NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
"’'(©If'tr of ll'f 
'■ ’
24 JUL 23 All 39
SENATE
Introduced by Senator FRANCIS "CHIZ" G. ESCUDERO
AN ACT
PROVIDING FOR THE REVISED GOVERNMENT AUDITING CODE OF THE 
PHILIPPINES
EXPLANATORY NOTE
Accountability, as one of the piiiars of the government budgeting and expenditure 
cycle, refers to the process in which government agencies and instrumentaiities are assessed 
and heid accountable based on their compiiance with the guidelines for utilization of funds 
and approved performance indicators.
This pivotal role in the government budget and expenditure is performed by the 
Commission on Audit, which is mandated to "examine, audit, and settie all accounts pertaining 
to the revenue and receipts of, and expenditures or uses of funds and property, owned or 
held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or 
instrumentalities, including government-owned or controlled corporations with original 
charters."
In fulfilling this duty, the Commission foliows the standards and procedures set forth 
under Presidentiai Decree No. 1445, otherwise known as the "Government Auditing Code of 
the Phiiippines", which was issued by then President Ferdinand E. Marcos in 1978. It goes 
without saying that this decree has been outstripped, if not rendered by irrelevant, by changes 
which have occurred in more than four decades since it was published. No iess than President 
Ferdinand R. Marcos Jr. urged Congress, in his 2023 State of the Nation Address, to "pass a 
new Government Code to make auditing more attuned to these changing times".
In iight of such recommendation from the President and the wisdom behind House Biil 
No. 9674 approved on third reading by the House of Representatives iast December 12, 2023, 
this bill seeks to enact a newer and more relevant auditing code. It will expand the general 
jurisdiction and authority of the Commission, particularly in the examination of the records of 
private entities engaged in Pubiic-Private Partnership projects or public utilities, and those that 
receive pubiic funds. It will also empower the State to leverage digital transactions, by 
maximizing the use of electronic official receipts, eiectronic payment modalities, and digitai 
record-keeping. Through these interventions, government wili become more accountabie, 
more efficient and more responsive to the needs of the Filipino people.


In light of the foregoing, I respectfully submit this bili for immediate consideration and 
approval.
FRANCIS G. E^UDERO


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
I'i. 
isvirnr
• 1 
• 
crS't I u •
'(©fficr of illf i"
24 JUL 23 All 39
SENATE
Introduced by Senator FRANCIS "CHIZ" G. ESCUDERO
AN ACT
PROVIDING FOR THE REVISED GOVERNMENT AUDITING CODE OF THE 
PHILIPPINES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
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TITLE I
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GENERAL PROVISIONS
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Section 1. Title. - This Act shall be known as the "Revised Government Auditing Act."
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Sec. 2. Declaration of Policy. - It is the policy of the State that all resources of the
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government shall be managed, expended, or utilized in accordance with law, rules, and
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regulations, and safeguarded against loss or wastage through illegal or improper disposition
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in order to ensure efficiency, economy, and effectiveness in the operations of government.
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The responsibility to take care that such policy is faithfully adhered to rests directly with the
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chief or head of the government agency concerned.
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Sec. 3. Definition of Terms. - As used in this Act:
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(a) Account refers to a list or statement of monetary transactions pertaining to
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fund, property, obligation, equity, revenue, collection, or expense, whether or
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not entered as item/s of debit or credit in the books of accounts, registry, or
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any other record;
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(b) Accountable Officer refers to the officer of any government agency or
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instrumentality who, by the nature of duties and responsibilities or participation
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in the collection or receipt and expenditure or use of government funds,
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custody, and disposal of government property, is required by law or regulation
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to render account to the Commission on Audit (COA). This shall include any
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public officer or private person or entity who may have participation in the
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transaction;


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(c) Advice to Debit Account (ADA) refers to an authorization issued by the 
government entity that serves as an instruction to government servicing banks 
to debit a specified amount from its available account balance for the payment 
of creditors/payees;
(d) Aggrieved Party refers to a person or entity adversely affected by any decision, 
order, resolution or ruling of the Commission or any of its duly authorized 
representatives;
(e) Appropriation refers to an authorization by law, appropriation ordinance, or 
other enactments, or the corporate operating budget directing the payment of 
Personnel Services (PS), Maintenance and Other Operating Expenses (MOOE), 
and capital outlay out of government funds under specified conditions and/or 
purposes;
(f) Appeai refers to the process of elevating to a higher authority any decision, 
order, resolution or ruling of the Commission or any of its duly authorized 
representatives;
(g) Audit refers to the examination, verification, evaluation and analysis of the 
accounts or financial records including evaluation of the effectiveness of 
internal control systems; the determination of the government entity's 
compliance with applicable laws, rules, and regulations; as well as the 
evaluation of the economy, efficiency and effectiveness of management 
systems, operations, and programs, activities, or projects (PAPs). It may also 
cover other special audits as may be prescribed by the Commission;
(h) Auditor refers to any officer or employee of the COA duly appointed or 
designated to conduct an audit;
(i) Audit Group refers to a cluster of Audit Teams that are grouped together 
headed by a Supervising Auditor (SA). The audit group shall plan, manage, 
conduct the audit work, and ensure prompt submission of the audit report;
(j) Audit Decision refers to the action of the auditor as a result of the audit to 
allow, disallow, or charge a particular transaction;
(k) Audit Report refers to the final output of an audit on the accounts, financial 
records, systems, and operations of a government entity;
(l) Audit Team refers to the basic organizational unit responsible for the audit of 
government and non-government entities;
{rr\)Audit Work Papers refer to the documentation or evidence, either in physical 
or electronic form, of the work done and the results thereof, consisting of


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relevant or pertinent data, analyses, computations, calculations, notes, 
schedules, excerpts, confirmations and other documents or materials gathered, 
prepared, and compiled in the course of an audit;
(n) Cash refers to money or its equivalent currencies, negotiable checks, or 
balances in bank accounts or in the possession or custody of a collecting and/or 
disbursing officer;
(o) Cash Advances refer to regular or special advances granted to public officers 
and employees for a public purpose;
(p) Charge refers to accountability pertaining to the assessment, appraisal, or 
collection of revenues, receipts, and other income such as those arising from 
under-appraisal, under-assessment or under-collection or failure to collect or 
remit collection which is found in the course of audit of revenues or receipts;
(q) COA Order of Execution (COE) refers to a written instruction to the head of 
agency to withhold payment of salary and other money due to persons liable, 
for settlement of their liability as indicated in the Notice of Disallowance or 
Notice of Charge. It is issued after the issuance of the Notice of Finality of 
Decision (NFD);
(r) Cost of Audit Services refers to the cost of discharging the audit function, taking 
into consideration the nature and complexity of operations, size of the 
government entity, and the volume of transactions being audited;
(s) Decision or Resoiution refers to an adjudication of any case or matter brought 
before any authorized official or body in the Commission which shall embody 
the facts of the case, the issue/s to be resolved, the ruling, and the law, 
regulations, or precedent on which the ruling is based;
(t) Depository refexs to any financial institution lawfully authorized to receive the 
deposit of government moneys;
(u) Direct Electronic Payment (DEP) refers to an electronic payment scheme where 
the payments are made by the government entity itself, using the 
intermediary's technology or infrastructure. This includes the use of ADA;
(v) DisaHowance refers to the disapproval in the audit of a transaction, either in 
whole or In part, involving government disbursement or property;
{\n) Electronic Collection (e-CoHection) refers to a method or manner wherein 
revenue, fees, assessments, or obligations due to the government entity is 
being collected using a mechanical device, electronic device, or computer- 
based system. The term refers to an alternative way of collection wherein no


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actual money, check, or any physical note is handed through the hands of the 
government entity's coiiecting officer. This inciudes the use of an intermediary 
in performing the collection function;
(x) Electronic Payment (e-Payment) refers to the disbursement of money or 
equivalent electronic representations of legal tender, for purposes of paying 
government expenditures, soieiy through electronic means as opposed to the 
use of cash, check, or physical notes to accomplish the same. This includes the 
manner by which an obligation is extinguished by means of sending instruction 
for the debit of the government entity's account and the corresponding credit 
to the payee's account. This includes the transfer of funds to the intermediary 
for the purpose of distribution;
(y) Financial Reporting Framework refers to a set of accounting principles, 
standards, interpretations, and pronouncements that must be foilowed in the 
preparation of the financial statements. It defines how and when to recognize, 
measure, present and disclose transactions in the financial statements. This 
refers to the applicable accounting standards adopted by the Commission on 
Audit (COA) as prescribed by the international standards-setting body;
(z) Government Agency refers to any department, bureau, or office of the national 
government, or any of its branches and instrumentalities, local government 
units and its political subdivision, including entities created by it, and 
government corporations, inciuding their subsidiaries;
(aa) Government Funds and Properties refer to public moneys of every sort and 
other resources pertaining or accruing to any agency of the government; 
including funds transferred to private entities as a subsidy, equity, donation, 
grant, or counterpart fund for impiementation of PAPs;
(bb) Liability refers to either an obligation arising from audit decisions or from 
contracts or quasi-contracts;
(cc) Money Claim refers to a demand for payment of a sum of money, 
reimbursement, or compensation arising from law, contract, or quasi-contract 
due from a government agency or owing to a claimant;
(dd) Notice of Finality of Decision (NFD) refers to a written notification addressed 
to the head of the agency that a decision of the Commission has become finai 
and executory;
(ee) Persons Liable refer to the persons determined to be answerable for an audit 
disailowance, charge, or decision by the Commission;


