Professional Documents
Culture Documents
MINISTRY OF FINANCE
OFFICE OF BUDGET AND MANAGEMENT
JOINT CIRCULAR NO. 8-85
October 31, 1985
TO
PURPOSE
This Circular is issued pursuant to the provisions of Sections 96 and 97 of the
Government Auditing Code of the Philippines (PD 1445) and to prescribe the guidelines,
procedures and accounting treatment in the replacement by the issuing agency of lost,
destroyed, stale and obsolete Treasury Warrant (TW) and Treasury Checking Accounts for
Agencies (TCAA) check and by the Treasurer of the Philippines of (a) TW/TCAA check
fraudulently encashed even before the recovery of the equivalent amount and (b)
TW/TCAA check paid by bank but subsequently lost before such TW/TCAA check is
cleared.
2.0
DEFINITION OF TERMS
For purposes of this Circular, the following terms hereby defined:
2.1
Lost TW/TCAA check A TW/TCAA check is considered lost under the following
circumstances:
2.1.1
2.1.2
When it is lost due to fortuitous events such as fire, perils of travel, flood or
typhoon or other causes due to force majeure and after diligent search
cannot be found or recovered.
2.1.3
3.0
2.2
2.3
2.4
2.5
2.6
Payee - refers to the person, natural or juridical, in whose name the TW/TCAA
check was issued.
2.7
Holder in due course - refers to the holder of a TW/TCAA check who has taken the
instrument under the following conditions:
2.7.1
2.7.2
that he became the holder of the instrument before it was overdue, and
without notice that it has been previously dishonored, if such was the fact.
2.7.3
2.7.4
that at the time it was negotiated to him, he had no notice of any infirmity in
the instrument or defect in the title of the person negotiating it.
RESPONSIBILITIES
3.1
Issuing Agency
The Issuing Agency shall:
(a) process the request for replacement of lost, destroyed, stale or
obsolete TW/TCAA check;
(b) approve or deny the request depending upon the validity of the claim;
(c) approve the indemnity bond thereof
(d) issue the replacement TW/TCAA check With respect to lost TW/TCAA
check, replacement shall be limited to those verified as still outstanding
(e) issue the required certification that the TW/TCAA check lost in transit
by bank before clearing was validly issued and that the same has not
been replaced.
3.2
3.3
(a)
(b)
(c)
3.4
4.0
GENERAL GUIDELINES
4.1
4.2
4.3
A stale and/or obsolete TW/TCAA check shall be replaced with a new one provided
the original TW/TCAA check is presented/surrendered for cancellation.
4.4
If the original TW/TCAA check cannot be presented due to loss, destruction or theft,
the procedures for lost TW/TCAA check shall apply (refer to Specific Procedures,
5.0 for Lost TW/TCAA Check).
4.5
4.6
Allotment and CDC for replacement of Stale TW/TCAA check shall be released only
upon showing proof (Journal Voucher, JV) that the amount of stale TW/TCAA
check has been adjusted to Surplus Adjustment (Accounts 7-92-411/7-92-412).
4.7
CDC for replacement of lost, destroyed and obsolete TW/TCAA check shall be
released only if the cancellation entry is made after the books have already been
closed. The request for the release of CDC shall be supported by the JV taking up
the amount and cancellation of the TW/TCAA check adjusted to Surplus Adjustment
(Accounts 7-92-411/7-92-412). The JV shall be duly certified by the Accountant.
5.0
4.8
If the cancellation is made in the current year, the year of issue, when the books are
still open, there is no need to request for CDC as an exception to the provision of
Joint Circular No. 2-84, as amended. The TW/TCAA check drawn to replace the
TW/TCAA check issued in previous quarters (same year) shall be charged against
the CDC previously utilized for the cancelled TW/TCAA check. The cancelled
TW/TCAA check shall not be included in the list of cancelled TW/TCAA check
supporting the request for CDC.
4.9
Only TW/TCAA check issued beginning January 1, 1980 which was paid by bank
and subsequently lost before it is cleared shall be the subject of clearing under this
circular.
