DEPARTMENT OF EDUCATION

Notes to Consolidated Financial Statements

For the Year ended December 31, 2018

1. General Information /Agency Profile

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

were authorized for issue on May 21, 2019 as shown in the Statement of
Management Responsibility for Financial Statements signed by Ms. Annalyn M.
Sevilla, Undersecretary for Finance.

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 were transferred to the Philippine Sports Commission
(PSC) but the programs for school sports and physical fitness still form 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 (ROs), Schools Division Offices
(SDOs) 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
City (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
No. 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 seven Undersecretaries in the following

areas:

• Curriculum and Instruction

• Planning & Field Operations
• Administrative Service
• Finance Service
• Legal and Liaison Office
• Legal Service
• Field Operations

Three Assistant Secretaries are assigned in the following areas:

• Public Affairs Service

• Curriculum & Instruction
• Finance & Procurement

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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 Council (ECCDC)

• 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:

• Sixteen 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 76,709 schools, broken
down as follows:

• 51,104 elementary schools (38,913 public and 12,191 private)

• 14,520 junior high schools (8,524 public and 5,996 private)
• 11,085 senior high schools (6,476 public and 4,609 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. 52, s. 2015.

Fund Clusters

The Department maintains separate set of books of accounts by Funding Source

under the following fund clusters:

• Fund Cluster 01 – Regular Agency Fund

• Fund Cluster 04 – Special Account-Foreign Assisted/Foreign Grants Fund
• Fund Cluster 05 – Business Related Funds
• Fund Cluster 07 – Trust Receipts & Provident Fund

Under Fund Cluster 01 general appropriations are maintained and all operations
relating thereto.

Fund Cluster 04 is maintained to record the receipts and disbursements of Education

Performance Incentive Partnership (EPIP) Grant from Government of Australia
executed under its Australian Agency for International Development (AusAID).

Fund Cluster 05 is maintained to record income derived from business-type activities

operating under the Revolving Fund concept. Income 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
Teachers’ Camp, the National Educators Academy of the Philippines (NEAP),

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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 Educators 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
NEAP.

• 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 Teachers’ Camp

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

workshops, and training and human resource development program for the
DepEd. Whenever possible, the Camp is also open for the housing and

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 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 (now under BLR)

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

• School Health and Nutrition Center (now under BLSS)

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.

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Fund Cluster 07 is maintained to record receipts and disbursements of grants that
have special purpose including 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
International Business Machines (IBM)-Payroll Services Division (PSD), Regional
Payroll Service Units (RPSUs) and school-based or office-based payroll preparation.
The SF collected monthly is 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.

However, as the DepEd Central Office moves 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 SF (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 diminishing computation is stated in the next page.

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 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; and
• 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 percent of the current year
interest income earned.

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 in 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.

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

The consolidated FSs of the DepEd have been prepared in accordance and
compliance with the Philippine Public Sector Accounting Standards (PPSAS) issued
by the Commission on Audit per COA Resolution No. 2014-003 dated January 24,
2014.

FSs as at December 31, 2018 are prepared by fund cluster as prescribed under COA
Circular No. 2015-002 dated March 9, 2015. These FSs are Regular Agency Fund,
Special Accounts – Foreign Assisted/Foreign Grants, Business Related, Trust
Receipts Funds and Provident Fund, combined and presented as the DepEd
Consolidated FSs with accompanying Notes to FSs, for the year then ended.

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

3. Summary of Significant Accounting Policies and Other Information

3.1 Basis of Accounting

a. The consolidated FSs are prepared on an accrual basis in accordance with

the PPSAS. All expenses are recognized when incurred and reported in the
FSs 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 (DBM) 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
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.

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 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 FSs 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 FSs reflect the assets, liabilities, revenues and expense of the
DepEd Central Office (CO) and all 16 Regional Offices (ROs), 221 Schools
Division Offices (SDOs), 2,505 Implementing Units, Attached Agencies of the
Department namely: DepEd Ecotech Center, Applied Nutrition Center, Baguio
Teachers Camp (BTC), NEAP as well as the RELC/Dormitory operations in 13
Regions and the DepEd Provident Fund. This also includes Special Account-
Foreign Assisted/Foreign Grants Fund namely, Educational Performance
Incentive Partnership (EPIP).

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
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.

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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.

Derecognition

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

financial asset or part of an Agency’s 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.

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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 indicate 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
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

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 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.

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

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 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.

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.

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 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 uses the cost model for the measurement of investment property
after initial recognition.

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.

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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.

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.

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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.

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.

The DepEd RO VIII derecognized its PPE due to the damaged brought about by
super Typhoon Yolanda last November 8, 2013.

27
3.8 Leases

Finance Lease

Finance leases are leases that transfer substantially the entire 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.

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

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.

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.

28
 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
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

29
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 be amortized.

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

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.

30
 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
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.

31
3.11 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 dates:

• Foreign currency monetary items are translated using the closing rate;

• Non-monetary 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

• Non-monetary 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.

3.12 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.

32
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.

33
 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.

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.

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.

3.13 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.

34
 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.

3.14 Budget Information

The annual budget is prepared on a cash basis and is published in the website of
the DBM under the GAA CY 2018.

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 FSs were for the DepEd and include
the budget for the 16 ROs, 209 SDOs, 2,505 implementing units, Attached
Agencies and Foreign Assisted Projects as reflected in the GAA for CY 2018,
as approved.

35
3.15 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.

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,

36
 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.

3.16 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, 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.

3.17 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).

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.

3.18 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.

37
 3.19 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.

3.20 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 (ODA)
Loans:

International Bank for Reconstruction and Development (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
IBRD, 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

38
the Early Grade Reading Assessment (EGRA) and Early Grade Math
Assessment (EGMA) tools to sample elementary schools in the five targeted
LEAPS Regions. These Assessment tools conceptualized in the dominant
mother tongues of the five 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 2018, the following were the disbursements of the DepEd for the
Eligible Expenditures for the Project (EEPs) of LEAPS which were included in
the CY 2018 Consolidated Status of Appropriations, Allotments, Obligations,
Disbursements and Balances (SAAODB):

School Maintenance and Other Operating Expenses 18,740,835,116.00

Human Resource Training and Development 1,797,603,509.00
In-Service Training 510,074,424.00
Alternative Learning System 350,510,287.00
Abot-Alam Program -

The abovementioned disbursements were submitted to World Bank as Eligible

Expenditures for LEAPS 7th Loan Withdrawal Application.

Asian Development Bank (ADB) Loan Agreement (LA) No. 3237-PH –

Senior High School Support Program (SHSSP)

The 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 percent 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 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 percent of the
loan amount.

39
 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 FY 2018, the following are the key Program/Activity/Project (PAPs) which
included programmed budgets for the Senior High School (SHS) Program:

Amount Obligated Programmed

Total
Program/Activity/Project vs. Total Amount Intended
Appropriations
Appropriations for SHS
New School Personnel Positions 39,157,116,000.00 27,233,971,000.00 51,733,000.00
(Creation and Hiring of teaching
and Non-teaching positions)
Provision and Maintenance of Basic 70,500,000,000.00 83,882,103,000.00 19,471,611,000.00
Education Facilities (New
Classroom Construction)
Provision and Maintenance of Basic 14,709,680,000.00 14,709,680,000.00
Education Facilities (Construction
of Computer, Technical-Vocational
and Science Laboratories)
Provision and Maintenance of Basic 3,478,385,000.00 2,935,367,000.00 34,200,000.00
Education Facilities (Provision of
School Furniture)
Provision of Learning Tools and 7,800,516,000.00 4,998,274,000.00 4,851,555,000.00
Equipment
Textbooks and Instructional 2,990,831,000.00 1,041,727,000.00 57,195,000.00
Materials (Provision of Grade 11
and 12 LMs for 176 unique
subjects)
Computerization Program 8,659,380,000.00 1,174,071,000.00 294,383,000.00
(Provision of computer packages)
Operations of Schools – Senior 2,536,600,000.00 2,341,545,000.00 2,536,600,000.00
High School (Grade 11 to 12) -
Central Office
Human Resource Development for 3,412,761,000.00 2,873,556,000.00 5,866,000.00
Personnel in Schools and Learning
Centers (Training of Teachers)
Government Assistance and 13,692,180,000.00 13,692,163,000.00 13,692,180,000.00
Subsidies - Voucher Program for
Private Senior High School (per RA
No. 10533)
Government Assistance and 742,454,000.00 725,297,000.00 742,454,000.00
Subsidies - Voucher Program for
Non-DepEd Public School (per RA
No. 10533)
Joint Delivery Voucher for Senior 1,159,960,000.00 1,130,074,000.00 1,159,960,000.00
High School Technical Vocational
and Livelihood Specializations
Total 168,839,863,000.00 142,028,148,000.00 57,607,417,000.00

40
 Of the DepEd’s ₱168,839,863,000.00, funds amounting to ₱57,607,417,000.00 are
programmed for the SHS Program.

Out of the Total Appropriations, funds amounting to ₱88,496,656,000.00 are

“transferred appropriations” to the Department of Public Works and Highways
(DPWH) categorized as “For Later Release” under the DBM National Budget
Circular No. 573 issued on January 3, 2018. Of this amount, ₱34,181,291,000.00 is
intended for the SHS Program.

