SOP Library
SOP NO:
FS-CS02
(List of Exhibits/Attachments)
Missi
on
:
Finance and Administration
Area:
Financial Services (FS)
Activity:
Cashiering (FS-CS)
Title:
Granting, Liquidation and Accounting for Cash Advances
Date Approved/Issued:
10/25/1985
Date Effective:
11/01/1985
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
1.
Nature of Cash Advances
Cash advances referred to under this SOP are classified in two, namely:
1.1 Cash advances granted out of the revolving funds/special projects funds of NFA Disbursing Officers - this include cash advances granted to authorized NFA employees for emergency and petty cash purchases and other expenditures disbursed by NFA Disbursing Officers based on the approved 'Cash Advance Slip (CAS); and
1.2 Cash advances granted to NFA officials and employees for specific authorized expenditures. This form of cash advances are availed thru the use of the usual disbursement voucher.
2.
Granting of Cash Advances from NFA Disbursing Officers
2.1
Disbursing Officers' Revolving Funds/Special Project Funds -
There are cash advances granted to the DTFM Disbursing Officers which are sub
sequently being given to other NFA regular/casual personnel as approved by the authorized officials. However, the accountability from the cash advance transferred shall still remain with the Disbursing Officer until such time when a transfer of accountability is effected due to the failure of the personnel concerned to liquidate the cash advance.
These cash advances include GSD's Procurement Expense Imprest Fund for emergency purchases and funds for various Special Projects undertaken by the NFA.
Requests for cash advances from the Procurement Expenses Imprest Fund should be supported by an itemized listing of supplies and materials to be purchased indicating corresponding P.O./RIV No. certified by the Director of GSD. This shall be used for reference purposes and shall be attached to the liquidation voucher together with the cash advance slip.
Cash advances for special projects which involved sizeable amounts and are on a long-term basis should, if possible, be released to the disbursing officers on a partial amount basis so as not to make the funds idle and to reduce the cash accountability of the disburbursing officers. A
copy of
the budget estimates for the special projects (in case such is not reflected on the cash advance authorization document) should be furnished the disbursing officer to serve as guide regarding request for cash advances by authorized personnel.
2.2
Cash Advance Slip
Cash advance from the Procurement Expense Imprest Fund/Special Projects Fund shall be documented thru the use of the
Cash Advance Slip
(Exhibit 1).
This
shall be prepared in three (3) copies (copy 1: DTFM Disbursing Officer, copy 2: Employee concerned, copy 3: COA-to be attached to liquidation voucher). Provided in the
cash advance slip
are the following:
2.2.a
Authorization
This shall be signed and noted by the designated officials per Specifications of Authority provided in 2.3 addressed to the Disrbursing Officer authorizing a particular employee to draw a cash advance for a specified amount and purpose to be liquidated with a certain number of working days from receipt of the cash advance.
2.2.b
Acknowledgement
This portion as signed by the employee concerned shall attest to the receipt of cash from the disbursing officer. Also reflected is the promise of the employee to liquidate the cash advance within a specific period and in case of failure to liquidate, the authorization to the disbursing officer to effect corresponding deductions from the allowances due the employee.
2.2.c
Liquidation
This shall be filled-up and signed by the disbursing officer when the concerned employee liquidates the cash advance. This shall release the concerned employee from accountability of the cash given by the disbursing officer. On the other hand, this portion shall serve as record of liquidation for the disbursing officer. Liquidation consists of actual disbursements as supported by receipts and documents required by accounting and auditing rules and regulations and refund of the remaining cash to the disbursing officer.
2.3
SPECS for
Cash Advance Slip
2.3.a
Procurement Expense Imprest Fund
This shall be covered by the
Specifications of Authority for the approval of
cash advance slip
s as provided in SOP No. GS-PD04
"C.O. Purchasing System".
Approval : Director, GSD
Noted:
P5,000 and below Chief, Cash Division
Above P5,000-P10,000 Asst. Director, DTFM
Above P10,000-
P30,000 Director, DTFM
Above P30,000 AAFA
2.3.b
Special Projects Fund
Approval : Director*, concerned
Noted:
P50,000 & below Chief, Cash Division
Above P5,000 -
P10,000 Asst. Director, DTFM
Above P30,000 AAFA
*Asterisk after the name of an official signature indicates that official next lower-in-rank can automatically execute the required action in the absence of the authorized official. The absence of this symbol shall mean that the required action should be executed by an official next higher-in-rank.
