6. GRANT ADMINISTRATION *

6.1 Roles of the Concerned Institutions/Offices/Staff

6.1.1 The SPD shall oversee the implementation of all approved DOST-GIA projects:

a. Act as the Secretariat to the DOST-GIA Executive Committee.
b. Ensure with the assistance of the designated Monitoring Agencies that grant conditions and policies concerning program/project implementation are strictly followed.

The SPD shall provide all concerned Offices with all pertinent documents related to the approved programs/projects for proper documentation and coordination/monitoring.

6.1.2 The Monitoring Agency shall ensure the efficient, timely and smooth implementation of approved projects and that set objectives and targets are attained. It shall conduct periodic field evaluation of the project to identify problems, solutions and remedial actions to avoid delays in implementation. The Monitoring Agency shall also examine the budget requirements of the projects especially those that require continued funding. In addition, it shall evaluate the activities conducted, review reports submitted and ensure that completed R&D projects produce (patentable and publishable accomplishments) including pre-print manuscript for publication in scientific journals most preferably those accredited by the Institute for Scientific Information (ISI).

The Monitoring Agency shall ensure that Intellectual Property (IP) protection is secured when warranted.

6.1.3 The Implementing Agency shall have primary responsibility of all project activities. It shall notify the Monitoring Agency of significant concerns/problems related to project implementation. The Agency Head shall ensure that the Project Leader submits all the required reports/documents on time.

6.1.4 The Program/Project Leader provide technical leadership and directly implement the program/project. He/she shall adhere to the goals/objectives of the program/project, follow strictly the approved activities as reflected in the work plan, deliver committed outputs, and submit required reports/documents on time. To ensure that Programs/Projects are effectively implemented, a Program Leader shall be allowed to handle only two (2) programs at a time while a Project Leader shall be allowed a maximum of only four (4) projects at a time.

6.1.5 The Project Staff shall undertake the actual day-to-day implementation of the S&T program/project; she/he shall be allowed to handle a maximum of only two (2) projects at a time.

6.2 Technical Monitoring

The Program/Project Leader shall submit periodic accomplishment reports to the Funding Agency through the Monitoring Agency. All reports must be duly endorsed by the Agency Head.

Submission of Technical Reports by the Implementing Agency to the Monitoring Agency

6.2.1 A regular semi-annual progress report using DOST Form No. 3A shall be submitted in two (2) hard copies and one electronic copy, within a month after the first semester.

6.2.2 A program/project with a one (1) year duration shall submit two (2) hard copies and 1 electronic copy, the terminal accomplishment report not later than two (2) months after project completion together with DOST Form No. 5 List of Equipment Purchased.

A Program/project with multi year duration shall submit in two (2) hard copies and 1 electronic copy, the annual technical report not later than two (2) months after each year of implementation together with DOST Form No. 5 List of Equipment Purchased.

In case of a program, a consolidated annual program report shall be submitted in addition to the individual project reports.

Submission of Technical Reports By the Monitoring Agency to the Funding Agency

6.2.3 The Funding/Monitoring Agency shall conduct periodic field evaluation to monitor progress of project implementation and help resolve problems, if any. An evaluation report using the following DOST Forms shall be submitted:

a. DOST Form No. 3C-1 Project Monitoring and Field Evaluation Report for Ongoing R&D Projects; and
b. DOST Form No. 3C-2 Project Monitoring and Field Evaluation Report for Completed R&D Projects

6.2.4 Upon completion of the program/project, a technical terminal report shall be submitted in two (2) hard copies and one (1) electronic copy, not later than three (3) months after completion. It shall include the pre-print manuscript and information on patentable invention, if applicable using the following DOST forms:

a. DOST Form No. 9A-1 Guidelines for Preparing R&D Terminal Report;
b. DOST Form No. 9A-1a Outline for Preparing DOST-GIA Project Terminal Report;
c. DOST Form No. 9A-2 Guidelines for Preparing Publishable Report/Article; and
d. Request for Equipment Transfer

6.2.5 The DOST appraisal/assessment report Form B shall be submitted to the Funding Agency within one (1) month of receipt of the acceptable terminal report.

Program/Project Extension

6.2.6 Requests for extension of program/project shall be submitted together with the following documents:

a. Latest financial report
b. Proposed LIB
c. Gantt Chart of activities for the extension period
d. Technical report
e. Justification for extension

Payment of honorarium shall not be allowed during the extension period.

