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Cash Advances

Cash Advances. Presented by: Atty. Roline M. Ginez-Jabalde Resident Ombudsman- DepEd. Rationale for the Use of Cash Advance System. It has been recognized as a facilitative tool in the financial operations of the government.

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Cash Advances

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  1. Cash Advances Presented by: Atty. Roline M. Ginez-Jabalde Resident Ombudsman-DepEd

  2. Rationale for the Use of Cash Advance System • It has been recognized as a facilitative tool in the financial operations of the government

  3. General Principles(Sec. 2, COA Circular No. 97-002) • Daily receipts on collection must be deposited intact with the authorized bank. Ex. Land Bank of the Philippines • All payments must be made by check. • Only payments in small amounts may be made through the petty cash fund. Replenishment of the petty cash fund shall be equal to the total amount of expenditures made there from.

  4. General Principles(Sec. 2, COA Circular No. 97-002) In cases when it may be impractical or impossible to make payments by check, payments may be made by the disbursing officer in the form of cash through his cash advance.

  5. Types of Cash Advance(Sec. 3, COA Circular No. 97-002) • Regular Cash Advance – are those granted to cashiers, disbursing officers, paymasters, and/or property/supply officer. • Special Cash Advance – those granted on the explicit authority of the Head of the Agency only to duly designated disbursing officers or employees for other legally authorized purposes.

  6. Purposes of RegularCash Advances • Salaries and wages • Commutable allowances • Honoraria and other similar payments to officials and employees • Petty operating expenses consisting of small payments for maintenance and operating expenses which cannot be paid conveniently by check or are required to be paid immediately.

  7. Purposes of Special Cash Advances • Current operating expenditures of the agency field office or of the activity of the agency undertaken in the field when it is impractical to pay the same by check, such as: - salaries, wages, and allowances - maintenance and other operating expenses

  8. Purposes of Special Cash Advances 2. Travel expenditures including transportation fare, travel allowance, hotel room/lodging expenses and other expenses incurred by officials and employees in connection with official travel.

  9. General Guidelines in Granting and Utilization of Cash Advances

  10. General Guidelines(COA Circular 97-002, RMO Circular 2009-002) • Specific legal purpose 2. No additional cash advance unless previous CA is liquidated 3. Immediate liquidation/reporting after purpose is served

  11. General Guidelines(COA Circular 97-002, RMO Circular 2009-002) • DOs should be bonded and must be permanent employees only 5. CA to elected officials only for official travelling expenses

  12. General Guidelines(COA Circular 97-002, RMO Circular 2009-002) 6. Duly appointed or designated DOs may perform disbursing functions • No transfer of CA from one AO to another

  13. General Guidelines(COA Circular 97-002, RMO Circular 2009-002) 8. CA shall be used solely for the specific legal purpose as granted 9. CA shall not be granted for payment of infrastructure projects or project basis undertaking

  14. General Guidelines(COA Circular 97-002, RMO Circular 2009-002) 10. Not to be used for encashment of checks or liquidation of previous CA 11. CAs for a particular year should not be used to pay expenses of other years

  15. General Guidelines(COA Circular 97-002, RMO Circular 2009-002) 12. CA for special time-bound undertaking must be liquidated within one ( 1 ) month from the accomplishment of the purpose 13. CA no longer needed/not used for a period of 2 months should be returned to the treasurer

  16. General Guidelines (COA Circular 97-002, RMO Circular 2009-002) 14. All CAs should be liquidated at the end of the year except petty cash fund

  17. Cash Advance for Official Travel(Local and Foreign) • Governed by COA Circular No. 96-004 dated April 19, 1996 • Both official local and foreign travels shall be treated and accounted for as cash advance • Shall not require bonding of the travelling official or employee

  18. General GuidelinesMiscellaneous Operating Expenses(Sec. 4.3, COA No. 97-002) • Not for Regular Expenses, i.e., rentals, subscriptions, light/water (utilities) • Not more than Php15,000 per transaction, except when allowed by law &/or COA • No splitting of transactions

  19. General GuidelinesField Current Operating Expenses (Sec. 4.4, COA No. 97-002) • Used to pay salaries/wages of field employees and miscellaneous operating expenses • No limits to payment for each transaction

  20. General GuidelinesField Current Operating Expenses (Sec. 4.4, COA No. 97-002) • All payments approved by head of field office • CA limited to two month requirement • Report of disbursements w/in 5 days after each month by AO

  21. Documentary Requirements Application for CA(Sec. 4, COA Circular No. 97-002) • Copy of authority from Agency head (attach to initial CA) • Copy of Bond (attach to initial CA) • Payroll, estimate of expenses, budget for COE of field office or activity

  22. Liquidation of Cash Advances

  23. Time to Liquidate(5.1.1 COA Circular 97-002) • Salaries, wages etc.– 5 days after each fifteen (15) day/end of the month pay period.

