A. Rationale

B. Objective

C. Scope

D. Basis

A. Objective

To update the guidelines in the handling and utilization of the Cereal Procurement Fund under the accountability of the Procurement Disbursing Officers - Regular Disbursing Officers/Special Disbursing Officers (RDOs/SDOs).

The revised SOP covers policies on CPF ceiling of RDOs/SDOs, limitations on cash and check payments of RDOs/SDOs, replenishment/liquidation of CPF and the reporting system. The accounting treatment relative to the CPF transactions and necessary internal control measures are also included.

C. Bases

1. Wire No. AO-2018-J-011 on Disbursements under the Cereal Procurement Fund Adopting the Provisions of the Php3.00/kg Buffer Stocking Incentives dated October 17, 2018 signed by OIC- Administrator Tomas R. Escarez.

2. Fax Message for Transmission AO-2018-J-005 dated October 9, 2018 approved by Tomas R. Escarez, Officer-in-Charge and Deputy Administrator for Finance and Administration.

3. Memorandum No. AO-2018-10-011 dated October 8, 2018 re: Implementing Guidelines on the Provision of Php3.00/kg Buffer Stocking Incentive (BSI) under the NFA’S Palay Procurement Program signed by Tomas R. Escarez, Officer-in-Charge concurrent Deputy Administrator for Finance and Administration and approved by Emmanuel F. Piņol, Secretary, Department of Agriculture.

4. Radio Message for Transmission AO-2K15-B0015 dated February 17, 2015 signed and approved by Administrator Renan B. Dalisay.

5. FAX Message for Transmission AO-2K12-J-016 dated 25 October 2012 signed and approved by OIC-Administrator, Ludovico J. Jarina.

6. Radio Message for Transmission AO-2K12-I-029 dated 12 September 2012 signed and approved by Administrator Angelito T. Banayo.

7. Radio Message for Transmission AO-2K12-I-027 dated 12 September 2012 signed and approved by Administrator Angelito T. Banayo.

8. Radio Message for Transmission ODAO-2K10-J001 dated October 11, 2010 signed by Deputy Administrator Pedro S. Hernando, Deputy Administrator for Operations

9. Radio Message for Transmission AO-sK9-H-013 re: Incoming Procirement of Corn dated 6 August 2009 signed by Administrator Jessup P. Navarro.


10. SOP on Cash with Procurement Officers (SOP No. FS-CS05) issued and made effective June 1, 1988 and its amendment/addedndum.

A. Disbursements and Utilization of Cereal Procurement Fund

1. The Cereal Procurement Fund (CPF) shall be utilized for grains procurement purposes only. The disbursements chargeable under the CPF shall be the basic cost of cereals as per the latest NFA Buying Price Bulletins plus procurement incentives defined in the latest approved Revised SOP on Grains Procurement.
2. Cereal Procurement Fund for palay and corn maybe utilized interchangeably. However, its utilization shall be properly recorded/accounted separately for palay/corn.

B. Fund Allocation and Remittance

1. The Regional Office (R.O.) shall furnish the Grains Marketing Operations Department (GMOD-Operations Coordination Division) with the CPF Budget Allocation Per Province (Exhibit 1). This shall reflect the procurement targets of the provinces and the corresponding costs. A break-down of the allocation as to when a particular amount is to be remitted (1st, 2nd, 3rd, or 4th week) shall also be reflected therein. The budget allocation shall be evaluated by the GMOD-OCD,

2. After evaluation, GMOD shall request for a budget allotment from the Budget Treasury and Fund Management Department – Budget Division (BTFMD-BD) thru the Cereal Procurement Fund Request (Exhibit 2). The CPF budget request shall constitute the two-week requirement of the province (the amount to be remitted during the current week and for the succeeding week). The BTFMD- Cash Division shall be furnished with a copy of the request.

3. Based on the approved request, Budget Division shall allot the budget required and send an advice (Exhibit 3) to Cash Division for a fund transfer.

4. Funds shall be remitted by the Cash Division to the R.O./P.O. per advice of the Budget Division. The Budget/Cash Division shall send a message through the fastest way of communication to the receiving regions for information purposes.

Other expenses relative to grains procurement operations such as cost of empty sacks purchased, travelling expenses of the procurement teams, incentives granted to the procurement teams, gas and oil expenses for vehicles used in procurement operations and other incidental expenses shall be charged under the General Operating Fund.

C. Cereal Procurement Fund (CPF) Ceilings
1. Cereal Procurement Fund Ceiling of RDOs/SDOs shall be maximum of Php3.0M and at the discretion of the Regional Manager (RM).
2. The RM shall authorize the CPF ceilings of the RDOs/SDOs amounting to more than Php1.5 million up to Php3.0 million per RDO/SDO.
3. The Provincial Manager/Officer-in-Charge (PM/OIC) shall authorize the CPF ceilings of RDOs/SDOs amounting to Php1.5 million and below.


