DEPARTMENT OF EDUCATION

Notes to Consolidated Financial Statements

For the year ended December 31, 2016

1. General Information /Agency Profile

The consolidated financial statements of the Department of Education (DepEd) were

authorized for issue on March 31, 2017 as shown in the Statement of Management
Responsibility for Financial Statements signed by Ms. Victoria Catibog,
Undersecretary for Finance Disbursements and Accounting.

The DepEd is the primary agency of the government responsible to provide the
framework for the governance of basic education, which shall set the general
directions for educational policies, standards, established authority, accountability
and responsibility for achieving higher learning outcomes. It shall also fulfill the
mandate embodied in the Constitution per Article XVI, Section 1, which provides
that: “The State shall protect and promote the right of all citizens to quality education
at all levels and shall take steps to make such education accessible to all.” Its mission
is to provide quality education that is equitably accessible to lay the foundation for
holistic, life-long learning through critical and creative thinking. Its ultimate aim is
to develop Filipinos to be functionally literate, economically secure, socially and
morally responsible and nationalistic citizens who will contribute to sustain global
development.

On August 11, 2001, Republic Act (RA) No. 9155 or the “Basic Education
Governance Act of 2001” came into law and on August 22, 2012, the then DepEd
Secretary Edilberto C. De Jesus signed the Implementing Rules and Regulations
(IRR) of RA No. 9155.

RA No. 9155 renamed among others, the Department of Education, Culture and
Sports (DECS) to the Department of Education wherein the functions and programs
related to sports competition was transferred to the Philippine Sports Commission
(PSC) but the programs for school sports and physical fitness still forms part of basic
education curriculum. RA No. 9155 put emphasis on the decentralization of functions
and governance in basic education through the school based management framework
and mechanisms and stresses the principles of “shared governance.” The Act and its
IRR also call for an equitable, direct, immediate release of resources to field offices
and assuring that financial resources are within the reach of the schools. The
Department of Budget and Management (DBM) and the DepEd issued Joint Circular
(JC) No. 2004-1 dated January 1, 2004 which covers the release of funds to DepEd-
Central Office (CO), Regional Offices (RO) s, Division Offices (DO) and Secondary
Schools (SS) for their respective regular operating requirements, locally-funded and
foreign-assisted projects and the nationwide/region-wide lump-sum appropriations
as provided in the General Appropriations Act (GAA).

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RA No. 10533, the Enhanced Basic Education Act of 2013, was signed by President
Benigno S. Aquino III on May 15, 2013 and its IRR was promulgated on
September 3, 2013. Under RA No. 10533, the enhanced basic education program
encompasses at least one year kindergarten education, six years elementary
education, six years secondary education wherein in the secondary education
includes four years of Junior High School (JHS) and two years Senior High School
(SHS). The K to 12 Program under RA No. 10533 envisions to provide sufficient
time for mastery of concepts and skills, develop lifelong learners, and prepare
graduates for tertiary education, middle-level skills development, employment, and
entrepreneurship.

The Agency registered office is located at DepEd Complex, Meralco Avenue Pasig
(formerly University of Life Complex).

DepEd Management Structure

To carry out its mandates and objectives, the Department is organized into two major
structural components. The Central Office maintains the overall administration of
basic education at the national level. The Field Offices are responsible for the
regional and local coordination and administration of the Department’s mandate. RA
9155 provides that the Department should have no more than four Undersecretaries
and four Assistant Secretaries with at least one Undersecretary and one Assistant
Secretary who are career service officers chosen among the staff of the Department.

In 2015, the Department underwent a restructuring of its office functions and staffing.
The result of which was the Rationalization Plan for the new organizational structure.
Details of the new structure are further explained in DepEd Order No. 52, s. 2015,
also known as the New Organizational Structures of the Central, Regional, and
Schools Division Offices of the Department of Education.

At present, the Department operates with four Undersecretaries in the following

areas:

 Curriculum and Instruction

 Finance and Administration
 Governance and Operations
 Legal and Legislative Affairs

Four Assistant Secretaries are assigned in the following areas:

 Curriculum and Instruction

 Finance and Administration
 Governance and Operations
 Legal and Legislative Affairs

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Supporting the Office of the Secretary (OSEC) at the Central Office are the different
strands, services, bureaus, and divisions.

There are five strands under OSEC:

 Curriculum and Instruction

 Finance and Administration
 Governance and Operations
 Legal and Legislative Affairs
 Strategic Management

Five attached agencies:

 Early Childhood Care and Development (ECCD) Council

 National Book Development Board (NBDB)
 National Council for Children's Television (NCCT)
 National Museum
 Philippine High School for the Arts

Three coordinating councils:

 Adopt-a-School Program (ASP) Coordinating Council

 Literacy Coordinating Council (LCC)
 Teacher Education Council (TEC)

At the sub-national level, the Field Offices consist of the following:

 Seventeen Regional Offices, and the Autonomous Region in Muslim Mindanao

(ARMM*), each headed by a Regional Director (a Regional Secretary in the
case of ARMM).

 Two hundred twenty-one Provincial and City Schools Divisions, each headed
by a Schools Division Superintendent. Assisting the Schools Division Offices
are 2,602 School Districts, each headed by a District Supervisor.

Under the supervision of the Schools Division Offices are 62,605 schools, broken
down as follows:

 49,209 elementary schools (38,648 public and 10,561 private)

 13,396 secondary schools (7,976 public and 5,420 private)

*ARMM is included in the budget of the Department on the following: creation of

teaching and non-teaching positions; funding for newly-legislated high schools;
regular School Building Program; and certain foreign-assisted and locally-funded
programs and projects.

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Central Office Organizational Structure

Shown below is the overview of the new organizational structure of the Department's
Central Office. A more detailed chart can be viewed at DepEd Order No. 5, s. 2015.

PROVIDENT FUND

The DepEd Provident Fund (PF) was established by virtue of Administrative Order
No. 279 dated May 5, 1992 and implemented through DECS Order No. 97, s. 1992
dated October 1, 1992 which was amended by DECS Order No. 12, s. 2004 dated
February 24, 2004 and DepEd Order No. 36 dated June 1, 2007.

The Fund aims to provide DepEd officials and employees with benefits and loans for
emergency needs; for their education and that of their children; for their
hospitalization and that of their immediate dependents; for minor but immediately
needed repair of their houses; and for other similar purposes as determined by the
Board of Trustees. The beneficiaries of the fund are the teachers as defined in the
Magna Carta for Public School Teachers and administrative support staff of the
Central, Regional, Division and field offices of the Department who have
permanent/regular status of employment.

The DepEd Provident Fund derives its funding from the Service Fees (SF) collected
from Private Lending Institutions (PLIs) and Insurance Companies (ICs) on the
implementation of the Automatic Payroll Deduction Scheme of the then IBM-PSD,
RPSUs and school-based or office-based payroll preparation. The SF collected
monthly are deposited to the National Treasury which is later requested for release
of Notice of Cash Allocation in favor of the DepEd PF. In previous years, some
regions were able to request directly from their respective PF.

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However, as the DepEd Central Office move to standardize operations, such
procedure is no longer allowed. Instead, certifications of deposits from the National
Treasury are submitted to the Central Office as integral document for issuance of
Notice of Cash Allocations (NCAs) from the DBM and subsequently allocated to the
Regional Offices following certain criteria and procedures.

The following is the manner of allocation and distribution of service fee (which form
part of the additional equity/capital of the PF) per Resolution No. 01, s. 2010 issued
by the National Board:

 Twenty percent of the service fee collections shall be transferred to the National
Common Fund;
 Fifty percent of the amount of service fee collected by the concerned regional
implementing units shall be returned to them; and
 The remaining balance shall be distributed among the regional implementing
units based on equity and performance on a 60/40 ratio.

The types of loan that can be availed by the borrowers with six percent per annum
interest add-on and straight computation is stated below:

A. Regular loans – for emergency needs of the teachers/employees, or immediate

and other members of his/her family up to the fourth degree of consanguinity
and affinity (up to P100,000.00)

 Hospitalization and/or medical expenses resulting from an accident/

illness;
 Death of immediate and /or other members of his/her family;
 Minor but immediately needed repair of the house of the teacher/
employee;
 Educational loans;
 Other emergency expenses to be specified by the teacher/employee-
applicant;

B. Additional loan (up to P100,000.00) can be granted at the discretion of the

Secretary to teachers and non-teaching employees, suffering from extreme
financial difficulty because of an immediate need for financial assistance and
whose final recourse is the DepEd Provident Fund;

C. Calamity loan (maximum of P20,000.00) may be availed in areas and

provinces declared under State of Calamity.

The accumulated interests earned from the lending operations over the years also
work as a revolving fund for continuous loaning operations. Administrative expenses
to support the operations are allowed but not to exceed 20% of the current year
interest income earned.

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The fund is being managed by the (1) National Board of Trustees which promulgate
rules and policies governing operations of the Fund, (2) the Regional Board of
Trustees which implement the policies, rules and regulations promulgated by the
National Board and supervises the Fund operations to their respective regions,
(3) and along with them are the designated Secretariats of the National/Regional
Boards that serve as the implementing arm of the Fund. Currently, the Chairman for
the National Board of Trustees is Undersecretary Victoria M. Catibog and Assistant
Secretary Jesus L.R. Mateo sits as Vice-Chairman of the Board.

DEPARTMENT OF EDUCATION - REGIONAL EDUCATION CENTERS

(RELC)

The Department of Education has incomes derived from business-type activities

operating under the Revolving Fund concept. The incomes are derived from the
rentals and use of DepEd facilities, such as the Regional Education Learning Centers
(RELC), The Ecological Technology Livelihood Community Center (Ecotech
Center), Baguio Teacher’s Camp, the National Educators Academy of the
Philippines (NEAP), Applied Nutrition Center (ANC) and the National Science
Teacher Instrumentation Centers (NSTIC). Most of the Regional Offices have
operating RELCs except for Region IV-B; the Ecotech Center, ANC and NSTIC are
located in Cebu City; as the name implies, the Baguio Teacher’s Camp is situated in
Baguio City.

 Regional Educations Learning Centers (RELC)

RELCs have been established under the Program for Decentralized Educational
Development (PRODED) to sustain the capability of the regions to effectively
and efficiently manage their staff. As envisioned, this center was designed to
meet the educational needs of school officials and teachers in the regions in
relation to education innovations and program implementation. On March 25,
1987, DECS Order No. 30, s. 1997 – Guidelines for the Effective Utilization of
the Regional Educational Learning Centers was issued.

 National Educator’s Academy of the Philippines (NEAP)

Letter of Instruction No. 1487 dated December 10, 1985 created the National
Education Learning Center (NELC). This is to sustain gains derived from the
Program for Decentralized Educational Development (PRODED). It mainly
addressed concerns related to the improvement of the curricula and
development of better instructional materials, the reorientation and retraining
of teachers and the improvement of the management capabilities of
superintendents, supervisors and administrators at the elementary level. On
May 27, 1992, Administrative Order No. 282 was issued renaming NELC to
National Educators’ Academy of the Philippines (NEAP).

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 Ecological Technology Livelihood and Community Center (Ecotech)

The Ecological Technology Livelihood Community Center, usually referred to

as “ECOTECH CENTER” is an inter-agency project by and between the
Department of Education and the defunct Ministry of Human Settlements.

The center was established in 1978 and acquired by DECS on August 25, 1989
from the Strategic Development Corporation (SIDCOR) as stipulated in a Deed
of Assignment executed by both parties on August 9, 1989 for a considerable
amount of P9,055,594.00. The lot where the center is situated was donated by
the Provincial Government of Cebu and was transferred in the name of DepEd
on February 8, 1999 per TCT No. 150266.

 Baguio Teacher’s Camp

The Baguio Teachers’ Camp is a year-round center for conferences, seminar-

workshops, and training and human resource development program for the
Department of Education (DepEd). Whenever possible, the Camp is also open
for the housing and conference needs of other government agencies, student and
professional organizations holding conferences in Baguio City. It also
accommodates teachers, school officials and other DepEd personnel and their
guests who are vacationing in Baguio City. This is a privilege extended to
teachers as a fitting tribute to their role in education in the country.

The Camp, with an area of 23.7 hectares, has 12 dormitories that can
accommodate 1,208 guests, 47 cottages with a bed capacity of 446, seven
conference halls and other facilities such as the water system. The Camp
provides the upkeep and maintenance of these facilities, including its grounds
and gardens. A staff of very competent personnel attends to these various areas.

 National Science Teaching Instrumentation Center (NSTIC)

The National Science Teaching Instrumentation Center (NSTIC) is part of the

Science Teaching Improvement Project (STIP), which started in 1989. The
project was implemented by DECS-EDPITAF and GTZ, the German Agency
for Technical Cooperation. On July 1993, President Fidel V. Ramos
institutionalized the Center through Executive Order No. 112 mandated to
undertake the following tasks:

 to develop prototypes of science teaching equipment using locally available

materials and technology;
 to develop user’s and experimentation manuals;
 to facilitate technology transfer to the private sector that will mass-produce
the science equipment developed by the Center;
 to provide training programs for science teachers;

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  to undertake quality control; and
 to implement a system of repair and maintenance for the science equipment

 School Health and Nutrition Center

The Department of Education, through the School Health and Nutrition Center
(SHNC), established in 1975 four nutrition centers nationwide to oversee the
implementation of the nutrition and health activities throughout the country.
These centers were named Applied Nutrition Center (ANC).

The facilities are not only for the learning centers of the Department but also compete
in the market for affordable venues for conferences, seminars, workshops and trainings
and other related activities. Not only the trainings and workshops of the Department
are held in these facilities but other Government Agencies and Private Entities as well
appreciate and choose the decent services that these Centers can offer.

I. Basic Education Profile

The Department of Education manages a considerable number of schools, personnel,
and learners which act as the software and hardware of delivering quality basic
education to every Filipino. For the year 2016, DepEd ensured to provide for the basic
necessities and requirements needed to facilitate continuous learning and over-all
development of Filipino learners across the nation.

Our schools

Nationwide, there are 221 school divisions and 2,683 school districts. The table below
summarizes the number of schools offering the basic education curriculums:

Number of Schools Offering

Sector Kindergarten & Junior High Senior High
Total
Elementary Schools School School
Public 38,803 8,282 5,958 53,043
Private 11,680 5,935 4,373 21,988
LUCs & SUCs 42 243 226 511
Total 50,525 14,460 10,557

Out of the above mentioned schools, the following table shows the number of schools
offering special curricular program.

Particulars Number of Schools

Secondary schools offering Special Programs 2,480
Regular schools with Special Education (SPED) centers 278
Schools operating solely as SPED centers 7
Special Science Elementary Schools 304

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 Particulars Number of Schools
Science High Schools 58
Science, Technology & Engineering-implementing Schools 348

Our learners

For 2016, DepEd served 1,814,713 kindergarten, 14,100,290 elementary, 7,521,136

junior high school, and 1,445,107 senior high school learners nationwide. For the
senior high school education, a total of 817,066 learners were enrolled in public senior
high schools, 41,112 in SUCs and LUCs, and 678,868 were enrolled in private senior
high schools. The 24,924,937 national enrollment data for School Year (SY) 2016-
2017 posed a slight increase of 1.08% due to the Grade 11 learners enrolled for the
first year of Senior High School implementation. The table below presents the
enrollment for the previous and present school years:

SY 2015-2016 SY 2016-2017
Level
Public* Private Total Public* Private Total
Kindergarten 1,737,567 382,012 2,119,579 1,597,716 216,997 1,814,713
Elementary 13,167,873 1,189,743 14,357,616 12,900,721 1,199,569 14,100,290
Junior High School 6,056,664 1,337,386 7,394,050 6,223,668 1,341,159 7,564,827
Senior High School --- --- --- 783,452 661,655 1,445,107
Total 20,962,104 2,909,141 23,871,245 21,505,557 3,419,380 24,924,937
*including SUCs and LUCs

Our personnel

Being the biggest bureaucracy in the Philippine government, DepEd is composed of

763,451 personnel across all levels of governance. 1,229 personnel are employed at
the central office, 2,149 serve in the regional offices, and 17,403 are employed at the
division offices. For the schools, 480,385 personnel for the kindergarten and
elementary and 262,285 personnel for the secondary serve as teaching, teaching-
related, and administrative staff.

Our Budget

For the Fiscal Year (FY) 2016, DepEd was granted with a total budget of
₱431,105,916,000.00. This budget allocation has increased 18.05% from the previous
fiscal year’s budget. DepEd’s budget for FY 2016 is 14.44% of the national budget.

II. Key performance indicators

Basic education accomplishments of the department can be further expounded
through its key performance indicators reflecting changes and developments related
to the basic education’s quality and accessibility. These key basic education
performance indicators serve as a mirror to the outcome level accomplishments of
the department for the past years.

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Enrollment rate

Enrollment rates serve as a measure of the capability of schools to provide for the
required quality basic education to school-aged learners. For SY 2015-2016, the
gross enrollment rate for elementary was pegged at 106.31% posing a lower gross
enrollment rate from the previous school year’s 109.29% while the secondary gross
enrollment rate was 83.67% which is 0.4% lower than the previous year. The net
enrollment rate, on the other hand, was 91.05% and 68.15% for elementary and
secondary, respectively. There has been a slight decrease of 1.52% on the net
enrollment rate for the elementary while there has been a 4.92% increase for the
secondary level.

Cohort survival rate

Survival rate tells whether learners at the beginning grade or year will be able to
reach the final grade or year of elementary or secondary level. For SY 2015-2016,
the recorded cohort survival rates were 87.07% and 80.75% for elementary and
secondary respectively. The cohort survival rate for elementary was slightly 1.99%
higher than the previous school year while the secondary was 0.49% lower than the
last school year.

Completion rate

Completion rate signifies whether learners on the first grade or year level of
education finish the level in accordance with the required number of years of study.
For SY 2015- 2016, the completion rate for elementary was at 83.43% while the
secondary was at 73.97%. The elementary completion rate was slightly higher than
the previous year while the completion rate for secondary was 4.73% lower than the
last school year.

1.1 Below are the highlights of accomplishment at the Department of

Education in CY 2016:
The year 2016 is an eventful year of transition for DepEd because it was
managed by two succeeding secretaries from the past and present
administration. The department’s accomplishments for this year are a product
of the combined efforts of former DepEd Secretary Bro. Armin Luistro and the
incumbent Secretary Leonor Magtolis-Briones. The transitory nature of 2016
has made this year a wonderful combination of past and present
administration’s drive to continuously champion basic education
accomplishments across the nation.

Making education accessible to every Filipino Learner

For 2016, the department made remarkable efforts to ensure that every Filipino
has access to free, compulsory, and at the same time inclusive education that
efficiently and effectively respond to the specific needs and contexts of the

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learners. The Department of Education strengthened its commitment to make
education accessible to every Filipino learner. In this regard, the department is
committed to ensure that there is inclusion of all learners in education through
reaching out and catering to all types of learners regardless of age, gender,
religion, and capacity.

Alternative Learning System

Alternative Learning System (ALS) aims to provide marginalized learners with

viable option to formal basic education. Being a priority project under
Secretary Leonor Magtolis Briones’ 10-point agenda for the department, ALS
has been intensified for extensive positive outcomes. Under this learning
system are two major non-formal education programs: The Basic Literacy
Program (BLP) and the Accreditation and Equivalency (A&E). For the year
2016, a total of 538,025 learners availed the ALS. The Basic Literacy Program
aims to eradicate illiteracy among out-of-school youths (OSYs), adults, and in
extreme cases, school-aged children by developing the basic literacy skills of
reading, writing, and numeracy. For this education program, the department
has served a total of 56,275 learners. The Accreditation and Equivalency
Program, on the other hand, is an option for school dropouts to complete their
education outside the formal school system. For 2016, a total of 87,850 and
393,900 ALS learners enrolled in elementary and secondary level, respectively.

Abot-Alam Program, an interagency effort (led together with the National

Youth Commission) to target and map out-of-school learners and enroll them
in appropriate program interventions in education, entrepreneurship, or
employment, has also been incorporated under the Alternative Learning
System for 2016. For this program, DepEd has served 9,818 learners under the
BLP, and 32,029 elementary and 118,871 secondary learners under the A&E
program.

The following table summarizes the number of learners under this system:

A&E A&E
Particulars BLP
Elementary Secondary
Alternative Learning System 56,275 87,850 393,900
Abot-Alam Program 9,818 32,029 118,871
Total 66,093 119,879 512,771

Madrasah Education Program

Madrasah Education Program is committed to provide a brand of education

that is culture-based and contextualized to the needs of our Muslim Learners
through the implementation of the Arabic Language and Islamic Values
Education (ALIVE) program in public schools and the Refined Standard
Madrasah Curriculum in the private madaris (schools). For 2016, DepEd

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served a total number of 938,966 elementary and 253,435 secondary muslim
learners. 2,368 of these learners benefitted from the private madaris provided
with financial assistance and 1,046 azatids (teachers) were provided with
compensation, allowance, and were trained during the in-service training.

Indigenous Peoples Education Program

Indigenous Peoples Education Program (IPEd) offers indigenous peoples (IP)

with a context-based education that considers their indigenous beliefs,
practices, and cultures and at the same time promote the knowledge translation
across generations. A total of 2,251,765 elementary and 678,072 secondary
learners were enrolled in the IPEd program in 2016. The number of IP learners
for 2016 increased by 20% from the previous year. Efforts were also made to
ensure that the IP cultures and traditions were incorporated in the development
and implementation of the K to 12 curriculum.

