National Budget Circular No. 541 dated July 18, 2012

National Budget Circular No. 541 dated July 18, 2012Adaptation of Operational Efficiency Measure Withdrawal of Agencies Unobligated Allotments as of June 30, 2012Incorporation: BEG No. 2012-19 dated July 20,2012

Department of Budget and Management1National Budget Circular No. 541 dated July 18, 20121.0 Rationale:In order to accelerate spending and sustain the fiscal targets during the year brought about by the unrealized spending targets for the first five months of FY 2012 To enhance agencies performance and to formulate strategies and improvement plans for the rest of 2012To allow the maximum utilization of available allotments to fund and undertake other priority expenditures of the national government

National Budget Circular No. 541 dated July 18, 20122.0 Purpose:To provide the conditions and parameters on the withdrawal of unobligated allotment of agencies as of June 30, 2012 to fund the priority and/or fast-moving programs/projects of the national government.To prescribe the reports and documents to be used as bases on the withdrawal of said unobligated allotments; andTo provide guidelines in the utilization or reallocation of the withdrawn allotment.(Budget Execution Guidelines No. 2012-19)

National Budget Circular No. 541 dated July 18, 20123.0 CoverageThose unobligated allotments as of June 30, 2012 of all NGAs charged against the FY 2011 Continuing Appropriation and FY 2012 Current Appropriation, pertaining to:Capital OutlaysMOOE related to the implementation of programs and projects, as well as capitalized MOOE; andPS corresponding to unutilized pension benefits declared as savings by the agencies concerned based on their updated/validated list of pensioners

National Budget Circular No. 541 dated July 18, 20123.0 CoveragePrograms, Projects, Activities reflected in the DBM list (Annex A) or specific programs and projects as may be identified by the agencies ( Related to 2.2.1 of BEG No. 2012-19) - Basis of issuance of Negative SARO: a) Shown in Annex A of the NBC 541 b) Document submitted by the agency reflecting specific P/A/Ps offered for withdrawal

National Budget Circular No. 541 dated July 18, 20124.0 ExemptionsNGAsConstitutional Offices/Fiscal Autonomy Group, granted fiscal autonomy under the Philippine Constitution; andSUCs that are adopting the Normative Funding allocation schemeFund sourcesPS other than pension benefits;MOOE items earmarked for specific purposes or subject to realignment conditions per General Provisions of the GAAConfidential and Intelligence FundSavings from travelling, communication , transportation and deliver, repair and maintenance, supplies and materials and utility which shall be used for the grant of CNA incentive benefit

National Budget Circular No. 541 dated July 18, 20124.0 Exemptions (continuation)Savings from mandatory expenditures which can be realigned only in the last quarter after taking consideration the agencys full year requirementsForeign-Assisted Projects (loan proceeds and peso counterpart)SPFQuick Response Funds; andAutomatic Appropriations

National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesNGAs shall continue to undertake procurement activities notwithstanding the implementation of the policy of withdrawal of unobligated allotments until the end of the 3rd quarter, FY 2012.Even without allotment, proceed in the undertaking the procurement process procurement planning up to conduct of bidding but short of contract awarding (GPPB Circular Nos. 02-2008 and 01-2009, and DBM CL No. 2010-9Item 2.2.6 of BEG 2012-19 qualifies that P/A/Ps which are found on going of its implementation and undergone procurement process need not be withdrawn.

National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesAll departments/agencies/operating units (OUs) shall submit budget accountability report as of June 30, 2012 to DBM not later than July 30, 2012 which will be the basis in determining the amount of unobligated allotment to be withdrawn.SAOB (BAR 4)Financial Report of Operations (BAR 2)Physical Report of Operations (BAR 1)

(Related to item 2.2.4 of BEG No. 2012-19)

National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesIn the absence of the abovementioned reports, the agencys latest report available shall be used by DBM as basis for withdrawal of allotment.DBM shall compute/ approximate the agencys obligation level as of June 30 to derive the unobligated allotments. Example: SAOB as of March 31, 2012 actual obligation of P800M Approximate agency obligation as of June 30, 2012: = P800M x 2 (representing 2 quarters) = P1,600M

(Related to 2.2.5 of BEG 2012-19)

