DETAILED OBSERVATIONS AND RECOMMENDATIONS

Financial and compliance

Submission of Accounts and Financial Reports

1. The submission of disbursement vouchers and its supporting documents, official

receipts and financial reports were delayed, thereby hampering the objective
review and evaluation of the transactions in violation to provision of Section 347
of Republic Act No. 7160, and pertinent provisions of COA Circulars No. 2019-
001 dated January 30, 2019.

1.1 Section 347 of R.A. 7160 provides that “Local treasurers, accountants and
other local accountable officers are required to render their accounts within
such time, in such form, style and content and under such regulations as COA
may prescribed.”

1.2 Item 4.0 of COA Circular No. 2019-001 dated January 30, 2019 provides the
following specific guidelines:

“4.1. Within 10 days after the end of the month, the BT shall prepare the
transmittal letter (Annex B) and submit the financial transaction documents
to the C/M Accountant.

4.2. Within three working days from submission of the transmittal letter and
financial transaction documents to the C/M Accountant, the BT shall submit
a duly receipted copy of transmittal letter, together with copies of the PBCs,
to the SA/ATL.

4.3. The C/M Accountant shall submit to the SA/ATL, the barangay
financial transaction documents, within 10 working days from receipt of the
transmittal letter.

4.4. If the BT fails to submit the financial transaction documents after five
days from the deadline, the C/M Accountant shall inform the PB, in a letter,
of the barangays failure to submit the documents, and shall require the PB
to enforce the immediate submission thereof, within three working days
from receipt of the letter, copy furnished the SA/ATL of the duly received
letter.

4.5. The C/M Accountant shall inform in writing the SA/ATL of the
barangay’s failure to submit the financial transaction documents if after
five days from receipt of the C/M Accountant’s letter by the PB there is still
no submission made.

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 4.6. Upon receipt of the C/M Accountant’s letter, the SA/ATL shall issue
within two working days a demand letter (Annex C) to the PB requiring the
BT to submit the financial transaction documents for the specific period
within three working days.

4.7. Upon submission, the SA/ATL shall verify check issuances in the BT
cashbook, validate bank statements for negotiated checks and review the
submitted financial transaction documents, issue appropriate audit
action/decision, if warranted, and furnish the C/M Accountant with
photocopies of the submitted financial transaction documents for recording
in the barangays books of accounts.

4.8. If the barangay still fail to submit the accounts, three working days
after the demand, the SA/ATL shall issue a Notice of Disallowance (ND)
for the unsubmitted transactions on the ground that the disbursement
were made without valid and legal purpose. Likewise, the SA/ATL shall
execute an affidavit (Annex D) on the non-submission of the accounts after
due demand and submit the same together with the supporting documents to
the COA Regional Director for evaluation and filing of appropriate case
with the Office of the Ombudsman, if warranted.(emphasis ours)”

1.3 Under existing laws and regulations therefore, accountable officers are required
to submit monthly reports of their transactions, which may consist, among
others, of the barangay receipts and disbursements, and that the respective head
of agency or Punong Barangay is mandated to ensure that the same is complied
with.

1.4 Evaluation of the barangay systems and procedures as well as the practices
made disclosed that the Barangay Treasurer still fails to submit the barangay
accounts and financial reports on time which is every 10 th day of the ensuing
month, thus, this caused the issuance of the Demand Letter after complying the
guidelines before such issuances. Due to the foregoing, the objective review and
evaluation of the transactions were hampered thus, the propriety and validity of
the transactions cannot be ascertained.

1.5 This practice precludes the auditor from conducting or performing a timely
verification and validation of transactions, thus, the propriety and validity of the
transactions cannot be ascertained.

1.6 It is reminded that failure on the part of the officials concerned to submit the
documents and reports mentioned herein shall cause the SA/ATL to issue a
Notice of Disallowance (ND) for the unsubmitted transactions on the ground
that the disbursements were made without valid and legal purpose.

1.7 We reiterated our recommendation that the Punong Barangay require the
Barangay Treasurer to submit the barangay accounts and financial reports

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 regularly in accordance with the above-cited regulations so as not to delay
the audit of the accounts of the barangay and to avoid the issuances of
Notice of Disallowance.

2. The Barangay did not maintain General Journals (GJ), General Ledgers (GL)
and Subsidiary Ledgers (SL) thereby recording and posting of the daily
transactions of the Barangay in the said books were not made which is not in
accordance with Section 1.2.4 of Chapter I of the Manual on the Financial
Management of Barangays and Section 6.3.1 of Chapter VI of the Manual on
Financial Management of Barangays.

2.1 Section 1.2.4 of Chapter I of the Manual on the Financial Management of

Barangays states that “Barangay books of accounts shall consist of a Journal of
Cash Transactions (JCT) – Annex 1, General Journal (GJ) – Annex 2, General
Ledger (GL) – Annex 3 and Subsidiary Ledger (SL) –Annex 4 which shall be
maintained by the barangay bookkeeper under the direct supervision of the
City/Municipal (C/M) Accountant.”

2.2 Also, Section 6.3.1 of Chapter VI of the Manual on Financial Management of

Barangays states that “Maintain the books of accounts of each barangay under
the city/municipality;
a. Record all cash transactions in the Journal of Barangay Transactions,
b. Record all non-cash transaction in the General Journal thru JEVs,
c. Post the recorded transactions in the journals to the General Ledgers,
and
d. Post all the transactions to the specific Subsidiary Ledgers.”

2.3 During the examination and verification of the cash and accounts of the
Barangay Treasurer, we noted that the Barangay is not maintaining the General
Journal (GJ), General Ledger (GL) and Subsidiary Ledger (SL).

2.4 The General Journals, General Ledgers and Subsidiary Ledgers are necessary
records of transactions to establish validity and existence of accounts. It is also a
useful tool in the monitoring of disposition of funds of the Barangay. Thus, the
non-preparation of these records cast doubt on the accuracy and authenticity of
the accounts of the Barangay and thereby causes delay in the reconciliation of
accountability of the Barangay Treasurer during audit.

2.5 Moreover, the Audit Team noted during the examination of the cash and
accounts that the daily collections and cash advances were not posted to the
respective ledgers, hence accountabilities were not properly recorded and
monitoring thereof was not straightforward.

2.6 We recommended that the Barangay Bookkeeper strictly adhere to the

provisions of Chapters I and VI of the Manual on the Financial

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 Management of Barangays on the maintenance of the General Journals
(GJ), General Ledgers (GL) and Subsidiary Ledgers (SL).

