Purpose and policy intent
- The Circular prescribes guidelines and procedures for the reversion of documented and undocumented A/Ps under E.O. No. 109.
- The Circular provides guidelines for releasing funds for legitimate obligations that may arise after the reversion of A/Ps.
Coverage and excluded funds
- The Circular covers all National Government Agencies and Government-Owned or Controlled Corporations (GOCCs) that maintain a General Fund and a Special Account in the General Fund.
- The Circular applies to A/Ps of all funds except Fiduciary Funds.
- Fiduciary Funds must continue to be maintained as long as the purpose for which such funds were created or given has not been accomplished.
- Foreign Assisted Projects (FAPs) are covered only for the duration of the project.
Core reversion rules (timelines and exceptions)
- All documented A/Ps of all funds that have remained outstanding for two (2) years must be reverted to the CROU, except for ongoing capital outlay projects.
- Documented A/Ps determined to be revertible as of the Circular’s issuance date must be reverted to the CROU on or before the end of 1999.
- All undocumented A/Ps, regardless of the year incurred, must be immediately reverted to the CROU.
- Payables covered by unliquidated cash advances, prepayments and deposits must be reviewed, and appropriate adjustments must be made in the books of accounts under accounting and auditing rules.
- FAPs-A/Ps that have remained outstanding for two (2) years after the completion date of the project per loan/grant documents must be reverted to the CROU.
- FAPs-A/Ps falling under a direct payment scheme must be reviewed by the concerned agencies for purposes of requesting issuance of a Non-Cash Availment Authority from DBM under DBM-COA-DOF Joint Circular No. 2-97 dated March 21, 1997.
- A/Ps reverted to the CROU that are later determined to be legitimate must be charged against the appropriate lump-sum provided for that purpose.
Special allotment release requirements (SARO)
- A Special Allotment Release Order (SARO) must be issued for reverted and legitimate claims when the actual transactions—delivery of goods and services—have already been completed.
- The issued SARO is effective only during the year it is issued.
- The SARO is treated as a “specific transaction release document” and cannot be re-issued; if the SARO is not obligated during the year released, no re-issuance for the same purpose is allowed.
- The SARO cannot be realigned for any other purpose.
Accounting structure for reverted claims
- Subsidiary ledger accounts must identify allotments, obligations, and liquidations pertaining to reverted claims.
- These subsidiary sub-accounts must be presented in the Trial Balance as short extension of the respective general ledger accounts.
- The required sub-accounts are:
- 0-90-400 — Appropriations Allotted, Reverted Claims
- 0-82-400 — Obligations Incurred, Reverted Claims
- 0-83-400 — Obligations Liquidated, Reverted Claims
Agency processing procedures and documents
- Agencies must review and analyze all recorded Payable Accounts covering account 8-81-100 to account 8-81-900.
- Documented A/Ps under Capital Outlays that meet the following conditions must not be reverted immediately:
- Ongoing construction projects with at least 15% overall accomplishment as of September 30, 1999; and
- Completion of the ongoing construction project by December 31, 2000.
- Agencies must prepare a Journal Voucher (JV) to revert to the CROU all A/Ps that remained outstanding for two years and do not fall under the Capital Outlays immediate-reversion exception.
- Agencies must submit to DBM and COA:
- A copy of the JV certified correct by the Chief Accountant, supported by a List of A/Ps reverted; and
- The corresponding Request for Obligation of Allotments (ROA No.) and the amounts due each payee.
- After reversion under E.O. No. 109, agencies may consider reverted A/Ps for payment through administrative processes that determine the existence, validity, and legality of the claims.
- Claimants must initiate the process by filing their request with the concerned agency.
- Claimants must submit pertinent documents including:
- Approved contracts;
- Proof that services had been rendered;
- Proof that assets and other properties had been delivered;
- Proof that projects have been completed and accepted by the agency; and
- Other documentation proving the validity and legitimacy of the claims.
- Upon establishment of proof of validity to settle the claim, the agency head must request issuance of a SARO from DBM supported by:
- A certified copy of the specific JV showing that the A/P had been reverted to the CROU; and
- Justification for non-payment of the claims during the past years.
- After DBM releases the SARO and the corresponding Notice of Cash Allocation chargeable against the appropriate lump-sum, the agency must process the payment of the claims.
Applicability, continuing effect, and deadlines
- The Circular has continuing application.
- Thereafter, agencies must pay only A/Ps outstanding for less than two (2) years, except for the exemptions provided in the Circular.
- Documented A/Ps determined revertible as of issuance must be reverted to the CROU on or before the end of 1999.
Enforcement, penalties, and related clauses
- Failure of concerned officials and employees to comply with the Circular subjects them to penalties under Section 43, Chapter 5, Book VI of E.O. No. 292, the revised Administrative Code of the Philippines.
- All provisions of existing circulars and other issuances inconsistent with the Circular are rescinded/repealed and/or modified accordingly.
- Cases not covered in the Circular must be referred to DBM, and resolved jointly with COA.
- The Circular takes effect immediately.