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(ff) Persons Responsible refer to the persons determined to be answerable for the 
compliance with the audit requirements as called for in the Notice of 
Suspension (NS);
(gg) Programs, Activities, Projects (PAPs) refer to any work progress or group of 
work progress undertaken to realize the outputs and outcomes of an agency. 
This is represented by an item of appropriation in the national budget;
(hh) Public Officer refers to any person holding any public office in the government 
by virtue of an appointment, election, or contract vested with sovereign 
functions of the government;
(ii) Public Purpose refers to any purpose or use directly available to the general 
public as a matter of right. This pertains to those traditionally viewed as 
essentially government functions such as the building of roads and the delivery 
of basic services. It may also include those purposes designed to promote social 
justice and public interest allowed by the law or jurisprudence;
(jj) Public Utility refers to a public service that operates, manages, or controls for 
public use any public facility, network and system as enumerated in Republic 
Act No. 11659 entitled, "An Act Amending Commonwealth Act No. 146, 
otherwise known as the Public Service Act, as amended";
(kk) Regular Cash Advances refer to those granted to cashiers, disbursing officers, 
paymasters, and/or property/supply officers for any of the following purposes:
(1) Salaries and wages;
(2) Commutable allowances;
(3) Honoraria and other similar payments to officials and employees; and
(4) Petty operating expenses, consisting of small payments for 
maintenance and operating expenses cannot be paid conveniently paid 
by check or are required to be paid immediately;
(II) Revenue refers to income or receipts derived by a government agency from 
taxes, excise, custom duties, fees, royalties, rents, sale of goods or services, 
sale of assets and collections from other sources;
{rr\rr\)Settlement of Liability refers to the payment, restitution, or other act of 
extinguishing an obligation as provided by law in satisfaction of the liability 
under a Notice of Disallowance or Notice of Charge (ND/NC) or in compliance 
with the requirements of a Notice of Suspension (NS);
(nn) Settlement of Accounts refers to the process of determining the status or 
balance of the account of an accountable officer after audit and examination;


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(oo) Settled Account refers to a transaction which after audit does not result to
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any adverse audit decision;
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(pp) Special Cash Advances refer to those granted on the explicit authority of the
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Head of the Agency only to duly designated disbursing officers or employees
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for other legally authorized purposes, as follows:
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(1) Current operating expenditures of the agency field office or of the
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activity of the agency undertaken in the field when it is impractical to
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pay to the same by check, such as - (a) Salaries, Wages and
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Allowances; (b) Maintenance and other operating expenses; and
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(2) Travel Expenditures, including transportation fare, travel allowance,
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hotel room/lodging expenses and other expenses incurred by the
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officials and employees in connection with official travel;
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(qq) Statement of Internal Control (SIC) refers to the representation of the head
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of the agency's informed judgment as to the overall adequacy and
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effectiveness of internal control within the agency related to compliance,
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reporting, and operations;
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(rr) Suspension refers to a temporary disallowance of a transaction or accounts
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which appear illegal or improper or irregular unless satisfactorily explained or
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justified by the persons responsibie or until the requirements on matters raised
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in the course of audit are submitted or complied with;
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(ss) Trust Funds refer to funds which, by operation of law or by contract which are
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officially in the possession of any government agency or of a public officer as
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trustee, agent, or administrator, which are for the fulfillment of certain
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obligations or a specific purpose; and
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(tt) Transfer-Distribute-Liquidate (TDL) refers to an e-Payment scheme where the
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government entity's funds are first transferred to the intermediary's possession
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and control, which the latter thereafter uses to distribute payments to the
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intended payees of the principal government entity.
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Sec. 4. Fundamental Principles. - Financial transactions and operations of any
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government agency shall be governed by the fundamental principles set forth hereunder:
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(a) No money shall be paid out of any public treasury or depository except in
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pursuance of an appropriation law, appropriation ordinance, or other specific
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statutory authority, or a Department of Budget and Management (DBM)-
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approved corporate operating budget;
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(b) Government funds or property shall be spent or used solely for public purposes;


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(c) Trust funds shall be spent only for the specific purpose for which the trust was
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created, or the funds received;
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(d) Fiscal responsibility shall, to the greatest extent, be shared by all those
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exercising authority over the financial affairs, transactions, and operations of
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the government agency;
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(e) Disbursements or disposition of government funds or property shall be
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approved by the proper official of the government agency;
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(f) Claims against government funds shall be properly authorized and supported
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with the complete required documentation;
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(g) Ali laws, rules, and regulations applicable to financial transactions shall be
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faithfully adhered to; and
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(h) Applicable financial reporting framework adopted by the Commission, as
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prescribed by international standards-setting body, as well as sound
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management and fiscal administration, shail be observed: Provided, That they
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do not contravene existing laws, rules, and regulations.
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TITLE II
17 
CHAPTER I
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Organization
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Sec. 5. Composition of the Commission on 
Audit, Qualifications, Term and Salary of
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Members. - The Commission shall be headed by a Chairperson and two (2) Commissioners,
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who shali be natural-born citizens of the Philippines and, at the time of their appointment, at
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least thirty-five (35) years of age, either certified public accountants with at least ten (10)
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years of auditing experience, or members of the Philippine Bar who have been engaged in the
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practice of law for at least ten (10) years, and must not have been candidates for any elective
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position in the elections immediately preceding their appointment. At no time shali all Members
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of the Commission belong to the same profession.
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The Chairperson and the Commissioners shall be appointed by the President of the
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Philippines, subject to the confirmation of the Commission on Appointments, for a term of
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seven (7) years without reappointment. Appointment to any vacancy shall be only for the
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unexpired portion of the term of the predecessor. In no case shall any member be appointed
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or designated in a temporary or acting capacity.
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In case of vacancy pending the appointment of a Chairperson, the senior member, as
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to appointment, shall perform the functions of the Chairperson until a new one is appointed
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and assumes office.


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No member of the Commission shall, during their tenure, hold any other office or
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employment in the government. They shall neither be in the practice of any profession or in
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the active management or control of any business which in any way may affect their functions
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as members of the Commission, nor shall they be financially interested, directly or indirectly,
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in any contract with, or in any franchise or privilege granted by the national government, any
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of its political subdivisions, agencies or instrumentalities, including government-owned or
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controlled corporations and their subsidiaries.
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The salary of the Chairperson and the Commissioners shall be fixed by law and shall
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not be decreased during their tenure.
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Sec. 6. The Commission Proper. - The Commission Proper shall be composed of the
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Chairperson and two (2) Commissioners. They shall sit as a collegial body in the discharge of
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the powers and functions of the Commission.
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Sec. 7. Functions of the Commission Proper. - The following shall be the functions of
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the Commission Proper:
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(a) Promulgate auditing rules and regulations for the determination of the scope
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and type of audit and examination by the Commission, establish the techniques
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and methods required therefor, including those for the prevention and
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disallowance of illegal, irregular, unnecessary, excessive, extravagant, or
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unconscionable expenditures or uses of government funds or property;
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(b) Promulgate accounting and auditing policies, rules, and regulations, and
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authorize the adoption of the international accounting and auditing standards
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prescribed by the international standards-setting body;
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(c) Promulgate its own rules concerning pleadings and practices before it or any
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of the office of the Commission. Such, however shall not diminish, increase, or
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modify substantive rights;
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(d) Decide by a majority vote of all its Members any case or matter brought before
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it;
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(e) Appoint the officials and employees of the Commission in accordance with the
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Civil Service laws, rules, and regulations. For the Regional Offices,
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appointments to rank-and-file positions may be delegated by the Commission
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Proper to the Directors concerned. The Commission Proper shall formulate the
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appropriate guidelines for this purpose;
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(f) Exercise original and concurrent jurisdiction over administrative cases filed
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against COA personnel.
8


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(g) Recommend to Congress its retirement benefits system pursuant to its fiscal
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autonomy;
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(h) Restructure, when necessary, the organizational structure of the Commission,
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create new positions, transfer items, or make adjustments in the Personnel
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Services Itemization in accordance with the organization, staffing and position
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classification standards of the DBM;
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(i) Authorize the conduct of special audits including re-opening of settled accounts
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in case of fraud, collusion, or error of calculation or when new and material
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evidence is discovered, and other investigations as may be prescribed by the
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rules of the Commission; and
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(j) Perform such other functions as may be provided by law.
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Sec. 8. Duties and Responsibilities of the Chairperson. - The Chairperson shall act as
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the presiding officer of the Commission Proper and chief executive officer of the Commission.
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As chief executive officer, the Chairperson shall:
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(a) Control and supervise the general administration of the Commission;
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(b) Direct and manage the implementation and execution of policies, standards,
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rules, and regulations promulgated by the Commission Proper;
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(c) Sign appointments for recruitment and promotions, and office orders for Audit
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engagements, assignment/reassignment of officials and employees, or any
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other personnel movement of any office or station;
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(d) Delegate to the Commissioners, Assistant Commissioners, Directors, and other
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officials of the Commission such authority on internal administration concerning
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personnel, planning, financial, legal, and other matters pertaining to their
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respective functional areas as may be determined by the Commission Proper;
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(e) Submit a proposed annual or supplemental budget of the Commission to the
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DBM for approval of the Congress;
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(f) Summon any person or public official for the purpose of gathering data or
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inquiring into matters pertinent to the formulation, implementation or
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enforcement of any order, decision, policy, standard, or regulation of the
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Commission Proper;
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(g) Designate appropriate official as head of the Public Sector Accounting
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Standards Board and the Public Sector Auditing Standards Board; and
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(h) Perform such other functions as may be required by law or policy of the
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Commission.


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Sec. 9. Duties and Responsibilities of the Commissioners. - The following are the duties
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and responsibilities of the Commissioners:
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(a) Participate in the proceedings of the Commission Proper in the discharge of its
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powers and functions; and
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(b) Perform such other functions as may be provided by law, rules, regulations, or
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policies of the Commission.
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Sec. 10. Duties and Responsibilities of the Assistant Commissioners. - The following
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are the duties and responsibilities of the Assistant Commissioners:
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(a) Formulate, develop, update, and supervise the implementation of the
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operational plan and performance commitment of the Sector headed which are
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aligned with the Commission's strategic plan;
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(b) Supervise the general administration of offices under the jurisdiction of the
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Assistant Commissioner;
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(c) Serve as a member of an Assistant Commissioners Group which shall work as
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a collegial body to study, review, and recommend policies, rules, and
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regulations for consideration by the Commission Proper or the COA
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Chairperson; and
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(d) Perform such other functions as may be assigned.
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Sec. 11. The General Counsel. - The Assistant Commissioner of the Legal Services
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Sector shall be the General Counsel of the Commission.
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Sec. 12. The Central and Regional Offices. - The operations of the Commission under
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Section 16 of this Act shall be further carried out by the various offices under each Sector in
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the Central and Regional Offices. Each regional office shall be headed by a regional director
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with a rank of Director IV. All offices under the audit sectors shall supervise their respective
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audit groups and audit teams.
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The COA Regional Offices shall serve as representatives of the Commission in the
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regions under the direct control and supervision of the Assistant Commissioner of Local
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Government Audit Sector (LGAS).
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Sec. 13. Duties and Responsibilities of the Commission Secretary. - The Commission
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Secretary shall have the rank of a Director IV who shall provide secretariat and administrative
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support to the CP.
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Sec. 14. Duties and Responsibilities of the Chief Executive Staff. - The Chief Executive
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Staff in the Office of the Chairperson shall have the rank of an Assistant Commissioner who
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shall be responsible for the general administration and supervision of the offices under it.
10


