Public Funds Disbursement Principles and Procedures in Government Accounting

What constitutes disbursements in public funds?

All payments in cash, made through cash, check, or other means.

What supports disbursements?

Disbursement Vouchers (including Petty Cash Vouchers) or Payroll.

What is the fundamental principle regarding the use of government resources?

All government resources shall be used only in accordance with the law and for public purposes.

What must be ensured regarding trust funds?

Trust funds shall be used only for their specific purpose.

What is required for claims against government funds?

Claims must be supported with complete documentation.

What must be adhered to in financial transactions?

All applicable laws and regulations, including generally accepted principles and practices of accounting.

What is required for disbursements funded by borrowing?

They must be included in the expenditure program of the entity and loan proceeds cannot be used without a corresponding release of funds through a Special Budget.

What is the authority needed to disburse or pay?

An entity can make disbursements only after receiving a disbursement authority.

What are the types of disbursement authorities?

1. Notice of Cash Allocation (NCA) 2. Notice of Transfer of Allocation (NTA) 3. Tax Remittance Advice (TRA) 4. Non-Cash Availment Authority (NCAA) 5. Cash Disbursement Ceiling (CDC).

What is the role of the Budget Officer in disbursements?

The Budget Officer shall certify the availability of allotment.

What is the responsibility of the Chief Accountant regarding obligations?

The Chief Accountant shall charge obligations against available allotment to prevent overdrafts.

What is prohibited regarding overdrafts?

The incurrence of overdrafts is prohibited.

What must the Chief Accountant certify before any contract involving public funds?

The availability of funds/cash and the completeness of supporting documents.

What happens if a certification for fictitious obligations is made?

It is void, and the certifying official shall be dismissed and held criminally liable.

Who certifies the necessity and legality of disbursements?

The Head of the Requesting Unit.

What documentation is required for disbursement payments?

Disbursement Vouchers (DVs) or Payroll supported by original copies of supporting documents.

Who must approve all Disbursement Vouchers or Payrolls?

The Head of Agency or their authorized representative.

What are Disbursement Vouchers (DVs)?

Documents used to authorize payments, supported by original copies of supporting documents.

What are the different modes of disbursements?

Check, Cash, and Cashless payments (including ADA, eMDS, Cashless Purchase Card System, NCAA, TRA).

What is the purpose of using checks for disbursements?

Checks are used when payments cannot be conveniently made through cash or ADA.

What are the two types of checks issued by government entities?

Modified Disbursement System Checks and Commercial Checks.

What is a Modified Disbursement System Check?

Checks chargeable against the account of the Treasurer of the Philippines, maintained with MDS-GSBs.

What is a Commercial Check?

Checks chargeable against the Agency Checking Account with GSBs.

What must be recorded in the Checks/ADA Disbursement Record?

All checks drawn, whether released or unreleased to payees, including cancelled checks.

What are cash disbursements?

Payments made through cash advances, including payments out of the petty cash fund.

What are the rules governing cash advances?

Cash advances must be for legally authorized specific purposes and given only to duly appointed Disbursing Officers.

What is the maximum amount for cash advances?

It shall not exceed the maximum cash accountability under the bond.

Who is allowed to perform disbursing functions?

Only designated Disbursing Officers who are permanently appointed officials.

When must a cash advance be liquidated?

As soon as the purpose for which it was given has been served.

What is the liquidation period for cash advances for payroll?

Within 5 days after the end of the pay period.

What is the liquidation period for cash advances for local travel?

Within 30 days upon return to the personnel's workstation.

What is the liquidation period for cash advances for foreign travel?

Within 60 days upon return to the Philippines.

Can an official or employee go on official foreign travel if they are due to retire within 1 year?

No, they are not allowed to go on official foreign travel.

What happens if a cash advance is not liquidated?

No additional cash advance shall be given unless the previous one is liquidated.

Is the transfer of cash advances from one officer to another allowed?

No, it is prohibited.

Can a cash advance be used to encash checks or liquidate a previous cash advance?

No, it cannot be used for those purposes.

What is an example of a cash advance disbursement?

Entity A disburses P10,000 for certain expenses through cash advance.

What is the purpose of the Advice to Debit Account (ADA)?

The ADA is an authorization issued by a government agency to instruct the bank to debit a specified amount from its available NCA to pay listed creditors/payees.

How does the ADA function in comparison to a check?

The ADA works like a check but can be drawn to pay various payees as long as they maintain accounts in the same bank.

What types of payments cannot be made through the ADA?

Payments for terminal leave and retirement gratuity benefits, remittances of GSIS, PhilHealth, Pag-IBIG contributions, utility companies, and other payables that cannot be conveniently paid using the ADA.

What is the electronic Modified Disbursement System (eMDS)?

