INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
This bill restructures and redesigns the existing outmoded government 
accounting system. While studies have been made in the past, including one 
commissioned to a US consulting firm in the early 1950s by the Budget 
Commission, the system essentially dates back to the colonial period. This 
will be the first time the country will have a law to govern Government 
Accounting. 
The draft of this bill was prepared by the Technical Working Group 
consisted of seasoned Certified Public Accountant (CPA) practitioners 
representing professional accounting associations, a representative from the 
Department of Justice advising on legal aspects, and CPA's from the 
Economic Affairs staff. Advise was also kindly provided by former Budget 
Secretaries. The professional accounting associations represented in the 
Technical Working Group were the Philippine Institute of CPAs (PICPA), 
Association of CPAs in Commerce and Industry (ACPACI), Association of 
CPAs in Public Practice (ACPAPP), Government Association of CPAs 
(GACPA), and Institute of Internal Auditors Philippines (IIAP). 
The bill introduced reforms in the accounting service so that accounting 
may serve as an effective tool for managing government offices, as it does in 
private business. Accurate, relevant and timely financial information from the 
accounting system is essential for monitoring of programs and projects, 
budget control, economic analysis, policy formulation, decision-making, and 
spotting possible areas for anomalies. 
Salient features of the bill include the following: 
1. Reorganization of the Department of Budget and Management; 
2. Identification of the purposes to be served by the government 
accounting system; 
3. Institution of internal control systems as a primary responsibility of 
heads of agencies, government corporations and local government 
units; 


4. Vesting responsibility in the Executive Branch for the accounting 
function as an essential element in management of the financial and 
fiscal affairs of Government; 
5. Delimitation of the accounting jurisdiction of the Commission on 
Audit to: 
a. Promulgation of general government accounting principles; 
b. Keeping of the general accounts or unappropriated surplus 
accounts. 
6. Creation of a Central Government Accounting Authority to be solely 
responsible for administration of the government accounting service 
and preparation of government wide financial reports. 
7. Adoption of the “accrual basis” of accounting in addition to the 
“obligation” and “cash accounting,” so as to generate more useful 
financial information. 
8. Delineation of accounting responsibilities of different agencies 
involved in the various functional accounting areas. 
The bill will streamline and improve effectiveness of the financial and 
internal control system at different levels of the bureaucracy. At present, such 
control is not a vailable to managers in government such that reliance is 
placed mainly on the Commission on Audit for the control on expenses and on 
use of the government‘s resources. The internal control system set up in this 
bill will provide government managers with the information and tools for more 
efficient, economical and effective management of government operations 
and resources. This should contribute to reducing red tape and, by providing 
timely and accurate information on transactions, help minimize the causes 
and incidence of graft and corruption in government offices. 
The management tools that the system established in this bill are made 
available for the sincere and competent administrators to reduce graft and 
corruption in government offices. 
In view of the foregoing considerations, early passage of this bill is 
earnestly sought. 
Senator 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
9 JIJL -2 is 
~ 
' 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
PROFESSIONALIZING THE GOVERNMENT ACCOUNTING SERVICE TO 
SERVE AS A TOOL FOR EFFECTIVE MANAGEMENT AND CONTROL OF 
GOVERNMENT RESOURCES, CREATING FOR THE PURPOSE THE 
GOVERNMENTACCOUNTANCYOFFKEUNDERTHEDEPARTMENTOF 
BUDGET AND MANAGEMENT AND FOR OTHER PURPOSES 
Be if enacted by fhe Senafe and House of Represenfafives of fhe 
Philippines in Congress assembled: 
GENERAL PROVISIONS 
SECTION 1. Title. This Act shall be known and cited as the 
"Government Accounting Act of 2007." 
SEC. 2. Declaration of Policy. All resources of government shall be 
managed, expanded or utilized in accordance with law and regulations, and 
safeguarded against loss or wastage through illegal andlor improper 
disposition, with a view of ensuring efficiency, economy and effectiveness in 
government operations. The responsibility to uphold that such policy is 
faithfully adhered to rests directly with the chief or head of the government 
agency concerned. 
For this purpose, all government transactions shall be properly 
documented, recorded, classified and interpreted into meaningful data and 
communicated on a timely basis to fiscal authorities concerned so that the 
information generated therefrom can be made useful for economic analysis, 
policy formulation and decision-making purposes. The responsibility to 
document and record faithfully said transaction shall rest with government 
accountants. 
SEC. 3. Definition of Terms. - Wherever used in this Act, the 
following terms shall be taken and understood in the sense indicated 
hereunder, unless the context otherwise requires: 


