DepEd Financial Management Operations Manual (FMOM)

The Financial Management Operations Manual (FMOM) is the Department of Education’s manual of financial procedures for every office it runs, from the Central Office down to the school. DepEd Order No. 60, s. 2016, dated September 2, 2016, adopted it “for all financial transactions at all levels of the Department”, to ensure “standard and uniform application of rules and processes in financial management operations” in budget, accounting, procurement and asset management (item 1). For a school head, the manual’s chapter on School-based Financial Management lists the work: planning and budgeting the school’s money, handling cash advances, recording and liquidating payments, procurement, custody of property, and reporting to stakeholders.

The manual was completed on March 31, 2016 with World Bank support and follows the Government Accounting Manual (GAM) that the Commission on Audit (COA) issued through COA Circular No. 2015-007. Many of the rules it cites have since been replaced. School maintenance and other operating expenses (MOOE) now follow DepEd Order No. 008, s. 2019, and cash advances follow DepEd Order No. 029, s. 2019. Purchases follow Republic Act No. 12009, the New Government Procurement Act. Fidelity bonds follow the Bureau of the Treasury’s Treasury Circular No. 1-2026, and disposal of property follows COA-DBM Joint Circular No. 2024-1. The rules below are those in force on November 5, 2026.

The day-to-day steps for school MOOE, from the cash advance to the year-end refund, are in the school MOOE guide.

Key findings

• The FMOM is still DepEd’s financial manual. DO 60, s. 2016 calls its content “prescriptive” and the manual “a living document” that the Finance Service updates as new issuances come out (items 2 and 3). As of November 5, 2026, DepEd has not replaced DO 60 or issued a new edition of the manual.
• School-based financial management covers six activities. The FMOM lists fiscal planning and budgeting, cashiering and disbursement, accounting and recording, procurement, asset and liability management, and physical and financial reporting (FMOM, p. 126).
• Most school heads manage a cash advance, not a set of books. In DepEd’s FY 2026 school MOOE allocation list, 2,679 of 45,801 schools are implementing units (IUs) with their own bookkeeper and disbursing officer. The other 43,122 are non-implementing units (non-IUs) whose transactions sit in the books of the Schools Division Office (SDO).
• The non-IU cash advance works on a 75% rule. The FMOM calls it a “modified” cash advance: the school may liquidate once 75% has been used, keeps working with the balance, and refunds what is left at year end (p. 128). DO 029, s. 2019 keeps the 75% basis for the next release (item 19.2).
• Bonding now follows a 2026 Treasury circular. The FMOM bonds school heads with a cash accountability of ₱5,000 or more under a 2009 Treasury circular (p. 129). Treasury Circular No. 1-2026 now bonds accountable officers whose accountability is not less than ₱5,001.00, through the Bureau of the Treasury’s Online Fidelity Bonding System, for one, two or three years (Secs. 5.1, 7.0 and 8.2).
• Two of the manual’s thresholds are out of date. RA 12009 repealed Republic Act No. 9184, the procurement law the FMOM follows, and its implementing rules allow Direct Acquisition up to ₱200,000 without a canvass (IRR, Sec. 32.1). COA Circular No. 2022-004 raised the capitalization threshold from ₱15,000 to ₱50,000.
• The documentary requirements are COA Circular No. 2012-001 again. COA Circular No. 2024-004 suspended the 2023 update, COA Circular No. 2023-004, from its effectivity on July 1, 2023, and reinstated COA Circular No. 2012-001.

What the FMOM is and why DepEd adopted it

DO 60, s. 2016 gives the manual four purposes. It standardizes how every DepEd office applies the rules on budget, accounting, procurement and asset management (item 1). It supports financial reform that “aims to increase transparency and accountability across all levels of the Department” (item 2). It stays current: “The FMOM is a living document that allows easy updating of its provisions for future government issuances related to finance, procurement and asset management, and/or new developments on School-Based Management”, with the Office of the Director for Finance Service leading the updates (item 3). And it comes with a five-year capacity-building plan for financial management staff, coordinated with the Bureau of Human Resource and Organizational Development (item 4).

The order names the rules the manual rests on (item 2): the GAM for national government agencies (COA Circular No. 2015-007, October 22, 2015), the Philippine Public Sector Accounting Standards (PPSAS, COA Resolution No. 2014-003), the Unified Accounts Code Structure (UACS) joint circulars of COA, the Department of Budget and Management (DBM) and the Department of Finance (DOF), RA 9184, and Presidential Decree (PD) No. 1445, the Government Auditing Code. “The processes are customized to the Department’s unique structure especially at the school level.”

The manual itself says it was developed by DepEd’s technical working group on financial management operations with World Bank financial management consultants (Message of Secretary Luistro, p. 3), with funding support from Australian aid (Acknowledgement, p. 5). The working group was told to make the manual “complement and not duplicate” DepEd’s other manuals that touch financial management, such as the Simplified Accounting Procedures for non-IU schools and the manuals on procurement and asset management (p. 5). That is why the FMOM keeps sending school heads to those manuals for detail.

How DepEd rolled the manual out to schools

DO 60, s. 2016 set a three-phase orientation (item 5).

The order then made support continuous: “Finance personnel in the ROs and SDOs shall conduct spot-checking and mentoring of schools in the effective and efficient delivery of financial management services using the FMOM” (item 7). A school head who has never attended an FMOM orientation can ask the division’s finance unit for one.

What the FMOM covers, chapter by chapter

The manual runs to 221 pages. Its table of contents (p. 6) lists the chapters below. The right-hand column says what each one means for a school.

