Republic of the Philippines
Province of South Cotabato
City of Koronadal
CITY LEGAL OFFICE
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Legal Opinion No.____________
March 1, 2013
MR. MARLOUN C. GUMBAO, CPA
BAC Chairman
This LGU
Sir:
Respectfully returned to the BAC Chairman, his within request for opinion on whether or not SHEMARIE Construction, Inc. may collect the 50% progress payment for the Project- Tricycle Painting and Renumbering.
While RA 9184, otherwise known as the Government Procurement Reform Act, provides for the rules and regulations governing the procurement activities of the government, its agencies and the local government units, a contract which is very vital in the procurement activities entered into by the procuring entity and the winning bidder or supplier may not be limited to the provisions of RA 9184 but may be enforced according to what has been agreed by both parties. A contract was made for the purpose of enforcing the obligation based on what is considered to be convenient and favourable to them. The purpose of a contract is to establish the agreement that the parties have made and to fix their rights and duties in accordance with that agreement. As long as it is not contrary to law, morals, customs and public policy, the contract shall be valid.
Art. 1159 of the Civil Code of the Philippines provides, to wit:
“Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. (1091a)”
Statutes prescribe and restrict the terms of a contract where the general public is affected. The courts may not create a contract for the parties. When the parties have no express or implied agreement on the essential terms of a contract, there is no contract. Courts are only empowered to enforce contracts, not to write them, for the parties. A contract, in order to be enforceable, must be valid. The function of the court is to enforce agreements only if they exist and not to create them through the imposition of such terms as the court considers reasonable.
It is the policy of the law to encourage the formation of contracts between competent parties for lawful objectives. As a general rule, contracts by competent persons, equitably made, are valid and enforceable. Parties to a contract are bound by the terms to which they have agreed, usually even if the contract appears to be improvident or a bad bargain, as long as it did not result from Fraud, duress, or Undue Influence.
The binding force of a contract is based on the fact that it evinces a meeting of minds of two parties in Good Faith. A contract, once formed, does not contemplate a right of a party to reject it. Contracts that were mutually entered into between parties with the capacity to contract are binding obligations and may not be set aside due to the caprice of one party or the other unless a statute provides to the contrary.
RA 9184 does not expressly provide for Progress Payments for Goods but neither does the law prohibit the same. The rule on statutory construction tells us that if the law does not prohibit, it may be allowed provided that it is not against the law, morals, good customs, public order and public policy.
In an express contract, the parties state the terms, either orally or in writing, at the time of its formation. There is a definite written or oral offer that is accepted by the offeree (i.e., the person to whom the offer is made) in a manner that explicitly demonstrates consent to its terms.
It is important to stress that even the Manual of Procedures for the Procurement of Goods and Services for Local Government Units allows the partial payment contemplated in the contract. It provides, to wit:
x x x
“7. Payment
7.1. Method of Payment for Contracts for the Procurement of Goods
The method and conditions of payment must be specified in the contract. However, the following guidelines may be considered by the LGU in preparing the contract provisions regarding payment:
1.xxxxxxxx xxxxxxxx xxxxxxx
Page 93 on the Manual of Procedures for the Procurement of Goods and Services for Local Government Units
2. Partial payment of the contract price will only be allowed if the contract provides/allows for partial or staggered delivery of goods procured, and such partial payment must correspond to the value of the goods delivered and accepted;
3. Payment must only be made after the appropriate inspection and acceptance procedures, as mandated by existing government rules and regulations, have been complied with by the LGU; and
4. Payment must be made in accordance with prevailing accounting and auditing rules and regulations.”
x x x
Based on the foregoing, while RA 9184 is silent on progress payment for goods, it does not necessarily follow that progress payment for goods is prohibited. Progress payments here may also be equated as partial payment because the intention of the transaction is just the same. The Manual of Procedures for the Procurement of Goods and Services for Local Government Units specifically provides that partial payment of the contract price is allowed if the contract provides/allows for partial or staggered delivery of goods procured, and such partial payment must correspond to the value of the goods delivered and accepted. Said manual was formulated by the GPPB within its power and authority granted under RA 9184, hence, the same must carry weight in the construction of the provisions of the law.
In sum, the undersigned is of the opinion that progress payments for goods may be allowed. A contract involving tricycle painting and renumbering is done by each unit. The painting of one (1) unit of a tricycle is dependent on the availability of the unit, without which the job required cannot be performed. Thus, the 100% completion for tricycle painting is not that certain to happen. If partial payment will not be allowed, chances are that the supplier will be fully paid on a date no one knows when. Certainly, this not what the law contemplates.
