1   
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
Second Regular Session  
House Bill No. 9646 
INTRODUCED BY REPRESENTATIVES RALPH WENDEL P. TULFO, 
JOCELYN P. TULFO, AND ERWIN T. TULFO 
AN ACT PROVIDING FOR THE REVISED GOVERNMENT AUDITING CODE 
OF THE PHILIPPINES 
EXPLANATORY NOTE 
The 1978 Government Auditing Code of the Philippines serves as the 
cornerstone for ensuring the proper use and management of public funds. In the wake 
of evolving fiscal landscapes and the ever-changing nature of governance, it has 
become imperative to revisit and refine certain provisions to address current 
challenges and to align with international best practices in public financial 
management. 
This bill then seeks to amend the Government Auditing Code of the Philippines 
and aims to enhance the effectiveness, transparency, and accountability of 
government financial management and auditing practices. 
In view of the foregoing, the urgent passing of this bill is earnestly sought. 
RALPH WENDEL P. TULFO 
Representative  
2nd District of Quezon City 
JOCELYN P. TULFO 
Representative 
ACT-CIS Partylist 
ERWIN T. TULFO 
Representative 
ACT-CIS Partylist 
December 4, 2023
8:35 am


2
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
Second Regular Session 
House Bill No. 9646 
INTRODUCED BY REPRESENTATIVES RALPH WENDEL P. TULFO, 
JOCELYN P. TULFO, AND ERWIN T. TULFO 
AN ACT PROVIDING FOR THE REVISED GOVERNMENT AUDITING CODE 
1 
OF THE PHILIPPINES 
2 
 
3 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
4 
assembled: 
5 
 
6 
TITLE I 
7 
8 
Chapter I 
9 
GENERAL PROVISIONS 
10 
11 
SECTION 1. Short Title. – This Act shall be known and cited as the “Revised 
12 
Government Auditing Code”. 
13 
14 
SEC. 2. Declaration of Policy. – It is the policy of the State that all resources of the 
15 
government shall be managed, expended, or utilized in accordance with law, rules and 
16 
regulations, and safeguarded against loss or wastage through illegal or improper 
17 
disposition in order to ensure efficiency, economy, and effectiveness in the operations 
18 
of government. The responsibility to ensure that such policy is faithfully adhered to 
19 
rests directly with the chief or head of the government agency concerned. 
20 
21 
22 
23 


 
 
 
 
3
SEC. 3. Definition of Terms. – As used in this Act: 
1 
 
2 
(a) 
Account refers to a list or statement of monetary transactions pertaining to 
3 
fund, property, obligation, equity, revenue, collection or expense, whether or 
4 
not entered as item of debit or credit in the books of accounts, registry or any 
5 
other record; 
6 
 
7 
(b) 
Accountable officer refers to the officer of a government agency who by the 
8 
nature of the duties and responsibilities or participation in the collection or 
9 
receipt and expenditure or use of government funds, custody, and disposal of 
10 
government funds, custody, and disposal of government property, is required 
11 
by law or regulation to render account to the Commission on Audit, hereinafter 
12 
referred to as the “Commission”, which includes any public officer or private 
13 
person or entity who may have direct or indirect participation in the 
14 
transaction; 
15 
 
16 
(c) 
Aggrieved party refers to a person or entity adversely affected by any decision, 
17 
order, resolution, or ruling of the Commission or any of its duly authorized 
18 
representative; 
19 
 
20 
(d) 
Annual Audit Report (AAR) refers to the final output of the regular yearly audit 
21 
conducted by the auditor on the accounts and operations of a government 
22 
entity and basically consists of the Independent Auditor’s Report, the audited 
23 
financial statements, and the audit observations and recommendations; 
24 
 
25 
(e) 
Management Letter (ML) refers to the final output of a regular or periodic audit 
26 
conducted by the auditor on the accounts and operations of a government 
27 
entity which is in the form of a letter to the auditee management containing 
28 
just basically the audit observations and recommendations; 
29 
 
30 
(f) 
Special Audit Report (SAR) refers to the final output of the special audit 
31 
conducted by the auditor assigned to audit specific accounts, transactions, 
32 


 
 
 
 
4
projects, programs, or activities of a government entity and basically consists 
1 
of audit observations and recommendations; 
2 
 
3 
(g) 
Appropriation refers to an authorization by law, appropriation ordinance, other 
4 
enactments, or the corporate operating budget directing the payment of 
5 
personal services, maintenance and other operating expenses (MOOE), and 
6 
capital outlay out of government funds under specified conditions or 
7 
purposes; 
8 
 
9 
(h) 
Appeal refers to the process of elevating to a higher authority any decision, 
10 
order, resolution, or ruling of the Commission or any of its duly authorized 
11 
representatives; 
12 
 
13 
(i) 
Audit refers to the examination, verification, and adjustment of an account; the 
14 
evaluation of internal control systems; the determination of the government 
15 
entity’s compliance with applicable laws, rules and regulations; as well as the 
16 
examination and evaluation of the economy, efficiency, and effectiveness of 
17 
management systems, operations, and decisions. It may also cover other 
18 
special audits as may be prescribed by the Commission; 
19 
 
20 
(j) 
Auditor refers to any officer or employee of the Commission duly appointed or 
21 
designated as such; 
22 
 
23 
(k) 
Audit group refers to a cluster of audit teams that are grouped together, headed 
24 
by a supervising auditor (SA), which is responsible for planning, managing, 
25 
supervising, and quality control of the audit work as well as ensuring the 
26 
prompt submission of audit reports; 
27 
 
28 
(l) 
Audit team refers to the basic organizational unit responsible for the audit of 
29 
government entities consisting of an audit team leader (ATL) and audit team 
30 
members (ATMs); 
31 
 
32 


 
 
 
 
5
(m) Audit work papers refer to the documentation or evidences of the work done and 
1 
the results thereof, consisting of relevant or pertinent data, analyses, 
2 
computations, calculations, notes, schedules, excerpts, confirmation, and other 
3 
documents or materials gathered, prepared, and compiled in the course of an 
4 
audit; 
5 
 
6 
(n) 
Cash refers to money or its equivalent currencies, negotiable checks, or balances 
7 
in bank accounts or in the possession or custody of a collecting or disbursing 
8 
officer; 
9 
 
10 
(o) 
Charge refers to an inclusion or addition to an accountability pertaining to the 
11 
assessment, appraisal, or collection of revenues, receipts, and other income 
12 
arising from under-appraisal, under-assessment, under-collection, or failure to 
13 
collect or remit collection which are found in the course of audit of revenues or 
14 
receipts; 
15 
 
16 
(p) 
Certificate of Execution (COE) refers to a written instruction to the head of 
17 
agency to withhold payment of salary and other money due to persons liable, 
18 
for settlement of their liability as indicated in the Notice of Disallowance or 
19 
Charge and issued after the issuance of the Notice of Finality of Decision 
20 
(NFD); 
21 
 
22 
(q) 
Decision or resolution refers to an adjudication or settlement of a claim or 
23 
controversy by the authorized official of the Commission which shall embody 
24 
the facts of the case, the issues to be resolved, and the laws, regulations, or 
25 
precedents on which the ruling is based; 
26 
 
27 
(r) 
Depository refers to any financial institution lawfully authorized to receive 
28 
deposit of government moneys; 
29 
 
30 
(s) 
Disallowance refers to the disapproval in audit of a transaction, either in whole 
31 
or in part, involving government disbursement or property; 
32 


 
 
 
 
6
 
1 
(t) 
Government agency refers to any department, bureau, or office of the national 
2 
government, or any of its branches and instrumentalities, local government 
3 
units and its political subdivisions, including entities created by it, as well as 
4 
government financial institutions and other government corporations, with or 
5 
without original charter, including its subsidiaries, other self-governing boards 
6 
or commissions of the government, constitutional bodies with fiscal autonomy, 
7 
and autonomous educational institutions; 
8 
 
9 
(u) 
Government funds refer to public moneys of every sort and other resources 
10 
pertaining or accruing to any agency of the government, including funds 
11 
transferred to the private sector as a subsidy, equity, or counterpart fund for 
12 
implementation of specific projects; 
13 
 
14 
(v) 
Liability refers to a personal obligation arising from an audit disallowance, 
15 
charge, or decision which may be satisfied through payment or restitution as 
16 
determined by competent authority or by other modes of extinguishment of an 
17 
obligation as provided by law; 
18 
 
19 
(w) 
Money claim refers to a demand for payment of a sum of money, 
20 
reimbursement, or compensation arising from law, contract, quasi-contract, or 
21 
quasi-delict due from a government agency or owing to a claimant; 
22 
 
23 
(x) 
Notice of Finality of Decision (NFD) refers to a written notification addressed to 
24 
the agency head that a decision of the Commission has become final and 
25 
executory; 
26 
 
27 
(y) 
Persons liable refer to the persons determined to be answerable for an audit 
28 
disallowance, charge, or decision by the Commission; 
29 
 
30 
(z) 
Persons responsible refer to the persons determined to be answerable for the 
31 
compliance with the audit requirements as called for in the Notice of 
32 
Suspension (NS); 
33 


 
 
 
 
7
 
1 
(aa) Public purpose refers to any purpose or use directly available to the general 
2 
public as a matter of right which includes traditionally viewed as essentially 
3 
government functions such as the building of roads and the delivery of basic 
4 
services, and other purposes designed to promote social justice and public 
5 
interest; 
6 
 
7 
(bb) Revenue refers to income or receipts derived by a government agency from 
8 
taxes, excise, custom duties, fees, royalties, rents, sales of goods, or services and 
9 
collections from other sources; 
10 
 
11 
(cc) Settlement refers to the payment, restitution, or other act of extinguishing an 
12 
obligation as provided by law in satisfaction of the liability under a Notice of 
13 
Disallowance or Notice of Charge (ND/NC) or in compliance with the 
14 
requirements of a NS; 
15 
 
16 
(dd) Settlement of accounts refers to the process of determining the status or balance 
17 
of the account of an accountable officer after audit and examination; and 
18 
 
19 
(ee) Trust funds refer to funds which, by operation of law or by contract, have come 
20 
officially into the possession of any government agency or public officer as 
21 
trustee, agent, or administrator, and received in fulfillment of certain 
22 
obligations or a specific purpose. 
23 
 
24 
SEC. 4. Fundamental Principles. – Financial transactions and operations of any 
25 
government agency shall be governed by the following fundamental principles: 
26 
 
27 
(a) 
No money shall be paid out of any public treasury or depository except in 
28 
pursuance of an appropriation law, appropriation ordinance, or other specific 
29 
statutory authority, or a board-approved corporate operating budget; 
30 
 
31 


 
 
 
 
8
(b) 
Government funds or property shall be spent or used solely for public 
1 
purposes; 
2 
 
3 
(c) 
Trust funds shall be spent only for the specific purpose for which the trust was 
4 
created or the funds were received; 
5 
 
6 
(d) 
Fiscal responsibility shall, to the greatest extent, be shared by all those 
7 
exercising authority over the financial affairs, transactions, and operations of 
8 
the government agency; 
9 
 
10 
(e) 
Disbursements or disposition of government funds or property shall be 
11 
approved by the proper official of the government agency; 
12 
 
13 
(f) 
Claims against government funds shall be supported with the complete 
14 
required documentation; 
15 
 
16 
(g) 
All laws, rules, and regulations applicable to financial transactions shall be 
17 
faithfully adhered to; and 
18 
 
19 
(h) 
Generally accepted principles and standards of accounting as well as of sound 
20 
management and fiscal administration shall be observed, provided that they 
21 
do not contravene existing laws and regulations. 
22 
 
23 
TITLE II 
24 
THE COMMISSION ON AUDIT 
25 
 
26 
Chapter I 
27 
ORGANIZATION 
28 
 
29 
SEC. 5. Commission on Audit: Composition, Qualifications, Term and Salary of 
30 
Members. – (a) The Commission on Audit (COA), is composed of a Chairperson and 
31 
two (2) Commissioners, who are natural-born citizens of the Philippines, either certified 
32 
public accountants with not less than ten (10) years of auditing experience, or members 
33 


 
 
 
 
9
of the Philippine Bar engaged in the practice of law for at least ten (10) years, and must 
1 
not have been candidates for any elective positions in the elections immediately 
2 
preceding their appointments. At no time shall all members of the Commission belong 
3 
to the same profession; 
4 
 
