Rationale for Implementing the Cash Budgeting System (CBS)
- Address significant gaps between actual expenditure and annual appropriations, which cause delays in public service delivery.
- Improve fiscal planning by enforcing operational cash budgets and setting deadlines for fund obligation and project execution.
- Accelerate the implementation of government programs and delivery of goods and services.
Adoption and Key Directives of CBS
- CBS effective from January 1, 2019.
- Authorized appropriations can only be obligated and disbursed until the fiscal year ends.
- Obligations must be implemented in the same fiscal year; corresponding goods and services must be delivered and accepted by fiscal year-end.
- Payments for obligations can be made up to an extended payment period (EPP) of three months post fiscal year, unless otherwise determined by the Department of Budget and Management (DBM).
- Special provisions for financial subsidies and statutory shares to local government units (LGUs) regarding availability for obligation and disbursement.
- Funds transferred among government units or LGUs are not considered disbursed until payment for delivered and accepted goods/services.
Reversion of Unused Funds
- Unreleased appropriations, unobligated allotments at fiscal year-end, unpaid obligations, and undisbursed funds after EPP revert to the National Treasury.
- Subsequent use requires legislative enactment.
- Financial subsidies to LGUs revert after the succeeding fiscal year.
- Compliance is mandatory for all national government units, including autonomous constitutional offices, state universities and colleges, GOCCs, and LGUs.
Multi-Year Projects and Contracts
- Multi-year projects exceeding 12 months require a Multi-Year Contractual Authority (MYCA) issued by DBM before procurement.
- MYCA covers the full project cost and forms the basis of budget approval.
- MYCA may also apply to projects of 12 months or less if research or scientific in nature requiring multi-year implementation.
- Public-Private Partnership projects require a DBM letter of commitment for National Government funding.
Early Procurement Activities (EPA)
- Agencies are authorized to begin procurement activities short of awarding contracts for the next fiscal year's projects.
- EPA must comply with the Government Procurement Reform Act and its implementing rules.
- EPA includes goods, infrastructure projects, and consulting services.
- EPA starts from the posting of procurement opportunities to the contract award recommendation stage.
Transitory Provisions in First Year of CBS Implementation
- Infrastructure capital outlays and subsidies valid for obligation until December 31, 2019; completion and payment due by December 31, 2020.
- Maintenance, operating expenses, and other capital outlays valid for obligation until December 31, 2019; delivery, inspection, and payment due by June 30, 2020.
Supplemental Guidelines, Separability, Repeal, and Effectivity
- DBM to formulate supplemental guidelines consistent with laws and regulations.
- Invalidity of any provision does not affect the rest of the Order.
- Conflicting previous issuances are repealed or modified.
- The Order took effect immediately upon publication in the Official Gazette or a general circulation newspaper.