Anong treatment ng liquidated damages sa books of accounts? Kailangan ba itong i-recognized?
Government Accountants, Budget Officers, Treasurers and Auditors’ Forum
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Government Accountants, Budget Officers, Treasurers and Auditors’ Forum
So yung LD nyo ay gawan nyo ng voucher para gawan ng check for deposit sa BTr?
Deduction po sa contract amount
yes
We remitted sa BTR po.
Liquidated damages is reduction to the contract cost.. it will change the cost of the asset to be recorded in the books. Savings ang mangyayari, adjust the ObR.
Section 3.2, Annex D of the Revised IRR of RA 9184 states that ‘the procuring entity need not prove that it has incurred actual damages to be entitled to liquidated damages. Such amount shall be deducted from any money due or which may become due to the supplier, or collected from any securities or warranties posted by the supplier, whichever is convenient to the procuring entity concerned.”
Likewise, Section 8.3, Annex E of the Revised IRR of RA 9184 states that “to be entitled to such liquidated damages, the procuring entity does not have to prove that it has incurred actual damages. Such amount shall be deducted from any money due or which may become due the contractor under the contract and/or collect such liquidated damages from the retention money or other securities posted by the contractor whichever is convenient to the procuring entity.”
Thus, we can directly deduct the liquidated damages from the claims of the suppliers/contractor. But the law is giving us leeway as enunciated on the phrase “whichever is convenient to the procuring entity concerned”.
Samin naka misc income heheeheh
Hindi eh, Sir Jon. Sabi sa RA 9184 “the supplier shall be liable for damages for the delay and shall pay the procuring entity liquidated damages, NOT BY WAY OF PENALTY, an amount equal to one-tenth (1/10) of one percent (1%) of the cost of the delayed goods scheduled for delivery for every day of delay until such goods are finally delivered and accepted by the procuring entity concerned.” (emphasis ours) 😁
To maintain assurance that the liquidated damages can be collected from the eering suppliers or contractors, it can be directly deducted upon payment of the claims to the suppliers/payees or to the progress billings if is infrastructure project. Liquidated damages for those PPAs sourced from FC 01 will be remitted to the BTr while those liquidated damages attributable to FC 05, 06, and 07 are not remited to BTr since these funds are not subsidies from the National Government but mostly include transfers from other NGAs and internally generated income of the agecy.
Agencies are not allowed to use all income collected/receipted under FC 01 (Regular Agency Fund) since only the Congress through legislative authorization can earmark this fund for a specific purpose, thus will be remitted to the National Treasury. That is why the liquidated damages collected under FC 01 will be remitted to the National Treasury. Section 65 (1) of PD No. 1445 states that “unless otherwise specifically provided by law, all revenues accruing to an entity by virtue of the provisions of existing law, orders and regulations shall be deposited/ remitted in the National Treasury (NT) or in any duly authorized government depository, and shall accrue to the General Fund (GF) of the NG”. By default, all collections shall be remitted to the National Treasury except to those fund covered by the exemption.
However, there are fund clusters wherein the agencies are authorized to use the collections accruing therefrom. hese fund clusters are covered by the exemption. Since the agencies are authorized by special/separate law to use these income, all collections under these fund clusters will not be remitted to the National Treasury. For example, with my agency which is a State University, aside from the collections under FC 01, we also have other collections such as collection of school fees and income earned from laboratory hotels/dormitories. All collection of school fees are recorded under FC 05 (Internally Generated Fund) and all income from schotel and dormitories are recorded under FC 06 (Business Related Fund). And by virtue of Republic Act 8292, Higher Modernization Act of 1997, we are authorized to use all income generated by the University from tuition fees and other school fees as well as from operation of auxiliary services such as laboratory hotels and dormitories. Since this law provides us patent authority to utilize these collections, it will not be necessary to remit this fund to the National Treasury. FC 05 (Internally Generated Fund or Retained Income/Funds) is defined by the Unified Accounts Code Structure (UACS) Manual as collections that are authorized by law to be used directly by agencies for their operation or specific purposes. These include but are not limited to receipts from SUCs for tuition and matriculation fees and other internally generated receipts and DOH for hospital income. FC 06 (Business Related Fund/Revolving Funds) is defined by the UACS manual as receipts derived from business-type activities of departments/agencies as authorized by law, and which are deposited in an AGDB. These funds shall be self-liquidating. All obligations and expenditures incurred because of these business-type activities shall be charged against the Revolving Fund. Since all collections under FC 05-07 can be legally used by the agency, there will be no sense to remit them to the National Treasury when in the first place you’re compelled to utilize these collections. Thus, the liquidated damages under FC 05-07 are not remitted to the National Treasury.
Penalties?
Liquidated Damages is recorded as credit to ‘Miscellaneous Income” per Government Accounting Manual (GAM). In the previous accounting manual, the NGAS Manual, it will be deducted to the contract amount but now under the GAM it is no longer deducted since it will be recognized as income of the agency instead. The obligation in the ORS or BURs will remain as is. Please refer to Volume I of the GAM specifically on page 174 for the illustrative accounting entries in booking up liquidated damages.
Misc income