Core Text

Module 2 Session 2
Prepare Statement of Accountability
Introduction
The previous session discussed the conduct of cash count, cash items and the taking
of inventory of accountable forms. The information gathered from these activities
are the bases of filling in General Form (GF) 74-A. The auditor requires the collecting
officer and the disbursing officer (who have been cash examined) to sign the
certification in GF 74-A in the presence of two responsible persons, whose signatures
shall likewise be affixed on the appropriate spaces provided therein.
Module 2 Map

Module 2 - Session 3
Module 2 - Session 1

Module 2 - Session 2

Conduct inventory of cash, cash

Prepare Statement of

items and accountable forms

Accountability

Prepare Reconcilitation
Statements

There are procedures and techniques peculiar to the examination of the cash and
accounts of the collecting and/or the disbursing officer, as well as detailed steps in
the preparation of the Statement of Accountability and in accomplishing GF 74-A. You
will read through all these procedures and techniques in the core text. Examples of
both GF 74-A and the reconciliation statement are also found in the core text for this
session in Module 2.

Learning objectives
By the end of the session, you will be able to
Prepare the Statements of Accountability of Collecting Officer and Disbursing
Officer and the Statement of Accountable Forms properly and correctly.

Core text
The following pages contain sections of the Handbook on Cash Examination. You are
required to read all of the pages for your understanding of the common procedures
and techniques in preparing Statement of Accountability and in accomplishing GF 74A, as well as other relevant information regarding this session in Module 2.

The following comprises the Cash Accountability of the Accountable Officer:

1. Cash In Vault This is cash kept on hand by the accountable officer in his/her vault to meet
day- to-day business needs, such as for cashing checks of clients or customers
or for paying claims of the agencys personnel and clients.
2. Petty Cash Fund
A small fund of cash kept on hand for purchases or reimbursements too small to
be worth submitting to the more rigorous purchase and reimbursement
procedures of a company or institution. Petty cash funds must be safeguarded
and documented to ensure that thefts do not occur. Often a custodian for the
funds is appointed who is held responsible for any shortfall or lack of
documentation of petty cash. (Reference: Investopedia)

3. Collections
Collections are cash received arising from payments of fees, cash refunds due
to overpayments, sales of books and/or merchandise, etc.
4. Cash Advance
It is an amount of money that an employee or employees claim in advance from
the office arising from an official performance of a functions, such as travel,
attendance in workshops/seminars using a prescribed voucher or form and
approved by authorized officials.
5. Payroll Fund
The sum total of the amounts due each employees receiving their salary
through payroll; it is the actual money on hand for distribution based on a
prepared payroll containing a list of employees.

Guide of the Accountable in Maintaining the Records

The cashbook is the basis in preparing the Statement of Accountability. A cash book is
a record maintained by the accountable officers (AOs) to record his/her collections
and deposits and/or withdrawals from the bank thru issuance of checks.
A cash accountable officer (collecting and disbursing) is required to maintain a
cashbook for each fund handled to facilitate verification of his/her accountability at
any given time. As such, he/she shall observe the following guidelines in the handling,
custody and disposition of the cashbook as stipulated in Section 174, GAAM Vol. I:

1. A newly appointed or designated AO shall start with a new cashbook. Before

discharging his duties, the accountable officer shall be briefed by the Accountant
and the Auditor on the proper recording of transactions and other matters related
to his work.
2. The AO shall maintain separate cashbooks for salaries, wages, allowances, etc. and
for petty operating expenses. He shall record the transactions in the prescribed
cashbook daily. He shall record each invoice/receipt/voucher individually for the
day or the totals for the day depending on the volume of transactions.
3. All transactions shall be personally recorded by the AO in the cashbook in ink and
in the order they occur. The cashbook shall be balanced, ruled and closed at the
end of the day.
4. The AO shall reconcile the cashbook balance with the cash on hand daily. S/He
shall foot and close the books at the end of each month. The AO and the

Accountant shall reconcile their records (the cashbook and the subsidiary/general
ledger) at least at the end of each quarter.
5. If the agency is maintaining a checking or a combo account, the AO shall maintain
a passbook, a check register and a bank cashbook. The entries in the bank
cashbook shall be reconciled with the accounting records as well as with the bank
statement at the end of each month.
6. The
cashbook shall be kept at the office of the AO and placed inside the safe
or cabinet when not in use. It may be taken from his/her custody only by the
Auditor or an official duly authorized by the Agency Head, who shall issue the
necessary receipt.
7. When the AO ceases to be one, the cashbook shall be submitted to the Accountant
and shall form part of the accounting records. No clearance shall be issued to an
AO if she/he fails to submit the cashbook as required.

