Annex A

Account Descriptions/Conditions
1. Cash Accounts comprise the following accounts

Cash Collecting Officers is used to recognize the amount of collections with the
Collecting Officers for remittance to the Treasurer of the Philippines (TOP)/ deposit to
AGDBs. Credit this account for remittance to the TOP/deposit to AGDBs.

Cash in Bank-Local Currency, Current Account is used to recognize deposits with

AGDBs of income received for which the agency has authority to use; trust receipts
authorized under specific contracts and agreements; Revolving Fund under specific
laws; and credit advices/memos received from the AGDBs. Credit this account for check
disbursements and debit advices/memos received from the AGDBs.

Petty Cash account is maintained under the Imprest System. All replenishments are
directly charged to expense account. The PCF is not used to purchase regular inventory
items for stock.

Cash in Bank-Local Currency, Savings Account is used in the BTr-NG books to

recognize deposits to savings account with AGDBs for collections of fees and charges
from collecting officers (NCOs).

Cash in Bank-Foreign Currency, Savings Account is used to recognize foreign currency

deposits of agencies implementing foreign-assisted projects and those authorized to
maintain Special Accounts/Imprest Accounts. (For COA only)

Cash-Modified Disbursement System (MDS), Regular is used to recognize in the agency

books the NCA received for its operating requirements.

Cash-Modified Disbursement System (MDS), Special Account is used to recognize in

the agency books the NCA received for SAGF.

Conditions

a. Commission on Audit

Delayed submission of the bank reconciliation statements for Cash MDS

and Status of funds for dollar accounts.
Collections from regions/payees intended to be deposited to a particular
fund account was deposited to other fund accounts.
Understated due to misclassification of accounts

b. Civil Service Commission

 Delayed submission of the bank reconciliation statements for Cash MDS
Unrecorded Notice of Cash Allocation (NCA) for Terminal Leave Benefits
and payment thereof
Propriety of fund transfers to Regional Offices and from MDS to CFAG
account.

2. Cash Advances may be classified into:

Advances to Officers and Employees for official travels;

Advances for Operating Expenses granted to regular disbursing officer for operating
expenses of operating/field units and foreign post not maintaining complete set of books;

Advances for Payroll for payment of salaries, wages and other personnel benefits; and

Advances to Special Disbursing Officer (SDO) for special purpose/time-bound

undertakings.

Conditions

a. Commission on Audit/ Civil Service Commission

Existence of long outstanding cash advances

Cash Advances were being granted despite non-liquidation of previous ones

3. Advances to the Department of Budget and Management-Procurement Service (DBM-

PS)

The recognized amount due from DBM-PS for the advance payment for the procurement
of commonly used office supplies of the National Government.

Conditions

a. Commission on Audit/Civil Service Commission

Significant amount of accumulated balance due to: non-delivery of goods;

non-recording of delivery
The account was not regularly reconciled with the DBM-PS

4. Receivables (Due from Officers and Employees)

Amount recognized for overpayment of salaries, personnel benefits, statutory contributions

and under deduction of tax of active and inactive employees in the COA Central Office
 and Regional Offices. Some of these balances were continuously deducted from the salaries
of active employees.

Conditions

a. Commission on Audit

The account includes dormant accounts

Significant amount of balance

b. Civil Service Commission

No subsidiary ledgers
Existence of dormant accounts

5. Inventories

Supplies and materials purchased for inventory purposes are recorded using the Perpetual
Inventory System and issuances of supplies for consumption using First-In, First-Out
(FIFO) valuation method.

Conditions

a. Commission on Audit/Civil Service Commission

Non-maintenance of subsidiary ledgers per inventory account

Unreconciled balance between the property and accounting records
Non-maintenance of stock cards
Some procurements were being charged directly to expense accounts
Inadequate storage facilities for inventories
Poor handling/stockpiling of inventories resulted to spoilage.
Supply Officer is not properly bonded.

6. Prepayments

Prepayments are expenses paid before they are incurred. At the end of the accounting
period, the expired portion shall be determined and an adjusting journal entry shall be
prepared to recognize the expense applicable to the period being reported.

Conditions

a. Commission on Audit/Civil Service Commission

Advances to contractors for completed was not yet fully recoup

b. Property, Plant and Equipment

Property, Plant and Equipment are carried at cost less accumulated depreciation and
obsolescence.

The Straight Line Method of depreciation is used in depreciating the Property, Plant &
Equipment with estimated useful lives ranging from five years to thirty years. A residual
value, computed at five percent (5%) of the cost of asset is set from the previous ten percent
(10%). Minor maintenance, repairs and replacements are charged to expense as incurred.

Conditions

a. Commission on Audit

The Management failed to submit the Report on Physical Count of Property

Plant and Equipment (RPCPPE) due to non-conduct Physical Inventory/Count
of Property Plant and Equipment
Unaccounted and unreconciled differences between the books and the property
records
Numerous items with values below the threshold of P15,000.00 were recorded
as PPE

b. Civil Service Commission

PPE were not tagged with property number

Non-disposal of unserviceable properties
Unaccounted and unreconciled differences between the books and the property
records
Numerous items with values below the threshold of P15,000.00 were recorded
as PPE

c. Payables

Payable are recognized and recorded in the books of accounts only upon acceptance of the
goods/inventory/other assets and rendition of services to the agency.

Conditions

a. Commission on Audit/Civil Service Commission

Existence of payables with no valid claims