1. “Government accounting” is the proper recording of all receipts and 
expenditures and other financial transactions of Government or any of its 
subdivisions, agencies or instrumentalities, the maintenance of records that 
reflect the propriety of transactions and give evidence of accountability for 
assets and other resources available for use, and the classification of data in 
a way that provides useful information for control and for effective and 
efficient management of government operations, in accordance with 
generally-accepted accounting principles where applicable. 
2. “Budgetary accounts” refers to the funds, resources, or surplus 
already appropriated and made available for government expenditure during a 
given fiscal year, consisting of appropriation, expenditure, revenue and 
borrowing accounts. 
3. 
“General accounts” refers to the unappropriate surplus or 
uncommitted resource of the Government, the utilization of which shall require 
an enabling act of Congress. 
4. “Resources” refers to the actual assets of any agency of the 
Government such as cash, instruments representing of convertible to money, 
receivables, lands, buildings, as well as contingent asset such as estimated 
revenues applying to the current fiscal period not accrued or collected, and 
bonds authorized and unissued. 
5. “Receipts” refers to all collections received by any collecting officer 
irrespective of source and for whatever purpose. 
6. “Revenues” refers to earnings of the Government arising out of tax 
levies, regulatory and investment transactions, including those in exchange 
for direct services rendered by government agencies to the public. 
7. “Income” refers to revenues earned during and accruing to the 
Government for a particular fiscal year. 
to the current fiscal year not yet collected as of the end of the year. 
to when ordered, delivered or paid. 
8,”Accrued income” represents revenues earned during and pertaining 
9. “Obligation” represents goods and services ordered, without regard 
1 O.”Cost” represents value of goods and services consumed, without 
regard when ordered, delivered or paid. 
11. “Disbursement” represents bills paid without regard to when the 
goods and services were ordered, delivered or paid. 
12. “Expense” means any item or class of cost of (or loss from) carrying 
on an activity, a present operating cost, or representing an irrevocable cost or 
loss. 
13. “Expenditure” means the incurring of a liability, the payment of 
cash, or the transfer of property for the purpose of acquiring an asset or 
service or setting a loss; when unqualified, the accrual basis of accounting is 
assumed. 


14. "Surplus" is the excess of revenues over expenditures in a given 
fiscal year. 
15. "Deficit" is the excess of expenditures over revenues in a given 
fiscal year. 
SEC. 4. Fundamental Principle. - Financial transactions and 
operations of any government agency shall be governed by the fundamental 
principles set forth hereunder, to wit: 
(1) No money shall be paid out of any public treasury or depository 
except in pursuance of an appropriation law or other specific 
statutory authority; 
legitimate public purposes; 
(2) Government funds or property shall be spent or used solely for 
(3) Trust funds may be spent only for the purpose for which that trust 
was created or for which the funds were received. 
(4) Fiscal responsibility or accountability shall, to the greatest extent, 
be shared by all those exercising authority over the financial affairs, 
transactions, and operations of the agency; 
(5) Disbursement or disposition of government funds or property shall 
bear the approval of the proper officials; 
(6) Claims against government funds shall be supported with complete 
documentation; 
(7) All laws and regulations applicable to financial transactions shall be 
(8) General accepted principles and practices of accounting as well as 
of sound management and fiscal administration shall be observed, 
provided that they do not contravene existing laws and regulations. 
faithfully adhered to; 
SEC. 5. Organizational and Functional Framework and Delineation 
of Accounting Responsibilities. - The organizational and functional 
framework and accounting responsibilities shall be delineated as follows: 
(1) Pursuant to the primary fiscal responsibility of the agency head, 
management decisions and prerogatives of such agency head shall be 
respected by other government agencies, and the Commission on Audit shall 
be authorized only to review these decisions in accordance with its mandate; 
(2) At the top level, the Government Accountancy Office (GAO) 
created under Section 9, shall be responsible for accounting of all resources 
of the Government. It shall provide overall technical supervision and direction 
of the agency accounting function and keep the budgetary accounts. It shall 
be responsible for the submission of the consolidated financial results of 
operation of the government. 


