SOP Library
SOP NO:
GM-DN16
(List of Exhibits/Attachments)
Mission
:
Technical Support Services
Area:
Grains Marketing (GM)
Area:
Grains Marketing (GM)
Activity:
Distribution (GM-DN)
Title:
SOP on the Rice Loan Program for Local Government Units (LGUs)
Date Approved/Issued:
03/29/1999
Date Effective:
04/01/1999
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
1.
Statement of Policies
A. Availment
a. Local Government Units (LGUs) shall be allowed to purchase rice on credit from the NFA under the NFA-LGUs Rice Loan Program. Rice purchased under this program shall be intended solely for the following purposes:
a.1 for relief distribution operations in times of calamities;
a.2 for stockpiling in preparation for any eventualities/emergencies that may occur.
b. The Rice Loan Program shall be covered by a
Memorandum of Agreement (MOA - Exh. 1)
to be executed by and between the concerned Provincial Governor/City/Municipal Mayor representing the LGUs and the NFA Provincial Manager of the concerned province. The MOA shall be in force for a period of one (1) year from the date of signing.
The terms and conditions of the
MOA
may be changed or modified upon mutual agreement in writing by the parties subject to the approval of the NFA Administrator. Any approved changes/modifications shall only be effected upon renewal of the loan.
c. The LGUs shall submit to the concerned NFA Provincial Office (NFA PO) a listing of their representatives who are authorized to transact with the NFA together with their pictures and specimen signatures. No other persons except those included in the list shall be allowed to withdraw the rice stocks and sign pertinent NFA documents in behalf of the LGUs. The list, however, may be amended through a written notice from the LGU head to be submitted to the NFA PO prior to any withdrawal.
d. Sale of rice on credit to LGUs shall commence only upon execution of the
Rice Loan MOA
and submission by the LGUs of their lists of authorized representatives.
e. The Rice Loan shall be approved by the NFA Provincial Manager upon submission by the LGUs of the following documents:
i. A
written request
from the Governor/City/Municipal Mayor specifying the purpose (for relief operations or for stockpiling) indicating therein the quantity and quality of rice to be purchased (Exh. 2);
ii. An approved
Resolution of the Sangguniang Panlalawigan/Panglungsod/Bayan
authorizing the purchase of rice on credit from the NFA under the Rice Loan Program and specifying the fund source (i. e., Calamity Fund, Special Development Fund, Emergency Fund) appropriated for such obligation (Exh. 3).
iii. If the purpose is for relief operations, a copy of the official proclamation that the area is under a state of calamity;
iv. Requisition and Issue Voucher (RIV) duly signed by the Governor/City/Municipal Mayor.
v. Purchase Order (PO) duly signed by the Governor/City/Municipal Mayor.
vi.
Certification as to the available Special Development Fund/Calamity Fund/Emergency Fund or any other fund appropriated for the rice loan program
issued by the Provincial/City/Municipal Treasurer (Exh. 4).
vii. If necessary, a letter amending the list of authorized representative(s) of the LGUs previously submitted to the NFA. The letter must be duly signed by the Governor/City/Municipal Mayor.
f. The maximum quantity of rice loan that an LGU can avail of within a given fiscal year shall not exceed 5,000 bags for Provincial Government, 2,000 bags for City Government, and 1,000 bags for Municipal Government, or the rice equivalent of their respective funds appropriated for the Rice Loan Program, whichever is lower.
g. Rice loans intended for stockpiling shall not exceed ten percent (10%) of the maximum loanable quantity which is equivalent to 500 bags for Provincial government, 200 bags for City Government and 100 bags for Municipal Government, or the rice equivalent of the 10% of their respective appropriated fund, whichever is lower.
h. The price of rice shall be based on the NFA Consumers’ Price as indicated in the latest Selling Price Bulletin (SPB).
i. The NFA, however, reserves the right to determine the final quantity of rice stocks that may be granted to the LGUs notwithstanding their requests depending upon the NFA’s stock inventory.
