Para sa mas mabilis na serbisyo! Duterte orders cash-based budgeting for 2019
By Prince Golez
President Rodrigo Duterte issued an executive order adopting a cash budgeting system beginning fiscal year 2019.
Executive Order (EO) 91, signed by Duterte on September 9, authorizes the shift from the usual obligation-based to cash-based budgeting to speed up the government’s budget utilization.
“Significant gaps between the actual expenditure out-turns and annual appropriations translate to billions of pesos of delayed and foregone services, which should have been delivered to the general public,” said Duterte.
“There is a need to improve the fiscal planning of government agencies through the implementation of an operational cash budget and by setting deadlines for obligation of funds and execution of projects during the fiscal year, in order to speed up the implementation of programs and to promptly deliver goods and services to our people,” he added.
Under EO 91, all authorized appropriations should be available for obligation and disbursement only until the end of each fiscal year.
Obligations incurred by the national government with each fiscal year should be implemented during the same fiscal year, the order said.
“Goods and services corresponding to said obligations shall be delivered or rendered, inspected and accepted by the end of each fiscal year,” it also stated.
Payment for obligations incurred shall be made until the end of the extended payment period (EPP), which shall be three months after the end of the validity of appropriations against which they were obligated, unless another period has been determined by the Department of Budget and Management (DBM).
EO 91 also provides that any unreleased appropriations and unobligated allotments at the end of the fiscal year, as well as unpaid obligations and undisbursed funds at the end of the extended EPP “shall revert to the National Treasury and shall not thereafter be available for expenditure, except by subsequent legislative enactment.”
For financial subsidies to local government units, “reversion shall be made to the National Treasury after the end of the succeeding fiscal year.”
Multi-year procurement projects shall require the issuance of a multi-year contractual authority by the DBM for national government agencies and qualified government-owned or -controlled corporations prior to the conduct of procurement, Duterte’s directive read.
The order likewise allows government agencies to undertake early procurement activities (EPA).
EPA shall cover goods to be delivered, infrastructure projects to be implemented and/or consulting services to be rendered in the following fiscal year pending approval of the corresponding General Appropriations Act.