Based on financial report submitted by DPWH as of December 31, 2018, a total

amount of ₱83,876,264,000.00 has been obligated/utilized out of the transferred
appropriations, provided for SHS school building program.

Meanwhile, based on the Department of Education’s Consolidated SAAODB as of

end-December 2018, the amount of ₱58,151,884,000.00 has been obligated/utilized
out of the Total Appropriations released to and managed by the Department.

The total funds utilized as of the end of FY 2018 is ₱142,028,148,000.00 or 84

percent of the Total Appropriations of ₱168,839,863,000.00.

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. In prior years
(2013 and below), residual value was pegged at 10 percent of the cost of PPE.

5. Prior Period Adjustments

During 2018, the DepEd has restated its previously issued Financial Statements for

41
the year 2017 to correct prior year’s errors, as follows:

Net Effect on the

Accumulated
Name of Affected Surplus/Deficit
Particulars/Nature of Error Amount
Account Beginning
Balances, January
1, 2018
Rent/Lease Income Petron Corporation – Lease of (256,500.00) 256,500.00
Property located in Taguig
City for the 4th quarter of
2017
Fines and Penalties – Various Supplier – set up/ 7,539,123.97 (7,539,123.97)
Business Income adjustment on liquidated
damages from delivery and
printing of
Textbooks/Learning Materials
(Debit bal.)
Other Business NCAE PEPT Certification Fee (2,000.00) 2,000.00
Income
Miscellaneous Refund of cash overage of Ms. (1,482.74) 1,482.74
Income Ligaya Ilagan
Salaries and Wages – Ronalyn Pilones and Ronaldo 326,688.90 (326,688.90)
Regular Cleofe – Payment of prior
period salary as Executive
Assistant and Project
Development Officer
Representation Encarnacion Escuadro – 5,000.00 (5,000.00)
Allowance (RA) Payment of RA for month of
November 2017
Transportation Encarnacion Escuadro – 5,000.00 (5,000.00)
Allowance (TA) Payment of TA for month of
November 2017
Overtime and Night Payment for Overtime 3,251,169.08 (3,251,169.08)
Pay Services of Regular
Employees for period January
1-Decemeber 31, 2017
Other Bonuses and Payment of other Bonus and 792,000.00 (792,000.00)
Allowances Allowances on Regular
Employees for the month of
November and December
2017
Pag-IBIG Remittance of Government 79,500.00 (79,500.00)
Contributions Share to Home Development
Mutual Funds for the month of
December 2017
PhilHealth Remittance of Government 242,800.00 (242,800.00)
Contributions Share to Philippine Health
Insurance Corporation for the
month of December 2017
Other Personnel Payment of other personnel 75,000.00 (75,000.00)
Benefits benefits of DepEd officials for
the months of November and
December 2017
Travelling Expenses Reimbursement and 36,056,709.53 (36,056,709.53)

42
 Net Effect on the
Accumulated
Name of Affected Surplus/Deficit
Particulars/Nature of Error Amount
Account Beginning
Balances, January
1, 2018
– Local Liquidation of travelling
expenses incurred on various
DepEd programs and project
for the year 2017
Travelling Expense – Reimbursement and 2,251,727.29 (2,251,727.29)
Foreign Liquidation of travelling
expenses incurred abroad on
various DepEd programs and
project for the year 2017
Training Expenses Reimbursement/Liquidations 87,400,929.23 (87,400,929.23)
of expenses incurred in
conducting trainings and
workshops
Fuel, Oil and Reimbursement of gasoline 40,143.91 (40,143.91)
Lubricant Expenses expenses of DepEd officials
and employees during the
conduct of
training/workshops/writeshops
Textbooks and Payment on the Printing and 545,027.23 (545,027.23)
Instructional Delivery of Textbooks and
Materials Expenses Teachers’ Manual for Public
School Nationwide
Other Supplies and Payment on the consumable 3,549,705.43 (3,549,705.43)
Materials Expenses supplies and materials during
the conduct of various
training/workshop activities
Water Expenses KAINAN SA NUEVO – (22,409.44) 22,409.44
Payment/refund of their water
bill for the month of
December 2017
Electricity Expenses Payment/refund of electricity (11,344.71) 11,344.71
expenses of Kainan sa Nuevo
and Land Bank of the
Philippines for the months of
November and December
2017
Postage and Courier Payment for the delivery of 796,948.50 (796,948.50)
Services test materials and dispatch of
registered mails and domestic
mail services for CY 2017
Telephone Expenses Payment of Communication 13,234.79 (13,234.79)
Expenses and reimbursement
postpaid bill from October to
December 2017
Prizes Cash Prize/Incentives to 360,000.00 (360,000.00)
International
Winners/Medalists of the 9th
ASEAN School Games and
for the winner of the Jingle

43
 Net Effect on the
Accumulated
Name of Affected Surplus/Deficit
Particulars/Nature of Error Amount
Account Beginning
Balances, January
1, 2018
Making Contest
Research, Exploration University of the Philippines – 7,200,000.00 (7,200,000.00)
and Development Payment for the conduct of
Expenses verification research of
Disbursement Linked
Indicator (DLI) 8.2 under
Learning, Equity and
Accountability Program
Support (LEAPS) Project.
Extraordinary and Reimbursement of 22,476.40 (22,476.40)
Miscellaneous miscellaneous expenses of
Expenses DepEd officials
Consultancy Services Payment for consultancy 8,181,962.76 (8,181,962.76)
services on different project
studies of DepEd
Other Professional Payment of Salaries and 25,859,281.74 (25,859,281.74)
Services Overtime rendered of Contract
of Services Personnel for CY
2017
Security Services Payment of security Services 1,784,241.67 (1,784,241.67)
rendered by VV Security
Agency Inc., Cafe Security &
Investigation Agency, Inc. and
Lockheed Global Security &
Investigation Services Inc.
Repairs and Payment/reimbursement of 391,632.40 (391,632.40)
Maintenance - repairs and spare parts
Machinery and procured for machinery and
Equipment equipment
Repairs and Payment for the repair and 418,811.70 (418,811.70)
Maintenance - maintenance and purchase of
Transportation spare parts of different vehicle
Equipment assigned to DepEd officials
Financial Assistance Fund transfer to various Local 12,178,015.33 (12,178,015.33)
to Local Government Government Units for the
Units implementation of different
programs/projects
Subsidies - Others Net of Payment and refund of 13,959,210,243.15 (13,959,210,243.15)
SHS voucher program subsidy
Advertising Expenses Philippine Daily Inquirer – 156,764.16 (156,764.16)
Payment for the posting of
Secretary Leonor Briones
2017 Philippine Education
Summit Message.
Printing and Payment of Printing of test 27,681,712.16 (27,681,712.16)
Publication Expenses booklet and scannable answer
sheet for A&E, NAT and
Principal Test
Rent/Lease Expenses Payment for the rent of 1,297,795.82 (1,297,795.82)

44
 Net Effect on the
Accumulated
Name of Affected Surplus/Deficit
Particulars/Nature of Error Amount
Account Beginning
Balances, January
1, 2018
photocopying machine for
office use and sound system
and LED wall for 2017 Family
Day Celebration
Subscription Payment for newspaper 186,520.40 (186,520.40)
Expenses subscriptions
Donations Financial Assistance given to 150,000.00 (150,000.00)
the family of the departed
DepEd Employees
Other Maintenance Payment on various expenses 63,975,441.99 (63,975,441.99)
and Operating incurred necessary for the
Expenses operation of DepEd
Total 14,251,731,870.65 (14,251,731,870.65)

Other adjustments for CY 2016 and below:

Net Effect on the

Accumulated
Surplus/Deficit
Particulars Amount
Beginning
Balances, January
1, 2018
Remittance to the Bureau of the Treasury the balance of 645,217,612.72 (645,217,612.72)
dormant accounts of Due from NGA (DBM-PS)
Liquidation of various Local Government for the 4,373,368.78 (4,373,368.78)
construction of School Buildings under Basic
Educational Facilities Fund (BEFF)
Disallowance of honoraria on the conduct of several (1,179,510.32) 1,179,510.32
orientation/seminar/workshop under BSE and NETRC
Refund of Travel Expense Voucher (TEV) (1,500.00) 1,500.00
Payment of LBP Extension Office for Long Outstanding (2,822,036.58) 2,822,036.58
Order Payable
Recognition of 2014 and 2015 depreciation expenses 11,376.99 (11,376.99)
Liquidation of cash advance for the administration of 14,465.00 (14,465.00)
2008 PEPT in the Division of Marinduque
Liquidation of cash advance of TEV (net of 24,124.35 (24,124.35)
adjustments)
Adjustment of the negative amount of Advances to (293,771.02) 293,771.02
Contractors' pertains to 2013 and prior year transaction
Reversion of the balance/s of the Accounts Payable (7,747,330.40) 7,747,330.40
which has remained outstanding for more than two (2)
years per AOM No. 2018-026 dated May 10, 2018.
Remittance to the Treasury of the unexpended balance (23,610,999.12) 23,610,999.12
of fund transfer made to various government agencies
and LGU
Sub-Total (613,985,800.40)
Liquidation of Petty Cash granted in 2016 24,970.45 (24,970.45)
Liquidation of fund transfer to DSWD for the 76,470,615.11 (76,470,615.11)

