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Ch. 5 Accounting for Disbursements and Disbursement must be from a duly approved
Related Transactions payroll or DVs
Advances for Payroll account replaced
Disbursement activities starts from the receipt of Payroll Fund Account. This account is debited
Notice of Cash Allocation (NCA) from DBM to pay for the amount granted to regular disbursing
off/incur obligations officer for payment of salaries, wages, and other
Entry for receipt of NCA: benefits of officers and employees
Cash MDS, Regular XXX Advances to Officers and Employees
Subsidy from Natl Govt replaced Cash-Disbursing Officer or as Due
XXX from Officers and Employees. This account is
used for cash advances for travel and for special
Disbursement System purpose/time bound undertaking. It is credited
Disbursements for liquidation of advances upon completion.
- all cash paid out during a given period by Due from Officers and Employees account
cash or check; settlement of govt used to record claims from officers and
payables/obligations by cash or check employees for over payment, cash shortage, loss
- covered by Disbursement Voucher (DV) or of assets, and other bills issued by the agency
Petty Cash Voucher or Payroll and credited the same for collection of this
- Involves preparation and processing of DV; receivable.
preparation and issuance of check; payment
by cash; granting, utilization, and Cash Advances for Travel
liquidation/replenishment of cash advances. Accounted for as Advances to Officers and
Basic requirements applicable to all types of Employees
govt disbursement are as follows: Subject to liquidation upon completion
1. Existence of a lawful and sufficient allotment CA > travel expenses incurred - excess cash is
certified as available by the Budget Officer refunded and OR is issued to acknowledge the
2. Existence of valid obligation certified by Chief receipt thereof. Liquidation report is prepared as
Accountant basis for Journal Expense Voucher (JEV)
3. Legality of transactions and conformity with CA < travel expenses incurred Liquidation
laws, rules and regulations
report is prepared to liquidate the CA and
4. Approval of the expense by the Chief of
disbursement voucher shall be prepared to claim
Office or by its duly authorized
reimbursement of deficient amount.
representative
5. Submission of proper evidence to establish
Disbursement Through Petty Cash Fund
the claim
Maintained under the imprest system
Head of Accounting unit to prepare Daily Cash
Fund should be sufficient for the non-recurring,
Position Report (COA Circular 2006-003)
emergency and petty expenses of the agency.
Disbursement by Checks Disbursed through the PCV approved by
Checks shall be drawn only on duly approved DV authorized officials and signed by payee to
or PCV and reported and recorded in books of acknowledge the amount received.
accounts only when actually released to OR or equivalent is attached to the PCV for
payees. documentation requirements.
Types of checks issued by Govt Agencies Adjustment is necessary at year end in order to
1. Modified Disbursement System (MDS) Checks report the expenses incurred and the actual size
issued by GAs chargeable against the of the petty cash fund. Without this adjustment,
account of the Treasurer of the Philippines; expenses will be understated and PCF is
Covered by NCA. overstated.
2. Commercial Checks issued by GAs
chargeable against the Agency Checking Inventory Accounting System
account with government servicing banks; COA Circular # 2005-002 dated Apr 14, 2005
Covered by income/receipts authorized to be provides that small tangible items with
deposited with authorized government estimated useful life of more than 1 year are
depository banks and funding checks recorded as inventories and shall be expensed
received. upon issuance. See list in book. Tangible assets
not included are considered as PPE and subject
Disbursements by Cash to depreciation.
To conform with COA rules and regulations
Ch. 5 Accounting for Disbursements and Related Transactions