6.2.7 Requests for extension without additional funding shall be evaluated and approved by the Monitoring Agency. Those with additional funding shall be evaluated and endorsed by the Monitoring Agency for approval of the Funding Agency. The Monitoring Agency shall submit to the DOST-EXECOM a quarterly report of projects approved for extension.

6.2.8 A program/project may be extended for a maximum of one year beyond its original duration unless allowed by the Funding/Monitoring Agency under very meritorious cases.

6.2.9 Extension of a continuing project shall not be allowed unless it is on its terminal/last year of implementation. The request for extension should be submitted three (3) months before the expected date of completion.

6.2.10 A program/project can be given a maximum of only two (2) extensions unless otherwise allowed by the DOST-EXECOM under meritorious circumstances.

Continuing Assistance and Additional Funding of Programs/Projects

6.2.11 The request for continued funding of an ongoing or multi-year program/project shall be submitted to the Monitoring Agency not later than (2) months before the end of the active period. The Monitoring Agency shall forward its recommendation to the DOST not later than one month before the end of the active period. If approval has not been sought by the end of the active period, the program/project shall be automatically suspended. The implementing agency is not authorized to use the project funds during the suspension period.

6.2.12 The request for continued funding shall be supported by the following:

a. Technical and financial reports that covers at least the three (3) quarters of the period covered
b. Work Plan
c. Proposed LIB (including cash program) for the succeeding year
d. Duly signed list of inventory report of equipment
e. Acknowledgement receipts of equipment (ARE)
f. List of personnel involved
g. Endorsement of the Monitoring Agency with an appraisal report (DOST Form 3D-1)

6.2.13 In renewing multi-year programs/projects, the proposed budget for continued funding shall be based on the amount originally approved by the DOST-EXECOM. Renewal of a multi-year programs/projects that does not require additional funding or has no major changes in the title, objectives or expected outputs shall be approved by the DOST Secretary upon recommendation by the Undersecretary concerned.

Any increase in funding shall require DOST-EXECOM approval.

Deferment/Suspension/Change in Implementation Date

6.2.14 The Monitoring Agency shall review and approve the request for deferment/change in implementation date of a new program/project and shall inform the DOST-EXECOM of such change. For DOST-Central Office (DOST-CO) directed projects, the concerned Undersecretary shall approve the requests for reprogramming.

6.2.15 The revised project duration shall have the same length as the originally approved duration.

6.2.16 Projects that deferred implementation due to delay in the release of funds shall resume within three (3) months after the release of funds. The request for deferment should be made two (2) months after fund release at the latest.

6.2.17 Requests to suspend the implementation of an ongoing project shall be approved by the concerned Undersecretary/Monitoring Agency upon submission of valid justification. Suspended projects shall resume implementation within three (3) months after the suspension. Suspension of more than three (3) months may be allowed by the Funding Agency under very meritorious circumstances.

Change in Project Title/Objectives/Activities/Implementing Agency

6.2.18 Request for change of implementing agency or objectives, shall be reviewed and endorsed by the Monitoring Agency for approval of the Funding Agency. The Implementing Agency shall be required to submit justification for such change. Change in the project title and activities/work plan/Gantt chart shall be approved by the Monitoring Agency.

6.3 Financial Monitoring

The DOST-GIA funds released to implementing agencies shall be available for use within the approved project duration including approved extension subject to DOST approval and existing government accounting and auditing rules and regulations. The GIA funds shall not be used for money market placement, time deposit and other forms of investment not related to the project. Project funds shall be deposited in an authorized government depository bank.

6.3.1 Fund Releases

a. The Funding Agency shall release the project funds to the Implementing Agency in partial or full amounts, once the MOA/MOI or conforme letter has been signed subject to availability of funds, accounting and auditing regulations, and bond requirements (if necessary).

b. Project implementation shall commence within three (3) months after the release of funds. Otherwise, the fund and interest/earnings shall be reverted to the Funding Agency unless there is a valid justification submitted by the Monitoring Agency which is approved by the Funding Agency.

c. Subsequent release of funds to continuing projects shall be subject to the submission of necessary financial reports, appropriate endorsement and other requirements as indicated in Section 6.2.11 to 13 of this guidelines.