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Sec. 15. Duties and Responsibilities of the Directors. - The Directors of the Commission
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shall have the following duties and responsibilities:
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(a) Formulate, develop, and supervise the implementation of the annual
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operational plan, in accordance with the Commission's strategic plan;
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(b) Manage the administrative operations of their office;
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(c) Implement and execute laws, policies, standards, and rules and regulations
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promulgated by the Commission or the Chairperson;
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(d) Submit annual performance report and other reports as directed by the
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Commission Proper or the Chairperson;
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(e) Adjudicate on cases within their jurisdiction;
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(f) Publish audit reports in the website of the Commission; and
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(g) Perform other functions that may be assigned by higher and competent
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authority;
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The Commission may add or limit the duties and responsibilities of the officers and
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employees.
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Sec. 16. Operations of the Commission. - The operations of the Commission shall be
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undertaken through the following sectors which shall each be headed by an Assistant
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Commissioner who shall exercise supervision over various offices under it:
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(a) Local Government Audit Sector (LGAS) shall be responsible for the audit of
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LGUs;
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(b) National Government Audit Sector (NGAS) shall be responsible for the audit of
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NGAs;
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(c) Corporate Government Audit Sector (CGAS) shall be responsible for the audit
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of government-owned or -controlled corporations;
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(d) Special Audit Services Sector (SASS) shall be responsible for the conduct of
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performance audit; fraud audit; and special audit of account of public utilities,
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private entities to which government funds have been transferred in the form
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of subsidy, equity, donation, grants, or counterpart funds, franchise grantees,
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payment of levies or government shares, PPP projects, and the like;
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(e) Systems and Technical Audit Services Sector (STASS) shall be responsible for
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technical audit and conduct of other technical-related services; audit of
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information technology and systems and conduct of other services related to
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information and communications technology resources and services of
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government agencies; and assessment of conformance of internal audit service
35 
or unit of government agencies with the prescribed internal auditing standards
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and providing assistance pertaining to the internal control systems of 
government agencies;
(f) Government Accountancy Sector (GAS) shall be responsible for the keeping of 
the general accounts of the government, preparation and submission of Annual 
Financial Reports and other financial reports, and providing technical assistance 
pertaining to accounting and financial management; recommendation on the 
adoption and implementation of accounting standards, policies, rules, and 
regulations;
(g) Legal Services Sector (LSS) shall be responsible for rendering legal opinions 
and legal services; review of legal retainers and other contracts, and COA 
issuances; preparation of comments on proposed congressional bills and 
issuances of government agencies; conduct of formal hearing and drafting of 
decisions on administrative cases; enforcement of COA decisions; assistance in 
the prosecution and litigation of cases involving COA and its personnel acting 
as witnesses, including preparation of pertinent comments and pleadings; 
coordination with the Office of the Solicitor General (OSG), Office of the 
Ombudsman (0MB) and other agencies pertaining to cases involving COA; legal 
assistance to COA personnel subjected to harassment suits;
(h) Commission Proper Adjudication Sector (CPAS) shall be responsible for drafting 
of decisions or resolutions for consideration of the Commission Proper;
(i) Planning, Finance and Management Sector (PFMS) shall be responsible for the 
formulation of long-range and annual plans and programs of the Commission; 
providing budget services to the Commission; and formulation, 
recommendation, and implementation of policies on the processing of claims, 
assessment of cost of audit services, and personnel payroll management;
(j) Administration Sector (AS) shall be responsible for the development and 
maintenance of the information system of the Commission, and human 
resources management program; and providing general administrative services 
and support to the Commission; and
(k) Professional and Institutional Development Sector shall be responsible for the 
formulation, recommendation, and implementation of policies and programs on 
learning and development of personnel of the Commission; and providing 
capacity building of other government agencies' personnel pertaining to 
accounting and auditing matters.
12


1 
The Commission Proper may effect changes in the organization and functions of the
2 
Commission as it may deem necessary in the exercise of its fiscal autonomy in order to carry
3 
out its constitutional mandate.
4 
Sec. 17. Legal Assistance to Current and Former Officials and Employees. - Current
5 
and former COA officials and employees are authorized to engage the services of private
6 
lawyers for a fee on cases filed against them in relation to the performance of their official
7 
functions in accordance with the guidelines issued by the Commission Proper.
8 
For this purpose, the Commission shall provide a legal assistance fund to be included
9 
in its annual appropriation.
10 
Sec. 18. Professionalization of Audit Services. - The Commission shall develop, adopt,
11 
and implement a competency-based capacity building and continuing education.
12 
It shall participate and support the activities of international professional organizations
13 
such as the International Organization of Supreme Audit Institutions (INTOSAI), Asian
14 
Organization of Supreme Audit Institutions (ASOSAI), ASEAN Supreme Audit Institutions
15 
(ASEANSAI), and other supreme audit institutions.
16 
For this purpose, the capacity building shall include courses on accounting standards,
17 
rules, and regulations relevant to auditing services.
18 
Sec. 19. Professionalization of Accounting and Other Services. - For accounting
19 
services, the Commission shall conduct capacity building in coordination with international
20 
professional bodies on accounting services such as the International Public Sector Accounting
21 
Standards Board (IPSASB), Financiai and Sustainability Reporting Standards Councii (FSRSC),
22 
and other international professional bodies relevant to accounting services.
23 
The Commission shall likewise provide similar capacity building for other services.
24 
Sec. 20. Fiscal Autonomy. - (a) The Commission shall enjoy fiscal autonomy and its
25 
approved annual appropriation shall be automatically and regularly released. The Chairperson
26 
of the COA is authorized to augment any item in the general appropriations for the Commission
27 
from savings in any item in the same appropriation; and (b) any savings from the approved
28 
budget under the General Appropriations Act (GAA) shall be retained by the Commission untii
29 
fully spent.
30 
Sec. 21. Statement of Objectives. - In keeping with its constitutional mandate, the
31 
Commission adheres to the following objectives:
32 
(a) Determine whether the fiscal responsibility which rests directly with the head
33 
of the government agency has been properly, efficiently, and effectively
34 
discharged;
13


1 
(b) Develop and implement a comprehensive audit plan that shall encompass the
2 
examination of financiai and non-financial transactions, accounts, and reports,
3 
including evaluation of the internal control system of the agency;
4 
(c) Institute control measures through the promulgation of auditing and
5 
accounting rules and regulations governing the revenue, receipts,
6 
disbursements, and uses of funds and properties, including audit of projects
7 
under Public-Private Partnership (PPP) agreements or the like, fund transfers
8 
to non-government organizations (NGOs), peoples' organizations (POs) or
9 
other private entities for specific purpose;
10 
(d) Promulgate accounting and auditing rules and regulations to faciiitate the
11 
keeping of the accounts of the Government and enhance their information
12 
value;
13 
(e) Institute measures designed to preserve and ensure the independence of the
14 
Commission, ensure transparency and accountability in government
15 
operations, and promote service excellence and quality in all aspects of its
16 
work; and
17 
(f) Bring its operations closer to the people by the delegation of authority through
18 
decentralization and participatory governance, consistent with the provision of
19 
the Constitution.
20 
Sec. 22. General Jurisdiction. - Pursuant to Section 2 (1), Article IX (D) of the 1987
21 
Constitution, the Commission shall have the power, authority, and duty to examine, audit and
22 
settle all accounts pertaining to the revenues and receipts of, and expenditures or uses of
23 
funds and property, owned or held in trust by, or pertaining to the Government, or any of its
24 
subdivisions, agencies, or instrumentalities, including government corporations, and on a post-
25 
audit basis:
26 
(a) Constitutional bodies, commissions and offices that have been granted fiscal
27 
autonomy under the Constitution;
28 
(b) Autonomous state colleges and universities;
29 
(c) Other government corporations and their subsidiaries; and
30 
(d) Such non-governmental entities receiving subsidy or equity directly or
31 
indirectly, from or through the government, which are required by law or the
32 
granting institution to submit to such audit as a condition of subsidy or equity.
33 
However, where the internal control system of the audited agencies is inadequate, the
34 
Commission may adopt such measures, including temporary or special pre-audit, as are
35 
necessary and appropriate to correct the deficiencies. It shall keep the general accounts of
14


1 
the government, and for such period as may be provided by law, preserve the vouchers and
2 
other supporting papers pertaining thereto.
3 
The Commission, under Section 2 (2), Article IX (D) of the 1987 Philippine Constitution,
4 
shail have exclusive authority subject to the iimitations in Articie IX of the Constitution, to
5 
define the scope of its audit and examination, establish the techniques and methods required
6 
therefor, and promulgate accounting and auditing ruies and reguiations including those for
7 
the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or
8 
unconscionable expenditures, or uses of government funds and properties.
9 
Sec. 23. Examining Authority. - The Commission shall have authority to examine in
10 
the course of audit, books, papers, documents pertaining to the income of individuals and
11 
corporations in connection with government revenue collection operations, for the purpose of
12 
ascertaining that all revenues determined to be collectible and due the Government have
13 
actually been collected.
14 
Sec. 24. Limited Jurisdiction over Private Entities. - The Commission shali have
15 
authority to examine and audit the books and records of private entities in connection with
16 
their contracts, agreements, or deaiings with the government for which they: (i) received
17 
subsidies, counterpart funding, government equity, donation or grant, fund transfer; (ii) were
18 
aliowed to use government properties or facilities; and/or (iii) were required to pay revenue
19 
share such as, but not limited, to levy, franchise fees, income share, or other forms.
20 
Sec. 25. Authority to Examine Accounts of Pubiic Utilities. - The Commission may
21 
conduct a special audit of the books, records, and accounts of all public utiiities for the purpose
22 
of determining reasonableness of rates charged to the public, or in relation to the proceedings
23 
of the proper regulatory agencies for purposes of determining franchise taxes and other fees.
24 
The Commission shall issue the audit guidelines to implement this provision.
25 
Sec. 26. Authority to Examine PPP Accounts. - The Commission may conduct a special
26 
audit of the books, records, and accounts of non-government entities which have contracts
27 
with the government under a PPP Agreement or any of its variants, as regards to the
28 
determination of the foiiowing:
29 
(a) Existence of value-for-money in procurement through PPP;
30 
(b) Compliance with the terms and conditions of the contract or agreement;
31 
(c) Reasonableness of the sharing of the risks and rewards between the private
32 
sector and the government; or
33 
(d) Absence of disadvantage to the government in the agreement reiating to the
34 
operation, maintenance and handover of the public infrastructure or project.
15


