Professional Documents
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TBT ( (Ommonhlealtb: Commission On Audit
TBT ( (Ommonhlealtb: Commission On Audit
1.0 BACKGROUND
As a rule, cash advances must be liqu idated within the prescribed periods
depending upon the nature and purpose of the particular cash advance. as provided
under COA Circular No . 97-002 dated February 10, 1997, restating with
amendments. the rules and regulations on the granting, utilizati on and liquidation of
cash advances.
COA C ircular No. 201 2-004 dated November 28, 20 12 was issued as a final
notice and demand to all concerned accountab le officers to settle and liqu idate all
cash advances outstanding as of December 31 , 201 1, on or before January 3 1, 2013.
In spite of the above issuances, material amounts of cash advances and fund
transfers remained unliquidated.
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its operations and affecting the fair presentation of accounts m the Financial
Statements (FSs).
2.0 PURPOSE
4.0 COVERAGE
This Circular covers dormant receivables ansmg from regular trade and
business transactions, claims from entities' officers and employees and other
dormant receivable accounts; dormant unliquidated cash advances for operating
expenses, payroll , special purpose/time-bound activities or undertakings and travel as
well as advances granted to Civil Society Organ ization s (CSOs)/NGOs/POs; and
dormant unliquidated fund transfers to/from NGAs, LGUs, and GOCCs.
Specifically, the following are the accounts used relat~ ·ve to ceivab les, cash
advances and fund transfers as defined/described in the revise of accounts:
• Accounts Receivable
Due from Officers and Employees
Other Receivables
• Advances for Operating Expenses
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Advances for Payroll
Advances to Special Disbursing Officer
Advances to Officers and Employees
Due from National Government Agencies
Due from Government-Owned and Controlled Corporations
Due from Local Government Units
Due from Non-Government Organizations/People ' s Organizations
Du~ froiD Central Office
Due from Bureaus
• Due from Regional Offices
Due fi-om Qperating Units
Due rrom Other Funds
Due to National Government Agencies
Due to Government-Owned and Controlled Corporations
Due to Local Government Units
Due to Central Office
Due to Bureaus
Due to Regional Offices
Due to Operating Units
Due to Other Funds
This Circular shall not cover the write.:off of loans and advances of
Government Financial Institutions which are governed by pertinent provisions of the
General Banking Act.
The following terms when used in this Circular shall be construed to mean as
follows:
5.1 Account - refers to Accounts Receivable, Due from Off~cers nd Employees,
Oth er Receivables, and other accounts, as enumerated 1 ection 4 of this
Circular.
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5.3 Debtor- a person or organization whether public or private that owes money to
the government.
5.6 Donnant Unliquidated Fund Transfers- advances granted by the source entity
to implementing entity for the implementation of programs/projects which
remained non-moving for ten (10) years or more and where settlement could no
longer be ascertained.
6.1 All government entities shall conduct regular monitoring and analysi s of
receivable accounts to ensure that these are collected when these become due
and demandable and that cash advances and fund transfers are liquidated within
the prescribed period depending upon their nature and purpose; and
6.2 All government entities shall prepare th~ . sc~e ule of all receivables,
unliquidated cash advances, and fund transfer~ f December 31 , 20 15 and
quarterly thereafter. (see Appendix 55 of Vol. I},\}) M) .
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7.0 SPECIFIC GUIDELINES
T he Accountant shall:
7.1 Conduct regular and periodic verification, analysis, and validation of the
existence of the receivabl es, unliquidated cash advances, and fund transfers,
and determine the concerned debtors, accountable officers (Regular and Special
Disbursi'ng Dfficers, Collecting Officers, Cash iers) and the source and
implementing government entiti es concerned;
7.2 Reconcile the unliquidated fund transfers between the source and implementing
government entities, prepare the adjusting entries for the reconciling items
noted, and require liquidation of the balances;
7.3 Prepare the necessary adjusting entry/ ies for the following:
a. Recognition of the computed/determined impairment in accordance with
the Philippine Public Sector Accounting Standards or Philippine Financial
Reporting Standards
b. Correction of inadvertent errors, or inaccurate calculation or computation
c. Reclassification of accounts
d. Recovery/settlement of previously written off accounts
Adj ustments made pursuant to 7.2 and 7.3 need not be submitted to the COA
for approval but are subject to the usual audit. However, the accountant or the
auditor may seek assistance from the GAS for proper accounting treatment: and
7.4 Prepare aging of dormant receivables, unliquidated cash advances. and fund
transfers on a quarterly basis (Annexes 1-3) to support the request for write-off,
and indicate in the remarks column the existence of the appl icable condi tions,
as follows:
a. Absence of records or documents to validate/support the cla im and/or
unreconciled reciprocal accounts
b. Death ofthe accountable officer/empl oyee/debt or
c. Unknown whereabouts of the acco untabl e officer/employee/debtor, and that
he/she could not be located despite diligent efforts to find him/her
d. incapacity to pay or insolvency ·
e. Exhaustion of all possible remedies by the Management to collect the
receivables and to demand liquidation of :~.l~~ces and fund transfers
f. No pending case in court involving the su~'~rmant accounts.
