Question & AnswerQ&A (Republic Act No. 7662)
All Heads, Budget Officers, and Management Analysts of Agencies of the National Government, including State Colleges and Universities.
Agencies must exercise thrift and economy in utilizing budgeted current operating expenditures and limit expenses to the minimum necessary to attain top priority objectives.
Any funds not committed for valid obligations at year-end shall revert to the National Treasury.
Amounts equivalent to one hundred ten percent (110%) of savings in maintenance and operating expenses actually reverted are made available to the agency in subsequent years as a reward for prudence and economy.
The reversion of funds must not jeopardize activities for which the funds were intended, and non-utilization of funds should not arise from failure to achieve agency work targets.
Funds may be used to augment agency budgets for equipment, construction, and other non-recurring expenses except for allowances, bonuses, or other forms of staff compensation.
Excluded are transfers from personal services, lump sum appropriations for grants, expenditures funded by borrowings or donations, blind certifications to accounts payable, savings from non-implementation of activities or failure to meet targets, and other exclusions as directed by the President.
They shall be charged to the Special Activities Fund or other available sources in the General Appropriations Law pertaining to the year the fund release is needed.
The Departmental and National Cost Reduction Committees created under LOI No. 506 are responsible for this evaluation.