Revised Guidelines and Procedures in the Disposal of PNP Property and Equipment and the Disposition of Derived Income

June 9, 2009

PNP MEMORANDUM CIRCULAR NO. 009-09

REVISED GUIDELINES AND PROCEDURES IN THE DISPOSAL OF PHILIPPINE NATIONAL POLICE PROPERTY AND EQUIPMENT (PE) AND THE DISPOSITION OF THE INCOME DERIVED THEREFROM

1. References:

a. Memo Circular No. 2006-011 entitled: "Revised Guidelines and Procedures in the Disposal of Philippine National Police (PNP) Properties and Disposition of the Income Derived Therefrom" dated June 22, 2006;

b. COA Circular Nr. 89-296 titled, "Audit Guidelines on the Divestment or Disposal of Property and Other Assets of National Government Agencies and Instrumentalities, Local Government Units and Government-Owned or Controlled Corporations and their Subsidiaries" dated January 27, 1989;

c. COA-PTTAF Manual on Disposal of Government Property;

d. COA Circular Nr. 95-006 titled, "Total Lifting of Pre-Audit on all Financial Transactions of the National Government Agencies, Government-Owned and/or Controlled Corporations and Local Government Units" dated May 18, 1995;

e. Presidential Decree No. 1911 titled, "Authorizing the Disposal of Unclaimed Recovered and Impounded Carnapped Motor Vehicles Amending for the Purpose R.A. No. 6539 otherwise known as the Anti-Carnapping Act of 1972" dated March 23, 1984;

f. Title 7, Chapter 3 of Government Accounting and Auditing Manual, Volume I, which pertains to "Disposal/Divestment of Property"; HIaTDS

g. General Orders Nr. DPL 08-15 dated October 7, 2008 "Restructuring of Unit";

h. PNPLSS General Orders Nr. 41 dated November 7, 2008 "Creation of Additional Functional Division";

i. Executive Order No. 309 "Reconstituting the Disposal Committee created under E.O. No. 285" dated March 8, 1996; and

j. National Budget Circular Nr. 425 "Manual on Disposal of Government Property" dated January 28, 1992.

2. Purpose:

This Circular prescribes the policies and procedures in the reporting, turn-in and disposal of PNP property and equipment (PE) whether Republic or Non-Republic, immovable or movable for being unserviceable, obsolete, abandoned or considered excess and the disposition of the proceeds thereof to avoid further deterioration of PE, clear storage space, and generate greater benefit to the PNP through the possible income that may be derived therefrom.

3. Definition of Terms:

a. Property and Equipment (PE) — are assets of the PNP that are acquired in the course of operations, are considered long-term in nature, and possess physical substance. (i.e., bldg., motor vehicle, firearms, ammunition, office equipment, etc.)

b. Abandoned Properties — movable PE in the possession of the PNP without known owners or claimants.

c. Cannibalization — the process of removing serviceable parts or accessories from a functioning piece of equipment making it unusable for its intended purpose or function. Cannibalization requires pre-approval by the organization's Supply Accountable Officer (SAO).

d. Disposal — covers the condemnation, transfer to other agencies, donation to institutions/associations, sale by public bidding or negotiation of unserviceable PNP PE which have been inventoried, inspected and appraised as disposable by the Disposal Committee. aDHCEA

e. Disposal Yard — a place within any PNP unit where the disposable articles/properties are stocked. The following are the authorized Disposal Yard of the PNP: LSS Disposal Yard, Police Regional Office (PRO) Disposal Yard, and Aviation Security Group (ASG) Disposal Yard.

f. Excess Properties — serviceable PE in the possession of any unit of the PNP which are in excess of the quantity required or authorized for retention, and cannot be utilized as substitute properties to satisfy the operational requirements.

g. Forfeited Properties — PE acquired by summary process or by order of the court pursuant to applicable laws, rules and regulations.

h. Non-Republic Properties — PE or supplies purchased from funds other than appropriated or reimbursable funds. These include Military Acquired Property (MAP) and other grant and/or aid materiel, properties found in station (those acquired from donation, confiscation/seizure/forfeiture or procurement), captured enemy materiel, reclaimed properties (those reclaimed or recovered from condemned or unserviceable properties) and salvaged properties.

i. Reclamation — restoration of materials found in the waste stream to a beneficial use which may be for purposes other than the original use.

