resulting from implementation of improved systems and procedures, cost saving measures and efficiency where the agency was able to meet and deliver the required or planned targets, programs and services approved in the annual budget at a lesser cost, targets, programs and services approved in the annual budget. (Relate with the definition of "Monthly or Quarterly Savings)

t) Self-liquidating units — refers to a unit which offer auxiliary services, primarily to internal clients and, secondarily, to external clients of the SUC. These are units operating by authority of the BOR/T. These units are initially funded out of the Special Trust Fund (STF), however, they generate revenue to sustain their operations. Any subsidy extended to it must have the approval of the BOR/T. The listing of these specific activities shall also be embodied in the collection report which is submitted to the BOR/T for approval. Self-liquidating units are usually managed by the units whose functions are aligned with the program under their supervision (example: in some SUCs without the Advanced Education budget from GAA, the Graduate School is a self-liquidating unit under the management of the SUC, but the income from tuition fees of undergraduate students are not used to provide for the needs of the graduate school, as their operation is funded solely out of the graduate school tuition fees collected. Therefore, any deficiency in the collection of tuition fee is shouldered by the students as additional cost if the enrollment falls below the minimum number of students per class; otherwise the subject offered is dissolved). SCDaET

u) Service Income — refers to collections which are received by the SUC from persons or entities that avail of the services of the SUC or administration officials. These fees are intended to augment administrative expenses (supplies and materials, administrative costs) and are usually de minimis in nature. Distinction must be made between service income and income from services offered by income generating units, in which case the income is being plowed back into the IGP to keep it viable and operational.

v) Special Trust Fund (STF) — refers to the income of the SUC arising from the collection of tuition fees, miscellaneous fees, service and other income. This is broken down into:

(1) Tuition Fees for use by the SUC in carrying out its trifocal function: instruction, research and extension, and production, as well as defray its administrative costs (general administrative support);

(2) Fiduciary Fund;

(3) Revenues collected by self-liquidating units;

(4) Revenues generated by IGUs;

(5) Regular and other Trust Fund without separate depository account (NSTP, ROTC, NEDA or DOST Funding, or other NGA Funding for the implementation of projects through the State College)

w) Unexpended Amount — refers to the unobligated balance of the budget. At the end of a given period, the unexpended amount may be declared as savings. At the end of the calendar year, it may be considered as Surplus. This is usually the amount which is included in the cumulative results of operations unappropriated or the acronym popularly known as "CROU", or simply stated, Accumulated Savings. The BOR/T, through the initiative of the finance division, may use the amount for the payment of additional incentives or reprogrammed as funding for projects proposed for the next calendar year. (See definition of Accumulated Savings).

x) Unappropriated Funds — refers to the balance which may be considered available for use for a specific project or projects, or procurement of equipment or for the payment of some expenditure or obligation.

ARTICLE II

Classification of Funds

SECTION 4. Fund Structure. — The SUC shall define its fund structure for the purpose of effective fund control and establishment of accountability of the responsibility center, which is also the fund administrator. Such structure is hereby outlined as follows:

I. Special Trust Fund

a. Tuition fees

b. Service Income

c. Other Income

d. College-wide Common Fund

i. Common Administrative Fund

ii. Faculty Development Fund

iii. SUC-wide Committee Fund

iv. Other Common Funds that may be created to serve a college-wide purpose ECaTDc

II. Fiduciary Fund

III. Other Fiduciary Funds

a. Self-Liquidating Units

b. Income-Generating Projects/Units (IGPs/IGUs)

c. Regular Trust Funds (funds held in trust for a school organization or another government agency, entity or NGO, and the like)

This structure may be modified as the need arises when some fund accounts need to be created, renamed, removed, or after having been removed, was restored, all to be carried out as a consequence of the approval in an administrative council meeting and subsequently approved by the governing board.

SECTION 5. Chart of Accounts. — A chart of accounts shall be established in accordance with those prescribed by the Commission on Audit. For accounts unique or peculiar to the operation of the SUC, the same shall be prescribed through and integrated in the formulation of the internal policies, rules and regulations, including process flows. The chart of accounts shall also be harmonized pertinent to the fund structure stated in Section 4 hereof. The accounts to be included under each type of fund shall be appropriately defined and classified according to its nature and purpose.