  24. Time to Liquidate(5.1.2 COA Circular 97-002) • Petty Operating Expenses and Field Operating Expenses– within 20 days after the end of the year; subject to replenishment as frequently as necessary during the year.

  25. Time to Liquidate OFFICIAL TRAVEL– within 60 days after return to the Philippines in case of Foreign Travel (3.1.2.1 COA Circular 96-004, EO 248) or within 30 days after return to his permanent official station in case of Local Travel (5.1.3 COA Circular 97-002)

  26. Local Travel, what to do when…. • Trip is cancelled – REFUND in full. • Trip is cut short or terminated in advance of the itinerary – REFUNDexcess payment, IMMEDIATELY upon cancellation or termination of the trip.

  27. Foreign Travel • Governed by COA Circular No. 96-004 dated April 19, 1996 Salaries may be suspended until cash advance has been liquidated (3.1.2.1, COA Circular No 96-004)

  28. Liquidation of CA(Sec. 5, COA Circular No. 97-002) Documents required to support liquidation • Salaries/Wages – Report of Disbursements with payrolls, vouchers, DTRs, approved leaves, etc.

  29. Liquidation of CA(Sec. 5, COA Circular No. 97-002) • Misc Operating Expenses • Report of Disbursements w/ support docs • Approved Requisition & Issue Voucher w/ Cert. of Emergency Purchase, if necessary • Receipts, Sales Invoices • Cert. of Acceptance/Inspection • Trip Ticket (if for fuel) • Other pertinent docs required by nature of expense

  30. Liquidation of CA(Sec. 5, COA Circular No. 97-002) Current Operating Expenditure • Same as the previous • Canvass of at least 3 Suppliers (except when purchase made while on official travel)

  31. Liquidation of CA(Sec. 5, COA Circular No. 97-002) Official Travel COA Circular No. 96-004 • Certificate of Travel Completed • Plane, boat, bus tickets • Hotel room/ lodging bills • Certificate of Appearance or Accomplishment Report

  32. Responsibility of Agency Head(Sec. 8, COA Circular No. 97-002) “It shall be the responsibility of the Head of the Agency to ensure the proper granting, utilization and liquidation of all cash advances in accordance with these rules and regulations”

  33. Responsibility of the Accountant(only in cases of travel cash advance pursuant to Circular 96-004) 1. The accountant shall retain a copy of the travel advance voucher and the itinerary of travel. He shall keep an index of the cash advances made by each official/employee and shall monitor the liquidation of the said cash advances;

  34. Responsibility of the Accountant (only in cases of travel cash advance pursuant to Circular 96-004) 2. In addition the accountant shall: a. Send within ten (10) days before the expiration of the 30 or 60 days period specified under Section 16, of EO 248, a written reminder under signature of the head of the agency or his duly authorized representative, enjoining the official or employee concerned to liquidate his travel cash advance. This is to preclude complaints arising from suspension of salaries due to non-liquidation of travel advances.

  35. Responsibility of the Accountant (only in cases of travel cash advance pursuant to Circular 96-004) b. Delete the name of the official or employee from the subsequent payrolls until such time that the travel cash advance has been fully liquidated, if the official or employee concerned fails to liquidate the cash advance within the prescribed period.

  36. Responsibility of the Accountant (only in cases of travel cash advance pursuant to Circular 96-004) c. Verify the liquidation voucher and supporting documents, and record the same in the books of accounts subject to the post audit by the auditor.

