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BAC Honoraria

Post by Berna on Tue Nov 09, 2010 9:44 pm

Good evening everybody...

I just wanna ask if it is legal to appropriate funds for BAC Honoraria in the annual budget?

Can the LGU treat the BAC Honoraria as part of the incidental expenses and incorporate it in the ABC of the project?



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Re: BAC Honoraria

Post by engrjhez® on Wed Nov 10, 2010 11:57 am

Bernadette G. Driza wrote:Good evening everybody...

I just wanna ask if it is legal to appropriate funds for BAC Honoraria in the annual budget?

Can the LGU treat the BAC Honoraria as part of the incidental expenses and incorporate it in the ABC of the project?




Nope for both. The grant of honoraria is clearly to be guided by DBM budget circular (Sec.15 of IRR) and is clear on BC-2004-5 as amended by BC-2004-5a and 2007-3. Smile
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Re: BAC Honoraria

Post by Berna on Wed Nov 10, 2010 4:32 pm

This was our query last July 10, 2009

DIR. ORLANDO R. GARCIA
Regional Director
Department of Budget and Management
6th/F Asiatrust Bldg., Quezon Avenue,
Quezon City

Dear Director Garcia:

Greetings in Peace!

We wish to clarify some issues with regards to our claim on honoraria as presented in p. 19, Package Benefits for the BAC, TWG and Secretariat of the Manual on Establishing Procurement Systems and Organizations for LGU.

The undersigned is the Municipal Assessor of our Agency and currently designated as Chair person of the Bids and Awards Committee. By authority of our local sanggunian, a resolution was approved for the claim of honoraria as follows:
BAC Chair - P3,500.00
BAC Members - 3,000.00
TWG and Secretariat - 2,500.00

The amount presented was an offshoot of the provisions under p.19 no. 1 Grounds for the Grant of Honoraria which provides the following:

a. the amount so granted does not exceed twenty-five percent of their respective basic salary;
b. funds are available for the purpose; and
c. the grant of honoraria conforms with the guidelines promulgated by the DBM.

The funding sources of our claim were sourced out from item no. 2 specifically section g and section h which read as follows:
g.11 “Savings from local budgets approved by their respective Sanggunian subject to the pertinent provisions of RA 7160, otherwise known as the Local Government Code of 1991”
h. Savings refer to portions or balances of LGU’s budget from any obligation or encumbrance which are:
I. Still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized;
II. Arising from unpaid compensation and related costs pertaining to vacant positions and leave of absences without pay; and
III. Realized from the implementation in improved systems and efficiencies and thus enabled the LGU to meet and deliver the required or planned targets, programs and services at lesser cost.

To be more specific we had charged our claim on the LGU savings realized after closing of Books of Accounts and portion of which was granted thru an appropriation approved by the local sanggunian as embodied in the 2009 Annual Budget.

In the process of our claim, our Municipal Accountant commented that the rates given to us had exceeded the maximum honorarium rate presented in Section 5.3 of DBM Budget Circular No. 2004-5A dated October 7, 2005 and that the funding sources should only be sourced out from the following items of Section 6; viz:
a. Proceeds from sale of bid documents
b. Fees from contractor/supplier
c. Fees charged for copies of minutes of Bid openings, BAC resolutions, and other BAC documents
d. Protest fees
e. Liquidated damages; and
f. Proceed from bid/performance security forfeiture

On the foregoing circumstances, may we ask clarity on the legality of the rate we had presented and the sources we charged our claim? The comments referred to DBM Circular and ours were based on the Manual Establishing Procurement Systems and Organizations for LGUs. Which of the two will prevail?

Hoping always your usual assistance on this matter.


Very truly yours,


CARMENCITA U. ISIDRO
Municipal Assessor
BAC Chair


Director Orlando Garcia replied on his letter, dated July 20, 2009, REference no. 09-1046, that the sources of funds are valid, but the rates exceeded the allowable rates provided under BC No. 2007-3.

Now that the BAC is claiming the honoraria for another set of projects, with the rates in accordance with BC No. 2007-3, charged to the appropriation approved by the local sanggunian as embodied in the 2010 Annual Budget, we just want to know if the claim is valid since the Procurement Manual for LGU under p.19 no. 1 states that:

"Grounds for the Grant of Honoraria which provides the following:

a. the amount so granted does not exceed twenty-five percent of their respective basic salary;
b. funds are available for the purpose; and
c. the grant of honoraria conforms with the guidelines promulgated by the DBM."
As we understood the phrase "funds are available for the purpose", the annual budget had legally appropriated an amount for this purpose.

