COMMISSION ON AUDIT
Proposed Cash Examination Manual vis-à-vis Proposed COA Circular on Cash Advances
REVIEW OBSERVATIONS
1 No provisions in both proposed
issuances that instruct the auditors to
verify the latest cash examination
report during the audit of cash
advances, and to verify results of audit
of cash advances before conduct of
cash examinations.
2 In the Cash Examination (CE) Manual,
there are no instructions to auditors
conducting CE in the regions/field,
with no books of accounts, to
coordinate with regional/head office
auditors on auditees where book of
accounts are kept at the level of their
auditees, and complete audit are done
at their end. An instruction is also
needed to the regional/field auditors
conducting CE of accountable officers
(AOs) in auditees that do not maintain
books of accounts, that copy of their
cash examination reports should be
furnished to the head office/regional
auditors where the cash advances and
liquidations/collections and remittances
being cash examined are booked. The
CE reports furnished will facilitate
reconciliation of the Statement of
Accountability of the AO in the CE
report against the ledgers/books of
accounts by the auditors of auditees
where the transactions of the AO are
booked.
COMMENTS/ COMMITTEE ACTIONS
Considering that a Credit Notice is being
issued in the audit of liquidation of cash
advance, there is no need to include such
instruction in the Cash Examination Manual.
Auditors may look at the liquidation of
previous cash advance rather than the latest
Cash Examination report where the date of
the cash examination may be far from the date
of the cash advance.
Cash advances granted and liquidated are
considered in the preparation of the Statement
of Accountability as these are presented as
debits and credits to the accountability of the
accountable officer.
The following instruction was inserted as No.
6 under Item O, Chapter III of the proposed
Cash Examination Manual:
Auditors before conducting cash
examinations in the regions/field with no
books of accounts should coordinate with the
Supervising Auditors(SAs)/Audit Team
Leaders (ATLs) of Head Office/Regional
Office auditees, where books of accounts are
kept, to obtain data on the accountabilities of
the AO such as accountable forms
issued/latest Monthly Statement of
Accountability on Accountable Forms
submitted, audited or booked remittances,
cash advances granted and liquidated from
the latest cash examination or outstanding
unliquidated cash advances, amonth others.
They should furnish a copy of their Cash
Examination Reports (CERs) to the SAs/ATLs
of Head Office/Regional Office auditees
where the cash advances and
liquidations/collections and remittances being
cash examined are booked. The CER
furnished shall be utilized by these SAs/ATLs
to reconcile the Statement of Accountability of
the AO in the CER against the ledgers/books
of accounts of their auditees where the
transactions of the AO are booked.
 REVIEW OBSERVATIONS
3 In the regions, if all CE reports (with
and without shortage) have to be
further submitted to the Regional
Director for further review and
disposition, delay is inevitable in the
transmittal of CE reports to concerned
agency officials due to thousands of
AOs in the local (including barangays),
national and corporate auditees in the
regions. I recommend that Supervising
Auditors be tasked to do the final
review and transmittal of CE reports
that have no shortages discovered
considering that they had even been
authorized by COA to do the final
review and transmittal of AARs on
municipalities and barangays.
4 The following are the deficiencies of
the old/current CE Manual which are
still not addressed in the attached
proposed CE Manual:
a. Details in the preparation and format
of Statement of Accountability of Cash
in Bank not provided and instructed in
the CE Manual.
b. No instructions as regards how the
reconciliation of Statement of
Accountability of Cash in Bank
Balance and Bank Statement Balance
shall be shown in the CE report.
c. No instructions in the CE Manual
how the checks issued that have been
recorded in the books as
disbursements/reported as paid checks
in the Bank Statements, which have no
disbursement vouchers and supporting
documents, should be considered
(shortage?). Different auditors in
different areas had different way of
handling this increasing problem of
check disbursements without voucher,
especially in the LGUs.
COMMENTS/ COMMITTEE ACTIONS
Item E of the proposed COA Memorandum is
revised as follows:
The result of the examination shall be
embodied in a narrative report consisting of
three parts; namely, the introduction, the
findings and recommendations, and the
appendices. Copies of the report shall be
submitted to the Supervising Auditor for
review and transmittal. However, Cash
Examination Report showing a cash shortage
which requires the filing of administrative
and/or criminal case against the accountable
officer shall be submitted to the
Cluster/Regional Director for final
disposition. The Accountable Officers and the
Head of Agency shall be furnished copies of
the report. The Auditor/Cash Examiner and
the Supervising Auditor should likewise each
have copy of the CER.
The overall objective of cash examination is
to audit the government funds in the hands of
an AO. Therefore, it does not include the cash
in the custody of the bank, which is usually in
the name of the government agency and under
the responsibility of the Accountants.
Audit of the Cash in Bank account is being
done regularly in financial audit. There is a
separate Audit Program for the audit of the
said account where Bank Statements/ Bank
Reconciliation Statements are verified. In the
audit of cash accountability, the receipts,
deposits and disbursements are traced to the
Bank Statements/Bank Reconciliation
Statements.
Paid Disbursement vouchers are post audited
in relation to the conduct of financial and
compliance. Notices of Disallowances are
issued on discrepancies or violations found,
thus persons liable may not only be the
concerned accountable officer. Hence, only
 REVIEW OBSERVATIONS COMMENTS/ COMMITTEE ACTIONS
cash items found in the hands of the AO are
subject of disallowances as provided for in
GF 74-A.

d. The prescribed text of the Auditor’s The text of the Auditor’s Certification in Item
Certificate in the Cashbook or L, Chapter III has been revised as follows:
equivalent has the connotation that the
cash examination was/can be Examined and verified the cash accountability
completed in a day. of (Accountable Officer), (Designation),
covering the period _______ to ______ and
arrived at a balance of P_______, of which
the amount of P_______ was actually found
on hand, consisting of P_______ in currency
and P_______ in cash items, thereby showing
(no difference/cash shortage/overage of
P ).

____ ____________________
(Signature over printed name)

________________________
(Designation)

_________________________
(Date)
Note: Deleted the date of the last day of the
cash examination and just indicated the date
below the signature.