Republic of the Philippines

(PAMBANSANG PANGASIWAAN NG PATUBIG) Quezon City

Office Address: National Government Center EDSA, Diliman, Quezon City, Philippines

Telephone Nos.: (02) 929-6071 to 78 Website: www.nia.gov.ph

Telefax No. (632) 928-9343 TIN No. 000-916^15

MC No. ^1 S. of 2017

MEMORANDUM C I R C U L A R

To: T H E S E N I O R D E P U T Y ADMINISTRATOR/ T H E D E P U T Y A D M I N I S T R A T O R S , D E P A R T M E N T / R E G I O N A L / P R O J E C T M A N A G E R S / DIVISION M A N A G E R S AND A L L O T H E R S C O N C E R N E D

Subject : G U I D E L I N E S AND P R O C E D U R E S ON T H E W R I T E - O F F O F DORMANT R E C E I V A B L E A C C O U N T S , UNLIQUIDATED C A S H A D V A N C E S AND NIA FUND T R A N S F E R S T O O T H E R A G E N C I E S

1.0 B A C K G R O U N D

As a rule, cash advances must be liquidated within the prescribed periods depending upon the nature and purpose of the particular cash advance, provided under C O A Circular No. 97-002 dated February 10, 1997, restating with amendments , rules and regulations on the granting, utilization and liquidation of ', cash advances.

Likewise, l iquidation of fund transfers to implementing entities is required under C O A Circular No. 94-013 dated December 13, 1994 and those to NonGovernmenta l Organizat ions (NGOs)/People's Organizat ions (POs) under COA Circular No. 2007-001 dated October 25, 2007.

COA Circular No. 2012-004 dated November 28, 2012 was issued as a final notice and demand to all concerned accountable officers to settle and liquidate all cash advances outstanding as of December 3 1 , 2 0 1 1 , on or before January 3 1 , 2013.

2.0 P U R P O S E

This Circular is issued to prescribe the guidelines and procedures in reconcil ing and cleaning the books of accounts of NIA of dormant receivable accounts, unl iquidated cash advances, and fund transfers for fair presentation of accounts in the Financial Statements.

3.0 L E G A L B A S I S

This Circular is issued pursuant to COA Circular 2016-005 dated December 19, 2016.

4.0 COVERAGE

This Circular covers dormant receivables arising from claims from NIA officers and employees and other dormant receivable accounts; dormant unliquidated cash advances for operating expenses, payroll, special purpose/time-bound activities or undertakings and travel as well as advances granted to Civil Society Organizations (CSOs)/NGOs/POs; and dormant unliquidated fund transfers to/from NGAs, LGUs, and GOCCs.

Specifically, the following are the accounts used relative to receivables, cash advances and fund transfers as defined/described in the revised chart of accounts:

Due from Officers and Employees Other Receivables Advances for Operating Expenses Advances for Payroll Advances to Special Disbursing Officer Advances to Officers and Employees Due from National Government Agencies Due from Government-Owned and Controlled Corporations Due from Local Government Units Due from Non-Government Organizations/People's Organizations Due from Bureaus Due to National Government Agencies Due to Government-Owned and Controlled Corporations Due to Local Government Units Due to Bureaus

This Circular shall not cover the following:

a. Receivables arising from disallowances and charges; b. Receivables arising from cash shortages; and c. Claims from NIA officers and employees and other parties for transactions which are the subject of a pending case in court or before investigative authorities.

5.0 DEFINITION O F T E R M S

The following terms when used in this Circular shall be construed to mean as follows:

5.1 Account - refers to Accounts Receivable, Due from Officers and Employees, Other Receivables, and other accounts, as enumerated in Section 4 of this Circular.

5.2 Condonation of Receivables - amnesty of debt where the creditor is blocked or estopped from attempting to collect the debt later.

5.3 Debtor- a person or organization whether public or private that owes money to the government.

5.4 Dormant Receivable Accounts - accounts which balances remained inactive or non-moving in the books of accounts for ten (10) years or more and where settlement/collectability could no longer be ascertained.

5.5 Dormant Unliquidated Cash Advances - advances granted to disbursing officers, agency officers and employees which remained non-moving for ten (10) years or more and where settlement/collectability could no longer be ascertained.

5.6 Dormant Unliquidated Fund Transfers- advances granted by NIA to implementing entity for the implementation of programs/projects which remained non-moving for ten (10) years or more and where settlement could no longer be ascertained.

5.7 Government Entity - a national government agency, a government-owned and controlled corporation or a local government unit.

