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SEMINAR ON PROPERTY AND SUPPLY MANAGEMENT SYSTEM June 26-29, 2012 Regional Training Center Commission on Audit Regional

XI, Davao City

The seminar started at 8 oclock in the morning. It begins from Registration of participants, Invocation, Pambansang Awit, and Opening Remarks given by Atty. Manolo C. Sy, Regional Director of Commission On Audit. After that, a leveling of expectation was heard. The speakers of the said seminar are: Ms. Myrna T. Sarabillo, Engr. Ariel A. Lagmay and Atty. Susan P. Donalvo. They are one of the topnotch resource persons in Commission On Audit, Regional Office XI. On the First day, Ms. Myrna T. Sarabillo, explained to us about Forecasting, Ordering and Annual Procurement Plan. Forecasting is an essential element in any inventory/supply management system. The key inventory decisions when and how much to order are done on the basis of estimated or future demand. Forecasting can be done by the following: Last period technique uses the demand for the last period as a forecast for the next period. Average technique all past demand data are summoned up and used as the forecast of the next forecast demand. Moving average as we advance each period, the latest demand figure is added to the running sums and the oldest demand subtracted. Experimental smoothing method estimate of demand for each future period is equal to the estimate of a permanent component of demand based on past data.

Ordering is one of the largest activities the government undertakes in the performance of its role as provider of multiple and wide ranging variety of services to the public and other agencies. The enormous fund outlay necessitates that it be systematized and simplified to assure that value of government money is obtained. Its objective is to maintain continuous supplies, materials and equipment needed in the governments normal operations and to support its various activities to achieve its goals. Procurement Planning and Preparation of Annual Procurement Plan (APP) is embodied in Section 7 of the Implementing Rules and Regulations of RA 9184, The Procurement Reform Act.
7.1. All procurement shall be within the approved budget of the procuring entity and should be meticulously and judiciously planned by the procuring entity. Consistent with government fiscal discipline measures, only those considered crucial to the efficient discharge of governmental functions shall be included in the Annual Procurement Plan (APP). For purposes of this IRR, a procurement project shall be considered crucial to the efficient discharge of governmental functions if it is required for the day-to-day operations or is in pursuit of the principal mandate of the procuring entity concerned. The APP shall include provisions for foreseeable emergencies based on historical records. In the case of infrastructure projects, the APP shall consider the appropriate timing/phasing of related project activities, such as, engineering design and acquisition of right of way, to reduce/lower project costs.

7.2.

No procurement shall be undertaken unless it is in accordance with the approved APP of the procuring entity. The APP shall bear the approval of the Head of the Procuring Entity or second-ranking official designated by the Head of the Procuring Entity to act on his behalf, and must be consistent with its duly approved yearly budget. The APP shall be formulated and revised only in accordance with the following guidelines: At the start of every budget period, the procuring entity shall prepare its proposed budget for the succeeding calendar year, taking into consideration the budget framework for that year in order to reflect its priorities and objectives for the budget period.(n) The end-user units of the procuring entity shall prepare their respective Project Procurement Management Plan (PPMP) for their different programs, activities, and projects (PAPs). The PPMP shall include: a. b. c. d. e. f. information on whether PAPs will be contracted out, implemented by administration in 1 accordance with the guidelines issued by the GPPB, or consigned; the type and objective of contract to be employed; the extent/size of contract scopes/packages; the procurement methods to be adopted, and indicating if the procurement tasks are to be outsourced as provided in Section Error! Reference source not found. of this IRR; the time schedule for each procurement activity and for the contract implementation; and the estimated budget for the general components of the contract.

7.3.

7.3.1.

7.3.2.

For purposes of this Section, consignment refers to an arrangement where the following requisites are present: (a) delivery of goods by their owner (consignor), without sale, to a government agency (consignee); (b) consignee must try to sell the goods and remit the price of the sold goods to the consignor; (c) consignee accepts without any liability except for failure to reasonably protect them from damage; (d) no disbursement of government funds is involved; and (e) at terms not disadvantageous to the GOP. 7.3.3. The PPMP shall then be submitted to the procuring entitys Budget Office. The procuring entitys Budget Office shall evaluate each end-users submitted PPMP and, if warranted, include it in the procuring entitys budget proposal for approval by the Head of the Procuring Entity. After the budget proposal has been approved by the Head of the Procuring Entity and/or other oversight bodies, the procuring entitys budget office shall furnish a copy of the procuring entitys budget proposal as well as the corresponding PPMPs to the BAC Secretariat for its review and consolidation into the proposed APP. The proposed APP shall be consistent with the procuring entitys budget proposal. As soon as the GAA, corporate budget, or appropriation ordinance, as the case may be, becomes final, the end-user units shall revise and adjust the PPMP to reflect the budgetary allocation for their respective PAPs. The revised PPMPs shall be submitted to the BAC, through its Secretariat, for the finalization of the modes of procurement under the proposed APP. The APP shall then be approved in accordance with Section 7.2 of this IRR.

