Cash Advances

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

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.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.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.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.

Purposes of Special Cash AdvancesCurrent 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 expensesPurposes of Special Cash Advances2. Travel expenditures including transportation fare, travel allowance, hotel room/lodging expenses and other expenses incurred by officials and employees in connection with official travel.General Guidelines in Granting and Utilization of Cash Advances 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

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 expensesGeneral 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

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 undertakingGeneral 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 yearsGeneral 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

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

Cash Advance for Official Travel(Local and Foreign)Governed by COA Circular No. 96-004 dated April 19, 1996Both official local and foreign travels shall be treated and accounted for as cash advanceShall not require bonding of the travelling official or employeeGeneral 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 COANo splitting of transactionsGeneral GuidelinesField Current Operating Expenses (Sec. 4.4, COA No. 97-002)Used to pay salaries/wages of field employees and miscellaneous operating expensesNo limits to payment for each transactionGeneral GuidelinesField Current Operating Expenses (Sec. 4.4, COA No. 97-002)All payments approved by head of field officeCA limited to two month requirement Report of disbursements w/in 5 days after each month by AODocumentary 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 activityLiquidation of Cash Advances

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.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.Time to LiquidateOFFICIAL 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) Local Travel, what to do when.Trip is cancelled REFUND in full.

Trip is cut short or terminated in advance of the itinerary REFUND excess payment, IMMEDIATELY upon cancellation or termination of the trip. Foreign TravelGoverned 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)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.

Liquidation of CA(Sec. 5, COA Circular No. 97-002)Misc Operating ExpensesReport of Disbursements w/ support docsApproved Requisition & Issue Voucher w/ Cert. of Emergency Purchase, if necessaryReceipts, Sales InvoicesCert. of Acceptance/InspectionTrip Ticket (if for fuel)Other pertinent docs required by nature of expense Liquidation of CA(Sec. 5, COA Circular No. 97-002)Current Operating ExpenditureSame as the previousCanvass of at least 3 Suppliers (except when purchase made while on official travel)Liquidation of CA(Sec. 5, COA Circular No. 97-002)Official TravelCOA Circular No. 96-004Certificate of Travel CompletedPlane, boat, bus ticketsHotel room/ lodging billsCertificate of Appearance or Accomplishment Report 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 regulationsResponsibility 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;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. 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.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.Duties & Responsibilities of the COA AuditorUpon 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;

Duties & Responsibilities of the COA Auditor2. 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;

Duties & Responsibilities of the COA Auditor3. The AO shall likewise be held criminally liable, for failure to settle his accounts. For this purpose the Auditor shall:

Duties & Responsibilities of the COA Auditora. 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;

Duties & Responsibilities of the COA Auditorb. 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)Actions against AO for Failure to Liquidate on TimeValid cause for the WITHHOLDING of salary; (97-002, 5.1.3 last par)No additional cash advanceMay be liable criminally, administratively and/or civillyPD 1445 GOVERNMENT AUDITING CODE OF THE PHILIPPINESCHAPTER 5ACCOUNTABILITY 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.PD 1445 GOVERNMENT AUDITING CODE OF THE PHILIPPINES2. 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.Are you an Accountable Officer?Art. 217, RPC (Malversation of Public Funds) is one who is accountable for public funds or propertySec. 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 conformityWhat is therefore CONTROLLING isthe 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)Criminal ChargesP.D. 1445Section 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.

Criminal Charges under the Revised Penal CodeArt. 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 renderedDemand for accounting not necessaryMisappropriation not necessary; rationale is to compel public officers entrusted with government funds to render regular and timely accountPenalty - 6 months 1 day to 2 years 4 monthsCriminal Charges under Revised Penal CodeArt. 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 fundsPresumption from failure to have duly forthcoming public funds upon demandDemand only as a matter of procedure, evidentiary BUT not necessary Penalty - 2 years 4 months to Reclusion Perpetua

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.Administrative ChargesDishonesty the concealment or distortion of truth, which shows lack of integrity OR a disposition to defraud, cheat, deceived or betray and an intent to violate the truth.**Civil Service Resolution No. 060538 for dishonesty to prosper, an absence of integrity, a disposition to betray, cheat, deceive or defraud, bad faith must be shown.* *Arca vs. Lepanto Consolidated Mining Company, November 24, 1958Administrative ChargesGrave Misconduct In the offense of the grave misconduct, the elements of corruption, clear intent to violate the law or flagrant disregard of established rule or regulation must be manifest.*

