QuestionsQuestions (Act No. 2436)
Act No. 2436 creates a permanent reimbursable appropriation called the “fidelity fund.” It is administered by the Insular Treasurer.
Under Section 1, it may be used (a) to replace losses, shortages, and defalcations in the accounts of public officers and employees bonded under the Act, indemnifying losses fairly arising under fidelity insurance, and (b) to pay administration and operation expenses incurred in carrying out the Act.
Section 2 appropriates fifty thousand pesos as the permanent capital of the fidelity fund from moneys in the Insular Treasury not otherwise appropriated.
Under Section 2, all accretions and gains by way of premiums, interest, earnings, or otherwise accrue to the fund until the combined capital and net earnings reach one hundred thousand pesos. Any excess reverts to the general funds.
If claims exceed the fund’s available balance, the amount necessary to cover the deficit shall be advanced from the general surplus of the Insular Government until the overdraft is offset by the future net earnings of the fund.
The Governor-General fixes and may change the annual premium rate chargeable for insurance of the fidelity of bonded officers and employees. The rate must be uniform throughout the service. Premium is paid by the governmental unit to which the bonded position pertains.
Section 3 provides that one-third of the premium is repaid by the officer or employee to the Bureau/Office/province/municipality concerned, except where exempted under the Act.
Section 3 states that the governmental share of the premium on the bond is borne by the respective units served in such proportion as the Insular Auditor shall determine.
Under Section 4, claims must be made or forwarded to the Insular Auditor with the evidence. If the Auditor recommends payment (or part thereof) and the recommendation is approved by the Governor-General, it becomes a legal claim against the fidelity fund and may be paid; otherwise, it is not payable.
Section 5 provides that all bonds must be approved in form, amount, and sufficiency by the Insular Auditor. The Insular Treasurer must prepare and keep an accurate record of bonded positions and prescribe necessary rules/regulations subject to approval of the Secretary of Finance and Justice.
Under Section 6, once an appointment or designation becomes effective (upon election and due qualification if required), the appointee is deemed bonded “ipso facto.” Liability begins with the discharge of duties, and the premium is calculated as of that date without waiting for a formal application for bond.
Section 7 requires them, without delay, to notify the Insular Treasurer by mail upon appointment/designation of a bonded official (including acting or temporary appointee) and upon changes or vacancies. Administrative measures may enforce compliance. The Insular Treasurer may report non-conservative risk to the Governor-General.
Under Section 8, persons whose offices or employment are listed by the Insular Treasurer are deemed bonded for faithful performance of duties now or hereafter imposed by law, including faithful accounting for public funds/property and lawful payment/disbursement/expenditure/transfer of all such funds or property in their possession or control.
Section 9 requires the government to pursue civil remedies to recover from the principal or obligor on the bond as best serves the public welfare, including possible attachment of properties and remedies like a private creditor, notwithstanding penal prosecution; proceeds revert to the fidelity fund.
Section 10 allows the Insular Treasurer to deposit the moneys at interest in any government depository or to invest, with the Governor-General’s approval, in securities and loans readily convertible.
Section 11 requires the governor (or the person lawfully appointed to act as sheriff if the governor declines) to execute a bond before qualification, with not less than three sureties, running to the Government of the Philippine Islands for the benefit of whom it may concern.
Section 13 provides that when an official/employee/agent is temporarily designated to perform the duties of a head or subordinate office under relevant laws, the fidelity and premium charges due or accruing on account of the temporary designation are paid wholly from the funds/appropriation of the Department, Bureau, province, or municipality where the services are rendered.
Section 14 repeals Act No. 1739 as amended. It mandates that all funds then on deposit under that Act be reverted at once to the general unappropriated surplus funds of the government, and it repeals inconsistent acts/parts.
Section 15 states that the Act took effect on December 31, 1914.