45
 Net Effect on the
Accumulated
Surplus/Deficit
Particulars Amount
Beginning
Balances, January
1, 2018
constructions of classrooms for indigenous communities
nationwide
Set up of receivables for overpayment salary and (67,793.38) 67,793.38
honorarium
Adjustment in taking up printing and delivery of (0.01) 0.01
Learning Materials and Teacher’s Guide
Liquidation of Cash advances of various Training and 511,230.86 (511,230.86)
Activities in 2016
Adjustment of prior years' recorded Accumulated (82,395,131.37) 82,395,131.37
Amortization - Computer Software,
Liquidation of Cash advances of TEV of various 94,070.15 (94,070.15)
Training and Activities in 2016
Adjustment on the payment of Printing and delivery of 403,189.29 (403,189.29)
Textbooks and Teacher’s Manual/Guide and recording
of payable for the registration fee in the conduct of
Performance and Results Management
Set up of payable for the reimbursement of various 14,384.00 (14,384.00)
travelling expenses
Payment of Negotiation Agreement Incentive of DepEd 260,247,473.28 (260,247,473.28)
Non-Teaching Employees nationwide
Sub-Total (255,303,008.38)
Grand Total (869,288,808.78)

6. Cash and Cash Equivalents

Total major account group balance amounted to ₱13,890,417,575.03 as of December

31, 2018 and is broken down into the following general ledger accounts such as:

Cash and Cash Equivalents

Accounts 2018 2017 (as restated)

Cash on Hand 40,233,926.60 32,607,867.94
Cash in Bank-Local Currency 12,845,057,579.46 14,157,213,451.78
Treasury/Agency Cash Accounts 1,005,126,068.97 998,551,325.34
Total 13,890,417,575.03 15,188,372,645.06

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 the succeeding year.

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

46
 Cash in Bank- Local Currency, Current Account – The bulk amount pertains to ROs
and Operating Units account. 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 RO 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 CO intended to cover
funding requirements for the implementation of various Centrally-Managed Projects
as well as fund transfers emanating from the RO 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.

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-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).

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 NCA from DBM-CO. Furthermore, part of this account pertains
to the PAGCOR-SBP Fund deposited by the DOs to BTr subject to request of NCA
upon progress billing of various creditors.

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.

7. Investments

Accounts 2018 2017

Financial Assets-Held to Maturity 9,213,734.09 42,670,668.93

The total amount consists of the following:

Region/Office Particulars Amount

CO 10% Cumulative Shares Series “B” re: 538,560.00
Installation of MERALCO

47
 Region/Office Particulars Amount
Bill Deposit to MERALCO 1,271,690.00
10% Cumulative Shares Series “B” re: 1,078,790.00
Installation of MERALCO Electric Facilities
Meter Deposit to MERALCO 522,240.00
For reconciliation/verification 5,769,518.09
CAR 32,936.00
Total 9,213,734.09

8. Receivables

Included in the above major account group as of December 31, 2018 are the
following general ledger accounts:

8.1 Loans and Receivables Accounts

Accounts 2018 2017

Accounts Receivable 106,285,002.56 77,474,802.56
Allowance for Impairment – AR (21,440.00) (20,552.30)
Net Value- Accounts Receivable 106,263,562.56 77,454,250.26
Notes Receivable 3,500.00 3,500.00
Allowance for Impairment-Notes Receivable - -
Net Value- Notes Receivable 3,500.00 3,500.00
Interests Receivable 28,968,444.67 27,113,745.17
Allowance for Impairment-Interests Receivable - -
Net Value- Interests Receivable 28,968,444.67. 27,113,745.17
Loans Receivable – Others 4,151,514,435.31 3,159,262,919.94
Allowance for Impairment-Loans Receivable –
GOCCs (1,229,651.14) (475,414.06)
Net Value- Loans Receivable-GOCCs 4,150,284,784.17 3,158,787,505.88
Totals 4,285,520,291.40 3,263,359,001.31

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.

Loans Receivable – Others pertains to loans under Provident Fund provided to

DepEd teaching and non-teaching personnel.

8.2 Lease Receivable

Accounts 2018 2017 (as restated)

Operating Lease Receivable 8,911,217.73 40,657,891.08
Allowance for Impairment- Operating Lease - -
Receivable
Total 8,911,217.73 40,657,891.08

48
8.3 Inter-Agency Receivables

Accounts 2018 2017 (as restated)

Due from National Government Agencies 8,330,476,983.39 8,218,585,992.31
Due from Government-Owned and/or 626,960,121.06 538,090,028.68
Controlled Corporations
Due from Local Government Units 112,884,940.29 100,597,007.81
Total Inter-Agency Receivables 9,070,322,044.74 8,857,273,028.80

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).

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.

In the CO books, ₱372,093,000.00 of Due from GOCC pertains to fund

transfer to Development Academy of the Philippines (DAP) for the Intensified
Abot-Alam Program (IAAP), a collaborative initiative of DepEd and DAP.

8.4 Intra - Agency Receivables

Accounts 2018 2017

Due from Central Office 64,925,571.84 64,847,632.95
Due from Bureaus 17,896,185.73 17,529,898.25
Due from Regional Offices 612,281,206.22 228,279,988.91
Due from Operating Units 5,276,744,964.95 4,322,369,392.28
Due from Other Funds 4,871,069.00 10,886,743.77
Total Intra-Agency Receivables 5,976,718,997.74 4,643,913,656.16

Due from Central Office account is used to record inter-office transactions in

the books of ROs/Staff Bureaus/Operating Units. For the DepEd, these are
receivables arising out of cancellation of payroll checks by the PSD (RPSU),
CO which were already remitted to the CO, 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.

49
 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.

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.

8.5 Other Receivables

Accounts 2018 2017 (as restated)

Receivables - Disallowances/Charges 465,839,681.52 470,703,084.77
Due from Officers and Employees 52,494,132.67 58,440,599.03
Due from Non-Government Organizations/ 1,226,129,108.28 1,225,908,987.67
People's Organizations
Other Receivables 98,982,470.20 123,050,638.38
Total Other Receivables 1,843,445,392.67 1,878,103,309.85

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.

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.

50
9. Inventories

The huge amount of inventories totaling ₱10,405,239,867.27 consists mainly of

Textbooks and Instructional Materials Inventory, Other Supplies and Materials
Inventory, Textbooks and Instructional Materials for Distribution and Office
Supplies Inventory as of December 31, 2018. Breakdown of Inventories as to Sub-
Major Account Group are as follows:

9.1 Inventory Held for Sale

Accounts 2018 2017

Merchandise Inventory 116,340.00 156,117.19

9.2 Inventory Held for Distribution

Accounts 2018 2017 (as restated)

Welfare Goods for Distribution - 11,455.00
Drugs and Medicines for Distribution 5,363,166.73 2,630,899.21
Medical, Dental and Laboratory Supplies 12,825,743.79 6,342,247.99
for Distribution
Textbooks and Instructional Materials for 494,618,832.93 509,328,185.35
Distribution
Construction Materials for Distribution 10,118.90 -
Property and Equipment for Distribution 66,474,034.98 106,245,700.14
Other Supplies and Materials Distribution 28,230,245.52 22,417,684.63
Total Inventory Held for Distribution 607,522,142.85 646,976,172.32

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 Manufacturing

Accounts 2018 2017

Raw Materials Inventory 6,183,215.00 -
Work-in Process Inventory - 6,331,882.00
Finished Goods Inventory 100,290.40 -
Total Inventory Held for Manufacturing 6,283,505.40 6,331,882.00

9.4 Inventory Held for Consumption

Accounts 2018 2017

Office Supplies Inventory 634,560,756.92 567,592,791.14

51
 Accounts 2018 2017
Accountable Forms, Plates and Stickers Inventory 3,192,019.59 3,212,373.51
Non-Accountable Forms Inventory 54,683.50 93,085.40
Animal/Zoological Supplies Inventory 69,492.78 53,451.24
Food Supplies Inventory 2,128,309.01 2,014,111.87
Drugs and Medicines Inventory 30,836,313.94 17,041,816.70
Medical, Dental and Laboratory Supplies 62,534,169.71 44,126,005.22
Inventory
Fuel, Oil and Lubricants Inventory 1,007,784.89 664,344.35
Agricultural and Marine Supplies Inventory 493,049.39 423,248.61
Textbooks and Instructional Materials Inventory 511,673,393.50 4,589,939,183.08
Construction Materials Inventory 11,209,496.64 8,614,350.94
Other Supplies and Materials Inventory 578,351,035.20 500,656,809.52
Total Inventory Held for Consumption 1,836,110,505.07 5,734,431,571.58

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.

