When contracts are prohibited or void
- Section 2 prohibits any Bureau, Board, committee, or officer of the Government of the Philippine Islands, or of any province or municipality, from entering into any contract, agreement, or other obligation involving expenditure of two thousand pesos or more for construction, equipment, or supplies unless the Insular Auditor first certifies in writing that:
- the money required for the contract or to pay the appropriation/expenditure is in the Treasury to the credit of the fund from which it is to be drawn, and
- the money is not appropriated for any other purpose.
- Section 2 requires that the certificate be attached to and made a part of the proposed contract.
- Section 2 provides that the certified sum shall not thereafter be available for expenditure for any other purpose until the Government, province, or municipality is discharged from the contract, agreement, or obligation.
- Section 2 declares that all contracts, agreements, or other obligations entered into contrary to these requirements are void, and no person may have any claim or demand thereunder against the Government or any branch or political subdivision.
- Section 2 prohibits any Bureau, Board, committee, or officer from waiving or qualifying the limits of the Act, from attaching any liability to the Philippine Government or to a province or municipality for any excess of limits, and from releasing any person from exact compliance with a contract under the Act, except as authorized under the provisions of the Act.
Effects on liability and public officers
- Section 2 provides that a violation disqualifies the violating person from holding any office of trust or profit in the Philippine Government or in the Government of any province or municipality.
- Section 2 makes the violating person liable to the Philippine Government, or the province or municipality, for damages resulting from the violation.
- Section 2 provides that if the violating person is in office, the person shall be dismissed.
Revenue-based treatment for multi-year contracts
- Section 2 establishes a special rule: for purposes of entering into such contracts, ninety percentum (90%) of the estimated revenues and receipts of the Government for any fiscal year covered by the contract shall be deemed to be in the Treasury.
- Section 2 requires the Act’s requirements to apply to contracts extending for more than one year.
- Section 2 requires that before expenditures may be made in any year during the continuance of a multi-year contract, the required certificate must be first had showing that funds for carrying on the contract for that year are in the Treasury under the same rule governing certification.
Amendments and altered contracts
- Section 3 requires that the same procedure used for original contracts must be followed when an existing contract for works of construction and repair is altered or amended.
- Section 3 makes the procedure mandatory when the alteration or amendment involves an expenditure of funds in excess of the original contract price.
Duplicate execution and distribution of copies
- Section 4 requires that all contracts for works of construction and repair entered into by the Government of the Philippine Islands must be executed in duplicate.
- Section 4 requires that one duplicate be filed in the division of archives, patents, copyrights, and trademarks of the Executive Bureau.
- Section 4 requires that the other duplicate be furnished to the contractor.
- Section 4 requires a certified copy to be furnished by the Executive Secretary to the Insular Auditor and to the Bureau, Board, committee, or officer that entered into the contract.
Purchasing requisitions and auditor certificate
- Section 5 requires that when requisitions are made upon the Purchasing Agent by any Bureau, Board, committee, or officer of the Government of the Philippine Islands, or of any province or municipality for two thousand pesos or more, the requisition must be accompanied by an Auditor’s certificate as required under the Act.
- Section 5 provides that no further certificate must be secured by the Purchasing Agent before entering into the contract for the purchase of the articles requisitioned.
Transitory and procedural finality
- Section 2 fixes the attachment and availability consequences of certification: the certificate must be attached to the contract, and the certified sum is not available for other purposes until the Government or local government is discharged from the contract, agreement, or obligation.
- Section 3 treats certain contract changes as triggering the same certification procedure as original contracting when the change increases expenditure beyond the original contract price.
- Section 4 imposes execution and filing mechanics for construction and repair contracts and requires certified distribution through the Executive Secretary.
- Section 5 streamlines purchasing execution by allowing the requisition certificate to serve as the required Auditor certification for entering into the related purchase contract.
Effectivity date
- The Act was enacted on February 1, 1912.