Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. 1554 
Introduced by HON. MIGUEL LUIS R. VILLAFUERTE, HON. VINCENZO 
RENATO LUIGI R. VILLAFUERTE, HON. TSUYOSHI ANTHONY G. HORIBATA, AND 
HON. TERRY L. RIDON 
EXPLANATORY NOTE 
Government auditing is important because it safeguards public funds and promotes 
good governance. When public resources are used lawfully and efficiently, it not only improves 
financial systems but also builds public trust in government institutions and operations. 
However, the Government Auditing Code that we have is outdated and no longer 
responsive to the current realities of public financial management. It has not kept pace with 
the transformative changes in governance, does not adequately reflect the complexities of 
digital financial systems, lacks provisions aligned with the demands of fiscal decentralization, 
and falls short of international accounting and auditing standards.  
Therefore, this proposed bill seeks to strengthen the role and improve the efficiency of 
the Commission on Audit (COA) as the supreme audit institution of the country by updating 
the Government Auditing Code of the Philippines which was enacted through Presidential 
Decree No. 1445 in 1978. 
Among the key features of the measure are reorganizing the COA, clearly defining the 
powers and functions of the Chairperson, Commissioners, Assistant Commissioners, 
Directors and Auditors, Audit Groups and Audit Teams; defining the specialization of duties 
and responsibilities of each sector as identified by the recent structure and revised Plantilla 
approved by the Department of Budget and Management; modifying the custodial 
responsibility of the auditor using the digital copies of audited vouchers and supporting papers, 
official receipts, and other documents or reports; professionalizing the audit and accounting 
services of COA; and institutionalizing the use of digitized transactions among others. The bill 
also reflects the expanded role of local government units following Mandanas-Garcia ruling. 
Most importantly, it aims to protect the resources of the country and enable the recovery of 
potential economic losses of the government. 
A modernized audit framework is in line with the broader goal of our country to advance 
to digital governance, improve accountability, promote transparency, and enforce fiscal 
discipline across all levels of public service. 
This proposed measure was approved on third and final reading by the House of 
Representatives in the 19th Congress, signifying legislative support and importance. 
In view of the foregoing, the immediate passage of this bill is earnestly sought. 
July 8, 2025
10:01 pm


 
 
 
 
 
 
HON. MIGUEL LUIS R. VILLAFUERTE    
 
 
 
 
 
HON. VINCENZO RENATO LUIGI R. VILLAFUERTE  
  
 
 
 
 
 
HON. TSUYOSHI ANTHONY G. HORIBATA  
 
 
 
 
 
HON. TERRY L. RIDON 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. 1554 
Introduced by HON. MIGUEL LUIS R. VILLAFUERTE, HON. VINCENZO 
RENATO LUIGI R. VILLAFUERTE, HON. TSUYOSHI ANTHONY G. HORIBATA, AND 
HON. TERRY L. RIDON 
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: 
TITLE I 
CHAPTER I 
GENERAL PROVISIONS 
SECTION 1. Title. – This Act shall be known and cited as the “Revised Government Auditing 
Act.” 
SECTION 2. Declaration of Policy. – It is the policy of the State that all resources of the 
government shall be managed, expended, or utilized in accordance with law, rules, and 
regulations, and safeguarded against loss or wastage through illegal or improper disposition 
in order to ensure efficiency, economy, and effectiveness in the operations of government. 
The responsibility to take care that such policy is faithfully adhered to rests directly with the 
chief or head of the government agency concerned. 
SECTION 3. Definition of Terms. – As used in this Act: 
(a) Account refers to a list or statement of monetary transactions pertaining to fund,
property, obligation, equity, revenue, collection, or expense, whether or not entered as
item/s of debit or credit in the books of accounts, registry, or any other record;
(b) Accountable Officer refers to the officer of a government agency who by the nature of
duties and responsibilities or participation in the collection or receipt and expenditure or
use of government funds, custody, and disposal of government property, is required by
law or regulation to render account to the Commission on Audit (COA). This shall include
any public officer or private person or entity who may have direct or indirect participation
in the transaction;


