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National revenue and trust funds shall not be withdrawn from the national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.