The payee or holder in due course shall file immediately, upon knowledge of loss, a
notice/request for stoppage of payment with the BTR addressed to the Treasurer of
the Philippines (Attention: The National Cashier), copy furnished the Chief
Accountant of the issuing agency in case of TW; in case of TCAA check, it shall be
addressed to the depository bank indicated on the check, copy furnished the
Deputized Disbursing Officer (DDO) of the issuing agency and the BTR-CDD.
The request shall indicate the following pertinent information:
a)
b)
Issuing agency;
c)
Name of payee;
(In case the party requesting for stop payment could not give the
name of the payee, this information may be omitted)
d)
Date of issue;
e)
Amount
f)
g) Date when the cause came to the knowledge of the party concerned.
When the above information (except C) can not be supplied by the party, the
Chief Accountant/DDO of the issuing agency, shall furnished the desired data for
transmission to the Treasury, upon request of the interested party.
In case the TW/TCAA check was lost by the issuing agency or lost while in
transit before the receipt by the payee, the office concerned shall file the request for
the stoppage of payment. Indemnity/surety bond as required under 5.3 b & c hereof
is not necessary.
The notice/request for stoppage of payment shall be supported by an
affidavit of loss. The affidavit of loss is a requirement by the bank before a
TW/TCAA check found paid can be charged back.
5.2
5.3
The BTR - CDD shall immediately verify the subject TW/TCAA check against the
Monthly List of Paid TW/TCAA checks from the date TW/TCAA check was issued
up to at least two (2) months after the date the stoppage request was received, to
determine whether the same has already been paid or not.
a)
If still unpaid, the BTR-CDD shall inform the issuing agency, copy furnished
the requesting party that the TW/TCAA check is not yet paid and was
therefore placed under stoppage of payment. Thereafter, procedures
defined under 5.3 to 5.6 shall apply.
b)
The payee or holder in due course shall request the issuing agency for replacement
of lost TW/TCAA check if the subject TW/TCAA check is not yet paid, attaching
thereto the following documents:
a)
b)
indemnity bond for double the amount of the lost TW/TCAA check if the
amount of the last TW/TCAA check does not exceed P3,000. General
Form No. 18(A) which can be purchased from the Government Printing
Office shall be used.
c)
surety bond for double the amount of the lost TW/TCAA check if the amount
of the lost TW/TCAA check exceeds P3,000. The surety bond shall be
secured from any surety company duly authorized to do business in the
Philippines and shall cover the remaining life of the said TW/TCAA
check.
d)
copy of the letter from the BTR-CDD regarding the status of the lost
TW/TCAA check.
6.0
5.4
The Chief Accountant or any responsible official designated by the head of the
agency/office shall evaluate the request for replacement, and approve or deny the
request depending upon the validity of the claim. If the claim for replacement is
meritorious/valid, the issuing agency shall issue the replacement TW/TCAA check.
5.5
The Accounting Division of the issuing agency shall record in its books of accounts
the cancellation and replacement of lost TW/TCAA check.
5.6
If the cancellation entry is made after the books of the issuing agency are already
closed, request for CDC shall be supported by the JV adjusting the amount of lost
TW/TCAA check to Surplus Adjustment account.
5.7
The payee/holder in due course shall file the claim for replacement, if the subject
TW/TCAA check is found to be fraudulently encashed, with the Bureau of the
Treasury as required under paragraph 8.0 of this circular.
The payee/holder in due course/Finance Officer (in case of Offices under the
Ministry of National Defense) shall file the request for replacement of stale
TW/TCAA check attaching thereto the original of said TW/TCAA with the agency
concerned thru its chief accountant.
6.2
The Chief Accountant or any responsible official designated by the head of the
agency/office shall evaluate the request for replacement to determine its validity.
He shall adjust thru JV the amount of stale TW/TCAA check to Surplus Adjustment
(Accounts 7-92-411/7-92-412). Copy of said JV shall be attached to the request for
release of allotment and CDC. At the end of each month, he shall report to the OBM
all claims received and found to be meritorious with a request for the release of
allotment (for those that have been previously reverted) and CDC for the
amount of the replacement TW/TCAA check to be issued.
