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THE ACCOUNTING FOR DISBURSEMENTS

Disbursements refer to the settlement of government payables/obligations by cash or by check


(COA Cir.No.2001-005, Sec.37).
The following are the typical transactions for which disbursements are made:
1. Personal Services refer to appropriations for the payment of salaries, wages and
other compensation of permanent, temporary, contractual, and casual employees of the
local government unit (R.A.7160,Sec.306)
2. Maintenance and Other Operating Expenses
3. Capital Outlay refers to appropriations for the purchase of goods and services, the
benefits of which extend beyond the fiscal year and which add to the assets of the local
government unit concerned, including investments in public utilities such as public
markets and slaughterhouses (R.A.7160,Sec.306).
4. Financial Expenses
A disbursement must be duly supported by a Disbursement Voucher (DV) or payrolls. It can be
paid either through a check (which is the more common and prescribed) or in cash. Along with
the DV is an attached Allotment and Obligation Slip (ALOBS).
CERTIFICATIONS AND APPROVALS OF DISBURSEMENT VOUCHERS (DV)
The Local Budget Officer must first certify that an appropriation for the disbursement
exists, otherwise no money shall be disbursed. The Local Treasurer, on the other hand, must
certify that there is fund availability for the purpose of the disbursement. The Local Accountant,
on this process, works as he/she is the one who obligated the appropriation to the Budget Office,
prepares the DV and ALOBS and ensure that there is compliance with the required
documentation regarding the other attachments.
While in the case of disbursements from the Trust Fund, it shall be sufficient that the
local accountant certifies to the existence of the trust liability and the local treasurer, to the
availability of funds for the purpose.
Vouchers and payrolls shall be certified to and approved by the head of the department
or office who has administrative control of the fund concerned as to validity, propriety, and
legality of the claim involved. In case of temporary absence or incapacity of the department
head or chief of office, the officer next-in-rank shall automatically perform his function and shall
be fully responsible therefor.
Sec. 39. Approval of vouchers. - Approval of the disbursement voucher by the local chief
executive himself shall be required whenever local funds are disbursed, except for regularly
recurring administrative expenses such as payrolls for regular or permanent employees,
expenses for light, water telephone and telegraph services, remittances to government creditor
agencies such as GSIS, SSS, LBP, DBP, National Printing Office, Procurement Service of the
DBM and others where the authority to approve may be delegated. However, disbursement

vouchers for expenditures appropriated for the operation of the sanggunian shall be approved
by the provincial vice governor, the city vice mayor or the municipal vice mayor, as the case
may be.
Sec. 40. Approval of Special Education Fund disbursements. - In the case of the Special
Education Fund, disbursements shall be approved by the chief executive concerned as cochairman of the local school board. The division/city superintendent of schools or the district
supervisor concerned, as the case may be, shall certify and approve vouchers or payrolls as to
validity, propriety, and legality of the claim involved.
Sec. 41. Approval of Trust Fund disbursements. - In the case of the Trust Funds, disbursements
shall be approved by the chief executive concerned, and certified and approved as to validity,
propriety, and legality of the claim involved by the department/office head concerned.

Sec. 42. Checks drawn on disbursement vouchers. - Checks in settlement of obligations


shall be drawn only on duly approved disbursement vouchers.
Sec. 43. Officials authorized to draw and sign checks. - Checks shall be drawn by the
local treasurer and countersigned by the local administrator. In case of temporary absence or
incapacity of the aforesaid officials these duties shall devolve upon their immediate assistance.
In the case of municipalities where no administrator has been appointed, checks shall be
countersigned by the municipal mayor. In the case, however, of expenditures appropriated for
the operation of the sanggunian, checks drawn thereon shall be countersigned by the
provincial vice governor, the city vice mayor, or the municipal vice mayor, as the case may be.
Sec. 44. Report on checks issued.- The treasurer/cashier shall prepare weekly the Report
of Checks Issued, Prov. Form No. 226 (A), (Annex F), in three copies and submit the original
and duplicate of the same to the accountant with the vouchers/payrolls and supporting
documents.
Sec. 45. Cash payments on disbursement vouchers. - Cash payments shall be made only
on duly approved payrolls/disbursement vouchers/liquidation vouchers out of regular cash
advances or special cash advances.
Sec. 46. Regular cash advances. - Regular cash advances are those granted to cashiers,
disbursing officers, paymasters, and/or property/supply officers separately for any of the
following purposes:
a.
b.