9.5 Semi - Expendable Machinery and Equipment

Accounts 2018 2017

Semi-Expendable Machinery 63,221,165.95 58,206,855.94
Semi-Expendable Office Equipment 45,790,783.08 31,751,571.16
Semi-Expendable Information and Communications 87,028,941.83 49,103,657.24
Technology Equipment
Semi-Expendable Agricultural and Forestry 904,357.86 318,089.00
Equipment
Semi-Expendable Communications Equipment 2,618,329.32 4,473,377.93
Semi-Expendable Disaster Response and Rescue 2,012,689.00 1,857,573.70
Equipment
Semi-Expendable Medical Equipment 12,208,653.47 6,028,204.18
Semi-Expendable Printing Equipment 1,014,568.55 669,341.35
Semi-Expendable Sports Equipment 4,751,574.99 3,533,559.93
Semi-Expendable Technical and Scientific 1,042,398,077.85 780,322,869.85
Equipment
Semi-Expendable Other Machinery and Equipment 128,294,878.21 160,287,325.81

52
 Accounts 2018 2017
Total Semi - Expendable Machinery and 1,390,244,020.11 1,096,552,426.09
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.

9.6 Semi - Expendable Furniture, Fixtures and Books

Accounts 2018 2017

Semi-Expendable Furniture and Fixtures 1,629,631,829.33 769,237,361.15
Semi-Expendable Books 4,935,331,524.51 2,576,796.96
Total Semi - Expendable, Fixtures and Books 6,564,963,353.84 771,814,158.11

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

Included in the above major account group as of December 31, 2018 are the
following General Ledger (GL) accounts:

10.1 Advances

Accounts 2018 2017 (as restated)

Advances for Operating Expenses 2,847,966,572.69 3,383,321,803.77
Advances for Payroll 539,622,020.40 583,604,632.51
Advances to Special Disbursing Officer 1,118,534,317.20 1,118,064,019.07
Advances to Officers and Employees 287,656,695.64 326,142,797.48
Total Advances 4,793,779,605.93 5,411,133,252.83

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

53
 autonomy, which are subject to liquidation.

10.2 Prepayments

Accounts 2018 2017 (as restated)

Advances to Contractors 955,956,328.66 943,405,664.77
Prepaid Rent 42,500.00 78,064.00
Prepaid Registration 20,969.35 16,703.63
Prepaid Insurance 7,639,908.80 6,140,785.81
Other Prepayments 5,782,870.49 5,569,539.32
Total Prepayments 969,442,577.30 955,210,757.53

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 2018 2017

Guaranty Deposits 8,020,694.35 8,834,482.90
Other Current Assets 217,547.73 281,668.05
Total Deposits 8,238,242.08 9,116,150.95

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 BTC held to earn rentals.

Accounts 2018 2017

Investment Property, Buildings 7,010,896.29 7,710,896.29
Accumulated Depreciation - Investment (2,676,406.66) (2,739,389.09)
Property, Buildings
Net Value 4,334,489.63 4,971,507.20

The recorded Investment Property is from BTC. The properties are stalls and
buildings held for rent/lease.

54
12. Property, Plant and Equipment (PPE)

The total balance of PPE accounts amounting to ₱169,570,208,138.44 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 2018 2017 (as restated)

Land 13,157,537,748.64 13,412,696,176.21
Land 13,157,537,748.64 13,412,696,176.21
Land Improvements 140,625,276.19 157,192,828.53
Land Improvements, Aquaculture Structures 15,863,808.61 11,474,255.37
Accumulated Depreciation-Land Improvements, (6,627,510.68) (7,267,038.15)
Aquaculture Structures
Net Value 9,236,297.93 4,207,217.22
Other Land Improvements 294,979,109.11 304,512,526.38
Accumulated Depreciation-Other Land (163,590,130.85) (151,526,915.07)
Improvements
Accumulated Impairment Losses-Other Land - -
Improvements
Net Value 131,388,978.26 152,985,611.31
Infrastructure Assets 249,674,683.63 40,636,743.37
Road Networks 1,898,881.44 -
Accumulated Depreciation-Road Networks (195,426.55) -
Net Value 1,703,454.89 -
Water Supply Systems 38,656,069.60 20,829,060.34
Accumulated Depreciation-Water Supply (5,085,849.74) (3,621,792.55)
Systems
Net Value 33,570,219.86 17,207,267.79
Power Supply Systems 97,513,533.64 16,107,643.65
Accumulated Depreciation-Power Supply (7,520,010.28) (4,838,651.50)
Systems
Accumulated Impairment Losses-Power Supply - (8,574.50)
Systems
Net Value 89,993,523.36 11,260,417.65
Communication Networks 23,330.60 23,330.60
Accumulated Depreciation-Communication (20,997.54) (20,997.54)
networks
Net Value 2,333.06 2,333.06
Other Infrastructure Assets 129,853,642.83 12,469,424.29
Accumulated Depreciation-Other Infrastructure (5,448,490.37) (302,699.42)
Assets
Net Value 124,405,152.46 12,166,724.87
Buildings and Other Structures 94,090,204,723.83 76,569,707,876.26
Buildings 5,235,048,600.30 4,294,481,358.05
Accumulated Depreciation-Buildings (1,567,124,206.33) (1,320,987,213.62)
Accumulated Impairment Losses-Buildings (32,493.76) (32,493.76)
Net Value 3,667,891,900.21 2,973,461,650.67
School Buildings (SB) 116,903,309,443.02 95,893,280,423.91
Accumulated Depreciation-SB (27,914,398,944.09) (23,753,951,678.81)

55
 Particulars 2018 2017 (as restated)
Accumulated Impairment Losses-SB (539,000.00) -
Net Value 88,988,371,498.93 72,139,328,745.10
Slaughterhouses 259,000.00 259,000.00
Accumulated Depreciation-Slaughterhouses - -
Accumulated Impairment Losses- - -
Slaughterhouses
Net Value 259,000.00 259,000.00
Hostels and Dormitories 110,822,835.57 110,795,699.57
Accumulated Depreciation-Hostels and (55,259,927.42) (50,663,539.56)
Dormitories
Net Value 55,562,908.15 60,132,160.01
Other Structures 1,912,416,556.95 1,857,587,033.48
Accumulated Depreciation-Other Structures (534,258,765.41) (461,060,713.00)
Accumulated Impairment Losses-Other (38,375.00) (0.00)
Structures
Net Value 1,378,119,416.54 1,396,526,320.48
Machinery and Equipment 26,101,959,326.27 15,568,336,774.83
Machinery 88,091,106.29 72,182,241.79
Accumulated Depreciation - Machinery (23,796,940.93) (21,841,390.71)
Net Value 64,294,165.36 50,340,851.08
Office Equipment 2,339,373,191.04 2,224,922,662.88
Accumulated Depreciation-Office Equipment (1,255,547,907.77) (1,196,052,772.83)
Accumulated Impairment Losses - Office (117,485.00) (117,485.00)
Equipment
Net Value 1,083,707,798.27 1,028,752,405.05
Information and Communication Technology 22,555,796,208.42 14,118,751,786.17
(ICT) Equipment
Accumulated Depreciation-ICT Equipment (4,176,087,063.32) (3,864,152,389.34)
Accumulated Impairment Losses -ICT (690,545.10) (493,686.40)
Equipment
Net Value 18,379,018,600.00 10,254,105,710.43
Agricultural and Forestry Equipment 9,889,564.58 9,581,547.58
Accumulated Depreciation-Agricultural and (3,429,775.77) (3,278,407.44)
Forestry Equipment
Accumulated Impairment Losses-Agricultural (11,205.12) (11,205.12)
and Forestry Equipment
Net Value 6,448,583.69 6,291,935.02
Marine and Fishery Equipment 1,417,010.00 1,445,292.00
Accumulated Depreciation-Marine and Fishery (1,158,034.11) (1,174,468.00)
Equipment
Net Value 258,975.89 270,824.00
Communication Equipment 255,809,397.37 222,839,599.65
Accumulated Depreciation-Communication (148,217,992.86) (136,957,813.53)
Equipment
Accumulated Impairment Losses-Communication - -
Equipment
Net Value 107,591,404.51 85,881,786.12
Construction and Heavy Equipment 2,389,153.73 2,757,859.73
Accumulated Depreciation - Construction and (592,882.71) (553,300.41)
Heavy Equipment
Net Value 1,796,271.02 2,204,559.32
Disaster Response and Rescue Equipment 17,374,256.28 16,410,174.91
Accumulated Depreciation-Disaster Response (11,698,549.98) (11,426,568.32)

