LEGAL OPINION RE DISBURSEMENT OF BURIAL ASSISTANCE THRU CASH ADVANCE

Republic of the Philippines
Province of South Cotabato
City of Koronadal
OFFICE OF THE CITY LEGAL OFFICER
Telephone No. (083) 228-1742
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LEGAL OPINION NO. _________

DATE : 13 March 2012

TO : HON. PETER B. MIGUEL, MD, FPSO-HNS
City Mayor

MS. IMELDA A. TAMAYO, CPA
City Accountant
This City

RE : Disbursement Of Burial Assistance Through Cash Advance
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Kanami Koronadal!


This has reference to your query on whether or not burial assistance may be disbursed through cash advance. The undersigned is of the opinion that applicable laws, rules and regulations allow the same.


Pursuant to Section 339 of the Local Government Code of 1991, the Commission On Audit (COA) has prescribed rules and regulations pertaining to cash advances made by a local official or employee, through certain issuances, among which is the Commission on Audit Circular No. 97-002 dated 10 February 1997, reinstating and amending COA Circular No. 90-331 dated 3 May 1990, the pertinent portion of which is provided hereunder, to wit:


x x x

“2. GENERAL PRINCIPLES

Ideally, cash should be handled under the general principles of the imprest system, to wit:

1. Daily receipts on collections must be deposited intact with the proper bank.
2. All payments must be made by check.
3. Only payments in small amounts may be made through the petty cash fund. Replenishment of the petty cash fund shall be equal to the total amount of expenditures made there from.

In practice, however, there are certain instances when it may be very difficult, impractical or impossible to make payments by check. In such a case, payments may be made by the disbursing officer in the form of cash through his cash advance. (Emphasis supplied)

3. DEFINITIONS AND SCOPE

Cash Advance shall be of two types, namely, the regular cash advances, and the special cash advances.

3.1. Regular cash advances are those granted to cashiers, disbursing officers, paymasters, and/or property/supply officers for any of the following purposes:

3.1.1. Salaries and Wages
3.1.2. Commutable allowances
3.1.3. Honoraria and other similar payments to officials and employees
3.1.4. 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.

3.2. Special cash advances are those granted on the explicit authority of the Head of the Agency only to duly designated disbursing officers or employees for other legally authorized purposes, as follows:

3.2.1. Current operating expenditures of the agency field office or of the activity of the agency undertaken in the field when it is impractical to pay the same by check, such as –

- Salaries, Wages and Allowances
- Maintenance and other operating expenses

3.2.2 Travel expenditures, including transportation fare, travel allowance, hotel room/lodging expenses and other expenses incurred by officials and employees in connection with official travel….
x x x


The same was stipulated in toto under COA Circular No. 368-91, Volume I, Chapter 2, Sections 172-173. The said circular, along with the other aforementioned COA Circulars, clearly allow the maintenance and other operating expense to be disbursed through cash advance. Also, the NGAS Manual for Local Government Units provides, thus:


x x x

Sec. 48. Payments out of the Petty Cash Fund. – Petty cash fund shall be maintained under the imprest system. The fund shall be sufficient for the non-recurring, emergency and petty expenses of the LGU for one month. Disbursements from the fund shall be through the Petty Cash Voucher (PCV) which shall be signed by the payee to acknowledge the amount received. The official receipt shall be attached to the PCV.
x x x

While the NGAS Manual for Local Government Units does not spell out the non-recurring, emergency and petty expenses covered thereby, reference can be made to the previous issuances of the COA.
The issue that needs to be resolved therefore is whether or not burial assistance can be considered as maintenance and other operating expense.

In a complex agency such as a Local Government Unit, particularly a City, burial expenses as assistance to its constituents, is a regular expense which falls within the scope of maintenance and operating expense under the Office of the City Mayor. The fact that it falls under the category of MOOE leaves no doubt as to its classification.
As a matter of fact, it has become regular as an expense considering that giving a dignified burial to its constituents is an inherent duty of the government under the general welfare clause and is undeniably part of the regular operations of the Office of the City Mayor. Therefore, burial expense is allowed by law and other applicable rules and regulations to be disbursed through cash advance.

The guidelines established by the COA are designed to prevent abuses and excesses in the disbursement of government money. They were not meant to suppress the need to expedite the delivery of the basic services to the populace, not to mention the underprivileged sector of our society. Laws and rules must be construed not by the letter that killeth, but by the spirit that giveth life.

The reason advanced for the innovation sought to be implemented, that is, to make the services readily accessible to the beneficiaries and to remove the undue and unnecessary burden to the recipients already in grief due to the loss of a loved one, is tenable as long as the safeguards are properly installed and observed to insure that the release of burial assistance does not become whimsical and capricious. Hence, there must still be a policy on qualification and standard operating procedure duly established to determine the qualified beneficiaries by the duly authorized LGU officer, i.e., a Government Social Worker. The same must form part of the supporting documents for the release of the cash assistance and for audit purposes.

I hope we have fully addressed your query.


Yours truly,



EUFEMIO A. SIMTIM, JR.
City Legal Officer