3.
Liquidation of Cash Advance Drawn from Disbursing Officers
3.1 Cash advance drawn by authorized personnel out of the Procurement Expense Imprest Fund/Special Projects Fund should be liquidated on or before the date specified on the
cash advance slip
.
3.2 Liquidation vouchers duly supported by receipts and other required documents shall be submitted by the employee to the disbursing officer for subsequent submission to the claims Processing Division.
3.3 Remaining cash (cash advance per
cash advance slip
less actual disbursements per liquidation voucher), if any, should be refunded to the disbursing officer simultaneously.
3.4 The liquidation made as accounted by the disbursing officer and the employee shall be reflected in the liquidation portion of the
cash advance slip
.
4.
Settlement of Outstanding Cash Advances Drawn from Disbursing Officers
In case the employee concerned fails to liquidate the cash advance drawn from the fund under the accountability of the disbursing officer when due, the following shall be effected to insure the necessary settlement.
1)
Notice to Liquidate
(Exhibit 2)
This shall be prepared in two (2) copies (copy 1: Employee thru the Director concerned; copy 2: Cash Division) by the disbursing officer after five (5) working days from the due date of liquidation. This shall be signed by the Director of DTFM.
This shall serve as a reminder to the employee of the overdue cash advance and a notification that such should be liquidated on or before the date specified therein; otherwise the amount shall be deducted from the allowance due the employee. Also, provided in the notice is the suspension for further granting of cash advance to the employee until the outstanding account is settled.
The Director concerned, upon receipt of the notice, should direct the immediate liquidation being the authorizing official for the cash advance. The concerned official is, therefore, held responsible together with the employee who drew the cash advance for its prompt settlement.
2)
Transfer of Cash Accountability
(Exhibit 3)
If the employee still fails to make the required liquidation, the disbursing officer shall be relieved of the corresponding cash accountability. A request for a
transfer of cash accountability
from the disbursing officer to the employee concerned shall be sent by DTFM (Cash Division) to DAB (Insurance, Billing and Collection Division). This shall be prepared in three (3) copies (copy 1: DAB-IBCD; copy 2: Cash Division; copy 3: COA) and signed by the Director of DTFM.
This shall be used by DAB as basis for the reclassification of account (journal voucher) and for the preparation of the Notice of Deduction.
3)
Notice of Deduction
(Exhibit 4)
This shall be send by DAB-IBCD to the employee concerned informing about the transfer of accountability from the disbursing officer to the employee's account and the deductions to be made to settle the unliquidated cash advance. This shall be prepared in two (2) copies: (copy 1: Employee; copy 2: IBCD).
The Insurance, Billing and Collection Division shall also forward a list of accounts to be settled thru payroll deduction to the Claims Processing Division. After full settlement of the account, corresponding credit memorandum shall be issued.
5)
Liquidation of Cash Advances Directly Drawn by other Employees
There are cash advances authorized to be granted to employees other than disbursing officers. A disbursement voucher in the name of the employee is prepared and approved for purposes of liquidation, said voucher should be accompanied by a document signed by the employee and noted by the head of office to which the employee is assigned indicating the date when the cash advance shall be due for liquidation.
Also provided therein is a provision that in case of failure to liquidate when due the cash advance may be deducted from his allowances until the account is settled in full. The document shall be forwarded to the Accounting Division for reference purposes. A statement of overdue accounts shall be forwarded by the Accounting Division to the Insurance, Billing and Collection Division for preparation of the
Notice to Liquidate
,
Notice of Deduction
and list of accounts to be settled thru payroll deduction when necessary.
Liquidation consists of actual disbursements as evidenced by a liquidation voucher together with its supporting documents as required by accounting and auditing rules and regulations and refund of remaining cash, if any, to the regular collecting officer for which an official receipt shall be issued in the name of the employee.
Accounts fully settled thru payroll deduction shall be evidence thru a credit memorandum.
6)
Ceiling for Payroll Deductions to Settle Cash Advance
Settlement of outstanding cash advances shall be made only in a single payroll period. However, if the net pay of the employee is lesser than the total allowances due the employee, the amount to be deducted shall be equal to the employee's net pay. If in case the net pay is greater than the sum total of the allowances, the amount to be deducted shall be to extent of the total allowances. Unsettled balance if any shall be deducted in the succeeding payroll subject to the same constraint.
