CASH OVERAGE

In case the cash examination disclosed cash overage, as

determined by the auditor. The amount shall be forfeited in
favor of the government and an official receipt shall be issued
by the collector/teller.

Cash in Treasury xx
Other Specific Income of LGU xx
DISHONORED CHECK
A check is said to be dishonored when upon presentation for
payment, such payment is refused or cannot be obtained. Upon
receipt of the debit memo and the dishonored check from the
bank, constructive cancellation of the official receipt covering
the dishonored check shall be immediately effected by the
treasurer on the copy of his possession.

Upon notification of the cancellation, the teller/collector

shall note the cancellation in triplicate copies of the receipt
and inform the auditor. Afterwards, it shall be forward to the
Accountant who cancels the official receipt in his possession
and prepare the JEV by crediting Cash in Bank account and
debiting appropriate income account.
Receipt of advice of Dishonored Check

Real Property Tax Receivable xx

Deferred Real Tax Income xx

Cancellation of Official Receipt

Due to LGU – Real Property Tax Income xx

Real Property Tax Income xx
Cash in Bank – Local Currency Account xx
NOTE – Real Property Tax sharing
Municipality 40% Barangay 25%
Province 35%

To record settlement

Cash in Vault xx
Real Property Tax Receivable xx
CANCELLATION OF LOST CHECK ISSUED
- a check is considered lost when misplaced, waylaid or left
behind negligently by the payee or holder in due course or by
the custodian/carrier and after diligent search cannot be
found.

- lost in a fortuitous event (theft or robbery)

- submit sworn statement by the payee that the check issued by

LGU is lost

- Treasurer immediately notify the bank concerned for the

stoppage of the payment

- Forwarded at the accountant, who shall prepare JEV to cancel

payment made and a copy of JEV shall be forwarded to the
Treasurer
To record Cancellation of Lost Check

Cash in Bank – Local Currency Account xx

Accounts Payable xx

To record the replacement

Accounts Payable xx
Cash in Bank – Local Currency Account xx
SPOILED AND STALE CHECKS

- Checks may be cancelled when spoiled or stale

- SPOILED when it is torn, mutilated, defaced or with

erasures/errors affecting the genuineness of any material
information contained

- STALE if ithas been outstanding for over 6 months from date

of issue or as prescribed by depository bank

- atleast one month before it becomes stale, treasurer shall

send a written notice to the payee

-both checks shall be marked cancelled on its face

- spoiled checks which are immediately cancelled and for which
the Report of Checks Issued (RCI) has not yet prepared, the
cancelled check shall be attached to the RCI and reported
chronologically with the other checks issued with the word
“Cancelled”

- stale checks which have been unclaimed (original disbursment

voucher and supporting Docs are stiil with the treasurer), it
shall be presented in the RCI after the las check issued for
the period. Original disbursement voucher and supporting docs
shall be returned to the accountant

- spoiled or stale checks in the hands of the payee and which

require replacement, a new check may be issued upon submission
of the spoiled or stale check to the treasurer.
- a certified copy of the disbursement voucher shall be
requested from the auditor for presentation to the
administrator/local chief executive, who shall
countersign the check

- cancelled checks shall be reported (chronologically)

and attached to the RCI
SUSPENSIONS, DISALLOWANCE AND CHARGES

- disallowances and charges shall be recorded only when they

are final and executory

- accountant shall prepare JEV: (dr) Receivable – disallowance

and charges account, (cr) appropriate expense account

- cash settlement of disallowance shall be recorded through the

JEV:

Cash in Treasury xx
Receivable – disallowance and charges xx
To record disallowance

Receivables – Disallowances/Charges xx
Office Supplies Expense xx

To record settlement

Cash in Vault xx
Receivable – Disallowance/Charged xx