COMMISSION ON AUDIT CIRCULAR NO.

92-382
TO

July 3, 1992

: ALL PUBLIC OFFICERS CONCERNED.

The General Manager, Metro Manila Authority; Provincial Governors, City and
Municipal Mayors; the Deputy General Manager for Finance, Metro Manila
Authority; Local Treasurers, Accountants, and Budget Officers; COA Directors;
Heads of Provincial, City, Municipal and Circuit Municipal Audit Units; and All
Others Concerned.

SUBJECT AND PURPOSE:

This Circular on Accounting and Auditing Rules and Regulations designed to
implement the provisions of Republic Act No. 7160, the Local Government Code of
1991, is issued pursuant to Section 2(2), Article IX-D, of the Constitution.
I.

GENERAL GUIDELINES

Sec. 1. Local Funds. - Provinces, cities and municipalities shall maintain a General
Fund which shall be used to account for such monies and resources as may be received by
and disbursed from the local treasury. The General Fund shall consist of monies and
resources of the local government which are available for the payment of expenditures,
obligations or purposes not specifically declared by law as accruing and chargeable to, or
payable from, any other fund. (Sec. 308, RA 7160)
Sec. 2. Special Funds. - There shall also be maintained in every provincial, city or
municipal treasury the following special funds:
a.

Special Education Fund which shall consist of the respective shares of

provinces, cities, and municipalities in the proceeds of the additional tax on real
property to be appropriated for purposes prescribed in Section 272 of the Local
Government Code; and

b.

Trust Funds which shall consist of private and public monies which have officially
come into the possession of the local government or of a local government
official as trustee, agent or administrator, or which have been received as a
guaranty for the fulfillment of some obligation. A trust fund shall only be used for
the specific purpose for which it was created or for which it came into the
possession of the local government unit. (Sec. 309, Ibid)

Sec. 3. Separate books and depository accounts. - Local accountants and

treasurers shall maintain separate books and/depository accounts, respectively, for each
fund in their custody or administration. (Sec. 310, Ibid)
Sec. 4. Acknowledgement of collections. - For every payment received, the collecting
officer shall immediately issue an official receipt in acknowledgment thereof. The receipt
may be in the form of cash tickets and the like, or officially numbered receipts subject to
proper custody, accountability and audit.

Sec. 5. Collection of local taxes, fees, and charges. - All local taxes, fees and charges
shall be collected by the provincial, city, or municipal treasurer, or their duly authorized
deputies. The provincial, city or municipal treasurer may designate the barangay treasurers as
his deputies to collect local taxes, fees, or charges in their respective jurisdictions. In case a
bond is required for the purpose, the provincial, city or municipal government shall pay the
premiums thereon in addition to the premiums for the bonds/s that may be required for a
barangay treasurer under the Local Government Code of 1991. (Sec. 170, Ibid)
Sec. 6. Collection of real property tax. - The collection of the real property taxes shall
be the responsibility of the city or municipal treasurer concerned. (Sec. 247, Ibid)
Sec. 7. Remittance of government monies to the local treasury. - Officers of the local
government unit authorized to receive and collect monies arising from taxes, revenues or
receipts of any kind shall remit the full amount received and collected to the treasury of such
local government unit which shall be credited to the particular account or accounts to which the
monies in question properly belong. (Sec. 307, Ibid)
Sec. 8. Deposit intact of collections. - All collections shall be deposited intact with
authorized depositories. The practice of retaining part of the collections as a cash reserve
for cash disbursements shall be discontinued.
Sec. 9. Disbursements by check - All disbursements shall be made by check, except as
otherwise provided herein.
Sec. 10. Disbursements by cash. - Disbursements by cash shall be made from a
cash advance drawn and maintained in accordance with COA rules and regulations.
Sec. 11. Accountability and responsibility for local government funds. - Every
officer of the local government unit whose duties permit or require the possession or custody
of local funds shall be properly bonded, and such officer shall be accountable and
responsible for said funds and for the safekeeping thereof in conformity with the provisions of
law. (Sec. 305(f), Ibid)
Sec. 12. Depository accounts in banks.- Provincial, City and municipal treasurers shall
maintain depository accounts in the name of their respective local government units with
banks, preferably government-owned, located in or nearest to their respective areas of
jurisdiction. (Sec. 311, Ibid)
Sec. 13. Obligation accounting system. - The obligation accounting system shall be
implemented in provinces, cities and municipalities.
Sec. 14. Special accounts in the General Fund - Special accounts in the General
Fund shall be maintained through the use of complete subsidiary accounts.
Sec. 15. Rendition of accounts by accountable officers. - Local treasurers, accountants
and other local accountable officers shall render their accounts in accordance with COA
regulations.