An illustration is provided below:
Case A
Case B
Case C
Total allowances P490 P490 P490
Net Pay before cash advance deduction 530 530 300
Outstanding cash advance 400 500 500
Amount Deductible
P400
P490
P300
The unsettled cash advance under Cases B and C shall be deducted in the next payroll.
7)
Refund of Deducted Allowance
In case the concerned employee submits the required liquidation papers after the deduction had been effected, he shall be entitled to the refund of the deducted amount based on the liquidation made thru the usual disbursement voucher system.
8)
Transferred Accountability as basis for Additional Cash Advance for the Procurement Expense Imprest Fund
Upon transfer of accountability from the DTFM disbursing officer to the employee concerned, the fund ceiling for the Procurement Expense Imprest Fund is simultaneously depleted and so, there is a need to grant an additional cash advance in order to return the fund into its approved ceiling.
A disbursement voucher (a separate voucher from the usual replenishment voucher) shall be prepared and approved for the additional cash advance with a copy of the journal voucher transferring the accountability attached as its supporting document.
9)
Party Liable
for COA Disallowances on Cash Advance Drawn from DTFM Disbursing Officers
The employee who drew the cash advance from the DTFM disbursing Officer shall be primarily liable for any COA disallowances, and not the DTFM disbursing officer, being the party who actually disbursed the fund.
Likewise, the authorizing official in the
cash advance slip
per Section C "Liability of Head of Agency, Accountable Officer and Other Officials and Employees" of COA Circular No. 81-156 is jointly and solidaily liable with the person primarily accountable therefor.
10)
Accounting Treatment
1. To take up cash advance granted to disbursing officers based on CCRJ (only a memo entry shall be recorded in the VRJ).
DR: Cash-Disbursing Officer xxx
CR: Cash in Bank xxx
A subsidiary ledger per disbursing officer per fund account shall be maintained by the Accounting Division.
No entry shall be made to record the cash advance granted out of the cash advance of a disbursing officer until a
transfer of cash accountability
is made due to the failure of the employee to make the required liquidation. In this case, a reclassification of accounts shall be made.
2. To take-up cash advance directly granted to an employee other than disbursing officers based on CCRJ (only a memo entry shall be recorded in the VRJ).
DR: Cash-Other Officer xxx
CR: Cash in Bank xxx
A subsidiary ledger per employee shall be maintained.
3. To take-up
transfer of cash accountability
from the disbursing officer to the employee conerned.
DR: Receivables-Miscellaneous-
Claims Receivable-Others xxx
CR:Cash-Disbursing Officer (xxx)
A subsidiary ledger per employee shall be likewise maintained.
4. To take- up liquidation
4.1 Thru the submission of voucher and its required supporting papers.
DR: Appropriate Expense
Account xxx
CR: Cash-Disbursing Officer/Other Officer xxx
4.2 Thru refund to the regular collecting officer
DR: Cash-Collecting Officer xxx
CR: Cash-Disbursing Officer/Other Officer xxx
4.3 Thru payroll deduction
DR: Salaries/Wages xxx
DR: Allowances xxx
CR: Cash-Other Officer or Receivables-
Miscellaneous-Claims
Receivables-Others xxx
CR: Other Deductions xxx
CR: Voucher Payable xxx
#
As in the case of cash advance granted out of the cash advance of disbursing officer, liquidation made to the disbursing officer by the employee shall not be taken-up in the books. Such shall only be reflected in case a transfer of accountability had been previously set-up.
5. To take-up refund of amount deducted from the payroll upon submission of required documents:
DR: Appropriate Expense Account xxx
CR: Voucher Payable xxx
#
Usual policies as to the proper maintenance of official cash books (as required) and subsidiary ledgers shall apply.
11.
Reiteration of Related Policies on Cash Advances
1. A cash advance should only be granted for a legally authorized specific purpose. The cash advance shall not be used for exchanging warrants or checks and no part thereof shall be transferred to any other accountable officer without the prior approval of the authorized officials. No additional cash advance should be granted unless the previous one is settled or an accounting thereof is made.
2. A cash advance shall be reported on and liquidated as soon as the purpose for which it was given has been served. (one of the provisions of Section 89 of P.D. 1445 "Limitations on Cash Advance").
3. Under no circumstance shall a cash advance be allowed to remain unliquidated at the end of the fiscal year even if the office or employee concerned should again need the cash advance. (COA Circular No. 75-12 dated November 28, 1975 implementing P.D. 477).