2.7 Moreover, once the foregoing books were already maintained, recording
and posting of transactions thereof should be made on an updated and
timely basis.

3. Expenditures were not monitored against Annual Budget/Appropriations due to

non-preparation of Registry on Appropriations and Obligations (RAO), thus,
charges and expenditures thereon exceeded the appropriation.

3.1. The Manual on the Financial Management of Barangays states that “Unless
authorized by the DBM and covered by subsequent SB Resolution approving the
appropriation, in no case shall commitments/expenditures exceed the approved
appropriation.”

3.2. Further, the same afore-mentioned Manual provides among others, the fiscal
responsibility of barangay officials in the management of barangay funds and
property. Included is the fiscal responsibility of the designated Chairman,
Committee on Appropriations (CCA) enumerated as follows:

a. Certifies the DV/payroll, contract/PO on the existence of available

appropriations to cover the claim;
b. Monitors the utilization of appropriations with the use of the
appropriate Record of Appropriations and Obligations (RAO);
c. Maintains the RAO;
d. Ensures that commitments/charges to the approved appropriations do
not exceed the available appropriations; and
e. Certifies the RAOs and submits the SAOB at month end and year end
to the municipal budget officer for consolidation and eventual
submission to the COA Auditor.

3.3. The above duties and functions were not undertaken by the designated CCA,
instead, said official relied on the availability of cash to back up barangay
commitments/obligations without determining the availability of appropriations,
thus, the expenditures were not monitored if such already exceeded its
appropriation or if an appropriation exist for such expenditure.

3.4. Further, due to the foregoing, the Statement of Appropriation and Obligations
and Balances (SAOB) was also not prepared and submitted. The SAOB is used
by CCA to report the charges to and balances of appropriations to the Punong
Barangay and SB monthly.

3.5. Had the CCA and all the barangay officials’ exercised concern over the
utilization of barangay resources and proper control been observed, incurrence
of unnecessary and irregular charges could have been avoided.

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 3.6. We recommended that the Punong Barangay:
a. require the designated CCA to perform his/her enumerated duties
and strictly monitor the balances of the appropriated funds to avoid
incurrence of obligations or commitments beyond its approved budget
and to avoid possible disallowance in audit.
b. instruct the CCA to prepare and maintain RAO and SAOB as basis in
determining the status of balances of appropriation.

4. The Barangay Treasurer did not prepare the monthly Report of Accountability
for Accountable Forms (RAAF) contrary to Chapter 4, Section 4.1.9 of the
Manual on Financial Management of Barangays, hence receipts, issuances and
balance of accountable forms at the end of the month could not be determined
and readily ascertained.

4.1. Chapter 4, Section 4.1.9 of the Manual on the Financial Management of

Barangays provides that “The Barangay Treasurer and Deputized Barangay
Collectors shall render their Report of Accountability for Accountable Forms
(RAAF).”

4.2. Also, Annex 18 of the same Manual provides the instructions on how to prepare
said report.

C. This report shall be prepared monthly by the BT in three copies to be

distributed as follows:
Original – COA Auditor
2nd Copy – C/M Accountant
rd
3 Copy – Barangay Treasurer
D. The barangays shall prepare one RAAF for all accountable forms
(official receipts, cash tickets and checks) received and issued during
the month.

4.3. Verification of reports presented during examination of accounts corroborated

by an interview with the Barangay Treasurer showed that no monthly RAAF
was prepared by the Barangay. The non-preparation thereof contributes to the
weak internal control system of the barangay on the handling, issuance and
reporting of all accountable forms which if not acted upon seriously will expose
the accountable officer to loss control of his or her accountabilities.

4.4. We therefore recommended that the Barangay Treasurer prepare the

Report on Accountability for Accountable Forms (RAAF) as part of his/her
reportorial requirements at the end of each month in compliance with the
above-cited regulations.

5. Monthly Reports of Collections and Deposits were not submitted within the
prescribed period to the Office of the Auditor contrary to COA Circular No.
2009-006 dated September 15, 2009 thus, depriving the timely verification and
audit of the same.

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 5.1. Sections 7.1.1 of COA Circular No. 2009-006 requires that the head of the
agency, who is primarily responsible for all government funds and property
pertaining to his agency, shall ensure that: (a) the required financial and other
reports and statements are submitted by the concerned agency officials in such
form and within the period prescribed by the Commission; xxx.

5.2. Moreover, Section 7.5.2 and Section 7.5.3 of Chapter VII of the Manual on
Financial Management of Barangays states that:

“7.5.2 The BT shall submit the RCDs, LR, ORs/DVs/Payrolls and Monthly
RAAF to the C/M Accountant on or before the 5th day of the succeeding
month.”

“7.5.3 The C/M Accountant shall submit to the local auditor concerned the
collections and disbursements accounts of each month on or before the 10th
working day of the succeeding month.”

5.3. However, the AO failed to submit the Report of Collections and Deposits
together with the supporting documents to the concerned offices within the
prescribed period of time or within ten (10) working days of the succeeding
month.

5.4. Delay in the submission of the said reports caused in an untimely verification
thereof.

5.5. We recommended that Monthly Report of Collections and Deposits

together with the supporting documents should be submitted to the Office
of the Auditor within ten days of the ensuing month to conduct the
necessary audit and examination of the report.

Cash and Cash Equivalents

6. The reliability and accuracy of the balance of Cash in Local Treasury account
amounting to P37,952.04 and P20,134.04 as at December 31, 2018 and December
31, 2019, respectively, could not be ascertained due to the failure of the
Barangay Treasurer and the Municipal Accountant to reconcile the cashbook
and general ledger.

6.1 Cash in Local Treasury account is used to record in the books of the barangay all
collections received by the barangay treasurer. The account will be credited in the
books when actual deposit in the agency account has been made.

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 6.2 The Financial Statements showed that the Cash-Local Treasury account of the
barangay had a balance of P37,952.04 and P20,134.04 as at December 31, 2018
and December 31, 2019, respectively.

6.3 Our inquiry from the Barangay Bookkeeper revealed that the balance of the
Cash in Local Treasury account was a carry-over balance, in which the details
of the amount are no longer available in the absence of subsidiary ledger.

6.4 Further, the balance appearing in the Financial Statements cannot be compared
with the balance per cashbook of the Barangay Treasurer in view of the latter’s
failure to update his cashbook and post actual balances.

