Republic of the Philippines COMMISSION ON AUDIT Commonwealth Avenue, Quezon City NO: 2017-_ O10 DATE: MEMORANDUM To : The Assistant Commissioners, Directors, Supervising Auditors (SAs), Regional SAs (RSAs), Audit Team Leaders (ATLs) of the National Government Sector (NGS), Corporate Government Sector (CGS), Local Government Sector (GS), and all Others Concerned Subject Restatement with Amendment of All Issuances Governing Submission of Status Reports of Unliquidated Cash Advances, Fund Transfers and other Receivables 1. RATIONALE While the Commission recognizes the susceptibility of cash advance to abuse, it also recognizes the grant of cash advances as a facilitation tool in the financial operation of the government. Thus, to strengthen internal control, rules and regulations in the grant, utilization and liquidation of cash advances were prescribed, the latest of which is under COA Circular No, 97-002 dated February 10, 1997. This was supplemented by COA Memorandum No. 2004-014 issued on February 24, 2004 requiring submission of Reports on Unliquidated Cash Advances to the Civil Service ‘Commission, Presidential Anti-Graft Commi n, Office of the Ombudsman (OMB) or Department of Justice, and COA Circular No. 2012-004 issued on November 28, 2012, demanding for immediate liquidation and settlement of all cash advances outstanding as of December 31, 2011. COA also issued COA Circular Nos. 94-013 dated December 13, 1994 prescribing the rules and regulations in the grant, utilization, and liquidation of funds transferred to Implementing Agencies and 2007-001 dated October 25, 2007 prescribing the guidelines in the grant, utilization, accounting and auditing of funds released to Non-Governmental Organizations/People’s Organization (NGOs/POs). Despite considerable measures adopted by the Commission, significant amounts of unliquidated cash advances and fund transfers, and other receivables were reported as of end of CY 2016 In view thereof, there is a need to assess and establish the status of unliquidated cash advances, fund transfers, and other receivables as of end of CY 2016 for purposes of taking appropriate action and/or demanding settlement thereof. For this purpose, the monitoring reports prescribed under existing COA regulations are hereby revised. ILIl. LEGAL BASIS Section 2 (2), Article [X-D, 1987 Philippine Constitution granted the Commission the exclusive authority, subject to limitations prescribed therein, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties IILCOVERAGE, This Guidelines shall cover unliquidated cash advances granted to Accountable Officers (AO) and employees, for operating expenses, payroll, special purpose/time-bound activities or undertakings and travel; funds released to Ci Society Organizations (CSOsVNGOs/POs; unliquidated fund transfers to/from NGAs, LGUs and GOCCs; and all other receivable accounts. IV.GENERAL GUIDELINES Audit Teams shall analyze the schedules of all receivables, unliquidated cash advances, and fund transfers as of December 31, 2016 prepared by the Auditees, including reports on dormant accounts, to determine their status and assess collectability considering available documents and to prepare Status Report thereon to be submitted not later than June 30, 2017. The status report shall be updated semi- annually to be submitted to the concerned Cluster/Regional Directors (CD/RD) within 30 days after the end of each semester. The Audit Team Leader (ATL) shall request from the Accountant proof of exhaustion of all remedies to collect receivables and liquidate cash advances and fund transfers as basis for the issuance of the final demand letter. There is therefore a need for the Accountant to issue demand letter to the AO/employce/recipient/NGOs to liquidate their due and demandable cash advances/fund transfers. V. SPECIFIC GUIDELINES. 1. The ATLs shall submit to their respective SAs/RSAs for review and submission to the CD/RD, the status of all receivables, unliquidated cash advances and fund transfers as of December 31, 2016 using the form attached as Annexes A to D not later than June 30, 2017. The Report shall include all accounts covered under COA Circular No. 2016-005 dated December 19, 2016. The Report shall be updated semi-annually to include newly granted cash advances and actions taken by both agency officials and the ATL as of reporting period, to be submitted to their respective CD/RD within 30 days after the end of each semester. 2. For long outstanding cash advances/fund transfer/other receivables not yet issued by the ATL with final demand letters, the ATL shall immediately issue the same upon receipt of the Schedules from the Auditees and proof of action taken by the accountant to demand liquidation/settlement thereof in preparation for the filing of hraccountant to demand liquidation/settlement thereof in preparation for the filing of appropriate charges by the concerned CD/RD before the OMB in case the accountable officersirecipient/NGO failed to comply therewith. In this case, the accumulation of unliquidated cash advances/fund transfers can be minimized if not totally avoided, Format of demand letters are attached as Annexes E and F 3. If the filing of administrative and/or criminal charges is warranted, the SA and ATL shall attach a swom Narrative Report (format attached as Annexes G and H) for each cash advance’ fund transfer, supported by the following documents: a) For Cash Advances to AOs and employees and other Receivables: Appointment of the AO granted CA, if applicable Designation or authority to draw CA, if authorized Authenticated copy of AO’s Fidelity Fund, if applicable Photocopy of demand letter and proof of receipt by the AO and/or employee or recipient and answer/explanation thereto, if any * Authenticated copy of disbursement voucher/s and supporting documents pertinent to CA granted to the AO/employee/recipient or equivalent and partial liquidation documents, if any * Authenticated copy of the paid check for the CA Pertinent Audit Observation Memorandum, if any © Notice of Suspension and/or Notice of Disallowance for the grant of and liquidation of CA, if any * Other relevant documents immediately available b) For Grant/Fund Transfers to NGO/PO: * Photocopy of Demand Letter and Proof of Receipt by the NGO/PO and answer/explanation thereto, if any © Authenticated copy of the Memorandum of Agreement or Trust ‘Agreement + Authenticated copy of the Official Receipt issued by the NGO upon receipt of fund transfer ‘* Authenticated copy of disbursement voucher/s and supporting documents pertinent to the grant/fund transfer or equivalent and partial liquidation documents, if any « Authenticated copy of the paid check for the grant/ fund transfers, if immediately available + Pertinent Audit Observation Memorandum, if any ‘* Notice of Suspension and/or Notice of Disallowance for the grant/fund transfer and corresponding liquidation, if any © Other relevant documents: 4. Upon receipt of the Status Report, the CD/RD concerned, with the assistance of their Legal Officer, shall evaluate the Status Report and accompanying sworn Narrative Report and its attachments within 30 days upon receipt. If there are bases for filing charges, the CD/RD shall execute complaint affidavit for the ‘Commission to be supported by Narrative Report, together with certified copy of pertinent documents, to be forwarded to the OMB within 15 days upon completion of the evaluation. {u 3