5 
(b) The Chairperson and the Commissioners shall be appointed by the President of 
6 
the Philippines, subject to the confirmation of the Commission on Appointments, for a 
7 
term of seven (7) years without reappointment. Appointment to any vacancy shall be 
8 
only for the unexpired portion of the term of the predecessor. In no case shall any 
9 
member be appointed or designated in a temporary or acting capacity; 
10 
 
11 
(c) No members of the Commission shall, during their tenure, hold any other office 
12 
or employment in the government. Neither shall they engage in the practice of any 
13 
profession or in the active management or control of any business which in any way 
14 
may affect their functions as members of the Commission, nor shall they be financially 
15 
interested, directly or indirectly, in any contract with, or in any franchise or privilege 
16 
granted by the national government, any of its political subdivisions, agencies or 
17 
instrumentalities, including government-owned or -controlled corporations and their 
18 
subsidiaries; and 
19 
 
20 
(d) The salary of the Chairperson and the Commissioners shall be fixed by law and 
21 
shall not be decreased during their tenure. 
22 
 
23 
SEC. 6. Commission Proper. – The Commission Proper is composed of the 
24 
Chairperson and two (2) Commissioners. They shall sit as a collegial body to formulate 
25 
policies, rules and regulations, prescribe standards governing the discharge of its 
26 
powers and functions. 
27 
 
28 
 
29 
 
30 


 
 
 
 
10
 
1 
 
2 
SEC. 7. Specific Functions of the Commission Proper. – The specific functions of the 
3 
Commission Proper are the following: 
4 
 
5 
(a) 
Promulgate the rules concerning pleadings and practices before the 
6 
Commission or any of its offices. Such rules however shall not diminish, 
7 
increase, or modify substantive rights; 
8 
 
9 
(b) 
Decide, by a majority vote of all members of the Commission Proper, any case 
10 
or matter brought before it within sixty (60) days from the date of submission 
11 
for decision or resolution; 
12 
 
13 
(c) 
Appoint, in accordance with the civil service laws and the applicable career 
14 
executive development programs, the officials and employees of the 
15 
Commission. Appointment of lower non-core positions may be delegated by 
16 
the Commission Proper to the appropriate officials of the Commission. It shall 
17 
have the original jurisdiction over administrative cases filed against the 
18 
personnel of the Commission; 
19 
 
20 
The Commission Proper shall determine the salaries and other forms of 
21 
compensation and other benefits, including medical, dental, optical, and other 
22 
health benefits of the personnel of the Commission, pursuant to its fiscal 
23 
autonomy as provided in the Constitution. 
24 
 
25 
The Commission Proper may re-organize the organizational structure of the 
26 
Commission as the need arises and to effectively attain the Commission’s 
27 
mandate in keeping with the demands of the service. 
28 
 
29 


 
 
 
 
11
The Commission Proper shall develop and implement a comprehensive and 
1 
continuing education, manpower training and development program for 
2 
officials and employees of the Commission. 
3 
 
4 
(d) 
Promulgate auditing rules and regulations for the determination of the scope 
5 
and type of audit and examination by the Commission, the establishment of 
6 
techniques and methods required therefor, including those for the prevention 
7 
and disallowance of illegal, irregular, unnecessary, excessive, extravagant, or 
8 
unconscionable expenditures or uses of government funds or property; 
9 
 
10 
(e) 
Issue policies, rules, and procedures in the custody and preservation of the 
11 
general accounts of the national government; 
12 
 
13 
(f) 
Issue regulations pertaining to the responsibility and accountability of the 
14 
audited agency in the custody and preservation of disbursement vouchers, 
15 
journal vouchers and their supporting papers, official receipts and report of 
16 
collection, accounting records and reports, whether audited or not, for a period 
17 
of ten (10) years or for a longer prescriptive period, as may be provided by law 
18 
or regulations; and 
19 
 
20 
(g) 
Perform such other functions as may be necessary for the effective 
21 
implementation of this Act. 
22 
 
23 
SEC. 8. Duties and Responsibilities of the Chairperson. – The Chairperson shall act 
24 
as the presiding officer of the Commission Proper and chief executive officer of the 
25 
Commission. As chief executive officer, the Chairperson shall: 
26 
 
27 
(a) 
Control and supervise the general administration of the Commission; 
28 
 
29 
(b) 
Direct and manage the implementation and execution of policies, standards, 
30 
rules and regulations promulgated by the Commission Proper; 
31 


 
 
 
 
12
 
1 
(c) 
Sign appointments, promotions, office orders for audit engagements, 
2 
assignment, reassignment of officials and employees, or any other personnel 
3 
movement in any office or station of the Commission without additional 
4 
remuneration, except those authorized by law; 
5 
 
6 
(d) 
Exercise control and supervision over the audit of intelligence or confidential 
7 
transactions or accounts of government agencies; 
8 
 
9 
(e) 
Delegate to the commissioners, assistant commissioners, directors, and other 
10 
officials of the Commission such authority on internal administration 
11 
concerning personnel, planning, financial, legal, and other matters pertaining 
12 
to their respective functional areas as may be determined by the Commission 
13 
Proper; 
14 
 
15 
(f) 
Submit an annual budget to the Commission Proper for its approval; 
16 
 
17 
(g) 
Submit to the Office of the President of the Philippines, Congress, and other 
18 
oversight agencies, the annual financial reports covering the financial 
19 
condition and results of operations of the Government, its subdivisions, 
20 
agencies, and instrumentalities, including government-owned or -controlled 
21 
corporations subject to its audit, together with recommendations or measures 
22 
to improve the economy, efficiency, and effectiveness of their operations, and 
23 
such other reports as may be required by law; 
24 
 
25 
(h) 
Authorize the re-opening of settled accounts in case of fraud, collusion, or error 
26 
of calculation or when new and material evidence is discovered. The auditor 
27 
may certify thereon a new balance within three (3) years after the original 
28 
settlement of any account by the auditor or discovery thereof but not to exceed 
29 
ten years from the date of transaction; 
30 
 
31 
(i) 
Summon any person or public official for the purpose of gathering data or 
32 
inquiring into matters pertinent to the formulation, implementation, or 
33 


 
 
 
 
13
enforcement of any order, decision, policy, standard, or regulation of the 
1 
Commission Proper; and 
2 
 
3 
(j) 
Perform such other functions as may be required by law or policy of the 
4 
Commission. 
5 
 
6 
SEC. 9. Duties and Responsibilities of the Commissioners. – The Commissioners, as 
7 
members of the Commission Proper, shall have the following duties and 
8 
responsibilities: 
9 
 
10 
(a) 
Formulate and propose policies, accounting and auditing rules; review, 
11 
evaluate, and update existing regulations of the Commission; and prescribe 
12 
standards governing the performance by the Commission of its powers and 
13 
functions; 
14 
 
15 
(b) 
Review and deliberate cases submitted for decision or resolution; 
16 
 
17 
(c) 
Approve the appointment and promotion of the officials and employees of the 
18 
Commission, subject to civil service rules; 
19 
 
20 
(d) 
Assist in the general administration of the Commission upon proper 
21 
delegation by the Chairperson; 
22 
 
23 
(e) 
Act as officer-in-charge of the Commission upon proper designation by the 
24 
Chairperson, in case of the latter’s absence; and 
25 
 
26 
(f) 
Perform such other functions as may be provided by law, rules, regulations, or 
27 
policies of the Commission. 
28 
 
29 
SEC. 10. Organizational Structure, Compensation of Personnel and Functions. – The 
30 
Commission Proper shall determine the organizational structure of the Commission, 
31 
and fix the salaries, allowances, and other benefits of its officials and employees, which 
32 


 
 
 
 
14
shall be exempt from the Salary Standardization Law, and in accordance with the fiscal 
1 
autonomy of the Commission. 
2 
 
3 
SEC. 11. Standards Boards. – The public sector accounting standards board and the 
4 
private sector auditing standards board shall be created directly under the Commission 
5 
Proper, the members of which shall function in an ex-officio capacity. 
6 
 
7 
SEC. 12. Assistant Commissioners. – The organizational structure of the 
8 
Commission shall be composed of sectors consisting of offices or clusters, as may be 
9 
determined by the Commission Proper. Each sector shall be headed by an Assistant 
10 
Commissioner who shall have the following functions: 
11 
 
12 
(a) 
Formulate, develop, update, and supervise the implementation of the 
13 
operational plan and performance commitment of the sector which are aligned 
14 
with the Commission’s strategic plan and annual holistic operational plan; 
15 
 
16 
(b) 
Supervise the general administration of offices or cluster of offices under 
17 
his/her jurisdiction; 
18 
 
19 
(c) 
Formulate, evaluate, and recommend policies, rules, and regulations for 
20 
consideration by the Commission Proper; and 
21 
 
22 
(d) 
Perform such other functions as may be necessary in the effective 
23 
implementation of this Act. 
24 
 
25 
SEC. 13. General Counsel. – One of the Assistant Commissioners shall head the legal 
26 
services sector of the Commission and be concurrently designated as the General 
27 
Counsel of the Commission who, as such, shall: 
28 
 
29 
(a) 
Perform advisory and consultative services on legal matters; 
30 
 
31 


 
 
 
 
15
(b) 
Render legal service with respect to the performance of the functions of the 
1 
Commission and the interpretation of pertinent laws and auditing rules and 
2 
regulations, with the exception of purely accounting matters which shall be 
3 
acted upon by the Commission’s government accountancy sector; 
4 
 
5 
(c) 
Handle the investigation of administrative complaints or cases filed against 
6 
personnel of the Commission; evaluate and act on all reports of involvement 
7 
of the personnel of the Commission in anomalies or irregularities in 
8 
government transactions; and perform any other investigative work required 
9 
by the Commission upon assignment by the Chairperson; 
10 
 
11 
(d) 
Represent the Commission in preliminary investigations of malversation and 
12 
other criminal or administrative cases discovered in audit; assist and 
13 
collaborate with the Solicitor General and the Ombudsman in handling cases 
14 
involving the Chairperson or any of the Commissioners, or other officials and 
15 
employees of the Commission in their official capacity; 
16 
 
17 
(e) 
Coordinate, for the Commission and with the appropriate legal bodies of 
18 
government, with respect to legal proceedings towards the collection and 
19 
enforcement of debts and claims, and the restitution of funds and property, 
20 
found to be due any government agency which are pending settlement or 
21 
adjustment by the Commission; and 
22 
 
23 
(f) 
Supervise the enforcement and settlement of disallowances, charges, and 
24 
decisions of the Commission covered by a notice of finality of decision and 
25 
order of execution. For this purpose, the General Counsel shall have control 
26 
and supervision over the Office of the Commission Chief Enforcement Officer. 
27 
 
28 
SEC. 14. Commission Chief Enforcement Officer. – (a) There shall be a Chief 
29 
Enforcement Officer who shall have the rank and privileges of a central office cluster 
30 
director. The powers and authority of the Chief Enforcement Officer shall be similar to 
31 
that of a sheriff of a regular court, with additional tasks as may be defined by the 
32 


 
 
 
 
16
Commission Proper. The Chief Enforcement Officer and the deputies shall be under the 
1 
control and supervision of the General Counsel. 
2 
 
3 
(b) There shall be a regional enforcement officer in every regional office in accordance 
4 
with the guidelines issued by the Commission Proper. 
5 
 
6 
SEC. 15. Central Office. – The Commission shall have offices as may be established 
7 
and organized by the Commission Proper. 
8 
 
9 
The existing organizational set-up and functions of the Commission, together with 
10 
the duties presently assigned to each office, shall continue to be observed unless 
11 
otherwise provided in this Act. The existing sectors in the Central Office are as follows: 
12 
 
13 
(a) 
Administration Sector (AS); 
14 
 
15 
(b) 
Planning, Finance, and Management Sector (PFMS); 
16 
 
17 
(c) 
Professional and Institutional Development Sector (PIDS); 
18 
 
19 
(d) 
Government Accountancy Sector (GAS); 
20 
 
21 
(e) 
Special Services Sector (SSS); 
22 
 
23 
(f) 
Legal Services Sector (LSS); 
24 
 
25 
(g) 
Commission Proper Adjudication Sector (CPAS); 
26 
 
27 
(h) 
Systems and Technical Services Sector (STSS); 
28 
 
29 
(i) 
National Government Audit Sector (NGAS); 
30 
 
31 
(j) 
Corporate Government Audit Sector (CGAS); and 
32 
 
33 


 
 
