Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
19TH CONGRESS 
Second Regular Session 
HOUSE BILL NO. 10591 
Introduced by Representative Michael L. Romero  
    EXPLANATORY NOTE 
The 1987 Constitution mandates the state to support a trustworthy, respected 
and independent audit institution that is an enabling partner of government in 
ensuring a better life for every Filipino through appropriate technology and 
research, with adequate financial, and other support services. 
Nurturing a growing government requires a mixture of boldness and 
prudence. And at a time when the early Philippine government was being 
zealously fleshed out by its American rulers emboldened by their newfound 
power, then President William McKinley ensured a healthy dose of prudence in 
these activities. 
As the nation celebrated its independence with the promulgation of the 
1935 Constitution, the institution also reached a milestone. The 1935 
Constitution expressly provided for a General Auditing Office, thereby elevating 
the audit institution to a constitutional body. Renamed as the General Auditing 
Office or GAO, it now embarked on a full Filipinization of the institution as a 
reflection of the government-wide transition to self-governance. For the first time, 
the institution was headed by a Filipino Auditor General in the person of the 
Hon. Jaime Hernandez. 
As a major stride towards the independence of the audit institution, the 
GAO was explicitly placed under the direction and control of an Auditor General 
to separate it as an organization from the Executive and other departments of 
the government. 
In 1972, the country was placed under Martial Law. Government 
experienced a major upheaval, and the GAO was not exempted. The GAO was 
July 16, 2024
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renamed the Commission on Audit (COA) and was granted broader powers 
under the new Constitution promulgated in 1973. Under this Constitution, COA 
was given a broader area of audit coverage by including the accounts of all 
subdivisions, agencies, instrumentalities of government and government-owned-
and-controlled corporations among those to be examined, audited and settled. 
As opposed to having an Auditor General single-handedly leading the GAO, 
the new Constitution provided for a three-man collegial Commission on Audit. 
This change aimed to strengthen the independence of the auditing office and 
improve the quality of its decisions, given the rationale that a three-man body 
was less susceptible to pressure than an office held by a single person. It worked 
as a built-in internal check within the Commission and encouraged opposing 
views to surface thereby resulting in earnest consultation and better 
deliberation. 
In the years that ensued, the Commission was a hub of activity. A 
landmark legislation on auditing, Presidential Decree 1445 or the 
Government Auditing Code, was promulgated in 1978. A Standard 
Government Chart of Accounts was likewise issued which greatly facilitated 
financial audit for computerization purposes. The Commission also implemented 
its comprehensive audit program focusing on the 3Es: economy, efficiency and 
effectiveness. Installation of this program represented a break from tradition that 
laid undue emphasis on compliance and voucher audit. And on top of all these, 
the Commission embarked on a massive reorganization and professionalization 
of its personnel. 
This era will also be remembered for the significant involvement of COA in 
international events such as initiating the establishment of the Asian 
Organization of Supreme Audit Institutions (ASOSAI), on to sponsorships of 
trainings for Asia’s auditors and culminating with the hosting of the XI 
International Congress of Supreme Audit Institutions (INCOSAI) in 1983. It 
was also during this time that a COA Chairman was first elected to the United 
Nations Board of Auditors. 
Years later, the world witnessed the 1986 EDSA Revolution. It was truly a 
historical event that highlighted the need for reforms in government as a whole. 
It provided everyone a chance for introspection and created an avenue towards 
change. As fate would have it, the COA again found itself working under a new 
government, under a new Constitution and with an even broader scope of 
authority. 
The 1987 Constitution maintained the independence of the Commission 
on Audit as the supreme auditing arm of the Philippine government. Moreover, 
the Constitution reiterated COA’s role as the sole official external auditor of 
government agencies as well as government-owned- and-controlled corporations 
(GOCCs). In other words, the previous practice of some GOCCs and other 


government agencies of hiring private accounting firms as a requirement of 
foreign funding institutions to act as their auditors for foreign-assisted projects 
was no longer allowed. 
Change, it seems, is the inescapable destiny of the Commission. But as 
history proves, whatever the nature of change brought about by national political 
events, the Commission manages to make it for the better. 
This House Bill seeks to ensure accountability for public resources, promote 
transparency, and help improve government operations, in partnership with 
stakeholders, for the benefit of the Filipino people. 
 
Thus, the early passage of this bill is earnestly requested.  
 
