COMMISSION ON AUDIT CIRCULAR NO.

92-125A March 4, 1992

TO : All Heads of Departments, Bureaus and Offices of the National Government,

Government-Owned and Controlled Corporations, The Treasurer of the
Philippines, COA Directors, Chief Accountants/Heads of Accounting Units,
Heads of Auditing Units and Others Concerned.

SUBJECT: Updated Procedures and Use of New Formats in the Reconciliation of Treasury
Accounts.

1.0 PURPOSE

This Circular is issued to:

1.1 Ensure regular reconciliation of account Cash-Treasury/Agency Account Current (C-

TAAC);

1.2 Prescribe modified procedures in the reconciliation of C-TAAC;

1.3 Prescribe the format for the reconciliation of the following as a result of the
implementation of the Modified Disbursement System (MDS);

8-70-700 C-TAAC-Deposits
8-70-707 C-TAAC-Check Disbursements
8-70-709 C-TAAC-Other Disbursements
8-70-712 C-TAAC-NCAA Disbursements

1.4 Delineate responsibilities of the Heads of Government Accounting Units and the
Treasury Accounts Reconciliation Division (TARD) of the Bureaus of the Treasury
(BTr).

2.0 RESPONSIBILITIES

2.1 The Chief Accountants/Heads of Accounting Units of National Government

Agencies shall:

2.1.1 Prepare monthly Treasury Reconciliation Statements (TRS) of treasury

accounts 8-70-700, 8-70-709 and 8-70-712 and Bank Reconciliation
Statement (BRS) of account 8-70-707 based on the Treasury Statement
(T/S) and Bank Statements (B/S) submitted by the BTr and the bank,
respectively.

2.1.2 Prepare correcting/adjusting entries for discrepancies/errors or other

reconciling items requiring corrections by the agency immediately after the
Treasury/Bank Reconciliation Statement were made and after those items
were properly analyzed and verified.

2.1.3 Submit the originals of the TRS for accounts 8-70-700, 8-70-709 and 8-70-
712 within 15 days after receipt of T/S together with copies of the Journal
Vouchers taking up the correcting/adjusting entries, to TARD, BTr and
 Accountancy Office (AO), COA.

2.1.4 Submit the original of the BRS for account 8-70-707 within 15 days after
the end of the month to the COA Resident Auditor, copy furnished the
concerned Government Servicing Bank (GSB) and the Department of
Budget and Management, Accounting Finance Bureau (DBM-AFB).

2.2 The Chief Accountants/Heads of Accounting Units of Government Owned and

Controlled Corporations maintaining Special Account in the General Fund (Fund
151) shall:

2.2.1 Prepare monthly TRS of Treasury Account 8-70-700 based on the T/S
submitted by the BTr.

2.2.2 Prepare correcting/adjusting entries for discrepancies/errors or other

reconciling items requiring corrections by the agency immediately after the
TRS was made and after these items were properly analyzed and verified.

2.2.3 Submit the original of the TRS for account 8-70-700 within 15 days after
receipt of T/S together with copies of the Journal Vouchers taking up the
correcting/adjusting entries, to TARD, BTr and AO, COA.

2.3 The Bureau of the Treasury (BTr) shall:

2.3.1 Prepare monthly Treasury Statements with supporting documents, of

accounts 8-70-700, 8-70-709 and 8-70-712 for each agency and furnish
the agencies concerned with the statements within 60 days after the end
of each month.

2.3.2 Prepare BRS of MDS account (8-70-707) with the Head of Office of
government servicing banks (GSBs) within five (5) days after receipt of the
bank statement.

2.3.3 Prepare the necessary adjusting/correcting entries for the valid

discrepancies/errors noted that should be taken up by the BTr after receipt
of the TRS.

2.3.4 Close accounts 8-70-700, 8-70-707, 8-70-709 and 8-70-712 to account 8-

99-00 at year-end.

2.3.5 Maintain individual subsidiary ledger of account 8-99-000 for each agency
covering transactions starting CY 1990.

2.3.6 Furnish the Accountancy Office, COA, a summary of subsidiary ledger

balances of account 8-99-000 on or before February 14 of the ensuing
year.