  37. Duties & Responsibilities of the COA Auditor • Upon failure of the AO to liquidate his cash advance within two (2) months for AOs holding office within the station and three (3) months for AOs outside the station from date of grant of the cash advance, the Auditor shall issue a letter demanding liquidation or explanation for non liquidation;

  38. Duties & Responsibilities of the COA Auditor 2. If thirty (30) days have elapse after the demand letter is served and no liquidation or explanation is received or the explanation is not satisfactory, the Auditor shall advise the head of the agency to cause or order the withholding of the payment of any money due the AO;

  39. Duties & Responsibilities of the COA Auditor 3. The AO shall likewise be held criminally liable, for failure to settle his accounts. For this purpose the Auditor shall:

  40. Duties & Responsibilities of the COA Auditor a. Execute an Affidavit stating the nature/purpose of the cash advance; the amount not liquidated/ accounted for; the fact that no liquidation or explanation has been submitted despite demand or if explanation has been submitted, the same is not satisfactory; the date the letter of demand was served on or received by AO; and other information which may be pertinent to the case;

  41. Duties & Responsibilities of the COA Auditor b. State in the affidavit the violation of the provisions of Section 89 of PD 1445 and the penal provisions under Section 128 of the same law; c. The affidavit shall be submitted to the COA Director concerned who shall refer the case to the appropriate Office of the Ombudsman, if the offense is committed in the regions or to the COA Legal Office for the filing of criminal proceedings, if the offense is committed within the Metropolitan Manila Area (97-002, Item 9.3)

  42. Actions against AO for Failure to Liquidate on Time • Valid cause for the WITHHOLDING of salary; (97-002, 5.1.3 last par) • No additional cash advance • May be liable criminally, administratively and/or civilly

  43. PD 1445 GOVERNMENT AUDITING CODE OF THE PHILIPPINES CHAPTER 5 ACCOUNTABILITY AND RESPONSIBILITY FOR GOVERNMENT FUNDS AND PROPERTY “Section 102. Primary and secondary responsibility: 1. The head of any agency of the government is immediately and primarily responsible for all government funds and property pertaining to his agency.

  44. PD 1445 GOVERNMENT AUDITING CODE OF THE PHILIPPINES 2. Persons entrusted with the possession or custody of the funds or property under the agency head shall be immediately responsible to him, without prejudice to the liability of either party to the government.”

  45. Are you an Accountable Officer? • Art. 217, RPC (Malversation of Public Funds) is one who is accountable for public funds or property • Sec. 101 (1), PD 1445 (Government Auditing Code of the Phils) – -every officer of any government agency -duties permit or require the possession or custody of government funds or property -and who shall be accountable therefore and for the safekeeping thereof in conformity

  46. What is therefore CONTROLLING is…… the NATURE of the duties which he performs - the fact that, as part of his duties, he received public money for which he was bound to account, and NOT THE NOMENCLATURE OR THE RELATIVE IMPORTANCE THE POSITION HELD (Querijero vs. People, GR 153483, Feb. 14, 2003)

  47. Criminal ChargesP.D. 1445 “Section 128. Penal provision. Any violation of the provisions of Sections 67, 68, 89, 106, and 108 of this Code or any regulation issued by the Commission implementing these sections, shall be punished by a fine not exceeding one thousand pesos or by imprisonment not exceeding six (6) months, or both such fine and imprisonment in the discretion of the court.”

  48. Criminal Charges under the Revised Penal Code Art. 218 – Failure to render accounts - Accountable Officer - Required by law or regulation to render accounts - Failure to do so for 2 months after such accounts should be rendered • Demand for accounting not necessary • Misappropriation not necessary; rationale is to compel public officers entrusted with government funds to render regular and timely account • Penalty - 6 months 1 day to 2 years 4 months

  49. Criminal Charges under Revised Penal Code Art. 217 – Malversation of Public Funds - Public Officer - Having custody or control of funds by reason of the duties of his office - Public funds for which he is accountable - Appropriating, Misappropriating, or permitting other person to take public funds • Presumption from failure to have duly forthcoming public funds upon demand • Demand only as a matter of procedure, evidentiary BUT not necessary • Penalty - 2 years 4 months to Reclusion Perpetua

  50. Administrative Charges Conduct Prejudicial to the Best Interest of the Service “…unwarranted act of the respondent (which) resulted to an undue prejudice to the best interest of the service.”* *Lucero, Antonio M., CSC Resolution No. 98-0649.

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