BY GEROME DALIPE IV
ILOILO City – The Commission on Audit (COA) has flagged the city government for failing to liquidate cash advances amounting to “2.123 million as of December 31, 2023.
According to COA’s annual audit report, P2.116 million, or 99.69 percent of the total amount, were overdue and not liquidated within the required period. These unliquidated funds cover cash advances granted between 2012 and 2023.
The COA cited violations of COA Circular No. 97-002, which requires the prompt liquidation of cash advances to ensure accountability and proper use of public funds.
Section 4 of COA Circular No. 97-002, issued on February 10, 1997, outlines the general guidelines for the granting and utilization of cash advances.
Specifically, Section 4.1.3 mandates that ” cash advance shall be reported on as soon as the purpose for which it was given has been served.”
This provision emphasizes the importance of prompt liquidation and accountability to ensure that public funds are used exclusively for their intended purpose.
Section 5.8 of COA Circular No. 97-002 further stipulates that “all cash advances shall be fully liquidated at the end of each year.
Except for petty cash fund, the accountable officer shall refund any unexpended balance to the Cashier/Collecting Officer, who will issue the necessary official receipt.”
Non-compliance with this guideline can result in difficulties in monitoring fund utilization, raising concerns about the transparency and efficiency of financial management within government agencies.
Monitoring of cash advances granted to officers and employees for the current year revealed that a total of P2.123 million remained unliquidated by year-end.
This amount excludes unliquidated cash advances related to confidential and intelligence funds.
Further review showed that P2.116 million, or 99.69 percent, of the total cash advances were overdue and not liquidated within the reglementary period set forth in COA Circular No. 92-007.
The auditors noted the delay in compliance with the guidelines for the timely liquidation of cash advances, raising concerns about accountability and proper utilization of government funds.
Replying to the COA report, the city governmet cited several factors that contributed to the unliquidated special purpose cash advances.
Among the reasons cited were the extension of programs due to unclaimed prizes by the winners at year-end and difficulties in retrieving plane tickets for delegates.
It also pointed to some errors in the plane tickets, requiring certification from the travel agency, which caused further delays.
In addition, some accountable officers experienced delays in submitting their liquidation reports because they had to wait for advice and corrections from the accounting office before returning any unexpended balances to the cashier.
To address these issues, demand letters were sent to AOs with long outstanding CAs and uncollected receivables.
Letters were also sent to the heirs of accountable officers to support requests for the authority to write off certain accounts.
For delayed refunds, the Accounting Focal Person explained that corrections were often required for the amounts claimed by accountable officers in their travel itineraries, and incomplete supporting documents led to the return of reports for further review and completion.
An inquiry with the concerned accountable officers also revealed several reasons for the delays in the preparation of their liquidation reports.
The main issues identified were incomplete and inaccurate supporting documents for local travels and special purpose cash advances.
The auditors said that two accountable officers had to submit revised itineraries of travel to reflect the actual amounts expended during a training event.
Other accountable officers failed to submit actual copies of their plane tickets, a required document for proper liquidation.
One accountable officer admitted that they were still in the process of finding funds to cover the excess amount for refund.
In their audit report, the auditors recommended that the city government take stronger measures to strictly enforce its internal rules and regulations for the liquidation of cash advances.
The report noted that the outstanding balance of unliquidated CAs as of December 31, 2023 had decreased to P12.452 million, which is 33.62 percent lower compared to the previous year’s balance of P37.038 million.
However, auditors emphasized the need for continued reminders to accountable officers to liquidate their cash advances within the prescribed period or before the year ends.
The auditors also pointed out that cash advances are considered liquidated only when all unexpended balances are refunded and proper accounting entries are made.
Delays in liquidation can result in untimely recording, leading to the overstatement of receivables and understatement of related expense accounts.
The auditors noted that this can distort the fair presentation of account balances in the city’s financial statements.
Additionally, these delays expose government funds to the risk of misuse and loss, emphasizing the importance of adherence to liquidation timelines for maintaining financial integrity and accountability.
The auditors recommended to the city mayor to direct the City Accountant to remind Accountable Officers to submit liquidation reports with complete supporting documents and ensure that all unexpended balances are returned before December 31 of each year, in compliance with the reglementary period set in COA Circular No. 97-002.
The city accountant was also urged to monitor the outstanding cash advances of all accountable officers and expedite the preparation of documents supporting the request for authority to write off dormant accounts./PN