2.3.7 Submit the original monthly Allocation Control Statement to the Resident
Auditor.

2.4 The Resident Auditor shall:

 2.4.1 Verify the correctness of the TRS and BRS prepared by agencies under
his jurisdiction.

2.4.2 Return the statements to the accounting unit/division within five (5) days
from receipt thereof.

3.0 PREPARATION AND RECONCILIATION PROCEDURES

3.1 National Government Agencies

A monthly reconciliation statement shall be prepared by the Chief Accountant

for each of the treasury accounts maintained by them using the forms attached
(Appendices A to D and Schedules A-1 to D-4).

The following general procedures for the reconciliation of accounts 8-70-700,

8-70-709 and 8-70-712 shall be observed:

3.1.1 Ensure that the opening balance on the Treasury Statement for the month
under review is the same as the ending balance in the corresponding
statement for the previous month as shown in the reconciliation statement.

3.1.2 Trace the items for correction by the BTr in the reconciliation statement for
the previous month to the corresponding Treasury Statement (T/S) for the
month under review to determine the reconciling items adjusted/corrected
by the BTr. Mark all items corrected and list in a worksheet all unmarked
items.

3.1.3 Trace all items presented as requiring correction by the agency on each
reconciliation statement for the previous month to the respective agency's
ledger for the month under review and identify items adjusted/corrected.
Mark all items corrected and list in the worksheet all unmarked items.

The following specific procedures shall be observed for each account:

For Treasury/Agency Account Current - Deposits (8-70-700)

3.1.4 Ensure that the total of the BTr Abstract of Deposits credited during the
month is correctly recorded in the T/S.

3.1.5 Verify whether each deposit reflected in the Report of Collection Statement
of Account Current (RCSAC) is duly supported by validated Remittance
Advices.

3.1.6 Determine whether the total deposits per RCSAC are properly recorded in
the Journal of Collections and Deposits and posted to the General Ledger.

3.1.7 Check each deposit per BTr Abstract of Deposit with deposits recorded in
the RCSAC. List down all unmatched items in the worksheet.

3.1.8 Examine each item in the worksheet and segregate deposits not taken up
 by the BTr or agency from items for correction such as understatement
and overstatement of deposits and deposits credited by the BTr but not
pertaining to the agency.

3.1.9 Enter the reconciling items in the proper column of the Reconciliation
Statement following the prescribed format attached herewith (Appendix
A).

For Treasury Account Current MDS Check Disbursements (8-70-707)

3.1.10 Determine the total checks issued by the agency as reflected in the
general ledger and the total checks negotiated per bank statement.

In cases when the bank statement reflects only the current month's
transactions, add the total checks negotiated as of the previous month's
BRS to the current month's total checks negotiated.

3.1.11 Review the previous month's BRS to check whether reconciling items
requiring corrections by the agency or the bank were adjusted. Likewise,
review the previous month's BRS to check whether outstanding checks
were already paid by the bank or not. If these were not yet adjusted/paid,
list down all items not corrected and outstanding checks not paid
excluding those pertaining to prior years.

The unadjusted prior year's reconciling items (as reflected in the

December BRS of the previous year) and outstanding checks shall be
monitored by the responsible accounting officials inasmuch as these shall
no longer be reflected in the current year's reconciliation statements
unless adjusted/paid.

3.1.12 Determine whether all checks issued by the agency per Report of Checks
Issued (RCI) were properly recorded in the Journal of Checks Issued and
posted to the General Ledger.

3.1.13 Compare the serial numbers and amounts of checks issued by the agency
per RCI with the checks negotiated by the bank per bank statement to
determine outstanding checks, unrecorded checks issued,
understatements or overstatements of checks issued/negotiated or any
other discrepancies. Enter the date when the checks were paid by the
bank in the proper column provided in the RCI and list down all unmatched
items in the worksheet.

3.1.14 Verify reconciling items of the previous year which were paid/adjusted in
the current year such that these will become current year's reconciling
items. Trace these items to the BRS of December last year.

3.1.15 Examine and analyze all items in the worksheet and enter the reconciling
items in accordance with the format prescribed herewith (Appendix B).

