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RMC No. 40-2021: Publishes the full text of COA-DBM Joint Circular No. 1, s. 2021 dated March 8, 2021 entitled, “Guidelines Implementing Executive Order (E.O.) No. 87 Directing that all Accounts Payable Which Remain Outstanding for Two Years or More in the Books of National Government Agencies be Reverted to the Accumulated Surplus of Deficit of the General Fund of the National Government”

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Summary

RMC No. 40-2021 publishes the full text of COA-DBM Joint Circular No. 1, s. 2021, which implements E.O. No. 87 on reverting Accounts Payable outstanding for two years or more to the Accumulated Surplus or Deficit of the General Fund.

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Key points

  1. Coverage and exceptions. It covers all Accounts Payable (A/Ps) of National Government Agencies (NGAs) and GOCCs maintaining a Special Account in the General Fund (SAGF). Trust or Fiduciary Funds, for as long as their purposes are not accomplished, and A/Ps of Foreign-Assisted Projects for the project’s duration are excepted.
  2. Reversion. NGAs and GOCCs revert all A/Ps for FY 2017 and prior years to the Accumulated Surplus/(Deficit) on or before the end of 2021. Foreign-Assisted Project A/Ps outstanding two (2) years after the project completion date are reverted, while those under direct payment are reviewed for a Non-Cash Availment Authority from the DBM.
  3. Payment of validated claims. Reverted A/Ps validated as legitimate claims are charged to the Contingent Fund if DBM finds them urgent, and/or to the agency’s budget in the succeeding year’s General Appropriations Act. This does not revive claims already barred by prescription or disallowed by final determination.
  4. Special Allotment Release Order. A SARO is issued for reverted legitimate claims whose goods or services were already delivered. It is effective only during the year issued, cannot be re-issued if not obligated that year, and cannot be modified for another purpose.
  5. Inventory and reports. Entities prepare an inventory of A/Ps incurred in FY 2017 and prior as of December 31, 2020, showing creditor, ORS Number, allotment class, funding source and year of incurrence. It is submitted to DBM and COA not later than June 30, 2021, and agencies are reminded to submit Financial Accountability Report (FAR) No. 3 before January 31, 2021.

Who is affected

  • National Government Agencies
  • GOCCs maintaining a Special Account in the General Fund

Deadlines and effectivity

  • Revert A/Ps for FY 2017 and prior on or before end of 2021
  • Inventory submitted to DBM and COA not later than June 30, 2021
  • FAR No. 3 before January 31, 2021

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.

Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.