Special Education Program

Special Education (SPED) Program ensures that the basic education services
of the department address the needs of our learners with various
exceptionalities. For the year 2016, SPED program served the following
learners:

Particulars Number of Learners

Elementary Gifted 74,346
Elementary Graded 58,559
Elementary Non-graded 41,974
Secondary Graded 128,230

Assistance to Students and Teachers in Private and Non-DepEd Public

Schools

Assistance to Students and Teachers in Private and Non-DepEd Public Schools

program is providing assistance to learners who wish to pursue secondary
schooling and to teachers in private schools. This assistance program is
comprised of three components which includes Education Service Contracting
Program (ESC) that extends financial assistance (in the form of tuition
subsidies) to qualified elementary school graduates who wish to pursue
secondary education in private schools, Teacher Salary Subsidy (TSS) which
provides salary subsidies to licensed teachers in ESC schools, and the SHS
Voucher Program (SHS VP) which provides qualified public and private Junior
High School (JHS) graduates with government subsidies that will enable them
to enroll and study in private and non-DepEd public schools licensed to offer
the SHS Program. For the year 2016, the TSS provided subsidy to 35,943
teacher beneficiaries while there is a 70% increase on the number of grantees
for ESC and SHS VP from the previous year. The ESC program posed an

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86.23% fund utilization rate for 2016 while the SHS Voucher program had a
32.38% fund utilization rate. The table below summarizes the number of
grantees for the ESC Program and SHS VP:

Grant/Assistance Type Number of Grantees

Education Service Contracting Program 932,090
SHS Voucher Program for Private Schools 581,511
SHS Voucher Program for Non-DepEd Public 34,418
Senior High Schools
Total 1,548,019

School Based Feeding Program

School-Based Feeding Program (SBFP) provides free meals in all public

elementary schools to learners classified as wasted and severely wasted and
aims to address short-term hunger and undernutrition among public school
children. This contributes to the participation and retention rates of the
undernourished beneficiaries by 70% at the end of the 120-day program. As
part of the department’s effort in addressing the problems of undernourished
learners who need health interventions, DepEd continued to implement the
SBFP and fed a total of 1,800,884 learners comprising 94% of the target
learners set for 2016.

Raising the quality and relevance of education

Another important factor in establishing an efficient and effective basic

education system is the improved quality of education being availed by the
learners. By advancing the quality of education, the basic education system
produces quality and well-rounded learners. With the continued
implementation of the K to 12 curriculum, the department pushed to raise the
quality of education by implementing relevant reforms and interventions
necessary to supplement the pressing needs of the basic education system. In
this on-going commitment of raising the quality of education, DepEd continued
to put into context the relevance of education in every aspect of human and
social development.

Continuous development of K to 12 curriculum and the implementation of

Grade 11

DepEd also ensured that there are continuous efforts to develop the K to 12
curriculum being implemented in schools nationwide. For SY 2016-2017, the
curriculums for Grade 5 and Grade 11 for the Senior High School program
were rolled out for the first time and a total of 1,445,107 Grade 11 learners
were enrolled in its first year of implementation.

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Provision of basic education inputs

In relation to the recent implementation of Grade 11 under the Senior High

School, there has been a significant demand for more basic education facilities
and personnel needed for the facilitation of learning among the Filipino
learners. These basic educational facilities and personnel serve as an important
venue, material, and facilitator to aid the learning and interaction among
learners. The tables below summarize the basic education inputs provided by
the department for 2015 and 2016:

PLANTILLA ITEMS 2015 2016

No. of created teaching items 39,002 58,720
No. of filled-in teaching items 38,808 41,360
No. of non-teaching and teaching-related items created 2,131 15,568
No. of non-teaching and teaching-related items filled in 1,433 3,855

INFRASTRUCTURE 2015 2016

No. of classrooms constructed under Basic Education 18,060 33,418
Facilities Fund
No. of classrooms constructed under Public-Private 3,963 791
Partnerships
No. of classrooms repaired/rehabilitated 1,104 21,509
No. of Wat-San facilities constructed/rehabilitated 3,875 549
No. of technical-vocational laboratories constructed --- 268
No. of seats provided 1,066,586 364,670

LEARNING AND INSTRUCTIONAL MATERIALS 2016

No. of ICT packages delivered to schools 20,713
No. of learning resources procured for printing and delivery 108,158,801
No. of schools with on-going provision of Science and 59,741
Mathematics equipment

Teacher trainings

As the department continued the full implementation of the K to 12 program,

DepEd capacitated its teachers with the new competencies necessary for the
roll out of the Grade 5 and Grade 11 K to 12 curriculums. For 2016, DepEd
trained 78,319 Grade 5 teachers and 36,150 Grade 11 teachers prior to the start
of School Year 2016-2017.

Making education responsive to the urgent needs and opportunities of the

nation

Going beyond access and quality, the outputs of the education system must be
responsive to the changing landscape of the nation today. As such, Secretary
Briones identified several emerging social issues to be prioritized through

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DepEd interventions. On top of the list is addressing poverty and inequality
through the expansion of the Alternative Learning System, to make every
Filipino a DepEd learner. The technical-vocational livelihood program was
also developed to provide more opportunities outside the formal sector. In
response to the developments of the information age, the department continued
to provide ICT packages to schools, coupled with computer literacy in the
curriculum. Answering the challenge of disaster risk reduction management
and climate change, the basic education curriculum was expanded to include
environmental awareness and disaster preparedness across all levels of
governance. Furthermore, a disaster preparedness manual was developed and
distributed to all public schools. Lastly, pursuant to the 0+10 point socio-
economic agenda of the Duterte administration, preventive drug education was
also included in the curriculum.

Making education truly liberating

Education can be used to liberate human ideas and principles for it entails
discovery of one’s self-consciousness. As part of Sec. Briones’ vision and
agenda for the department, emphasis has been made on the importance of
critical thinking as well as the history, culture, and the arts on the overall
development of learners. In 2016, DepEd strengthened the curricular
components of critical thinking and culture and the arts on the K to 12
curriculums. For SY 2016-2017, 5,869 learners were enrolled on the Arts and
Design track, posing a very low number of enrollees as compared to other
tracks. In this regard, efforts have also been made to ensure that more learners
will have interest to enroll on courses related to arts and culture to strengthen
the role of arts and culture to human liberation and development.

Education is also seen as a tool to truly liberate the Filipinos from poverty. As
such, DepEd, as a member of the National Coordinating Committee for the
Philippine Qualification Framework (PQF), has developed information,
education, and communications materials to advocate the PQF.

Making the delivery of services effective, efficient, and collaborative

System Solutions

For 2016, the department continued to advance the system solutions which aim
to institutionalize an organized and systematic data collection of basic
education statistics. With the endeavor to improve the technology-based
systems of the department, the Enhanced Basic Education Information System
(EBEIS) was continuously enhanced and improved to provide for a more
efficient decision-making process, and to promote empowerment at all levels
of education system, better guidelines and up to date relevant information to
support the department and its stakeholders and development of plans and
issuance of policies and programs. The Learners’ Information System (LIS),

25
while being a web-based solution also includes the active participation of all
teachers, principals, planning officers, and other DepEd personnel in all levels
of governance throughout the country. With these collaborative efforts from all
levels of education system, the Department was able to know more about our
learners and was able to provide better and appropriate interventions in
formulation of the provision of quality basic education for all Filipino learners.
Furthermore, mechanisms were developed and enhanced to improve the
efficiency of the administration of internal systems of the department.

The financial systems internal to DepEd were streamlined and documented into
an official manual called the Financial Management Operations Manual
(FMOM). Likewise, the processing of information and documents related the
human resources of the department were also packaged into an online system
and enhanced further into the Enterprise Human Resource Information System
(eHRIS). Both the FMOM and the eHRIS were operationalized in 2016, and
will be fully cascaded in 2017.

Basic Education Research

To effectively build and promote evidence-based policy development and

decision making, the guidelines for the use of the Basic Education Research
Fund (BERF) were revised and amended. This development was also aimed to
streamline the process to further encourage researchers across the country to
avail the research fund. As a result, a database of research studies was
established. Likewise, the Basic Education Research Agenda, issued in 2016,
identified teaching and learning, child protection, human resource
development, and governance as priority research areas agendas.

Program Implementation Review

Strengthening its monitoring and evaluation framework, the Department

conducted regular Program Implementation Reviews (PIR) of all programs,
projects, and activities in all levels of governance to monitor progress of all
programs, projects, and activities throughout the year. Major actions
undertaken in the conduct of program implementation review includes policy-
related interventions such as the early release of multi-year guidelines for
various centrally-managed programs and projects, and the review of various
processes related to procurement of basic education materials and equipment.
The issues and concerns gathered from the regular PIR’s supplemented various
evidence-based decision making of the department’s management in 2016.

Education Summit

To discuss the urgent concerns of the education sector and define the vision
and agenda of basic, higher and technical-vocational education in the
Philippines, the department, in relation to other government agencies

26
concerning education, conducted the Education Summit last November 2016.
This event served as a venue to analyze the K-12 Curriculum and its support
system in relation to other issues concerning the education system in the
country. Major agreements of this summit include the interventions to
strengthen the trifocal education sector, and to intensify the relation of
education with the agenda of other allied government offices. This summit also
revisited the country’s vision and agenda for basic, higher, and technical-
vocational education in the Philippines.

External Partners

In 2016, the Department of Education continued the collaboration with external

partners and engagements with stakeholders and other private sectors to further
enhance the quality of the basic education system in the country. Some of the
major projects of the department in partnership with several external partners
are the yearly Brigada Eskwela, a partnership with the school's’ key
stakeholders which aims to prepare a clean, safe, disaster-prepared, and
conducive to learning schools for the opening of classes, and the Adopt a
School Program, a program created to help generate investments and support
to the upgrading and modernization of public basic education outside the
mainstream funding and the national budget. The table below highlights some
of the other key external partnerships for the basic education sector for 2016:

 DepEd received 50,000 units of blackboards and 5,000 units

of Digital Pianos from Booyoung Co. Ltd.
 DepEd and various industry partners inked a pact for SHS
Program requirements.
 Partnered with DSWD in promoting the rights of adopted
children as part of government’s advocacy for protecting and
upholding the rights of every child.
 Inked a MOA with Little League Baseball Philippines
(LLBP) to boost the development of baseball programs for
elementary students in the country.
 Launched “Storybook on Disaster Preparedness” in
partnership with JICA.
 Tied up with Marina to offer Maritime program in SHS.
 In partnership with Stairway Foundation launched the
CyberSafe Project Manuals which aims to guide and protect
the Filipino children in the use of the internet.
 In partnership with Rappler, conducted the online training for
teachers who will serve as Board of Election Inspectors
(BEIs) during the May 9 National and Local Elections.
 In partnership with IBEX Global Solutions, launched the
SHS Helpdesk (667-1188) for May 23, 2016 until June 30,
2016

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  In partnership with the Philippine Long Distance Telephone
Company (PLDT), the Bangko Sentral ng Pilipinas (BSP),
the Insurance Commission, Smart Communications, the
Landbank of the Philippines, USAID, Sun Life of Canada
(Philippines), Philippines Business for Social Progress, and
Voyager Innovations Inc., launched Personal Insurance and
Savings Option (PISO) sa Kinabukasan, a technology-
enabled early-stage micro-savings and personal accident
insurance program for public school students on voluntary
basis primarily for K to 12 learners.

1.2 Financial Reforms for CYs 2015 – 2016

Financial Management Issuances

National Budget Circular (NBC) No. 556, June 3, 2015 (DBM)

DepEd fully supports DBM policy statement of promoting greater budget

efficiency in executing its programs, activities and projects and in delivering
planned results in a timely manner wherein the Department submitted its 2015
plans and targets as reflected in the Budget Execution Documents (BEDs) per
DBM NBC No. 555 of CY 2014 and Budget Circular No. 556 as its Guidelines
on the Release of Funds for FY 2015.

Likewise, the implementation of vital reforms during budget execution was

continued. These include the following:

1) General Appropriations Act-as Release-Document (GAARD) to

facilitate the procurement process and bolster the efforts to minimize
carry-over allotments in the succeeding year;

2) Unified Accounts Code Structure (UACS) to ensure efficient fund

release, accounting and reporting of financial transactions by agencies;

3) Performance-Informed Budgeting (PIB) to make clear to the public and

legislators the outputs and outcomes agencies are committing to deliver
in exchange for their budgets; and

4) Checkless Payment System (CPS) through Advice to Debit Account

(ADA) to settle government payables in a timely and transparent
manner as well as ensure predictability of disbursements.

Summary Performance Monitoring Report

Under Circular Letter No. 2015-9 dated June 30, 2015, the DBM requires the
submission of Summary Performance Monitoring Report. Thus, DepEd, thru

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its Full-time Delivery Unit under the Office of the Secretary (OSEC), submits
a flash performance monitoring report in order to address the need for timely
submission of accountability reports which is important in evaluating agency
performance versus plans and targets.

The flash performance monitoring report is from the Budget and Financial
Accountability Reports (BFARs) and shall summarize the agencies' monthly
cumulative absorptive capacity, i.e., obligation and disbursement rates, by
appropriations source and allotment class only, without accomplishing at
length the information by Major Final Output (MFO),
Program/Activities/Project (P/A/P) and by object of expenditure. Said report is
accompanied by a supporting document citing the reasons for the
underperformance, if any, as well as action plan outlining the necessary
delivery and execution strategies to address the reasons for the
underperformance.

The report is submitted to the Department of Budget and Management every

10th day of the following month, copy furnished the NEDA and the Office of
the Cabinet Secretary.

DBM Budget Circular No. 2016-1 dated March 7, 2016 – Clarification on

the Grant of the Productivity Enhancement Incentive (PEI) to
Government Employees for FY 2015

Item 3 of the Special Provisions on the Miscellaneous Personnel Benefits Fund

(MPBF) under Republic Act (RA) No. 10651 or the General Appropriations
Act of FY 2015, provides for the grant of Productivity Enhancement Incentive
(PEI) at either Five Thousand Pesos (P5,000) or one month basic salary, subject
to the following conditions: (i) accomplishment of FY 2014 Performance
Targets for at least one strategic Major Final Output of the National
Government Agencies; and (ii) compliance with two good governance
conditions (i.e. transparency seal and citizen's charter), provided that the
implementation of this provision shall be subject to guidelines to be issued by
the President.

Executive Order (EO) No. 181, s. 2015 was issued to implement the above-
cited provision and prescribe the guidelines on the grant of the FY 2015 PEI.
Section 11 thereof states that issues arising from the implementation of this
Order shall be referred to the Department of Budget and Management (DBM)
for final resolution, and that DBM may likewise issue guidelines as may be
necessary for the proper implementation of EO No. 181.

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DBM Budget Circular No. 2016-2 dated March 29, 2016 – Computation and
Funding of Terminal Leave Benefits and Monetization of Leave Credits

In view of the enactment of Republic Act No. 9849 declaring Eidul Adha and
Eidul Fitr as regular holidays being observed in the Philippines, the Civil
Service Commission issued CSC Resolution No. 1501530 dated December 21,
2015 amending the constant factor in the formula used in computing the
terminal leave benefits (TLB) and monetization of leave credits (MLC).

DBM Budget Circular No. 2016-3 dated April 28, 2016 – Rules and
Regulations on the Grant of the Mid-Year Bonus for FY 2016

The DBM shall release to the agencies/operating units concerned the Special
Allotment Release Order for the Mid-Year Bonus requirement, based on data
on the number of filled positions as of April 30, 2016 from the Government
Manpower Information System, chargeable against the MPBF.

The DBM shall issue the corresponding Notice of Cash Allocation to cover the
Mid-Year Bonus of agency personnel to be given not earlier than May 15 of
the current year, subject to the provisions of National Budget Circular No. 561
dated January 4, 2016 on the release of funds.

DBM Budget Circular No. 2016-4 dated April 28, 2016 – Updated Rules
and Regulations on the Grant of the Year-End Bonus and Cash Gift for
FY 2016 and Years Thereafter

Executive Order (EO) No. 201, s. 2016, entitled "Modifying the Salary
Schedule for Civilian Government Personnel and Authorizing the Grant of
Additional Benefits for Both Civilian and Military and Uniformed Personnel,"
provided for the adoption of a compensation adjustment strategy that will
ensure that the government compensation structure is comparable with the
prevailing rates in the private sector, thereby attracting and retaining competent
and committed civil servants.

The compensation adjustment strategy includes the following:

a) Increase in the basic salary of civilian personnel;

b) Grant of new and increased rates of certain allowances for the military
and uniformed personnel;
c) Grant of a Mid-Year Bonus equivalent to one-month basic salary not
earlier than May 15 of every year, as an additional benefit; and
d) Enhancement of the existing Performance-Based Bonus.

EO No. 201 likewise provides that the existing Year-End Bonus and Cash Gift
shall be given in November of every year.

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DBM Budget Circular No. 2016-7 dated December 1, 2016 – Guidelines on
the Grant of Collective Negotiation Agreement (CNA) Incentive for FY
2016

Administrative Order (AO) No. 135 s. 2005 authorizes the grant of CNA
Incentive to government employees and directs the Department of Budget and
Management (DBM) to issue the necessary policy and procedural guidelines
for its implementation. Item (4)(h)(ii)(aa) of the Congress Joint Resolution (JR)
No. 4, s. 2009, institutionalizes the grant of the CNA Incentive as a form of
reward to motivate employee efforts toward higher productivity, to wit:

"(aa) Collective Negotiation Agreement (CNA) Incentive - This may be

granted to both management and rank-and-file employees of agencies
with approved and successfully implemented CNAs in recognition of
their efforts in accomplishing performance targets at lesser cost, in
attaining more efficient and viable operations through cost-cutting
measures and systems improvement xxx."

Section 77 of the General Provisions of the FY 2016 General Appropriations

Act (GAA) authorizes the payment of CNA Incentive sourced from the
allowable Maintenance and Other Operating Expenses (MOOE) allotments
identified by the DBM.

Department Order No. 2, s. 2016 dated January 18, 2016 - Implementation

of ₱3,500.00 Net Take Home Pay for DepEd Personnel

The Department of Education (DepEd) shall implement the Authorized

Deductions provided in Section 52 of the General Provisions of the Republic
Act (RA) No. 10717, General Appropriations Act (GAA) for Fiscal Year (FY)
2016, entitled An Act Appropriating Funds for the Operation of the
Government of the Republic of the Philippines from January 1 to December
31, 2016, and for Other Purposes, which is quoted as follows:

Section 52. Authorized Deductions. Deductions from salaries and other

benefits accruing to any government employee, chargeable against the
appropriations for Personnel Services, may be allowed for the payment of
individual employee’s contributions or obligations due the following, and in
the order of preference stated below:

a) The BIR, PHILHEALTH, GSIS and HDMF;

b) Non-stock savings and loan associations, and mutual benefits
associations duly operating under existing laws, which are managed
by and/or for the benefit of government employees;
c) Associations, cooperatives, or provident funds organized and
managed by government employees for their benefit and welfare;
d) GFIs authorized by law and accredited by appropriate government
regulating bodies to engage in lending;

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 e) Licensed insurance companies; and
f) Thrift banks and rural banks accredited by the BSP.

In no case shall the foregoing deductions reduce the employee’s monthly net
take home pay to an amount lower than Three Thousand Five Hundred Pesos
(₱3,500.00).

Department Order No. 12, s. 2016 dated March 10, 2016 – Implementation
of the First Tranche Compensation Adjustment for Civilian Personnel,
and Military and Uniformed Personnel in the National Government

In relation to the above, reference should be made to the “Department of

Budget and Management (DBM) National Budget Circular No. 562 dated
February 24, 2016 prescribing the guidelines, rules and regulations for the
implementation of the First Tranche Compensation Adjustment for Civilian
Personnel, and Military and Uniformed Personnel in the National Government,
and Executive Order No. 201, s. 2016 entitled Modifying the Salary Schedule
for Civilian Government Personnel and Authorizing the Grant of Additional
Benefits for Both Civilian and Military and Uniformed Personnel.”

Department Order (DO) No. 13, s. 2016 dated March 11, 2016 -
Implementing Guidelines on the Direct Release and Use of Maintenance
and Other Operating Expenses (MOOE) Allocations of Schools, Including
Other Funds Managed by School

Legal Bases for DO 13, s. 2016 dated March 11, 2016 is the “DBM and DepEd
Joint Circular No. 2004-1 dated January 1, 2004 entitled Guidelines on the
Direct Release of Funds to DepEd Regional Offices and Implementing Units”
and “Section 10, RA No. 9155 (Governance of Basic Education Act of 2001)
which provides that the appropriation intended for the regional and field offices
(elementary, secondary schools, and schools division offices) are to be
allocated directly and released immediately by the DBM to the said offices.”

More detailed guidelines are embodied in DepEd Order: No. 60, s. 2011; and
(No. 49, s. 2006). This took effect retroactively on January 1, 2016

Department Order No. 18, s. 2016 dated April 5, 2016 - Policies and
Guidelines on the Implementation of the Government Assistance to
Students and Teachers in Private Education (GASTPE) Program
Effective School Year 2016-2017

The GASTPE, consisting of the Education Service Contracting (ESC) and the
Teacher Salary Subsidy (TSS), is a demonstration of the Government’s
commitment to maintain the viability of private education as a key partner in
the delivery of quality basic education.

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Article XIV of the 1987 Constitution of the Republic of the Philippines and
Republic Act (RA) No. 8545 – the Expanded Government Assistance to
Students and Teachers in Private Education (GASTPE) Act – provide the legal
bases for Education Service Contracting (ESC). It is the declared policy of the
State, in conformity with the mandate of the Constitution, to promote and make
quality education available to all Filipino citizens. The State also recognizes
the complementary roles of public and private schools in the education system,
especially the latter’s invaluable contribution to education. The ESC, since its
pilot test in 1982 to 1984, has become a symbol of private-public school
partnership in making secondary education accessible to all Filipino citizens.

A key provision of Republic Act No. 10533 – the Enhanced Basic Education
Act of 2013 – is the introduction of two (2) additional year levels in secondary
education. In School Year (SY) 2016-2017, secondary education shall consist
of four (4) years of junior high school and the first of two (2) years of senior
high school. Further, RA No. 10533 expands support for private education by
extending the coverage of GASTPE to qualified students in senior high school.