1 
Sec. 27. Deputization of Government Licensed Professionals or Experts to Assist
2 
Government Auditors. - The Commission Proper may, when the exigencies of the service so
3 
require, deputize, and retain in the name of the Commission such certified public accountants
4 
and other government licensed professionals or experts as it may deem necessary, to assist
5 
its auditors in undertaking specialized audit engagements.
6 
The deputized professionals or experts shall be entitled to such compensation and
7 
allowances as may be stipulated in the contract, subject to pertinent rules and regulations on
8 
compensation and fees.
9 
The Commission Proper shall issue guidelines in contracting deputized professionals or
10 
experts referred to in this section.
11 
Sec. 28. Participation of Civil Society Organizations in the Conduct of Audit - The COA
12 
Chairperson may deputize duly accredited Civil Society Organizations (CSOs) in the conduct
13 
of audit to help auditors in the ocular inspection, validation, evaluation, collection of data or
14 
information and monitoring of projects located in remote and critical areas to enhance
15 
credibility, accountability, and transparency in audit processes.
16 
Sec. 29. Prohibition of Person or Entity from Rendering Auditing and Related Services
17 
to Government Entities. - No person or entity shall enter into a contract to render accounting
18 
or auditing related services for a fee to any government agency or conduct of seminars or
19 
workshops on accounting and auditing for government personnel on these topics without
20 
clearance from COA to enable it to determine if it has the resources and capability to undertake
21 
the same. Should the Commission decide not to undertake the study or service, it shall
22 
nonetheless have the power to review the proposed contract in order to determine the
23 
necessity, capability or expertise of the private party and the reasonableness of its fees.
24 
Any contract entered into without the approval of the Commission shall be considered
25 
null and void and the related expenditures incurred thereon shall be disallowed in audit and
26 
become the personal liability of the officials concerned.
27 
Sec. 30. Government Contracts for the Hiring of a Private Lawyer or Law Firm to Handle
28 
Legal Cases or Render Legal Services to Government Agencies. - No contract involving public
29 
funds shall be entered into for the services of a private lawyer or law firm to represent
30 
government agencies in court or to render legal services for them. If hiring of such legal
31 
services cannot be avoided, or is justified under extraordinary or exceptional circumstances,
32 
the written conformity and acquiescence or clearance of the OSG or the Office of the
33 
Government Corporate Counsel (OGCC), as the case may be, and the written concurrence of
34 
the COA shall first be secured before the engagement of a private lawyer or law firm, unless
35 
exempted under the rules of the Commission.
16


1 
In the absence of above-stated requirements, any payment thereof shall be disallowed
2 
in audit and the same shall be the personal liability of the officials concerned.
3 
Sec. 31. Prohibition of Private Foundations and Entities to Use the Name and Resources
4 
of the Government to Soiicit and/or Receive Donations, Grants, Financial Assistance from
5 
Private Domestic and Internationa! Donors. - Private foundations and entities organized and
6 
managed by government officials and employees are prohibited from using the name,
7 
resources, insignia, or logo of a government agency for whatever enterprise to solicit and/or
8 
receive donations, grants, financial assistance from the public or other donors.
9 
Any violation of the preceding paragraph shall subject the said foundation or entity to
10 
special audit by the Commission as if the funds so received are public funds which should be
11 
recognized in the books of the concerned government agency. Refusal to submit itself to such
12 
audit shall constitute an offense punishable under Section 101 of this Act.
13 
Sec. 32. Prevention of liiegai. Irregular, Unnecessary, Excessive, Extravagant or
14 
Unconscionable Expenditures or Uses of Government Funds of Property; Power to Disallow
15 
such Expenditures. - The Commission shall promulgate accounting and auditing rules and
16 
regulations for the prevention and disallowance of illegal, irregular, unnecessary, excessive,
17 
extravagant, or unconscionable expenditures or uses of government funds or property. Any
18 
violation of such ruies and regulations shall be a ground for disallowance without prejudice to
19 
administrative, civil and/or criminal sanctions against the persons liable therefor.
20 
Sec. 33. Settlement of Accounts Between Agencies. - The Commission shall have the
21 
exclusive power, under such regulations as it may prescribe, to authorize and enforce the
22 
settlement of accounts subsisting between agencies of the government.
23 
Sec. 34. Collection of Indebtedness Due to the Government. - The Commission,
24 
through proper channels, may assist in the collection and enforcement of all debts and claims
25 
and the restitution of all funds or the replacement or payment to the government of any
26 
government property lost or destroyed.
27 
Sec. 35. Power to Adjudicate Money Claims Against the Government - The
28 
Commission shall have the power to adjudicate money claims filed against the government or
29 
any of its subdivisions, agencies, and instrumentalities in relation to liquidated claims and
30 
quantum meruit cases. Unliquidated money claims against the government shall be filed
31 
before the proper courts, tribunals, and other adjudicative bodies.
32 
Liquidated claims refer to those determined or readily determinable from vouchers,
33 
invoices, and such other papers within reach of accounting officers.
34 
When the Commission is in the exercise of its power to execute judgments on money
35 
claims, the Commission shall, at all times, respect the principle of immutability of judgments.
17


1 
Sec. 36. Power to Compromise Claims. - When the interest of the Government so
2 
requires, the Commission Proper may compromise or release in whole or in part, any settled
3 
claim or liability to any government agency not exceeding Ten million pesos (P10,000,000.00)
4 
arising out of any matter or case before it or within its jurisdiction. In case the claim or liability
5 
exceeds Ten million pesos (P10,000,000.00), the Commission shall submit with its
6 
recommendations, the application for relief to Congress.
7 
The respective governing bodies of government corporations and self-governing
8 
boards, commissions or agencies of the government shall have the authority to condone,
9 
compromise or release any similar claim or liability when expressly authorized by their
10 
charters, subject to timely review and post-audit by the Commission. When their charters do
11 
not so provide, the power to condone or compromise shall be exercised exclusively by the
12 
Commission in accordance with the preceding paragraph.
13 
Sec. 37. Satisfaction of Indebtedness Arising from Final and Executory Audit Decisions.
14 
- When any person or entity is indebted to any government agency by reason of a final and
15 
executory audit decision, the Commission shall direct the head of agency to withhold the
16 
salary or any money due to such entity or person liable or from the estate, in satisfaction of
17 
the indebtedness under the said decision.
18 
In case the money due is not sufficient or there is no such money due to the entity or
19 
person liable to satisfy the indebtedness from the final and executory audit decision, the
20 
Commission shall have the power to levy property or garnish bank accounts to the extent of
21 
the unpaid balance.
22 
Failure on the part of the head of agency concerned to comply with the preceding
23 
paragraphs shall make the head of agency personally liable without prejudice to administrative
24 
action that may be filed for neglect of duty.
25 
Sec. 38. Authority to Require Submission of Documents Relative to Government
26 
Transactions. - The Commission shall have the power to require the submission of the original,
27 
in whatever form, of any order, deed, contract, or other document under which any collection
28 
of, or payment from, government funds may be made, together with any certificate, receipt,
29 
or other evidence in connection therewith. If an authenticated copy is needed for record
30 
purposes, the copy shall upon demand be furnished.
31 
In the case of deeds to property purchased by any government agency, the
32 
Commission shall require a certificate of title entered in favor of the government or other
33 
evidence satisfactory to it that the title is in the name of the government.
18


1 
It shall be the duty of the officials or employees concerned, including those in non-
2 
government entities under audit, or affected in the audit of government and non-government
3 
entities, to comply promptly with these requirements.
4 
Sec. 39. Investigatory and Inquisitorial Powers; Power to Punish for Contempt - The
5 
Chairperson, and other officials and employees specially deputized in writing for the purpose
6 
by the Chairperson shall, in compliance with the requirement of due process, have the power
7 
to summon the parties to a case brought before the Commission for resolution, issue subpoena
8 
and subpoena duces tecum, administer oaths, and otherwise take testimony in any
9 
investigation or inquiry on any matter within the jurisdiction of the Commission.
10 
The Commission shall have the power to punish for contempt as provided for in the
11 
Revised Rules of Court and the Revised Rules of Procedure of the COA, under the same
12 
procedure and with the same penalties provided therein. Any violation of any final and
13 
executory decision, order or ruling of the Commission shall constitute as indirect contempt.
14 
Sec. 40. Annual Financial Report of the Commission. - The Commission shall submit
15 
to the President and the Congress of the Philippines not later than the last day of October of
16 
each year an annual report on the financial condition and results of operation of all
17 
government agencies, which shall include recommendation of measures necessary to improve
18 
economy, efficiency, and effectiveness of these agencies.
19 
To carry out the purposes of this Section, the Chief Accountant or the official in charge
20 
of keeping the accounts of the government agency shall submit to the Commission, year-end
21 
financial statements and such other supporting or subsidiary statements as may be required
22 
by the Commission not later than the 31st day of March of each year. Financial statements
23 
returned by the Commission for revision due to non-compliance with accounting standards,
24 
rules and regulations shall be resubmitted within five (5) working days after the date of receipt
25 
by the official concerned.
26 
Sec. 41. Annual Report on Appropriations, Allotments, Obligations and Disbursements,
27 
Including Off-Budgetary Funds and Trust Receipts. - Within one hundred twenty (120) days
28 
after the end of every fiscal year, the Commission shall submit to the President and the
29 
Congress of the Philippines an annual report on appropriations, allotments, obligations and
30 
disbursements of nationai government agencies and government corporations maintaining
31 
Special Accounts in the General Fund and receiving budgetary support from the government.
32 
For the purpose stated in this section, agencies are required to submit financial
33 
accountability reports to this Commission in compliance with the pertinent sections of the
34 
General Provisions of the GAA and Republic Act No. 7226.
19


