Cil'ir

NINETEENTH CONGRESS OF THE

REPUBLIC OF THE PHILIPPINES
Third Regular Session )
24 DEC 18 P4:28

SENATE
ni:' ■ ■

s.B. No. 2907

(In substitution of Senate Bill No. 2746, taking into consideration
House Bill No. 9674)

Prepared and submittedjointly by the Committees on Constitutional Amendments and

Revision of Codes; Civil Service, Government Reorganization and Professional
Regulation; and Finance with Senators Escudero, Villanueva, and Padilla as authors
thereof

AN ACT
REVISING PRESIDENTIAL DECREE NO. 1445, SERIES OF 1978, AS
AMENDED, OTHERWISE KNOWN AS THE GOVERNMENT AUDITING CODE OF
THE PHILIPPINES, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembied:

1 TITLE I
2 GENERAL PROVISIONS

3 Section 1. Title. - This Act shall be known as the "Revised Government Auditing
4 Act."
5 Sec. 2. Declaration of Policy. - It is the policy of the State to ensure efficiency,
6 economy, and effectiveness in the operations of government by ensuring that
7 resources of the government shall be managed or utilized in accordance with law,
8 rules, regulations, and shall be safeguarded against loss or wastage from illegal or
9 improper disposition. The responsibility to take care that such policy is faithfully
10 adhered to rests directly with the chief or head of the government agency concerned.
11 Sec. 3. Definition of Terms. - As used in this Act:
12 (a) /4ca7^y/7^refers to a list or statement of monetary transactions pertaining
13 to fund, property, obligation, equity, revenue, collection, or expense.
 1 whether or not entered as item/s of debit or credit in the books of
2 accounts, registry, or any other record;
3 (b) Accountable Officer refers to the officer of any government agency or
4 instrumentality who, by the nature of duties and responsibilities or
5 participation in the collection or receipt and expenditure or use of
6 government funds, custody, and disposal of government property, is
7 required by law or regulation to render account to the Commission on
8 Audit (COA). This shall include any public officer or private person or
9 entity who may have participation in the transaction;
10 (c) Advice to Debit Account (ADA) refers to an authorization issued by the
11 government entity that serves as an instruction to government servicing
12 banks to debit a specified amount from its available account balance for
13 the payment of creditors/payees;
14 (d) Aggrieved Party refers to a person or entity adversely affected by any
15 decision, order, resolution or ruling of the Commission or any of its duly
16 authorized representatives;
17 (e) Appropriation refers to an authorization by law, appropriation ordinance,
18 or other enactments, or the corporate operating budget directing the
19 payment of Personnel Services (PS), Maintenance and Other Operating
20 Expenses (MOOE), and capital outlay out of government funds under
21 specified conditions and/or purposes;
22 (f) Appeal refers to the process of elevating to a higher authority any
23 decision, order, resolution or ruling of the Commission or any of its duly
24 authorized representatives;
25 (g) refers to the examination, verification, evaluation and analysis of
26 the accounts or financial records; the determination of the government
27 entity's compliance with applicable laws, rules, and regulations; the
28 evaluation of the economy, efficiency and effectiveness of management
29 systems, operations, and programs, activities, or projects (PAPs); and it
30 may also cover other special audits as may be prescribed by the
31 Commission, and the evaluation of the effectiveness of internal control
 1 systems for purposes of determining the nature, extent, and timing of
2 the audit;
3 (y\) Auditor to any officer or employee of the COA duly appointed or
4 designated to conduct an audit;
5 (i) Audit Group refers to a cluster of Audit Teams that are grouped together
6 headed by a Supervising Auditor (SA). The audit group shall plan,
7 manage, conduct the audit work, and ensure prompt submission of the
8 audit report;
9 (j) Audit Decision refers to the action of the auditor as a result of the audit
10 to allow, disallow, or charge a particular transaction;
11 (k) Audit Report refers to the final output of an audit on the accounts,
12 financial records, systems, and operations of a government entity;
13 (l) Audit Team refers to the basic organizational unit responsible for the
14 audit of government and non-government entities;
15 (m) Audit Work Papers refer to the documentation or evidence, either in
16 physical or electronic form, of the work done and the results thereof,
17 consisting of relevant or pertinent data, analyses, computations,
18 calculations, notes, schedules, excerpts, confirmations and other
19 documents or materials gathered, prepared, and compiled in the course
20 of an audit;
21 (n) Cash refers to money or its equivalent currencies, negotiable checks, or
22 balances in bank accounts or in the possession or custody of a collecting
23 and/or disbursing officer;
24 (o) Cash Advances refer to regular or special advances granted to public
25 officers and employees for a public purpose;
26 (p) Charge refers to accountability pertaining to the assessment, appraisal,
27 or collection of revenues, receipts, and other income such as those
28 arising from under-appraisal, under-assessment or under-collection or
29 failure to collect or remit collection which is found in the course of audit
30 of revenues or receipts;
31 (q) COA Order of Execution (COE) refers to a written instruction to the head
32 of agency to withhold payment of salary and other money due to persons
 1 liable, for settlement of their liability as indicated in the Notice of
2 Disallowance or Notice of Charge issued after the issuance of the Notice
3 of Finality of Decision (NFD);
4 (r) Cost ofAudit Services refers to the cost of discharging the audit function,
5 taking into consideration the nature and complexity of operations, size
6 of the government entity, and the volume of transactions being audited;
7 (s) Decision or Resolution refers to an adjudication of any case or matter
8 brought before any authorized official or body in the Commission which
9 shall embody the facts of the case, the issue/s to be resolved, the ruling,
10 and the law, regulations, or precedent on which the ruling is based;
11 (t) Depository refers to any financial institution lawfully authorized to
12 receive the deposit of government moneys;
13 (u) Direct Electronic Payment (DEP) refers to an electronic payment scheme
14 where the payments are made by the government entity itself, using the
15 intermediary's technology or infrastructure, including the use of ADA;
16 (v) Disallowance refers to the disapproval In the audit of a transaction,
17 either in whole or in part, involving government disbursement or
18 property;
19 (w) Electronic Collection (e-CoHection) refers to a method or manner
20 wherein revenue, fees, assessments, or obligations due to the
21 government entity are collected using a mechanical device, electronic
22 device, or computer-based system wherein no actual money, check, or
23 any physical note is handed through the hands of the government
24 entity's collecting officer: Provided, That this shall include collections
25 performed by a financial intermediary;
26 (x) Electronic Payment (e-Payment) refers to the disbursement of money or
27 equivalent electronic representations of legal tender, for purposes of
28 paying government expenditures, solely through electronic means as
29 opposed to the use of cash, check, or physical notes to accomplish the
30 same, including the manner by which an obligation is extinguished by

31 means of sending instruction for the debit of the government entity's

32 account and the corresponding credit to the payee's account, and the
 1 transfer of funds to a financial intermediary for the purpose of
2 distribution;
3 (y) Excessive Expenditures refer to unreasonable expenses that are incurred
4 at an immoderate quantity and exorbitant price; exceed what is usual or
5 proper, are unreasonably high and beyond just measure or amount;
6 and/or are in excess of reasonable limits;
7 (z) Extravagant Expenditures refer to expenditures that are incurred without
8 restraint, judiciousness and economy; are extravagant and exceed the
9 bounds of propriety; and/or are immoderate, prodigal, lavish, luxurious,
10 grossly excessive, and injudicious;
11 (aa) Financial Reporting Framework refers to a set of accounting principles,
12 standards, interpretations, and pronouncements adopted by
13 Commission on Audit (COA) as prescribed by the international standards-
14 setting body which are followed in the preparation of the financial
15 statements that defines how and when to recognize, measure, present
16 and disclose transactions in the financial statements;
17 (bb) Government Agency refers to any department, bureau, or office of the
18 national government, or any of its branches and instrumentalities, local
19 government units (LGU) and its political subdivision, including other
20 entities it created, and government-owned or controlled corporations
21 (GOCC), including their subsidiaries;
22 (cc) Government Funds and Properties refer to any form of public moneys
23 and other resources pertaining or accruing to any agency of the
24 government; including funds transferred to private entities as a subsidy,
25 equity, donation, grant, or counterpart fund for implementation of PAPs;
26 (dd) liiegai Expenditures refer to expenses incurred in violation of the law;
27 (ee) Irreguiar Expenditures refer to expenditures, that are incurred without
28 adhering to established rules, regulations, procedural guidelines,
29 policies, and generally-accepted principles or practices; and/or are
30 incurred when funds are disbursed without conforming with prescribed
31 usages and rules of discipline incurred without observance of an
 1 established pattern, course, procedure, mode of action, behavior,
2 conduct or standard;
3 (ff) Liability refers to either an obligation arising from audit decisions or from
4 contracts or quasi-contracts;
5 (gg) Money Claim refers to a demand for payment of a sum of money,
6 reimbursement, or compensation arising from law, contract, or quasi­
7 contract due from a government agency or owing to a claimant;
8 (hh) Notice of Finality of Decision (NFD) refers to a written notification
9 addressed to the head of the agency that a decision of the Commission
10 has become final and executory;
11 (ii) Persons Liable refer to the persons determined to be answerable for an
12 audit disallowance, charge, or decision by the Commission;
13 (jj) Persons Responsible refer to the persons determined to be answerable
14 for the compliance with the audit requirements as called for in the Notice
15 of Suspension (NS);
16 (kk) Programs, Activities, Projects (PAPs) refer to any work progress or group
17 of work progress undertaken to realize the outputs and outcomes of an
18 agency which is represented by an item of appropriation in the national
19 budget, appropriation ordinances in the case of LGUs, and corporate
20 operating budgets in the case of GOCCs;
21 (II) Public Officer refers to any person holding any public office in the
22 government by virtue of an appointment, election, or contract vested
23 with sovereign functions of the government;
24 (mm) Public Purpose refers to any purpose or use directly available to the
25 general public as a matter of right, including those traditionally viewed
26 as essentially government functions such as the building of roads and
27 the delivery of basic services, and those purposes designed to promote
28 social justice and public interest as provided for by law or jurisprudence;
29 (nn) Regular Cash Advances refer to those granted to cashiers, disbursing
3t) officers, paymasters, and/or property/supply officers for any of the
31 following purposes:
32 (1) Salaries and wages;
 1 (2) Commutable allowances;
2 (3) Honoraria and other similar payments to officials and employees;
3 and
4 (4) Petty operating expenses, consisting of small payments for
5 maintenance and operating expenses cannot be paid conveniently
6 by check or are required to be paid immediately;
7 (oo) Revenue refers to income or receipts derived by a government agency
8 from taxes, excise, custom duties, fees, royalties, grants, rents, sale of
9 goods or services, sale of assets and collections from other sources;
0

