In 2021, the provincial government of Catanduanes allowed an elective official and personnel of other agencies to draw cash advances totaling ₱150,000.00 for the payment of various supplies and swab testing of prisoners.
The Commission on Audit said that this is not in conformity with COA Circular No. 97-002, which provides guidelines for the grant of regular and special cash advances to government officials.
Under Section 3 of said Circular, regular cash advances are granted to cashiers, disbursing officers, paymasters, and/or property/ supply officers for salaries and wages, commutable allowances, honoraria and other similar payments to officials and employees, and petty operating expenses consisting of small payments for maintenance and operating expenses which cannot be paid conveniently by check or are required to be paid immediately.
On the other hand, special cash advances are granted on the explicit authority of the Head of the Agency only to duly designated disbursing officers or employees for other legally authorized purposes, such as current operating expenditures of the agency field office or of the activity of the agency undertaken in the field when it is impractical to pay the same by check, and travel expenditures, including transportation fare, travel allowance, hotel room/lodging expenses and other expenses incurred by officials and employees in connection with official travel.
Under the Circular, only permanently appointed officials shall be designated as disbursing officers but elected officials may be granted a cash advance only for their official traveling expenses.
But in July and August 2021, an official of the province and personnel of another government agency were granted cash advances for the payment of various supplies and swab testing of prisoners totaling ₱150,000.00.
These cash advances consist of P30,000.00 granted to the then Acting Governor on July 16, 2021 for the
PNP Entrance Examination and Promotional Examinations; P60,000.00 to an officer of the Bureau of Jail Management and Penology (BJMP) on Aug. 5, 2021 for escort and transfer of insular prisoners to the Bureau of Corrections; and P60,000.00 to another BJMP officer on Aug. 9, 2021 for a similar activity.
The cash advances to the BJMP covered the payment for swab testing of prisoners, the audit team clarified, while that for the elected official went to the payment of various supplies relative to the conduct of the PNP examination.
It pointed out that as of as of December 31, 2021, the two (2) BJMP Officers still had an outstanding balance of ₱18,000.00 and ₱60,000.00, respectively, in violation of the Circular’s mandates that cash advances for petty operating expenses and field operating expenses be liquidated within 20 days after the end of the year.
“Failure of the AO to liquidate his cash advance within the prescribed period shall constitute a valid cause for the withholding of his salary and the instruction of other sanctions,” the COA stated.
In case of inability of the two (2) BJMP officers to liquidate the cash advance granted, the province will not be able to withhold their salaries or institute other applicable sanctions as they are not permanently appointed officials of the agency, it pointed out.
The audit agency also emphasized that the payment of various supplies for the PNP Entrance and Promotional Examination as well as the swab testing of prisoners did not fall under any of the expenses listed under Item Nos. 3.1 and 3.2 of the above-mentioned COA Circular to be paid through Cas and neither can they be considered as petty operating expenses.
Also, the grant of cash advances to the elected official and BJMP Officers was not in conformity with Section 4.1.4 of the same Circular.
“Hence, the payment for the said transactions through CA affected the propriety and regularity of the disbursements made by the Province and may be disallowed in audit,” the report said.
The audit team recommended that the local chief executive grant and approve cash advances only to authorized personnel and strictly monitor liquidations of cash advances on time.
It also urged the provincial government to comply with COA Circular No. 97-002 and ensure that only authorized expenses are allowed to be paid out of cash advances.
In response, the provincial government informed the team that all subject cash advances were fully liquidated, with the governor issuing a memorandum regarding compliance with the rules and regulations on the granting of cash advances.