1 
Sec. 42. Powers, Functions, and Duties of Auditors. - The following are the powers,
2 
functions, and duties of auditors as representatives of the Commission:
3 
(a) Exercise such powers and functions as may be authorized by the Commission
4 
in the examination of cash and accounts of accountable officers; conduct
5 
financial, compliance, performance, and other special audits; settle accounts
6 
of the agencies under the respective audit jurisdiction;
7 
(b) Submit an audit report on the date and in the manner prescribed by the
8 
Commission and render such other reports as the Commission may require;
9 
(c) For transactions subject of Audit Observation Memorandum (AOM), NS, ND,
10 
NC, complaint or a pending audit or investigation or court case, retain custody
11 
and be responsible for the safekeeping and preservation of paid expense
12 
vouchers, journal entry vouchers, stubs of checks, reports of collections and
13 
disbursements, and similar documents together with their respective
14 
supporting papers, until the final disposition thereof. The Commission shall
15 
prescribe the manner for preservation of these audit or legal evidence;
16 
(d) Retain a digital copy of the audited vouchers and supporting papers, official
17 
receipts, and other documents or reports upon turnover or return of the
18 
originals to the auditee for safekeeping and preservation in accordance with
19 
the guidelines promulgated by the Commission Proper;
20 
(e) Act as witness in proceedings before the courts, the 0MB, and other quasi-
21 
judicial bodies; and
22 
(f) Perform such other functions as may be assigned to them by the Commission.
23 
Sec. 43. Examination of Cash and Accounts of Accountable Officer. - The cashbooks,
24 
accounts, papers, and cash in the accountability of an accountable officer shall be opened at
25 
all times to audit and examination of the Commission and its duly authorized representatives.
26 
In case an examination of the cash and accounts of an accountable officer discloses a
27 
shortage, it shall be the duty of the auditor to immediately demand in writing the restitution
28 
of the shortage and notify in writing the head of the government agency concerned of said
29 
shortage in accordance with the regulations of the Commission. The head of the agency may
30 
immediately relieve the accountable officer and assign another officer to assume the former's
31 
duties and responsibilities. A complete report on the cash examination of the accounts of the
32 
accountable officer with cash shortage shall immediately be submitted by the auditor to the
33 
Director concerned for purposes of referral to the 0MB for investigation and filing of the
34 
appropriate administrative and/or criminal case against the said defalcating accountable
35 
officer, as the evidence may warrant.
20


1 
For this purpose, the auditor shall, at all times, be regarded as a witness only in cases
2 
filed before the 0MB and the regular courts. In no case shall the auditor be named as the
3 
complainant therein.
4 
Sec. 44. Withholding of Salaries and Other Emoluments of Accountable Officers. -
5 
Whenever an accountable officer has been found short of any accountability during cash
6 
examination or audit and after failure to explain satisfactorily or to produce the missing funds
7 
within the period prescribed by the rules of the Commission, the auditor shall order the head
8 
of the agency to direct the withholding of the salaries and other emoluments due the
9 
accountable officer found to have incurred cash shortage up to the extent of the liability until
10 
the final determination of the latter's accountability by the Commission or by final judgment
11 
of a competent court.
12 
Sec. 45. Constructive Distraint of Property of Accountable Officer. - Upon discovery in
13 
audit of a shortage in the accounts of any accountable officer and upon a finding of a prima
14 
facie case of malversation of public funds or property against such accountable officer, in
15 
order to safeguard the interest of the government, the Commission may place under
16 
constructive distraint the personal property of the accountable officer concerned where there
17 
is reasonable ground to believe that the said officer is retiring from the government service
18 
or intends to leave the Philippines or remove the property therefrom or hide or conceal such
19 
property.
20 
The constructive distraint shall be effected by requiring the accountable officer
21 
concerned or any other person having possession or control of the property to accomplish a
22 
receipt in the form prescribed by the Commission, covering the property distrained and
23 
obligating to preserve the same intact and unaltered and not to dispose of it in any manner
24 
whatsoever without the express authority of the Commission.
25 
In case the said accountable officer or other person having the possession and control
26 
of the property sought to be placed under constructive distraint refuses or fails to accomplish
27 
the receipt herein referred to, the representative of the Commission effecting the constructive
28 
distraint shall proceed to prepare a list of such property; and, in the presence of two witnesses,
29 
leave a copy thereof in the premises where the property distrained is located. Thereafter, the
30 
said property shall be deemed to have been placed under constructive distraint, in accordance
31 
with the rules and regulations of the Commission.
32 
The auditor shall submit a report to the Chairperson on any distraint effected pursuant
33 
to this Section not later than five (5) calendar days from the date of the distraint of the
34 
property.
21


1 
Sec. 46. Appeals from Decisions of Auditors. - Any person aggrieved by the decision
2 
of an auditor, may within one hundred eighty (180) calendar days from receipt of a copy of
3 
the decision, appeal in writing to the Commission. The procedures of appeal shall be governed
4 
by the internal rules concerning pleadings and practices of the Commission, including the
5 
imposition of reasonable filing and legal research fees.
6 
Sec. 47. Period Rendering Decisions of the Commission. - The Commission Proper
7 
shall decide any case brought before it within sixty (60) days from the date of its submission
8 
for decision or resolution. A case is deemed submitted for decision or resolution upon receipt
9 
of the last comment on the draft decision from any member of the Commission Proper
10 
necessary for a proper decision.
11 
CHAPTER II
12 
Decision of the Commission
13 
Sec. 48. Appeal from Decisions of the Commission. - The party aggrieved by any
14 
decision, order or ruling of the Commission may, within thirty (30) days from the receipt of a
15 
copy thereof, appeal on certiorari to the Supreme Court in the manner provided by law and
16 
the Rules of Court. When the decision, order, or ruling adversely affects the interest of any
17 
government agency, the appeal may be taken by the proper head of that agency.
18 
The OSG shall, at all times, represent the Commission in all its decisions appealed to
19 
the Supreme Court.
20 
Sec. 49. Finality of Decisions of the Commission and Responsibility of Head of the
21 
/lp,e/7C/.-A decision of the Commission, upon any matter within its jurisdiction, if not appealed
22 
as herein provided, shall be final and executory.
23 
The General Counsel or any authorized official of the Commission shall issue an order
24 
of execution for final and executory decisions, resolutions, or orders of the Commission.
25 
For final and executory decisions on money claims, the claimant shall initiate the
26 
process of payment with the agency concerned pursuant to existing rules and regulations.
27 
Sec. 50. Enforcement of Decisions of the Auditor or Commission Proper. - The head
28 
of agency shall ensure the immediate settlement of final and executory decisions of the
29 
Commission. Unreasonable failure or refusal of the head of agency or concerned official to
30 
implement the final and executory decision of the Commission shall render the former
31 
administratively liable for neglect of duty.
32 
Sec. 51. Re-audit of Audited Transactions. - All transactions and accounts are open
33 
for audit within ten (10) years after the date of transaction.
22


1 
TITLE III
2 
CHAPTER I
3 
Basic Policies and Standards
4 
Sec. 52. Definition of Government Auditing. - Government auditing is a systematic,
5 
independent, and objective process that involves obtaining and evaluating evidence in
6 
accordance with the prevailing International Standards for the Supreme Auditing Institutions
7 
(ISSAIs) for the purpose of assessing whether the financial information, transactions,
8 
programs, operations, accounts, and reports of any government agency are in accordance
9 
with the applicable international accounting framework. Government audits cover three audit
10 
streams: financial audits, compliance audits, and performance audits which are guided
11 
respectively by separate ISSAIs.
12 
Sec. 53. Principles of Government Auditing. - The auditor shall be guided by the
13 
general principles and the prescribed internationai standards related to the audit process:
14 
(a) Comply with the relevant ethical principles of integrity, independence and
15 
objectivity, competence, professional behavior, and confidentiality 
and
16 
transparency;
17 
(b) Maintain appropriate professional behavior by applying professional skepticism,
18 
professional judgment, and due care throughout the audit;
19 
(c) Perform the audit in accordance with professional standards on quality control;
20 
(d) Possess collectively the knowledge, skills, expertise, and ability and experience
21 
to exercise professional judgment necessary to successfully complete the audit;
22 
(e) Manage the risks of providing a report that is inappropriate in the
23 
circumstances of the audit;
24 
(f) Consider materiality throughout the audit process, in relation to stakeholder
25 
concerns, public interest, regulatory requirements and consequences for
26 
society;
27 
(g) Prepare audit documentation that is sufficiently detailed to provide a clear
28 
understanding of the work performed, evidence obtained, and conclusions
29 
reached; and
30 
(h) Establish effective communication throughout the audit process.
23


1 
CHAPTER II
2 
Receipts and Disposition of Funds and Properties
3 
Sec. 54. Accounting for Moneys and Property Received by Public Officiais. - Al I moneys
4 
and properties officially received by a public officer in any capacity or upon any occasion, or
5 
those received in connection with the office, must be accounted for as government funds and
6 
property, except as may otherwise be specifically provided by law or competent authority.
7 
Their recognition in the books of accounts of the agency concerned shall be in accordance
8 
with pertinent laws, policies, rules and regulations, and applicable financial reporting
9 
framework.
10 
Sec. 55. Designation of Collecting or Disbursing Officers for Government Agencies. -
11 
The head of agency may designate such number of collecting and disbursing officers or agents
12 
as may be deemed necessary. They shall render reports of their collections and disbursements
13 
pursuant to the regulations of the Commission, to be submitted promptly to the auditor
14 
concerned who shall conduct the necessary examination and audit.
15 
Sec. 56. Time and Mode of Rendering Account - In the absence of specific provision
16 
of law, all accountable officers, through the agency accountants, shall render their accounts,
17 
submit their vouchers, and make deposits of money collected or held by them at such time
18 
and in such manner as shall be prescribed in the rules and regulations of the Commission.
19 
The auditor concerned shall then conduct the necessary examination and audit thereof.
20 
Sec. 57. Accrual of Income or Revenues to Unappropriated Surpius of the General
21 
Fund. - All income or revenues accruing to the agencies by virtue of the provisions of law,
22 
orders and regulations shall be deposited in the National Treasury or in any duly authorized
23 
government depository and shall accrue to the unappropriated surplus of the General Fund of
24 
the government, unless otherwise specifically provided by law.
25 
Income or revenues from business-type activities and revolving funds of government
26 
agencies may be separately recorded and disbursed in accordance with such rules and
27 
regulations as may be determined by the Permanent Committee created by law, composed of
28 
the Secretary of Department of Finance as Chairperson, Secretary of Department of Budget
29 
and Management, and Chairperson of Commission on Audit, as members.
30 
Sec. 58. Special, Fiduciary and Trust Funds. - Receipts shall be recorded as income of
31 
Special, Fiduciary or Trust Funds or Funds other than General Fund only when authorized by
32 
law in accordance with the rules and regulations issued by the Permanent Committee.
33 
Revenues collected from particular taxes, levy and royalties for special purpose shall
34 
be treated as a special fund or Special Account in the General Fund and paid out for such
24