6.5 The reconciliation of cashbook and general ledger should be given priority to
validate and reflect the correct and accurate total of Cash Local Treasury
balance in the financial statements. It is significant to verify the actual existence
of cash against the reported balance. Without reconciliation, the reported
balance in the financial statements would remain unreliable and doubtful.

6.6 We recommended that the Punong Barangay:

a. Request the Municipal Accountant and the Barangay Treasurer to
reconcile their balances so that the account shall be accurately and
fairly presented in the financial statements.
b. Instruct the Barangay Treasurer to regularly update his cashbook
and post the actual balance of his cash on hand.

7. Collections of the Barangay were not deposited regularly and intact with the
authorized government depository bank contrary to Section 334 of Republic Act
(R.A.) No. 7160 thus, resulted in shortage of the cash accounts amounting to
P23,967.25 and exposing government funds to risk of loss, theft and/or
misappropriation.

7.1 Section 334 (a) of RA 7160, also known as the Local Government Code of the
Philippines provides that “The Barangay treasurer shall collect all taxes, fees,
and other charges due and contributions accruing to the Barangay for which he
shall issue official receipts, and shall deposit all collections with the city or
municipal treasury or in the depository account maintained in the name of the
Barangay within five (5) days after receipt thereof.”

7.2 Also, Section 3.1 (5) of the Manual on the Financial Management of Barangays
states that “Collections accruing to the barangay shall be deposited intact
daily. Where travel time to the depository bank is more than one day, deposit
shall be made at least once a week or as soon as the collections reach
P5,000.00.”

7.3 We noted during the verification of deposits through the examination of the
individual deposit slips and bank statements of the Barangay that deposits do

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 not equal the preceding collections for a given period of time, thereby leaving
an undeposited collection at a particular point in time which exposes the said
collections to the risk of misapplication, misuse or loss.

7.4 Also, during the cash examination of cash and cash accounts of the barangay
treasurer, a shortage of P23,967.25 were found. However, only the amount of
P10,000.00 was restituted/deposited from the said shortage hence leaving a
balance of P13,967.25.

7.5 We strongly reiterated our recommendation that the Barangay Treasurer

follow the prescribed minimum requirements in the deposit of collections to
avoid misapplication or loss of funds. Also, we recommended that
collections be deposited intact (collections must equal the deposit for a
given period of time) so as to avoid future concerns such as shortages or
overages and to deposit the remaining balance of shortage amounting to
P13,967.25.

8. Weak and/or absence of internal control system over cash, cash items, cash
advances, accountable forms and other barangay records, exposes these on the
risk of loss, misuse or theft, contrary to the principles of sound internal control
system and the provisions of Section 27 of PD 898.

8.1 Section 27 of Presidential Decree No. 898 dated March 3, 1976 provides that
“It shall be the direct responsibility of the chief or head of each government
subdivision, agency, or instrumentality, including government-owned or
controlled corporation and other self-governing board, commission, or agency,
to install, implement, and monitor a sound system of internal control.
For this purpose, the chief or head of agency may seek the assistance of the
Commission in the design and installation of the internal control system.”

8.2 Also, Section 7.1.3 (a) of Chapter VII of the Manual on Financial Management
of Barangays provides that “Barangay Treasurer – Collections a. Keeps
custody of barangay funds and property and ensure the safety of cash, cash
items and barangay records”

8.3 Among the properties of the Barangay, cash and cash related items were the
most susceptible to theft, misuse or misapplication. This is the reason why the
attached inherent risk to this asset is very high.

8.4 However, during the conduct of our cash examination, we noticed that
accountable forms and bills and coins presented were just placed in a folder and
were not stored in a safe or vault.

8.5 Also, our interview revealed that undeposited collections and unissued
accountable forms were just being kept by the Barangay Treasurer elsewhere,

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 and sometimes were used to defray expenses of the Barangay, which also
magnifies the risk of loss, theft, misuse and misappropriation of the said assets.

8.6 The above stated practices are beyond the boundaries of a sound internal control
system and must not be tolerated.

8.7 We therefore recommended that safety deposit boxes/drawers and/or vault

be provided to the Barangay Treasurer to protect its cash and non-cash
accountabilities from risk of loss, theft or misuse.

8.8 Also, we recommended that the Barangay Treasurer strictly adhere to its
fiscal responsibilities to the government.

9. The Barangay Cashbook was not updated regularly and posting of transactions
thereof were not made on a daily basis and the balance of Cash in Bank account
under the accountability of the BT were not properly monitored, creating an
impact on both the business’ situation and financial position of the Barangay
contrary to Section 3.1 (8) and Section 1.2 (8) of the Manual on Financial
Management of Barangays.

9.1 Section 3.1 (8) of the Manual on the Financial Management of Barangays
provides that “Collections and deposits shall be recorded in the Cashbook
maintained by the BT based on the Report of Collections and Deposits (RCD).”

9.2 Section 1.2 (8) of the Manual on the Financial Management of Barangays also
provides that “A Cashbook (Annex 8) shall be maintained and updated daily.”

9.3 The cashbook shall be maintained by the Barangay Treasurer (BT) to record
daily collections and deposits, cash advance for payroll of the barangay, cash
advances granted for specific and time bound undertakings of the barangay and
to monitor the balance of Cash in Bank account under the accountability of the
BT.

9.4 During our audit with the objective of verifying the completeness through
tracing supporting documents (e.g. AF 51 Official Receipts, Disbursement
Vouchers, Deposit Slips) to the financial records (Barangay Cashbook) and
during the conduct of cash count, we noted that transactions were not posted up-
to-date.

9.5 One of the oft-repeated common rules on internal control over cash receipts
states that “control over cash, including remittances through the mails, should
be established immediately after it has been received; collections should be
acknowledged with pre-numbered official receipts and recorded promptly and
properly.” (COA Circular No. 77-48 dated January 31, 1977).

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 9.6 We therefore recommended that the Barangay Treasurer update
immediately the Barangay Cashbook to properly reflect the transactions
that transpired during the said period of time.

9.7 We also recommended an up to date, consistent and timely recording of

financial transactions in the Barangay Cashbook because delays in
reporting as well as inappropriate cut-off of transactions and reporting will
weaken internal control.

10. The Barangay Treasurer does not rule and foot the balances of his cashbook at
the end of each month as required by Section 26 of the Manual for LGU on New
Government Accounting System (NGAS), Volume II thus correct balances were
not easily determined during cash examination.