*Landrito vs. CSC, 223 SCRA 551COA CLEARANCE NOT GROUND FORDISMISSAL OF CRIMINAL CASE Indeed, while the COA may regard petitioner to have substantially complied with its accounting rules, this fact is not sufficient to dismiss the criminal cases. Beyond compliance with COA rules and regulations, the questions of fact to be established by evidence.**Rodolfo E. Aguinaldo vs. Sandiganbayan, et. al., G.R. No.124471, November 28, 1996MC No. 155 issued by the OP on June 15, 1992Pursuant to COA Circular No. 90-331 dated May 3, 1990 & in the interest of the govt, all heads of departments etc, are hereby directed to require all govt. officials/employees in their respective offices with cash advances, to settle and secure clearances from their accountabilities before being allowed to transfer or resign from their positions.Cash Advances

Presented by:Atty. Roline M. Ginez-Jabalde Resident Ombudsman-DepEdObservations1.All the UCAs are beyond the time allotted for liquidation in clear violation of COA Circular No. 97-002 dated February 10, 1997

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.

Time to Liquidate(5.1.2 COA Circular 97-002Petty 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.

Time to LiquidateOFFICIAL 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)

Observations2. There is also a failure to restrict the issuance of additional cash advance in violation of Section 89 of P.D. 1445 otherwise known as the Government Auditing Code of the PhilippinesSec. 89 of P.D. 1445

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 madeObservations3. However, significant number of employees were able to subsequently obtain a cash advance although they have yet to liquidate the first cash advances granted to them.

Observations4. Sanctions prescribed under Sec. 16 of E.O. 248 and Item 3.3.2 (b) of COA Circular No. 96-004 for failure to liquidate cash advance within the prescribed period, are not imposed. Sanctions under Sec. 16 of E.O. 248Title III Sec. 16 Payment of the salary of any official or employee who fails to comply with the provisions of this Section shall be suspended until he complies therewith

Sanction under Item 3.3.2 (b) of COA Circular No. 96-004Delete 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 periodObservations5. Failure on the part of the accountant to send a notice to liquidate within ten(10) days before the expiration of the 30 or 60 days period specified under Sec. 16 of EO. Notice to LiquidateThis is a written reminder under the signature of the head of the agency or his duly authorized representative, enjoining the official/employee concerned to liquidate his travel cash advance.The failure on the part of the accountant to send a notice to liquidate & subsequent suspension of salary in case the concerned employee fails to liquidate the cash advance within the prescribed period may constitute violations of Items 3.3.2 of COA Circular No. 96-004 which can be a ground for administrative and criminal actions.

Actions made by the Resident Ombudsman1. Reminder Letters were sent to ninety-eight (98) officials & employees out of three hundred ninety-eight (398) DepEd officials & employees whose individual UCAs for travel expense purposes that exceeded ten thousand pesos. (P10,1000.00).Actions made by the Resident Ombudsman2. We also focused on the UCAs of Special Purpose Disbursing Officers (SDOs) that date back to the previous year (2010), some of which date as far back as 1998Actions made by the Resident Ombudsman3. To date, a total of nineteen (19) officials & employees submitted their response to the reminder letterSixteen (16) employees have informed our Office that they have submitted their full/partial liquidation reportsOne (1) employee asked the Accounting Division to deduct from his salary his UCATwo (2) employees stated that they lost the liquidation reports and are in the process of reconstituting the sameActions made by the Resident OmbudsmanIn the case of the 16 employees who have submitted their liquidation reports, their names are still on the Statement of Aging of Cash Advances

Coordination with the Accounting Division reveals that the latter subject the reports to pre-audit prior to submitting the same to COA for review; pending the pre-audit stage, the cash advance is still recorded as unliquidated

Actions made by the Resident OmbudsmanAlthough several employees have submitted their liquidation reports several months ago, their names still appear on the list of Unliquidated Cash Advances

The pre-audit phase at the Accounting Division is a slow process due to the bulk of liquidation reportsActions against AO for Failure to Liquidate on TimeValid cause for the WITHHOLDING of salary; (97-002, 5.1.3 last par)No additional cash advanceMay be liable criminally, administratively and/or civilly

Cases Initiated by the Resident Ombudsman Both criminal & administrative cases were already filed by our Office against erring officials & employees for unliquidated cash advancesThank you