 
 
17
(k) 
Local Government Audit Sector (LGAS). 
1 
 
2 
 
Each sector shall discharge their existing duties and such other duties and functions 
3 
as may be prescribed by the Commission Proper. 
4 
 
5 
SEC. 16. Commission Secretariat. – The Commission Secretariat shall be headed by 
6 
a director who shall have the same rank and privileges of a central office cluster director. 
7 
 
8 
The Commission Secretariat shall perform the following functions: 
9 
 
10 
(a) 
Prepare the agenda for the sessions of the Commission Proper; 
11 
 
12 
(b) 
Prepare, keep, and preserve the minutes of all sessions, hearings, and 
13 
conferences of the Commission Proper; 
14 
 
15 
(c) 
Maintain and preserve the records of the Commission Proper; and 
16 
 
17 
(d) 
Perform such related functions as may be assigned by the Chairperson or the 
18 
Commission Proper. 
19 
 
20 
SEC. 17. Duties and Responsibilities of the Central Office Directors. – The duties 
21 
and responsibilities of the central office directors, as head of their respective offices or 
22 
clusters, are as follows: 
23 
 
24 
(a) 
Formulate, develop, and supervise the implementation of the annual 
25 
Operational Plan and Office Performance Commitment of the office or cluster, 
26 
both aligned with the sector’s operational plan and performance commitment, 
27 
and in accordance with the Commissioner’s Strategic Plan; 
28 
 
29 


 
 
 
 
18
(b) 
Manage the general administration of the office, including matters pertaining 
1 
to workload, work accomplishment, and management of the resources of the 
2 
office or cluster; 
3 
 
4 
(c) 
Direct and manage the implementation and execution of laws, and policies, 
5 
standards, rules, and regulations promulgated by the Commission and 
6 
memoranda issued by the Office of the Chairperson; 
7 
 
8 
(d) 
Submit annual performance report and other reports as directed by the 
9 
Commission Proper or by the Chairperson; and 
10 
 
11 
(e) 
Perform other functions that may be assigned by higher and competent 
12 
authorities in the Commission relevant to the effective implementation of this 
13 
Act. 
14 
 
15 
SEC. 18. Regional Offices: Structure and Functions. – (a) There shall be COA regional 
16 
offices as may be established or organized by the Commission Proper. Until otherwise 
17 
provided by the Commission Proper, the existing regional offices are as follows: 
18 
 
19 
(1) 
CORDILLERA ADMINISTRATIVE REGION (CAR); 
20 
(2) 
REGION I; 
21 
(3) 
REGION II; 
22 
(4) 
REGION III; 
23 
(5) 
REGION IV-A (CALABARZON); 
24 
(6) 
REGION IV-B (MIMAROPA); 
25 
(7) 
REGION V; 
26 
(8) 
REGION VI; 
27 
(9) 
REGIONAL SATELLITE AUDIT OFFICE NEGROS ISLAND; 
28 
(10) REGION VII; 
29 
(11) REGION VIII; 
30 
(12) REGION IX; 
31 
(13) REGION X; 
32 


 
 
 
 
19
(14) REGION XI; 
1 
(15) REGION XII; 
2 
(16) REGION XIII; and 
3 
(17) BANGSAMORO AUTONOMOUS REGION IN MUSLIM MINDANAO 
4 
(BARMM). 
5 
 
6 
 
7 
 (b) Each regional office shall be headed by a director who shall perform the 
8 
following functions: 
9 
 
10 
(1) 
Formulate, develop, and supervise the implementation of the Operational Plan 
11 
and Office Performance Commitment of the regional office, both aligned with 
12 
the sector’s operational plan and performance commitment, as well as the 
13 
Commission’s strategic plan; 
14 
 
15 
(2) 
Exercise supervision and control over the implementation of auditing rules 
16 
and regulations in any agency of the government with principal offices or place 
17 
of operations within the region; 
18 
 
19 
(3) 
Review, analyze, and consolidate local, national, and corporate audit reports 
20 
and audited financial statements of agencies in the region as may be required; 
21 
 
22 
(4) 
Exercise authority over internal administration of personnel, planning, 
23 
financial (budgetary and accounting), and legal matters pertaining to the 
24 
region upon delegation by the Commission Proper; and 
25 
 
26 
(5) 
Perform such other related functions as may be assigned by the Chairperson. 
27 
 
28 
SEC. 19. Audit Groups and Audit Teams. – In accordance with the policies approved 
29 
by the Commission Proper, audit groups and audit teams are created as the exigencies 
30 
of the service may require. 
31 


 
 
 
 
20
 
1 
(a) 
Audit groups may be constituted for the audit of a group of agencies to be 
2 
determined by the Commission Proper. Each audit group shall be headed by a 
3 
supervising auditor, who shall report directly to the cluster or regional 
4 
director; 
5 
 
6 
(b) 
Audit teams may be constituted to audit various agencies as may be 
7 
determined by the Commission Proper. Each audit team shall be headed by a 
8 
team leader who shall report to the supervising auditor of the concerned audit 
9 
group; 
10 
 
11 
(c) 
The audit team supervisor (ATS) or the audit team leader (ATL) who signs the 
12 
independent auditor’s report shall be a certified public accountant; 
13 
 
14 
(d) 
The Commission Proper shall review the composition of the audit groups and 
15 
audit teams, and may make changes or modifications in the exigency of the 
16 
service and as the need arises; 
17 
 
18 
(e) 
Until such time that the Commission shall have adequate provincial satellite 
19 
audit offices (PSAO) in each province to house the audit teams for the national 
20 
government or local government agencies, the audited agency shall continue 
21 
to provide suitable and sufficient office and storage space together with 
22 
supplies, equipment, furniture, and other necessary operating expenses of 
23 
their audit teams. They shall transfer such amounts budgeted for auditing 
24 
services to the regional or central office having supervision over the audit team 
25 
assigned to the auditee. 
26 
 
27 
SEC. 20. Powers, Functions, and Duties of Authors. – (a) The auditor shall exercise 
28 
such powers and functions as may be authorized by the Commission in the 
29 
examination, audit and settlement of the accounts, funds, property, financial 
30 
transactions, resources and physical operations of the agencies under his/her respective 
31 
audit jurisdiction; 
32 


 
 
 
 
21
 
1 
(b) The auditor shall employ such auditing procedures and techniques as it may 
2 
prescribe under the regulations of the Commission; 
3 
 
4 
(c) The ATL shall submit an audit report to the head of the audit group on the date 
5 
and in the manner that the Commission may prescribe and render such other reports as 
6 
the Commission may require; 
7 
 
8 
(d) The ATL shall, after the audit, retain custody and responsibility for the 
9 
safekeeping and preservation of paid expense vouchers, journal vouchers, stubs of 
10 
checks, reports of collections and disbursements and similar documents together with 
11 
their respective supporting papers, which are the subject of an audit observation 
12 
memoranda, notice of suspension, notice of disallowance, notice of charge, complaint, 
13 
or a pending audit or investigation or court case until these audit or legal evidence shall 
14 
have been turned over to a Central Audit Evidence Management Services (CAEMS) in 
15 
the Central Office or the Regional Audit Evidence Management Unit (RAEMU) which 
16 
are created by the Commission; and 
17 
 
18 
(e) The audit team shall retain a digital copy of the post-audited vouchers and 
19 
supporting 
papers, 
official 
receipts, 
and 
other 
documents/reports 
upon 
20 
turnover/return of the originals to the auditee for safekeeping and preservation in 
21 
accordance with the guidelines promulgated by the Commission Proper. 
22 
 
23 
SEC. 21. Annual Audit and Work Program. – The ATL shall develop or formulate an 
24 
annual audit plan and the necessary audit programs for auditee in accordance with the 
25 
regulations of the Commission. The annual audit plan of the audit team shall be aligned 
26 
with the cluster or regional office’s operational plan and performance commitment. 
27 
 
28 
SEC. 22. Assignment and Compensation of Auditing Personnel. – (a) The assignment 
29 
of representatives and support personnel of the Commission to agencies of the 
30 


 
 
 
 
22
government shall be determined by the Chairperson in accordance with the policy 
1 
promulgated by the Commission Proper; and 
2 
 
3 
(b) The salaries and other forms of compensation of the personnel of the Commission 
4 
shall be determined by the Commission Proper which shall be exempt from the Salary 
5 
Standardization Law pursuant to the Commission’s fiscal autonomy as provided in the 
6 
1987 Constitution. 
7 
 
8 
SEC. 23. Legal Assistance to COA Officials and Employees. – (a) The officials and 
9 
employees of the Commission are authorized to engage the services of private lawyers 
10 
for a fee in accordance with the guidelines issued by the Commission Proper; and 
11 
 
12 
(b) For this purpose, the Commission shall include in its budget the amount to be set 
13 
aside as a legal assistance fund. 
14 
 
15 
SEC. 24. Professionalization of Audit Services. – The Commission shall develop, 
16 
adopt, and implement for its officials and employees a comprehensive and continuing 
17 
manpower training and development program, which may follow a ladderized system. 
18 
For this purpose, it shall continue its capacity building program in coordination with 
19 
international professional bodies such as the International Organization of Supreme 
20 
Audit Institutions, Asian Organization of Supreme Audit Institutions, Association of 
21 
Southeast Asian Nations Supreme Audit Institutions and other supreme audit 
22 
institutions. 
23 
 
24 
Chapter II 
25 
APPROPRIATIONS, FUNDING, AND FISCAL AUTONOMY 
26 
 
27 
SEC. 25. Appropriations and Funding. – (a) The annual operating budget of the 
28 
Commission as provided in the General Appropriations Act shall be sourced from the 
29 
following: 
30 


 
 
 
 
23
 
1 
(1) 
One-half of one percent (1/2 of 1%) of the annual collections from national 
2 
internal revenue taxes; 
3 
 
4 
(2) 
A fixed amount equivalent to the actual cost of the audit services in the 
5 
government corporations, plus a reasonable rate to cover overhead expenses; 
6 
and 
7 
 
8 
(3) 
Other sources such as but not limited to collections of audit fees from water 
9 
districts and special audits, consultancy fees and retained income; 
10 
 
11 
 
(b) The budget proposal may be subject to review by the Department of Budget and 
12 
Management but in no case shall it be lower than the approved budget of the 
13 
Commission for the previous year; and 
14 
 
15 
 
(c) All government corporations, including their subsidiaries, and self-governing 
16 
boards shall appropriate in their respective budgets and remit not later than the end of 
17 
the second quarter of each year an amount equivalent to the appropriation for Personal 
18 
Services to the National Treasury and shall transfer to the Commission, the amount for 
19 
the MOOE and Capital Outlay to be utilized by the assigned audit team of the 
20 
Commission during the calendar year. Should the assigned audit team remain in 
21 
residency in the premises of the GOCC, the Capital Outlay and MOOE budget by the 
22 
audit team shall continue to be directly provided by the agency. 
23 
 
24 
SEC. 26. Fiscal Autonomy. – (a) The Commission shall enjoy fiscal autonomy. Its 
25 
approved annual appropriation shall be automatically and regularly released. The 
26 
Commission Proper may be authorized to augment any item in the general 
27 
appropriations for the Commission from savings in any item in the same appropriation; 
28 
 
29 
(b) Any savings from the approved budget under the GAA shall be retained by the 
30 
Commission until fully spent; and 
31 


 
 
 
 
24
 
1 
(c) Violation of this Section shall subject the concerned responsible officials to 
2 
appropriate administrative sanctions. 
3 
 
4 
 
5 
 
6 
 
7 
 
8 
Chapter III 
9 
JURISDICTION, POWERS, AND FUNCTIONS OF THE COMMISSION 
10 
 
11 
SEC. 27. Statement of Objectives. – Pursuant to its constitutional mandate, the 
12 
Commission adheres to the following objectives: 
13 
 
14 
(a) 
Determine whether the fiscal responsibility which rests directly with the head 
15 
of the government agency has been properly, efficiently, and effectively 
16 
discharged; 
17 
 