10.1 Section 26 of the NGAS Manual for LGU’s requires that Cashbook for Cash in
Treasury/Vault used to record collections and deposits to the bank shall be
updated and balanced daily. The Accountable Officer shall, at the end of the
month or when required to do so by proper competent authority, rule and foot
the cashbook. He shall likewise accomplish the required certification in the
cashbook.

10.2 Despite this provision, the barangay treasurer failed to rule and foot their
balances at the end of the month as required by the manual. Hence, running
balances and accountabilities at a given period of time cannot be readily
ascertained.

10.3 Interview with the barangay treasurer disclosed that transactions were not
recorded in the cashbook regularly and as consequence he was not able to
closely monitor his cash balances.

10.4 Compliance of the procedures in filling out and totaling the balances per month
would provide for efficient monitoring of cash accountabilities and ease of audit
verification.

10.5 We recommended that the Barangay Treasurer rule and foot the balances
of his cashbook at the end of each month, as provided by the NGAS
Manual. This will facilitate efficient monitoring of accountabilities and
prompt detection and correction of errors, as well as the audit thereof.

Cash Advances

11. Cash Advances totaling P50,133.00 for purposes other than travel were granted
to elected officials not in accordance with Section 339 of RA 7160 and Paragraph
4.1.4 of COA Circular No. 97-002 dated February 10, 1997.

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 11.1 Section 339 of RA 7160 states that “No cash advance shall be granted to any
local official or employee, elective or appointive, unless made in accordance
with the rules and regulations as the COA may prescribe.”

11.2 Paragraph 4.1.4 of COA Circular No. 97-002 provides that “Only permanently
appointed officials shall be designated as disbursing officer. Elected officials
may be granted a cash advance only for their official travelling expenses:”

11.3 Post-audit of transactions disclosed that the the SK Chairperson was granted
cash advances for different purposes other than travel, to wit:

Date Check Payee Position Purpose Amount

No.
09/23/201 553996 Bruce M. SK Cash advance 32,633.00
9 Guzman Chairperson for paints and
labor
10/04/201 553400 Bruce M. SK C/a for 5,000.00
9 Guzman Chairperson payment of
basketball
ball and
cement
10/22/201 731103 Bruce M. SK C/a for 12,500.00
9 Guzman Chairperson payment of
SK
uniform,fuel
Total P50,133.00

11.4 Although the above cash advances were liquidated as of December 31, 2019,
paragraph 4.1.4 of COA Circular No. 97-002 specifies that said transactions
could have been drawn by the Barangay Teasurer and not through an elective
official.

11.5 Further scrutiny of the Liquidation Reports showed that these disbursements
could have been paid directly to the suppliers/creditors or been granted to the
Barangay Treasurer thereat

11.6 We recommended that:

a. The Barangay should only process cash advances of elected officials

for their official travel; and
b. Direct payment to suppliers/creditors be observed.

12. Huge amount of cash advances was granted to Barangay Treasurer monthly
without definite and specific purpose, thus, exposing risk of possible
misappropriation contrary to COA Circular No. 97-002 dated February 10,
1997.

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 12.1 COA Circular No. 97-002 dated February 10, 1997 and reiterated in COA
Circular No. 2009-002 dated May 18, 2009 and Section 89 of PD No. 1445
prescribed the guidelines on the rules and regulations on the grant and
liquidation of cash advances, as follows:

 No cash advance shall be given unless for a legally authorized specific

purpose
 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
 No cash advance shall be granted for payments on account of
infrastructure projects or other undertaking on a project basis.
 Transfer of cash advance from one Accountable officer to another
shall not be allowed.

12.2 Review of the transactions of the barangay disclosed that the disbursement
process of the Barangay Treasurer commences upon receipt of the Internal
Revenue Allotment (IRA). At the beginning of the month, the Barangay
Treasurer prepared checks for the withdrawal of the IRA, through cash
advances, without specific purpose/s, thus exposing government funds to
possible misappropriation. Disbursement vouchers with estimated amounts were
used to support the drawing of cash advances.

12.3 Most of the time, the amount of cash advances withdrawn did not equal the
actual amount of expenditures paid which resulted to difficulty in monitoring
the liquidation of cash advances and accumulation of unliquidated balances
monthly.

12.4 We reiterated our recommendation that the Barangay stop the practice of
drawing a huge amount of cash advances with no specific purpose of
disbursement. Cash advances of Barangay Treasurer should only be
limited to Honoraria and other similar payments to officials and employees,
payroll for labor and petty operating expenses consisting of small payments
for maintenance and operating expenses which cannot be paid conveniently
by check or are required to be paid immediately.

13. Some of the cash advances made by the Barangay Treasurer were transferred to
other barangay officials and employees in violation of Section 89 of PD 1445 and
COA Circular No. 97-002 dated February 10, 1997.

13.1 COA Circular No. 97-002 dated February 10, 1997 Section 89 of PD No. 1445
prescribed the guidelines on the rules and regulations on the grant and
liquidation of cash advances states that “Transfer of cash advance from one
Accountable officer to another shall not be allowed.”

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 13.2 Review of the disbursement process of the barangay showed that the Barangay
Treasurer was allowed a one-time withdrawal of huge amount of cash advance
monthly. Included in the cash advance were payment of materials for
infrastructure projects and the amount used for the purchase of equipment that
should have been paid directly to the supplier by check. Instead the Barangay
Treasurer transferred the cash advance to the barangay official who will
purchase the materials or equipment or as payment to barangay official for the
reimbursement of the amount used for such purchase.

13.3 Also included in the cash advance of the barangay treasurer that were
transferred to various barangay officials and employees are the payment for
registration fees and travelling expenditures, including transportation fare, travel
allowance, hotel room/lodging expenses and other expenses incurred by
officials and employees in connection with official travel, seminars and
conferences. Cash advance for travel should be personally made by the
barangay official or employee authorized to travel or attend
seminars/conferences.

13.4 The transfer of cash advances from Barangay Treasurer to concerned barangay
officials and employees was only through Acknowledgment Receipt detailing
the purpose and the name of barangay official receiving the money.

13.5 The practice of the barangay to allow the barangay treasurer to make a huge
cash advance monthly and subsequently transfer part of the cash advance to
various officials and employees for various purposes resulted difficulty in the
establishing and monitoring the accountability of the barangay treasurer and the
concerned barangay official and employees, for which the cash advance was
transferred.

13.6 We recommended that:

a. No cash advances shall be granted to Barangay Treasurer nor to any

barangay officials and employees for the procurement of equipment
and materials for infrastructure projects, instead payment should be
made directly to the contractor/supplier by check.
b. Stop the practice of transferring cash advances for travel. The
barangay official and employee should personally cash advance
his/her travel expenditure in connection with his/her official travels.
c. Strictly comply with the above-mentioned regulations.