5.8 Impairment - a loss in the future economic benefits due to uncertainty of collectability of the receivables or the amount in respect of which recovery has ceased to be probable.

5.9 Write-off of Dormant Accounts - the process of derecognizing the asset account and the corresponding allowance for impairment from the books of accounts and transferring the same to the Registry of Accounts Written off

(RAWO). This does not mean condoning/extinguishing the obligation of the accountable officer/debtor.

6 . 0 G E N E R A L GUIDEL INES

6.1 NIA shall conduct regular monitoring and analysis of receivable accounts to ensure that these are collected when these become due and demandable and that cash advances and fund transfers are liquidated within the prescribed period depending upon their nature and purpose; and

6.2 NIA shall prepare the schedule of all receivables, unliquidated cash advances, and fund transfers as of December 3 1 , 2016 and quarterly thereafter. (See Appendix 55 of Vol. II, GAM). (Annex 1)

7.0 S P E C I F I C GUIDEL INES

The NIA Accounting Division Manager (CO), Chief Corporate Accountants (RO) and Project Accountants shall:

7.1 Conduct regular and quarterly verification, analysis, and validation of the existence of the receivables, unliquidated cash advances, and fund transfers, and determine the concerned debtors, accountable officers (Regular and Special Disbursing Officers, Collecting Officers, Cashiers);

7.2 Reconcile the unliquidated fund transfers between NIA and implementing government entities, prepare the adjusting entries for the reconciling items noted, and require liquidation of the balances;

7.3 Prepare the necessary adjusting entry/ies for the following:

a. Recognition of the computed/determined impairment in accordance with the Philippine Public Sector Accounting Standards or Philippine Financial Reporting Standards b. Correction of inadvertent errors, or inaccurate calculation or computation c. Reclassification of accounts d. Recovery/ settlement of previously written off accounts

Adjustments made pursuant to 7.2 and 7.3 need not be submitted to the COA for approval but are subject to the usual audit. However, the accountant or the auditor may seek

assistance from tlie COA Government Accounting Sector (GAS) for proper accounting treatment: and

7.4 Prepare aging of dormant receivables, unliquidated cash advances, and fund transfers on a quarterly basis (Annexes 2-4) to support the request for write-off, and indicate in the remarks column the existence of the applicable conditions, as follows:

a. Absence of records or documents to validate/support the claim and/or unreconciled receivable accounts b. Death of the accountable officer/employee/debtor c. Unknown whereabouts of the accountable officer/employee/debtor, and that he/she could not be located despite diligent efforts to find him/her d. Incapacity to pay or insolvency • e. Exhaustion of all possible remedies by the Management to collect the receivables and to demand liquidation of each advances and fund transfers f. No pending case in court involving the subject dormant accounts.

8.0 P R O C E D U R E S IN T H E W R I T E - O F F OF DORMANT A C C O U N T S

8.1 As a general rule, pleadings, mode of filing, docketing of cases, and filing fee shall be governed by the 2009 Revised Rules of Procedure of the COA (RRPC) (Annex 5), unless specified in this Circular;

8.2 The NIA Administrator (CO) / Regional Manager / Division Manager / Project Manager (RO/PO) shall file the request for authority to write-off dormant receivable accounts, unliquidated cash advances, and fund transfers to the COA Audit Team Leader and/or Supervising Auditor. No filing fee is required; 8.3 The request shall be supported by the following documents:

a. Schedule of dormant accounts by accountable officer/debtor/government entity and by account, certified by the accountant and approved by the NIA Administrator (CO) / Regional Manager (RO) / Project Manager (PO);

b. Certified relevant documents validating the existence of the conditions, as applicable, such as:

b.1 Death Certificate issued by Philippine Statistics Authority (formerly National Statistics Office)

b.2 Proof of Insolvency

b.3 Certification from the Department of Trade and Industry that the debtor has no registered business

b.4 Certification from the Securities and Exchange Commission that the Corporation is no longer active

b.5 Certificate of no residence in the barangay of the municipality/city of last known address

b.6 Proof of exhaustion of all remedies to collect the receivables and demand to liquidate the cash advances and fund transfers, such as but not limited to copies of served or returned demand letters

b.7 Certification by Legal Officer of NIA of no pending case relative to the account

b.8 Certification by the responsible officials of the entity to the effect that there are no records/documents available to validate claim

b.9 Other justifications, like in the case of request for write-off due to loss of documents, the circumstances of the loss should be stated in the letter-request

b.lO In case of fund transfer, the unliquidated amount after reconciliation shall be supported by certification by the Division Manager of Administrative and Finance and approved by the Heads of the concerned Office and implementing entities that the fund was utilized for the purpose, and certification from the recipient that the project was partially or fully implemented, supported by pictures of the implemented projects.

