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REVENUE MEMORANDUM CIRCULAR NO. 40-2021 issued on March 25, 2021 publishes the full text of COA-DBM Joint Circular No. 1, s.2021 titled, “Guidelines Implementing Executive Order (E.O.) No. 87Directing that All Accounts Payable whichRemain Outstanding for TwoYears orMore in the Books of National Government Agencies be Reverted to the AccumulatedSurplus or Deficit of the General Fund of the ational Government”
       The Circular covers all Accounts Payable (A/Ps) of National Government Agencies(NGAs) and Government Owned/or Controled Corporations (GOCCs) maintaining Special Account in the General Fund (SAGF). It shall apply to all funds of NGAs except for: (1) Trust or Fiduciary Funds for as long as thepurposes for its creation have not beena ccomplished; and (2)A/Ps corresponding to ForeignAssisted Projects (FAPs) for the duration of the said project.
       In line with Section 1 of E.O. No. 87, NGAs/GOCCs shall revert all A/Ps for FY 2017 and prior years thereto in the Accumulated Surplus/(Deficit) on or before the end of 2021. The following shall apply to FAPs-A/Ps:
         a. Those which have remained outstanding for two (2) years after the completion date ofthe project per loan/grant documents shall be reverted to the Accumulated Surplus/(Deficit); and
         b. Those falling under direct payment scheme of loan availment shall not be reverted to the Accumulated Surplus/(Deficit) and, instead, be reviewed by agencies concerned for purposes of requesting the issuance of  NonCash Availment Authority from the DBM pursuant to the provisions of DBM-COA-DOF Joint Circular No. 2-97.

        All A/Ps that were reverted to the Accumulated Surplus/(Deficit) and which have been validated by competent authorities or by final and executory decisions to be legitimate claims shall be charged against the following:
             a. Contingent Fund for the payment of validated claims and determined by DBM as urgent;
             b. The specific budget of the agency concerned under succeeding year’s annual General
Appropriations Act (GAA).
         Said A/Ps that were reverted to the Accumulated Surplus/(Deficit) and validated to be legitimate claims shall in no way be construed as authority to revive or validate claims and accounts payable that are already barred by prescription or disallowed by final judicial or administrative determination.
       A Special Allotment Release Order (SARO) shall be issued for reverted and legitimate claims for which the actual transactions, i.e., delivery of goods and services, have already been completed. The SARO to be issued shall have the following conditions:
             a. It shall be effective only during the year it is issued;
             b. It shall be treated as a “specific transaction release document” which cannot be reissued. Thus, if for any reason the SARO for the reverted claim was not obligated during
the year it was released, there can be no re-issuance of a SARO for the same purpose;
          c. It cannot be modified for whatever other purpose.
           All government entities concerned shall prepare an inventory of A/Ps incurred in FY 2017 and years prior thereto as of December 31, 2020. It shall reflect the name of creditor, Obligation Request and Status (ORS) Number, allotment class, funding source, year of incurrence and obligations, etc., and shall be submitted to DBM and COA not later than June 30, 2021. Such inventory shall serve as one of the bases for reversion of the A/P and for the purpose of payment after reversion, subject to agency validation procedures