18 
(b) 
Develop and implement a comprehensive audit plan that shall encompass the 
19 
examination of financial and non-financial transactions, accounts, and reports, 
20 
including evaluation of the internal control system of the agency; 
21 
 
22 
(c) 
Institute control measures through the promulgation of auditing and 
23 
accounting rules and regulations governing the revenue, receipts, 
24 
disbursements, and uses of funds and property, including evaluation of 
25 
projects under public-private partnership (PPP) agreements or the like, fund 
26 
transfers to non-government organizations (NGOs), people’s organizations 
27 
(POs), or other private entities for a specific purpose, consistent with the total 
28 
economic development efforts of the Government; 
29 
 
30 


 
 
 
 
25
(d) 
Promulgate accounting and auditing rules and regulations to facilitate the 
1 
safekeeping of the accounts of the government and enhance their information 
2 
value using state-of-the-art technology;  
3 
 
4 
(e) 
Institute measures designed to preserve and ensure the independence of the 
5 
Commission’s officials and employees; and 
6 
 
7 
(f) 
Bring its operations closer to the people by the delegation of authority, 
8 
consistent with the provision of the Constitution and the national policy on 
9 
decentralization. 
10 
 
11 
SEC. 28. Jurisdiction of the Commission. – (a) The Commission shall have the power, 
12 
authority, and duty to examine, audit, and settle all accounts pertaining to the 
13 
assessments and collections of revenues and receipts, and to the expenditures or uses 
14 
of funds and property, owned or held in trust by, or pertaining to the national 
15 
government, or any of its subdivisions, agencies, including state universities and 
16 
colleges, instrumentalities, government corporations and their subsidiaries, including 
17 
water districts; 
18 
 
19 
(b) The Commission shall also have audit jurisdiction over the following: 
20 
 
21 
(1) 
Public utilities; 
22 
 
23 
(2) 
Non-government entities such as electric cooperatives, NGOs, POs; private 
24 
foundations, educational institutions and other entities receiving subsidy or 
25 
equity, donation or grant, or fund transfer directly or indirectly from or 
26 
through the government, those which have government shares, or counterpart 
27 
funds from the government, and those which are required by law or the 
28 
granting institution to submit to such audit as a condition of subsidy or equity, 
29 
donation or grant, or fund transfer. This authority, however, shall pertain only 
30 


 
 
 
 
26
to the audit of these funds or subsidies coming from or through the 
1 
government; 
2 
 
3 
(3) 
Leagues of provinces, cities, municipalities, and barangays; and 
4 
 
5 
(4) 
Private entities collecting revenues in behalf of the government; 
6 
 
7 
(c) The Commission shall have exclusive authority, subject to the limitations of 
8 
Article IX of the 1987 Constitution, to define the scope of its audit and examination, 
9 
establish the techniques and methods required therefor, and promulgate accounting 
10 
and auditing rules and regulations, including those for the prevention and 
11 
disallowance of illegal, irregular, unnecessary, excessive, extravagant, or 
12 
unconscionable expenditures, or uses of government funds and property; 
13 
 
14 
(d) No entity of the government, its instrumentalities, or subsidiaries shall be 
15 
exempted in any guise whatsoever from the jurisdiction of the Commission; 
16 
 
17 
(e) The authority and power of the Commission shall extend to and comprehend all 
18 
matters relating to: 
19 
 
20 
(1) 
Auditing procedures, systems, and controls; 
21 
 
22 
(2) 
Keeping of the general accounts of the government; 
23 
 
24 
(3) 
Examination and inspection of the books, records, and papers relating to those 
25 
accounts and operations under audit; 
26 
 
27 
(4) 
Audit and settlement of the accounts of all persons respecting funds or 
28 
property received or held by them in an accountable capacity; 
29 
 
30 


 
 
 
 
27
(5) 
Settlement of accounts subsisting between agencies of the government; and 
1 
 
2 
(6) 
Examination, audit, and settlement of all debts and claims of any sort, 
3 
including set-off, due from or owing to the government or any of its 
4 
subdivisions, agencies, or instrumentalities; 
5 
 
6 
(f) The Commission shall have visitorial authority over the following: 
7 
 
8 
(1) 
Non-government entities subsidized by the government, those required to pay 
9 
levies or government share; royalties or fees from exploitation, exploration, 
10 
and development of natural resources. This authority pertains only to the 
11 
determination of the amount to be assessed, collected, and remitted to the 
12 
government; 
13 
 
14 
(2) 
Non-government entities whose loans are guaranteed by the government, 
15 
provided that such authority shall pertain only to the audit of the 
16 
government’s contingent liability; 
17 
 
18 
(3) 
Non-government entities operating and charging fees or tariffs to the public 
19 
for the use of public facilities or utilities insofar as the reasonableness of the 
20 
rates charged to the users of the facilities or utilities; and 
21 
 
22 
(4) 
Non-government entities which have contracts with the government under a 
23 
PPP Agreement or any of its variants, insofar as the determination of the 
24 
existence of value-for money in procurement through PPP; compliance with 
25 
the terms and conditions of the contract or agreement; reasonableness of the 
26 
sharing of the risks and rewards between the private sector and the 
27 
government; and absence of disadvantage to the government in the agreement 
28 
relating to the operation, maintenance, and handover of the public 
29 
infrastructure or project. 
30 
 
31 


 
 
 
 
28
SEC. 29. Fees for Audit and Other Services. – (a) The Commission shall assess and 
1 
collect reasonable fees for the different services rendered to non-government entities 
2 
that shall be audited in connection with their dealings with the government, arising 
3 
from but not limited to subsidies, counterpart funding, government equity, donation, 
4 
grant, fund transfer, directly or indirectly from or through the government, or where 
5 
audited records become the basis for a government levy or share. Fees of this nature 
6 
shall accrue directly to the Commission within ten (10) working days following the 
7 
completion of the audit; and 
8 
 
9 
(b) Whenever the Commission enters into a contract with any government entity, to 
10 
render audit and deliver services beyond the normal scope of such services, the 
11 
Commission is empowered to assess and collect reasonable fees. Such fees shall likewise 
12 
accrue directly to the funds of the Commission within the time provided for in the 
13 
contract or in the billing statement rendered by the Commission. 
14 
 
15 
SEC. 30. Deputization of Licensed Professionals or Experts. – (a) The Commission 
16 
Proper may, when the exigencies of the service so require, deputize and retain in the 
17 
name of the Commission such certified public accountants and other government 
18 
licensed professionals or experts not in the public service, to assist its auditors in 
19 
undertaking specialized audit engagements; 
20 
 
21 
(b) The deputized professionals or experts are entitled to such compensation and 
22 
allowances as may be stipulated in an agreement or contract, subject to pertinent rules 
23 
and regulations on compensation and fees; and 
24 
 
25 
(c) The Commission Proper shall issue guidelines in contracting deputized 
26 
professionals or experts referred to in this Section. 
27 
 
28 
SEC. 31. Civil Society Organizations in the Conduct of Audit. – The Chairperson 
29 
may deputize duly accredited civil society organizations (CSOs) in the conduct of audit 
30 


 
 
 
 
29
to help auditors in the ocular inspection, validation, evaluation, and monitoring projects 
1 
imbued with public interest or located in remote and critical areas in order to enhance 
2 
credibility, accountability, and transparency in audit processes. 
3 
 
4 
SEC. 32. Disallowance of Unconscionable Expenditures of Funds or Uses of 
5 
Property. – The Commission shall promulgate accounting and auditing rules and 
6 
regulations for the prevention and disallowance of illegal, irregular, unnecessary, 
7 
excessive, extravagant, or unconscionable expenditures, or uses of government funds 
8 
or property. Any violation of such rules and regulations shall be a ground for 
9 
disallowance without prejudice to administrative, civil, and criminal sanctions against 
10 
the persons liable. 
11 
 
12 
SEC. 33. Auditing Transactions with Private Persons. – No government agency or 
13 
government employees association shall enter into any contract or transaction with any 
14 
private person or firm for services to undertake studies and services relating to 
15 
government auditing and accounting, including services to conduct, for a fee, seminars 
16 
or workshops for government personnel on these topics, unless the proposed contract 
17 
is first submitted to the Commission to enable it to determine if it has the resources and 
18 
capability to undertake such studies or services. The Commission may engage the 
19 
services of experts from the public or private sectors in the conduct of such studies. 
20 
 
21 
Should the Commission decide not to undertake the study or service, the 
22 
Commission shall nonetheless have the power to review the proposed contract in order 
23 
to determine the necessity, capability, or expertise of the private party and the 
24 
reasonableness of its fees. 
25 
 
26 
Any contract entered into without the approval of the Commission shall be 
27 
considered null and void and the related expenditures incurred thereon shall be 
28 
disallowed in audit and become the personal liability of the officials concerned. 
29 
 
30 


 
 
 
 
30
SEC. 34. Legal Services of Private Law Firms. – No contract involving public funds 
1 
shall be entered into for the services of a private law firm or lawyer to represent 
2 
government agencies in court or to render legal services for them. In the event that such 
3 
legal services cannot be avoided or is justified under extraordinary or exceptional 
4 
circumstances, the written conformity and acquiescence or clearance of the Solicitor 
5 
General or the Government Corporate Counsel, as the case may be, and the written 
6 
concurrence of the Commission shall first be secured before the hiring or employment 
7 
of a private lawyer or law firm. 
8 
 
9 
In the absence of said requirements, any payment thereof shall be disallowed in audit 
10 
and the same shall be the personal liability of the officials concerned. 
11 
 
12 
SEC. 35. Prohibition in Soliciting, Grants, or Financial Assistance. – Private 
13 
foundations and entities organized and managed by government officials and 
14 
employees are prohibited from using the name and resources of the government agency 
15 
in soliciting or receiving donations, grants, or financial assistance from private, 
16 
domestic, and international donors. 
17 
 
18 
Any violation of the preceding paragraph shall subject the said foundation or entity 
19 
to special audit by the Commission as if the funds so received are public funds which 
20 
should be recorded in the books of the concerned government agency. Refusal to submit 
21 
itself to such audit shall constitute an offense punishable under Section 102 of this Act. 
22 
 
23 
SEC. 36. Submission of Documents Relative to Government Obligations. –The 
24 
Commission shall have the power, for audit and examination purposes, to require the 
25 
submission of the original of any: (a) order, deed, contract, or other document which is 
26 
the basis for any collection of, or payment from government funds, together with any 
27 
certificate of ownership in case of investments; (b) official receipts and assessment 
28 
notices issued by the Bureau of Internal Revenue, Bureau of Customs, Land 
29 
Transportation Office, and similar agencies and the related compromise agreements, if 
30 


 
 
 
 
31
any; (c) copies of board resolutions or council resolutions in case of GOCCs or local 
1 
government units (LGUs), respectively; or (d) other records and papers or other 
2 
evidence in connection with a financial transaction involving public funds. 
3 
 
4 
In the case of deeds to property purchased by any government agency, the 
5 
Commission shall require a certificate of title entered in the favor of the government or 
6 
other evidence satisfactory to it that the title is in the name of the government. 
7 
 
8 
It shall be the duty of the officials or employees concerned, including those in non-
9 
government entities under audit, or affected in the audit of government and non-
10 
government entities, to comply promptly with these requirements. 
11 
 
12 
Failure or refusal to do so without justifiable cause shall constitute a ground for 
13 
administrative disciplinary action as well as for disallowance of the claim under 
14 
examination, assessment of additional levy or government share, or withholding or 
15 
withdrawal of government funding or donations through the government, as well as 
16 
for penal or administrative sanctions as provided by law. 
17 
 
18 
SEC. 37. Investigatory and Contempt Powers. – The Chairperson or any 
19 
Commissioner of the Commission, the Assistant Commissioners, central office 
20 
directors, regional directors, the auditors assigned to any government agency, and any 
21 
other official or employee of the Commission specially deputized in writing for the 
22 
purpose by the Chairperson shall, in compliance with the requirement of due process, 
23 
have the power to summon the parties to a case brought before the Commission for 
24 
resolution, issue subpoena and subpoena duces tecum, administer oaths, and otherwise 
25 
take testimony in any investigation or inquiry on any matter within the jurisdiction of 
26 
the Commission. 
27 
 
28 
The Commission shall have the power to punish for contempt as provided for in the 
29 
Revised Rules of Court and the Revised Rules of Procedure of the Commission, under 
30 


