Escolar Documentos
Profissional Documentos
Cultura Documentos
No.
: 2016-005
TO
: All Heads of Departments, Bureaus, Offices, Agencies and Instrumentalities of the National Government; Provincial Governors,
City/Municipal Mayors; Managing Heads of Government Owned and Controlled Corporations; Heads of Finance/Comptrollership/
Financial Management Services; COA Assistant Commissioners, Directors and Auditors; and All Others Concerned
SUBJECT : Guidelines and Procedures on the Write-off of Dormant Receivable Accounts, Unliquidated Cash Advances, and
Fund Transfers of National Government Agencies (NGAs), Local Government Units (LGUs) and Government-Owned and
Controlled Corporations (GOCCs)
1.0
BACKGROUND
As a rule, cash advances must be liquidated within the prescribed periods depending upon the nature and purpose of
the particular cash advance, as provided under COA Circular No. 97-002 dated February 10, 1997, restating with
amendments, the rules and regulations on the granting, utilization and liquidation of cash advances.
Likewise, liquidation of fund transfers to implementing entities is required under COA Circular No. 94-013 dated
December 13, 1994 and those to Non-Governmental Organizations (NGOs)/Peoples Organizations (POs) under COA
Circular No. 2007-001 dated October 25, 2007.
COA Circular No. 2012-004 dated November 28, 2012 was issued as a final notice and demand to all concerned
accountable officers to settle and liquidate all cash advances outstanding as of December 31, 2011, on or before January
31, 2013.
In spite of the above issuances, material amounts of cash advances and fund transfers remained unliquidated.
The Annual Financial Reports (AFRs) invariably show the consolidated common audit observations on unreliable
receivable account balances, significant amounts of unliquidated cash advances, and fund transfers of a number of entities
due to unsupported/undocumented dormant accounts which have long been outstanding/remained past due/dormant, thus,
depriving the government of funds for its operations and affecting the fair presentation of accounts in the Financial
Statements (FSs).
2.0
PURPOSE
This Circular is issued to prescribe the guidelines and procedures in reconciling and cleaning the books of accounts
of NGAs, LGUs, and GOCCs of dormant receivable accounts, unliquidated cash advances, and fund transfers for fair
presentation of accounts in the FSs.
3.0
LEGAL BASIS
The Commission shall have exclusive authority, subject to the limitations in this Article, to define the scope of its
audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing
rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures, or uses of government funds and properties [Section 2 (2), Article IX-D,
1987 Philippine Constitution].
The Government Accountancy Sector (GAS) of this Commission is mandated to formulate/recommend policies, rules
and regulations on government accounting for consideration of the Public Sector Accounting Standards Board
(PSAcSB)/Chairman/Commission Proper (CP). The GAS is also mandated to provide technical assistance to entities
finance officials, accountants, and auditors on matters pertaining to accounting and financial management (COA
Resolution No. 2013-021 dated November 20, 2013).
4.0
COVERAGE
This Circular covers dormant receivables arising from regular trade and business transactions, claims from entities
officers and employees and other dormant receivable accounts; dormant unliquidated cash advances for operating
expenses, payroll, special purpose/time-bound activities or undertakings and travel as well as advances granted to Civil
Society Organizations (CSOs)/NGOs/POs; and dormant unliquidated fund transfers to/from NGAs, LGUs, and GOCCs.
Specifically, the following are the accounts used relative to receivables, cash advances and fund transfers as
defined/described in the revised chart of accounts:
Accounts Receivable
Due from Officers and Employees
Other Receivables
Advances for Operating Expenses
Advances for Payroll
Advances to Special Disbursing Officer
Advances to Officers and Employees
Due from National Government Agencies
Due from Government-Owned and Controlled Corporations
Due from Local Government Units
Due from Non-Government Organizations/Peoples Organizations
Due from Central Office
Due from Bureaus
Due from Regional Offices
Due from Operating Units
Due from Other Funds
Due to National Government Agencies
Due to Government-Owned and Controlled Corporations
Due to Local Government Units
Due to Central Office
Due to Bureaus
Due to Regional Offices
Due to Operating Units
Due to Other Funds
This Circular shall not cover the write-off of loans and advances of Government Financial Institutions which are
governed by pertinent provisions of the General Banking Act.
Likewise, it shall not cover the following:
Receivables arising from disallowances and charges;
Receivables arising from cash shortages; and
c. Claims from entities officers and employees and other parties for transactions which are the subject of a pending
case in court or before investigative authorities.
a.
b.
