Republic of the Philippines

Department of Health
Cagayan Valley Medical Center
Regional Tertiary, Teaching and Training Hospital
Carig, Tuguegarao City, Cagayan
Tel. No. 304 – 0033 or 1810
PHILHEALTH ACCREDITED HOSPITAL

External Training Report

Prepared Checked Approved
Date: October 3, 2018

REIA DOREEN M. RUECO DAISY A. ANDAL, MPA NOEL B. ARNEDO, CPA

Admin. Officer I Supervising Administrative Financial and
Officer Management Officer II
Training Subject LAWS AND RULES ON GOVERNMENT EXPENDITURE
Training Institute COMMISSION ON AUDIT
Training Period August 28-31, 2018
Trainee REIA DOREEN MAPPALA RUECO

Course Objective: The seminar aims to enlighten and provide the needed knowledge in order to become
effective and efficient in the processing or disbursing of funds in accordance with the implementing rules and
regulations of the government.

SESSION 1: APPROPRIATION, ALLOTMENT, OBLIGATION and DISBURSEMENT OF PUBLIC FUNDS

Discussed by Dir. Amelia VP. Valdez, Director III, Accpounting Office-Planning, Finance and
Management Sector
The disbursement process comprises of the following:

1. Appropriation, wherein it is an authorization made by law or other legislative enactments of

obligations to be incurred and allowing payments to be made with funds of the government under specified
conditions and purposes.
2. Allotment, unlike appropriation, this is an authorization issued by the DBM to NGA to incur
obligations for specified amounts.
3. Obligation, this is an act of a duly authorized official which binds the government to the immediate or
eventual payment of a sum of money. It shall be made through an issuance of Obligation Request and
Status (ORS), and
4. Disbursement, it is an all cash pay-out during a given period in currency or by check/ADA. It shall be
made by through a Disbursement Voucher, Petty Cash Voucher or Payroll.

Note: Only Programmed appropriations are supported by corresponding resources, that is, they already have
definite funding sources and are readily implementable. However, Unprogrammed appropriations are not yet
supported by corresponding resources and are nevertheless included by Congress in the GAA.

As part of the BUDGET Section of the FINANCE Division this session lets me understand the appropriations
major component which are the Budget Policy, wherein the State is to formulate and implement a National
Budget that is an instrument of national development, reflective of national objectives, strategies and plans; and
Budget Process during which the national government budget is planned and prepared, evolves into a law, and
is implemented and accounted for. It is also a well settled rule that realignment of savings from one allotment
class to another shall require prior approval of the DBM.

Government Budgeting is the allocation of public funds to attain the economic and social goals of an agency. This
is important because it enables the government to plan and manage its financial resources to support the
implementation of various programs and projects that best promote the development of the country. Budgeting
for NGA’s involves four (4) distinct phases:
 1. Budget Preparation
2. Budget Authorization
3. Budget Execution
4. Budget Accountability

SESSION 2: LAWS AND RULES ON GOVERNMENT EXPENDITURES

Discussed by Dir. Amelia VP. Valdez, Director III, Accpounting Office-Planning, Finance and
Management Sector

Existence of an Appropriation:

An appropriation is governed by certain legal provisions of law that shall be complied with, to wit;

1. Sec. 29 (1), Article VI, 1987 Constitution, which “No money shall be paid out of the Treasury except
in pursuance of an appropriation made by law.”
2. Sec. 4 (1), PD No. 1445, which “No money shall be paid out of any public treasury of depository except
in pursuance of an appropriation law or other specific statutory authority.
3. Sec. 85 (1), PD No. 1445, which “No contract shall be entered into unless there is an appropriation
therefore, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed
expenditure.”
4. Sec. 4 (3), PD No. 1445, which “Trust Funds shall be available and may be spent only for the specific
purpose for which the trust was created.”
5. Sec. 86, PD 1445; Sec. 40, Chapter 5, Book VI of EO No. 292, which “Issuance of Certificate of
Availability of Funds (CAF) of the Chief Accountant.”

In the absence of the appropriation or CAF, the contract shall be considered as void in accordance with Sec. 87,
PD No. 1445.

One of the topics discussed is the IIUUEE, as per COA Circular No. 2009-006 and COA Circular No. 2012-003. The
evaluation of IIUUEE expenditures shall be guided by the general and special provisions of the GAA, PDD 145, RA
7160 and the existing laws, rules and regulations.

1. Illegal, contrary to law.

2. Irregular, deviates from established rules, regulations, procedural guidelines, policies, principles or
practices that have gained recognition in law.
3. Excessive, immoderate or beyond the required.
4. Extravagant, a lavish, luxurious and wasteful expenditure.
5. Unnecessary, it is not essential, not supportive of the objectives of the agency.
6. Unconscionable, it is an unreasonable and immoderate expenditure; those incurred in violation of ethical
and moral standards.