The management of GASTPE has been contracted out by the Department of

Education (DepEd) to the Private Education Assistance Committee (PEAC),
which is the trustee of the Fund for Assistance to Private Education (FAPE), a
perpetual trust fund created by and between the Philippine and United States
governments under Executive Order No. 156, s. 1968 for the purpose of
providing assistance to private education in the country.

Department Order No. 22, s. 2016 dated April 19, 2016 - Implementing
Guidelines on the Allocation and Utilization of the Indigenous Peoples
Education (IPEd) Program Support Fund for Fiscal Year (FY) 2016

The Department of Education (DepEd) has instituted a National Indigenous

Peoples Education (IPEd) Program in pursuit of the National Indigenous
Peoples Education Policy Framework based on DepEd Order No. 62, s. 2011,
entitled Adopting the National Indigenous Peoples (IP) Education Policy
Framework and Republic Act (RA) No. 10533, the Enhanced Basic Education
Act of 2013.

The Indigenous Peoples Education (IPEd) Program is DepEd’s response to the

right of indigenous peoples (IP) to basic education that is responsive to their
context, respects their identities, and promotes the value of their indigenous
knowledge, skills, and other aspects of their cultural heritage.

Allocation of Program Support Fund

All regions with IP communities/learners are covered by PSF except the

National Capital Region (NCR) and the Autonomous Region in Muslim
Mindanao (ARMM). In the case of NCR, it is assumed that the needs of the IP

33
learners (e.g., Sama-Bajau) will be addressed using other funding sources,
while ARMM shall be supported by the Basic Education Assistance to
Mindanao (BEAM)-ARMM. The DepEd-Indigenous Peoples Education
Office (IPsEO), however, will provide technical assistance to NCR and
ARMM as may be deemed necessary.

Department Order No. 31, s. 2016 dated May 23, 2016 - Implementing
Guidelines on the Release and Utilization of Maintenance and Other
Operating Expenses (MOOE) Allocations of Senior High Schools

The enhanced Basic Education Act of 2013 (Republic Act No. 10533) expands
the basic education system from a 10-year to a 13-year program with the
addition of one year of Kindergarten and two years of Senior High School
(SHS). Starting in June 2016, the DepEd mainstreamed the new level of basic
education and enrolled Grade 10 completers in public and private SHS that
offered Grade 11 and Grade 12 programs. At least 1.5 M learners proceeded to
Grade 11 in SY 2016-2017.

School MOOE should be used for the following:

1. To fund activities as identified in the approved SHS Implementation

Plan;
2. To support expenses for school-based training and activities that are
selected or designed to address the most critical needs that will improve
learning outcomes in the school as well as official school meetings,
such as but not limited to Learning Action Cells (LAC) and Continuous
Improvement (CI) activities;
3. To finance expenses pertaining to graduation rites and recognition
activities;
4. To procure supplies and other consumables for teachers and students
deemed necessary in the conduct of classes;
5. To fund minor repairs of facilities, building and grounds maintenance
and the upkeep of the school;
6. To fund rental and minor repairs of tools and equipment deemed
necessary for the conduct of teaching and learning activities;
7. To fund rental of facilities for the conduct of classes;
8. To pay for wages of full-time utility, building and grounds
maintenance, messengerial, janitorial, transportation/mobility and
security services;
9. To pay for utilities (electricity and water and gas for workshop
laboratories) and communication (telephone and Internet connectivity)
expenses; and
10. To pay for reproduction of teacher-made activity sheets and other
resources that may be downloaded from the Learning Resource
Management and Development System (LRMDS) portal, which
support differences in learning among students.

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The school MOOE may be used to procure small capital expenditure items
worth ₱15,000 and below, as provided in the New Government Accounting
Manual issued by the COA. This shall be subject to separate guidelines to be
issued by DepEd

In no case shall the school MOOE be used for the procurement of school seats,
and teacher’s tables and chairs, except for school furniture which are not
procured/provided by the Central, Regional or Schools Division Offices. These
may include laboratory and workshop furniture. In no case shall the school
MOOE also be used for the procurement of textbooks and other instructional
materials, even if these expenditures are contained in the SHS implementation
Plan.

Department Order No. 56, s. 2016 dated July 27, 2016 - Guidelines on the
Grant of Performance-Based Bonus for the Department of Education
Employees and Officials for Fiscal Year (FY) 2015

The Department of Education (DepEd) issues the enclosed Guidelines on the

Grant of Performance-Based Bonus (PBB) for the Department of Education
Employees and Officials for FY 2015, which aims to establish a set of
guidelines that provides for systematic, credible and evidence-based policy of
linking organizational and individual performance to personnel incentives, and
recognizing and rewarding exemplary accomplishment to foster teamwork and
meritocracy.

The process, mechanism and criteria on the grant of PBB shall guide all DepEd
schools and offices in evaluating the performance of each delivery unit and
personnel, and in determining the level of personnel incentive corresponding
to the level of achievement of their expected outputs.

All DepEd Orders and other related issuances, rules and regulations and
provisions which are inconsistent with these guidelines are hereby repealed,
rescinded, or modified accordingly.

Executive Order (EO) No. 80, s. 2012 directs the adoption of the Performance-
Based Incentive System (PBIS) for government employees, consisting of the
Productivity Enhancement Incentive (PEI) and the Performance-Based Bonus
(PBB). It is based on the principle that service delivery by the bureaucracy can
be improved by linking personnel incentives to the bureau or delivery unit’s
performance and by recognizing and rewarding exemplary performance to
foster teamwork and meritocracy.

The grant of the PBB in DepEd aims to motivate higher performance and
greater accountability and to ensure the achievement of education targets and
commitments under the five (5) Key Result Areas (KRAs) laid down in EO
No. 43, s. 2011 and the Philippine Development Plan (PDP) 2011-2016. It

35
ultimately seeks to give monetary incentive to each personnel based on his/her
performance in achieving the expected outputs of his/her function.

In view of the above, this Order aims to establish a PBB system by which the
performance of delivery units and personnel within DepEd are evaluated and
incentivized in a verifiable, credible, and standardized process.

Department Order No. 60, s. 2016 dated September 2, 2016 -

Implementation of the Financial Management Operations Manual
(FMOM) and Orientation of DepEd Financial Management Staff at the
Regional, Division, and School Levels

1. The Department of Education (DepEd) issues the following policy

guidelines for the adoption and utilization of the Financial Management
Operations Manual (FMOM) for all financial transactions at all levels of
the Department. This is to ensure standard and uniform application of
rules and processes in financial management operations, as prescribed by
governing regulations for (i) budget; (ii) accounting; (iii) procurement;
and (iv) asset management.

2. The FMOM becomes a rudiment that mobilizes financial reform which

aims to increase transparency and accountability across all levels of the
Department. The content of the Manual is prescriptive, and it adheres to
the basic principles of financial management and operations based on the
following current government issuances: a) Government Accounting
Manual (GAM CY 2015, COA Circular No. 2015-007 issued on October
22, 2015); b) Philippine Public Sector Accounting Standards (PPSAS,
COA Resolution No. 2014-003 issued on January 24, 2014); c) Unified
Accounting Code Structure (UACS, Joint Circular 2013-1 and 2014 COA-
DBM-DOF); d) RA No. 9184 (Procurement Law); and e) PD No. 1445
(State Audit Code of the Philippines, as amended). The processes are
customized to the Department’s unique structure especially at the school
level.

3. The FMOM is a living document that allows easy updating of its

provisions for future government issuances related to finance,
procurement and asset management, and/or new developments on School-
Based Management. The Office of the Director for Finance Service shall
lead the revisiting and updating of the FMOM whenever deemed
appropriate.

4. Through this policy, the DepEd recognizes the importance of continuous

professional development of its financial management staff as agents of
change and financial reform. The implementation of the FMOM includes
the development of a five-year professional/capacity building plan which
shall be consolidated and implemented in coordination with the Bureau

36
 for Human Resource and Organizational Development (BHROD) at the
Central Office (CO) and Regional Offices (ROs). The development plans
shall adhere to the Department’s policies for training and development.

5. Trainers for the NToT at the regional level will be from the CO, while
trainers for the NToT at the schools division level will be led by the
members of the Technical Working Group for FMOM from the CO and
ROs cited in DepEd Undersecretary for Finance and Administration
Memorandum 2014-018015. Trainers trained from Phase II will lead the
orientation of schools using the prescribed training module.

6. Finance personnel in the ROs and SDOs shall conduct spot-checking and
mentoring of schools in the effective and efficient delivery of financial
management services using the FMOM.

Department Order No. 63, s. 2016 dated September 30, 2016 - Guidelines
on the Implementation and Monitoring of FY 2016 Bottom-Up Budgeting
Projects

The Department of Education (DepEd) issues the Guidelines on the

Implementation and Monitoring of FY 2016 Bottom-Up Budgeting (BUB)
Projects which aims to set standards on the implementation of FY 2016 BUB
Projects by Local Government Units (LGUs) and provide guidance to all
DepEd Regional Offices (ROs) and Schools Division Offices (SDOs) for
monitoring and reporting of said projects.

Department Order No. 64, s. 2016 dated October 4, 2016 - Guidelines on

the Utilization of the 2015 and 2016 Financial Support for Multigrade
Schools

One of the continuing initiatives of the Department of Education (DepEd),

along its thrust of increasing access to quality elementary education, is
strengthening the implementation of the Multigrade Program in Philippine
Education (MPPE) to address pressing concerns and issues on the provision of
customized teaching and learning materials for multigrade classes and
professional development of teachers.

In support to DepEd’s plans to effectively implement the multigrade program,

the enclosed Guidelines on the Utilization of the 2015 and 2016 Financial
Support for Multigrade Schools, stipulates procedures on funds release,
utilization, reporting, and liquidation.

Consistent with its mandate to improve access to quality elementary education

particularly in the far-flung, isolated and poor communities, the DepEd through
the Bureau of Elementary Education (BEE) launched the Multigrade Program
in Philippine Education (MPPE) in 1993. The Department’s first initiative for

37
MPPE was to improve the conditions of the MG education in the country
through training programs, curriculum development and development of
appropriate learning materials.

Anchored on the Basic Education Act of 2013, Republic Act (RA) No. 10533,
the DepEd is strengthening the implementation of Multigrade Program in
Philippine Education (MPPE) through clearly defined standards, mechanisms
and processes in the organization of multigrade classes, adoption of multigrade
teaching as well as content of the curriculum, mode of instruction, provision of
education resources, administration of assessment, development of pupils and
teachers, incentives and benefits of teachers, creation of appropriate learning
environment, and monitoring and supervision of schools.

A total of ₱142,780,000.00 is allocated for each fiscal year 2015 and 2016
under the General Appropriation Act (GAA).

Department Order No. 65, s. 2016 dated October 21, 2016 - Amendment
to DepEd Order No. 79, s. 2012 (Implementing Guidelines on the Grant of
Step Increment for Teachers with Specialization in Science and/or
Mathematics)

In view of the changes in the organizational structure and staffing complement

as a result of the implementation of the Department’s Rationalization Plan. It
is emphasized that the grant of three (3) salary steps increment for this purpose
is effected only once. The Division HRMO/AO shall maintain a Registry of
Science and Mathematics Teachers already granted the salary steps increment
in this regard.

Department Order No. 68, s. 2016 dated November 4, 2016 - Amendment

to DepEd Order No. 56, s. 2016 (Guidelines on the Grant of Performance-
Based Bonus for the Department of Education Employees and Officials
for Fiscal Year 2015)

Provision No. V.C.16 (f)(i), page 8, of the Enclosure of DepEd Order (DO)
No. 56, s. 2016 entitled Guidelines on the Grant of Performance-Based Bonus
for the Department of Education Employees and Officials for Fiscal Year 2015
issued on July 27, 2016 states that:

f. Schools that have demonstrated exceptional performance in terms of

initiative, innovation, leadership, creativity, recognition, and uniqueness
shall receive a plus point on top their total score from the above cited
indicators. The following criteria shall be observed.

i. The school is awarded as Best Implementor of Brigada Eskwela

in the national level in SY 2014-2015 (see Annex 3–Best
Implementing Schools of Brigada Eskwela in SY 2014-2015). xxx

38
 Annex 3 of DO No. 56, s. 2016 with the SY 2015-2016 list of school-awardees
for Brigada Eskwela will not be referred to for FY 2015 Performance-Based
Bonus (PBB).

It is advised that the 2014 Best Implementing Schools of Brigada Eskwela as

enclosed in DepEd Memorandum (DM) No. 141, s. 2014 issued on December
16, 2014 shall remain the official list of school-awardees.

In view of this, the provision in V.C.16 (f)(i) is amended. The school-awardees

declared in DM No. 141, s. 2014 shall receive a plus point on top of their total
score in the school level ranking relative to the grant of FY 2015 PBB.

Department Order No. 75, s. 2016 dated December 29, 2016 -

Implementing Guidelines on the Use of Capital Outlay Fund for Schools
Effective Fiscal Year 2016

This fund is lodged under Schools Division Offices in the DepEd’s Operations
of Schools–Elementary Schools Budget in the General Appropriations Act
starting FY 2016.

The CO Fund aims to enable elementary schools to finance small CO

requirements, such as furniture and equipment, which cannot be charged
against their regular operating budgets or against their Maintenance and Other
Operating Expenses allocations.
The mechanisms and procedures contained herein shall guide the composition,
utilization and reporting of this Fund. It shall also clarify the guidelines on the
capitalization threshold of Plant, Property and Equipment as prescribed in the
new Government Accounting Manual issued by the Commission on Audit and
as cited in DepEd Order Nos. 13 and 31, s. 2016.

2. Statement of Compliance and Basis of Preparation of Financial Statements

The consolidated financial statements of the Department of Education have been

prepared in accordance with and comply with the Philippine Public Sector
Accounting Standards (PPSAS) issued by the Commission on Audit per COA
Resolution No. 2014-003 dated January 24, 2014.

Financial Statements as at December 31, 2016 are prepared by fund cluster as

prescribed under COA Circular No. 2015-002 dated March 9, 2015. These financial
statements are Regular Agency Fund, Special Accounts – Foreign Assisted/Foreign
Grants, Business Related and Trust Receipts Funds to include Provident Fund,
combined and presented as the Department of Education Region Consolidated
Financial Statements with accompanying Notes to Financial Statements, for the year
then ended.

39
 The consolidated financial statements have been prepared on the basis of historical
cost, unless stated otherwise. The Statement of Cash Flows is prepared using the
direct method.

The consolidated financial statements presented the comparative balances for CYs
2016 and 2015 to include Trust Receipts with Provident Fund, Business Related
Funds and Foreign-Assisted Projects, which were not incorporated in the
consolidated financial statements as of December 31, 2015, thus showing variance
in some of the affected accounts in CY 2015 as reflected in the combined
consolidated financial statements as of December 31, 2016.

For RO X - All personnel and accounting records were burned when the office of the
Division of Cagayan de Oro City was razed by fire last August 12, 2012. Its financial
statements include those accounts that will be adjusted once request of the relief of
accountabilities of all concerned accountable officers of that Office will be approved
by the Commission on Audit. As of December 31, 2015, the COA has approved only
one out of the seven of the said requests.

3. Summary of Significant Accounting Policies and Other Information

3.1 Basis of Accounting

a. The consolidated Financial Statements are prepared on an accrual basis in

accordance with the Philippine Public Sector Accounting Standards
(PPSAS). All expenses are recognized when incurred and reported in the
financial statements in the period to which they relate. Income is on accrual
basis, except for transactions where accrual basis is impractical or when
other methods are required by law.

b. Notices of Cash Allocation (NCAs) received from the Department of

Budget and Management are recorded in the Regular Agency (RA) books,
as well as, those income/receipts which the agency is not authorized to use
and are required to be remitted to the National Treasury.

c. The Modified Obligation System is used to record allotments received and

obligations incurred. Separate registries are maintained to control allotments
and obligations for each class of allotment.

d. Allowance for doubtful accounts is maintained at a level adequate to provide

for potential non-collectability of receivables. A review of the receivables,
designed to identify accounts to be provided with allowance, is made on a
regular basis.

e. The one fund concept is adopted in accounting for all funds received from
the National Government and other donor agencies such as the funds from
the local government received by our operating units and the financial

40
 assistance from the World Bank (WB), Asian Development Bank (ADB),
Japan Bank for International Cooperation (JBIC), United Nations
Children’s Fund (UNICEF), Australia Agency for International
Development (AusAID), The Government of Spain (GOS), etc. are
accounted for and recorded separately.

f. Transactions in foreign currencies are recorded in Philippine Peso based on

Bangko Sentral ng Pilipinas (BSP) rate of exchange prevailing at the date
of transaction.

g. Correction of Fundamental Errors-Fundamental errors of prior years are

corrected as direct adjustments to Accumulated Surplus/ (Deficit) Account.
Errors affecting current year’s operation are charged to the current year’s
account.

h. Subsequent Events - Non-adjusting entries after the balance sheet date

which are so significant that non-disclosure would affect the ability of the
users of the financial statements to make proper evaluation and decisions,
have to be disclosed by stating the nature of the event and an estimate of its
financial effects. Information received after the balance sheet date about
conditions that existed at that date has to be stated to update the disclosures
made.

3.2 Consolidation

Consolidated entities

The Consolidated Financial Statements reflect the assets, liabilities, revenues

and expense of the DepEd Central Office and all 16 Regional Offices, 209
Division Offices, 2,505 Implementing Units, Attached Agencies of the
Department namely: DepEd Ecotech Center, Applied Nutrition Center, Baguio
Teachers’ Camp, National Educators’ Academy of the Philippines (NEAP),
and National Science Teaching and Instrumentation Center (NSTIC) as well as
the RELC/Dormitory operations in 13 regions and the DepEd Provident Fund.
This also includes Foreign Assisted Projects namely, Educational Performance
Incentive Partnership (EPIP) and School Based Program for Basic Education
(SBP4BE).

3.3 Financial instruments

a. Financial assets

Initial recognition and measurement

Financial assets within the scope of PPSAS 29 - Financial Instruments:

Recognition and Measurement are classified as financial assets at fair value

41
through surplus or deficit, loans and receivables, held-to-maturity
investments or available-for-sale financial assets, as appropriate. The
DepEd determines the classification of its financial assets at initial
recognition.

Purchases or sales of financial assets that require delivery of assets within a

time frame established by regulation or convention in the marketplace
(regular way trades) are recognized on the trade date, i.e., the date that the
DepEd commits to purchase or sell the asset.

DepEd’s financial assets include: cash and short-term deposits; trade and
other receivables; loans and other receivables.

Subsequent measurement

The subsequent measurement of financial assets depends on their

classification.

Financial assets at fair value through surplus or deficit

Financial assets at fair value through surplus or deficit include financial

assets designated upon initial recognition at fair value through surplus and
deficit.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market. After initial
measurement, such financial assets are subsequently measured at amortized
cost using the effective interest method, less impairment. Amortized cost is
calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the effective interest rate. Losses
arising from impairment are recognized in the surplus or deficit.

Held-to-maturity

Non-derivative financial assets with fixed or determinable payments and

fixed maturities are classified as held to maturity when the Agency has the
positive intention and ability to hold it to maturity.

After initial measurement, held-to-maturity investments are measured at

amortized cost using the effective interest method, less impairment.
Amortized cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the
effective interest rate. The losses arising from impairment are recognized in
surplus or deficit.

42
Derecognition

DepEd derecognizes a financial asset or, where applicable, a part of a

financial asset or part of an Agency’s of similar financial assets when:

 The rights to receive cash flows from the asset have expired or is
waived; and
 DepEd has transferred its rights to receive cash flows from the asset or
has assumed an obligation to pay the received cash flows in full without
material delay to a third party; and either: (a) the Agency has transferred
substantially all the risks and rewards of the asset; or (b) the agency has
neither transferred nor retained substantially all the risks and rewards
of the asset, but has transferred control of the asset.

Impairment of financial assets

The Agency assesses at each reporting date whether there is objective

evidence that a financial asset or a group of financial assets is impaired. A
financial asset or a group of financial assets is deemed to be impaired if, and
only if, there is objective evidence of impairment as a result of one or more
events that has occurred after the initial recognition of the asset (an incurred
‘loss event’) and that loss event has an impact on the estimated future cash
flows of the financial asset or the group of financial assets that can be
reliably estimated.

Evidence of impairment may include the following indicators:

 The debtors or a group of debtors are experiencing significant financial

difficulty
 Default or delinquency in interest or principal payments
 The probability that debtors will enter bankruptcy or other financial
reorganization
 Observable data indicates a measurable decrease in estimated future
cash flows (e.g. changes in arrears or economic conditions that correlate
with defaults)

Financial assets carried at amortized cost

For financial assets carried at amortized cost, the Agency first assesses
whether objective evidence of impairment exists individually for financial
assets that are individually significant, or collectively for financial assets
that are not individually significant. If the Agency determines that no
objective evidence of impairment exists for an individually assessed
financial asset, whether significant or not, it includes the asset in a group of
financial assets with similar credit risk characteristics and collectively
assesses them for impairment. Assets that are individually assessed for

43
 impairment and for which an impairment loss is, or continues to be,
recognized are not included in a collective assessment of impairment
Investments.

If there is objective evidence that an impairment loss has been incurred, the
amount of the loss is measured as the difference between the assets carrying
amount and the present value of estimated future cash flows (excluding
future expected credit losses that have not yet been incurred). The present
value of the estimated future cash flows is discounted at the financial asset’s
original effective interest rate. If a loan has a variable interest rate, the
discount rate for measuring any impairment loss is the current effective
interest rate.

The carrying amount of the asset is reduced through the use of an allowance
account and the amount of the loss is recognized in surplus or deficit. Loans
together with the associated allowance are written off when there is no
realistic prospect of future recovery and all collateral has been realized or
transferred. If, in a subsequent year, the amount of the estimated impairment
loss increases or decreases because of an event occurring after the
impairment was recognized, the previously recognized impairment loss is
increased or reduced by adjusting the allowance account. If a future write-
off is later recovered, the recovery is credited to finance costs in surplus or
deficit.

b. Financial Liabilities

Initial recognition and measurement

Financial liabilities within the scope of PPSAS 29 are classified as financial

liabilities at fair value through surplus or deficit or loans and borrowings, as
appropriate. The entity determines the classification of its financial
liabilities at initial recognition.