ARTICLE III

Specific Budgetary Allocation

Specific allocation for the following may be made by each responsible fund administrator after deduction of the SUC-wide common fund establishment of benchmark data to the following thrust, program or activity:

SECTION 6. Budget Allocation for Instruction (50% of the Tuition Fees). — The primary function of the SUC is instruction and shall be allocated a total of fifty percent (50%) of the actual tuition fees collected within the current calendar year. It shall be broken down into the following components:

a) Faculty and Staff Development (12.5%)

Budget allocation shall be used for overload pay (faculty member with permanent status), trainings and seminars, scholarship grants, educational tours (assistance), in-house training and evaluation, and other similar activities for the enhancement of the capabilities of the faculty members. Supplies and materials, maintenance and other operating expenses shall be limited to office supplies used in administration of a college or program.

b) Curriculum Development (12.5%)

Budget allocation shall be used for honoraria of part time faculty members (with duly approved contract of employment), subscription to journals (trade journals), books, reviewers, reproduction of instructional materials, shop tools and other instructional equipment, educational field trip assistance, industry immersion, seminar workshops and curriculum review and development, and such other maintenance and operating expenses as may be deemed directly and indirectly related and necessary to accomplish delivery of curricular requirements.

c) Student Development (12.5%)

Budget allocation shall be used for in-house trainings of student leaders or officers, trainings sponsored by accredited agencies, student labor deployment and compensation, IT equipment, medical and dental services/programs, trainings, orientation or seminar workshop for student organization officers, scholarship and incentive programs designed to uplift and motivate student achievers, and other similar activities, in furtherance of the goal in support of the welfare of the general student population. TSacCH

d) Facilities Development (12.5%)

Budget allocation shall be used for audio-visual equipment, furniture and fixtures, room maintenance or enhancement, workshop enhancement and/or upgrading, instructional shop tools and equipment upgrading, school buildings construction (if a portion of this fund is accumulated to this end), sports facilities and equipment (buildings and other structures), information technology and communication system and infrastructure, major and minor repair and maintenance of plant and physical facilities, and such other expenses that would contribute to the delivery of effective curricular and extra-curricular services to the general student population.

SECTION 7. Limitation on Adjustment or Modification of Percentage Allocation for Instruction. — The above percentages assigned to the components of instruction may be adjusted in accordance with the expenditure trends established in the preceding year. However, the adjustment resulting to reduction in the allocation of one or more component shall not fall below 7.5%, in order not to unduly curtail developmental goals and regular operations therein.

SECTION 8. Budget Allocation for Research Services (10% of Tuition Fees). — Budget allocation for the second major function of the SUC, the research function, shall be set at a fixed rate of ten percent (10%) of tuition fees after deducting allowance for college wide common administrative costs. Said allocation shall be used for objects of expenditure related to the formulation or implementation of programs, projects, and activities, such as, but not limited to honoraria and incentives of researchers, lecturers, or research presenters, research assistants (with contract of employment) and wages of other personnel, office and IT equipment, facilities, supplies and materials, training and travel expenses, in-house research review, research presentation in appropriate forum and other research activities or undertaking that is geared towards producing research outputs that would be beneficial for the development of the community or locality where the SUC is located.

SECTION 9. Limitation on Adjustment or Modification of Percentage Allocation for Research Services. — The budget allocation for Research shall be fixed at ten percent (10%). This percentage shall not be modified or reduced in order to ensure the accomplishment of research activities or undertaking that is geared towards producing research outputs that would be beneficial for the development of the community or locality where the SUC is located.

SECTION 10. Budget Allocation for Extension Services (10% of Tuition Fees). — The third major function of the SUC is extension services, which primarily includes the dissemination of the research output for the use and benefit of the community or locality in which the SUC is located.

The budget allocation for this function shall be used for instructional materials necessary for effective technology transfer of research outputs to the community, skills training in livelihood relative to the research output, honoraria of trainers undertaking the technology transfer of research outputs to the community, travel, training and seminar of extension services personnel, trainers' industry immersion program, wages of contract of service personnel other services (job order). Expenses incurred in undertaking the secondary function of extension services which includes alternative learning system (outreach program), skills training and development in consortium with local government units involving human resource development and other similar activities may likewise be included in the budget for this function.