What has changed since 2016

The FMOM’s principles still apply, but many of the issuances it cites have since been amended, superseded or repealed. Where a later issuance or law covers a point, it governs. The table lists the changes a school head meets most often.

Two rules the FMOM cites have not changed. School planning still follows DepEd Order No. 44, s. 2015 on the SIP and the School Report Card (SRC). And DepEd Order No. 72, s. 2008, the Manual on Simplified Accounting Procedures for Non-Implementing Units, still governs the Cash Disbursements Register (CDR): DO 029, s. 2019 has school heads submit the register “following” it (item 32.2), and the 2026 School-Based Feeding Program guidelines apply it to feeding funds.

How money reaches a school: the budget cycle

The FMOM explains the national budget as a cycle of four phases: preparation, legislation, execution and accountability (p. 24). The phases overlap: “while the Executive implements the budget for the current year, it also prepares the budget for the next fiscal year or defends it before Congress” (p. 25). A school takes part in all four.

The release documents behind the school’s money

Money cannot be spent until two authorities exist: an authority to commit funds and an authority to pay. The FMOM lists them (pp. 34 to 35 and 51 to 56).

Each commitment is recorded on an Obligation Request and Status (ORS). The head of the requesting office certifies in Section A “the necessity and legality of charges to the budget under his supervision and the validity, propriety and legality of supporting documents”. The budget officer then certifies in Section B that allotment is available (pp. 54 to 55). For revolving funds and trust receipts, the equivalent form is the Budget Utilization Request and Status (BURS) (pp. 57 and 177). Changing the object of expenditure within an allotment class needs the agency head’s approval. Moving money from one allotment class to another, for example from MOOE to capital outlay, needs DBM’s (p. 58).

For a school head, the lesson is the link the FMOM draws in its overview: “A plan without budget cover is meaningless, while a budget that has no plan is a waste of resources” (p. 18). The AIP is the school’s claim on the budget, and DO 008, s. 2019 makes school MOOE “valid for release and obligation for one fiscal year: that is from January 1 to December 31” (Sec. I, item 3).

Implementing and non-implementing schools

The FMOM’s school chapter starts with a distinction that decides most of a school head’s financial duties (pp. 126 to 127).

The FMOM describes an implementing unit (IU) as a secondary school “with a minimum required set of financial staff to enable the separation of functions as provided by basic accounting principles of internal control. That is, recording of transactions is separate from handling of cash and disbursements.” It keeps a complete set of books, receives its allocation directly from the DBM regional office, and submits financial statements to the DBM, COA and DOF, with copies to the division for consolidation. DO 008, s. 2019 adds that IUs have “Bookkeeper and Disbursing Officer plantilla positions” (Sec. V.B, item 1).

A non-implementing unit (non-IU) has no financial staff and keeps no complete set of books. It receives its allocation from the division as cash advances, which the school head and a designated staff member, if any, handle. Its transactions are recorded in the division’s books and reports (p. 127).

The FMOM estimated in 2016 that most of about 40,000 elementary schools and about two-thirds of about 8,000 secondary schools were non-IUs (p. 127). DepEd’s FY 2026 school MOOE allocation list tags 2,679 of its 45,801 schools as IUs and 43,122 as non-IUs. Every FY 2026 IU has a junior or senior high school allocation, and 29 of them also have an elementary allocation.

School-based financial management: the six parts

The FMOM defines school-based financial management as the “activities undertaken or pursued by a school head and his/her designated staff who assist in the management of financial and relevant nonfinancial resources available to the school” (p. 126). It opens with a frank sentence: “Financial management at the school level is admittedly a challenging process considering the lack of formal preparation of school heads.”

1. Fiscal planning and budgeting

Fiscal planning estimates every source of money the school can expect: the GAA allocation, the local government’s share of the Special Education Fund (SEF) or its general fund, Parent-Teacher Association (PTA) donations, income-generating projects, private donations and other sources (p. 127). It then sets targets, lists the activities needed to reach them, and matches activities with the timing of the money. The FMOM treats the SIP as “the major fiscal planning activity of the school”: “An SIP is a medium term fiscal plan”, covering three years (p. 127).

Budgeting is annual. “The AIP is also referred to as the school operating budget (SOB)” (p. 127). The School Improvement Plan guide explains how the SIP and AIP are made under DO 44, s. 2015. The Special Education Fund guide covers how a school can ask its Local School Board for support.

The FMOM’s description of how the school’s MOOE share is computed, by the formula in use since 2013 (the “Boncodin formula”, p. 128; DO 008, s. 2019, Sec. I, item 1) and a planned Normative Funding Formula, has been overtaken; the school MOOE guide covers DepEd’s 2026 statements on its Simplified Normative Funding Formula.

2. Cashiering and disbursement

For implementing schools, the manual’s general chapters on cash and disbursement apply. For non-IUs, the sections on cash advances apply, including the bonding of the accountable officer (p. 128). The rules for both follow.

3. Accounting and recording

For IUs, accounting means keeping books and producing financial statements; COA audits IU transactions separately. For non-IUs, it means “substantiation of disbursements with the appropriate documentation of transactions made and preparation of the liquidation reports as required for cash advances”, which the division then records in its own books (p. 130).

