1

Updates on Accounting

and Auditing Reforms

LOURDES M. CASTILLO Assistant Commissioner

Government Accountancy Sector

Commission on Audit

Delivered during the 35th ANC of the

Government Association of Certified Public Accountants

Crown Regency Suites and Residences

April 17-20, 2013

2

Topical Outline

2. COA Circular No. 2013-002 dated January 30, 2013

“Adoption of the Revised Chart of Accounts for National Government Agencies”

1. COA-DBM Joint Circular No. 2013-1

dated March 15, 2013

“Revised Guidelines on the Submission of Quarterly Accountability Reports on Appropriations, Allotments, Obligations and Disbursements”

3

3. COA Resolution No. 2013-007 dtd. January 29, 2013

“Adoption of the Philippine Public Sector Standards for Auditing”

4. COA Circular No. 2012-005 dtd. December 07, 2012

“Revocation of COA Circular No. 2009-008 dated November 9, 2009 and Prescribing the Use of Punong Barangay’s Certification (PBC) and COA Auditor’s Advice (CCA)”

5. COA Circular No. 2012-004 dtd. November 28, 2012

“Demand for the Immediate Liquidation and Settlement of All Cash Advances Outstanding as of December 31, 2011”

4

Revised Guidelines on the Submission

of Quarterly Accountability Reports on

Appropriations, Allotments, Obligations

and Disbursements

5

Legal Basis

COA-DBM Joint Circular No. 2013-1

dated March 15, 2013

6

Rationale

• The DBM and COA, as oversight agencies on Financial

Management require agencies to submit on a regular

basis, Budget and Financial Accountability reports.

• The DBM uses the budget and accountability reports in

monitoring the agencies’ performance and providing the

President and other fiscal agencies, the necessary

information for policy making.

• The COA uses the data in the Financial Statements to

prepare the Annual Financial Report of Allotments,

Obligations and Disbursements being submitted to the

President and Congress, pursuant to R.A. 7226 dtd.

March 12, 1992.

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Purpose

1. To prescribe harmonized formats of the

financial accountability reports (FAR) on

appropriations, allotments, obligations,

disbursement authorities, disbursements and

balances; and

2. To prescribe guidelines on the preparation and

timely submissions of FARs by the agencies to

the DBM and the COA after the end of each

quarter.

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Coverage

The Circular covers all departments, bureaus,

offices and agencies of the national government

and government-owned and/or controlled

corporations maintaining Special Accounts in

the General Fund.

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Definition of Terms

1. Appropriation – an authorization made by law or other

legislative enactment, directing the payment of goods and

services out of government funds under specified

conditions or for specified purposes.

2. Allotment – a specific authority in the form of Agency

Budget Matrix (ABM) or Special Allotment Release Order

(SARO) issued by DBM to identified agencies to incur

obligations not exceeding a given amount during a

specified period for the purpose indicated therein.

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3. Sub-Allotment – a specific authority in the form of Sub-

Allotment Release Order (Sub-ARO) issued by the Central Office

(CO)/Regional Office (RO) of a department/office/agency to its

ROs/lower operating units (i.e. field office, district office or

provincial office ) which allow them to incur obligations within a

specified amount during a specified period. The Sub-ARO should

not exceed the allotment releases to the CO.

4. Obligation – a commitment by the government agency arising

from an act of a duly authorized official which binds the

government to the immediate or eventual payment of a sum of

money. The agency is authorized to incur obligations only in the

performance of activities which are in pursuit of its functions and

programs authorized in the appropriation acts/laws within the

limit of the allotment released by the DBM.

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7. Commitment – an obligation incurred by

government agencies for which items have not yet

been delivered and services not yet rendered. This is

also called “Obligations Not Yet Due and

Demandable”.

8. Unpaid Obligation – this is the balance of an

accounts payable or commitment.

9. Operating Unit – a “national government agency” or

a unit thereof receiving direct release of a Notice of

Cash Allocation (NCA) from the DBM.

