DBM: No more fake SAROs

MANILA, Philippines - The Department of Budget and Management said yesterday it had eliminated the scam-prone process of securing Special Allotment Release Orders (SAROs) by establishing the General Appropriations Act (GAA) as the government’s official budget release document.

Under the GAA-as-Release-Document budget regime, departments and agencies will no longer need SAROs to obligate funds, which involves entering into contracts and kick-starting the procurement process for a particular project.

Instead, an agency could begin obligating funds as soon as the 2014 GAA is implemented on the very first working day of the fiscal year.

The 2014 GAA, as signed by President Aquino last Dec. 20, stands as the government’s primary budget release document.

This means that all the disaggregated budget items in the GAA are considered released to their respective agencies, with the exception of lump-sum funds that have yet to be itemized, and which will require prior approval before their release, Budget and Management Secretary Florencio Abad said.

“The GAA-as-Release-Document regime is a huge departure from the longstanding practice of using SAROs and other release documents to move funds towards projects under various departments and agencies. By making the GAA as the release document for all budgetary items, we’ve practically eliminated the delays that have plagued fund releases, since agencies no longer have to secure SAROs and other release documents to obligate their funds. Instead, they can begin obligating funds as early as today: the first working day of the year, when the GAA officially takes effect,” he added.

Some budgetary items will still require prior clearance and approval before the funds for these can be released to their respective agencies.

These include lump-sum funds within an agency’s budget that have not been itemized prior to the approval and enactment of the 2014 GAA, as well as Special Purpose Funds, including budgetary support to government corporations.

Other budgetary items that would likewise need clearance prior to release are those with conditions and requirements specified under the 2014 GAA‘s General/Special Provisions and Budget Affirmation/Veto Message in the GAA, and all automatically appropriated items, including Special Accounts in the General Fund.

Besides speeding up and making fund releases more efficient, the GAA-as-Release-Document regime is expected to prevent or minimize irregularities in the release of public funds to agencies, such as those involving the circulation of fake SAROs.

“In 2013, we were made aware of a well-established and highly coordinated racket that centered on the dissemination of fake SAROs. We asked the National Bureau of Investigation to launch a probe into this, the official results of which we’re still waiting for. Altogether, however, it appears that unscrupulous individuals have taken advantage of the necessity of release documents so that these parties were able to profit from the distribution of fake SAROs,” Abad said.

“With the new GAA-as-Release-Document regime in place, however – and the fact that SAROs are no longer needed for many of the fund releases we’ll be making this year – we don’t just intend to accelerate releases so that they can properly fund our key programs and projects. We also mean to thwart those who’ve made the budget implementation process a hotbed of graft and corruption. This is part of our deliberate, focused campaign to facilitate greater transparency and accountability in the expenditure process, so that every peso spent by government will indeed benefit all Filipinos,” Abad said.