6.3.2 Budget Reprogramming or Realignment/Creation of Expense Items

Disbursement of grants shall be in accordance with the approved LIB and subject to existing government accounting and auditing rules and procedures. If budget reprogramming is required, a request shall be made not later than two (2) months before the end of the project’s current year of implementation. A program/project may have a maximum of three (3) budget reprogramming’s during each year of implementation (including the approved extension). The Funding Agency may allow additional reprogramming only in meritorious circumstances.

The request for reprogramming shall be supported by the following documents:

a. Request letter duly signed by the Agency Head;
b. Endorsement/approval letter from the monitoring agency ;
c. Latest financial report;
d. Work plan; and
e. Progress report (if additional funding and/or project extension is required)

These documents shall be considered as the final program/project documents.

A revised LIB shall be issued to cover:

a. Budget realignment
b. Transfer of funds
c. Reclassification of the position of the project personnel
d. Creation of expense item/s

Any realignment or transfer of funds from one expense item to another shall be based on the LIB approved by the Funding Agency. The Funding/Monitoring Agency must be informed of the budget realignment including changes in the indirect cost made by the Monitoring/Implementing Agency. Otherwise, the reprogramming shall be deemed null and void.

The approving authorities of budget realignment shall be as follows:

a. Implementing Agency

Realignment/transfer of funds within 33% of existing expense item budget as originally approved by the Funding Agency to augment direct and indirect cost under PS, MOOE, and EO shall be approved by the Implementing Agency provided that it will not exceed the 7.5% ceiling for indirect cost. The Monitoring and Funding Agencies shall be informed of such reprogramming.

The approved realigned item/s shall be reflected in the financial report/s to be submitted by the Implementing Agency (under “approved budget”).

b. Monitoring Agency (The Undersecretary concerned in the case of DOST-CO-directed projects)

1. The Monitoring Agency shall review and approve requests for budget realignment which does not require additional funding but are beyond the approving authority of the Implementing Agency. A copy of the approved LIB and other required documents shall be submitted to the Funding Agency.

2. The Monitoring Agency shall approve budget realignment involving creation of new expense item/s without additional funding, both under the direct and indirect costs with appropriate advice to the Funding Agency.

3. In approving requests for reprogramming, the Monitoring Agencies shall ensure that objectives and targets of the program/project shall not be affected.

c. Funding Agency

The Funding Agency through the DOST-EXECOM shall approve budget realignment that entails creation of new expense item/s with additional funding, both under the direct and indirect costs, based on the recommendation of the Monitoring Agency.

6.3.3 Submission of Financial Reports (FR)

6.3.3.1 For monitoring purposes, the Implementing Agency shall submit to the Monitoring Agency a FR certified correct by the agency accountant a month after each semester depending on the nature of the project. If applicable, the following requirements shall be submitted:

a. DOST Form No. 4 Semi-Annual/Annual FR;
b. DOST Form No. 7 Report of Income/Interest Generated/ Earned
c. DOST Form No. 8 Schedule of Accounts Payable

The FRs shall be itemized in accordance with the approved LIB.

6.3.3.2 For program/project with multi year duration, the Project Leader shall submit FR for grants received, duly noted by the Head of the Agency or its authorized representative and certified by the agency accountant within two (2) months after the end of each year of implementation. For NGOs or privately owned institutions, an annual Audited Financial Report (AFR) shall be submitted duly certified by a licensed independent accountant together with an Audit Certificate/Report.

For projects with EO, the FR shall be supported by the following:

a. DOST Form No. 6 List of Equipment Purchased
b. Acknowledgement Receipts for Equipments

6.3.3.3 A Terminal AFR (DOST Form No. 9B) shall be submitted to the Monitoring Agency within three (3) months after the completion of the project. The Monitoring Agency shall submit the AFR not later than one month after receipt from the Implementing Agency.

6.3.4 Unexpended Balance (UB) and Savings/Interest/Income

a. The UB/savings/income and interest of a program/project, if any, shall be reported and included in the annual FR/AFR submitted to the Funding/Monitoring Agency.

b. For continuing projects, the UB of the previous year shall be deducted from its total approved budget for the current year unless the Funding Agency approves its use under meritorious cases. Otherwise, it shall be reverted to the Funding Agency.

For multi-year projects, the Funding Agency may allow the use of the unexpended balance to pay for the salaries of existing project staff, and provide for MOOE in case of delay in the release of project funds.

Requests for additional funds and/or to use the UB/savings/income of completed/terminated/ extended projects to pay for salaries and MOOE expenses shall be approved by the Funding Agency upon recommendation of the Monitoring Agency.

