CURRENT SOCIETAL CONCERNS
24 November 2013
Luz M. Alzate-Peria*
Whenever calamities strike, it is always the local communities that are affected. Lives, livelihood and properties are lost. Hence, there is a need to prepare and protect these communities from calamities.
The People’s Survival Fund or PSF, established pursuant to Section 13 of RA 10174, is one way of protecting vulnerable communities from calamities.
An amount of P500 Million is provided under the Unprogrammed Fund (UF) of the 2013 General Appropriations Act. The same amount is included under UF for 2014 as reflected under the Details of 2014 Budget. Further, PSF is included in the Unified Account Code System (UACS) under COA-DBM-DOF JC No. 2013-1 dated August 6, 2013 and was assigned funding source code 105426. The purpose of UACS, as paraphrased from the UACS Manual, is for identifying, aggregating and reporting financial transactions in budget preparation, execution, accounting and auditing. UACS will enable DOF, DBM and COA to report and assess accurately and timely actual revenue collections and expenditures against what was budgeted or targeted. Despite the appropriation and the inclusion of PSF in the UACS, still, there is no release for PSF to date.
II. FUNDING PSF
a. Sources and Type of Fund
There are 2 sources of fund for PSF, one is the General Appropriations Act (GAA) and the other source is donations, endowment, grants and contributions.
For the first source of funds, the GAA, Section 13 of RA 10174 provides that an amount of P1 B shall be appropriated in the GAA as opening balance of the PSF. Further, it appears from the said law that the amount is a recurring appropriation. Hence, the amount should have been included as part of the New General Appropriations of the GAA and not under the Unprogrammed Fund (UF). This way, PSF is assured of funding every year.
As to the second source of funds for the PSF, Section 7 of the General Provisions of 2013 GAA (Page 1680) provide, among others, that, agencies/offices may accept donations, contributions and grants (for a term exceeding 1 year) from local or foreign sources for purposes that are relevant to their functions and that said donations are deemed automatically appropriated, which means this will no longer have to go through Congress for its authorization. Once accepted by the agencies, said donations shall be deposited with the National Treasury and shall be taken up as a Special Account in the General Fund. To have this money released from the General Fund will however require a Special Budget pursuant to Section 35, Chapter V, Book VI, EO 292. How this special budget is released is explained under “Accessing PSF” below.
b. The 2013 Appropriation
There is a P500 Million line item appropriation under the UF of the 2013 GAA, P250 Million MOOE and P250 Million Capital Outlays.
UF is a standby fund and it may only be released if the following conditions are met:
a. Revenue collections exceed the original revenue targets in the Budget of Expenditures and Sources of Financing (BESF) submitted by the President to Congress;
b. New revenues are collected/realized from sources not originally considered in the BESF
c. Newly-approved loans for foreign-assisted projects are secured
c. 2014 Budget
Proposed appropriation for CY 2014 for PSF is also P500 Millions which is only for MOOE. Like the 2013 appropriation, it is a line item under the UF and is also subject to the conditions stated above.
III. ACCESSING PSF
a. 2013 Appropriation in the GAA
It is provided in Section 63 of the General Provisions of the 2013 GAA that all appropriations in the GAA shall be available for release and obligation until the end of FY 2013 only.
Hence, if the appropriation is not released this year, it will revert to the unappropriated surplus of the General Fund (GF), this is assuming that the conditions for the release of UF is met.
Given that the year is about to end and that there is no signed IRR yet for PSF and that the PSF Board has not yet been convened, then, there is a big possibility that the P500 M appropriation will be reverted to the unappropriated surplus of the GF.
The provision of Section 13 of RA 10174 which state, among others, that the balance of PSF including the amount appropriated in the GAA which shall form part of the fund shall not revert back to the general fund is not consistent with the provisions of Section 63 of the GP of the 2013 GAA. Besides, PSF, being a part of the GAA is a already a general fund. In the UACS, PSF is also categorized as general fund.
b. 2014 Proposed Budget
If the proposed appropriation of P500 M is maintained under the UF, then, the release of funds will still be dependent on whether the conditions for the release of UF is met.
c. Release of Funds
1. Release of Funds, both from UF and donations, is subject to a special budget pursuant to Section 35, Chapter V, Book VI, EO 292 and the provisions of the IRR for PSF and the guidelines for the release of funds to be issued by DBM, if one is deemed needed or if the IRR will not suffice.
2. Once the condition of the release of UF is met, the Climate Change Office (CCO) may request from DBM the release of funds by way of submission of a special budget.
The special budget request will contain a Work and Financial Plan detailing the programs, projects and activities to be funded as well as the budget by item of expenditure (ex. Travel, communications, supplies, honoraria, etc.). The basis in the preparation of the special budget is the approved project proposals submitted by the local government units (LGUs) and local communities.
3. Donations, grants and contributions for a term exceeding 1 year are deemed automatically appropriated. A special budget request for the purpose is supported by a certification from the Bureau of Treasury that an amount is deposited with the National Treasury for PSF. Likewise, the special budget request shall contain a work and financial plan.
Considering that the year is about to end, the P500 M appropriation of PSF under UF will, most likely, revert to the unappropriated surplus of the GF. It will then become part of the revenue that is available for re-appropriation next year.
It is recommended that civil society organizations interested on the issue should lobby Congress for the re-appropriation of the 2013 appropriation for PSF and be added to the proposed appropriation of PSF for 2014, making the total proposed appropriation for PSF P1 Billion.
Another item that needs to be lobbied is for the PSF be included as part of the special purpose funds like IRA, Calamity Fund, DepEd School Building Program, under the New General Appropriations and not under UF so that PSF will be assured of funding in 2014.
Furthermore, release of funds to LGUs must be done thru the IRA release mode and that the release of funds to local organizations/communities be done thru the direct payment system similar to the one adopted for the payment of DPWH accounts payable. The system/scheme was outlined in DBM Circular No. 99-11.
*The author worked with the Department of Budget and Management, from 1987 until she retired in 2009 as a Supervising Budget and Management Specialist reviewing, among other tasks, the budget requests and releases of some identified national government agencies and local government units.