(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 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) Appeal 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;
(m) 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 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 resolution 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 refers 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) Disallowance refers to the disapproval in the audit of a transaction, either in whole or in 
part, involving government disbursement or property;  
 
(w) Electronic Collection (e-Collection) 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 actual money, check, or any physical note is 
handed through the hands of the government entity's collecting officer. This includes 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, solely 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 followed 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, 
including 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 implementation 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 final and executory;  
 
(ee) Persons Liable refer to the persons determined to be answerable for an audit 
disallowance, charge, or decision by the Commission;  
 
(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;   
 
(ll) 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;  
 
(mm) 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;  
 
(oo) Settled Account refers to a transaction which after audit does not result to any adverse 
audit decision;  
 
(pp) Special Cash Advances refer to those granted on the explicit authority of the Head of 
the Agency only to duly designated disbursing officers or employees for other legally 
authorized purposes, as follows:   
 
(1) 
Current operating expenditures of the agency field office or of the activity of 
the agency undertaken in the field when it is impractical to pay to the same by 
check, such as – (a) Salaries, Wages and Allowances; (b) Maintenance and other 
operating expenses; and  
 
(2) 
Travel Expenditures, including transportation fare, travel allowance, hotel 
room/lodging expenses and other expenses incurred by the officials and 
employees in connection with official travel;  
 
 
(qq) Statement of Internal Control (SIC) refers to the representation of the head of the 
agency’s informed judgment as to the overall adequacy and effectiveness of internal 
control within the agency related to compliance, reporting, and operations;  
 
(rr) Suspension refers to a temporary disallowance of a transaction or accounts which 
appear illegal or improper or irregular unless satisfactorily explained or justified by the 
persons responsible or until the requirements on matters raised in the course of audit 
are submitted or complied with;  
 
(ss) Trust Funds refer to funds which, by operation of law or by contract which are officially 
in the possession of any government agency or of a public officer as trustee, agent, or 
administrator, which are for the fulfillment of certain obligations or a specific purpose; 
and  
 
(tt) Transfer-Distribute-Liquidate (TDL) refers to an e-Payment scheme where the 
government entity's funds are first transferred to the intermediary's possession and 
control, which the latter thereafter uses to distribute payments to the intended payees of 
the principal government entity.  


 
 
 
 
 
 
 
 
 
 
SECTION 4. Fundamental Principles. – Financial transactions and operations of any 
government agency shall be governed by the fundamental principles set forth hereunder:  
 
(a) No money shall be paid out of any public treasury or depository except in pursuance 
of an appropriation law, appropriation ordinance, or other specific statutory authority, 
or a Department of Budget and Management (DBM)-approved corporate operating 
budget;  
 
(b) Government funds or property shall be spent or used solely for public purposes;  
 
(c) Trust funds shall be spent only for the specific purpose for which the trust was created, 
or the funds received;  
 
(d) Fiscal responsibility shall, to the greatest extent, be shared by all those exercising 
authority over the financial affairs, transactions, and operations of the government 
agency; 
 
(e) Disbursements or disposition of government funds or property shall be approved by 
the proper official of the government agency;  
 
(f) Claims against government funds shall be properly authorized and supported with the 
complete required documentation;  
 
(g) All laws, rules, and regulations applicable to financial transactions shall be faithfully 
adhered to; and  
 
(h) Applicable financial reporting framework adopted by the Commission, as prescribed 
by international standards-setting body, as well as sound management and fiscal 
administration, shall be observed: Provided, That they do not contravene existing laws, 
rules, and regulations.  
 
 
TITLE II 
Chapter I 
ORGANIZATION 
 
 
SECTION 5. Composition of the Commission on Audit, Qualifications, Term and Salary 
of Members. – The Commission shall be headed by a Chairperson and two (2) 
Commissioners, who shall be natural-born citizens of the Philippines and, at the time of their 
appointment, at least thirty-five (35) years of age, either certified public accountants  with at 
least ten (10) years of auditing experience, or members of the Philippine Bar who have been 
engaged in the practice of law for at least ten (10) years, and must not have been candidates 
for any elective positions in the elections immediately preceding their appointment. At no time 
shall all Members of the Commission belong to the same profession.  
 
