Presented by:

Atty. Roline M. Ginez-Jabalde

Resident Ombudsman-DepEd
Rationale for the Use of Cash
Advance System

It has been recognized as a

facilitative tool in the financial
operations of the government
General Principles
(Sec. 2, COA Circular No. 97-002)
1. Daily receipts on collection must be deposited
intact with the authorized bank. Ex. Land Bank
of the Philippines

2. All payments must be made by check.

3. Only payments in small amounts may be made

through the petty cash fund. Replenishment of
the petty cash fund shall be equal to the total
amount of expenditures made there from.
General Principles
(Sec. 2, COA Circular No. 97-002)

In cases when it may be impractical

or impossible to make payments by
check, payments may be made by the
disbursing officer in the form of cash
through his cash advance.
Types of Cash Advance
(Sec. 3, COA Circular No. 97-002)
1. Regular Cash Advance – are those granted to
cashiers, disbursing officers, paymasters,
and/or property/supply officer.

2. Special Cash Advance – those granted on the

explicit authority of the Head of the Agency
only to duly designated disbursing officers or
employees for other legally authorized
purposes.
Purposes of Regular
Cash Advances
 Salaries and wages
 Commutable allowances
 Honoraria and other similar payments to
officials and employees
 Petty operating expenses consisting of small
payments for maintenance and operating
expenses which cannot be paid conveniently
by check or are required to be paid
immediately.
Purposes of Special Cash Advances
1. Current operating expenditures of the
agency field office or of the activity of the
agency undertaken in the field when it is
impractical to pay the same by check, such
as:
- salaries, wages, and allowances
- maintenance and other operating
expenses
Purposes of Special Cash Advances
2. Travel expenditures including transportation
fare, travel allowance, hotel room/lodging
expenses and other expenses incurred by officials
and employees in connection with official travel.
 General Guidelines
in
Granting and Utilization
of
Cash Advances
General Guidelines
(COA Circular 97-002, RMO Circular 2009-002)

1. Specific legal purpose

2. No additional cash advance unless

previous CA is liquidated

3. Immediate liquidation/reporting
after purpose is served
General Guidelines
(COA Circular 97-002, RMO Circular 2009-002)

4. DOs should be bonded and must

be permanent employees only

5. CA to elected officials only for

official travelling expenses
General Guidelines
(COA Circular 97-002, RMO Circular 2009-002)

6. Duly appointed or designated DOs

may perform disbursing functions

7. No transfer of CA from one AO to

another
General Guidelines
(COA Circular 97-002, RMO Circular 2009-002)

8. CA shall be used solely for the

specific legal purpose as granted

9. CA shall not be granted for

payment of infrastructure projects
or project basis undertaking
General Guidelines
(COA Circular 97-002, RMO Circular 2009-002)

10. Not to be used for encashment of

checks or liquidation of previous
CA

11. CAs for a particular year should

not be used to pay expenses of other
years
General Guidelines
(COA Circular 97-002, RMO Circular 2009-002)

12. CA for special time-bound undertaking

must be liquidated within one ( 1 )
month from the accomplishment of the
purpose

13. CA no longer needed/not used for a

period of 2 months should be returned
to the treasurer
General Guidelines
(COA Circular 97-002, RMO Circular 2009-002)

14. All CAs should be liquidated at the

end of the year except petty cash fund
Cash Advance for Official Travel
(Local and Foreign)
Governed by COA Circular No. 96-004
dated April 19, 1996
Both official local and foreign travels
shall be treated and accounted for as
cash advance
Shall not require bonding of the
travelling official or employee
General Guidelines
Miscellaneous Operating Expenses
(Sec. 4.3, COA No. 97-002)

Not for Regular Expenses, i.e., rentals,

subscriptions, light/water (utilities)
Not more than Php15,000 per
transaction, except when allowed by law
&/or COA
No splitting of transactions
General Guidelines
Field Current Operating Expenses
(Sec. 4.4, COA No. 97-002)

Used to pay salaries/wages of field

employees and miscellaneous
operating expenses
No limits to payment for each
transaction
General Guidelines
Field Current Operating Expenses
(Sec. 4.4, COA No. 97-002)
All payments approved by head of
field office
CA limited to two month
requirement
Report of disbursements w/in 5
days after each month by AO
Documentary Requirements
Application for CA
(Sec. 4, COA Circular No. 97-002)
Copy of authority from Agency
head (attach to initial CA)
Copy of Bond (attach to initial CA)
Payroll, estimate of expenses,
budget for COE of field office or
activity
Liquidation of
Cash Advances
Time to Liquidate
(5.1.1 COA Circular 97-002)

 Salaries, wages etc. – 5 days after

each fifteen (15) day/end of the
month pay period.
Time to Liquidate
(5.1.2 COA Circular 97-002)

Petty Operating Expenses and

Field Operating Expenses –
within 20 days after the end of
the year; subject to
replenishment as frequently as
necessary during the year.
Time to Liquidate
OFFICIAL TRAVEL – within 60 days after
return to the Philippines in case of
Foreign Travel (3.1.2.1 COA Circular 96-
004, EO 248) or within 30 days after
return to his permanent official station
in case of Local Travel (5.1.3 COA Circular
97-002)
Local Travel, what to do
when….