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Guidelines

A. The head of each operating unit (OU), office or agency shall be

responsible for the timely submission, either physically or

electronically, the following FARs to the DBM and COA (Audit

Team Leaders and the Government Accountancy Sector (GAS)

not later than the 30th day after the end of each quarter:

1. Statement of Appropriations, Allotments, Obligations

Disbursements and Balances (SAAODB)

3. Detailed Statement of Current Year’s Obligations,

Disbursements and Unpaid Obligations (SODUO-CY)

2. List of Agency Budget Matrix (ABM) or SAROs and

Sub-AROs

4. Summary of Prior Year’s Obligations, Disbursements

and Unpaid Obligations (SODUO-PY)

5. Summary of Report of Disbursements

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B. The FARs prescribed in the Circular shall replace the following

DBM and COA reports as follows:

Statement of Allotments, Obligations and Balances (SAOB) –

BAR No. 4

1. DBM

Financial Report of Operations (BAR No. 2) Monthly Report of Disbursements – Bar No. 3

2. COA

SAOB Detailed Breakdown of Obligations

Detailed Breakdown of Disbursements

Regional Breakdown of Expenses

Statement of Cumulative Allotments, Obligations Incurred

and Unobligated Balances

Detailed Statement of Cumulative Expenditures/Obligations

Incurred, Obligations Liquidated/Disbursements and Unliquidated

Obligations

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Responsibilities

Budget Officer/Head of Budget Unit – for the portion of the

report pertaining to appropriations, allotments, obligations,

unobligated allotments and unreleased appropriations

1. The FARs shall be prepared and certified correct by the

following officials:

Chief Accountant/Head of Accounting Unit – for the portion

of the report pertaining to appropriations, allotments,

obligations, unobligated allotments and unreleased

appropriationsChief Accountant/Head of Accounting Unit –

for the portion of the report pertaining t disbursement and

unpaid obligations

The FARs shall be signed by the Agency Head as the

approving official. He/she shall ensure the timely submission

of the accurate and reliable FARs.

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Due Dates of Submission to COA and DBM

All Departments/Agencies – not later than the 30th

day after the end of each quarter

The Lower Operating Units – within (5) days after

the end of each quarter for consolidation

The Agency Regional Offices – to submit the

consolidated report to COA (GAS) and DBM CO

within (10) days after the end of each quarter

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Penalty Clause

COA and DBM shall regularly monitor agency/OU

compliance with the reporting requirements prescribed

in the Circular.

For failure to submit the FARs, the “no report, no

release” policy of the DBM shall be enforced.

Administrative sanctions on the automatic suspension

of the payment of salaries of the officials concerned.

Violation for three (3) times without justifiable cause

during the year, shall constitute a ground for the filing

of an administrative/disciplinary action against the

officials for inefficiency and incompetence.

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COA REVISED

CHART OF ACCOUNTS

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Legal Basis

COA Circular No. 2013-002 dated

January 30, 2013

Effective Date: January 01, 2014

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To provide new accounts for the adoption of

the Philippine Public Sector Accounting

Standards (harmonized with IPSAS)

Objectives

To provide uniform accounts for national

government accounting and budget systems

to facilitate the preparation of harmonized

financial and budgetary accountability reports

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Objectives

To expand the account code from three (3)

digits in the NGAS Chart of Accounts to eight

(8) digits, to allow expansion or creation of

new accounts as may be necessary to

implement new standards or policies and

provide up to four levels of consolidation

depending on the users’ information needs.

