Withdrawal and Remittance of Existing Account Balances
- Agencies must withdraw balances as of February 28, 1990, from all accounts under the old New Disbursement System (NDS).
- Withdrawn amounts must be remitted to the Treasurer of the Philippines (TOP) either via government depository banks or directly to the BTR.
- Exemptions include legally authorized trust receipts, revolving funds, Government-Owned or Controlled Corporations (GOCCs), and Local Government Units (LGUs).
- Accounts will close after outstanding checks are cleared or six months after MDS implementation; remaining balances remitted to BTR.
Establishment and Use of MDS Accounts and Checks
- BTR will open MDS deposit accounts with the Head Offices of Philippine National Bank (PNB), Land Bank of the Philippines (LBP), and Development Bank of the Philippines (DBP).
- Government agencies must withdraw funds using specially designed commercial checks (MDS checks) from these MDS accounts.
- Treasury Warrants Type A and B are discontinued except for special arrangements with the Department of Education, Culture and Sports (DECS) until June 1990.
Inventory and Disposal of Unused Checks and Warrants
- Agencies to inventory unused NDS commercial checks or Treasury Warrants except those under prior special arrangements.
- Disposal must comply with relevant Commission on Audit (COA), Department of Finance (DOF), and Monetary Board regulations.
Notice of Cash Allocation (NCA) and Fund Releases
- The Department of Budget and Management (DBM) issues monthly NCAs directly to Central Offices, Regional Offices, and some Provincial or Operating Units.
- NCAs guide agency fund withdrawal limits and are valid only for the calendar year issued.
- Funds released to sub-agencies not receiving NCAs directly are by MDS checks covering two weeks' requirements.
- Separate MDS checks should be used per allotment class.
- Specific procedures apply for payroll accounts and salary payments.
- Agencies must submit monthly allocation utilization statements and bank reconciliation reports.
Bank Account Management and Statements
- GSBs maintain separate accounts per agency and fund with controls based on NCAs.
- Monthly statements of accounts and negotiated checks must be provided by GSBs for reconciliation within five days after month-end.
- Agencies authorized to maintain sub-accounts reconcile monthly with GSBs.
Responsibilities of Bureau of the Treasury (BTR)
- Open and maintain MDS accounts.
- Deposit funds to GSBs to support MDS operations.
- Design and authorize the use of MDS checks.
- Replenish MDS accounts daily based on negotiated checks.
- Prepare monthly allocation control statements and bank reconciliations for submission to COA.
Responsibilities of Department of Budget and Management (DBM)
- Issue Advice of Allotment (AA) and monthly NCAs with copies to GSBs and BTR.
- Forward NCAs at least two weeks in advance.
- Approve and evaluate requests for NCAs including special budgets.
- Receive and evaluate agencies' financial reports as basis for fund releases.
Responsibilities of Government Agencies
- Withdraw and remit NDS balances per guidelines.
- Close old deposit accounts.
- Stop use of Treasury Warrants with exceptions.
- Inventory and dispose unused checks.
- Submit required plans and reports for AA and NCA issuance.
- Record NCAs per COA accounting procedures.
- Open sub-accounts with authorized banks.
- Use MDS checks and adhere to fund limits ensuring disbursements do not exceed NCAs.
- Designate authorized signatories for checks and reconciliation documents.
- Purchase blank MDS checks limited to one month’s use.
- Release funding checks to sub-offices as applicable.
- Handle payroll in accordance with approved methods.
- Remit refunds for overpayments.
- Submit daily Advice of Checks Issued and Cancelled (ACIC) and monthly bank reconciliations.
- Properly cancel spoiled checks and ensure proper reconciliation with bank statements.
Responsibilities of Government Servicing Banks (GSBs)
- Manage MDS accounts for BTR and agencies.
- Issue blank checks only upon authorized purchase orders.
- Honor only MDS checks listed in ACIC and refrain from honoring overdrafts.
- Provide monthly statements for reconciliation.
- Report daily negotiated check summaries to BTR.
- Handle adjustments and corrections as required.
Specific Procedures for Funding Checks to Sub-Offices
- Central and Regional Offices issue funding checks for two weeks’ needs to sub-offices.
- Sub-offices maintain deposit accounts with GSBs and issue regular checks against these accounts.
- Unused balances must be remitted to BTR annually.
Transfer of Allocation Procedures for Some Agencies
- Central Offices submit requests for Notice of Transfer of Allocation (NTA) to sub-offices with copies to relevant agencies.
- GSBs distribute NTAs and monitor agency withdrawals not to exceed allocated funds.
- Sub-offices comply with applicable reporting, funding, and reconciliation guidelines.
Management of NCAs for Foreign Assisted Projects
- Agencies maintain specific ledgers per project to monitor expenditures.
- Continuing appropriations policies remain applicable even as NCAs are valid only through the calendar year.
Accounting and Record-Keeping
- COA to prescribe accounting guidelines and procedures for the implementation of the MDS.
Penalty Clause
- Disbursements must not exceed the NCAs.
- Officers authorizing or allowing excess withdrawals are personally liable under Section 47 of PD 1177.
Effectivity
- The Circular implementing the MDS took effect on March 1, 1990.