 
 
 
 
32
the same procedure and with the same penalties provided therein. Any violation of any 
1 
final and executory decision, order, or ruling of the Commission shall constitute as 
2 
indirect contempt. 
3 
 
4 
SEC. 38. Power to Adjudicate Money Claims. – The Commission shall have the 
5 
power to adjudicate money claims filed against the government arising from law, 
6 
contract, quasi-contract, or quasi-delict. 
7 
 
8 
SEC. 39. Power to Compromise Claims. – (a) When the interest of the government so 
9 
requires, the Commission Proper may compromise or release in whole or in part, any 
10 
settled claim or liability to any government agency not exceeding Ten Million Pesos 
11 
(PhP10,000,000.00) arising out of any matter or case before it or within its jurisdiction. 
12 
In case the claim or liability exceeds Ten Million Pesos (PhP10,000,000.00), the 
13 
Commission shall submit with its recommendations the application for relief to 
14 
Congress; and 
15 
 
16 
(b) The respective governing bodies of government financial institutions and other 
17 
government corporations and self-governing boards, commissions, or agencies of the 
18 
government shall have the authority to condone, compromise, or release any similar 
19 
claim or liability when expressly authorized by their charters, subject to timely review 
20 
and post-audit by the Commission. When the charters do not so provide, the power to 
21 
condone or compromise shall be exercised exclusively by the Commission in 
22 
accordance with the preceding paragraph. 
23 
 
24 
SEC. 40. Collection of Indebtedness due the Government. – (a) The Commission shall, 
25 
through proper channels, assist in the collection and enforcement of all debts and 
26 
claims, and the restitution of all funds or the replacement or payment at a reasonable 
27 
price, of property found to be due the government agency in the settlement and 
28 
adjustment of its accounts. 
29 
 
30 


 
 
 
 
33
If any legal proceeding in court, involving final and executory audit disallowances 
1 
or charges, is necessary, the Prosecution and Litigation Office of the Commission shall 
2 
handle the same. All other cases shall be handled by the Office of the Solicitor General 
3 
or the Office of the Government Corporate Counsel, as the case may be. The 
4 
Commission shall extend full support in the litigation. All money claims due and 
5 
payable shall bear the legal interest rate from the date of receipt of the Order of 
6 
Execution or upon demand by the Commission; and 
7 
 
8 
(b) The Commission may further refer the case to the Office of the Ombudsman for 
9 
the filing of the proper administrative and criminal actions against agency personnel 
10 
concerned and private persons in case of any irregularity or illegality in the incurrence 
11 
of such debts and claims. 
12 
 
13 
SEC. 41. Retention of Money for Satisfaction of Indebtedness. – (a) When any person 
14 
or entity is indebted to any government agency, including final and executory audit 
15 
disallowances or charges, the Commission may direct the head of agency or public 
16 
officer concerned to withhold the payment of any money due from such entity or person 
17 
or the estate, in satisfaction of the indebtedness, disallowances, and charges; and 
18 
 
19 
(b) Failure on the part of the head of agency or public officer to withhold the said 
20 
money to satisfy such indebtedness or audit disallowances and charges shall make the 
21 
head of agency or public officer personally liable therefor without prejudice to 
22 
administrative action that may be filed for neglect of duty. 
23 
 
24 
SEC. 42. Annual Report. – (a) The Commission shall submit to the President and the 
25 
Congress of the Philippines, not later than September 30 of each year, an annual report 
26 
on the financial condition and results of operation of all government agencies, which 
27 
shall include recommendations of measures necessary to improve economy, efficiency, 
28 
and effectiveness of these agencies. 
29 
 
30 


 
 
 
 
34
(b) To carry out the purposes of this Section, the chief accountant or the official in 
1 
charge of keeping the accounts of the government agency shall submit to the 
2 
Commission the year-end financial statements and such other supporting or subsidiary 
3 
statements as may be required by the Commission not later than March 31 of each year. 
4 
Financial statements returned by the Commission for revision due to non-compliance 
5 
with accounting standards, rules, and regulations shall be resubmitted within three (3) 
6 
days after the date of receipt by the official concerned; and 
7 
 
8 
(c) Failure on the part of any official or employee to comply with the provisions of 
9 
the immediately preceding paragraph shall cause automatic suspension of the payment 
10 
of the salary and other emoluments until the official or employee shall have complied 
11 
therewith. The violation of these provisions for at least three (3) times shall subject the 
12 
offender to administrative disciplinary action. 
13 
 
14 
SEC. 43. Authority to Examine Accounts of Public Utilities. – The Commission shall 
15 
examine and audit the books, records, and accounts of all public utilities such as water 
16 
concessionaires, franchise holders, and electric distribution, and transmission utilities 
17 
including generation utilities, in connection with the fixing of rates of every nature, or 
18 
in relation to the proceedings of the proper regulatory agencies for purposes of 
19 
determining franchise taxes and other fees. The examination and audit shall be 
20 
conducted any time after a provisional or final rate increase is approved or 
21 
implemented by the Energy Regulatory Commission. Any authorized government 
22 
agency may, without any need of prior request of the said government agency, examine 
23 
and audit subject to the guidelines of the Commission: 
24 
 
25 
(a) During the examination and audit, any official or employee of the public utility 
26 
concerned shall produce all the reports, records, books of accounts, and such other 
27 
papers as may be required. The Commission shall have the power to take testimony 
28 
under oath from any official or employee of the said public utility on matters pertaining 
29 
to the audit; and 
30 


 
 
 
 
35
 
1 
(b) Any official or employee of the public utility who refuses the examination and 
2 
audit of the books of accounts and pertinent records, or causes unnecessary obstruction 
3 
to the examination and audit, or found guilty of concealing any material information 
4 
concerning its financial status shall be subject to the penalties provided under Section 
5 
102 hereof. 
6 
 
7 
SEC. 44. Powers, Functions, and Duties of Audit Groups. – The audit groups in 
8 
government agencies shall perform the following functions and duties: 
9 
 
10 
(a) Examine, audit, and settle accounts, funds, financial transactions and resources 
11 
of the agencies under the respective audit jurisdiction and exercise such powers 
12 
and functions as may be authorized by the Commission; 
13 
 
14 
(b) Submit an audit report for each calendar year on the dates prescribed by the 
15 
Commission but not later than June 30 following the close of the year; 
16 
 
17 
(c) In the performance of the respective audit functions as herein specified, employ 
18 
auditing procedures and techniques in consonance with the applicable Philippine 
19 
and International Standards adopted by the Commission; 
20 
 
21 
(d) Conduct audit of the transactions and accounts submitted for audit within such 
22 
period prescribed by the Commission in the guidelines and issue the results, 
23 
findings, and observations thereon through Audit Observation Memoranda, 
24 
Notice of Suspension, Disallowances, and Charges in accordance with the rules 
25 
and regulations on settlement of accounts; 
26 
 
27 
(e) Keep and preserve disbursement vouchers, journal vouchers, original copies of 
28 
paid checks, bank statements, reports of collections and disbursements, and 
29 
similar documents together with the supporting papers evidencing transactions 
30 
that are disallowed, charged, or suspended in audit, including those that are the 
31 


 
 
 
 
36
subject of audit observations or court cases or investigations by the Office of the 
1 
Ombudsman or other investigative bodies in accordance with the rules and 
2 
regulations of the Commission. 
3 
 
4 
   The safekeeping and preservation of other audited documents not falling under the 
5 
preceding paragraph shall be returned to the custody and responsibility of the 
6 
management subject any time to the access of, and examination by, the authorized 
7 
representative of the Commission. Under no circumstances shall said documents be 
8 
removed or disposed of without the approval of the Commission or the authorized 
9 
representative; and 
10 
 
11 
(f) Perform such other functions as may be assigned by the superiors. 
12 
 
13 
SEC. 45. Examination of Cash and Accounts of Accountable Officer. – (a) The 
14 
cashbooks, accounts, papers, and cash in the accountability of an accountable officer 
15 
shall at all times be open to the audit and examination of the Commission and its duly 
16 
authorized representatives; and 
17 
 
18 
(b) In case an examination of the cash and accounts of an accountable officer discloses 
19 
a shortage, the auditor shall immediately demand in writing the restitution of the 
20 
shortage, and notify in writing the head of the government agency concerned of said 
21 
shortage in accordance with the regulations of the Commission. The head of the 
22 
government agency shall immediately relieve the accountable officer and assign 
23 
another officer to assume the former’s duties and responsibilities. A complete report on 
24 
the cash examination of the accounts of the accountable officer with cash shortage shall 
25 
be submitted immediately by the auditor to the director for purposes of filing the 
26 
appropriate administrative and criminal case against the said defalcating accountable 
27 
officer with the Office of the Ombudsman, as the evidence may warrant. 
28 
 
29 


 
 
 
 
37
SEC. 46. Withholding of Salaries and Other Emoluments. – Whenever an 
1 
accountable officer has been found short of the accountabilities during cash 
2 
examination or audit of the cash and accounts, the auditor shall order the withholding 
3 
of the salaries and other emoluments due the accountable officer found to have incurred 
4 
cash shortage until the final determination of the latter’s accountability by the 
5 
Commission or final judgment by a competent court. In the event that the accountable 
6 
officer is found not liable for the cash shortage, the withheld salary and other 
7 
emoluments shall be released to the accountable officer, otherwise, it shall be applied in 
8 
payment of the officer’s indebtedness. 
9 
 
10 
SEC. 47. Constructive Distraint of Property of Accountable Officer. – (a) Upon 
11 
discovery in audit of a shortage in the accounts of any accountable officer, and upon 
12 
finding a prima facie case of malversation of public funds or property against an 
13 
accountable officer, the Commission may place under constructive distraint the 
14 
personal property of the accountable officer concerned where there is reasonable 
15 
ground to believe that the said officer is retiring from the government service, or intends 
16 
to leave the Philippines or remove the property therefrom, or hide or conceal the 
17 
property; 
18 
 
19 
(b) The constructive distraint shall be effected by requiring the accountable officer or 
20 
any other person having possession or control of the property to accomplish a receipt 
21 
in the form prescribed by the Commission, covering the property distrained and 
22 
obligating the accountable officer to preserve the same intact and unaltered, and not to 
23 
dispose of it in any manner whatsoever without the express authority of the 
24 
Commission; 
25 
 
26 
(c) In case the said accountable officer or any person having the possession and 
27 
control of the property sought to be placed under constructive distraint refuses or fails 
28 
to accomplish the receipt herein referred to, the representative of the Commission, 
29 
effecting the constructive distraint, shall proceed to prepare a list of such property and, 
30 


 
 
 
 
38
in the presence of two (2) witnesses, leave a copy thereof in the premises where the 
1 
property distrained is located. Thereafter, the said property shall be deemed to have 
2 
been placed under constructive distraint, in accordance with the rules and regulations 
3 
of the Commission; and 
4 
 
5 
(d) The auditor shall submit to the chairperson, through the director, a report on any 
6 
distraint effected pursuant to this Section not later than five (5) calendar days from the 
7 
date of the distraint of the property. A copy of the report shall be furnished to the 
8 
General Counsel of the Commission. 
9 
 
10 
Chapter IV 
11 
DECISIONS OF THE COMMISSION 
12 
 
13 
SEC. 48. Appeal from Decision of Auditors. – (a) Any person aggrieved by the 
14 
decision of an auditor of any government agency in the settlement of an account or 
15 
claim may, within 180 calendar days from receipt of a copy of the decision, appeal in 
16 
writing to the Commission. The procedures of appeal shall be governed by the internal 
17 
rules concerning pleadings and practices of the Commission; and 
18 
 
19 
(b) The Commission shall impose reasonable appeal filing fees and legal research fee. 
20 
These fees shall be assessed by the office where the appeal is filed and paid to the 
21 
Commission’s Treasury Office. The corresponding receipts shall be attached to the 
22 
appeal or petition for review, which shall form part of the record of the appeal. Appeal 
23 
or petition for review not supported with receipt of the filing fee shall be a ground for 
24 
the dismissal of the case, except those appeals that may be allowed by the Commission. 
25 
In no case shall expenses related to the appeal from the decisions of the auditor or 
26 
director be charged against public funds. 
27 
 
