Executive Order No. 292 [BOOK VI/Chapter 5-Budget Execution]

CHAPTER 5

Budget Execution

SECTION 32. Use of Appropriated Funds.—All moneys appropriated for functions, activities, projects and programs shall be available solely for the specific purposes for which these are appropriated.

SECTION 33. Allotment of Appropriations.—Authorized appropriations shall be allotted in accordance with the procedure outlined hereunder:

(1) Appropriations authorized for any Department or agency of the Government may be made available for expenditure when the head for each Department or agency submits to the Secretary a request for allotment of funds showing the estimated amounts needed for each function, activity or purpose for which the funds are to be expended during the applicable allotment period. The form and the time of submission of the request for allotment showing the proposed quarterly allotments of the whole authorized appropriation for the department or agency, shall be prescribed by the Secretary.

(2) In the administration of the allotment system herein provided, each calendar year shall be divided into four quarterly allotment periods beginning, respectively, on the first day of January, April, July and October. In any case where the quarterly allotment period is found to be impractical or otherwise undesirable, the Secretary may prescribe a different period suited to the circumstances.

(3) Request for allotment shall be approved by the Secretary who shall ensure that expenditures are covered by appropriations both as to amount and purpose and who shall consider the probable needs of the department or agency for the remainder of the fiscal year or period for which the appropriation was made.

(4) At the end of every quarter, each department or agency shall report to the Secretary the current status of its appropriations, the cumulative allotments, obligations incurred or liquidated, total disbursements, unliquidated obligations and unexpended balances and the result of expended appropriations.

(5) Releases of funds appropriated for a given agency may be made to its regional offices if dictated by the need and urgency of regional activities.

(6) The Secretary shall have authority to modify or amend any allotment previously issued. In case he shall find at any time that the probable receipts from taxes or other sources of any fund will be less than anticipated and that as a consequence the amount available for the remainder of the term of the appropriations or for any allotment period will be less than the amount estimated or allotted therefor, he shall, with the approval of the President and after notice to the department or agency concerned, reduce the amount or amounts allotted so as to conform to the targeted budgetary goals.

(7) The Secretary shall maintain a control record showing quarterly by funds, accounts, and other suitable classifications, the amounts appropriated, the estimated revenues, the actual revenues or receipts, the amounts allotted and available for expenditures, the unliquidated obligations, actual balances on hand, and the unencumbered balance of the allotments for each department or agency of the Government.

SECTION 34. Program of Expenditure.—The Secretary of Budget shall recommend to the President the year’s program of expenditure for each agency of the government on the basis of authorized appropriations. The approved expenditure program shall constitute the basis for fund release during the fiscal period, subject to such policies, rules and regulations as may be approved by the President.

SECTION 35. Special Budgets for Lump-Sum Appropriations.—Expenditures from lump-sum appropriations authorized for any purpose or for any department, office or agency in any annual General Appropriations Act or other Act and from any fund of the National Government, shall be made in accordance with a special budget to be approved by the President, which shall include but shall not be limited to the number of each kind of position, the designations, and the annual salary proposed for which an appropriation is intended. This provision shall be applicable to all revolving funds, receipts which are automatically made available for expenditure for certain specific purposes, aids and donations for carrying out certain activities, or deposits made to cover to cost of special services to be rendered to private parties. Unless otherwise expressly provided by law, when any Board, head of department, chief of bureau or office, or any other official, is authorized to appropriate, allot, distribute or spend any lump-sum appropriation or special, bond, trust, and other funds, such authority shall be subject to the provisions of this section.

In case of any lump-sum appropriation for salaries and wages of temporary and emergency laborers and employees, including contractual personnel, provided in any General Appropriation Act or other Acts, the expenditure of such appropriation shall be limited to the employment of persons paid by the month, by the day, or by the hour.

SECTION 36. Cash Budgets.—An operational cash budget shall be implemented to ensure the availability of cash resources for priority development projects and to establish a sound basis for determining the level, type and timing of public borrowings. The procedure, format, accounts, and other details necessary for the execution, monitoring and control aspects of the system shall be determined jointly by the Secretary of Finance, the Secretary of the Budget and the Chairman of the Commission on Audit.

SECTION 37. Creation of Appropriation Reserves.—The Secretary may establish reserves against appropriations to provide for contingencies and emergencies which may arise later in the calendar year and which would otherwise require deficiency appropriations.