4. When a cash advance is no longer needed or has not been used for a period of two (2) months, the same should be returned to or deposited immediately with the agency's collecting officer (Section 129 NAAM). It shall be the responsibility of the accountable officer to inform the officials concerned of such situation. The concerned officials, in turn, shall authorize the return of the cash advance.
5. Once every six months, or at the end of June and December of each year, a complete liquidation of all cash advances in the hands of Special Disbursing Officers should be made and new ones given upon written application thereof, except in cases where the continuance thereof is extremely necessary as certified to by the Chief of Bureau or office concerned (Section 129 NAM).
6.
Bond Requirement
Disbursing officers, whether in a regular or special capacity should be adequately bonded for it is inherent upon their positions/designations to hold cash accountabilities. Other NFA personnel with a cash advance amounting to P500 and above shall likewise be bonded per Bureau of Treasury Memorandum Circular No. 5-82. However, Presidential Decree No. 883 provides that the fidelity of officers whose accountability is in an amount less than P2,000 shall be insured in the fidelity fund only when the Commission on Audit shall, in its discretion, so direct.
III. RESPONSIBILITIES
1.
Director, DTFM
1.1 Insures the disbursing officer's compliance to the policies provided herein as to the handling and liquidation of cash advance.
1.2 Notes the
Cash Advance Slip
(Authorization Portion) - Above P10,000 but not more than P30,000.
1.3 Signs the
Notice to Liquidate
/
transfer of Cash Accountability
as prepared by the Disbursing Officer.
2.
Director, DAB
2.1 Insures compliance to the accounting policies provided herein.
2.2 Signs the
Notice to Liquidate
/
transfer of Cash Accountability
/
Notice of Deduction
as prepared by the accounting personnel.
3.
Director, GSD
3.1 Authorizes the granting of cash advance out of the Procurement Expense Imprest Fund.
3.2 Responsible for the prompt liquidation of said cash advance and liable together with the employee primarily accountable, in case no settlement is made.
4.
Director, Directorate Concerned
4.1 Authorizes the granting of cash out of the Special Projects Fund
4.2 Responsible for the prompt liquidation of said cash advance and liable together with the employee primarily accountable in case no settlement is made.
5.
Assistant Director, DTFM
Notes the
Cash Advance Slip
(Authorization portion) - Above P5,000 - P10,000.
6.
Chief, Cash Division, DTFM
6.1 Supervises directly the activities of the disbursing officer involving cash advances.
6.2 Notes the
Cash Advance Slip
(Authorization portion) - P5,000 and below.
7.
Chief, Accounting Division
7.1 Records transactions involving cash advances in accordance with the accounting policies herein provided.
7.3 Forwards a list of overdue accounts (Cash- Disbursing Officer/Other Officers) to IBCD for preparation of
Notice to Liquidate
,
Notice of Deduction
and list of accounts to be settled thru payroll deduction.
8.
Chief, Insurance, Billing and Collection Division
Responsible for the reclassification of accounts (transfer of accountability) and preparation of required
Notice to Liquidate
,
Notice of Deduction
and list of accounts to be settled thru payroll deduction.
9.
Chief, Claims Processing Division
9.1 Supervises the processing of claims for cash advances and liquidation vouchers.
9.2 Effects authorized deductions based on advice by the Accounting Division/IBCD and issues corresponding credit memorandum.
10.
Disbursing Officer, DTFM
10.1 Accounts for cash advances received including proper maintenance of cash book.
10.2 Disburses funds for duly authorized purpose only.
10.3 Prepares
Notice to Liquidate
and Transfer for Cash Accountability to be signed by the Director of DTFM.
10.4 Liquidates cash advances based on the auditing rules herein provided.
11.
NFA Employee with Cash Advances Drawn from Disbursing Officers
11.1 Liquidates promptly cash advances drawn thru submission of required voucher and its supporting documents for the actual disbursement and refund of remaining cash, if any, to the disbursing officer.
11.2 Primarily liable for any COA disallowances for fund actually disbursed.
12.
NFA Employee with Cash Advances Directly Under His Accountability
Liquidates promptly cash advances under his accountability thru the submission of required voucher and its supporting documents for actual disbursement to the Claims Processing Division and refund of excess cash to the regular collection officer.
IV. FLOW CHART
Top Page
EXHIBITS
Cash Advance Slip
Cash Advance Slip - Authorization
Notice to Liquidate
Transfer of Cash Accountability
Notice of Deduction for Outstanding Cash Advance