SESSION 3: MODES OF DISBURSEMENTS

Discussed by Dir. Amelia VP. Valdez, Director III, Accpounting Office-Planning, Finance and
Management Sector

This session enumerates various modes of disbursing government funds. It is either by CHECK, by CASH, by
NCAA, by TRA, and by ADA.

Granting and Utilization of Cash Advance (CA)

This session discussed that no CA shall be given unless for a legally specific purpose and shall be reported on as
soon as the purpose for which it has been given has been already served. No additional CA shall be allowed to
any official or employee unless the previous CA given to him is first settled or a proper accounting thereof has
been made, and this is in compliance with Sec. 89, PD No. 1445. Failure to observe such Decree shall be penalize
under Sec. 128 of a fine not exceeding P1,000.00 or by imprisonment not exceeding 6 months, or both in
discretion of the court.
Under COA Circular No. 2017-001, dated June 19, 2017 it states that reimbursements of expenses of P300.00 or
less need not be supported by Official Receipt; however, a certification of expenses not requiring receipts is shall
be submitted.

SESSION 4: PERSONNEL SERVICES

Discussed by Atty. Abdul Nassif M. Faisal, State Auditor IV, CGS-Cluster 6, Social Cultural Trading
Promotional and Other Services

This session entails the basic documentary requirement and attachments in payment of the Personnel Services
(Salaries and Wages, Other Compensation, Personnel Benefit Contributions, and Other Personnel Benefits)
provided by the agency.

The following are the Allowances, Incentives and Other benefits covered by the Government Appropriations Act:

OTHER COMPENSATION:

1. PERA
-governed by Sec. 48 General Provisions, 2017 GAA; BC No. 2009-3
-an amount of P 2,000.00/month

2. RATA
-governed by Sec. 54 General Provisions, 2017 GAA
-not all employees are entitled for a RATA but certain Government Officials only as provided by Sec. 55
FY 2018 GAA
-the amount depends on the workdays of work performance in a month, decided below:
1-5 rendered days are allowed for a 25% Actual pay of RATA
6-11 rendered days are allowed for a 50% Actual pay of RATA
12-16 rendered days are allowed for a 75% Actual pay of RATA, and
17 and more rendered days are allowed for a 100% Actual pay of RATA.

3. CLOTHING ALLOWANCE
-it is a fixed incentive granted to all government employees governed by Sec. 50 FY 2018 GAA
-an amount of P 6,000.00/year

4. LOYALTY CASH AWARD

-governed by Sec. 7 Rule 10 Omnibus Rules of the CSC, DBM Dept. Order No. 92-10 and CSC Memo
Circular No. 6 s. 2002.
-any official or employee granted of Longevity Pay under an existing law is not eligible for the grant of
Step Increment due to length of service in accordance to CSC-DBM Joint Circular No. 1 s. 2012
-payment of this shall only start after a ten-year service in an agency which amounts to P 10,000.00 on
its first payment. Loyalty pay shall be paid every after five years from the first payment which amounts to
P 5,000.00/five year.

5. MAGNA CARTA BENEFITS for Health Workers

-governed by Sec. 50 General Provisions, 2017 GAA and RA No. 7305 and its IRR
-this includes Hazard Pay (25% of Basic Salary for SG 19 and Below; and 5% of Basic Salary for SG 20
and Above), Subsistence Allowance (P 50.00/working day) and Laundry Allowance (P
150.00/month)

6. HONORARIUM (Lecturers, Resource persons, Coordinators and Facilitators)

-governed by Sec. 53 General Provision, 2017 GAA
-amount is computed based on BC No. 2007-1

7. HONORARIUM (Special Projects)

-governed by Sec. 53 General Provision, 2017 GAA
-amount is computed based on BC No. 2007-2

8. HONORARIUM (BAC)
-governed by Sec. 53 General Provision, 2017 GAA
 -for BAC Chairman, an amount of P3,000.00 is allowed per procurement project, for BAC Members, an
amount of P2,500.00 is allowed per procurement project, and for Members, an amount of P2,000.00 is
allowed per procurement project provided that total honoraria received from all projects shall not exceed
25% of the annual basic salaries.

9. MID-YEAR, YEAR END BONUS and CASH GIFT

-governed by Sec. 58 and 59 of FY 2018 GAA
-for the mid-year and year-end bonuses, an amount equivalent to a one month basic salary shall be given
and an additional cash gift of P5,000.00/year.

10. PBB
-governed by EO No. 80 s. 2012 and Sec. 4 EO No. 201 s. 2016, DBM Memorandum Circular No. 2017-1
-the amount shall be based on the monthly salary of the employee but still depends on the performance
category of delivery unit.