II.

SPECIFIC GUIDELINES
A. Reconciliation and Closing of Depository Accounts of Municipalities
Sec. 16. Reconciliation of municipal deposits.- Municipal treasurers shall
reconcile the Cash, Other Government Treasury Account (8-70-102) of each fund
in the municipal books with the corresponding Trust Liability Account (8-84-200) in
the provincial or city (in the case of Metro Manila municipalities) treasurer's books.
Sec. 17. Withdrawal of municipal deposits.- An application to withdraw the
reconciled balance of the municipal deposit shall be prepared by the municipal
treasurer by fund in the prescribed form and submitted to the provincial/city
treasurer concerned. The approved withdrawal voucher shall then be submitted to
the provincial/city auditor concerned for pre-audit.
Sec. 18. Check drawn for deposit to appropriate account. - Based on the
pre-audited disbursement voucher, the provincial/city treasurer shall prepare a
check for each fund balance of the municipal deposits. The check shall be drawn
in the name of the municipality for deposit under the appropriate fund.
B. Bank Depository Accounts
Sec. 19. Opening of depository accounts. - Provincial, city and municipal
treasurers shall open and maintain in the name of their respective local
government units separate depository accounts for each fund with a governmentowned bank located in or nearest the locality. In case there is no governmentowned bank located in or nearest the locality, depository accounts may be
opened with a bank duly designated as government depository by the Central
Bank of the Philippines, upon prior authority of the sanggunian and the approval of
the chief executive.
Pending the reconciliation and withdrawal of their deposits with the
provincial/city treasurers concerned, municipalities may immediately open depository
accounts for each fund.
Sec. 20. Combined savings and current accounts. - Provinces, cities, and
municipalities may open a combined savings and current account (COMBO) for the
General and Special Education Funds in the duly authorized depository bank. The
opening of the bank accounts shall be documented with a depository contract or
other appropriate documentation required by the bank, signed by the local
treasurer concerned in behalf of the local government unit.
Deposits to the
COMBO account shall be made only through the savings account and withdrawals
shall be made only by the issuance of checks to be drawn on approved vouchers,
against the current account. At the termination of the COMBO contract, the balance
of the savings account shall be transferred to the current account which shall
henceforth to subject to the regulations on current accounts.

