SOP Library
SOP NO:
HR-PB55
(List of Exhibits/Attachments)
Missi
on
:
Finance and Administration
Area:
Human Resource (HR)
Activity:
Personnel Benefits and Services (HR-PB)
Title:
SOP on Educational Loan Program (Revised 2011)
Date Approved/Issued:
09/15/2010
Date Effective:
09/15/2010
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
A.
Loan Availment
1. Qualifications for Entitlement
a. All NFA employees who have rendered at least six (6) months of continuous service
without incurring leave without pay for more than 30 days
shall be entitled to avail of the non-interest bearing Educational Loan Program (EDL).
b. In compliance with the General Appropriations Act for FY 2010, the employee-borrower should have a net take home pay of at least
Three Thousand pesos (P3,000.00)
after deducting the regular deductions, other loan amortizations and the corresponding EDL amortization.
b.1 Employees with net take home pay of P3,000.00 after deducting the regular deductions, other loan amortization and the corresponding EDL amortization. If the employee has deleted deductions, he/she shall be required to submit a certification from his/her creditor (i.e. NFAEA/ NFA-MPCI/MSMPC) that his/her obligations has been fully paid or a certification that he/she will pay directly to his/her creditors and not through payroll deduction.
c. Any outstanding balance of the previous loan shall be settled first and paid directly to the cashier, otherwise, the employee can not avail of a new EDL.
2
.
Purpose of EDL
a.
Regular EDL
a.1. The loan may be availed by NFA officials and employees and their beneficiary/ies for any degree/level of education and any course except for graduate studies which shall be extended only to NFA employees.
b. Additional EDL
b.1. NFA officials and employees pursuing a degree in Bachelor of Laws/ graduate/post graduate studies on their own or as scholars under any scholarship program (CSC-LSP, etc.) shall be entitled to an additional EDL on top of the regular EDL given by NFA.
b.2. The employee-borrower shall still be entitled to the additional EDL even if he/she is already the beneficiary/recipient of his/her regular EDL.
3.
Qualified Beneficiaries/Recipient of the Regular Educational Loan
Aside from the employee-borrower, the following are qualified also as beneficiaries of the regular EDL:
a. Legitimate spouse of the employee;
b. Legitimate, legitimated, acknowledged natural, legally adopted children of the employee who are 23 years old and below and not gainfully employed.
However, the maximum age may be extended up to 26 years old for children who are taking up medical and law courses
.
c. unmarried brothers/sisters of NFA officials and employees who are 23 years of age and below and not gainfully employed and whose parents are incapable of supporting their education .
d. Unmarried nieces/nephews (children of the employee-borrower's siblings) and grandchildren (offspring of the employee-borrower's children) who are 23 years old and below and not gainfully employed and whose parents are incapable of supporting their education.
4.
Requirements for a Co-maker:
a. The co-maker should be of the same salary grade level or higher than that of the applicant and maybe from the same department/office or other Central Office department/office. Co-makers with next lower grade level are allowed provided there are at least two co-makers and provided further that they are from the same department/office as the applicant.
b. The co-maker should have a minimum monthly take home pay of P 3,000, after deducting the regular deductions, other loan amortization/s and the corresponding EDL deduction and should not have deleted deductions in the payslip.
c. An employee may avail of the loan and can still act as co-maker to only one borrower. Husband and wife within the agency shall not be allowed to act as co-maker for each other.
B. Loanable Amount
The loanable amount for both regular EDL and additional EDL shall be equivalent to one (1) month basic salary or lower, depending on the capacity of the borrower to pay. The amount shall be adjusted by the designated AA/RAO/PAO upon confirmation of the borrower that the result of the net take home pay of the employee is not less than P3,000 after deducting monthly EDL amortization(s).
C. Loan Processing
1.
The period of submission and processing of regular EDL application shall be from March 16 to 31 and September 16 to 30 for the first and second semesters, respectively, to synchronize the release of the regular EDL proceeds with the payment period of school fees. However, there shall only be two (2) batches of payroll preparation.
