General Guidelines
- Funds must be released and used according to the General Appropriations Act.
- Adherence to guidelines prescribed in this Circular is mandatory.
Nature of Projects Eligible for CDF Funding
- Must contribute to government development thrusts.
- Examples of eligible projects:
- Infrastructure: roads, bridges, waterworks, electrification, school buildings, public facilities.
- Livelihood projects under existing government programs.
- Projects improving health, social, and economic community conditions.
- Calamity assistance supported by presidential proclamation or National Disaster Coordinating Council certification.
- Purchase of equipment.
- Projects should be short-term (one year) and require no future financial commitments.
- Ineligible expenditures include:
- Regular operating expenses (supplies, maintenance, travel, grants, subsidies).
- Personal expenditures (salaries, honoraria, allowances, bonuses).
Implementing Agencies
- Can include government agencies, government corporations, and local government units (LGUs).
- Agencies must implement only projects within their mandates.
- LGU implementation of projects outside their mandate requires a Sangguniang Bayan or Panlalawigan resolution.
- Barangays and NGOs cannot directly implement projects but may be contracted by government agencies or LGUs.
- Only government financial institutions may implement credit facilities funded from CDF; these must be revolving funds deposited in trust.
Realignments of CDF Projects
- Any changes in implementing agency, project specifics, location, or funds require DBM approval.
- Realignments allowed within six months from SARO issuance.
- Changes involving allotment class or implementing agency cannot be made after December 31 of the year of SARO issuance.
Use of Unexpended Balances
- LGUs may request use of unexpended balances to expand or fund allied projects.
- Endorsement from original project proponent required.
Procedural and Accounting Guidelines
- Fund release requests submitted to DBM must specify:
- Project nature and description.
- Location.
- Cost or fund requirement.
- Implementing agency.
- LGUs must record releases as trust accounts.
- Upon project completion, unutilized cash must be remitted to the National Treasury with proper documentation.
- Realignment requests need documents including requests from agency heads, endorsements, and certifications on fund availability.
- Special requirements exist for realignments involving withdrawal of funds from LGUs.
- Unobligated CDF allotments revert to the National Government General Fund operation account after validity period.
Reporting Requirements
- Implementing agencies to prepare semi-annual reports on fund utilization and project accomplishments.
- Reports must be certified by agency head and verified by COA representative.
- Reports submitted to Budget and Finance Bureau F, DBM.
Saving Clause
- Issues not covered by the Circular shall be referred to the Department of Budget and Management.
Effectivity
- Circular effective immediately upon issuance (July 1, 1995).