4. Procurement

The FMOM describes a school bids and awards committee (SBAC) and a school inspection committee (SIC). Small schools may be clustered into a cluster committee, and some divisions formed district-level committees. The point of both bodies, the manual says, is impartiality and the prevention of corruption and fraud (p. 130). For non-IUs, it sets four steps (pp. 130 to 131): prepare or update the Annual Procurement Plan (APP); separate common-use items from others; buy common-use items from the Procurement Service of the DBM (PS-DBM) through an Agency Procurement Request, and the rest through the proper mode; and pay from the cash advance for school MOOE.

The structure survives, but the law under it changed. RA 12009 took effect on August 13, 2024 (Government Procurement Policy Board [GPPB] Resolution No. 02-2025), and RA 9184 is repealed (IRR, Sec. 115). The modes of procurement are now those in Section 26 of the IRR. Two of them fit most school purchases:

The APP rule is unchanged: “No government procurement shall be undertaken unless it is in accordance with the approved Indicative APP or final APP” (IRR, Sec. 7.8). Splitting contracts to avoid the rules is prohibited (Sec. 39). For late deliveries, the IRR keeps liquidated damages at one-tenth of one percent of the cost of the delayed goods for every day of delay, and lets the procuring entity rescind the contract once the damages reach 10% of the contract price (Sec. 71.1.4).

The FMOM’s question-and-answer section adds two school rules. A non-IU “can conduct procurement within the level of cash advance subject to the existing procurement rules and regulations”. A non-IU may not sell bid documents, because it has no collecting officer, no official receipts and no bookkeeper (FAQ, p. 161). The school MOOE guide covers who acts as head of the procuring entity for a school and the emergency procurement rules of DepEd Order No. 005, s. 2026.

5. Asset and liability management

For IUs, the manual’s general chapters apply. For non-IUs, asset management is “indirect”, since the school’s property is in the division’s books, so “the initiative lies with the division office” (p. 131). Three areas still need the school head’s attention: custodianship, inventory management and disposal (p. 131). They are covered in the section on property below.

6. Physical and financial reporting

“For schools, the main document that is prepared to show information on accomplishments and financial resources applied to produce outputs is the school report card (SRC)” (p. 132). The manual also names the transparency board, which “must be located in a place open to public view and frequented by the school’s stakeholders” (p. 132). DO 008, s. 2019 now requires the board to show the sources, intended use and actual use of school funds, “updated every three (3) months”, and requires the school head to present sources and uses through the SRC to the faculty, the PTA, the School Governance Council (SGC) and local partners (Sec. VI.A, items 4 and 5).

Cash advances for non-implementing schools

The FMOM’s account of the non-IU cash advance is still the clearest explanation of why the system works as it does: “The unique feature of a cash advance for non-IUs is that liquidation can be made when 75% of the cash advance has been used. The unused balance is not returned but may still be used and liquidated with the succeeding cash advance. In effect the system is a ‘modified’ cash advance system that allows non-IU schools to always have available cash to meet school needs” (p. 128). The advance is closed at year end, and any unspent balance is refunded.

The general rule for other cash advances is stricter: “No additional cash advance shall be given unless previous cash advance has been fully liquidated, except for operating expenses / school MOOE” (p. 98). The FMOM bases the grant of cash advances on COA Circular No. 97-002, as amended by COA Circular No. 2006-005 (p. 94).

The manual’s four requirements for the first advance (pp. 132 to 133), and its rule on holding the cash (p. 133), have changed as follows.

Liquidation follows the Simplified Accounting Procedures. The school head records every payment in the CDR and submits it, the paid vouchers and the supporting documents to the division on or before the 5th day of the following month; the next advance is released on a register covering at least 75% of the previous one (DO 72, s. 2008 manual, item H.1.1; DO 008, s. 2019, Sec. V.C, item 3.3; DO 029, s. 2019, items 19.2 and 32.2). The FMOM’s list of supporting documents for a non-IU liquidation (p. 133) includes the CDR, approved purchase requests, receipts and invoices, trip tickets, canvasses, an abstract of canvass, a certificate of inspection and acceptance, and a waste materials report when something is replaced or repaired. Its rule of a canvass from three suppliers “for all purchases” predates RA 12009; a purchase made through Direct Acquisition needs no canvass, but it still needs the invoice and the other documents COA requires.

The steps for the school bank account, the December 20 deadline for the Authority to Debit/Credit Account, the year-end transfer of the balance to the BTr, and turnover on transfer are in the school MOOE guide. Two updates apply to them. Requests to open accounts now follow Treasury Circular No. 2-2025 of April 2, 2025, which repealed Treasury Circular No. 04-2024 and has the BTr Regional Directors act on accounts of DepEd non-IUs for school MOOE and program funds (Sec. 4.2.4). The request still uses BTr Form 1 (Request for Authority to Open Account) and BTr Form 2 (Undertaking) (Secs. 4.1.1 and 4.1.2). And the documentary requirements for the vouchers come from COA Circular No. 2012-001: COA Circular No. 2024-004, dated March 14, 2024, suspended COA Circular No. 2023-004 “retroactive to its effectivity on July 1, 2023”, reinstated COA Circular No. 2012-001, and withdrew audit actions based on COA Circular No. 2023-004 except those resting on provisions copied from COA Circular No. 2012-001.

Program funds follow the same system. DO 029, s. 2019 requires one CDR for school MOOE and one for each program fund every month (item 19.1). DepEd Order No. 013, s. 2026, the institutional guidelines on the School-Based Feeding Program, lets an SDO download feeding funds to a school only if the school has “no unliquidated fund balances for the past six (6) months” and no adverse COA findings, (Sec. VIII.A.3), and requires expenditures to adhere to DO 72, s. 2008 (Sec. VIII). A school that liquidates late can lose the chance to run its own feeding program.

