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Signature of the Chief Accountant before or after the HOPE signs in the contract

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Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by fe a. araya on Sun Oct 10, 2010 12:40 pm

Just for discussion. Is the Chief Accountant right to refuse to sign as witness and as to funds availability without the |
signature of the HOPE as one of the contracting parties? What if the HOPE does not sign also if the accountant has not signed yet for reasons that the HOPE would like to be assured that indeed there are funds available at the time of contract signing. May I add, in the NGAS, I think it is the finance/budget officer who certifies as to availabilty of funds/budget and earmarked to be utilized and the accountant certifies as to completeness of docs and observance to accounting rules and regulations and cash availability.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by jcolas on Sun Oct 10, 2010 1:40 pm

fe a. araya wrote:
Is the Chief Accountant right to refuse to sign as witness and as to funds availability without the |
signature of the HOPE as one of the contracting parties?


He's not right. His main duty is to certify as to the availability of funds and he has to do that before the HOPE signs the contract. Its not the other way around. When he signs the CAF, he is simply informing the HOPE, that funds/NCA is available to cover the contract. Then and only then can the HOPE signs the contract, and when the HOPE affixes his/her signature, the contract becomes binding as it becomes enforceable.

May I add, in the NGAS, I think it is the finance/budget officer who certifies as to availabilty of funds/budget and earmarked to be utilized and the accountant certifies as to completeness of docs and observance to accounting rules and regulations and cash availability

In an NGA, it is the Accountant that certifies as to availability of funds and the Budget Officer as to the availability of Appropriation/Allotment, that is the reason why when we speak of the CAF, we look for the Accountant and not the budget officer, but their seems to be a difference and how we interpret the word funds. For me, funds refers to the NCA while Appropriation refers to the allotment.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by engrjhez® on Sun Oct 10, 2010 10:53 pm

fe a. araya wrote:Just for discussion. Is the Chief Accountant right to refuse to sign as witness and as to funds availability without the |
signature of the HOPE as one of the contracting parties? What if the HOPE does not sign also if the accountant has not signed yet for reasons that the HOPE would like to be assured that indeed there are funds available at the time of contract signing. May I add, in the NGAS, I think it is the finance/budget officer who certifies as to availabilty of funds/budget and earmarked to be utilized and the accountant certifies as to completeness of docs and observance to accounting rules and regulations and cash availability.

Please see the other thread leading to the same question (and answer). Click here. Smile
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by RDV @ GP3i on Mon Oct 11, 2010 11:29 am

fe a. araya wrote:Just for discussion. Is the Chief Accountant right to refuse to sign as witness and as to funds availability without the |
signature of the HOPE as one of the contracting parties? What if the HOPE does not sign also if the accountant has not signed yet for reasons that the HOPE would like to be assured that indeed there are funds available at the time of contract signing. May I add, in the NGAS, I think it is the finance/budget officer who certifies as to availabilty of funds/budget and earmarked to be utilized and the accountant certifies as to completeness of docs and observance to accounting rules and regulations and cash availability.

Every General Appropriations Act (GAA) has a provision on the Certification of Availability of Funds (CAF). The CY 2010 GAA (RA 9970), specifically Sec. 73, General Provisions, has likewise the same provision, to wit:

"Sec. 73. Certification of Availability of Funds. Before entering into contracts involving the expenditure of public funds, all departments, bureaus, offices or agencies shall secure a certification of availability of funds for the purpose from the agency chief accountant, subject to Section 40, Chapter 5 and Section 58, Chapter 7, Book VI of E.O. No. 292: PROVIDED, That the certification of availability of funds sufficient to cover the cost of the contracted activities shall be contained in, and made part of, the contract duly signed by the chief accountant of the contracting agency, as provided by LOI No. 968 dated December 17, 1979.

From the said provision, it is very clear that the following are required:
1) The CAF has to be secured before any department, bureau, office or agency can enter into contracts involving expenditure of public funds;
2) The CAF has to be issued by the agency chief account; and
3) The CAF shall be contained in and made part of the contract of the contracting agency.

In what form will the certification be? (This was also raised in a similar but longer-running topic in this forum.) It is well to examine the provisions of Letter of Instructions No. 968, the title of which is "Ensuring that Contracts are Signed only when Supported by Available Funds."

Item 2 of the said LOI has this provision:
"2. It shall be the responsibility of the Chief Accountant to verify the availability of funds, as duly evidenced by programmed appropriations released by the Ministry of the Budget and received by the agency, from which such contract shall be ultimately payable. His signature shall be considered as consisting a certification to that effect."