For TAAC, Other Disbursements (8-70-709) and TAAC, NCAA Disbursements (8-70-
712)
 3.1.16 Verify whether all transactions pertaining to these accounts which were
recorded in the General Journal through the journal vouchers were
properly posted to the General Ledger.

3.1.17 Trace each item listed in the Treasury Statements against the agency's
general ledger. Prepare list of items not taken up or erroneously taken up
by the Treasury or Agency.

3.1.18 Enter the reconciling items in the proper column of the Reconciliation
Statement following the prescribed formats attached herewith (Appendices
C and D).

For all accounts

3.1.19 Prepare the necessary adjusting/correcting entries immediately after the

TRS/BRS are made and the items for adjustments are properly analyzed
and verified; and record them in the proper journals.

3.2 Bureau of the Treasury

The BTR shall prepare monthly reconciliation statements of account 8-70-707

maintained with the Head Office of GSBs. The following specific procedures shall
be observed in the reconciliation:

3.2.1 Ensure that all debit advices/replenishments are reflected in the General
Ledger.

3.2.2 Trace all replenishments to the Journal of Clearing and Disbursements

(JCD).

3.2.3 Verify whether each replenishment in the JCD is duly supported by the
Request for Replenishment by the Head Office Bank with the Statement of
Account by the bank branches supported with the List of Negotiated
Checks by Bank Branch (LNCBB).

3.2.4 Trace negotiated checks from the LNCBB to the Advice of Checks Issued
and Cancelled (ACIC) submitted by the agencies through the bank. List
down all unmatched items in the worksheet.

3.2.5 Examine each item in the worksheet and segregate negotiated checks
reflected in the LNCBB but not reflected in the ACIC or vice versa.

3.2.6 Take note of discrepancies/items for correction/verification like differences

in amounts and list them in the worksheet.

3.2.7 Analyze and verify all items in the worksheet and take them into
consideration in the succeeding replenishment.

4.0 SUBMISSION AND DISTRIBUTION

 The TRS and BRS shall be prepared within 15 days after receipt of the TS/BS in
four copies to be distributed as follows:

Original - BTr (TARD)

(except for account 8-70-707)
Duplicate - Accountancy Office, COA
Triplicate - Resident Auditor
Quadruplicate - Agency Accounting file

5.0 PENALTY CLAUSE

Failure on the part of the officials concerned to comply with the requirements of this
Circular shall subject them to the sanctions imposed under Section 122 (2) and (3) of PD
1445.

6.0 REPEALING CLAUSE

All circulars, orders, memoranda and existing rules and regulations in conflict
herewith are hereby revoked/amended accordingly.

7.0 EFFECTIVITY

This circular shall take effect immediately.

(SGD.) ROGELIO B. ESPIRITU, Commissioner

(SGD.) EUFEMIO C. DOMINGO, Chairman

Attachments:
Appendix A - Treasury/Agency Account Current-Deposits Monthly Reconciliation
Statement
Schedule A-1/2 - Remittances Advices Not Taken Up By Treasury/Agency
Schedule A-3/4 - Dishonored Deposits Not Taken Up By Treasury/Agency
Schedule A-5/6 - Remittance Advices Overstated By Treasury/Agency
Schedule A-7/8 - Remittance Advices Understated By Treasury/Agency
Appendix B - Treasury Account Current - MDS Checks Monthly Reconciliation
Statement
Schedule B-1 - Checks Not Taken Up By Agency
Schedule B-2/3 - Checks Overstated By Bank/Agency
Schedule B-4/5 - Checks Understated By Bank/Agency
Schedule B-6 - Cancelled Checks Not Taken Up By Agency
Schedule B-7 - Outstanding Checks
Appendix C - Treasury/Agency Account Current-Other Disbursements Monthly
Reconciliation Statement
Appendix D - Treasury/Agency Account Current-NCAA Disbursements Monthly
Reconciliation Statement
Schedule D-1/2 - Debit Advices Not Taken Up By Treasury/Agency
Schedule D-3/4 - Journal Vouchers Not Taken Up By Treasury/Agency