(3) At the agency level, agency accountants shall be responsible for 
agency accounting functions. They shall be responsible for the preparation 
and submission of financial reports required by the agency head and higher 
fiscal authorities. 
(4) The Bureau of Treasury in close coordination with the Government 
Accountancy Office shall be responsible for cash accounting and debt 
management. 
(5) The Commission shall conduct audits of and prepare audit reports 
covering the overall financial operation of the Government. These audits shall 
be performed on a post-audit basis within a reasonable period of time from 
submission of pertinent reports. It shall promulgate general accounting 
principles and keep the general or unappropriated surplus accounts. 
CHAPTER I 
BASIC POLICIES AND STANDARDS OF GOVERNMENT ACCOUNTING 
SEC. 6. Concept and Basic Features of Government Accounting. - 
Government accounting is a process in which the transactions of an operating 
agency are documented, classified, and recorded for the purpose of 
accumulating and providing financial information essential to the conduct of 
designated activities. It includes the design of accounting systems which 
involves: (1) the development of recording methods, (2) the documentation 
and review of financial transactions, (3) the maintenance of records and 
books of accounts, and (4) the preparation of financial and other reports. 
SEC. 7. Purposes of Government Accounting. - The range of 
purposes to be served by government accounting is: 
I. 
The accounting system shall be so designed to comply with the 
constitutional, statutory and other legal requirements and generally accepted 
accounting principles, when applicable. 
2. The accounting system shall be related to the budget classifications 
since budgetary and accounting functions are complementary elements of 
financial management and therefore must be closely integrated. 
3. The accounts shall clearly identify the objects and purposes for 
which funds have been received and expended, and the agency responsible 
for custody and use of funds in the program implementation; 
4. The accounting system shall be maintained in a way to facilitate 
audit by external review authorities, and to readily furnish the information 
needed for an effective audit; 
5. The accounting system shall permit effective administrative control of 
funds and operations, program management and internal audit and appraisal; 


6. The accounts shall effectively disclose the economic and financial 
results of programs operations, including the measurement of revenues, 
identification of costs and determination of the operating results (the surplus 
or deficit position) of the government and its programs and organizations; 
7. The accounting system shall be capable of serving the basic 
financial information needs of development of planning and programming, and 
the review and appraisal of performance in physical and financial terms; and 
8. The accounts shall provide financial data useful for economic 
analysis and classification of governmental transactions, and assist in the 
development of national accounts, 
SEC. 8. General Standards of Government Accounting and 
Reporting. - Government accounting shall adopt the following general 
standards. 
1. Except as may otherwise be specifically provided by law, all moneys 
and property officially received by a public officer in any capacity or upon any 
occasion must be accounted for as government funds and property. 
2. The accounting system shall basically serve the broad purpose of 
accountability and management needs; 
3. The accrual basis of accounting shall be employed as a basic 
component of management of government resources in addition to the 
existing cash and obligation accounting; 
4. All financial transactions shall be property documented as the 
different phases of the transactions take place and shall be recorded on a 
double-entry basis; 
5. A complete set of books of accounts shall be maintained by 
agencies to whom allotments or sub-allotments advices have been released; 
agencies without 
allotments or 
sub-allotments 
but 
have financial 
accountabilities shall keep appropriate books of accounts as required by the 
GAO; 
6. The financial statements and accounting reports shall satisfy the 
information needs essential for purposes of : (a) budget accountability; (b) 
economic analysis, (c) policy formulation, (d) executive decision -making \, 
and (e) external audit; 
7. Reports must present factual data useful for evaluation, monitoring 
and control of operations at different levels of management; 
8. The basic accounting reports shall include the statement of fiscal 
operations, the balance sheet, costs of a given program or project, and 
statements of appropriation, allotment, obligation, expenditure and payable 
accounts and balances; 