4. The maximum CPF cash advance which the PM can grant to a regular employee without a need for a R.O. clearance shall be Php1.5 million.

5. The CPF ceiling shall be in cash form, checking account, or a combination of both. The cash account shall be used under the cash payment scheme, whereas, the checking account shall be for the check payment scheme.

A current account shall be opened in the name of NFA under the account of RDOs/SDOs with LBP or DBP. This shall be done under the discretion of the PM/OIC.

6. It shall be the responsibility of the PM/OIC to determine the individual cash and check requirement of the RDOs/SDOs subject to the above limitations. The Asst. Provincial Manager (APM)/Provincial Operations Officer (POO) and Sr. Accounting Specialist (SAS) -Provincial Accountant shall make the necessary recommendation based on the projected grains procurement activities of the area, distance of the buying stations with the depository bank/NFA Office, peace and order condition of the place, and other factors.
7. Increase in the CPF ceilings may be authorized wherever necessary based on the latest approved guidelines, memoranda or general wires signed by the Administrator.

D. Procurement Disbursing Officer

1. The Procurement Disbursing Officer shall be anyone of the following:

a. Cashier III - Regular Disbursing Officer
b. Cashier II – Special Disbursing Officer

c. Regular employee other than the Cashier III and Cashier II

Supply Officers and accounting personnel may be designated as SDOs provided they are relieved from their functions/duties considering their access to accountable forms and accounting records.

2. The RDOs/SDOs shall be designated by the PM/OIC thru an Office Order or by the Central Office/Regional Office thru a Special Order.

The Office/Special Order shall relieve the employees designated as SDO of their regular functions and duties while acting as such.

3. As a policy, only regular employees shall be designated as RDOs/SDOs. In view of COA Circular No. 90-331 dated May 3, 1990 which restricts the grant of cash advances to only permanent appointed employees, designation of job order employees as RDOs/SDOs shall require prior clearance from the Commission on Audit.

The RM shall utilize all available regular employees within the region.

4. The RDOs/SDOs shall be properly bonded in accordance with law (Fidelity Bond) before assumption to duty. The pertinent policies provided in the latest approved SOP on Fidelity Bond Application/Cancellation of NFA Accountable Officers and Employees, shall be implemented.

E. Cash and Check Payments by RDOs/SDOs

1. Payments to be made by the RDOs/SDOs shall cover only grains purchases from Individual Farmers (IF) and Farmers’ Organizations (FOs) at the buying stations amounting to not more than P500,000.00.
2. Cash and check payment guidelines shall be as follows:

• Grains purchases up to the maximum of P300,000 shall be paid in cash;
• Grains purchases in excess of P300,000 up to P500,000 shall be paid in check or a combination of cash and check but the cash portion should only be up to P300,000;
• Full check payment shall be allowed when the farmer-seller opted or requested to be paid in check.

3. Grains purchases exceeding P500,000 shall be paid at the P.O. through the usual disbursement voucher system;
4. Full cash payment in less-risk areas shall be implemented at the discretion of the PM. Payment through cross checks shall be discontinued so that checks can be immediately encashed by the payee;
5. All Checks issued by the RDOs/SDOs shall be made payable only to legitimate farmer-sellers/farmer organizations.

6. Post-dating and ante-dating of checks shall not be allowed.

7. The following internal control are hereby given emphasis:
a. The policy “One Check, One Purchase Receipt” shall be strictly enforced. Issuance of two or more checks for a single Purchase Receipt shall not be allowed.
b. The PM/SAS shall conduct frequent surprise cash count of RDOs/SDOs to ensure that cash advances are used for the purpose intended.

c. Paid PRs and WSRs shall be marked "PAID" for control purposes

8. Documentation on purchases of grain shall follow procedures provided on the latest approved SOP on Warehouse Stocks and Empty Sacks Documentation and Reporting System.
9. Replenishment of CPF

a. Replenishment of cash advances by the RDOs/SDOs shall be given special priority to facilitate the processing of their liquidation vouchers. Replenishment of RDO’s/SDO’s CPF thru the Mobile Disbursing Officer (MDO) shall be discouraged. This shall lessen if not to avoid the risk, as the MDO will bring a large amount of cash to remote warehouses and buying stations to replenish the CPF.
b. Replenishment shall only be done in the NFA P.O. upon liquidation of prior cash advances of the concerned RDO/SDO thru the usual voucher processing system.

c. The replenishment shall be approved by the PM/OIC following the government accounting and auditing procedures.

d. The CPF shall be replenished every end of the month or as often as necessary. For this purpose, the RDOs/SDOs shall submit to the SAS the Abstract of Grains Purchases, Statement of Individual Deliveries, copies of WSRs, Statement of Deliveries and the Purchase Receipts.

e. Upon receipt, the SAS shall cross-check and verifies the completeness and accuracy of the documents submitted. The replenishment shall be approved by the PM/OIC following the government accounting and auditing procedures.