56
 Particulars 2018 2017 (as restated)
and Rescue Equipment
Accumulated Impairment Losses-Construction - -
and Heavy Equipment
Net Value 5,675,706.30 4,983,606.59
Military, Police and Security Equipment 478,214.00 335,130.00
Accumulated Depreciation-Military and Police (197,990.93) (200,534.39)
Equipment
Net Value 280,223.07 134,595.61
Medical Equipment 60,912,560.90 62,925,804.18
Accumulated Depreciation-Medical Equipment (36,191,730.48) (35,445,888.58)
Accumulated Impairment Losses-Medical - -
Equipment
Net Value 24,720,830.42 27,479,915.60
Printing Equipment 8,250,415.02 6,335,399.09
Accumulated Depreciation-Printing Equipment (1,870,107.97) (922,331.08)
Net Value 6,380,307.05 5,413,068.01
Sports Equipment 48,132,295.92 46,234,743.86
Accumulated Depreciation-Sports Equipment (17,130,080.65) (15,298,293.60)
Accumulated Impairment Losses-Sports - -
Equipment
Net Value 31,002,215.27 30,936,450.26
Technical and Scientific Equipment 6,054,823,140.68 3,945,381,425.01
Accumulated Depreciation - Technical and (275,058,345.81) (263,530,006.83)
Scientific Equipment
Accumulated Impairment Losses-Sports (931,916.30) -
Equipment
Net Value 5,778,832,878.57 3,681,851,418.18
Other Machinery and Equipment 832,223,140.57 585,942,820.06
Accumulated Depreciation - Other Machinery (220,023,782.35) (195,998,934.13)
and Equipment
Accumulated Impairment Losses-Other (247,991.37) (254,236.37)
Machinery and Equipment
Net Value 611,951,366.85 389,689,649.56
Transportation Equipment 240,848,019.23 228,442,676.67
Motor Vehicles 542,519,519.69 501,342,819.57
Accumulated Depreciation - Motor Vehicles (302,382,810.50) (274,100,412.83)
Accumulated Impairment Losses-Motor Vehicles (315,000.00) -
Net Value 239,821,709.19 227,242,406.74
Watercrafts 575,772.75 1,150,322.75
Accumulated Depreciation - Watercrafts (222,192.92) (464,877.09)
Accumulated Impairment Losses - Watercrafts - (7,671.75)
Net Value 353,579.83 677,773.91
Other Transportation Equipment 1,784,578.91 1,686,377.91
Accumulated Depreciation-Other Transportation (1,111,848.70) (1,163,881.89)
Equipment
Net Value 672,730.21 522,496.02
Furniture, Fixtures and Books 4,816,145,509.30 4,597,929,532.34
Furniture and Fixtures 7,104,438,701.43 6,611,827,601.65
Accumulated Depreciation-Furniture and Fixtures (2,499,810,986.28) (2,228,470,998.63)
Accumulated Impairment Losses - Furniture and (638,519.98) (645,004.88)
Fixtures
Net Value 4,603,989,195.17 4,382,711,598.14

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 Particulars 2018 2017 (as restated)
Books 502,417,470.03 511,677,998.35
Accumulated Depreciation- Books (290,434,300.90) (296,452,968.45)
Accumulated Impairment Losses - Books 173,145.00 (7,095.70)
Net Value 212,156,314.13 215,217,934.20
Leased Assets - 23,333.28
Leased Assets, Machinery and Equipment - 23,333.28
Net Value - 23,333.28
Investment Property, Buildings 64,392.31 321,876.77
Other Leased Assets Improvements 64,392.31 333,723.77
Accumulated Depreciation-Other Leased Assets - (11,847.00)
Improvements
Net Value 64,392.31 321,876.77
Heritage Assets 22,356,327.86 7,902,755.54
Historical Buildings 5,087,810.69 8,375,284.96
Accumulated Depreciation-Historical Buildings (522,114.56) (472,529.42)
Net Value 4,565,696.13 7,902,755.54
Other Heritage Assets 18,383,777.76 0.00
Accumulated Depreciation-Other Heritage Assets (593,146.03) 0.00
Net Value 17,790,631.73 0.00
Service Concession Tangible Assets 11,700,372,176.72 13,245,555,601.31
Other Service Concession Assets 18,601,366,568.56 18,601,366,568.56
Accumulated Depreciation-Other Service (6,900,994,391.84) (5,355,810,967.25)
Concession Assets
Net Value 11,700,372,176.72 13,245,555,601.31
Other Property, Plant and Equipment 244,785,434.21 231,515,129.03
Work/Zoo Animals 1,642,830.93 1,132,546.10
Accumulated Depreciation-Work/Zoo Animals (157,515.00) (111,155.00)
Net Value 1,485,315.93 1,021,391.10
Other Property, Plant and Equipment 545,652,576.02 511,061,775.35
Accumulated Depreciation-Other Property, Plant (302,322,708.54) (280,568,037.42)
and Equipment
Accumulated Impairment Losses-Other Property, (29,749.20) (0.00)
Plant and Equipment
Net Value 243,300,118.28 230,493,737.93
Construction in Progress 18,805,634,520.25 15,536,608,796.78
Construction in Progress- Land Improvements 23,919,394.92 3,699,625.64
Construction in Progress- Infrastructure Assets 87,208,983.65 28,500.00
Construction in Progress-Buildings and Other 18,693,067,284.17 15,531,441,813.63
Structures
Construction in Progress-Leased Assets 1,438,857.51 1,438,857.51
Total 169,570,208,138.44 139,596,870,100.92

For DepEd CO, 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.

The carrying amounts of PPE with costs below the ₱15,000.00 threshold as at
December 31, 2018 were charged to Accumulated Surplus/(Deficit).

58
Reclassifications were made for some PPE items during the year.

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.

Transfer of Accountability Recognized after December 31, 2018

Motor Vehicles recognized in the books correspond to the purchase of two units of
shuttle bus for DepEd CO amounting to ₱6,057,920.00. The credit transactions on
this account pertain to transfer of accountability of vehicles to different DepEd
Divisions including the donated mobile Dental Bus from Department of Health
(DOH). As of December 31, 2018, the recorded transfers amounted to
₱25,583,550.00, of which ₱23,700,000.00 pertains to the six Dental Buses. The
donation of 20 buses with the value of ₱79,000,000.00 was recognized in the books
on February 28, 2017 under JEV No. 2017-02-0012345.

Additional transfers of motor vehicles (Dental Bus and other vehicles) were recorded
also in 2019, as stated in the next page:

JEV No. Date Amount

2019-02-005443 2/28/2019 1,092,000.00
2019-02-005447 2/28/2019 1,134,000.00
2019-02-005451 2/28/2019 753,550.00
2019-04-006042 4/29/2019 1,350,000.00
2019-06-009041 6/4/2019 3,950,000.00
2019-06-009048 6/4/2019 3,950,000.00
2019-06-009044 6/4/2019 3,950,000.00
2019-06-009045 6/4/2019 3,950,000.00
TOTAL 20,129,550.00

Information and Communication Technology Equipment (ICTE)

This account pertains to the cost of centrally procured ICTE for the implementation
of DepEd Computerization Program (DCP) in which the items were delivered
directly to recipient schools nationwide. Part of the discrepancies between the
records of Accounting and Asset Management Division (AMD) were the unrecorded
transfer of accountabilities to different DepEd Schools/Divisions as of December 31,
2018 as noted in AOM No. 2019-022(2018) dated April 12, 2019. These transfers
were recorded in the books in 2019 as stated below:

JEV No. Date Total Amount

Various JEV Nos. Feb – June 2019 5,170,242,888.09

Technical and Scientific Equipment

These are Science and Mathematics Equipment Packages also delivered directly to

59
the recipient schools identified. Part of the Net Transaction Effect stated in AOM
No. 2019-022(2018) dated April 12, 2019 were transfers not yet recognized in
December 31, 2018 but recorded in 2019, as stated in the next page.

