CURRENT SOCIETAL CONCERNS
Luz M. Alzate-Peria
25 October 2015
The Department of Finance recently announced that the much-awaited People’s Survival Fund (PSF) created by Republic Act 10174 will soon make available the Php1 billion peso for climate adaptation projects by local government units (LGUs) and communities through a call for proposals set this October 28, 2015.
Before that may happen, LGUs and support organizations of communities through civil society organizations may need to get a sense of what other relevant budget policies and the laws they have to take into account so they can be assured these funds will be released to them this year for their proposals.
One of these laws is the General Appropriation Act (GAA) of 2015 or Republic Act 10651. One of the general provisions of this law states that the MOOE and capital outlays (CO) authorized in this Act shall be valid for release and obligation for the purpose specified, and under the same special provisions applicable thereto, for a period extending to one fiscal year after the end of the year in which such items were appropriated. This means that the appropriation for MOOE and CO in the 2015 GAA shall be valid for release and obligation or spending until the end of 2016 only.
MOOE for climate adaptation projects may include trainings while allowable items for CO may include equipment like early warning device and infrastructure projects like flood control and drainage.
Comparing the general provision of the GAA with the implementing rules of RA 10174 , which provides that an amount of P1 Billion pesos shall be appropriated in the General Appropriations Act (GAA) as opening balance of PSF and with the same rules which provide that the balance of PSF including the amount appropriated in the GAA shall not revert to the General Fund, this means PSF funds will not lapse.
So, will the funds for this round of proposals be available only for two years, as what GAA 2015 provides, or there will be no time-limit for their availability, provided they are not used up?
I am not a lawyer but I am more inclined to believe that the general provision of the GAA shall be applicable to the P1 Billion appropriations for PSF in the GAA. My view is that the amount shall be available for release and obligation or spending only until December 31, 2016. However, I think the general provisions of the GAA on the validity of appropriations shall not be applicable to donations and other sources of funds of PSF.
How PSF is funded in the 2015 GAA
PSF is funded under the National Disaster Risk Reduction and Management Fund (NDRRMF) under Purpose 3 of the 2015 GAA . P750 Million is set aside for MOOE while P250 Million is for CO. Pursuant to Section 61 of the General Provisions of 2015 GAA, the amounts will be valid until December 31, 2016 only.
Another provision of the NDRRMF provides that the amount of One Billion Pesos (P1,000,000,000) appropriated for PSF shall be used in support of the adaptation projects and activities of LGUs and community organizations as may be approved by the People’s Survival Fund Board pursuant to Sections 20 and 21 of R.A. No. 9729, as amended. The said provision also states that releases from said Fund shall be subject to the submission of a Special Budget , and that the implementation of special provision 2 shall be subject to guidelines to be issued by the People’s Survival Fund Board in coordination with the DBM.
This means that a guideline issued by the PSF Board is necessary before funds from PSF may be released from the 2015 GAA.
I tried checking in the websites of DBM, CCC and DOF for a guideline on the release of PSF but found none. Despite that, let us assume that there is an approved guidelines. What is the possibility of release of PSF this year?
How will the PSF be released?
The RIRR of RA 10174 provides that all approved project proposals, duly supported with a Certificate of Availability of Funds, shall be submitted by the Climate Change Office to the DBM for approval of a Special Budget, subject to budgeting laws, rules and regulations.
The guidelines for release of funds for 2015 is National Budget Circular (NBC) No. 556 dated January 5, 2015. NDRRMF is listed among the funds withheld for later release and said Circular provides that appropriations under Annex B shall be released through SARO.
The same Circular also provides that for charges against multi-user Special Purpose Funds (SPFs), agencies shall submit Special Budget Requests (SBR) for eligible expenditures for issuance of SARO consistent with the Special Provisions of the Special Purpose Fund (SPF) concerned. Hence, release of SARO shall be subject to the issuance of a guidelines for PSF since it is so provided in Special Provisions 2 of NDRRMF.
A special budget request (SBR) is usually accompanied by a Physical Plan, Financial Plan and other documentary requirements. I believe the Certificate of Availability of Funds required under Rule XV of the RIRR of RA 10174 is applicable to PSF sourced from donations, grants and other non-GAA funds.
Upon approval of the special budget request, a SARO is released by DBM along with the NCA. SARO is the basis of agencies to obligate or spend and enter into contract while NCA is the basis for disbursements/liquidation or payment of obligations.
In addition, the same Circular set the deadline for the submission to DBM of agency requests for any release requiring issuance of SAROs/additional NCAs on November 15, 2015. Hence, there is less than a month for the Climate Change Office to evaluate and review, for the PSF Board to approve project proposals, and for CCO to package all the approved proposals together with the Physical Plan, Financial Plan and other documentary requirements and submit the same to DBM for release of allotment and NCA.
If the CCO/PSF Board does not beat the deadline, then release of funds will be extended to 2016. Another challenge to face if funds are released next year is the COMELEC election ban .
For the benefit of the poor communities usually affected by calamities, I hope and pray that the CCO will be able to beat the deadline and submit the SBR to DBM on November 15, 2015.
However, if the CCO cannot submit the special budget request on November 15, 2015, it is not precluded from submitting the special budget request in 2016 subject to the same budget laws, rules and regulations and the deadline of the submission of requests of release of SARO/NCA set in the guidelines to be issued by DBM for release of 2016 funds.