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Can you record obligation even if goods are not yet delivered or services are not yet rendered?
For instance, contract for security and janitorial service, do you obligate the whole amount of contract upon approval of the contract or obligate only that pertains to the monthly cost of the contract which have already been rendered?
According to the DBM:
Obligations are liabilities legally incurred and committed to be paid for by the government either immediately or in the future.
Disbursements refer to the actual withdrawal of cash from the Bureau of the Treasury due to the encashment of checks issued by agencies and payment of budgetary obligations.
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Obligations arising from contracts can be recognized as soon as they are perfected. 😊. The question now is, when is a contract perfected or given force in the course of government operations?
In my opinion it should be obligated upon approval of PO
Upon signing of Contract or issuance of notice of award, or to proceed, which ever is applicable.
Up!
I dont know how to explain it in theories. But i will give an actual situation.
When it comes to services like security services, labor & wages, salaries we obligate when there is an actual service rendered based on the DTR.
For infra project, we obligate the entire contract amount when there is an approved contract. Which means there was no accomplishment yet at that time. Pero ino obligate na natin.
When it comes to equipment & supplies, we obligate when there is an approved Purchase Order although there is no delivery of goods yet.
Upon delivery of goods dun pa lang gagawan ng voucher for payment.