All financial liabilities are recognized initially at fair value and, in the case
of loans and borrowings, plus directly attributable transaction costs.

The DepEd’s financial liabilities include loans, borrowings such as Service

Concession Arrangements Payable, Treasury Bills, Bonds Payable, Due to
GOCCs/NGAs/LGUs, Guaranty Deposits Payable, Internal Revenue
Allotment Payable etc.

Subsequent measurement

The measurement of financial liabilities depends on their classification.

44
 Financial liabilities at fair value through surplus or deficit

Financial liabilities at fair value through surplus or deficit include financial

liabilities designated upon initial recognition as at fair value through surplus
or deficit.

Loans and borrowing

After initial recognition, interest bearing loans and borrowings are

subsequently measured at amortized cost using the effective interest
method. Gains and losses are recognized in surplus or deficit when the
liabilities are derecognized as well as through the effective interest method
amortization process.

Amortized cost is calculated by taking into account any discount or

premium on acquisition and fees or costs that are an integral part of the
effective interest rate.

Derecognition

A financial liability is derecognized when the obligation under the liability

is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same

lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability,
and the difference in the respective carrying amounts is recognized in
surplus or deficit.

3.4 Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and cash at bank, deposits
on call and highly liquid investments with an original maturity of three months
or less, which are readily convertible to known amounts of cash and are subject
to insignificant risk of changes in value. For the purpose of the consolidated
statement of cash flows, cash and cash equivalents consist of cash and short-
term deposits as defined above, net of outstanding bank overdrafts.

3.5 Inventories

Inventory is measured at cost upon initial recognition. To the extent that

inventory was received through non-exchange transactions (for no cost or for
a nominal cost), the cost of the inventory is its fair value at the date of
acquisition.

45
 Costs incurred in bringing each product to its present location and conditions
are accounted for, as follows:

 Raw materials: purchase cost using the weighted average cost method;
 Finished goods and work in progress: cost of direct materials, labor and a
proportion of manufacturing overheads based on the normal operating
capacity, but excluding borrowing costs.

After initial recognition, inventory is measured at the lower of cost and net
realizable value. However, to the extent that a class of inventory is distributed
or deployed at no charge or for a nominal charge, that class of inventory is
measured at the lower of cost and current replacement cost.

Net realizable value is the estimated selling price in the ordinary course of
operations, less the estimated costs of completion and the estimated costs
necessary to make the sale, exchange, or distribution.

Inventories are recognized as an expense when deployed for utilization or

consumption in the ordinary course of operations of the Agency.

3.6 Investment Property

Investment properties are measured initially at cost, including transaction

costs. The carrying amount includes the replacement cost of components of an
existing investment property at the time that cost is incurred if the recognition
criteria are met and excludes the costs of day-to-day maintenance of an
investment property.

Investment property acquired through a non-exchange transaction is measured

at its fair value at the date of acquisition. Subsequent to initial recognition,
investment properties are measured using the cost model and are depreciated
over its estimated useful life.

Investment properties are derecognized either when they have been disposed
of or when the investment property is permanently withdrawn from use and no
future economic benefit or service potential is expected from its disposal. The
difference between the net disposal proceeds and the carrying amount of the
asset is recognized in the surplus or deficit in the period of derecognition.

Transfers are made to or from investment property only when there is a change
in use.

The DepEd use the cost model for the measurement of investment property
after initial recognition.

46
3.7 Property, Plant and Equipment

Recognition

An item is recognized as property, plant, and equipment (PPE) if it meets the

characteristics and recognition criteria as a PPE.

The characteristics of PPE are as follows:

 Tangible items;
 Are held for use in the production or supply of goods or services, for rental
to others, or for administrative purposes; and
 Are expected to be used during more than one reporting period.

An item of PPE is recognized as an asset if:

 It is probable that future economic benefits or service potential associated

with the item will flow to the entity; and
 The cost or fair value of the item can be measured reliably.

Measurement at Recognition

An item recognized as property, plant, and equipment is measured at cost.

A PPE acquired through non-exchange transaction is measured at its fair value

as at the date of acquisition.

The cost of the PPE is the cash price equivalent or, for PPE acquired through
non-exchange transaction its cost is its fair value as at recognition date.

Cost includes the following:

 Its purchase price, including import duties and non-refundable purchase

taxes, after deducting trade discounts and rebates;
 expenditure that is directly attributable to the acquisition of the items; and
 initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located, the obligation for which an entity
incurs either when the item is acquired, or as a consequence of having used
the item during a particular period for purposes other than to produce
inventories during that period.

Measurement After Recognition

After recognition, all PPE are stated at cost less accumulated depreciation and
impairment losses.

47
When significant parts of PPE are required to be replaced at intervals, the
Agency recognizes such parts as individual assets with specific useful lives and
depreciates them accordingly. Likewise, when a major repair/replacement is
done, its cost is recognized in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are satisfied.

All other repair and maintenance costs are recognized as expense in surplus or
deficit as incurred.

Depreciation

Each part of an item of PPE with a cost that is significant in relation to the total
cost of the item is depreciated separately.

The depreciation charge for each period is recognized as expense unless it is

included in the cost of another asset.

Initial Recognition of Depreciation

Depreciation of an asset begins when it is available for use such as when it is

in the location and condition necessary for it to be capable of operating in the
manner intended by management.

For simplicity and to avoid proportionate computation, the depreciation is for

one month if the PPE is available for use on or before the 15th of the month.
However, if the PPE is available for use after the 15th of the month,
depreciation is for the succeeding month.

Depreciation Method

The straight line method of depreciation shall be adopted unless another

method is more appropriate for agency operation.

Estimated Useful Life

The Agency uses the Schedule on the Estimated Useful Life of PPE by
classification prepared by COA.

DepEd uses a residual value equivalent to at least five percent (5%) of the cost
of the PPE.

Impairment

An asset’s carrying amount is written down to its recoverable amount, or

recoverable service amount, if the asset’s carrying amount is greater than its
estimated recoverable service amount.

48
 Derecognition

The DepEd derecognizes items of PPE and/or any significant part of an asset
upon disposal or when no future economic benefits or service potential is
expected from its continuing use. Any gain or loss arising on derecognition of
the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the surplus or deficit when the
asset is derecognized.

DepEd Region VIII derecognizes items of property, plant and equipment

and/or any significant part of an asset upon disposal or when no future
economic benefits or service potential is expected from its continuing use. Any
gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is
included in the surplus or deficit when the asset is derecognized.

The DepEd Regional Office VIII derecognized its property, plant and
equipment due to the damaged brought about by super Typhoon Yolanda last
November 8, 2013.

3.8 Leases

Finance Lease

Finance leases are leases that transfer substantially all of the risks and benefits
incidental to ownership of the leased item.

Assets held under a finance lease are capitalized at the commencement of the
lease at the fair value of the leased property or, if lower, at the present value of
the future minimum lease payments. The Agency also recognizes the
associated lease liability at the inception of the lease. The liability recognized
is measured as the present value of the future minimum lease payments at initial
recognition.

Subsequent to initial recognition, lease payments are apportioned between

finance charges and reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are
recognized as finance costs in surplus or deficit.

An asset held under a finance lease is depreciated over the useful life of the
asset. However, if there is no reasonable certainty that the Agency will obtain
ownership of the asset by the end of the lease term, the asset is depreciated over
the shorter of the estimated useful life of the asset and the lease term.

49
 Operating Lease

Operating leases are leases that do not transfer substantially all the risks and
benefits incidental to ownership of the leased item. Operating lease payments
are recognized as an operating expense in surplus or deficit on a straight-line
basis over the lease term.

Finance Lease

The Agency recognizes lease payments receivable under a finance lease as

assets in the statements of financial position. The assets are presented as
receivable at an amount equal to the net investment in the lease.

The finance revenue is recognized based on a pattern reflecting a constant

periodic rate of return on the net investment in the finance lease.

Operating Lease

Leases in which the Agency does not transfer substantially all the risks and
benefits of ownership of an asset are classified as operating leases.

Initial direct costs incurred in negotiating an operating lease are added to the
carrying amount of the leased asset and recognized over the lease term.

Rent received from an operating lease is recognized as income on a straight-

line basis over the lease term. Contingent rents are recognized as revenue in
the period in which they are earned.

The depreciation policy for PPE is applied to similar assets leased by the entity.

3.9 Intangible Assets

Recognition and Measurement

Intangible assets are recognized when the items are identifiable non-monetary
assets without physical substance; it is probable that the expected future
economic benefits or service potential that are attributable to the assets will
flow to the entity; and the cost or fair value of the assets can be measured
reliably.

Intangible assets acquired separately are initially recognized at cost.

If payment for an intangible asset is deferred beyond normal credit terms, its
cost is the cash price equivalent. The difference between this amount and the
total payments is recognized as interest expense over the period of credit unless
it is capitalized in accordance with the capitalization treatment permitted in

50
PPSAS 5, Borrowing Costs.

Subsequent Expenditure on an Acquired In-process Research and

Development Project

Subsequent expenditure on an in-process research or development project

acquired separately and recognized as an intangible asset is:

 Recognized as an expense when incurred if it is research expenditure;

 Recognized as an expense when incurred if it is development expenditure
that does not satisfy the criteria for recognition as an intangible asset; and
 Added to the carrying amount of the acquired in-process research or
development project if it is development expenditure that satisfies the
recognition criteria for intangible assets.

Intangible Assets Acquired through Non-Exchange Transactions

The cost of intangible assets acquired in a non-exchange transaction is their

fair value at the date these were acquired.

Internally Generated Intangible Assets

Internally generated intangible assets, excluding capitalized development

costs, are not capitalized and expenditure is reflected in surplus or deficit in the
period in which the expenditure is incurred.

Recognition of an Expense

Expenditure on an intangible item was recognized as an expense when it is

incurred unless it forms part of the cost of an intangible asset that meets the
recognition criteria of an intangible asset.

Subsequent Measurement

The useful life of the intangible assets is assessed as either finite or indefinite.
Intangible assets with a finite life are amortized over its useful life:

The straight line method is adopted in the amortization of the expected pattern
of consumption of the expected future economic benefits or service potential.

An intangible asset with indefinite useful lives shall not to be amortized.

Intangible assets with an indefinite useful life or an intangible asset not yet
available for use were assessed for impairment whenever there is an indication
that the asset may be impaired.

51
 The amortization period and the amortization method, for an intangible asset
with a finite useful life, were reviewed at the end of each reporting period.
Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset were considered to modify the
amortization period or method, as appropriate, and were treated as changes in
accounting estimates. The amortization expense on an intangible asset with a
finite life is recognized in surplus or deficit as the expense category that is
consistent with the nature of the intangible asset.

Gains or losses arising from de-recognition of an intangible asset were

measured as the difference between the net disposal proceeds and the carrying
amount of the asset and were recognized in the surplus or deficit when the asset
is derecognized.

Research and development costs

The DepEd expenses research costs as incurred. Development costs on an

individual project were recognized as intangible assets when the DepEd can
demonstrate:

 The technical feasibility of completing the asset so that the asset will be
available for use or sale
 Its intention to complete and its ability to use or sell the asset
 How the asset will generate future economic benefits or service potential
 The availability of resources to complete the asset
 The ability to measure reliably the expenditure during development

Following initial recognition, intangible assets were carried at cost less any
accumulated amortization and accumulated impairment losses.

Amortization of the asset begins when development is complete and the asset
is available for use. It is amortized over the period of expected future benefit.

During the period of development, the asset is tested for impairment annually
with any impairment losses recognized immediately in surplus or deficit.

3.10 Provisions

Provisions are recognized when the Agency has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits or service potential will be required to
settle the obligation and a reliable estimate can be made of the amount of the
obligation.

Where the Agency expects some or all of a provision to be reimbursed, for

example, under an insurance contract, the reimbursement is recognized as a

52
 separate asset only when the reimbursement is virtually certain.

The expense relating to any provision is presented in the statement of financial

performance net of any reimbursement.

Provisions were reviewed at each reporting date, and adjusted to reflect the
current best estimate. If it is no longer probable that an outflow of resources
embodying economic benefits or service potential will be required to settle the
obligation, the provisions are reversed.

Contingent liabilities

The Agency does not recognize a contingent liability, but discloses details of
any contingencies in the notes to the financial statements, unless the possibility
of an outflow of resources embodying economic benefits or service potential
is remote.

Contingent assets

The Agency does not recognize a contingent asset, but discloses details of a
possible asset whose existence is contingent on the occurrence or non-
occurrence of one or more uncertain future events not wholly within the control
of the Agency in the notes to the financial statements.

Contingent assets are assessed continually to ensure that developments are

appropriately reflected in the financial statements. If it has become virtually
certain that an inflow of economic benefits or service potential will arise and
the asset’s value can be measured reliably, the asset and the related revenue are
recognized in the financial statements of the period in which the change occurs.

3.11 Changes in accounting policies and estimates

The DepEd recognizes the effects of changes in accounting policy

retrospectively. The effects of changes in accounting policy were applied
prospectively, if retrospective application is impractical.

The DepEd recognizes the effects of changes in accounting estimates

prospectively by including in surplus or deficit.

The DepEd corrects material prior period errors retrospectively in the first set
of financial statements authorized for issue after their discovery by:

 Restating the comparative amounts for prior period(s) presented in which

the error occurred; or

53
  If the error occurred before the earliest prior period presented, restating the
opening balances of assets, liabilities and net assets/equity for the earliest
prior period presented.

3.12 Foreign Currency Transactions

Transactions in foreign currencies are initially recognized by applying the spot

exchange rate between the function currency and the foreign currency at the
transaction.

At each reporting date:

 Foreign currency monetary items are translated using the closing rate;
 Nonmonetary items that are measured in terms of historical cost in a
foreign currency shall be translated using the exchange rate at the date of
the transaction; and
 Nonmonetary items that are measured at fair value in a foreign currency
shall be translated using the exchange rates at the date when the fair value
was determined.

Exchange differences arising (a) on the settlement of monetary items, or

(b) on translating monetary items at rates different from those at which they
were translated on initial recognition during the period or in previous financial
statements, are recognized in surplus or deficit in the period in which they arise,
except as those arising on a monetary item that forms part of a reporting entity’s
net investment in a foreign operation.

Transactions in foreign currencies are recorded in Philippine Peso based on

Bangko Sentral ng Pilipinas (BSP) rate of exchange prevailing at the date of
transaction.

3.13 Revenue from non-exchange transactions

Recognition and Measurement of Assets from Non-Exchange Transactions

An inflow of resources from a non-exchange transaction, other than services

in-kind, that meets the definition of an asset are recognized as an asset if the
following criteria are met:

 It is probable that the future economic benefits or service potential

associated with the asset will flow to the entity; and
 The fair value of the asset can be measured reliably.

An asset acquired through a non-exchange transaction is initially measured at

its fair value as at the date of acquisition.

54
Recognition of Revenue from Non-Exchange Transactions

An inflow of resources from a non-exchange transaction recognized as an asset

is recognized as revenue, except to the extent that a liability is also recognized
in respect of the same inflow.

As the Agency satisfies a present obligation recognized as a liability in respect

of an inflow of resources from a non-exchange transaction recognized as an
asset, it reduces the carrying amount of the liability recognized and recognizes
an amount of revenue equal to that reduction.

Measurement of Revenue from Non-Exchange Transactions

Revenue from non-exchange transactions is measured at the amount of the

increase in net assets recognized by the entity, unless a corresponding liability
is recognized.

Measurement of Liabilities on Initial Recognition from Non-Exchange

Transactions

The amount recognized as a liability in a non-exchange transaction is the best

estimate of the amount required to settle the present obligation at the reporting
date.

Taxes

Taxes and the related fines and penalties are recognized when collected or
when these are measurable and legally collectible. The related refunds,
including those that are measurable and legally collectible, are deducted from
the recognized tax revenue.

Fees and fines not related to taxes

The Agency recognizes revenues from fees and fines, except those related to
taxes, when earned and the asset recognition criteria are met. Deferred income
is recognized instead of revenue if there is a related condition attached that
would give rise to a liability to repay the amount.

Other non-exchange revenues are recognized when it is probable that the future
economic benefits or service potential associated with the asset will flow to the
entity and the fair value of the asset can be measured reliably.

Gifts and Donations

The Agency recognizes assets and revenue from gifts and donations when it is
probable that the future economic benefits or service potential will flow to the
entity and the fair value of the assets can be measured reliably.

55
Goods in-kind are recognized as assets when the goods are received, or there
is a binding arrangement to receive the goods. If goods in-kind are received
without conditions attached, revenue is recognized immediately. If conditions
are attached, a liability is recognized, which is reduced and revenue recognized
as the conditions are satisfied.

On initial recognition, gifts and donations including goods in-kind are

measured at their fair value as at the date of acquisition, which were ascertained
by reference to an active market, or by appraisal. An appraisal of the value of
an asset is normally undertaken by a member of the valuation profession who
holds a recognized and relevant professional qualification. For many assets, the
fair value is ascertained by reference to quoted prices in an active and liquid
market.

Transfers

DepEd recognizes an asset in respect of transfers when the transferred

resources meet the definition of an asset and satisfy the criteria for recognition
as an asset, except those arising from services in-kind.

For DepEd Region VIII – Transfer for Science and Mathematics Equipment
from DepEd CO were recognized as assets by DepEd RO VIII implementing
units in the same manner as transfers from DepEd Regional Office VIII.

Services in-Kind

Services in-kind are not recognized as asset and revenue considering the
complexity of the determination of and recognition of asset and revenue and
the eventual recognition of expenses.

SDO - Leyte recognizes revenue from rendering of services by reference to the

stage of completion when the outcome of the transaction can be estimated
reliably. The stage of completion is measured by reference to labor hours
incurred to date as a percentage of total estimated labor hours.

Transfers from other government entities

Revenues from non-exchange transactions with other government entities and

the related assets are measured at fair value and recognized on obtaining
control of the asset (cash, goods, services and property) if the transfer is free
from conditions and it is probable that the economic benefits or service
potential related to the asset will flow to the Agency and can be measured
reliably.

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3.14 Revenue from Exchange transactions

Measurement of Revenue

Revenue shall be measured at the fair value of the consideration received or

receivable.

Rendering of Services

The DepEd recognizes revenue from rendering of services by reference to the

stage of completion when the outcome of the transaction can be estimated
reliably. The stage of completion is measured by reference to labor hours
incurred to date as a percentage of total estimated labor hours.

Where the contract outcome cannot be measured reliably, revenue is

recognized only to the extent that the expenses incurred were recoverable.

Sale of Goods

Revenue from the sale of goods is recognized when the significant risks and
rewards of ownership have been transferred to the buyer, usually on delivery
of the goods and when the amount of revenue can be measured reliably and it
is probable that the economic benefits or service potential associated with the
transaction will flow to the DepEd.

Interest income

Interest income is accrued using the effective yield method. The effective yield
discounts estimated future cash receipts through the expected life of the
financial asset to that asset’s net carrying amount. The method applies this yield
to the principal outstanding to determine interest income each period.

Dividends

Dividends or similar distributions are recognized when the Agency’s right to

receive payments is established.

Rental income

Rental income arising from operating leases on investment properties is

accounted for on a straight-line basis over the lease terms and included in
revenue.

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3.15 Budget information

The annual budget is prepared on a cash basis and is published in the website
of the Department of Budget and Management under the General
Appropriations Act CY 2016.

A separate Statement of Comparison of Budget and Actual Amounts (SCBAA)

were prepared since the budget and the financial statements were not prepared
on comparable basis. The SCBAA was presented showing the original and
final budget and the actual amounts on comparable basis to the budget.
Explanatory comments are provided in the notes to the annual financial
statements.

The annual budget figures included in the financial statements were for the
Department of Education and include the budget for the sixteen (16) Regional
Offices, (209) Division Offices 2,505 implementing units, Attached Agencies
and Foreign Assisted Projects as reflected in the General Appropriation Act for
CY 2016, as approved.

3.16 Impairment of Non-Financial Assets

Impairment of cash-generating assets

At each reporting date, the Agency assesses whether there is an indication that
an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Agency estimates the asset’s recoverable
amount. An asset’s recoverable amount is the higher of an asset’s or cash-
generating unit’s fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of
assets.

Where the carrying amount of an asset or the cash-generating unit (CGU)

exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their
present value using a discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. In determining fair
value less costs to sell, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate valuation
model is used.

For assets, an assessment is made at each reporting date as to whether there is

any indication that previously recognized impairment losses may no longer
exist or may have decreased. If such indication exists, the Agency estimates
the asset’s or cash-generating unit’s recoverable amount.

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 A previously recognized impairment loss is reversed only if there has been a
change in the assumptions used to determine the asset’s recoverable amount
since the last impairment loss was recognized. The reversal is limited so that
the carrying amount of the asset does not exceed its recoverable amount, nor
exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognized for the asset in prior
years. Such reversal is recognized in surplus or deficit.

Impairment of non-cash-generating assets

The DepEd assesses at each reporting date whether there is an indication that a
non-cash-generating asset may be impaired. If any indication exists, or when
annual impairment testing for an asset is required, the DepEd estimates the
asset’s recoverable service amount. An asset’s recoverable service amount is
the higher of the non-cash generating asset’s fair value less costs to sell and its
value in use.

Where the carrying amount of an asset exceeds its recoverable service amount,
the asset is considered impaired and is written down to its recoverable service
amount. The DepEd classifies assets as cash-generating assets when those
assets were held with the primary objective generating a commercial return.
Therefore, non-cash generating assets would be those assets from which the
DepEd does not intend (as its primary objective) to realize a commercial return.