1 
purpose only. If the purpose for which a special fund was created has been fulfilled or
2 
abandoned, the balance, if any, shall be transferred to the General Fund of the government.
3 
In case any government agency fails or refuses to implement such reversion and
4 
closure, the Permanent Committee may recommend for approval of the President the
5 
reversion and closure of the Special Account in the General Fund, Fiduciary or Trust Funds on
6 
any of the following grounds:
7 
(a) The terms have expired or no longer necessary for attainment of the purpose
8 
for which said funds were established;
9 
(b) Dormant for unreasonable length of time;
10 
(c) Needed by the General Fund in times of emergency; or
11 
(d) Used in violation of the rules and regulations issued by the Permanent
12 
Committee.
13 
Sec. 59. Receipts and Revenues of Local Government Units (LGUs). - All receipts and
14 
income accruing to the LGUs shall be deposited in their account maintained in the authorized
15 
government depository bank or private bank with the prior approval of the Department of
16 
Finance.
17 
Sec. 60. Receipts and Revenues of Government Corporations. - All receipts and income
18 
accruing to GOCCs shall be deposited in their account maintained in the authorized
19 
government depository bank.
20 
Sec. 61. Collections by the Government - No payment of any nature shall be received
21 
by a collecting officer without immediately issuing an official receipt in acknowledgment
22 
thereof. The receipt may be in the form of postage, internal revenue or documentary stamps
23 
or such other digital forms as the law or the Commission may allow. At no instance shall
24 
temporary or provisional receipts be issued to acknowledge the receipt of public funds.
25 
Where digital or electronic devices are used to acknowledge cash receipt, an electronic
26 
official receipt (eOR) shall be issued and the electronic copies of the pieces of evidence of the
27 
e-collection through Self-Collect and Credit (SCC) or Collect-Aggregate-Remit (CAR) or other
28 
modes of electronic collection allowed by the rules of the COA, shall be kept in electronic
29 
archives. The same shall be subject to inspection and verification by the Commission, in
30 
accordance with its prescribed guidelines on the use of eORs to acknowledge collection of
31 
income and other receipts of government.
32 
The same is acceptable provided the document maintains its integrity and reliability
33 
and can be authenticated so as to be usable for subsequent reference: Provided, That the
34 
electronic document has remained complete and unaltered, apart from the addition of any
35 
endorsement and any authorized change, or any change which arises in the normal course of
25


1 
communication, storage and display; and that the electronic document is reliable for the
2 
purpose for which it was generated and for all relevant circumstances.
3 
Collections in the form of checks in favor of the government shall be governed by the
4 
rules of the Commission.
5 
At no instance should money in the hands of the collecting officer be utilized for
6 
whatever purpose but should be deposited intact with an authorized government depository
7 
bank.
8 
Sec. 62. Payment in Settlement - Electronic payment through TDL, credit card, DEP
9 
such as ADA and other modes may be used to settle all obligations of the government in
10 
accordance with the guidelines of the Commission and other Public Financial Management
11 
agencies of the government.
12 
Electronic payment to a person not duly authorized to receive such payment shall
13 
subject the concerned accountable officer to administrative/civil sanctions or criminal
14 
prosecution, as may be warranted.
15 
In instances when checks are drawn against the checking account of the government
16 
agencies maintained with any government depository in payment of an obligation:
17 
(a) The check shall be made payable directly to the creditor to whom the money
18 
is due, or to the disbursing officer or employee for an official disbursement;
19 
(b) Checks drawn in payment of any indebtedness shall likewise be accepted by
20 
the officer concerned, provided it shall be made payable to the entity or the
21 
authorized official of the payee; and
22 
(c) When a check drawn in favor of the government is not accepted by the drawee
23 
bank for any reason, the drawer shall continue to be liable for the sum due and
24 
all penalties resulting from delayed payment. Where the reasons for non-
25 
acceptance by the drawee bank are insufficiency of funds and/or closed
26 
accounts, the drawer shall be criminally liable therefor.
27 
Sec. 63. Deposit of Money in the Treasury or Authorized Government Depository Bank.
28 
- Public officers authorized to receive and collect moneys arising from taxes, revenues, or
29 
receipts of any kind shall remit or deposit intact the full amounts so received and collected by
30 
them to the account of the National Treasury or in the agencies account maintained in the
31 
authorized government depository bank not later than the following banking day, except when
32 
it is impractical to do so due to distance and the amount to be deposited is minimal.
33 
Fifty percent (50%) share on proceeds from the community tax certificates collected
34 
by duly deputized barangay treasurers shall be automatically retained and deposited intact in
35 
authorized depository banks of the barangay where the tax is collected pursuant to the
26


1 
Republic Act No. 7160, as amended, otherwise known as the "Local Government Code of
2 
1991."
3 
No collections shall be used for purposes of disbursements except when authorized by
4 
law or regulations.
5 
Sec. 64. Acknowledgment of Receipt of Money by Government Depositories. - All
6 
authorized government depository banks shall acknowledge receipt of all money received by
7 
them, for the account of the National Treasurer or the agency concerned. The
8 
acknowledgment shall bear the date of actual deposit and indicate from whom and on what
9 
account it was received. Such moneys received shall be governed by the Treasury Single
10 
Account System established pursuant to law. The authorized agency official shall regularly
11 
furnish the monthly bank statements to the auditor.
12 
Sec. 65. Shipment of Government Money or Property by a Carrier; Notation of Evidence
13 
of Loss. - When government money or property is transported from one place to another by
14 
a carrier, it shall be the duty of the consignee or duly authorized representative to make
15 
notation or notations on the bill of lading or receipt on any evidence of loss, shortage, or
16 
damage.
17 
Sec. 66. Credit for Loss Occurring in Transit or Due to Fire, Theft, Robbery or Force
18 
Majeure. - When a loss of government funds, property, documents evidencing financial
19 
transactions, or records of accountabilities occurs while they are in transit or loss is caused by
20 
fire, theft, robbery or force majeure, the officer or employee accountable therefor or having
21 
custody thereof shall immediately notify the auditor concerned and, within thirty (30) days
22 
from the occurrence of loss, shall file an application for relief, together with the required
23 
supporting evidence. When warranted, credit for the loss shall be allowed. An officer or
24 
employee who fails to comply with this requirement shall not be relieved of liability or allowed
25 
credit for any loss thereof. The procedures on application for relief shall be governed by the
26 
rules and regulations of the Commission.
27 
Sec. 67. Disposal of Government Property. - When property of the government
28 
becomes unserviceable or is no longer needed, it may be disposed of in the following manner,
29 
following the guidelines issued by the Commission:
30 
(a) Transfer of property between government agencies;
31 
(b) Destruction or sale of unserviceable property;
32 
(c) Sale through public auction of unserviceable property;
33 
(d) Sale through public auction of government property that is no longer needed;
34 
and
27


1 
(e) Other modes as may thereafter be approved and prescribed in the guidelines
2 
issued by the Commission.
3 
Sec. 68. Disposal of Rea! Property. - Whenever the subject of the disposal by sale is
4 
real property, the same shall require prior approval of the Commission.
5 
Sec. 69. Disposal of Goods and Properties Seized or Confiscated by Law Enforcement
6 
Agencies. - The destruction or disposal of goods and properties seized or confiscated by law
7 
enforcement agencies and presented as evidence in cases before the courts shall be carried
8 
out by such agencies in accordance with their respective rules and regulations.
9 
Sec. 70. Funds or Property Held by Deceased, Incapacitated or Absconding
10 
Accountable Officer. - When an officer accountable for government funds or property dies,
11 
becomes incapacitated, or absconds in the performance of duties, the head of the agency
12 
shall designate a custodian to take charge of the funds or property until a successor shall have
13 
been appointed and qualified. The head of the agency may appoint a committee to count the
14 
cash and take an inventory of the property for which the officer was accountable and to
15 
determine the responsibility for any shortage therein. One copy of the inventory and the report
16 
of the committee, duly certified, shall be filed with the auditor concerned but the findings of
17 
the committee shall not be conclusive until audit thereon is completed. The head of the
18 
agency, whenever necessary, shall be responsible for securing a "hold departure order" from
19 
the proper government agency to prevent the absconding officer from leaving the country.
20 
If the deceased, incapacitated, or absconding officer is accountable for funds or
21 
property of a local government unit, the acting custodian and committee shall be designated
22 
by the local chief executive, furnishing notice to the Secretary of the Department of Finance
23 
or the authorized appointing official as prescribed under the Local Government Code.
24 
Sec. 71. Disposal of Foreclosed Assets or Collaterals Acquired in the Regular Course of
25 
Business by Government Corporations. - Notwithstanding their respective charters, foreclosed
26 
assets or collaterals acquired in the regular course of business by government corporations
27 
shall be sold thru public bidding to the highest bidder after appraisal thereof by an independent
28 
appraiser. Such sale shall be under the supervision of the proper committee on award or
29 
similar body of the government corporation, after publication for not less than two (2)
30 
consecutive days in any national newspaper of general circulation.
31 
In the event that the public bidding fails, the property may be sold at a negotiated
32 
sale at such price as may be fixed by the same committee, subject to the immediate audit of
33 
the auditor concerned in accordance with the regulations of the Commission. If the property
34 
remains unsold for at least one (1) year, this will be subject to reappraisal and offered again
35 
for sale through public bidding.
28


1 
Government property may be disposed of as payment of dividend, after appraisal
2 
thereof by an independent appraiser and review by the Commission.
3 
Sec. 72. Final Report of Accountable Officers. - An accountable officer, upon ceasing
4 
to act in official capacity, shall submit to the auditor of the agency concerned a report of
5 
accountabiiity within one (1) month after such cessation. Upon receipt of the report, the
6 
auditor shall conduct a cash examination on the accountability of such accountable officer.
7 
Any remaining balance on cash accountability shall be deposited immediately in the
8 
proper treasury.
9 
Sec. 73. Notice of Disallowances, Charges and Suspensions Issued by the Auditor to
10 
Accountable Officer. - Whenever there is a finding of pecuniary loss or damage on the part
11 
of the government, the auditor concerned shall issue a written notice of disallowance or charge
12 
through the head of the agency to each accountable officer, whose accounts have been
13 
audited in whole or in part.
14 
Within ninety (90) days, an audit suspension which is not settled either by satisfactory
15 
explanation, justification, or submission of evidence to prove the contrary to the initial findings
16 
of an auditor on the irregularity or illegality of the transaction after receipt of the notice shall
17 
become a disallowance.
18 
Any person aggrieved by the decision of the auditor pertaining to disallowances,
19 
charges, or suspensions, may appeal the case in accordance with the rules and regulations
20 
on settlement of accounts of the Commission.
21 
TITLE III
22 
CHAPTER I
23 
Government Accounting
24 
Sec. 74. Appropriation Before Entering into a Contract. - No contract involving the
25 
expenditure of public funds shall be entered into unless there is an appropriation or approved
26 
budget therefor, the unexpended balance of which, free of other obligations, shall be sufficient
27 
to cover the proposed expenditure.
28 
Sec. 75. Certificate Showing Appropriation to Meet Contract. - Except in the case of a
29 
contract for personnel services or for supplies for immediate consumption, no contract
30 
involving the expenditure of public funds by any government agency shall be entered into or
31 
authorized unless the proper budget officer of the agency concerned shall have certified to
32 
the officer entering into the obligation that funds have been duly appropriated for the purpose
33 
and that the amount necessary to cover the proposed contract for the fiscal year is available
34 
for expenditure on account thereof. The certificate signed by the proper budget officer shall
29


