FINANCIAL MANAGEMENT OPERATIONS MANUAL (FMOM) A Guide for Officials and Staff Engaged in or Served by the DepEd Financial Management System

Overview of the Financial Management Operations Manual (FMOM) inserted

Development of the Financial Management Operations Manual (FMOM) is a Department of Education project with support from the World Bank (WB) that was completed on 31 March 2016. This manual outlines the systems and procedures of financial operations and other related management practices to be observed by DepEd Implementing Units (Central Office, Regional Offices, Division Offices and Schools). It conforms to existing government standards, rules and regulations as provided for by the Commission on Audit (COA), the Department of Budget and Management (DBM), the Bureau of Treasury (BTr) and other government regulatory bodies.

Why is there a need for an FMOM in DepEd? To have a guidebook for the uniform and standard interpretation and implementation of financial management practices in all spending units of DepEd on the following: latest issuances on prescribed rules, regulations of DBM, COA, DOF (BTr), etc., affecting FM practice; latest DepEd policies customizing and adapting national guidelines to unique characteristics and circumstances of DepEd concerning FM issues

Why is there a need for an FMOM in DepEd? financial transactions defining and describing procedures to be followed, forms to be used, signing authorities, recording and reporting and documentary requirements;

What are the unique features of the FMOM? It is a living document subject to change as necessary: prescribed procedures, rules and regulations by government regulatory bodies DepEd policies affecting FM issues and concerns

What are the unique features of the FMOM? 2. It is customized and adapted to the unique needs of DepEd, and provides sections on the following: School-based Financial Management Provident Fund A Matrix of Processes summarizing all requirements per transaction that serves as a short-cut to the FMOM

What are the major contents of the FMOM?? 1. Budget (e.g. Planning linkage, Budget Cycle) 2. Procurement (e.g. Asset Management 3. Accounting (e.g. Receipts and Deposits Disbursement and Financial Reporting 4. School-Based Financial Manament and Operation 5. Provident Fund 6. Other Unique features of FMOM NEXT

Budget & Planning Linkage Through the Development Budget Coordination Committee (DBCC) this linkage is operationalized. The Committee performs the following – Establishes the Budget level based on projected revenues and manageable deficit level; Sets the sectoral targets and priorities; Provides guidelines on the proper allocation of resources in various expenditure dimensions to achieve the national development goals and objectives. Effective financial management requires a strongly linked planning, budgeting and procurement processes in an organization. Understanding the basic principles and standards, as well as the policies and guidelines under each of the systems, facilitates the implementation of the procedures to be undertaken. FMOM MAJOR CONTENTS

BUDGET CYCLE Preparation Budget Call Stakeholder engagement Technical Budget Hearings Executive Review Consolidation, Validation & Confirmation Presentation to the President & Cabinet President’s Budget Legislation House Deliberation Senate Deliberation Bicameral Deliberation Ratification & Enrolment President’s Enactment & Veto Execution Release Guidelines & Program Budget Execution Documents Allotment & Cash Release Programming Allotment and Cash Releases Incurring Obligations Disbursements/ Payments Accountability Performance Targets & Outcomes Budget Accountability Reports Quarterly Performance R2eview Year-end Budget Performance Assessment Review Audit The four phases of the budget cycle overlap in continuing cycles every year. For instance, the Executive implements the budget for the current year and prepares the budget for the next fiscal year or defends it in Congress. Execution and Accountability phases are simultaneously implemented year-round. FMOM MAJOR CONTENTS

PROCUREMENT The FMOM provides an overview of the national procurement system as part of an agency’s planning and budget preparation. A separate section on the process of procurement at the school level is provided as well as Asset Management, which involves – Custodianship Inventory Management Disposal procedures Extracts from the Property and Supply Handbook are cited specifically those relevant to the schools. DepEd has developed the Customized Agency Procurement Manual (CAM) which is a generic procurement manual to systematize the procurement process, ensure transparency and avoid confusion. This was subsequently approved by Government Procurement Policy Board (GPPB) on May 30, 2008 in compliance with the provisions of Section 6 of R.A. 9184 and its IRR. FMOM MAJOR CONTENTS

