Professional Documents
Culture Documents
and
Fund Utilization
Introduction
Introduction
Introduction
Fund
A sum of money or other resources set aside for the purpose of
carrying out specific activities or attaining certain objectives in
accordance with special regulations, restrictions or limitations, and
constitutes an independent fiscal and accounting entity.
[Sec. 3(1), PD1445; Sec. 2(1), Title I(B), Bk V, 1987 Adm. Code; Sec. 306(h), RA 7160]
Government Funds
Government funds include public moneys of every sort and other
resources pertaining to any agency of the government.
[Sec. 3(2), PD 1445; Sec. 2(2), Title I(B), Bk V, 1987 Adm. Code]
Concept of Funds
2. Special Funds
Profits or income derived from the operation of pubblic utilities and other
economic enterprises, after deductions for the cosdt of improvement, repair
and other related expenses of the public utility or economic enterprise
concerned, shall first be applied for the return of the advances or loans
made therefor. Any excess shall form part of the general fund of the local
government unit concerned (Sec. 313, RA 7160)
Fundamental Principles Governing Utilization of Local Funds
• Depository Accounts
Prohibitions on Disbursements:
• Advance Payments - No money shall be paid on account of any
contract under which no services have been rendered or goods
delivered
• Expenditures for Religious or Private Purposes - No public
money or property shall be appropriated or applied for religious or
private purposes.
• Expenses for Reception and Entertainment - No money
shall be appropriated, used, or paid for entertainment or reception
except to the extent of the representation allowances authorized by law
or for the reception of visiting dignitaries of foreign governments or
foreign missions, or when expressly authorized by the President in
specific cases.
DISBURSEMENT OF LOCAL FUNDS
Basic Requirements for Disbursements from the General Fund and
Special Funds.
Certification in the Disbursement Voucher by the Local Accountant
The Local Treasurer shall release the check only to the payee or his
duly authorized representative. For purposes of releasing checks, the
Local Treasurer shall maintain a Check Register where all checks
issued shall be recorded chronologically and where the claimants shall
be required to acknowledge receipt hereof. (NGAs for LGUs, Sec. 41)
Lost Checks
A check is considered lost under the following circumstances:
When any check is lost, stolen or destroyed, the issuing officer may
issue a replacement check which shall be paid under the regulations of
the Commission on Audit in regard to issuance and payment and upon
execution of a bond to indemnify the issuing agency in such amount
and with such security as the Commission may require.
3. 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 mare therefrom.
• Only permanently appointed officials and employees shall be granted cash advances.
• Only duly appointed or designated disbursing officers may perform disbursing functions.
Officers and employees who are given cash advances for foreign travel need not be
designated as Disbursing Officers.
• Only one disbursing officer shall be assigned/designated for a specific legal purpose.
Additional disbursing officers may be assigned/designated for the same purpose only when
fully justified by the Agency Head.
• The cash advance shall be used solely for the specific legal purpose for which it was granted.
Under no circumstance shall it be used for encashment of checks or for liquidation of a
previous cash advance.
• The Accountant shall obligate all cash advances granted. He shall see that cash advances for
a particular year are not used to pay expenses of other years.
GRANTING AND UTILIZATION OF CASH ADVANCES
• The cash advance shall be equal to the net amount of the payroll for a pay
period.
• The cash advance shall not be used for payments of regular expenses, such as rentals,
subscriptions, light and water and the like. Payments out of the cash advance shall be allowed
only for amounts not exceeding P5,000.00 for each transaction, except when a higher amount
is allowed by law and/or specific authority by the Commission on Audit. Splitting the
transactions to avoid exceeding the ceiling shall not be allowed.
- Estimate of expenses
GRANTING AND UTILIZATION OF CASH ADVANCES
• The amount of the cash advance shall be limited to the requirements for two months. Within 5
days after the end of each month, the AO shall submit a Report of Disbursements. Additional
cash advances shall be granted on the basis of the activity budget or the requirements for two
months, whichever is lower.
o Budget for COE of the Agency field office or agency activity in the field.
GRANTING AND UTILIZATION OF CASH ADVANCES
Foreign Travel
• Authority to travel
• Itinerary of travel
• Salaries, Wages, etc. - within 5 days after each 15 day/ end of the month
pay period.
Failure of the AO to liquidate his cash advance within the prescribed period
shall constitute a valid cause for the withholding of his salary.