1 
be attached to and become an integral part of the contract, and the sum so certified shall not
2 
thereafter be available for expenditure for any other purpose until the obligation of the
3 
government agency concerned under the contract is fully extinguished.
4 
The funding guidelines of the DBM shall be followed for multi-year contracts.
5 
Sec. 76. Void Contract and Liability of Officer. - Any contract entered into contrary to
6 
the requirements of the two immediately preceding sections shall be void and not binding to
7 
the government. The officer of any government agency responsible for the said contract shall
8 
be personally liable to the government or other contracting party as if the transaction had
9 
been entered into between private parties.
10 
Sec. 77. Prohibition Against Advance Payment on Government Contracts. - Except
11 
when authorized by law, the government shall not be obliged to make an advance payment
12 
on contracts for:
13 
(a) Services not yet rendered;
14 
(b) Supplies and materials not yet delivered, inspected, and accepted, except in
15 
lease of venues and catering services as provided for in the procurement law
16 
and its implementing rules and regulations; and
17 
(c) Infrastructure projects not yet implemented or completed, inspected, and
18 
accepted, other than for mobilization as provided for in the procurement law
19 
and its implementing rules and regulations.
20 
Sec. 78. Limitations on Cash Advance. - The following shall be the limitations on cash
21 
advance:
22 
(a) No cash advance shall be given unless for a legally authorized specific purpose;
23 
(b) A cash advance shall be reported on and liquidated as soon as the purpose for
24 
which it was given has been served;
25 
(c) No additional cash advance shall be granted or allowed unless the previous
26 
cash advance has been first settled/liquidated or a proper accounting thereof
27 
is made;
28 
(d) Except for cash advance for official travel, no officer or employee shall be
29 
granted cash advance unless such officer or employee is properly bonded in
30 
accordance with existing laws or regulations. The amount 
of cash advance
31 
which may be granted shall not exceed the maximum cash 
accountability
32 
covered by bond of an officer or employee;
33 
(e) Only permanent appointed officials shall be designated as disbursing officers;
30


1 
(f) Only duly appointed or designated disbursing officers may perform disbursing
2 
functions. Officers and employees who are given cash advances for official
3 
travel need not be designated as disbursing officers;
4 
(g) Transfer of cash advance from one accountable officer to another shall not be
5 
allowed;
6 
(h) The cash advance shall be used solely for specific iegai purpose for which it
7 
was granted. Under no circumstance shall it be used for encashment of checks
8 
or for liquidation of a previous cash advance;
9 
(i) The failure of the concerned official or employee to liquidate the cash advance
10 
after due demand by an authorized officer is a prima facie presumption 
of
11 
malversation despite the absence of a finding 
of actual 
damage to the
12 
government;
13 
(j) The transfer of cash advance by a disbursing officer to another does not
14 
constitute an expenditure for which the disbursing officer may claim credit in
15 
accounts, but the responsibility of such disbursing officer continues to attach
16 
until the amount has been fully accounted for; or
17 
(k) No cash advance shall be granted for the procurement or implementation of
18 
infrastructure projects.
19 
Any violation of the foregoing provisions shall constitute a valid cause for the
20 
withholding of the salary of the accountable officer without prejudice to the imposition of
21 
administrative/civii sanction and criminal prosecution of both the authorizing and the
22 
accountable officials, as may be warranted.
23 
Sec. 79. Transfer of Funds from One Officer to Another. - Transfer of government
24 
funds from one officer to another shall, except as allowed by law or regulation, be made only
25 
upon prior direction or authorization of the head of the agency following the accountability
26 
and accounting guidelines issued by the Commission.
27 
Sec. 80. Limitations on Fund Transfers from One Government Agency to Another. -
28 
The foliowing shall be the limitations on transfer of funds from one government agency to
29 
another:
30 
(a) No fund transfers shali be given except for legally authorized specific purpose
31 
as embodied in a Memorandum of Agreement (MOA) executed between the
32 
source and implementing agencies;
33 
(b) The fund transfers shall be reported on and/or liquidated by the implementing
34 
agencies as soon as the purpose for which they have been granted have been
35 
served, but not later than the end of the year;
31


1 
(c) No additional or new fund transfers shall be made unless the previous transfers
2 
have been fully liquidated as certified by the head of agency concerned;
3 
(d) The heads of the source and implementing agencies shall be responsible for
4 
compliance with the foregoing requirements.
5 
Failure on the part of the foregoing officials/persons to comply with the above-
6 
mentioned responsibilities shall constitute a ground for administrative or criminal action, as
7 
evidence may warrant.
8 
Sec. 81. Limitations on Fund Transfers from Any Government Agency to a Private
9 
Organization or Entity. - The following shall be the limitations on transfer of funds from any
10 
government agency to any private organization or entity:
11 
(a) No fund transfer from a government agency shall be given to a private
12 
organization or entity unless authorized by law for a specific purpose which
13 
should be embodied in a MOA executed between the source government
14 
agency and the implementing private organization or entity;
15 
(b) Only duly registered, accredited, and reputable private organizations or
16 
entities shall be granted fund transfers;
17 
(c) Fund transfers shall be reported on and liquidated by the implementing private
18 
organizations or entities to the source government agency as soon as the
19 
project has been completed or not later than sixty (60) days after project
20 
completion. If the project implementation will go beyond December 31st of
21 
the year, a partial liquidation report as of December 31st of that year shall be
22 
submitted to the source government agency not later than January 15 of the
23 
ensuing year;
24 
(d) No additional or new fund transfers shall be made unless the previous fund
25 
transfers have been fully liquidated as certified by the head of the agency; or
26 
(e) The heads of the source government agency and implementing private
27 
organizations or entities shall be responsible for compliance with the foregoing
28 
requirements.
29 
Failure on the part any public officer, employee, or any person to comply with the
30 
above-mentioned responsibility shall constitute a ground for administrative or civil sanction or
31 
criminal prosecution.
32 
Sec. 82. Payment of Rewards. - When a reward becomes payable by authority of law
33 
for information given relative to any offense or any illegal activity, or for any act done in
34 
connection with the apprehension of the offender, the reward shall be paid as prescribed by
32


1 
law or regulations. Such payment of reward shall be subject to audit in accordance with the
2 
regulations of the Commission.
3 
Sec. 83. Loss Through Electronic Collection or Payment - Government agencies
4 
utilizing e-Collection and/or payment systems shall formulate internal policy guidelines to
5 
implement reasonable and appropriate organizational, technical, and personnel controls to
6 
prevent loss of funds caused by internet connectivity issues, errors in payment instructions,
7 
online banking fraud, security breach, or other similar events. Any loss due to the foregoing
8 
shall be the liability of the erring party.
9 
Sec. 84. Replacement of Lost, Stolen or Destroyed Checks. - When payment is made
10 
through check and the same was lost, stolen, or destroyed, the issuing officer may issue a
11 
replacement check as payment for the same obligation. Replacement shall be made upon the
12 
execution of an affidavit of loss and submission of stop payment order to the drawee bank. If
13 
destroyed, presentation of the destroyed check to the issuing officer is also required. The chief
14 
accountant or internal auditor of the agency shall be responsible for seeing to it that no double
15 
payment is made as a result thereof.
16 
Sec. 85. Reversion of Unpaid Trade Payables Aged More Than Two (2) Years. - The
17 
head of national government agencies, LGUs and government corporations classified as non-
18 
commercial public sector entities shall cause the reversion of trade payables aged more than
19 
two (2) years to the Unappropriated Surplus or Accumulated Surplus/(Deficit).
20 
The head of government corporations classified as commercial public sector entity shall
21 
revert unpaid trade payables aged more than two (2) years to retained earnings.
22 
In both instances the reversion shall only be made when there is no actual claim or is
23 
not supported by a valid contract.
24 
CHAPTER II
25 
Accountability and Responsibility for Government Funds and Property
26 
Sec. 86. Accountable Officers; Bond Requirement - Every officer of any government
27 
agency whose duties permit or require the possession or custody of government funds or
28 
property shall be accountable therefor and for the safekeeping thereof in conformity with law.
29 
Other government officers who, though not accountable by the nature of their duties, may
30 
likewise be similarly held accountable for government funds or property through their
31 
participation in the use or application thereof.
32 
Every accountable officer shall be properly bonded in accordance with law and the
33 
pertinent rules or regulations.
33


1 
Sec. 87. Primary Responsibility and Fiscal Accountability of the Head of the Agency. -
2 
The head of any agency who is primarily responsible for all government funds and property
3 
pertaining to the agency, shall ensure that:
4 
(a) The required financial and other reports and statements are submitted by the
5 
concerned agency officials in such form and within the period prescribed by the
6 
Commission;
7 
(b) The settlement of disallowances and charges is made within the prescribed
8 
period;
9 
(c) The requirements of transactions suspended in audit are complied with; and
10 
(d) Appropriate actions are taken on the deficiencies noted in the course of audit.
11 
Persons entrusted with the possession or custody of the funds or property under the
12 
head of the agency shall be accountable therefor and immediately responsible to the head of
13 
the agency, without prejudice to the liability of either party to the government.
14 
Sec. 88. General Liability for Unlawful Expenditures. - Expenditures of government
15 
funds or uses of government property in violation of law or regulations shall be the personal
16 
liability of the official or employee found to be directly responsible therefor.
17 
Sec. 89. Degree of Supervision over Accountable Officers. - The head of any
18 
government agency shall exercise due diligence in supervising accountable officers under the
19 
control of such head of the agency to prevent the incurrence of loss of government funds or
20 
property, otherwise the head of the agency shall be jointly and solidarily liable with the person
21 
primarily accountable therefor.
22 
The treasurer of the LGU shall likewise exercise the same degree of supervision over
23 
accountable officers under the oversight of the treasurer, otherwise the treasurer shall be
24 
jointly and solidarily liable with them for the loss of government funds or property under their
25 
stewardship.
26 
Sec. 90. Measure of Liability of Accountable Officers. - Every officer accountable for
27 
government property shall be liable for its money value in case of improper or unauthorized
28 
use or misapplication thereof by such accountable officer or by any person for whose acts
29 
such accountable officer may be responsible for. Accountable officer shall likewise be liable
30 
for all losses, damages, or deterioration occasioned by negligence in the keeping or use of the
31 
property regardless of whether or not it is in actual custody of such accountable officer.
32 
Every accountable officer for government funds shall be liable for all losses resulting
33 
from the unlawful deposit, use, or application thereof and for all losses attributable to
34 
negligence in the keeping of the funds.
34


