Updated guidelines in the implementation of the modified direct payment scheme (MDPS) for the accounts payable of all national government agencies (NGA) have been released by the Department of Budget and Management (DBM) to reduce the outstanding checks and achieve better cash management.
NGA are mandates to pay using the advice to debit account (ADA) to all creditors/suppliers. These payees are advised to open accounts with government servicing banks (GSB) where the agency concerned has an account.
The updated guidelines also clarify procedures on the payment of NGA to small creditors and others who cannot be conveniently paid with ADA through the issuance of checks.
There are also protocols on bank transaction fees with the instruction that the supplier/creditor shall issue remittance advice to the GSB to transfer the concerned agency’s payment to their account outside of the GSB.
In clarifying the requirement of the official receipt (OR) from the supplier/creditor, the OR, sales invoice or validated list of due and demandable accounts payable — advice to debit accounts (LDDAP-ADA) shall form part of the disbursement voucher (DV) as proof of payment.
The streamlining of the preparation of the LDDAP-ADA and summary of LDDAP-ADA and invalidated ADA entries for efficiency is also included in the updated guidelines.
The GSB must credit the supplier/creditor’s account within two banking days upon receipt of the LDDAP-ADA from the concerned agency except for payroll which shall be credited on the same day as the ADA was issued.
To prepare the NGAs for implementation, these updated guidelines are effective last 2 January.
The BTr reported outstanding NGA checks amounting to P22.7 billion as of 29 June 2018.