10 (pp) Settlement of Liability refers to the payment, restitution, or other act of

11 extinguishing an obligation as provided by law in satisfaction of the
12 liability under a Notice of Disallowance or Notice of Charge (ND/NC) or
13 in compliance with the requirements of a Notice of Suspension (NS);
14 (qq) Settlement of Accounts refers to the process of determining the status
15. or balance of the account of an accountable officer after audit and
16 examination;
17 (rr) Settled Account refers to a transaction which after audit does not result
18 to any adverse audit decision;
19 (ss) Special Cash Advances refer to those granted on the explicit authority of
20 the Head of the Agency only to duly designated disbursing officers or
21 employees for other legally authorized purposes, as follows:
22 (1) Current operating expenditures of the agency field office or of the
23 activity of the agency undertaken in the field when it is impractical
24 to pay to the same by check, such as - (a) Salaries, Wages and
25 Allowances; (b) Maintenance and other operating expenses; and
26 (2) Travel Expenditures, including transportation fare, travel
27 allowance, hotel room/lodging expenses and other expenses
28 incurred by the officials and employees in connection with official
29 travel;
30 (tt) Suspension refers to a temporary disallowance of a transaction or
31 accounts which appear illegal or improper or irregular unless
32 satisfactorily explained or justified by the persons responsible or until
 1 the requirements on matters raised in the course of audit are submitted
2 or complied with;
3 (uu) Trust Funds refer to funds which are by operation of law or by contract
4 are officially in the possession of any government agency or of a public
5 officer as trustee, agent, or administrator, which are for the fulfillment
6 of certain obligations or a specific purpose;
7 (w) Transfer-Distribute-Liquidate (TDL) refers to an electronic payment
8 scheme where the government entity's funds are first transferred to the
9 intermediary's possession and control, which the latter thereafter uses
10 to distribute payments to the intended payees of the principal
11 government entity;
12 (ww)Unconscionable Expenditures refer to expenditures which are
13 unreasonable and immoderate, which no fair and honest man in his right
14 sense would make or accept asreasonable, and which are incurred in
15 violation of ethical and moral standards; and
16 (xx) Unnecessary Expenditures refer to expenditures which i) does not satisfy
17 the test of prudence or the diligence of a good father of a family, thereby
18 denoting non-responsiveness to the exigencies of the service; ii) are not
19 supportive of the objectives and mission of the agency relative to the
20 nature of its operation; iii) are not dictated by the demands of good
21 government; and/or iv) the utility cannot be ascertained at a specific
22 time, are not essential and can be dispensed with without loss or damage
23 to property, and/or contrary to the mission and thrusts of the agency
24 incurring the expenditures.
25 Sec. 4. Fundamental Principles. - Financial transactions and operations of any
26 government agency shall be governed by the fundamental principles set forth
27 hereunder:
28 (a) No money shall be paid out of any public treasury or depository except
29 in pursuance of an appropriation law, appropriation ordinance, or other
30 specific statutory authority, or a Department of Budget and Management
31 (DBM)-approved corporate operating budget;

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 1 (b) Government funds or property shall be spent or used solely for public
2 purposes;
3 (c) Trust funds shall be spent only for the specific purpose for which the
4 trust was created, or the funds received;
5 (d) Fiscal responsibility shall, to the greatest extent, be shared by all those
6 exercising authority over the financial affairs, transactions, and
7 operations of the government agency;
8 (e) Disbursements or disposition of government funds or property shall be
9 approved by the proper official of the government agency;
10 (f) Claims against government funds shall be properly authorized and
11 supported with the complete required documentation;
12 (g) All laws, rules, and regulations applicable to financial transactions shall
13 be faithfully adhered to; and
14 (h) Applicable financial reporting framework adopted by the Commission, as
15 prescribed by international standards-setting body, as well as sound
16 management and fiscal administration, shall be observed: Provided,
17 That they do not contravene existing laws, rules, and regulations.

18 TITLE II
19 CHAPTER I
20 Organization

21 Sec. 5. Composition of the Commission on Audit, Quaiifications, Term and

22 Saiary of Members. - The Commission shall be headed by a Chairperson and two (2)
23 Commissioners, who shall be natural-born citizens of the Philippines and, at the time
24 of their appointment, at least thirty-five (35) years of age, either certified public
25 accountants with at least ten (10) years of auditing experience, or members of the
26 Philippine Bar who have been engaged in the practice of law for at least ten (10)
27 years, and must not have been candidates for any elective position in the elections
28 immediately preceding their appointment. At no time shall all Members of the
29 Commission belong to the same profession.
30 The Chairperson and the Commissioners shall be appointed by the President of
31 the Philippines, subject to the confirmation of the Commission on Appointments, for a
 1 term of seven (7) years without reappointment. Appointments to any vacancy
2 resulting from death, permanent disability, resignation or removal from office shall be
3 only for the unexpired portion of the term of the predecessor. In no case shall any
4 Member be appointed or designated in a temporary or acting capacity.
5 In case of vacancy pending the appointment of a Chairperson, the senior
6 member, as to appointment, shall perform the functions of the Chairperson until a
7 new one is appointed and assumes office.
8 No member of the Commission shall, during their tenure, hold any other office
9 or employment in the government. They shall neither be in the practice of any
10 profession or in the active management or control of any business which in any way
11 may affect their functions as members of the Commission, nor shall they be financially
12 interested, directly or indirectly, in any contract with, or in any franchise or privilege
13 granted by the national government, any of its political subdivisions, agencies or
14 instrumentalities, including GOCCs and their subsidiaries.
15 The salary of the Chairperson and the Commissioners shall be fixed by law and
16 shall not be decreased during their tenure.
17 Sec. 6. The Commission Proper. - The Commission Proper shall be composed
18 of the Chairperson and two (2) Commissioners sitting as a collegial body in the
19 discharge of the powers and functions of the Commission.
20 Sec. 7. Functions of the Commission Proper. - The following shall be the
21 functions of the Commission Proper:
22 (a) Promulgate auditing rules and regulations for the determination of the
23 scope and type of audit and examination by the Commission, establish
24 the techniques and methods required therefor, including those for the
25 prevention and disallowance of illegal, irregular, unnecessary, excessive,
26 extravagant, or unconscionable expenditures or uses of government
27 funds or property;
28 (b) Promulgate accounting and auditing policies, rules, and regulations,
29 including standards on internal auditing and internal control system, and
30 authorize the adoption of the international accounting and auditing
31 standards prescribed by the international standards-setting body;

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 1 (c) Promulgate its own rules concerning pleadings and practices filed before
2 the Commission or any of its offices: Provided, That such rules shall not
3 diminish, increase, or modify substantive rights;
4 (d) Decide by a majority vote of all its Members any case or matter brought
5 before it;
6 (e) Appoint and promote the officials and employees of the Commission in
7 accordance with the Civil Service laws, rules, and regulations.
8 (f) Prescribe the duties and responsibilities of the officials and employees
9 of the Commission;
10 (g) Exercise original and concurrent jurisdiction over administrative cases
11 filed against COA personnel.
12 (h) Recommend to Congress its retirement benefits system pursuant to its
13 fiscal autonomy;
14 (i) Reorganize or rightsize, when necessary, the organizational structure of
15 the Commission, create new positions, transfer plantilla items, or make
16 adjustments in the Personnel Services Itemization in accordance with
17 the organization, staffing and position classification standards and
18 subject to approval of the DBM;
19 (j) Authorize the conduct of special audits including re-opening of settled
20 accounts in case of fraud, collusion, or error of calculation or when new
21 and material evidence is discovered, and other investigations as may be
22 prescribed by the rules of the Commission; and
23 (k) Perform such other functions as may be provided by law.
24 Sec. 8. Duties and Responsibilities of the Chairperson. - The Chairperson shall
25 act as the presiding officer of the Commission Proper and chief executive officer of the
26 Commission. As chief executive officer, the Chairperson shall:
27 (a) Control and supervise the general administration of the Commission;
28 (b) Direct and manage the implementation and execution of policies,
29 standards, rules, and regulations promulgated by the Commission
30 Proper;
31 (c) Sign appointments for recruitment and promotions, and office orders for
32 audit engagements;

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 1 (d) Authorize the transfer, reassignment, secondment and other forms of
2 personnel movement of the officials and employees of the Commission
3 in accordance with the Civil Service laws, rules and regulations;
4 (e) Delegate to the Commissioners, Assistant Commissioners, Directors, and
5 other officials of the Commission such authority on internal
6 administration concerning personnel, planning, financial, legal, and
7 other matters pertaining to their respective functional areas as may be
8 determined by the Commission Proper;
9 (f) Submit a proposed annual or supplemental budget of the Commission
10 to the DBM for approval of the Congress;
11 (g) Summon any person or public official for the purpose of gathering data
12 or inquiring into matters pertinent to the formulation, implementation or
13 enforcement of any order, decision, policy, standard, or regulation of the
14 Commission Proper;
15 (h) Designate appropriate official as head of the Public Sector Accounting
16 Standards Board and the Public Sector Auditing Standards Board;
17 (i) Exercise control and supervision over the audit of intelligence and/or
18 confidential transactions or accounts of government agencies;
19 (j) Exercise control and supervision over the audit of foreign-assisted
20 projects; and
21 (k) Perform such other functions as may be required by law, rules,
22 regulations, or policies of the Commission.
23 Sec. 9. Duties and Responsibilities of the Commissioners. - The following are
24 the duties and responsibilities of the Commissioners:
25 (a) Participate in the proceedings of the Commission Proper in the discharge
26 of its powers and functions; and
27 (b) Perform such other functions as may be provided by law, rules,
28 regulations, or policies of the Commission.
29 Sec. 10. Duties and Responsibilities of the Assistant Commissioners. - The
30 following are the duties and responsibilities of the Assistant Commissioners:

