COMMISSION ON AUDIT CIRCULAR NO.

91-349 January 18, 1991

TO

SUBJECT:

1.0

The Secretaries, Department of Education, Culture and Sports, Department of

Health, Department of Agriculture, Department of Transportation and
Communications; the Directors/Heads of the National Stud Farm, Baguio
Teachers Camp, Regional Educational Learning Centers, National Historical
Institute, National Museum, Herbal Processing Plant, Agricultural Training
Institute, Maritime Industry Authority, and National Telecommunications
Commission; Heads of Accounting Units; COA Auditors; and All Others
Concerned.
Accounting System and Procedural Guidelines governing the creation and
operation of Revolving Funds of various agencies pursuant to the Special
Provisions pertaining to their respective appropriations under Republic Act No.
6831 (General Appropriations Act for CY 1990).

PURPOSE

This Circular is issued to set up the accounting system and prescribe the procedural
guidelines in the operation of Revolving Funds created pursuant to pertinent Special
Provisions under Republic Act No. 6831 for the following agencies:
Agency

Sources of Fund

Department of Education, Culture and Sports:

Baguio Teachers Camp (BTC)

Rental for the use of buildings and facilities,

board and lodging, and other sources

Regional Educational
Learning Center (RELC)

Rental for use of buildings and

board and lodging, and other sources

National Historical Institute (NHI)

Proceeds from sale of souvenirs, replicas and

historical objects not exceeding P500,000.00

National Museum (NM)

Proceeds from sale of museum souvenirs,

relics
or
publications
not
exceeding
P500,000.00

Department of Health
Herbal Processing Plant (HPP)

Income from sale of products of Herbal

Processing Plant

Department of Agriculture
Agricultural Training Institute (ATI)

Training fees and other income not exceeding

P2,000,000.00 to be derived from the use and
operation of ATI and other Agricultural Training
Centers.

Department of Transportation and Communications

Maritime Industry Authority (MARINA)

Income from fees, charges, fines and penalties

not exceeding P2,000,000.00

National Telecommunications
Commission (NTC)

Income from fines, penalties and

surcharges not exceeding P2,000,000.00

Other Executive Offices

National Stud Farm (NSF)

2.0

All income derived from breeding operations,

such as stud service fees, boarding fees, and
other fees received in connection with the
registration of race horses

GENERAL GUIDELINES
2.1

The agencies enumerated in par. 1.0 hereof shall each maintain a Revolving Fund
(RF) for the income derived from the specified source.

2.2

A separate set of books of accounts for the RF shall be maintained by each

agency concerned.

2.3

The fund shall be deposited in an Authorized Government Depository Bank

(AGDB).

2.4

Interest earned on such deposits shall be remitted to the National Treasury for
the account of the Agencies' General Fund (Fund 101), except that of the National
Stud Farm which shall accrue to the RF.

2.5

Remittance of interest to the National Treasury shall be made at the end of each
quarter by the Collecting Officer who shall furnish the Chief Accountant with a
validated copy of the Remittance Advice within five (5) days after making such
remittance.

2.6

The Chief Accountant of the Agency, upon receipt of the Remittance Advice, shall
draw a journal voucher taking up the remittance as income under Fund 101.

2.7

All disbursements/withdrawals from the RF shall be made thru the issuance of

commercial checks and shall be treated as direct charges against the Fund,
subject to existing accounting and auditing rules and regulations.

2.8

In no case shall the salaries pertaining to new and existing permanent and regular
positions be charged against the RF.

2.9

A monthly trial balance of the RF shall be prepared and submitted on or before

the 10th day of the following month, to the Unit Auditor for verification and audit. A
year-end trial balance, together with a Status Report, shall be submitted to the
Accountancy Office of this Commission on or before February 14 of the following
year.

3.0

2.10

A quarterly report of income and expenditures of the RF shall be submitted to the

Department of Budget and Management (DBM). No withdrawals in subsequent
quarters shall be allowed unless this requirement has been satisfied.

2.11

In case of abolition of the RF, balances of all the accounts pertaining thereto shall
be transferred to the General Fund of the agency concerned.

SPECIFIC GUIDELINES
3.1

Baguio Teachers Camp and Regional Educational Learning Centers

3.1.1

3.2

3.3

3.4

National Historical Institute

3.2.1

The Fund shall be used solely for the printing, publication and
reproduction of museum souvenirs and historical objects.

3.2.2

Income from proceeds of sales in excess of P500,000.00 shall be

deposited with the National Treasury and shall accrue to the General
Fund.

National Museum
3.3.1

The Fund shall be used solely for the fabrication and reproduction of
museum souvenirs and relics; for the printing of publications; and for
operation and maintenance of the museum shop.

3.3.2

Sale proceeds in excess of P500,000.00 shall be remitted to the National

Treasury and shall accrue to the General Fund.

Herbal Processing Plant

3.4.1

3.5

3.6

The Fund shall be made available for direct maintenance and operating
expenses incurred for the board and lodging of teachers-occupants, for
maintenance and other operating expenses, and for capital outlays.

The Fund shall be used exclusively to cover expenses in the operation of

herbal plants and marketing of their products.

Agricultural Training Institute

3.5.1

The Fund shall be used exclusively for the maintenance and operation of
training facilities administered by the Institute.

3.5.2

Income in excess of P2,000.000.00 shall be remitted to the National

Treasury and shall accrue to the General Fund.

Maritime Industry Authority

3.6.1

The Fund shall be used solely for strengthening its regulatory, supervisory
and enforcement functions; for technical, economic policy research and
studies for the promotion and development of the MARINA, particularly in

the domestic and overseas shipping sectors; and to defray any deficiency
in maintenance and other operating expenses.
3.7

3.8

National Telecommunications Commission

3.7.1

The Fund shall be used solely for strengthening its supervisory, regulatory
and enforcement functions; for maintenance, operations and inspection of
telecommunications and broadcast facilities; for technical, economic, legal
research and study in the use of Radio Frequency Spectrum; for traveling
expenses and allowances of examiners and watchers conducting radio
operators examinations; and for payment of additional expenses for
supplies and materials.

3.7.2

Income in excess of P2,000.000.00 shall be remitted to the National

Treasury and shall accrue to the General Fund.

National Stud Farm

3.8.1

The Fund shall be made available to defray maintenance and operating

expenses for the Farm's breeding operations and other related projects.

4.O ACCOUNTING ENTRIES

The accounting entries to be followed shall be in accordance with "Annex A" and "Annex
B" hereof.
5.0

REPEALING CLAUSE

All circulars, instructions and orders or provisions thereof which are inconsistent herewith
are hereby repealed, amended or modified accordingly.
6.0

EFFECTIVITY
The circular shall take effect on January 2, 1990.

(SGD.) BARTOLOME C. FERNANDEZ, JR., Commissioner

(SGD.) EUFEMIO C. DOMINGO, Chairman

Note: See attachments

ANNEX A

ANNEX B

"ILLUSTRATIVE ACCOUNTING ENTRIES FOR

APPLICABLE TO BTC, RELC, HPP, AND NSF"
"ILLUSTRATIVE ACCOUNTING ENTRIES FOR
APPLICABLE TO NM, NHI, ATI, MARINA AND NTC"

REVOLVING

FUND

REVOLVING

FUND