COA: PDEA had P118M worth of unliquidated cash advances, unsupported disbursements

The Philippine Drug Enforcement Agency (PDEA) has accumulated at least P118 million worth of unliquidated cash advances and undocumented disbursements in 2019, the Commission on Audit (COA) said. 

In its 2019 annual audit report on PDEA, state auditors revealed the agency had P87 million worth of unliquidated cash advance granted to 26 employees. This is a violation of COA Circular No. 97-002 which requires an accountable officer to liquidate the cash advance for Petty Operating Expenses and Field Operating Expenses within 20 days after the end of the year, subject to replenishment as frequently as necessary during the year, COA said.

Likewise, COA said PDEA’s non-liquidation of P87 million worth of cash advance also ran contrary Presidential Decree No. 1445 which states that “a cash advance shall be reported on and liquidated as soon as the purpose for which it was given has been served” and that no additional cash advance shall be allowed to any official or employee unless the previous cash advance give to him is first settled or a proper accounting thereof is made." 

“Analysis showed that the accumulation of the outstanding balances was caused by the delay in the liquidation of cash advances, while liquidation reports were delayed by an average of 117 days,” COA said. 

“Inquiry showed that the delays were due to delayed implementation of the activities, incomplete supporting documents of the payments, and unrefunded/unutilized balances after completion of the activity,” state auditors added.

COA then warned said that such accumulation of cash advance could result in problems such as: 

• government resources being susceptible to misuse of funds;  
• difficulty in the safekeeping of cash on hand and supporting documents;
• cash advances not being liquidated until all activities are completed; and
• difficulty in tracking the transactions pertaining to specific cash advance.

On top of the unliquidated funding, COA also flagged PDEA for P31 million worth of 100 disbursement vouchers which were not supported by official receipts as required by existing laws, rules and regulations, thus, casting doubt on the validity, existence, occurrence and regularity of the claims.

“As a rule, one of the general requirements for all types of disbursement is that documents are sufficient and relevant to establish validity of claims,” state auditors pointed out.

“100 transactions from October to December 31, 2019 amounting to P31 million were submitted for audit but were not supported with official receipts to indicate that payment/receipt were received by claimants. The non-provision of the official receipts to the payments gives doubts on the validity, existence, occurrence and regularity of the claims aside from non-conformity with laws and regulations,” COA added.

COA has reiterated its prior year’s recommendation on requiring PDEA to take the following measures:

• the Chief Accountant sending demand letters to all administrative officers with outstanding cash advances to immediately settle/liquidate their cash advances considering that the purpose for which the cash advances were granted had already been served; and
• all administrative officers to liquidate their cash advances in accordance with the prescribed timelines and study the possibility of assigning one administrative officer per region to maintain the cash advances on replenishment method instead of different administrative officers for different purposes.

PDEA agreed to these recommendations, COA said. 

As for unsupported disbursement vouchers, COA tasked PDEA to require the claimants to submit/issue official receipts of the received payments and refrain from processing their next claims without complete documentation of the previous ones.

PDEA argued that its Financial Management Service has always been exerting its best effort to secure the official receipts from the payees. However it usually takes time to coordinate with the payees because they need to verify first the payments credited to their respective bank accounts before issuing the official receipts which PDEA has no control over. —KG, GMA News