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REPUBLIC OF THE PHILIPPINES DEPARTMENT OF BUDGET AND MANAGEMENT

BONCODIN HALL, GEN. SOLANO ST., SAN MIGUEL, MANILA

National Budget Circular No. 566 December 15, 2016

TO : All Heads of Departments, Agencies, State Universities and Colleges including Commissions and Offices under the Constitutional Fiscal Autonomy Group, and Government -Owned or -Controlled Corporations; Heads of Finance and Planning Units; and All Others Concerned

SUBJECT : Guidelines in the Utilization of the Legal Defense Fund for FY 2016 and Succeeding Years

1.0 RATIONALE

In the performance of their official functions, government personnel may face administrative, civil or criminal charges before courts, for which they incur actual expenses in the defense of their cases.

To promote the welfare and extend assistance to government personnel, Republic Act (RA) No. 10717 or the FY 2016 General Appropriations Act (GAA) has appropriated the amount of Two Hundred Million Pesos (P200,000,000) for the Legal Defense Fund under the Miscellaneous Personnel Benefits Fund (MPBF). The Legal Defense Fund shall be used for actual expenses, including payment of premiums for posting of bail bonds and cash advance for expenses incurred by government personnel, in relation to the defense of administrative, civil or criminal cases filed against them in courts for acts committed in the performance of their actual functions.

2.0 PURPOSE

To prescribe the guidelines in the use of the Legal Defense Fund, including the establishment of the appropriate organizational and procedural set-up for its release and utilization.

3.0 ESTABLISHMENT AND FUNCTIONS OF THE LEGAL DEFENSE FUND CLAIMS BOARD ("CLAIMS BOARD")

3.1 Each line department shall establish its respective Claims Board to cover claims for legal expenses of its incumbent, separated or retired employees, including those of its attached agencies. The Claims Board shall determine the eligibility of claimants and expenses, and the amounts to be charged against the Legal Defense Fund.

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3.2 Establishment of the Claims Board shall not entail creation of a separate or independent office but instead, shall be an additional function to those designated as members and support staff of the Board.

3.3 The head of agency may decentralize the functions of the Claims Board by creating Regional Claims Board/s. For this purpose, the head of agency shall provide the rules on the coverage, composition, procedure, and finality of decisions and/or any appeal procedure of the Regional Claims Board. In no case shall said rules contravene the provisions of this Circular.

3.4 Any favorable decision by the Claims Board shall be final and executory. In case of denial of claim, the same shall be appealable to the Office of the President.

3.5 The Claims Board shall be chaired by an Undersecretary or an Assistant Secretary, preferably a member of the Philippine Bar, and composed of five (5) or seven (7) members:

Chairperson: Undersecretary or Assistant Secretary;

Vice-chairperson: Head of Legal Service; and

Three (3) to five (5) members who may be any of the following:

Head of Administrative Service;

Head of Internal Audit Service;

Head of Financial Service;

Head of an Operations Unit;

Technical staff from the Office of the Secretary; or

Head of the Accredited Employees Organization.

Any of the members may assign an alternate subject to the internal rules of the Claims Board.

3.6 The Claims Board shall have the following powers and functions:

Decide all claims against the Legal Defense Fund;

Create a secretariat from personnel designated by the members of the Claims Board;

Issue internal guidelines consistent with this Circular; and

Perform such other powers and functions as may be necessary to fully carry out the provisions of the Legal Defense Fund and this Circular.

3.7 The Claims Board shall carry out its business by a majority vote of the members present. However, all decisions shall be arrived at by a majority decision of all the members.

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4.0 REQUIREMENTS AND PROCEDURE IN THE PROCESSING OF CLAIMS

4.1 The requirements for claims against the Legal Defense Fund are:

The claimant is an incumbent, separated, or retired government employee with plantilla position;

The administrative, civil or criminal case arose from the performance of the claimant's responsibilities and functions;

The case is filed before any court or those under the supervision of the Supreme Court; and

The claim is filed before the agency where the claimant performed responsibilities and functions subject of the case.

4.2 The Legal Defense Fund provided in the annual GAA may only be used for the payment of actual legal expenses incurred by claimants during the same year.

4.3 The claim shall be in a form of cash advance or reimbursement for legal expenses incurred by qualified claimants in relation to their court defense.

4.4 The claimant may engage a private or government legal counsel, subject to pertinent laws, rules and regulations.

4.5 Eligible legal expenses shall be limited to the following types and amounts of expenses:

Payee Type of Expense Maximum Amount Inclusive of Taxes

Claimant Bail bond Payment of bond premiums. No reimbursement of cash bond shall be allowed.

