Disbursement Acceleration Program

Disbursement Acceleration Program

Facts:

Disbursement Acceleration Program or DAP was implemented to speed up the funding of government projects. The DAP enables the Executive to realign funds and according to Secretary Abad the funds under the DAP were usually taken from:

1)    Unreleased appropriations

2)    Unprogrammed funds

3)    Appropriations unreleased from the previous year

4)    Budgets from slow-moving projects

The allotted funds mentioned above will be withdrawn by the Executive and these funds will be declared “savings” by the Executive and will be reallotted to other priority projects of the government.

The power of the purse or to make appropriations is vested in the Congress. In the exercise of the power to augment, it effectively allows the transfer of a portion of or even the whole appropriation made in one item in the General Appropriations Act to another item within the same office.

The DAP controversy was precipitated when Sen. Jinggoy Ejercito Estrada delivered on September 25, 2013 a privilege speech in the Senate of the Philippines and revealed that some senators, including himself, had been allotted an additional P50 Million each as an “incentive” for voting in favor of the impeachment of Chief Justice Renato C. Corona. This apparently opened a can of worms as it turns out that the DAP does not only realign funds within the Executive. It turns out that some non-Executive projects were also funded.

In transferring appropriated funds, there must be a law authorizing the President, the President of the Senate, the Speaker of the House, Chief Justice of the Supreme Court, and the heads of Constitutional Commission to transfer funds within their respective offices. The funds to be transferred are savings generated from appropriations for their respective office. The purpose of the transfer is to augment an item in the general appropriations law for their respective offices.

Petitioners claim that the funds used in the DAP (unreleased appropriations and withdrawn unobligated allotments) were not actual savings because according to the provisions of the General Appropriations Act, the savings should be understood to refer to the excess money or when the Project, Activity Programs for which the funds had been appropriated were actually implemented and completed, or finally discontinued or abandoned.

They insist that savings could not be realized with certainty in the middle of the fiscal year; and that the funds for slow-moving projects could not be considered as savings because such Project, Activity Program had not actually been abandoned or discontinued yet.

A valid transfer of funds is that the purpose of the transfer should be to augment an item in the general appropriations law for their respective offices.

Issue:

Whether or not the Executive exceeded his powers to augment items in the budget within Executive Branch of the Government.

Held:

Yes. When the Executive withdrawn the unobligated funds and declared the withdrawn funds as savings, there is no valid transfer of funds because under the definition of savings in the General Appropriations Act, there can only be savings occur when there is an excess in the funding of a certain project once it is completed, finally discontinued, or abandoned and there can be no savings in the middle of fiscal year.

Under the DAP, funds were already withdrawn in the middle of the fiscal year and declared as savings and withdrawn funds even when the projects were not actually been completed, finally discontinued, or abandoned.

Cross-border augmentations are prohibited by Section 25(5) Article VI of the 1987 Constitution.

In Section 25(5) Article VI of the 1987 Constitution, “No law shall be passed authorizing any transfer of appropriations; however the President, Senate President, House Speaker, Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations”

When the Executive withdrawn funds from unreleased appropriations and unobligated allotments and declared it as savings, the savings must only be used in their respective offices to avoid any cross-border augmentations. Secretary Abad admitted making some cross-border augmentations during an oral argument on January 28, 2014

Under the DAP, the funding of projects, activities and programs were not covered by any appropriation in the General Appropriations Act.