The document outlines the principles and guidelines for cash management and disbursements within government agencies, emphasizing the efficient use of cash, maintenance of liquidity, and adherence to legal and fiscal regulations. It details the requirements for disbursements, cash advances, and the processes for liquidating cash advances, including timelines and documentation necessary for compliance. Ultimately, it serves as a framework for ensuring responsible financial management in public governance.

1. Cash Disbursement
and Management
Edgar B. Eslier, MST-SS
Discussant
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2. Discussion Outline
We will be discussing the following topics:
 Cash Management
 Fundamental Principles Governing Financial
Transactions and Operations of Any Government
Agency
 Disbursements
 Liquidation of Cash Advance
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3. Cash Management
“the strategy and associated
processes for managing cost-
effectively the government’s
short-term cash flows and
cash balances, both within
government, and between
government and other
sectors”
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4. Cash Management
The primary objective of cash management is to
efficiently maximize the use of cash in line with
the direction, plans and goals of the agency. Specifically:
• to maintain the liquidity of the agency,
• to optimize cash, and
• to manage risk.
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5. Fundamental Principles Governing
Financial Transactions and
Operations of Any
Government Agency
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6. 1. No money shall be paid out of any public treasury or
depository except in pursuance of an appropriation law or
other specific statutory authority.
2. Government funds or property shall be spent or used solely for
public purposes.
3. Trust funds shall be available and may be spent only for the
specific purpose for which the trust was created, or the funds
received
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Fundamental Principles Governing Financial Transactions and Operations of Any Government Agency

7. 4. Fiscal responsibility shall, to the greatest extent, be shared by
all those exercising authority over the financial affairs,
transactions, and operations of the government
agency.
5. Disbursements or disposition of government funds or property
shall invariably bear the approval of the proper officials.
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Fundamental Principles Governing Financial Transactions and Operations of Any Government Agency

8. 6. Claims against government funds shall be supported with
complete documentation.
7. All laws and regulations applicable to financial transactions
shall be faithfully adhered to.
8. Generally accepted accounting principles and practices as well
as of sound management and fiscal administration shall be
observed, provided that they do not contravene existing laws
and regulations.
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Fundamental Principles Governing Financial Transactions and Operations of Any Government Agency

9. Disbursements
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10. Disbursements constitutes all cash paid out during a
given period either in currency (cash) or by cheque. It may also
mean the settlement of government payables/ obligations by
cash or by cheque.
The disbursement system covers the preparation and
processing of Disbursement Voucher (DV); preparation and
issuance of cheques; payment by cash; granting, utilization, and
liquidation/ replenishment of cash advances.
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Cash and Disbursement Management – Disbursement

11. 1. General Requirement for All Types of Disbursement
1.1 Certificate of Availability of Funds issued by the Chief Accountant
1.2 Existence of lawful and sufficient allotment duly obligated as
certified by authorized officials (except for Government-Owned and
Controlled Corporations (GOCC)/ Government Financing Institutions
(GFIs)
1.3 Legality of transaction and conformity with laws, rules or
regulations
1.4 Approval of expenditure by Head of Office or his authorized
representative
1.5 Sufficient and relevant documents to establish validity of claim
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Cash and Disbursement Management – Disbursement

12. 2. General Guidelines
2.1 Granting of Cash Advance
2.1.1 No cash advance shall be given unless for a legally authorized
specific purpose
2.1.2 No additional cash advances shall be allowed to any official or
employee unless the previous cash advance given to him is first
liquidated and accounted for in the books
2.1.3 No cash advance shall be granted for payments on account of
infrastructure projects or other undertaking on a project basis
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Cash and Disbursement Management – Disbursement

13. 2. General Guidelines
2.1 Granting of Cash Advance
2.1.4 A cash advance shall be reported as soon as the purpose for
which it was given has been served
2.1.5 Only permanently appointed officials shall be designated as
Disbursing Officers. Elected officials may be granted a cash advance
only for their official travelling expenses
2.1.6 Transfer of cash advances from one Accountable Officer to
another shall not be allowed
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Cash and Disbursement Management – Disbursement

14. Liquidation of Cash Advance
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15. 1. The Accountable Officer shall liquidate cash advances within
the following period:
o Salaries, wages, allowances, honoraria and other similar
payments within five calendar days after the end of the pay period.
o Field Operating Expenses – within 20 calendar days after the end of
the year subject to replenishment as frequently as necessary during
the year.
o Petty Cash Fund (PCF) – as soon as the disbursements reaches 75
percent or as needed, the PCF shall be replenished which shall be
equal to the total amount of expenditures made there from. In case
of termination, resignation, retirement or dismissal of the PCF
custodian, immediately thereafter.
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Cash and Disbursement Management – Liquidation of Cash Advance

16. 1. The Accountable Officer shall liquidate cash advances within
the following period:
o Traveling Expenses – within 30 days after the return of the official/
employee concerned to his official/ employee concerned to the
Philippines in the case of foreign travel.
o Special purpose – as soon as the purpose of the cash advance has
been served.
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Cash and Disbursement Management – Liquidation of Cash Advance

17. 2. Official local travels shall be treated and accounted for as cash
advances included in the Advances for Officers and Employees
Account. Thus, they shall be liquidated prior to approval of any
subsequent travel.
3. As required by COA for liquidation purposes, the travelling
personnel shall secure a Certificate of Appearance duly signed by
the concerned official of the campus/ office visited.
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Cash and Disbursement Management – Liquidation of Cash Advance

18. 4. The Accountant shall:
o Prepare a list of employees who failed to liquidate the cash advance
within the prescribed period
o Verify the liquidation report and its supporting documents, record it
in the books and submit the same to the Auditor within ten (10)
days after receipt of the report from the special disbursing officer
and travelling personnel. The cash advance shall be considered
liquidated upon recording by the Accounting Section.
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Cash and Disbursement Management – Liquidation of Cash Advance

19. 5. The cashier shall withhold the salaries, allowances and other
receivables of those who fail to liquidate the CA within the
prescribed period.
6. When a cash advance is no longer needed or has not been used
for a period of two (2) months, it must be refunded
immediately.
7. All cash advances shall be fully liquidated at the end of each
year. Any unexpended balance shall be refunded to the
cashier/collecting officer who will issue the necessary official
receipt.
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Cash and Disbursement Management – Liquidation of Cash Advance

20. Thank you!
Any questions?
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21. Reference:
Commission on Audit (COA), Committee for the Revision of Auditing Requirements for
Typical Government Disbursement, “Revised Documentary Requirements for Common
Government Transactions as Prescribed Under COA Circular No. 2012-001 dated 14 June
2012,” June 2012. Financial Management System
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