Unless po, we have the new Procurement Manual contradicting the premise.
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Re: BAC Honoraria

Post by engrjhez® on Wed Nov 10, 2010 5:19 pm

Bernadeth G. Driza,

Thanks for sharing your practices and inquiries with us. I do not mean to spoil the privilege of honoraria but let me give you some (personal) insights:

  • First. Honoraria is NOT mandatory. It is a privilege out of the performance requirement of the law. If the HOPE decided not to grant it in any case or any reason, then we could do nothing so let us be thankful).

  • Second. According to the law itself that brought the privilege of honoraria (RA 9184), the guidelines shall be from the DBM and not from other laws or issuance.

  • Third. Should there be "funds available for the purpose" it must be cleared that honoraria must be sourced first from the sale of bid documents, etc. and will be drawn out from other sources only if found insufficient.
Those are my views on the matter. Smile
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Re: BAC Honoraria

Post by Berna on Thu Nov 11, 2010 9:21 am

Thank you very much engr jhez i printed it and gave it to our BAC Vice chair, she told me, "Never mind the honorarium." Very Happy
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Re: BAC Honoraria

Post by engrjhez® on Thu Nov 11, 2010 9:38 am

Bernadette G. Driza wrote:Thank you very much engr jhez i printed it and gave it to our BAC Vice chair, she told me, "Never mind the honorarium." Very Happy
I hope my message was not seen as "never mind the honoraria"-principle. What my real message was, as government officials and employees, we are expected to serve and to serve with honor, dignity and excellence - with or without honoraria. It should not be taken as a compensation (kasi if that is compensation, I would say we are really underpaid), but a gift from the government for all hardships we encounter along the way. Yun lang, taxable pa rin when it exceeds certain amount. Smile
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Re: BAC Honoraria

Post by RDV @ GP3i on Thu Nov 11, 2010 11:37 pm

Bernadette G. Driza wrote:This was our query last July 10, 2009

DIR. ORLANDO R. GARCIA
Regional Director
Department of Budget and Management
6th/F Asiatrust Bldg., Quezon Avenue,
Quezon City

Dear Director Garcia:

Greetings in Peace!

We wish to clarify some issues with regards to our claim on honoraria as presented in p. 19, Package Benefits for the BAC, TWG and Secretariat of the Manual on Establishing Procurement Systems and Organizations for LGU.

The undersigned is the Municipal Assessor of our Agency and currently designated as Chair person of the Bids and Awards Committee. By authority of our local sanggunian, a resolution was approved for the claim of honoraria as follows:
BAC Chair - P3,500.00
BAC Members - 3,000.00
TWG and Secretariat - 2,500.00

The amount presented was an offshoot of the provisions under p.19 no. 1 Grounds for the Grant of Honoraria which provides the following:

a. the amount so granted does not exceed twenty-five percent of their respective basic salary;
b. funds are available for the purpose; and
c. the grant of honoraria conforms with the guidelines promulgated by the DBM.

The funding sources of our claim were sourced out from item no. 2 specifically section g and section h which read as follows:
g.11 “Savings from local budgets approved by their respective Sanggunian subject to the pertinent provisions of RA 7160, otherwise known as the Local Government Code of 1991”
h. Savings refer to portions or balances of LGU’s budget from any obligation or encumbrance which are:
I. Still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized;
II. Arising from unpaid compensation and related costs pertaining to vacant positions and leave of absences without pay; and
III. Realized from the implementation in improved systems and efficiencies and thus enabled the LGU to meet and deliver the required or planned targets, programs and services at lesser cost.

To be more specific we had charged our claim on the LGU savings realized after closing of Books of Accounts and portion of which was granted thru an appropriation approved by the local sanggunian as embodied in the 2009 Annual Budget.

In the process of our claim, our Municipal Accountant commented that the rates given to us had exceeded the maximum honorarium rate presented in Section 5.3 of DBM Budget Circular No. 2004-5A dated October 7, 2005 and that the funding sources should only be sourced out from the following items of Section 6; viz:
a. Proceeds from sale of bid documents
b. Fees from contractor/supplier
c. Fees charged for copies of minutes of Bid openings, BAC resolutions, and other BAC documents
d. Protest fees
e. Liquidated damages; and
f. Proceed from bid/performance security forfeiture

On the foregoing circumstances, may we ask clarity on the legality of the rate we had presented and the sources we charged our claim? The comments referred to DBM Circular and ours were based on the Manual Establishing Procurement Systems and Organizations for LGUs. Which of the two will prevail?