The Chairperson and the Commissioners shall be appointed by the President of the 
Philippines, subject to the confirmation of the Commission on Appointments, for a term of 
seven (7) years without reappointment. Appointment to any vacancy shall be only for the 


 
 
 
 
 
 
 
 
unexpired portion of the term of the predecessor. In no case shall any member be appointed 
or designated in a temporary or acting capacity.  
  
In case of vacancy pending the appointment of a Chairperson, the senior member, as 
to appointment, shall perform the functions of the Chairperson until a new one is appointed 
and assumes office.  
  
No member of the Commission shall, during their tenure, hold any other office or 
employment in the government. They shall neither be in the practice of any profession or in 
the active management or control of any business which in any way may affect their functions 
as members of the Commission, nor shall they be financially interested, directly or indirectly, 
in any contract with, or in any franchise or privilege granted by the national government, any 
of its political subdivisions, agencies or instrumentalities, including government-owned or 
controlled corporations and their subsidiaries.  
 
The salary of the Chairperson and the Commissioners shall be fixed by law and shall 
not be decreased during their tenure.  
 
SECTION 6. The Commission Proper (CP). – The Commission Proper shall be composed 
of the Chairperson and two (2) Commissioners. They shall sit as a collegial body in the 
discharge of the powers and functions of the Commission.  
 
SECTION 7. Functions of the CP. – The following shall be the functions of the CP:  
 
(a) Promulgate auditing rules and regulations for the determination of the scope and type 
of audit and examination by the Commission, establish the techniques and methods 
required therefor, including those for the prevention and disallowance of illegal, 
irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or 
uses of government funds or property;  
(b) Promulgate accounting and auditing policies, rules, and regulations, and authorize the 
adoption of the international accounting and auditing standards prescribed by the 
international standards-setting body;  
(c) Promulgate its own rules concerning pleadings and practices before it or any of the 
offices of the Commission. Such rules however shall not diminish, increase, or modify 
substantive rights;  
(d) Decide by a majority vote of all its Members any case or matter brought before it;  
(e) Appoint the officials and employees of the Commission in accordance with the Civil 
Service laws, rules, and regulations. For the Regional Offices, appointments to rank-
and file positions may be delegated by the CP to the Directors concerned. The CP 
shall provide the appropriate guidelines for this purpose;  
(f) Exercise original and concurrent jurisdiction over administrative cases filed against 
COA personnel.  
(g) Recommend to Congress its retirement benefits system pursuant to its fiscal 
autonomy;  
(h) Restructure, when necessary, the organizational structure of the Commission, create 
new positions, transfer items, or make adjustments in the Personnel Services 
Itemization in accordance with the organization, staffing and position classification 
standards of the DBM;  
(i) Authorize the conduct of special audits including re-opening of settled accounts in case 
of fraud, collusion, or error of calculation or when new and material evidence is 


 
 
 
 
 
 
 
 
discovered, and other investigations as may be prescribed by the rules of the 
Commission; and  
(j)  Perform such other functions as may be provided by law.  
 
SECTION 8. Duties and Responsibilities of the Chairperson. – The Chairperson shall act 
as the presiding officer of the CP and chief executive officer of the Commission. As chief 
executive officer, the Chairperson shall:  
 
(a) Control and supervise the general administration of the Commission;  
 
(b) Direct and manage the implementation and execution of policies, standards, rules, and 
regulations promulgated by the CP;  
 
(c) Sign appointments for recruitment and promotions, and office orders for audit 
engagements, assignment/reassignment of officials and employees, or any other 
personnel movement of any office or station; 
 
(d) Delegate to the Commissioners, Assistant Commissioners, Directors, and other 
officials of the Commission such authority on internal administration concerning 
personnel, planning, financial, legal, and other matters pertaining to their respective 
functional areas as may be determined by the CP;  
 
(e) Submit a proposed annual or supplemental budget of the Commission to the DBM for 
approval of the Congress; 
 
(f) Summon any person or public official for the purpose of gathering data or inquiring 
into matters pertinent to the formulation, implementation or enforcement of any order, 
decision, policy, standard, or regulation of the CP; 
 
(g) Designate appropriate official as head of the Public Sector Accounting Standards 
Board and the Public Sector Auditing Standards Board; and 
 
(h) Perform such other functions as may be required by law or policy of the Commission.  
 