7.3.4.

7.3.5.

7.4.

Updating of the individual PPMPs and the consolidated APP for each procuring entity shall be undertaken every six (6) months or as often as may be required by the Head of the Procuring Entity. The updating of

7.5.

the PPMPs shall be the responsibility of the respective end-user units of the Procuring Entities, while the consolidation of these PPMPs into an APP shall be lodged with the BAC Secretariat, subject to approval of the Head of the Procuring Entity. The ABC as reflected in the APP or PPMP shall be at all times consistent with the appropriations for the project authorized in the GAA, continuing, and automatic appropriations, the corporate budget, and the appropriation ordinance, as the case may be. For NGAs, to facilitate the immediate implementation of projects even pending approval of the GAA, the ABC shall be based on the budget levels under the proposed national budget submitted by the President to Congress. Also, Ms Sarabillo added that the general policies of procurement should be followed, She enumerated: 1. 2. 3. 4. 5. Compliance with Laws, Rules and Existing Policies; Prohibition against Splitting of Requisitions, Purchase/Letter Orders and Payment; Need for Certificate of Availability of Funds for the purchase; Protection of Locally Manufactured/Produced Articles over foreign-Made Products; Prohibition against Irregular, Unnecessary, Excessive, Extravagant and Unconscionable Expenditures or Uses of Funds and Property.

Annual Procurement Plan of the coming fiscal year shall be submitted to Department and Budget and Management (DBM) every November 15 of the prior year.

On the First and Second day, Engr. Ariel A. Lagmay tackled to us, RA 9184 also known as AN ACT PROVIDING FOR THE MODERNIZATION, STANDARIZATION AND REGULATION OF THE PROCUREMENT ACTIVITIES OF THE GOVERNMENT AND FOR OTHER PURPOSES. Procurement as defined by RA 9184, refers to the acquisition of Goods, Consulting Services, and the contracting for Infrastructure Projects by the Procuring Entity. Procurement shall also include the lease of goods and real estate. According to Engr. Lagmay Government procurement is governed by these principles: a. Transparency in procurement process and in the implementation of procurement contracts through wide dissemination of bid opportunities and participation of pertinent non-government organizations. b. Competitiveness by extending equal opportunity to enable private contracting parties who are eligible and qualified to participate in public bidding. c. Streamlined procurement process that will uniformly apply to all government procurement. d. System of accountability where the public officials directly or indirectly involved in the procurement process as well as ion the procurement contracts and the private parties that deal with the Government of the Philippines (GOP) are, when warranted by circumstances, investigated and held liable for their actions relative thereto. e. Public monitoring of the procurement process and the implementation of awarded contracts are awarded with the end in view of guaranteeing that these contracts are awarded pursuant to the provisions of the Act and the IRR, and that all these contracts are performed strictly according to specifications. He further added, that generally procurement should be done in Public Bidding but an alternative mode of procurement can be avail subject to the prior approval of the Head of the Procuring Entity or his duly authorized representative, and whenever justified by the conditions provided in this

Act, the Procuring Entity may, in order to promote economy and efficiency, resort to any of the following alternative methods of Procurement: a. Limited Source Bidding, otherwise known as Selective Bidding - a method of Procurement that involves direct invitation to bid by the Procuring Entity from a set of pre-selected suppliers or consultants with known experience and proven capability relative to the requirements of a particular contract; b. Direct Contracting, otherwise known as Single Source Procurement - a method of Procurement that does not require elaborate Bidding Documents because the supplier is simply asked to submit a price quotation or a pro-forma voice together with the conditions of sale, which offer may be accepted immediately or after some negotiations; c. Repeat Order. - a method of Procurement that involves a direct Procurement of Goods from the previous winning bidder, whenever there is a need to replenish Goods procured under a contract previously awarded through Competitive Bidding; d. Shopping - a method of Procurement whereby the Procuring Entity simply requests for the submission of price quotations for readily available off-the-shelf Goods or ordinary/regular equipment to be procured directly from suppliers of known qualification; or e. Negotiated Procurement - a method of Procurement that may be resorted under the extraordinary circumstances provided for in Section 53 of this Act and other instances that shall be specified in the IRR, whereby the Procuring Entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant. In all instances, the Procuring Entity shall ensure that the most advantageous price for the government is obtained. On the afternoon of second day, Atty. Susan P. Donalvo speaks to us on Custodianship and Accountability, She defines the following: Property Custodianship refers to the guardianship of government property by the person accountable. This includes the receipt of supplies, materials and equipments, the safekeeping, issuance, repair and maintenance. Likewise, it includes the accountability, responsibility and Liability of accountable or responsible officers arising from loss, misuse, damage or deterioration of government property due to fault or negligence in the safe keeping. It may be physical/actual or constructive. Accountability as a persons obligations to carry out responsibilities and be answerable for decisions and activities. Every public officer, whose duties permits or requires the possession or custody of public funds and property, is accountable and responsible for the safekeeping thereof. He is liable for all losses, resulting from the unlawful deposit, use, or application thereof and attributable to negligence in the keeping of the same. Other officers though not accountable may likewise be similarly held accountable and responsible through their participation in the use of application thereof.