The use of UB/savings/income may be permitted to enable the program/project to:

1. Continue its operation;"
2. Acquire R&D equipment, and publications deemed critical to the attainment of the set objectives; and
3. Undertake other related activities as may be authorized by DOST and its grant-giving units.

c. Request to use the UB/savings/income to continue project implementation shall be submitted within in one (1) month before the expected date of completion. It shall be supported with FR and valid justification to be used as basis in preparing a new or revised LIB.

d. Upon project completion/termination, all balances/savings and income/interests earned shall be reported and reverted to Funding Agency within three (3) months after the end of project period.

e. The UB/savings of completed or terminated project can be used for other DOST-approved projects of the concerned agency upon approval of the Funding Agency and provided the two-year fund effectivity has not lapsed.

f. In no case shall the interests and income earned under a project be used to fund a new project not related to the original intent of the fund.

Income derived from business activities as a result of the project shall be used to fund/augment additional and/or existing projects related thereto upon approval of the Funding Agency.

Use of interest/income earned out of deposit from any bank shall follow government existing rules and regulations.

6.3.5 Refund Mechanism

For any S&T intervention assistance provided to firms/communities to help them acquire materials/equipment that are necessary to upgrade/improve their products and/or processes, (such as the Small Enterprise Technology Upgrading Program (SETUP)) the following conditions shall be followed:

a. The DOST and the Monitoring Agency shall ensure that funds are used to purchase or fabricate materials/equipment as indicated in the approved LIB. Otherwise, the amount provided for such purpose shall be refunded to the Funding Agency with 12% penalty charge per annum especially if the project was prematurely terminated or the funds were not used as originally intended.

A project beneficiary shall be required to post a surety bond which shall be considered as his/her counterpart funds. If a beneficiary is unable to refund the total amount due to the Funding Agency. DOST shall pull-out the equipment procured under the project or collect other forms of payment. If it is not possible to get the equipment back, the DOST shall instigate legal proceedings in coordination with the insurance company concerned.

b. The provision on refund of the cost of materials/equipment shall be stipulated in the MOA between the DOST and the beneficiary. Repayment shall commence six (6) months after the start of the project or not later than 12 months after the release of project funds. All refunds shall be fully paid within three (3) to five (5) years or earlier depending on the expected Return of Investment (ROI) of the project. The schedule of refund may be extended to a maximum of two (2) years upon approval of the Program Director of SETUP Program. Should refund start later than the agreed grace period but is within 18 months after the release of funds, a six percent (6%) penalty charge per annum shall be collected. If refund is not started after 18 months, the Funding Agency is authorized to demand full repayment of the financial assistance including accrued interests and charges. For arrears, a default charge of two percent (2%) per month shall be due on every installment.

c. The Funding Agency shall own the acquired under the project until the refund has been paid fully and ownership has been transferred to the beneficiary.

d. The beneficiary and the Monitoring Agency shall keep and maintain financial records in accordance with generally accepted accounting principles. The records shall be subject to visitorial audit and examination of the Funding Agency and Commission on Audit (COA).

e. In case of failure or termination of project due to force majeure, the beneficiary may submit to COA a written request for condonation or conversion of the financial assistance into a grant. It shall then be subject to Section 26 of P.D. 1445 – Ordaining and Instituting a Government Auditing Code of the Philippines.

f. The Funding Agency, Monitoring Agency and beneficiary shall agree on the terms and conditions for refund and the agreed upon terms and conditions shall be stipulated in the Memorandum of Instruction/Memorandum of Agreement (MOI/MOA).

6.3.6 Standard Procedure for Non-Submission of Requirements

For failure to submit within six months the required financial, technical and other reports prescribed deadlines, demand letter shall be sent to the Project Leader and Head of Agency.

Upon the recommendation of the Monitoring Agency, the Project Leader is prevented from receiving further grants or any kind of support from within the DOST System until he/she is cleared from all obligations pertinent to the previous GIA grant. The Funding Agency may instigate legal action against the Project Leader.

6.3.7 Audit and Inspection

a. A program/project being implemented by a government institution shall be subject to audit by the COA resident auditor or its authorized representative. A program/project being implemented by a non-government agency, shall be audited by an independent Certified Public Accountant.

b. The activities, operation, books of accounts and records of the project shall be subject to inspection by the authorized representative of the Funding Agency and its auditor, whenever necessary.