PERMANENT COMMITTEE (COA-DBM-DOF) JOINT CIRCULAR NO · PDF filepermanent committee (coa-dbm-dof) joint circular no 4joint circular no. 4-2012 sept. 11, 2012 rules and regulations implementing

PERMANENT COMMITTEE (COA-DBM-DOF)JOINT CIRCULAR NO 4-2012JOINT CIRCULAR NO. 4-2012

SEPT. 11, 2012

RULES AND REGULATIONS IMPLEMENTING EXECUTIVE RULES AND REGULATIONS IMPLEMENTING EXECUTIVE ORDER NO. 431 DATED MAY 30, 2005 DIRECTING THE REVERSION OF ALL DORMANT ACCOUNTS, UNNECESSARY SPECIAL AND TRUST FUNDS TO THE GENERAL FUND AND FOR OTHER PURPOSES

Section 1.0 Purpose

These Rules are promulgated to prescribe the procedures and guidelines for the implementation of Executive Order (EO) No 431 in order to facilitate compliance therewith and (EO) No. 431 in order to facilitate compliance therewith and achieve the objectives thereof.

Section 2.0 Rationale

2.1 It is hereby declared the policy of the State

that unless otherwise specifically provided for by

law, all income collected by agencies of the

government by virtue of the provisions of law,

orders and regulations shall be deposited in the

National Treasury, and shall accrue to the

unappropriated surplus of the General Fund of theunappropriated surplus of the General Fund of the

Government;

2.2 It is also the policy of the State that receipts

of agencies authorized by law to be recorded asof agencies authorized by law to be recorded as

a Special Account in the General Fund, Fiduciary

or Trust Fund or a fund other than the Generalor Trust Fund or a fund other than the General

Fund shall be separately recorded and disbursed

in accordance with such rules and regulations

as may be determined by a Permanent

Committee composed of the Secretary of the

Department of Finance (DOF) as Chairman, thep ( ) ,

Secretary of the Department of Budget and

Management (DBM) and the Chairman of theManagement (DBM) and the Chairman of the

Commission on Audit (COA), as members

2.3 Reports of COA show that there are huge

cash balances being maintained by government

agencies deposited in authorized governmentg p g

depository banks (AGDBs) and other institutions,

which may include dormant accounts orwhich may include dormant accounts or

unnecessary special and trust funds; and the

account of the National Treasury

Section 3.0 Definition of Terms

For the purpose of these Rules, the following terms shall be construed to mean as follows:terms shall be construed to mean as follows:

3.1 Authorized Government Depository Banks (AGDB ) f t fi i l i tit ti /b k (AGDBs) - refer to financial institutions/banks authorized by the Bangko Sentral ng Pilipinas BSP to accept deposits from government p p gagencies.

3 2 Dormant Accounts - refer to collections 3.2 Dormant Accounts - refer to collections authorized by law to be deposited with an AGDB but have remained inactive for more than five (5) years.

3.3 Unauthorized Accounts - refer to: Cash account

balances maintained by agencies without specific

authority or legal basis; or

• Cash account balances with a specific authority but

maintained with non-AGDBs.

3.4 Unnecessary special and trust funds - refer to

authorized special and trust funds maintained by authorized special and trust funds maintained by

government agencies with AGDBs but which are no

longer necessary for the attainment of the purposes for longer necessary for the attainment of the purposes for

which said funds were established i.e., specific projects/

programs, the implementation of which have been p og a s, t e p e e tat o o c a e bee

completed or abandoned.

Section 4.0 Responsibilities of the Permanent Committee in

the Implementation of EO No 431the Implementation of EO No. 431

4.1 Prepare an inventory of the cash accounts and balances 4.1 Prepare an inventory of the cash accounts and balances

of each and every department, bureau and agency of the

National Government;;

4.2 Coordinate with the heads of agencies concerned to

inform them that the Permanent Committee and its

authorized representatives shall conduct inspection of their

books of accounts ill order to examine, look into and

evaluate all existing cash deposits of whatever nature,

whether in foreign or local currency maintained with AGDBs

and other institutions;

