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BAC Involvement for POs under an MOOE Account that cannot be completely delivered within the CY

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BAC Involvement for POs under an MOOE Account that cannot be completely delivered within the CY

Post by trezada on Thu Dec 23, 2010 1:42 pm

Sir/Madam:

Good day!

The situation is we have an outstanding Purchase Order by the end of this year 2010. Considering the storage capacity and the utilization progress of the said items, our department deems that the complete delivery of the said items would be by January of 2011. Since the items are charged to an MOOE account which closes by the end of the year and that the said items delivered by January cannot be considered as a liability/payable under 2010 account since the delivery happened by January of 2011 (thus, considered an MOOE under 2011). On behalf of our department, I would like to query on the necessary BAC actions or resolutions for the said concern. Should the end-user process a new Purchase Request charging the balance of the said purchase order to the account of the same nature under 2011? Else, what should be the appropriate BAC Action for this situation in order to reflect the validity of the said purchase order balance of items for delivery to be charged to the current account of 2011?The end-user deems that the option of canceling the outstanding quantity balance of the item for delivery and processing an all-new PR as detrimental to the operations considering of the length of time of the procurement process.

In anticipation of your prompt response, we convey our sincere gratitude. Happy Holidays!
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Re: BAC Involvement for POs under an MOOE Account that cannot be completely delivered within the CY

Post by engrjhez® on Thu Dec 23, 2010 2:14 pm

trezada wrote:Sir/Madam:

Good day!

The situation is we have an outstanding Purchase Order by the end of this year 2010. Considering the storage capacity and the utilization progress of the said items, our department deems that the complete delivery of the said items would be by January of 2011. Since the items are charged to an MOOE account which closes by the end of the year and that the said items delivered by January cannot be considered as a liability/payable under 2010 account since the delivery happened by January of 2011 (thus, considered an MOOE under 2011). On behalf of our department, I would like to query on the necessary BAC actions or resolutions for the said concern. Should the end-user process a new Purchase Request charging the balance of the said purchase order to the account of the same nature under 2011? Else, what should be the appropriate BAC Action for this situation in order to reflect the validity of the said purchase order balance of items for delivery to be charged to the current account of 2011?The end-user deems that the option of canceling the outstanding quantity balance of the item for delivery and processing an all-new PR as detrimental to the operations considering of the length of time of the procurement process.

In anticipation of your prompt response, we convey our sincere gratitude. Happy Holidays!
This situation calls for a good procurement planning. It would be prudent to have procurement cutoff by November (or earlier) to avoid this kind of dilemma. In our case, such "unstoppable" procurement with POs by January of the following year, we have no choice but to charge them on that Budget Year. In fact, we have been issuing the Obligation Request (ObR) only after award of the procurement. In that case, we avoid blind obligations and obligations done without successful procurement.

I suggest that you judiciously and meticulously plan your procurement ahead of time as mandated by Section 7 of the IRR. Smile
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Re: BAC Involvement for POs under an MOOE Account that cannot be completely delivered within the CY

Post by jcolas on Fri Dec 24, 2010 10:02 am

"Madam trezada wrote".

The situation is we have an outstanding Purchase Order by the end of this year 2010. Considering the storage capacity and the utilization progress of the said items, our department deems that the complete delivery of the said items would be by January of 2011. Since the items are charged to an MOOE account which closes by the end of the year and that the said items delivered by January cannot be considered as a liability/payable under 2010 account since the delivery happened by January of 2011 (thus, considered an MOOE under 2011). On behalf of our department, I would like to query on the necessary BAC actions or resolutions for the said concern. Should the end-user process a new Purchase Request charging the balance of the said purchase order to the account of the same nature under 2011? Else, what should be the appropriate BAC Action for this situation in order to reflect the validity of the said purchase order balance of items for delivery to be charged to the current account of 2011?The end-user deems that the option of canceling the outstanding quantity balance of the item for delivery and processing an all-new PR as detrimental to the operations considering of the length of time of the procurement process.

In anticipation of your prompt response, we convey our sincere gratitude. Happy Holidays:
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I agree with Sir Engrjhez that judicious planning is necessary but the situation cited by trezada is common to all, national, corporate and local. To the query whether the BAC has to take action on that part of delivery which will be done next year, I say nothing as this part of the procurement processes is within the supervision of the HOPE already. The first thing that you should do is to please refer to the approved Purchase Order as to the period of the delivery. I safely assume that the procurement processes has been done properly that is why your office has issued the appropriate Purchase Order and that it has been properly obligated by your Budget Officer and signed by the Chief Accountant for the CAF. If the PO has been approved by the HOPE, and accepted and signed by the supplier, then the obligation has been properly recorded. Now, if the Purchase Order calls for a delivery period which will be done this year, then I am very sure that the supplier has noted this as he has properly received the PO by signing the conforme portion of the Purchase Order. If the delivery period calls for a period which will last during the early part of January next year, madam trezada has nothing to worry about as long as the obligation has been properly recorded and properly accepted by the Supplier. I also would like you to inquire from your accounting section and I am sure they will brief you more on this. Happy holidays.
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Re: BAC Involvement for POs under an MOOE Account that cannot be completely delivered within the CY

Post by jcolas on Mon Jan 24, 2011 11:31 pm

"Madam Trezada wrote"

The situation is we have an outstanding Purchase Order by the end of this year 2010. Considering the storage capacity and the utilization progress of the said items, our department deems that the complete delivery of the said items would be by January of 2011. Since the items are charged to an MOOE account which closes by the end of the year and that the said items delivered by January cannot be considered as a liability/payable under 2010 account since the delivery happened by January of 2011 (thus, considered an MOOE under 2011). On behalf of our department, I would like to query on the necessary BAC actions or resolutions for the said concern. Should the end-user process a new Purchase Request charging the balance of the said purchase order to the account of the same nature under 2011? Else, what should be the appropriate BAC Action for this situation in order to reflect the validity of the said purchase order balance of items for delivery to be charged to the current account of 2011?The end-user deems that the option of canceling the outstanding quantity balance of the item for delivery and processing an all-new PR as detrimental to the operations considering of the length of time of the procurement process.

This might be moot and academic already as all agencies, both local, corporate and national must, under the law, finished recording all their obligations and unused balance must have been remitted to the Bureau of National Treasury, but I saw that Madam Trezada might have not read my answer to her query. And so I opened again this thread. Again, I asked that Madam Trezada and all those who have experienced this scenario should refer to their accountant and their auditor as they are the very people who can expertly answer the query.
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