1. Lost check shall be reported immediately to the P.O.. A replacement check shall only be prepared after compliance with all the conditions stated hereunder:

a. Submission of a duly notarized Affidavit of Loss executed by the farmer-payee;

b. The lost check is still outstanding (not yet presented to the bank for payment); and

c. Formal notification of the loss ("Request for Stop-Payment") to the bank had been made by the PM/OIC.


2. If these conditions had been fully complied with, a replacement check shall be issued as authorized by the PM/OIC. "Replacement for a lost check" (indicating its serial number) shall be noted on the duplicate copy of the check voucher for easy reference.

G. Stale Checks

1. For purposes of control and effecting early liquidation of the accountabilities of the RDOs/SDOs, a check issued from the procurement funds of the RDOs/SDOs shall only be valid within three (3) months from the date of issuance. Non-presentation of the check to the bank within three (3) month period shall render the check stale.

2. The stale check shall be surrendered to the NFA by the payee for replacement. The check shall be marked "STALE" and shall be perforated.

3. In case the bank account of the RDOs/SDOs is already closed, replacement of stale checks shall be authorized by the PM/OIC.

4. Stale checks shall be reverted back to the account of the NFA. Subsequent adjustment shall be made upon issuance of replacement checks.


H. Bank Statement/Cashbook/Subsidiary Ledger/Reconciliation
1. The Accounting Unit shall secure the Monthly Bank Statement for the current account of the RDOs/SDOs together with debit/credit memorandum and paid checks.

2. The usual Monthly Bank Reconciliation statement shall be prepared by the Accounting Unit. The RDOs/SDOs shall have no access in its preparation, however, a copy thereof may be furnished RDOs/SDOs.

3. The RDOs/SDOs shall maintain an official cashbook for the CPF (cash and checking account) handled. Recording of transactions as well as comparing of the cashbook balance with that of the cash on hand and in bank shall be made daily by the RDOs/SDOs. The cashbook entries shall be closed and ruled at the end of the month and the balance forwarded to the succeeding month.
4. The cashbook shall be subject to examination and inspection by the SAS, IASD/COA Auditors and/or any of their authorized representatives.
5. A subsidiary ledger per RDOs/SDOs shall be maintained by the Accounting Unit. In order to establish the monthly accountability of the RDOs/SDOs, the SAS shall require at least once a month reconciliation of the subsidiary ledger balance with that of the cashbook.

I. Liquidation of Cash Advance (at the end of the procurement season)

1. The accountability (cash and check) of the SDO - designated on a temporary basis) shall be liquidated in full at the end of the procurement period. This shall be directed by the PM/OIC in consultation with the Asst. PM/POO and SAS
2. The APM/POO/SAS may recommend to the PM/OIC the closure of the bank account of the SDO upon payment of all outstanding checks or after the lapse of one month from the date of issue of the last check whichever comes earlier.
3. The Accounting Unit shall advise the bank to transfer the balance of the SDO to NFA-CPF Account.
4. Liquidation of the accountability of the RDO - Cashier III shall also be effected. However, instead of closing the CPF account, only a reduction in the fund ceiling shall be made. The amount to be retained in the checking account of the RDO shall be determined by the PM/OIC based on procurement projections (estimated stocks that still have to be purchased by the NFA).
5. At the end of the procurement season upon instruction of the PM/SAS, any balance of the CPF shall be immediately returned to the CPF account of the concerned province.

6. All unused CPF except for the amount retained under the RDO's accounts shall be remitted back to the Central Office.

7. All unused PRs shall be returned to the Supply Officer and the unused check to the SAS for safekeeping.

8. Policies on idle CPF shall follow the provisions provided on the latest approved Revised SOP on Grains Procurement.

J. Accounting Entries please refer to Annex A

1. The Abstract of Grains Purchases (Exhibit 4) shall be prepared by the RDOs/SDOs when replenishing/liquidating the cash advances. This is a listing of grains purchases paid by the disbursing officers.
2. A Monthly Report of Accountability for Accountable Forms (Exhibit 5) shall be required from the RDOs/SDOs. This shall reflect the PRs handled during the month.

Top Page
EXHIBITS

Exhibit 1 - Fund Allocation of the CPF Budget Ceiling
Exhibit 2 - Cereal Procurement Fund Request
Exhibit 3 - Fund Transfer
Exhibit 4 - Abstract of Grains Purchases
Exhibit 5 - Monthly Report of Accountability for Accountable Forms
Annex A - Accounting Entries