COA relaxes rules on processing of donations

THE Commission on Audit has issued a circular informing all government agencies, including local government units (LGUs), that it is temporarily relaxing rules on the inventory of donated goods and funds to speed up distribution to beneficiaries nationwide.

Citing “difficult times” facing the country due to the COVID-19 pandemic, the COA circular dated dated April 21 said it sees a need to support the government in its efforts to provide basic necessities to people under quarantine as well as supplies to health workers and other front liners battling the infection.

COA clarified the move does not necessarily mean that basic controls would be disregarded, to ensure that donations are properly accounted for.

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For in-kind donations coming from local and foreign donors, the usual practice is to open all packages, segregate, and record them before repacking and distribution. The practice is being blamed for slowing down the delivery of relief goods to survivors of calamities.

Under COA Circular No. 2020-009 the sorting, recording, and inventory of donated relief goods is “put on hold during the quarantine.” Instead, only the remaining balance at the end of the quarantine period will be costed and recorded in the books.

Likewise, subject only to the directions of the Office of the President, all agencies may now transfer responsibility over relief distribution to the LGUs based on a validated list of affected families.

“The goods need not be released by the agency directly to the intended beneficiaries, but it may be done through the LGUs, particularly if the concerned agencies lack the resources or facilities to do so,” the COA said.

Agencies accepting donations are encouraged to adopt an electronic tracking platform to facilitate recording, monitoring, and utilization of donations, whether in cash or in kind, on the condition that the chosen platform should be able to generate an audit trail on the processing of transactions.

In lieu of traditional official receipts, the COA is now also allowing the use of electronic receipts or mere recording of proof of receipt for cash donations as long as the date, nature, and amount of the donation is recorded as well as the name of the donor and a reference number, if applicable.

“For donations made directly to the recipient agency’s bank account, the credit memo or bank statement shall serve as proof of receipt,” the COA explained.

Where the donations are sent through electronic wallets including GCash, Peso Net, Insta Pay, and Landbank IAccess, the proof and recording requirement will be the transaction reference number.

Rather than submitting monthly reports, agencies are now required only to submit a one-time report although segregating cash from in-kind donations.  This should be turned in to the National Disaster Risk Reduction and Management Council within 10 days after the end of the quarantine, copy furnished COA auditors.

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