COAble: List of Common COA Audit Findings, Observations, Suspensions, Disallowances — Cash Advances

Listed hereunder are the common audit findings, observations, suspensions, disallowances issued/imposed by the Commission on Audit (COA) on cash advances.

1. Advances for Payroll were not liquidated at the end of the year, contrary to COA Circular No. 97-002 dated February 10, 1997.

What you can do: Instruct the disbursing officer to return the unused cash and/or to submit all documents to fully liquidate his/her cash advances at the end of the year to comply with COA Circular No. 97-002 dated February 10, 1997.

[Source: Commission on Audit]

2. The granting of cash advances to officers and employees was not adequately controlled resulting in the accumulation of outstanding cash advance balances contrary to the provisions of Section 89 of Presidential Decree No. 1445.

What you can do: (a) issue demand letters to (i) notify the concerned officials and employees of their responsibility to settle their unliquidated cash advances. If settlement was not received, withhold from their salaries considering that they have been notified and given more adequate time to liquidate; (ii) employees who already resigned and transferred to immediately cause the liquidation or settlement of the unliquidated balances; (b) request the write-off of the unliquidated cash advances balances of the dead employees; (c) ensure the completeness of prescribed supporting documents for the granting of cash advances in processing claims for payment thereof; (d) do not grant additional cash advance to concerned officials and employees unless the previous cash advance granted them have been liquidated; (e) do not process cash advances other than for official travel/purpose; (f) strictly monitor periodically the submission of liquidation reports to ensure timely accounting thereof to avoid undue accumulation of outstanding cash advances; and (g) strictly comply with the provisions of the Circulars pertaining to cash advances.

[Source: Commission on Audit]

3. Non-compliance with the rules and regulations on cash advances as prescribed under Section 89 of PD No. 1445, and pertinent Sections of COA Circular No. 97-002 dated February 10, 1997 and GAM Volume I, resulted in control weaknesses over the granting, utilization and liquidation of cash advances.

What you can do: (a) stop the practice of granting additional cash advance to Accountable Officers (AOs) and personnel who still have unliquidated cash advance/s; (b) refrain from the practice of transferring cash advances of AOs to other officers/personnel who actually need the cash, but instead, require them to be adequately bonded in accordance with law; (c) undertake full information dissemination for the immediate liquidation of cash advances; (d) submit Liquidation Reports for cash advances obtained for official travels, seminars/trainings within the prescribed period; and (e) take appropriate action for the full settlement of the year-end balance of unliquidated cash advances.

[Source: Commission on Audit]

4. Cash Advances for local and foreign travels were not liquidated within the prescribed period after return to their permanent official stations.

What you can do: Ensure that all cash advances for local and foreign travels are liquidated within the prescribed period. COA Circular No. 97-002 February 10, 1997 (Rules and Regulations on the granting, utilization and liquidation of cash advances) provides that cash advances for official travels shall be liquidated as follows: “(xxx) within sixty (60) days after return to the Philippines in the case of foreign travel or within thirty (30) days after return to permanent official station in case of local travel.”

The same period is also prescribed in Section 22 Executive Order No. 77 — the latest legal basis for the grant of traveling allowances for government personnel.

[Source: Commission on Audit]

5. Additional cash advances were granted to officials and employees without liquidating previous cash advances.

What you can do: Refrain from granting additional cash advances without first liquidating the previous cash advance. Section 4.1.2 of COA Circular No. 97-002 dated February 10, 1997 provides that: “No additional cash advances 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 made.”

[Source: Commission on Audit]

6. The grant of cash advance and the liquidation thereof were not supported with proper and complete supporting documents.

What you can do: Ensure that the documentary requirements prescribed under COA Circular No. 2012-001 dated June 14, 2012 (Revised Documentary Requirements for Common Government Transactions) and other pertinent issuances concerning cash advances were properly complied with.

7. Granting of cash advances to personnel without the required fidelity bond.

What you can do: Refrain from granting cash advances to accountable officers without first securing them with Fidelity Bond, pursuant to Section 101.2 of PD 1445.

8. Cash advances for traveling allowances were granted without appropriations in violation of Section 4 of P.D. 1445.

What you can do: Ensure that the granting of cash advances shall be limited to those with available appropriations. Section 4.1 of PD 1445 provides that no money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority. In cases where the appropriations are no longer sufficient to cover any expenditure, an appropriation act/ordinance, shall first be passed and approved before payment of said expenditure be effected.

9. Contractual employees were given cash advances contrary to existing rules and regulations.

What you can do: Avoid granting cash advance to non-permanent employees to avoid unnecessary loss of government funds. Pursuant to existing rules and regulations, only permanently appointed officials and employees shall be granted cash advance. Take note that the employment of contractual employees solely depend on the renewal of their Contract of Service. Abrupt resignation or absence without official leave of these employees may result to permanently unliquidated cash advances.

[Source: Commission on Audit]

10. Deducting unsettled cash advances against the salary of employees concerned

What you can do: The practice of salary deduction from unsettled cash advances is contrary to the provisions of COA Circular No. 97-002, which requires prompt liquidation of cash advances. Avoid said practice and implement the appropriate process of liquidating cash advances.

[Source: Commission on Audit]