After conducting the cash count/examination of the accountable officer, the auditor
need to accomplish the Statement of Accountability in General Form No. 74(A)
starting from the date of last examination to the current on the basis of verified
amounts of debits and credits to accountability of the AO. The auditor has to ensure
that the beginning balance of the statement shall reflect the amount of
accountability determined during the last examination.

Specific Procedures and Techniques Collecting Officer

Specific procedures and techniques to be applied in the preparation of the Statement
of Accountability of the Collecting Officer include the following:
1. Check all entries in the cashbook/Cash Receipt Records (CRR) or equivalent
from the date of last examination up to the current examination.
2. Check all entries in the cashbook/CRR or equivalent from the date of last
examination up to the current examination.
3. Ascertain that the amount actually collected/transacted is the amount
recorded.

4. Check the numerical sequence of ORs and other accountable forms received
and
issued. Ascertain that the original and duplicate copies of cancelled
ORs or accountable forms are submitted with the corresponding

Report/Abstract of Collections or equivalent. Take note

cancellations of ORs which may be an indication of irregularity.

of

frequent

5. Scrutinize the remittance advices or deposit slips or CTS for signs of tampering.
Confirm with the Bureau of the Treasury or depository banks all
remittances/deposits made during the period under examination.
6. Obtain copies of debit advices issued by the depository banks during the period
under examination. Ensure that these are taken up in the cashbook/CRR or its
equivalent.
7. Examine adjustments made by accounting office/unit during the period under
examination. Determine propriety and correctness of all adjusting entries.
8. Consider all discrepancies affecting the AOs accountability.
The Statement of Accountability is prepared starting from the last date of
examination to the date of current examination, on the basis of verified cash
advances, disbursements and refunds using the appropriate spaces in General Form
No. 74(A).
Cash accountability of the AO is established by adding the total debits to the
accountability to the balance of accountability from the date of last examination and
deduct the total credits to accountability.

Specific Procedures and Techniques Disbursing Officer

Specific procedures and techniques to be applied in the preparation of the Statement
of Accountability of the Disbursing Officer.
1. Check all entries in the cashbook/Cash Deposit Record (CDR)/Check Deposit
Record (CkDR) or equivalent from the date of last examination to the date of
current examination.

2. Based
on
accounting
records,
determine
whether
all
cash
advances/withdrawals have been entered in the cashbook/CDR/CkDR or
equivalent on the dates they were received. List all unposted cash
advances/withdrawals.

3. Check all cash disbursements against the corresponding vouchers. Determine

whether the vouchers were duly approved and payments acknowledged.

4. Make sure that the amount entered in the

the approved amount of the voucher.

cashbook/CDR

or equivalent was

5. Trace refunds of cash advances to the original receipts issued therefor.

6. Determine propriety and correctness of adjusting entries

7. Consider all discrepancies affecting the DOs accountability in the preparation

of the Statement of Accountability.

Two types of accountable forms:

1. Accountable Forms (AF) with money value
o Postage stamps
o Cash tickets
o Documentary stamps
o Money orders
2. AF without money value
o Official receipts
o Checks
o Treasury warrants
o Money orders
o Cattle registration certificates
o Marriage licenses
o Drivers licenses
o Motor vehicle registration receipts
o Other specifically designed form(s)
There should be separate Statement of Accountability prepared for each type.

Statement of Accountability of Accountable Forms With Money Value

Statement of Accountability of Accountable Forms Without Money Value

Specific procedures and techniques in preparing the Statement of

Accountability for Accountable Forms.
1. Obtain the balance of accountability for accountable forms per last
examination to be considered as beginning balance of the current examination.
2. Add all accountable forms received during the period under examination to
the inventory of accountable forms as of date of last examination.
3. Ascertain that all accountable forms requisitioned or procured from all sources
are included.
4. Determine the total number of accountable forms issued and/or transferred as
shown in the cashbook/CDR/CRR or equivalent, Report of Accountability for
Accountable Forms and other records.
5. Deduct total issues/transfers determined from total inventories established to
establish the balance of accountability as of the date of count.
6. Compare the balance of accountability arrived at with the inventory of unused
accountable forms. Require the AO to explain discrepancies in writing, if any.
Shortages of accountable forms with money value shall, like a cash shortage,
be covered by a letter of demand.

Summary
This session discussed what comprises the cash accountability of the accountable
officer. The different accountable forms with money value and without money value
were likewise listed.
The procedures and techniques peculiar to the examination of the cash and accounts
of the collecting and/or the disbursing officer, as well as detailed steps in the
preparation of the Statement of Accountability and in accomplishing GF 74-A were
enumerated to give you an idea of how to do this in your own conduct of cash
examination.
You were able to read through all these procedures and techniques in the core text.
Examples of both GF 74-A and the reconciliation statement are also found in the core
text for this session in Module 2.

Reference:
1. Handbook on Cash Examination