A. Trip is cancelled – REFUND in full.

B. Trip is cut short or terminated in

advance of the itinerary – REFUND
excess payment, IMMEDIATELY upon
cancellation or termination of the trip.
Foreign Travel
Governed by COA Circular No. 96-004
dated April 19, 1996

Salaries may be suspended until cash

advance has been liquidated (3.1.2.1,
COA Circular No 96-004)
Liquidation of CA
(Sec. 5, COA Circular No. 97-002)

Documents required to support

liquidation

Salaries/Wages – Report of
Disbursements with payrolls, vouchers,
DTRs, approved leaves, etc.
Liquidation of CA
(Sec. 5, COA Circular No. 97-002)
Misc Operating Expenses
Report of Disbursements w/ support docs
Approved Requisition & Issue Voucher w/
Cert.
of Emergency Purchase, if necessary
Receipts, Sales Invoices
Cert. of Acceptance/Inspection
Trip Ticket (if for fuel)
Other pertinent docs required by nature of
expense
Liquidation of CA
(Sec. 5, COA Circular No. 97-002)

Current Operating Expenditure

Same as the previous
Canvass of at least 3 Suppliers (except
when purchase made while on official
travel)
Liquidation of CA
(Sec. 5, COA Circular No. 97-002)

Official Travel
COA Circular No. 96-004
 Certificate of Travel Completed
 Plane, boat, bus tickets
 Hotel room/ lodging bills
 Certificate of Appearance or
Accomplishment Report
Responsibility of Agency Head
(Sec. 8, COA Circular No. 97-002)

“It shall be the responsibility of the

Head of the Agency to ensure the
proper granting, utilization and
liquidation of all cash advances in
accordance with these rules and
regulations”
Responsibility of the Accountant
(only in cases of travel cash advance pursuant to
Circular 96-004)

1. The accountant shall retain a copy of the

travel advance voucher and the itinerary
of travel. He shall keep an index of the
cash advances made by each
official/employee and shall monitor the
liquidation of the said cash advances;
Responsibility of the Accountant
(only in cases of travel cash advance pursuant to Circular 96-004)
2. In addition the accountant shall:
a. Send within ten (10) days before the expiration
of the 30 or 60 days period specified under
Section 16, of EO 248, a written reminder under
signature of the head of the agency or his duly
authorized representative, enjoining the official
or employee concerned to liquidate his travel cash
advance. This is to preclude complaints arising
from suspension of salaries due to non-
liquidation of travel advances.
Responsibility of the Accountant
(only in cases of travel cash advance pursuant to Circular 96-004)
b. Delete the name of the official or
employee from the subsequent payrolls
until such time that the travel cash
advance has been fully liquidated, if the
official or employee concerned fails to
liquidate the cash advance within the
prescribed period.
Responsibility of the Accountant
(only in cases of travel cash advance pursuant to Circular 96-004)
c. Verify the liquidation voucher and
supporting documents, and record the
same in the books of accounts subject to
the post audit by the auditor.
Duties & Responsibilities of the
COA Auditor
1. Upon failure of the AO to liquidate his
cash advance within two (2) months
for AOs holding office within the
station and three (3) months for AOs
outside the station from date of grant
of the cash advance, the Auditor shall
issue a letter demanding liquidation
or explanation for non liquidation;
Duties & Responsibilities of the
COA Auditor
2. If thirty (30) days have elapse after the
demand letter is served and no
liquidation or explanation is received
or the explanation is not satisfactory,
the Auditor shall advise the head of
the agency to cause or order the
withholding of the payment of any
money due the AO;
Duties & Responsibilities of the
COA Auditor

3. The AO shall likewise be held

criminally liable, for failure to
settle his accounts. For this
purpose the Auditor shall:
Duties & Responsibilities of the
COA Auditor
a. Execute an Affidavit stating the
nature/purpose of the cash advance; the
amount not liquidated/ accounted for; the fact
that no liquidation or explanation has been
submitted despite demand or if explanation
has been submitted, the same is not
satisfactory; the date the letter of demand was
served on or received by AO; and other
information which may be pertinent to the
case;
Duties & Responsibilities of the
COA Auditor
b. State in the affidavit the violation of the
provisions of Section 89 of PD 1445 and the penal
provisions under Section 128 of the same law;
c. The affidavit shall be submitted to the COA
Director concerned who shall refer the case to
the appropriate Office of the Ombudsman, if
the offense is committed in the regions or to the
COA Legal Office for the filing of criminal
proceedings, if the offense is committed within
the Metropolitan Manila Area (97-002, Item 9.3)
Actions against AO for Failure to
Liquidate on Time