MICHAEL L. ROMERO Ph.D.    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
 
19TH CONGRESS 
Second Regular Session 
 
HOUSE BILL NO. 10591 
 
 
Introduced by Representative Michael L. Romero  
 
 
    AN ACT 
 PROVIDING FOR THE MODERNIZATION OF THE COMMISSION 
ON AUDIT (COA), TO ENSURE ACCOUNTABILITY FOR PUBLIC 
RESOURCES, PROMOTE TRANSPARENCY, APPROPRIATING 
FUNDS THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 
1. 
SHORT TITLE — This Act shall be known as the 
Commission on Audit (COA) modernization Act of 2024. 
SECTION 
2. 
DECLARATION OF POLICY — It is a declared policy of 
the state in conformity with the mandate of the Constitution, to promote a 
trustworthy, respected and independent audit institution that is an enabling 
partner of government in ensuring a better life for every Filipino. 
For these purposes, the state shall provide the mechanisms to improve 
public accountability by maximizing the use of all existing resources. 
recognizing in the process the government’s responsibility to instill these 
government resources transparency as having priority over its other functions. 


SECTION 3.   
Commission on Audit shall be composed of a Chairman and 
two Commissioners, who shall be natural-born citizens of the Philippines and, 
at the time of their appointment, at least thirty-five years of age, certified public 
accountants with not less than ten years of auditing experience, or members of 
the Philippine Bar who have been engaged in the practice of law for at least ten 
years, and must not have been candidates for any elective position in the 
elections immediately preceding their appointment. At no time shall all Members 
of the Commission belong to the same profession. 
SECTION 4.  
Chairman and the Commissioners shall be appointed by the 
President with the consent of the Commission on Appointments for a term of 
seven years without reappointment.  
of those first appointed, the Chairman shall hold office for seven years, one 
Commissioner for five years, and the other Commissioner for three years, 
without reappointment. Appointment to any vacancy shall be only for the 
unexpired portion of the term of the predecessor. In no case shall any Member 
be appointed or designated in a temporary or acting capacity. 
 
SECTION 5.  
POWERS AND FUNCTIONS - The Commission on Audit shall 
have the power, authority, and duty to examine, audit, and settle all accounts 
pertaining to the revenue and receipts of, and expenditures or uses of funds and 
property, owned or held in trust by, or pertaining to, the Government, or any of 
its subdivisions, agencies, or instrumentalities, including government-owned or 
controlled corporations with original charters, and on a post-audit basis:  
(a) constitutional bodies, commissions and offices that have 
been granted fiscal autonomy under this Constitution.  
(b) autonomous state colleges and universities.  
(c) other government-owned or controlled corporations and 
their subsidiaries; and  


(d) such non-governmental entities receiving subsidy or 
equity, directly or indirectly, from or through the Government, 
which are required by law or the granting institution to submit 
to such audit as a condition of subsidy or equity. However, 
where the internal control system of the audited agencies is 
inadequate, the Commission may adopt such measures, 
including temporary or special pre-audit, as are necessary 
and appropriate to correct the deficiencies. It shall keep the 
general accounts of the Government and, for such period as 
may be provided by law, preserve the vouchers and other 
supporting papers pertaining thereto. 
 
SECTION 6.  
SCOPE - the Commission shall have exclusive authority, 
subject to the limitations in this Act, to define the scope of its audit and 
examination, establish the techniques and methods required therefor, and 
promulgate accounting and auditing rules and regulations, including those for 
the prevention and disallowance of irregular, unnecessary, excessive, 
extravagant, or unconscionable expenditures, or uses of government funds and 
properties. 
SECTION 7.  
AUTHORITY - No law shall be passed exempting any entity of 
the Government or its subsidiary in any guise whatever, or any investment of 
public funds, from the jurisdiction of the Commission on Audit. 
SECTION 8.  
FINANCIAL STATUS - the Commission shall submit to the 
President and Congress, within the time fixed by law, an annual report covering 
the financial condition and operation of the Government, its subdivisions, 
agencies, and instrumentalities, including government-owned or controlled 
corporations, and non-governmental entities subject to its audit, and 
recommend measures necessary to improve their effectiveness and efficiency. It 
shall submit such other reports as may be required by law. 


SECTION 
9. 
MODERNIZATION FUNDING. – The amount of Two Billion 
Pesos (Php 2, 000,000,000.00) for the operation and administration of the 
Commission on Audit (COA) shall be chargeable against funds for the 
purpose and other sources recommended by the Department of Budget and 
Management (DBM).  
 
Thereafter, appropriations for the (COA), shall be included in the budget 
proposals under the annual General Appropriations Act (GAA) 
 
The Department of Budget and Management (DBM) shall rationalize the 
existing organizational structure and staffing pattern of the (COA) in 
accordance with the prevailing provisions and relevant compensation and 
position classification laws, rules and regulations. 
Thereafter, the amount needed for the continued implementation of the 
modernization program shall be included in the annual General Appropriations 
Act (GAA). 
SECTION 
10. 
Commission on Audit (COA) MODERNIZATION 
FUND – There is hereby created the (COA) Modernization Fund to be used 
exclusively for the (COA) Modernization Program. 
The (COA) Modernization Fund shall be administered by the Chairperson in 
accordance with existing government budgeting, accounting, and auditing rules 
and regulations. 
 