Salaries and wages;


Commutable allowances;

c.
d.

Honoraria and other similar payments to officials and employees; and


Petty operating expenses
Sec. 47. Special cash advances. - Special cash advances are those granted on the explicit
authority of the local chief executive only to duly designated disbursing officers or employees
for other legally authorized purposes such as:

a.
b.

Confidential expenses; and/or


Expenditures for activities of the agency undertaken in the field when it is impractical to pay by
check.
Sec. 48. Rules on grant, use, and liquidation of cash advances. - In the granting,
utilization, and liquidation of cash advances the following shall be observed:

(a)

Only permanently appointed officials and employees shall be granted cash advances.

(b)

Only duly appointed or designated disbursing officers may perform disbursing functions.
Officers and employees who are given cash advances for foreign travel need not be designated
as disbursing officers.

(c)

Only one disbursing officer shall be assigned/designated for a specific legal purpose.
Additional disbursing officers may be assigned/designated for the same purpose only when
fully justified by the local chief executive.

(d)

Transfer of cash advance from one accountable officer to another shall not be allowed.

(e)

The cash advance shall be used solely for the specific legal purpose for which it was granted.
Under no circumstance shall it be used for encashment of checks or for liquidation of a previous
cash advance.

(f)

The accountant shall obligate all cash advances granted. Cash advances for a particular year
shall not be used to pay expenses of other years.

(g)

The cash advance for salary payments shall be equal to the net amount of the payroll for a
pay period.

(h)

The cash advance for petty operating expenses shall be sufficient for the recurring expenses of
the agency for one month. The accountable officer may request replenishment of the cash
advance when the disbursements reach at least 75%, or as needed, by submitting a
replenishment voucher with all supporting documents duly summarized in a report of
disbursements.

(i)

The cash advance for petty operating expenses shall not be used for payment of regular
expenses, such as rentals, subscriptions, light and water and the like.

(j)

Payments out of the cash advance shall be allowed only for amounts not exceeding P10,000.00
for each transaction, except when a higher amount is allowed by law and/or specific authority
by the Commission on Audit. Splitting of transactions to avoid exceeding the ceiling shall not
be allowed.

(k)

The cash advances shall be liquidated as follows:

(l)

Salaries, wages, etc. - within 5 days after each 15 days/end of the month pay period.
Petty operating expenses - within 20 days after the end of the year; subject to
replenishment during the year.
Foreign Travel - within 60 days after return to the Philippines.
The accountable officer shall prepare the Report of Disbursements. Gen. Form No. _____,
(Annex G) in three (3) copies and submit the original and duplicate of the same with the
vouchers/payrolls and supporting documents to the accountant. For payments based on
receipts and invoices only, he shall also prepare a disbursement (liquidation) voucher which
shall be submitted with the report and the supporting documents to the accountant. He shall
ensure that the receipt of the report is properly acknowledged by the accountant.

(m) Within ten days after receipt of the report and supporting documents form the accountable
officer, the accountant shall verify the report including the completeness of the supporting
documents, record it in the Journal of Disbursements by Treasurer/Disbursing Officer and
submit the report with all the vouchers/payrolls and supporting documents to the unit
auditor.
(n)

When a cash advance is no longer needed or has not been used for a period of two (2) months, it
must be returned or deposited immediately with the collecting officer.

(o)

All cash advances shall be fully liquidated at the end of each year. The accountable officer
shall refund any unexpected balance to the cashier/collecting officer who shall issue the
necessary official receipt.

(p)

At the start of the ensuing year, a new cash advance mat be granted, provided that a list of
expenses against the previous cash advance is submitted. However, when no liquidation of

the previous cash advance is received on or before January 20 of the accountant shall cause
the withholding of the accountable officer's salary.
(q)

The accountable officer shall maintain an official cashbook to record the transactions on each
cash advance fund.