Monthly Archives: March 2012

Suppression: More Dangerous Than Oppression

Oppression is the act of subjugating by cruelty or force. Suppression is the act of withholding, restraining or preventing further action. In both cases, one thing is sure – there are superior and inferior beings.

In oppressing individuals, the inferior class may simply accept their fate and hold their hands up in the air for any blow the oppressor may give them. Nobody is fighting back. In most cases, people simply die of surrendering their rights.

In suppression, no heavy “batting” occurs and the aggrieved party doesn’t seem to be aggrieved at all. That is because they were given rights and privileges. Unfortunately in the reign of suppression, all that people are free to do are non-conformable, unacceptable, and in short, taboo. And because these people knew what they have to do, they will not die in ignorance and frustrations. Suppression gives them more power to go on. And that made them more dangerous.

Dead men tell no tales. Those were the oppressed. But suppressed people are living in a legacy. They write, they speak, and they touch people’s lives. They are like “water” that cannot be contained in one’s hand for so long without spilling. They are like the earth’s crust waiting for tectonic and volcanic actions.

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Posted by on March 21, 2012 in Personal


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Building a Cathedral on Ridge

It’s been a few days off my blog and the paper works are piling up. But before going BACk to my assign tasks, I have tried to reflect on he past Team Building Seminar Workshop at DAP, Tagaytay City last March 13-15, 2012.

The familiar Mr. Ping Sotto was in the house. It reminded me of the April 24-25, 2008 LEADING CHANGE seminar held at Pilipinas Shell Training Center, Pililia, Rizal. The concepts will “shake your world”. But to me, the learning just reminded me of things I have been through. This year’s slide presentation was titled LEADING CHANGE 2. It was to no surprise much of the topics were already “self explanatory” and the exercises are “alternate realities”.

One important topic that was left was the phrase “building a cathedral”. On the slide, there were three kinds of persons doing the same thing. All of them were asked on what are they doing. The first one answered “I am laying bricks”. The second one answered “I am building a wall”. The third one answered “I am building a cathedral”. It was not elaborated further in the seminar but I made a more extensive study on the three scenarios. Based on their answers, I came up to my own conclusion:

The first one appeared to be the a person who does things only when ordered. He does not have the initiative nor a complete idea of what he is doing. He is just comfortable doing things and relied mostly in the “present” than in any other timeline. He also has a little understanding of the work.

The second one is the person who knows what he is doing but not quite sure where it will lead him to. He has the understanding of the immediate future and it is all unclear to him. He has the initiative but only focused on the area he can see and handle. He knows his work but has less concern of the end product.

The third one is the person we are expected to be. One who knows his work and understands its purpose. He does not simply look on the materials and its building parts, but also realized that it was not the brick nor the wall but the cathedral he is building. He is imaginative and creative. He is motivated. He knows that when his job is done, It will be for the greater purpose for mankind.

Unfortunately for most of the participants, this is just another time for story telling. Many are very much concerned of their individuality. Should only all the members of the team thought the same way as the third person, they can work together more effectively and efficiently, as they all know what are they building. But granted we are all like the third person above, can we serve our best purpose if we are building a cathedral in a ridge?

Look at this way. Building the structure in a solid foundation is wise, but building it on a ridge like building it on sand, not quite intellectual. Given the experts have thought of it and designed it properly, it will still take much of the precious resources building it. Advantages versus disadvantages must be well considered. In a ridge, the view may be magnificent. The serenity and solemnity of the location is well fitted for a cathedral. But how about the persons who will go into it after it is constructed? Why would people need to perish in attending the worship or mass, just because the persons who chose the location wanted it as an exhibit of expertise and professional knowledge.

In the end, we may all fulfill our individual missions in life and build that cathedral. But to choose where to build it may be more important than how to build it. The manner this write up was constructed is in the same manner my message is with this article. Some questions are considered to be the best answers, while some of the best answers are still questions. Did you get it? I hope we are building ours in the right place.

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Posted by on March 18, 2012 in Personal


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Case Study: Obligation Request (Part 5)

[This will be the last one for this series.]