3.17 Service concession arrangements

The DepEd analyzes all aspects of service concession arrangements that it

enters into in determining the appropriate accounting treatment and disclosure
requirements. In particular, where a private party contributes an asset to the
arrangement, the DepEd recognizes that asset when, and only when, it controls
or regulates the services the operator must provide together with the asset, to
whom it must provide the, and at what price.

In the case of assets other than ‘whole-of-life’ assets, it controls, through

ownership, beneficial entitlement or otherwise – any significant residual
interest in the asset at the end of the arrangement. Any assets so recognized
were measured at their fair value. To the extent that an asset has been
recognized, the Agency also recognizes a corresponding liability, adjusted by
a cash consideration paid or received.

3.18 Borrowing Costs

The benchmark treatment is used by the DepEd in the recognition of borrowing

costs pertaining to loans borrowed by the National Government (NG) which
were recorded in the Bureau of the Treasury (BTr).

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 Under the benchmark treatment, borrowings costs were recognized as
expense in the period in which they were incurred, regardless of how the
borrowings were applied.

3.19 Employee benefits

The employees of DepEd are members of the Government Service Insurance

System (GSIS), which provides life and retirement insurance coverage.

The Agency recognizes the undiscounted amount of short term employee

benefits, like salaries, wages, bonuses, allowance, etc., as expense unless
capitalized, and as a liability after deducting the amount paid.

The Agency also recognizes expenses for accumulating compensated absences

when these are paid (commuted or paid as terminal leave benefits). Unused
entitlements that have accumulated at the reporting date are not recognized as
expense. Non-accumulating compensated absences, like special leave
privileges, are not recognized.

3.20 Measurement uncertainty

The preparation of consolidated financial statements in conformity with

PPSAS, requires management to make estimates and assumptions that affect
the reporting amounts of assets and liabilities, and disclosure of contingent
assets and liabilities, at the date of the consolidated financial statements and
the reported amounts of the revenues and expenses during the period. Items
requiring the use of significant estimates include the useful life of capital assets,
estimated employee benefits, rates for amortization, impairment of assets,
liability for contaminated sites, etc.

Estimates are based on the best information available at the time of preparation
of the consolidated financial statements and are reviewed annually to reflect
new information as it becomes available. Measurement uncertainty exists in
these consolidated financial statements. Actual results could differ from these
estimates.

For Region III, items requiring the use of significant estimates include five,
seven, 10, 20 and 30 years estimated useful life of capital assets and estimated
employee benefits.

3.21 Other Information

To support the implementation of the Philippine Government’s educational

reform agenda, the following development partners have extended their
assistance to DepEd through the Official Development Assistance Loans:

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IBRD Loan No. 8344 PH - Learning, Equity and Accountability Program
Support (LEAPS)

The Learning, Equity and Accountability Program Support (LEAPS) is a

USD300 million project under the Results-Based Lending program of the
International Bank for Reconstruction and Development (IUBRD, or the
Bank). The Project was designed to improve the quality of Grades 1 to 3
reading and math skills of children in Target Regions (V, VIII, IX CAR and
CARAGA) and target schools, with a special focus on those belonging to
Target Disadvantaged Groups (children with learning and physical disabilities,
children from remote/hard to reach areas, children belonging to an IP group,
out of school children youth).

The target results or Disbursement Linked indicators (DLIs) are specified

within the following three major project components:

Component 1 Improvement of Teaching and Learning in Grades 1 to

3 Reading and Math
Component 2 Strengthening of Accountability and Incentives of
Employees of the Department of Education
Component 3 Improvement of Program Design for Targeting
Disadvantaged Groups

The project’s outcome indicator will be measured through the administration

of the Early Grade Reading Assessment (EGRA) and Early Grade Math
Assessment (EGMA) tools to sample elementary schools in the five targets
LEAPs Regions. These Assessment tools conceptualized in the dominant
mother tongues of the 5 Regions (Bikol, Waray, Iloko, Chavacano and
Sinugbuanong Binisaya) pertain to measuring the performance of students
from regular schools and those belonging to the disadvantaged groups in early
grades’ reading and math.

For CY 2016, the following were the disbursements of the Department of

Education for the Eligible Expenditures for the Project (EEPs) of LEAPS
which were included in the CY 2016 Consolidated Status of Appropriations,
Allotments, Obligations, Disbursements and Balances (SAAODB):

School Maintenance and Other Operating Expenses P 17,195,003,480.00

Human Resource Training and Development 1,277,110,236.00
In-Service Training 344,777,423.00
Alternative Learning System 224,694,742.00
Abot-Alam Program 164,463,442.00

Of the above disbursements, the following amounts were to World Bank as

Eligible Expenditures for LEAPS 4th Loan Withdrawal Application:

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 School Maintenance and Other Operating Expenses P 17,194,407,274.00
Human Resource Training and Development 1,277,801,023.00
In-Service Training 343,395,850.00
Alternative Learning System 224,694,742.00
Abot-Alam Program 164,463,442.00

ADB LA No. 3237-PH – Senior High School Support Program (SHSSP)

The Asian Development Bank (ADB), referred to as the “Bank”, entered into
a loan agreement with the Government of the Philippines (GPH), with DepEd
as the beneficiary to support the SHS subsector. The Bank will finance a total
of USD300 million, which is 6.8% of the estimated total cost of implementing
the SHS program until 2019.

The SHSSP financed by ADB, will cover activities from 2014-2019 relating to
math and science teachers, the technical-vocational and livelihood track,
classroom facilities, and engagement of private education providers

A Results Based Loan (RBL) modality is being used for the SHSSP. Under
the RBL, financing is triggered by the achievement of mutually agreed results
called Disbursement-Linked Indicators (DLIs) which is a subset of DepEd’s
overall results framework for SHS. To achieve the intended results, six (6)
DLIs were identified broken down into a sequence of time-bound targets.
Disbursements shall be made following the achievement and verification of the
agreed DLIs.

As provided for in the Loan Agreement, the Philippine Government may apply
for advanced financing for the purposes of meeting its requirements, provided
however, that drawdown made in this way will not exceed 25% of the loan
amount.

Likewise, a semi-annual implementation review mission will be jointly

undertaken by ADB and DepEd with other implementing partners and
government agencies to review the implementation of the project and provide
assistance to the Department.

For Fiscal Year 2016, the following are the key Program/Activity/Project
(PAPs) which included programmed budgets for the Senior High School (SHS)
Program:

Amount
Programmed
Total Obligated vs.
Program/Activity/Project Amount
Appropriations Total
Intended for SHS
Appropriations
Creation and hiring of teaching and 30,278,712,000.00 17,026,470,000.00 14,144,571,000.00
non-teaching positions

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 Amount
Programmed
Total Obligated vs.
Program/Activity/Project Amount
Appropriations Total
Intended for SHS
Appropriations
Provision and Maintenance of Basic 61,800,000,000.00 54,102,953,000.00 36,800,000,000.00
Education Facilities (New
Classroom Construction)
Provision and Maintenance of Basic 11,382,500,000.00 11,382,500,000.00
Education Facilities(Construction
of Technical Vocational and
Livelihood Workshops)
Provision and Maintenance of Basic 2,848,094,000.00 941,956,000.00 782,000,000.00
Education Facilities (Provision of
School Furniture)
Provision of Technical Vocational 4,695,999,000.00 2,381,606,000.00 4,600,612,000.00
Livelihood Tools and Equipment
Textbooks and Instructional 4,182,000,000.00 494,873,000.00 2,460,300,000.00
Materials (Provision of Grade 11
and 12 LMs for 176 unique
subjects)
Provision of Science and 2,400,346,000.00 - 2,400,346,000.00
Mathematics Tools and Equipment
DepEd Computerization Program 6,867,816,000.00 1,966,152,000.00 6,164,755,000.00
(Provision of computer packages)
Operations of Schools – Secondary 1,295,461,000.00 537,554 ,000.00 1,295,461,000.00
Schools (School MOOE)
Human Resource Training and 3,608,045,000.00 1,418,009,000.00 1,837,310,000.00
Development (HTRD) Fund
(Training of Teachers)
Senior High School Voucher 12,183,401,000.00 5,913,221,000.00 12,183,401,000.00
Program for Private Schools and
State and Local Colleges and
Universities
Total 141,542,374,000.00 84,782,794,000.00 94,051,256,000.00

Of the Department of Education’s Appropriations of P141,542,374,000.00 per

GAA for FY 2016, funds amounting to P94,051,256,000.00 is programmed for
the SHS Program.

Out of the total Appropriations, funds amounting to P73,182,500,000.00, are

“transferred appropriations” to the Department of Public Works and Highways
(DPWH) categorized as “For Later Release” under the Department of Budget
and Management’s (DBM) Circular No. 561 issued on January 4, 2016. Of this
amount, P48,182,500,000.00 is intended for the SHS Program.

Based on financial report submitted by DPWH as of December 31, 2016, a total

amount of P54,102,953,000.00 has been obligated/utilized out of the
transferred appropriations provided for SHS school building program.

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 Meanwhile, based on the DepEd’s Consolidated SAAODB as of end of
December 2016, the amount of P30,679,841,000.00 has been obligated/utilized
out of the total Appropriations released to and managed by the Department.

4. Changes in Accounting Policies

The Agency recognizes the effects of changes in accounting policy retrospectively.

The effects of changes in accounting policy are applied prospectively if retrospective
application is impractical.

DepEd recognizes the effects of changes in accounting estimates prospectively by

including in surplus or deficit.

The Agency also corrects material prior period errors retrospectively in the first set
of financial statements authorized for issue after their discovery by:

 Restating the comparative amounts for prior period(s) presented in which the
error occurred; or

 If the error occurred before the earliest prior period presented, restating the
opening balances of assets, liabilities and net assets/equity for the earliest prior
period presented.

The DepEd changed its accounting estimates on the use of residual value equivalent
to five percent to 10 percent of the cost of the PPE starting CY 2014. During prior
years (2013 and below), residual value is pegged at 10 percent of the cost of PPE.

On the same date, the DepEd Region III adopted accounting policies under PPSAS
Nos. 3, 9, 12, 14, 17, 19, 21 and 23 which include the requirements for the
recognition, measurement, presentation and disclosure. These are effective beginning
of CY 2016 with reference to the New Government Accounting Manual.

The 13 Division Offices of DepEd Region VIII adopted the following new
accounting policies:

 The replenishment basis was strictly followed in the downloading of School

MOOE. Downloading was made to the cluster heads through direct credits to
the ATM Payroll Accounts of the school heads.

 Effective January 1, 2016, SDO - Leyte downloaded their School MOOE

directly to the duly designated Teachers-in-Charge, thereby increasing the
number of school heads whose school MOOE were directly released to them.

 A new organizational structure for the Accounting Unit was implemented under
Division Memorandum No. 13, s. 2016, creating the following sub-units,
namely: Internal Control Unit, School Operations Unit,

64
 Program/Activity/Project Unit, Division Payroll Services Unit, Provident Fund
Unit and Accounting Performance Unit. Downloading of school MOOE is
managed by the School Operations Unit with payrolls effectively prepared by
District for elementary and by batch for secondary, on a first-come-first-served
basis by the Senior Bookkeepers assigned therein.

 Effective March 11, 2016, DepEd Order No. 13, s. 2016, entitled “Implementing
Guidelines and Procedures on the Downloading and Use of School MOOE and
Other Funds Managed by the school” was issued, superseding DepEd Order No.
12, s. 2014. The new guidelines relatively increased the number of valid uses of
school MOOE and excluded as one of the limitations, the procurement of
equipment.

5. Prior Period Adjustments

For Region X - The Agency included adjustment for the amount of SPHERE Fund
Accumulated Surplus that was added to conform to the issued memorandum from
the DepEd-Central Office. It also includes prior years’ adjustments such as
reclassification of last year’s expenses (Financial Assistance to NGAs) to receivable
account (Due from Operating Units) as recommended by the Resident Auditor for
the School-Based Feeding Program Fund for Operational Expenses SY 2015-2016
amounting to ₱1,377,900.00. It also includes represents adjustments for the various
liquidations of cash advances granted in 2015 and prior years but only liquidated
and/or refunded in 2016, closing of Due to RO for the liquidation of the 2015 PEI
and the booking up of transferred DPWH School Building Projects.

In CAR - There are expenses in prior years which were not recognized as expenses
at the time of the expenses’ were incurred. As a result, the amount of ₱21,756,175.61
was adjusted from the beginning balance of Accumulated Surplus (Deficit) Account.

RO VIII (SDO – Leyte) has determined that beginning balances of Advances and
Accounts Payable were erroneous and were adjusted for errors with either a debit or
credit to Accumulated Surplus.

6. Cash and Cash Equivalents

Total major account group balance amounted to ₱13,993,230,541.06 as of December

31, 2016 and is broken down into the following general ledger accounts such as:

Cash and Cash Equivalents

Accounts 2016 2015

Cash on Hand 22,406,387.23 20,829,569.13
Cash in Bank-Local Currency 13,203,620,217.14 12,362,127,447.12
Cash in Bank-Foreign Currency 0.00 167.67
Treasury/Agency Cash Accounts 767,203,936.69 651,143,393.71
Total 13,993,230,541.06 13,034,100,577.63

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Cash and Cash Equivalents include:

Cash - Collecting Officers – This account represents undeposited collections of

various collecting officers on the last working day of the year. The same was
deposited on the first working day of January, 2017.

Petty Cash - This account pertains to amount of cash granted to designated officers
for payment of authorized petty or miscellaneous expenses.

Cash in Bank- Local Currency, Current Account – The bulk amount pertains to
Regional Offices and Operating Units account amounting to ₱13,191,788,023.49.
This represents the remittances of the implementing units of payroll deductions and
government shares to various government and private financial institutions which
were transferred to cover the RPSU payrolls for the month of December which were
received by the Regional Office few days before the cut-off date and disbursements
were not affected during the reporting period.

This also includes intra-agency fund transfers from DepEd Central Office intended
to cover funding requirements for the implementation of various Centrally-Managed
Projects as well as fund transfers emanating from the Regional Office to cover
funding requirements of the operating units. Furthermore, the same consists of cash
balances of trust collections of secondary schools intended for student related
activities. This also includes deposit of unused collection of seminar fees during the
conduct of various conference/workshops and registration fees from the Philippine
Educational Placement Test (PEPT) examinees.

For Region III, Cash in Bank-Local Currency, Current Account represents, mainly,
transferred funds from Schools Division Offices and Implementing Units to the
Regional Office for the remittance of salary deductions of payrolls prepared by the
Regional Payroll Services Unit (RPSU) due on January 2016 and the unexpended
portion or balance of NEAP III (formerly Regional Education Learning Center)
revolving fund.

Cash in Bank- Local Currency, Savings Account – This account represents fund for
income generating project of operating units which was recorded in the books as trust
liability account. Interest earned on this account was recorded as Interest Income.

Cash in Bank – Foreign Currency, Savings Account – This account is used to record
deposits and withdrawals of foreign currency in savings account maintained with
authorized government depository banks (AGDBs).

Cash in Bank- Treasury/Agency Deposit, Regular – This account is used to record in

the agency books the amount of collections remitted to the BTr under the General
Fund, either directly or thru the authorized agent banks (AABs) and AGDBs. At year-
end this account was credited to close to the Accumulated Surplus/ (Deficit).

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Cash in Bank- Treasury/Agency Deposit, Trust – This account represents the amount
deposited to BTr for service fees collected by the agency from private lending
institutions and cooperatives. The account is credited upon receipt of Certificate of
Deposit from BTr which is transmitted to DepEd Central Office for transfer of
liability to request Notice of Cash Allocation (NCA) from Department of Budget and
Management-Central Office (DBM-CO). Furthermore, part of this account pertains
to the PAGCOR-SBP Fund deposited by the Division Offices to BTr subject to
request of NCA upon progress billing of various creditors.

For Region III, Cash – Treasury/Agency Deposit, Trust refers to service fees
collected from private companies accredited under the Department’s Automatic
Payroll Deduction Scheme (APDS) by the Regional Office and IUs.

For Region V, cash balance under the Cash National Treasury, MDS (regular) as of
December 31, 2015 represents total amount of unclaimed checks for school MOOE,
school feeding program and others. No adjustment was made for all unreleased
checks as of December 31, 2016 under Cash-MDS in pursuant to Chapter 18, Section
56 of GAM, Volume I.

For RO X, Cash – Treasury/Agency Deposit, Trust account has a balance of

₱105,303,315.65 which represents remittances of service fees collected by the agency
from private lending institutions and cooperatives deposited to the BTr which will be
released back to the agency as an additional amount for provident fund upon request.

Cash - Modified Disbursement System (MDS), Regular - The receipt of NCA, an

authorization issued by the DBM to the agency to withdraw cash from the National
Treasury is recorded using the MDS wherein an MDS account is being maintained.
All disbursements are being done by issuing an MDS check which is chargeable
against the account of the Treasurer of the Philippines. The unused balance minus the
unreleased checks of the MDS account as of December 31, 2016 is automatically
reverted to the National Treasury. The unreleased checks are restored to the
corresponding cash account vis-a-vis the appropriate payable/liability account as of
December 31, 2016 and then again reverted back to the corresponding liability
account on the first working day of January 2017.

For Region IV-B, the MDS accounts of the Division of Palawan and Puerto Princesa
City were being maintained in the Philippine Veterans Bank (PVB). The LBP Puerto
Princesa Branch does not accommodate the MDS checks from the PVB issued for
deposit by the said Division Offices to fund the Elementary and Secondary payroll
CFC Current Accounts with the LBP. The Regional Office’s Trust Fund Account
serves as a parking account, upon confirmation from the PVB of the fund transfer,
the ROP shall again process the transfer of the same fund to our LBP-RPSU
Remittances Current Account. Thus, at the end of the year the balance of the Regional
Office’s Trust Fund includes the funds for transfer to the said LBP accounts.

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 For NCR, Cash & Cash Equivalents of the total amount of ₱989,175,741.40 in the
books of the Regional Office Proper, ₱699,675,321.83 was disbursed in January
2016. Remaining balances will be deposited to the National Treasury upon paying all
unpaid obligations for CY 2016 and prior years.

7. Investments

Accounts 2016 2015

Financial Assets-Held to Maturity 9,180,798.09 9,385,793.39
Total 9,180,798.09 9,385,793.39

The total amount pertains to OSEC account which consists of the following:

 10% Cumulative Shares Series “B” re: Installation of MERALCO –

₱538,560.00
 Bill Deposit to MERALCO – ₱1,271,690.00
 10% Cumulative Shares Series “B” re: Installation of MERALCO Electric
Facilities – ₱1,078,790.00
 Meter Deposit to MERALCO – ₱522,240.00
 The amount of ₱5,769,518.09 is still for reconciliation/verification

8. Receivables

Included in the above major account group as of December 31, 2016 are the
following general ledger accounts such as:

8.1 Loans and Receivables Accounts

Accounts 2016 2015

Accounts Receivable 41,688,534.60 36,693,700.89
Allowance for Impairment - AR (86,347.70) (52,911.50)
Net Value- Accounts Receivable 41,602,186.90 36,640,789.39
Notes Receivable 3,500.00 3,500.00
Allowance for Impairment-Notes 0.00 0.00
Receivable
Net Value- Notes Receivable 3,500.00 3,500.00
Interests Receivable 19,040,506.86 16,323,120.16
Allowance for Impairment-Interests 0.00 0.00
Receivable
Net Value- Interests Receivable 19,040,506.86 16,323,120.16
Loans Receivable - Others 3,116,686,656.79 3,062,312,112.44
Allowance for Impairment-Loans (436,247.34) (627,252.31)
Receivable - GOCCs
Net Value- Loans Receivable-GOCCs 3,116,250,409.45 3,061,684,860.13
Totals 3,176,896,603.21 3,114,652,269.68

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Accounts Receivables represents amount due from customers/clients resulting from
services rendered, trading/business transactions, and sale of merchandise or property
which are expected to be collected in the regular course of business or over a definite
period.

For Region III, the Loans Receivable-Others represents Provident Fund loans granted
to employees of the DepEd Region III and its Implementing Units (IUs). Repayment
of loan shall be made in fixed monthly equal installments with an interest rate of 6%
per annum through automatic deduction from borrower’s salary.

For RO VIII, this represents various receivables such as from Rosary & Tom Catering
and other overpayment to suppliers.

For CARAGA, this represents overpayments of salaries of newly hired teachers in

various Divisions. Refund will be collected from said teachers.

8.2 Lease Receivable - ₱9,502,709.00

This account represents the accrual of lodging fees and rental of facilities in Baguio
Teachers’ Camp.

8.3 Inter-Agency Receivables

Accounts 2016 2015

Due from National Government Agencies 9,526,164,364.49 5,712,306,646.20
Due from Government-Owned and/or 168,844,757.72 168,984,796.18
Controlled Corporations
Due from Local Government Units 76,706,032.11 78,341,358.97
Total Inter-Agency Receivables 9,771,715,154.32 5,959,632,801.35

Due from National Government Agencies (NGAs) – This account represents

receivables from various national government agencies such as cash advances
released to the Department of Public Works and Highways (DPWH) and also that of
DBM Procurement Service (pre-payment).

For RO III, the Due from NGAs refers to transfer of funds to other government
institutions for programs and projects subject to liquidation which includes among
others the transfer of funds of DepEd Regional Office III to DILG – Region III for
the Bottom – Up Budgeting Provincial Summit dated November 04, 2016 amounting
to ₱121,800.00.

Due from Government Owned and Controlled Corporations (GOCCs) – This account
consists of claims from government-owned/controlled corporations arising from
over-remittances of contributions and other deductions due them. The account also
includes over-remittance to GSIS due to cancelled checks which were not deducted
from the succeeding monthly remittances. This is the accumulated amount of over
remittances since the start of operations of the RPSU in CY 2002.

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At the Central Office, this includes accounts which remained dormant for years and
the supporting documents are either not available or cannot be located.

For Region III, Due from Government-Owned or Controlled Corporations refers

mainly to the remittances made to the Government Service Insurance System (GSIS)
for payroll of teaching and non-teaching personnel which were subsequently
cancelled due to subsequently reported absences.

