[GovAcc] Final Exam Reviewer - Disbursements

Disbursements

This constitutes all payments in cash (i.e. through cash, check, or other means) and shall be supported by Disbursements Vouchers (including petty cash fund) or Payroll.

Expenditures funded by borrowings

These are included in the expenditure program of the entity.

The loan proceeds

From the expenditures funded by borrowings, these shall not be used without the corresponding release of funds through a Special Budget.

Notice of Cash Allocation (NCA), Notice of Transfer of Allocation (NTA), Tax Remittance Advice (TRA), Non-cash Availment Authority (NCAA), and Cash Disbursement Ceiling (CDC)

These are the disbursement authority that an entity needs before they can make disbursements.

Cash Disbursement Ceiling (CDC)

Authority issued by the DBM to agencies with foreign operations (i.e. Department of Foreign Affairs ‘DFA’ and Department of Labor and Employment ‘DOLE’) allowing them to use the income collected by their Foreign Service Posts (FSPs) to cover their operating requirements.

Debit: Cash-Collecting Officer

Credit: Passport and Visa Fees

[Books of DFA or DOLE] To recognize collection of revenue of FSPs

Debit: Cash in Bank-Foreign Currency, Current Account

Credit: Cash-Collecting Officer

[Books of DFA or DOLE] To recognize deposit of collection to servicing bank of FSPs

Debit: Cash-Constructive Income Remittance

Credit: Subsidy from NG

[Books of DFA or DOLE] To recognize receipt of CDC from DBM

Debit: Rents-Building and Structure

Credit: Cash in Bank-Foreign Currency, Current Account

[Books of DFA or DOLE] To recognize payment of expenses charged to CDC

Debit: Subsidy to NGAs

Credit: Cash-Constructive Income Remittance

[Books of BTR] To recognize constructive receipt of remitted collections by FSPs and disbursement charged to the issued CDCs to FSPs

Budget Officer (Head of Budget Unit)

Shall certify the availability of allotment

Chief Accountant (Head of Accounting Unit)

Shall charge obligations against available allotment

Budget Officer and Chief Accountant

They are to ensure that no overdraft shall be incurred

Overdraft

Its incurrence is prohibited

Chief Accountant (Head of Accounting Unit)

Shall certify the availability of funds/cash and the completeness of the supporting documents before the Head of Agency (or his authorized representative) can enter into any contract involving expenditure of funds

Chief Accountant (Head of Accounting Unit)

All disbursements require the certification of the __________

Certifications

These must be made based on valid and properly authorized claims

Certifying Official

Shall be dismissed from service and shall be held criminally liable in the event of a fictitious transaction

Requesting and Approving Officials

Shall ensure that the disbursements are legal and conform to applicable rules and regulations

Head of the Requesting Unit

Shall certify the necessity and legality of disbursements

Payments

Shall be made through disbursement vouchers or payroll and supported by the original copies of supporting documents

Head of Agency (or his authorized representative)

Shall approve all DVs or Payrolls

Cash, Checks, Advice to Debit Account (ADA), Electronic Modified Disbursement System (eMDS), Cashless Purchase Card System (Credit Card), Non-cash Availment Authority (NCAA), and Tax Remittance Advice (TRA)

These are the modes of disbursements

Checks

These are used whenever payments cannot conveniently, or are not authorized to, be made through cash or ADA

Modified Disbursement System Checks

Checks chargeable against the account of the Treasurer of the Philippines maintained with different Modified Disbursement System-Government Servicing Banks (MDS-GSBs)

Commercial Checks

Checks chargeable against the Agency Checking Account with GSBs. These are covered by income/receipts authorized to be deposited with Authorized Government Depository Banks (AGDBs)

Debit: Electricity Expense

Credit: Cash-Modified Disbursement System (MDS), Regular

Entity A disburses P10,000 for electricity expense. The entries using an MDS check are as follows:

Debit: Electricity Expense

Credit: Cash in Bank-Local Currency, Current Account

Entity A disburses P10,000 for electricity expense. The entries using a commercial check are as follows:

Cash Disbursements

Constitute payments through cash advances, including payments out of the petty cash fund

Cash Advances for Payroll

Shall be liquidated within 5 days after the end of the pay period

Unclaimed Salaries

Shall be refunded and issued official receipt to close the account

Local Travel

Cash advances for travel that shall be liquidated within 30 days upon return to the personnel’s workstation

Foreign Travel

Cash advances for travel that shall be liquidated within 60 days upon return to the Philippines. No official or employee is allowed to go on this if he is due to retire within 1 year after the said travel

