Gorospe 10:42 AM, Nov 16, 2022
Does over the counter purchases thru Petty Cash Fund requires the BAC approval or resolution on each purchases or would the documentary requirements under COA Circular no. 2012-001 dated June 14, 2012 Sections 1.1.2 and 1.2.2 suffice?
Officer 11:14 AM, Nov 18, 2022
November 18, 2022
Dear Mr. Gorospe,
Thank you for your request dated Nov 16, 2022 10:42:11 AM under Executive Order No. 2 (s. 2016) on Freedom of Information in the Executive Branch.
You asked whether over-the-counter purchases to be paid using Petty Cash Fund (PCF) require Bids and Awards Committee (BAC) approval or resolution or whether compliance with the documentary requirements under Commission on Audit (COA) Circular No. 2012-001 dated 14 June 2012 suffices.
We note that prior to this reply, we also had a previous consultation with you via your given contact number to clarify your concern.
Response to Request
Your FOI request is approved.
At the outset, we emphasize that there is no hard-and-fast rule to answer your query. A responsive answer to your question requires a consideration of the subject of purchase and other underlying circumstances.
We emphasize that compliance with the documentary requirements under COA Circular No. 2012-001 for use of PCF and on the other hand, with procurement laws, rules, and regulations primarily provided under Republic Act No. 9184 or the Government Procurement Reform Act and its 2016 revised Implementing Rules and Regulations (IRR) are not mutually exclusive. One is merely a mode of payment, while the other provides the rules on procurement that must be complied with, regardless of the mode of payment.
There is a need to harmonize these rules.
For example, when you purchase a small volume of office supplies to be paid using PCF, you may not necessarily need a BAC Resolution, but you must provide at least three (3) price quotations from bona fide suppliers. You must always ensure that apart from complying with the documentary requirements set by COA, you adhere to the general principles of public procurement set under Section 3 of RA No. 9184 and its IRR in the conduct of procurement/ purchase, regardless of volume. You must exercise due diligence to ensure adherence to competition among prospective suppliers and efficient transparency.
Furthermore, goods, services, and other projects that are in the Annual Procurement Plan must be procured in accordance with RA 9184 and its 2016 IRR. On that note, the BAC shall perform its function and issue the necessary documents to facilitate the procurement process.
Notwithstanding this guidance, we defer to the issuances or internal protocol of your office in terms of documentary requirements and processes.
For your reference, we are providing the following to assist in the proper assessment of your factual and circumstantial concerns:
a. General rules cited in the above COA Circular:
1. The PCF shall be sufficient for the recurring petty operating expenses of the agency for one month.
2. The cash advance shall not be used for payment of regular expenses, such as rentals, subscriptions, light and water bills and the like.
3. Payments out of PCF shall be allowed only for amounts not exceeding Php 15,000.00 for each transaction, except when a higher amount is allowed by law and/or specific authority by the COA.
4. Splitting of transactions to avoid exceeding the ceiling shall not be allowed.
b. Relevant procurement laws, rules, and regulations
1. Section 3. Governing Principles on Government Procurement
The procurement of the GoP shall be governed by these principles:
a) Transparency in the procurement process and in the implementation of procurement contracts through wide dissemination of bid opportunities and participation of pertinent non-government organizations.
b) Competitiveness by extending equal opportunity to enable private contracting parties who are eligible and qualified to participate in competitive bidding.
c) Streamlined procurement process that will uniformly apply to all government procurement. The procurement process shall be simple and made adaptable to advances in modern technology in order to ensure an effective and efficient method.
d) System of accountability where both the public officials directly or indirectly involved in the procurement process as well as in the implementation of procurement contracts and the private parties that deal with government are, when warranted by circumstances, investigated and held liable for their actions relative thereto.
e) Public monitoring of the procurement process and the implementation of awarded contracts with the end in view of guaranteeing that these contracts are awarded pursuant to the provisions of the Act and this IRR, and that all these contracts are performed strictly according to specifications.
2. Section 4 of the Administrative Order No. 17, s. 2011, requires the procurement of Common-Use Supplies and Equipment (CSE) products from the Department of Budget and Management – Procurement Service (DBM-PS) or its depots.
3. Section 52.1(b) of the 2016 revised IRR of RA No. 9184 provides that Procuring Entities may resort to Shopping in case of unavailability of ordinary or regular office supplies and equipment in the PS involving an amount not exceeding the thresholds prescribed in Annex “H” of the same IRR;
In case the CSEs are not available or not listed in the Electronic Catalogue, the GPPB resolved under GPPB Resolution No. 17-2020 to allow Procuring Entities to procure the CSE items from other sources without the need of securing a CNAS, subject to the following: a. The item is not available from the PS, as shown on its website; and b. Procuring Entities shall keep a record of the proof of unavailability of the CSE as shown in the PS website, such as a printed form of the webpage or a screenshot of the same showing the date and time that it was accessed.
4. Section 52 of RA 9184 and its IRR.
Shopping is a method of procurement of Goods whereby the Procuring Entity simply requests for the submission of price quotations for readily available off-the-shelf goods or ordinary/regular equipment to be procured directly from suppliers of known qualifications.
This method of procurement shall be employed in any of the following cases:
a) When there is an unforeseen contingency requiring immediate purchase: Provided, however, That the amount shall not exceed the thresholds prescribed in Annex “H” of this IRR.
b) Procurement of ordinary or regular office supplies and equipment not available in the Procurement Service involving an amount not exceeding the thresholds prescribed in Annex “H” of this IRR.
The phrase “ordinary or regular office supplies” shall be understood to include those supplies, commodities, or materials which are necessary in the transaction of official businesses, and consumed in the day-to-day operations.
However, office supplies shall not include services such as repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related or analogous services
Under Section 52.1 (b) of this IRR, at least three (3) price quotations from bona fide suppliers shall be obtained.
The thresholds prescribed in Annex “H” of the 2016 revised IRR of RA No. 9184 shall be subject to a periodic review by the GPPB. For this purpose, the GPPB shall be authorized to increase or decrease the said amount in order to reflect changes in economic conditions and for other justifiable reasons.
Your right to request a review
If you are unhappy with this response to your FOI request, you may ask us to carry out an internal review of the response by writing to Executive Director, Atty. Rowena Candice M. Ruiz, thru e-mail address at firstname.lastname@example.org. Your review request should explain why you are dissatisfied with this response and should be made within fifteen (15) calendar days from the date when you received this letter. We will complete the review and tell you about the result within thirty (30) calendar days from the date when we receive your review request.
If you are not satisfied with the result of the review, you then have the right to appeal to the Office of the President under Administrative Order No. 22 (s. 2011).
To help us in our constant endeavor to provide excellent service, we would sincerely appreciate if you shared your thoughts, concerns, comments, and suggestions through this brief customer feedback form provided in the link below:
GPPB Resolution No. 17-2020 NO NEED FOR CNAS.pdf
Updated 2016 revised IRR of RA No. 9184 as of 13 October 2022.pdf