j. Republic Properties — PE or supplies purchased from appropriated funds or reimbursable funds of the PNP.

k. Obsolete Properties — PE which have lost its efficacy either due to technical advancement, change of procedures, reorganization of the office or completion of project.

l. Salvaged Properties — PE that are unserviceable and declared beyond economical repair by reason of severe or total damage, destruction and lost components/parts due to uncontrolled cannibalization.

m. Serviceable Properties — PE in serviceable condition which are in the possession of a unit of the PNP. Serviceable properties include those properties authorized in the Table of Organization and Equipment (TOE) that are put to use by the agency and other PPE that are still in good conditions but are no longer put to use due to excess or obsolescence. HDATCc

n. Unserviceable Properties — refers to unserviceable and/or no longer needed PE that cannot be used or placed in service due to fair wear and tear or obsolescence.

4. Classification of Disposable PE:

a. Excess properties remaining after redistribution

b. Obsolete properties

c. Salvaged properties

d. Forfeited properties

e. Abandoned properties

f. Unserviceable properties

5. Policies:

a. Disposal action of PE with salvage value shall be undertaken only at the level of the NHQ and PRO Disposal Committees. All disposable properties with salvage value in any lower unit or office shall be turned-in at the appropriate disposal activity/yard as defined in para 3e. All disposal committees shall ensure that controlled reclamation/cannibalization is conducted on the disposable PE.

b. All disposable PE of the Regional Offices of NASUs/NOSUs may be turned-in to their respective PROs for proper disposal action upon approval of the concerned NSU.

c. All salvaged properties recovered by the PNP in any clearing or recovery operations of sunken vessels and abandoned equipment, etc., shall be considered as PNP property subject to private claims and shall be disposed of in accordance with this Circular, if no claim is presented within six (6) months from the date of recovery after two (2) publications in two (2) consecutive weeks in a newspaper of national circulation.

d. Items or supplies in stock which have no recorded demands for at least two (2) years at the Logistics Support Service (LSS) Warehouse or for at least one (1) year at other PNP Supply Units shall be declared and reported as excess or obsolete properties. All declared excess properties shall be turned-in to their respective disposal yard and redistributed to other units that may need the items before disposal action may be undertaken. Physical inspection and redistribution of excess properties shall be effected at the authorized disposal activity/yard. cTIESD

e. Copies of the LSS excess/obsolete property list shall be furnished to all concerned units of the PNP. Only after a period of one (1) year from date of distribution of the excess/obsolete items list shall disposal proceedings be initiated.

f. All forfeited and abandoned properties in the possession of any PNP unit or office shall be turned-in to their respective disposal activity/yard. Reclamation/cannibalization from said properties is not allowed unless the prior approval in writing of the SAO concerned has been obtained.

g. All disposal actions shall be in a manner deemed advantageous to the PNP and in accordance with the provisions of Chapter 3, Sec 501 -m 510, Volume 1 of the Government Accounting and Auditing Manual (GAAM) and PD 1911.

h. Disposal awards shall be recommended only for amounts not less than the final appraised values indicated by the Disposal Committee for the disposable properties. All recommendations for disposal shall be subject to the final approval of the Disposal Committee.

i. The cash proceeds of disposal through sale shall be directly remitted to the Collecting Officer of the Finance Service (FS), who shall issue the corresponding Official Receipt of Property.

j. Disposal of Military Acquired Property (MAP), the ownership of which has not yet been fully vested to the PNP, shall be conducted in a manner prescribed by a Memorandum of Agreement between the Armed Forces of the Philippines (AFP) and PNP.

k. Disposal of PNP buildings shall be determined by the Directorate for Logistics (DL) upon the recommendation/assessment of the Engineering Service (ES) and in conformity with existing regulations/manual. This is usually undertaken through dismantling/destruction to make way for planned new facilities.

l. The NHQ/PRO Disposal Committees may create Sub-Disposal Committees in their respective jurisdictions that will conduct the initial evaluation and address all preparatory concerns for the disposal of a particular property, i.e., one each for vehicles, firearms, office equipment, land and/or buildings, and other disposable properties. The creation of Sub-Committees will ensure that the NHQ/PRO Disposal Committees shall not be overburdened, promote efficiency and develop specialization. The members of the Sub-Committees shall come from the offices that composed the NHQ/PRO Disposal Committees plus a representative of the office that exercises regulatory function over the item for disposal or responsible for its acquisition. ACHEaI

