FINANCIAL MANAGEMENT OPERATIONS MANUAL FMOM A Guide for

FINANCIAL MANAGEMENT OPERATIONS MANUAL (FMOM) A Guide for Officials and Staff Engaged in or Served by the Dep. Ed Financial Management System

OVERVIEW OF THE FINANCIAL MANAGEMENT OPERATIONS MANUAL (FMOM) DEPARTMENT OF EDUCATION 2

Development of the Financial Management Operations Manual (FMOM) is a Department of Education project with support from the World Bank (WB) that was completed on 31 March 2016. This manual outlines the systems and procedures of financial operations and other related management practices to be observed by Dep. Ed Implementing Units (Central Office, Regional Offices, Division Offices and Schools). It conforms to existing government standards, rules and regulations as provided for by the Commission on Audit (COA), the Department of Budget and Management (DBM), the Bureau of Treasury (BTr) and other government regulatory bodies. DEPARTMENT OF EDUCATION 3

Why is there a need for an FMOM in Dep. Ed? To have a guidebook for the uniform and standard interpretation and implementation of financial management practices in all spending units of Dep. Ed on the following: latest issuances on prescribed rules, regulations of DBM, COA, DOF (BTr), etc. , affecting FM practice; latest Dep. Ed policies customizing and adapting national guidelines to unique characteristics and circumstances of Dep. Ed concerning FM issues DEPARTMENT OF EDUCATION 4

Why is there a need for an FMOM in Dep. Ed? financial transactions defining and describing procedures to be followed, forms to be used, signing authorities, recording and reporting and documentary requirements; DEPARTMENT OF EDUCATION 5

What are the unique features of the FMOM? 1. It is a living document subject to change as necessary: prescribed procedures, rules and regulations by government regulatory bodies Dep. Ed policies affecting FM issues and concerns DEPARTMENT OF EDUCATION 6

What are the unique features of the FMOM? 2. It is customized and adapted to the unique needs of Dep. Ed, and provides sections on the following: • School-based Financial Management • Provident Fund • A Matrix of Processes summarizing all requirements per transaction that serves as a short-cut to the FMOM DEPARTMENT OF EDUCATION 7

What are the major contents of the FMOM? ? 1. Budget (e. g. Planning linkage, Budget Cycle) 3. Accounting (e. g. Receipts and Deposits Disbursement and Financial Reporting 5. Provident Fund 2. Procurement (e. g. Asset Management 4. School-Based Financial Manament and Operation 6. Other Unique features of FMOM NEXT DEPARTMENT OF EDUCATION 8

Budget & Planning Linkage BUDGET Effective financial management requires a strongly linked planning, budgeting and procurement processes in an organization. Understanding the basic principles and standards, as well as the policies and guidelines under each of the systems, facilitates the implementation of the procedures to be undertaken. Through the Development Budget Coordination Committee (DBCC) this linkage is operationalized. The Committee performs the following – • Establishes the Budget level based on projected revenues and manageable deficit level; • Sets the sectoral targets and priorities; • Provides guidelines on the proper allocation of resources in various expenditure dimensions to achieve the national development goals and objectives. FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 9

BUDGET CYCLE The four phases of the budget cycle overlap in continuing cycles every year. For instance, the Executive implements the budget for the current year and prepares the budget for the next fiscal year or defends it in Congress. Execution and Accountability phases are simultaneously implemented yearround. Preparation Legislation Execution Accountability Budget Call House Deliberation Release Guidelines & Program Performance Targets & Outcomes Stakeholder engagement Technical Budget Hearings Executive Review Consolidation, Validation & Confirmation Presentation to the President & Cabinet President’s Budget Senate Deliberation Bicameral Deliberation Budget Execution Documents Allotment & Cash Release Programming Allotment and Cash Releases Ratification & Enrolment President’s Enactment & Veto Budget Accountability Reports Incurring Obligations Disbursements/ Payments Quarterly Performance R 2 eview Year-end Budget Performance Assessment Review Audit FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 10

PROCUREMENT Dep. Ed has developed the Customized Agency Procurement Manual (CAM) which is a generic procurement manual to systematize the procurement process, ensure transparency and avoid confusion. This was subsequently approved by Government Procurement Policy Board (GPPB) on May 30, 2008 in compliance with the provisions of Section 6 of R. A. 9184 and its IRR. • The FMOM provides an overview of the national procurement system as part of an agency’s planning and budget preparation. • A separate section on the process of procurement at the school level is provided as well as Asset Management, which involves – ü Custodianship ü Inventory Management ü Disposal procedures • Extracts from the Property and Supply Handbook are cited specifically those relevant to the schools. FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 11

