COMMISSION ON AUDIT CIRCULAR NO.

91-359 July 18, 1991

TO : The Chairman, Metro Manila Authority; Provincial Governors and City/Municipal

Mayors; Provincial, City and Municipal Treasurers; Chief Accountants; Heads of
Auditing Units; and All Others Concerned.

SUBJECT: Lifting of Pre-Audit of Liquidation of Cash Advances before these are taken up
in the Books of Accounts.

Under COA Circular No. 86-257, as amended, liquidation of cash advances shall first be
audited before the same are taken up in the books of accounts. This pre-audit activity may
result in the suspension of credit of cash disbursements to the accountabilities of cash
disbursing officers. There is now a perceived need to adopt an audit technique that will be
more conducive to efficient delivery of public services and improved operations of local
government units.

In view thereof, the audit of liquidation of cash advances shall henceforth be undertaken
on a post-audit basis, i.e., the liquidation of cash advances may be recorded in the books of
accounts even before the same are audited. Within 10 days from receipt of the report of
disbursements/liquidation voucher, the Accountant shall verify the report/voucher, record it in
the books as a tentative credit to the accountable officer, and submit the same with all the
supporting documents to the Auditor. The audit thereof shall be undertaken and completed by
the Auditor within 30 days from his receipt of the report/voucher. The Auditor shall issue the
corresponding Credit Notice to the accountable officer informing him of the results of the audit.
In case of disallowance, a copy of the Credit Notice shall be furnished the Accountant who
shall within three (3) days from receipt thereof record the restoration of the cash advance for
the amount disallowed.

This Circular shall take effect immediately.

(SGD.) ROGELIO B. ESPIRITU, Commissioner

(SGD.) BARTOLOME C. FERNANDEZ, JR., Commissioner
(SGD.) EUFEMIO C. DOMINGO, Chairman