Malacañang says SARO abolition reduces red tape

MANILA, Philippines - Malacañang said on Friday that the abolition of the special allotment release order (SARO) would reduce red tape and fast-track the implementation of government projects.

Deputy Presidential Spokesperson Abigail Valte said the new system would allow agencies to undertake procurement activities immediately after the signing of the national budget.

Previously, agencies had to wait for the SARO before they could issue a notice of award to winning bidders.

“It will be easier for them to front-load projects, at least for ideally within the first week of January, you can already award projects,” Valte said in a press briefing.

“More importantly, the GAA (General Appropriations Act) as a release document will reduce red tape or the papers that have to be accomplished and submitted; and you lessen opportunities for corruption because there is less red tape.”

The Department of Budget Management (DBM) has removed the SARO requirement in the wake of reports that some groups are benefiting from the circulation of fake release orders. The National Bureau of Investigation is now probing the “well-established” and “highly coordinated” racket, which reportedly involved some budget personnel.

Under the GAA-as-release-document system, agencies will no longer need SAROs to obligate funds for their projects.

This means an agency can start obligating funds as soon as the 2014 budget or GAA is implemented on the first working day of the fiscal year. In lieu of the SARO, the 2014 budget will serve as the government’s primary budget release document.

“All the disaggregated budget items in the GAA are already considered released to their respective agencies, with the exception of lump-sum funds that have yet to be itemized, and which will require prior approval before their release," Budget Secretary Florencio Abad said in an earlier statement.

However, some items will still require clearance and approval before their funds can be disbursed. These include lump-sum funds within an agency's budget that have not been itemized prior to the enactment of the 2014 budget and special purpose funds including calamity fund and budgetary support to government corporations.

“The DBM is currently in process of full computerization of issuing SAROs for those items that still need it like the SPF and lump sum,” Valte said.

She said measures are in place to ensure that the new system would not be tainted with anomalies.

“The agency remains responsible for the budget that is given to them and, of course, part of that is the assurance that they follow the process when it comes to procurement, disbursement, liquidation since they are being audited by the COA (Commission on Audit),” Valte said.

The Budget department previously said that the new system is part of the campaign to promote transparency and accountability in the expenditure process.

“We don't just intend to accelerate releases so that they can properly fund our key programs and projects. We also mean to thwart those who've made the budget implementation process a hotbed of graft and corruption,” Abad said.