6. Composition of the PNP Disposal Committees and Secretariats

a. National Headquarters (NHQ) Disposal Committee

1)	Director for Logistics	- Chairman
2)	Director for Comptrollership	- Vice Chairman
3)	Director, Logistics Support Service	- Member
4)	Director, Legal Service	- Member
5)	Chief Accountant, PNP	- Member
6)	Chief, Internal Audit Office	- Member
7)	Chief, SAMD, LSS	- Member
8)	COA Representative	- Witness

b. Police Regional Office (PRO) Disposal Committee

1)	Deputy Regional Director for Administration	- Chairman
2)	Chief, Regional Logistics Division	- Vice Chairman
3)	Chief, Regional Comptrollership Division	- Member
4)	Chief, Regional Legal Service	- Member
5)	Chief, Regional Engineering Office	- Member
6)	Chief, Regional Accounting Office	- Member
7)	Regional Supply Accountable Officer	- Member
8)	Regional COA Representative	- Witness

c. NHQ Disposal Committee Secretariat

1)	Chief, Property Disposal Mgmt Div, LSS	- Head
2)	Asst Chief, Property Disposal Mgt Div, LSS	- Asst Head
3)	Construction & Repair Div Representative, ES	- Member
4)	Supply Storage & Distribution Div Rep, LSS	- Member
5)	Logistics Representative, CES	- Member
6)	Legal Service Representative	- Member
7)	Supply Accounting & Monitoring Div Rep, LSS	- Member
8)	FAs & Ammunition Sec Representative, SMD, DL	- Member
9)	Mobility, Aviation & Maritime Sec Rep, SMD, DL	- Member
10)	General Support Sec Representative, SMD, DL	- Member
11)	Information & Management Sec Rep, LPPD, DL	- Member
12)	Storage Branch Representative, FED	- Member
13)	Carnapped Vehicles Impounding Area Rep, TMG	- Member
14)	Internal Audit Office Representative	- Member

 Representatives of the respective offices that exercise regulatory functions over the PE for disposals shall be members of the Disposal Secretariat on a need basis.

d. Pro Disposal Committee Secretariat

1)	Assistant Chief, Regional Logistics Division	- Head
2)	Assistant Chief, Regional Comptrollership Division	- Asst Head
3)	Chief, Regional Direct Support Unit	- Member
4)	Regional Legal Service Representative	- Member
5)	Regional Supply Accountable Officer Rep	- Member

 7. Procedures:

a. The PNP NHQ/PRO Disposal Committee shall create a Disposal Secretariat that will manage, monitor and compile all the data/details of PNP properties for disposal.

b. The PNP NHQ/PRO Disposal Committee shall identify disposable items in their respective jurisdictions; conduct technical inspection, classification and appraisal of every item or property earmarked for disposal and, thereafter, dispose the disposable properties according to the methods prescribed in this Circular.

c. After disposing of the properties, the NHQ/PRO Disposal Committee shall submit a report within five (5) days to the C, PNP, copy furnished the Directorate for Logistics (DL), all relevant documents for the dropping of said properties from the PNP Book of Accounts. TcSHaD

8. Methods of Disposal:

The following are the authorized methods/modes of disposal:

a. Sale through public bidding shall be the primary method of disposal of PNP properties. Should this mode be unsuccessful, the Disposal Committee may dispose the properties in a manner most advantageous to the PNP.

b. Sale through negotiation — This mode of disposal may be resorted to only upon justifiable reason and when required by the exigencies of the service. However, the following factors must exist before resorting to this method:

1) Failure of public auction due to the following instances:

1.1 The amount of bid received is below the approved floor price.

1.2 The bidder is disqualified for an award of contract.

2) Records of the proceedings of the negotiation must be maintained.

c. The NHQ and PRO Disposal Committees may barter disposable PNP properties with properties of other government agencies, provided it is for the best interest of the PNP.

d. Transfer of excess/surplus PNP properties to other government agencies may be made upon the request of the office needing the properties and shall be approved by the C, PNP. Since the transfer will involve inter-government agency transfer, property accountability shall be maintained throughout the process (Accomplishment of invoice receipt for property is imperative).