11. COLLECTIVE NEGOTIATION AGREEMENT

-governed by Sec. 71 General Provision, 2017 GAA, AO No. 135, and Sec. 3 (b) PSLMC Reso. No. 4 s.
2002
-the amount depends on savings generated by reason of cost saving measures introduced by CAN

OTHER PERSONNEL BENEFIT

1. Terminal Leave Benefits
2. Vacation and Sick Leave
3. Special Privilege Leave
4. Paternity and Maternity Leave

PERSONNEL BENEFIT CONTRIBUTION

1. Life Retirement and Retirement Insurance Contribution
2. Membership in Pag-Ibig Fund
3. Membership in PhilHealth

SESSION 5: TRAVEL EXPENSES

Discussed by Atty. Abdul Nassif M. Faisal, State Auditor IV, CGS-Cluster 6, Social Cultural Trading
Promotional and Other Services

Travel Expenses are also discussed as part of the course to ascertain that the claim is properly authorized,
documented and correctly computed. Also, in order to determine whether or not the expense is necessary and
economical together with the limitations on the payment of Traveling Allowances.
Travel allowance is governed by Executive Order No. 298 as further amendment of EO 248A which prescribes
rules and regulations and new rates of allowances for official local and foreign travels of government personnel,
and COA Circular No. 2012-001 prescribing the revised guidelines and documentary requirements for common
government transactions.

The Travel Expense of government personnel regardless of the rank and destination shall be apportioned as
follows:

Hotel Lodging-50%, Meals-30% and Incidental Expenses-20%, and the entitlement of an P800.00 per diems shall
start only upon arrival at the place of destination and shall cease upon departure therefrom at the following
percentages.

PARTICULARS PERCENTAGE COVERAGE

Arrival not later than 12:00 noon 100% Hotel (50%), Meals (30%), IE
(20%)
Arrival after 12:00 noon 80% Hotel (50%), Meals (10%), IE
(20%)
Departure before 12:00 noon 30% Breakfast (10%), IE (20%)

Departure at 12:00 noon and later 40% Breakfast (10%), Lunch (10%),
IE (20%)
SESSION 6: PURCHASE OF INVENTORY ITEMS
Discussed by Ms. Marilyn B. Miran, State Auditor V, NGS-Cluster 2, Oversight and Public Debt
Management Agencies

Inventories are expendable commodities acquired or ordered for immediate use in connection with government
operations. It is normally consumed within one year or converted in the process of manufacture or construction.
There are two classifications of Inventories provided; these are Semi-expendable Machinery & Equipment,
and Semi-Expendable Furniture, Fixtures and Books.

Procurement, on the other hand, refers to the acquisition of goods, consulting services and the contracting for
Infrastructure Projects by the Procuring Entity. The procurement of inventory items is governed by the existing
policies of RA 9184 and in accordance with LOI No. 755, EO Nos. 289 and 359 series of 1987 and 1989,
respectively.

SESSION 7: OTHER MOOE & FINANCIAL EXPENSES

Discussed by Ms. Marilyn B. Miran, State Auditor V, NGS-Cluster 2, Oversight and Public Debt
Management Agencies

This session entails the other MOOE frequently incurred by a government agency, the rules and regulations, and
other applicable laws related to the expenses accounts and their documentary requirements to support payment.
The following are the list of MOOE commonly used in CVMC:
1. Training & Seminar Expenses
2. Utility expense
3. Communication Expense
4. Professional Services
5. Repairs and Maintenance
6. Taxes, Insurance Premiums and Other fees
7. Other MOOE

SESSION 8: CONSTRUCTION OF PPE

Discussed by Ms. Cynthia S. Vergara, State Auditor V, CGS-Cluster 6, Social Cultural Trading
Promotional and Other Services

Property, Plant and Equipment are considered as FIXED ASSETS which are charged against capital outlay, the
asset account is taken up upon purchase. In the recording of the construction of the assets, the Construction
Period Theory is followed. All expenses such as interests, license fees, etc during the construction period are
capitalized. Bonus paid to the contractor for completing the work ahead of time shall be added to the total cost of
the project. However, liquidated damages charged to the contractor for delayed completion are deducted from
the total cost.

SESSION 9: PROPERTY INSPECTION

Discussed by Ms. Cynthia S. Vergara, State Auditor V, CGS-Cluster 6, Social Cultural Trading
Promotional and Other Services

The basic concept of inspection is the examination of supplies and services to determine whether the supplies and
services conform to the contract requirements, which include all applicable drawings, specifications and purchase
descriptions. Inspection may also consist of check for identity, quantity and shipping damages.
The inspection of COA shall be conducted only on deliveries properly receipted for, accepted and/or paid by the
agency in accordance to COA Circular No. 81-131a and COA Circular No. 95-006.
Inspection is focused on the quality and quantity to ensure that the delivery are in conformance with the order
and as represented by the supplies. It is an act of measuring, examining, testing or gauging the characteristics
and features of a product or service.