5.0
DEFINITION OF TERMS
The following terms when used in this Circular shall be construed to mean as follows:
5.1 Account refers to Accounts Receivable, Due from Officers and Employees, Other Receivables, and other accounts,
as enumerated in Section 4 of this Circular.
5.2 Condonation of Receivables amnesty of debt where the creditor is blocked or estopped from attempting to collect
the debt later.
5.3 Debtor a person or organization whether public or private that owes money to the government.
5.4 Dormant Receivable Accounts accounts which balances remained inactive or non-moving in the books of accounts
for ten (10) years or more and where settlement/collectability could no longer be ascertained.
5.5 Dormant Unliquidated Cash Advances advances granted to disbursing officers, agency officers and employees
which remained non-moving for ten (10) years or more and where settlement/collectability could no longer be
ascertained.
5.6 Dormant Unliquidated Fund Transfers advances granted by the source entity to implementing entity for the
implementation of programs/projects which remained non-moving for ten (10) years or more and where settlement
could no longer be ascertained.
5.7 Government Entity a national government agency, a government-owned and controlled corporation or a local
government unit.
5.8 Impairment a loss in the future economic benefits due to uncertainty of collectability of the receivables or the
amount in respect of which recovery has ceased to be probable.
5.9 Write-off of Dormant Accounts the process of derecognizing the asset account and the corresponding allowance for
impairment from the books of accounts and transferring the same to the Registry of Accounts Written off (RAWO).
This does not mean condoning/extinguishing the obligation of the accountable officer/debtor.
This does not mean condoning/extinguishing the obligation of the accountable officer/debtor.
6.0
GENERAL GUIDELINES
6.1 All government entities shall conduct regular monitoring and analysis of receivable accounts to ensure that these are
collected when these become due and demandable and that cash advances and fund transfers are liquidated within the
prescribed period depending upon their nature and purpose; and
6.2 All government entities shall prepare the schedule of all receivables, unliquidated cash advances, and fund transfers
as of December 31, 2015 and quarterly thereafter. (see Appendix 55 of Vol. II, GAM).
7.0
SPECIFIC GUIDELINES
The Accountant shall:
7.1
Conduct regular and periodic verification, analysis, and validation of the existence of the receivables, unliquidated
cash advances, and fund transfers, and determine the concerned debtors, accountable officers (Regular and Special
Disbursing Officers, Collecting Officers, Cashiers) and the source and implementing government entities concerned;
7.2 Reconcile the unliquidated fund transfers between the source and implementing government entities, prepare the
adjusting entries for the reconciling items noted, and require liquidation of the balances;
7.3 Prepare the necessary adjusting entry/ies for the following:
a. Recognition of the computed/determined impairment in accordance with the Philippine Public Sector Accounting
Standards or Philippine Financial Reporting Standards
b. Correction of inadvertent errors, or inaccurate calculation or computation
c. Reclassification of accounts
d. Recovery/settlement of previously written off accounts
Adjustments made pursuant to 7.2 and 7.3 need not be submitted to the COA for approval but are subject to the usual
audit. However, the accountant or the auditor may seek assistance from the GAS for proper accounting treatment; and
7.4
8.0
Prepare aging of dormant receivables, unliquidated cash advances, and fund transfers on a quarterly basis
(Annexes 1-3) to support the request for write-off, and indicate in the remarks column the existence of the applicable
conditions, as follows:
a. Absence of records or documents to validate/support the claim and/or unreconciled reciprocal accounts
b. Death of the accountable officer/employee/debtor
c. Unknown whereabouts of the accountable officer/employee/debtor, and that he/she could not be located despite
diligent efforts to find him/her
d. Incapacity to pay or insolvency
e. Exhaustion of all possible remedies by the Management to collect the receivables and to demand liquidation of
cash advances and fund transfers
f. No pending case in court involving the subject dormant accounts.
b.8 Certification by the responsible officials of the entity to the effect that there are no records/documents
available to validate claim
b.9 Other justifications, like in the case of request for write-off due to loss of documents, the circumstances of the
loss should be stated in the letter-request
b.10 In case of fund transfer, the unliquidated amount after reconciliation shall be supported by certification by
the Chief Accountants and approved by the Heads of the source and implementing entities that the fund was
utilized for the purpose, and certification from the recipient that the project was partially or fully
implemented, supported by pictures of the implemented projects.