JEV No. Date Total Amount

Various JEV Nos. Feb – June 2019 655,112,860.03

Furniture and Fixture

Analysis of the Net Transaction Effect of the account Furniture and Fixture for 2018
is presented in the next page as stated in AOM No. 2019-022(2018) dated April 12,
2019:

Amount
Particulars Remarks
Debit Credit
Net Transaction Effect for 2018 34,965,188.48
Reclassified to Semi Expendable 2,734,050.00 Included in JEV No.
Furniture and Fixture 2019-02-0010302
Reclassified to Technical Scientific 29,089,456.86 Included in JEV No.
Equipment 2019-02-0010302
Remained as Furniture and Fixture 3,141,681.62 34,965,188.48
Difference -

School Building

Analysis of the Net Transaction Effect of the School Building Account is presented
in the next page as stated in AOM No. 2019-022(2018) dated April 12, 2019:

Total Debit: ₱ 137,630,746.25

Less: Total Credits* 4,164,760.00
Net Effect ₱ 133,465,986.25
*pertains to prior year transaction

Particulars Amount Remarks

Total Debit Transactions 137,630,746.25
Less : erroneous classification of various 29,697,710.20
JEV No. 2019-02-0010305
disbursements
School Building to be identified 107,933,036.05
Less : School Building constructed by 43,845,000.00 waiting for validation of
NHA in resettlement Area field engineers and
subsequent PTR from
AMD
For preparation of JEV 64,088,036.05

Communication Equipment

Transfers of accountability to Regional/Division Office for Communication

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 Equipment not yet recognized in December 31, 2018 but recorded in 2019 are
presented below:

JEV No. Date Amount

2019-02-005388 2/28/2019 279,240.00
2019-02-005403 2/28/2019 23,924.16
2019-02-005385 2/28/2019 93,080.00
2019-02-005380 2/28/2019 22,046.06
2019-02-005374 2/28/2019 22,046.06
Total 440,336.28

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, II, III, VIII, XI and CAR such as Breeding Stocks, Livestock and
Livestock Held for Consumption/Sale/Distribution with the following balances as of
December 31, 2018:

Particulars 2018 2017

Bearer Biological Assets 1,906,843.00 1,502,681.00
Breeding Stocks 783,100.00 558,816.00
Livestock 1,106,103.00 926,225.00
Other Bearer Biological Assets 17,640.00 17,640.00
Consumable Biological Assets 175,561.00 14,211.00
Livestock Held for Consumption/Sale/Distribution 123,061.00 14,211.00
Aquaculture 52,500.00 -
Total 2,082,404.00 1,516,892.00

14. Intangible Assets

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

Software program for use in government operation as of December 31, 2018.

Accounts 2018 2017 (as restated)

Patents/Copyrights 6,789,103.05 6,790,478.05
Computer Software 688,960,556.78 689,847,279.37
Accumulated Amortization - Computer Software (504,837,852.10) (382,906,862.80)
Net Value 184,122,704.68 306,940,416.57
Total Intangible Assets 190,911,807.73 313,730,894.62

Computer Software was purchased during the year by DepEd CO from DBM-PS
with net value amounting to ₱176,956,993.69. Patents/Copyrights pertain to
Copyright authorization fee of Horizon: Music and Arts Appreciation for young
Filipinos from Grade 10 Learners Materials and Teachers Guide paid to Tawid
Publication.

61
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 2018 2017

Acquired Assets 245,058.59 101,778.00
Abandoned Property Assets 245,108.15 236,038.15
Other Assets 420,311,892.10 419,058,940.01
Accumulated Impairment Losses - Other Assets (6,002,355.83) (2,153,895.39)
Net Value 414,309,536.27 416,905,044.62
Total Other Assets 414,799,703.01 417,242,860.77

For DepEd CO, Other Asset amounting to ₱123,162,875.34 pertains to the cost or
accumulated value of imported items already paid but could not be recorded in the
books of accounts due to the inaccessibility of the supporting documents. This
account remained dormant and outstanding since CY 2004 and should be requested
for write-off upon availability of supporting documents as per COA
recommendation.

16. Financial Liabilities

Included in the above major account group as of December 31, 2018 are the
following General Ledger accounts:

Accounts 2018 2017 (as restated)

Accounts Payable 10,387,475,446.50 21,876,000,125.45
Due to Officers and Employees 7,526,742,468.85 4,422,441,479.79
Internal Revenue Allotment Payable - 5,920.60
Service Concession Arrangements Payable 8,191,836,700.33 10,626,923,290.56
Total Payables 26,106,054,615.68 36,925,370,816.40

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.

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.

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 Service Concession Arrangement Payable is used to recognize the liability arising
from unconditional obligation of the grantor entity to make series of payments to the
operator upon recognition of service concession assets, excluding finance charge
and service components of the payments. It is the financial liability recognized
relative to Public - Private Partnership for School Infrastructure Project (PSIP) of the
Department.

Recapitulation PSIP Particulars Amount Payment Balance

Bright Future 3,441,882,285.67 1,585,361,435.65 1,856,520,850.02
PSIP Package A,
Educational
I Region I
Facilities, Inc.
Citicore- 5,229,899,136.00 2,390,651,358.08 2,839,247,777.92
PSIP Package B,
Megawide
I Region III
Consortium, Inc.
Citicore- Package C, 7,593,214,406.06 3,276,776,159.20 4,316,438,246.86
PSIP
Megawide Region IV-
I
Consortium, Inc. A
Megawide 1,358,019,761.73 1,859,323,059.45 (501,303,297.72)
PSIP
Construction Package A
II
Corporation
BSP & Company, 978,301,979.10 1,297,368,855.85 (319,066,876.75)
Inc./Vicente T. PSIP
Package E
Lao Construction II
(JV)
Total 18,601,317,568.56 10,409,480,868.23 8,191,836,700.33

Bills/Bonds/Loans Payable

Particulars 2018 2017

Treasury Bills Payable 0.50 0.50

17. Inter-Agency Payables

Inter-agency payables account is composed of the following:

Particulars 2018 2017 (as restated)

Due to BIR 540,618,514.28 1,003,522,104.50
Due to GSIS 7,802,660,663.77 7,413,559,364.37
Due to Pag-IBIG 391,306,762.93 400,770,335.51
Due to PhilHealth 1,579,821,310.43 1,112,809,304.00
Due to NGAs 1,071,484,151.28 1,077,143,666.02
Due to GOCCs 8,110,647.57 4,168,011.03
Due to LGUs 29,329,311.13 42,903,267.08
Totals 11,423,331,361.39 11,054,876,052.51

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 receipts
of NCA for regular operating expenses from the DBM in CY 2018 or thru bank
debit system.

63
 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 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 NGAs
including those inter-agencies 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 2018 and as of the closing of books are due for remittance by January
2019. Reconciliations are also being done regularly to effect some adjustments on
the remittances made by the Agency to these GOCCs and BIR.

18. Intra-Agency Payables

Intra-agency payables account is composed of the following:

Particulars 2018 2017 (as restated)

Due to Central Office 153,658,926.12 122,230,805.53
Due to Bureaus 14,398,069.97 13,756,769.38
Due to Regional Offices 280,472,662.31 180,682,074.79
Due to Operating Units 88,111,624.70 94,190,543.64
Due to Other Funds 18,029,735.98 181,802,417.04
Total Intra-Agency Payables 554,671,019.08 592,662,610.38

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

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 In the CO Books, Due to Bureaus pertains to cash advances made in previous years
from DECS Salaries/Deployed Employees (Trust Account) due to insufficient
OSEC Regular Cash Allocation to cover payments of salaries and other operating
expense. This balance is subject for reconciliation. It includes also the refunds of
cash advance from Trust Accounts (UNICEF, EPIP) which were erroneously
deposited to OSEC Regular Fund.

Due to Regional Offices – This refers to amount payable by CO/Bureaus/Operating

Units of NGAs to their ROs.

19. Trust Liabilities

Particulars 2018 2017

Trust Liabilities 135,727,058.77 106,159,692.19
Guaranty Deposits Payable 1,564,080,427.19 1,220,208,316.11
Customers' Deposit Payable 1,276,396.34 1,266,400.59
Total Trust Liabilities 1,701,083,882.30 1,327,634,408.89

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 ten 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.

Particulars 2018 2017

Other Deferred Credits 20,628,174.94 23,203,597.29
Other Unearned Revenue 20,877,784.63 191,400.00
Total Deferred Credits/Unearned Income 41,505,959.57 23,394,997.29

21. Provisions

Particulars 2018 2017

Leave Benefits Payable 19,063,068.67 18,000,000.00
Total Provisions 19,063,068.67 18,000,000.00

Leave Benefits Payable account is used to record accrual of money value of the

65
 earned leave credits of government personnel. This account is debited upon
monetization of earned leave and payment of terminal leave benefits.

22. Other Payables

Other Payables account is composed of the following:

Fund Type 2018 2017 (as restated)

Regular Agency Fund 4,708,826,151.24 4,544,405,562.89
Trust Receipts 1,547,485,764.68 1,509,238,809.64
Provident Fund 1,311,825,141.84 1,332,245,393.26
Business-Related Fund 10,346,355.34 12,022,598.76
Foreign-Assisted Projects Fund 1,671,584.72 738,069.19
Total Other Payables 7,580,154,997.82 7,398,650,433.74

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 (PLIs) and Insurance
Companies for loan repayments and insurance premium deducted from salaries of
the employees.

23. Service and Business Income

The large portion of income was derived from registration/seminar fees and service
fee collected from the PLIs.