28 
SEC. 49. Period for Rendering Decisions of the Commission. – The Commission 
29 
Proper shall decide any case brought before it within sixty (60) days from the date of its 
30 


 
 
 
 
39
submission for resolution. If the account or claim involved in the case needs referral to 
1 
other persons or offices, or to a party interested, the period shall be counted from the 
2 
time the last comment or pleading necessary to a proper decision is received by it. 
3 
 
4 
SEC. 50. Appeal from Decisions of the Committee. – The party aggrieved by any 
5 
decision, order, or ruling of the Commission may, within thirty (30) days from the 
6 
receipt of a copy thereof, appeal on certiorari to the Supreme Court in the manner 
7 
provided by law and the Rules of Court. When the decision, order, or ruling adversely 
8 
affects the interest of any government agency, the appeal may be taken by the proper 
9 
head of that agency. The Office of the Solicitor General shall at all times represent the 
10 
Commission in all its decisions appealed to the Supreme Court. 
11 
 
12 
SEC. 51. Finality of Decision of the Commission. – (a) The decision of the 
13 
Commission, director, or auditor upon any matter within the audit jurisdiction, if not 
14 
appealed as herein provided, shall be final and executory; and 
15 
 
16 
(b) The General Counsel or any authorized officer of the Commission shall issue an 
17 
order of execution requiring the sheriffs or enforcement officers of the Commission to 
18 
execute its final decisions, resolutions, orders, or claims and awards. 
19 
 
20 
SEC. 52. Enforcement of Decisions of the Auditor or Commission Proper. – The 
21 
agency head shall ensure the immediate settlement of the final and executory decision 
22 
of the auditor, director, or the Commission Proper. Unreasonable failure or refusal of 
23 
the head of agency or concerned officer to implement the final and executory decision 
24 
of the auditor, director, or the Commission Proper shall render the former 
25 
administrative liable for neglect of duty. 
26 
 
27 
SEC. 53. Reopening and re-audit of audited transactions. – (a) All transactions and 
28 
accounts are open for audit within ten (10) years after the date of transaction; and 
29 
 
30 


 
 
 
 
40
(b) When any transaction appears to be tainted with fraud, collusion, or error of 
1 
assessment, or when new and material evidence is discovered, the Commission Proper 
2 
may, motu proprio or upon the instance of a party-in-interest, order the reopening or re-
3 
audit thereof within three (3) years after the original audit but not to exceed ten (10) 
4 
years from the date of the transaction. The concerned auditor shall prepare an audit 
5 
report thereon and submit the same to the chairperson or the authorized representative. 
6 
 
7 
TITLE III 
8 
GOVERNMENT AUDITING 
9 
 
10 
Chapter I 
11 
BASIC POLICIES AND STANDARDS 
12 
 
13 
SEC. 54. Definition of Government Auditing. – Government auditing is the analytical 
14 
and systematic examination and verification of financial transactions, operations, 
15 
accounts, and reports of any government agency for the purpose of determining the 
16 
accuracy, integrity, authenticity, and compliance with the requirements of law, rules 
17 
and regulations, International Public Sector Accounting Standards (IPSAS) or 
18 
Philippine Financial Reporting Standards (PFRS), and the standards in auditing or the 
19 
International Standards for Supreme Audit Institutions (ISSAIs). 
20 
 
21 
SEC. 55. General Standards. – (a) The audit shall be performed by a person with 
22 
adequate technical training and proficiency in auditing; 
23 
 
24 
(b) In all matters relating to the audit work, the auditor shall maintain complete 
25 
independence, impartiality, and objectivity, and shall avoid any possible compromise 
26 
of the independence or any act that creates a presumption of lack of independence, or 
27 
the possibility of undue influence in the performance of duties; and 
28 
 
29 


 
 
 
 
41
(c) The auditor shall exercise due professional care guided by applicable laws, 
1 
regulations, and the internationally adopted standards of audit or the ISSAIs, which 
2 
guide the planning, performance, and execution of the audit work, reporting of the 
3 
results of the audit, monitoring and quality assurance in the conduct of all phases of the 
4 
audit. 
5 
 
6 
Chapter II 
7 
RECEIPT AND DISPOSITION OF FUNDS AND PROPERTY 
8 
 
9 
SEC. 56. Accounting of Money and Property Received by Public Officials. – All 
10 
moneys and property officially received by a public officer in any capacity or upon any 
11 
occasion must be accounted for as government funds and government property, except 
12 
as may otherwise be specifically provided by law or competent authority. The 
13 
recognition in the books of accounts of the concerned agency shall be in accordance with 
14 
the IPSAS or PFRS. 
15 
 
16 
SEC. 57. Designation of Collecting or Disbursing Officers for Government Agencies. 
17 
– The head of any government agency may designate such number of collecting or 
18 
disbursing officers or agents as may be deemed necessary. 
19 
 
20 
SEC. 58. Time and Mode of Rendering Account. – In the absence of specific provision 
21 
of law, all accountable officers shall, through the agency accountants, render their 
22 
accounts, submit their vouchers, and make deposits of money collected or held by them 
23 
at such time and in such manner as shall be prescribed in the rules and regulations of 
24 
the Commission. The auditor concerned shall then conduct the necessary examination 
25 
and audit thereof. 
26 
 
27 
SEC. 59. Accrual of Income or Revenues to Unappropriated Surplus of the General 
28 
Fund. – (a) All income or revenues accruing to the agencies by virtue of the provisions 
29 
of law, orders, and regulations shall be deposited in the National Treasury or in any 
30 


 
 
 
 
42
duly authorized government depository and shall accrue to the unappropriated surplus 
1 
of the General Fund of the government, unless otherwise specifically provided by law; 
2 
and  
3 
 
4 
(b) Income or revenues from business-type activities and revolving funds of 
5 
government agencies may be separately recorded and disbursed in accordance with 
6 
such rules and regulations as may be determined by a Permanent Committee composed 
7 
of the Secretary of Finance as Chairperson, Chairperson of the COA, and the Secretary 
8 
of Budget and Management, as members. 
9 
 
10 
SEC. 60. Special, Fiduciary, and Trust Funds. – (a) Receipts shall be recorded as 
11 
income of Special, Fiduciary, or Trust Funds or funds other than General Fund only 
12 
when authorized by law in accordance with the rules and regulations issued by the 
13 
Permanent Committee; 
14 
 
15 
(b) Revenues collected from particular taxes, levy, and royalties for special purpose 
16 
shall be treated as a special fund or Special Account in the General Fund and paid out 
17 
for such purpose only. If the purpose for which a special fund was created has been 
18 
fulfilled or abandoned, the balance, if any, shall be transferred to the General Fund of 
19 
the government; and 
20 
 
21 
(c) In case any government agency fails or refuses to implement such reversion and 
22 
closure, the Permanent Committee may recommend for approval of the President the 
23 
reversion and closure of the Special Account in the General Fund, Fiduciary, or Trust 
24 
Funds on any of the following grounds: 
25 
 
26 
(1) 
When the terms have expired or when it is no longer necessary for attainment 
27 
of the purpose for which the funds were established; 
28 
 
29 
(2) 
When the funds have remained dormant for unreasonable length of time; 
30 


 
 
 
 
43
 
1 
(3) 
When the General Fund is needed in times of emergency; or 
2 
 
3 
(4) 
When used in violation of the rules and regulations issued by the Permanent 
4 
Committee. 
5 
 
6 
SEC. 61. Receipts and Revenues of Local Government Units. – All receipts and 
7 
income accruing to the LGUs shall be deposited in the account maintained in the 
8 
authorized government depository bank or private bank with the prior approval of the 
9 
Secretary of Finance. 
10 
 
11 
SEC. 62. Receipts and Revenues of Government Corporations. – All receipts and 
12 
income accruing to government corporations shall be deposited in the account 
13 
maintained in the authorized government depository bank. 
14 
 
15 
SEC. 63. Issuance of Official Receipts. – (a) No payment of any nature shall be 
16 
received by a collecting officer without immediately issuing an official receipt in 
17 
acknowledgment thereof. The receipt may be in the form of postage, internal revenue 
18 
or documentary stamps, or such other forms as the law or the Commission may allow. 
19 
Temporary or provisional receipts shall not be issued to acknowledge the receipt of 
20 
public funds; 
21 
 
22 
(b) Where digital or electronic devices are used to acknowledge cash receipt, the 
23 
same shall be subject to inspection and verification by the Commission; and 
24 
 
25 
(c) The same is acceptable provided the document maintains its integrity and 
26 
reliability and may be authenticated so as to be usable for subsequent reference, in that: 
27 
 
28 
(1) 
The electronic document remains complete and unaltered, apart from the 
29 
addition of any endorsement and any authorized change, or a change which 
30 
arises in the normal course of communication, storage, and display; and 
31 


 
 
 
 
44
 
1 
(2) 
The electronic document is reliable for the purpose for which it was generated 
2 
and for all relevant circumstances. 
3 
 
4 
SEC. 64. Check Payments for Taxes or Other Indebtedness to the Government. – (a) 
5 
An officer charged with the collection of revenue or the receipt of moneys payable to 
6 
the government shall accept a payment in the form of checks issued in favor of the 
7 
government agency, upon proper indorsement and identification of the payee or 
8 
indorsee. Checks drawn in favor of the government for payment of any indebtedness 
9 
shall likewise be accepted by the officer concerned, provided it shall be made payable 
10 
to the agency or the official title or designation of the official concerned as the payee; 
11 
 
12 
(b) When a check drawn in favor of the government is not accepted by the drawee 
13 
bank for any reason, the drawer shall continue to be liable for the sum due and all 
14 
penalties resulting from delayed payment. Where the reasons for non-acceptance by the 
15 
drawee bank are insufficiency of funds or closed accounts, the drawer shall be 
16 
criminally liable therefor; and 
17 
 
18 
(c) Money in the hands or custody of the collecting officer shall not be utilized for the 
19 
purpose of encashing private checks. 
20 
 
21 
SEC. 65. Deposit of Money in the Treasury or Authorized Government Depository 
22 
Bank. – (a) Public officers authorized to receive and collect moneys arising from taxes, 
23 
revenues, or receipts of any kind shall remit or deposit intact the full amounts so 
24 
received and collected by the officers to the account of the National Treasury or in the 
25 
account of agencies maintained in the authorized government depository bank not later 
26 
than the following banking day, except when it is impractical to do so due to distance 
27 
and the amount to be deposited is minimal; and 
28 
 
29 


 
 
 
 
45
(b) The collections shall not be used for purposes of disbursements except when 
1 
authorized by law or regulations. 
2 
 
3 
SEC. 66. Acknowledgment of Receipt of Money by Government Depositories. – All 
4 
authorized government depository banks shall acknowledge receipt of all the money 
5 
received, for the account of the national treasurer or the agency concerned. The 
6 
acknowledgment receipt shall bear the date of actual deposit and shall indicate from 
7 
whom, and on what account the money was received. The money received shall be 
8 
governed by the Treasury Single Account System established pursuant to Executive 
9 
Order No. 55, Series of 2011. 
10 
 
11 
SEC. 67. Shipment of Government Money or Property by Carrier; Notation of 
12 
Evidence of Loss. – When government money or property is transported from one place 
13 
to another by carrier, it shall be the duty of the consignee or the representative to make 
14 
notations on the bill of lading or receipt on any evidence of loss, shortage, or damage. 
15 
 
16 
SEC. 68. Credit for Loss Occurring in Transit or Due to Fire, Theft, Robbery, or Force 
17 
Majeure. – In case of loss of government funds, property, documents evidencing 
18 
financial transactions, or records of accountabilities occur while in transit, or loss is 
19 
caused by fire, theft, robbery, or force majeure, the officer or employee accountable or 
20 
in custody thereof, shall immediately notify the auditor concerned and, within thirty 
21 
(30) days from the occurrence of loss, shall present the application for relief together 
22 
with the required supporting evidence. When warranted, credit for the loss shall be 
23 
allowed. An officer or employee who fails to comply with this requirement shall not be 
24 
relieved from liability nor shall be allowed credit for any loss thereof. 
25 
 
26 
SEC. 69. Transfer of Funds from One Agency to Another or From One Officer to 
27 
Another. – Transfer of government funds from one agency to another or from one officer 
28 
to another shall, except as allowed by law or regulation, be made only upon prior 
29 


 
 
 
 