Hoping always your usual assistance on this matter.


Very truly yours,


CARMENCITA U. ISIDRO
Municipal Assessor
BAC Chair


Director Orlando Garcia replied on his letter, dated July 20, 2009, REference no. 09-1046, that the sources of funds are valid, but the rates exceeded the allowable rates provided under BC No. 2007-3.

Now that the BAC is claiming the honoraria for another set of projects, with the rates in accordance with BC No. 2007-3, charged to the appropriation approved by the local sanggunian as embodied in the 2010 Annual Budget, we just want to know if the claim is valid since the Procurement Manual for LGU under p.19 no. 1 states that:

"Grounds for the Grant of Honoraria which provides the following:

a. the amount so granted does not exceed twenty-five percent of their respective basic salary;
b. funds are available for the purpose; and
c. the grant of honoraria conforms with the guidelines promulgated by the DBM."
As we understood the phrase "funds are available for the purpose", the annual budget had legally appropriated an amount for this purpose.

Unless po, we have the new Procurement Manual contradicting the premise.

Good evening, bernadette.

I am the one who succeeded Dir. Garcia, who was the recipient of your query and who answered your query as well.

Please do not misunderstood the statement on one of the funding sources, which is "funds available for the purpose" to mean that funds are appropriated for the purpose. While payment of honoraria is not mandatory, if the HOPE decides to grant honoraria on the basis of Sec. 15 of RA 9184, it is subject to "availability of funds." The funds available for the purpose has been clearly established under BC 2004-5A and BC 2007-3. Based on the said circulars it does not mean that an amount for honoraria for BAC and support staff is specifically appropriated in the annual budget. Actually, appropriating an amount for honoraria for BAC and support staff is a violation of the circulars issued by the DBM as you are not supposed to appropriate an amount for honoraria for BAC and support staff.
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Re: BAC Honoraria

Post by Berna on Tue Oct 04, 2011 10:45 am

RDV @ GP3i wrote:
Bernadette G. Driza wrote:This was our query last July 10, 2009

DIR. ORLANDO R. GARCIA
Regional Director
Department of Budget and Management
6th/F Asiatrust Bldg., Quezon Avenue,
Quezon City

Dear Director Garcia:

Greetings in Peace!

We wish to clarify some issues with regards to our claim on honoraria as presented in p. 19, Package Benefits for the BAC, TWG and Secretariat of the Manual on Establishing Procurement Systems and Organizations for LGU.

The undersigned is the Municipal Assessor of our Agency and currently designated as Chair person of the Bids and Awards Committee. By authority of our local sanggunian, a resolution was approved for the claim of honoraria as follows:
BAC Chair - P3,500.00
BAC Members - 3,000.00
TWG and Secretariat - 2,500.00

The amount presented was an offshoot of the provisions under p.19 no. 1 Grounds for the Grant of Honoraria which provides the following:

a. the amount so granted does not exceed twenty-five percent of their respective basic salary;
b. funds are available for the purpose; and
c. the grant of honoraria conforms with the guidelines promulgated by the DBM.

The funding sources of our claim were sourced out from item no. 2 specifically section g and section h which read as follows:
g.11 “Savings from local budgets approved by their respective Sanggunian subject to the pertinent provisions of RA 7160, otherwise known as the Local Government Code of 1991”
h. Savings refer to portions or balances of LGU’s budget from any obligation or encumbrance which are:
I. Still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized;
II. Arising from unpaid compensation and related costs pertaining to vacant positions and leave of absences without pay; and
III. Realized from the implementation in improved systems and efficiencies and thus enabled the LGU to meet and deliver the required or planned targets, programs and services at lesser cost.

To be more specific we had charged our claim on the LGU savings realized after closing of Books of Accounts and portion of which was granted thru an appropriation approved by the local sanggunian as embodied in the 2009 Annual Budget.

