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Splitting of BAC Honorarium?

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Splitting of BAC Honorarium?

Post by neilbeluan on Thu Jun 17, 2010 1:02 pm

Please consider this situation:

For a certain month, there are five successful procurement projects awarded by the BAC. For each procurement project, a BAC member is entitled to receive up to P2,500.00 of honorarium as stipulated in the DBM M.C. 2004-5a, which for five projects will sum up to P12,500.00. However, the guidelines state that the maximum honorarium to be received for each month shall not exceed 25% of the basic monthly salary. Is it legal to pay honorarium by installment, so that if the 25%-limit of the BAC member is only P 10,000.00, he could receive on this month P10,000.00 as his honoraria for the four projects, and receive again P 2,500.00 on the following month as his honorarium for one remaining successful project? Is this action against DBM guidelines? Is it correct to say that if the procurement project is awarded on a particular month, the BAC members are allowed to claim their honorarium only on that same month?
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Re: Splitting of BAC Honorarium?

Post by riddler on Thu Jun 17, 2010 3:27 pm

neilbeluan wrote:Please consider this situation:

For a certain month, there are five successful procurement projects awarded by the BAC. For each procurement project, a BAC member is entitled to receive up to P2,500.00 of honorarium as stipulated in the DBM M.C. 2004-5a, which for five projects will sum up to P12,500.00. However, the guidelines state that the maximum honorarium to be received for each month shall not exceed 25% of the basic monthly salary. Is it legal to pay honorarium by installment, so that if the 25%-limit of the BAC member is only P 10,000.00, he could receive on this month P10,000.00 as his honoraria for the four projects, and receive again P 2,500.00 on the following month as his honorarium for one remaining successful project? Is this action against DBM guidelines? Is it correct to say that if the procurement project is awarded on a particular month, the BAC members are allowed to claim their honorarium only on that same month?

you are correct.. you can always put all the fund from the sale into a Trust Fund of your Treasurer as long as it shall not exceed the 25% threshold whether annualy or monthly alloted for members of the BAC-TWG-Secretariat
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Re: Splitting of BAC Honorarium?

Post by fe a. araya on Thu Jun 17, 2010 5:31 pm

I think there's no problem if the honorarium for the remaining one (1) project is paid for the following month. There's no provision in the DBM guidelines that only projects awarded for a certain month can only be paid on the same month. For as long as the fund from the sale is still available and the claim is not in excess of the allowable rate and 25% of his monthly salary, then I think it's okey to be fair to BAC members/secretariat and TWG who did their jobs.
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Re: Splitting of BAC Honorarium?

Post by neilbeluan on Fri Jun 18, 2010 4:18 pm

I agree with you fe. It just happen that our accounting office thinks differently.
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Re: Splitting of BAC Honorarium?

Post by fe a. araya on Sun Jun 20, 2010 4:25 pm

I think your accountant should be updated on DBM issuances or better still, attend trainings being conducted by the GPPB. Or maybe designate her/him as member of the TWG (not as BAC member for that is not allowed under COA rules). AS TWG member, he/she will experience how it is to be part of the procurement activities being undertaken by the BAC. It is a big responsibility and it is just fair to receive the honorarium as prescribed by law.
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Re: Splitting of BAC Honorarium?

Post by engrjhez® on Mon Jun 21, 2010 2:02 pm

neilbeluan wrote:Please consider this situation:

For a certain month, there are five successful procurement projects awarded by the BAC. For each procurement project, a BAC member is entitled to receive up to P2,500.00 of honorarium as stipulated in the DBM M.C. 2004-5a, which for five projects will sum up to P12,500.00. However, the guidelines state that the maximum honorarium to be received for each month shall not exceed 25% of the basic monthly salary. Is it legal to pay honorarium by installment, so that if the 25%-limit of the BAC member is only P 10,000.00, he could receive on this month P10,000.00 as his honoraria for the four projects, and receive again P 2,500.00 on the following month as his honorarium for one remaining successful project? Is this action against DBM guidelines? Is it correct to say that if the procurement project is awarded on a particular month, the BAC members are allowed to claim their honorarium only on that same month?