Going back to the issue when to accomplish the ObR, after following thoroughly the reason behind its purpose thru logical thinking and common sense, the author is of the opinion and position that the Obligation Request is only but proper to be issued after the determination of obligee (i.e. the awarded supplier/ contractor/ consultant) and that the amount to be reflected is consistent with the awarded amount. (Note 2012-07-18: a more exacting term is when Notice of Award was already issued)

With this statement, the author is appealing to the following agencies to give a clear-cut answer in the form of Joint Memorandum Circular or severally as appropriate, if deemed necessary:

Commission on Audit (COA);

Department of Budget and Management (DBM);

Government Procurement Policy Board (GPPB);

Department of Interior and Local Government (DILG)

The author believes that this issue is of national importance and significance, considering the number of LGUs in as far as government procurement is concerned. What are the risks of leaving this issue unresolved? Issuance of ObR prior to procurement:

  1. involves the practice of certifying blindly to the obligee as to payee and amount;
  2. is dangerous as disbursement is assured even in the absence of a procurement process;
  3. is problematic in the case of starting a procurement process whose funding shall come from next years’ annual budget
  4. ensures payment on ‘midnight deals’ (those to be procured at the verge of closing the book of accounts every year end) thus, catering the non-compliance to judicious and meticulous planning of procurement as stated under Sec.7 of RA 9184.

On the other hand, the practice of issuing an ObR after award has been approved:

  1. completely satisfies the form in letter and substance as there is a payee (as a result of the award) and the amount does not need any adjustment as to obligation;
  2. ensures that a procurement process was conducted as evidenced by the presence of bidding documents, abstracts, reports, and approval of award (check and balance);
  3. does not pose a problem on disbursements whose procurement process may be completed within the current year but funding is to be taken from following year’s annual budget;
  4. safeguards payment on ‘midnight deals’ (those to be procured at the verge of closing the book of accounts every year end) and promotes strict adherence to procurement planning as stated under Sec.7 of RA 9184.

For the purpose of efficiency, transparency, and accountability, the manner and timing of ObR’s issuance and guidelines of use is now wanting to be resolved. 


Posted by on March 12, 2012 in Government Procurement


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Case Study: Obligation Request (Part 4)

So what does the forms ROA, ALOBS, OS, ObR, PR, DV, etc have in common? They were all issued by COA. For LGUs the forms being used were from COA’s issuances. Why? If we look back to the repealed Section 383 of RA 7160:

Section 383. Implementing Rules and Regulations. – The Chairman of the Commission on Audit shall promulgate the rules and regulations necessary to effectively implement the provisions of this Title, including requirements as to testing, inspection, and standardization of supply and property.

To ensure that Title 6 Book 2 work seamlessly in accordance to accounting and auditing guidelines, COA was tasked to issue standard forms. The power of COA emanates from Section 2 (2), Article IX-D of the 1987 Philippine Constitution:

(2) The Commission shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds and properties.

It is now at this point to understand that there is a need to update not only the process, but also the forms.  The PR form for example was created from a ’reactive’ nature of transaction. Under RA 9184, this should have already been replaced by a ‘proactive’ Project Procurement Management Plan (PPMP) and Annual Procurement Plan (APP).  But since COA still stand as an independent constitutional agency, procurement practitioners are only bound to comply even if there seemed to be duplication of forms. Another example is the Purchase Order (PO) form. Under RA 9184

Section 17, Bidding Documents shall be prepared by the Procuring Entity following the standard forms and manuals prescribed by the GPPB x x x

That includes Form of Contract (Contract Agreement Form). Yet even in the procurement thru public bidding, some COA Auditors still require a PO form even if there are Contract Agreement (prescribed by GPPB) present.