14. Cash Advances amounting to P40,893.00 remained unliquidated as of December

31, 2018 and December 31, 2019, respectively, in violation of Section 89 of P.D.
1445 and Item 5 of COA Circular NO. 97-002 dated February 10, 1997.

14.1 Section 89 of P.D. 1445 provides that “No cash advance shall be given unless
for a legally authorized specific purpose. A cash advance shall be reported on
and liquidated as soon as the purpose for which it was given has been served.

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 No additional cash advance shall be allowed to any official or employee unless
the previous cash advance given to him is first settled or a proper accounting
thereof is made.”

14.2 Item 5 of COA Circular No. 97-002 dated February 10, 1997 which provides the
rules on the liquidation of cash advances states that “All cash advances shall be
fully liquidated at the end of each year. Except for petty cash fund, the AO shall
refund any unexpended balance to the Cashier/Collecting Officer who will issue
the necessary official receipt.”

14.3 Further, Item 5.1.7 of the Manual on the Financial Management of Barangays
prescribes that “All cash advances shall be liquidated at year end. No
additional cash advances shall be given to any official or employees unless the
previous cash advance is liquidated and accounted for in the books.”

14.4 Review of the Financial Statements of the barangay disclosed a balance of the
account Advances for Officers and Employees of P40,893.00 as of December
31, 2018 and December 31, 2019, respectively. Further inspection then revealed
that these are carry forward balances from prior years. Furthermore, the
balances cannot be ascertained due to the non-maintenance of subsidiary ledger.

14.5 We reiterated our recommendation that management:

a. In coordination with the Municipal Accounting Office, reconcile and

trace the origin of the balances and its supporting documents in order
to determine the persons liable therefrom
b. After reconciliation, issue demand letters to notify the concerned
officials and employees of their responsibility to settle their
unliquidated cash advances. If settlement was not received, withhold
from their salaries considering that they have been notified and given
more adequate time to liquidate
c. Issue demand letters to employees who already resigned and
transferred to immediately cause the liquidation or settlement of the
unliquidated balances
d. Not grant additional cash advance to concerned officials and
employees unless the previous cash advance granted them have been
liquidated;
e. Strictly monitor periodically the submission of liquidation reports to
ensure timely accounting thereof to avoid undue accumulation of
outstanding cash advances.
f. Strictly comply with the provisions of the abovementioned Circulars.

Property, Plant and Equipment

15. The reliability and accuracy of the Property, Plant and Equipment accounts
with total carrying value of P3,788,529.59 and P3,463,358.59 as at December 31,

28
2018 and December 31, 2019, respectively, could not be completely ascertained
due to the non-preparation and non-submission of the Report on Inventory of
Property and Equipment (RIPE) contrary to pertinent provisions of the Manual
on the Financial Management of Barangays.

15.1 The Manual on the Financial Management of Barangays provides, among

others:

7.2.5. Inventory Taking and Reconciliation

a. The Inventory Committee headed by the PB (Punong

Barangay) or his authorized representative and the BT
(Barangay Treasurer) as his member shall conduct a physical
count of all property and equipment of the barangay at least
once a year

b. The Inventory Committee, upon the completion of the

physical count, shall prepare three copies of Report on
Inventory of Property and Equipment (RIPE) and shall be
approved by the PB. The original copy of the RIPE shall be
submitted to the COA Auditor through the Municipal
Accountant. The duplicate and triplicate copy thereof shall
be distributed to the Municipal Accountant and Barangay
Treasurer, respectively.(emphasis supplied)

12.5.4.The PB shall submit to the Municipal Accountant and the COA

Auditor concerned the Reports on the Property Inventory and
Supplies Inventory at year-end, not later than the 10 th day of
January of the following year.

15.2 As per the financial statement of the barangay, the account Property, Plant and
Equipment has a total carrying value of P3,788,529.59 and P3,463,358.59 as of
December 31, 2018 and December 31, 2019, respectively. The reliability and
accuracy of the recorded balances, however, could not be completely
ascertained because the barangay did not submit their Report on Inventory of
Property and Equipment (RIPE). The non-submission of the inventory report
indicates the non-conduct of the physical inventory of their properties at year
end.

15.3 We reiterated our recommendation that the Punong Barangay ensure the
conduct of annual physical inventory of the properties of the Barangay.
Correspondingly, the Report on Inventory of Property and Equipment
(RIPE) as of December 31, 2019 be submitted to the Office of the Auditor
to facilitate the verification of the PPE accounts.

29
16. The barangay did not provide and recognize depreciation for Property, Plant
and Equipment as of December 31, 2019, thus overstating its income by the
amount of depreciation not taken up.

16.1 The Manual on the Financial Management of Barangays provides, among

others:

7.1.1 Depreciation of Investment Property and PPE shall be computed

using the straight-line method after deducting a residual value
equivalent to 5 per cent of the cost of the property and
equipment.

7.1.2 Depreciation shall start on the month when the PPE is already
available for use.

16.2 It was observed that the corresponding depreciation expense for each of the
Property, Plant and Equipment accounts totaling P3,788,529.59 and
P3,463,358.59 as of December 31, 2018 and December 31, 2019, respectively,
were not provided thereby understating the expense and overstating the income
of the barangay by the amount equivalent to the depreciation not taken up.

16.3 We reiterated our recommendation that the Barangay Bookkeeper, with

the assistance of the Municipal Accountant, provide depreciation for each
property, plant & equipment account of the barangay in conformity with
the afore-mentioned provisions.

Local Disaster Risk Reduction and Management Fund (LDRRMF)

17. The Monthly Report on Sources and Utilization of Barangay Disaster Risk
Reduction Management Fund (BDRRMF) were not prepared and submitted to
the Auditor contrary to Section 5.1.5 of COA Circular No. 2012-002 dated
September 12, 2012.

17.1 COA Circular No. 2012-002 dated September 12, 2012 cover the accounting
and reporting of the Local Disaster Risk Reduction and Management Fund
(LDRRMF), National Disaster Risk Reduction and Management Fund
(NDRRMF) transferred to LGUs, funds received from other LGUs and other
sources starting with the unspent balance of the funds for disaster risk reduction
and management (DRRM) for calendar year 2011 and years after.

