Public Financial Management Reforms

Public Financial Management Reforms – Gains and Relevance to a Government in Transition

 

Summary of Proceedings

Written below are the highlights of the conference held last 25-27 November 2015.

 

The Opening Remarks and Statement of Purpose was delivered by Vice President Luzvi Pangan Chatto, Membership Conference Chair.

 

In her Welcome Remarks, President Carmela S. Perez, thanked the participants for their overwhelming response. She stated that this membership conference is a continuity of EUC past conferences on public accounting reforms, and as always, we will discuss how these systems can be of help to our society.

 

For Keynote Address, DBM Undersecretary Richard E. Moya discussed the achievements and economic gains of the Philippines during the term of President Aquino. Some of these revolve around transparency, honest leadership, pursuit of corruption cases against high-profile figures, poverty reduction, increase in public investments, better debt management, improved revenue collections and credit ratings. There is big improvement already, and yet much has still to be done. He encouraged the participants to continue the fight on transparency and accountability.

 

Technical Session 1: Accounting and Auditing Reforms

Asst. Commissioner Lourdes M. Castillo, COA, focused her discussion on the Overview of Government Accounting Manual (GAM) for National Government Agencies.  GAM is the new system which will replace the New Government Accounting System (NGAS) effective January 1, 2016.  The objective of GAM is to provide updates on government accounting standards, policies, guidelines, and on coding structure and accounts. There are three volumes included, and she updated the participants in details regarding changes adopted (such as in FS titles, components of FS, books and records maintained, etc.), budget and financial accountability reports, and responsibility accounting. Lastly, she discussed the GAM implementation strategy.

 

Technical Session 2: Budget Reporting and Performance Standards,

Directors Cecille Narido and Lorna Imenzo represented DBM Undersecretary Luz M. Cantor.

Director Narido discussed that there is a unified accounts code structure promulgated by COA-DBM Joint Circular no. 2014-1 (BAR 1) and National Budget Circular No, 555 (BED 2). There are four Budget Execution Document (BEDs): BED 1 is the financial plan; BED 2 is the physical plan; BED 3 reflects the monthly disbursement programs which show the projected estimates; and BED 4 is the annual procurement plan for common use supplies and equipment. She also explained the timelines in submission of BEDs to be followed. In addition, she went through the five Financial Accountability Reports (FAR). There are also Philippine budgeting policies for government-owned corporate sector which cover the two types of GOCCs.

On the part of Dir. Imenzo, she discussed the guidelines in the adoption of the modified statement of receipts and expenditures (SRE) format of local government units. Guides in the release of funds were also  tackled which involve prohibition of usage of funds for personnel services, use of project menu, prohibition of replacements of projects, and  release of funds by DBM central office to its regional offices.

 

Technical Session 3: Updates on Treasury Single Account (TSA)

This was presented on behalf of Deputy Treasurer Gisela F. Lood, Planning and Policy Subsector, Bureau of the Treasury, by Atty. William A. Beluso, Jr., Director III, Legal Service)

In line with the existing TSA process, he gave a brief review of TSA legal framework and its corresponding implementation framework.  In 2013, BTr undertook the following:

1) procured banking services for the development and provision of a TSA reporting and monitoring system;

2) signed an agreement with Bangko Sentral ng Pilipinas (BSP) for the establishment of a bank account (treasury single account) lodged at BSP;

3) signed agreements with BIR and BOC authorized agent banks on the modification of the reporting and remittance of government collections and the cancellation of the float regime and the transition to transaction fee-based compensation scheme;

 4) issued Treasury Circular No. 03-2013 prescribing the implementation guidelines to be observed by authorized agency banks and authorized government depository banks in reporting and remitting collections of taxes, duties and other fees and charges; and

5) formally launched with AGDBs and BIR and BOC AABs. TSA Reporting and Monitoring System (TRAMS) provides among others reports on revenue module and disbursement module.

 

Technical Session 4: Results-Based Performance Management System (RBPMS)

Day 2 started with Technical Session 4 on Results-Based Performance Management System (RBPMS) with guest speaker Ms. Agatha Beatrix Caballero Calces, Senior Budget and Management Specialist, Department of Budget and Management. The gist of her talk is on the Inter-Agency Task Force on Harmonization of National Government Performance, Information and Reporting Systems (AO No. 25).  This revolves around the battlecry of the government “Serbisyong ramdam ni Juana at ni Juan” to promote performance-based incentive system for government employees. This is carried out through a Performance-Based Bonus (PBB) which involves top-up bonus based on individual’s contribution to accomplishment of agency’s targets.  She also expounded the new requirements for the grant of PBB for FY 2015.