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Posted by on March 11, 2012 in Government Procurement


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Case Study: Obligation Request (Part 3)

By the time the Obligation Request (ObR) was “baptized” by COA Circular 2006-002 the following year, the requesting party now have to certify that “supporting documents are valid, proper and legal” in addition to the preceding (OS) certification that “charges to appropriation/allotment necessary, lawful and under my direct supervision”. The rationale:

In line with NGAS implementation, this circular delineates the responsibilities of the Heads of the Requesting Office/Unit, the Budget Unit and the Accounting Unit as well as the Treasurer in Local Government Units. It also prescribes the revised forms to be used in recording obligations incurred and disbursements

Clearly, there were already changes in policy the same time ObR was introduced. The responsibilities of the Heads of the Requesting Unit, the Budget Unit, the Accounting Unit and the Treasurer are hereby set forth (with the same COA Circular 2006-002, for LGUs) as follows:

  1. The Head of the Requesting Unit shall prepare the Obligation Request (ObR) and the Disbursement Voucher (DV) and certify on the necessity and legality of charges to appropriation and allotment under his direct supervision. He shall also certify to the validity, propriety and legality of supporting documents;
  2. The Head of the Budget Unit shall certify the existence of available appropriation, take charge of budgetary activities as provided under Section 344 and Section 475, respectively, of R.A. 7160, the Local Government Code, and shall maintain the Registries of Appropriations, Allotments and Obligations as prescribed under the Manual on the New Government Accounting System for Local Government Units;
  3. The Head of the Accounting Unit shall certify the obligation of allotment and completeness of supporting documents in the DV;
  4. The Treasurer shall certify the availability of funds in the DV as provided in the Local Government Code;
  5. The Treasurer shall prepare the Daily Cash Position Report to be submitted to the Local Chief Executive.

What are those supporting documents? If it was only the PR, then it should be identified clearly as it or at least the rationale reflects singularity (document vs. documents). It could only mean that there are two or more. It could not be a PR alone.

What would be those “budgetary activities” stated in No.2 above “as provided under Sec.344 and Sec.475 of RA 7160”? As we may recall, it refers to certification prior to disbursement of funds. Reading thru the statutory intent of that section, the ObR now used covers the purpose of Section 344 of RA 7160. Section 475 on the other hand only elaborates the title, qualification, roles and function of the Budget Officer. Hence, there is no need to have the three (3) signatures originally required by Section 344 in one certification alone. The Disbursement Voucher (DV) now caters the signature of the Chief Accountant and the Treasurer.

What happens now to Section 360 of RA 7160 where a certification prior to requisition was mandatory? The answer is a more recent law – RA 9184.

Section 76. Repealing Clause. x x x This law amends Title Six, Book Two of Republic Act No. 7160, otherwise known as the “Local Government Code of 1991” x x x

What is Title Six Book 2 of RA 7160? It was titled “Property and Supply Management in Local Government Units”. It covered Section 355 up to Section 383, where Section 360 is included. It will now be clearer that the argument of requisition accompanied by a certification, at least prior to procurement, is already obsolete. Even if the ObR nowadays served the same purpose of ALOBS (or even ROA) in NGAS, the procedure do not hold true today due the repealing clause of RA 9184.

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Posted by on March 10, 2012 in Government Procurement


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Case Study: Obligation Request (Part 2)

Later, the ROA evolved rapidly into many names and forms. It became Allotment and Obligation Slip (ALOBS) in the advent of NGAS Manual thru COA Circular 2002-003 dated 20 June 2002. On 28 February 2005, COA issued Circular No.2005-001 introducing Obligation Slip (OS) to replace ALOBS. This form was again immediately replaced by the Obligation Request (ObR) that we currently use to date by virtue of COA Circular 2006-002 dated 21 January 2006.

A clear stipulation that obligation is required for every requisition may be found at NGAS Manual Volume I Chapter 7 Section 116 (d) to wit:

Certification on Allotment and Obligation Slip (ALOBS) – Every PR must be accompanied by an ALOBS showing the certification of the local budget officer and the local accountant, that an appropriation therefore exists; and that the estimated amount of such expenditure has been obligated. The Local Treasurer shall certify as to cash availability in the purchase request.

This appears to be in agreement with Sec.360 of RA 7160 and it follows that before any procurement is undertaken, an obligation is a must, and the amount to reflect is the estimated amount of expenditure. This was made in reference to ALOBS. This means, by the time this was issued, the consideration was the requesting official, the budget officer, and accountant were signatories. When the ALOBS was replaced by COA’s issuance of OS form, the column for “Allotment Class” was removed. The Chief Accountant’s signature box was removed. The Budget Officer’s certification as to ‘existence of available appropriations’ was replaced by ‘certification that appropriation/allotment was available and obligated for the purpose as indicated’. The reason behind is the rationale of COA Circular 2005-001:

This circular defines the roles and functions of the Heads of Budget or its equivalent in the certification as to the availability of funds and obligations on contracts/purchase orders and all claims against the government agencies. For purposes of this circular, “funds” is construed to mean appropriations/allotments/budget.

