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USE OF BAC's TRUST FUND

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USE OF BAC's TRUST FUND

Post by engrjhez® on Fri Apr 03, 2009 7:07 pm


This topic was first brought up in the topic below:

HONORARIA SOURCED FROM LGU SAVINGS

  • If in the case where BAC's collection overshoots its allocation for Honoraria of its members and staff, can we use the excess fund for something else? Like additional supplies (other than bidding documents), equipment (like computers, fax and photocopying machine, etc.) and trainings? If yes, can this be drawn out directly or will have to return to the General Fund (from the Trust Fund) to be appropriated later?


Last edited by engrjhez on Sat Apr 04, 2009 3:38 pm; edited 2 times in total
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Re: USE OF BAC's TRUST FUND

Post by RDV @ GP3i on Sat Apr 04, 2009 11:47 am

engrjhez wrote:
This topic was first brought up in the topic below:

HONORARIA SOURCED FROM LGU SAVINGS

  • If in the case where BAC's collection overshoots its allocation for Honoraria of its members and staff, can we use the excess fund for something else? Like additional supplies (other than bidding documents), equipment (like computers, fax and photocopying machine, etc.) and trainings? If yes, can this be drawn out directly or will have to return to the General Fund (from the Trust Fund) to be appropriated later?

The question specifically touches on the guidelines issued by the DBM as it is mandated under Sec.15 of the GPRA to issue the guidelines on payment of Honoraria to BAC members.

DBM has issued Budget Circular 2004-5 which was superseded by B.C. 2004-5A dated Oct. 7, 2005. Sec. 6 of that Circular provides for the funding source, and under which Sec. 6.2 provides as follows:

6.2 Pursuant to the DOF-DBM-COA Permanent Committee Resolution No. 2005-2 datedJune 2005, all agencies are authorized to treat the collections from the sources identified in item 6.1 hereof as trust receipts to be used as exclusively for the payment of honoraria and overtime pay herein authorized. Agencies may utilize up to one hundred percent (100%) of the said collections for the payment of honoraria and overtime pay subject to the guidelines in item 5.0 of this Circular. Any excess in the amount collected shall be remitted by NGAs to the Bureau of the Treasury. In the case of GOCCs and LGUs, the same shall form part of their corporate or local government funds, respectively. " ."

On Nov. 9, 2007, DBM issued another circular, B.C. 2007-3 amending certain provision of B.C 2004-5A, but the above-mentioned section 6.2 was not amended and not being inconsistent with the later issuance, it remains valid. Moreover, Sec. 3.4 thereof provides that: "The manner of payment of honoraria...shall be in accordance with Sec. 6.2 of B.C. 2004-5A, except use of savings by national government agencies which shall follow the General Provisions of the GAA..."

From the foregoing, the answer to your question is NO.
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Re: USE OF BAC's TRUST FUND

Post by engrjhez® on Sat Apr 04, 2009 3:40 pm

From our last query with the agency, all surplus of BAC's Trust Fund remained intact and was never been transfered to the General Fund (as the DBM Guidelines dictates). Do we still have to make an intermediate action, like a BAC Resolution transferring the remains of BAC's Trust Fund to the General Fund? Or does a simple letter to the Treasury/Accounting (noted by the BAC Chair or LCE) will do?

After the successful transfer, will appropriations for the above queried purposes be justified considering it is already the LGU's operational (general) fund?

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Re: USE OF BAC's TRUST FUND

Post by RDV @ GP3i on Sat Apr 04, 2009 4:25 pm

engrjhez wrote:
From our last query with the agency, all surplus of BAC's Trust Fund remained intact and was never been transfered to the General Fund (as the DBM Guidelines dictates). Do we still have to make an intermediate action, like a BAC Resolution transferring the remains of BAC's Trust Fund to the General Fund? Or does a simple letter to the Treasury/Accounting (noted by the BAC Chair or LCE) will do?

After the successful transfer, will appropriations for the above queried purposes be justified considering it is already the LGU's operational (general) fund?


I don't think a BAC Resolution would be necessary. At the end of the year, whatever balance should be reverted to the General Fund. Once transferred to the GF, then the normal budgeting/appropriation process sets in and, just as in any other budget proposals, proposed appropriations have to be justified. But why would the BAC need a separate fund? All expenditures of the BAC, except honoraria, are chargeable from the GF anyway.