2.
Availment of the additional EDL by the employee may be done anytime within the year up to a maximum of two times in a year, if semestral, or three times in a year, if trimestral.
3.
If the employee is enrolled in a trimestral curriculum, the employee can avail of an additional EDL loan thrice in one year. The loan shall be payable in four months, with the first payment commencing immediately in the month following after release of the loan.
4.
The period of submission for trimestral EDL applications shall be two (2) weeks before the start of classes. Trimestral loan application may be filed together with the regular EDL. The current or the immediately preceding school year/term Statement of Account or the Official Receipt from the school shall be attached to the loan application.
5.
Processing of applications for EDL of central office employees shall be decentralized at the department level. The designated Administrative Assistants shall process EDL applications of employees (including executives) in their respective departments/offices.
6.
EDL applications of all Provincial Office personnel (including Provincial Manager) shall be processed by the Provincial Administrative Officer. EDL applications of Regional Office Personnel (including Regional Manager) shall be processed by the Regional Administrative Officer.
7.
In processing EDL applications for both the regular and additional EDL, the designated Administrative Assistant/Regional Administrative Officer/Provincial Administrative Officer shall look into the following:
a.
eligibility of the borrower and co-maker
b. eligibility of the beneficiaries of the loan
c. outstanding balance (if any) of previous loan must have been paid
d. photocopy of the following documents certified by the designated
Administrative Asst. / Regional / Provincial Administrative Officer which
shall be attached to the EDL application form:
d.1. Documentary requirements from applicants availing of the loan for
the first time, for the following beneficiaries/recipients:
v
If the beneficiary / recipient is the employee-borrower's spouse
, Marriage Contract
v.
If the beneficiary / recipient is the employee-borrower's child,
Birth or Baptismal Certificate of the child
v
If the beneficiary / recipient is the employee-borrower's brother / sister
, Birth or Baptismal Certificate of the brother/sister and employee-borrower to establish the relationship
v
If the beneficiary / recipient is the employee-borrower's niece/nephew
, Birth or Baptismal Certificates of the employee-borrower's niece/nephew, the employee-borrower's sibling, and that of the employee-borrower to establish the relationship.
v
If the beneficiary / recipient is the employee-borrower's grandchild
, Birth or Baptismal Certificates of the employee-borrower's grandchild and the child's parent who is the child of the employee-borrower to establish the relationship.
v
Notarized Affidavit of Support (Exhibit 1) stating that the brother/sister, niece/nephew or grandchild is dependent upon the employee-borrower, is unmarried and not gainfully employed and that the parents of these children are incapable of supporting their education. An Affidavit of Support shall be attached to the EDL application form every renewal.
v
Photocopy of the latest payslips of the employee-borrower and co-maker (C.O.) / Statement of Net Pay received certified by the ASD/Accountant (F.O.)
v
If the employee has deleted deductions, he/she shall be required to submit a certification from his/her creditor (i.e. NFAEA/ NFA-MPCI/MSMPC) that his/her obligations has been fully paid or a certification that he/she will pay directly to his/her creditors and not through payroll deduction.
d.2. For loan renewal
:
§
Validated official enrollment /registration form of the school or official receipt for school fees for the current or preceding school year/term certified as true copy by the designated AA/RAO/PAO evidencing enrollment of the EDL beneficiary/ies shall be attached to the loan renewal/application.
If the school does not issue the aforementioned documents, a certified photocopy of the school ID or report card for the current school year/term shall be allowed
. Failure to submit evidence of enrollment shall not entitle the applicant for a loan renewal.
§
Certified photocopy of latest payslip of borrower and co-maker (C.O.) or Statement of Net Pay certified by the accountant (F.O.)
§
Certified photocopy of the documents as listed in C.7.d.1, except for the birth or baptismal certificate of the borrower’s child which shall be submitted only once.