Sec. 21. Time deposit accounts. - Provinces, cities and municipalities may
deposit with duly authorized depository banks idle funds in the General Fund under
time deposit accounts, upon prior authority of the sanggunian and the approval of
the chief executive.
Sec. 22. Definition of idle funds. - Idle funds in excess of normal operating
requirements shall generally mean the level of funds which an entity can freely
invest in government securities and/or fixed term deposits after considering
provisions for coverage of regular and recurring operating expenses like salaries
and wages, repairs and maintenance, inventories and supplies, debt servicing,
etc., within the context of the entity's cash operating cycle. Unremitted national
collections and funds set aside for payment of obligations to government
corporations/cooperatives shall not form part of the idle funds of local government
units. (DOF Department Circular No. 6-90, Dec. 6, 1990)
Sec. 23. Depository accounts earnings. - Earnings of each depository account
shall accrue exclusively thereto.
C. Collection
Sec. 24. Custodianship of accountable forms. - The treasurer shall be the
custodian of all accountable forms requisitioned by the local government unit. He
shall maintain a complete record of the receipt, issue and transfer of accountable
forms.
Sec. 25. Requisition of accountable forms. - Collectors/tellers shall file
requisitions of accountable forms for their use with the treasurer through a
Requisition and Issue Voucher. They shall be accountable for all accountable forms
issued to them. There shall be no transfer of accountable forms between
collectors/tellers.
Sec. 26. Daily turn over of collections. - At the close of the business day,
collectors/tellers shall turn over all of their collections intact to the treasurer/cashier.
They shall accom plish the Daily Statement of Collections and Accountable Forms
(DSCAF), Prov. Form No. 95 (A), (Annex A), in four copies. The original and two
copies, together with the duplicates of official receipts issued and the cash collected,
shall be submitted to the treasurer/cashier. The fourth copy of the DSCAF shall be
retained by the collector/teller concerned. Barangay Treasurers deputized to
collect taxes imposed by provinces, cities and municipalities shall follow the
same procedures in submitting their collections to the treasurer/cashier concerned.
In the case of collectors assigned to the field, where travel time from their
places of assignment to the treasurer's office is more than one day, turn over of
collections shall be made at least once a week, or as soon as the collections
reach P5,000.00.
Sec. 27. Verification of collections and accountable forms.The
treasurer/cashier shall verify the DSCAF: check the statement of accountable
forms as to initial balances on hand; make a physical account of the accountable
forms remaining in the custody of the collector/teller and check the same to the new
balances on hand column. He shall indicate his verification copy of the last official

receipt issued. He shall count the money turned over to him and sign the
certification and receipt portion of all copies of the DSCAF.
Sec. 28. Deposit of collections with banks.- The treasurer/cashier shall
deposit intact all his collections, as well as all collections turned over to him
by the collectors/tellers, with the authorized depository bank daily or not later
than the next banking day. He shall summarize the collections and deposits by
accomplishing the Cashier/Treasurer's Report of Daily Collections and Deposits
(CTRDCD), Prov. Form No. 213(A), (Annex B), in three copies. The original and
duplicate, together with the original and duplicate copies of the DSCAF's and the
deposit slips and the duplicates of official receipts, shall be submitted daily to the
accountant. The third copies of the CTRDCD and the DSCAF shall be
retained by the treasurer/cashier.
In the case of municipalities where travel time to the depository bank is
more than one day, deposit of collection shall be made at least once a week, or as
soon as the collections reach P10,000.00.
Sec. 29. Recording of collections in the cashbook. - The treasurer/cashier
shall record in his cashbook all collections received by him. He shall provide in his
cashbook columns for the accounts Cash-in-Treasury and Cash-Other Banks. The
Cash-in-Treasury account shall be debited with the collections received, and
credited with the collections deposited with the authorized depository bank. The
Cash-Other Banks account shall be debited with the deposits of collections with the
bank, and credited with the withdrawals from the depository account.
Sec. 30. Liquidating officer for collections. - The Treasurer may designate
liquidating officers from among the collectors/tellers whenever necessary.
Sec. 31. Turn over of collections to liquidating officer. - Collectors/tellers shall
turn over their collections to their designated liquidating officer, following the
procedures prescribed in Sec. 26. The DSCAF shall however be prepared in five
copies, four copies to be submitted to the liquidating officer, the fifth copy to be
retained by the collector/teller.
Sec. 32. Verification of collections and accountable forms by liquidating
officer.- The liquidating officer shall perform the procedures for the receipt and
verification of collections turned over to him, as in Sec. 27. He shall also prepare
the Report of Collections by Liquidating Officer (RCLO), Prov. Form No. 225 (A),
(Annex C) in four copies to summarize the collections turned over to him by the
collectors/tellers as well as his own collections.
Sec. 33. - Turn over of collections by liquidating officer. - The liquidating officer
shall turn over intact the cash collections to the treasurer/cashier together with the
original and two copies of the RCLO, the original and two copies of the DSCAF, and
the duplicates of the official receipts issued. The treasurer/cashier shall
acknowledge receipt of the cash and all accompanying documents by signing all
copies of the RCLO on the certification and receipt portion of the form. The fourth
copies of the RCLO and the DSCAFs shall be retained by the liquidating officer.