12
 1 (a) Formulate, develop, update, and supervise the implementation of the
2 operational plan and performancecommitment of the Sector headed
3 which are aligned with the Commission's strategicplan;
4 (b) Supervise the general administration of offices under the jurisdiction of
5 the Assistant Commissioner;
6 (c) Serve as a member of an Assistant Commissioners Group which shall
7 work as a collegial body to study, review, and recommend policies, rules,
8 and regulations for consideration by the Commission Proper or the COA
9 Chairperson; and
10 (d) Perform such other functions as may be assigned.
11 Sec. 11. The General Counsel. - The Assistant Commissioner of the Legal
12 Services Sector shall be the General Counsel of the Commission.
13 Sec. 12. The Central and Regional Offices. -The operations of the Commission
14 under Section 16 of this Act shall be further carried out by the various offices under
15 each Sector in the Central and Regional Offices. Each office in the central office and
16 the regional offices shall be headed by a Director with a rank of Director IV. All offices
17 under the audit sectors shall supervise their respective audit groups and audit teams.
18 The COA Regional Offices shall serve as representatives of the Commission in
19 the regions and shall be under the direct control and supervision of the Assistant
20 Commissioner of Local Government Audit Sector.
21 Sec. 13. Dudes and Responsibilities of the Commission Secretary. - The
22 Commission Secretary shall have the rank of a Director IV and shall provide secretariat
23 and administrative support to the Commission Proper.
24 Sec. 14. Duties and Responsibilities of the Chief Executive Staff. -The Chief
25 Executive Staff in the Office of the Chairperson shall have the rank of an Assistant
26 Commissioner and shall be responsible for the general administration and supervision
27 of the following offices:
28 (a) Office of the Chief Executive Staff shall monitor dissemination of the
29 regulations, instructions, and directives issued by the Chairperson;
30 monitor transmittal of the audit reports and annual financial reports;
31 maintain schedule, agenda, and make necessary arrangements for the
32 Chairperson as Chairperson/Member of inter-agency committees; and

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 1 ensure that the Chairperson is fully informed in a timely manner of all
2 matters of importance in relation to the conduct of the day-to-day
3 operations of the Commission to include accomplishments of targets
4 and significant deviation from performance commitments and
5 established goals and objectives;
6 (b) Internal Audit Office shall provide independent and objective assurance
7 and advisory services to obtain reasonable assurance on the adequacy
8 and effectiveness of governance, risk management, and control
9 processes of the Commission based on its approved Strategic and
10 Annual Audit Plan and establish guidelines to ensure conformance with
11 applicable code of ethics and standards for internal auditing;
12 (c) International and Audit Relations Office shall coordinate and supervise
13 the work involving the functions of the COA relating to international
14 audit and relations, and audit of foreign-based government agencies;
15 (d) Internal Affairs Office shall evaluate and investigate complaints filed
16 against COA personnel and recommend the filing of administrative
17 cases or dismissal and/or termination of the complaint;
18 (e) Project Management Office shall evaluate, integrate, monitor, and act
19 as secretariat for the priority projects of the COA and coordinate the
20 resources of the Commission and liaise with the development partners
21 in the implementation of various projects and programs;
22 (f) Public Information Office shall manage engagement with internal and
23 external stakeholders, specifically media and general public, to
24 contribute to achievement of organizational goals, and provide
25 electronic communication needs of the Commission; and
26 (g) Quality Assurance Office shall conduct quality assurance reviews to
27 provide reasonable assurance that the quality management system of
28 the Commission is working effectively and in accordance with
29 professional standards and best practices.
30 Sec. 15. Duties and Responsibilities of the Directors. - The Directors of the
31 Commission shall have the following duties and responsibilities:

14
 1 (a) Formulate, develop, and supervise the implementation of the annual
2 operational plan, in accordance with the Commission's strategic plan;
3 (b) Manage the administrative operations of their office;
4 (c) Implement and execute laws, policies, standards, and rules and
5 regulations promulgated by the Commission or the Chairperson;
6 (d) Submit annual performance report and other reports as directed by the
7 Commission Proper or the Chairperson;
8 (e) Adjudicate on cases within their jurisdiction;
9 (f) Publish audit reports in the website of the Commission; and
10 (g) Perform other functions that may be assigned by higher and competent
11 authority.
12 Sec. 16. Operations of the Commission. - The operations of the Commission
13 shall be undertaken through the following sectors which shall each be headed by an
14 Assistant Commissioner who shall exercise supervision over various offices under it:
15 (a) Local Government Audit Sector shall be responsible for the audit of
16 LCDs;
17 (b) National Government Audit Sector shall be responsible for the audit of
18 NGAs;
19 (c) Corporate Government Audit Sector shall be responsible for the audit of
20 GOCCs;
21 (d) Special Audit Services Sector shall be responsible for the conduct of
22 performance audit, fraud audit, and special audit;
23 (e) Systems and Technical Audit Services Sector shall be responsible for
24 technical audit and conduct of other technical-related services; and audit
25 of information technology and systems and conduct of otherservices
26 related to information and communications technology resources and
27 services of government agencies;
28 (f) Government Accountancy Sector shall be responsible for the keeping of
29 the general accounts of the government, preparation and submission of
30 Annual Financial Reports and other financial reports, and providing
I

31 technical assistance pertaining to accounting and financial management;

32 recommendation on theadoption and implementation of accounting

15
 1 standards, policies, rules, and regulations; and development,
2 implementation and maintenance of computerized systems and tools
3 related to government accounting and financial management vital to its
4 operation including systems essential for its technical oversight function
5 over government accountants;
6 (g) Legal Services Sector shall be responsible for rendering legal opinions
7 and legal services; review of legal retainers and other contracts, and
8 COA issuances; preparation of comments on proposed congressional
9 bills and issuances of government agencies; conduct of formal hearing
10 and drafting of decisions on administrative cases; enforcement of COA
11 decisions; assistance in the prosecution and litigation of cases involving
12 COA and its personnel acting as witnesses, including preparation of
13 pertinent comments and pleadings; coordination with the Office of the
14 Solicitor General (OSG), Office of the Ombudsman (0MB) and other
15 agencies pertaining to cases involving COA; legal assistance to COA
16 personnel subjected to harassment suits;
17 (h) Commission Proper Adjudication Sector shall be responsible for drafting
18 of decisions or resolutions for consideration of the Commission Proper;
19 (i) Planning, Finance and Management Sector shall be responsible for the
20 formulation of long-range and annual plans and programs of the
21 Commission; providing budget services to the Commission; and
22 formulation, recommendation, and implementation of policies on the
23 processing of claims, assessment of cost of audit services, and personnel
24 payroll management;
25 (j) Administration Sector shall be responsible for the development and
26 maintenance of the information system of the Commission, and human
27 resources management program; and providing general administrative
28 services and support to the Commission; and
29 (k) Professional and Institutional Development Sector shall be responsible
30 for the formulation, recommendation, and implementation of policies
31 and programs on learning and development of personnel of the
32 Commission; and providing capacity building of other government

16
 1 agencies' personnel pertaining to accounting and auditing matters, and
2 other policies, rules and regulations issued by the Commission, including
3 those concerning internal auditing and internal control systems
4 standards.
5 The Commission Proper may effect changes in the organization and functions
6 of the Commission as it may deem necessary in the exercise of its fiscal autonomy in
7 order to carry out its constitutional mandate.
8 Sec. 17. Legal Assistance to Current and Former Officials and Employees. -
9 Current and former COA officials and employees are authorized to engage the services
10 of private lawyers for a fee on cases filed against them in relation to the performance
11 of their official functions in accordance with the guidelines issued by the Commission
12 Proper.
13 For this purpose, the Commission shall provide a legal assistance fund to be
14 included in its annual appropriation.
15 Sec. 18. Professionalization of Audit Services. - The Commission shall develop,
16 adopt, and implement a competency-based capacity building and continuing
17 education.
18 It shall participate and support the activities of international professional
19 organizations such as the International Organization of Supreme Audit Institutions,
20 Asian Organization of Supreme Audit Institutions, Association of Southeast Asian
21 Nations (ASEAN) Supreme Audit Institutions, and other supreme audit institutions.
22 For this purpose, the capacity building shall include courses on accounting
23 standards, rules, and regulations relevant to auditing services.
24 Sec. 19. Professionalization ofAccounting and Other Services. - For accounting
25 services, the Commission shall conduct capacity building in coordination with
26 international professional bodies on accounting services such as the International
27 Public Sector Accounting Standards Board, Financial and Sustainability Reporting
28 Standards Council, and other international professional bodies relevant to accounting
29 services.
30 The Commission shall likewise provide similar capacity building for other
31 services.

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 1 Sec. 20. Fiscal Autonomy. - The Commission shall enjoy fiscal autonomy and
2 its approved annual appropriation shall be automatically and regularly released. The
3 Chairperson of the COA is authorized to augment any item in the general
4 appropriations for the Commission from savings in any item in the same appropriation.
5 Sec. 21. Statement of Objectives. - In keeping with its constitutional mandate,
6 the Commission adheres to the following objectives:
7 (a) Determine whether the fiscal responsibility which rests directly with the
8 head of the government agency has been properly, efficiently, and
9 effectively discharged;
10 (b) Develop and implement a comprehensive audit plan that shall
11 encompass the examination of financial transactions, accounts, and
12 . reports, including compliance with applicable laws and regulations, as
13 well as evaluation of the economy, efficiency, and effectiveness of
14 programs, activities and projects;
15 (c) Institute control measures through the promulgation of auditing and
16 accounting rules and regulations governing the revenue, receipts,
17 disbursements, and uses of funds and properties, including audit of fund
18 transfers to non-government organizations, peoples' organizations (POs)
19 or other private entities for specific purpose;
20 (d) Promulgate accounting and auditing rules and regulations to facilitate
21 the keeping of the accounts of the Government and enhance their
22 information value;
23 (e) Institute measures designed to preserve and ensure the independence
24 of the Commission, ensure transparency and accountability in
25 government operations, and promote service excellence and quality in
26 all aspects of its work; and
27 (f) Bring its operations closer to the people by the delegation of authority
28 through decentralization and participatory governance, consistent with
29 the provision of the Constitution.
30 Sec. 22. GeneraiJurisdiction. - Pursuant to Section 2 (1), Article IX (D) of the
31 1987 Constitution, the Commission shall have the power, authority, and duty to
32 examine, audit and settle all accounts pertaining to the revenues and receipts of, and

18
 1 expenditures or uses of funds and property, owned or held in trust by, or pertaining
2 to the government, or any of its subdivisions, agencies, or instrumentalities, including
3 GOCCs, and on a post-audit basis:
4 (a) Constitutional bodies, commissions and offices that have been granted
5 fiscal autonomy under the Constitution;
6 (b) Autonomous state colleges and universities;
7 (c) Other GOCCs and their subsidiaries; and
8 (d) Such non-governmental entities receiving subsidy or equity directly or
9 indirectly, from or through the government, which are required by law
10 or the granting institution to submit to such audit as a condition of
11 subsidy or equity.
12 Provided, however, That in case where the internal control system of the
13 audited agencies is deemed inadequate, the Commission may adopt such measures,
14 including temporary or special pre-audit, as are necessary and appropriate to correct
15 the deficiencies. It shall keep the general accounts of the government, and for such
16 period as may be provided by law, preserve the vouchers and other supporting papers
17 pertaining thereto.
18 The Commission, under Section 2 (2), Article IX (D) of the 1987 Philippine
19 Constitution, shall have exclusive authority subject to the limitations in Article IX of
20 the Constitution, to define the scope of its audit and examination, establish the
21 techniques and methods required therefor, and promulgate accounting and auditing
22 rules and regulations including those for the prevention and disallowance of irregular,
23 unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of
24 government funds and properties.
25 Sec. 23. Examining Authority. - The Commission shall have authority to
26 examine in the course of audit, books, papers, documents pertaining to the income of
27 individuals and corporations in connection with government revenue collection
28 operations, for the purpose of ascertaining that all revenues determined to be
29 collectible and due the government have actually been collected.
30 Sec. 24. Limited Jurisdiction over Private Entities. -The Commission shall have
31 authority to examine and audit the contracts, agreements, or dealings of private
32 entities with the government for which such private entities: (i) received subsidies.

