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NAME: DATE: SCORE:
CASE ANALYSES (20 points: 4 items x 5 points)
Direction: Analyze the cases and answer the given questions.
1. Assume that in 20X2, Congress passed Republic Act No. 7180 (R.A. 7180), otherwise known as the General
Appropriations Act of 20X2. This law provided an appropriation for the Department of Interior and Local
Government (DILG) under Title XIII and set aside P75,000,000.00 for the DILG Capability Building Program
(CBP). The usage of the Capability Building Program Fund (CBPF) is provided under the Special Provisions of the
law as follows:
Special Provisions
1. Capability Building Program for Local Personnel. The amount herein appropriated for the Capability Building
Program for local personnel shall be used for local government and community capability building programs,
such as training and technical assistance, with the necessary support for training materials, supplies, and
facilities: Provided, that savings from the appropriation may be used to acquire equipment, except motor
vehicles, in further support of the programs.
The Capability Building Program shall be implemented nationwide by the DILG through the Local Government
Academy (LGA) and shall involve local officials and employees, including barangay officials, elected and
appointed.
The appropriations authorized herein shall be administered by the DILG and shall be released upon submission
of a work and financial plan supported by a detailed breakdown of the projects, activities, and objects of
expenditures proposed to be funded.
Savings generated over and above the requirements prescribed in Section 18 of the General Provisions of this
Act shall be made available for the Capability Building Program of the Department of the Interior and Local
Government for local officials and employees, subject to Section 40 of P.D. 1177.
On 11 November 202X, Atty. Paras, Project Director of the Ad Hoc Task Force for Inter-Agency Coordination to
Implement Local Autonomy, informed the Deputy Executive Secretary Dionisio de la Serna of the proposal to
constitute a task force to implement local autonomy institutionalized under the Local Government Code of 1991. The
purpose for creating the task force was to design programs, strategize, and prepare modules for an effective program
for local autonomy. The estimated expenses for its operation was P2,388,000.00 for a period of six (6) months
beginning on December 1, 20X2 up to May 31, 20X3, unless the above ceiling is sooner expended and/or the project
is earlier pre-terminated.
The proposal was accepted by the Deputy Executive Secretary, who consequently issued a memorandum for the
transfer and remittance to the Office of the President of the sum of P300,000.00 for the operational expenses of the
task force even though there were no savings in the fund. An additional cash advance of P300,000.00 was requested.
These amounts were taken from the fund.
Two (2) cash advances both in the amount of P300,000.00 were withdrawn from the CBPF by the DILG and
transferred to the Cashier of the Office of the President. The "Particulars of Payment" column of the disbursement
voucher states that the transfer of funds was made "to the Office of the President for Ad-Hoc Task Force for Inter-
Agency Coordination to Implement Local Autonomy
The first cash advance in the amount of P300,000.00 was liquidated, although no receipts were presented to support
the expenditures as given in the next page:
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Payroll P226,000.00
Office rentals 60,000.00
Office furniture 7,500.00
Office supplies 3,682.50
Xerox 300.30
Transportation expense 406.00
Bank charges 75.00
Miscellaneous 60.00
P298,023.80
Questions:
1. Give one (1) disbursement rule violated by the above case. Justify your answer in no more than five (5)
sentences.
The disbursement rule that was violated was “Trust funds shall not be paid out of any public treasury or
depository except in fulfillment of the purpose for which the trust was created, or funds received, and upon
authorization of the legislative body, or head of any other agency of the government having control thereof, and
subject to the pertinent budget, laws rules and regulations. In this case, the Capability Building program fund
partakes the nature of a trust fund because it was allocated or a specific purpose, which is that the fund be used
for local government and community capability programs such as training and technical assistance, etc. The
funds were not used for a specific purpose stated but rather used for expenditures of the Ad Hoc Task Force
which is not a legal basis.
2. Who has the authority of determining whether the transactions above are in accordance with the rules in
disbursement? Justify your answer in no more than five (5) sentences.
The Commission on Audit has the authority of determining whether the transactions are in accordance with the
rules in disbursements because its duties are to examine, audit and settle all accounts about the revenue and
receipts of and expenditures owned or held in trust by the government. They also promulgate accounting and
auditing rules and regulations for the prevention and disallowance of irregular use of government funds and
properties.
2. Ramon R. Yap is the holder of a regular position of Department Manager of the National Development Company
(NDC), a government-owned and controlled corporation with the original charter. He was appointed by the Board of
Directors Manila Gas Corporation (MGC), a subsidiary of NDC, Vice-President for Finance, while remaining as a
regular employee of NDC. The additional employment entitled him to honoraria equivalent to 50% of his basic
salary at NDC and various allowances attached to the office.
In the course of the regular audit, the Corporate Auditor, MGC issued the following notices of disallowances against
Mr. Ramon R. Yap:
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Notice of Date Amount Nature
Disallowance
ND 99- 03(98) MGC 03/26 P3,330.00 Subscription to National Geographic and Reader's
Digest
ND 99-10(98) MGC 04/12 2,848.00 Car maintenance allowance
1,500.00 Annual fee of VISA card
ND 99-12(98) MGC 04/12 789.00 Representation expense on a Sunday
ND 99-16(98) MGC 09/09 4,180.56 Fellowship with other PCA club Members on Sunday
ND 99-07(98) IIGSI 08/28 11,500.00 Car maintenance allowance
ND 99-14(98) IIGSI 08/31 7,000.00 Executive check-up
ND 99-09(99) MGC 05/26 119,508.90 Monthly allowance
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Mr. Yap appealed the Auditor's disallowances, primarily contending that the questioned benefits were all approved
by the MGC Board of Directors.
Questions:
1. Discuss the possible reason why the Commission on Audit disallowed the above transactions. Justify your
answer in no more than five (5) sentences.
Section 4 states that Government funds or property shall be spent or used solely for public purposes. In this
case, Mr. Yap violates this provision where the government funds are rather spent for personal purposes and not
for public purpose. The following natures stated on the disallowances only benefit him. So regardless of the
disbursements bearing the approval of the proper officials (MGC Board of Directors), it still does not satisfy the
sole purpose of the public.
2. In no more than five (5) sentences, discuss the fundamental principle “Government funds or property shall be
spent or used solely for public purposes.”
It means that government funds must be used to benefit the public such as the community by spending it for the
financing of government projects and expenditures and not for other purposes which are not connected to the
public.
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Rubric for grading:
CRITERIA PERFORMANCE INDICATORS POINTS
Content Provided pieces of evidence, supporting details, and factual scenarios.
Organization of Ideas Expressed the points in clear and logical arrangement of ideas in the 2
paragraph
TOTAL 5
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