Sec. 34. - Deposit of collections and recording in the cashbook. - The

treasurer/cashier shall deposit all collections and prepare the CTRDCD summarizing
the collections and deposits for recording in his cashbook and submission to the
accountant, accompanied by all supporting documents, as in Sec. 28 and Sec. 29,
including two copies of the RCLO.
Sec. 35. - Account classification of collections. - The accountant shall
determine the account classification of the collections covered by the CTRDCD
and the supporting papers submitted by the Treasurer/Cashier, and shall
accomplish the accounting recapitulation section of the CTRDCD accordingly. The
account Undistributed Income (8-86-200) shall be used only in cases where the
income account classification cannot be immediately determined. The accountant
shall also maintain the Abstract of Real Property Tax Collections, P. F. No. (A), to
facilitate the distribution and remittance of the shares of the different government
units concerned in the real property tax collections.
Sec. 36. - Remittance of collections to other government units. Collections made by provincial, city, or municipal treasurers for other government
units, shall be promptly remitted to the government units concerned. At least once
a week, the accountant concerned shall prepare the disbursement vouchers
covering such remittances and the supporting statements containing the complete
descriptions of the collections being remitted. The disbursement vouchers and their
supporting statements, duly certified by the accountant, shall be transmitted to the
treasurer for certification as to availability of funds, and forwarded to the local chief
executive or the duly authorized official for approval. The disbursement vouchers
and statements shall then be returned to the treasurer for the preparation of the
checks to cover the remittances. The checks, duly approved or signed, each
accompanied by a copy of the corresponding statements, shall be transmitted to
the government units concerned. The remittances shall be acknowledged by the
units concerned.
The remittances shall be acknowledged by the recipient
government units by the issuance of official receipts.
Sec. 37. Report of accountable forms. - Treasurers, collectors/tellers and
other accountable officers shall render their report of accountability for
accountable forms on Gen. Form No. 16 (A), Annex D, at least once a month.
Such report shall also be prepared in case of transfer of office or accountability by
the accountable officer. The treasurer shall consolidate these reports on Prov.
Form No. 224 (A), (Annex E), and submit the consolidated report accompanied by
the individual reports to the unit auditor concerned not later than the fifth day of the
ensuing month.
D. Disbursements
Sec. 38. Certifications and approval of disbursement vouchers. - No money
shall be disbursed unless the local budget officer certifies to the existence of
appropriation that has been legally made for the purpose, the local accountant has
obligated said appropriation, and the local treasurer certifies to the availability of
funds for the purpose. In the case of disbursements from the Trust Fund, it shall be
sufficient that the local accountant certifies to the existence of the trust liability and
the local treasurer, to the availability of funds for the purpose. Vouchers and
payrolls shall be certified to and approved by the head of the department or office

