Commission on Audit (COA) guidelines generally discourage regular reimbursements for standard government procurement because transactions should be paid directly to suppliers via approved procurement methods under Republic Act No. 12009.
However, reimbursements are allowed for specific instances such as official travel, petty cash operations, and small-scale purchases from establishments not issuing official receipts.
Under COA Circular No. 2017-001 and COA Circular No. 2021-001, government personnel who advance money or who used personal money for official business must submit a Certification of Expenses Not Requiring Receipts for expenses of ₱300 or less.
For expenses above ₱300 up to ₱1,000 bought from establishments that do not issue receipts, they submit a Reimbursement Expense Receipt (RER). If the seller issues an official receipt or invoice, you must submit it regardless of the amount.
What Are the COA Guidelines on Reimbursement of Expenses?
Reimbursement is the refund of money that an official or employee personally advanced for an official purpose. This means the official or employee used personal money to pay goods or services for an official purpose.
However, the expense must be authorized by law and agency rules and chargeable to available funds, and it is subject to COA audit. COA Circulars 2017-001 and 2021-001 specifically set the supporting document needed to prove the expense.
Why did COA relax the receipt rule?
COA Circular No. 2017-001 cited the reduced purchasing power of the peso. Small expenses of ₱300 or less no longer need official receipts, since many small vendors (tricycle drivers, market stalls, sari-sari stores) do not issue them.
What is Certification of Expenses Not Requiring Receipts (CENRR)
The Certification of Expenses Not Requiring Receipts is a sworn-style statement the employee signs to support a reimbursement claim of ₱300 or less when the seller does not issue an official receipt. It is a form prescribed under COA Circular No. 2017-001 attached as Annex “A”.
It stands in place of the receipt. The employee certifies that the expense was necessary for an official purpose, and that the goods or services came from parties not issuing receipts.
When it applies:
- The expense is ₱300 or less.
- The seller or provider does not issue receipts.
- Fares on buses, trains, and vessels that issue receipts are excluded. Those need the actual receipt or ticket, and so do purchases from establishments that issue receipts.
What the form contains:
- Agency name, employee name, employee number, and office or division
- Particulars and amount of each expense, with the total
- Purpose of the expense
- The certification statement, including awareness that willful falsification is punishable by law
- Signature of the employee, noted by the immediate supervisor, with dates
Related rule: For expenses above ₱300 up to ₱1,000 from sellers that don’t issue receipts, COA Circular No. 2021-001 requires a Reimbursement Expense Receipt (RER) instead.
What is the RER?
COA Circular No. 2004-006 describes the RER as a paper-based document. It applies when the payee is not a business entity required by the BIR to issue ORs, the official advanced the money, and the agency is authorized to reimburse the expense. COA Circular No. 2021-001 clarified when to use the RER and when to use the Certification, because the two earlier circulars confused many offices.
What reimbursement does COA prohibit?
COA doesn’t prohibit reimbursement entirely. Small, necessary out-of-pocket expenses are allowed, as the Certification and RER rules show. But COA treats it as an exception, due to these reasons:
It bypasses procurement rules.
Buying with personal money and claiming it back skips the planning, competitive bidding, and small-value procurement steps that RA 9184 (now RA 12009) requires.
There is no prior commitment of funds.
Normally an obligation is recorded against an appropriation before a purchase is made. With reimbursement, the money is spent first and the paperwork follows. This works against PD 1445’s rule that no contract involving public funds can be entered into without an appropriation.
Weaker internal controls.
The same person can request, buy, receive, and get paid, with no independent check on price or whether the goods were needed. This also makes splitting purchases easier, to stay under thresholds.
Higher fraud and documentation risk.
Claims rely on receipts, RERs, or certifications, which can be inflated, falsified, or recycled. Auditors flagged this in a case where cash advances were used in ways that violated COA guidelines, with spurious and questionable transactions and outright cash payments that did not fit the “shopping” mode.
Payee irregularities.
In a COA audit report on a senator’s PDAF-funded trade fair expenses, auditors noted that a ₱54,000 reimbursement check for gift checks was made payable to the senator rather than to the supplier. The report said this “may be considered” an irregular transaction.
Paying a reimbursement to the official instead of the supplier is a payment arrangement auditors may question, especially when the supporting documents don’t clearly show who delivered the goods or services and who was actually paid. [src]
Personal liability falls on officials.
Because the process skips normal controls, a disallowed reimbursement can end up as a Notice of Disallowance. Approving officers, certifying officers, and recipients may be made to refund, following the Madera rules.
It signals poor planning.
Routine reimbursement usually means the office is not planning its supply needs, so purchases go through an emergency channel.
In practice, the proper route is the regular procurement process, with cash advances or petty cash for small recurring needs, and reimbursement reserved for real emergencies and minor expenses.
Legal Basis
- COA Circular No. 2017-001 (June 19, 2017): Reimbursement of expenses not requiring official receipts
- COA Circular No. 2021-001 (June 24, 2021): Clarification on the use of RER and Certification
- COA Circular No. 2004-006 (September 9, 2004): Acceptability of evidence of receipt of payment for disbursements
- COA Circular No. 2023-004 (June 14, 2023): Updated documentary requirements for common government transactions, amending COA Circular No. 2012-001
- PD 1445: Government Auditing Code of the Philippines
Frequently Asked Questions
Do I still need an official receipt for a ₱250 expense?
If the seller or carrier issues a receipt, yes. The relaxed rule applies only to sellers that do not issue receipts. Fares on buses, trains, and vessels that issue receipts are also excluded.
What if the expense is ₱500 and the seller issues no receipt?
Submit an RER. A Certification covers only ₱300 or less.
Can I split a bigger purchase into smaller claims to stay under ₱300?
No. Splitting to avoid the receipt requirement is an irregularity and can be disallowed, and a false Certification is punishable by law.
Who signs the Certification?
The employee signs it, and the immediate supervisor notes it.
Does COA decide if my expense is reimbursable?
No. The expense must still be authorized by the agency, necessary for the official purpose, and supported by the proper document.
Summary / Key Takeaways
- Reimbursement is allowed, but it is the exception. COA discourages it as a routine way of buying, and every claim is subject to audit.
- Documents depend on the amount and the seller:
- Seller issues a receipt or invoice: submit the OR or invoice, regardless of amount.
- ₱300 or less, seller issues no receipt: submit the Certification of Expenses Not Requiring Receipts (COA Circular 2017-001).
- More than ₱300 up to ₱1,000, seller issues no receipt: submit the RER (COA Circular 2021-001).
- Public utility fares that issue receipts need the receipt or ticket.
- Why COA discourages reimbursement:
- It can bypass procurement rules (RA 9184, now RA 12009).
- Funds are spent before they are obligated against an appropriation.
- Internal controls are weaker, and purchases are easier to split.
- Fraud and documentation risks are higher.
- Payment arrangements, such as paying the official instead of the supplier, may be questioned.
- Approving officers and recipients may be made to refund if the claim is disallowed.
- Routine reimbursement signals poor procurement planning.
- Do not split purchases to stay under ₱300 or ₱1,000, and never certify anything untrue. Willful falsification is punishable by law.
- Plan ahead. Use regular procurement for planned needs, and cash advances or petty cash for small recurring ones. Keep reimbursement for real emergencies and minor expenses.
Disclaimer: This article is based on COA Circular No. 2017-001, COA Circular No. 2021-001, COA Circular No. 2004-006, and COA Circular No. 2023-004. It is for educational purposes only and not for use in any government transaction. Always consult your agency’s accounting office and COA auditor.