 
SECTION. 9. Duties and Responsibilities of the Commissioners. – The following are the 
duties and responsibilities of the Commissioners:  
 
(a) Participate in the proceedings of the CP in the discharge of its powers and functions; 
and  
 
(b) Perform such other functions as may be provided by law, rules, regulations, or policies 
of the Commission.  
 
SECTION 10. Duties and Responsibilities of the Assistant Commissioners. – The 
following are the duties and responsibilities of the Assistant Commissioners:   
 
(a) Formulate, develop, update, and supervise the implementation of the operational 
plan and performance commitment of the Sector headed which are aligned with the 
Commission’s strategic plan;  
 


 
 
 
 
 
 
 
 
(b) Supervise the general administration of offices under the jurisdiction of the Assistant 
Commissioner;  
 
(c) Serve as a member of an Assistant Commissioners Group which shall work as a 
collegial body to study, review, and recommend policies, rules, and regulations for 
consideration by the CP or the COA Chairperson; and  
 
(d) Perform such other functions as may be assigned.  
 
SECTION 11. The General Counsel. – The Assistant Commissioner of the Legal Services 
Sector shall be the General Counsel of the Commission.  
 
SECTION 12. The Central and Regional Offices. – The operations of the Commission under 
Section 16 of this Act shall be further carried out by the various offices under each Sector in 
the Central and Regional Offices. Each regional office shall be headed by a regional director 
with a rank of Director IV. All offices under the audit sectors shall supervise their respective 
audit groups and audit teams.  
 
The COA Regional Offices shall serve as representatives of the Commission in the 
regions under the direct control and supervision of the Assistant Commissioner of Local 
Government Audit Sector (LGAS).  
 
SECTION 13. Duties and Responsibilities of the Commission Secretary. – The 
Commission Secretary shall have the rank of a Director IV who shall provide secretariat and 
administrative support to the CP.   
 
SECTION 14. Duties and Responsibilities of the Chief Executive Staff. – The Chief 
Executive Staff in the Office of the Chairperson shall have the rank of an Assistant 
Commissioner who shall be responsible for the general administration and supervision of the 
offices under it.  
 
SECTION. 15. Duties and Responsibilities of the Directors. – The Directors of the 
Commission shall have the following duties and responsibilities:  
 
(a) Formulate, develop, and supervise the implementation of the annual operational 
plan, in accordance with the Commission’s strategic plan;  
 
(b) Manage the administrative operations of the office;  
 
(c) Implement and execute laws, policies, standards, and rules and regulations 
promulgated by the Commission or the Chairperson;  
 
(d) Submit annual performance report and other reports as directed by the CP or the 
Chairperson;  
 
(e) Adjudicate on cases within their jurisdiction;  
 
(f) Publish audit reports in the website of the Commission; and  
 
(g) Perform other functions that may be assigned by higher and competent authority;  
 


 
 
 
 
 
 
 
 
The Commission may add or limit the duties and responsibilities of the officers and 
employees.  
 
SECTION 16. Operations of the Commission. – The operations of the Commission shall 
be undertaken through the following sectors which shall each be headed by an Assistant 
Commissioner who shall exercise supervision over various offices under it:  
 
(a) Local Government Audit Sector (LGAS) shall be responsible for the audit of LGUs;  
 
(b) National Government Audit Sector (NGAS) shall be responsible for the audit of NGAs;  
 
(c) Corporate Government Audit Sector (CGAS) shall be responsible for the audit of GCs; 
 
(d) Special Audit Services Sector (SASS) shall be responsible for the conduct of 
performance audit; fraud audit; and special audit of account of public utilities, private 
entities to which government funds have been transferred in the form of subsidy, 
equity, donation, grants, or counterpart funds, franchise grantees, payment of levies 
or government shares, PPP projects, and the like;  
 
(e) Systems and Technical Audit Services Sector (STASS) shall be responsible  for 
technical audit and conduct of other technical-related services; audit of information 
technology and systems and conduct of other services related to information and 
communications technology resources and services of government agencies; and 
assessment of conformance of internal audit service or unit of government agencies 
with the prescribed internal auditing standards 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 (OMB) 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 CP;  
 
(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.  
 