For NCR, Due from Government-Owned or Controlled Corporations is for the over
remittance to GSIS arising from the late reporting of cancelled salary. It was for the
year 2012 and below when GSIS did not allow offsetting of cancelled deductions
which were previously remitted. It was already avoided effective CY 2013, when we
required the retiree or his/her legal heirs to pay the over remittance directly to GSIS
and to other GFIs.

Due from Local Government Units (LGUs) account is used to record the amount due
from provinces, cities, municipalities, barangays and other LGUs.

At the Central Office - Due from Local Government Units amounting to

₱40,776,144.48 pertains to releases made to different LGUs for the implementation
of specific government projects/activities subject to liquidation or delivery of goods
and services.

For Region III, this account represents long time unliquidated advances to LGUs for
the implementation of Non-Formal Education (NFE) – Social Reform Agenda (SRA)
Priority Projects granted in CYs 1997 and 1998. Despite repeated efforts to follow
up the submission of liquidation reports, no liquidation report is received due to
various reasons ranging from non-passing in audit and/or the responsible officers are
no longer in office.

For Regions CAR and CARAGA, balance of this account represents the uncollected
10 percent LGU Equity of TEEP School Building Construction.

8.4 Intra - Agency Receivables

Accounts 2016 2015

Due from Central Office 68,681,008.17 77,612,325.10
Due from Bureaus 18,123,461.02 81,925,552.40
Due from Regional Offices 443,609,580.56 2,503,535,687.30
Due from Operating Units 3,119,027,756.98 3,348,166,903.89
Due from Other Funds 53,617,406.91 0.00
Total Intra-Agency Receivables 3,703,059,213.64 6,011,240,468.69

Due from Central Office account is used to record inter-office transactions in the
books of Regional Offices/Staff Bureaus/Operating Units. For the DepEd, these are
receivables arising out of cancellation of payroll checks by the PSD (RPSU), Central

70
Office which were already remitted to the Central Office, the amount of which shall
be deducted to the following year’s fund transfer to CO and unfunded Sub-Allotment
Release Orders (Sub-AROs) received by ROs from CO.

Due from Bureaus is used to record transfer of funds not covered by allotment to the
Department/Offices from their Bureaus and Offices. It also includes fund transfers to
a Bureau/Office from another Bureau/Office of the same Department/Office.

Due from Regional Office/Staff Bureaus is used to record inter-office transactions in

the books of CO/OUs. It includes receivables from RO/Staff Bureaus at year-end
equivalent to the unobligated balance of allotment covered by funding check. For
DepEd, these are largely RPSU checks cancelled by the Division Offices. Cash
covering net payment and deductions of said cancelled checks were already
transferred to the ROPs. Likewise, this includes receivables by the Regional Office
Desks (RO Desks-CO) from the Regional Offices’ funding requirements for personal
and Government shares of teachers’ deductions serviced by the Payroll Services
Division for remittance to various GOCCs and private institutions.

The DepEd Region III transferred ₱2,529,954.53 to Don Jesus Gonzales National
High School for the payment of the school’s Net Payroll for the month of December
2015 and RPSU Salary Deduction Current Account for the corresponding salary
deductions due to non-availability of cash and also remitted for the school’s unfunded
salary deductions on the same year amounting to ₱4,592,192.56. As at December 31,
2016, the said amounts totaling to ₱7,122,147.09 remained outstanding and no update
has been received on the formal investigation of the case of misappropriation in the
said school. Further, the amount was eliminated against the balance of Due to
Regional Office of the said school.

The Due from Regional Office account amounting to ₱61,518,813.33 which refers to
the remittances made to the Government Service Insurance System (GSIS) for payroll
of teaching and non-teaching personnel which were subsequently cancelled due to
subsequently reported absences, was eliminated against the Due from Operating
Units credit balance. The remaining credit balance of the Due from Operating Units
account after said elimination is still being reconciled.

For Region X, Due from Regional Offices account amounting to ₱63,153,105.82

represents remittance of funds intended for the payment of contributions to
Government Financial Institutions (GFIs) and Private Lending Institutions (PLIs) for
the ensuing month.

For Region XI, the amount is in the books of Digos City which remains dormant for
more than five (5) years. Reconciliation is on-going and corresponding adjustment
will be made as soon as the activity will be done.

For CARAGA, the account for the Regional Office Proper refers to the cost of
properties which were not found and were confirmed lost by the accountable
employees during the conduct of the actual physical count of properties with the

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presence of the Resident Auditor representative.

Due from Operating Units – This account is used to record inter-office transactions
in the books of Central/Regional/Division Offices (CO/RO/DO). It also includes
receivables from OUs at year-end equivalent to the unobligated balance of allotment
covered by funding check. The big portion of this account pertains to receivables due
to the timing difference of deposits from the operating units’ funding requirements
for payment of salaries of all teaching and non-teaching personnel.

For Region III, the balance of this account cannot be eliminated because this is also
being used for reclassifying unliquidated balances of downloading of MOOE to Non-
IU schools at year-end.

For the Education Assessment Division (NETRC), the account is composed of prior
years’ unremitted collection of examination fees for National Elementary
Achievement Test (NEAT)/ National Secondary Achievement Test (NSAT) and
PEPT, and funding checks issued in previous years purposely to cover the expenses
of Testing Programs subject to liquidation by the field offices.

RO X - Due from Operating Units has a balance of ₱803,453,975.66. Of the amount,

₱803,423,970.66 pertains to the Regional Office Proper representing amount released
for payment of the Productivity Enhancement Incentive (PEI) to all teaching and non-
teaching personnel of the Region. Such release is subject to the submission of audited
liquidation reports by the 14 Division Offices and 39 Secondary Implementing Units.
The amount of ₱30,005.00 pertains to the Division of Gingoog City.

For NCR, in the books of the Regional Office, there is a total of ₱110,695,971.81
unadjusted balance under Due from Operating Units representing the (over) / under
remittances per submitted Monthly Report of Deposit (ROD) against SCDR (RPSU
generated disbursement report) for the monthly funding requirements of net salary
pay of teachers and other remittable deductions and government share. This account
was closed to Subsidy to Other NGAS/Financial Assistance to NGAS as part of the
eliminating entry for consolidation purposes. The Regional Office has already issued
the Statement of Account as of December 31, 2016 as basis for the Reconciliation
Statements (showing the reconciling items between RO Books and OUs Books) to be
prepared and submitted by various Operating Units.

8.5 Other Receivables

Accounts 2016 2015

Receivables - Disallowances/Charges 421,882,061.58 373,887,670.32
Due from Officers and Employees 95,459,655.81 190,347,087.70
Due from Non-Government Organizations/ 2,837,254,656.70 37,200,474.54
People's Organizations
Other Receivables 94,074,992.85 93,365,685.88
Total Other Receivables 3,448,671,366.94 694,800,918.44

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 Receivables-Disallowances/Charges – This account refers to amounts due from
officers and employees and those outside of government agencies for
audit/disallowances/charges, which have become final and executory. It also includes
claims from retired accountable officials and employees which remained unsettled to
date.

For Region II, the balance amounting to ₱17,368,788.90 have been requested for
lifting in view of the dismissal of cases filed against various officials of DepEd by
the Sandiganbayan.

Region III has Disallowances/Charges in the amount of ₱23,299,235.58. This

represents mainly the unsettled disallowances of prior years. Although some of these
disallowances were requested for settlement by submitting justifications, they were
not given favorable action by the previous Auditors.

For NCR, in the books of the Regional Office, this account amounting to
₱2,543,732.51 refers to the recording of unpaid Disallowances/Charges issued by the
Commission on Audit.

Due from Officers and Employees – This account is used to record amount of claims
from agency’s officers and employees for overpayment, cash shortage, loss of assets
and other bills issued by the agency.

Due from Non-Governmental Organizations/Peoples’ Organizations (NGOs/POs) –

This account represents fund releases entrusted to NGOs/POs for the implementation
of government projects.

Other Receivables – This account is used to record amount due from debtors and
other agencies not falling under any of the specific receivable account.

For RO V, Other Receivables (RO Books) amounting to ₱3,186,285.59 is subject to

review and verification. This amount pertains to the responding entry made by the
Regional Office during the year-end closing of books in 1994 or 1995 to take up
excess funding checks issued to some operating units. Reversal entry was
inadvertently omitted.

9. Inventories

For NCR, the bulk of inventory amount can be found in the Consolidated Financial
Reports of various Division Offices. Reclassification of inventory accounts to
appropriate expense accounts will be effected immediately upon receipt of Inventory
Custodian Slip (ICS) and Report of Materials and Supplies Issued (RSMI) from the
Supply Officer.

The huge amount of inventories totaling ₱5,521,087,461.75 consists mainly of

Textbooks & Instructional Materials Inventory, Other Supplies and Materials

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Inventory, Textbooks & Instructional Materials for Distribution and Office Supplies
Inventory as of December 31, 2016. Breakdown of Inventories as to Sub-Major
Account Group are as follows:

9.1 Inventory Held for Sale

Accounts 2016 2015

Merchandise Inventory 202,437.17 287,025.46

9.2 Inventory Held for Distribution

Accounts 2016 2015

Welfare Goods for Distribution 21,505.00 0.00
Drugs and Medicines for Distribution 937,475.43 2,529,808.44
Medical, Dental and Laboratory Supplies 2,719,773.63 2,343,719.04
for Distribution
Textbooks and Instructional Materials for 518,834,855.29 489,999,630.02
Distribution
Construction Materials for Distribution 0.00 3,808.00
Property and Equipment for Distribution 25,287,952.07 8,500,444.22
Other Supplies and Materials Distribution 22,876,379.01 22,737,886.40
Total Inventory Held for Distribution 570,677,940.43 526,115,296.12

Textbooks & Instructional Materials for Distribution - This account is used to record
the cost of textbooks and instructional materials including flipcharts, video
clips/slides, and the like, purchased/received for distribution.

Textbook and Instructional Materials Inventory amount represents the buffer stocks
of textbooks & supplementary materials of the Central Office including those
purchased from various book publishing companies. The same shall be dropped in
the books of accounts upon receipt of inventory reports from the IMCS/Property
Division.

9.3 Inventory Held for Consumption

Accounts 2016 2015

Office Supplies Inventory 477,434,269.40 482,314,174.86
Accountable Forms, Plates and Stickers 3,524,101.29 4,076,851.41
Inventory
Non-Accountable Forms Inventory 152,641.50 311,517.50
Animal/Zoological Supplies Inventory 77,555.26 85,060.32
Food Supplies Inventory 0.00 45,708.54
Drugs and Medicines Inventory 12,511,715.55 14,975,570.29
Medical, Dental and Laboratory Supplies 23,843,203.15 27,487,131.76
Inventory
Fuel, Oil and Lubricants Inventory 640,343.48 387,531.27
Agricultural and Marine Supplies 313,102.61 293,735.96
Inventory

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 Accounts 2016 2015
Textbooks and Instructional Materials 3,827,734,552.98 2,570,026,098.84
Inventory
Chemical and Filtering Supplies Inventory 24,810.00 24,810.00
Construction Materials Inventory 7,356,136.08 6,243,594.14
Other Supplies and Materials Inventory 440,765,307.73 601,555,079.70
Total Inventory Held for Consumption 4,794,377,739.03 3,707,826,864.59

Office Supplies Inventory - This is used to record the cost or value of

purchased/acquired office supplies such as bond papers, inks, and small tangible
items like staple wire removers, punchers, staplers and other similar items for
government operations.

Bulk of Inventory items are attributed to Textbook & Instructional Materials

Inventory. This balance represents prior year inventories that need to be dropped
from the books of accounts of the regional/division offices/operating units.
Reconciliation efforts and monitoring of these inventories are still on-going at all
levels.

Other Supplies and Materials Inventory represents items that cannot be classified
under any specific inventory accounts held for consumption. It also includes costs of
obsolete books, destroyed chairs, tools and materials which are due for
condemnation. Dropping of these obsolete items in the books of accounts should
further reduce this account.

For Region III, the accounts Office Supplies Inventory, Textbooks & Instructional
Materials Inventory and Other Supplies Inventory represents the accumulated
inventories carried at the individual books of accounts of all Implementing Units,
including the Regional Office. To validate these figures, physical inventory report
and accounting records should be reconciled.

For Region V, Accountable Forms Inventory consists of checks stubs for MDS and
commercial checks.

For Region IX, physical count of inventories is still on-going. Reconciliation of

inventory account is subject to submission of inventory reports so as to bring
balances (subsidiary ledger cards and general ledger) into agreement.

For CARAGA, Office Supplies Inventory pertains to supplies and materials procured
for operational requirements of the agency. Majority of these were already issued to
end-users but left unliquidated at the end of the year due to non-submission of RSMIS
to the Accounting Unit by the Accountable Officer.

For Baguio Teachers Camp, the inventory accounts represent balances of supplies,
materials and merchandise consisting of Centennial Plates and History Books as of
December, 2016.

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 For National Science Teaching Instrumentation Center (NSTIC), this account
consists of supplies and materials to be used in the production of various prototypes
of Science Teaching Equipment which is the major mandate of the Agency.

9.4 Semi - Expendable Machinery and Equipment

Accounts 2016 2015

Semi-Expendable Machinery 10,130,061.96 0.00
Semi-Expendable Office Equipment 14,783,731.24 0.00
Semi-Expendable Information and Communications 13,917,352.00 0.00
Technology Equipment
Semi-Expendable Agricultural and Forestry 545,879.92 0.00
Equipment
Semi-Expendable Communications Equipment 3,574,497.62 0.00
Semi-Expendable Disaster Response and Rescue 179,639.00 0.00
Equipment
Semi-Expendable Medical Equipment 445,614.68 0.00
Semi-Expendable Printing Equipment 703,551.12 0.00
Semi-Expendable Sports Equipment 1,729,678.66 0.00
Semi-Expendable Technical and Scientific 3,045,347.33 0.00
Equipment
Semi-Expendable Other Machinery and Equipment 12,009,494.37 0.00
Total Semi - Expendable Machinery and 61,064,847.90 0.00
Equipment

Semi-Expendable Machinery and Equipment account is used to recognize the

cost/fair value of the purchased/acquired Machinery and Equipment costing less than
₱15,000.00.

9.5 Semi - Expendable Furniture, Fixtures and Books

Accounts 2016 2015

Semi-Expendable Furniture and Fixtures 91,659,615.52 0.00
Semi-Expendable Books 3,104,881.70 0.00
Total Semi - Expendable , Fixtures and Books 94,764,497.22 0.00

Semi - Expendable Furniture, Fixtures and Books account is used to recognize the
cost/fair value of the purchased/acquired Furniture, Fixtures and Books costing less
than ₱15,000.00.

10. Other Current Assets - ₱5,572,508,821.28

Included in the above major account group as of December 31, 2016 are the
following General Ledger (GL) accounts such as:

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10.1 Advances

Accounts 2016 2015

Advances for Operating Expenses 2,616,967,860.43 2,260,433,867.27
Advances for Payroll 704,043,622.15 546,688,319.58
Advances to Special Disbursing Officer 1,074,102,394.47 816,353,168.03
Advances to Officers and Employees 429,226,340.60 483,636,566.21
Total Advances 4,824,340,217.64 4,107,111,921.09

For this year, Consolidated Status of Cash Advances of the Agency totaled to
₱4,784,426,636.15. Total Cash Advances for current year amounted to
₱16,551,205,553.54 of which a total of ₱12,548,199,249.21 or an equivalent of
75.81% was liquidated. This reveals an over-all increase in liquidation of 3.77% from
that of last year (75.40%). For prior years account balance of ₱4,441,012,826.76
(inclusive of adjustment) a total of ₱3,659,645,558.84 or an equivalent of 82.41%
was liquidated thereby leaving a total balance of unliquidated cash advances
amounting to ₱4,784,426,636.15 for both current and prior years account at year end.

Aging of Cash Advances as of December 31, 2016 are as follows:

Age Amount
Current: Less than 30 days 2,659,707,651.44
31-60 days 501,280,575.79
61-90 days 346,899,554.95
91-365 days 562,517,466.61
Past Due: Over 1 year 412,415,188.24
Over 2 years 131,706,629.96
3 years & above 169,899,569.16
Total 4,784,426,636.15

At the regional level, Advances for Operating Expenses account represents

unliquidated MOOE downloaded to Elementary and Non-Implementing Units
Secondary Schools. The account is used to establish accountabilities of School Heads
for their regular operating requirements downloaded monthly.

Advances for Payroll account represents unclaimed payroll of teaching and non-
teaching personnel and reimbursement for transportation and monitoring for various
program.

Advances to Special Disbursing Officers account represents unrefunded balance of

cash advances made for special programs and projects.

Advances to Officers and Employees account represents the amount granted as cash
advances for payment of various expenses, for specific purpose like MOOE
downloaded to Elementary and Secondary Schools without fiscal autonomy, which
is subject to liquidation.

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 10.2 Prepayments

Accounts 2016 2015

Advances to Contractors 731,401,535.95 502,299,170.30
Prepaid Rent 57,564.00 57,564.00
Prepaid Registration 17,309.18 9,065.10
Prepaid Interest 4,543.83 0.00
Prepaid Insurance 4,729,105.15 5,964,885.00
Other Prepayments 3,559,338.99 39,916,943.04
Total Prepayments 739,769,397.10 548,247,627.44

Advances to Contractors account represents unrecouped advance payments or

mobilization costs granted to various contractors for infrastructure projects
implemented by the agency and advance payments (equivalent to 15% of the contract
price) made to contractors in the implementation of the school building program.

Prepaid Rent account represents the amount advanced for payment of rent.

Prepaid Insurance account represents the amount advanced for the insurance of
government vehicles and office building.

Other prepayments refer to other prepayments to various creditors.

10.3 Deposits

Accounts 2016 2015

Guaranty Deposits 8,118,992.83 10,459,558.88
Other Current Assets 280,213.71 52,790.05
Total Deposits 8,399,206.54 10,512,348.93

Guaranty Deposits refers to deposits made to various creditors to guarantee

compliance with the terms of an agreement.

Total Prepayments and Deposits as of December 31, 2016 amounted to

₱739,769,397.10 and ₱8,399,206.54 respectively. The two sub-major accounts
consists of prepaid expenses, advances to contractors for their unrecouped
mobilization fee in the implementation of projects under School Building Program,
deposit on letters of credit and guaranty deposits to water district, water and electric
meters as well as other installation provided by them.

For RO IV-A, Guaranty Deposits refers to deposits made to various creditors to

guarantee compliance with the terms of an agreement.

11. Investment Property

This account pertains to the cost of the buildings of Baguio Teachers’ Camp held to
earn rentals.

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 Accounts 2016 2015
Investment Property, Buildings 21,252,309.67 0.00
Accumulated Depreciation - (5,942,764.05) 0.00
Investment Property, Buildings
Net Value 15,309,545.62 0.00

12. Property, Plant and Equipment (PPE)

The total balance of PPE accounts amounting to ₱122,264,496,424.69 are carried at

cost less accumulated depreciation and impairment losses. These accounts are subject
to reconciliation and valuation based on the actual physical count. Minor
replacements and maintenance expenses of fixed asset accounts are charged to
MOOE as incurred while major additions and improvements that extend the
estimated economic life of the assets are capitalized.