6.3
The OBM shall issue the Advice of Allotment (AA) and Notice of Cash
Disbursement Ceiling (NCDC) as requested by the agency.
6.4
The Accounting Division of the agency concerned shall record in its books of
accounts the receipt of AA and NCDC to cover payment of stale TW/TCAA check.
No replacement TW/TCAA check shall be issued unless the corresponding AA and
NCDC has been received from OBM, and that the amount of the stale TW/TCAA
check had been reverted to unappropriated surplus.
6.5
The replacement TW/TCAA check shall be issued by the agencies Central Offices
in Metro Manila. Those payable to provincial claimants shall be forwarded to them
thru the field units of the agency concerned.
6.6
7.0
8.0
The payee or holder in due course shall surrender the original obsolete and/or
destroyed TW/TCAA check to the issuing agency for cancellation and replacement.
7.2
The issuing agency shall verify the validity of the surrendered TW/TCAA check. If
validly issued, a replacement TW/TCAA check shall be issued in the name of
the payee or holder in due course by the same office/unit of the agency that
issued the TW/TCAA check.
7.3
The Accounting Division of the issuing agency shall record in the books of
accounts the cancellation and replacement of the obsolete and/or destroyed
TW/TCAA check.
7.4
7.5
If a TW/TCAA check becomes stale and obsolete at the same time, the procedures
for replacement of stale TW/TCAA check shall apply.
7.6
Allotment and CDC for replacement of obsolete and/or destroyed TW/TCAA check
shall be released only upon showing proof (JV) that the amount of obsolete
and/or destroyed TW/TCAA check has been adjusted to surplus adjustment
account.
7.7
CDC for the replacement of obsolete and/or destroyed TW/TCAA check shall be
released only if the cancellation entry is made after the books have already
been closed.
The payee or holder in due course shall file a claim with the BTR for the
replacement of the fraudulently encashed TW/TCAA check supported by:
a)
2.
9.0
3.
name of payee
4.
amount
5.
6.
7.
circumstances of loss
b)
c)
8.2
The BTR-CDD shall retrieve the original TW/TCAA check and refer it to the BTRLISD for investigation to determine whether the indorsement/signature of the
payee or holder in due course on the TW/TCAA check is genuine or forged
and
whether
the circumstances surrounding the alleged fraudulent
encashment is true or not.
8.3
8.4
PAID
BY
BANK
AND
The authorized officer of the Head Office of the negotiating bank shall file a claim
with the BTR for the reimbursement of the amount involved in a sworn statement
stating the following:
a)
b)
TW/TCAA check serial number which shall include the alpha prefix
in case of TW TYPES "A" and "B" or the alpha-numeric prefix and
numeric suffix in case of TCAA check;
c)
Date of issue;
d)
Name of payee;
e)
f)
9.2
b)
c)
2)
or its authorized
3)
4)
5)
6)
The BTR-CDD shall see to it that the subject TW/TCAA check is under stoppage of
payment.
9.3
9.4
The BTR-CDD shall verify from the Monthly List of Paid TWs/TCAA checks or
record of charge back whether the subject TW/TCAA check is still
outstanding or has not been charged back.
9.5
9.6
9.7
10.0
The BTR-CD/BTR-CDD shall dishonor the original TW/TCAA check which may
be received subsequently through bank clearing operations or paid either by the
depository bank or by the Treasury paying tellers, or deposited by collecting
officers as part of their collections.
ACCOUNTING TREATMENT
Pertinent accounting entries for transactions covered by this Circular are illustrated
in Annex A.
11.0
REPEALING CLAUSE
All circulars, memoranda and other issuance inconsistent herewith are hereby
repealed and/or modified accordingly.
12.0
EFFECTIVITY
This Circular shall take effect immediately.
(SGD.) CESAR E.A. VIRATA
Minister of Finance