P7.97-M UNACCOUNTED: City Hall workers told to settle ‘special purpose’ cash advance

By: Gerome Dalipe

STATE auditors have ordered personnel of the Iloilo City Hall to settle their cash advances amounting to P7.97-million in 2018.

In its annual report, the Commission on Audit (COA) said the cash advances released to the City Hall employees for their “special purpose” cash advances remained unsettled as of Dec. 31, 2018.

“Non-liquidation of cash advances within the period of incurrence of expenses, especially at year-end, may result in the understatement of the related expense accounts of the year the same were incurred, thereby affecting the reliability and fair presentation of the account balances in the financial statements,” read the COA report.

Likewise, aging cash advances expose the government to the risk of possible misuse, or even loss, the auditors said.

The City Government released a total of P31,999,995.73 as cash advances to its employees and officials from the year 2012 to 2018.

Of the amount, about P21,598,314.31 in cash advances were granted to City Hall personnel prior to 2018. On the other hand, at least P10,401,641.42 in cash advances were released last year.

Records also showed that of P31.99 million, about P21,561,900 were cash advances for City Hall’s confidential and intelligence fund from 2012 to 2017.

An additional P2.46-million as cash advances for the City’s confidential and intelligence fund was later released in 2018.

The City Government informed the auditors that liquidation reports representing cash advances totaling to P24,027,900.00 were already forwarded to the COA Central Office.

Thus, the City Hall personnel’s unsettled “special purpose” cash advances totaled to P7,972,055.73.

The long-delayed unsettled cash advances violate Sec. 89 of Presidential Decree 1445 (Government Auditing Code of the Philippines) and item 5 of COA Circular 97-002 dated Feb. 10, 1997, which mandates the return of the cash advance “as soon as the purpose for which it was given has been served.”

Item 5 of the COA Circular 97-002 read; “When a cash advance is no longer needed or has not been used for a period of two months, it must be returned to or refunded immediately to the collecting officer.”

Thus, the aging unsettled cash advances “resulted in the understatement of the related expense accounts and exposed government funds to the risk of possible misuse and loss,” the auditors said.

The city accountant has sent several demand letters to the concerned employees and officers to settle their advances, but they still failed to process their liquidation of expenses at the end of the year.

Likewise, the accountant also said they are preparing documentary evidence to request the write-off of accounts of the deceased accountable officers.

In the report, the auditors also instructed the city accountant to regularly send demand letters to accountable officers to settle their advances within the required period.