ACCO 30033

Audit of Expenditures

In the government, there is a need to consider expenditures as irregular, unnecessary,

excessive, extravagant, or unconscionable. This will help in preventing the incurrence of these
types of expenditures. Refer to COA Circular No. 2012-003/PD No. 1445-Section 33

Irregular Expenditures
These are the expenditures incurred without adhering to established rules, regulations,
procedural guidelines, policies, principles or practices that have gained recognition in law. These
were incurred without conforming to prescribed usages and rules of discipline. A transaction
conducted in a manner that deviates or departs from, or which does not comply with standards
set, is deemed irregular. An anomalous transaction which fails to follow or violates appropriate
rules of procedure is likewise irregular.

Unnecessary Expenditures
These are the expenditures which could not pass the test of prudence or the required
diligence of a good father of a family, thereby not responsive to the exigencies of the service.
Unnecessary expenditures are not supportive of the objectives and mission of the agency relative
to the nature of its operations. These could also include incurrence of expenditures not dictated
by the demands of good government, and the utility of which cannot be ascertained at a specific
time. The mission and thrusts of the agency incurring the expenditure must be considered
expenditure in determining whether or not the expenditure is necessary.

Excessive Expenditures
Excessive expenditures are unreasonable or the expenses incurred at an immoderate
quantity or exorbitant price. These also include expenses which exceed what is usual or proper
as well as expenses which are unreasonably high, and beyond just measure or amount. They also
include expenses in excess of reasonable limits.

Extravagant Expenditures
Extravagant expenditures are those incurred without restraint, judiciousness and
economy. They exceed the bound of propriety. These expenditures are immoderate, prodigal,
lavish, luxurious, wasteful, grossly excessive, and injudicious.

Unconscionable Expenditures
Unconscionable expenditures are those incurred without knowledge or sense of what is
right, reasonable and just and not guided or restrained by conscience. These are unreasonable
and immoderate expenses incurred in violation of ethics and morality by one who does not have
any feeling of guilt for the violation.

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 Exercise 3: Classify the following as to what type of expenditures:
A - Irregular Expenditures
B - Unnecessary Expenditures
C - Excessive Expenditures
D - Extravagant Expenditures
1. Expenses for advertisement of anniversaries, etc. in newspapers, TV, or radio merely for
publicity or for propaganda purposes.
2. Expenditures for supply and materials in quantities beyond that is required and needed by
the agency for a determinable period resulting in overstocking.
3. Purchase of luxurious and expensive office furnishings for office buildings of office staff.
4. Payment of allowances and other forms of additional compensation without proper
authority.
5. Installation of highly sophisticated outdoor signs, billboards and neon signs advertising
the office.
6. Payment of claims under a contract awarded not strictly in accordance with the
prescribed modes of procurement of supplies, materials and equipment.
7. Construction of a warehouse used as a pelota/badminton court.
8. Purchase of air-conditioning units to be used in Baguio City offices.
9. Purchase of expensive cars by the barangay officials.
10. Overpricing of purchases, characterized by grossly exaggerated or inflated quotations, in
excess of the current market price by 50% variance.
11. Payment for rent of expensive halls or room in luxury hotels or restaurant used for meetings and
other functions.
12. Payment for emergency purchase when there is no actual emergency.
13. Grant of overtime pay for work that is not urgent in nature as to require completion within a
specified time or that can be undertaken during regular office hours.
14. Purchase of items from middlemen.
15. Payment for repair of government equipment at a cost exceeding 30% of the current market
price of the same or similar equipment.

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 Exercise 4
The following are the transactions of a national government agency for the 1 st quarter of 2020:
A. Receipt of Allotment for:

PS 11,000,000
MOOE 3,400,000
CO 2,000,000
FE 100,000

B. Receipt of NCA, regular to cover the operating requirements for the1st quarter of
2020, P14,000,000.

C. Payment to officers and employees for:

Salaries and PERA, net amount, thru ATM 5,393,000

Cash advances for travel 15,000
Reimbursement of meals and snacks incurred
during the
10,000
official meeting
RATA thru ATM 400,000

Computation of salaries & PERA of officers and employees for the month of July follows:
Salaries P8,431,000
PERA 870,000
D. Payment to
Total P9,301,000
suppliers:
Less: Deductions Invoice
BIR 896,000 Amount

GSIS MERALCO 2,601,000 850,000

PAG-IBIG MANILA WATER 303,000 430,000

PHILHEALTH PLDT 108,000 100,000

OFFICE WAREHOUSE
Net 5,393,000
Office supplies 50,000
Office Equipment 900,000
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 E. Remittance of salary deductions (except BIR).

F. Payment of government share:

Life & retirement contribution 1,091,000

Pag-ibig contributions 49,000
Philhealth contributions 108,000
ECIP contributions 47,000

G. Receipt of NCA-TRA, equivalent to taxes withheld.

H. Remittance of all taxes withheld.

REQUIRED:

1. Compute for the balance of allotment for PS not yet obligated as of March 31, 2020.
(Unobligated allotment)
2. Compute for the unused NCA for the period ending March 31, 2020.
3. Compute for the balance of SNG as of March 31, 2020.
4. Journalize all transactions.

1. Allotment Received 2,000,000

Obligations Incurred 1,700,000
Balance of Allotment for PS 300,000

2. Amount of NCA received

MDS Check Disbursements
Unused NCA

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 3. Amount of NCA received
Tax Remittance Advice
Return of unused NCA
Balance of SNG

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