46
direction or authorization of the agency head following the accountability and 
1 
accounting guidelines issued by the Commission. 
2 
 
3 
SEC. 70. Transfer of Property between Government Agencies. – Any government 
4 
property that is no longer serviceable or needed by the agency to which it belongs may 
5 
be transferred without cost, or at an appraised value, to other government agencies 
6 
upon authority of the respective agency heads. 
7 
 
8 
SEC. 71. Invoice and Receipt upon Transfer of Property. – When government 
9 
property is transferred from one accountable officer to another, or from an outgoing 
10 
officer to the successor, it shall be done upon properly itemized invoice and receipt 
11 
which shall invariably support the clearance to be issued to the relieved or outgoing 
12 
officer, subject to regulations by the Commission. The head of agency shall ensure the 
13 
proper turn-over of their accountabilities. 
14 
 
15 
SEC. 72. Destruction or Sale of an Unserviceable Property. – When government 
16 
property has become unserviceable for any cause, an inventory shall be made, and upon 
17 
application by the officer accountable therefor for destruction, the property shall be 
18 
inspected and appraised by the appraisal committee created by the head of agency, 
19 
subject for review by the auditor concerned and, if found to be valueless, unserviceable, 
20 
or unsaleable, the property may be destroyed or disposed of in the presence of the 
21 
auditor. 
22 
 
23 
If found to be valuable, the property may be sold thru public bidding to the highest 
24 
bidder under the supervision of the Disposal Committee of the government agency, 
25 
after advertising the same for two (2) consecutive days in any national newspaper of 
26 
general circulation. Where the value of the property does not warrant the expense of 
27 
publication, as determined by said Committee, the notice of sale shall be posted for the 
28 
same period in at least three (3) public places in the locality where the property is to be 
29 
sold. In the event that the public bidding fails, the property may be sold at a negotiated 
30 


 
 
 
 
47
sale at such price as may be fixed by the same committee, subject to the immediate audit 
1 
of the auditor concerned in accordance with the regulations of the Commission. 
2 
 
3 
SEC. 73. Disposition of Government Property. – Any government property that is 
4 
no longer needed by the agency to which it belongs as certified by the head of the said 
5 
agency may, after appraisal thereof by management, and review by the Commission, 
6 
be sold thru public bidding to the highest bidder. Such sale shall be under the 
7 
supervision of the proper committee on award or similar body of the government 
8 
agency, after publication for not less than two (2) consecutive days in any national 
9 
newspaper of general circulation. Where the value of the property does not warrant the 
10 
expense of publication, as determined by the said proper committee, notices of said sale 
11 
shall be posted for a like period in the website of the agency and in at least three (3) 
12 
public places in the locality where the property is located, or where the sale will be 
13 
conducted. In the event that the public bidding fails, the property may be sold at a 
14 
negotiated sale at such price as may be fixed by the same committee, subject to the 
15 
immediate audit of the auditor concerned in accordance with the regulations of the 
16 
Commission. 
17 
 
18 
Sale or any mode of disposition of real properties shall be subject to the prior 
19 
approval by the Commission. 
20 
 
21 
SEC. 74. Disposition of Foreclosed Assets or Collaterals Acquired in the Regular 
22 
Course of Business by Government Corporations. – Their Charters notwithstanding, 
23 
foreclosed assets or collaterals acquired in the regular course of business by government 
24 
corporations shall be sold through public bidding to the highest bidder after appraisal 
25 
thereof by an independent appraiser and review by the Commission. Such sale shall be 
26 
under the supervision of the proper committee on award or similar body of the 
27 
government corporation, after publication for not less than two (2) consecutive days in 
28 
any national newspaper of general circulation. 
29 
 
30 


 
 
 
 
48
In the event that the public bidding fails, the property may be sold at a negotiated 
1 
sale at such price as may be fixed by the same committee, subject to the immediate audit 
2 
of the auditor concerned in accordance with the regulations of the Commission. If the 
3 
property remains unsold for at least one (1) year, it shall be subject for reappraisal and 
4 
shall be offered again for sale through public bidding. 
5 
 
6 
Government property may be disposed of as payment of dividend, after appraisal 
7 
thereof by an independent appraiser and review by the Commission. 
8 
 
9 
SEC. 75. Disposition of Funds or Property Held by Deceased, Incapacitated, or 
10 
Absconding Accountable Officer. – (a) When an officer accountable for government 
11 
funds or property absconds, dies, or becomes incapacitated in the performance of 
12 
duties, the agency head shall designate a custodian to take charge of the funds or 
13 
property until a successor shall have been appointed and qualified. The agency head 
14 
may appoint a committee to count the cash and take an inventory of the property for 
15 
which the officer was accountable and to determine the responsibility for any shortage 
16 
therein. One copy of the inventory and of the report of the committee duly certified 
17 
shall be filed with the auditor concerned but the findings of the committee shall not be 
18 
conclusive until audit thereon is completed. The agency head, whenever necessary, 
19 
shall be held responsible for securing a “hold departure order” from the proper 
20 
government agency to prevent the absconding officer from leaving the country; and 
21 
 
22 
(b) If the absconding, deceased, or incapacitated officer is accountable for funds or 
23 
property of a province or city, the acting custodian and committee shall be designated 
24 
by the local chief executive, furnishing notice to the Secretary of Finance, who shall 
25 
thereafter appoint a regular accountable officer through the Bureau of Local 
26 
Government Finance. 
27 
 
28 
SEC. 76. Final Report of Accountable Officers. – (a) An accountable officer, upon 
29 
ceasing to act as such, shall submit to the auditor of the agency a report of the 
30 


 
 
 
 
49
accountability within one (1) month after ceasing to act as accountable officer. Upon 
1 
receipt of the report, the auditor shall conduct a cash examination on the accountability; 
2 
and 
3 
 
4 
(b) Any remaining balance of the cash accountability shall be deposited in the proper 
5 
treasury immediately. 
6 
 
7 
SEC. 77. Auditor’s Notice of Disallowances, Charges, and Suspensions to 
8 
Accountable Officer. – (a) At the end of every period prescribed by the Commission, 
9 
the auditor shall send a written notice of disallowance, charge, or suspension, if any, to 
10 
each accountable officer, through the agency head, whose accounts have been audited 
11 
and settled in whole or in part. An audit suspension which is not satisfactorily explained 
12 
within ninety (90) days after receipt of the notice by the accountable officer shall become 
13 
a disallowance; and 
14 
 
15 
(b) Any person aggrieved by the decision of the auditor pertaining to disallowances, 
16 
charges, or suspensions, may appeal the case in accordance with the rules of procedure 
17 
of the Commission. 
18 
 
19 
Chapter III 
20 
APPLICATION OF APPROPRIATED FUNDS 
21 
 
22 
SEC. 78. Appropriation Before Entering into Contract. – The contract involving the 
23 
expenditure of public funds shall not be entered into unless there is an appropriation 
24 
therefor, the unexpended balance of which, free of other obligation, is sufficient to cover 
25 
the proposed expenditure. 
26 
 
27 
SEC. 79. Certificate Showing Appropriation to Meet Contract. – Except in the case 
28 
of a contract for personal services or for supplies for immediate consumption, no 
29 
contract involving the expenditure of public funds by any government agency shall be 
30 


 
 
 
 
50
entered into or authorized unless the proper accounting official of the agency shall have 
1 
certified to the officer entering into the obligation that funds have been duly 
2 
appropriated for the purpose and that the amount necessary to cover the proposed 
3 
contract for the fiscal year is available for expenditure on account thereof. The certificate 
4 
signed by the proper accounting official shall be attached to and become an integral part 
5 
of the contract, and the sum so certified shall not thereafter be available for expenditure 
6 
for any other purpose until the obligation of the government agency under the contract 
7 
is fully extinguished. 
8 
 
9 
SEC. 80. Void Contract and Liability of Officer. – Any contract entered into contrary 
10 
to the requirements of the two (2) immediately preceding sections shall be void and not 
11 
binding to the government. The officers of any government agency responsible for the 
12 
contract shall be personally liable to the government or other contracting party as if the 
13 
transaction had been entered into between private parties. 
14 
 
15 
SEC. 81. Restrictions on Payment under Government Procurement Contracts. – No 
16 
payment, partial or final, shall be made on any government procurement contract 
17 
except upon a certification by the head of the agency or the duly authorized 
18 
representative to the effect that the services have been rendered, supplies, materials, or 
19 
equipment have been delivered and infrastructure projects have been implemented or 
20 
completed in accordance with the terms and conditions of the contract and have been 
21 
duly inspected and accepted. 
22 
 
23 
SEC. 82. Prohibition against Advance Payment on Government Contracts. – Except 
24 
when authorized by law, the government shall not be obliged to make an advance 
25 
payment for contracts for: 
26 
 
27 
(a) 
Services not yet rendered; 
28 
 
29 
(b) 
Supplies and materials not yet delivered, inspected, and accepted; and 
30 


 
 
 
 
51
 
1 
(c) 
Infrastructure projects not yet implemented or completed, inspected, and 
2 
accepted other than for 15% mobilization as provided for in RA 9184. 
3 
 
4 
SEC. 83. Limitations on Cash Advance. – (a) Cash advance shall not be given unless 
5 
for a legally authorized specific purpose. A cash advance shall be reported on, and 
6 
liquidated, as soon as the purpose for which the cash advance was given has been 
7 
served. Additional cash advance shall not be allowed to any official or employee unless 
8 
the previous cash advance given has been settled or a proper accounting has been made; 
9 
 
10 
(b) The failure of the official or employee to liquidate the cash advance after due 
11 
demand by an authorized officer is a prima facie presumption of malversation despite 
12 
the absence of a finding of actual damage to the government; 
13 
 
14 
(c) The transfer of cash advance by a disbursing officer to another does not constitute 
15 
an expenditure for which the disbursing officer may claim credit in the accounts, but 
16 
the responsibility continues to attach until the amount has been fully accounted for; and 
17 
 
18 
(d) Cash advance shall not be granted for the procurement or implementation of 
19 
infrastructure projects. 
20 
 
21 
Any violation of the foregoing provisions shall constitute a valid cause for the 
22 
withholding of the salary of the accountable officer without prejudice to the imposition 
23 
of administrative or civil sanction and criminal prosecution of both the authorizing and 
24 
the accountable officials, as may be warranted. 
25 
 
26 
SEC. 84. Limitations on Cash or Fund Transfers from One Government Agency to 
27 
Another. – (a) Cash or fund transfers shall not be given unless for legally authorized 
28 
specific purpose as embodied in a memorandum of agreement executed between the 
29 
source and implementing agencies; 
30 
 
31 


 
 
 
 
52
(b) The cash or fund transfers shall be reported and liquidated by the implementing 
1 
agencies as soon as the purpose for which they have been granted have been served, 
2 
but not later than the end of the year; 
3 
 
4 
(c) Additional or new cash or fund transfers shall not be made unless the previous 
5 
transfers had been fully liquidated as certified by the head of agency; and 
6 
 
7 
(d) The heads of the source and implementing agencies shall be responsible for 
8 
compliance with the foregoing requirements. 
9 
 
10 
Failure on the part of the foregoing officials or persons to comply with the 
11 
abovementioned responsibility shall constitute a ground for administrative or criminal 
12 
action, as evidence may warrant. 
13 
 
14 
SEC. 85. Limitations on Cash or Fund Transfers from Any Government Agency to a 
15 
Private Organization or Entity. – (a) Cash or fund transfers from a government agency 
16 
shall not be given to a private organization or entity unless authorized by law for a 
17 
specific purpose which should be embodied in a Memorandum of Agreement executed 
18 
between the source government agency and the implementing private organization or 
19 
entity; 
20 
 
21 
(b) Only duly registered, accredited, and reputable private organizations or entities 
22 
shall be granted cash or fund transfers; 
23 
 
24 
(c) The cash or fund transfers shall be reported on and liquidated by the 
25 
implementing private organizations or entities to the source government agency as 
26 
soon as the project has been completed or not later than sixty (60) days after project 
27 
completion. If the project implementation will go beyond December 31st of the year, a 
28 
partial liquidation report as of December 31st of that year shall be submitted to the 
29 
source government agency not later than January 15 of the ensuing year; 
30 


 
 
 
 