Particulars 2018 2017

Service Income 652,135,828.76 530,312,315.09
Documentary Stamp 2,895.00 -
Permit Fees 3,642,180.00 3,375,425.00
Registration Fees 51,152,013.07 29,838,028.98
Registration Plates, Tags and Stickers Fees - 17,200.00
Clearance and Certification Fees 529,386.83 126,647.11
Legal Fees 236,128.18 130,645.00
Inspection Fees 5,079,900.00 7,643,530.00
Verification and Authentication Fees 2,780.00 37,350.00
Processing Fees 772,060.00 22,269,257.86
Fines and Penalties-Service Income 8,223,653.33 12,363,663.79
Other Service Income 582,494,832.35 454,510,567.35
Business Income 974,463,534.03 839,218,772.09
School Fees 1,670,243.74 2,535,293.37
Affiliation Fees 697,700.00 92,000.00
Examination Fees 6,028,720.00 8,085,024.00
Seminar Fees/Training Fees 107,345,344.59 67,510,537.38
Rent/Lease Income 13,767,879.79 16,593,372.72
Waterworks System Fees - 15,000.00
Power Supply System Fees - 675.59
Landing and Parking Fees 32,025.00 -
Income from Hostels/Dormitories and Other
Like Facilities 410,265,450.01 390,405,094.48

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 Particulars 2018 2017
Income from Printing and Publication 5,572,365.68 3,416,624.83
Net Sales Revenue 1,246,254.37 -
Interest Income 253,750,641.89 233,874,208.25
Fines and Penalties - Business Income 74,281,219.71 52,754,521.57
Other Business Income 99,805,689.25 63,936,419.90
Total Service and Business Income 1,626,599,362.79 1,369,531,087.18

For the DepEd, 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.

24. Shares, Grants, and Donations

Total Shares, Grants and Donations for the year are ₱368,417,232.89 which is
composed of donations in kind and in cash. Breakdown is as follows:

Particulars 2018 2017

Income from Grants and Donations in Cash 11,039,064.46 22,315,091.43
Income from Grants and Donations in Kind 357,378,168.43 1,873,984,437.06
Total Shares, Grants and Donations 368,417,232.89 1,896,299,528.49

25. Gains

Total gains recorded for the year is ₱282,353.00 representing gains in agricultural
produce in Region II.

26. Miscellaneous Income

Miscellaneous income is composed of the following:

Fund Type 2018 2017

Regular Agency Fund 28,396,791.90 13,421,313.67
Trust Receipts 10,597,480.01 3,641,644.95
Provident Fund 27,499,931.47 22,640,094.63
Business-Related Fund 66,016.81 817,018.28
Total Miscellaneous Income 66,560,220.19 40,520,071.53

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27. Personnel Services

Total expenses for personnel services for the year is ₱375,000,861,312.21 which
represents 89 percent of the total operating expenses. 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 2018 2017

Salaries and Wages - Regular 243,894,899,350.81 217,861,870,265.46
Salaries and Wages – Casual/Contractual 1,327,766,705.10 1,311,180,269.96
Total Salaries and Wages 245,222,666,055.91 219,173,050,535.42

27.2 Other Compensation

Particulars 2018 2017

Personnel Economic Relief Allowance 20,292,851,830.81 18,785,800,415.61
(PERA)
Representation Allowance (RA) 87,335,664.79 91,647,791.43
Transportation Allowance (TA) 82,219,189.21 69,834,033.62
Clothing/Uniform Allowance 5,098,685,416.97 4,029,738,185.65
Subsistence Allowance 57,119,674.99 50,188,905.84
Laundry Allowance 8,471,994.85 5,748,785.69
Quarter Allowance 670,898.09 322,775.17
Productivity Incentive Benefits 390,991,187.72 343,220,349.97
Overseas Allowance 169,000.00 -
Honoraria 33,942,561.79 37,113,226.48
Hazard Pay 615,246,339.82 688,683,738.14
Longevity Pay 268,119,580.31 253,724,056.45
Overtime and Night Pay 110,896,982.53 106,729,354.30
Year End Bonus 26,508,167,315.67 28,784,233,606.20
Cash Gift 4,234,791,772.83 3,798,833,676.70
Other Bonuses and Allowances 33,222,057,821.10 13,632,621,162.29
Total Other Compensation 91,011,737,231.48 70,678,440,063.54

27.3 Personnel Benefits Contributions

Particulars 2018 2017

Retirement and Life Insurance 28,879,620,416.76 25,856,259,186.29
Contributions
Pag-IBIG Contributions 1,036,651,352.78 981,712,672.86
PhilHealth Contributions 3,254,756,546.88 2,519,775,904.19
Employees Compensation Insurance 1,032,160,519.64 944,099,129.22
Premiums
Provident/Welfare Fund Contributions 11,201.24 30,180.03
Total Personnel Benefits Contributions 34,203,200,037.30 30,301,877,072.59

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 27.4 Other Personnel Benefits

Particulars 2018 2017

Pension Benefits 401,800.00 2,248,643.00
Retirement Gratuity 39,113,237.87 60,263,202.32
Terminal Leave Benefits 1,019,414,308.79 1,101,549,133.91
Other Personnel Benefits 3,504,328,640.86 3,451,972,169.10
Total Other Personnel Benefits 4,563,257,987.52 4,616,033,148.33

28. Maintenance and Operating Expenses

28.1 Travelling Expenses

Particulars 2018 2017

Traveling Expenses – Local 2,399,318,952.50 2,222,282,529.42
Traveling Expenses – Foreign 46,095,215.09 84,175,674.32
Total Travelling Expenses 2,445,414,167.59 2,306,458,203.74

28.2 Training and Scholarship Expenses

Particulars 2018 2017

Training Expenses 6,363,491,446.29 6,955,850,938.35
Scholarship Expenses 4,592,799.80 8,482,258.34
Total Training and Scholarship Expenses 6,368,084,246.09 6,964,333,196.69

28.3 Supplies and Materials Expenses

Particulars 2018 2017

Office Supplies Expenses 4,107,657,866.33 4,033,314,587.07
Accountable Forms Expenses 15,262,968.30 11,890,470.97
Non-Accountable Forms Expenses 2,116,137.77 3,015,536.97
Animal/Zoological Supplies Expenses 459,282.80 279,781.27
Food Supplies Expenses 2,564,231,446.80 1,769,768,910.79
Welfare Goods Expenses 72,500.00 439,893.02
Drugs and Medicines Expenses 113,447,219.66 105,972,790.67
Medical, Dental and Laboratory Supplies 179,044,212.47 84,172,132.69
Expenses
Fuel, Oil and Lubricants Expenses 107,541,595.98 92,203,578.11
Agricultural and Marine Supplies 12,656,516.44 4,550,803.47
Expenses
Textbook and Instructional Materials 2,522,998,876.18 1,661,398,562.03
Expenses
Military, Police and Traffic Supplies 16,228.00 24,614.03
Expenses
Chemical and Filtering Supplies Expenses 158,382.00 773,453.99
Semi-Expendable Machinery and 980,888,539.92 723,901,986.89
Equipment Expenses
Semi-Expendable Furniture, Fixtures and 694,054,255.81 476,640,617.49
Books Expenses
Other Supplies Expenses 3,634,613,723.72 3,321,064,122.14
Total Supplies and Materials 14,935,219,752.18 12,289,411,841.60

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28.4 Utility Expenses

Particulars 2018 2017

Water Expenses 621,695,557.12 589,211,029.58
Electricity Expenses 2,553,538,976.67 2,210,887,948.40
Total Utility Expenses 3,175,234,533.79 2,800,098,977.98

28.5 Communication Expenses

Particulars 2018 2017

Postage and Courier Services 12,582,219.55 13,596,997.34
Telephone Expenses 304,367,993.63 317,034,248.78
Internet Expenses 585,862,176.99 485,583,633.57
Cable, Satellite, Telegraph, and Radio Expenses 5,061,753.29 6,385,042.18
Total Communication Expenses 907,874,143.46 822,599,921.87

28.6 Awards/Rewards and Prices Expenses

Particulars 2018 2017

Awards/Rewards Expenses 11,678,570.84 5,500,148.97
Prices 11,428,027.28 10,578,794.79
Total Award/Rewards and Prices 23,106,598.12 16,078,943.76

28.7 Survey, Research, Exploration and Development Expenses

Particulars 2018 2017

Survey Expenses 3,328,071.18 7,525,740.47
Research, Exploration and Development Expenses 23,559,383.79 26,693,535.19
Total 26,887,454.97 34,219,275.66

28.8 Demolition and Relocation Expenses

Particulars 2018 2017

Demolition and Relocation Expenses 159,998.16 717,266.58
Total Demolition and Relocation Expenses 159,998.16 717,266.58

28.9 Confidential, Intelligence and Extraordinary Expenses

Particulars 2018 2017

Confidential Expenses 514,395.56 28,042.50
Extraordinary and Miscellaneous Expenses 46,520,818.15 46,654,156.07
Total Confidential, Intelligence and 47,035,213.71 46,682,198.57
Extraordinary Expenses

28.10 Professional Services

Particulars 2018 2017

Legal Services 5,755,611.89 6,511,998.52
Auditing Services 7,347,620.72 5,950,375.51

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 Particulars 2018 2017
Consultancy Services 14,399,434.47 28,175,554.98
Other Professional Services 408,575,437.96 478,054,324.33
Total Professional Services 436,078,105.04 518,692,253.34