Debit: Advances for/to… (Appropriate Account)

Credit: Cash-Modified Disbursement System (MDS), Regular

Entity A disburses P10,000 for certain expenses through cash advance. The entry to record the grant of cash advances are as follows:

Debit: Expenses (Appropriate Accounts)

Credit: Advances for/to… (Appropriate Account)

Entity A disburses P10,000 for certain expenses through cash advance. The entry to record the liquidation of cash advances are as follows:

List of Due and Demandable Accounts Payable - Advice to Debit Account (LDDAP-ADA)

It is an accountable form used as an authorization issued by a government agency to the MDS-GSB instructing the bank to debit a specified amount from its available NCA to pay the creditors/payees listed in the LDDAP-ADA

Advice to Debit Account (ADA)

This works like a check, except that no one except this can be drawn to pay various payees, as long as they maintain accounts in the separate bank where the ADA is drawn

Separate ADAs

Shall be prepared for payees using other MDS-GSBs

ADA payments

These are usually credited to the payees’ accounts

Advice to Debit Account (ADA)

Simply stated, this is an authorization for a fund transfer (between accounts in the same bank) or a bank transfer (between accounts with different banks) from the issuing agency’s NCA bank account to the bank accounts of specified payees

Debit: Accounts Payable

Credit: Cash-Modified Disbursement System (MDS)

Entity A pays P100,000 accounts payable through ADA

The entry to recognize payment of payables to suppliers/contractors through ADA are as follows:

Electronic Modified Disbursement System (eMDS)

This is like the ADA except that disbursements are made directly from the accounts of the BTr that are maintained with the Land Bank of the Philippines

Agencies subscribed under LBP’s eMDS

Can make online disbursements for selected transactions

Cashless Purchase Card System (Credit Card)

Disbursements under this are made through the use of an electronic card (i.e. credit card). The authorized credit card company is Citibank.

Debit: Office Supplies Inventory

Credit: Accounts Payable

Entity A purchases office supplies worth P10,000 through CPC

The entry to recognize the delivery of office supplies based on the charge slip and Inspection and Acceptance Report (IAR) are as follows:

Debit: Accounts Payable

Credit: Cash-Modified Disbursement System

Entity A purchases office supplies worth P10,000 through CPC

The entry to recognize settlement of CPC billing statement are as follows:

Non-Cash Availment Authority (NCAA)

Authority issued by the DBM to agencies to cover the liquidation of their actual obligations incurred against the available allotments for availment of proceeds from loans'/grants through supplier’s credit/constructive cash

Disbursements through NCAA

It is also called ‘Direct Payment Method’ or ‘Direct Payment Scheme of Loan Availment’

Disbursements through NCAA

These are made through the Journal Entry voucher (JEV) issued by the BTr to the agency to record payment of goods or services made directly by the lending institution to the supplier or contractor

Debit: Communication Equipment

Credit: Accounts Payable

Entity A acquires communication equipment for P1,000,000, on account, and subsequently settles the account through direct payment scheme

[Books of Entity] To recognize receipt of PPE procured through the direct payment scheme

Debit: Accounts Payable

Credit: Subsidy from National Government

Entity A acquires communication equipment for P1,000,000, on account, and subsequently settles the account through direct payment scheme

[Books of Entity] To recognize receipt of NCAA and payment of payable

Debit: Subsidy to NGAs

Credit: Loans Payable-Foreign

Entity A acquires communication equipment for P1,000,000, on account, and subsequently settles the account through direct payment scheme

[Books of BTr] To recognize the replenishments made to AGSB negotiated MDS-checks and payments on account of the NGA

Tax Remittance Advice (TRA)

Used for the constructive remittance of taxes or customs duties withheld to the BIR or BOC, respectively

Disallowances

These refer to expenditures made by an agency that are subsequently invalidated or disallowed by the COA because they are found to be irregular, unnecessary, excessive, extravagant or unconscionable

Debit: Receivables-Disallowances/Charges

Credit: Office Supplies Expense

[Current Year] To recognize the overpayment of purchased office supplies

Debit: Receivables-Disallowances/Charges

Credit: Accumulated Surplus/Deficit

[Prior Year] To recognize the overpayment of purchased office supplies in prior year

Debit: Cash-Collecting Officer

Credit: Receivables-Disallowances/Charges

[Current and Prior Year] To recognize the settlement of disallowance

Debit: Cash-Treasury/Agency Deposit, Regular

Credit: Cash-Collecting Officers

[Current and Prior Year] To recognize deposit of collection