SOP Library
SOP NO:
HR-PB29
(List of Exhibits/Attachments)
Missi
on
:
Finance and Administration
Area:
Human Resource (HR)
Activity:
Personnel Benefits and Services (HR-PB)
Title:
Revised SOP on Vehicle Loan Program
Date Approved/Issued:
04/07/1997
Date Effective:
04/07/1997
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
A. ELIGIBILITY
1. NFA officials from grade levels 24 and above shall be entitled to avail of the vehicle loan. Holders of executive positions as of July 1, 1989 but whose positions were downgraded in the implementation of the Salary Standardization Law (i.e. Special Assistants, Operations Specialists, Staff Assistants and a few Division Chiefs) shall also be eligible to avail of the program. Their present positions shall be considered as equivalent to Salary Grade 24 for purposes of this program.
2. The applicant must have no pending administrative charges filed against him/her by the NFA management at the time of filing of the vehicle loan application.
3.
The eligible applicant must have a monthly net take home pay of not less than P4,000 after deducting the monthly amortization on the vehicle loan applied for and all other loans. Rice allowance shall not be considered in computing the net take home pay.
4. Applicants with record of delinquency in the past SVLF programs regardless of amount or duration, shall be eligible only to avail of this loan six (6) months after the initial implementation. This policy applies even if subject loan has been fully settled. Those who have not fully settled their delinquent accounts shall only be eligible to re-avail of the SVLF six (6) months after full settlement of the existing loan.
B. LIMITATION
1. Only one vehicle per official shall be eligible for acquisition under SVLF financing. However, renewal of vehicle loan may be allowed subject to the provisions on item II.P of this SOP.
2. The vehicle to be purchased out of the loan shall be of the employee’s choice provided:
a) That the vehicle is not more than five (5) years old, if second hand, and in good running condition as appraised by NFA Motorpool or by an accredited motor shop for vehicles to be bought in the provinces.
b) That the vehicle to be purchased is either a car or a van (jeepneys, owner-type jeepneys, bicycle, and tricycle shall not be allowed);
c) That the vehicle shall not be used for business.
C. LOANABLE AMOUNT
1. The maximum loanable amount is
P
400,000.
2. The amount of loan that shall be granted shall be the
value of the vehicle
or the applicant’s
maximum loanable amount
, whichever is lower.
2.1 The
value of the vehicle
shall be the cash price of the vehicle if brand new; or the appraised value of the vehicle as determined by the NFA Motorpool/accredited motor shop (for cars to be purchased in the provinces) if the vehicle is second hand.
2.2 The applicant’s
maximum loanable amount
shall be computed as follows:
Loanable Amount = (Net Pay before SVLF -
P
4,000) X 60 but not
more than
P
400,000
D. FUNDING
1. The program shall be funded by the Special Vehicle Loan Fund (SVLF), the special fund set aside for the purpose.
2. DAS and HRMD shall maintain an
SVLF Ledger
(Exhibit 1) to monitor available funds for the month. DTBFM shall inform HRMD every 5th day of the month on total payments collected for the preceeding month.
E. ORDER OF PRIORITY IN THE GRANTING OF THE VEHICLE LOAN
1. All qualified applicants with complete requirements received for the month will be prioritized in the following manner:
Priority 1 - Applications of executives who are availing of the vehicle loan program for the first time.
Priority 2 - Applications of executives who have previously availed of the program and those applications for purposes of re-financing existing car loans of the applicant.
2. Applications belonging to the same priority shall be further prioritized as follows:
a) first, according to rank;
b) second, according to the length of service in NFA;
c) all things equal, on a “first come, first serve” basis.
F. APPLICATION AND PROCESSING
1. The Benefits Unit - HRMD shall accept, screen and process all applications for the vehicle loan. It shall only accept applications with complete and properly accomplished supporting documents.
2. The applicant shall file a duly accomplished
Vehicle Loan Application Form
(Exhibit 2) together with the following requirements:
a) copy of the latest payslip for C.O. executives
b) Certificate of no pending administrative case from DLA
c) Cash Price Quotation for brand new vehicles
d)
Motorpool Appraisal
&
Inspection Report
& Optional Accessories (
Exhibit 3
,
3A
,
3B
), for second hand vehicles. Second hand vehicles to be purchased in the provinces shall be appraised by an accredited motor shop. The Inspection Report, with picture of the vehicle attached, shall be certified correct by the Regional Engineer to be reviewed by GSD Motorpool.
e) Contract of Loan (
Exhibit 4
)
f) Deed of Undertaking (
Exhibit 5
)
g) Proof of Indebtedness / Statement of Account (Car Financing Loan) for those intending to transfer existing mortgage.
h) disbursement voucher for loan applied for signed in the certified portion by the HRMD Department Manager.