who has administrative control of the fund concerned as to validity, propriety,

and legality of the claim involved. In case of temporary absence or incapacity of
the department head or chief of office, the officer next-in-rank shall automatically
perform his function and shall be fully responsible therefor.
Sec. 39. Approval of vouchers. - Approval of the disbursement voucher by the
local chief executive himself shall be required whenever local funds are disbursed,
except for regularly recurring administrative expenses such as payrolls for regular
or permanent employees, expenses for light, water telephone and telegraph
services, remittances to government creditor agencies such as GSIS, SSS, LBP,
DBP, National Printing Office, Procurement Service of the DBM and others where
the authority to approve may be delegated. However, disbursement vouchers for
expenditures appropriated for the operation of the sanggunian shall be approved
by the provincial vice governor, the city vice mayor or the municipal vice mayor, as
the case may be.
Sec. 40. Approval of Special Education Fund disbursements. - In the case of
the Special Education Fund, disbursements shall be approved by the chief
executive concerned as co-chairman of the local school board. The division/city
superintendent of schools or the district supervisor concerned, as the case may be,
shall certify and approve vouchers or payrolls as to validity, propriety, and legality of
the claim involved.
Sec. 41. Approval of Trust Fund disbursements. - In the case of the Trust
Funds, disbursements shall be approved by the chief executive concerned, and
certified and approved as to validity, propriety, and legality of the claim
involved by the department/office head concerned.
Sec. 42. Checks drawn on disbursement vouchers. - Checks in settlement of
obligations shall be drawn only on duly approved disbursement vouchers.
Sec. 43. Officials authorized to draw and sign checks. - Checks shall be
drawn by the local treasurer and countersigned by the local administrator. In case of
temporary absence or incapacity of the aforesaid officials these duties shall devolve
upon their immediate assistance. In the case of municipalities where no
administrator has been appointed, checks shall be countersigned by the municipal
mayor. In the case, however, of expenditures appropriated for the operation of the
sanggunian, checks drawn thereon shall be countersigned by the provincial vice
governor, the city vice mayor, or the municipal vice mayor, as the case may be.
Sec. 44. Report on checks issued.- The treasurer/cashier shall prepare weekly the
Report of Checks Issued, Prov. Form No. 226 (A), (Annex F), in three copies and submit the
original and duplicate of the same to the accountant with the vouchers/payrolls and
supporting documents.
Sec. 45. Cash payments on disbursement vouchers. - Cash payments shall
be made only on duly approved payrolls/disbursement vouchers/liquidation vouchers
out of regular cash advances or special cash advances.

Sec. 46. Regular cash advances. - Regular cash advances are those granted to
cashiers, disbursing officers, paymasters, and/or property/supply officers separately for any of
the following purposes:
a.
b.
c.
d.

Salaries and wages;

Commutable allowances;
Honoraria and other similar payments to officials and employees;
and
Petty operating expenses

Sec. 47. Special cash advances. - Special cash advances are those granted on the
explicit authority of the local chief executive only to duly designated disbursing officers or
employees for other legally authorized purposes such as:
a.
b.

Confidential expenses; and/or

Expenditures for activities of the agency undertaken in the field
when it is impractical to pay by check.

Sec. 48. Rules on grant, use, and liquidation of cash advances. - In the granting,
utilization, and liquidation of cash advances the following shall be observed:
(a)

Only permanently appointed officials and employees shall be

granted cash advances.

(b)

Only duly appointed or designated disbursing officers may perform

disbursing functions. Officers and employees who are given cash
advances for foreign travel need not be designated as disbursing
officers.

(c)

Only one disbursing officer shall be assigned/designated for a

specific legal purpose. Additional disbursing officers may be
assigned/designated for the same purpose only when fully justified
by the local chief executive.

(d)

Transfer of cash advance from one accountable officer to another

shall not be allowed.

(e)

The cash advance shall be used solely for the specific legal
purpose for which it was granted. Under no circumstance shall it
be used for encashment of checks or for liquidation of a previous
cash advance.

(f)

The accountant shall obligate all cash advances granted. Cash

advances for a particular year shall not be used to pay expenses of
other years.

(g)

The cash advance for salary payments shall be equal to the net
amount of the payroll for a pay period.

(h)

The cash advance for petty operating expenses shall be sufficient

for the recurring expenses of the agency for one month. The

accountable officer may request replenishment of the cash advance

when the disbursements reach at least 75%, or as needed, by
submitting a replenishment voucher with all supporting documents
duly summarized in a report of disbursements.
(i)

The cash advance for petty operating expenses shall not be

used for payment of regular expenses, such as rentals,
subscriptions, light and water and the like.

(j)

Payments out of the cash advance shall be allowed only for

amounts not exceeding P10,000.00 for each transaction, except
when a higher amount is allowed by law and/or specific authority
by the Commission on Audit. Splitting of transactions to avoid
exceeding the ceiling shall not be allowed.

(k)

The cash advances shall be liquidated as follows:

(l)

Salaries, wages, etc. - within 5

days/end of the month pay period.

Petty operating expenses - within 20 days after the end of the

year; subject to replenishment during the year.

