FINANCIAL MANAGEMENT OPERATIONS MANUAL (FMOM) A Guide for Officials

FINANCIAL MANAGEMENT OPERATIONS MANUAL (FMOM) A Guide for Officials and Staff Engaged in or Served by the DepEd 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 DepEd 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 DEPARTMENT OF EDUCATION 3

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

Why is there a need for an FMOM in DepEd? 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 DepEd 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 DepEd, 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 Through the Development Budget Coordination Coordination Committee Committee (DBCC) (DBCC) this this linkage linkage is is operationalized. operationalized. The The Committee Committee performs performs the the following following –– Establishes Establishes the the Budget Budget level level based based on on projected projected revenues revenues and and manageable manageable deficit deficit level; level; Sets Sets the the sectoral sectoral targets targets and and priorities; priorities; Provides Provides guidelines guidelines on on the the proper proper allocation allocation of of resources resources in in various various expenditure expenditure dimensions dimensions to to achieve achieve the the national development goals and national development goals and objectives. objectives. FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 9

BUDGET CYCLE The The four four phases phases of of the the budget budget cycle cycle overlap overlap in in continuing continuing cycles cycles every every year. year. For For instance, instance, the the Executive Executive implements implements the the budget budget for for the the current current year year and and prepares prepares the the budget budget for for the the next next fiscal fiscal year year or or defends defends it it in in Congress. Congress. Execution Execution and and Accountability Accountability phases phases are are simultaneously simultaneously implemented implemented yearyearround. round. Preparatio n Budget Call Stakeholder engagement Technical Budget Hearings Executive Review Consolidation, Consolidation, Validation Validation & & Confirmation Confirmation Presentation Presentation to to the the President President & & Cabinet Cabinet President’s Budget Legislatio n Execution Accounta bility House Deliberatio n Release Guidelines & Program Performanc e Targets & Outcomes Senate Deliberatio n Bicameral Deliberatio n Ratification & Enrolment President’s Enactment & Veto Budget Execution Documents Allotment & Cash Release Programming Allotment and Cash Releases Incurring Obligations Disbursemen ts/ Payments Budget Accountabil ity Reports Quarterly Performanc e R2eview Year-end Budget Performance Assessment Assessment Review Review Audit FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 10

PROCUREMENT DepEd 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 The FMOM FMOM provides provides an an overview overview of of the the national national procurement procurement system system as as part part of of an an agency’s agency’s planning planning and and budget budget preparation. preparation. A A separate separate section section on on the the process process of of procurement procurement at at the the school school level level is is provided provided as as well well as as Asset Asset Management, Management, which which involves involves –– Custodianship Custodianship Inventory Inventory Management Management Disposal Disposal procedures procedures Extracts Extracts from from the the Property Property and and Supply Supply Handbook Handbook are are cited cited specifically specifically those those relevant relevant to to the the schools. schools. FMOM MAJOR CONTENTS DEPARTMENT OF EDUCATION 11

Accounting and Disbursement Government accounting encompasses the processes of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property, and interpreting the results. Major accounting processes such as Receipts and Deposits, Disbursements and Financial Reporting are discussed aligned with the current GAM, PPSAS and UACS. Similarly, governing laws and circulars are similarly hyperlinked to the FMOM. Illustrative examples and process flows for each type of accounting transaction are provided in the FMOM. 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 non-financial 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: Handbook on School Based Management (S BM) Simplified Accounting Procedures DepEd Order No., 44, s. 2015 – Enhanced proc ess on SIP and SRC 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

Contents in the FMOM Legal basis PROVIDENT FUND The Provident Fund of Beneficiaries DepEd has been Governance established under Administrative Order Guidelines No. 279, s. 1992. It started operation in Compensation of Staff January 1995 through receipt of seed money Operating expenses in the amount of Seventy five million Disbursement procedures pesos (P 75 million) and recording representing Collection of Service fee from Financial reports GOCCs and PLIs Illustrative entries deposited to BTr. 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 – DepEd Procurement Manual and RA 9184 – DepEd Asset Management Manual – Latest COA, DBM, DOF (BTr) issuances – Latest DepEd Orders affecting FM concerns DEPARTMENT OF EDUCATION 17

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

Who are the intended users of the FMOM? – Finance Officers – Accountants – Other FM staff and personnel – Heads of DepEd 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 DepEd, i.e. the DepEd 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 DepEd DEPARTMENT OF EDUCATION 20

Pre-Roll-out Activities DATE 10-12 May 2017 ACTIVITY Preparation of the Training Module c/o FMOM TWG 06 June 2017 Completion of the Training Module c/o FMOM TWG Accounting 09 June 2017 onwards Downloading of funds c/o Budget Division - CO 13-16 June 2017 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