Appraisal Committee Manual

Republic of the Philippines
Department of Health, Regional Office IV-A
BATANGAS MEDICAL CENTER

Batangas City
ISO 9001:2008 CERTIFIED

APPRAISAL COMMITTEE MANUAL
Document No:
Revision No.: 00
Effective Date:
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REVISION HISTORY
DCN
NUMBER
EFFECTIVE
DATE
REVISION
NUMBER
00
REVISION
TYPE
DETAILS OF
REVISION
PAGE
AFFECTED
Creation
Newly
established
based on ISO
9001:2008
Quality
Management
System
N/A
ORIGINATOR
ESTELA A.
DIMACUHA
AO III
REVIEWED
BY:
AMOR B.
CALAYAN,
RN, MAN,
PhD,
QMR
APPROVED BY:
RAMONCITO C.
MAGNAYE, MD,
FPCS, MHA
MCC II


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APPRAISAL COMMITTEE
MANUAL


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Table of Contents
I.
II.
III.
IV.
V.
VI.
Revision History
Cover Page
Table of Contents
Objectives
Scope
Policy
A. Basis of Computation of Appraisal Value
B. Inspection
C. Formulae
D. Definition of Terms (as used in Formulae)
E. Sample Computation
F. Setting of Minimum Value
Committee
A. Chairman
B. Members
Duties and Responsibilities
Program/Activities
Annex A (Hospital Order No. 43, s. 2015 Members of Appraisal
Committee)
Page
1
2
3
4
4
5
5
6
7
9
12
14
14
15
16
17


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I.
II.
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OBJECTIVES
1.
To provide practical information regarding computation of appraised value for purposes

of disposal of government property
2.
To ensure that the hospital is compliant with the standards set by the government in the
setting of minimum value of articles set for disposal
3.
To increase transparency in hospital transactions relating to appraisal of minimum value

for purposes of disposal of government property
SCOPE
The provisions of this manual are applicable only to articles declared as disposable property
which includes:
1.0 Property which can no longer be repaired or reconditioned;
2.0 Property whose maintenance cost/costs of repair more than outweighs the benefits and
services that will be derived from its continued use;
3.0 Property that has become obsolete or outmoded because of changes in technology;
4.0 Serviceable property that has been rendered unnecessary due to change in the
agencys functions or mandate;
5.0 Unused supplies, materials, and spare parts that were procured in excess of
requirements; and
6.0 Unused supplies and materials that has become dangerous to use because of long
storage or use of which determined to be hazardous.
It shall not apply to the disposal of real property as well as to the disposal of hospital
records, both of which are governed by different special laws.


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APPRAISAL COMMITTEE POLICIES

The objective in computing the appraised value of the property for disposal is to set the
hospitals Disposal Committees minimum selling price so that the hospital shall receive fair
compensation for the items sold. The Appraisal Committee is the one in charge of the
preparation of an appraisal report.
A. BASIS OF COMPUTATION OF APPRAISAL VALUE
The Appraisal Committee, upon notice of the Disposal Committee that a hospital
property is declared as Disposable Property, shall conducted an ocular inspection; and
regardless of the mode of disposal to be undertaken, shall compute the appraised value
of the property using as basis the information/data appearing in the Inventory &
Inspection Report of Unserviceable Property (I & I Report otherwise known as General
Form No. 12, Revised September 2002); Waste Materials Report ((WRM, Doc. No.
BAtMC-MM-F-004); and Invoice-Receipt for Property (IRP, otherwise known as General
Form No. 30(A), Revised March, 1938), as the case may be.
The following basic variables are to be used:
- Year of acquisition
- Cost of acquisition
- Replacement cost
B. INSPECTION
Inspection is aimed at obtaining a first-hand observation of the physical and operational
condition of the property and their marketability or ability to attract prospective buyers. Conduct
of ocular inspection by the members of the Appraisal Committee shall be for the purpose of:
1.1 Determining the physical condition/general appearance of the property relative to:
a. the equipment being operational, economically repairable or beyond economical
repair;
b. the availability of spare parts and the general obsolescence of the equipment; and
c. the quality, degree and extent of maintenance and repair done on equipment
1.2 Establishing the total estimated weight per lot in cases where the equipment is declared
to be junk. The cost per unit of the property/supplies inspected will depend on the kind of
material appraised.