9. The accounting function shall be performed by persons with 
I O .  An agency accounting manual shall be developed and maintained 
adequate knowledge of government accounting; and 
by each agency upon installation of its accounting system. 
In accordance therewith, Section 63 to 124 of Presidential Decree No. 
1445 and Sections 40 to 53, book V, Title I, Sub-title 6, 
of Executive Order No. 
292 are hereby repealed. 
CHAPTER II 
CENTRAL GOVERNMENT ACCOUNTING AUTHORITY 
SEC. 9. Establishment of Central Government Accounting Authority. 
- There shall be created and established a Central Government Accounting 
Authority, herein referred to as the Government Accountancy Office (GAO), 
under the Department of Budget and Management (DBM) which shall be 
solely responsible for the technical supervision of accounting functions in all 
government agencies. 
SEC. 10 . Statement of Objectives. - The following are the specific 
objectives of the Government Accountancy Office: 
1. To initiate government accounting refoms needed in achieving 
effective control of funds in-flow and out-flow without necessarily constricting 
agency management thus allowing them to assume greater fiscal 
responsibility as provided by law; 
2. To improve accounting efficiency and capability at the agency 
operating level; and 
3. To facilitate preparation and submission of accounting and other 
financial reports ,for budget accountability, management decisions, and 
external audit purposes. 
SEC. 11. Head of the Governmen Accountancy Offices; Deputies; 
Qualifications; and Salary. - 
1, The GAO be headed by an Accountant General whose rank shall be 
equivalent to a Department Undersecretary. He shall be assisted by two 
deputies, whose ranks shall be equivalent to Department Assistant 
Secretaries. 
2. The Accountant General shall be appointed by the President for a 
term of seven (7) years. The Deputies shall be chosen by the President from 
among the Career Executive Services (CES) eligibles. In no case shall any 
one of them be appointed or designated in a temporary or acting capacity. 
3. The Accountant General and each deputy shall receive an annual 
salary as may be provided by law. 


SEC. 12. The Office of the Accountant General. - 
1. The Office of the Accountant General shall determine policies, 
promulgate government accounting rules and regulations and prescribe 
accounting systems, procedures and techniques and standards governing the 
performance by the agency of its duties and functions. 
2. It shall also formulate measures on internal control to ensure 
accuracy, integrity and reliability of accounting records and reports. 
SEC. 13. The Central Offices and Regional Accounting Services. - 
The GAO shall organize ofices to handle the following areas of accounting: 
(1) technical accounting services; 
(2) administration of chart of accounts and maintenance of budgetary 
control 
accounts; 
(3) systems and training; 
(4) national government accounting; 
(5) local government accounting; 
(6) government corporation accounting; 
(7) financial management information; and 
(8) decentralized accounting services. 
These off ices shall perform primarily staff functions, exercise technical 
supervision over the agency accounting services, and perform such other 
functions as may be assigned by the Accountant General. 
CHAPTER 111 
JURISDICTION, POWERS AND LINKAGES 
SEC. 14. General Jurisdiction. - The following powers and duties 
shall be 
within the functional jurisdiction of the Government Accountancy Office, to wit: 
(1) The design and prescription of accounting and financial reporting 
(2) The administration of the Government Chart of Accounts; 
(3) The keeping of the central books of accounts of the Government; 
(4) The preparations of government-wide management accounting and 
systems, 
and 
SEC. 15. Keeping the Books of Appropriated Funds of the National 
Government. - The Department of Budget and Management thru the 
Government Accountancy Office shall keep and maintain the central books of 
accounts of the appropriated funds of the National Government. 