j. No subsequent issuance of rice on credit shall be made unless the previous loan has been fully paid as confirmed by the Accounting Section of the NFA PO. However, an exception to this provision may be allowed when a disaster/calamity occurs in which case, the additional rice loan may be granted subject to the following limitations:
j.1 It shall not exceed the rice equivalent of the remaining funds of the LGUs appropriated for the program after the balance of the outstanding loan has been deducted. A
certification
by the Provincial/City/Municipal Treasurer as to the remaining available funds shall be required.
j.2 it shall not exceed the maximum quantity of rice loan that the LGU is allowed to avail.
k. The NFA shall, from time to time, conduct on-the-spot inspection of the LGUs’ warehouses and/or distribution/relief operation centers to determine compliance with the terms and conditions of the
MOA
.
B. Issuance/Withdrawal of Rice Stocks
a. All stock issuances under the Rice Loan Program for LGUs shall be documented following the usual Warehouse Stock Documentation System.
b. Actual stock withdrawal by the LGUs must be completed within a period of fifteen (15) working days reckoned from the date of receipt of the Authority to Issue (AI) from the NFA Provincial Office. Any unwithdrawn balance beyond the prescribed 15-day period shall be deemed cancelled.
c. For monitoring and control purposes, no subsequent AI shall be approved unless the previously approved AI has been fully served/withdrawn.
d. The NFA may accede to the requests of LGUs to deliver the stocks to its designated delivery points subject to the availability of NFA trucks and accesibility of the delivery points through land routes. The delivery fee shall be in accordance with the prevailing delivery rates of the NFA at the time of delivery.
C. Billing and Collection
a. The weight/quantity/quality of stocks as received and acknowledged by the LGU representative in the NFA official documents shall be final and binding. This shall be used as the basis for billing and reconciliation.
b. The NFA Provincial Office shall bill the LGU based on actual stock issuances within five (5) working days counted from the date of last withdrawal as indicated in the Warehouse Stock Issue (WSI).
c. The concerned NFA Provincial Office shall ensure that payment for the rice stocks issued including delivery fee, if any, shall be made within fifteen (15) working days from the date of LGU’s acknowledgment of the NFA billing statement. Unpaid bills after the fifteen (15) days grace period shall have an interest charge of one percent (1%) per month or a fraction thereof based on the value of rice granted on credit and the number of days consumed within the month up to a maximum of six (6) months. If the LGUs still fail to settle their bills after the six- month period, a penalty equivalent to two percent (2%) of the unpaid amount per month shall be imposed on top of the 1% interest charge until the rice loan has been fully paid.
D. Reporting System
a.
Rice issuances to LGUs
shall be reported by the concerned NFA Provincial Offices to the Department for Marketing Operations (DMO) copy furnished the concerned LGU thru the fastest available means of communication ( i.e., lotus notes, fax, wire message) within 24 hours after every withdrawal made by the LGUs using the
prescribed form
(Exh. 5).
b. A
Status Report
(Exh. 6) shall be submitted to DMO cc DAS by the concerned P.O. at the end of the month. The report shall indicate stock issuances under the program as well as payments made by the LGUs.
E. Accounting Entries
1. Issuance of Stocks:
DR: Trade Receivable xxx
CR: Sales xxx
#
DR: Cost of Sales xxx
CR: Inventory-Items for Sale xxx
#
2. Collection of Receivables, Delivery Fee, etc.
DR: Cash-Collecting Officer xxx
CR: Trade Receivable xxx
CR: Operating & Services Income
- Facility Services-Trucking xxx
- Interest xxx
- Fines & Penalties xxx
#
3. Deposit of Collections:
DR: Cash-Other Bank Savings xxx
CR: Cash - Collecting Officer xxx
#
4. Remittance to Central Office
CR: HOA xxx
CR: Cash-Other Bank Savings xxx
#
This SOP on Rice Loan Program to Local Government Units (LGUs) shall take effect this
01
day of
April
, 1999.
III. RESPONSIBILITIES
IV. FLOW CHART
Top Page
EXHIBITS
Rice Loan - MOA
Written Request from the Governor/City/Municipal Mayor
Approved Resolution
Certification of Availability of Funds
Issuances of NFA-LGU Rice Loan
Rice Loan Program Status Report