Question:
Hi po. We have an Audit Observation Memorandum (AOM) for paying obligations which were obligated in CY 2017 but were only paid in CY 2019.
According to our Auditor lapsed na daw yung appropriation so illegal daw yung payment; hence, will be disallowed in audit. Is this correct?
CY 2017 appropriation was valid until December 31, 2018. Question po: should the obligations which were incurred in CY 2017 be paid or disbursed also within the validity period of the appropriation?
DBM also downloaded cash back up for paying these obligations in 2019.
If there are any suggestions po na pwede naming pang-justify and i-cite like DBM, COA Circulars or any issuances, kindly suggest naman po.
Thank you po sa mga sasagot. It would be a great help.
Best Possible Answers:
“Tama si Auditor na lapsed na yung appropriation, but the payment is valid since na-obligate na in 2017.” | By Jon de Castro
“Your payment was valid. The validity of the appropriation is for purposes of obligation not for the actual disbursement of funds. This usually happens sa mga infra projects with delayed implementation. Unlike NBC No. 578, the guidelines for the release of funds for FY 2020 which, explicitly provides for the timelines of payment walang ganung provision sa NBc 567 for FY 2017.” | By Janelle Bahade-Rojas
“Nung in-obligate nyo po ba eh ni-record nyo din as Accounts Payable (AP)? Kung naka-record as AP, and may funds naman para sa obligation, for me I dont see any problem, unless di nakarecord sa accounting books yung obligation.” | By Anthony Valencia
“For disallowance, 2017 obligation is valid only to be paid in the succeeding year if booked as payable on that year. Hence, you can request funding for your payable [from] DBM if only properly recorded as such. | By Jmb del Valle
“AOM plng po yan. Write all your justifications and legal basis through your reply. If the auditor is not satisfied, he/she may issue a rejoinder and/or [Notice of Disallowance]. If iissuehan po kayo ng ND, hindi po dito ang proper forum. You shall file an appeal to the Regional Director, if denied, next is to the Commission Proper, and if also denied, next and final is to the Supreme Court. Present all facts, evidence, and justifications there and let them decide. None of us here has the jurisdiction to hear your case. It doesn’t mean that if you received an ND, it is automatically final and executory, except if the prescription period to appeal had already lapsed.” | By LutzCris Salesro
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