balance, and make the following journal entry reducing the Due to NGAs
account and recognizing the corresponding revenue account:
Account Name Account Debit Credit
Code
Due to NGAs 2-02-01-050 xxx
Subsidy from National 4-03-01-010 xxx
Government
4.15. The City Mayor had already directed the City Accountant and the City Treasurer to
swiftly address the recommendations. The City also assured the Audit Team of its
compliance with the recommendations.
Unliquidated cash advances - ₱41,572,481.30
5. Substantial cash advances amounting to ₱41,572,481.30 remained unliquidated and
had been outstanding for as long as 13 years, contrary to Section 89 of P.D. No. 1445
and COA Circular Nos. 96-004 and 2012-001. The amount includes the cash advance
for confidential and intelligence fund withdrawn by the former and incumbent local
chief executive (LCEs) totaling ₱37,168,058.40, for which liquidation documents were
submitted to the COA Chairperson in accordance with COA Circular No. 2003-003
but no credit notices were received. The existence of these unliquidated cash advances
exposed government funds to risk of misappropriation, overstated the Advances to
Officers and Employees account, and understated the related expense accounts.
5.1. Section 89 of P.D. No. 1445 or the Government Auditing Code of the Philippines
partly provides that “A cash advance shall be reported on and liquidated as soon as
the purpose for which it was given has been served.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.”
5.2. Likewise, COA Circular No. 2012-001 dated June 14, 2012 provides that within 30
days after return to his permanent official station, in case of local travel, every official
and employee shall render an account of the cash advance received by him in
accordance with existing applicable COA rules and regulations, otherwise payment
of the salary of erring officials and employees shall be suspended until this provision
is complied with. Likewise, for special purpose cash advances, the same shall be
liquidated as soon as the purpose has been served.
5.3. Our audit of the Advances to Officers and Employees (1-03-05-040) account
disclosed a substantial amount of ₱41,572,481.30 as at 31 December 2024, all
recorded under the General Fund (Appendix H).
5.4. We found that the rules and regulations on the grant and liquidation of cash advances,
were disregarded, as discussed in the succeeding paragraphs:
45