4.3 Review and determine the legal basis for the

maintenance of said cash account balances with

AGDBs or other institutions where the funds are

deposited; anddeposited; and

4 4 Recommend to the President the transfer 4.4 Recommend to the President the transfer

thereof to the National Treasury where no legal

impediment exists pursuant to the provisions of

Sections 44 and 45, Chapter 5, Book VI of the

Administrative Code of 1987

Section 5.0 Procedural Guidelines

5 1 COA h ll b it t th P t C itt th t t 5.1 COA shall submit to the Permanent Committee the status

of the cash account balances of each department/agency of

the national government with AGDBs and other institutions the national government with AGDBs and other institutions

(both local and foreign) as reflected in the Annual Financial

Report as of December 31, 2010.Report as of December 31, 2010.

5.2 DOF, through BTr, shall provide the Department , g , p p

Secretaries a copy of the report cited under Section 5.1

above covering agencies/bureaus/offices under their

jurisdiction. These cash account balances shall be the

reference point in preparing the report required under Section

1 of the DBM-DOF-COA Joint Administrative Order (JAO) No.

2012-01.

5.3 Agencies shall include any cash account g ybalances not included in the COA report for the preparation ofthe report required under JAO No. 2012-012012-01.

5.4 BTr shall submit a report to the Permanent C itt hi hli hti it fi di l ti t th Committee highlighting its findings relative to the following:

5.4.1 If the cash account balances are maintained in AGDBs.

5.4.2 The legal basis for the maintenance of the cash accounts balances outside of the Bureau of TTreasury.

5 5 Permanent Committee shall:5.5 Permanent Committee shall:

5.5.1. Require the immediate transfer to the National Treasury of the cash balances of unauthorized accounts as defined in Item 3.3 maintained with AGDBs and other banks. For those bank accounts which are authorized under existing laws including dormant accounts as defined under Item 3 2 the Permanent Committee defined under Item 3.2, the Permanent Committee shall evaluate their legal bases to determine if their continuing existence is still necessary and

fmake a recommendation to the President for the purpose.

5.5.2. Request the agency head for further

inspection of its books of accounts, if found

necessary.

5 6 COA shall prescribe the necessary accounting 5.6 COA shall prescribe the necessary accounting

entries and supporting

d t f th t f f th h b l f documents for the transfer of the cash balances of

unauthorized

accounts to the National Treasury.

5.7 Agencies, upon the directive/instruction of the

Permanent Committee, shall immediately effect the , y

closure of the cash balances of their unauthorized

accounts and transfer the same to the National accounts and transfer the same to the National

Treasury. They shall prepare the adjusting entries

b ib d b COA d It 5 6 If as maybe prescribed by COA under Item 5.6. If

there are accounts which will affect the books of

the National Treasury, they shall furnish the BTr

with the Journal Voucher pertaining thereto.

Section 6.0 Responsibilities of departments, bureaus and

agencies of the National Government:

The heads of departments, bureaus and agencies of the

National Government shall have the following responsibilities:

6.1 Cooperate, open their books of account and assist the

Permanent Committee and its authorized representatives in

the conduct of inspection and review of their cash balances; the conduct of inspection and review of their cash balances;

and

6.2 Provide the Permanent Committee with the required

information and instruct their officials concerned to effect the smooth and efficient transfer to the National Treasury of

the cash balances of unauthorized accounts.

Section 7.0 Monitoring of ComplianceSection 7.0 Monitoring of Compliance

The COAshall monitor compliance of the guidelines stated above and shall report to the Permanent stated above and shall report to the Permanent Committee.

Section 8 0 Administrative SanctionSection 8.0 Administrative Sanction

Heads of the departments, bureaus and all other agencies of the National Government along with the Permanent Committee shall ensure the strict implementation of EO No. 431 and these Rules. implementation of EO No. 431 and these Rules. Any violation hereof shall be sternly dealt with in accordance with law Secretary of Finance Chairman Permanent CommitteeChairman Permanent Committee

Section 9.0 Repealing Clause

All circulars, memoranda and other issuances or

parts thereof which are inconsistent with the

provisions of this issuance are hereby rescinded/

repealed/ modified accordingly.repealed/ modified accordingly.

S ti 10 0 Eff ti itSection 10.0 Effectivity

These Rules shall take effect immediately.