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Major Changes

a. Coverage is limited only to all

national government agencies and

GOCCs receiving funds constituted as

SAGF from the National Government

b. Expanded account code structure from

three (3) digits to eight (8) digits

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Account Code Structure

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Codes are assigned to account groups to facilitate location of accounts in the general and subsidiary ledgers, to provide systematic arrangement and classification of accounts and facilitate preparation of the consolidated financial reports as follows:

Code Account Groups

1 Assets

2 Liabilities

3 Equity

4 Income

5 Expenses

Account Groups

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Asset without Contra Account Ex. Cash, Collecting Officer

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Asset with Contra Account

Asset with contra account

1 03 1 01 1

Asset

Receivables

Loans and Receivable

Accounts

Accounts Receivable

Allowance for Impairment -

Accounts Receivable

1 03 01 01 0

Asset

Receivables

Loans and Receivable

Accounts

Accounts Receivable

General Ledger

Contra-Account

Ex. Accounts Receivable

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Asset with contra account

1 03 1 01 1

Asset

Receivables

Loans and Receivable

Accounts

Accounts Receivable

Allowance for Impairment -

Accounts Receivable

1 03 01 01 1

Ex. Allowance for Impairment –

Accounts Receivable

Asset with Contra Account

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Major Changes

c. New accounts were provided for the

implementation of the Philippine

Public Sector Accounting Standards

(PPSAS)

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New Accounts

1 02 01 010 Financial Assets Held for Trading in compliance with IPSAS 28-30

1 02 02 011 Allowance for Impairment -

Investments in Treasury Bills -

Local

in compliance with IPSAS 29 (Financial Instruments -

Recognition and Measurement)

1 03 02 020 Finance Lease Receivable in compliance with IPSAS 13 (Leases)

1 03 02 021 Allowance for Impairment -

Finance Lease Receivables

in compliance with IPSAS 13 (Leases)

1 05 01 020 Investment Property, Buildings in compliance with IPSAS 16 (Investment Property)

1 05 01 021 Accumulated Depreciation -

Investment Property, Buildings

in compliance with IPSAS 16 (Investment Property)

1 05 01 022 Accumulated Impairment Losses -

Investment Property, Buildings

in compliance with IPSAS 26 (Impairment of Cash

Generating Assets)

Example:

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New Accounts

1 01 04 010 Cash-Treasury/Agency

Deposit, Regular

1 01 04 020 Cash - Treasury/Agency

Deposit, Special Account

1 01 04 030 Cash - Treasury/Agency

Deposit, Trust

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Major Changes

d. Some accounts were deleted since

these accounts are for use by local

government units or government-

owned and/or controlled

corporations, while other accounts

are no longer applicable to

national government agencies.

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Example:

Deleted Accounts

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Major Changes

e. Some accounts were either

expanded or compressed. For instance,

expense accounts for repairs and

maintenance and depreciation of

property, plant and equipment which

were previously presented per asset

account were compressed based on the

major account classification

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811 Repairs and Maintenance - 5 02 13 040 Repairs and Office Buildings Maintenance- 812 Repairs and Maintenance - Buildings and Other School Buildings Structures 813 Repairs and Maintenance - Hospitals and Health Centers 814 Repairs and Maintenance - Market and Slaughterhouses 815 Repairs and Maintenance - Other Structures

Compressed Accounts

Example:

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Compressed Accounts

Example:

811 Depreciation-Office 5 05 01 040 Depreciation - Buildings Buildings and 812 Depreciation-School Other Structures Buildings 813 Depreciation-Hospitals and Health Centers 814 Depreciation-Market and Slaughterhouses 815 Depreciation-Other Structures

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Subsidiary Ledgers:

Repairs and Maintenance –

Buildings and Other Structures

01 - Buildings

02 - School Buildings

03 - Hospitals and Health Centers

04 - Markets

05 - Slaughterhouses

06 - Hostels and Dormitories

99 - Other Structures

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Subsidiary Ledgers:

Depreciation - Buildings and Other

Structures

01 - Buildings

02 - School Buildings

03 - Hospitals and Health Centers

04 - Markets

05 - Slaughterhouses

06 - Hostels and Dormitories

99 - Other Structures

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716 Subsistence, Laundry 5 01 02 050 Subsistence

and Quarters Allowance

Allowance 5 01 02 060 Laundry

Allowance

5 01 02 070 Quarters

Allowance

Expanded Account

Example:

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Cash - National 1 01 04 040 Cash-Modified Disbursement

Treasury, System (MDS), Regular

Modified 1 01 04 050 Cash-Modified Disbursement

Disbursement System (MDS), Special

System (MDS) Account

1 01 04 060 Cash-Modified Disbursement

System (MDS), Trust

Expanded Account

Example:

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The Revised Chart of Accounts

As Object Code in the

Unified Account Code Structure

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Purposes of Object Classification

and Coding

To capture all financial transactions such as

goods or services acquired, payments made,

revenue sources and the causes of increases or

decreases in assets and liabilities.