Bonding: the school head as accountable officer

The FMOM explains that a bonded officer is one whose duties require the custody of funds or property for which they are accountable, and that at the school level this is “usually the School Head and/or Special Disbursing Officer” (p. 128). An officer insured in the Fidelity Fund is considered bonded from the moment of assuming office, and must account for all funds and property in their custody (pp. 128 to 129). The manual also puts the rule bluntly in its chapter on disbursement: “Cash advance must be granted only to duly bonded Accountable Officials designated to handle cash advance” (pp. 97 to 98).

The FMOM’s bonding procedure (p. 129) used Treasury Circular No. 02-2009: an application on General Form No. 57A, character references from three division officials, the Statement of Assets, Liabilities and Net Worth (SALN), and a certification of no pending case, with the SDS fixing the amount of the bond. The Bureau of the Treasury has since issued new bonding rules. Treasury Circular No. 1-2026, dated January 22, 2026, repealed Treasury Circular No. 02-2019 and its amendments (Sec. 13.0) and now governs.

The FMOM’s question-and-answer section says a school head’s bond may be carried to a new school in the same division when the bond application names no station (FAQ, p. 163). The 2026 circular is stricter: the bond is “non-transferable and personal” (Sec. 8.2), “The basis of accountability and the issuance of risk number is per station” (Sec. 6.4), and an officer who moves to a different role applies for a transfer of station or change of position (Sec. 8.2). A school head who is reassigned should update the bond before signing a check at the new school.

The school MOOE guide covers how bonding fits into the steps for the first cash advance. What happens to an accountable officer who cannot produce funds is covered in Can a Principal Be Jailed Over School Funds?.

The rules behind every voucher

The FMOM opens its chapter on disbursement with a warning: “Expenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible” (p. 82). It then restates the fundamental principles of PD 1445, Section 4 (p. 84), among them:

• “No money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or specific authority.”
• “Government fund or property shall be used solely for public purposes.”
• A trust fund may be spent only for the purpose for which it was created or received.
• Fiscal responsibility is shared by all who exercise authority over the agency’s finances.
• Every disbursement bears the approval of the proper officials.
• Claims against government funds are supported with complete documentation.

Before any payment, the manual requires certification that the allotment or budget is available, that the obligation is properly charged, that funds and cash are available, that the transaction is legal, and that the claim is supported by proper evidence (p. 83). The head of the requesting unit certifies “the necessity and legality of charges” and the validity of the supporting documents (pp. 83 to 84).

Modes of payment

The FMOM lists six modes of disbursement (p. 85). Four of them reach schools.

Other cash advances a school head may handle

The FMOM’s question-and-answer section settles a common question for large secondary schools: when the senior high school’s MOOE is drawn as a cash advance, the school head, not the assistant principal in charge of senior high, draws it (FAQ, p. 160).

Money the school collects

Schools receive money from more sources than MOOE: fees for the use of rooms, proceeds of disposed property sold through the Disposal Committee, canteen income and donations. The FMOM’s rules on revenue and receipts start from two laws (p. 69). Unless a law provides otherwise, revenue goes to the National Treasury or an authorized depository (PD 1445, Sec. 65). And “all moneys and property officially received by a public officer in any capacity or upon any occasion must be accounted for as government funds and government property” (Administrative Code of 1987, Book V, Title I(B), Chapter 7, Sec. 42).

The manual’s rules on collection follow from them (pp. 69 to 79):

• “No payment of any nature shall be received by a collecting officer without immediately issuing an official receipt in acknowledgement thereof” (PD 1445, Sec. 68(1)).
• “At no instance shall temporary receipts be issued to acknowledge the receipt of public funds.”
• Official receipts are pre-numbered and issued in strict numerical sequence.
• Only personnel authorized by the head of the unit collect money, and employees who handle cash are bonded.
• “All receipts should be deposited in the AGDB within the day of receipt”, meaning the authorized government depository bank; cash not deposited that day is kept in a vault.
• Collections are never used to encash personal checks.
• Offices without a complete set of books record collections in the Cash Receipts Register and send a certified copy, with receipts and deposit slips, to the mother unit within five days after the end of each month.

The FMOM’s question-and-answer section applies this to schools. Fees paid by the Professional Regulation Commission for the use of classrooms as examination venues are deposited with the BTr: “all collections should be deposited to BTr” (FAQ, p. 164). DO 029, s. 2019 keeps such money out of the MOOE account, which may hold only funds from DepEd offices (item 21). Canteen income has its own rules, covered in the canteen guide. PTA funds follow DO 013, s. 2022, covered in the School Governance Council and PTA guide. Whatever the source, DO 008, s. 2019 requires the school head to declare it and report its use (Sec. VI.A, item 1).

Property: custody, inventory and disposal

The FMOM’s chapter on procurement and asset management begins with PD 1445, Section 2: all government resources must be “safeguarded against loss or wastage through illegal or improper disposition” (p. 63). It points schools to DepEd’s Handbook on Property and Supply Management, with a caution that matters: the handbook’s processes “still apply except for the threshold on items classified as semi-expendable, forms and other relative provisions effected by the new GAM and other COA/DBM issuances” (p. 64).

Recording and issuing property

The FMOM lists the asset management forms (p. 190). A school property custodian uses them in this order:

The dividing line between the ICS and the PAR is the capitalization threshold. The GAM instructions describe the ICS as the form for issuing items “amounting to less than P15,000” and the PAR as the form for issuing property, plant and equipment. Read with COA Circular No. 2022-004, which raised the threshold to ₱50,000, the line now falls at ₱50,000.

