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Cash Advances LILIAN B. SALAN TEACHER II Balingasag Central School Balingasag , Misamis Oriental, Philippines

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Rationale for the Use of Cash Advance System It has been recognized as a facilitative tool in the financial operations of the government

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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 2 . All payments must be made by check.

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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 made there from. General Principles (Sec. 2, COA Circular No. 97-002)

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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. General Principles (Sec. 2, COA Circular No. 97-002)

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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.

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2. 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. Types of Cash Advance (Sec. 3, COA Circular No. 97-002)

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Purposes of Regular Cash Advances Salaries and wages Commutable allowances Honoraria and other similar payments to officials and employees

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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 Regular Cash Advances

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Purposes of Special Cash Advances Current 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 expenses

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2. Travel expenditures including transportation fare, travel allowance, hotel room/lodging expenses and other expenses incurred by officials and employees in connection with official travel. Purposes of Special Cash Advances

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General Guidelines in Granting and Utilization of Cash Advances

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General Guidelines (COA Circular 97-002, RMO Circular 2009-002) 1. Specific legal purpose 2. No additional cash advance unless previous CA is liquidated 3. Immediate liquidation/reporting after purpose is served

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4. DOs should be bonded and must be permanent employees only 5. CA to elected officials only for official travelling expenses General Guidelines (COA Circular 97-002, RMO Circular 2009-002)

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6. Duly appointed or designated DOs may perform disbursing functions 7. No transfer of CA from one AO to another General Guidelines (COA Circular 97-002, RMO Circular 2009-002)

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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 undertaking General Guidelines (COA Circular 97-002, RMO Circular 2009-002)

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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 years General Guidelines (COA Circular 97-002, RMO Circular 2009-002)

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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)

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14. All CAs should be liquidated at the end of the year except petty cash fund General Guidelines (COA Circular 97-002, RMO Circular 2009-002)

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Cash Advance for Official Travel (Local and Foreign) Governed by COA Circular No. 96-004 dated April 19, 1996 Both official local and foreign travels shall be treated and accounted for as cash advance Shall not require bonding of the travelling official or employee

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General Guidelines Miscellaneous 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 COA No splitting of transactions

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General Guidelines Field Current Operating Expenses (Sec. 4.4, COA No. 97-002) Used to pay salaries/wages of field employees and miscellaneous operating expenses No limits to payment for each transaction

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All payments approved by head of field office General Guidelines Field Current Operating Expenses (Sec. 4.4, COA No. 97-002) CA limited to two month requirement Report of disbursements w/in 5 days after each month by AO

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Report of disbursements w/in 5 days after each month by AO 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 activity

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Liquidation of Cash Advances

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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. 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 .

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Time to Liquidate (5.1.1 COA Circular 97-002) OFFICIAL 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)

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Local Travel, what to do when…. A. Trip is cancelled – REFUND in full. B. Trip is cut short or terminated in advance of the itinerary – REFUND excess payment, IMMEDIATELY upon cancellation or termination of the trip.

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Foreign Travel Governed 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)

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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.

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Receipts, Sales Invoices Liquidation of CA (Sec. 5, COA Circular No. 97-002) Cert. of Acceptance/Inspection Trip Ticket (if for fuel) Other pertinent docs required by nature of expense Approved Requisition & Issue Voucher w/ Cert. of Emergency Purchase, if necessary Report of Disbursements w/ support docs

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Current Operating Expenditure Liquidation of CA (Sec. 5, COA Circular No. 97-002) Same as the previous Canvass of at least 3 Suppliers (except when purchase made while on official travel)

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Official Travel Liquidation of CA (Sec. 5, COA Circular No. 97-002) COA Circular No. 96-004 Certificate of Travel Completed Plane, boat, bus tickets Hotel room/ lodging bills Certificate of Appearance or Accomplishment Report

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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 regulations”

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Responsibility 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;

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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)

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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)

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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. Responsibility of the Accountant (only in cases of travel cash advance pursuant to Circular 96-004)

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Duties & Responsibilities of the COA Auditor 1. Upon 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 ;

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2. 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 Auditor

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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 Auditor

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A. 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 Auditor

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B . 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; Duties & Responsibilities of the COA Auditor 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)

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Actions against AO for Failure to Liquidate on Time 1. Valid cause for the WITHHOLDING of salary; (97-002, 5.1.3 last par) 2. No additional cash advance 3. May be liable criminally, administratively and/or civilly

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PD 1445 GOVERNMENT AUDITING CODE OF THE PHILIPPINES CHAPTER 5 ACCOUNTABILITY 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.

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2. 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.” PD 1445 GOVERNMENT AUDITING CODE OF THE PHILIPPINES

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Are you an Accountable Officer? Art. 217, RPC (Malversation of Public Funds) is one who is accountable for public funds or property Sec. 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 conformity

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What is therefore CONTROLLING is…… the 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)

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Criminal Charges P.D. 1445 “Section 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.”

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Criminal Charges under the Revised Penal Code Art. 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 rendered 1. Demand for accounting not necessary 2. Misappropriation not necessary; rationale is to compel public officers entrusted with government funds to render regular and timely account Penalty - 6 months 1 day to 2 years 4 months

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Criminal Charges under Revised Penal Code - 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 funds Presumption from failure to have duly forthcoming public funds upon demand

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Demand only as a matter of procedure, evidentiary BUT not necessary Criminal Charges under Revised Penal Code Penalty - 2 years 4 months to Reclusion Perpetua

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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

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Dishonesty Administrative Charges “…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, 1958

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Grave Misconduct Administrative Charges “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 551

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COA CLEARANCE NOT GROUND FOR DISMISSAL 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, 1996

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SOURCES TAKEN FROM THE PRESENTATION OF ATTY. RELINE M. GINES-JABALDE Resident Ombudsman - DepED

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THANK YOU