RULES & REGULATIONS ON THE GRANTING, UTILIZATION & LIQUIDATION
OF CASH ADVANCES
2. The AO shall prepare the Report of Disbursements (using Gen. Form No.
______) in three (3) copies and submit the same with the
vouchers/payrolls and supporting documents to the Accountant. For
payments based on receipts and invoices only, he shall also prepare a
liquidation voucher which shall be submitted with the report and the
supporting documents to the Accountant. He shall ensure that receipt of
the report is properly acknowledged by the Accountant.
3. Within 10 days after receipt of the report and supporting documents for
the AO, the Accountant shall verify the report, record it in the books and
submit the same with all the vouchers/payrolls and supporting
documents to the Auditor.
RULES & REGULATIONS ON THE GRANTING, UTILIZATION & LIQUIDATION
OF CASH ADVANCES
• Salaries, Wages, etc. - Report of disbursements with all duly signed payrolls
and/or vouchers and all pertinent supporting documents, such as daily
time records, approved leaves of absence, etc.
• Petty Operating Expenses
Same requirements as those for salaries, wages, etc. and petty operating
expenses, supra
Canvass of at least three suppliers (Not required if purchase is made while on
official travel)
• Foreign Travel
Itinerary of travel
Certificate of travel completed
Report on trip undertaken
Plane, boat or bus ticket (if included in the cash advance)
Receipts for hotel bills and incidental expenses
RULES & REGULATIONS ON THE GRANTING, UTILIZATION & LIQUIDATION
OF CASH ADVANCES
• The AO shall reconcile the book balance with the cash on hand daily. He
shall foot and close the books at the end of each month. The AO and the
Accountant shall reconcile their books of accounts at least quarterly.
• The cashbooks shall be kept at the Office of the AO and placed inside the
safe or cabinet when not in use. It may be taken from his custody only by
the Auditor or an official duly authorized by the Agency Head, who shall
issue the necessary receipt.
The foregoing documents shall be submitted, together with the application for bond,
to the auditor who shall fix and approve the amount of the bond and shall transmit the
same to the Fidelity Bond Division of the Bureau of the Treasury.
RULES & REGULATIONS ON THE GRANTING, UTILIZATION & LIQUIDATION
OF CASH ADVANCES
Travelling Allowances
• General Guidelines
Travels shall cover only those that are urgent and extremely
necessary, will involve the minimum expenditure and are
beneficial to the agency concerned and/or country.
(EO 298, dated March 23, 2004, as amended)
DISBURSEMENT OF LOCAL FUNDS
Specific Guidelines on the Grant of Cash Advance for
Payroll, Field Operating Expenses and Travel
• Foreign Travel:
2.2.1 Funded by LGU
2.2.2 Funded by the National Government
2.2.3 Funded by a Foreign Institution/Country
2.2.4 Personal Foreign Travel
DISBURSEMENT OF LOCAL FUNDS
Documentary Requirements
• Travelling Expenses
Local Travel
Foreign Travel
Disbursements from the Petty Cash Fund shall be through the Petty
Cash Voucher which shall be signed by the payee to acknowledge
the amount received.
Government Expenditures
Personal Services
Maintenance and Other Operating Expenses
Financial Expenses
• Capital Outlays
IRREGULAR
LEGAL BASIS
UNNECESSARY UNCONSCIONABLE
COA CIRCULAR
NO. 2012-003
EXCESSIVE EXTRAVAGANT
COA CIRCULAR NO. 2012-003
October 29, 2012
Loyalty service award granted to employees that have not rendered the
minimum service of ten years in government
(BCDA vs COA, GR No. 142760), 8/6/02)
Grant of food allowance, rice subsidy and health care allowance, there is
no law authorizing such allowance
(BFAR Employees Union, RO VII vs COA, GR No. 169815, 8/13/08;
Benguet State University vs. COA, GR No. 169637, 6/8/07)
ILLEGAL EXPENDITURES
• Transactions in violation of laws
EXAMPLES:
For widening, repairing & improving sidewalks of a privately owned
subdivision where the land it is situated has not been transferred to
the government by way of donation or acquired by the government
through expropriation (Albon vs Bayani Fernando et al., GR No.
148357, 6/30/06)
EXAMPLES
Continuous repair of vehicles & equipment already considered beyond
economic repair as evidenced by frequent breakdown and non-use after
repair
Hiring of consultants whose functions are redundant to the respective
functions of concerned officials – hiring of procurement consultant,
financial consultant, media consultant
EXCESSIVE EXPENDITURES
EXAMPLES
Grant of exorbitant & unreasonable bonuses, allowances
& fringe benefits to public officials and employees
Live-in seminars in five-star hotels within an
unreasonable period of time
LOCAL FUND MANAGEMENT AND UTILIZATION
• Current Assets – cash and other assets that are not earmarked
for specific purposes other than the payment of a current liability
or a readily marketable investment. (p. 391, Glossary of Terms
for State Auditors)
LOCAL FUND MANAGEMENT AND UTILIZATION
LGU
B. The Treasurer shall maintain this record to monitor the cash in
Name of the province/city
treasury balance as of specific date. All transactions for the day
municipality FUND
shall be recorded immediately.