Premises considered, your query is answered in the affirmative.
Yours truly,
ATTY. EUFEMIO A. SIMTIM, JR.
City Legal Officer
-and-
ALEXANDER A. ALCAZAR
Legal Asst. II
Who is Atty. Jayr?
- atty. jay_ar
- Atty. Eufemio A. Simtim, Jr. or Atty. Jayr is a licensed lawyer in the Philippines. He is a Partner at Simtim Gunay Viejo Sales Sobrejuanite Law Group, but he does only virtual consultations as he is presently out of the country. He has been in the litigation practice in most part of his legal career and has worked in the academe, in the government and in the corporate world. He also passed the PRC licensure exams for Real Estate Broker and for Real Estate Appraiser (Rank No. 5). He presently runs his Youtube Channel, @yourlawyer, providing free legal information and updates.
Tuesday, March 5, 2013
Saturday, April 21, 2012
LEGAL OPINION RE DISBURSEMENT OF BURIAL ASSISTANCE THRU CASH ADVANCE
Republic of the Philippines
Province of South Cotabato
City of Koronadal
OFFICE OF THE CITY LEGAL OFFICER
Telephone No. (083) 228-1742
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LEGAL OPINION NO. _________
DATE : 13 March 2012
TO : HON. PETER B. MIGUEL, MD, FPSO-HNS
City Mayor
MS. IMELDA A. TAMAYO, CPA
City Accountant
This City
RE : Disbursement Of Burial Assistance Through Cash Advance
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Kanami Koronadal!
This has reference to your query on whether or not burial assistance may be disbursed through cash advance. The undersigned is of the opinion that applicable laws, rules and regulations allow the same.
Pursuant to Section 339 of the Local Government Code of 1991, the Commission On Audit (COA) has prescribed rules and regulations pertaining to cash advances made by a local official or employee, through certain issuances, among which is the Commission on Audit Circular No. 97-002 dated 10 February 1997, reinstating and amending COA Circular No. 90-331 dated 3 May 1990, the pertinent portion of which is provided hereunder, to wit:
x x x
“2. GENERAL PRINCIPLES
Ideally, cash should be handled under the general principles of the imprest system, to wit:
1. Daily receipts on collections must be deposited intact with the proper bank.
2. All payments must be made by check.
3. Only payments in small amounts may be made through the petty cash fund. Replenishment of the petty cash fund shall be equal to the total amount of expenditures made there from.
In practice, however, there are certain instances when it may be very difficult, impractical or impossible to make payments by check. In such a case, payments may be made by the disbursing officer in the form of cash through his cash advance. (Emphasis supplied)
3. DEFINITIONS AND SCOPE
Cash Advance shall be of two types, namely, the regular cash advances, and the special cash advances.
3.1. Regular cash advances are those granted to cashiers, disbursing officers, paymasters, and/or property/supply officers for any of the following purposes:
3.1.1. Salaries and Wages
3.1.2. Commutable allowances
3.1.3. Honoraria and other similar payments to officials and employees
3.1.4. Petty operating expenses consisting of small payments for maintenance and operating expenses which cannot be paid conveniently by check or are required to be paid immediately.
3.2. Special cash advances are those granted on the explicit authority of the Head of the Agency only to duly designated disbursing officers or employees for other legally authorized purposes, as follows:
3.2.1. Current operating expenditures of the agency field office or of the activity of the agency undertaken in the field when it is impractical to pay the same by check, such as –
- Salaries, Wages and Allowances
- Maintenance and other operating expenses
3.2.2 Travel expenditures, including transportation fare, travel allowance, hotel room/lodging expenses and other expenses incurred by officials and employees in connection with official travel….
x x x
The same was stipulated in toto under COA Circular No. 368-91, Volume I, Chapter 2, Sections 172-173. The said circular, along with the other aforementioned COA Circulars, clearly allow the maintenance and other operating expense to be disbursed through cash advance. Also, the NGAS Manual for Local Government Units provides, thus:
x x x
Sec. 48. Payments out of the Petty Cash Fund. – Petty cash fund shall be maintained under the imprest system. The fund shall be sufficient for the non-recurring, emergency and petty expenses of the LGU for one month. Disbursements from the fund shall be through the Petty Cash Voucher (PCV) which shall be signed by the payee to acknowledge the amount received. The official receipt shall be attached to the PCV.
x x x
While the NGAS Manual for Local Government Units does not spell out the non-recurring, emergency and petty expenses covered thereby, reference can be made to the previous issuances of the COA.
