Findings No.3 COA Annual Audit Report 2005

July 25, 2008

3. The management grants additional cash advances despite the non-liquidation of previous ones. The practice had caused the accumulation of unliquidated cash advances to P32.260 Million as of December 31, 2005, in violation to COA Circular No. 97-002 dated February 10, 1997.

COA Circular No. 97-002 dated February 10, 1997, prescribes the rules and regulations on the grant, utilization and liquidation of cash advances. Cash advances granted to regular and/or special disbursing officers are recorded in the books of accounts under Cash- Disbursing Officers account.

Review of the year-end balances of Cash – Disbursing Officers account for CYs 2005 and 2004 shows the following data:

(In Million Pesos)

Kind of FundCY 2005CY 2004Variance1. General FundP28.567P20.332P8.2352. SEF1.7870.6061.1813. Trust Fund1.9052.179(0.274)TotalP32.259P23.117.P9.142

The compositions of item 1 CY 2005 (P28.567 Million -GF) are the following accounts:

No. of AccountsTotalRegular Disbursing Officers8P9.476 Special Disbursing Officers14919.091Total157P28.567

107 of the 149 numbers of special disbursing officers are dormant or non-moving for more than three (3) years. Liquidation of cash advances was the subject of our letter dated January 31, 2005 to the City Mayor (Annex B).

Among the prescribed rules and regulations on cash advances are the following:

No additional cash advance shall be allowed to any official or employee unless the previous cash advance given to him is first settled or a proper accounting thereof is made. (Section 89, PD 1445 and Section 4.1.2, COA Cir. 97-022)

A cash advance shall be reported on as soon as the purpose for which it was given has been served. (Section 4.13, COA Cir. 97-002)

When a cash advance is no longer needed or has not been used for a period of two (2) months, it must be returned to or refunded immediately to the collecting officer. (Section 5.7, COA Cir. 97-002)

All cash advances shall be fully liquidated at the end of each year. Except for petty cash fund, the Accountable Officer shall refund any unexpended balance to the Cashier/Collecting Officer who will issue necessary official receipt. (Section 5.8, COA Cir. 97-002)

No officer or employee shall be granted a cash advance unless s/he is properly bonded in accordance with law. The amount of cash advance, which may be granted, shall not exceed the maximum amount covered by the bond. (Handbook on Cash Management & Control System)

Of the P9.142 Million over-all increased of outstanding cash advances at year-end, P8.235 Million pertains to unliquidated cash advances from the General Fund attributable to the following accounts:

NamePositionCash AdvancesLiquidationBalanceF. AlmanzorLTOO III2,140,451.00225,346.00P1,915,105.00G. TanClerk III988,000.00336,334.00651,666.00A. BrionesClerk III1,204,800.0013,787.851,191,012.15LM MataSGRR0 II3,215,011.723,031,307.34183,704.38J. SaytasR. Officer II2,067,774.45174,179.151,893,595.30R. NadayagLTOO IV1,635,000.00-1,635,000.00Leticia YuAdm Officer II 977,600.00-977,600.00TotalP12,228,637.17P3,780,954.34P8,447,682.83

Further review of the above accounts disclosed the following deficiencies, details thereof are shown in Annex C of this report:

Additional cash advances were allowed in 2005 to all of the above-designated Special Disbursing Officers, despite their respective unliquidated previous multiple cash advances granted on different dates and our previous audit recommendations on the matter.

Cash advances were not reported/liquidated on as soon as the purpose (s) for which it were given have been served.

Cash advance (s) not used for a period of two (2) months were not returned to or refunded to the collecting officer.

Bonds of Saytas, Mata, Almanzor, Briones and Tan were insufficient on various dates as against their respective cash advances granted on various dates.

During the exit conference, the management through the City Accountant informed the audit team that he had already referred the matter to the Office of the City Legal Officer for action.

Recommendations

Require all regular and special disbursing officers to submit their respective liquidation on all cash advances already due for liquidation, file appropriate legal action, if necessary.

Stop the practice of granting additional cash advances to those who have still outstanding cash advance

Written by admin · Filed Under Commission on Audit, Iligan City