19
 1 counterpart funding, government equity, donation or grant, fund transfer or were
2 allowed to use government properties or facilities; or (ii) were required to pay
3 government share such as, but not limited, to levy, franchise fees, or income share.
4 Sec. 25. Deputization of Government Licensed Professionals or Experts to Assist
5 Government Auditors. - The Commission Proper may, when the exigencies of the
6 service so require, deputize and retain, in the name of the Commission, certified public
7 accountants and such other government licensed professionals or experts as it may
8 deem necessary to assist its auditors in undertaking specialized audit engagements.
9 The deputized professionals or experts shall be entitled to such compensation
10 and allowances as may be stipulated in the contract, subject to pertinent rules and
11 regulations on compensation and fees.
12 The Commission Proper shall issue guidelines in contracting deputized
13 professionals or experts referred to in this section.
14 Sec. 26. Participation of Civil Society Organizations in the Conduct of Audit -
15 The COA Chairperson may deputize duly accredited Civil Society Organizations in the
16 conduct of audit to help auditors perform ocular inspection, validation, evaluation,
17 collection of data or information and monitoring of projects located in remote and
18 critical areas to enhance credibility, accountability, and transparency in audit
19 processes.
20 Sec. 27. Prohibition of Person or Entity from Rendering, Auditing and Related
21 Services to Government Entities. - No person or entity shall enter into a contract to
22 render accounting or auditing related services for a fee to any government agency or
23 conduct of seminars or workshops on topics relating to accounting; auditing; and
24 internal control system and internal auditing standards for government personnel
25 without securing clearance from COA. Should the Commission decide not to undertake
26 the study or service, it shall nonetheless have the power to review the proposed
27 contract in order to determine the necessity, capability or expertise of the private party
28 and the reasonableness of its fees.
29 Any contract entered into without the approval of the Commission shall be
30 considered null and void and the related expenditures incurred thereon shall be
31 disallowed in audit and become the personal liability of the officials concerned.

20
 1 Sec. 28. Government Contracts for the Hiring of a Private Lawyer or Law Firm
2 to Handie Legal Cases or Render Legal Services to Government Agencies. - No
3 contract involving public funds shall be entered into by any government agency to
4 secure the services of a private lawyer or law firm for the purposed representing the
5 government agency concerned in court or for rendering legal services: Provided, That
6 if hiring of such legal services cannot be avoided, or is justified under extraordinary or
7 exceptional circumstances, the written conformity and acquiescence or clearance of
8 the OSG or the Office of the Government Corporate Counsel, as the case may be, and
9 the written concurrence of the COA shall first be secured before the engagement of
10 private legal services: Provided, further. That in case of LGUs, only the written
11 approval of the Commission shall be required: Provided, furthermore. That the
12 Commission shall issue guidelines for the implementation of this provision. Provided,
13 finally, That in case of non-compliance with the above requirements and the relevant
14 rules of the Commission, any payment thereof shall be disallowed in audit and the
15 same shall be the personal liability of the officials concerned.
16 The request for written concurrence shall be acted upon by the Commission
17 within sixty (60) days from the receipt of all documents necessary to evaluate such
18 request. The Commission shall be deemed to approve the request for written
19 concurrence should it fail to act thereon after the lapse of the (60) day period.
20 Sec. 29. Prohibition of Private Foundations and Entities to Use the Name and
21 Resources of the Government to Solicit and/or Receive Donations, Grants, Financial
22 Assistance from Private Domestic and International Donors. - Private foundations and
23 entities organized and managed by government officials and employees are prohibited
24 from using the name, resources, insignia, or logo of a government agency for
25 whatever enterprise to solicit and/or receive donations, grants, financial assistance
26 from the public or other donors.
27 Any violation of the preceding paragraph shall subject the said foundation or
28 entity to special audit by the Commission as if the funds so received are public funds
29 which should be recognized in the books of the concerned government agency.
30 Refusal to submit itself to such audit shall constitute an offense punishable under
31 Section 101 of this Act.

21
 1 Sec. 30. Prevention and Disallowance of Illegal, Irregular, Unnecessary,
2 Excessive, Extravagant or Unconscionable Expenditures or Uses of Government Funds
3 of Property. - The Commission shall promulgate accounting and auditing rules and
4 regulations for the prevention and disallowance of illegal, irregular, unnecessary,
5 excessive, extravagant, or unconscionable expenditures or uses of government funds
6 or property. Any violation of such rules and regulations shall be a ground for
7 disallowance without prejudice to administrative, civil and/or criminal sanctions
8 against the persons liable therefor.
9 Sec. 31. Settlement of Accounts Between Agencies. - The Commission shall
10 have the power, under such regulations as it may prescribe, to authorize and enforce
11 the settlement of accounts subsisting between agencies of the government.
12 Sec. 32. Collection of Indebtedness Due to the Government - The Commission,
13 through proper channels, shall assist in the collection and enforcement of all debts
14 and claims and the restitution of all funds or the replacement or payment to the
15 government of any government property lost or destroyed.
16 Sec. 33. Power to Adjudicate Money Claims Against the Government - The
17 Commission shall have the power to adjudicate money claims filed against the
18 government or any of its subdivisions, agencies, and instrumentalities in relation to
19 liquidated claims and quantum meruit cases. Unliquidated money claims against the
20 government shall be filed before the proper courts, tribunals, and other adjudicative
21 bodies.
22 Liquidated claims refer to those determined or readily determinable from
23 vouchers, invoices, and such other papers within reach of accounting officers.
24 When the Commission is in the exercise of its power to execute judgements on
25 money claims, the Commission shall, at all times, respect the principle of immutability
26 of judgments.
27 Sec. 34. Power to Compromise Claims. - When the interest of the Government
28 so requires, the Commission Proper may compromise or release in whole or in part,
29 any settled claim or liability to any government agency not exceeding Ten miilion
30 pesos (P10,000,000.00) arising out of any matter or case pending before the
31 Commission or falling within its jurisdiction. In case the claim or liability exceeds Ten
32 million pesos (P10,000,000.00), the Commission shall submit an application for relief

22
 1 to Congress with its recommendations. The threshold amount subject to compromise
2 shall be reviewed and adjusted to inflation every five (5) years.
3 The respective governing bodies of GOCCs and self-governing boards,
4 commissions or agencies of the government shall have the authority to condone,
5 compromise or release any similar claim or liability when expressly authorized by their
6 charters, subject to timely review and post-audit by the Commission: Provided,
7 however, That if the power to condone, compromise or release claims or liabilities is
8 not explicitly provided under the charter of the government agency concerned, the
9 same be exercised exclusively by the Commission in accordance with the provision of
10 this Act.
11 Sec. 35. Satisfaction of Indebtedness Arising from Final and Executory Audit
12 Decisions. - When any person or entity is indebted to any government agency by
13 reason of a final and executory audit decision, the Commission shall direct the head
14 of agency to withhold the salary or any money due to such entity or person liable or
15 from the estate, in satisfaction of the indebtedness under the said decision.
16 In case any money due to the liable entity or person is insufficient to satisfy
17 the indebtedness from the final and executory audit decision, the Commission shall
18 have the power to levy property or garnish bank accounts to the extent of the unpaid
19 balance.
20 Failure on the part of the head of agency concerned to comply with the
21 preceding paragraphs shall render the head of agency personally liable without
22 prejudice to the filling of administrative action for neglect of duty.
23 Sec. 36. Authority to Require Submission ofDocuments Relative to Government
24 Transactions. - The Commission shall have the power to require the submission of the
25 original, in whatever form, of any order, deed, contract, or other document under
26 which any collection of, or payment from, government funds may be made, together
27 with any certificate, receipt, or other evidence in connection therewith. If an
28 authenticated copy is needed for record purposes, the copy shall upon request be
29 furnished.
30 In the case of deeds to property purchased by any government agency, the
31 Commission shall require a certificate of title entered in favor of the government or

23
 1 other evidence that would provide substantial proof that the title is in the name of the
2 government.
3 It shall be the duty of the officials or employees concerned, including those in
4 non-government entities under audit, or affected in the audit of government and non-
5 government entities, to comply promptly with these requirements.
6 Sec. 37. Investigatory and Inquisitorial Powers; Power to Punish for Contempt
7 - The Chairperson, and other officials and employees specially deputized in writing for
8 the purpose by the Chairperson shall, in compliance with the requirement of due
9 process, have the power to summon the parties to a case brought before the
10 Commission for resolution, issue subpoena and subpoena duces tecum, administer
11 oaths, and otherwise take testimony in any investigation or inquiry on any matter
12 within the jurisdiction of the Commission.
13 The Commission shall have the power to cite for contempt as provided for in
14 the Revised Rules of Court and the Revised Rules of Procedure of the COA, under the
15 same procedure and with the same penalties provided therein. Any violation of any
16 final and executory decision, order or ruling of the Commission shall constitute as
17 indirect contempt.
18 Sec. 38. Annual Financial Report of the Commission. - The Commission shall
19 submit to the President and the Congress of the Philippines not later than the last day
20 of September of each year an annual report on the financial condition and operation
21 of all government agencies, which shall include recommendation of measures
22 necessary to improve economy, efficiency, and effectiveness of these agencies.
23 To carry out the purposes of this Section, the Chief Accountant or the official
24 in charge of keeping the accounts of the government agency shall submit to the
25 Commission, year-end financial statements and such other supporting or subsidiary
26 statements as may be required by the Commission not later than the 14th day of
27 February of each year. Financial statements returned by the Commission for revision
28 due to non-compliance with accounting standards, rules and regulations shall be
29 resubmitted within five (5) working days after the date of receipt by the official
30 concerned.
31 Sec. 39. Annual Report on Appropriations, Allotments, Obligations and
32 Disbursements, Including Off-Budgetary Funds and Trust Receipts. - Within one