8.1 As a general rul e, pleadings. mode of filing. docketing of cases, and filin g fe~
shell be governed by the 2009 Revised Rules of Procedure of the COA
(RRPC), unless specified in this Circular;
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8.2 The Head of the government entity shall file the request for authority to write-
off dormant receivable accounts, unliquidated cash advances, and fund
transfers to the COA Audit Team Leader (ATL) and/or Supervising Auditor
(SA). No filing fee is required;
8.4 The A TL and SA, upon receipt of the request, sha~~assign reference number,
verify and validate the above documents and · on the req uests for
authority to write off for amounts not exceeding P 0 000.00 per accountable
officer/debtor/government entity and by account with in 15 working days from
receipt thereof;
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8.5 In case the basis for denial of the request for write-off by the A TL and SA is
failure to comply with the conditions and requirements under paragraph s 7.4
and 8.3, the aggrieved party may refile the request for write-off before the ATL
and SA provided that the basis for denial has been satisfactorily complied
with/met. The ATL and SA shall decide on the request within 15 workin g days
from receipt thereof;
8.6
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The aggrieved party oay appeal from the decision of the ATL and SA to the
COA Cluster Director (CD)/Regional Director (RD) who has jurisdiction over
the government ~ntity under audit within 15 working days from receipt of the
decision. The CD/RD shall decide on the appeal within 15 working days from
receipt thereof. The decision of the CD/RD on appealed request is final and
non-appealable;
8.8 The CD/RD shall review the entire records of the requests and shall decide on
amounts involving more than PIOO,OOO.OO but not exceeding Pl ,OOO,OOO.OO
per accountable officer/debtor/government entity and by account within 15
working days from receipt thereof;
8.9 ln case the basis for denial of the request for write-off by the CD/RD is fai lure
to comply with the conditions and requirements under paragraphs 7.4 and 8.3,
the aggrieved party may refile the request for write-off before the CD/RD
provided that the basis for denial has been satisfactorily complied with/met;
8.1 0 The aggrieved party may appeal from the decision of the CD/RD to the
Assistant Commissioner (AC) concerned within 15 working days from receipt
of the deci sion. The AC shalL decide on the appeal within 15 working days
from receipt thereof. The decision of the AC on appealed request is final and
non-appealable;
8.12 The AC of the Sector shall review the entire records of the requests and shall
decide on amounts exceeding Pl ,000,000.00 per accountable officer/debtor/
government entity and by account within 15 working days from receipt thereof:
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8.13 In case the basis for denial of the request for write-off by the AC of the Sector
is failure to complywith the conditions and requirements under paragraphs 7.4
anct 8.3, the aggrieved party may refile the request for write-off before the AC
of the Sector provided that the basis for denial has been satisfactoril y compl ied
with/met; and
8.14 The aggrieved party may appeal from the decision of the AC of the Sector to
the CP within 15 working days from receipt of the decision. F iling fee is
required at a rate prescribed in the 2009 RRPC. The decision of the CP is final
and non-appealable.
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8.15 The Accountant shall:
a. Prepare the JEV within 15 working days upon receipt of the decision
granting the authority to write-off, for approval of the Head of the
government entity, effect the adjusting entries in the books, and enter the
gross amount of the receivables in the RA WO. A sample form of the
RA WO is anached as Annex 4 (Appendix 56, Vol. II, GAM);
b. Submit the JEV to the COA A TL;
c. Maintain a RA WO to record the accounts written-off and keep a copy of
the approved request for write-off including the records and documents
pertaining thereto: and _
d. At the end of the year, foot entries in the RA WO and make the appropriate
disclosures in the Notes to FS.
9.1 Quarterly Report on Requests for Write-off (QRRWO) shall be prepared and
submitted by the:
a. SA/A TL to CD/RD
b. CD/RD to AC concerned
c. ACto CP Secretariat
d. CP Secretariat for CP Decision
9.2 The CD/RD shall consolidate the QRRWOs submitted by the SA/ATL and the
AC of the Sector shall consolidate the QRRWOs submitted by the CD/RD.
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The illustrative accounting entries to record the adjustment for the writing off
of dormant receivable accounts, unliquidated cash advan ces, and fund transfers are
shown below:
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10.1 Writing Off of Receivable Accounts
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Account Title Credit
Accumulated Surplus/(Deficit) XXX
Allowance for Impairment- Accounts Receivable XXX
Allowance for Impairment- Other Receivables XXX
Accounts.Receivable XXX
Due from Offic..ers and Employees XXX
Other Receivables XXX
To recognize writing off of dormant Receivable
Accounts
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B. Implementing Agency's Books
...,.
Account Title Debit Credit
Due to NGAs XXX
Due to GOCCs XXX
Due to LGUs XXX
Due to Central Office XXX
Due to Bur~a~s XXX
Due to Regional Oifices XXX
Due to Operating Units XXX
Due to Other Funds XXX
Accumulated Surp1us/(Deficit) XXX
To recognize writing off of intra/inter-agency payables
A. Receivable Accounts
Account Title Debit Credit
Accounts Receivable XXX
Due frcm Officers and Em!)loyees XXX
Other Receivables XXX
Miscellaneous Income XXX
To recognize the restoration of recoverable
Receivabl e accounts written off
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Account Title
Cash- Collecting Officers
Advances for Operating Expenses XXX
Advances for Payroll XXX
Advances to Special Disbursing Officer XXX
Advances to Officers and Employees XXX
To recognize collection of recovered dormant
unliquidated -sash advances
This Circular shall not be interpreted to neither condone the written off
accounts nor to extinguish the obligations. The Management shall continue to exert
effort to collect the accounts appearing in the RA WO when circumstances would
warrant. Further, this shall not be construed as a ground to exonerate the liability of
the officers/employees for infidelity in the custody of documents.
All circulars, memoranda, and other issuances or parts thereof which are
inconsistent with the provisions of this Circular are hereby repealed/modified
accordingly.
13.0 EFFECTIVITY
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Chairperson
I Ct\.BEL D. AGITO
Commissioner
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