G. APPROVAL OF THE LOAN
All vehicle loan applications shall be approved by the Administrator upon the recommendation of the Deputy Administrator for Finance and Administration. The Assistant Administrator for Finance and Administration shall affix her initials under the name of the Deputy Administrator for Finance and Administration. In the absence of the Deputy Administrator for Finance and Administration, the Deputy Administrator for Operations shall recommend the approval of the loan.
H. RELEASE OF LOAN
1. The voucher prepared by the applicant shall be processed by CIAD-DAS in accordance with the usual accounting/auditing procedures. The check representing the loan shall be payable to the seller or creditor in the case of re-financing, for the account of the applicant.
2. The borrower, prior to the release of the loan, shall submit to DTBFM the required post-dated checks covering amortization payments for the entire repayment duration.
3. The following documents shall be submitted to HRMD-Benefits Unit immediately, but not later than 30 days after the release of the loan:
a)
Chattel Mortgage Contract
(Exhibit 6) duly registered with the Registry of Deeds
b) LTO Certificate of Registration (orig.) & certified photocopy of Official Receipt
c) Comprehensive Insurance Policy (orig.)
d) Mortgage Redemption Insurance Policy (orig.)
e) Sales Invoice for brand new vehicles or Deed of Sale for second hand vehicles
f) Motor Vehicle Clearance from PNP (orig.) for second hand vehicles
4. Failure to submit any of the above documents shall subject the loan to 2% interest per month until the time the requirements are submitted. HRMD shall promptly notify the DAS / Regional Accountant / Provincial Accountant, as the case may be, about the non-submission. The latter shall assess the penalty/interest and book the same as receivable from the applicant.
Upon assessment, the applicant shall be notified of the same and the amount shall be deducted from his salaries in accordance with existing rules on salary deductions of amounts due the Agency. Correspondingly, this will be treated as Miscellaneous Income and will be added to the SVLF. Failure on the part of the DAS processor / Regional / Provincial Accountant to deduct the said amount shall subject him to administrative case for neglect of duty.
I. TERMS AND CONDITIONS
1. The vehicle loan shall be free of interest, payable in five (5) years or in sixty (60) equal monthly installments.
2. All expenses relative to the application of the loan and acquisition of the vehicle shall be shouldered by the applicant (e.g. notarial fee, registration fee, etc.).
3. The loan shall be paid thru post dated checks secured from any bank located within Metro Manila. The check shall be payable to
NFA-SVLF
. The first check shall be dated end of the month following the release of the loan and the succeeding checks end of each month thereafter. (
Example: If the loan is released on March 2, the first check shall be dated April 30. The succeeding checks shall be dated May 31, June 30, and so on.)
4. DTBFM shall acknowledge receipt of post-dated checks by issuing an
Acknowledgment Receipt
(Exhibit 7). DTBFM shall keep the post-dated checks and shall issue the official an Official Receipt after each check has been cleared by the bank.
5. In the event of default in payment of monthly amortization, the official shall be given a grace period of fifteen (15) days to settle his dishonored check, otherwise, the total outstanding balance, plus 2% interest per month and 2% penalty per month from date of default, shall become immediately due and demandable, without prejudice to the filing of administrative case for violation of the terms and conditions of this SOP and/or criminal case for estafa. DTBFM shall notify Benefits Unit-HRMD of the default. NFA management, thru DLA, shall file charges against the official within five (5) days from receipt of notice from HRMD.
6. Any record of delinquency under this program shall disqualify the official from availing of all other loans from NFA. For this purpose, Benefits Unit - HRMD shall notify the concerned region/province of any delinquency.
7. The subject vehicle shall not be disposed of by sale, transfer, or in any manner encumber the same unless the balance of the loan has been fully paid and the Chattel Mortgage has been cancelled. (
see Exhibit 8 -
Cancellation of Chattel Mortgage
)
J.
SEPARATION OF OFFICIAL FROM NFA
1. In case of retirement, resignation, transfer, or any other manner of separation of the official from NFA service prior to full payment of the loan, the balance of the loan shall become immediately due and demandable.
