CHAPTER 5: Disbursements

Disbursements- all payments in cash, in whatever manner (cash, check, and other means).
Disbursements shall be supported by Disbursement Vouchers, (Including Petty Cash Vouchers)
or Payroll.

Fundamental Principles for Disbursement of Public Funds

A. All government resources shall be used only in accordance with law and public purpose.
B. Trust fund shall be used for their specific purposes.
C. Fiscal responsibility shall be shared by those exercising authority over a government
agency.
D. The use of government resources shall be approved by proper officials.
E. Use of government funds shall be supported by complete documentation.
F. All laws and regulations shall be adhered to, including the generally accepted principles
and practices of accounting, management and fiscal administration, as long as does not
contravene the existing laws.

 Expenditures funded by borrowings are included in expenditure program. Loan proceeds

shall not be used without corresponding fund release using Special Fund.

Authority to Disburse/Pay
 Notice of Cash Allocation (NCA)
 Notice of Transfer of Allocation (NTA)
 Tax Remittance Advice (TRA)
 Non-Cash Availment Authority (NCAA)
 Cash Disbursement Ceiling (CDC)- agency has a foreign business wherein they are
authorized by the government to use the proceeds in their own operation.

Books of DFA or DOLE Books of BTr

Cash- CO 100
Passport or Visa Fees 100
Cash in Bank- Foreign, Current 100
Cash- CO 100
Cash-Constructive Income Rem 100 Subsidy to NGAs 100
Subsidy from NG 100 Cash- Constructive Income Rem. 100
Rents- Building and Structure 80
Cash in Bank- Foreign, Current 80
Basic Requirements and Certifications for Disbursements
A. Budget Officer (Head of Budget Unit)- certify the availability of allotment
B. Chief Accountant (Head of Accounting Unit)- charge obligations to allotments to ensure that
there is no overdraft (obligation exceeds allotment - prohibited)
C. Chief Accountant (Head of Accounting Unit)- certify availability of funds/cash and
completeness of supporting documents before Head of Agency (authorized representative)
enter into contracts involving public funds.
 All disbursements shall be certified by the Chief Accountant. It should be valid and
authorized. Fictitious transactions are prohibited, the certifying officer will be dismissed and
criminally liable together with others involved.
D. The requesting and approving agencies shall ensure that the disbursements are legal
E. The Head of the Requesting Unit shall certify the necessity and legality of documents.
(Disbursement Vouchers, Payroll, and original copies).
F. The Head of the Agency (authorized representative) shall approve the Disbursement
Vouchers or Payroll.

Modes of Disbursements
Check (all checks whether released, unreleased, or cancelled is recorded in Checks/ADA
Disbursement Records, maintained by cash/Treasury Unit)
 Modified Disbursement Systems Check- chargeable against the National Treasurer and
maintained with different MDS-Government Servicing Banks.
 Certified Checks- charged against the Agency Checking Account with Government
Servicing Banks. Covered by receipts to be deposited in Authorized Government Depository
Banks.

Cash
 Made only for a legally authorized specific purpose
 Cash advances, other than travel, shall be given to duly appointed Disbursing Officers
who must be properly bonded. The amount of cash advance shall not exceed the
maximum cash accountability.
 Only designated Disbursing Officers are allowed to disburse. Only permanently
appointed officials shall be designated as Disbursing Officer
 Cash advance shall be liquidated as soon as the purpose to which it was given has been
served.
* Payroll- within 5 days after the end of pay period. Unclaimed are returned and issued
receipt to close.
* Local Travel- within 30 days from the return to workplace
* Foreign Travel- within 60 days from the return to Philippines. (Employee shall not be
allowed to travel abroad if planning to retire within 1 year after the travel).
 No additional cash advance until the first is liquidated
 Transfer of cash advance from one officer to another is not allowed.
 A cash advance shall not be used to encash checks or liquidate another cash advance.

Disbursements through Advice to Debit Account (ADA)

 List of Due and Demandable Accounts Payable - Advice to Debit Account (LDDAP-ADA)
 Authorization issued by government agency to MDS-GSB requesting them to transfer
certain amount of money to creditors from its available NCA.
 It works like a check, except when multiple creditors are in the same back as ADA, one ADA
can be drawn to pay all of them. Separate ADAs for different MDS-GSB.
The following shall not be paid through ADA:
1. Payment of Terminal Leave and Retirement Gratuity Benefits
2. Remittance of GSIS, Pag-IBIG, and PHilHealth contributions
3. Payment of utilities
4. Other payables
Date Accounts payable 100,000
Cash- Modified Disbursement System (MDS), Regular 100,000

Disbursements Through the Electronic Modified Disbursement System (eMDS)

 Same with ADA, except that the disbursements are directly from the Treasurer, account
maintained in Land Bank of the Philippines.
 Can use online transaction

Disbursements Through Cashless Purchases Card (CPC) System

 Electronic card (credit card) maintained in Citibank
A. CPC purchases shall only be for eligible items and merchants
B. Only authorized individuals are allowed to use CPC, with monthly limit, changes subject to
approval of Steering Committee.
C. Agency officials who approve of CPC shall be jointly accountable.
D. The CPC system shall comply with disbursement policies and procedures.
E. The amount covered by CPC shall form part of participating agencies, It shall not be used to
increase cash advance.
F. CPC shall initially be used to purchase small value, non-common use items not available in
Procurement Service
G. Unauthorized items purchased using CPC shall be personal liability of the card holder,
without prejudice to the revocation of privileges.
H. Participating agencies shall immediately inform Citibank incase of discrepancy.
I. Participating agencies shall ensure timely payment of billing. Delays will cause late payment
charges. NCA shall not be used to pay these penalties.
J. The cardholder shall submit all receipts from the use of CPC to the accounting unit for
reconciliation of charge slips and billing summary.
K. The accounting unit shall check if the procured items are allowed by law to be purchased
using the CPC.
L. In case the CPC is lost or stolen, the cardholder shall report immediately to Citibank and
Program Administrator. PA will check if the cardholder is negligent and whether their privileges
should be suspended. The cardholder is liable to any CPC charges during the period the card
was lost or stolen.

Disbursements through the Non-Cash Availment Authority

 Authority issued by the DBM to cover the liquidation (payment) of their actual obligation with
the available allotment.
 Also called (Direct Payment Method) or (Direct Payment Scheme of Loan Availment) are
made through the Journal Entry Voucher issued by the BTr to record payment made directly
by lending institutions.
Books of Entity A Books of BTr
Communication Equipment 1M
Accounts Payable 1M
Accounts Payable 1M Subsidy to NGAs 1M
Subsidy from NG 1M Loan Payable - Foreign 1M

 No cash is involved in the acquisition because it was paid directly by the lending institution.

Disbursements through Tax Remittance Advice

Accounting for Disallowances- invalidated or disallowed by COA because too expensive,
irregular, unnecessary, and extravagant. Recorded only if final and executory.
 Accounting for disallowances (overpayment) is the same with accounting for current and
prior period errors. Prior: corrected in RE or Accumulated Surplus (Deficits).

Current Year Prior Year

Receivables- Disallowances 10,000 Receivables- Disallowances 10,000
Office Supplies Expense 10,000 Accumulated Surplus (Deficits) 10,000
Cash- CO 10,000 Cash- CO 10,000
Receivables- Disallowances 10,000 Receivables- Disallowances 10,000
Cash- Treasury… 10,000 Cash- Treasury… 10,000
Cash- CO 10,000 Cash- CO 10,000

Accounting for Overpayments- Example: Payrolls are paid in banks before checking the
attendance of employees for the period.