AUDITING RULES
- 1. Discussant : BLESS C. GO Professor : NATALIA B. UY, Ph.D. Topic : AUDITING RULES Sub-Topic : Disbursement The Modified Disbursement System (MDS) Salaries under Special Circumstances Addition or Double Compensation
- 2. Disbursements Constitute all cash paid out during a given period either in currency or by check. This is the final step of the budget execution phase where government monies actually spent.
- 3. The basic requirements applicable to all classes of disbursement are: • Certificate of Availability of Fund. Existence of lawful appropriation, certified as available by an accounting officer or any other official required to accomplish the certificate. • Use of money appropriated solely for the specific purpose for which appropriated, and for no other, except when authorized by law or by a corresponding appropriating body.
- 4. Disbursement of Government funds shall governed by the following rules: Revenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other statutory or authority. Trust fund shall not be paid out of any public treasury or depository except in fulfillment of the purpose for which trust was created or funds received and upon authorization of the legislative body or the DECS Secretary having control thereof, and subject to pertinent budget law, rules and regulations. National revenue and trust funds shall not be withdrawn from the national treasury except upon warrant or other instruments of withdrawal approved by the Secretary of Finance as recommended by the Treasurer of the Philippines.
- 5. Modified Disbursement System (MDS) The Modified Disbursement Scheme is mostly used, where disbursements of National Government agencies chargeable against the Treasury are made through government servicing banks, such as the Land Bank of the Philippines
- 6. A.) To facilitate the management of cash resources of the national government, the Modified Disbursement System (MDS) was implemented conformably to the DOF/DBM joint Circular No. 1-90 effective March 1, 1990. B.) Under the National Budget Circular No. 437 dated January 2, 1995, the DBM shall automatically release the initial Notice of Cash Allocation (NCA) to cover the first quarter obligation authority granted to agencies on the basis of authorized programmed appropriations. The NCA will be deposited by DBM to LBP or any approved government deposited bank for credit to the MDS account of the DECS Regional Offices.
- 7. C.) A quarterly cash allocation is issued by the Financial Management Services to the DECS Regional Offices, thru their respective servicing bank, equivalent to the operational requirements of that region for the month or for the quarter. D.) All payments should be made by the check chargeable against the cash allocation. In practice, however, there are certain instances when it may be difficult, in practical or impossible to make payments by check in such case, a cash advance may be issued to the cashier/ Disbursing Officer to pay for salaries, wages, travelling expense and miscellaneous expenses of the office subject to the rules and regulations on the granting and utilization of cash advance as per Commission on Audit Circular No. 90-331 dated May 3, 1990.
- 8. Lost, Destroy, and Obsolete Checks A check is considered lost under the following circumstances: A.When it is misplaced, waylaid or left behind inadvertently/ negligently by the payee or holder in due course, or by the custodian/carrier thereof, and after diligent search cannot be found or located. B.When it is lost due to fortuitous events such as fire, perils of travel, flood or typhoon or other causes due to force majeure and after diligent search, cannot be found or recovered. C.When it is lost by theft or robbery.
- 9. A check is considered destroyed when it is torn, mutilated, or defaced or with erasure affecting genuineness of any material information contained therein. A check is considered stale six months after date of issue. A check is considered obsolete when it is use/issuance is no longer authorized.
- 10. Salaries under Special Circumstances PRESIDENTIAL DECREE No. 1177 REVISING THE BUDGET PROCESS IN ORDER TO INSTITUTIONALIZE THE BUDGETARY INNOVATIONS OF THE NEW SOCIETY This Decree shall be known as "Budget Reform Decree of 1977." Section 68. Salary for Substitutionary Service. When an official or employee is issued a duly approved appointment in a temporary or acting capacity to take the place and perform the duties of another who is temporarily absent from his post with pay, savings in the appropriations of the department, bureau or office may be used for the payment of his salary or differential, subject to the approval of the Commissioner.
- 11. Addition or Double Compensation Section 65. Authority to Receive Additional Compensation. Officials and employees who are duly appointed by competent authority to any position in another government office or agency in a current capacity, may, in the discretion of the President, be allowed to receive additional compensation in the form of allowance or honorarium at such rates he shall fix and subject to such conditions as he may prescribe. Such additional compensation shall be paid from the appropriations of the office or agency benefiting from the concurrent service.
- 12. Section 70. Additional Compensation for Overtime Service. Officials and employees of the National Government, when required to work overtime after regular working hours during ordinary days, during half-day sessions, or on Saturdays, Sundays and holidays, by the heads of departments concerned, to finish work that must be completed within a specified time, may be paid overtime compensation from any unexpended balance of the appropriation for salaries and wages authorized in the General Appropriations Act and under such guidelines as may be issued by the President.
- 13. Section 73. Additional Compensation for School Faculty Members. Professors, instructors, teachers, or members of the faculty of government schools, colleges and universities, when required to teach more than their regular teaching loads may be paid additional compensation not exceeding seventy-five per centum of their basic salary.
- 14. Presidential Decree No. 442, AS AMENDED May 1, 1974 A DECREE INSTITUTING A LABOR CODE THEREBY REVISING AND CONSOLIDATING LABOR AND SOCIAL LAWS TO AFFORD PROTECTION TO LABOR, PROMOTE EMPLOYMENT AND HUMAN RESOURCES DEVELOPMENT AND INSURE INDUSTRIAL PEACE BASED ON SOCIAL JUSTICE This Decree shall be known as the "Labor Code of the Philippines". Article 86. Night shift differential. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.
- 15. Article 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.
- 16. Article 93. Compensation for rest day, Sunday or holiday work. Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day.