Signature on where? Also the question on who signs first, the HOPE or the Chief Accountant, Item 1 of the same LOI is very instructive:
"1. All contracts for capital projects and for the supply of commodities and services, including equipment, maintenance contracts, and other agreements requiring payment which are chargeable to agency current operating or capital expenditure funds, shall be signed by agency heads or other duly authorized official only when there are available funds. The Chief Accountant of the contracting agency shall sign such contracts as witness and contracts without such witness shall be considered as null and void;"

In other words, the Chief Accountant sign first the contract as a witness, such signature in the contract will take the form of the CAF, before the HOPE signs the contract.

I hope it is much clearer now.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by fe a. araya on Mon Oct 11, 2010 2:33 pm

Thanks, RDV for that lengthy explanation. Actually, that situation is an actual case in our office and I was really insisting to the Chief Accountant that she should sign first before the HOPE for reasons that if I am the HOPE I don't want to have my signature in the contract compromised for signing without the assurance that there are available funds for the purpose. I can't just insist for lack of law or rules to cite. Am not an accountant but common sense dictates. In fact, the Budget Officer has already indicated that funds are available and allotment has been earmarked for the purpose.


Last edited by fe a. araya on Mon Oct 11, 2010 2:38 pm; edited 1 time in total (Reason for editing : additional info)
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by RDV @ GP3i on Mon Oct 11, 2010 3:48 pm

fe a. araya wrote:Thanks, RDV for that lengthy explanation. Actually, that situation is an actual case in our office and I was really insisting to the Chief Accountant that she should sign first before the HOPE for reasons that if I am the HOPE I don't want to have my signature in the contract compromised for signing without the assurance that there are available funds for the purpose. I can't just insist for lack of law or rules to cite. Am not an accountant but common sense dictates. In fact, the Budget Officer has already indicated that funds are available and allotment has been earmarked for the purpose.

Mabalos, ms. fe. I just do hope that the citations of the provisions and the statutes I made would be sufficient already in your case.

You are right, it is common sense, but common sense (it seems) is no longer too common these days. Very Happy Some people would rather rely on a specific provision of law which says this and that. Because of that, I rarely respond to queries unless I could mention a specific provision of law or issuance or jurisprudence.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by engrjhez® on Mon Oct 11, 2010 9:21 pm

RDV @ GP3i wrote:x x x
In other words, the Chief Accountant sign first the contract as a witness, such signature in the contract will take the form of the CAF, before the HOPE signs the contract.
x x x
Recent jurisprudence actually takes less significance of the underlined above (that the signature of Chief Accountant in the contract as witness takes care of CAF requisite) as in GR-151373-74 (DOH vs CVCAA, 2005)
x x x
The signatures of the chief accountants as instrumental witnesses do not constitute substantial compliance with the explicit requirements of said Codes. As Melchor v. Commission on Audit teaches, the certification, not the accountant’s signature as contract witness, is “the basic and more important validating document,” and “the more reliable indicium of fund availability,” notwithstanding paragraph 2 of Letter of Instructions No. 968 (LOI No. 968) which considers the signature of the chief accountant as itself constituting a certification that funds are indeed available. For LOI No. 968, being an administrative issuance, must yield to the explicit provisions of The Auditing Code of the Philippines and Revised Administrative Code of 1987.
x x x

This would mean relying on the signature of the Chief Accountant as the CAF in the face of the contract is futile. Smile

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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by RDV @ GP3i on Tue Oct 12, 2010 12:33 pm

engrjhez® wrote:
RDV @ GP3i wrote:x x x
In other words, the Chief Accountant sign first the contract as a witness, such signature in the contract will take the form of the CAF, before the HOPE signs the contract.
x x x
Recent jurisprudence actually takes less significance of the underlined above (that the signature of Chief Accountant in the contract as witness takes care of CAF requisite) as in GR-151373-74 (DOH vs CVCAA, 2005)
x x x
The signatures of the chief accountants as instrumental witnesses do not constitute substantial compliance with the explicit requirements of said Codes. As Melchor v. Commission on Audit teaches, the certification, not the accountant’s signature as contract witness, is “the basic and more important validating document,” and “the more reliable indicium of fund availability,” notwithstanding paragraph 2 of Letter of Instructions No. 968 (LOI No. 968) which considers the signature of the chief accountant as itself constituting a certification that funds are indeed available. For LOI No. 968, being an administrative issuance, must yield to the explicit provisions of The Auditing Code of the Philippines and Revised Administrative Code of 1987.
x x x

This would mean relying on the signature of the Chief Accountant as the CAF in the face of the contract is futile. Smile


Thank you, engrjhez, for the information on that relatively recent SC decision that the formalities requiring a certification under the Auditing Code (PD 1445) and not the signature of the chief accountant on the contract (under LOI 968) is "the basic and more important validating document,” and “the more reliable indicium of fund availability,” as enunciated in Melchor vs COA.