Claimant Transportation expenses for every hearing, appearance, meeting or conference with the claimant's lawyer.

Amount, supported by receipts and subject to the following: (i) travel authority by the head of agency or his duly authorized representative; (ii) for meetings and conferences, limited to four (4) in a month; and (iii) compliance with accounting and auditing rules and regulations.

Claimant Expenses for photocopying of documents, required certifications, and transcript of stenographic notes

Photocopying expenses shall be based on the actual amount incurred while the other expenses shall be based on the prescribed legal fees under Rule 141 of the Rules of Court, as amended, but not to exceed a total amount of Ten Thousand Pesos (P10,000) for every case.

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Claimant Fees to be paid to private counsel for the preparation or filing of pleadings and/or motions, excluding Motions to Reset Hearing and for Extension of Time

Total amount not to exceed Twenty Thousand Pesos (P20,000) per case

Claimant Acceptance and/or attorney's fee to be paid to private counsel

Total amount not to exceed Fifty Thousand Pesos (P50,000) per case

Claimant Appearance fee to be paid to private counsel for every hearing or appearance before a court

Amount based on the prescribed minimum rates of the local Integrated Bar of the Philippines (IBP) chapter, or if not available, the rates of the nearest IBP chapter where the case is being heard or tried. If the IBP rates are not available, the appearance fee shall not be more than Five Thousand Pesos (P5,000) per hearing.

Government Legal Counsel

Transportation and other travel expenses for every hearing or appearance before any court and for interviews with client or preparation of documents

For transportation expenses, the amount supported by receipts and subject to the following: (i) travel authority by the head of agency or his duly authorized representative;

for meetings and conferences, limited to four (4) in a month; and

compliance with accounting and auditing rules and regulations.

For Other Travel Expenses, those provided under EO No. 248, s. 1995 (Prescribing Rules and Regulations and New Rates of Allowances For Official Local And Foreign Travels Of Government Personnel), and any amendments and guidelines thereto

Government Legal Counsel

Appearance Fee Amount authorized for Special Counsel Allowance under the General Provisions of the annual GAA

4.6 All legal expenses in excess of those, and not included above, shall not be allowed.

4.7 The maximum allowable amounts abovementioned shall be applied per case, and consolidated cases shall be considered as one case.

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4.8 The Legal Defense Fund may likewise be used in the case of legal assistance of the Bids and Awards Committee (BAG) members and their support staff authorized under RA No. 9184 and its Implementing Rules and Regulations and subject to the pertinent guidelines issued by the Government Procurement Policy Board (GPPB).

4.9 In the event of competing claims among employees of a specific agency, priority shall be given to rank and file employees over the agency's senior officials.

5.0 RELEASE OF FUNDS

5.1 The head of agency or its authorized representative shall submit a request before the DBM supported by a favorable decision by the Claims Board, Regional Claims Board or the Office of the President under items 3.3 and 3.4 hereof, as the case may be.

In case of claims for BAG Legal Assistance under RA No. 9184 and GPPB guidelines, the request shall be supported by approval from the head of the procuring entity as required under GPPB guidelines for the purpose.

5.2 Upon receipt of the request with complete supporting documents, the DBM shall release the Special Allotment Release Order (SARO) and Advice of Notice of Cash Allocation Issued (ANCAI) to the agency concerned, and the Notice of Cash Allocation to the authorized government depository bank concerned.

5.3 The agency shall, upon receipt of the SARO and ANCAI:

5.3.1 Issue the Advice to Debit Account for crediting to the account of the claimant or the government legal counsel, depending on the type of claim granted enumerated under item 4.5 hereof.

5.3.2 Observe the pertinent budgeting, accounting or auditing rules and regulations in the release of funds to the claimants.

6.0 MONITORING

The DBM shall maintain the pertinent ledgers to monitor the status of the Legal Defense Fund.

7.0 RESPONSIBILITY

It shall be the responsibility of the heads of the agencies to strictly implement the provisions of this Circular which shall be applicable until amended or modified.

8.0 ISSUES FOR RESOLUTION

Interpretation of the provisions in this Circular, including cases not covered herein shall be referred to the DBM for final resolution.

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9.0 REPEALING CLAUSE

All provisions in existing guidelines that are not consistent with this Circular are hereby revised, modified and/or repealed accordingly.

10.0 EFFECTIVITY

This Circular shall take effect immediately upon publication.

C- BENJAMIN E. DIOKNO

Secretary

Department of Budget and Management

6-eac. -,

OSEC-2016-001001

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