Basilan flagged for unliquidated cash advances

The Commission on Audit (CoA) has flagged the Basilan provincial government for accumulating P83.56 million in unliquidated cash advances, exposing government funds to “misuse and loss.”

In its 2023 report, state auditors said that the P83,555,572.89 in unliquidated cash advances comprised of advances of payroll (P5,790,871.32), advances to special disbursing officer (P77,724,854.79) and advances to officers and employees (P39,846.78).

The sum remains unliquidated as of year-end 2023, which the auditing body said breached Section 5.8 of CoA Circular No. 97-002, which mandates that “all cash advances shall be fully liquidated at the end of each year except for petty cash fund.”

Not only did it violate several provisions of various CoA circulars, but it also contravened Section 89 of the Government Auditing Code, which requires that no cash advance be given unless for a legally authorized specific purpose.

The same section mandates that a cash advance shall be liquidated as soon as the purpose for which it was given has been served and no additional cash advance shall be allowed to any official or employees unless the previous cash advance given is first settled or a proper accounting is made.

Audit findings revealed that the cause of the unliquidated cash advances is Basilan LGU's insufficiency of internal control and non-compliance with the rules and regulations on the grant process and liquidation of cash advances.

Furthermore, state auditors discovered that additional cash advances were granted despite the non-liquidation of prior years' cash advances, contributing to the prior years' unliquidated balance.

"The non-observance of strict compliance with the CoA rules and regulation on the grant and liquidation of cash advance exposes the government funds to possible misuse and loss and it also affects the timing in recording and reporting of the related expenses in the FS (financial statements)," CoA said.

A copy of this report was sent to Basilan Governor Jim Hataman Salliman on 20 March.

CoA ordered the Basilan provincial government to prioritize and exhaust all possible remedies to cause the immediate liquidation of the outstanding cash advances and ensure that cash advances shall be reported as soon as possible.

State auditors added that LGU must keep a close eye on the submission of the liquidation reports and issue a demand letter to the officers and employees concerned.

The Basilan provincial government, meanwhile, assured CoA they would adhere to the recommendations and vowed to order the employees concerned to promptly liquidate their outstanding cash advances.