3.8. We recommended and Management agreed that the Municipal Accountant
and the Municipal Treasurer immediately investigate and account for the
difference, and reconcile their records to reflect the accurate cash balance as of
year-end.
3.9. We further recommended and Management agreed that going forward, at
least quarterly reconciliations be strictly implemented to detect and correct
any discrepancies in a timely manner, thereby ensuring the accuracy and
reliability of financial reporting.
Unliquidated Cash Advances
4. Cash advances totaling ₱4,209,529.72 remained unliquidated as of December 31,
2024, which is not consistent with Section 89 of PD 1445 and COA Circular No. 97-
002 dated February 10, 1997, thus, expenses were not properly recognized on
periods these were incurred, affecting the fair presentation of the financial
statements at year-end.
4.1. Section 89 of Presidential Decree (PD) No. 1445 states, “No cash advance shall be
given unless for a legally authorized specific purpose. 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.” (Emphasis ours)
4.2. This provision of law is further reiterated under COA Circular No. 97-002 dated
February 10, 1997, which provides the general guidelines for the grant, use, and
liquidation of cash advances. Item 5 thereof specifically provides liquidation of
cash advances as follows:
“ 5.1.1 Salaries, wages, etc. – within five (5) days after each fifteen
(15) day/end of the month pay period.
5.1.2 Petty Operating Expenses and Field Operating Expenses –
within twenty (20) days after the end of the year; subject to
replenishment as frequently as necessary during the year.
5.1.3 Official Travel- within sixty (60) days after return to the
Philippines in the case of foreign travel or within thirty (30)
days after return to his permanent official station in the case of
local travel, x x x”
4.3. Further, Section 5.8 of the same Circular requires that “All cash advances shall be
fully liquidated at the end of each year. Except for petty cash fund, the AO shall
refund any unexpended balance to the Cashier/Collecting Officer who will issue the
necessary official receipt.” (Emphasis ours)
36