24
 1 hundred twenty (120) days after the end of every fiscal year, the Commission shall
2 submit to the President and the Congress of the Philippines an annual report on
3 appropriations, allotments, obligations and disbursements of NGAs and GOCCs
4 maintaining Special Accounts in the General Fund and receiving budgetary support
5 from the government.
6 For the purpose stated under this Section, agencies are required to submit
7 financial accountability reports to this Commission in compliance with the pertinent
8 sections of the General Provisions of the GAA and Republic Act No. 7226.
9 Sec. 40. Powers, Functions, and Duties of Auditors. - The following are the
10 powers, functions, and duties of auditors as representatives of the Commission:
11 (a) Exercise such powers and functions as may be authorized by the
12 Commission in the examination of cash and accounts of accountable
13 officers; conduct financial, compliance, performance, and other special
14 audits; settle accounts of the agencies under the respective audit
15 jurisdiction;
16 (b) Submit an audit report on the date and in the manner prescribed by the
17 Commission and render such other reports as the Commission may
18 require;
19 (c) For transactions subject of Audit Observation Memorandum, NS, ND, NC,
20 complaint or a pending audit or investigation or court case, retain
21 custody and be responsible for the safekeeping and preservation of paid
22 expense vouchers, journal entry vouchers, stubs of checks, reports of
23 collections and disbursements, and similar documents together with
24 their respective supporting papers, until the final disposition thereof. The
25 Commission shall prescribe the manner for preservation of these audit
26 or legal evidence;
27 (d) Retain a digital copy of the audited vouchers and supporting papers,
28 official receipts, and other documents or reports upon turnover or return
29 of the originals to the auditee for safekeeping and preservation in
30 accordance with the guidelines promulgated by the Commission Proper;
31 (e)Act as witness in proceedings before the courts, the 0MB, and other
32 quasi-judicial bodies; and

25
 1 (0 Perform such other functions as may be assigned to them by the
2 Commission.
3 Sec. 41. Examination of Cash and Accounts of Accountabie Officer. - The
4 cashbooks, accounts, papers, and cash in the accountability of an accountable officer
5 shali be opened at all times to audit and examination of the Commission and its duly
6 authorized representatives.
7 In case a shortage has been discovered during an examination of the cash and
8 accounts of an accountable officer, it shall be the duty of the auditor to immediately
9 demand in writing the restitution of the shortage and notify in writing the head of the
10 government agency concerned of said shortage in accordance with the regulations of
11 the Commission. The head of the agency may immediately relieve the accountable
12 officer and assign another officer to assume the former's duties and responsibilities. A
13 complete report on the cash examination of the accounts of the accountable officer
14 with cash shortage shall immediately be submitted by the auditor to the Director
15 concerned for purposes of referral to the 0MB for investigation and filing of the
16 appropriate administrative and/or criminal case against the accountable officer
17 concerned, as the evidence may warrant.
18 For the purpose of this Section, the auditor shall be regarded as a witness only
19 in cases filed before the 0MB and the regular courts, and in no case shall the auditor
20 be named as the complainant therein.
21 Sec. 42. Withholding ofSalaries and Other Emoluments of Accountable Officers.
22 -Whenever an accountable officer has been found short of any accountability during
23 cash examination or audit and after failure to explain satisfactorily or to produce the
24 missing funds within the period prescribed by the rules of the Commission, the auditor
25 shall order the head of the agency to direct the withholding of the salaries and other
26 emoluments due the accountable officer concerned up to the extent of the liability
27 until the final determination of the latter's accountability by the Commission or by final
28 judgment of a competent court.
29 Sec. 43. Constructive Distraint of Property of Accountable Officer. - Upon
30 discovery in audit of a shortage in the accounts of any accountable officer and upon
31 a finding of a prima facie case of malversation of public funds or property against such
32 accountable officer, the Commission may, in order to safeguard the interest of the

26
 1 government, place the personal property of the accountable officer concerned under
2 constructive distraint when there is reasonable grounds to believe that the said officer
3 intends to retire from the government service or leave the Philippines, or remove, hide
4 or conceal the property therefrom.
5 The constructive distraint shall be effected by requiring the accountable officer
6 concerned or any other person having possession or control of the property to
7 accomplish a receipt in the form prescribed by the Commission, covering the property
8 distrained and obligating to preserve the same intact and unaltered and not to dispose
9 of it in any manner whatsoever without the express authority of the Commission.
10 In case the said accountable officer or other person having the possession and
11 control of the property sought to be placed under constructive distraint refuses or fails
12 to accomplish the receipt herein referred to, the representative of the Commission
13 effecting the constructive distraint shall proceed to prepare a list of such property;
14 and, in the presence of two witnesses, leave a copy thereof in the premises where the
15 property distrained is located. Thereafter, the said property shall be deemed to have
16 been placed under constructive distraint, in accordance with the rules and regulations
17 of the Commission.
18 The auditor shall submit a report to the Chairperson on any distraint effected
19 pursuant to this Section not later than five (5) calendar days from the date of the
20 distraint of the property.
21 Sec. 44. Appeals from Decisions of Auditors. - Any person aggrieved by the
22 decision of an auditor, may within one hundred eighty (180) calendar days from
23 receipt of a copy of the decision, appeal in writing to the Commission. The procedures
24 of appeal shall be governed by the internal rules concerning pleadings and practices
25 of the Commission, including the imposition of reasonable filing and legal research
26 fees.
27 Sec. 45. Period Rendering Decisions of the Commission. - The Commission
28 Proper shall decide any case brought before the Commission within sixty (60) days
29 from the date of its submission for decision or resolution. For this purpose of this
30 Section, a case or matter is deemed submitted for decision or resolution upon the
31 filing of the last pleading, brief, or memorandum required by the rules of the
32 Commission or by the Commission itself.

27
 1 CHAPTER II
2 Decision of the Commission

3 Sec. 46. Appeal from Decisions of the Commission. - Any decision, order or
4 ruling of the Commission may be brought to the Supreme Court on certiorari \n\\:\\\u
5 thirty (30) days from the receipt of a copy thereof. When the decision, order, or ruling
6 adversely affects the interest of any government agency, the remedy may be taken
7 by the proper head of that agency.
8 Sec. 47. Finality of Decisions of the Commission and Responsibility of Head of
9 the Agency. - A decision of the Commission upon any matter within its jurisdiction, if
10 not appealed as herein provided, shall be final and executory.
11 The General Counsel or any authorized official of the Commission shall issue an
12 order of execution for final and executory decisions, resolutions, or orders of the
13 Commission.
14 For final and executory decisions on money claims, the claimant shall initiate
15 the process of payment with the agency concerned pursuant to existing rules and
16 regulations.
17 Sec. 48. Enforcement of Decisions of the Auditor or Commission Proper. - The
18 head of agency shall ensure the immediate settlement of final and executory decisions
19 of the Commission. Unreasonable failure or refusal of the head of agency or concerned
20 official to implement the final and executory decision of the Commission shall render
21 the former administratively liable for neglect of duty.
22 Sec. 49. Re-audit ofAudited Transactions. - All transactions and accounts shall
23 be open for audit within ten (10) years after the date of transaction except for
24 intelligence and/or confidential transactions or accounts which may be authorized to
25 be re-audited by the Chairperson. The Commission shall issue the appropriate
26 guidelines for this purpose.

27 TITLE III

28 CHAPTER I
29 Basic Policies and Standards

28
 1 Sec. 50. Government Auditing. - Government auditing shall cover financial,
2 compliance and performance audits, and shall be performed in accordance with the
3 prevailing International Standards for the Supreme Auditing Institutions (ISSAIs) for
4 the purpose of assessing whether the financial information, transactions, programs,
5 operations, accounts, and reports of any government agency are in accordance with
6 the applicable international accounting framework.
7 Sec. 51. Principies of Government Auditing. - The auditor shall be guided by
8 the following general principles as prescribed under international standards related to
9 the audit process:
10 (a) Comply with the relevant ethical principles of integrity, independence
11 and objectivity, competence, professional behavior, and confidentiality
12 and transparency;
13 (b) Maintain appropriate professional behavior by applying professional
14 skepticism, professional judgment, and due care throughout the audit;
15 (c) Perform the audit in accordance with professional standards on quality
16 control;
17 (d) Possess collectively the knowledge, skills, expertise, and ability and
18 experience to exercise professional judgment necessary to successfully
19 complete the audit;
20 (e) Manage the risks of providing a report that is inappropriate in the
21 circumstances of the audit;
22 (f) Consider materiality throughout the audit process, in relation to
23 stakeholder concerns, publicinterest, regulatoryrequirements and
24 consequences for society;
25 (g) Prepare audit documentation that is sufficiently detailed to provide a
26 clear understanding of theworkperformed, evidence obtained, and
27 conclusions reached; and
28 (h) Establish effective communication throughout the audit process.
29 CHAPTER II
30 Receipts and Disposition of Funds and Properties

31 Sec. 52. Accounting for Moneys and Property Received by Pubiic Officials. - All
32 moneys and properties officially received by a public officer in any capacity and in

29
 1 connection with his or her office, must be accounted for as government funds and
2 property, except as may otherwise be specifically provided by iaw or competent
3 authority. The recognition of such money and property in the books of accounts of the
4 agency concerned shall be in accordance with pertinent laws, policies, rules and
5 regulations, and appiicabie financial reporting framework.
6 Sec. 53. Designation of Coiiecting or Disbursing Officers for Government
7 Agencies. - The head of agency may designate such number of collecting and
8 disbursing officers or agents as may be deemed necessary. They shall render reports
9 of their coliections and disbursements pursuant to the regulations of the Commission,
10 to be submitted promptly to the auditor concerned who shall conduct the necessary
11 examination and audit.
12 Sec. 54. Time and Mode of Rendering Account - In the absence of specific
13 provision of law, all accountable officers, through the agency accountants, shall render
14 their accounts, submit their vouchers, and make deposits of money they have collected
15 or held at such time and manner as prescribed in the ruies and regulations of the
16 Commission. The auditor concerned shall then conduct the necessary examination and
17 audit thereof.
18 Sec. 55. Accruai of Income or Revenues to Unappropriated Surplus of the
19 General Fund. - All income or revenues accruing to the agencies by virtue of the
20 provisions of law, orders and regulations shail be deposited in the National Treasury
21 or in any duly authorized government depository and shall accrue to the
22 unappropriated surplus of the General Fund of the government, unless otherwise
23 provided by iaw.
24 Income or revenues from business-type activities and revolving funds of
25 government agencies may be separately recorded and disbursed in accordance with
26 such rules and regulations as may be determined by the Permanent Committee
27 created by law, composed of the Secretary of Finance as Chairperson, Secretary of
28 Budget and Management, and Chairperson of the Commission, as members.
29 Sec. 56. Special, Fiduciary and Trust Funds. - Receipts shall only be recorded
30 as income of Special, Fiduciary or Trust Funds or Funds other than General Fund when
31 the same is duly authorized by law and performed in accordance with the rules and
32 regulations issued by the Permanent Committee.