Donations need the same records. DepEd Order No. 82, s. 2011, which the FMOM cites (FAQ, p. 163), requires a signed and notarized deed of donation, a copy for the property and accounting units, and recording “at cost, when determinable at the time of donation”, or at exchange, fair market or appraised value when cost is not available. The RA 9155 guide covers the school head’s authority to accept donations and the duty to report them.

Disposal of unserviceable property

Property is due for disposal when it has exceeded its useful life, can no longer be repaired, is beyond economic repair, is obsolete, is no longer needed, or has become dangerous to use (Revised Manual, Part II.B). The FMOM tells non-IU schools to “coordinate with the DO on the disposal of property particularly because these items are recorded in the books of the DO” (p. 132), and notes that schools may earn from disposed items “if these are sold following prescribed procedures” (p. 132).

Those procedures are now in COA-DBM Joint Circular No. 2024-1, dated January 30, 2024, which adopted the Revised Manual on the Disposal of Government Properties and repealed National Budget Circular No. 425 and the 1992 manual (item 8.0).

• The Disposal Committee recommends; the head of office approves. Each department constitutes a committee, and heads of regional and field offices “shall likewise constitute their respective Disposal Committees” (Revised Manual, Part II.A, item 1.1). The committee determines the mode of disposal and recommends it for approval; for a regional or field office, the head of the regional office approves (Part II.A, items 2.2 and 2.5).
• The property unit submits the forms. The IIRUP for property carried in the books (or an equivalent document, such as the IIRUSP for semi-expendable items), the WMR for supplies, spare parts and remnants, and the Property Transfer Report for transfers (Part II.C).
• The committee inspects, appraises and recommends a mode. The manual lists ten modes, from condemnation and transfer to another agency to barter, donation, return to the supplier, public auction, negotiated sale, and sale of junk or scrap (Part II.H).

A school head’s part is to keep unserviceable items recorded and secured, report them to the division on the right forms, and never sell, give away or destroy government property on the school’s own authority. The ethics and internal control guide covers custody routines and what to do when property is lost.

Liabilities: payables and remittances

The FMOM groups DepEd’s liabilities into financial liabilities, inter-agency payables, intra-agency payables, trust liabilities, deferred credits, provisions and other payables (p. 135). Two groups touch schools.

• Payables to suppliers. Accounts Payable records goods and services received but not yet paid (p. 135). The manual’s aging report shows “which creditors are being paid on time, which are not”, and long-overdue payables signal an inefficient payment system (p. 143). DO 029, s. 2019 has the SDO’s accounting unit advise school heads on “the prompt settlement of accounts payable within target turn-around-time” (item 33.3).
• Withholdings for other agencies. Taxes withheld for the BIR and payroll deductions for GSIS, Pag-IBIG and PhilHealth are payables that must be remitted (p. 136).

Under PPSAS 19, a contingent liability, such as a lawsuit claim or a loss from a calamity, is not recognized in the books but is disclosed in the notes to the financial statements (p. 142). In an implementing school, the bookkeeper and the principal, who are responsible for the statements, make that disclosure.

The DepEd Provident Fund

The Provident Fund is DepEd’s lending facility for its personnel, established under Administrative Order No. 279, s. 1992. It began operating in January 1995 with ₱75 million in seed money from service fees collected from government corporations and private lending institutions (FMOM, p. 121). Its beneficiaries are teachers, non-teaching staff and officials with permanent status under the regular payroll deduction scheme. The FMOM adds that casual, contractual and coterminous employees qualify after at least two years in DepEd service and 100 or more days of leave credits (p. 121); for coterminous employees, DO 52, s. 2017 later changed that rule (below). Boards of trustees at the national, regional and division levels run the fund (p. 121).

The rules have been amended four times since the FMOM was written.

• DO 52, s. 2017 (October 18, 2017) moved all loans to 6% a year on the diminishing balance, replacing an add-on rate, and let coterminous employees with at least two years in DepEd, counting contract-of-service time in the last five years, borrow up to ₱50,000, payable in 12 to 24 months (item 1).
• DO 37, s. 2018 made that rate effective November 2017, set repayment at 12 to 60 months through automatic payroll deduction, and allowed newly hired teachers a loan of up to one month’s basic salary, payable in six months.
• DO 003, s. 2022 kept the multi-purpose loan ceiling at ₱100,000 and raised the additional loan for extreme cases from ₱100,000 to ₱200,000, both at 6% per year for one to five years.
• DO 008, s. 2022 revised who recommends and approves the loans; in a Schools Division Office chapter, the SDS approves.

Loans from private lenders are a separate matter: they go through the Automatic Payroll Deduction System, whose terms DepEd Order No. 020, s. 2026 of August 7, 2026 revised.

Financial reporting

The FMOM’s chapter on reporting is written mainly for accountants, but two parts bind implementing schools directly.

First, responsibility. “Responsibility for the fair presentation and reliability of financial statements rests with the management of the reporting agency” (p. 156). For an implementing school, the manual names the bookkeeper as head of the accounting office and the school principal as head of the agency (p. 157).

Second, the statements and their deadlines. Following the GAM and PPSAS, the financial statements are the Statement of Financial Position, the Statement of Financial Performance, the Statement of Changes in Net Assets/Equity, the Statement of Cash Flows, the Statement of Comparison of Budget and Actual Amounts, and the notes (p. 153). For consolidation, the FMOM sets these internal deadlines for implementing units (pp. 157 to 158):

All implementing units also submit their statements and accountability reports directly to their COA and DBM counterparts, “as a consequence of the direct fund release system” (p. 158). Where the division’s current schedule differs from these 2016 deadlines, follow the division.