BALANCE Fund name/code
INSTRUCTIONS
The amount
and
CREDIT
DEBIT The difference between the Debit REFERENCE
DATE
deposited
Credit columns,with
PARTICULARS
which shall
The amount of
C. At the endthe collections
of each day, the debit and The be
credit number of Report
shall be ruled of
and
A. This form shall be
Date
based on RCD
of
banksthe source
based on documents
the
Details RCD’s
or nature of transactions
equal to the amount of cash collections
closed. All totals shall
attached be written
deposit slips. legibly
hands of the Treasurer
in the
in ink and and deposits
the balances
accomplished as follows:
shall be carried forward as opening balances of the Cash Book
for the next day.
LGU
B.Name
TheofTreasurer shall maintain this record to monitor the cash in
the province/city
bankmunicipality
balance as of specific date. All transactions
BANK ACCOUNT NO. for the FUND
day
be recorded immediately. The bank name and account
shallDEBIT Fund name/code
INSTRUCTIONS
The amount deposited for the day
The amount
CREDIT BALANCE number
based on the RCD’s depositchecks issued
slipsThe
and for thebetween
difference
DATE
day REFERENCE
the Debit
PARTICULARS
C. At based
the end of each day, the debitand
and credit
shallshall
be ofbe
theruled
sourceand
interest income
closed.
A. This form shall be
andonother
withholding
All
the Checks/Bank
and
related Credit
Date of the source
taxes/charges
totals
transactions based on Journal Entryshall
equalbe to
Advise
columns,
Detailsdocuments
and
written
the other
The
which
legibly
amount
number
or nature of transactions
in ink
of Cash in and the balance
document
chargesforward
based onas JEVopening
accomplished
shall be (JEV)
Vouchers carried
for the next day.
as follows: Bank balances of the Cash Book
LGU
Name of the province/city
B. The Treasurer shall maintain this record to monitor the cashFUND
municipality
advances balance as of specific date. All OFFICER
DISBURSING transactions forThe thefund from
day shall be recorded immediately.Name of Disbursing Officer which cash advance
DEBIT INSTRUCTIONS
CREDIT
BALANCE
The difference between the Debit
DATE PARTICULARS
REFERENCE was made
The amount advanced
The amount by the and
disbursed out
Credit
of the
columns,
cash which
andThe number
shall beof the Voucher
C. AtOfficer
Disbursing the end
Voucher
A. This form shall be
ofofeach
Date
based
closed. Payroll
onthe
theday,Details
source
advances
the debit
documents
or nature credit
of shall be ruled and
transactions
equal to the amount of cash inPayroll
All totals shall hand
be written legiblyOfficers
in ink and the balance
of Disbursing
accomplished
shall be asbalances
carried forward as opening follows:
of the Cash Book
for the next day.
LGU
Name of the province/city
municipality
LIQUIDATING OFFICER
Name of the designated
DEBIT INSTRUCTIONS
CREDIT
Liquidating Officer
BALANCE
The difference between the Debit
Amounts remitted or turned-over to
Collections remitted by theand Credit columns, which shall REFERENCE
be
A. This form shall be
the treasurer/cashierDATE
supported PARTICULARS
by
tellers and market/field equal to the amount
RCDsDate
andofduplicate ORsdocuments
the source
The
of number
cash on of the source
ofor nature of transactions
Details
collectors and based on RCD hand not yet turned over todocument
the
accomplished as follows:
tellers/collector
treasurer/cashier.
CASH BOOK
LGU
Name of the province/city
municipality TELLER/COLLECTOR
Name of the designated
Teller/Collector
BALANCE
DEBIT
INSTRUCTIONS
individual tellers
CREDITThe difference between the Debit
Collections received by
Collections remitted toand
and
DATE
theCredit PARTICULARS
columns, which
designated
REFERENCE
shall be of the source
The number
Date
liquidating of thesupported
officers source
equal documents
Details
to or amount
the
by nature ofoftransactions
cash document
on
A. This form shall be
market/field collectors and
hand not yet remitted to the
ORs/Cash tickets
based on individual RCDs
designated liquidating officer.
accomplished as follows:
Bureau of Local Government Finance