SECTION 11. Limitation on Adjustment or Modification of Percentage Allocation for Extension Services. — The budget allocation for Extension Services shall be fixed at ten percent (10%) of the tuition fees to ensure effective delivery of programs involving technology transfer of research outputs to the community or locality in which the SUC is located.

SECTION 12. Budget Allocation for Production (10% of Tuition Fees). — In view of the corporatization initiatives for all SUCs to render themselves reliant and sustainable, the SUC shall earmark a fixed ten percent (10%) budget allocation for the establishment of a project or income generating activity, or for investment outlay in the form of commercial structures that would generate additional revenues for the SUC. Maintenance expenses for the said income generating project shall thereafter be financed out of its collections as soon as it becomes viable. For its initial operations, budget allocation as stated in the budget proposal approved by the governing board for office supplies, facilities enhancement, other services (job order), equipment, utilities, and other maintenance and operating expenses may be made. After review of its viability or feasibility, the project, which assumes a temporary duration until officially considered as a regular activity (or has become an income generating unit assigned to or supervised by the Director for Business Affairs), shall be assessed, whether fit for permanent operation or should be further subsidized for another term or period or should be phased out or discontinued. CcAESI

SECTION 13. Limitation on Adjustment or Modification of Percentage Allocation for Production. — The budget allocation for Production may be fixed at ten percent (10%) of the collected tuition fees to ensure effective delivery of programs involving the establishment of an investment outlay project or income generating project of the main campus, satellite branches or external campuses of the SUC to be funded out of their respective tuition fee collections. However, any reduction to the allocated percentage must be justified in writing and approved by the governing boards. The assignment of the portion pertaining to the reduction shall be specifically stated, that is, if the same shall be used as augmentation to the budget of the other functions stated in the preceding sections.

SECTION 14. Budget Allocation for Administrative Services (10% of Tuition Fees). — Basic general administrative support services commonly known as Administrative Services or Administration, shall include the following: administrative services which personnel or human resource management, cashiering, maintenance, security, supply and property management, and liaison to and from other national government agencies concerned with personnel benefits and privileges; financial management which includes accounting, budgeting, and financial reporting; and administration which cater to the needs of the executive officers' maintenance and operating expenses.

Budget allocation for this aspect of operations shall be used for personnel services, staff development trainings and seminars, travel expenses, office supplies and materials, security and maintenance services (job order/contracts of service) and such other maintenance and operating expenses necessary for the effective and efficient delivery of general administrative support services as contribution to the attainment of the vision, mission, goals and objectives of State College.

SECTION 15. Limitation on Adjustment or Modification of Percentage Allocation for Administrative Services (or Administration). — The budget for allocation for Administrative Services (or Administration) shall be fixed at ten percent (10%). Modification resulting to reduction of the percentage allocation shall not be allowed. Any unexpended balance may be used to augment infrastructure or capital outlay appropriation.

SECTION 16. Budget Allocation for Mandatory Reserve (10% of Tuition Fees). — A budget allocation of ten percent (10%) for Mandatory Reserve shall be made by the SUC main campus, satellite branches or external campuses as contingency fund for any unexpected event which may adversely affect the institution and its operations.

SECTION 17. Appropriation Out of the Mandatory Reserve. —

Projects or object of expenditures that may be financed by resorting to the scheme using the mandatory reserve shall include emergency construction of structures destroyed by natural or man-made calamities. This is a provision made in response to emergency circumstances beyond the control of the SUC or campus administrators.

This mechanism shall be carried out by virtue of an Administrative Council resolution and is internal in nature. Contribution from the other branch campuses or external campuses may be consolidated, in the same way that repayment out of future collections may likewise be apportioned to the extent of the loan extended. This shall be stated in the budget proposal approved by the governing board, as "Repayment of loan assistance granted by [name of the campus]".

The above suggested percentage allocation may be modified to suit the needs of the SUC, provided such modification was approved by the governing board.

SECTION 18. Provision for Common Fund. — The SUC shall provide for a common fund out of which the expenditures considered as SUC wide common administrative costs shall be paid.