For non-IUs, the reporting duties are the CDR, the transparency board and the SRC. DO 008, s. 2019 also lets the SGC report any irregularity in the use of school funds to the disciplining authority (Sec. VIII, item 2).

What this means for school heads

The FMOM asks a school head to treat financial management as part of the job, not as the accountant’s business. These steps put its rules, and the ones that replaced them, into practice.

1. Know which kind of school you head. Check the school’s tag in DepEd’s MOOE allocation list. An IU head signs financial statements with the bookkeeper; a non-IU head manages a cash advance under the division’s books.
2. Plan the money with the plan. Every peso the school spends should trace back to an AIP activity, and every purchase to the APP. Revise the AIP and the procurement plan before buying, not after.
3. Get bonded before you handle funds, and keep the bond current. Apply through the OFBS, choose the bond period, and renew within 60 days before it expires (Treasury Circular No. 1-2026, Secs. 7.0 and 8.2). On reassignment, settle the turnover and the bond before signing anything at the new school.
4. Liquidate on time, every month. Close the CDR at month end and submit it with the vouchers and bank statement by the 5th. Late liquidation blocks the next release, your clearance when you transfer or retire, and even the school’s eligibility to run feeding funds itself (DO 013, s. 2026, Sec. VIII.A.3).
5. Use the current thresholds. Direct Acquisition up to ₱200,000, Small Value Procurement up to ₱2,000,000, and a ₱50,000 line between semi-expendable property and equipment.
6. Receipt and deposit every collection. An IU does this through its authorized collecting officer; a non-IU, which has no collecting officer or official receipts of its own (FAQ, p. 161), goes through the division. Deposit within the day, and keep non-DepEd money out of the MOOE account.
7. Keep property records alive. Issue every item by ICS or PAR to a named person, count property at least once a year with the custodian, and report unserviceable items to the division for its Disposal Committee.
8. Report openly. Update the transparency board every three months and present sources and uses through the SRC.

What a school head may not do: pay without complete documents or a covering appropriation, split purchases to avoid procurement rules, deposit personal, PTA or donated money in the MOOE account, issue temporary receipts, sell or destroy property without the division, or leave a post without liquidating and turning over the school’s funds.

These steps serve strands of the Philippine Professional Standards for School Heads (PPSSH), adopted through DepEd Order No. 024, s. 2020: strand 2.2 (financial management) and strand 2.3 (school facilities and equipment), explained in the guide to Domain 2, and strand 1.2 (school planning and implementation) in the guide to Domain 1. Indicator 2.2.1 asks Career Stage 1 aspirants to “Demonstrate knowledge and understanding of policies, guidelines and issuances in managing finances such as allocation, procurement, disbursement and liquidation aligned with the school plan.” Indicator 2.2.2 asks Career Stage 2 school heads to “Manage finances adhering to policies, guidelines and issuances in allocation, procurement, disbursement and liquidation aligned with the school plan.” Under the revised SBM system of DepEd Order No. 007, s. 2024, two indicators read “The school achieves a 75-100% utilization rate of its Maintenance and Other Operating Expenses (MOOE)” and “The school liquidates 100% of its utilized MOOE” (Annex A, indicators 41 and 42); the SBM guide explains the indicators.

How the NASH may test this

The items below are original practice items, scored 3 (Relational), 2 (Multistructural), 1 (Unistructural) or 0 (Prestructural). An option that breaks a rule scores 0.

Question 1

Indicator 2.2.2, Financial management. Career Stage 2, Situational, Difficult.

You have just been designated school head of a non-implementing elementary school in an upland district. Your predecessor retired last week. The school’s bank account still holds part of the last MOOE cash advance, and the registers your predecessor submitted cover only part of it. Teachers are asking for reading materials planned in the AIP, and the division will release the next advance once registers covering at least 75 percent of the last one are submitted. You are not yet bonded. What is the most appropriate action?

• A. Get your fidelity bond first, then draw the next cash advance and buy the reading materials, leaving your predecessor’s liquidation and turnover for the division to settle with them later.
• B. Hold all purchases and wait for the division to tell you when the account is ready, so that no school funds move while your predecessor is still the account’s signatory.
• C. Ask a senior teacher to withdraw the balance and keep it in a personal bank account, so that the planned purchases can go ahead while your bond is still being processed.
• D. Ask the division to have your predecessor liquidate and turn over the balance to you, apply for your fidelity bond, and change the bank signatory before buying the planned materials.

Answer and explanation

Best answer: D. Points: A = 2, B = 1, C = 0, D = 3.

• A (2 points, Multistructural). Bonding is the right first step, but drawing a new advance while the predecessor’s advance is unliquidated and the predecessor is still the account’s signatory skips the turnover the order requires, and the next release needs registers covering 75% of the last advance.
• B (1 point, Unistructural). It is right not to draw on an account whose signatory is still the predecessor, but waiting does nothing to complete the turnover or the bond, and the learners’ reading program stalls.
• C (0 points, Prestructural). Public funds may not be held in a personal account, and only a bonded accountable officer may handle a cash advance.
• D (3 points, Relational). It has the outgoing head liquidate and turn over the funds as the order requires, puts the account under a bonded officer, and then serves the reading program through the plan.