To enable the classification and coding of

transactions for reporting of impact of government

revenues and expenditures on the economy as well

as internal departmental analysis and decision-

making by oversight agencies.

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The object coding in the information system

provides a repository of government-wide

information which can be used by oversight

agencies without requiring departments and

agencies to respond to individual requests.

Provides a basis for coding the object

classification which uses accrual accounting

requiring transactions to be recorded in the period

when they occur and not only when cash or

equivalents are received or paid.

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The Unified Account

Code Structure

FUNDING SOURCE 6Digits

ORGANIZATION 12 digits

LOCATION 9 digits

MFO/PROGRAM, ACTIVITY and PROJECT 9 digits

OBJECT CODE 10 digits

Financing Source 1 digit

Authorization 2 digits

Fund Category 3 digits

Department 2 digits

Agency 3 digits

Operating Unit 7 digits

Region 2 digits

Province 2 digits

City, Municipality 2 digits

Barangay 3 digits

MFO/PAP Code 9 digits

COACoA*Object8 digits

Sub-Object 2 digits

Required Required Required Required Required Optional Optional Unique for each Department/Agency

Uniform across Government

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The Unified Account Code

Structure (UACS)

Jointly developed by DBM, DOF and COA

It is a government-wide coding framework to

provide a harmonized budgetary and accounting

code classification that will facilitate reporting

of actual revenues and collections and

expenditures compared with programmed

revenues and expenditures, starting fiscal year

2014

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The UACS is to be adopted in identifying,

aggregating, budgeting, accounting, auditing

and reporting the financial transactions of

the government.

Strengthen financial controls and

accountability.

Enhance the quality and timeliness of

financial data for the generation of the

required reports and analysis of the same.

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Key Elements of the UACS

Funding Source Codes: Six (6) digit code

to reflect the Financing Source,

Authorization and Funding Category

Organization Codes: Twelve (12) digit code

to reflect the Department, Agency and Sub-

Agency or Operating Unit/Revenue

Collecting Unit

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Location Codes: Nine (9) digit code to reflect the

Region/Province/Municipality/Barangay following

the Philippine Standard Geographic Code

prescribed by the National Statistical Coordination

Board

Major Final Output (MFO)/Program, Activity and

Project (PAP) codes: Nine (9) digit code to reflect

the MFO/PAP codes

Object codes: Assets, Liabilities, Equity, Revenues,

and Expenses following the COA Chart of

Accounts by object and sub-objects provided by

BTr, BIR, DOF, BOC and DBM

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Object Code Structure in UACS

OBJECT CODE

10 digits

COA

Revised Chart of Accounts

8 digits

DBM

Sub-Object Code

2 digits

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Account Code Structure in UACS

FS Elements:

1 Assets

2 Liabilities

3 Equity

4 Income

5 Expenses

Account Code Structure

8 digits

FS Element Major Summary GL Account

Account Account

1 digit 2 digits 2 digits 3 digits

Generally, the account code structure below

shall be followed.

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Sub-Object Code If disaggregation is necessary, sub object codes of two digits

shall be used to show the breakdown of selected assets, income

and expenses, otherwise, two zeros will be used. The

responsibility for disaggregation and sub-coding of the

following accounts are as shown below.