1. Valid cause for the WITHHOLDING of

salary; (97-002, 5.1.3 last par)
2. No additional cash advance
3. May be liable criminally,
administratively and/or civilly
PD 1445 GOVERNMENT AUDITING CODE OF THE
PHILIPPINES
CHAPTER 5
ACCOUNTABILITY AND RESPONSIBILITY FOR
GOVERNMENT FUNDS AND PROPERTY

“Section 102. Primary and secondary

responsibility:
1. The head of any agency of the government is
immediately and primarily responsible for all
government funds and property pertaining to
his agency.
PD 1445 GOVERNMENT AUDITING CODE OF THE
PHILIPPINES
2. Persons entrusted with the possession
or custody of the funds or property
under the agency head shall be
immediately responsible to him,
without prejudice to the liability of
either party to the government.”
Are you an Accountable Officer?
 Art. 217, RPC (Malversation of Public Funds)
is one who is accountable for public funds or
property
 Sec. 101 (1), PD 1445 (Government Auditing
Code of the Phils) –
-every officer of any government agency
-duties permit or require the possession or
custody of government funds or property
-and who shall be accountable therefore and
for the safekeeping thereof in conformity
What is therefore
CONTROLLING is……
the NATURE of the duties which he
performs - the fact that, as part of his
duties, he received public money for
which he was bound to account, and
NOT THE NOMENCLATURE OR THE
RELATIVE IMPORTANCE THE
POSITION HELD

(Querijero vs. People, GR 153483, Feb. 14, 2003)

Criminal Charges
P.D. 1445
“Section 128. Penal provision. Any
violation of the provisions of Sections 67, 68,
89, 106, and 108 of this Code or any regulation
issued by the Commission implementing
these sections, shall be punished by a fine not
exceeding one thousand pesos or by
imprisonment not exceeding six (6) months,
or both such fine and imprisonment in the
discretion of the court.”
Criminal Charges under the Revised
Penal Code
Art. 218 – Failure to render accounts
- Accountable Officer
- Required by law or regulation to render accounts
- Failure to do so for 2 months after such accounts
should be rendered
 Demand for accounting not necessary
 Misappropriation not necessary; rationale is to
compel public officers entrusted with government
funds to render regular and timely account
Penalty - 6 months 1 day to 2 years 4 months
 Criminal Charges under Revised
Penal Code
Art. 217 – Malversation of Public Funds
- Public Officer
- Having custody or control of funds by reason of
the duties of his office
- Public funds for which he is accountable
- Appropriating, Misappropriating, or permitting
other person to take public funds
 Presumption from failure to have duly
forthcoming public funds upon demand
 Demand only as a matter of procedure,
evidentiary BUT not necessary
 Penalty - 2 years 4 months to Reclusion
Perpetua
Administrative Charges
Conduct Prejudicial to the Best Interest of the
Service
“…unwarranted act of the respondent (which)
resulted to an undue prejudice to the best interest
of the service.”*

*Lucero, Antonio M., CSC Resolution No. 98-

0649.
Administrative Charges
Dishonesty
“…the concealment or distortion of truth, which
shows lack of integrity OR a disposition to
defraud, cheat, deceived or betray and an intent
to violate the truth.”*
*Civil Service Resolution No. 060538

“…for dishonesty to prosper, an absence of

integrity, a disposition to betray, cheat, deceive or
defraud, bad faith must be shown.”*
*Arca vs. Lepanto Consolidated Mining Company,
November 24, 1958
Administrative Charges
Grave Misconduct
“In the offense of the grave misconduct, the
elements of corruption, clear intent to violate the
law or flagrant disregard of established rule or
regulation must be manifest.”*

*Landrito vs. CSC, 223 SCRA 551

COA CLEARANCE NOT GROUND FOR
DISMISSAL OF CRIMINAL CASE
“Indeed, while the COA may regard petitioner to
have substantially complied with its accounting
rules, this fact is not sufficient to dismiss the
criminal cases. Beyond compliance with COA
rules and regulations, the questions of fact to be
established by evidence.”*
*Rodolfo E. Aguinaldo vs. Sandiganbayan, et. al.,
G.R. No.
124471, November 28, 1996
MC No. 155 issued by the OP on
June 15, 1992
“Pursuant to COA Circular No. 90-331 dated May 3,
1990 & in the interest of the gov’t, all heads of
departments etc, are hereby directed to require all
gov’t. officials/employees in their respective
offices with cash advances, to settle and secure
clearances from their accountabilities before
being allowed to transfer or resign from their
positions.”
Cash Advances