 
 


SECTION 11.  
MANDATES: 
a) Examine, audit and settle all accounts pertaining to the revenue 
and receipts of, and expenditures or uses of funds and property 
owned or held in trust by, or pertaining to, the government. 
b) Promulgate accounting and auditing rules and regulations 
including those for the prevention and disallowance of irregular, 
unnecessary, 
excessive, 
extravagant 
or 
unconscionable 
expenditures, or uses of government funds and properties. 
c) Submit annual reports to the President and the Congress on the 
financial condition and operation of the government. 
d) Recommend measures to improve the efficiency and effectiveness 
of government operations. 
e) Keep the general accounts of government and preserve the 
vouchers and supporting papers pertaining thereto. 
f) Decide any case brought before it within 60 days. 
g) Performs such other duties and functions as may be provided by 
law. 
 
SECTION 
12. 
PROGRESS REPORT – The Chairperson of the (COA) 
shall prepare an annual report on the status of the implementation of the 
Modernization Programs which shall be submitted, to the Office of the President. 
SECTION 
13. 
INCREASE OF PERSONNEL. – The (COA) shall 
maintain a sufficient staffing pattern.  
Hence, it is authorized to increase its manpower to meet such required 
and may continue to increase personnel per percentage rate increase of 
committed mandates annually or as the need arises. 
SECTION 
14. 
PERIOD OF IMPLEMENTATION – The modernization 
program under this Act shall be implemented for an initial period of three (3) 
years:  


Provided, that payments for multi-year contract obligations incurred 
under this Act may extend beyond this period:  
Provided, further, That the (COA) shall continue to develop, modernize and 
constantly update its operational capabilities to keep pace with best global 
practices. 
SECTION 
15. 
SUPERVISING AND ASSESSMENT CONCERNS. — the 
Office of the President and DBM shall provide the necessary technical and 
financial assistance to ensure effective operations and build-up. 
SECTION 
16. 
PRESERVATION of TRANSPARENCY - It is the duty 
of every citizen to preserve and conserve government transparency and all its 
resources. The retrieval and conservation of government transparency and its 
resources shall be vigorously pursued. 
SECTION 
17. 
TRANSITORY 
PROVISION – 
Existing 
industries, 
businesses and offices affected by the implementation of this Act shall be given 
six (6) months transitory period from the effectivity of the IRR or such other 
period as may be determined, to comply with the requirements of this Act. 
SECTION 18. 
PERIODIC REPORTS - The Chairperson of the (COA) 
shall submit periodic reports on its findings and make recommendations on 
actions to be taken by the Office of the President and other appropriate 
departments, in order to carry out the objectives and mandates of this Act. 
SECTION 
19. 
AUTOMATIC REVIEW - Every three (3) years after the 
effectivity of this Act, an independent review panel composed of experts to be 
appointed by the President of the Republic shall review the policies and 
implementation 
in 
the 
modernization 
program 
and 
shall 
make 
recommendations, based on its findings. 


SECTION 
20. 
PENAL CLAUSE. – Any person, whether natural or 
juridical, violating any section of this Act shall, upon conviction, therefore, be 
liable to a fine of not less than five hundred thousand pesos (P500,000.00) or 
imprisonment for a term not less than six (6) years, or both, at the discretion of 
the court for each and every violation.  
In case the violation is committed by a corporation or an association, the 
penalty shall devolve upon the president, director, or any other officer 
responsible for such violation. 
SECTION 
21. 
IMPLEMENTING RULES AND REGULATIONS. – The 
departments and agencies charged with carrying out the provisions of this Act 
shall, within sixty (60) days after the effectivity of this Act, formulate the 
necessary rules and regulations for its effective implementation. 
SECTION 
22. 
REPEALING CLAUSE. – All laws, decrees, executive 
orders, rules and regulations, or parts thereof inconsistent with the provisions 
of this Act are hereby repealed or modified accordingly. 
SECTION 
23. 
SEPARABILITY CLAUSE. – If, for any reason, any 
section or provision of this Act is held unconstitutional or invalid, the other 
sections or provisions hereof shall not be affected thereby. 
SECTION 
24. 
EFFECTIVITY CLAUSE. – This Act shall take effect 
after fifteen (15) days from its publication in the Official Gazette or in at least two 
(2) national newspapers of general circulation whichever comes earlier. 
 
Approved,