The issue that needs to be resolved therefore is whether or not burial assistance can be considered as maintenance and other operating expense.
In a complex agency such as a Local Government Unit, particularly a City, burial expenses as assistance to its constituents, is a regular expense which falls within the scope of maintenance and operating expense under the Office of the City Mayor. The fact that it falls under the category of MOOE leaves no doubt as to its classification.
As a matter of fact, it has become regular as an expense considering that giving a dignified burial to its constituents is an inherent duty of the government under the general welfare clause and is undeniably part of the regular operations of the Office of the City Mayor. Therefore, burial expense is allowed by law and other applicable rules and regulations to be disbursed through cash advance.
The guidelines established by the COA are designed to prevent abuses and excesses in the disbursement of government money. They were not meant to suppress the need to expedite the delivery of the basic services to the populace, not to mention the underprivileged sector of our society. Laws and rules must be construed not by the letter that killeth, but by the spirit that giveth life.
The reason advanced for the innovation sought to be implemented, that is, to make the services readily accessible to the beneficiaries and to remove the undue and unnecessary burden to the recipients already in grief due to the loss of a loved one, is tenable as long as the safeguards are properly installed and observed to insure that the release of burial assistance does not become whimsical and capricious. Hence, there must still be a policy on qualification and standard operating procedure duly established to determine the qualified beneficiaries by the duly authorized LGU officer, i.e., a Government Social Worker. The same must form part of the supporting documents for the release of the cash assistance and for audit purposes.
I hope we have fully addressed your query.
Yours truly,
EUFEMIO A. SIMTIM, JR.
City Legal Officer
Province of South Cotabato
City of Koronadal
OFFICE OF THE CITY LEGAL OFFICER
Telephone No. (083) 228-1742
------------------------------------------------------------------------------
LEGAL OPINION NO. _________
DATE : 13 March 2012
TO : HON. PETER B. MIGUEL, MD, FPSO-HNS
City Mayor
MS. IMELDA A. TAMAYO, CPA
City Accountant
This City
RE : Disbursement Of Burial Assistance Through Cash Advance
------------------------------------------------------------------------------
Kanami Koronadal!
This has reference to your query on whether or not burial assistance may be disbursed through cash advance. The undersigned is of the opinion that applicable laws, rules and regulations allow the same.
Pursuant to Section 339 of the Local Government Code of 1991, the Commission On Audit (COA) has prescribed rules and regulations pertaining to cash advances made by a local official or employee, through certain issuances, among which is the Commission on Audit Circular No. 97-002 dated 10 February 1997, reinstating and amending COA Circular No. 90-331 dated 3 May 1990, the pertinent portion of which is provided hereunder, to wit:
x x x
“2. GENERAL PRINCIPLES
Ideally, cash should be handled under the general principles of the imprest system, to wit:
1. Daily receipts on collections must be deposited intact with the proper bank.
2. All payments must be made by check.
3. Only payments in small amounts may be made through the petty cash fund. Replenishment of the petty cash fund shall be equal to the total amount of expenditures made there from.
In practice, however, there are certain instances when it may be very difficult, impractical or impossible to make payments by check. In such a case, payments may be made by the disbursing officer in the form of cash through his cash advance. (Emphasis supplied)
3. DEFINITIONS AND SCOPE
Cash Advance shall be of two types, namely, the regular cash advances, and the special cash advances.
3.1. Regular cash advances are those granted to cashiers, disbursing officers, paymasters, and/or property/supply officers for any of the following purposes:
3.1.1. Salaries and Wages
3.1.2. Commutable allowances
3.1.3. Honoraria and other similar payments to officials and employees
3.1.4. Petty operating expenses consisting of small payments for maintenance and operating expenses which cannot be paid conveniently by check or are required to be paid immediately.
3.2. Special cash advances are those granted on the explicit authority of the Head of the Agency only to duly designated disbursing officers or employees for other legally authorized purposes, as follows:
3.2.1. Current operating expenditures of the agency field office or of the activity of the agency undertaken in the field when it is impractical to pay the same by check, such as –
- Salaries, Wages and Allowances
- Maintenance and other operating expenses
3.2.2 Travel expenditures, including transportation fare, travel allowance, hotel room/lodging expenses and other expenses incurred by officials and employees in connection with official travel….
x x x
The same was stipulated in toto under COA Circular No. 368-91, Volume I, Chapter 2, Sections 172-173. The said circular, along with the other aforementioned COA Circulars, clearly allow the maintenance and other operating expense to be disbursed through cash advance. Also, the NGAS Manual for Local Government Units provides, thus:
x x x
Sec. 48. Payments out of the Petty Cash Fund. – Petty cash fund shall be maintained under the imprest system. The fund shall be sufficient for the non-recurring, emergency and petty expenses of the LGU for one month. Disbursements from the fund shall be through the Petty Cash Voucher (PCV) which shall be signed by the payee to acknowledge the amount received. The official receipt shall be attached to the PCV.
x x x
While the NGAS Manual for Local Government Units does not spell out the non-recurring, emergency and petty expenses covered thereby, reference can be made to the previous issuances of the COA.