30
 1 Revenues collected from particular taxes, levy and royalties for special purpose
2 shall be treated as a special fund or Special Account in the General Fund and shall be
3 paid out only for such purpose: Provided, That, the Permanent Committee may
4 recommend for approval of the President the reversion and closure of the Special
5 Account in the General Fund, Fiduciary or Trust Funds on any of the following grounds:
6 (a) The purpose for which a special fund was created has been fulfilled,
7 terminated or abandoned;
8 (b) The terms have expired or no longer necessary for attainment of the
9 purpose for which said funds were established;
10 (c) The account remained dormant for unreasonable length of time;
11 (d)The funds in the account are needed by the Government in times of
12 emergency; or
13 (e) The funds in the account are being used in violation of the rules and
14 regulations issued by the Permanent Committee.
15 Sec. 57. Receipts and Revenues ofLocai Government Units. - All receipts and
16 income accruing to the LGUs shall be deposited in their account maintained in the
17 authorized government depository bank or private bank with the prior approval of the
18 Department of Finance (DOF).
19 Sec. 58. Receipts and Revenues of GOCCs. - All receipts and income accruing
20 to GOCCs shall be deposited in their account maintained in the authorized government
21 depository bank, unless otherwise specifically provided by law or agreements.
22 Sec. 59. Coiiections by the Government - No payment of any nature shall be
23 received by a collecting officer without immediately issuing an official receipt in
24 acknowledgment thereof. The receipt may be in the form of postage, internal revenue
25 or documentary stamps or such other digital forms as the law or the Commission may
26 authorize: Provided, That, in no instance shall temporary or provisional receipts be
27 issued to acknowledge the receipt of public funds.
28 Where digital or electronic devices are used to acknowledge cash receipt, an
29 electronic official receipt (eOR) shall be issued and the electronic copies of the pieces
30 of evidence of the e-collection through Self-Collect and Credit or Collect-Aggregate-
31 Remit or other modes of electronic collection allowed by the rules of the COA. Such
32 eORs shall be kept in electronic archives, and shall be subject to inspection and

31
 1 verification by the Commission, in accordance with its prescribed guidelines on the
2 use of eORs to acknowledge collection of income and other receipts of government.
3 The eORs shall be acceptable provided the document maintains its integrity
4 and reliability and can be authenticated so as to be usable for subsequent reference:
5 Provided, That, the electronic document has remained complete and unaltered, apart
6 from the addition of any endorsement and any authorized change, or any change
7 which arises in the normal course of communication, storage and display; and that
8 the electronic document is reliable for the purpose for which it was generated and for
9 all relevant circumstances.
10 Collections in the form of checks in favor of the government shall be governed
11 by the rules of the Commission.
12 In no instance shall money in the hands of the collecting officer be utilized for
13 whatever purpose but should be deposited intact with an authorized government
14 depository bank.
15 Sec. 60. Payment in Settlement - Electronic payment through TDL, credit card,
16 DEP such as ADA and other modes may be used to settle all obligations of the
17 government in accordance with the guidelines of the Commission and other Public
18 Financial Management agencies of the government.
19 Electronic payment to a person not duly authorized to receive such payment
20 shall subject the accountable officer concerned to administrative/civil sanctions or
21 criminal prosecution, as may be warranted.
22 In instances when checks are drawn against the checking account of the
23 government agencies maintained with any government depository in payment of an
24 obligation:
25 (a) The check shall be made payable directly to the creditor to whom the
26 money is due, or to the disbursing officer or employee for an official
27 disbursement;
28 (b) Checks drawn in payment of any indebtedness shall likewise be accepted
29 by the officer concerned, provided it shall be made payable to the entity
30 or the authorized official of the payee; and
31 (c) When a check drawn in favor of the government is not accepted by the
32 drawee bank for any reason, the drawer shall continue to be liable for

32
 1 the sum due and all penalties resulting from delayed payment. Where
2 the reasons for non-acceptance by the drawee bank are insufficiency of
3 funds and/or closed accounts, the drawer shall be criminally liable
4 therefor.
5 Sec. 61. Deposit of Money in the Treasury or Authorized Government
6 Depository Bank. - Public officers authorized to receive and collect moneys arising
7 from taxes, revenues, or receipts of any kind shall remit or deposit the full amount
8 received and collected to the account of the National Treasury or in the agencies
9 account maintained in the authorized government depository bank not later than the
10 following banking day, except when it is impractical to do so due to distance or when
11 and the amount to be deposited is minimal.
12 Fifty percent (50%) share on proceeds from the community tax certificates
13 collected by duly deputized barangay treasurers shall be automatically retained and
14 deposited intact in the authorized depository banks of the barangay where the tax is
15 collected pursuant to the Republic Act No. 7160, as amended, otherwise known as the
16 "Local Government Code of 1991."
17 No collections shall be used for the purpose of disbursements except when
18 authorized by law or regulation.
19 Sec. 62. Acknowiedgment of Receipt of Money by Government Depositories. -
20 All authorized government depository banks shall acknowledge receipt of all money
21 received for the account of the National Treasurer or the agency concerned. The
22 acknowledgment shall bear the date of actual deposit and indicate from whom and on
23 what account it was received. Such moneys received shall be governed by the
24 Treasury Single Account System established pursuant to law.
25 Sec. 63. Access to Bank Statements for Audit Purposes. - The authorized
26 agency official shall regularly furnish the monthly bank statements of the agency to
27 the auditor. In the event that the agency fails or refuses to comply with this
28 requirement, the auditor shall be authorized to directly request such bank statements
29 from the government depository bank concerned. In such case, the bank shall
30 promptly provide the requested statements, and shall waive any pertinent bank fee
31 that may be imposed on such request.

33
 1 Sec. 64. Shipment of Government Money or Property by a Carrier; Notation of
2 Evidence of Loss. - When government money or property is transported from one
3 place to another by a carrier, it shall be the duty of the consignee or duly authorized
4 representative to make notation or notations on the bill of lading or receipt on any
5 evidence of loss, shortage, or damage.
6 Sec. 65. Credit for Loss Occurring in Transit or Due to Fire, Theft, Robbery or
7 Force Majeure. - When a loss of government funds, property, documents evidencing
8 financial transactions, or records of accountabilities occurs while they are in transit or
9 loss is caused by fire, theft, robbery or force majeure, the officer or employee
10 accountable therefor or having custody thereof shall Immediately notify the auditor
11 concerned and, within thirty (30) days from the occurrence of loss, shall file an
12 application for relief, together with the required supporting evidence. When
13 warranted, credit for the loss shall be allowed. An officer or employee who fails or
14 refuses to comply with this requirement shall not be relieved of liability or allowed
15 credit for any loss thereof. The procedures on application for relief shall be governed
16 by the rules and regulations of the Commission.
17 Sec. 66. Disposai of Government Property. - When property of the government
18 becomes unserviceable or is no longer needed, it may be disposed of in the following
19 manner, following the guidelines issued by the Commission:
20 (a) Transfer of property between government agencies;
21 (b) Destruction or sale of unserviceable property;
22 (c) Sale through public auction of unserviceable property;
23 (d) Sale through public auction of government property that is no longer
24 needed; and
25 (e) Other modes as may thereafter be approved and prescribed in the
26 guidelines issued by the Commission, or by the joint guidelines issued
27 by the Commission and the DBM.
28 Sec. 67. Disposai of Reai Property. -The disposal of real property through sale
29 shall require prior approval of the Commission: Provided, however, That government
30 agencies specifically authorized by law or rules to dispose real properties without need
31 of prior approval of the Commission may proceed with such disposal.

34
 1 Sec. 68. Disposal of Goods and Properties Seized or Confiscated by Law
2 Enforcement Agencies. - The destruction or disposal of goods and properties seized
3 or confiscated by law enforcement agencies and presented as evidence in cases before
4 the courts shall be carried out by such agencies in accordance with their respective
5 rules and regulations.
6 Sec. 69. Funds or Property Held by Deceased, Incapacitated or Absconding
7 Accountable Officer. - When an officer accountable for government funds or property
8 dies, becomes incapacitated, or absconds in the performance of duties, the head of
9 the agency shall designate a custodian to take charge of the funds or property until
10 the appointment of a qualified successor. The head of the agency may appoint a
11 committee to conduct an inventory of the cash and property for which the officer was
12 accountable and to determine the responsibility for any shortage therein. A duly
13 certified copy of the inventory and the report of the committee shall be filed with the
14 auditor concerned: Provided, That the findings of the committee shall not be
15 conclusive until the completion of an audit thereon. The head of the agency, whenever
16 necessary, shall be responsible for filing appropriate case and securing thereof a "hold
17 departure order" from the court to prevent the absconding officer from leaving the
18 country.
19 If the deceased, incapacitated, or absconding officer is accountable for funds
20 or property of an LGU, the acting custodian and committee shall be designated by the
21 local chief executive, furnishing notice to the Secretary of the Finance or the
22 authorized appointing official as prescribed under the Local Government Code.
23 Sec. 70. Disposal of Foreclosed Assets or Collaterals Acquired in the Regular
24 Course of Business by GOCCs. - Notwithstanding their respective charters, foreclosed
25 assets or collaterals acquired in the regular course of business by GOCCs shall be sold
26 through public bidding following the appraisal thereof by an independent appraiser.
27 Such sale shall be under the supervision of the proper committee on award or similar
28 body of the GOCC. Notice of such sale shall be published for not less than two (2)
29 consecutive days in any national newspaper of general circulation.
30 In the event that the public bidding fails, the property may be sold at a
31 negotiated sale at such price as may be fixed by the same committee subject to the
32 immediate audit of the auditor concerned in accordance with the regulations of the

35
 1 Commission. If the property remains unsold for at least one (1) year, this will be
2 subject to reappraisal and offered again for sale through public bidding.
3 Government property may be disposed of as payment of dividend, after
4 appraisal thereof by an independent appraiser and review by the Commission, subject
5 to the approval of the DOF.
6 Sec. 71. Final Report of Accountable Officers. - An accountable officer, shall
7 after one month upon ceasing to act in official capacity, shall submit to the auditor of
8 the agency concerned a report of accountability. Upon receipt of the report, the
9 auditor shall conduct a cash examination on the accountability of such accountable
10 officer.
11 Any remaining balance on cash accountability shall be deposited immediately
12 in the treasury.
13 Sec. 72. Notice of Disallowances, Charges and Suspensions Issued by the
14 Auditor to Accountable Officer. - Whenever there is a finding of pecuniary loss or
15 damage on the part of the government, the auditor concerned shall issue a written
16 notice of suspension, disallowance or charge through the head of the agency to each
17 accountable officer, whose accounts have been audited in whole or in part.
18 Within ninety (90) days, after the receipt of the notice of audit suspension,
19 failure to submit satisfactory explanation, justification, or evidence to settle or
20 disprove initial findings of an auditor with regard to irregularity or illegality of the
21 covered transaction shall render the audit suspension into disallowance.
22 Any person aggrieved by the decision of the auditor pertaining to disallowances
23 or charges may appeal the case in accordance with the rules and regulations on
24 settlement of accounts of the Commission.

