The National Agricultural and Fishery Council’s (NAFC) outstanding cash advances to officers and employees totaled P4.035 million as of end-2014, of which P3.715 million remained unliquidated after more than two to 35 years, state auditors said.
The Commission on Audit (COA) in a 2014 audit report attributed the accumulation of outstanding balances to the council’s “non-adherence” to existing rules and regulations on the grant, use and liquidation of cash advances.
“The aging schedule of cash advances showed that P3.715 million or 92.04 percent of the total outstanding balances of P4.036 million remained unliquidated for more than two to 35 years,” the report said.
Based on the audit report, P84,037.13 remained unliquidated for over two years; P146,405.95, for over five to 10 years; P2.228 million for over 10 to 20 years; P1.255 million for over 20 to 30 years, and; P1.352 million for over 31 to 35 years.
“Further, of the total outstanding balances, the amount of P3.689 million pertains to those cash advances granted to employees who are no longer connected with the agency,” the auditors said.
They added, “Several cash advances for local travels granted to officers and employees in CY [calendar year]2014 totaling P139,736.03 were not liquidated within the required time frame, contrary to Section 89 of PD [Presidential Decree] 1445, Section 126.96.36.199 of COA Circular No. 96-004 dated April 19, 1996 and Section 5.1.3 of COA Circular No. 97-002 dated February 10, 1997.”
PD 1445 is the State Audit Code.
Under Section 89 of PD 1445, a cash advance should be reported on and liquidated as soon as it has served the purpose for which it was given.
Likewise, the auditors explained, the said COA circulars require that cash advances granted for local travel shall be liquidated by the concerned official/employee within 30 days after his return to his permanent official station otherwise, payment of his salary shall be suspended until he complies.
“The continuous laxity in the liquidation of cash advances and absence of sanction against the erring accountable officers resulted in the accumulation of the outstanding cash advance of P4,035,941.73 and may result in the loss of government funds,” the auditors said.
“We recommended and Management [NAFC] agreed to…strictly enforce the liquidation/settlement of unliquidated cash advances by sending periodic demand letters and withhold the salary of concerned officials and employees until their balances are settled,” the report said.
It added that the auditors also told the agency to “exert effort in tracing the whereabouts of the employees who are no longer connected with the agency and require the immediate settlement of their outstanding balances, if warranted, file appropriate legal actions against them.”