Misrepresentation in the information indicated in the EDL application form and falsification of supporting documents shall be a ground for filing of administrative charge.
e.
Compliance to GAA Provision of P3,000.00 net take home pay
·
Regular EDL
The designated AA/RAO/PAO shall see to it that the regular EDL to be availed of by the borrower will not result to a net take home pay of less than P3,000.00.
·
Additional EDL
The designated AA/RAO/PAO shall see to it that the additional EDL to be availed of by the employee will not result to a net take home pay of less than P3,000.00 after all deductions, including the regular EDL and the additional EDL amortization have been deducted.
·
The designated AA/RAO/PAO shall verify loan balances of each employee based on the payslip and adjust the loanable amount, if necessary, upon confirmation of the borrower.
D. Loan Approval
Approval of EDL applications shall be as follows :
Applicant
Recommending Approval
Approval
1. Central Office
Rank and file employees Division Chief Department Manager
Division Chief Asst. Dept. Manager Department Manager
(for ASD, FDC and GMOD)
Asst. Dept. Manager N o n e Department Manager
of ASD, FDC and GMOD
Department Manager N o n e concerned Asst. Administrator
Asst. Administrator N o n e concerned Deputy dministrator
Deputy Administrator N o n e Administrator
Administrator N o n e Administrator
2. Field Offices
a. Regional Office
Rank and file employees Regional Adm. Officer/ Regional Manager
Asst. Regional Manager
Asst. Regional Manager N o n e Regional Manager
Regional Manager N o n e Regional Manager
b. Provincial Office
Rank and file employees Provincial Adm. Officer/ Provincial Manager
Asst. Provincial Manager
Asst. Provincial Manager N o n e Provincial Manager
Provincial Manager N o n e Regional Manager
E. Release of Loan
1. ASD-Claims Division/Finance Section shall check the amount of loan to be granted to an NFA employee vis-a-vis his/her basic monthly pay
2. For regular EDL, complete individual applications and supporting documents shall be attached to the EDL Payroll List.
·
The usual Disbursement Voucher, Budget Utilization Request (BUR) and check preparation shall be effected in the processing of EDL. The EDL Payroll List shall be attached to the disbursement voucher.
·
Payment of EDL proceeds shall be for credit to the ATM bank account of the employee (C.O.) / Regional/Provincial Administrative Officer (F.O.) or designated employee as authorized by the head of office.
F. Loan Amortization
1. Loan payments for regular EDL shall be made through compulsory payroll deductions in six equal monthly installments, in accordance with the following schedule:
Month of Availment
Payment Schedule
March April to September
September October to March
2.
Loan amortization for the additional EDL shall be for four to six months, whichever is applicable, with the first amortization to start in the succeeding month following the granting of the additional EDL.
3.
Direct payment to the cashier for monthly amortization shall no longer be allowed unless the payment is for the total outstanding balance of the loan.
4. Subsidiary Ledger per employee shall be maintained by ASD – Central Office Accounting Division (COAD) which shall reflect the running balances of each employee’s EDL.
5. In case of suspension, dismissal, retirement or transfer of the employee to another government/private agency, the outstanding balance of loan shall immediately become due and demandable.
6. In case the employee-borrower fails to pay an installment payment due to insufficient take home pay, he/she should pay directly to the cashier within the month of default. Otherwise, he/she shall be considered in default and ASD shall deduct the unpaid installment from the succeeding payroll period together with the regular installment due for the month.
7. In case the employee-borrower is separated from the service due to death, transfer, retirement, dismissal or dropping from the rolls, the loan balance shall be applied against any benefit due him/her. In the event that the amount due him/her is not sufficient to cover his/her outstanding loan, the installment due will be applied against the salary and allowance of the co-maker, after issuance of due notice or demand by ASD.