SEC. f6. Examining Authority. - The GAO shall have the authority to 
examine the agency books of accounts for the purpose of ascertaining 
whether financial transactions are properly recorded and to determine 
compliance with budgetary and accounting rules and regulations. 
SEC. 17. Power to Withhold Release of Funds. - The GAO shall have 
the authority to withhold the release of notice cash allocation to agencies 
which have not complied with the financial reporting requirement fifteen (15) 
working days after the prescribed deadline for its submission. 
SEC. 18. Power to Exact Compliance with Financial Reporting 
Requirements. - The GAO shall have the power to exact strict compliance 
with timely financial reporting requirements from all agencies of the 
Government. 
SEC. 19. Adjustment of Accounts between Agencies. - The GAO 
shall have the power, under such regulations as it may prescribe, to authorize 
and enforce the adjustment of accounts subsisting between various 
agenciesof the Government. 
SEC. 20. Collection of Indebtedness due the Government. - The 
GAO shall, through proper channels, assist in the collection and enforcement 
of all debts and claims, and the restitution of all funds or the replacement or 
payment at a reasonable price of property, found to be due the Government, 
or any of its agencies, in the settlement and adjustment of its accounts. If any 
legal proceeding is necessary to that end, the GAO shall refer the case to the 
Solicitor General, the Government Corporate Counsel, or the legal staff of the 
creditor government office or agency concerned to institute such legal 
proceeding. The GAO shall extend full support in the litigation. All such 
moneys due and payable shall bear interest at the legal rate from the date of 
written demand by the GAO. 
SEC. 21. Submissian of the Annual Consolidated Financial Report. - 
The GAO, thru the Secretary of the Department of Budget and Management, 
shall submit within four (4) months after the end of the fiscal year, to the 
President, Congress and the Commission on Audit, an audited annual 
consolidated financial report reflecting the results of government operations. 
CHAPTER IV 
AGENCY ACCOUNTING FUNCTIONS 
SEC. 22. Organization and Functions. - There shall be created in every 
government agency an accounting group to be headed by an accountant 
administratively under the head of the agency or under the financial 
management service, but technically under the GAO who shall perform the 
following functions: 


(I) 
Maintain the agency books of accounts; 
(2) Analyze, record, classify and summarize all transactions involving 
the receipt and disposition of government funds and property; 
(3) Prepare financial statements and interpret the results of financial 
operations for agency management decision-making purposes; 
(4) Prepare regular financial reports for the budgetary control purposes 
for guidance of agency management and for reporting to the DBM 
through the GAO; 
(5) Prepare and submit accounting reports required by the Commission 
on Audit; and 
(6) Certify to availability of funds. 
SEC. 23. Keeping of Accounts. - 
(1)The accounts of an agency shall be kept in such detail as is 
necessary to meet the needs of the agency and at the same time be 
adequate to provide the information needed by fiscal or control agencies of 
the Government; 
(2) The highest standards of honesty, objectivity and consistency shall 
be observed in the keeping of accounts to safeguard against erroneous, 
inaccurate or misleading information. 
SEC. 24. Recording of Financial Transaction. - Each government 
agency shall record its financial transactions and operations conformably with 
generally accepted accounting principles and in accordance with pertinent 
laws and regulations, and by using the standard chart of accounts as 
prescribed by the GAO. 
SEC. 25. Financial and Physical Reports and Statements. - 
(1) The financial reports prepared by the agencies shall comply with 
the specific requirements of applicable laws and regulations as to nature, 
accounting basis, content, frequency, and distribution as well as with all 
applicable restrictions pertaining to information classified for national security 
purposes. 
(2) The financial statements shall be based on official accounting 
records kept in accordance with law and the generally accepted accounting 
principles and standards and should be signed by agency heads and the 
Chief accountants who must be Certified Public Accountants indicating his 
CPA certificate number. 
(3) The physical reports shall include the identification of the approved 
units or work measurements, work targets, work accomplished and manpower 
utilized for each budgeting functions, program or project. 


