COMMISSION ON AUDIT CIRCULAR NO.

91-366 November 18, 1991

TO : All Heads of Departments, Agencies, Bureaus and Offices of the National

Government, COA Directors, Heads of Auditing Units, and All Others
Concerned.

SUBJECT: Guidelines for the Implementation of Section 6 of the General Provisions of RA

7078 (GAA, FY 1991)

For the information and guidance of all concerned, quoted hereunder is the full text of
National Budget Circular No. 424, dated August 28, 1991, of the Secretary of Budget and
Management, which is self-explanatory:

"Republic of the Philippines

Department of Budget and Management
Malacaang, Manila"

NATIONAL BUDGET CIRCULAR NO.424

August 28, 1991

GUIDELINES FOR THE IMPLEMENTATION OF SECTION 6 OF THE GENERAL PROVISIONS

OF RA 7078 (GAA, FY 1991)

1.0 PURPOSE

This circular is being issued to guide departments, bureaus, offices or agencies in the
implementation of Section 6 of the General Provisions of RA 7078, which reads as
follows, to wit:

"Sec. 6 Sale of Non-Serviceable, Obsolete and Other Unnecessary

Equipment. Departments, bureaus, offices or agencies are hereby authorized
to sell non-serviceable, obsolete, and other unnecessary equipment.

Fifty percent (50%) of the proceeds from the sale of equipment of the
agency shall be deemed automatically appropriated for the purchase of new
ones except cars, vans and the like and for the repair or rehabilitation of
existing vital equipment for which no fund has been provided in this Act."

2.0 COVERAGE

This circular shall cover all departments, bureaus, offices, or agencies of the national
government.

3.0 DEFINITION OF EQUIPMENT

Equipment referred to in Section 6 of the General Provisions shall include the items
enumerated in the COA Standard Government Chart of Accounts, 1983 Revised Edition,
specifically categorized under the account code 8-79-000 which are more or less capital
in nature, the cost of which amounts to P1,500 (as amended by COA Circular 86-200B
dated 3 January 1986) or more, and which, when used do not suffer any material or
 substantial change or alteration in size or form.

4.0 GENERAL GUIDELINES

4.1 The sale of non-serviceable, obsolete and other unnecessary equipment shall be in
accordance with the provisions of Executive Order No.888 dated 18 March 1983
and Executive Order No. 285 dated 25 July 1987.

4.2 The full amount of the proceeds from the sale of non-serviceable, obsolete, and
other unnecessary equipment shall be treated as income and deposited by the
agency concerned with the National Treasury.

4.3 Agencies may utilize 50% of the proceeds from the sale of equipment by submitting
a request to the Department of Budget and Management in accordance with
Section Five (5.0) hereof.

5.0 SPECIFIC GUIDELINES

5.1 Agencies desiring to utilize the 50% of the proceeds shall submit a letter-request
accompanied by the following:

5.1.1. Official receipt issued by agency concerned covering receipt of proceeds

from the sale of unserviceable equipment.

5.1.2 Legible copy of remittance advice to the National Treasury covering

deposit of collection from sale of unserviceable equipment.

5.1.3 If the proceed shall be utilized for the purchase of new equipment, an
itemized list of the equipment proposed to be purchased with the
corresponding cost; and if the proceed shall be used for the repair or
rehabilitation of existing vital equipment, a description of the equipment
proposed to be repaired or rehabilitated and its corresponding state or
condition, and the estimated cost of repair or rehabilitation.

5.1.4 In case the equipment proposed to be purchased include items which

require special clearance, proof that proper clearance was secured.

5.2 The proceeds shall not be used for the purchase of any kind of motor vehicle.

5.3 Any purchase or repair/rehabilitation to be made shall be fully supported by the

50% proceeds from the sale of equipment of the agency concerned without any
augmentation on the part of the national government.

5.4 Request for the use of the proceeds must be submitted to the Department of
Budget and Management not later than November 30, 1991. Requests submitted
beyond this period shall be denied.

6.0 REPEALING CLAUSE

Previous circulars, memoranda or other issuances inconsistent with this budget circular
 are hereby amended accordingly.

7.0 EFFECTIVITY

This Circular shall take effect immediately.

(SGD.) GUILLERMO N. CARAGUE

Secretary of Budget and Management"

Strict adherence to the foregoing circular is hereby enjoined.

(SGD.) ROGELIO B. ESPIRITU, Commissioner

(SGD.) BARTOLOME C. FERNANDEZ, JR., Commissioner
(SGD.) EUFEMIO C. DOMINGO, Chairman