Findings No.6 COA Annual Audit Report 2005

July 28, 2008

Cash advances of P670,000.00 was granted to the City Treasurer without specific purpose and supporting documents contrary to Section 89 of P.D. 1445 which resulted to LGUs weak control over its resources.

Section 89 of P.D. 1445 states that:

“Limitations on Cash Advances – No cash advance shall be given for a legally authorized specific purpose. A cash advance shall be reported on and liquidated as soon as the purpose for which it was given has been served. No additional cash advance shall be allowed to any official or employees unless the previous cash advance given to him is first settled or a proper accounting thereof is made.”

Verification revealed that cash advances amounting to P670,000.00 was granted to the City Treasurer without any specific purpose. Further, it was revealed that the said amount was granted in the form of short-term borrowings. These cash advances were granted since September 2005 and up to the end of year same were still reflected in the books as due from the officers and employees. Moreover, same was granted for personal purpose and not for a legally authorized specific purpose.

This condition existed because the management failed to impose stricter guidelines on the granting of cash advances.

When the City Treasurer was asked for comment, she pointed out that the cash advances would be returned/liquidated on the first week of March 2006.

This resulted to the LGUs weak control over its resources.

Recommendation:

Comply strictly on the provisions of Sec. 89 of P.D. 1445 on the granting of cash advances. Strict guidelines should be implemented to strengthen control measure as regards granting of cash advances.

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