Full settlement may be made in the following manner:
a) Cash prior to issuance of Clearance.
b) To be deducted from claims, gratuity pay or terminal pay, due the official as per
Deed of Undertaking
provided that there are no constraints in the official’s claim for gratuity/terminal pay which are of his making or fault.
c) In case the official will be constrained to collect his claims from NFA for any reason (i.e. those with accountability shortage; those with pending administrative case) full payment in cash shall be compelled. Otherwise, foreclosure proceedings shall be undertaken.
2. Upon full settlement of the loan, the remaining post dated checks shall be returned to the borrower.
K. CHATTEL MORTGAGE
1. All applicants shall execute a
Chattel Mortgage Contract
(Exhibit 6) over the vehicle in favor of NFA and all expenses relative thereto shall be at the expense of the applicant. Registration of the mortgage shall be undertaken by the applicant, under supervision of HRMD.
2. The LTO Certificate of Registration shall be marked “encumbered” which means that said vehicle being registered is under mortgage with the NFA. The LTO registration should bear the same mark for a period of 5 years until the loan is fully paid.
3. Upon full payment of the loan, the official may request from DAS a certificate of full payment, aside from the NFA monthly official receipts, which he will present to HRMD prior to the release of the original copy of the LTO Certificate of Registration. The official shall be responsible in facilitating the cancellation the Chattel Mortgage on the vehicle.
L.
DEED OF UNDERTAKING
Aside from the Contract of Loan and the
Chattel Mortgage Contract
, the applicant shall also execute an
Undertaking
(Exhibit 5) authorizing NFA, in the event of separation from service to deduct from their gratuity pay and any other claims from NFA any unpaid portion of their loan.
M.
COMPREHENSIVE INSURANCE COVERAGE
1. For the duration of the loan agreement, the applicant shall secure a comprehensive motor car insurance to be endorsed in favor of the NFA up to the extent of loan availed, from a reputable insurance company. Same shall be submitted within 30 days from the date of release of the loan. Premiums shall be shouldered by the applicant and paid directly to the insurance company.
2. HRMD-BENEFITS Unit shall monitor the expiration date of all motor vehicle insurance based on effectivity date of the policy and on the premium bill. The monthly
Expiry Index Card
(Exhibit 9) shall still be maintained by the Benefits Unit to facilitate monitoring.
3. A month prior to the expiration of each vehicle insurance coverage, HRMD- BENEFITS Unit shall notify the borrower, in writing, about the need to renew the insurance.
4. The original copy of the policy or Proof of renewal of insurance shall be submitted to HRMD- BENEFITS Unit within five (5) days from expiration, otherwise the official’s monthly RATA shall be withheld until he/she complies with this requirement.
N. MORTGAGE REDEMPTION INSURANCE
1. The applicant shall also secure a Mortgage Redemption Insurance (MRI) in favor of NFA on a yearly basis against the cost of vehicle financed by NFA.
2. Annual renewal of the MRI shall also be monitored by HRMD. The original copy of the policy or proof of renewal of the insurance to be submitted by the official to HRMD within five (5) days from expiration thereof, otherwise the official’s RATA shall be withheld until he complies with this requirement.
O.
REGISTRATION
1. Annual registration of the mortgaged vehicle with the Land Transportation Office shall be shouldered by the official.
2. A
certification
signed by the HRMD Department Manager (Exhibit 10) may be issued to the borrower upon request to certify that the original copy of the LTO Certificate of Registration is in the custody of NFA.
3. In no case shall HRMD be allowed to issue the original Registration Certificate to anybody, unless the borrower submits proof of full payment issued by DAS.
P.
RENEWAL OF LOAN
The official may re-avail of the program provided:
a) the official has fully settled his SVLF account and has not been delinquent in payment of his SVLF amortization;
b) the approval of loan renewal shall be subject to availability of funds and order of priority in granting of vehicle loan.
III. RESPONSIBILITIES
1. APPLICANT
a) Submits duly accomplished application form and voucher together with other requirements and forwards same to HRMD-Benefits Unit for processing.
b) For acquisition of second hand vehicles, requests NFA Motorpool to inspect and appraise the car. For field executives who will buy second hand cars in the provinces, requests an accredited motor shop to appraise the car.
c) Undertakes registration of Chattel Mortgage.
d) Submits additional requirements to HRMD within thirty (30) days after release of the loan.
e) Upon full payment of loan, secures from DAS a certificate of full payment.
f) Submits renewal of insurance and registration to Benefits Unit.