8.4 The requests for authority to write off for amounts not exceeding P100,000.00 per accountable officer/debtor/concerned office and by account shall be submitted to the COA Audit Team Leader and Supervising Auditor,

who shall assign a reference number, verify and validate the above documents within 15 working days from receipt thereof;

8.5 In case the request for write-off is denied by the COA Audit Team Leader and Supervising Auditor due to failure to comply with the conditions and requirements under paragraphs 7.4 and 8.3, NIA may refile the request for write-off before the COA Audit Team Leader and Supervising Auditor provided that the deficiencies in the requirements are complied with/met. The COA Audit Team Leader and Supervising Auditor shall decide on the request within 15 working days from receipt thereof;

8.6 In case the request is still denied despite compliance in paragraph 8.5, NIA may appeal from the decision of the COA Audit Team Leader and Supervising Auditor to the COA Cluster Director /Regional Director who has jurisdiction over NIA within 15 working days from receipt of the decision. The COA Cluster Director /Regional Director shall decide on the appeal within 15 working days from receipt thereof. The decision of the COA Cluster Director /Regional Director on appealed request is final and non-appealable;

8.7 For amounts exceeding PI00,000.00 per accountable officer/debtor/ government entity and by account, the COA Audit Team Leader and Supervising Auditor shall fonA/ard the entire records of the requests to the COA Cluster Director /Regional Director, together with their comments and recommendations, within 15 working days from receipt thereof;

8.8 The COA Cluster Director /Regional Director shall review the entire records of the requests and shall decide on amounts involving more than PI00,000.00 but not exceeding PI,000,000.00 per accountable officer/ debtor/ government entity and by account within 15 working days from receipt thereof;

8.9 In case the basis for denial of the request for write-off by the COA Cluster Director /Regional Director is failure to comply with the conditions and requirements under paragraphs 7.4 and 8.3, NIA may refile the request for write-off before the COA Cluster Director /Regional Director provided that the basis for denial has been satisfactorily complied with/met;

8.10 In case the request is still denied despite compliance in paragraph 8.9, NIA may appeal from the decision of the COA Cluster Director /Regional Director to the Assistant Commissioner concerned within 15 working days from receipt of the decision. The Assistant Commissioner shall decide on the

appeal within 15 working days from receipt thereof. The decision of the Assistant Commissioner on appealed request is final and non-appealable;

8.11 For amounts exceeding P I ,000,000.00 per accountable officer/debtor/ concerned office and by account, the COA Cluster Director /Regional Director shall forward the entire records of the requests together with his/her recommendation to the Assistant Commissioner of the Sector within 15 working days from receipt thereof;

8.12 The Assistant Commissioner of the Sector shall review the entire records of the requests and shall decide on amounts exceeding PI,000,000.00 per accountable officer/debtor/ concerned office and by account within 15 working days from receipt thereof:

8.13 In case the basis for denial of the request for write-off by the Assistant Commissioner of the Sector is failure to comply with the conditions and requirements under paragraphs 7.4 and 8.3, NIA may refile the request for write-off before the Assistant Commissioner of the Sector provided that the basis for denial has been satisfactorily complied with/met; and

8.14 NIA may appeal from the decision of the Assistant Commissioner of the Sector to the Commission Proper within 15 working days from receipt of the decision. Filing fee is required at a rate prescribed in the 2009 Revised Rules of Procedure of the COA. The decision of the Commission Proper is final and non-appealable.

8.15 The NIA Accounting Division Manager, Chief Corporate Accountants and Project Accountants shall:

a. Prepare the JEV within 15 working days upon receipt of the decision granting the authority to write-off, for approval of the Head of the concerned Offices, effect the adjusting entries in the books, and enter the gross amount of the receivables in the Registry of Accounts Written off. A sample form of the Registry of Accounts Written off is attached as Annex 5 (Appendix 56, Vol. II, GAM);

b. Submit the JEV to the COA Audit Team Leader;

0. IVIaintain a Registry of Accounts Written off to record the accounts written-off and keep a copy of the approved request for write-off including the records and documents pertaining thereto; and

d. At the end of the year, foot entries in the Registry of Accounts Written off and make the appropriate disclosures in the Notes to Financial Statements.