 

Technical Session 5:  Barangay Financial Management Manual

Technical Session 5 is about the Barangay Financial Management Manual (BFMM) which was ably discussed by Ms. Rosa dela Cruz, Supervising Auditor of Quezon City, representing Asst. Commissioner Divinia M. Alagon, Local Government Sector, COA.  The BFMM has incorporated the provisions of Philippine Public Sector Accounting Standards (PPSAS) and it is targeted to be implemented in 2016.

According to the 1987 Phil. Constitution Mandate: “The financial records of the barangay shall be kept in the office of the city or municipal accountant in simplified manner as prescribed by COA”.   The speaker discussed the different general accounting principles which include timelines, Chart of Accounts, cash transactions, funds granted to barangays, trust liability, share of unspent Local Disaster Risk Reduction and Mgt. Fund (LDRRMF) and Sangguniang Kabataan (SK), Registry of Special Trust Fund (RSTF), Record of Appropriations and Obligations (RAO), cashbook, transfers, inventories, assets, and revenue-generating sources.

 

Technical Session 6: Computerization Program – Towards Increased Revenue Collections

This technical session was handled by Asst. Commissioner Carolyn Ann Caja Reyes of Bureau of Internal Revenue, Information Systems Project Management Service. She emphasized the need for proactive strategies catering to different taxpayers attitude types such as honest compliers (taxpayers who voluntarily comply), honest non-compliers (would comply but restricted by lack of knowledge or resources), and dishonest non-compliers (taxpayers who actively evade such as businesses about to be bankrupt).  The Integrated Tax System (ITS) was developed based on the three core functions of tax administration namely: registration, filing and payment, and case monitoring.   Furthermore, ITS is a computerized and integrated system designed to automate and enhance the core tax administration process. BIR launched the program RFP (register – file – pay).  Lastly, the challenges lie in the compliance by taxpayers which can be done through resolutions, private sector support (help from the banks), and linkages with other agencies (e.g. SEC).

 

Technical Session 7: The Big One

Director Renato U. Solidum Jr. of Philippine Institute of Volcanology and Seismology gave a lively discussion about the relevant topic – The Big One.  In spite of the fact that the country is prone to many natural hazards (earthquake, tsunami, volcanic eruption, typhoon, storm surge, flood, landslide), the speaker said that the Filipinos lack the necessary preparation. People are affected by natural hazards due to unsafe location, poor construction, don’t believe that they can be affected, don’t know how they can be affected, don’t know what to do, lack of timely and proper response. Structures do not follow the minimum standards for construction and housing.  Thus, there is an imperative need for preparation.  This starts with imagination (hazards identification, hazards assessment, risk assessment, impact/damage scenario), preparedness and mitigation, and lastly, response and recovery.  Earthquake-related hazards include faulting rupture, ground shaking, liquefaction, fire and landslide.

 

Technical Session 8: Wellness 

This session on Wellness was handled by Dr. Jaime Galvez Tan, President of Health Futures Foundation, Inc.  He advocated the universal law of attraction and universal law of the present. There can be daily affirmations that people have to claim such as “I am happy!”, “I am full of joy!”, and “I am healthy!” He commented a spiritual consideration, saying that with God there is nothing impossible. The core areas of his session were conscious breathing and joint exercises. He demonstrated these and taught the participants.  In sum, there has to be an integration of body, mind and spirit.  All  participants were energized by the said varied exercises.

 

Technical Session 9: UACS, PPSAS and RCA-Compliant eNGAS and eBudget System: Issues and Concerns 

The speaker, Director IV Luzvi Pangan Chatto of Commission on Audit (Government Accountancy Sector), mainly discussed eNGAS and eBudget. eNGAS is an accounting software developed by COA to ensure correctness, reliability, completeness and timeliness in recording government financial transactions and to generate financial reports in accordance with the PPSAS, UACS, RCA and pertinent accounting policies and procedures. eBudget, for its part, complies with the basic policies and procedures of the UACS and PPSAS. In 2001 both enGAS and eBudget – both part of the accounting reforms – were implemented. These application systems are outputs of COA to promulgate accounting rules and regulations. The speaker also discussed lengthily the timeline of the development of eNGAS from 2001 to present time, and highlighted the different milestones throughout this time framework involving accounting simplification, circulars, and assessment of the implementation. In addition, accounting and auditing reforms projects were highlighted. Lastly, as part of the capacity-building provided by COA to different agencies, there is a 5-day training for them and a help-desk to cater to their needs.

The EUC leadership informed all the member-participants that our association will continue to render services. The EUC website and Facebook accounts are available to serve as communication link among members, and between Government Accountancy Sector Help Desk and members. Finally, all members are requested to like the EUC Facebook account so that they can become a member of the community of users of  public financial management systems.

 

~

Written in my capacity as the Rapporteur General of Electronic Financial Users’ Circle, Inc. (EUC)

This was published originally in the website of EUC at euc-inc.ph/download-page/.

 

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