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C. FORMULAE
In the computation of the appraised value, any of the formulae as enumerated below in
versions may be used depending on the information available.
Version 1 this is used for all types of property where the
acquisition cost and year of acquisition are known.
APPRAISED VALUE = RUV x CF x CFF x No. of Units
where,
RUV = (AC SV) x
R + SV
L

acquisition cost and year of acquisition are unknown but the
replacement cost can be established.
APPRAISED VALUE = RC x CF x UF x No. of Units
acquisition cost and year of acquisition is unknown, but year of
acquisition and replacement cost can be established.
APPRAISED VALUE = RC x AF x CF x No. of Units
Legend:
RUV Remaining Useful Value
CF Condition Factor
CRR Currency Fluctuation Factor
AC Acquisition Cost
SV Salvage Value
R Remaining Useful Life
L Estimated Service Life
AS Actual Service
RC Replacement cost
UF Usage Factor
AF Age Factor


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D. DEFINITION OF TERMS (AS USED IN THE FORMULAE):

1.1 ACQUISITION COST (AC) refers to the price or amount at which the property was
purchased or acquired.
1.2 REPLACEMENT COST (RC) refers to the current market price of similar new
equipment; or if the equipment is no longer available in the market due to product
obsolescence, the market price of similar equipment which can functionally replace
the item appraised.
1.3 CURRENCY FLUCTUATION FACTOR (CFF), or P to $ rate APPRAISAL YEAR over
P to $ rate ACQUISITION YEAR, as used in Version 1, refers to the U.S. Dollar
reference rate relative to the Philippine Peso at the time of appraisal/acquisition.
1.4 ESTIMATED SERVICE LIFE (L), as used in Version 1, refers to the length of service
life that may be expected from particular equipment assuming normal utilization.
1.5 ACTUAL SERVICE (AS) is defined as the age of the equipment/property from date of
purchase, of the difference between the year of disposal and the acquisition year.
1.6 REMAINING USEFUL LIFE (R), as used in Version 1, refers to the difference
between e Estimated Service Life (L), and the number of years of actual service (AS)
of the property. If the computed R is less than zero, R is assigned a value of zero.
1.7 SALVAGE VALUE (SV), it equivalent to ten percent (10%) of the acquisition cost of
the equipment/property.
1.8 PHYSICAL CONDITION (PC) refers to the condition of the property at the time of
inspection relative to such observable factors as form, physical state, general
appearance, degree of deterioration/obsolescence, completeness of components,
marketability of the property/components and other similar observable factors.
1.9 CONDITION FACTOR (CF), as used in all versions, refers to the value, used for
computational purposes, corresponding to the Physical Condition of the
equipment/property.


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PHYSICAL CONDITION
EXCELLENT
VERY GOOD
GOOD
SATISFACTORY
ADEQUATE
FAIR
POOR
VERY POOR
CF VALUE
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
1.10
USAGE FACTOR (UF), as used in all versions, refers to whether the
equipment/property has been used or not at the time of disposal. If the property has
not been used, UF is assigned a constant value of 0.90; otherwise, it is equal to the
values assigned to the Condition Factor (CF).
VALUES OF THE USAGE FACTOR:
a) If UNUSED
b) If USED, and the physical condition is:
PHYSICAL CONDITION
EXCELLENT
VERY GOOD
GOOD
SATISFACTORY
ADEQUATE
FAIR
POOR
VERY POOR
0.90
CF VALUE
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
1.11
AGE
FACTOR (AF),
as
used
in
Version 3, refers
to the remaining
economic value
of the property relative to its estimated useful life.