The establishment of appropriation reserves shall not necessarily mean that such portion of the appropriation will not be made available for expenditure. Should conditions change during the fiscal year justifying the use of the reserve, necessary adjudgments may be made by the Secretary when requested by the department, office or agency concerned.

SECTION 38. Suspension of Expenditure of Appropriations.—Except as otherwise provided in the General Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services appropriations used for permanent officials and employees.

SECTION 39. Authority to Use Savings in Appropriations to Cover Deficits.—Except as otherwise provided in the General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations Act for programs and projects of any department, office or agency, may, with the approval of the President, be used to cover a deficit in any other item of the regular appropriations: Provided, that the creation of new positions or increase of salaries shall not be allowed to be funded from budgetary savings except when specifically authorized by law: Provided, further, that whenever authorized positions are transferred from one program or project to another within the same department, office or agency, the corresponding amounts appropriated for personal services are also deemed transferred, without, however increasing the total outlay for personal services of the department, office or agency concerned.

SECTION 40. Certification of Availability of Funds.—No funds shall be disbursed, and no expenditures or obligations chargeable against any authorized allotment shall be incurred or authorized in any department, office or agency without first securing the certification of its Chief Accountant or head of accounting unit as to the availability of funds and the allotment to which the expenditure or obligation may be properly charged.

No obligation shall be certified to accounts payable unless the obligation is founded on a valid claim that is properly supported by sufficient evidence and unless there is proper authority for its incurrence. Any certification for a non-existent or fictitious obligation and/or creditor shall be considered void. The certifying official shall be dismissed from the service, without prejudice to criminal prosecution under the provisions of the Revised Penal Code. Any payment made under such certification shall be illegal and every official authorizing or making such payment, or taking part therein or receiving such payment, shall be jointly and severally liable to the government for the full amount so paid or received.

SECTION 41. Prohibition Against the Incurrence of Overdraft.—Heads of departments, bureaus, offices and agencies shall not incur nor authorize the incurrence of expenditures or obligations in excess of allotments released by the Secretary for their respective departments, offices and agencies. Parties responsible for the incurrence of overdrafts shall be held personally liable therefor.

SECTION 42. Adjustment of Appropriations for Reorganization.—When under authority of law, a function or an activity is transferred or assigned from one agency to another, the balances of appropriations which are determined by the head of such department to be available and necessary to finance or discharge the function or activity so transferred or assigned may, with the approval of the President, be transferred to and be made available for use by the agency to which said function or activity is transferred or assigned for the purpose for which said funds were originally available. Balances so transferred shall be credited to any applicable existing appropriation account or to new appropriation accounts which are hereby authorized to be established, and shall be merged with any fund already in the applicable existing or newly established appropriation account or accounts and thereafter accounted for as one fund.

The funding requirement of agencies reorganized in accordance with approved reorganization plans or reorganized pursuant to law enacted after the approval of the General Appropriations Act, are deemed appropriated and shall be available for expenditure as soon as the reorganization plans are approved. The Secretary of Budget is hereby authorized to make necessary adjustments in the appropriations to carry out the provisions of this section. The department head concerned, with the approval of the Secretary of Budget, is hereby authorized to make necessary salary adjustments resulting from final selection of personnel to fill the positions in the staffing patterns of reorganized agencies, to make necessary salary adjustments resulting from new appointments, promotions or salary increases, subject to the provisions of Presidential Decree No. 985.

SECTION 43. Liability for Illegal Expenditures.—Every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received.

Any official or employee of the Government knowingly incurring any obligation, or authorizing any expenditure in violation of the provisions herein, or taking part therein, shall be dismissed from the service, after due notice and hearing by the duly authorized appointing official. If the appointing official is other than the President and should he fail to remove such official or employee, the President may exercise the power of removal.

SECTION 44. Accrual of Income to Unappropriated Surplus of the General Fund.—Unless otherwise specifically provided by law, all income accruing to the departments, offices and agencies by virtue of the provisions of existing laws, orders and regulations shall be deposited in the National Treasury or in the duly authorized depository of the Government and shall accrue to the unappropriated surplus of the General Fund of the Government: Provided, That amounts received in trust and from the business-type activities of government may be separately recorded and be disbursed in accordance with such rules and regulations as may be determined by the Permanent Committee created under this Act.