9.0 MONITORING AND REPORTING

9 .1 . Accounting Personnel of Central Office/Regional Office/Project Office shall regularly monitor dormant accounts possible for write-off.

9.2. Quarterly Report on Consolidated Schedule of Advances to Officers and Employees shall be prepared and submitted by the Regional Office/Project Office to Central Office.

10.0 I L L U S T R A T I V E ACCOUNTING E N T R I E S

The illustrative accounting entries to record the adjustment for the writing off of dormant receivable accounts, unliquidated cash advances, and fund transfers are shown below:

10.1 Writing Off of Receivable Accounts

Account Title Debit Credit Accumulated Surplus/ (Deficit) xxx Allowance for Impairment- Accounts Receivable xxx Allowance for Impairment- Other Receivables xxx

Accounts Receivable xxx Due from Officers and Employees xxx Other Receivables xxx

To recognize writing off of dormant Receivable Accounts

10.2 Writing Off of Unliquidated Cash Advances

Account Title Debit Credit Accumulated Surplus/ (Deficit) xxx

Advances for Operating Expenses xxx Advances for Payroll xxx Advances to Special Disbursing Officer xxx Advances to Officers and Employees xxx

To recognize writing off of dormant unliquidated cash advances

10.3 Writing Off of Fund Transfers (Intra/lnter-Agency Receivables)

A. NIA'sBooks Account Title Debit Credit

Accumulated Surplus/ (Deficit) xxx Due from National Government Agencies xxx Due from Government-Owned or Controlled xxx Corporations Due from Local Government Units xxx Due- from Non-Government Organizations xxx Due from Central Office xxx Due from Bureaus xxx Due from Regional Offices xxx Due from Operating Units xxx Due from Other Funds xxx

To write- off of intra/inter-agency receivables

Note: Furnish copy of the JEV to the Implementing Agency

10.4 Recovery of Accounts Written-Off

A. Receivable Accounts

Account Title Debit Credit Accounts Receivable xxx Due from Officers and Employees xxx Other Receivables xxx

Miscellaneous Income xxx To record the restoration of recoverable Receivable accounts

written off

Cash- Collecting Officers xxx Accounts Receivable xxx Due from Office.rs and Employees xxx Other Receivables xxx

To record collection of recovered dormant Receivable accounts

B. Unliquidated Cash Advances

Account Title Debit Advances for Operating Expenses xxx Advances for Payroll xxx Advances to Special Disbursing Officer xxx Advances to Officers and Employees xxx

Accumulated Surplus/ (Deficit) To record the restoration of recoverable

advances written off

Credit

xxx unliquidated cash

Account Title Cash- Collecting Officers

Advances for Operating Expenses Advances for Payroll Advances to Special Disbursing Officer Advances to Officers and Employees

To record collection of recovered advances

Debit xxx

Credit

xxx xxx xxx xxx

dormant unliquidated -cash

11.0 SAVING C L A U S E

This Circular shall not be interpreted to neither condone the written off accounts nor to extinguish the obligations. NIA shall continue to exert effort to collect the accounts appearing in the Registry of Accounts Written off when circumstances would warrant. Further, this shall not be construed as a ground to exonerate the liability of the officers/employees for infidelity in the custody of documents.

12.0 R E P E A L I N G C L A U S E

i

All circulars, memoranda, and other issuances or parts thereof which are inconsistent with the provisions of this Circular are hereby repealed/modified.

13.0 E F F E C T I V I T Y

Appendix 55

S C H E D U L E O F A C C O U N T S R E C E I V A B L E As at

Entity Name: Fund Cluster: UACS Object Code :

No. Name of Debtor

(in alphabetical order) Amount Balance

Amount Due

Remarks No. Name of Debtor

(in alphabetical order) Amount Balance

Current Past Due Remarks No. Name of Debtor

(in alphabetical order) Amount Balance less than 91-365 Over Over Over 3 years

Remarks No. Name of Debtor

(in alphabetical order) Amount Balance

90 days days 1 year 2 years and onwards

Remarks

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

•

Certified Correct:

Chief Accountant/Head of Accounting Division/Unit

Appendix 56

R E G I S T R Y OF ACCOUNTS W R I T T E N O F F

Entity Name : Account Title : Fund Cluster :

U A C S Object Code : Sheet No.:

Reference Particulars

Reason for Write-off

Authority No. of Years Uncollected

Amount

Date No.

Particulars Reason for Write-off

Authority No. of Years Uncollected

Amount

143