COA: NBI understated P537,106 worth of petty cash fund in 2017

The Commission on Audit (COA) has called out the National Bureau of Investigation (NBI) for the double recording of its petty cash fund in its liquidation reports that resulted in the understatement of its account in the amount of P537,106.35 in 2017.

Upon a review of transactions and accounting records, COA auditors said 13 custodians of the NBI's petty cash fund had posted the liquidation of the petty cash account twice in their subsidiary ledgers in 2016.

The COA said this was recorded in the accounting books of the NBI through "a debit to Accumulated Surplus (Deficit) and a credit to petty cash," thus resulting in the understatement of the petty cash account.

The COA further said the custodians failed to implement the Imprest System, which states petty cash funds should be replenished as soon as disbursements reach at least 75 percent, required under Section 35, Chapter 6, Volume 1 of the Government Accounting Manual.

The same manual also said the petty cash fund of government agencies shall only cover its recurring operating expenses for one month.

"A review of the transactions under the Petty Cash account disclosed that the Imprest System was not adopted because the practice of custodians is to request for petty cash at the early part of the year and submit its liquidation at the latter part of the year or the following year," the audit report read.

"The petty cash fund was never replenished even when disbursements reached at least 75 percent. Instead, the custodian will request another cash advance for the succeeding year, after refunding the unused balance of the previous (petty cash)," it added.

The COA said the presence of refunds and the lack of replenishment meant the NBI had excessive petty cash on hand.

The COA directed the NBI and its accountant to make the necessary adjustments in the balances of the petty cash fund, and require the custodians to familiarize themselves with the rules on the maintenance of the fund.

During the exit conference, the NBI informed the COA that it will train its custodians on how to properly handle the petty cash fund.

Less than P4,000 monthly salary

Meanwhile, the COA also flagged the NBI for allowing 154 of its employees to receive a net take home pay of less than P4,000 monthly.

As of December 31, 2017, the COA said 87 of these personnel are assigned at the NBI central office in Manila while 67 are in the field offices. This was already reduced by half from the 309 personnel found by COA in January to be getting that salary.

The COA said the take home pay of these employees violated Section 47 of the General Appropriations Act of 2017 which limits the minimum amount to P4,000 after mandatory deductions.

These deductions include government insurances, non-stock savings and loans, and provident funds.

"We recommended that management adhere to Section 47 of the 2017 GAA and direct the personnel division/payroll section to re-instate the net take home pay of every permanent/regular employee to P4,000.00, taking into account the order of preference in the deductions of obligations," the COA said.

The NBI told COA during the exit conference that minimum net take home pay for 2018 will increase to P5,000 monthly due to the effects of the TRAIN Law. — MDM, GMA News