Foreign Travel - within 60 days after return to the Philippines.

days

after

each 15

The
accountable officer shall prepare the
Report
of
Disbursements. Gen. Form No. _____, (Annex G) in three (3)
copies and submit the original and duplicate of the same with the
vouchers/payrolls and supporting documents to the accountant.
For payments based on receipts and invoices only, he shall also
prepare a disbursement (liquidation) voucher which shall be
submitted with the report and the supporting documents to the
accountant.
He shall ensure that the receipt of the report is
properly acknowledged by the accountant.

(m) Within ten days after receipt of the report and supporting
documents form the accountable officer, the accountant shall verify
the report including the completeness of the supporting
documents, record it in the Journal of Disbursements by
Treasurer/Disbursing Officer and submit the report with all the
vouchers/payrolls and supporting documents to the unit auditor.
(n)

When a cash advance is no longer needed or has not been used

for a period of two (2) months, it must be returned or deposited
immediately with the collecting officer.

(o)

All cash advances shall be fully liquidated at the end of each year.
The accountable officer shall refund any unexpected balance to
the cashier/collecting officer who shall issue the necessary official
receipt.

(p)

At the start of the ensuing year, a new cash advance mat be

granted, provided that a list of expenses against the previous
cash advance is submitted. However, when no liquidation of the
previous cash advance is received on or before January 20 of
the accountant shall cause the withholding of the accountable
officer's salary.

(q)

The accountable officer shall maintain an official cashbook

record the transactions on each cash advance fund.

to

E. Transfer of the accounting functions to the local accountant.

Sec. 49. Updating of accounts before transfer of accounting functions to the
accountant. - To effect the transfer of the accounting functions from the treasurer
to the accountant, all the books and records (cashbooks, journals, ledgers, etc.)
shall be updated, incorporating all the necessary reconciliations and adjustments
to the date of transfer, which shall be as the end of the month. The trial balances
shall then be drawn in the usual manner, including all required supporting
statements.
Pending the actual transfer of the accounting books and records, the local
accountant may open a new set of appropriate journals and ledgers to record the
transactions made after the cut-off date.
Sec. 50. Rendition of accounts. - The treasurer shall render his accounts as
of the date of transfer, to the unit auditor concerned, in accordance with existing
regulations. The unit auditor shall verify the completeness of the accounts
submitted.
Sec. 51. Transfer of books of accounts and all accounting records.- The
treasurer shall transfer to the accountant all journals and ledgers; copies of trial
balances, statements of operations and balance sheets, with supporting schedules
and statements; copies of transaction documents, inventory reports of supplies and
property, and such other financial statements and reports which form the
accounting records. Under existing regulations, cashbooks of accountable officers
who have ceased to be such, shall also be submitted to the accountant and shall
form part of the accounting records.
Sec. 52. Preparation of invoice-receipts. - The treasurer shall prepare an
invoice-receipt in triplicate to cover the transfer of the records to the accountant.
The invoice-receipt duly signed by the treasurer and the accountant, shall be
distributed as follows:
Original
Duplicate
Triplicate

to the unit auditor concerned;

to the local accountant; and
to the local treasurer.

F. Merging of Funds
Sec. 53. Maintenance of local and special funds. - The Local Government
Code of 1991 (RA 7160) requires the maintenance by the provinces, cities and
municipalities of the General Fund as a local fund, and the Special Education
Fund and Trust Funds as special funds. The Infrastructure Fund which was
abolished, shall therefore be merged with the General Fund. Development
projects implemented within the Infrastructure Fund shall be incorporated as
special accounts of the General Fund. The NALGU Fund and the Municipal
Development Fund shall be merged with the Trust Funds. The Special Education
Fund shall continue to be maintained. Accounting procedures on the merging of
the funds are shown in Annex J.
G. The Obligation Accounting System for Expenditures and Transfers
Sec. 54. Accounting for expenditures and transfers. - Expenditures and
transfers of the General Fund and the Special Education Fund shall be taken up in
the accounts as the obligations are incurred. Obligations refer to the amounts
committed to be paid by the local government unit for any lawful act made by an
accountable officer for and in behalf of the local government unit concerned.
Sec. 55. Advice of allotment. - The advice of allotment of appropriations
issued by the local chief executive shall serve as the authorization for the
department/office of the local government unit to incur obligations within the
limits of the authorized allotment.
Sec. 56. Request for obligation of allotment (ROA). - For all anticipated
expenditures and transfers of the funds concerned, the requesting
department/office shall prepare the Request for Obligation of Allotment (ROA),
Prov. Form No. 227(A), (Annex H), signed by the department or office head as
requesting official.
Sec. 57. Certification of budget officer. - The budget officer shall certify to
the existence of appropriation that has been legally made for the purpose by
signing Certification No. 1 of the ROA.
Sec. 58. Certification of the treasurer.- The treasurer shall certify that funds
are available by signing Certification No. 2 of the ROA.
Sec. 59. Certification of the accountant. - The accountant shall review the
ROA, assign an obligation number thereto, and record the amount of the
obligation in the Journal and Analysis of Obligations (JAO), Prov. Form No.
228(A), (Annex I). The accountant shall then certify as to the obligation of the
allotment by signing the ROA.
Sec. 60. ROA as integral part of the disbursement voucher.- The ROA shall
form an integral part of the covering disbursement voucher/payroll and the
certifications of the local budget officer, treasurer and accountant thereon shall serve
as their certifications on the disbursement as required by law.