The finance officer shall assist in determining the costs pertaining to the identified object of expenses in accordance with the expenditure trends of the preceding calendar year and determinable expenditures of the next calendar year. Each campus or SUC shall allocate a portion of their budget to defray college-wide administrative and development costs. The pro-rata distribution shall be based on tuition fee collections. A SUC-wide administrative and development cost have been identified, but is not limited to, the following: HESIcT

a. Costs in the holding of BOR/T meeting

b. Travel expenses of the BOR/T members

c. Honoraria and other incentives of the BOR/T

d. General administrative support services

e. Honoraria of the VPA, VPAA, Student Services Directors, Research & Development Services, and Extension & External Services Directors,

f. MOOE of College-wide Officials and staff (Chief Administrative Officers, Budget Officers, Accountant, Human Resource Officer, Management and Audit Analyst, Supply and Property Officer, and other college-wide officers)

g. Other SUC-wide services and activities (non-recurring, e.g., thanksgiving at year end, equipment outlay — payroll/salary and HRM services; four campuses-disbursement/payment services-cashier's office equipment, year-end incentives and the like).

h. Establishment of fund for SUC wide faculty development fund and for any specific committee that may be established for a specific purpose.

SECTION 19. SUC-Wide Faculty Development (NBC 461 Committee). — In view of the nature and manner by which faculty members may be upgraded professionally or can avail of academic promotions with implication on compensation, NBC 461 Committee shall be formally established herein as a permanent SUC wide faculty development committee. As such, the director in charge of the coordination, consolidation, reporting, submission, liaison functions, and such other duties and functions that may be undertaken towards the objectives of this Committee shall be entitled to transportation allowance which shall be paid out of this fund. Maintenance and other operating expenses may likewise be paid out of the fund appropriated from the SUC wide common fund.

SECTION 20. SUC-Wide Committee Fund. — Budget allocation for this specific committee which may be created in the future or is already existing in the present calendar year, shall be limited to the budgetary requirement contained in the budget proposal, or in the absence of a proposed or specific amount, as deliberated upon as reasonable and agreed, in an appropriate forum such as during an administrative or academic council meeting. Approval of the governing board shall be a basic requirement before any expenditure may be incurred.

SECTION 21. Pro-Rata Distribution Based on Tuition Fee as a Measure of Ability to Pay. — The basis for the distribution of share in the SUC wide common administrative cost shall be the tuition fee collection computed as follows:

1st semester enrolment of the preceding calendar year)	[collection per
+ (2nd semester enrolment (30%)	satellite/branch/
——————————————————————	campus]
1st semester enrolment of the preceding calendar year)
+ (2nd semester enrolment (30%)	[grand total — tuition
		fee collection as
		consolidated]
X	Total Amount Appropriated for the Common Fund
=	Amount of Contribution or Share Due from a Satellite/Branch/External Campus

The amount due from a satellite campus, branch campus or external campus, as the case may be, shall be deducted from the actual tuition fee collected within the period covered by the budget period cut off. Consequently, if the budget period for the first quarter (January to March) shall be funded out of collections for December 16, 2009 to March 15, 2010, the amount due as contribution shall be deducted from the total actual collections, and the remaining amount to be distributed or allocated to the different functions and budgetary provisions as identified in Section 6 to Section 20.

ARTICLE IV

Specific Budgetary Provisions

SECTION 22. Documents to Support Budget Proposal. — The budget for the use of income shall be submitted for approval to the BOR/T. However, no budget shall be submitted for approval by the BOR/T unless the same is accompanied by the following:

a. A certificate duly signed by the Accountant that collections have been made, duly receipted and deposited in the official government depositary bank. Such certification shall be broken down by college, campus, and fund (fiduciary, self-liquidating projects and activities and regular funds) showing the details of the fees collected. AEcIaH

b. Annual Procurement Plan (APP)/Project Procurement Management Plan (PPMP)/EPP

All budget proposals for maintenance and other operating expenses requiring procurement shall be covered by an APP and PPMP duly signed by the deans, executive directors, fiduciary and IGP/Production fund administrators, and the President, and submitted for approval to the BOR/T. This requirement and all other mandatory requirements under RA 8194 (Government Procurement Reform Act) shall be observed strictly to maximize the use of financial and material resources.

c. Investment Plan

All capital outlay and investment program must be covered by a BOR/T approved Project Procurement Management Plan.

