Professional Documents
Culture Documents
Session 3 Dated May 13 2023
Session 3 Dated May 13 2023
on Local Treasury
Examination
Session 3
DEFINITION OF TERMS
Accountable Officer
Allotment –An allotment is an
the officer of any authorization issued by the
government agency whose Local Chief Executive to a
duties permit or require the department office of the local
possession or custody of government unit, which allows
government funds or it to incur obligations for
property, (such as the Local specified amounts within the
Treasurer, Collecting Officer, appropriations ordinance.
Disbursing Officer, Cashier,
Paymaster, Property Officer The authorization is called
and the like) who is required the Allotment Release Order
by law to render account to (ARO), which is a specific
the Commission on Audit authority to incur obligations
not exceeding the amount
for the specific purpose
indicated
Appropriation
Disallowance
the disapproval in audit
of a transaction, either in Disbursement
whole or in part.
Disbursements constitute all
payments made during a given
period either in currency, by
check, through bank and
electronic transfers, telegraphic
transfers, letters of credit,
credit/debit cards and other non-
conventional modes of payment
DEFINITION OF TERMS Persons Liable
the persons determined by the
auditor to be answerable for an
audit disallowance or charge
Obligations
arising from the post-audit of
refers to an amount committed
transaction or examination of the
to be paid by the local
cash and accounts of an
government unit for any lawful
accountable officer.
act made by an accountable
officer for and in behalf of the
local unit concerned.
Persons Responsible
the persons determined by the
auditor to be answerable for
compliance with the audit
requirements as called for in the
notice of suspension.
Suspension
Reconsideration
the deferment of action to
allow or disallow in audit a
transaction pending compliance the process whereby an aggrieved
party requests the very officer or
with certain requirements
body who made the decision,
order, or ruling to review the same
with the view of its modification or
reversal.
DEFINITION OF TERMS
This should be distinguished from
"appeal" which is the process of
elevating to the next higher authority
a decision, order, or ruling.
CONCEPT OF FUNDS Good governance is about efficiency
in the management of public funds,
demanding high standards of integrity,
Good governance is viewed as transparency and accountability.
the exercise of economic,
political
Thus, Local Treasurers need to
and administrative authority to continuously update their knowledge
manage a country's/local and skills on their specific area of good
government's affairs at all levels.
governance, which is fund or cash
management
It comprises mechanisms,
processes, and institutions through
which citizens and groups
articulate their interests, exercise
their legal rights, meet their
obligations, and mediate
their differences.
Annual Appropriation CONCEPT OF
An Annual Appropriation is an APPROPRIATION,
appropriation consisting of ALLOTMENT AND
specified amounts for salaries,
wages, and sundry expenses, etc., OBLIGATION
authorized by the sanggunian as
necessary for the regular
operations of the local Form and Content of Local
government unit during any Government Budget
given year
Budget preparation is the first phase This phase starts from the time the
of the local budget process. Sanggunian receives the Local
Expenditure Program (LEP) submitted
It involves cost estimation per PPA, by the LCE, and ends with the
preparation of budget proposals, enactment of the Appropriation
executive review of budget Ordinance and approval thereof by
proposals, and preparation of the the LCE. Authorization of the budget is
LEP and the Budget Message. done through an Appropriation
Ordinance enacted by the Local
This phase starts with the issuance of Sanggunian in accordance with the
the Budget Call, and ends with fundamental principle that, ―No
submission of the Executive Budget money shall be paid out of the local
to the Sanggunian on or before treasury except in pursuance of an
October 16 of each year. Appropriation Ordinance or law‖
Local Budget Cycle
Budget Review
The tools used in cash programming are The plan is prepared for the entire
the Cash Flow Forecast and the calendar year with quarterly/semi-
Cash Flow Analysis. annual targets for the
departments/offices to achieve
Types of Unlawful Expenditures
Irregular Expenditures
The term "Irregular Expenditure" signifies that the Payment of salaries and
expenditure incurred without adhering to wages wherein the signature
established rules, regulations, procedural in the logbook vary with the
guidelines, policies, principles or practices that
have gained recognition in law. signatures of the workers in
the payroll
Irregular expenditures are incurred if funds are
disbursed without conforming to prescribed
usages and rules of discipline. Honoraria to private
individuals sitting as
There is no observance of an established members of special
pattern, course, mode of action, behavior, or
conduct in the incurrence of an irregular committees (e.g., Ethic
expenditure. Committee) of a government
agency, without authority of
A transaction conducted in a manner that approval from the DBM
deviates or departs from, or which does not
comply with standards set is deemed irregular.
In case, however, of expenditures for the Unused checks shall be kept in the
operation of the sanggunian, checks drawn
thereon shall be countersigned by the vault, which shall be accessible
provincial Vice Governor, the City Vice only to the Local Treasurer.
Mayor, or the municipal Vice Mayor, as the
case may be.
The signing or countersigning of
blank checks shall not be allowed.
DISBURSEMENT OF LOCAL FUNDS
Reporting of Checks Issued Spoiled and Stale Checks
Checks may be cancelled when
The checks released to they become spoiled or stale.
claimants shall be reported in
the Report of Checks Issued A check is considered spoiled when it
(RCI) which shall be prepared is torn, mutilated, defaced, or
daily by the Local Treasurer contains erasures/errors affecting the
for each fund. genuineness of material information.
On the other hand, a check is
It shall be submitted to the considered stale when it is
Accountant for preparation of outstanding for over six months from
Journal Entry Voucher based date of issue, or as prescribed by the
on individual checks issued government authorized depository
and recording in the Check bank.
Disbursement Journal
A spoiled or stale check shall be
marked "CANCELLED" on its face and
reported
DISBURSEMENT OF LOCAL FUNDS
Disbursements Through Cash
Advances b) Special Cash Advances
Step 1: The annual growth rates for each revenue category in the
Statement of Receipts and Expenditures (SRE), e.g., real property tax,
business tax, other taxes, fees and charges, etc., and for each LGU
type — province, city, and municipality, excluding Inter-Local
Transfers, are forecasted
The Local Treasurer uses the Cash Flow Forecast as a tool in estimating
projected cash flows based on certain assumptions.
The Cash Flow Forecast enables the Local Chief Executive and the Local
Treasurer to plan for an effective management and utilization of cash of
the local government unit
FUND
MANAGEMENT
PRACTICES Cash Flow from Financing
Activities
The Auditor shall prepare the SASDC - Form 6 - summarizing the total
suspensions,
disallowances and charges of the audited transactions of an agency
at the end of each quarter.