FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
.5 E NAT E 
S.B. 1049 
Introduced by Senator Manny Villar 
EXPLANATORY NOTE 
1 O.U. -e P Ji :01 
The challenge of good governance has never been more urgent during these 
times when massive corruption in the government remains unresolved. While the fight 
against corruption involves all of us, auditors playa significant part in anti-corruption 
efforts by ensuring that financial reports fOllow the generally accepted guidelines and 
are accurate. 
Auditors are instrumental in protecting and preventing intentional behavior and 
actions that undermine the will of the people, waste of public funds and resources and 
discourage accountability and transparency. They have to demonstrate that they are 
honest and prudent stewards of their respective institutions. 
The sensitive nature of the work of slate auditors makes them vulnerable to 
outside forces that challenge their principles. If not well-compensated, they are likely to 
commit fraud or indiscretions to accommodate the requests of unscrupulous and self-
serving individuals in exchange for a·sum of money. 
One way to protect our auditors against this system is by providing them with 
monetary incentives equal to the worth of their specialized profession, which this bill 
seeks to promote. More importantly,.'it gives them a greater sense of self, knowing that 
the government fully recognizes the value of their work. 
Accurate auditing reports lend credibility and foster public trust, which create an 
overall high level of auditing standa.rds. We c~m only do this if we rally behind our 
auditors and give what is due them. 
In view of the above, the passage of this bill is earnestly sought. 


FIFTEENTH CONGRESS OF THE: 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
s.B.1049 
Introduced by Senator Manny Villar 
AN ACT 
GRANTING ADDITIONAL COMPENSATION IN THE FORM OF SPECIAL 
ALLOWANCE FOR THE OFFICERS AND EMPLOYEES OF THE 
COMMISSION ON AUDIT (COA) AND FOH OTHER PURPOSES 
Be it enacted by the Senate Elnd the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Statement of Policy. - The function of the Commission on Audit 
(COA) which embraces all matters relating to auditing procedures, systems and 
controls, the maintenance of the general accounts of the government, the preservation 
and safekeeping of transaction vouchers relative to government endeavors, the 
examination and inspection of the hooks of accounts, records and relevant documents, 
the audit and settlement of funds and properties of all accountable officers, for purposes 
of safeguarding the government's coffers from wastage, is hereby affirmed and 
recognized. 
SEC. 2. COA's Independence. - The effectiveness of the discharge by COA of 
its delicate and awesome responsibilities is inextricably linked to the degree of 
independence it enjoys. To he able to preserve its independence, the COA needs to be 
insulated from any control and unwarranted influences. As vibrant partner in nation 
building, the COA needs to he free from any partisan influence and political pressure so 
that it can institute and enforce fiscal control within the overall framework of public fiscal 
administration towards the realization of government goals and objectives. 
SEC. 3. Fiscal Autonomy. - The General Appropriations Act authorized 
independent constitutional comm,issions and offices enjoying fiscal autonomy, such as 
COA, to fix and determine the salaries, allowances, and other benefits of their personnel 
within the limits of their respective appropriations, notwithstanding any provision of law 
to the contrary. 
SEC. 4. Grant of Special Allowance. - Pursuant to the declared policy of this 
Act and in order to maintain the COA's independence, there is a need to keep a roster 
of efficient, dedicated and globally competitive State Auditors, by providing them with 
incentives commensurate to their positions and intricate functions. 
Additionally, to give more meaning and recognition to the sensitive and peculiar 
nature of the functions of the COA as praetorian of the national treasury and in 
acknowledging its fiscal autonomy, all officials and employees of the COA shall be 
granted special allowances in amounts to be determined by the' Secretary of the 
Department of Budget and Management (DBM) and the Chairman of the Commission. 
The grant of the said special allowance shall not exceed one hundred percent 
(100%) of the basic salary p,rbportionate to the salary grades of the officials and 
1 


employees concerned as provided in Republic Act No. 6758, otherwise known as the 
Salary Standardization Law, as amended. 
SEC. 5. Appropriations. - The amount necessary for the initial implementation 
of this Act shall be charged against the current fiscal year's appropriations under the 
budget of the Commission. Thereafter, such sums as may be necessary for the 
continued implementation of this Act shall be included in the annual General 
Appropriations Act. 
SEC. 6. Additional FundinQ Source. - The additional funding sources of the 
amount necessary to implement the additional compensation in the form of special 
allowances granted under this Act shall be as follows: 
1. 
From savings generated by the COA in its operations; 
2. 
From fees collected by COA in performing: 
a. 
audit and related services to government-owned and controlled 
corporations (GOCCs) and local government units (LGUs); 
b. 
services rendered to private entities audited in connection with their 
dealings with the government arising from subsidies, counterpart 
funding by the government, or where audited records become the 
basis for government levy and share; and 
c. 
audit and related services arising from contracts with government 
entities and international organizations; 
3. 
From income sourced through the imposition of filing fees on cases filed 
before the COA in the exercise of its quasi-judicial function. 
4.. 
Collection through imposition of fines on administrative cases . 
• 
5. 
From income collected through the use of COA facilities such as 
dormitories, gym and training centers. 
6. 
From income sourced through the conduct of seminars and lectures. 
The amounts collected pursuant to this section shall constitute and shall be deposited 
as a Special Trust Fund which shall be administered by the Chairman of the 
Commission to carry out the provisions of this Act. 
SEC. 
7. Effects of Subsequent Salary Increases. -
In the event that 
subsequent increases in the salary rates provided under Republic Act No. 6758, as 
amended, is implemented and/or increases of salary rates is granted by the President of 
the Philippines, all special allowances granted under this Act to the officials and 
employees of the COA shall be considered as an implementation of the said salary 
increases as may be provided by law. The special allowance equivalent to the increase 
in the basic salary as may be provided by law shall be converted as part of the basic 
salary: Provided, That the amounts converted as basic salary shall be funded from the 
regular appropriations of the COA. Any excess in the special allowances granted under 
this Act not converted as basic salary shall continue to be granted as such and shall 
continue to be funded under Sections 5 and 6 of this Act. 
SEC. 
8. Implementing Rules and Regulations. - The COA shall issue the 
necessary rules and regulations for the effective implementation of this Act not later 
than ninety (90) days from approval hereof. 
2 


• 
SEC. 9. Separability Clause. - If for any reason any section or provision of this 
Act is declared to be unconstitutional or invalid, the other sections or provisions thereof 
which are not affected thereby shall continue to be in full force and effect. 
SEC. 10. Repealing Clause. - All laws, decrees, orders, rules or regulations or 
parts thereof inconsistent with the provision of this Act are hereby repealed, amended, 
or modified accordingly. 
SEC. 11. Effectivity. -This Act shall take effect fifteen (15) days following its 
publication in the Official Gazette or in two (2) newspapers of general circulation, 
whichever comes earlier. 
Approved, 
3