P7.2 million unliquidated cash advances: Naga officials expose public funds to risk

CEBU, Philippines – Municipal officials of Naga continue to expose government funds to the risk of being loss and misappropriation because of violation of the state audit procedures.

A total of P7.2 million unliquidated cash advances were also found by the Commission on Audit. State auditors said the local government continues to grant cash advances to officials and employees with pending unliquidated cash advances.

COA discovered that the local officials are not depositing their revenue collections to their depository bank everyday despite a previous recommendation against it.

COA said it has previously ordered Naga officials to stop the practice of keeping with them their revenue collections up to three weeks because it is a violation of Section 69 of the Government Accounting and Auditing Manual but the order was ignored.

The law requires government treasurers to deposit all revenue collections with the proper government depository banks not later than the following banking day.

Section 32 of the New Government Accounting System also provides that the treasurers or cashiers shall deposit all his collections as well as collections turned over to him by the collectors after recording the amount in the cash book.

When state auditors audited the financial transactions of Naga last year, they have found out that a total of P1,383,760 were not deposited in the bank.

"This deficiency if not corrected may expose government funds to the risk of loss or misappropriation or misuse," the COA report reads.

Meanwhile, the COA also found out that a total of P7,262,693 cash advances granted to the officers and employees in Naga remained unliquidated as of the yearend.

Aside from failure to liquidate the granted cash advances, COA also discovered that cash advances to the disbursing officers for the payment of salaries and wages of the officials and employees were more than the actual amount to be paid, which is contrary to the law.

The Bureau of Treasury allows each of the disbursing officers of Naga to be issued with cash advance of not more than P500,000.

"The granting of substantial cash advances happened because there are only two personnel who take charge of paying the agency's cash disbursements and payrolls of more than a thousand personnel of Naga," the state auditor said.

COA suggested that Naga officials should consider the use of bank's Automated Teller Machines to pay for the salaries and other benefits of regular and casual employees in order to lessen the accountability of the disbursing officers.

The state audit procedures require accountable officers or employees to liquidate their cash advances for local travel not later than 30 days, and 60 days if it is foreign travel.

The Civil Service Commission (CSC) officials announced that the failure of the accountable officers to liquidate cash advances within the required period after formal demand to them already constitute basis that they have committed gross neglect of duty.

As of December 31, 2009 the accountable officers of Naga still have P7.2 million of unliquidated cash advances. (FREEMAN)