• Major accounting processes such as Receipts and Deposits, Accounting and Disbursements and Financial Reporting are discussed aligned Government accounting encompasses the with the current GAM, PPSAS processes of analyzing, and UACS. recording, classifying, • Similarly, governing laws and summarizing and communicating all circulars are similarly hyperlinked transactions involving the to the FMOM. receipt and disposition of • Illustrative examples and process government funds and flows for each type of accounting property, and interpreting the results. transaction are provided in the FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 12

School-Based Financial Management (excerpts from the FMOM) School-based Financial Management (SBFM) refer to activities undertaken or pursued by a school head and designated staff who assist in the management of financial and relevant nonfinancial resources available to the school. These are aimed at maximizing the benefits that may be derived from the utilization of these resources and minimizing the attendant negative costs or effects of such activities. SBFM activities include but are not limited to the following: • fiscal planning, budgeting • cashiering and disbursement • accounting and recording • procurement • asset and liability management, and • physical and financial reporting DEPARTMENT OF EDUCATION 14

School-Based Financial Management The sources for the chapter on SBFM include the following documents: ü Handbook on School Based Management (SBM) ü Simplified Accounting Procedures ü Dep. Ed Order No. , 44, s. 2015 – Enhanced process on SIP and SRC ü Handbook on Property & Supply Management …excerpts from the FMOM Documentary requirements for salaries, petty operating expenses, other personnel services, and maintenance and other operating expenses depending on the nature of expenses incurred : 1. 2. Cash Disbursements Register Approved purchase request with certificate of Emergency Purchase, if necessary 3. Bills, official receipts, sales invoices, Reimbursement Expense Receipt (RER) 4. Approved trip ticket, for gasoline expenses 5. Toll Receipts 6. Trip tickets 7. Canvass from at least three suppliers for all purchases, 8. Summary/Abstract of Canvass 9. Certificate of inspection and acceptance 10. Report of Waste Materials in case of replacement or repair FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 15

PROVIDENT FUND The Provident Fund of Dep. Ed has been established under Administrative Order No. 279, s. 1992. It started operation in January 1995 through receipt of seed money in the amount of Seventy five million pesos (P 75 million) representing Collection of Service fee from GOCCs and PLIs deposited to BTr. Contents in the FMOM q Legal basis q Beneficiaries q Governance q Guidelines q Compensation of Staff q Operating expenses q Disbursement procedures and recording q Financial reports q Illustrative entries FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 16

Other unique features of the FMOM It is complete and updated and includes in its attachments a compilation of the following latest documents as references: – Government Accounting Manual, 3 volumes, 2015 version – Dep. Ed Procurement Manual and RA 9184 – Dep. Ed Asset Management Manual – Latest COA, DBM, DOF (BTr) issuances – Latest Dep. Ed Orders affecting FM concerns DEPARTMENT OF EDUCATION 17

Other unique features of the FMOM – Simplified Accounting and Reporting for Non-IUs – Latest Dep. Ed Reorganization Plan and RA 9155 – Unified Accounting Code Structure (UACS) – Philippine Public Sector Accounting Standards (PPSAS) – Laws on Budget, Accounting and Audit affecting Dep. Ed FM DEPARTMENT OF EDUCATION 18

Who are the intended users of the FMOM? – Finance Officers – Accountants – Other FM staff and personnel – Heads of Dep. Ed offices – School heads – Other interested parties DEPARTMENT OF EDUCATION 19

What other use would the FMOM serve ? • As basis for future automation of the FM processes in Dep. Ed, i. e. the Dep. Ed FMIS • As basis to support the national GFMIS if and when this is pursued by government • As a reference material for the orientation and/or training of new school heads and new officers and employees, particularly financial staff, of Dep. Ed DEPARTMENT OF EDUCATION 20

Pre-Roll-out Activities DATE 10 -12 May 2017 06 June 2017 ACTIVITY Preparation of the Training Module c/o FMOM TWG Completion of the Training Module c/o FMOM TWG Accounting 09 June 2017 onwards 13 -16 June 2017 Downloading of funds c/o Budget Division - CO Final review of the Training Module c/o FMOM TWG 19 -20 June 2017 Finalization of the Training Module c/o FMOM TWG Accounting DEPARTMENT OF EDUCATION 21

Pre-Roll-out Activities DATE 22 June 2017 23 June 2017 July – Sept 2017 ACTIVITY Approval of Module by Usec Victoria M. Catibog Distribution of FMOM Module to Regions Roll-out of FMOM to Non-IUs DEPARTMENT OF EDUCATION 22

Thank You! DEPARTMENT OF EDUCATION 23