The issue that needs to be resolved therefore is whether or not burial assistance can be considered as maintenance and other operating expense.
In a complex agency such as a Local Government Unit, particularly a City, burial expenses as assistance to its constituents, is a regular expense which falls within the scope of maintenance and operating expense under the Office of the City Mayor. The fact that it falls under the category of MOOE leaves no doubt as to its classification.
As a matter of fact, it has become regular as an expense considering that giving a dignified burial to its constituents is an inherent duty of the government under the general welfare clause and is undeniably part of the regular operations of the Office of the City Mayor. Therefore, burial expense is allowed by law and other applicable rules and regulations to be disbursed through cash advance.
The guidelines established by the COA are designed to prevent abuses and excesses in the disbursement of government money. They were not meant to suppress the need to expedite the delivery of the basic services to the populace, not to mention the underprivileged sector of our society. Laws and rules must be construed not by the letter that killeth, but by the spirit that giveth life.
The reason advanced for the innovation sought to be implemented, that is, to make the services readily accessible to the beneficiaries and to remove the undue and unnecessary burden to the recipients already in grief due to the loss of a loved one, is tenable as long as the safeguards are properly installed and observed to insure that the release of burial assistance does not become whimsical and capricious. Hence, there must still be a policy on qualification and standard operating procedure duly established to determine the qualified beneficiaries by the duly authorized LGU officer, i.e., a Government Social Worker. The same must form part of the supporting documents for the release of the cash assistance and for audit purposes.
I hope we have fully addressed your query.
Yours truly,
EUFEMIO A. SIMTIM, JR.
City Legal Officer
Thursday, June 9, 2011
LEGAL OPINION RE ENTITLEMENT TO UNIFORM/CLOTHING ALLOWANCE
LEGAL OPINION NO. ________
DATE : 6 JUNE 2011
TO : JULIETA R. GASTALA
City Budget Officer
City of Koronadal
RE : UNIFORM/CLOTHING ALLOWANCE CLAIM
--------------------------------------------------------
Elric M. Batilaran, employee of the Koronadal Investment Center, who is currently in Japan on a scholarship program sponsored by NEDA, in a letter dated 24 May 2011, requests that the clothing allowance for the year 2011 be granted to him. He represents, as follows:
x x x
“The main meat of this letter is about my disallowance to receive a clothing allowance this year amounting to Four Thousand Pesos (Php 4,000) despite my inquiry and intentions to avail for it. I had received a Budget Circular Number 2003-8 dated 8 December 2003 on Rules and Regulations on the Grant of Uniform/Clothing Allowance to all Government Personnel for FY 2004 and years thereafter” signed Secretary Emilia T. Bancodin as the basis of our LGU’s Budget Office for not granting me the said benefit. When I was reviewing the content of the said Budget Circular, I cannot find any legitimate rationalization in there that would disallow me to receive the said benefit as I am a government employee who is on leave with pay.”
x x x
The bone of his contention is that the denial of the said uniform/clothing allowance by the City Budget Office was due to its erroneous reliance on Item No. 2 of the said circular which provides that:
x x x
“2.0 COVERAGE AND EXEMPTIONS
This Circular shall apply to all government personnel, whether appointive or elective on full-time or part-time basis, under permanent, temporary or casual status, and contractual personnel whose employment is in the nature of a regular employee.
It shall not apply, however, to the following:
x x x
2.3 Government personnel who are on leave without pay or on training/study/scholarship grant and other similar activities for more than six (6) consecutive months in a particular year.” [Emphasis added]
x x x
Mr. Batilaran posits that his scholarship in Japan is considered as on leave with pay; hence, the said provision should not be applied to him, presumably taking into consideration the provision found in Item No. 3.2 which states that “[g]overnment personnel who are expected to render at least six (6) consecutive months in a particular year including leaves of absence with pay shall be entitled to U/CA.”
The issue that needs to be resolved via the instant Legal Opinion therefore is: Whether or not Mr. Elric Batilaran, a city government employee who is presently on scholarship grant and on official leave with pay, is entitled to receive uniform/clothing allowance.