Particulars 2016 2015

Land 12,798,249,011.15 12,265,084,181.46
Land 12,798,249,011.15 12,265,084,181.46
Net Value 12,798,249,011.15 12,265,084,181.46
Land Improvements 160,546,657.25 169,916,340.78
Land Improvements, Aquaculture Structures 12,180,486.52 27,462,173.87
Accumulated Depreciation-Land Improvements, (5,646,678.61) (6,914,170.19)
Aquaculture Structures
Net Value 6,533,807.91 20,548,003.68
Other Land Improvements 302,265,845.91 286,272,846.84
Accumulated Depreciation-Other Land (148,124,746.57) (136,875,423.34)
Improvements
Accumulated Impairment Losses-Other Land (128,250.00) (29,086.40)
Improvements
Net Value 154,012,849.34 149,368,337.10
Infrastructure Assets 133,643,763.74 31,259,919.97
Water Supply Systems 26,034,742.11 15,321,041.17
Accumulated Depreciation-Water Supply (2,851,587.10) (2,065,825.68)
Systems
Net Value 23,183,155.01 13,255,215.49
Power Supply Systems 13,473,265.54 13,089,599.35
Accumulated Depreciation-Power Supply (2,140,872.76) (994,786.53)
Systems
Accumulated Impairment Losses-Power Supply (8,574.50) (8,574.50)
Systems
Net Value 11,323,818.28 12,086,238.32
Communication Networks 0.00 1,423,310.60
Accumulated Depreciation-Communication 0.00 (1,031,316.44)
networks
Net Value 0.00 391,994.16
Other Infrastructure Assets 99,322,838.45 5,526,472.00
Accumulated Depreciation-Other Infrastructure (186,048.00) 0.00
Assets
Net Value 99,136,790.45 5,526,472.00

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 Particulars 2016 2015
Buildings and Other Structures 68,565,312,521.97 61,714,929,081.36
Buildings 3,981,999,419.15 3,858,321,165.21
Accumulated Depreciation-Buildings (1,271,750,059.79) (1,235,074,006.41)
Accumulated Impairment Losses-Buildings (104,000.66) (342,897.56)
Net Value 2,710,145,358.70 2,622,904,261.24
School Buildings 86,412,340,427.84 77,568,055,651.62
Accumulated Depreciation-SB (21,970,834,946.00) (19,752,546,257.53)
Accumulated Impairment Losses-SB (6,538,922.51) (6,499,509.21)
Net Value 64,434,966,559.33 57,809,009,884.88
Hospitals and Health Centers 908,851.92 0.00
Hostels and Dormitories 104,786,131.35 23,390,611.94
Accumulated Depreciation-Hostels and (46,914,757.18) (7,641,020.87)
Dormitories
Net Value 57,871,374.17 15,749,591.07
Other Structures 1,743,902,170.08 1,592,444,246.41
Accumulated Depreciation-Other Structures (382,148,120.23) (325,178,902.24)
Accumulated Impairment Losses-Other (333,672.00) 0.00
Structures
Net Value 1,361,420,377.85 1,267,265,344.17
Machinery and Equipment 11,280,187,979.76 5,249,611,540.79
Machinery 38,323,490.89 53,842,268.08
Accumulated Depreciation - Machinery (19,966,951.56) (30,223,958.45)
Net Value 18,356,539.33 23,618,309.63
Office Equipment 2,113,177,436.83 2,126,136,074.74
Accumulated Depreciation-Office Equipment (1,145,627,607.24) (1,190,578,546.47)
Accumulated Impairment Losses - Office (6,645.33) (296,963.98)
Equipment
Net Value 967,543,184.26 935,260,564.29
Information and Communication Technology 11,053,550,585.90 7,319,145,307.59
Equipment
Accumulated Depreciation-Information and (3,787,493,276.21) (3,920,732,518.21)
Communication Technology Equipment
Accumulated Impairment Losses -ICT (1,717,682.85) (1,030,269.34)
Equipment
Net Value 7,264,339,626.84 3,397,382,520.04
Agricultural and Forestry Equipment 32,525,037.08 6,469,460.18
Accumulated Depreciation-Agricultural and (3,240,829.47) (3,472,642.01)
Forestry Equipment
Accumulated Impairment Losses-Agricultural (11,205.12) 0.00
and Forestry Equipment
Net Value 29,273,002.49 2,996,818.17
Marine and Fishery Equipment 5,011,552.00 608,117.00
Accumulated Depreciation-Marine and Fishery (1,083,555.30) (640,832.50)
Equipment
Net Value 3,927,996.70 (32,715.50)
Communication Equipment 225,493,929.88 248,052,080.57
Accumulated Depreciation-Communication (140,549,849.64) (150,624,140.23)
Equipment

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 Particulars 2016 2015
Accumulated Impairment Losses- (12,776.00) (812,458.25)
Communication Equipment
Net Value 84,931,304.24 96,615,482.09
Construction and Heavy Equipment 2,650,059.73 3,382,796.43
Accumulated Depreciation - Construction and (541,196.29) (869,717.77)
Heavy Equipment
Net Value 2,108,863.44 2,513,078.66
Disaster Response and Rescue Equipment 16,988,567.32 20,394,580.83
Accumulated Depreciation-Disaster Response (10,952,564.15) (11,927,633.29)
and Rescue Equipment
Accumulated Impairment Losses-Construction (3,520.00) 0.00
and Heavy Equipment
Net Value 6,032,483.17 8,466,947.54
Military, Police and Security Equipment 387,361.12 326,866.62
Accumulated Depreciation-Military and Police (154,692.10) (129,370.54)
Equipment
Net Value 232,669.02 197,496.08
Medical Equipment 65,815,193.91 58,402,415.59
Accumulated Depreciation-Medical Equipment (39,294,070.76) (41,154,522.71)
Accumulated Impairment Losses-Medical 0.00 (10,607.48)
Equipment
Net Value 26,521,123.15 17,237,285.40
Printing Equipment 2,445,047.72 2,042,130.30
Accumulated Depreciation-Printing Equipment (501,117.12) (249,332.38)
Net Value 1,943,930.60 1,792,797.92
Sports Equipment 48,740,358.64 44,032,248.61
Accumulated Depreciation-Sports Equipment (16,555,545.12) (16,477,225.14)
Accumulated Impairment Losses-Sports (4,772.55) 0.00
Equipment
Net Value 32,180,040.97 27,555,023.47
Technical and Scientific Equipment 2,800,178,452.24 833,555,146.17
Accumulated Depreciation - Technical and (271,751,954.79) (322,804,885.45)
Scientific Equipment
Accumulated Impairment Losses-Sports 0.00 (547,778.14)
Equipment
Net Value 2,528,426,497.45 510,202,482.58
Other Machinery and Equipment 507,470,414.65 427,278,064.10
Accumulated Depreciation - Other Machinery (193,042,530.85) (201,302,739.22)
and Equipment
Accumulated Impairment Losses-Other (57,165.70) (169,874.46)
Machinery and Equipment
Net Value 314,370,718.10 225,805,450.42
Transportation Equipment 136,206,022.62 115,590,751.35
Motor Vehicles 392,080,290.48 341,913,201.89
Accumulated Depreciation - Motor Vehicles (257,237,474.01) (226,962,257.97)
Accumulated Impairment Losses-Motor (37,800.00) (642,150.00)
Vehicles
Net Value 134,805,016.47 114,308,793.92

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 Particulars 2016 2015
Watercrafts 1,150,322.75 842,645.25
Accumulated Depreciation - Watercrafts (349,116.60) (347,956.98)
Net Value 801,206.15 494,688.27
Other Transportation Equipment 1,695,267.66 1,784,960.41
Accumulated Depreciation-Other Transportation (1,095,467.66) (997,691.25)
Equipment
Net Value 599,800.00 787,269.16
Furniture, Fixtures and Books 3,916,139,453.38 3,669,030,770.89
Furniture and Fixtures 5,817,123,013.77 5,474,490,203.69
Accumulated Depreciation-Furniture and (2,126,153,832.76) (2,058,271,544.96)
Fixtures
Accumulated Impairment Losses - Furniture and 0.00 (3,253,356.22)
Fixtures
Net Value 3,690,969,181.01 3,412,965,302.51
Books 539,652,529.10 551,453,772.79
Accumulated Depreciation- Books (313,852,372.30) (295,220,178.36)
Accumulated Impairment Losses - Books (629,884.43) (168,126.05)
Net Value 225,170,272.37 256,065,468.38
Leased Assets 0.00 39,395.00
Leased Assets, Machinery and Equipment 0.00 19,395.00
Net Value 0.00 19,395.00
Other Leased Assets 0.00 20,000.00
Net Value 0.00 20,000.00
Investment Property, Buildings 3,108.56 196,168.56
Other Leased Assets Improvements 3,108.56 196,168.56
Net Value 3,108.56 196,168.56
Heritage Assets 618,343.68 0.00
Historical Buildings 1,043,897.66 0.00
Accumulated Depreciation-Historical Buildings (425,553.98) 0.00
Net Value 618,343.68 0.00
Service Concession Tangible Assets 10,060,495,680.46 11,863,548,341.83
Other Service Concession Assets 13,871,131,308.12 11,863,548,341.83
Accumulated Depreciation-Other Service (3,810,635,627.66) 0.00
Concession Assets
Net Value 10,060,495,680.46 11,863,548,341.83
Other Property, Plant and Equipment 228,120,151.25 260,131,832.50
Work/Zoo Animals 1,250,258.00 1,478,798.00
Accumulated Depreciation-Work/Zoo Animals (92,250.00) (50,422.50)
Net Value 1,158,008.00 1,428,375.50
Other Property, Plant and Equipment 498,662,489.38 550,199,549.14
Accumulated Depreciation-Other Property, Plant (271,525,350.21) (291,377,472.71)
and Equipment
Accumulated Impairment Losses-Other (174,995.92) (118,619.43)
Property, Plant and Equipment
Net Value 226,962,143.25 258,703,457.00
Construction in Progress 14,984,973,730.87 14,991,422,798.87
Construction in Progress- Land Improvements 1,930,469.59 2,105,879.18
Construction in Progress- Infrastructure Assets 19,461,619.96 2,627,496.58

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 Particulars 2016 2015
Construction in Progress-Buildings and Other 14,963,581,641.32 14,986,689,423.11
Structures
Totals 122,264,496,424.69 110,330,761,123.36

For OSEC – The School Building account consists of completed projects

implemented by the Department and other NGAs. The same shall be dropped in the
books of accounts once the project is completed and transferred to implementing
units. It also includes current and prior years’ completed projects implemented by
the DPWH.

For Region I, Motor Vehicles account still includes the two damaged vehicles due to
fire in CY 2008, while Construction in Progress account still includes completed
projects but not yet reclassified to its proper accounts pending the issuance of the
Certificates of Completion and Acceptance.

For Region III, the School Buildings balance of ₱178,544,627.93 as at December 31,
2016 includes the cost of repairs and rehabilitation of classrooms located throughout
the region under CYs 2014 and 2015 Basic Education Facilities Fund (BEFF)
implemented by the Regional Office Proper (ROP).

Furthermore, the Computer Software account with a carrying amount of

₱3,351,419.19 were properly reclassified to Information and Communication
Technology Equipment during the year as this really pertains to desktop computers
being used by the SDOs and other IUs.

Cost incurred for non-fiscally autonomous schools will be transferred to the

respective Schools Division Offices and cost for Fiscally Autonomous Schools will
be transferred accordingly through the issuance by the ROP of Transfer Journal Entry
Vouchers (JEVs) after completion and turnover.

Likewise, the Furniture and Fixtures and Water Supply Systems balances of
₱2,036,604.71 and ₱1,291,978.71, respectively in the Regional Office books
(SBP4BE) will likewise be transferred to the respective Schools Division Offices and
Fiscally Autonomous High Schools through the issuance of Transfer JEVs.

The carrying amounts of Property, Plant and Equipment with costs below the
₱15,000.00 threshold as at December 31, 2016 were charged to Accumulated
Surplus/ (Deficit).

Additions refers to acquisitions during the year including among others, the Transfer
JEVs for completed construction of School buildings and major repairs of
classrooms, reclassification of fully depreciated PPEs that are still serviceable from
Other Assets to appropriate PPE accounts and major repairs under the CY 2014
BEFF Repair and Rehabilitation of Classrooms.

Disposals include among others the reclassification of PPE items below the

83
₱15,000.00 threshold and transfer JEVs of School Buildings for CY 2013 BEFF
Repair and Rehabilitation of Classrooms issued by the Regional Office Proper to
various SDOs and other IUs.

Reclassifications were made for some PPE items during the year.

For RO IV-A, Construction in Progress – Buildings and Other Structures –

₱524,435,070.19 is the balance as of December 31, 2015 after debiting the identified
appropriate asset accounts. The amount of ₱74,963,900.41 pertains to the ending
balance as of December 31, 2005, prior to the implementation of CY 2005 School
Building Project. Efforts have been exerted in tracing the origin of this amount but
to no avail, hence it has remained unadjusted as of this date. The balance amounting
to ₱449,471,169.78 pertains to the final billings of various contractors. The latter is
for adjustment to appropriate asset account.

For Region V, Property, Plant and Equipment are carried at cost. Depreciation cost
is not provided for all property and equipment for the reason that there is no complete
data available to compute for the depreciation, such as cost and date of acquisition of
some properties and equipment especially the donated properties. It may be noted
that an untoward incident happened in Malapay NHS, an annex school of Ligao NHS
were some school equipment were stolen. The Supply Custodian and the Teacher in
Charge were not yet relieved of accountability and the items lost were not yet
dropped from the books of accounts.

For Region VIII, part of the PPE are those of the Regional Office Proper and other
Division Offices which were heavily damaged/washed out by Typhoon Yolanda in
November 2013 which are being reconciled per Physical Inventory Report from the
Supply Section.

For Region IX, physical count of PPE is still ongoing. Reconciliation of PPE account
is subject to submission of inventory reports so as to bring balances (SL and GL) into
agreement.

During the year, ROP transferred a building completed to Division Offices under
Cluster 2011 in the amount of ₱9,584,191.70, net of Accumulated Depreciation of
₱1,745,098.41.

For RO X, Accumulated Depreciation - Due to the fire incident on December 8, 2014

which destroyed all the records and documents of the existing PPE as of December
31, 2014, adjustments due to the change of residual value from 10 percent to 5 percent
were made according to the assumption that all property and equipment were
depreciated uniformly over their useful lives as provided by the Table of Estimated
Useful Life of PPE by the COA.

For Region XI, the amount of PPE is inclusive of the properties of the ROP and
various Division Office/Schools which are not yet reconciled. Reconciliation of the

84
 said asset is on-going, after reconciliation the office will issue JEV for the transfer
of accountability from the Regional Office to the Division Offices/Schools. The
amount reflected in the Inventory Report is subject for verification and reconciliation
from the books of accounts, as it does not tally with the records.

For CARAGA, the lot occupied by DepEd CARAGA where the Teacher
Development Center is located has an area of 3,000 sq. m. It is leased from the
Provincial Government of Agusan del Norte for 50 years at P1.00 per year. The lot
of DepEd CARAGA at Tiniwisan, Butuan City is part of the government center
identified by the City Government of Butuan. It consists of 2,000 sq. m. and out of
this area, 1,000 sq. m. was given by the City Government of Butuan while the other
1,000 sq. m. will be paid by DepEd CARAGA. To date, this was not yet booked by
the Regional Office because no payment has been made since the valuation of the
property is still in process and the supporting documents for the above property are
not yet received from the City Government of Butuan. However, expenses incurred
for the filling of the land were charged to Land Improvements.

For NSTIC, per Transfer Certificate of Title No. 151568, the parcel of land
containing an area of 3,000 square meters more or less, where the buildings of DepEd
NSTIC are located, has been registered in the name of the Department of Education,
Culture and Sports on March 30, 1999 at the City of Cebu. This parcel of land is not
yet recorded in the books of accounts.

Included in the balance of Construction in Progress – Building and Other Structure

account were ongoing projects implemented by the Department such as School
Building Program, repair of various buildings and the on-going projects implemented
by other NGAs. The same shall be credited upon project completion.

For NCR, there is a total of ₱815,248,651.30 under account Construction in progress

– Buildings and Other Structures as of December 31, 2016. This account will be
reclassified to the appropriate Building Account upon receipt of certification of
completion and acceptance to be issued by the Engineering Department.

13. Biological Assets

Biological Assets pertains to livestock, breeding stock including livestock held for
consumption/sale/distribution of fiscally autonomous and technical-vocational
schools.

This major account group includes the following general ledger accounts in the
Books of Region I, III and CAR such as Breeding Stocks, Livestock and Livestock
Held for Consumption/Sale/Distribution with the following balances as of December
31, 2016.

Particulars 2016 2015

Bearer Biological Assets 1,161,956.00 953,018.83
Breeding Stocks 529,316.00 481,671.00

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 Particulars 2016 2015
Livestock 615,000.00 471,347.83
Other Bearer Biological Assets 17,640.00 0.00
Consumable Biological Assets 14,211.00 14,211.00
Livestock Held for Consumption/Sale/Distribution 14,211.00 14,211.00
Totals 1,176,167.00 967,229.83

14. Intangible Assets

Balance pertains to the purchase costs or capitalized development costs of Computer

Software program for use in government operation. This account is in the books of
Regions I, III, VI, VII, VIII, IX, X, CARAGA, CAR and NCR as of December 31,
2016.

Accounts 2016 2015

Patents/Copyrights 6,786,800.00 0.00
Computer Software 9,132,873.51 30,644,630.68
Accumulated Amortization - Computer Software 4,283,017.97 22,351,649.11
Net Value 4,849,855.54 8,292,981.57
Other Intangible Assets 61,913.94 61,913.94
Total Intangible Assets 11,698,569.48 8,354,895.51

15. Other Non-Current Assets

Asset accounts that cannot be classified properly as PPE or current asset are being
booked in this account. This account is also used to record fully depreciated assets.
Likewise, obsolete and unserviceable assets awaiting final disposition as well as
those assets still serviceable but are no longer being used form part of this account.

Accounts 2016 2015

Acquired Assets 75,740.00 2,367,083.27
Abandoned Property Assets 236,038.15 236,038.15
Other Assets 394,490,549.77 300,660,281.91
Accumulated Impairment Losses - Other Assets 1,324,281.20 1,936,243.20
Net Value 393,166,268.57 298,724,038.71
Total Other Assets 393,478,046.72 301,327,160.13

For OSEC - Other Asset amounting to ₱123,162,875.34 pertains to the cost or

accumulated value of imported equipment already paid but not yet
delivered/received. This account remained dormant and outstanding since CY 2004.

16. Financial Liabilities

Included in the above major account group as of December 31, 2016 are the
following General Ledger accounts:

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 Accounts 2016 2015
Accounts Payable 5,761,301,004.71 3,371,132,623.39
Due to Officers and Employees 4,356,250,439.58 3,724,512,571.49
Service Concession Arrangements Payable 9,260,558,126.49 10,891,998,955.85
Total Payables 19,378,109,570.78 17,987,644,150.73

Accounts Payable – This account pertains to the obligations/indebtedness to

contractors/suppliers arising from the purchase of goods and services and other
obligations in connection with the agencies’ operation/trade/business. It also includes
prior year obligations and unreleased checks of the MDS account as of December 31,
2016 which are subject for reversion. The unreleased checks are restored to the
corresponding cash account vis-a-vis the appropriate payable/liability account as of
December 31, 2016 and then again reverted back to the corresponding liability
account on the first working day of January 2017.

The principle of recognizing payables only when there is actual delivery and
inspection of goods and services is being applied for MOOE and Capital Outlay
projects. However, recognition of payables in the books of accounts is subject to
availability of released allotments, hence unpaid prior years step increments which
are not provided allotments are not recognized in the books of accounts.

Due to Officers and Employees – This account is used to record incurrence of liability
to officers and employees for salaries, benefits and other emoluments including
authorized expenses advanced by them.

For Region III, Due to Officers and Employees refer to CY 2015 salary adjustment
for the implementation of approved Equivalent Record Forms/MTs and
Reclassification of Positions and other benefits due to teaching and non-teaching
personnel of the DepEd Region III and its IUs.

Bonds Payable – Domestic – This account is used to record issuances/flotations of

peso-denominated bonds.

Bills/Bonds/Loans Payable

Particulars 2016 2015

Treasury Bills Payable 0.50 0.50
Bonds Payable - Domestic 70,000.00 196,282.17
Loans Payable - Domestic 0.00 2,000.00
Totals 70,000.50 198,282.67

17. Inter-Agency Payables

Particulars 2016 2015

Due to BIR 881,144,003.22 569,544,798.58
Due to GSIS 6,181,790,232.28 5,383,927,423.57
Due to PAG-IBIG 316,462,045.44 330,483,768.34

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 Particulars 2016 2015
Due to PHILHEALTH 999,047,519.87 941,738,184.91
Due to NGAs 917,801,931.09 1,037,545,125.33
Due to NGAs 2,448,887.17 6,898,385.47
Due to LGUs 32,201,316.18 29,085,185.12
Totals 9,330,895,935.25 8,299,222,871.32

Due to BIR – this account pertains to taxes withheld from internal/external

contractors and creditors subject to remittance to the Bureau of Internal Revenue
(BIR) either thru the Tax Remittance Advice (TRA) payment scheme upon receipt
of Notice of Cash Allocation (NCA) for regular operating expenses from the
Department of Budget and Management (DBM) in CY 2016 or thru bank debit
system.

Due to GSIS, Pag-Ibig and Philhealth – the accounts represent unremitted life and
retirement contributions/loans, Pag-Ibig premiums/loans and Medicare contributions
due to the Government Service Insurance System (GSIS), Home Development and
Mutual fund (HDMF) and Philippine Health Insurance Corporation (PHIC),
respectively.

The DepEd contributes together with its employees to the GSIS in accordance with
Republic Act No. 8291 (GSIS Act of 1997). The GSIS administers the plan,
including payment of compulsory life insurance, optional life insurance, retirement
benefits including pension and disability benefits for work-related contingencies and
death benefits to employees to whom the act applies.

Due to NGAs – This account is used to record the amount of liabilities due to
National Government Agencies including those inter-agency transferred funds
received for the implementation of specific programs/projects.

Due to LGUs – This account is used to record the receipt of funds from LGUs for
delivery of goods/services as authorized by law, fund transfers for the
implementation of specific programs or projects and other inter-agency transactions.

The aforementioned accounts particularly the mandatory deductions for the month
of December 2016 and as of the closing of books are due for remittance by January
2017. Reconciliations are also being done regularly to effect some adjustments on
the remittances made by the Agency to these GOCCs and Bureau of Internal
Revenue.

18. Intra- Agency Payables

Particulars 2016 2015

Due to Central Office 157,472,634.82 959,476,746.13
Due to Bureaus 13,528,129.64 34,401,556.51
Due to Regional Offices (56,689,222.91) 452,374,913.31
Due to Operating Units 339,752,686.15 271,909,871.62

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 Particulars 2016 2015
Due to Other Funds 204,603,175.24 0.00
Total Intra-Agency Payables 658,667,402.94 1,718,163,087.57

Due to Central Office – This account is used to record the receipt of funds not covered
by allotment from Central Office by Bureaus/Regional Offices/ Operating Units of
the same agency for the implementation of specific program or project and other
intra-agency transactions.

Due to Bureaus – This account is used to record the receipt of funds not covered by
allotment from a Bureau by the Central Office/ Regional Offices/ Operating Units or
another Bureau within the same agency for the implementation of specific program
or project and other intra-agency transactions.

Due to Regional Offices – This refers to amount payable by Central

Office/Bureaus/Operating Units of NGAs to their Regional Offices.

19. Trust Liabilities

Particulars 2016 2015

Trust Liabilities 120,590,120.36 79,121,982.99
Guaranty Deposits Payable 1,184,128,206.40 858,050.00
Bail Bonds Payable 0.00 941,510,906.13
Customers' Deposit Payable 1,209,902.59 662,450.34
Total Trust Liabilities 1,305,928,229.35 1,022,153,389.46

Trust Liabilities account is used to record the receipt of amount held in trust for
specific purpose.

Guaranty/Security Deposits Payable – This pertains to the withheld portion of

payments to contractors of school buildings and other infrastructures to guarantee
performance which are refundable/ returnable to the depositor upon the completion
of the purpose for which it was given or may be used to cover possible future damage
to the constructed/repaired property.

For the DepEd, Guaranty Deposits Payable represents 10 percent retention

automatically deducted from the progress billing submitted by contractors and
payment will be made after satisfying all the requirements.