e. Donation of excess/surplus PNP properties to other government agencies, charitable and non-profit institutions and foreign friendly countries shall only be done upon approval of the C, PNP. The following requirements shall be incorporated in the request: a) brief statement of the agencies activities; b) general information on the intended use of the property; c) statement that the property shall not be resold or used other than the intended purpose indicated. TcHCIS

f. Upon approval of the NHQ and PRO Disposal Committees and after inspection of the COA, destruction or abandonment may be allowed provided the manner of disposal will not be detrimental or dangerous to public health or safety or will not cause infringement on the rights of other persons or upon government agreements. Provided further that the following conditions are satisfied: a) The property has no commercial value (valueless); b) The estimated cost for its handling and care including cost to sell would exceed the estimated proceeds from its sale and; c) Other methods of disposal are not economically feasible.

g. Destruction shall also be resorted to if it is unsalable and it may pose hazard to the public if not destroyed.

9. Utilization of Proceeds of Disposal:

a. The disposition of proceeds of the disposal of Republic and Non-Republic properties shall be managed at the PNP NHQ/PROs. All cash proceeds shall be directly remitted to the respective PNP Finance Service (FS) Office by the contracting parties.

b. All cash proceeds from properties sold shall be deposited with the Authorized Government Depository Bank (AGDB) for the account of the agency or the Bureau of the Treasury (BTr).

c. In the case where payment for the sale of disposable property is made in the form of supplies or in kind, same shall be witnessed by the Disposal Committee for the proper recording in the books of the PNP.

d. The basis for determining the quantity of supplies to be delivered as payment or barter for properties sold through bidding or negotiation shall be the bid or negotiated price equated to the fair market value of the supplies bartered.

10. Accounting and Auditing of Funds and Properties:

a. Accounting — The accounting of properties and funds relative to the disposal of properties, both Republic or Non-Republic shall be done in accordance with this Circular while disposal of Military Acquired Property (MAP) shall be done in accordance with agreements executed by the DILG and DND. DASEac

b. Auditing — The auditing of accounts and transactions relative to the disposal of non-MAP shall be in accordance with applicable laws and regulations. The Internal Auditor, PNP or representatives shall conduct audit of accounts and transactions relative to the disposal of all properties.

c. Dropping of property accountabilities shall be in accordance with the provisions of the Government Accounting and Auditing Manual (GAAM) and the New Government Accounting System (NGAS).

d. Nothing in this Circular shall preclude the intervention of independent auditors of the Commission on Audit (COA) in the disposal of properties, in the dropping of property accountability and the auditing of disbursement or the proceeds acquired thereof.

11. Responsibilities:

a. The Director for Logistics (TDL)

1) Sit as Chairman of the NHQ Disposal Committee;

2) Primarily responsible in the implementation of this Circular; and

3) Confirm if the property recommended for disposal by the Disposal Committee shall be disposed.

b. The Director for Comptrollership (TDC)

1) Sit as Vice Chairman of the NHQ Disposal Committee;

2) Drop all properties disposed by the Disposal Committees from the PNP Book of Accounts; and

3) Provide funds for the Secretariat.

c. NHQ Disposal Committee

1) Conduct inventory and inspection of PNP supplies and properties for disposal stored in authorized PNP disposal yards and real estates/buildings in PNP premises;

2) Subject to COA approval, set the final appraised value for all disposable properties taking into consideration obsolescence, market demand, physical condition and result of previous biddings for similar properties; caHIAS

3) Ensure that the disposal/award of disposable properties are made consistent with existing laws, rules and regulations. Disposal shall be on "as is, where is" basis; and

4) Submit list of disposed properties to the C, PNP (Attn: DC) and ensure that said properties are properly dropped from the accountability of concerned Supply Accountable Officer.

d. NHQ Disposal Committee Secretariat

1) Responsible for documentation and recording of all transactions involving, supplies, materiel and equipment belonging to the PNP as regards to disposal;

2) Maintain an updated stock record card, equipment ledger cards and an official registry book of all supplies, materiel and equipment for disposal;

3) Coordinate with other supply activity units pertaining to disposal of materiel and equipment;

4) Prepare pertinent papers for the disposal of unserviceable equipment and materiel and assist the Disposal Committee in the conduct of disposal activity;

5) Conduct periodic inventory and inspection of PNP supplies and properties for disposal stored in authorized PNP disposal yards and real estates/buildings in PNP premises;