53
 
1 
(d) No additional or new cash or fund transfers shall be made unless the previous 
2 
cash or fund transfers have been fully liquidated as certified by the head of the agency; 
3 
and 
4 
 
5 
(e) The heads of the source government agency and implementing private 
6 
organizations or entities shall be responsible for compliance with the foregoing 
7 
requirements. 
8 
 
9 
Failure on the part of the officials or persons to comply with the abovementioned 
10 
responsibility shall constitute a ground for administrative or civil sanction or criminal 
11 
prosecution, as warranted. 
12 
 
13 
SEC. 86. Payment of Rewards. – When a reward becomes payable by authority of 
14 
law for information given relative to any offense or any illegal activity, or for any act 
15 
done in connection with the apprehension of the offender, the reward shall be paid as 
16 
prescribed by law or regulations. Such payment of reward shall be subject to audit in 
17 
accordance with the regulations of the Commission. 
18 
 
19 
SEC. 87. Replacement of Lost, Stolen, or Destroyed Checks. – When any check is lost, 
20 
stolen, or destroyed, the issuing officer may issue a replacement check as payment for 
21 
the same obligation upon the execution of an affidavit of loss, submission of stop 
22 
payment order to the drawee bank and a surety bond issued by the Government Service 
23 
Insurance System (GSIS) to indemnify the issuing agency of the amount of the check. If 
24 
destroyed, presentation of the destroyed check to the issuing officer is also required. 
25 
The chief accountant or internal auditor of the agency shall be responsible that no 
26 
double payment is made as a result thereof. 
27 
 
28 
SEC. 88. To Whom Checks are Payable. – Checks drawn against the government 
29 
agencies’ Checking Account maintained with any government depository shall be 
30 


 
 
 
 
54
made payable directly to the creditor to whom the money is due, or to a disbursing 
1 
officer or employee for an official disbursement. 
2 
 
3 
Release of checks to a person not duly authorized to receive such check shall subject 
4 
the accountable officer to administrative or civil sanctions or criminal prosecution, as 
5 
warranted. 
6 
 
7 
SEC. 89. Reversion of Unliquidated Balances of Accounts Payable. – The head of 
8 
agency shall cause the reversion to the unappropriated surplus of the general fund of 
9 
the national government or of LGUs, and for GOCCs, to their retained earnings, any 
10 
unliquidated balance of accounts payable in their books of accounts, which has been 
11 
outstanding for two (2) years or more and which no actual valid claim, administrative 
12 
or judicial, has been filed. 
13 
 
14 
Chapter IV 
15 
ACCOUNTABILITY AND RESPONSIBILITY FOR GOVERNMENT FUNDS 
16 
AND PROPERTY 
17 
 
18 
SEC. 90. Accountable Officers; Bond Requirement. – (a) Every officer of any 
19 
government agency whose duties permit or require the possession or custody of 
20 
government funds or property shall be accountable for the safekeeping thereof in 
21 
conformity with law. Other government officers not accountable by the nature of their 
22 
duties may be similarly held accountable for government funds or property through 
23 
their participation in the use or application thereof; and 
24 
 
25 
(b) Every accountable officer shall be properly bonded in accordance with law and 
26 
the pertinent rules or regulations. 
27 
 
28 


 
 
 
 
55
SEC. 91. Primary Responsibility and Accountability of the Agency Head. – (a) The 
1 
head of any agency of the government is immediately and primarily responsible for all 
2 
government funds and property pertaining to the agency; and 
3 
 
4 
(b) Persons entrusted with the possession or custody of the funds or property under 
5 
the agency head shall be immediately responsible, without prejudice to the liability of 
6 
either party to the government. 
7 
 
8 
SEC. 92. General Liability for Unlawful Expenditures. – Expenditures of 
9 
government funds or uses of government property in violation of law or regulations 
10 
shall be the personal liability of the official or employee found to be directly responsible 
11 
therefor. 
12 
 
13 
SEC. 93. Degree of Supervision over Accountable Officers. – The head of any 
14 
government agency shall exercise the diligence of a good father of a family in 
15 
supervising accountable officers under his control to prevent the incurrence of loss of 
16 
government funds or property, otherwise liability shall be joint and solidary with the 
17 
person primarily accountable therefor. The treasurer of the local government unit shall 
18 
likewise exercise the same degree of supervision over accountable officers under his 
19 
oversight, otherwise liability shall be joint and solidary with the head of government 
20 
agency for the loss of government funds or property. 
21 
 
22 
SEC. 94. Measure of Liability of Accountable Officers. – (a) Every officer accountable 
23 
for government property shall be liable for its money value in case of improper, 
24 
unauthorized use or misapplication thereof, by the officer or any person for whose acts 
25 
the officer may be responsible. The accountable officer shall also be liable for all losses, 
26 
damages, or deterioration occasioned by negligence in the keeping or use of the 
27 
property regardless of whether or not there is actual custody; and 
28 
 
29 


 
 
 
 
56
(b) Every officer accountable for government funds shall be liable for all losses 
1 
resulting from the unlawful deposit, use, or application thereof and for all losses 
2 
attributable to negligence in the keeping of the funds. 
3 
 
4 
SEC. 95. Liability for Acts Done by Direction of Superior Officer. – The accountable 
5 
officer shall not be relieved from liability by reason of acting under the direction of a 
6 
superior officer in paying out, applying, or disposing of the funds or property for which 
7 
the officer is accountable, unless prior to that act, the accountable officer notified the 
8 
superior officer in writing of the illegality of the payment, application, or disposition. 
9 
The superior officer directing any illegal payment or disposition of the funds or 
10 
property and the accountable officer who fails to serve the required notice shall be 
11 
jointly and solidarily liable. 
12 
 
13 
SEC. 96. Prohibition Against Pecuniary Interest. – The head of agency, board of 
14 
directors, accountable officer, or public official shall not have pecuniary interest, 
15 
directly or indirectly, in any contract or transaction of the agency in which he/she is an 
16 
officer, or in any other office where he/she has influence. 
17 
 
18 
This prohibition shall apply to the accountable officer’s immediate family and 
19 
relatives up to the third civil degree by consanguinity or affinity. 
20 
 
21 
TITLE IV 
22 
GOVERNMENT ACCOUNTING 
23 
 
24 
Chapter I 
25 
 
26 
SEC. 97. Government Accounting. – Government accounting encompasses the 
27 
processes of analyzing, recording, classifying, summarizing, and communicating all 
28 
transactions involving the receipt and disposition of government funds and property, 
29 
and interpreting the results thereof. 
30 


 
 
 
 
57
 
1 
SEC. 98. Accounting Rules and Regulations. – The Commission shall promulgate 
2 
accounting rules and regulations in accordance with the Generally Accepted 
3 
Accounting Principles, IPSAS, and International Financial Reporting Standards (IFRS), 
4 
as applicable. Such rules and regulations shall be updated from time to time as the 
5 
Commission may deem proper, to meet the changing government accounting 
6 
requirements. 
7 
 
8 
Chapter II 
9 
ACCOUNTING REPORTS 
10 
 
11 
SEC. 99. Financial Reports and Statements. – (a) The financial reports prepared by 
12 
the agencies shall comply with the specific requirements of applicable laws and 
13 
regulations as to nature, accounting basis, content, frequency, and distribution as well 
14 
as with all applicable restrictions pertaining to information that is classified for national 
15 
security purposes; and 
16 
 
17 
(b) The financial statements shall be based on official accounting records and 
18 
registries kept in accordance with law, regulations of the Commission, and the IPSAS, 
19 
and IFRS, as applicable. 
20 
 
21 
SEC. 100. Submission of Reports. – (a) Whenever deemed necessary in the exigencies 
22 
of the service, the Commission may, under regulations issued by it, require the agency 
23 
heads, chief accountants, budget officers, cashiers, disbursing officers, administrative 
24 
or personnel officers, and other responsible officials of the various agencies to submit 
25 
financial statements, physical inventory reports, current plantilla of personnel, and such 
26 
other reports as may be necessary for the exercise of its functions; 
27 
 
28 
(b) In case of failure on the part of the officials concerned to submit the documents 
29 
and reports mentioned herein within the prescribed period, the head of the agency shall 
30 


 
 
 
 
58
cause the suspension of the payment of the salaries until the officials shall have 
1 
complied with the requirements of the Commission without prejudice to any 
2 
disciplinary action that may be instituted against such official or employee in 
3 
accordance with the applicable rules on administrative cases issued by the Civil Service 
4 
Commission; and 
5 
 
6 
(c) Failure on the part of the head of the government agency to implement, without 
7 
justifiable cause, the sanctions provided in the immediate preceding paragraph shall 
8 
constitute as a ground for this Commission to file the appropriate administrative charge 
9 
against the erring official. 
10 
 
11 
Chapter III 
12 
INTERNAL CONTROL SYSTEMS 
13 
 
14 
SEC. 101. Internal Control System and its Installation. – (a) Internal control is the 
15 
plan of organization and all the coordinate methods and measures adopted within an 
16 
organization or agency to safeguard its assets, check the accuracy and reliability of its 
17 
accounting data, and encourage adherence to prescribed managerial policies; 
18 
 
19 
(b) It shall be the direct responsibility of the agency head to establish an internal 
20 
control unit that shall install, implement, and monitor a sound internal control system 
21 
in that government agency; and 
22 
 
23 
(c) Failure on the part of the head of the government agency to implement the 
24 
preceding paragraph, without justifiable cause, shall constitute as a ground for this 
25 
Commission to file the appropriate administrative charge against the erring official. 
26 
 
27 
TITLE V 
28 
FINAL PROVISIONS 
29 
 
30 


 
 
 
 
59
SEC. 102. Penal Provision. – The penalty of fine not exceeding One Hundred 
1 
Thousand Pesos (PhP100,000.00) or imprisonment not exceeding one (1) year, or both 
2 
at the discretion of the court, shall be imposed upon any public officer or private person 
3 
committing any of the following acts or omissions declared as obstruction of audit: 
4 
 
5 
(a) Refusing or neglecting to render or settle an account as required by law or 
6 
regulation after demand by the Commission or its authorized representatives; 
7 
 
8 
(b) Denying access to or failing to produce documents, records, or papers under 
9 
custody of such public officer or private person within fifteen (15) days after 
10 
demand by the Commission or its authorized representatives in connection with 
11 
the conduct of audit; and 
12 
 
13 
(c) Destroying or concealing documents, records, or papers which are officially 
14 
entrusted to such public officer or private person, pertaining to the collection, 
15 
receipt, expenditure, or disbursement of public funds and utilization or disposal 
16 
of government property in connection with the conduct of audit. 
17 
 
18 
SEC. 103. Duty to Respect the Commission’s Independence. – It shall be the duty of 
19 
every person to respect, protect, and preserve the independence of the Commission. 
20 
 
21 
SEC. 104. Administrative Disciplinary Action. – (a) Any unjustified failure by the 
22 
public officer to comply with the requirements imposed in this Code, shall constitute 
23 
neglect of duty or grave misconduct, and shall be a ground for the Commission to file 
24 
appropriate administrative disciplinary action against the public officer who, upon 
25 
being found guilty after hearing, shall be meted the penalty commensurate with the 
26 
degree of the guilt in accordance with the civil service laws, without prejudice to 
27 
criminal prosecution whenever the evidence warrants; and 
28 
 
29 


 
 
 
 
60
(b) The auditor shall report to the director any violation of the preceding paragraph 
1 
for referral of the case to the Office of the Ombudsman, or other government 
2 
disciplining authorities. 
3 
 
4 
SEC. 105. Separability Clause. – If any provision or part of this Code is declared 
5 
invalid or unconstitutional, the remaining parts or provisions not affected shall remain 
6 
in full force and effect. 
7 
 
8 
SEC. 106. Repealing Clause. – Presidential Decree No. 1445, otherwise known as the 
9 
“Government Auditing Code of the Philippines”, is hereby expressly repealed. All 
10 
other laws, executive orders, proclamations, decrees, instructions, rules and 
11 
regulations, or parts thereof which are inconsistent or in conflict with any provision of 
12 
this Code are hereby are repealed or modified accordingly. 
13 
 
14 
SEC. 107. Effectivity. – This Code shall take effect fifteen (15) days after its 
15 
publication in the Official Gazette or in two (2) newspapers of general circulation. 
16 
 
17 
Approved, 
18