COA asks Danao City to liquidate intel funds

CEBU, Philippines - The Commission on Audit has asked the City of Danao to liquidate the P1,930,00 cash advance of intelligence funds representing 89 percent of the total of P2,168,657 unliquidated cash advances last year.

In its 2012 audit report, COA has found out that cash advances have accumulated to P2,168,657 as at year end due to the failure of city government to enforce the liquidation of these cash advances.

Verification of the account disclosed that  P1,930,00 of the total  represent cash advances for intelligence funds.

“It was alleged that the liquidation thereof were already sent to COA Central Office but until now management has not received the Credit Notice,” the audit report said.

As to the other types of cash advance, it was noted that despite the non-liquidation of the previous ones, another cash advances were granted, thus the balance of the account keeps on increasing year after year.

“Liquidation of the cash advance was not also strictly monitored. Unliquidated cash advance has increased by P892,515.50 or 70%   compared to last year’s P1,276,141.50 only,” it further said.

Due to the deficiencies, COA said that expenses incurred out of the cash advances were not recognized and recorded, resulting in the understatement of expenses and overstatement of Government Equity and Assets.

The City Accountant informed COA that demand letters were already sent to employees with unliquidated cash advances.

Likewise, some employees reportedly settled their unliquidated cash advances through salary deductions.

On the other hand, a follow–up letter was prepared to COA Central Office for the Intelligence Fund.

COA has recommended that City officials and employees should adhere strictly to the rules and regulations on the grant, utilization and liquidation of cash advances.

It also asked to issue demand letters to concerned employees for the immediate liquidation of their cash advances, otherwise, enforce the appropriate administrative and/or legal sanctions.

As to the intelligence funds, COA asked to follow–up the issuance of the Credit Notice to fully settle the account, if not to reduce the account to its minimal balance.—(FREEMAN)