In the process of our claim, our Municipal Accountant commented that the rates given to us had exceeded the maximum honorarium rate presented in Section 5.3 of DBM Budget Circular No. 2004-5A dated October 7, 2005 and that the funding sources should only be sourced out from the following items of Section 6; viz:
a. Proceeds from sale of bid documents
b. Fees from contractor/supplier
c. Fees charged for copies of minutes of Bid openings, BAC resolutions, and other BAC documents
d. Protest fees
e. Liquidated damages; and
f. Proceed from bid/performance security forfeiture

On the foregoing circumstances, may we ask clarity on the legality of the rate we had presented and the sources we charged our claim? The comments referred to DBM Circular and ours were based on the Manual Establishing Procurement Systems and Organizations for LGUs. Which of the two will prevail?

Hoping always your usual assistance on this matter.


Very truly yours,


CARMENCITA U. ISIDRO
Municipal Assessor
BAC Chair


Director Orlando Garcia replied on his letter, dated July 20, 2009, REference no. 09-1046, that the sources of funds are valid, but the rates exceeded the allowable rates provided under BC No. 2007-3.

Now that the BAC is claiming the honoraria for another set of projects, with the rates in accordance with BC No. 2007-3, charged to the appropriation approved by the local sanggunian as embodied in the 2010 Annual Budget, we just want to know if the claim is valid since the Procurement Manual for LGU under p.19 no. 1 states that:

"Grounds for the Grant of Honoraria which provides the following:

a. the amount so granted does not exceed twenty-five percent of their respective basic salary;
b. funds are available for the purpose; and
c. the grant of honoraria conforms with the guidelines promulgated by the DBM."
As we understood the phrase "funds are available for the purpose", the annual budget had legally appropriated an amount for this purpose.

Unless po, we have the new Procurement Manual contradicting the premise.

Good evening, bernadette.

I am the one who succeeded Dir. Garcia, who was the recipient of your query and who answered your query as well.

Please do not misunderstood the statement on one of the funding sources, which is "funds available for the purpose" to mean that funds are appropriated for the purpose. While payment of honoraria is not mandatory, if the HOPE decides to grant honoraria on the basis of Sec. 15 of RA 9184, it is subject to "availability of funds." The funds available for the purpose has been clearly established under BC 2004-5A and BC 2007-3. Based on the said circulars it does not mean that an amount for honoraria for BAC and support staff is specifically appropriated in the annual budget. Actually, appropriating an amount for honoraria for BAC and support staff is a violation of the circulars issued by the DBM as you are not supposed to appropriate an amount for honoraria for BAC and support staff.

thank you sir.

i just read your post po.

we always have problems when claiming our honoraria.

after we have bid the projects, we have found out that the bid projects have savings since the abc is 1M and the bid price is 800,000. can't we charge the honoraria to these savings? since the sale of biddocs is not enough for the said claim.

another thing po is, the project is charged under 20%development fund, there is a circular disallowing the claim of salaries and wages, including honoraria and overtime services.
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Berna
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Re: BAC Honoraria

Post by RDV @ GP3i on Tue Oct 04, 2011 12:29 pm

Berna wrote:
RDV @ GP3i wrote:
Good evening, bernadette.

I am the one who succeeded Dir. Garcia, who was the recipient of your query and who answered your query as well.

Please do not misunderstood the statement on one of the funding sources, which is "funds available for the purpose" to mean that funds are appropriated for the purpose. While payment of honoraria is not mandatory, if the HOPE decides to grant honoraria on the basis of Sec. 15 of RA 9184, it is subject to "availability of funds." The funds available for the purpose has been clearly established under BC 2004-5A and BC 2007-3. Based on the said circulars it does not mean that an amount for honoraria for BAC and support staff is specifically appropriated in the annual budget. Actually, appropriating an amount for honoraria for BAC and support staff is a violation of the circulars issued by the DBM as you are not supposed to appropriate an amount for honoraria for BAC and support staff.

thank you sir.

i just read your post po.

we always have problems when claiming our honoraria.

after we have bid the projects, we have found out that the bid projects have savings since the abc is 1M and the bid price is 800,000. can't we charge the honoraria to these savings? since the sale of biddocs is not enough for the said claim.

another thing po is, the project is charged under 20%development fund, there is a circular disallowing the claim of salaries and wages, including honoraria and overtime services.

If the 'savings' from bidded projects fall within the definition of savings under Budget Circular 2007-3, then the answer is YES, you could charge your honoraria from these savings, subject to the provisions of the Local Government Code.

As to the provision on the 20% for development projects, the provision of the LGC is it should not be less than 20% of the IRA. So long as you make sure that if there are savings from these development projects and you use those savings for personal services, the minimum requirement of 20% of IRA for development projects under Sec. 287 of the LGC is still complied with.
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