Please take note that when the COA issued this circular, R.A. 9184 was already in effect two (2) years after if was enacted. Not only form was modified but also the functions of the Budget Officer. Before, the ALOBS contained the signature of the Chief Accountant as to ‘obligation of allotment’. In the OS, the Budget Officer (or its equivalent) was then certifying as to the obligation (accomplished by Chief Accountant in the ALOBS) in addition to existence of appropriation. In short, the Chief Accountant was removed from the ALOBS because the “obligation for allotment” was now tasked to the Budget Officer. It was also worthy to note that the amount in the OS was now defined as “amount of obligation/adjustment” (from the original definition of amount was “estimated amount of expenditure” in the ALOBS). The idea of adjustment in case of discrepancy was now emerging as an issue.

Still under the NGAS, the Head of the Budget Unit or its equivalent shall also maintain the registries of funds/ appropriations/ allotments and obligations/utilization and shall certify on their availability while the Head of Accounting Unit shall keep the records and certify on the availability of cash. The Circular in effect also introduced OS and DV as applicable forms for LGUs. The certification of the Chief Accountant should still be there, somewhere.

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Posted by on March 9, 2012 in Government Procurement


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Case Study: Obligation Request (Part 1)

Since the dawn of New Government Accounting System (NGAS) and the emergence of Obligation Request (ObR), there has been a divided interpretation on its use particularly when to issue the said form. Some say it must be issued together with the Purchase Request (PR) before any procurement takes place. Others argue that it is only proper to issue ObR after award has been made. There is only one thing in common and the author believed both ‘sides of the coin’ will have to agree – that an ObR is required prior to accomplishing a Disbursement Voucher (DV).

To understand the nature and purpose of the Obligation Request we have to go back to the roots of government accounting and auditing rules as well as the applicable laws under the Local Government Code (RA 7160). Let us define first some important terms under Section 306 of RA 7160:

(b)”Appropriation” refers to an authorization made by ordinance, directing the payment of goods and services from local government funds under specified conditions or for specific purposes;

(j)”Obligations” refers to an amount committed to be paid by the local government unit for any lawful act made by an accountable officer for and in behalf of the local unit concerned;

The above definitions are important to better understand this discussion, especially in the purview of Local Government units. Now looking on Section 344 of RA 7160:

Section 344. Certification, and Approval of, Vouchers. – No money shall be disbursed unless the local budget officer certifies to the existence of appropriation that has been legally made for the purpose, the local accountant has obligated said appropriation, and the local treasurer certifies to the availability of funds for the purpose. Vouchers and payrolls shall be certified to and approved by the head of the department or office who has administrative control of the fund concerned, as to validity, propriety, and legality of the claim involved. x x x

Being self-explanatory, it appears that there shall at least be three persons issuing a certification prior to any disbursement- the Budget Officer, the Accountant, and the Treasurer. To comply with this, the a Joint Circular was issued by Department of Budget and Management and Commission on Audit in the form of Request for Obligation of Allotment (ROA) immediately after the effectivity of the Local Government Code.  ROA was also made in compliance of Section 360 of RA 7160.

Section 360. Certification by the Local Budget Officer, Accountant, and Treasurer. – Every requisition must be accompanied by a certificate signed by the local budget officer, the local accountant, and the local treasurer showing that an appropriation therefor exists, the estimated amount of such expenditure has been obligated, and the funds are available for the purpose, respectively.

Later, the ROA evolved rapidly into many names and forms. It became Allotment and Obligation Slip (ALOBS) in the advent of NGAS Manual thru COA Circular 2002-003 dated 20 June 2002. On 28 February 2005, COA issued Circular No.2005-001 introducing Obligation Slip (OS) to replace ALOBS. This form was again immediately replaced by the Obligation Request (ObR) that we currently use to date by virtue of COA Circular 2006-002 dated 21 January 2006.

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Posted by on March 8, 2012 in Government Procurement


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