28.11 General Services

Particulars 2018 2017

Environment/Sanitary Services 2,040,830.95 2,817,020.61
Janitorial Services 631,746,483.00 526,229,752.54
Security Services 780,535,691.00 653,846,398.79
Other General Services 664,356,999.76 614,002,977.85
Total General Services 2,078,680,004.71 1,796,896,149.79

28.12 Repairs and Maintenance

Particulars 2018 2017

Repairs and Maintenance-Investment Property 3,071.14 315,350.47
Repairs and Maintenance-Land Improvements 38,094,265.65 46,245,604.78
Repairs and Maintenance-Infrastructure Assets 40,041,529.44 9,680,302.89
Repairs and Maintenance-Buildings and Other 5,072,012,662.54 4,831,401,582.61
Structures
Repairs and Maintenance-Machinery and 97,023,188.23 99,516,893.32
Equipment
Repairs and Maintenance -Transportation 53,551,514.18 48,553,164.59
Equipment
Repairs and Maintenance - Furniture and 58,819,469.30 82,702,242.47
Fixtures
Repairs and Maintenance - Leased Assets 73,198.76 194,130.82
Improvements
Restoration and Maintenance - Heritage Assets - 3,510.00
Repairs and Maintenance-Semi-Expendable 9,084,997.46 12,613,649.32
Machinery and Equipment
Repairs and Maintenance-Semi-Expendable 3,783,279.84 2,469,359.22
Furniture, Fixtures and Books
Repairs and Maintenance - Other Property, Plant 12,048,092.01 15,900,558.64
and Equipment
Total Repairs and Maintenance 5,384,535,268.55 5,149,596,349.13

28.13 Taxes, Insurance Premiums and Other Fees

Particulars 2018 2017

Taxes, Duties and Licenses 8,549,370.96 14,415,878.42
Fidelity Bond Premiums 114,863,662.39 92,950,491.37
Insurance Expenses 28,621,199.65 25,263,211.71
Total Taxes, Insurance Premiums and Other 152,034,233.00 132,629,581.50
Fees

28.14 Labor and Wages

Particulars 2018 2017

Labor and Wages 201,251,772.53 157,572,798.40

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 Particulars 2018 2017
Total Labor and Wages 201,251,772.53 157,572,798.40

28.15 Other Maintenance and Operating Expenses

Particulars 2018 2017

Advertising Expenses 7,432,531.63 11,135,996.88
Printing and Publication Expenses 799,057,955.95 799,640,398.37
Representation Expenses 162,888,285.94 114,909,569.70
Transportation and Delivery Expenses 165,322,306.13 125,471,875.15
Rent/Lease Expenses 37,235,379.91 28,785,353.56
Membership Dues and Contributions to 1,491,789.26 1,861,241.48
Organizations
Subscriptions Expenses 7,867,797.59 8,987,691.64
Donations 13,239,649.00 18,252,073.61
Litigation/Acquired Assets Expenses 61,766.73 14,811.58
Other Maintenance and Operating Expenses 3,126,505,520.95 3,057,942,970.29
Total Other Maintenance and Other 4,321,102,983.09 4,167,001,982.26
Operating Expenses

29. Financial Expenses

Particulars 2018 2017

Management Supervision /Trusteeship Fees - 30,600.00
Interest Expenses 178,494.95 69,175.33
Guarantee Fees - 543,500.00
Bank Charges 1,195,758.14 1,096,287.98
Other Financial Charges 317,533.72 37,395.80
Total Financial Expenses 1,691,786.81 1,776,959.11

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.

30.1 Depreciation

Particulars 2018 2017

Depreciation - Investment Property 333,017.57 825,103.42
Depreciation-Land Improvements 7,120,599.74 7,313,114.32
Depreciation-Infrastructure Assets 8,663,039.65 2,486,542.75
Depreciation-Buildings and Other Structures 3,111,112,568.89 2,620,128,177.94
Depreciation-Machinery and Equipment 471,256,651.11 356,770,010.63
Depreciation-Transportation Equipment 29,593,653.96 21,956,573.41
Depreciation-Furniture, Fixtures and Books 256,528,003.11 252,157,420.33
Depreciation - Heritage Assets 642,731.17 46,975.44
Depreciation - Service Concession Assets 1,545,174,604.59 1,545,174,604.59
Depreciation - Other Property, Plant and 27,179,917.93 29,439,075.34
Equipment
Total Depreciation 5,457,604,787.72 4,836,297,598.17

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 30.2 Amortization

Particulars 2018 2017

Amortization - Intangible Assets 123,741,112.60 460,211,315.66
Total Amortization 123,741,112.60 460,211,315.66

30.3 Impairment Loss

Particulars 2018 2017

Impairment Loss-Loans and Receivables 869,165.66 -
Impairment Loss-Property, Plant and Equipment 2,873,292.32 3,044,177.89
Impairment Loss-Biological Assets - 9,500.00
Impairment Loss-Intangible Assets - 3,000.00
Impairment Loss-Other Assets 965.00 8,249.77
Total Impairment Loss 3,743,422.98 3,064,927.66

31. Net Financial Assistance/Subsidy

Financial Assistance/Subsidy from NGAs, LGUs, GOCCs

Particulars 2018 2017

Subsidy from National Government 479,942,194,760.03 405,298,699,631.48
Subsidy from Other National Government Agencies 1,294,198,658.80 430,549,152.98
Assistance from Local Government Unit 115,360,343.80 77,344,356.34
Assistance from GOCCs 2,222,224.00 933,500.00
Subsidy from Other Funds 38,787,899.04 36,586,919.89
Subsidy from Central Office 280,092,965.10 109,567,586.76
Subsidy from Regional Office/Staff Bureau 364,437,743.21 43,484,204.89
Total Financial Assistance/Subsidy from NGAs, 482,037,294,593.98 405,997,165,352.34
LGUs, GOCCs

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

Particulars 2018 2017

Subsidy to National Government Agencies - 13,727,312.03
Financial Assistance to NGAs 740,308,683.74 696,519,030.74
Financial Assistance to LGUs 2,125,000.00 13,144,845.51
Budgetary Support to GOCCs - 110,000.00
Financial Assistance to NGOs/POs 60,805,000.00 104,719,000.00
Subsidy to Regional Offices/Staff Bureaus 4,247,668.76 39,650,000.00
Subsidy to Operating Units 475,485,315.38 272,303,181.80
Subsidy to Other Funds 4,330,630.34 10,000.00
Subsidies - Others 25,208,321,472.41 36,891,567,804.09
Total Financial Assistance/Subsidy to NGAs, 26,495,623,770.63 38,031,751,174.17
LGUs, GOCCs
Net Financial Assistance/Subsidy 455,541,670,823.35 367,965,414,178.17

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32. Other Non-Operating Income

32.1 Sale of Assets

Particulars 2018 2017

Sale of Unserviceable Property 302,735.09 982,408.57
Total Sales of Assets 302,735.09 982,408.57

32.2 Gains

Particulars 2018 2017

Gain on Sale of Property, Plant and 237,345.78 2,400.00
Equipment
Other Gains 6,889,301.03 10,198,308.27
Total Gains 7,126,646.81 10,200,708.27

32.3 Losses

Particulars 2018 2017

Loss on Sale of Property, Plant and 158,368.00 -
Equipment
Loss of Assets 2,288,284.87 1,611,009.93
Other Losses 19,746.19 330,775.53
Total Losses 2,466,399.06 1,941,785.46

33. Receipt of Cash Allocation

NCAs received from the DBM 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 NCAs received by the Agency for the year to settle its current and prior years’
obligations are stated below.

Region Amount
I 26,860,822,353.15
II 18,776,796,962.38
III 44,964,878,290.49
IV-A 49,211,432,430.42
IV-B 16,692,265,061.82
V 32,792,558,809.79
VI 36,148,351,766.52
VII 34,785,492,966.32
VIII 27,452,973,794.47
IX 19,189,071,878.67
X 21,450,715,542.16
XI 20,866,759,708.90
XII 21,131,400,288.96
CARAGA 16,063,116,849.57
CAR 10,487,923,988.79

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 Region Amount
NCR 35,019,124,664.72
Central Office 62,377,151,402.48
Attached Agencies 21,906,010.04
Total NCA Received 494,292,742,769.65

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 76,466,500.76
II 46,691,154.25
III 637,861,836.58
IVA 789,998,630.75
IV-B 132,232,025.13
V 344,053,180.50
VI 205,189,328.88
VII 882,906,087.81
VIII 639,632,388.80
IX 64,797,988.62
X 233,544,372.75
XI 434,028,072.60
XII 94,531,212.02
CARAGA 291,490,376.84
CAR 132,429,404.21
NCR 558,028,049.54
Central Office 7,409,666,013.79
Attached Agencies 223,342.64
Total Reversal of Unutilized NCA 12,973,769,966.47

75