17.2 Section 5.1.5 of the same circular states that a Report on Sources and Utilization
of DRRMF using the format in Annex B therein, shall be prepared and certified
correct by the Local Accountant. The Local Disaster Risk Reduction and
Management Officer (LDRRMO) shall submit the report on or before the 15 th

30
 day after the end of each month through the LDRRMC and Local Development
Council (LDC) to the COA auditor of the LGU.
17.3 However, the corresponding report on the sources and utilization of DRRMF
were not submitted by the BDRRMO to COA within the prescribed period. It is
stressed that the report be prepared and certified correct by the Accountant for
submission to COA by the BDRRMO on or before the 15 th day after the end of
each month pursuant to Section 5.1.5 of the circular using the format provided
therein. As such, sources and utilization of the BDRRMF were not properly
reported as prescribed.

17.4 Validation whether or not the utilization of the BDRRMF is in accordance with
the Barangay’s Local Disaster Risk Reduction Management Fund Investment
Plan (BDRRMFIP) could not be performed due to the non-submission of the
said report.

17.5 We reiterated our recommendation that the required reports on the

sources and utilization of DRRMF from the BDRRMO be prepared and
submitted pursuant to COA Circular No. 2012-002 dated September 12,
2012.

Disbursements

18. Various disbursements totaling P141,733.00 were doubtful for lack of the necessary
supporting documents in violation of Section 4(6) of Presidential Decree No. 1445. .

18.1 Section 4(6) of Presidential Decree (PD) No. 1445 states that, “Claims against
government funds shall be supported with complete documentation .

18.2 Audit of CY 2018-2019 transactions of the barangay showed that disbursements were
only supported by Disbursement Vouchers and no other necessary documents were
attached to justify its necessity and legality, as follows .

Date Check Payee Purpose Amount Lacking

No Documents
10/15/201 55398 Glennmoo Payment 44,100.00 Purchase
9 re of Request,
Caramanci aggregate Purchase Order,
on s Delivery
Receipt,
Inspection and
Acceptance;
ReportPrice
Quotation from

31
 at least 3
bonafide and
reputable
supplier
10/17/201 731102 Minardo Cash 35,000.00 Purchase
9 Macarilay advance Request,
for Purchase Order,
BDRRM Delivery
fund and Receipt,
Mooe Inspection and
(chainsaw Acceptance;
) ReportPrice
Quotation from
at least 3
bonafide and
reputable
supplier
10/22/201 731103 Bruce M. Cash 32,633.00 Purchase
9 Guzman advance Request,
for paints Purchase Order,
and labor Delivery
Receipt,
Inspection and
Acceptance;
ReportPrice
Quotation from
at least 3
bonafide and
reputable
supplier
11/19/201 731108 Minardo Various 15,000.00 Purchase
9 Macarilay Office Request,
Supplie Purchase Order,
Delivery
Receipt,
Inspection and
Acceptance;
Report
11/18/201 731109 Bruce Sk 15,000.00 Purchase
9 Guzman Bastkebal Request,
l Jersey Purchase Order,
Delivery
Receipt,
Inspection and
Acceptance;
ReportPrice
Quotation from
at least 3
bonafide and
reputable

32
 supplier
Total P141,733.00

18.3 Documentary requirements are essential tools in proving the proprietary,

legality and validity of a particular transaction. It is a sound principle of internal
control that all government transactions must be supported by an appropriate
supporting documentation.

18.4 We recommended that the Punong Barangay:

a. Submit the lacking supporting documents to avoid suspension in audit

of the above-enumerated disbursements.
b. Instruct the Barangay Treasurer not to process payments for the
procurement of construction materials unless all the required
supporting; and

19. Disbursements were made by the barangay despite deficiencies in the supporting
documents in violation of Section 4(6) of Presidential Decree No. 1445 and
Systems and Procedures Manual on the Management of Barangay Funds and
Property, Volume I, thus, validity and legality of the transactions were doubtful.

19.1 Section 4 (6) of the Presidential Decree No. 1445 states that “Claims against
government funds shall be supported with complete documentations.”

19.2 Likewise, the Systems and Procedures Manual on the Management of Barangay
Funds and Property, Volume I provides, among others that existing rules and
regulations require that all disbursement of public funds be supported by
documents necessary to prove their validity, propriety and legality, to wit:

a. For grant of cash advance for travel-

 Travel order (TO)
 Itinerary of Travel

b. Liquidation of cash advances-

 For honorarium - Paid disbursement vouchers or payrolls duly
signed and approved by barangay officials concerned.
 For travel – original copy of travel order, plane/bus tickets or its
equivalent, Official Receipts, if any, boarding pass, certificate of
appearance, Liquidation Report, etc.
 For training – certificate of appearance, certificate of training and
invitation to attend the training.

c. For payment of maintenance and other operating expenses-

 Membership Dues – Statement of account/bill from the
organization

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  Repairs and maintenance – Job orders, Invoices, Certificate of
warranty/guarantee, pre and post repair inspection report,
inspection and acceptance report, labor payroll (for repairs
undertaken by administration), or contract (for repairs undertaken
by contract).

d. For purchase of equipment, supplies, materials and other items-

 Purchase Request
 Purchase Order
 Bidding documents or equivalent (depending on the mode of
procurement)
 Delivery Receipt – duly signed
 Sales Invoice or Official Receipt
 Inspection and Acceptance Report

e. For infrastructure and reforestation projects-

By Administration
 For materials/supplies – PO, Supplier’s Invoice, bidding
documents or equivalent (depending on the mode of
procurement), delivery receipts, inspection and acceptance
report
 For Wages – Labor payroll, DTR and contract of labor
 Plans or Program of Work

19.3 In our audit of the disbursements of the Barangay, we noted that disbursement
vouchers were not adequately supported with the minimum required documents
due to the inefficiency in safeguards and laxity in the control of government
funds. As observed, most of the disbursements were supported only by official
receipt, acknowledgement receipts and reimbursement expense receipt (RER).

19.4 We also noted that payments for travelling expenses were only based on the
submitted Certificate of Appearance, without the corresponding approved travel
order and itinerary to show the inclusive dates of travel and the amount claimed
and paid by the Barangay Treasurer.

19.5 Due to the incomplete documentation the propriety of the disbursement and the
validity of payment cannot be ascertained.

19.6 We reiterated our recommendations that:

a. Punong Barangay, being responsible for the validity, propriety and

legality of the disbursements, pay only claims which are properly
documented and duly approved by proper officials to avoid
suspension and possible disallowance in audit.
b. The Barangay strictly adhere to the aforementioned regulations.