Accounts Agency Responsible for

Disaggregation

Cash in Bank BTr

Taxes BIR

Import Duties BOC

Non-Tax Revenues DOF/BTr

Personnel Services DBM

MOOE DBM

Capital Outlays DBM

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COA Resolution No. 2013-007

dated January 29, 2013

“Adoption of the Philippine

Public Sector Standards for

Auditing”

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Twenty-four (24) PPSSAs already

adopted

Eleven (11) PPSSAs are being finalized for submission to the Commission Proper for approval

Eighteen (18) ISAs / ISSAs are ongoing evaluation for adoption as PPSSAs

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PPSSA Book 1

PPSSA 20 - Principles of Transparency and

Accountability

PPSSA 30 - Code of Ethics

PPSSA 40 - Quality Control for the Commission on

Audit

PPSSA Book II – Volume 1

PPSSA 100 - Basic Principles in Government Auditing

PPSSA 200 - General Standards in Government Auditing

and Standards with Ethical Significance

PPSA 300 - Field Standards in Government Auditing

PPSSA 400 - Reporting Standards in Government

Auditing

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PPSSA Book II – Volume 3A – Part 1

PPSSA 1200 - Overall Objectives of the Independent

Auditor and the Conduct of an Audit in

Accordance with International

Standards on Auditing

PPSSA 1210 - Agreeing the Terms of Audit

Engagements

PPSSA 1220 - Quality Control for an Audit of

Financial Statements

PPSSA 1230 - Audit Documentation

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PPSSA Book II – Volume 3A – Part 2

PPSSA 1240 - The Auditor’s Responsibilities

Relating to Fraud in an Audit of

Financial Statements

PPSSA 1250 - Consideration of Laws and

Regulations in an Audit of Financial

Statements

PPSSA 1260 - Communication with Those Charged

with Governance

PPSSA 1265 - Communicating Deficiencies in

Internal Control to Those Charged

with Governance and Management

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PPSSA Book II – Volume 3B – Part 1

PPSSA 1300 - Planning an Audit of Financial Statements

PPSSA 1315 - Identifying and Assessing the Risks of

Material Misstatement Through

Understanding the Entity and Its

Environment

PPSSA 1320 - Materiality in Planning and Performing an

Audit

PPSSA 1330 - The Auditor’s Responses to Assessed Risks

PPSSA 1402 - Audit Considerations Relating to an Entity

Using a Service Organization

PPSSA 1450 - Evaluation of Misstatements Identified

During the Audit

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PPSSA Book II – Volume 3D

PPSSA 1700 - Forming an Opinion and Reporting

on Financial Statements

PPSSA 1705 - Modifications to the Opinion in the

Independent Auditor’s Report

PPSSA 1706 - Emphasis on Matter Paragraphs and

Other Matter Paragraphs in the

Independent Auditor’s Report

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Twenty-Three (23) PPSAS are prepared and are ready for focus group discussions prior to adoption

Updates on Accounting Reforms

Six (6) PPSAs remaining are 45% completed

Revision of NGAS Manual is 83% completed

Prescribed the necessary accounting guidelines and

procedures on the reversion of dormant accounts and

unnecessary Special and Trust Funds to the General

Fund pursuant to the Permanent Committee Joint

Circular No. 4-0012 dated September 11, 2012

implementing Executive Order No. 431 dated May 30,

2005

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COA Circular No. 2012-004 dated

November 28, 2012

“Demand for the Immediate

Liquidation and Settlement of All

Cash Advances Outstanding as of

December 31, 2011”

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Rationale As a general rule, cash advances must be liquidated

within the prescribed periods depending on the nature

and purpose of the cash advance:

– Salaries and wages

– Petty and field operating expenses

– Local travel and foreign travel

– Honoraria and similar payments to officials and employees

– Expenses for special projects/activities such as anniversary

celebration

– Cultural and athletic activities

The above cash advances must be liquidated within

twenty (20) days from the accomplishment of the

purpose.

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Settlement and Liquidation

of Cash Advance

A cash advance is settled and liquidated either by:

1. Returning the money advanced if unspent,

2. Or by the presentation of regularly accomplished

vouchers, giving satisfactorily detail of the items

thereon paid which must be in accordance with

the purpose for which the cash advance was

granted, and further supported by proper receipts

and other evidence of payment, subject to the

result of the post-audit thereof by the auditor

concerned.