SEC. 26. Submission of Reports. - 
(1) All heads of accounting units shall submit within two (2) months after 
the end of the fiscal year, to the GAO and the Commission on Audit, an annual 
financial report reflecting the results of the agency or program operations. 
(2) Whenever deemed necessary in the exigencies of the service, the 
GAO may under regulations issued by it require the agency heads, chief 
accountants, budget officers, cashiers, disbursing officers, administrative or 
personnel officers, and other responsible officials of the various agencies to 
submit trial balances, physical inventory reports, current plantilla of personnel, 
and such other reports as may be necessary for the exercise of its functions, 
including physical performance indicators report. 
(3) Failure on the part of the officials concerned to submit the required 
documents and reports at the time mentioned herein shall automatically cause 
the suspension of payment of their salaries until they shall have complied with 
the requirements of the GAO. 
(4) Any other violation of the provisions of this Section shall likewise cause. 
the suspension of payment of salaries, without prejudice to any other disciplinary 
action that may be instituted against such concerned official or employee. 
CHAPTER V 
INTERNAL CONTROL SYSTEM 
SEC. 27. Concept of lnternal Control - lnternal control is the plan of 
organization and all the coordinate methods and measures adopted within an 
organization or agency to safeguard its assets, check the accuracy and reliability 
of its accounting data, promote administrative and operational efficiency and 
encourage adherence to prescribed managerial policies. 
SEC. 28. installation of lnternal Control System. - The installation and 
implementation of a sound system of internal control shall be the direct 
responsibility of the agency head. For this purpose, such agency head shall 
ensure that all actions of the officials concerned are properly monitored and 
coordinated. 
SEC. 29. lnternal Confrol System. - Subject to the provisions of existing 
laws, rules and regulations and this Act, each Agency shall set up internal control 
systems for the following areas: 
1. Cash receipt and disbursement 
2. Property, supplies and other inventory items; 
3. Accounting and bookkeeping; 
4. Personnel recruitment, promotion and separation; and 
5. Procurement, purchases, storage, requisitions, issuance and disposal. 
SEC. 30. Organization. - There shall be created in every government 
agency an internal control unit which shall be responsible for assuring that steps 
are taken to safeguard the assets of the agency, checking the accuracy and 


reliability of the accounting data, promoting administrative and operational 
efficiency, encouraging adherence to prescribed managerial policies, and may 
conduct such other activities to achieve these ends. 
For this purpose, the agency head may absorb as memberk of the staff of 
the internal control unit the resident COA personnel at the time of the effectivity 
of this Act. 
SEC. 31. Functions. -The internal control unit shall have the following 
functions: 
1. Conduct spot cash audit of regularkpecial collecting disbursing officers 
of the agency. 
2. Pre-Audit agency transactions. 
3. Review contracts before awarding. 
4. Inspect properties delivered. 
5. Certify unserviceable and condemned equipments before replacement 
and disposal. 
6. Keep custody, and be responsible for the safekeeping and preservation 
of paid expense vouchers, journal vouchers, stubs of treasury warrant or 
checks, reports of collections and disbursements and similar documents 
together with their respective supporting papers. 
Subsection 1 to 4 may be performed by the internal control unit on test 
basis or sampling method, in accordance with the implementing rules and 
regulations to be issued by GAO. 
SEC. 32. Reporting Responsibilities. - The head of the internal control 
unit shall submit reports directly to the head of the agency, copy furnished the 
DBM and the Commission on Audit, of his findings, observations and 
recommendations to maintain a sound financial management of the agency 
resources. 
SEC. 33 Liabilitjf of the Head of the Infernal Control Unit. - All 
management reports required by central fiscal agencies shall be certified correct 
by the central fiscal agencies shall be certified correct by the head of the internal 
control unit and the agency head who will shall be liable solidarity with each other 
for any malfeasance, and misrepresentation which may later on the discovered 
by appropriate authorities. 
SEC. 34. Implementing Rules and Regulations. - As part of its 
functions, the GAO in coordination with the Commission on Audit shall develop 
and promulgate internal control standards and procedures to be adopted by all 
government agencies. 
SEC. 35. Technical Supervision. - The Government Accountancy Office 