Why. This aligns with Career Stage 2 expectations because indicator 2.2.2 asks the school head to manage disbursement and liquidation in adherence to issuances and aligned with the school plan. DO 029, s. 2019 requires an outgoing school head’s advance to be liquidated and the balance and unused checks turned over to the incoming school head through an Authority to Transfer Accountability, with the bank signatory changed before the outgoing head is cleared (items 20, 32.4 and 33.2). DO 008, s. 2019 has the designated school head apply for bonding (Sec. V.C, item 3.1), and the FMOM grants cash advances “only to duly bonded Accountable Officials”. The 2-point option bonds the new head but skips the liquidation and transfer of accountability.

Indicator 2.2.2: Manage finances adhering to policies, guidelines and issuances in allocation, procurement, disbursement and liquidation aligned with the school plan.

Sources: DepEd Order No. 029, s. 2019, items 19.2, 20, 21, 32.4 and 33.2; DepEd Order No. 008, s. 2019, Sec. V.C, item 3; Financial Management Operations Manual, pp. 97 to 98; Treasury Circular No. 1-2026, Secs. 5.1 and 7.5.1.

Question 2

Indicator 2.3.1, School facilities and equipment. Career Stage 1, Conceptual, Moderate.

A non-implementing elementary school has 20 broken armchairs and two printers beyond repair stored in a classroom. Which statement best describes how the school head should handle their disposal?

• A. Keep the items stored in the classroom until the next physical count of property, so that the inventory committee can list each one and note its condition in the annual report.
• B. Sell the items to a junk shop through the property custodian and use the proceeds for supplies, since a school may earn from the property it disposes of.
• C. Report the items on the unserviceable property forms and ask the division’s disposal committee to haul them away soon, so that the classroom can be used again.
• D. Return the items to the property custodian, report them on the unserviceable property forms, and coordinate with the division, whose disposal committee determines the mode.

Answer and explanation

Best answer: D. Points: A = 1, B = 0, C = 2, D = 3.

• A (1 point, Unistructural). Counting and recording unserviceable property is part of inventory, but storing the items indefinitely leaves the disposal undone and the classroom unused.
• B (0 points, Prestructural). A school may not sell government property on its own authority; disposal and any sale follow the prescribed procedures of the Disposal Committee.
• C (2 points, Multistructural). It uses the right forms and turns to the right committee, but treats the committee as a hauler, leaving out the custodian’s record and the committee’s decision on the mode of disposal.
• D (3 points, Relational). It connects the custodian’s accountability, the reporting forms, and the division’s books and Disposal Committee in the order disposal requires.

Why. This aligns with Career Stage 1 expectations because indicator 2.3.1 asks for knowledge of the policies on recording and disposal of school equipment. The FMOM tells non-IU schools to “coordinate with the DO on the disposal of property particularly because these items are recorded in the books of the DO” (p. 132). COA-DBM Joint Circular No. 2024-1 has the property unit submit the IIRUP, an equivalent document such as the IIRUSP for semi-expendable items, or the WMR to the Disposal Committee, which inspects, appraises and recommends the mode of disposal (Revised Manual, Part II.A, II.C and II.H). The 2-point option reports the items but leaves out the custodian’s record and the committee’s role.

Indicator 2.3.1: Demonstrate knowledge and understanding of policies, guidelines and issuances on acquisition, recording, utilization, repair and maintenance, storage, and disposal in managing school facilities and equipment.

Sources: Financial Management Operations Manual, pp. 131 to 132; COA-DBM Joint Circular No. 2024-1 and its Revised Manual on the Disposal of Government Properties, Part II.

Nothing in this guide reproduces or predicts examination content.

Frequently asked questions

Is the DepEd Financial Management Operations Manual still in effect?

Yes. DO 60, s. 2016 adopted the FMOM for all financial transactions at all levels of DepEd, and as of November 5, 2026 DepEd has not replaced it. The order calls the manual a living document, so read each procedure with the issuance that now governs it, such as DO 008 and DO 029, s. 2019 for school MOOE and RA 12009 for procurement.

What is the difference between an implementing and a non-implementing school?

An implementing unit has a bookkeeper and a disbursing officer, keeps its own books and receives its allotment and cash directly from DBM (FMOM, p. 126; DO 008, s. 2019, Sec. V.B). A non-implementing school has no finance staff and receives its MOOE from the division as a cash advance that the school head liquidates. In DepEd’s FY 2026 allocation list, 2,679 of 45,801 schools are implementing units.

Does a school head need a fidelity bond?

Yes, when the school head handles a cash advance or signs checks for the school’s account. Treasury Circular No. 1-2026 requires a bond for accountable officers, including special disbursing officers and bank account signatories, whose accountability is not less than ₱5,001.00 (Sec. 5.1). The FMOM allows a cash advance only to a duly bonded accountable officer (pp. 97 to 98).

Can school MOOE buy equipment such as a printer?

The FMOM says yes for items below ₱15,000 per unit that are in the APP and the AIP (FAQ, p. 160). COA Circular No. 2022-004 has since raised the capitalization threshold to ₱50,000, while DO 008, s. 2019 still prints ₱15,000. Before buying an item that costs between the two figures, ask the division accountant how it will be recorded.

What documents support a school’s liquidation?

The CDR, the paid disbursement vouchers, the bank statement, and the supporting documents for each kind of expense, such as receipts or invoices, purchase requests, inspection and acceptance reports and trip tickets (FMOM, p. 133; DO 029, s. 2019, item 32.2). The documentary requirements come from COA Circular No. 2012-001, which COA reinstated in 2024 when it suspended COA Circular No. 2023-004.

