Question & AnswerQ&A (DBM JOINT CIRCULAR NO. 1-90)
The main purpose of the Modified Disbursement System (MDS) is to facilitate effective management of the National Government's cash resources and to facilitate reconciliation of disbursements between government agencies, the Bureau of the Treasury, and Government Servicing Banks.
The Government Servicing Banks authorized under the MDS are the Philippine National Bank (PNB), Land Bank of the Philippines (LBP), and Development Bank of the Philippines (DBP).
Government agencies must immediately withdraw the balance per books of all deposit accounts under the New Disbursement System and other related accounts from servicing banks and remit these amounts to the account of the Treasurer of the Philippines through authorized government depository banks or directly to the Bureau of the Treasury.
No, exemptions include deposits authorized by law creating trust receipts or revolving funds, as well as deposit accounts of Government-Owned or Controlled Corporations (GOCCs) and Local Government Units (LGUs).
Government agencies are required to use specially designed commercial checks known as MDS checks to withdraw funds from the MDS account established by the Bureau of the Treasury with GSBs.
Generally, no. Government agencies shall no longer use Treasury Warrants Type A and B to withdraw funds except that the Department of Education, Culture and Sports (DECS) was allowed to continue using Type A warrants for certain personnel salary payments until June 1990 under prior arrangement with the Bureau of the Treasury.
The officer who directly allows withdrawals exceeding the NCA shall be held personally liable pursuant to Section 47 of Presidential Decree No. 1177.
GSBs must open and maintain MDS accounts of the Treasurer of the Philippines and sub-accounts for each agency and fund, issue blank checks upon proper authority, honor only MDS checks listed in the Advice of Checks Issued and Cancelled (ACIC), provide monthly reports, and debit the MDS account for negotiated checks, among other responsibilities.
Government agencies must record the NCAs according to COA accounting procedures, submit Statement of Monthly Allocation and Utilization to DBM within 10 days after month-end, reconcile accounts with GSB statements, submit bank reconciliation statements within 15 days after month-end, prepare and submit daily ACIC to GSBs, and ensure checks are used and cancelled properly.