shall provide technical supervision and support in the development, installation 
and implementation of the agency internal control system. 
SEC. 36. Management Audit. - As the exigency of the service requires, 
the Department of Budget and Management shall conduct management audit of 
government agencies to check on management adherence to prescribed internal 
control standard and effect immediate remedial measures if existing internal 
control system is found weak and inadequate. 
FINAL PROVISION 
SEC. 37. Reorganization of fhe Department of Budget and 
Management. - Within sixty (60) days after the approval of this Act, the 
Department of Budget and Management shall reorganized its functions and 
structure in accordance with the provisions herein. 
SEC. 38. Administrative Disciplinary Action. - Subject to such rules and 
regulations as may formulated by GAO and approved by the President, any 
unjustified failure by the public officer concerned to comply with any requirement 
imposed in this Act shall constitute neglect of duty and shall be a ground fro 
administrative disciplinary action against the said public officer who, upon being 
found guilty thereof after hearing, shall be meted out such penalty as is 
commensurate with the agree of his guilt in accordance with the Civil Service 
Law. Repeated unjustified failure to comply with the requirements imposed in this 
Act shall be conclusive proof that the public officer concerned is notoriously 
undesirable and corresponding penalties shall be imposed accordingly. 
SEC. 39. Penal Provisions. - Any violation of the provisions of this Act or 
any rules and regulations issued pursuant thereto, shall be punishable by a fine 
not exceeding Five hundred thousand pesos (P500,OOO.OO) or by imprisonment 
for a period not exceeding twelve (12) years or both, in the discretion of the court, 
without prejudice to the provisions of the Anti-Graft and Corrupt Practices Act 
and other applicable laws. In addition thereto, the penalty of perpetual 
disqualification from holding any public office and/or temporary disqualification 
from exercising any calling or profession shall be imposed when the court 
deemed it appropriate. 
Any proceeds obtained by reason of any violation of this Act or any rules 
and regulations issued pursuant thereto shall be forfeited in favor of the 
Government. 
SEC. 40. Appropriation. - The necessary appropriations to implement the 
provisions of this Act consisting of the annual operating expenses of the Offices, 
including the salaries, allowance and other emoluments of all the its officials and 
employees shall be included in the annual General Appropriations Law. The 
usage of these funds shall be governed by the general appropriations and other 
budget laws. 


SEC. 41. Implementing Rules and Regulations. - The GAO shall 
formulate and issue the necessary implementing rules and regulations, except as 
otherwise specifically provided in this Act. 
SEC. 42. Separability Clause. - Should any provision of this Act or any 
part thereof be declared invalid, the other provisions, so far as they are separable 
from the invalid one, shall remain in force and effect. 
SEC. 43. Repealing Clause. - All laws, executive orders, proclamations, 
decrees, instructions, rules and regulations, or part thereof, which are 
inconsistent or in conflict with any provision of this Act shall be deemed repealed 
or modified accordingly. 
SEC. 44. Effectivity Clause. - This Act shall take effect thirty (30) days 
after its complete publication in the Official Gazette or in complete publication in 
the newspaper of general circulation. 
Approved,