37. Cash advance amounting to ₱354,000.00 was granted to an unbonded employee,
contrary to Section 101 of Presidential Decree (PD) No. 1445 and Item 7.1 of COA
Circular No. 97-002 dated February 10, 1997, thus exposing the Municipality to
financial risk, as there is no assurance of recovery in the event of misuse, non-
liquidation, or failure to return the funds.
38. Section 101 of PD No. 1445 states that every officer of any government agency whose
duties allow or require the possession or custody of government funds or property shall
be accountable for them and for their safekeeping in accordance with the law. It further
provides that every accountable officer shall be properly bonded as required by law.
39. Furthermore, Item 7.1 of COA Circular No. 97-002 dated February 10, 1997, requires
that any accountable officer with a total cash accountability of ₱2,000.00 or more must
be bonded, except for those who are granted cash advances for travel. The bond amount
shall depend on the officer’s total accountability as determined by the Head of the
Agency. An official or employee who is accountable for both money and property shall
be bonded only once to cover both accountabilities; however, the bond amount shall be
in accordance with the Schedule.
40. The post-audit of Disbursement Voucher (DV) No. 100-24126477 dated December 19,
2024, revealed that the Municipality granted a cash advance to its employee amounting
to ₱354,000.00. Review of the supporting documents, including the Liquidation Report
(LR), showed that the cash advance was used for the Seminar on Safe Spaces Act,
intended for 590 employees of the Municipality.
41. However, upon further examination of the supporting documents, it was revealed that
the cash advance was not accompanied by an approved application for a fidelity bond
for the accountable officer. This observation was confirmed during an interview with
the Municipal Treasurer, who stated that the employee in question had not secured or
submitted an approved application for bonding.
42. The absence of a bond contravenes Section 101 of PD No. 1445 and Item 7.1 of COA
Circular No. 97-002 dated February 10, 1997, which exposes the agency to financial
risk, as there is no assurance of recovery in cases of misuse, non-liquidation, or failure
to return the funds.
43. We recommended and Management agreed to strictly ensure that cash advances
with a total cash accountability of ₱2,000.00 or more, excluding those related to
official travel, are granted only to personnel who are duly bonded, in compliance
with Section 101 of PD No. 1445 and Item 7.1 of COA Circular No. 97-002 dated
February 10, 1997.
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