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Primary responsibility of Heads

of Agencies

Section 2 of Presidential Decree (P.D.) No.

1445, the Government Accounting Code of

the Philippines, places the responsibility to

faithfully take care that government funds

and property be safeguarded from wastage

directly with and primarily on the chief or

head of the government agency concerned

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Legal presumption against

non-liquidation of cash advance

Article 217 of the Revised Penal Code

states in unequivocal terms that:

“The failure of a public officer to have duly

forthcoming any public funds or property

with which he is chargeable, upon demand

by any duly authorized officer, shall be prima

facie evidence that he has put such missing

funds or property to personal use.”

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Final demand to settle

unliquidated cash advance

Final notice and demand is hereby made to all

concerned to settle and liquidate all outstanding

cash advances as of December 31, 2011, on or

before January 31, 2013. Provided, however, that

those who have been issued by the Commission on

Audit notice and demand, prior to the issuance of

this Circular, to settle and liquidate their cash

advances within a specified period, shall do so

within the period specified in the said notice.

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This Circular shall serve as the

demand required under appropriate

law, rules and regulations to settle the

accountable officer’s unliquidated

cash advance as well as all those who

are already separated from the service

or have transferred to other agency.

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Duties of Agency officials:

a. On or before December 15, 2012, all heads of

government agencies shall disseminate in writing this

Circular to all Accountable officials and employees

within their respective agencies and serve a written

notice to and demand settlement of the outstanding

cash advances as of December 31, 2011.

b. The Chief Accountant shall, within the same period,

furnish the head of agency and the head of the

auditing unit thereat a list of accountable officers

with unliquidated and outstanding cash advances.

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Duties of the Commission on Audit: Ensure that the outstanding cash advances are

liquidated within the specified periods

Shall Evaluate the cash advances of Accountable Officers to determine compliance with pertinent COA Rules and Regulations and to report violations thereof

Shall report on or before February 28, 2013 to the agency head and to the Director, FAIO, compliance with this Circular including the ageing of the cash advances showing the purpose and other information

Submit to the respective COA Directors the vouchers

and all supporting documents relative to the grant of the

cash advance, copy furnished the COA Chairperson

67

COA Circular No. 2012-005

dated December 7, 2013

“Revocation of COA Circular 2009-008

dated Nov. 9, 2009 and Prescribing the

Use of Punong Barangay’s Certification

(PBC) and COA Auditor’s Advice

(CAA)”

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Salient Features

The responsibility to initiate, process, approve

financial transactions and issue Punong

Barangay’s Certification (PBC) under oath rests

with the Barangay officials.

The DVs are duly certified and approved,

The PBC to be issued only under oath after the PB has duly examined and been satisfied that the:

The expenditure or disbursement is

proper and valid, and

The supporting documents are complete.

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Salient Features

The PB shall be primarily accountable for all losses arising from issuance of the PBC.

The Authorized Government Depository Bank (AGDB) shall encash the checks issued if the corresponding PBC is issued.

Checks encashed without the corresponding PBC or with falsified PBC shall be the responsibility of the AGDB.

The PBC shall be numbered sequentially by year and by barangay and in (4) copies.

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Salient Features

The PBC (4th) copy shall be submitted to the accountant for recording within (10) days after end of month and subsequently submitted to the COA auditor for audit.

Non-submission of PBCs within (15) days after demand by the Auditor shall be a ground for preparation of the COA Auditor’s Advice (CAA) to the AGDB to hold further payments of checks issued by the said barangay.

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COA Circular No. 2012-003

dated October 29, 2012

“Updated Guidelines for the

Prevention of Disallowance of

Irregular, Unnecessary, Excessive

and Unconscionable Expenses as

enumerated under COA Circular No.