By the way, balance of Trust Fund, based on the GPPB Resolution on Legal Assistance, can be used for legal assistance or medical assistance of BAC and BAC Support Staff.
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re BAC honoraria

Post by brucewayne on Sun Apr 12, 2009 10:11 am

Please be informed that BAC Honoraria can now be charged from the GF.
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Re: USE OF BAC's TRUST FUND

Post by engrjhez® on Sun Apr 12, 2009 10:54 pm

brucewayne wrote:Please be informed that BAC Honoraria can now be charged from the GF.
Thanks brucewayne,

We may also see the discussion (DBM BC 2007) on that topic here.
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Re: USE OF BAC's TRUST FUND

Post by blesilda on Fri Dec 17, 2010 2:56 am

In case, there was a realized surplus from the BAC trust fund, can we use that to procure an office equipment and/or other supplies that will be used exclusively for BAC-related documents? Do we need to request for another city council ordinance to specify and include said items in the utilization of the BAC Trust fund Account?
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Re: USE OF BAC's TRUST FUND

Post by RDV @ GP3i on Mon Dec 20, 2010 1:47 pm

blesilda wrote:In case, there was a realized surplus from the BAC trust fund, can we use that to procure an office equipment and/or other supplies that will be used exclusively for BAC-related documents? Do we need to request for another city council ordinance to specify and include said items in the utilization of the BAC Trust fund Account?

The trust fund shall be used exclusively for honoraria of BAC/TWG only and for payment of OT services of those administratively supporting the BAC, including that of the BAC Secretariat (if not entitled to receive honoraria.) It cannot be used, therefore, for the procurement of equipment and/or supplies even if for the use exclusively by the BAC.
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Re: USE OF BAC's TRUST FUND

Post by Jovinal on Tue Feb 28, 2012 1:03 pm

Sir RVD I was confused with the your following views on the treatment of Bids Docs Proceeds particularly no 2 & 3:

1)I don't think a BAC Resolution would be necessary. At the end of the year, whatever balance should be reverted to the General Fund. Once transferred to the GF, then the normal budgeting/appropriation process sets in and, just as in any other budget proposals, proposed appropriations have to be justified. But why would the BAC need a separate fund? All expenditures of the BAC, except honoraria, are chargeable from the GF anyway.

2) By the way, balance of Trust Fund, based on the GPPB Resolution on Legal Assistance, can be used for legal assistance or medical assistance of BAC and BAC Support Staff.

3) The trust fund shall be used exclusively for honoraria of BAC/TWG only and for payment of OT services of those administratively supporting the BAC, including that of the BAC Secretariat (if not entitled to receive honoraria.) It cannot be used, therefore, for the procurement of equipment and/or supplies even if for the use exclusively by the BAC.

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Re: USE OF BAC's TRUST FUND

Post by RDV @ GP3i on Tue Feb 28, 2012 3:11 pm

Jovinal wrote:Sir RVD I was confused with the your following views on the treatment of Bids Docs Proceeds particularly no 2 & 3:

1)I don't think a BAC Resolution would be necessary. At the end of the year, whatever balance should be reverted to the General Fund. Once transferred to the GF, then the normal budgeting/appropriation process sets in and, just as in any other budget proposals, proposed appropriations have to be justified. But why would the BAC need a separate fund? All expenditures of the BAC, except honoraria, are chargeable from the GF anyway.

2) By the way, balance of Trust Fund, based on the GPPB Resolution on Legal Assistance, can be used for legal assistance or medical assistance of BAC and BAC Support Staff.

3) The trust fund shall be used exclusively for honoraria of BAC/TWG only and for payment of OT services of those administratively supporting the BAC, including that of the BAC Secretariat (if not entitled to receive honoraria.) It cannot be used, therefore, for the procurement of equipment and/or supplies even if for the use exclusively by the BAC.


Per DBM Budget Circular 2004-5A, specifically Item 6.2 thereof, "collections from the sources identified in item 6.1 hereof as trust receipts to be used as exclusively for the payment of honoraria and overtime pay herein authorized...Any excess in the amount collected shall be remitted by NGAs to the Bureau of the Treasury. In the case of GOCCs and LGUs, the same shall form part of their corporate or local government funds, respectively."

However, in an issuance by the GPPB in 2005, specifically GPPB Resolution No. 021-2005, which was issued October 2005 the same month and year when BC 2004-5A was issued, it provided as additional funding source for legal assistance and medical assistance to BAC members and support staff; i.e., "Protest fees, proceeds from sale of bidding documents, and any other additional funds derived from other income-generating activities of the agency may be used to augment the funding source provided in this section."

Because of this GPPB resolution, although the DBM circular provided for the exclusive use of collections for honoraria and OT pay, the procuring entity is also given the option to utilize any balance for legal assistance and medical assistance, if needed.

I hope I have remove the confusion.
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Re: USE OF BAC's TRUST FUND

Post by Jovinal on Tue Feb 28, 2012 6:09 pm

In summary SIR RVD, Proceeds of Bids Document collected during the current year can be used for honoraria, OT and for legal assistance and medical assistance, and then at the end of the year, whatever balance should be reverted to the General Fund. I am right SIR ?
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