The value of the AGE FACTOR (AF) is determined by evaluating first the
Depreciation and reckoning the corresponding value of the Age Factor (AF). The
computation for the value of Depreciation (D) is:
D = L - AS
L


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If D is
Value of AF is:
1.
D < -1.00
2. -1.00 < D < -0.90
3. -0.90 < D < -0.80
4. -0.80 < D < -0.70
5. -0.70 < D < -0.60
6. -0.60 < D < -0.50
7. -0.50 < D < -0.40
8. -0.40 < D < -0.30
9. -0.30 < D < -0.20
10. -0.20 < D < -0.10
11. -0.10 < D < 0.00
12.
D=0
13.
0 < D < 0.50
14.
D > 0.50
0.100
0.118
0.136
0.155
0.173
0.191
0.209
0.227
0.245
0.264
0.282
0.300
D + 0.400
0.900
E. SAMPLE COMPUTATIONS
E.1 VERSION 1
APPRAISED VALUE = RUV x CF x CFF x No. of Units
RUV = (AC SV) x R/L + SV
Given:
Year of Acquisition:
Year of Disposal:
Acquisition Cost:
Estimated Service Life:
No. of Units:
Physical Condition:
1960
1991
P 50,000.00
20 years
one (1)
poor
Step 1. Compute Remaining Useful Life (R)

R = L - AS
= 20 - (1991 - 1960)
= 20 - 31
= -11
Since the value of R is negative, R is assigned a value of ZERO (0)
R = 0


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Step 2. Compute for the Salvage Value (SV)

SV = 10% x Acquisition Cost
= 10% x P 50,000.00
= P 5,000.00
Step 3. Compute for the Remaining Useful Value (RUV)
RUV = (AC - SV) x R + SV
L
= (50,000 - 5,000) x 0 + 5,000
20
= (45,000) x 0 + 5,000
= 5,000
Step 4. Compute for the Currency Fluctuation Factor (CFF)
CFF = Peso to Dollar Rate Appraisal Year
Peso to Dollar Rage Acquisition Year
= P 21.80
P 2.50
= 8.752
Step 5. Convert Physical Condition to Equivalent Numerical Value Using CF
Table
CF value for POOR = 0.20
Step 6. Compute for the APPRAISED VALUE
APPRAISED VALUE = RUV x DF x CFF x No. of Units
= 5,000 x 0.20 x 8.752 x 1
= P 8,752.00


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E.2 VERSION 2
APPRAISED VALUE = RC x CF x UF x No. of Units
Examples No. 1 (Usage Factor = Used)
Given: Year of Acquisition:
Acquisition Cost:
Replacement Cost:
No. of units:
Physical Condition:
Usage Factor:
unknown
unknown
P 50,000.00
one (1)
Very Good
Unused
Step 1. Convert Physical Condition to equivalent numerical value using CF

table
CF Value for VERY GOOD = 0.70
Step 2. UF for unused property is constant
UD = 0.90
Step 3. Compute for the APPRAISED VALUE
APPRAISED VALUE = RC x CF x UF x No. of units
= P 50,000 x 0.70 x 0.90 x 1
= P 31,500.00
E.3 VERSION 3
APPRAISED VALUE = RC x AF x CF x No. of Units
Given: Year of Acquisition:
Year of Disposal:
Acquisition Cost:
Replacement Cost:
Estimated Service Life:
No. of units:
Physical Condition:
1975
1991
unknown
P 50,000.00
20 years
one (1)
Satisfactory
Step 1. Convert Physical Condition to equivalent numerical value using CF

Table
CF value for SATISFACTORY = 0.50


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Step 2. Compute for the Depreciation (D)

