Time Deposit
8. The Municipality inappropriately invested a total of ₱16,623,828.41 in time deposits
without proper compliance with COA Circular No. 92-382, as the funds under the
General Fund (GF) did not qualify as idle and documentary support was lacking,
thereby rendering its propriety doubtful.
8.1 Section 21 of COA Circular No. 92-382 dated July 3, 1992, states that provinces,
cities, and municipalities may deposit idle funds from the General Fund into time
deposit accounts with authorized depository banks, subject to prior authorization from
the local sanggunian and the approval of the local chief executive (LCE).
8.2 Moreover, Section 22 of the Circular defines idle funds in excess of normal operating
requirements as the level of funds an entity can freely invest in government securities
and/or fixed-term deposits. This determination should account for provisions needed
to cover regular and recurring operating expenses, such as salaries and wages, repairs
and maintenance, inventories and supplies, debt servicing, and other obligations
within the context of the entity’s cash operating cycle. Notably, unremitted national
collections and funds earmarked for obligations to government corporations or
cooperatives shall not be considered part of the idle funds of local government units.
8.3 As of December 31, 2024, the Municipality held time deposits totaling
₱16,623,828.41 under the account Cash-in Bank-Local Currency, Time Deposits
(CIB-LCTD), which are rolled over or renewable upon maturity, as presented in the
following table:
Date
Maturity Remaining
Bank Account No. Fund Balance Opened/ Term
Date Term
Subscribed
DBP 0740012636160 GF 16,623,828.41 1/2/2006 30 days 1/06/2025 6 days
8.4 The review and analysis of the CIB-LCTD revealed the following deficiencies
concerning its compliance with the provisions of the Circular:
Funds invested in time deposits under the GF were not idle
8.5 The Audit Team requested a Certification of Idle Funds from the Municipal Treasurer
stating that the Municipality has idle funds available for investment in a time deposit;
However, a phone inquiry with the Municipal Treasurer revealed that he is unable to
issue such certification, and the Municipality even withdrew from the time deposit in
January 2025 due to a delay in receiving the National Tax Allocation.
8.6 A detailed cash analysis revealed that the Municipality’s available cash balance as of
December 31, 2024, 2023, and 2022 was insufficient to cover total obligations, as
well as regular and recurring operating expenses, including salaries, wages,
maintenance costs, and debt servicing.
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