Sources

DepEd issuances

• DepEd Order No. 60, s. 2016, Implementation of the Financial Management Operations Manual and Orientation of DepEd Financial Management Staff at the Regional, Division, and School Levels, September 2, 2016, items 1 to 9.
• DepEd Financial Management Operations Manual (2016), 221 pages: Introduction (p. 7), Coverage (pp. 9 to 17), Planning, Budgeting and Procurement (pp. 18 to 68), Revenue/Receipts and Deposit Procedures (pp. 69 to 81), Accounting and Disbursement Procedures (pp. 82 to 118), Provident Fund (pp. 121 to 125), School-based Financial Management (pp. 126 to 134), Liability Management (pp. 135 to 144), Financial Reporting System (pp. 145 to 158), FAQs (pp. 159 to 164), Summary of Financial Forms and Reports (pp. 188 to 191).
• DepEd Order No. 72, s. 2008, Manual on Simplified Accounting Procedures for Non-Implementing Units, December 2, 2008, and the manual (Version 2008), items C and H.
• DepEd Order No. 008, s. 2019, Revised Implementing Guidelines on the Direct Release, Use, Monitoring and Reporting of MOOE Allocation of Schools, Including Other Funds Managed by Schools, May 2, 2019, Secs. I, V, VI and VIII.
• DepEd Order No. 029, s. 2019, Procedural Guidelines on the Management of Cash Advances for School MOOE and Program Funds of Non-Implementing Units, October 17, 2019, items 7, 19 to 21, 32 and 33.
• DepEd Order No. 12, s. 2014 and DepEd Order No. 13, s. 2016, earlier school MOOE guidelines, both replaced.
• DepEd Order No. 69, s. 2012 and DepEd Order No. 45, s. 2015, SBM grants.
• DepEd Order No. 44, s. 2015, Guidelines on the Enhanced School Improvement Planning Process and the School Report Card.
• DepEd Order No. 013, s. 2026, Institutional Guidelines on the Implementation of the School-Based Feeding Program, June 4, 2026, Sec. VIII.
• DepEd Order No. 82, s. 2011, Guidelines on the Proper Recording of All Donated Properties, October 24, 2011.
• DepEd Order No. 12, s. 2004, DepEd Order No. 52, s. 2017, DepEd Order No. 37, s. 2018, DepEd Order No. 003, s. 2022 and DepEd Order No. 008, s. 2022, DepEd Provident Fund.
• DepEd Order No. 020, s. 2026, Revised Loan Terms of Payment under the Automatic Payroll Deduction System Program, August 7, 2026.
• DepEd Order No. 54, s. 2009 and DepEd Order No. 013, s. 2022, PTA guidelines.
• DepEd Order No. 007, s. 2024, Revised School-Based Management System.
• DepEd School MOOE Allocation, FY 2026, DepEd transparency page (school-level file, 45,801 schools).
• DepEd Order No. 024, s. 2020, Philippine Professional Standards for School Heads, indicators 2.2.1, 2.2.2 and 2.3.1.
• DepEd Order No. 005, s. 2026, emergency procurement under RA 12009.

Laws and procurement rules

• Republic Act No. 12009, New Government Procurement Act, and its Implementing Rules and Regulations, Secs. 7.8, 26, 32, 34, 39, 71.1.4, 113 and 115; GPPB Resolution No. 02-2025, February 4, 2025.
• Presidential Decree No. 1445, Government Auditing Code of the Philippines, Secs. 2, 4, 65 and 68, as quoted in the FMOM.
• Executive Order No. 292, Administrative Code of 1987, Book V, Title I(B), Chapter 7, Sec. 42, as quoted in the FMOM.

COA, DBM and Bureau of the Treasury issuances

• COA Circular No. 2012-001, June 14, 2012, Revised Guidelines and Documentary Requirements for Common Government Transactions.
• COA Circular No. 2024-004, March 14, 2024, Suspension of the Application of COA Circular No. 2023-004.
• COA Circular No. 2022-004, May 31, 2022, on the increase in the capitalization threshold from ₱15,000 to ₱50,000.
• COA Circular No. 2015-007, October 22, 2015, Government Accounting Manual for National Government Agencies, Volume II, Appendices 59 (ICS) and 71 (PAR).
• COA-DBM Joint Circular No. 2024-1, January 30, 2024, Revised Manual on the Disposal of Government Properties, Part II.
• COA-DBM-DepEd Joint Circular No. 2019-1, February 4, 2019, Management of Cash Advances to DepEd Non-Implementing Units for School MOOE and Program Funds.
• Treasury Circular No. 1-2026, January 22, 2026, Revised Omnibus Guidelines for the Fidelity Bonding of Accountable Public Officers, Secs. 5.1, 6.2 to 6.4, 7.0, 7.5, 8.2, 11.1 and 13.0.
• Treasury Circular No. 2-2025, April 2, 2025, Revised Omnibus Guidelines Governing the Opening of Accounts for Receipts and Disbursement of the National Government, Secs. 4.1, 4.2 and 9.0.

Written by Mark Anthony Llego for NASH Reviewer. Sources: DepEd Order No. 60, s. 2016 and the Financial Management Operations Manual; DepEd Orders No. 72, s. 2008, No. 008 and No. 029, s. 2019, and No. 013, s. 2026; Republic Act No. 12009 and its IRR; COA Circulars No. 2012-001, No. 2022-004 and No. 2024-004; COA-DBM Joint Circular No. 2024-1; Treasury Circulars No. 1-2026 and No. 2-2025.