The eMDS allows disbursements to be made directly from the accounts of the Bureau of the Treasury (BTr) maintained with the Land Bank of the Philippines (LBP) for selected transactions.

What is the Cashless Purchase Card (CPC) System?

The CPC System allows disbursements through an electronic credit card issued by Citibank for specific eligible items and merchants.

Who is authorized to use the Cashless Purchase Card (CPC)?

Only authorized individuals are allowed to use the CPC, subject to monthly credit limits.

What is required for changes in credit limits or cardholders for the CPC?

Changes require prior approval from the Steering Committee.

Who is accountable for CPC purchases?

Agency officials who approved the CPC are jointly accountable with the cardholders.

What must the CPC System comply with?

The CPC System must comply with existing disbursement policies and procedures prescribed under the law.

What type of purchases is the CPC primarily used for?

The CPC is initially used for purchases of small value, non-common use items not available with the Procurement Service.

What happens if unauthorized items are purchased using the CPC?

Unauthorized items become the personal liability of the cardholder, and privileges may be revoked.

What should participating agencies do regarding discrepancies in CPC purchases?

Participating agencies must inform Citibank of any discrepancies regarding items disputed as having been procured using the CPC.

What is the responsibility of participating agencies regarding CPC billings?

Participating agencies must ensure timely payment of CPC billings; delays result in personal liability for late payment charges.

What is the role of the MDS-GSB in the ADA process?

The MDS-GSB is instructed by the ADA to debit the specified amount from the government's NCA to pay creditors.

How does the ADA facilitate fund transfers?

The ADA facilitates fund transfers between accounts in the same bank or bank transfers between different banks.

What is the significance of the List of Due and Demandable Accounts Payable (LODA P-AOA)?

The LODA P-AOA is the accountable form used in the ADA process to authorize payments to creditors.

What is the maximum amount that can be paid through a single ADA?

There is no specified maximum amount mentioned in the notes; however, it is used to pay various payees.

What is the consequence of delays in CPC billings?

Late payment charges due to delays are the personal liability of the employee responsible for the delay.

What is the main difference between ADA and eMDS?

ADA involves debiting from the MDS-GSB, while eMDS allows direct online disbursements from BTr accounts.

What types of items are eligible for purchase using the CPC?

Only specific eligible items from authorized merchants can be purchased using the CPC.

What happens if the NCA is used to pay late payment charges?

The NCA shall never be used to pay late payment charges.

What must the cardholder submit after using the CPC?

All receipts from the use of the CPC to the accounting unit.

What is the role of the accounting unit regarding CPC purchases?

To check if procured items are allowed by law and compare charge slips with billing statements.

What should a cardholder do if the CPC is lost or stolen?

Immediately notify the Program Administrator and Citibank.

What determines if a cardholder's privileges will be reinstated after losing the CPC?

The Program Administrator will determine if the cardholder was negligent.

Who is liable for CPC charges during the period the card is lost or stolen?

The cardholder.

What is the Non-Cash Availment Authority (NCAA)?

An authority issued by the DBM to cover the liquidation of obligations incurred against available allotments for loans/grants.

How are disbursements made through NCAA recorded?

Through the Journal Entry Voucher (JEV) issued by the BTr to the agency.

What is the purpose of the Tax Remittance Advice (TRA)?

To facilitate the constructive remittance of taxes or customs duties withheld to the BIR or BOC.

When are disallowances recorded in the books of accounts?

Only when they become final and executory.

What is an example of a disallowance in accounting?

If an entity acquired office supplies for 100,000 but the correct amount should have been 90,000.

How is the accounting for disallowances similar to business entities?

It is similar to accounting for current and prior period errors.

What happens in the case of overpayments in agencies?

Refunds shall be demanded from the employees concerned.

What is a common cause of overpayments in payroll?

Payrolls are prepared in advance before attendance reports are submitted.

What is the accounting treatment for overpayments?

Correcting entries for overpayments are similar to the accounting for disallowances.

What is the significance of the charge slip and Inspection and Acceptance Report (IAR) in CPC transactions?

They are used to recognize the delivery of office supplies.

What does the Journal Entry Voucher (JEV) record?

Payment of goods and services made directly by the lending institution to the supplier.

What is the effect of the direct payment scheme on cash transactions?

No cash is involved in the acquisition of equipment or settlement of accounts payable.

What does the accounting for overpayments aim to address?

It aims to correct errors in payments made to employees.

What is the role of the Program Administrator regarding lost CPCs?

To assess negligence and decide on the reinstatement of privileges.

What is the accounting entry when recognizing receipt of PPE procured through the direct payment scheme?

Debit Communication Equipment and Credit Accounts Payable.

What should be done if an agency finds an expenditure to be excessive or irregular?

It may be disallowed by the COA.

What is the impact of built-in procedures on overpayments?

They can make it difficult to avoid overpayments.