34
20. Honoraria of the barangay officials and employees were paid even without
complete documents to support the claims, contrary to Section 4(6) of PD 1445
and the Systems and Procedures Manual on the Management of Barangay Funds
and Property, Volume I, Policies and Procedures on Disbursements, thus affecting
the validity and legality of the transactions.

20.1 Section 4(6) of PD 1445, otherwise known as the State Audit Code of the
Philippines states that “claims against government funds shall be supported
with complete documentation”

20.2 Likewise, Systems and Procedures Manual on the Management of Barangay

Funds and Property, Volume I, Policies and Procedures on Disbursements
provides that, “Existing rules and regulations require that all disbursements of
public funds be supported by documents necessary to prove their validity,
propriety and legality." Basic supporting documents for Disbursement. The
basic supporting documents for payment of salaries/honoraria and other
personnel services:

a. Approved payroll supported by Daily Time Record (DTR)

b. Minutes of Meeting of the SB duly signed by the members of the
SB and Barangay Secretary.

20.3 Post-audit of disbursements revealed that the Barangay Treasurer made

advances for Payroll every month for the payment of honoraria. However,
liquidation thereof was not supported with the stated basic documentary
requirements. It must be stressed that the basis of payment of honoraria is the
attendance of barangay officials in two (2) sessions.

20.4 Hence claims without supporting documents raises doubt on the validity and
legality of the transactions.

20.5 Further inspection also revealed that several payees did not affixed their
signature upon receipt of their honorarium contrary to Section 1.2.1 of COA
Circular
No. 2012-001 dated June 14, 2012, otherwise known as Prescribing the Revised
Guidelines and Documentary Requirements for Common Government
Transactions which states that liquidation of cash advances for payroll should be
supported by an Approved payroll/vouchers duly acknowledged/signed by the
payee/s.

20.6 We recommended that the Barangay Treasurer attach the

necessary/complete documents to the liquidation report to support the
validity and legality of the claim and to avoid suspension or disallowance in
audit.

35
 20.7 Furthermore, we recommended that the Barangay Treasurer require all
payees in the Payroll Register to acknowledge the receipt of their
honorarium by affixing their signature therein.

21. The amount of P16,500.00 paid by the Barangay for registration fee and traveling
allowance for the Training Course for the Barangay Peacekeeping Action Team
(BPATS) and Disaster Preparedness Program exceeded the appropriation for Training
Expense under the Barangay Disaster Risk Reduction and Management Fund contrary
to Section 305(a) of RA 7160.

21.1 Section 305 of RA 7160 provides the fundamental principles for the financial affairs,
transactions and operations of local government units which shall include ;

a) No money shall be paid out of the local treasury except in pursuance of an

appropriations ordinance or law;.

21.2 Barangay San Vicente appropriated P148,242.80 for the BDRRMF for CY 2019. Of
the total BDRRMF, the amount of P103,769.96 was allocated for the 70% Mitigation
Fund and the amount of P44,472.84 was allocated for the 30% Quick Response Fund .

21.3 Review of the Annual Budget of the Barangay showed that the 70% Mitigation Fund
was appropriated for the following Projects/Programs/Activities (PPAS), to wit .

PPAs Appropriation
Conduct of Risk Assessment and Vulnerability 5,000.00
Promotion of Green Technology 10,000.00
Conduct of Trainings on disaster preparedness 12,000.00
IEC Campaign 3,000.00
Early Warning System 2,000.00
Procurement of basic emergency supplies 7,000.00
Equipment 20,000.00
Provision of food subsistence 10,000.00
Disaster operational system 10,000.00
Construction and Rehabilitation of damaged infrastructure 24,769.96
facilities
Total P103,769.96

21.4 Post-audit of the transactions of Barangay San Vicente for CY 2019 disclosed the
following transactions from the BDRRM Fund, to wit:

Date Check Payee Amount Reg Fee for

No. BPATS
11/06/2019 731104 Minardo 35,000.00 16,500.00
Macarilay

36
 Total P16,500.00

21.5 The above disbursements were payment for the Training Course for the Barangay
Peacekeeping Action Team (BPATS) and Disaster Preparedness Program at Water
Worlds Grand Resort, Inc, Ramon, Isabela on November 27-29, 2019. The said
training/seminar was sponsored/organized by the Liga Ng Mga Barangay (LNB) and
Municipal Local Government Operations Officer (MLGOO) .

22. Considering that the appropriation for training for the BDRRMF is P12,000.00, still the
barangay made a disbursement amounting to P16,500.00 which is in excess of the
appropriation amounting to P4,500.00.

22.1 Assuming arguendo that there was an ordinance passed for its reprograming which is
being sourced out from other PPAs of the 70% Mitigation fund, still it is not valid .

22.2 It is to be emphasized that the listed PPAs under the 70% Mitigation Fund of the
BBDRRM Plans are viable for implementation. Hence, the Barangay could have
implemented the funded PPAs.

22.3 The re-programming made by the Barangay deprived the barangay constituents of the
intended benefits that could have been derived from the implementation of the PPAs.

22.4 The LDRRM Fund is a special fund that is used for disaster risk management
activities, quick response fund or stand-by fund for relief and recovery programs. In
this regard, the LDRRM Fund should be disbursed or used for the purpose for which
the fund was created.

22.5 We recommended that the Punong Barangay to:

a. submit a copy of the Barangay Ordinance for its reprogram

appropriation, if any; and
b. require the Accountant to carefully check, review and ensure that the
limit the use of the LDRRM Fund to the purposes allowed by law and
regulations and in accordance with the approved LDRRMP.

23. The Barangay made payments amounting to P30,000.00 for transactions that
have no clear purpose contrary to Section 4.2 of Presidential Decree (PD) No.
1445 otherwise known as Government Auditing Code of the Philippines.

23.1 Section 4.2 of PD 1445 states that “Government Funds or property shall be spent or
used solely for public purposes.”

23.2 Post-audit of transactions of the Barangay for CYs 2018 and 2019 showed that the
following disbursements were paid, however, complete description of the
Projects/Purpose/Activities were not complete to promote transparency and
comprehension of the transactions, to wit:

37
 Date Check Payee Purpose (as stated in DV) Amount
No
09/23/201 Minardo Cash Advance of payment
9 553997 Macarilay of MOOE 15,000.00
10/17/201 Minardo Cash Advance of payment
9 731101 Macarilay of MOOE 15,000.00

TOTAL P30,000.00

23.3 The purpose of the disbursement was generally stated in the Disbursement Voucher
(DV). In addition, the DV was only supported by various official receipts which also
did not specify the purpose of disbursements.