National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesThose unobligated allotment chargeable against the FY 2011 Continuing Appropriation shall be immediately considered for withdrawal.Considerations:Those approved P/P/As are assumed to be implementation-ready and doable during the given fiscal year ; andCarryover appropriations may imply that agency has a slower-than-programmed implementation capacity or agency tends to implement projects within a two years timeframe.Note: On-going P/A/Ps will not be withdrawn as indicated in item 2.2.6 of BEG 2012-19

National Budget Circular No. 541 dated July 18, 20125.0 Guidelines (DBM role)Consistent with the Presidents directive, the DBM shall, based on evaluation of the reports cited above and results of consultations with the departments/agencies, withdraw the unobligated allotments as of June 30, 2012 through issuance of negative SARO.Issuance of Negative SARO directly to Agency/OUs (Pursuant to item 2.2.7 of the BEG)Guidelines on the evaluation of report (item 2.2.2 of BEG)Validate allotment reports submitted by the agencies./OUs with DBM recordOUs report vs DBM records- SAOB -ABM/SARO releases-FRO - ABM/SARO releases- Financial Plan (BED 1)

National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesOther disclosures required in BEG 2012-19Under item 2.2.8 on the issuance of Negative SARO Purpose: This release shall cover withdrawal of unobligated allotments per SAOB/FRO as of June 30, 2012. OR

This release shall cover withdrawal of unobligated allotments as computed per SAOB/FRO as of (state cut-off month/day), 2012.

Notes: Issuance of this negative SARO is consistent with NBC No. 541 dated July 18, 2012 re: Adoption of Operational Efficiency Measure Withdrawal of Agencies Unobligated Allotments as of June 30, 2012.

Under item 2.5The ICTSS shall update the notes to be indicated in the SARO consistent with this BEG

National Budget Circular No. 541 dated July 18, 20125.0 Guidelines (DBM role)DBM shall prepare report on the magnitude of withdrawn allotment and submit it to the President. The report shall highlight the agencies which failed to submit the June 30 reports required under this Circular.Guidelines on the Reporting arrangements:Under item 2.6.1 of BEG 2012-19 BTS shall prepare the overall status on the withdrawn allotments for submission to the OP.Under Item 2.6.2 of BEG 2012-19BMBs/ROs shall prepare the Status report of the withdrawn unobligated allotment as of June 30 to be submitted to:BMB-B for DepEd, DOH, CHED and TESDABMB-A for DPWHDeadline: on or before October 2, 2012

National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesThe withdrawn allotments may be:Reissued for the original programs and projects of the agencies/OUs concerned, from which the allotment were withdrawn;Realigned to cover additional funding for other existing programs and projects of the agency/OUs; or Guidelines in the reissuance to same agency of positive SARO/s

(Related to item 1.2.1 of the BEG)

15National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesThe withdrawn allotments may also be:Used to augment existing programs and projects of any agency and to fund priority programs and projects not considered in the 2012 budget but expected to be started or implemented during the current year.Subject to the approval of the PresidentRelease shall be implemented via the Disbursement Acceleration Program (DAP) of the government (Item 2.4 of the BEG)

16National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesDocumentary RequirementsReissuance and realignment of withdrawn allotment (of the same agency) Special Budget Request (SBR)Physical and Financial Plan;MCPProof that the project/activity has started the procurement process Proof of Posting/Advertisement of Invitation to BidAugmentation of withdrawn allotment (of another Agency)Special Budget Request (SBR)Physical and Financial Plan;MCPApproval of the President(Related to item 2.3.1 and 2.4 of BEG 2012-19)

National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesDeadline for submission of request/s end of the 3rd quarter of the year (September 30, 2012)Utilization of the consolidated withdrawn allotments for other priority programs and projects under item 5.7.3 of this Circular, shall be subject to the approval of the President. DBM shall issue SARO to cover the approved priority expenditures subject to submission by the agency/OU concerned of the documentary requirements (SBR, PFP and MCP)

National Budget Circular No. 541 dated July 18, 20125.0 GuidelinesAll releases out of the withdrawn allotment shall be within the approved Expenditure Program level of the national government for the current year. The SARO to be issued shall properly disclose the appropriation source of the release to determine the extend of allotment validity, as follows:R.A. 10147 allotment shall be valid up to December 31, 2012R.A. 10155 allotment shall be valid up to December 31, 2013

Procedural Guidelines in the issuance of Negative and Positive SAROs shall be done thru the eBudget System, if practicable. (Item 2.1 of BEG)

National Budget Circular No. 541 dated July 18, 20126.0 EffectivityNBC No. 541 shall take effect immediately.

Thank you!