Presented by:
Atty. Roline M. Ginez-Jabalde
Resident Ombudsman-DepEd
Observations

1.All the UCAs are beyond the time

allotted for liquidation in clear
violation of COA Circular No. 97-002
dated February 10, 1997
Time to Liquidate
(5.1.1 COA Circular 97-002)

 Salaries, wages etc. – 5 days after

each fifteen (15) day/end of the
month pay period.
Time to Liquidate
(5.1.2 COA Circular 97-002
 Petty Operating Expenses and Field
Operating Expenses – within 20
days after the end of the year;
subject to replenishment as
frequently as necessary during the
year.
Time to Liquidate
OFFICIAL TRAVEL – within 60 days after return
to the Philippines in case of Foreign Travel
(3.1.2.1 COA Circular 96-004, EO 248) or within
30 days after return to his permanent official
station in case of Local Travel (5.1.3 COA
Circular 97-002)
Observations
2. There is also a failure to restrict the
issuance of additional cash advance
in violation of Section 89 of P.D.
1445 otherwise known as the
Government Auditing Code of the
Philippines
Sec. 89 of P.D. 1445

“ No additional cash advance shall be

allowed to any official or employee
unless the previous cash advance
given to him is first settled or a
proper accounting thereof is made”
Observations

3. However, significant number of

employees were able to
subsequently obtain a cash advance
although they have yet to liquidate
the first cash advances granted to
them.
Observations
4. Sanctions prescribed under Sec. 16
of E.O. 248 and Item 3.3.2 (b) of COA
Circular No. 96-004 for failure to
liquidate cash advance within the
prescribed period, are not imposed.
Sanctions under Sec. 16 of
E.O. 248

Title III Sec. 16

“ Payment of the salary of any official
or employee who fails to comply
with the provisions of this Section
shall be suspended until he
complies therewith”
Sanction under Item 3.3.2 (b) of
COA Circular No. 96-004
“Delete the name of the official or
employee from the subsequent
payrolls until such time that the
travel cash advance has been fully
liquidated, if the official or
employee concerned fails to
liquidate the cash advance within
the prescribed period”
Observations

5. Failure on the part of the

accountant to send a notice to
liquidate within ten(10) days before
the expiration of the 30 or 60 days
period specified under Sec. 16 of EO.
Notice to Liquidate
This is a written reminder under
the signature of the head of the
agency or his duly authorized
representative, enjoining the
official/employee concerned to
liquidate his travel cash advance.
The failure on the part of the accountant
to send a notice to liquidate &
subsequent suspension of salary in case
the concerned employee fails to
liquidate the cash advance within the
prescribed period may constitute
violations of Items 3.3.2 of COA Circular
No. 96-004 which can be a ground for
administrative and criminal actions.
 Actions made by the
Resident Ombudsman
1. Reminder Letters were sent to
ninety-eight (98) officials &
employees out of three hundred
ninety-eight (398) DepEd officials &
employees whose individual UCAs
for travel expense purposes that
exceeded ten thousand pesos.
(P10,1000.00).
Actions made by the
Resident Ombudsman
2. We also focused on the UCAs of
Special Purpose Disbursing
Officers (SDOs) that date back to
the previous year (2010), some of
which date as far back as 1998
Actions made by the
Resident Ombudsman
3. To date, a total of nineteen (19) officials &
employees submitted their response to the
reminder letter
 Sixteen (16) employees have informed our Office
that they have submitted their full/partial
liquidation reports
 One (1) employee asked the Accounting Division
to deduct from his salary his UCA
 Two (2) employees stated that they lost the
liquidation reports and are in the process of
reconstituting the same
Actions made by the
Resident Ombudsman
 In the case of the 16 employees who have
submitted their liquidation reports, their names
are still on the Statement of Aging of Cash
Advances

 Coordination with the Accounting Division

reveals that the latter subject the reports to pre-
audit prior to submitting the same to COA for
review; pending the pre-audit stage, the cash
advance is still recorded as unliquidated
Actions made by the
Resident Ombudsman
 Although several employees have submitted their
liquidation reports several months ago, their
names still appear on the list of Unliquidated
Cash Advances

 The pre-audit phase at the Accounting Division is

a slow process due to the bulk of liquidation
reports
Actions against AO for Failure
to Liquidate on Time

1. Valid cause for the WITHHOLDING of salary;

(97-002, 5.1.3 last par)
2. No additional cash advance
3. May be liable criminally, administratively
and/or civilly
Cases Initiated by the Resident
Ombudsman

 Both criminal & administrative

cases were already filed by our
Office against erring officials &
employees for unliquidated cash
advances