Reversion of All Dormant Accounts, Unnecessary Special and Trust Funds to the General Fund

1. Reversion of All Dormant Accounts, Unnecessary Special and Trust Funds to the General Fund (E.O. No. 431 May 30, 2005) DBM, October 24-27, 2012

2. Legal Basis • Sec. 45, Chapter 5, Book VI of EO 292 (Administrative Code of 1987) – mandates the Permanent Committee to monitor and evaluate the activities and balances of all Funds outside the General Fund • E.O. No. 338, s. 1996 – requires all government offices and agencies, to immediately transfer all public monies deposited with depository banks and other institutions to the BTR • E.O. No. 431, s. 2005 – reversion of all dormant accounts, unnecessary special and trust funds to the General Fund

3. Composition of the Permanent Committee • Secretary of Finance – Chairman • Members • Secretary of Budget and Management • Chairman, Commission on Audit

4. Functions of the Permanent Committee • Monitor and evaluate the activities and balances of all Funds of the national government other than the General Fund • Recommend for consideration and approval of the President the reversion of the General Fund of such amounts as are: no longer necessary for the attainment of the purposes for which said Funds were established; needed by the General Fund in times of emergency violative of the rules and regulations adopted by the Committee

5. E.O. No. 431 as implemented by Permanent Committee Joint Circular No. 4-2012 dated Sept. 11, 2012 • Rationale • All income collected by agencies of government shall be deposited in the National Treasury, and shall accrue to the unappropriated surplus of the General Fund • Receipts of agencies authorized by law to be recorded as a Special Account in the General Fund, Fiduciary or Trust Fund or a fund other than the General Fund shall be separately recorded and disbursed in accordance with the rules and regulations determined by the Permanent Committee • Reports of COA show that there are huge cash balances being maintained by agencies deposited in authorized government depository banks and other institutions, which may include dormant accounts or unnecessary special or trust funds

6. Coverage • Dormant Accounts • refer to collections authorized by law to be deposited with an authorized government depository banks but have remained inactive for more than 5 years • Unauthorized Accounts • cash account balances maintained by agencies without specific authority or legal basis • cash account balances with a specific authority but maintained with non authorized government depository banks

7. Coverage …. con’t. • Unnecesary Special and Trust Funds • refer to authorized special and trust funds maintained by agencies with authorized government depository banks but which are no longer necessary for the attainment of its purposes for which said funds were established

8. Responsibilities • Permanent Committee • Prepare an inventory of the cash accounts and balances of each and every department, bureau and agency of the national government • Conduct inspection of the concerned agencies’ books of accounts in order to examine and evaluate all existing cash deposits of whatever nature, whether in foreign or local currencies maintained with authorized government depository banks or other institutions • Review and determine the legal basis for the maintenance of said cash account balances • Require the immediate transfer to the National Treasury of the cash balances of unauthorized accounts

9. Responsibilities … con’t. • Permanent Committee • For authorized bank accounts including dormant accounts – evaluate the legal bases to determine if their continuing existence is still necessary • Recommend to the President the transfer of the said funds to the National Treasury where no legal impediments exist • Request the agency head for further inspection of its books of accounts, if found necessary

10. Responsibilities … con’t. • Bureau of the Treasury – shall submit a report to the Permanent Committee highlighting the following: • If the cash account balances are maintained in authorized government depository banks • The legal basis for the maintenance of the cash account balances outside of the BTR

11. Responsibilities … con’t. • Departments, Bureaus and Agencies • Cooperate, open their books of accounts and assist the Permanent Committee in the conduct of inspection and review of their cash balances • Include any cash account balances not included in the COA report • Effect the immediate closure of the cash balances of unauthorized accounts and transfer the same to the National Treasury

12. Responsibilities … con’t. • Commission on Audit • Submit to the Permanent Committee the status of the cash account balances of each department/agency as reflected in the Annual Audit Report as of December 31, 2010 • Monitor the compliance of the agencies of the guidelines and report to the Permanent Committee • Prescribe the necessary accounting entries and supporting documents for the transfer of the cash balances of unauthorized accounts to the National Treasury

13. Thank You and Have a nice day!