25 TITLE IV
26 CHAPTER I
27 Government Accounting

28 Sec. 73. Appropriation Before Entering into a Contract - No contract involving

29 the expenditure of public funds shall be entered into unless there is an appropriation
30 or approved budget therefor, the unexpended balance of which, free of other
31 obligations, shall be sufficient to cover the proposed expenditure.

36
 1 Sec. 74. Certificate Showing Appropriation to Meet Contract - Except in the
2 case of a contract for personnel services or for supplies for immediate consumption,
3 no contract involving the expenditure of public funds by any government agency shall
4 be entered into or authorized without a certification issued by the proper budget officer
5 of the agency concerned that funds have been duly appropriated for the purpose and
6 that the amount necessary to cover the proposed contract for the fiscal year is
7 available for expenditure on account thereof. The certificate signed by the proper
8 budget officer shall be attached to and become an integral part of the contract, and
9 the sum so certified shall not thereafter be available for expenditure for any other
10 purpose until the obligation of the government agency concerned under the contract
11 is fully extinguished.
12 The funding guidelines of the DBM shall be followed for multi-year contracts.
13 Sec. 75. Void Contract and Liabiiity of Officer. - Any contract entered into
14 without satisfying the requirements of Sections 75 and 76 shall be void ab initio dx\6
15 shall not be binding to the government. The officer of any government agency
16 responsible for the said contract shall be personally liable to the government or other
17 contracting party as if the transaction had been entered into between private parties.
18 Sec. 76. Prohibition Against Advance Payment on Government Contracts. -
19 Except when authorized by law or its implementing rules and regulations, the
20 government shall not be obliged to make an advance payment on contracts for:
21 (a) Services not yet rendered;
22 (b) Supplies and materials not yet delivered, inspected, and accepted,
23 except in lease of venues and catering services as provided for in the
24 procurement law and its implementing rules and regulations; and
25 (c) Infrastructure projects not yet implemented or completed, inspected,
26 and accepted, other than for mobilization as provided for in the
27 procurement law and its implementing rules and regulations.
28 Sec. 77. Limitations on Cash Advance. - The following shall be the limitations
29 on cash advance:
30 (a) No cash advance shall be given unless for a legally authorized specific
31 purpose;

37
 1 (b)Cash advances shall be reported on and liquidated as soon as the
2 purpose for which it was given has been served;
3 (c) No additional cash advance shall be granted or allowed unless the
4 previous cash advance has been settled/liquidated, or after the conduct
5 of a proper accounting thereof;
6 (d) Except for cash advance for official travel, no officer or employee shall
7 be granted cash advance unless such officer or employee is properly
8 bonded in accordance with existing laws or regulations. The amount of
9 cash advance which may be granted shall not exceed the maximum cash
10 accountability covered by bond of an officer or employee;
11 (e)Only permanent appointed officials shall be designated as disbursing
12 officers;
13 (f) Only duly appointed or designated disbursing officers may perform
14 disbursing functions. Officers and employees who are given cash
15 advances for official travel need not be designated as disbursing officers;
16 (g) Transfer of cash advance from one accountable officer to another shall
17 not be allowed;
18 (h) The cash advance shall be used solely for specific legal purpose for which
19 it was granted, and under no circumstance shall it be used for
20 encashment of checks or for liquidation of a previous cash advance;
21 (i) The failure of the concerned official or employee to liquidate the cash
22 advance after due demand by an authorized officer is a prima facie
23 presumption of malversation despite the absence of a finding of actual
24 damage to the government;
25 0) The transfer of cash advance by a disbursing officer to another does not
26 constitute an expenditure for which the disbursing officer may claim
27 credit in accounts, but the responsibility of such disbursing officer
28 continues to attach until the amount has been fully accounted for; or
29 (k) No cash advance shall be granted for the procurement or implementation
30 of infrastructure projects.
31 Any violation of the foregoing provisions shall constitute a valid cause for the
32 withholding of the salary of the accountable officer without prejudice to the imposition

38
 1 of administrative/civil sanction and criminal prosecution of both the authorizing and
2 the accountable officials, as may be warranted.
3 Sec. 78. Transfer of Funds Between Public Officers. - Transfer of government
4 funds from one officer to another shall, except as allowed by law or regulation, be
5 made only upon prior direction or authorization of the head of the agency following
6 the accountability and accounting guidelines issued by the Commission.
7 Sec. 79. Limitations on Fund Transfers Between Government Agencies and
8 Instrumentalities. - The following shall be the limitations on transfer of funds from
9 one government agency to another:
10 (a) No fund transfers shall be given except for legally authorized specific
11 purpose as embodied in a Memorandum of Agreement (MOA) executed
12 between the source and implementing agencies;
13 (b)The fund transfers shall be reported on and/or liquidated by the
14 implementing agencies as soon as the purpose for which they have been
15 granted have been served, but not later than the end of the year;
16 (c) No additional or new fund transfers shall be made unless the previous
17 transfers have been fully liquidated as certified by the head of agency
18 concerned;
19 (d) The heads of the source and implementing agencies shall be responsible
20 for compliance with the foregoing requirements.
21 Failure on the part of the foregoing officials/persons to comply with the above-
22 mentioned responsibilities shall constitute a ground for administrative, civil or criminal
23 action, as evidence may warrant.
24 Sec. 80. Limitations on Fund Transfers from Any Government Agency to a
25 Private Organization or Entity. - The following shall be the limitations on transfer of
26 funds from any government agency to any private organization or entity;
27 (a) No fund transfer from a government agency shall be given to a private
28 organization or entity unless authorized by law for a specific purpose
29 which should be embodied in a MOA executed between the source
30 government agency and the implementing private organization or
31 entity;

39
 1 (b) Only duly registered, accredited, and reputable private organizations or
2 entities shall be granted fund transfers;
3 (c) Fund transfers shall be reported on and liquidated by the impiementing
4 private organizations or entities to the source government agency as
5 soon as the project has been compieted or not later than sixty (60) days
6 after project completion. If the project implementation will go beyond
7 December 31st of the year, a partial liquidation report as of December
8 31st of that year shali be submitted to the source government agency
9 not later than January 15 of the ensuing year;
10 (d) No additional or new fund transfers shall be made unless the previous
11 fund transfers have been fully liquidated as certified by the head of the
12 agency; or
13 (e) The heads of the source government agency and implementing private
14 organizations or entities shall be responsible for compliance with the
15 foregoing requirements.
16 Failure on the part any public officer, employee, or any person to comply with
17 the above-mentioned responsibility shall constitute a ground for administrative or civil
18 action or criminal prosecution.
19 Sec. 81. Payment of Rewards. - When a reward becomes payable by authority
20 of law for information given relative to any offense or any illegal activity, or for any
21 act done in connection with the apprehension of the offender, the reward shall be paid
22 as prescribed by law or regulations. Such payment of reward shall be subject to audit
23 in accordance with the regulations of the Commission.
24 Sec. 82. Loss Through Electronic Collection or Payment - Govern ment agencies
25 utilizing e-Collection and/or payment systems shall formulate internal policy guidelines
26 to implement reasonable and appropriate organizational, technical, and personnel
27 controls to prevent loss of funds caused by internet connectivity issues, errors in
28 payment instructions, online banking fraud, security breach, or other similar events.
29 Any loss due to the foregoing shall be the liability of the erring party.
30 Sec. 83. Replacement of Lost, Stolen or Destroyed Checks. - When payment is
31 made through check and the same was lost, stolen, or destroyed, the issuing officer
32 may issue a repiacement check as payment for the same obligation. Replacement shall

40
 1 be made upon the execution of an affidavit of loss and submission of stop payment
2 order to the drawee bank. If destroyed, presentation of the destroyed check to the
3 issuing officer is also required. The chief accountant of the agency shall be responsible
4 for seeing to it that no double payment is made as a result thereof.
5 Sec. 84. Reversion of Unpaid Trade Payabies Aged More Than Two (2) Years.
6 - The head of NGAs, LGUs and GOCCs classified as non-commercial public sector
7 entities shall cause the reversion of trade payables aged more than two (2) years to
8 the Unappropriated Surplus or Accumulated Surplus/(Deficit).
9 The head of GOCCs classified as commercial public sector entity shall revert
10 any unpaid trade payables aged more than two (2) years to retained earnings.
11 In both instances the reversion shall only be made when there is no actual
12 claim or is not supported by a valid contract.