Responsibility is the acceptance of assigned authority and the obligation prudently to exercise assigned or imputed authority attaching to the assigned or imputed role of an individual or group participating in organizational activities or decisions. Liability refers to the OBLIGATION that arises as a consequence of an illegal or improper act or the nonperformance of what one is mandated to do. Such obligation generally comes in the nature of penalty but it could be in the form of a fine, administrative punishment, imprisonment, or a combination of these. Atty. Donalvo pointed out that Under Treasury Circular No. 02-2009, immediately after appointment/designation of the accountable public officer to a bonded or bondable position he/she shall notify the Bureau of Treasury, by accomplishing General Form No. 57(A) which requests for application, increase, reduce, renew, cancel or transfer of a bond which shall be duly signed by the head of the agency. On the third day, Ms. Myrna Sarabillo discussed to us the Issuance of Property from storage/warehouse and its Utilization. Issuance is the act of transferring the custodianship of a property from one person to another. Utilization, on the other hand, is the process of promoting greater services and economy in the use of supplies, materials and equipment of the government through efficient and honest procurement, systematic and coordinated transfer of control and recording; proper care, maintenance and repair and appropriate And timely disposal. Due care shall be exercised in the use of equipment, otherwise, they will deteriorate rapidly. They will accumulate dust, become rusty and parts will rapidly tear out unless properly oiled and covered when not in actual use. Every officer accountable for government property: 1. Shall be liable for its money value in case of improper or unauthorized use or misapplication thereof, by himself or any person for whose acts he may be responsible. 2. Liable for all losses, damages or deterioration occasioned by negligence in the keeping or use of the property, whether or not it be, at the time of such loss, damage, or deterioration, in his actual custody. On the afternoon of the third day and in the morning of fourth day, Disposal of government property was clearly discussed by Engr. Ariel A. Lagmay. Disposal was defined as the end of life cycle of a government property. Property/assets subject to disposal are the following: 1. 2. 3. 4. 5. Unserviceable property Confiscated/Seized property Property under Distraint/Levy/Garnishment Unclaimed Motor Vehicles Real Property

6. Valueless Records/Documents The modes of disposal of the above property/assets are as follows: 1. 2. 3. 4. 5. Condemnation/Destruction Transfer of property Barter Donation of property Sale of unserviceable property

Lastly, Ms. Sarabillo embarked to us about Internal Control over Property and Supply Management System, on the fourth day. Control in general is the process of exercising or directing influence over the activities of an object, organism or a system. The goal of control is to prevent losses to the organization arising from the different hazards in government business operations. There are three Basic Types of Control, these are: 1. Preventive Controls are designed to prevent the adverse actions or risk from occurring. 2. Detective Controls are designed to detect an error or adverse event after it occurs but within a reasonable time to permit correction and through awareness of the problem, help prevents other error from occurring. 3. Corrective Controls are designed to identify a problem and bring it to managements attention for resolution and correction. The term internal controls, on the other hand, refer to an organizations whole system or network of methods, procedures, and plans which govern its activities to accomplish its goals and objectives. Such system is generally known as the Internal Control System. The objectives of Internal Controls are as follows: 1. 2. 3. 4. To safeguard the reliability of data. To safeguard assets and records. To promote operational efficiency. Top encourage adherence to prescribed policies.

The seminar ended up on the fourth day at 5:00 in the afternoon.

Prepared by:

ERIC T. VALIENTE Administrative Assistant II

Noted by:

ANGELINA A. TALINGTING IMSD Chief