Accounting and Disbursement Major accounting processes such as Receipts and Deposits, Disbursements and Financial Reporting are discussed aligned with the current GAM, PPSAS and UACS. Similarly, governing laws and circulars are similarly hyperlinked to the FMOM. Illustrative examples and process flows for each type of accounting transaction are provided in the FMOM. Government accounting encompasses the processes of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property, and interpreting the results. Sample hyperlinked document see page 101 FMOM MAJOR CONTENTS

School-Based Financial Management (excerpts from the FMOM) SBFM activities include but are not limited to the following: fiscal planning, budgeting cashiering and disbursement accounting and recording procurement asset and liability management, and physical and financial reporting School-based Financial Management (SBFM) refer to activities undertaken or pursued by a school head and designated staff who assist in the management of financial and relevant non-financial resources available to the school. These are aimed at maximizing the benefits that may be derived from the utilization of these resources and minimizing the attendant negative costs or effects of such activities.

School-Based Financial Management …excerpts from the FMOM Documentary requirements for salaries, petty operating expenses, other personnel services, and maintenance and other operating expenses depending on the nature of expenses incurred : Cash Disbursements Register Approved purchase request with certificate of Emergency Purchase, if necessary Bills, official receipts, sales invoices, Reimbursement Expense Receipt (RER) Approved trip ticket, for gasoline expenses Toll Receipts Trip tickets Canvass from at least three suppliers for all purchases, Summary/Abstract of Canvass Certificate of inspection and acceptance Report of Waste Materials in case of replacement or repair The sources for the chapter on SBFM include the following documents: Handbook on School Based Management (SBM) Simplified Accounting Procedures DepEd Order No., 44, s. 2015 – Enhanced process on SIP and SRC Handbook on Property & Supply Management Page 132 of the FMOM FMOM MAJOR CONTENTS

Disbursement procedures and recording Financial reports PROVIDENT FUND Contents in the FMOM Legal basis Beneficiaries Governance Guidelines Compensation of Staff Operating expenses Disbursement procedures and recording Financial reports Illustrative entries The Provident Fund of DepEd has been established under Administrative Order No. 279, s. 1992. It started operation in January 1995 through receipt of seed money in the amount of Seventy five million pesos (P 75 million) representing Collection of Service fee from GOCCs and PLIs deposited to BTr. Page 120 of the FMOM FMOM MAJOR CONTENTS

Other unique features of the FMOM It is complete and updated and includes in its attachments a compilation of the following latest documents as references: Government Accounting Manual, 3 volumes, 2015 version DepEd Procurement Manual and RA 9184 DepEd Asset Management Manual Latest COA, DBM, DOF (BTr) issuances Latest DepEd Orders affecting FM concerns

Other unique features of the FMOM Simplified Accounting and Reporting for Non-IUs Latest DepEd Reorganization Plan and RA 9155 Unified Accounting Code Structure (UACS) Philippine Public Sector Accounting Standards (PPSAS) Laws on Budget, Accounting and Audit affecting DepEd FM

Who are the intended users of the FMOM? Finance Officers Accountants Other FM staff and personnel Heads of DepEd offices School heads Other interested parties

What other use would the FMOM serve ? As basis for future automation of the FM processes in DepEd, i.e. the DepEd FMIS As basis to support the national GFMIS if and when this is pursued by government As a reference material for the orientation and/or training of new school heads and new officers and employees, particularly financial staff, of DepEd

Pre-Roll-out Activities DATE ACTIVITY 10-12 May 2017 Preparation of the Training Module c/o FMOM TWG 06 June 2017 Completion of the Training Module c/o FMOM TWG Accounting 09 June 2017 - onwards Downloading of funds c/o Budget Division - CO 13-16 June 2017 Final review of the Training Module c/o FMOM TWG 19-20 June 2017 Finalization of the Training Module c/o FMOM TWG Accounting

Pre-Roll-out Activities DATE ACTIVITY 22 June 2017 Approval of Module by Usec Victoria M. Catibog 23 June 2017 Distribution of FMOM Module to Regions July – Sept 2017 Roll-out of FMOM to Non-IUs

Thank You!