6) Prepare and submit all the required logistical reports to higher HQS pertaining to the supplies and equipment for disposal;

7) Implement the directive regarding the disposal of supplies and equipment; and

8) Perform other duties and functions as may be directed by the Chairman, Disposal Committee and higher authorities.

e. Regional Director, Police Regional Office

1) Organize and operationalize the PRO Disposal Committee;

2) Issue implementing guidelines for the proper implementation of this Circular at the PRO;

3) Determine excess supplies and identify other disposable properties of the PRO and turn-in same to the PRO Disposal Yard;

4) Ensure that cash proceeds from disposal action are remitted to the Regional Finance Service Office (RFSO);

5) Ensure maximum protection of items at the disposal yard from further deterioration and pilferage; 

6) Submit a quarterly report of excess and disposable items to the C, PNP (Attn: DL); and

7) Ensure that properties disposed are properly dropped from the accountability of the Supply Accountable Officer (SAO). CEHcSI

f. Pro Disposal Committee Secretariat

1) Manage, monitor and compile all the data/details of PNP properties which are subject for disposal;

2) Prepare documentation and assist the Disposal Committee in the disposal activities;

3) Responsible in the maintenance and management of records with regard to disposal;

4) Submit report to the PRO Disposal Committee as regards the conduct of disposal; and

5) Perform other duties and functions as may be directed by the Chairman, PRO Disposal Committee.

g. Supply Accountable Officer

1) Conduct periodic inventory and inspection of unserviceable/disposable properties quarterly and to submit thereon the Inventory and Inspection Report (IIR) to the PNP Disposal Committee (Attn: Disposal Secretariat);

2) Submit an updated Inventory List of all Properties Found-in-Station to include their sources, whereabouts and condition/remarks quarterly as changes occur (thru a report of changes);

3) Conduct technical inspection and classification of disposable properties at respective unit;

4) Submit to the Regional Director, Attn: C, RLRDD, quarterly report on excess and disposable properties in the prescribed format; and

5) Recommend to the Regional Director through C, RLRDD, properties which are deemed to be disposed.

h. COA Representative

Per COA Circular No. 95-006 dated May 8, 1995, COA Representative shall serve as witness/observer to the disposal of unserviceable properties and review in-house appraisal in aid of post-audit of the transactions, including disbursements of the proceeds. EaIDAT

12. Required Report/Forms:

a. Quarterly Report on Excess and Disposable Properties — This report shall be rendered by the Regional Directors having responsibility over authorized PNP Disposal Yards. The report shall be categorized by technical service classification, consolidated and finally submitted to the C, PNP (Attn: DL) not later than the 15th day after the end of the quarter.

b. Inventory and Inspection Report (IIR) — A report on the semi-expendable materials and equipment and non-expendable supplies which shall be accompanied by the following:

1) Individual Survey Report duly certified by the supply officer and head of unit/agency.

2) Individual photographs of properties taken from two (2) different views.

3) List of missing spare parts duly certified by the supply officer/head of unit/agency.

4) Stencils of chassis and engine numbers of motor vehicles.

5) Stencils of serial number, make, type and caliber as regard to firearms (FAs).

c. Report of Waste Material (RWA) — A report for expendable materials, supplies and consumables including spare parts, empty containers and remnants from destroyed or damaged fixed assets. This must be accompanied by current onsite photograph taken from two (2) different views.

d. Invoice Receipt for Property (IRP) — A report for transfer of non-expendable properties from one supply accountable officer to another supply accountable officer.

e. Property Turn-In Slip (PTS) — a report for turning-in to the supply installation of the next higher level all excess and unserviceable non-expendable supplies.

13. Penalty Clause:

Any violation of this Circular shall be investigated and, if warranted by evidence, appropriate criminal, civil, and administrative charges shall be filed against those who may be responsible thereof. EHaCTA

14. Repealing Clause:

Provisions of existing PNP issuances which are inconsistent with this Circular, in whole or in part, are deemed repealed, set aside, amended or modified accordingly.

15. Effectivity:

This Circular takes effect after fifteen (15) days from the filing of a copy hereof at the University of the Philippines Law Center in consonance with Sections 3 and 4, Chapter 2, Book VII, E.O. No. 292, otherwise known as "The Revised Administrative Code of 1987", as amended.

 

(SGD.) JESUS A. VERZOSA, CEO VIPolice Director General