D = L - AS
L
= 20 - (1991-1975)
20
= 20 - (16)
20
= 0.20
Step 3. Convert Depreciation (D) to equivalent Age Factor (AF) value using AF
Table
AF value for D = 0.20 is row 13 of AF Table:
If D is
0 < D < 0.50
Value of AF is:
D + 0.400
Thus:
AF = D + 0.400
= 0.20 + 0.400
= 0.60
Step 4. Compute the APPRAISED VALUE
APPRAISED VALUE = RC x AF x CF x No. of units
= P 50,000 x 0.60 x 0.50 x 1
= P 15,000.00
F. SETTING OF MINIMUM VALUE
1.0 Once all item listed in the I&I of Unserviceable Property, WRM, or IRP have been
computed, the Appraisal Committee shall submit a report setting the Total Appraised
Value of the Disposable Property to the Disposal Committee.
2.0 The Disposal Committee may approve the same or order the Appraisal Committee to recompute the Appraised Value.
3.0 The Appraised Value, as finally approved by the Disposal Committee shall be the basis
of the minimum bid price. If the members of the Disposal Committee cannot arrive at a
consensus, the Chairman shall adopt an appraised value which he deems most
advantageous to the hospital as a government agency, based on either of the following:
3.1 the highest appraised value submitted by a Committee member
3.2 the average of the submitted appraised values plus 10%


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4.0 the minimum value shall be set depending on how the property shall be sold i.e., by
piece, by lot or by all lots.
5.0 The minimum value set shall be good only for six months. If the property remains unsold
after six months, a reappraisal must be conducted.


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Committee
A. Chairman
MRS. ESTELA A. DIMACUHA
Chairman
Administrative Officer III
B. Members
MRS. CELSA P. PLATA
Member
Supervising Administrative
Officer
MR. MANUEL V.
SANVICTORES
Member
Supervising Administrative
MS. MARIA JOYCELYN M.
ANTENOR
Member
Accountant III
MRS. CYNTHIA C. PEREZ
Member
Administrative Assistant III
MR. NECITAS T. MAGDAUG
Member
Med. Equipment Tech. I
NON-GOVERNMENTAL ORGANIZATION
(NGO) REPRESENTATIVE*
Member
* NGO Representative acts only in an ad hoc capacity and must be an expert with respect to the item being appraised.


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DUTIES AND RESPONSIBILITIES

Chairperson
Ensures that the hospital is adherent to the standards set by the government for
establishing the appraised value of government properties for disposal
Formulates and implements hospital programs, policies and procedures on appraisal
of government properties for disposal
Chooses multi-disciplinary members of the hospitals Disposal Committee among
Batangas Medical Centers personnel
Chooses the NGO Representative who is an expert with respect to the appraisal of
the government property for disposal
Reports to the Medical Center Chief II all accomplishments and major concerns of
the Committee
Members
Assist the Chairperson in the formulation and implementation of hospital programs,

policies and procedures on establishing the appraised value of government
properties for disposal
Perform other duties as the Chairperson may prescribe


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PROGRAMS/ACTIVITIES
ACTIVITIES/
PROGRAMS
Appraisal of
government
property for
disposal
OBJECTIVES
START/END
To appraise the
value of properties
for disposal for the
purpose of setting
the floor price in
the public
bidding/negotiated
in case of sale of
disposable
properties
Upon receipt of
notice from
Disposal
Committee that
an article is
scheduled for
disposal
through public
bidding/
negotiated sale
OUTCOME
Disposable
hospital property
shall be sold at a
fair price which is
most
advantageous to
the government
EFFECT/
SIGNIFICANCE
Transparency in
the sale of
disposable
government
properties shall be
enhanced


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ANNEX A
Hospital Order of the Committee Members

Appraisal Committee Manual

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Republic of the Philippines

Department of Health, Regional Office IV-A

BATANGAS MEDICAL CENTER

ISO 9001:2008 CERTIFIED

Republic of the Philippines

BATANGAS MEDICAL CENTER

ISO 9001:2008 CERTIFIED

Republic of the Philippines

BATANGAS MEDICAL CENTER

ISO 9001:2008 CERTIFIED