The undersigned answers in the AFFIRMATIVE.
It is important to stress that DBM Local Budget Circular No. 2003-8 has already been amended by DBM Local Budget Circular No. 2003-8-A-04, issued on 2 July 2004. Said amendment provides that:
x x x
1.0 Purpose
This Circular is issued to amend Sub-item 2.3 of Budget Circular (BC) No. 2003-8 dated December 8, 2003 by excluding government employees on training/study/scholarship grant and other similar activities from the list of those not covered by the BC.
It shall not apply, however, to the following:
xxx xxx xxx
2.3 Government personnel who are on leave without pay for more than six (6) consecutive months in a particular year.” [Emphasis added]
x x x
Said amendment has effectively removed all doubts besetting the entitlement of Mr. Elric Batilaran to U/CA. Attached herewith for easy reference is the machine copy of DBM Budget Circular No. 2003-8-A-04.
RESPECTFULLY SUBMITTED:
EUFEMIO A. SIMTIM, JR.
City Legal Officer
- and -
MYRA JOY H. LAWI-AN, LLB
Legal Assistant II
DATE : 6 JUNE 2011
TO : JULIETA R. GASTALA
City Budget Officer
City of Koronadal
RE : UNIFORM/CLOTHING ALLOWANCE CLAIM
--------------------------------------------------------
Elric M. Batilaran, employee of the Koronadal Investment Center, who is currently in Japan on a scholarship program sponsored by NEDA, in a letter dated 24 May 2011, requests that the clothing allowance for the year 2011 be granted to him. He represents, as follows:
x x x
“The main meat of this letter is about my disallowance to receive a clothing allowance this year amounting to Four Thousand Pesos (Php 4,000) despite my inquiry and intentions to avail for it. I had received a Budget Circular Number 2003-8 dated 8 December 2003 on Rules and Regulations on the Grant of Uniform/Clothing Allowance to all Government Personnel for FY 2004 and years thereafter” signed Secretary Emilia T. Bancodin as the basis of our LGU’s Budget Office for not granting me the said benefit. When I was reviewing the content of the said Budget Circular, I cannot find any legitimate rationalization in there that would disallow me to receive the said benefit as I am a government employee who is on leave with pay.”
x x x
The bone of his contention is that the denial of the said uniform/clothing allowance by the City Budget Office was due to its erroneous reliance on Item No. 2 of the said circular which provides that:
x x x
“2.0 COVERAGE AND EXEMPTIONS
This Circular shall apply to all government personnel, whether appointive or elective on full-time or part-time basis, under permanent, temporary or casual status, and contractual personnel whose employment is in the nature of a regular employee.
It shall not apply, however, to the following:
x x x
2.3 Government personnel who are on leave without pay or on training/study/scholarship grant and other similar activities for more than six (6) consecutive months in a particular year.” [Emphasis added]
x x x
Mr. Batilaran posits that his scholarship in Japan is considered as on leave with pay; hence, the said provision should not be applied to him, presumably taking into consideration the provision found in Item No. 3.2 which states that “[g]overnment personnel who are expected to render at least six (6) consecutive months in a particular year including leaves of absence with pay shall be entitled to U/CA.”
The issue that needs to be resolved via the instant Legal Opinion therefore is: Whether or not Mr. Elric Batilaran, a city government employee who is presently on scholarship grant and on official leave with pay, is entitled to receive uniform/clothing allowance.
The undersigned answers in the AFFIRMATIVE.
It is important to stress that DBM Local Budget Circular No. 2003-8 has already been amended by DBM Local Budget Circular No. 2003-8-A-04, issued on 2 July 2004. Said amendment provides that:
x x x
1.0 Purpose
This Circular is issued to amend Sub-item 2.3 of Budget Circular (BC) No. 2003-8 dated December 8, 2003 by excluding government employees on training/study/scholarship grant and other similar activities from the list of those not covered by the BC.
It shall not apply, however, to the following:
xxx xxx xxx
2.3 Government personnel who are on leave without pay for more than six (6) consecutive months in a particular year.” [Emphasis added]
x x x
Said amendment has effectively removed all doubts besetting the entitlement of Mr. Elric Batilaran to U/CA. Attached herewith for easy reference is the machine copy of DBM Budget Circular No. 2003-8-A-04.
RESPECTFULLY SUBMITTED:
EUFEMIO A. SIMTIM, JR.
City Legal Officer
- and -
MYRA JOY H. LAWI-AN, LLB
Legal Assistant II
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