The underlined is a misinterpretation. As far as the BC is concerned, the section is quoted as follows:
5.4 The average amount of honoraria per month over one year shall not exceed twenty five percent (25%) of the basic monthly salary. The honoraria, however, shall be paid only upon the successful completion of each procurement.
We are talking here of the average, not the exact honoraria per month. This means, if the procurements are completed and the funding has it, you can claim for the maximum 25% (average annual) even if we are this early (June). Now, if there are more procurements to come, the service we have to provide for the rest of the year shall now be "for free". At the end of the year, the average honoraria shall be compared with monthly salary cap.

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Re: Splitting of BAC Honorarium?

Post by janarie on Fri Jul 13, 2012 11:21 am

Good day,

I hate to resurrect old threads, but I this is the closest I could find regarding the interpretation of Section 5.4 of BC 2004-5A.

It states the average amount of honoraria per month over one year shall not exceed twenty-five percent (25%) of the basic monthly salary.
My question is, suppose for 3 successfully completed procurements, the BAC Chairman whose monthly salary is 38,000 received an honorarium amounting to 25% (9,500) for the month of January 2011, but under the BC, he should only receive 9,000 (3x3000). There is a 500 difference which should be disallowed, right? But assuming at year end, there are 50 successfully completed projects and he actually received a total amount of 100,000 as honorarium. Should the difference of 500 in January still be disallowed considering that the total amount received for the year (100,000) is much lower than the 25% annual salary (114,000)? How should Section 5.4 in this case apply?

Thank you.

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Re: Splitting of BAC Honorarium?

Post by engrjhez® on Fri Jul 13, 2012 11:55 am

janarie wrote:Good day,

I hate to resurrect old threads, but I this is the closest I could find regarding the interpretation of Section 5.4 of BC 2004-5A.

It states the average amount of honoraria per month over one year shall not exceed twenty-five percent (25%) of the basic monthly salary.
My question is, suppose for 3 successfully completed procurements, the BAC Chairman whose monthly salary is 38,000 received an honorarium amounting to 25% (9,500) for the month of January 2011, but under the BC, he should only receive 9,000 (3x3000). There is a 500 difference which should be disallowed, right? But assuming at year end, there are 50 successfully completed projects and he actually received a total amount of 100,000 as honorarium. Should the difference of 500 in January still be disallowed considering that the total amount received for the year (100,000) is much lower than the 25% annual salary (114,000)? How should Section 5.4 in this case apply?

Thank you.

Welcome to this forum!

To apply the rules consistently, we should determine which rule should come first than the other.

The first rule is that honoraria will be based on "successfully completed procurement". Following this 1st rule, the P500.00 disallowance is in order if there were only actually 3 procurement completed at the rate of P3,000/proc.

Second rule is that honoraria must not exceed 25% of the average basic monthly salary. It should not be construed to mean "at every month" alone but as a whole in the entirety of the year. There is no way we can prematurely determine this limitation unless it is already December. So precautions, rather than limitations may only be applied in the middle of the year.

The proposed disallowance in your first situation should be treated independent of the voucher as it is claimed. If the first situation was not claimed and disbursed, it has no bearing then in the claim of P100,000.00 total honoraria in a year. Smile
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Re: Splitting of BAC Honorarium?

Post by janarie on Fri Jul 13, 2012 12:30 pm

Thank you for your timely response.

I would like to be clarified on what you meant on your last paragraph. You said that if the first situation was not claimed (I am assuming the 9,500 in the example), it has no bearing in the claim of the 100,000 total honoraria at the end of the year. What if it was claimed and received by the BAC Chairman? Will it mean that the 500 disallowance still stands at the end of the year?

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Re: Splitting of BAC Honorarium?

Post by engrjhez® on Tue Jul 17, 2012 8:37 am

janarie wrote:Thank you for your timely response.

I would like to be clarified on what you meant on your last paragraph. You said that if the first situation was not claimed (I am assuming the 9,500 in the example), it has no bearing in the claim of the 100,000 total honoraria at the end of the year. What if it was claimed and received by the BAC Chairman? Will it mean that the 500 disallowance still stands at the end of the year?

Yes. Provided that at the time the P9,500.00 was collected, the actual completed procurement were just 3.
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Re: Splitting of BAC Honorarium?

Post by janarie on Tue Jul 17, 2012 11:25 am

thank you very much sir and belated happy birthday! Smile

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Re: Splitting of BAC Honorarium?

Post by engrjhez® on Tue Jul 17, 2012 6:55 pm

janarie wrote:thank you very much sir and belated happy birthday! Smile

Haha. Where did you get that? Anyway, thanks Very Happy
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