Authority and Legal Basis for Reversion
- Republic Act No. 3526 and Presidential Decree No. 1445 authorize the Commission on Audit to revert unliquidated balances of accounts payable after two years to the Unappropriated Surplus, now called the Cumulative Result of Operations.
- Executive Order No. 228 (1970) and Memorandum Order No. 181 (1988) similarly require the reversion of old and undocumented accounts payable, except for trust funds with unaccomplished purposes.
Exclusions and Exceptions
- Accounts payable under fiduciary (trust) funds are excluded if the purposes of such funds have not been fulfilled.
- Accounts payable related to foreign-assisted projects are retained for the duration of those projects.
Funding Mechanism for Legitimate Claims
- The Department of Budget and Management shall include a lump-sum allocation in the Annual General Appropriations Act to cover legitimate obligations arising after the reversion of accounts payable.
- This funding does not authorize revival of claims already barred by law or dismissed by final administrative or judicial decisions.
Compliance and Sanctions
- Officials and employees who fail to comply with the reversion mandate shall be subject to appropriate sanctions based on the circumstances.
Implementation and Oversight
- The Department of Budget and Management and the Commission on Audit are tasked to jointly issue the implementing rules and regulations for this order.
Scope and Impact
- The order addresses dormant accounts payable that hinder realistic government cash programming.
- It aims to clarify national government cash requirements by eliminating obsolete liabilities.
Immediate Effectivity
- The order took effect immediately upon issuance on June 10, 1999 by the President.
This Executive Order revitalizes existing laws and directives to ensure more accurate financial accountability by reverting stale and undocumented accounts payable to the national government’s cumulative operations account, while safeguarding legitimate claims through budgetary provisions.