SECTION 45. Special, Fiduciary and Trust Funds.—Receipts shall be recorded as income of Special, Fiduciary or Trust Funds or Funds other than the General Fund, only when authorized by law and following such rules and regulations as may be issued by a Permanent Committee consisting of the Secretary of Finance as Chairman, and the Secretary of the Budget and the Chairman, Commission on Audit, as members. The same Committee shall likewise monitor and evaluate the activities and balances of all Funds of the national government other than the General fund and may recommend for the consideration and approval of the President, the reversion to the General fund of such amounts as are (1) no longer necessary for the attainment of the purposes for which said Funds were established, (2) needed by the General fund in times of emergency, or (3) violative of the rules and regulations adopted by the Committee: Provided, that the conditions originally agreed upon at the time the funds were received shall be observed in case of gifts or donations or other payments made by private parties for specific purposes.

SECTION 46. Service Fees and Honoraria.—Agencies are authorized to charge fees, including honoraria and other reasonable allowances as compensation for consultation, seminars or training programs, or technical services rendered to other government agencies or private parties. Such fees or honoraria shall be recorded as income of the government and subject to the usual accounting, auditing and other pertinent requirements.

SECTION 47. Administration of Lump-Sum Funds.—The Department of Budget shall administer the Lump-Sum Funds appropriated in the General Appropriations Act, except as otherwise specified therein, including the issuance of Treasury Warrants covering payments to implementing agencies or other creditors, as may be authorized by the President.

SECTION 48. Cost Reduction.—Each head of a department, bureau, office or agency shall implement a cost reduction program for his department, bureau, office or agency for the purpose of reducing cost of operations and shall submit to the President reports on the results of the implementation thereof. The Department of Budget shall provide technical and other necessary assistance in the design and implementation of cost reduction activities. An incentive award not exceeding one month’s salary may be granted to any official or employee whose suggestion for cost reduction has been adopted and shall have actually resulted in cost reduction, payable from the savings resulting therefrom.

SECTION 49. Authority to Use Savings for Certain Purposes.—Savings in the appropriations provided in the General Appropriations Act may be used for the settlement of the following obligations incurred during a current fiscal year or previous fiscal years as may be approved by the Secretary in accordance with rules and procedures as may be approved by the President:

(1) Claims of officials, employees and laborers who died or were injured in line of duty, including burial expenses as authorized under existing law;

(2) Commutation of terminal leaves of employees due to retirement, resignation or separation from the service through no fault of their own in accordance with the provisions of existing law, including unpaid claims for commutation of maternity leave of absence;

(3) Payment of retirement gratuities or separation pay of employees separated from the service due to government reorganization;

(4) Payment of salaries of employees who have been suspended or dismissed as a result of administrative or disciplinary action, or separated from the service through no fault of their own and who have been subsequently exonerated and reinstated by virtue of decisions of competent authority;

(5) Cash awards to deserving officials and employees in accordance with civil service law;

(6) Salary adjustments of officials and employees as a result of classification action under, and implementation of, the provisions of the Compensation and Position Classification Act, including positions embraced under the Career Executive Service;

(7) Peso support to any undertaking that may be entered into by the government with international organizations, including administrative and other incidental expenses;

(8) Covering any deficiency in peso counterpart fund commitments for foreign-assisted projects, as may be approved by the President;

(9) Priority activities that will promote the economic well-being of the nation, including food production, agrarian reform, energy development, disaster relief, and rehabilitation.

(10) Repair, improvement and renovation of government buildings and infrastructure and other capital assets damaged by natural calamities;

(11) Expenses in connection with official participation in trade fairs, civic parades, celebrations, athletic competitions and cultural activities, and payment of expenses for the celebration of regular or special official holidays;

(12) Payment of obligations of the government or any of its departments or agencies as a result of final judgment of the Courts; and

(13) Payment of valid prior year’s obligations of government agencies with any other government office or agency, including government-owned or controlled corporations.

SECTION 50. Appointment of Budget Officers.—No person shall be appointed as budget officer in any department, bureau, office or agency unless he meets the qualification and training requirements established by the Budget Commission as prerequisite to appointment, in addition to other qualification requirements prescribed by the Civil Service Commission for the position.

Executive Order No. 292
ADMINISTRATIVE CODE OF 1987