13 CHAPTER II
14 Accountability and Responsibility for Government Funds and Property

15 Sec. 85. Accountable Officers; Bond Requirement - Every officer of any

16 government agency whose duties permit or require the possession or custody of
17 government funds or property shall be accountable therefor and for the safekeeping
18 thereof in conformity with law. Other government officers who, though not
19 accountable by the nature of their duties, may likewise be similarly held accountable
20 for government funds or property through their participation in the use or application
21 thereof.
22 Every accountable officer shall be properly bonded in accordance with law and
23 the pertinent rules or regulations.
24 Sec. 86. Primary Responsibility and Fiscal Accountability of the Head of the
25 Agency. - The head of any agency who is primarily responsible for all government
26 funds and property pertaining to the agency, shall ensure that:
27 (a) The required financial and other reports and statements are submitted
28 by the concerned agency officials in such form and within the period
29 prescribed by the Commission;
30 (b)The settlement of disallowances and charges is made within the
31 prescribed period;

41
 1 (c) The requirements of transactions suspended in audit are complied with;
2 and
3 (d) Appropriate actions are taken on the deficiencies noted in the course of
4 audit.
5 Persons entrusted with the possession or custody of the funds or property
6 under the head of the agency shall be accountable therefor and immediately
7 responsible to the head of the agency, without prejudice to the liability of either party
8 to the government.
9 Sec. 87. General Liability for Unlawful Expenditures. - Expenditures of
10 government funds or uses of government property in violation of law or regulations
11 shall be the personal liability of the official or employee found to be directly responsible
12 therefor.
13 Sec. 88. Degree of Supervision over Accountable Officers. - The head of any
14 government agency shall exercise due diligence in supervising accountable officers
15 under the control of such head of the agency to prevent the incurrence of loss of
16 government funds or property, otherwise the head of the agency shall be jointly and
17 solidarily liable with the person primarily accountable therefor.
18 The treasurer of the LGU shall likewise exercise the same degree of supervision
19 over accountable officers under the oversight of the treasurer, otherwise the treasurer
20 shall be jointly and solidarily liable with them for the loss of government funds or
21 property under their stewardship.
22 Sec. 89. Measure of Liability of Accountable Officers. - Every officer
23 accountable for government property shall be liable for its money value in case of
24 improper or unauthorized use or misapplication thereof by such accountable officer or
25 by any person for whose acts such accountable officer may be responsible for.
26 Accountable officer shall likewise be liable for all losses, damages, or deterioration
27 occasioned by negligence in the keeping or use of the property regardless of whether
28 or not it is in actual custody of such accountable officer.
29 Every accountable officer for government funds shall be liable for all losses
30 resulting from the unlawful deposit, use, or application thereof and for all losses
31 attributable to negligence in the keeping of the funds.

42
 1 Sec. 90. Liability for Acts Done by Direction of Superior Officer. - No
2 accountable officer shall be relieved from liability by reason of acting under the
3 direction of a superior officer in paying out, applying, or disposing of the funds or
4 property for which such accountable officer is accountable, unless prior to such act,
5 the accountable officer notified the superior officer in writing that the expenditure is
6 illegal, irregular, excessive, extravagant, unnecessary, and unconscionable. The officer
7 directing any illegal payment or disposition of the funds or property and the
8 accountable officer who fails to serve the required notice shall be jointly and solidarily
9 liable.
10 Sec. 91. Prohibition Against Pecuniary Interest - No head of agency, members
11 of the board or commission, accountable officer or public official shall have direct or
12 indirect pecuniary interest in any contract or transaction of the agency when such
13 public officer is appointed, or in any office where the public officer has influence.
14 This prohibition shall likewise apply to the accountable officer's immediate
15 family and relatives up to the third (3rd) civil degree of consanguinity or affinity.

16 TITLE V
17 CHAPTER I
18 Basic Principles

19 Sec. 92. Government Accounting. - Government accounting shall encompass

20 the processes of analyzing, recording, classifying, summarizing, and communicating
21 all transactions involving the receipt and disposition of government funds and property
22 in accordance with the applicable international accounting framework. International
23 Public Sector Accounting Standards or Philippine Financial Reporting Standards, as the
24 case may be, and interpreting the results thereof.
25 Sec. 93. Recognition of Financial Transactions. - Each government agency shall
26 recognize its financial transactions and operations in accordance with pertinent laws,
27 policies, rules and regulations, and applicable financial reporting framework.
28 Sec. 94. Accounting Policies, Rules and Regulations. - The Commission shall
29 promulgate accounting policies, rules, and regulations in accordance with the
30 applicable international accounting framework, which shall be updated from time to
31 time as the Commission may deem proper.

43
 1 CHAPTER II
2 Accounting Reports

3 Sec. 95. Financial Reports and Statements. - The financial reports prepared by
4 the agencies shall comply with the applicable financial reporting framework to the
5 government agency.
6 The financial statements shall be based on official accounting records and
7 registries kept in accordance with pertinent laws, policies, rules and regulations of the
8 Commission, and the applicable financial reporting framework to the government
9 agency.
10 Sec. 96. Submission of Reports. - The Commission shall require the head of
11 the agencies, chief accountants, budget officers, cashiers, disbursing/collecting
12 officers, administrative or personnel officers, and other responsible officials of the
13 various agencies to submit financial statements, financial accountability reports,
14 physical inventory reports, current staffing pattern, and such other reports as may be
15 necessary for the exercise of its functions.
16 In case of failure or refusal on the part of the officials concerned to submit the
17 documents and reports mentioned herein within the prescribed period, the head of
18 the agency shall cause the suspension of the payment of their respected salaries until
19 they complied with the requirements of the Commission, without prejudice to any
20 disciplinary action that may be instituted against such official or employee in
21 accordance with the applicable rules on administrative cases issued by the Civil Service
22 Commission.
23 Failure or refusal on the part of the head of the government agency to
24 implement, without justifiable cause, the sanctions provided in the immediately
25 preceding paragraph shall constitute as a ground for this Commission to file the
26 appropriate administrative charge against the erring official concerned.

27 CHAPTER III
28 Internal Controls

29 Sec. 97. Internai ControiSystem. - Internal control shall comprise the integral
30 process effected by those charged with governance, agencies' management and

44
 1 personnel designed to provide reasonable assurance regarding the achievement of
2 objectives reiating to operations, compliance, reporting and safeguarding of assets.
3 It shail be the direct responsibility of the agency head to instaii, implement,
4 and monitor a sound system of internal control.

5 TITLE VI
6 Final Provisions

7 Sec. 98. Duty to Respect the Independence of the Commission. - It shali be

8 the duty of every person to respect, protect and preserve the independence of the
9 Commission.
10 Sec. 99. Administrative Disciplinary Action. - Any unjustified faiiure or refusal
11 by the public officer concerned to comply with any requirement imposed in this Act
12 shail constitute neglect of duty or grave misconduct, as the case may be, and shail be
13 a ground for this Commission to file appropriate administrative disciplinary action
14 against the said pubiic officer who, upon being found guilty thereof after hearing, shaii
15 be meted out such penalty commensurate with the degree of guilt in accordance with
16 the civil service law, without prejudice to criminai prosecution whenever the evidence
17 warrants.
18 The auditor shall report any violation of the preceding paragraph to the Director
19 of the Commission concerned for referral of the case to the 0MB, or other government
20 disciplining authorities.
21 Sec. 100. Pena! Provisions. - Any person who shaii commit any of the following
22 acts shall, upon conviction, suffer imprisonment of not less than six (6) years and one
23 day to twelve (12) years or a fine of not less than One hundred thousand pesos
24 (P100,000.00) but not more than One million Two hundred thousand pesos
25 (PI,200,000.00), or both at the discretion of the court:
26 (a) Refusing or neglecting to render or settle an account as required by law
27 or regulation after demand by the Commission or its authorized
28 representatives;
29 (b) Denying access to databases or information technology systems, or
30 failing to produce documents, records, or papers under custody within

45
 1 fifteen (15) days after demand by the Commission or its authorized
2 representatives in connection with the conduct of audit;
3 (c) Destroying or concealing documents, records, or papers which are
4 officially entrusted to such person, pertaining to the collection, receipt,
5 expenditure, or disbursement of public funds and utilization or disposal
6 of government property in connection with the conduct of audit;
7 (d) Failing or refusing to submit documents required in audit without
8 justifiable cause shall constitute a ground for disallowance of the claim
9 under examination, assessment of additional levy or government share,
10 or withholding or withdrawal of government funding or donations
11 through the government, as well as for administrative or penal
12 sanctions; or
13 (e) Committing other similar acts that impede, frustrate, or delay the
14 efficient conduct of audit.
15 If a violation of this Act constitutes an offense or crime punished under Act No.
16 3815, otherwise known as the Revised Penal Code, as amended, or other special laws
17 which impose a higher penalty, the latter shall prevail.
18 If the offender is a corporation, partnership or association or other juridical
19 entity, the penalty may, in the discretion of the court, be imposed upon such juridical
20 entity and upon the officer or officers of the corporation, partnership, association, or
21 entity responsible for the violation.
22 Sec. 101. Implementing Rules and Regulations. - The Commission Proper shall
23 promulgate the necessary rules and regulations for the effective implementation of
24 this Act.
25 Sec. 102. Appropriations. -The amount necessary for the implementation of
26 this Act shall be included in the annual GAA.
27 The COA is hereby authorized to collect the following:
28 (a) one-half (1/2) of one percent (1%) from the annual national tax
29 collections not otherwise accruing to special funds or special accounts in
30 the general fund of the national government, upon authority from the
31 Secretary of Finance, shall be deducted from such collections and shall

46
 1 be remitted to the National Treasury to cover the cost of auditing
2 services rendered to LGUs;
3 (b) a fixed amount equivalent to the annual cost of the audit services in the
4 GOCCs; and
5 (c) from other sources such as, but not limited to, collections of audit fees
6 from water districts and special audits, consultancy fees and retained
7 income.
8 All GOCCs, including their subsidiaries, and self-governing boards shall
9 appropriate in their respective budgets and remit not later than the end of the second
10 quarter of each year an amount equivalent to the appropriation for personnel services
11 of the audit team to the National Treasury.
12 The amount for the MOOE and capital outlay to support the annual or the actual
13 audit operations of the audit teams assigned to NGAs, LGUs and GOCCs which form
14 part of the approved budget of the audited agency for auditing services under the
15 GAA, appropriations ordinance or annual operating budget, respectively, shall be
16 remitted directly to the COA Central Office.
17 All internally generated income of the Commission from other sources shall
18 accrue to its retained income fund to be exclusively utilized for the operation and
19 performance of its mandate.
20 Sec. 103. Franking Privilege. - All official mail matters and telegrams of the COA
21 addressed for delivery within the Philippines shall be received, transmitted, and
22 delivered free of charge: Provided, That mail matters addressed to private persons or
23 non-government offices shall not exceed one hundred and twenty (120) grams.
24 Sec. 104. Repealing Clause. - Presidential Decree No. 1445, otherwise known
25 as the Government Auditing Code of the Philippines; Subtitle B, Title I, Book V, of
26 Executive Order No. 292, or the Administrative Code of 1987; and all other laws,
27 executive orders, proclamations, decrees, instructions, rules and regulations, or parts
28 thereof which are inconsistent or in conflict with any provision of this Act shall be
29 deemed amended, repealed or modified accordingly.
30 Sec. 105. Separability Ciause. - Should any provision of this Act or any part
31 thereof be declared invalid, the other provisions, insofar as they are separable from
32 the invalid provision, shall remain in force and effect.

47
1 Sec. 106. Effectivity. - This Act shall take effect fifteen (15) days following
2 completion of its publication in the Official Gazette or in any newspaper of general
3 circulation.
Approved,

48