G. Accounting Treatment
1. Accounting entries in the books of accounts to reflect the availment of the educational loan are as follows :
a) DR : Due from Officers and Employees -
Educational Loan xxx
CR : Due to Officers and Employees xxx
b) DR : Due to Officers and Employees xxx
CR : Cash in Bank – Local Currency – Current Account xxx
2. Accounting entries in the books to reflect the payment of the educational loan thru payroll deduction:
DR : Salaries/Wages/Allowance xxx
CR : Due from Officers and Employees –
Educational Loan xxx
CR : Due to Officers and Employees xxx
DR : Due to Officers and Employees xxx
CR : Cash in Bank – Local Currency – Current Account xxx
3. Accounting entries in the books to reflect the payment of the educational loan thru official receipt :
DR: Collecting Officer xxx
CR: Due from Officers and Employees -
Educational Loan xxx
III. PROCEDURES AND RESPONSIBILITIES
1.
Employee - Applicant
1.1 Accomplishes the EDL application form (Please see Exhibit 2 - Revised EDL Form) and files same within the given period in two (2) copies to be distributed as follows:
Copy 1 - Attachment to the Voucher/COA
2 - ASD-Claims/Finance Section
1.2 Requests a regular employee of the same salary grade level or higher to act as co-maker within or other Central Office department/office or at least two co-makers with next lower grade level from the same department/office as the applicant.
.
1.3 Attaches the necessary supporting documents.
2.
Co-maker
2.1 Signs in the appropriate portion of the EDL Application Form.
2.2 Submits photocopy of his/her payslip duly certified by ASD
3.
Designated Administrative Asst. /RAO/PAO
3.1. Checks if applicant has outstanding EDL balance. If with unpaid balance, requires full payment of previous loan before processing the new EDL application;
3.2. Verifies with ASD-Claims/Accounting Section if there are other pending deductions to be made from the payroll of the employee in the succeeding month and considers this in her computation of the EDL to be granted to the employee;
3.3. Evaluates borrower and co-maker’s net take home pay against their payslips.
3.4. Computes for maximum loanable amount that will result to a net take home pay of not less than P3,000 considering all loan amortization and number of remaining installments.
3.5. Prepares the payroll list, disbursement voucher and Budget Utilization Receipt (BUR) to include the names of the borrowers’ co-makers.
4. ASD-Claims /Finance Section
4.1. Sees to it that the net take home pay of the borrower and co-maker is at least P3,000.00 and the payslip data is complete, including the following:
a. Number counter of the loan amortization for GSIS, Pag-ibig and other financing institutions if applicable.
b.
Amount for disallowed/excess TEV cash advances and other forms of deductions.
4.2. Division Chief – ASD Claims Division/Regl./Provl. Accountants - signs the Certified Supporting Documents Complete portion of the Voucher.
4.3 ASD-Claims Division (for C.O.) /Finance Section (for F.O.)
a. Processes the payroll in accordance with the usual accounting and auditing procedures. Retains duplicate copy of the EDL application.
b. Deducts the installment payment from the payroll starting in the months of April and October for the first and second semesters respectively, until the loan is fully paid.
c. In case the employee-borrower defaults in any installment payment due to insufficient take home pay, ASD shall deduct the unpaid installment from the succeeding payroll period together with the regular installment due for the month if the employee-borrower will not be able to pay directly to the cashier.
d. In case of separation from the service, charges the unpaid balance of the loan to the following in order of priority:
d.1 Benefits due to the employee-borrower.
d.2 Salaries/allowances of the co-maker
5. Deputy Administrator/Asst. Administrator/Department Manager/Regional Manager/Provincial Manager
Approves the loan; affixes signature on the approval portion of the EDL Application Form.
The foregoing supersedes SOP No HR-PB35 made effective on August 27, 1999 and its amendments and addenda, and all rulings and/or issuances inconsistent herewith,
This SOP will take effect this
15th
of
September,
20
10
.
Date Approved :
September 15, 2010
.
III. RESPONSIBILITIES
IV. FLOW CHART
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