2. BENEFITS UNIT, HRMD
a) Issues application form for vehicle loan to applicants.
b) Accepts and screens all vehicle loan applications with complete documents/requirements.
c) Forwards processed applications to the Asst. Administrator for Finance and Administration and Deputy Administrator for Finance and Administration for recommending approval respectively.
d) Notifies the applicant of the approval of his vehicle loan application and ensures that necessary requirements are submitted promptly.
e) Supervises the applicant in the registration of Chattel Mortgage.
f) Notifies DAS/Regional Accountant/Provincial Accountant of non-submission of necessary requirements.
g) Safekeeps original copies of LTO Certificate of Registration, and copies of Insurance Policy Contracts (Comprehensive Motor Vehicle Insurance and Mortgage Redemption Insurance) until the loan has been fully paid.
h) If requested, issues
certification
that the original copy of the Registration Certificate is in the custody of NFA.
i) Monitors the expiration of vehicle insurance policies and reminds the official to renew the insurance policy.
j) In case of default of the official in the payment of monthly amortization (beyond the 15-day grace period), coordinates with DAS / Regional / Provincial Accountant on the computation of the 2% interest and 2% penalty per month to be deducted from salary.
k) Monitors the strict implementation of the program.
l) Maintains an SVLF Ledger to monitor available funds for the month.
3. DEPARTMENT MANAGER, HRMD
Certifies to the completeness and authenticity of the submitted documents.
4. CHIEF, ADMINISTRATIVE FACILITY SERVICES DIVISION - NFA MOTORPOOL
a) Conducts inspection and submits report to HRMD re appraisal and physical condition of second hand vehicles to be purchased under the program.
b) Reviews Inspection Report accomplished by a reputable motor shop at the field office.
5. REGIONAL ENGINEER
Certifies to the correctness the Inspection Report prepared by an accredited motor shop in their area.
6. DEPARTMENT MANAGER, DLA
a) Issues certificate of no pending administrative case filed against the applicant.
b) Files case/s against defaulting applicants upon notice of DTBFM.
c) Advises on legal matters re implementation of the program.
7. DIVISION CHIEF, Claims and Inter-Branch Accounting Division, Department for Accounting Services
a) Certifies to the correctness of the earnings of the applicant.
b) Evaluates loan applied for vis-a-vis the value of the vehicle to be purchased and the applicant’s maximum loanable amount to be computed using the formula as provided for in item IV.C.2.2.
c) Processes the disbursement voucher corresponding to the loan in accordance with the usual rules and procedures of processing.
d) Monitors fund utilization.
8. DIVISION CHIEF, General Accounting Division, Department for Accounting Services
a) Certifies to the record of outstanding loans and amount of arrears of the applicant, if any.
b) Maintains an updated ledger/record for each official.
c) Sees to it that all repayments are promptly recorded in the books.
9. DEPARTMENT MANAGER, DAS
Certifies to the correctness of the certifications issued by the Division Chief of CIAD and GAD.
10. CASH DIVISION, DTBFM
a) Releases checks for the vehicle loans and notifies HRMD - Benefits Unit.
b) Issues Acknowledgment Receipt for the post-dated checks issued by the applicants.
c) Safekeeps the post-dated checks.
d) Deposits the checks that are due and issues official receipts after checks have been cleared by the bank.
e) Notifies the official in case the check has no sufficient fund giving him 5 days grace period within which to make good his check.
f) Notify DLA to file charges against defaulting officials.
11. ASST. ADMINISTRATOR FOR FINANCE & ADMINISTRATION
Affixes initials on the recommending approval portion of the application form.
12. DEPUTY ADMINISTRATOR FOR FINANCE AND ADMINISTRATION
Recommends approval of the vehicle loan.
13. ADMINISTRATOR
Approves/disapproves application for vehicle loan
IV. FLOW CHART
Top Page
EXHIBITS
Exhibit 1 - Sprecial Vehicle loan Fund Ledger
Exhibit 2 - Vehicle Loan Application (Revised)
Exhibit 3B- Optional Accessories (Appraised Value)
Contract - (Exhibit 4A - SVLF Amendment)
Exhibit 5 - SVLF Deed of Undertaking
Exhibit 6 - SVLF Chattel Mortgage
Exhibit 7 - SVLF Acknowledgement Receipt
Exhibit 8 - SVLF - Cancellation of Chattel Mortgage
Exhibit 9 - SVLF
Exhibit 10 - SVLF - Registration Certificate
Exhibit 3 - SVLF - Inspection Report
Exhibit 3-A - SVLF-Appraisal Report