20. Deferred Credits/Unearned Income

Other Deferred Credits account is used to record other transactions not falling under
any of the specific deferred credit accounts. Balance of this account as of December
31, 2016 is ₱58,789,354.17.

Particulars 2016 2015

Other Deferred Credits 58,583,654.17 60,044,647.94

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 Particulars 2016 2015
Other Unearned Revenue 205,700.00 0.00
Total Deferred Credits/Unearned Income 58,789,354.17 60,044,647.94

21. Provisions

Particulars 2016 2015

Leave Benefits Payable 143,122.51 0.00
Other Provisions 0.00 10,760.06
Total Provisions 143,122.51 10,760.06

Leave Benefits Payable account is used to record accrual of money value of the
earned leave credits of government personnel. This account is debited upon
monetization of earned leave and payment of terminal leave benefits.

22. Other Payables – ₱6,810,587,042.28

Other Payables – Generally, this account is used to record other liabilities not falling
under any of the specific payable accounts. It includes balances of trust liability
accounts of operating units and amounts payable to Private Lending Institutions and
Insurance Companies for loan repayments and insurance premium deducted from
salaries of the employees.

For Region III, Other Payables account represents mainly, the amount to be remitted
to private companies accredited under the Department’s APDS including Provident
Fund for salary deductions of teachers and other personnel whose payroll are
prepared by the RPSU in accordance with the signed Memorandum of Agreement
between the Department and the said private companies.

For Region V, the Other Payables account amounting to ₱460,487,729.17 as of

December 31, 2016 pertains to the payables to agencies not classified as financial
liabilities. This includes loans payable to Private Lending Institutions.

While for Region VIII, the account Other Payables is used to record collections and
deposits for registration fees which has specific purpose or use, including but not
limited to payment of expenses chargeable against the collected amounts. Effective
January 1, 2016, the effects of these transactions were excluded from the General
Fund and were consolidated together with the Provident Fund and other Trust Funds.

23. Service and Business Income

Total Service and Business Income recorded for the year is ₱1,067,673,689.06. Large
amount of income were derived from registration/seminar fees and service fee
collected from the Private Lending Institutions (PLIs).

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 Particulars 2016 2015
Service Income 380,135,766.37 288,522,390.31
Permit Fees 4,385,190.00 3,224,220.00
Registration Fees 30,539,457.28 23,967,115.22
Clearance and Certification Fees 2,805,115.65 103,601.76
Legal Fees 12,610.00 300.00
Inspection Fees 9,361,373.18 9,934,910.00
Verification and Authentication Fees 47,950.00 40,520.00
Processing Fees 18,499,144.58 500,600.00
Fines and Penalties-Service Income 83,537,673.61 54,685,860.49
Other Service Income 230,947,252.07 196,065,262.84
Business Income 687,537,922.69 497,337,296.31
School Fees 2,956,171.42 2,350,746.31
Affiliation Fees 83,100.00 57,600.00
Examination Fees 7,298,382.00 4,518,130.19
Seminar Fees/Training Fees 112,514,487.25 77,442,024.39
Rent/Lease Income 13,761,364.47 51,523,674.04
Income from Hostels/Dormitories and 234,130,726.44 109,844,801.19
Other Like Facilities
Income from Printing and Publication 1,102,149.95 865,909.10
Interest Income 218,629,775.54 205,805,452.53
Fines and Penalties - Business Income 41,264,908.69 1,590,896.56
Other Business Income 55,796,856.93 43,338,062.00
Total Service and Business Income 1,067,673,689.06 785,859,686.62

The DepEd Region III conducts trainings, seminars and workshops where
registration or seminar fees are collected. These collections were used to defray
expenditures relative to the said activities.

Issuance of certification, authentication and verification (CAV) of elementary and

secondary education diploma, official transcript of records and other school records
is one of the functions of the Records Unit in the DepEd Region III as per DepEd
Memorandum No. 381, s. 2007.

For the Department of Education, clearance and certification fees are for the
collections from individuals requesting certification/authentication of names and
from private schools requesting for certification/authentication/recognition as to their
status to operate.

Inspection fees are collections from private schools applying for permit to operate
and offer courses.

Fines and Penalties – Service Income are for penalties imposed to the supplier for
late delivery of various procurement.

Examination fees are for collections for various students, teachers, principals and
superintendents’ tests.

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24. Shares, Grants and Donations

Total Shares, Grants and Donations for the year is ₱168,878,342.43 which is
composed of donations in kind and in cash, the Regional breakdown are as follows:

Particulars 2016 2015

Share from PAGCOR/PCSO 0.00 230,000.00
Income from Grants and Donations in Cash 35,667,479.78 19,108,148.14
Income from Grants and Donations in Kind 133,210,862.65 61,157,389.42
Total Shares, Grants and Donations 168,878,342.43 80,495,537.56

25. Gains – ₱24,040.00

Total Gains recorded for the year is ₱24,040.00 representing gains in agricultural
produce in Regions I and II.

26. Miscellaneous Income

Particulars 2016 2015

Proceeds from Insurance/Indemnities 555,216.10 0.00
Miscellaneous Income 2,984,624.72 0.00
Total Miscellaneous Income 3,539,840.82 0.00

27. Personnel Services

Total Expenses for personnel services for the year is ₱294,404,046,929.08 which is
90 percent of the total operating expenses for the year. The Agency being the largest
Executive Agency of the National Government and having a workforce almost half
of the total public employees spends and accounts most of its appropriations for
personal services expenses.

27.1 Personnel Services

Particulars 2016 2015

Salaries and Wages - Regular 194,680,605,544.38 175,630,741,968.25
Salaries and Wages – Casual/Contractual 1,274,507,654.57 1,086,258,179.77
Total Salaries And Wages 195,955,113,198.95 176,717,000,148.02

27.2 Other Compensation

Particulars 2016 2015

Personnel Economic Relief Allowance 17,751,951,393.71 16,261,381,733.90
(PERA)
Representation Allowance (RA) 79,238,756.56 67,971,905.99
Transportation Allowance (TA) 69,367,380.91 234,640,104.09
Clothing/Uniform Allowance 3,668,930,727.38 3,482,358,744.27
Subsistence Allowance 45,288,516.10 91,417,320.61

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 Particulars 2016 2015
Laundry Allowance 4,984,310.52 5,253,545.83
Quarter Allowance 341,328.44 3,569,857.96
Productivity Incentive Benefits 404,522,184.97 1,272,636,290.52
Honoraria 41,957,011.33 36,915,743.58
Hazard Pay 303,711,127.66 521,590,230.98
Longevity Pay 237,796,488.45 187,235,648.07
Overtime and Night Pay 102,488,733.80 147,319,728.22
Year End Bonus 29,723,309,305.55 14,125,983,116.69
Cash Gift 3,553,832,988.63 3,571,700,074.27
Other Bonuses and Allowances 10,546,095,628.41 20,381,887,191.24
Total Other Compensation 66,533,815,882.42 60,391,861,236.22

27.3 Personnel Benefits Contributions

Particulars 2016 2015

Retirement and Life Insurance 23,192,139,084.66 20,840,093,121.55
Contributions
Pag-IBIG Contributions 905,360,162.09 1,033,688,552.66
PhilHealth Contributions 2,336,644,583.76 2,018,570,190.31
Employees Compensation Insurance 884,103,460.90 826,520,710.52
Premiums
Provident/Welfare Fund Contributions 53,766.60 672,909.42
Total Personnel Benefits Contributions 27,318,301,058.01 24,719,545,484.46

27.4 Other Personnel Benefits

Particulars 2016 2015

Pension Benefits 485,681.50 1,458,105.05
Retirement Gratuity 78,715,402.60 152,782,191.64
Terminal Leave Benefits 829,536,927.53 1,002,486,611.96
Other Personnel Benefits 3,688,078,778.07 2,779,971,670.21
Total Other Personnel Benefits 4,596,816,789.70 3,936,698,578.86

28. Maintenance and Operating Expenses

Total Maintenance and Operating Expenses incurred during the year amounted to
₱29,310,347,501.72 wherein large amount of expenses were incurred for travelling
expenses, training and scholarship expenses, supplies and materials, utility expenses,
repair and maintenance and other MOOEs:

28.1 Travelling Expenses

Particulars 2016 2015

Traveling Expenses – Local 1,581,606,796.94 1,340,885,082.19
Traveling Expenses – Foreign 13,532,363.47 40,180,649.28
Total Travelling Expenses 1,595,139,160.41 1,381,065,731.47

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28.2 Training and Scholarship Expenses

Particulars 2016 2015

Training Expenses 4,159,371,409.53 3,061,486,212.39
Scholarship Expenses 6,270,992.58 6,146,780.10
Total Training and Scholarship Expenses 4,165,642,402.11 3,067,632,992.49

28.3 Supplies and Materials Expenses

Particulars 2016 2015

Office Supplies Expenses 3,716,917,750.15 2,710,047,065.14
Accountable Forms Expenses 11,132,674.36 11,239,519.64
Non-Accountable Forms Expenses 4,035,174.22 4,426,202.99
Animal/Zoological Supplies Expenses 372,502.13 516,850.69
Food Supplies Expenses 1,411,271,558.83 491,719,978.03
Welfare Goods Expenses 80,946.20 312,108.50
Drugs and Medicines Expenses 72,614,701.08 54,253,688.97
Medical, Dental and Laboratory Supplies 66,243,251.82 39,904,791.13
Expenses
Fuel, Oil and Lubricants Expenses 80,232,815.08 86,974,878.93
Agricultural and Marine Supplies Expenses 2,905,402.36 3,902,977.81
Textbook and Instructional Materials Expenses 966,254,217.38 727,577,663.89
Military, Police and Traffic Supplies Expenses 19,500.00 190,487.00
Chemical and Filtering Supplies Expenses 168,943.68 860,097.21
Semi-Expendable Machinery and Equipment 223,046,740.35 0.00
Expenses
Semi-Expendable Furniture, Fixtures and 307,464,680.07 0.00
Books Expenses
Other Supplies Expenses 2,471,340,263.10 1,918,467,175.87
Total Supplies and Materials 9,334,101,120.81 6,050,393,485.80

28.4 Utility Expenses

Particulars 2016 2015

Water Expenses 508,282,253.25 391,959,106.93
Electricity Expenses 1,776,699,322.58 1,385,119,965.54
Total Utility Expenses 2,284,981,575.83 1,777,079,072.47

28.5 Communication Expenses

Particulars 2016 2015

Postage and Courier Services 7,545,232.15 22,014,321.33
Telephone Expenses 276,705,737.03 242,341,743.55
Internet Expenses 416,728,721.21 400,150,534.52
Cable, Satellite, Telegraph, and Radio Expenses 5,845,589.42 7,231,760.45
Total Communication Expenses 706,825,279.81 671,738,359.85

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28.6 Awards/Rewards and Prices Expenses

Particulars 2016 2015

Awards/Rewards Expenses 3,767,568.75 7,600,026.38
Prices 9,078,879.79 3,860,334.60
Total Award/Rewards and Prices 12,846,448.54 11,460,360.98

28.7 Survey, Research, Exploration and Development Expenses

Particulars 2016 2015

Survey Expenses 995,764.01 744,506.27
Research, Exploration and Development 2,769,824.71 367,823.95
Expenses
Total 3,765,588.72 1,112,330.22

28.8 Demolition and Relocation Expenses

Particulars 2016 2015

Demolition and Relocation Expenses 57,000.00 149,451.00
Total Demolition and Relocation Expenses 57,000.00 149,451.00

28.9 Generation, Transmission and Distribution Expenses

Particulars 2016 2015

Generation, Transmission and Distribution 1,030.00 0.00
Expenses
Total Generation, Transmission and 1,030.00 0.00
Distribution Expenses

28.10 Confidential, Intelligence and Extraordinary Expenses

Particulars 2016 2015

Confidential Expenses 20,460.00 3,928.00
Intelligence Expenses 0.00 5,514.00
Extraordinary and Miscellaneous Expenses 46,650,975.66 28,136,426.99
Total Confidential, Intelligence and 46,671,435.66 28,145,868.99
Extraordinary Expenses

28.11 Professional Services

Particulars 2016 2015

Legal Services 6,607,049.19 7,098,213.42
Auditing Services 6,382,579.00 10,054,835.37
Consultancy Services 38,620,517.68 15,995,632.75
Other Professional Services 467,508,517.96 645,097,544.10
Total Professional Services 519,118,663.83 678,246,225.64

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28.12 General Services

Particulars 2016 2015

Environment/Sanitary Services 2,504,229.98 2,826,944.96
Janitorial Services 402,502,329.41 273,593,920.93
Security Services 494,396,024.97 347,245,850.66
Other General Services 512,119,542.37 461,766,405.44
Total General Services 1,411,522,126.73 1,085,433,121.99

28.13 Repairs and Maintenance

Particulars 2016 2015

Repairs and Maintenance-Investment Property 456,425.74 8,194,740.61
Repairs and Maintenance-Land Improvements 40,356,121.01 35,963,145.36
Repairs and Maintenance-Infrastructure Assets 9,313,754.63 4,276,017.39
Repairs and Maintenance-Buildings and Other 4,788,923,212.99 2,827,005,374.37
Structures
Repairs and Maintenance-Machinery and 102,439,126.27 78,712,191.98
Equipment
Repairs and Maintenance -Transportation 41,298,714.61 37,311,274.61
Equipment
Repairs and Maintenance - Furniture and 66,307,245.94 63,333,609.45
Fixtures
Repairs and Maintenance - Leased Assets 0.00 20,685.00
Repairs and Maintenance - Leased Assets 70,640.80 16,125.00
Improvements
Repairs and Maintenance-Semi-Expendable 2,378,840.28 0.00
Machinery and Equipment
Repairs and Maintenance-Semi-Expendable 674,478.11 0.00
Furniture, Fixtures and Books
Repairs and Maintenance - Other Property, 15,532,129.78 15,072,881.77
Plant and Equipment
Total Repairs and Maintenance 5,067,750,690.16 3,069,906,045.54

28.14 Taxes, Insurance Premiums and Other Fees

Particulars 2016 2015

Taxes, Duties and Licenses 5,309,722.29 9,438,892.34
Fidelity Bond Premiums 82,165,530.26 71,259,644.33
Insurance Expenses 16,625,680.71 13,262,262.68
Total Taxes, Insurance Premiums and Other 104,100,933.26 93,960,799.35
Fees

28.15 Labor and Wages

Particulars 2016 2015

Labor and Wages 130,943,039.80 102,687,471.79
Total Labor and Wages 130,943,039.80 102,687,471.79

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 28.16 Other Maintenance and Operating Expenses

Particulars 2016 2015

Advertising Expenses 8,788,692.46 17,475,876.42
Printing and Publication Expenses 667,620,316.37 598,781,171.64
Representation Expenses 96,756,595.25 72,191,349.23
Transportation and Delivery Expenses 70,350,808.74 57,273,060.30
Rent/Lease Expenses 35,984,514.80 26,253,188.54
Membership Dues and Contributions to 821,216.88 15,432,798.58
Organizations
Subscriptions Expenses 9,975,907.32 10,483,786.40
Donations 620,168,781.93 6,840,663,192.91
Litigation/Acquired Assets Expenses 11,801.00 18,807.65
Other Maintenance and Operating Expenses 2,416,402,371.30 1,949,287,389.32
Total Other Maintenance and Other 3,926,881,006.05 9,587,860,620.99
Operating Expenses

29. Financial Expenses

Particulars 2016 2015

Management Supervision /Trusteeship Fees 24,753.36 0.00
Interest Expenses 9,713.02 710,639,507.60
Guarantee Fees 0.00 1,500.00
Bank Charges 970,881.87 1,157,469.99
Other Financial Charges 868,978.82 218,027.23
Total Financial Expenses 1,874,327.07 712,016,504.82

For DepEd – Central Office, the variance between CYs 2015 and 2016 balance of
Interest Expense was for the amortization of finance charge related to the Service
Concession Asset in 2015 which is no longer recognized in 2016.

30. Non-Cash Expenses

The Non-cash expenses represent the recorded depreciation of various property, plant
and equipment of the Department as well as amortization of some intangible assets.
Total Non-cash expenses for the year amounted to ₱4,426,542,472.52.

30.1 Depreciation

Particulars 2016 2015

Depreciation - Investment Property 944,243.99 0.00
Depreciation-Land Improvements 12,358,841.97 23,785,677.34
Depreciation-Infrastructure Assets 1,643,352.50 521,228.08
Depreciation-Buildings and Other Structures 2,223,664,479.66 2,010,651,151.70
Depreciation-Machinery and Equipment 313,213,599.15 337,368,811.06
Depreciation-Transportation Equipment 15,946,399.71 19,197,147.69
Depreciation-Furniture, Fixtures and Books 285,856,588.35 283,325,381.66
Depreciation-Leased Assets 0.00 18,503.23

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 Particulars 2016 2015
Depreciation - Heritage Assets 46,975.39 0.00
Depreciation - Service Concession Assets 1,545,174,603.66 0.00
Depreciation - Other Property, Plant and 24,155,422.90 46,779,375.28
Equipment
Total Depreciation 4,423,004,507.28 2,721,647,276.05

30.2 Amortization

Particulars 2016 2015

Amortization - Intangible Assets 110,022.71 208,180.78
Total Amortization 110,022.71 208,180.78

30.3 Impairment Loss

Particulars 2016 2015

Impairment Loss-Loans and Receivables 33,436.20 0.00
Impairment Loss- Investment Property 128,305.38 0.00
Impairment Loss-Property, Plant and Equipment 2,726,791.21 214,121.75
Impairment Loss-Other Assets 539,409.74 41,238.01
Total Impairment Loss 3,427,942.53 255,359.76

30.4 Losses

Particulars 2016 2015

Loss on Sale of Biological Assets 0.00 199.90
Total Losses 0.00 199.90

31. Net Financial Assistance/Subsidy

Financial Assistance/Subsidy from NGAs, LGUs, GOCCs

Particulars 2016 2015

Subsidy from National Government 359,965,608,261.17 309,369,147,252.13
Subsidy from Other National Government 1,337,018,778.71 591,714,764.97
Agencies
Assistance from Local Government Unit 97,372,551.42 98,537,692.51
Assistance from GOCCs 954,556.75 47,500.00
Subsidy from Other Funds 13,619,336.96 32,326,008.38
Subsidy from Central Office 39,078,252.65 22,462,289.99
Subsidy from Regional Office/Staff Bureau 336,368,235.77 0.00
Total Financial Assistance/Subsidy from 361,790,019,973.43 310,114,235,507.98
NGAs, LGUs, GOCCs

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 Less: Financial Assistance/Subsidy to NGAs, LGUs, GOCCs, NGOs, POs

Particulars 2016 2015

Subsidy to National Government Agencies 57,869,163.73 168,676,136.47
Financial Assistance to NGAs 1,092,620,166.54 753,988,405.56
Financial Assistance to LGUs 4,949,676.06 249,748.75
Financial Assistance to NGOs/Pos 14,077,080.00 41,397,160.93
Subsidy to Operating Units 91,342,278.20 0.00
Subsidies - Others 13,478,563,131.38 23,402,019.09
Total Financial Assistance/Subsidy to 14,739,421,495.91 987,713,470.80
NGAs, LGUs, GOCCs
Net Financial Assistance/Subsidy 347,050,598,477.52 309,126,522,037.18

32. Other Non-Operating Income

32.1 Sale of Assets

Particulars 2016 2015
Sale of Garnished/Confiscated Abandoned/ 0.00 6,274.55
Seized Goods
Sale of Unserviceable Property 14,989.95 0.00
Total Sales of Assets 14,989.95 6,274.55

32.2 Gains
Particulars 2016 2015
Gain on Sale of Property, Plant and Equipment 55,420.00 26,010.00
Other Gains 6,148,764.29 9,551,414.30
Total Gains 6,204,184.29 9,577,424.30

32.3 Losses
Particulars 2016 2015
Loss on Sale of Property, Plant and Equipment 105,267.68 421,693.81
Loss on Sale of Assets 0.00 89,476.13
Loss of Assets 497,668.65 2,012,347.47
Other Losses 24,756.41 364,128.92
Total Losses 627,692.74 2,887,646.33

33. Receipt of Cash Allocation

Notices of Cash Allocation (NCAs) received from the Department of Budget and
Management are recorded in the Regular Agency (RA) books as well as those
income/receipts which the agency are not required to use and are required to be
remitted to the National Treasury.

Total Notice of Cash Allocations (NCAs) received by the Agency for the year to
settle its current and prior years obligations are stated below. The releases are
composed of Regular/Budgetary Allocations and Trust Receipts accounts of the
Agency.

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 Region Amount
I 19,011,544,098.00
II 14,260,380,754.61
III 33,459,443,403.00
IV-A 36,170,908,909.56
IV-B 12,205,436,693.06
V 24,878,499,509.00
VI 27,260,856,425.26
VII 23,999,017,543.70
VIII 21,036,216,854.09
IX 13,927,130,766.00
X 16,878,407,687.14
XI 16,687,910,067.35
XII 14,708,868,109.08
CARAGA 11,653,922,266.19
CAR 7,701,718,309.25
NCR 27,416,101,275.70
Central Office 43,910,836,974.00
Attached Agencies 15,295,673.00
Total NCA Received 365,182,495,317.99

34. Reversal of Unutilized NCA

The following is the breakdown of the unutilized NCAs that was reverted back to the
National Treasury:

Region Amount
I 273,410,848.60
II 268,177,348.03
III 1,246,716,886.99
IVA 585,897,637.52
IV-B 103,231,803.34
V 1,100,516,161.62
VI 731,705,738.32
VII 565,182,434.12
VIII 964,375,721.90
IX 154,506,796.04
X 1,173,421,991.30
XI 2,083,682,239.14
XII 160,588,629.99
CARAGA 613,202,885.11
CAR 218,202,589.35
NCR 745,305,360.14
Central Office 12,556,879,845.00
Attached Agencies 392,053.59
Total Reversal of Unutilized NCA 23,545,396,970.10

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