85-55A dated Sept. 8, 1985”

72

Legal Basis

Section 2(2), Article IX-D of the

1987 Constitution

Section 33 of P.D. 1445

73

1. “Irregular” Expenditures

Expenditure incurred without adhering to

established rules, regulations, procedural

guidelines, policies, principles or practices

that have gained recognition in laws

Definitions

Transactions conducted in a manner that

deviates or departs from, or which does

not comply with standards set

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2. “Unnecessary” Expenditures Expenditures which could not pass the test of

prudence or the diligence of a good father of a family,

thereby denoting non-responsiveness to the exigencies

of the service

Not supportive of the implementation of the

objectives and mission of the agency relative to the

nature of its operation

Not dictated by the demands of good government, and

those, the utility of which cannot be ascertained at a

specific time

Not essential or that which can be dispensed with

without loss or damage to property

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3. “Excessive” Expenditures

Signifies unreasonable expense or expense

incurred at an immoderate quantity and

exorbitant price

Includes expenses which exceed what is

usual or proper, as well as expenses which

are unreasonably high and beyond just

measure or amount

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4. “Extravagant” Expenditures

Signifies those incurred without restraint,

judiciousness and economy

Exceeds the bounds of propriety

Immoderate, prodigal, lavish, luxurious,

grossly excessive, and injudicious

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5. “Unconscionable” Expenditures

Pertains to expenditures which are

unreasonable and immoderate, and

which no man in his right sense would

make, nor a fair and honest man would

accept as reasonable, and those incurred

in violation of ethical and moral

standards

78

Outline Fundamental Principles – PD 1445

General Requirements for all Types of Disbursements

Specific Requirements for Each Type of Disbursement

– Cash Advances

– Fund Transfers to NGOs/Pos

– Fund Transfers to Implementing Agencies/From Trust Fund to Gen Fund for Unspent Balance

– Salary

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– Allowances, Honoraria and Other Forms of Compensations

– Other Expenditures

– Extraordinary and Miscellaneous Expenses

– Prisoner’s Subsistence Allowance

– Procurement

– Cultural and Athletic Activities

– Human Resource Development and Training Program

– Financial Expenses

– Road Right-of-Way (ROW)/Real Property

80

Fundamental Principles,

Sec. 4, P.D. 1445 No money shall be paid except in pursuance of an

appropriation law or other specific statutory authority

Use solely for public purpose

Trust funds only for the specific intended purpose

Fiscal responsibility shared by all those exercising authority over finance, transactions and operations

Disbursements or dispositions should bear approval of proper officials

Claims should be supported with complete documentation

Faithful adherence to all pertinent laws and regulations

Observance of GAAP and practices as well as sound management and fiscal administration, provided they do not contravene with existing laws and regulations

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General Requirements for All Types

of Disbursements

Certification of Availability of Fund by Chief Accountant

Lawful and sufficient allotment duly obligated as certified, except for GOCCs and GFIs

Legality of transaction and conformity with laws, rules and regulations

Approval of expenditure by Head of Office or authorized representative

Sufficient and relevant documents to establish validity of claim

82

1.0 Cash Advances General Guidelines – COA Circulars 97-002, 2009-002,

Sec. 89 of PD 1445, pertinent GAA provisions

Specific Guidelines and Documents Required

Types of Cash Advances (Payroll Fund, PCF, Field/Activity COE, TA (local and foreign)

Granting of Cash Advance

–General Guidelines

–Documents Required Common to All CAs except for travel

–Additional Documents per type of Cash Advance

Liquidation of Cash Advances

83

2.0 Fund Transfers to NGOs/POs

General Guidelines – pertinent provision of the GAA for the year, Sec. 4.5.6 COA Circular 2007-001 and GPPB Res. 12-2007

Specific Guidelines and Documentary Requirements

– Release of Funds

– Implementation and Liquidation of Funds Released

– Staggered Release of Funds to NGO/PO

84

3.0 Fund Transfers

General Guidelines – COA Cirular 94-013, COA Memo 2010-014

Specific Guidelines and Documents Required

– Transfer to Implementing Agencies

– From Trust Fund to General Fund for Unspent/Excess Amount

Liquidation by Source Agency

Transfer Implementation and Liquidation by

Implementing Agency

85