SOP No: SS-LG08.A

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SOP NO: SS-LG08.A (List of Exhibits/Attachments)

Mission: Support Staff Services

Area: Support Staff Services (SS)

Title: Guidelines in the Execution of a Compromise Agreement in the Payment of Final Shortages by NFA
Accountable Officers

Date Approved/Issued: 11/11/2013

Date Effective: 11/11/2013

Digest:

I. TERMS OF REFERENCE

A. Rationale

B. Objective

C. Scope

D. Basis

II. IMPLEMENTING GUIDELINES

IV. WHO MAY AVAIL

NFA Accountable Officers with final cash and / or stock shortages, retired or not, who have no existing Compromise Agreement / pre-approved payment scheme as defined under Item II.B.3 of SOP No. SS-LG08 dated 04 February 2013, whose final shortages is not more than One Million Pesos.

V. HOW INITIATED

Accountable Officers may submit their proposals in writing, addressed to the Office of the NFA Administrator, and copy furnished the Legal Affairs Department (LAD) and the Offices of NFA Regional and Provincial Managers, where the shortages were incurred.

VI. COMPROMISE AGREEMENT TECHNICAL WORKING GROUP (CA-TWG)

A. Composition

1. A Compromise Agreement-Technical Working Group (herein “CA-TWG”) shall be created through a Special Order* to be signed by the Administrator. The CA-TWG shall be composed of the following:

Chairman

: Director, Legal Affairs Department

Members : (1) Authorized representative, Accounting

Services Department

(2) Authorized representative, Human Resource Management Department

(3) Authorized Representative, Security Services and Investigation Department

(4) Authorized Representative, Internal Audit

Services Department

(5) Authorized Representative, Grains Marketing Operations Department

(6) Representative, NFA Employee’s Association

Observer : Representative, Administrator’s Office

Secretariat : Legal Affairs Department

* Special Order should specify names of members and should also contain specific period of effectivity

B. Duties and Responsibilities

1. The CA-TWG shall convene, as needed, at the NFA-Central Office, Quezon City. To constitute quorum, every convention of the CA-TWG should be attended by at least a majority of the members.

2. The power of the TWG shall include, but not limited to:

a. Evaluation of the terms of the proposals submitted by Accountable Officers, and to:

a.1 Recommend to the Administrator, thru the NFA Executive Committee, for the acceptance, denial, or modification of the offer of compromise;

b. Continuing review for the amendment of existing policies and the adoption of new ones to better carry out the collection of final shortages from NFA Accountable Officers.

It is understood that any and all terms as may be contained in the proposals for Compromise Agreement that may be submitted by Accountable Officers shall be construed as an offer.

4.a For non-retirable employees:

Offer to pay thru monetization of 50% of earned leave credits shall be accepted provided that it complies with Item VII.B.2 hereof.

4.b For retirable employees:

Offer to pay out terminal / retirement / provident fund and other benefits shall be accepted subject to accounting and auditing rules.

For purposes of this provision, the term “retirable employees” shall mean those who are availing themselves of retirement under RA 1616 AND who are actually retiring within a period of six (6) months before the actual date of retirement.

Hence, Management reserves the right to deny, modify, or restructure the terms and concessions proposed by the Accountable Officer, with the end in view of arriving at a scheme that is just, feasible, and acceptable to both parties and their interests.

The CA-TWG Secretariat shall maintain a record of the minutes of all meetings made by the CA-TWG.

VII. TERMS

A. Form of payment

Installment payments to be made under an approved Compromise Agreement shall be in Philippine Currency only.

b. Threshold amounts and corresponding payment schedules

1. For purposes of determining the applicable payment schedules of the shortages to be paid in installment basis, the total obligation shall refer to the final shortages.

1.a Management shall provide the accountable officer who wants to enter into a compromise with the amount of the total obligation.

2. The threshold amounts and the corresponding payment schemes shall be as follows;

AMOUNT OF TOTAL OBLIGATION	PAYMENT SCHEME
P500,000 and below	At least 50% downpayment as the first payment and the remaining balance to be paid in no more than 6 equal monthly installments. Balance for installment shall be subject to an interest of (the prevailing interest rate**) per annum* (diminishing application) and shall be covered by post-dated checks.
P500,001 to P1 Million	At least 50% downpayment as the first payment and the remaining balance to be paid in no more than 12 equal monthly installments. Balance for installment shall be subject to an interest of (the prevailing interest rate**) per annum* (diminishing application) and shall be covered by post-dated checks.

*** Rate of prevailing interest rate to be verified with DTBFM

The downpayment as referred to in this provision shall be paid by the Accountable Officer within fifteen (15) working days from receipt of the approved Compromise Agreement.

For the orderly reconciliation of accounts, all PDCs as referred herein shall be tendered to the provincial office where the shortages were incurred. It shall be the duty of the provincial cash officers to notify the CA-TWG of the submission by the Accountable Officers of the PDCs.

3. Offers for compromise agreements involving shortages in the amount more than P200,000.00 shall be accompanied by adequate security.

4. The following conditions shall be followed on posting the security:

4.a For total obligations up to P1 Million:

4.a.1 Must be accompanied with security the value of which should be at least equivalent to the balance due;

Securities shall be made in favor of the NATIONAL FOOD AUTHORITY and duly registered with the proper offices. Acceptable forms of security shall include, but not limited to;

a. Real Estate Mortgage (pro-forma document to be provided)

b. Chattel Mortgage (pro-forma document to be provided)

All costs to be incurred in the registration of the securities shall be on the Accountable Officer’s account.

C. Where payments should be made

1. Installment payments under an approved Compromise Agreement shall be made at the NFA Provincial Office where the shortages were incurred.

In case the Accountable Officer has more than one shortage incurred in different provincial offices, the payments will be made in the respective provincial office where such shortages were incurred.

The corresponding Official Receipts (ORs) covering these payments shall be issued.

VIII. REPORTORIAL REQUIREMENTS

It shall be the duty of the Provincial field offices concerned to prepare a monthly report of payments made under approved Compromise Agreements in their respective areas of jurisdiction. Said report shall be submitted not later than the 10

^th

day of the subsequent month, addressed to the Accounting Services Department (ASD), copy furnished the following offices;

1. Office of the Administrator (AO)

2. Internal Audit Services Department (IASD)

3. Legal Affairs Department (LAD)

4. Security Services and Investigation Department (SSID)

IX. APPROVAL OF COMPROMISE AGREEMENTS (pro-forma document to be provided)

Proposals evaluated by the CA-TWG shall be submitted and recommended for approval to the Administrator, through the NFA Executive Committee.

Compromise Agreements shall be prepared in seven (7) copies and shall be distributed as follows: LAD / ASD / IASD / RO / PO / Accountable Officer / Notary Public.

X. FINAL PROVISIONS

A. Any violation by the Accountable Officer of the terms of an approved Compromise Agreement shall grant NFA the authority to avail itself of the appropriate legal remedies. It is understood that there are violations under the following instances;

Failure to pay any installments when due;

Submission of inadequate security.

B. Failure of the Provincial Managers to strictly adhere / implement the provisions of these guidelines, and to monitor compliance by the SAO to the CA shall hold the PM administratively liable.

C. These guidelines supersede and repeal all other inconsistent prior issuances.

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Approval:

ORLAN A. CALAYAG (SGD)

Administrator

III. RESPONSIBILITIES

IV. FLOW CHART
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