1 
Sec. 91. Liability for Acts Done by Direction of Superior Officer. - No accountable
2 
officer shall be relieved from liability by reason of acting under the direction of a superior
3 
officer in paying out, applying, or disposing of the funds or property for which such
4 
accountable officer is accountable, unless prior to that act, the accountable officer notified the
5 
superior officer in writing that the expenditure is illegal, irregular, excessive, extravagant,
6 
unnecessary, and unconscionable. The officer directing any illegal payment or disposition of
7 
the funds or property and the accountable officer who fails to serve the required notice shall
8 
be jointly and solidarily liable.
9 
Sec. 92. Prohibition Against Pecuniary Interest - No head of agency, members of the
10 
board or commission, accountable officer or public official shall have pecuniary interest,
11 
directly or indirectly, in any contract or transaction of the agency in which such public officer
12 
is an officer, or in any other office where the public officer has influence.
13 
This prohibition shall likewise apply to the accountable officer's immediate family and
14 
relatives up to the 3rd civil degree by consanguinity or affinity.
15 
TITLE IV
16 
CHAPTER I
17 
Basic Principles
18 
Sec. 93. Definition of Government Accounting. - Government accounting encompasses
19 
the processes of analyzing, recording, classifying, summarizing, and communicating all
20 
transactions involving the receipt and disposition of government funds and property in
21 
accordance with the applicable international accounting framework - International Public
22 
Sector Accounting Standards (IPSAS) or Philippine Financial Reporting Standards (PFRS), as
23 
the case may be, and interpreting the results thereof.
24 
Sec. 94. Recognition of Financial Transactions. - Each government agency shall
25 
recognize its financial transactions and operations conformably with pertinent laws, policies,
26 
rules and regulations, and applicable financial reporting framework.
27 
Sec. 95. Accounting Policies, Rules and Regulations. - The Commission shall
28 
promulgate accounting policies, rules, and regulations in accordance with the applicable
29 
international accounting framework. Such policies, rules and regulations shall be updated from
30 
time to time as the Commission may deem proper.
35


1 
CHAPTER II
2 
Accountability and Responsibility for Government Funds and Property
3 
Sec. 96. Financial Reports and Statements. - The financial reports prepared by the
4 
agencies shall comply with the applicable financial reporting framework to the government
5 
agency.
6 
The financial statements shall be based on official accounting records and registries
7 
kept in accordance with pertinent laws, policies, rules and regulations of the Commission, and
8 
the applicable financial reporting framework to the government agency.
9 
Sec. 97. Submission of Reports. - The Commission shall, under regulations issued by
10 
it, require the head of the agencies, chief accountants, budget officers, cashiers,
11 
disbursing/collecting officers, administrative or personnel officers, and other responsible
12 
officials of the various agencies to submit financial statements, financial accountability reports,
13 
physical inventory reports, current staffing pattern, and such other reports as may be
14 
necessary for the exercise of its functions.
15 
In case of failure on the part of the officials concerned to submit the documents and
16 
reports mentioned herein within the prescribed period, the head of the agency shali cause the
17 
suspension of the payment of their salaries until they shall have complied with the
18 
requirements of the Commission without prejudice to any disciplinary action that may be
19 
instituted against such official or employee in accordance with the applicable rules on
20 
administrative cases issued by the Civil Service Commission.
21 
Failure on the part of the head of the government agency to implement, without
22 
justifiable cause, the sanctions provided in the immediately preceding paragraph shall
23 
constitute as a ground for this Commission to file the appropriate administrative charge
24 
against the erring official concerned.
25 
CHAPTER III
26 
Internal Controls
27 
Sec. 98. Internal Control System and its Installation. - Internal control is an integral
28 
process that is effected by an agency's management and personnel and is designed to address
29 
risks and provide reasonable assurance that in pursuit of the agency's mission, the general
30 
objectives are being achieved. It shall be the direct responsibility of the head of the agency
31 
to establish an internal control unit that shall install, implement, review, and monitor a sound
32 
internal control system in accordance with Internal Control Standards for the Philippine Public
33 
Sector.
36


1 
The head of agency shall sign the Statement of Internal Control (SIC).
2 
Failure on the part of the head of the government agency to implement the preceding
3 
paragraph, without justifiable cause, shall constitute as a ground for this Commission to file
4 
the appropriate administrative charge against the erring official concerned.
5 
TITLE IV
6 
Final Provisions
7 
Sec. 99. Duty to Respect the Independence of the Commission. - It shall be the duty
8 
of every person to respect, protect and preserve the independence of the Commission.
9 
Sec. 100. Administrative Discipiinary Action. - Any unjustified failure by the public
10 
officer concerned to comply with any requirement imposed in this Act shall constitute neglect
11 
of duty or grave misconduct, as the case may be, and shall be a ground for this Commission
12 
to file appropriate administrative disciplinary action against the said public officer who, upon
13 
being found guilty thereof after hearing, shall be meted out such penalty commensurate with
14 
the degree of guilt in accordance with the civil service law, without prejudice to criminal
15 
prosecution whenever the evidence warrants.
16 
The auditor shall report to the concerned Director any violation of the preceding
17 
paragraph for referral of the case to the 0MB, or other government disciplining authorities.
18 
Sec. 101. Penai Provisions. - Any person who shall commit any of the following acts
19 
shall, upon conviction, suffer imprisonment of not less than six (6) months and one (1) day
20 
but not more than six (6) years or a fine of not less than One hundred thousand pesos
21 
(P100,000.00) but not more than One million two hundred thousand pesos (Pl,200,000.00)
22 
or an imprisonment of six (6) years and one (1) day to twelve (12) years, or both at the
23 
discretion of the court:
24 
(a) Refusing or neglecting to render or settle an account as required by law or
25 
regulation after demand by the Commission or its authorized representatives;
26 
(b) Denying access to databases or information technology systems, or failing to
27 
produce documents, records, or papers under custody within fifteen (15) days
28 
after demand by the Commission or its authorized representatives in
29 
connection with the conduct of audit;
30 
(c) Destroying or concealing documents, records, or papers which are officially
31 
entrusted to such person, pertaining to the collection, receipt, expenditure, or
32 
disbursement of public funds and utilization or disposal of government property
33 
in connection with the conduct of audit;
37


1 
(d) Failing or refusing to submit documents required in audit without justifiable
2 
cause shall constitute a ground for disallowance of the claim under
3 
examination, assessment of additional levy or government share, or
4 
withholding or withdrawal of government funding or donations through the
5 
government, as well as for administrative or penal sanctions; or
6 
(e) Committing other similar acts that impede, frustrate, or delay the efficient
7 
conduct of audit.
8 
If a violation of this Act constitutes an offense or crime punished under Act No. 3815,
9 
otherwise known as the Revised Penal Code, as amended, or other special laws which imposes
10 
a higher penalty, the latter shall prevail.
11 
If the offender is a corporation, partnership or association or other juridical entity, the
12 
penalty may in the discretion of the court be imposed upon such juridical entity and upon the
13 
officer or officers of the corporation, partnership, association, or entity responsible for the
14 
violation.
15 
Sec. 102. Implementing Rules and Regulations. - The Commission Proper shall
16 
promulgate the necessary rules and regulations for the effective implementation of this Act.
17 
Sec. 103. Appropriations. - The amount necessary for the implementation of this Act
18 
shall be included in the annual General Appropriations Act.
19 
The Commission on Audit is authorized to:
20 
(a) Collect one-half (1/2) of the one percent (1%) from the annual national tax
21 
collections not otherwise accruing to special funds or special accounts in the
22 
general fund of the national government, upon authority from the Secretary of
23 
Finance, shall be deducted from such collections and shall be remitted to the
24 
National Treasury to cover the cost of auditing services rendered to local
25 
government units;
26 
(b) A fixed amount equivalent to the annual cost of the audit services in the
27 
government corporations; and
28 
(c) Other sources such as, but not limited to, collections of audit fees from water
29 
districts and special audits, consultancy fees and retained income.
30 
All government corporations, including their subsidiaries, and self-governing boards
31 
shall appropriate in their respective budgets and remit not later than the end of the second
32 
quarter of each year an amount equivalent to the appropriation for personnel services of the
33 
audit team to the National Treasury.
38


1 
The amount for the MOOE and capital outlay to support the annual or the actual audit
2 
operations of the COA audit teams assigned to NGAs, LGUs and government corporations
3 
which form part of the approved budget of the audited agency for auditing services under the
4 
General Appropriations Act, appropriations ordinance or annual operating budget,
5 
respectively, shall be remitted directly to the Commission on Audit Central Office.
6 
All internally generated income from other sources shall accrue to its general fund to
7 
be exclusively utilized for the operation and performance of its mandate.
8 
Sec. 104. Repealing Clause. - Presidential Decree No. 1445, otherwise known as the
9 
Government Auditing Code of the Philippines, and Subtitle B, Title I, Book V, of Executive
10 
Order No. 292, or the Administrative Code of 1987, are hereby repealed. All other laws,
11 
executive orders, proclamations, decrees, instructions, rules and regulations, or parts thereof
12 
which are inconsistent or in conflict with any provision herewith shall be deemed amended,
13 
repealed or modified accordingly.
14 
Sec. 105. Separability Clause. - Should any provision of this Act or any part thereof be
15 
declared invalid, the other provisions, insofar as they are separable from the invalid provision,
16 
shall remain in force and effect.
17 
Sec. 106. Effectivity. - This Act shall take effect fifteen (15) days following completion
18 
of its publication in the Official Gazette or in any newspaper of general circulation.
Approved,
39