Sec. 61. Liquidation of obligations.- The disbursement voucher for

payment or liquidation of the obligation duly accomplished as to Certificates No.
1, 2 and 3 and supported with the duly approved ROA and other necessary
papers, shall be submitted by the department/office head to the accountant who
shall accomplish certificate No. 4. The disbursement voucher with the ROA and
other supporting papers shall then be forwarded to the chief executive or the duly
authorized official for approval, after which the same shall be transmitted to the
treasurer for payment by check or by cash.
Sec. 62. Accounting procedures for the obligation accounting system.Detailed accounting procedures to be used in the obligation accounting system
are shown in Annex K.
H. Maintenance of Special Accounts in the General Fund
Sec. 63. Special accounts in the General Fund.- Local government units
shall maintain special accounts in the General Fund for public utilities and other
economic enterprises; loans, interests, bond issues, and other contributions for
specific purposes; and development projects funded form the share of the local
government unit concerned in the internal revenue allotment and such other special
accounts which may be created by law or ordinance.
Sec. 64. Profits from operations.- Profits or income derived from the operations
of public utilities and other economic enterprises, after deduction of the cost of
improvement, repair and other related expenses of the public utility or economic
enterprises concerned, shall first be applied for the return of the advances or
loans made therefor. Any excess shall form part of the general fund of the local
government unit concerned.
Sec. 65. Objectives of maintenance of special accounts.- Accounting
procedures for the operation of the special accounts are hereby adopted in order
to (a)

Determine whether the incomes generated by the public utilities

or economic enterprises are sufficient to meet their respective
operating costs.

(b)

Provide adequate information as to the assets, liabilities and

cumulative results of operation of each special account.

Sec. 66. Special accounts' subsidiary ledgers. - No separate books of

accounts shall be maintained for the special accounts. Transactions pertaining
thereto shall be recorded in the books maintained for the General Fund with
subsidiary postings to the special accounts subsidiary ledgers.
Sec. 67. Accounting procedures for special accounts. - Detailed
accounting procedures in the maintenance of special accounts in the General
Fund are shown in Annex L.

I.

New/Revised Account Codes and Books of Accounts

Sec. 68. New/revised account description/codes and books of accounts. - The
list of new/revised account description/codes and journals which are hereby
prescribed for use by the local government units in the implementation of the
Local Government units in the implementation of the Local Government Code of
1991 are attached as Annexes M, N, O, and P.

III.

REPEALING CLAUSE
Sec. 69. Repealing Clause. - All COA Circulars, Memoranda and other issuances
inconsistent herewith are hereby revoked or modified accordingly.

IV.

EFFECTIVITY
Sec. 70. Effectivity. - This Circular shall take effect immediately.

(SGD.) EUFEMIO C. DOMINGO, Chairman

(SGD.) SOFRONIO B. URSAL, Commissioner
(SGD.) ROGELIO B. ESPIRITU, Commissioner