Question & AnswerQ&A (EXECUTIVE ORDER NO. 87)
Republic Act No. 3526 and Presidential Decree No. 1445 (the Government Auditing Code of the Philippines) authorize the reversion of unliquidated balances of accounts payable outstanding for two years or more.
All documented accounts payable for fiscal year 2016 and prior years, as well as all documented accounts payable outstanding for at least two years for which no actual administrative or judicial claim has been filed, are subject to automatic reversion.
All undocumented accounts payable or those not covered by perfected contracts on record, regardless of when incurred, shall automatically be reverted, and the recording of such undocumented accounts payable in agency books is strictly prohibited.
If reverted accounts payable are subsequently validated, the Department of Budget and Management (DBM) will determine the funding source subject to applicable laws, rules, and regulations.
No, Section 4 clarifies that the Order cannot be construed to revive or validate claims and accounts payable already barred by prescription or disallowed by final judicial or administrative determination.
The Order applies to all accounts payable of all national government agencies except for (i) trust or fiduciary funds, as long as their creation purposes are not accomplished, and (ii) accounts payable corresponding to foreign-assisted projects for the duration of those projects.
Failure to comply may result in appropriate sanctions and/or administrative action against responsible government officials and employees, depending on the circumstances.
The Department of Budget and Management (DBM), in consultation or coordination with the Commission on Audit (COA), is responsible for preparing the implementing rules and regulations.
The Order took effect immediately upon issuance on August 13, 2019.