8.4 The ATL and SA, upon receipt of the request, shall assign a reference number, verify and validate the above documents
and decide on the requests for authority to write off for amounts not exceeding P100,000.00 per accountable
officer/debtor/government entity and by account within 15 working days from receipt thereof;
8.5 In case the basis for denial of the request for write-off by the ATL and SA is failure to comply with the conditions and
requirements under paragraphs 7.4 and 8.3, the aggrieved party may refile the request for write-off before the ATL
and SA provided that the basis for denial has been satisfactorily complied with/met. The ATL and SA shall decide on
the request within 15 working days from receipt thereof;
8.6 The aggrieved party may appeal from the decision of the ATL and SA to the COA Cluster Director (CD)/Regional
Director (RD) who has jurisdiction over the government entity under audit within 15 working days from receipt of the
decision. The CD/RD shall decide on the appeal within 15 working days from receipt thereof. The decision of the
CD/RD on appealed request is final and non-appealable;
8.7 For amounts exceeding P100,000.00 per accountable officer/debtor/ government entity and by account, the ATL and
SA shall forward the entire records of the requests to the CD/RD, together with their comments and recommendations,
within 15 working days from receipt thereof;
8.8 The CD/RD shall review the entire records of the requests and shall decide on amounts involving more than
P100,000.00 but not exceeding P1,000,000.00 per accountable officer/debtor/government entity and by account
within 15 working days from receipt thereof;
8.9 In case the basis for denial of the request for write-off by the CD/RD is failure to comply with the conditions and
requirements under paragraphs 7.4 and 8.3, the aggrieved party may refile the request for write-off before the CD/RD
provided that the basis for denial has been satisfactorily complied with/met;
8.10 The aggrieved party may appeal from the decision of the CD/RD to the Assistant Commissioner (AC) concerned
within 15 working days from receipt of the decision. The AC shall decide on the appeal within 15 working days from
receipt thereof. The decision of the AC on appealed request is final and non-appealable;
8.11 For amounts exceeding P1,000,000.00 per accountable officer/debtor/ government entity and by account, the CD/RD
shall forward the entire records of the requests together with his/her recommendation to the AC of the Sector within
15 working days from receipt thereof;
8.12 The AC of the Sector shall review the entire records of the requests and shall decide on amounts exceeding
P1,000,000.00 per accountable officer/debtor/ government entity and by account within 15 working days from receipt
thereof;
8.13 In case the basis for denial of the request for write-off by the AC of the Sector is failure to comply with the conditions
and requirements under paragraphs 7.4 and 8.3, the aggrieved party may refile the request for write-off before the AC
of the Sector provided that the basis for denial has been satisfactorily complied with/met; and
8.14 The aggrieved party may appeal from the decision of the AC of the Sector to the CP within 15 working days from
receipt of the decision. Filing fee is required at a rate prescribed in the 2009 RRPC. The decision of the CP is final and
non-appealable.
8.15 The Accountant shall:
a. Prepare the JEV within 15 working days upon receipt of the decision granting the authority to write-off, for
approval of the Head of the government entity, effect the adjusting entries in the books, and enter the gross amount
of the receivables in the RAWO. A sample form of the RAWO is attached as Annex 4 (Appendix 56, Vol. II, GAM);
b. Submit the JEV to the COA ATL;
c. Maintain a RAWO to record the accounts written-off and keep a copy of the approved request for write-off
including the records and documents pertaining thereto; and
d. At the end of the year, foot entries in the RAWO and make the appropriate disclosures in the Notes to FS.
9.0
d.
10.1
Debit
Accumulated Surplus/(Deficit)
xxx
xxx
xxx
Credit
Accounts Receivable
xxx
xxx
Other Receivables
xxx
10.2
Debit
Credit
xxx
xxx
xxx
xxx
xxx
10.3
Account Title
Debit
Accumulated Surplus/(Deficit)
Credit
xxx
xxx
xxx
xxx
Organizations/Peoples
xxx
xxx
xxx
xxx
xxx
xxx
Account Title
Debit
Due to NGAs
xxx
Due to GOCCs
xxx
Due to LGUs
xxx
xxx
Due to Bureaus
xxx
xxx
xxx
xxx
Accumulated Surplus/(Deficit)
Credit
xxx
Account Title
Debit
Accounts Receivable
xxx
xxx
Other Receivables
xxx
Miscellaneous Income
Credit
xxx
xxx
Accounts Receivable
xxx
xxx
Other Receivables
xxx
Account Title
Debit
xxx
xxx
xxx
xxx
Accumulated Surplus/(Deficit)
Credit
xxx
Account Title
Debit
Credit
xxx
xxx
xxx
xxx
xxx
To recognize collection
unliquidated cash advances
of
recovered
dormant
13.0 EFFECTIVITY
This Circular shall take effect immediately.