SECTION 23. Distribution of Copies of the Approved Budget. — Upon approval of the budget, the Office of the Board Secretary shall furnish a copy of the BOR/T approved budget to the COA resident auditor, DBM Regional Office, the Chief Accountant and all the fund administrators, and attach thereto the excerpt of minutes of the meeting and the Board Resolution with control number thereon for reference of the users of the budget document.

SECTION 24. Implementation of the Budget. — Budget authorized by the BOR/T shall be implemented within the Calendar Year for which it was formulated. The inclusive collection period and the Quarter for which the collection will be used shall be clearly and specifically stated.

The BOR/T meets only once every quarter, and allowed to conduct two (2) special meetings. Therefore a reasonable scheme must be resorted to in order to abide with COA Circular No. 2000-02, s. 2000 which requires board approval for the use of income, while aligning the financial operations and transactions with financial cycle which abides by a January to December or calendar year period.

Hence, for example, collections for the period covering November 16, 2009-February 28, 2010 shall be used for operations of the first Quarter CY 2010 which covers January to March 2010.

A collection period is associated for one quarter. The implication is that the standard months pertaining to a quarter will not necessarily be the same as the collection period. This happens because of (1) the limitation on the availability of the BOR/T members to meet on a regular basis which ought to be on the month before the next quarter period and (2) the impossibility of generating actual report of collections pertaining to the quarter for which they will authorize the budget. This necessitates the authority of the BOR/T to incur "obligational authority" to the extent of amounts stated in the Program of Receipts and Expenditures (PRE) for the current Calendar Year.

For this reason, obligational authority to the extent of amounts stated in the BOR/T approved Program/Projected Receipts and Expenditures (PRE) shall be obtained to fill in the ensuing vacuum in budgetary authority created by this desynchronization.

SECTION 25. Prior Year's Expenditure to Be Paid in the Current Year. — Expenditures which have been obligated in the current year but to be paid or settled in the next calendar year shall be funded out of remaining fund balance as of December 31. It shall be included as among those to be deducted from Fund Balance at the End of the Year in determining the Accumulated Savings subject of appropriation.

SECTION 26. Approval of Request for Obligation in Accordance with Approved Budget; Availability of Unobligated Funds and Budget Officer's Certification. — In the implementation of the budget, no request obligation of allotment or funds shall be approved if provision for the said expenditure has been made or allocated in the approved budget. Likewise, no request for obligation of allotment or funds shall be approved in the absence of available unobligated funds in the account of the main, satellite, branch, or external campus, or college, units, divisions, sections or committees established therein. SCADIT

ARTICLE V

Reservation of Funds

SECTION 27. Appropriation for Specific Infrastructure Projects. — Funds may be earmarked for a specific project, construction, or acquisition of equipment or vehicle to be made out of a specific fund which should be properly identified. Such reservation shall be made and embodied in a budget proposal for the use of income. If the cost of the project requires that the amount be accumulated over a period of time, such reservation shall be duly taken up in a subsidiary ledger to account for the same until the project, construction or acquisition is ready to be undertaken.

SECTION 28. Prior Year's Expenditures Associated with the Implementation of an Ongoing Project Carried Over into the Current Year. — Expenditures which have been obligated in the current year and is associated with a BOR/T approved project, but to be paid or settled in the next calendar year shall be funded out of remaining fund balance as of December 31. It shall be included as among those to be deducted from Fund Balance at the end of the year in determining the Accumulated Savings subject of appropriation, being a "reserved fund" for a continuing project.

SECTION 29. Action Plan and/or Investment Plan. — Funds may be reserved out of the special trust fund income, upon the submission of an investment plan or list of projects which implementation period extends to more than one (1) year or which authority was obtained and implementation takes place near the end of the calendar year and extends over to the next calendar year. For the latter, the project may appropriately be considered as a continuing appropriation out of the special trust fund and shall not be included in the funds to be declared as unappropriated surplus.

