Department of Budget and Management(DBM-)

February 16, 2023 Dear Anjo Ellis Padilla, Thank you for your request for clarification dated February 11, 2023 under Executive Order No. 2 (s. 2016) on Freedom of Information in the Executive Branch on whether or not, the 3 months extended payment period under E.O. No. 91 series of 2019 is also applicable to continuing appropriation specifically RA 11640, an act extending the availability of the 2021 appropriations to December 31, 2022. Executive Order No. 91 which adopts the Cash Budgeting System (CBS) beginning fiscal year 2019 aims to improve fiscal planning of the government through the implementation of an operational cash budget. It sets deadlines for the obligation of funds and the execution of projects during the fiscal year to speed up the implementation of programs. Under the CBS, all authorized appropriations will be made available for obligation and disbursement only until the end of each fiscal year. Payments for obligations incurred within the fiscal year may be made up to an extended period of three months after the end of the validity of appropriations against which they are obligated, unless otherwise prescribed by the Department of Budget and Management (DBM). However, the extended payment period of three (3) months is not applicable for continuing appropriation specifically FY 2021 appropriations which validity was extended until December 31, 2022 under R.A. No. 11640. Pursuant to Section 1 of said R.A. No. 11640, Section 62 of the General Appropriations Act of 2021 or Republic Act No. 11518 is hereby amended to read as follows: “SEC. 62. Cash Budgeting System. Appropriations authorized in this Act, including budgetary support to GOCCs and financial assistance to LGUs, shall be available for release and obligation for the purpose specified, and under the same general and special provisions applicable thereto, until December 31, 2022, except for personnel services which shall be available for release, obligation and disbursement until December 31, 2021. On the other hand, appropriations for the statutory shares of LGUs shall be available for release, obligation and disbursement until appropriations are fully utilized and funds fully disbursed. Likewise, contribution of infrastructure projects, delivery of goods and services, inspection and payment shall be made not later than December 31, 2022. After the end of the validity period, all unreleased appropriations and unobligated allotments shall lapse, while unexpected or undisbursed funds shall revert to the unappropriated surplus of the General Fund in accordance with Section 28, Chapter 4, Book VI of E.O. No. 292 and shall not thereafter be available for expenditure except by subsequent legislative enactment. Departments, bureaus and offices of the National Government including constitutional offices enjoying fiscal autonomy, SUCs and GOCCs, shall strictly observe the validity of appropriations and the reversion of funds. Except for transfers between LGUs, all balances of fund transfers between or among agencies, instrumentalities, GOCCs and LGUs, which, while obligated but not actually used, utilized, expended or disbursed to pay for completed construction, goods delivered, and services rendered, inspected and accepted as of December 31, 2022, shall revert to the unappropriated surplus of the General Fund.” (emphasis ours) Moreover, Section 3.5 of the National Budget Circular No. 587 or the Guidelines on the Release of Funds for FY 2022 states that: “Pursuant to RA No. 11640 which extended RA No. 11518 (FY 2021 GAA), appropriation items authorized under RA 11518 for MOOE and CO are valid for release, obligation and disbursement until December 31, 2022” With the above-cited provisions, the 3 months extended payment period under EO No. 91 series of 2019 is not applicable to said FY 2021 Appropriations which validity was extended under R.A. No. 11640 because its release, obligation and disbursement is until December 31, 2022 only. I hope this will clarify the issue raised. Thank you. Respectfully, Action Officer Region 3 FOI Receiving Officer