23.4 We recommend that the Punong Barangay:

a. Instruct the Barangay Treasurer to provide brief but complete description
of every disbursement to present a clear picture of the barangay’s
transactions.
b. Ensure that all disbursements made by the Barangay are for public
purposes.

20% Development Fund

24. The amount of P110,000.00 from the CY 2019 20% development fund was
appropriated for projects which are inconsistent with the guidelines set under
DILG-DBM Joint Memorandum Circular No. 2017-1 dated February 22, 2017.

24.1 Item 3.0 of DILG – DBM Joint Memorandum Circular No. 2017-1 provides the
allowable development projects chargeable against the 20% DF, to wit:

3.1 Social Development

3.1.1 Construction or rehabilitation of health centers, rural health

units or hospitals, including purchase of lot for the purpose;

3.1.2 Purchase of ambulance and medical equipment;

3.1.3 Construction or rehabilitation of local government-owned

potable water supply system;

3.1.4 Establishment or rehabilitation of Manpower Development

Centers;

38
 3.1.5 Construction or rehabilitation of evacuation centers,
including purchase of lot for the purpose;

3.1.6 Construction of Special Drug Education Centers, and Drug

Treatment/Rehabilitation Centers, including purchase of lot
for the purpose;

3.1.7 Rehabilitation of historical sites classified as such by the

National Historical Commission of the Philippines;

3.1.8 Purchase and development of land for the relocation of

informal settlers and relocation of victims of calamities;

3.1.9 Construction or rehabilitation multi-purpose hall, including

purchase of lot for the purpose; and

3.1.10 Installation street lighting system.

3.2 Economic Development

3.2.1 Construction or rehabilitation of communal irrigation or water

impounding system;

3.2.2 Purchase or lease of post-harvest facilities, such as farm or

hand tractor with trailer, thresher and mechanical driers;

3.2.3 Construction or rehabilitation of local roads or bridges

including purchase of appropriate engineering equipment such
as dump trucks, graders and pay loaders;

3.2.4 Capital expenditures related to the implementation of livelihood

or entrepreneurship/local economic development projects;

3.2.5 Development of alternative power or energy sources such as,

but not limited to, renewable power plants; and

3.2.6 Amortization of loans used to finance development projects cited

in this JMC, subject to the 20% debt service cap prescribed
under Section 324 (b) of RA No. 7160.

3.3 Environmental Management

3.3.1 Reforestation and urban greening;

3.3.2 Construction or rehabilitation of sanitary landfills, material

recovery facilities;

39
 3.3.3 Purchase of garbage trucks and related equipment for
environmental management and protection purposes;
3.3.3 Implementation of flood and erosion control projects such as
rehabilitation and construction of drainage systems, de-silting of
rivers, de-clogging of canals; and

3.3.4 Other environmental management projects that promote air and

water quality, as well as productivity of the coastal or freshwater habitat,
agricultural land and forest land, such as, but not limited to, treatment of
wastewater for conservation/re-use purposes, and installation of air
pollution control devices.

24.2 The Barangay appropriated a total of P537,971.20 for the 20% Economic
Development Fund for CY 2019. Review of the CY 2019 Annual Budget of the
barangay disclosed that the following PAPs as embodied in its Annual
Investment Plan (AIP) were not in accordance with the afore-mentioned Joint
Memorandum Circular, to wit:

PAPs Appropriation
Loan Assistance to JIGLO-RIC & UW4GG for 10,000.00
Livelihood
Promotion of Binallay Festival during Pinilisa 50,000.00
Festival
Promotion of Binallay Festival 30,000.00
Tree Planting Activities 20,000.00
TOTAL 110,000.00

24.3 It is to be noted that of the total appropriation made by the Barangay for the
20% BDF, 20.45% were appropriated for PPAs that were inconsistent with the
above-cited joint memorandum circular, hence, it defeats the purpose of the
20% Development.

24.4 Further, post audit of disbursement vouchers showed that most of the
disbursements made from the above enumerated PPA’s were payment for meals
and snacks for fiesta celebration. The said utilization of the fund was also
inconsistent with above cited provision.

24.5 The above enumerated PAPs are surely beneficial to the populace, however, it
should have been appropriated to their proper fund and not from the 20% EDF.
The 20% EDF is intended for social, economic and environmental projects
which shall contribute to the attainment of socio-economic development and

40
 shall partake the nature of investment or capital expenditures as specified under
Section 3 of DILG-DBM JMC No. 2017-01

24.6 We recommended that management:

a. Ensure that the utilization of 20% Development Fund must be for capital
expenditure and/or in the nature of investments; and
b. Strictly adhere with the DILG and DBM joint Circular No. 2017-1 in the
preparation of Annual Investment Plan to be funded out of the 20% EDF
to ensure that all items to be funded are development programs/projects
and activities which are compliant with the guidelines.

Others

25. Several inconsistencies committed by the Brgy. Treasurer in the performance of

his/her duties resulted to various errors that affected the sound internal control
system of the barangay.

25.1 In the course of audit we noted the inaccuracies of the Barangay Treasurer such
as:

a. All disbursement vouchers were not pre-numbered sequentially. The

numbering of disbursement vouchers serves as a cross-reference with the
entries in the Cashbook and Report of Checks Issued (RCI).
b. Failure to attach copy of paid checks in the disbursement vouchers. The
paid checks provides information regarding the check number, name of
payee, date of transaction and the amount involved.
c. Failure to let the payee sign the “Receive” portion of the disbursement
voucher. This will provide information regarding the name of receiver,
signature and date received. Signature of payee or authorized receiver not
appearing in the received portion is a crucial/vital error because the
Barangay Treasurer may be liable if the payee denies the existence of the
check on her/his custody.
d. To submit a properly filled up reports of RAO, RCD and RAAF.

25.2 These inconsistencies had to be corrected or observed by the Barangay

Treasurer in all disbursements. She/he must be guided with the principles of
good internal control being a custodian of public funds and properties.

25.3 We recommended that Barangay Treasurer to perform his/her assigned

task diligently by strictly complying with the following recommendations:

a. To pre-number every disbursement voucher sequentially;

b. To submit paid copies of paid checks to be attached in front of the
disbursement vouchers;

41
c. To let the payees to sign the received portion of the disbursement
vouchers; and
d. To properly filled up the RAO, RCD and RAAF.

42