It is noteworthy that in Melchor vs COA, the Auditor raised the issue that the contract is null and void in the absence of the chief accountant's signature in the contract in compliance with Sec. 1 of LOI 968. In the DOH case, it is the nullity of the contract for lack of the accountant's certification despite the said accountant's signature as witness in the contract.

Because of that DOH case, I bet it could raise an avenue (for or against any government agency) for declaring contracts as null and void because there are lots of government contracts which only have that signature by the Chief Accountant.

DBM and Congress should also be advised of this ruling because, as I have mentioned earlier, the annual GAA contains that Section in its General Provisions citing LOI 968, which the SC, in the DOH case, considered as a mere administrative issuance, but which I believe has the force and effect of a statute and not just a mere administrative issuance.

Nevertheless, it is well that we should be aware of this SC decision.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by jcolas on Tue Oct 12, 2010 6:56 pm

Sir RDV wrote:
In other words, the Chief Accountant sign first the contract as a witness, such signature in the contract will take the form of the CAF
This statement is contained in paragraph 2 of LOI 968 which was assailed by the Supreme Court in its ruling in the DOH vs Canchela & Associates in November 0f 2005. The same statement is found in the General Appropriation Act of 2010. I fully agree with Sir RDV when he said that paragraph 2 of LOI 968 has the force and effect of a statute as the very same section has become part and parcel of the appropriation law of 2010.. Which of the two,then, shall prevail; the General Appropriation Law of 2010 or the Supreme Court Decision in DOH vs Canchela & Assiociates? It is basic in law that the Supreme Court is the final arbiter in matters concerning jurisprudence, but I am intrigued as the assailed statement is found in the appropriation law crafted by the Legislative branch of government, a co-equal branch. What says you, friends?
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by engrjhez® on Tue Oct 12, 2010 7:34 pm

For me, co-equality is only among themselves (executive-legislative-judiciary). When we talk of an individual (or even entity), it would be prudent to yield on jurisprudence. It is the SC that our 'fate' is determined, not by the Congress.

But that's just me. Smile
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by sunriser431 on Wed Oct 13, 2010 9:35 pm

another classical example why CAF is absolutely necessary, Try this LINK . enjoy reading bounce
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by blesilda on Fri Oct 22, 2010 12:02 pm

Is there any provision identifying the general qualifications of the TWG like that of the BAC members and BAC Sec (...at least 3rd ranking permanent plantilla personnel . . . .) aside from that they must have procurement proficiency, integrity... Further, is a Supply Officer II qualified to become a member of the TWG.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by engrjhez® on Fri Oct 22, 2010 1:02 pm

blesilda wrote:Is there any provision identifying the general qualifications of the TWG like that of the BAC members and BAC Sec (...at least 3rd ranking permanent plantilla personnel . . . .) aside from that they must have procurement proficiency, integrity... Further, is a Supply Officer II qualified to become a member of the TWG.
Please proceed to your other post by clicking here.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by RDV @ GP3i on Sat Oct 23, 2010 9:50 am

blesilda wrote:Is there any provision identifying the general qualifications of the TWG like that of the BAC members and BAC Sec (...at least 3rd ranking permanent plantilla personnel . . . .) aside from that they must have procurement proficiency, integrity... Further, is a Supply Officer II qualified to become a member of the TWG.

There is no requirement for ranking for TWG members so long as they are experts on legal, or financial, or technical matters and their expertise could provide valuable assistance to the BAC in its responsibility of conducting eligibility check and shortlisting (for consulting services), evaluation of bids, and post-qualification, as well as assist in the preparation of bidding documents and in the finalization of contracts.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by jomai on Tue Oct 26, 2010 1:22 pm

There is a prohibition on the Head of the Accounting Unit to be BAC Members, but can accouting head be appointed as TWG?
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

Post by sunriser431 on Tue Oct 26, 2010 7:45 pm

jomai wrote:There is a prohibition on the Head of the Accounting Unit to be BAC Members, but can accouting head be appointed as TWG?
excerpt from the Frequently asked Questions (General provisions)
xxxx
Can a Municipal Accountant or any personnel of the accounting department, being an expert in financial matters, be designated as a TWG member of the BAC?
Yes.
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Re: Signature of the Chief Accountant before or after the HOPE signs in the contract

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