SECTION 30. Availability of Funds and Accountant's Certification. — The plan shall be submitted to the BOR/T so that funds may be appropriated as a continuing investment or capital outlay to the effect that funds earmarked for the project shall be deemed appropriated for the period within which it is to be implemented until completed; Provided, That funds appropriated therefore shall be supported by a certification from the accountant that the same is available and had already been set aside for the purpose.

Projects which had been proposed nine months before the year end but was not yet implemented by October of the current year may be subject for reprogramming in the next calendar year if the implementing unit has manifested in writing its intention to reprogram the schedule of the said project. The fund allocated for the project shall be reserved and is excluded in determining the Accumulated Savings. It is strongly enjoined that booking of unpaid accounts arising from transactions not yet consummated or ongoing projects, as Accounts Payable be strictly observed to make the reservation of funds effective.

If the above section is observed, better management decision making is promoted as well as the efficient and maximum utilization of financial resources.

ARTICLE VI

Accumulated Savings/The CROU

SECTION 31. Use of STF Accumulated Savings or Cumulative Results of Operations-Unappropriated (CROU). — The disposition of the STF Accumulated Savings or Cumulative Results of Operations-Unappropriated arising from tuition fees, service and other income shall be approved by the BOR/T upon the recommendation of President in consultation with the Administrative Council (ADCO). The BOR/T approval may include proposed major project or to use it in payment of a loan incurred by the SUC from a bank, or other financial institution, or for the payment of incentives or any other project or expenditure that would benefit the SUC. EcaDCI

SECTION 32. Maintenance of Subsidiary Accounts. — A subsidiary ledger shall be maintained by the Financial Management Services Division to monitor the accumulation of unexpended amount. This shall serve as the common fund account of the whole SUC, regardless of where the unexpended fund was taken. In the case of the budget for Production, and the funds pertaining to fiduciary fund, self-liquidating units, income generating units, and regular funds, a running balance shall be retained. Its inclusion in the CROU shall be expressly approved by the BOR/T by virtue of a board resolution, after due deliberation.

SECTION 33. Discretion of the BOR/T. — The power vested in the BOR/T to delegate to the SUC President to administer or manage the accumulated savings of the SUC is justified by his accountability as head of agency, as long as it is in furtherance of the goals and objectives of the SUC as a whole. The respective fund administrators have already been given the authority to execute their respective budget using their respective allocations upon the approval of the BOR/T. Their failure to do so may cause the increase of accumulated savings to the SUC, but is not a credit to their performance.

In case decision is to use the accumulated savings for personal services, such as additional incentive, the PRAISE committee and the ADCO shall agree on it, and the same shall undergo the usual BOR/T approval upon favorable endorsement by the SUC President.

ARTICLE VII

Final Provisions

SECTION 34. Effectivity. — The above-stated fiscal policies and guidelines shall take effect immediately, and therefore, implementation shall be made upon approval of the same by the BOR/T.

SECTION 35. Supplemental Provisions. — Any portion hereof which needs clarification shall be issued supplemental instruction. Whenever practicable, consultations shall be made with all those concerned. Any modification, repeal or supplement of any provision may be recommended upon due deliberation. Any introduction of new developments of shift to new methods of data management shall be adopted to enhance financial management information dissemination as well as access to it by internal users and decision-makers.

SECTION 36. Formulation of Internal Procedures and Process Flows. — It shall be the responsibility of the SUC to formulate internal procedures and process flows to implement the provisions in this guidelines, and the same shall be modified periodically in compliance with rules and regulations that may be passed by other concerned national government agencies from time to time, particularly those originating from CHED, DBM, COA, NEDA, DOST, DA and agencies which functions or mandate are allied with the functions and mandate of the SUC.

SECTION 37. Separability Clause. — Any portion hereof contrary to law, rules and regulations may be immediately modified or removed accordingly, and the corresponding law, rule or regulation is attached herewith for ready reference. Any portion hereof not affected shall remain in full force and effect unless repealed or deemed superseded by a new law, rule, regulation or BOR/T approved policy.

SECTION 38. Transition Period. — As far as practicable, all provisions herein stated take effect immediately. Reasonable efforts are expected to bring to full implementation on these policies and guidelines in the use of the Special Trust Fund. DISEaC

Issued this 4th day of August, 2011, Quezon City, Philippines.

(SGD.) PATRICIA B. LICUANAN, Ph.D.Chairperson