The CP may effect changes in the organization and functions of the Commission as it 
may deem necessary in the exercise of its fiscal autonomy in order to carry out its 
constitutional mandate.  
 
SECTION 17. Legal Assistance to Current and Former Officials and Employees. – 
Current and former COA officials and employees are authorized to engage the services of 
private lawyers for a fee on cases filed against them in relation to the performance of their 
official functions in accordance with the guidelines issued by the CP.  
 
For this purpose, the Commission shall provide a legal assistance fund to be included 
in its annual appropriation.  
 
SECTION 18. Professionalization of Audit Services. – The Commission shall develop, 
adopt, and implement a competency-based capacity building and continuing education. It shall 
participate and support the activities of international professional organizations such as the 
International Organization of Supreme Audit Institutions (INTOSAI), Asian Organization of 
Supreme Audit Institutions (ASOSAI), ASEAN Supreme Audit Institutions (ASEANSAI), and 
other supreme audit institutions.   
 
For this purpose, the capacity building shall include courses on accounting standards, 
rules, and regulations relevant to auditing services.  
 
SECTION 19. Professionalization of Accounting and Other Services. – For accounting 
services, the Commission shall conduct capacity building in coordination with international 
professional bodies on accounting services such as the International Public Sector Accounting 
Standards Board (IPSASB), Financial and Sustainability Reporting Standards Council 
(FSRSC), and other international professional bodies relevant to accounting services.  
 
The Commission shall likewise provide similar capacity building for other services.  
 
SECTION 20. Fiscal Autonomy. – (a) The Commission shall enjoy fiscal autonomy and its 
approved annual appropriation shall be automatically and regularly released. The Chairperson 
of the COA is authorized to augment any item in the general appropriations for the Commission 
from savings in any item in the same appropriation; and (b) any savings from the approved 
budget under the GAA shall be retained by the Commission until fully spent.  
 
SECTION 21. Statement of Objectives. – In keeping with its constitutional mandate, the 


 
 
 
 
 
 
 
 
Commission adheres to the following objectives:  
 
(a) Determine whether the fiscal responsibility which rests directly with the head of the 
government agency has been properly, efficiently, and effectively discharged;  
  
(b) Develop and implement a comprehensive audit plan that shall encompass the 
examination of financial and non-financial transactions, accounts, and reports, 
including evaluation of the internal control system of the agency;  
 
(c) Institute control measures through the promulgation of auditing and accounting 
rules and regulations governing the revenue, receipts, disbursements, and uses of 
funds and properties, including audit of projects under public-private partnership 
agreements or the like, fund transfers to non-government organizations (NGOs), 
peoples’ organizations (POs) or other private entities for specific purpose;  
 
(d) Promulgate accounting and auditing rules and regulations to facilitate the keeping 
of the accounts of the Government and enhance their information value;  
 
(e) Institute measures designed to preserve and ensure the independence of the 
Commission, ensure transparency and accountability in government operations, 
and promote service excellence and quality in all aspects of its work; and  
 
(f) Bring its operations closer to the people by the delegation of authority through 
decentralization and participatory governance, consistent with the provision of the 
Constitution.  
 
SECTION 22. General Jurisdiction. – Pursuant to Section 2(1), Article IX-D of the 1987 
Constitution, the Commission shall have the power, authority, and duty to examine, audit and 
settle all accounts pertaining to the revenues 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 corporations, and on a 
post-audit basis:   
 
(a) Constitutional bodies, commissions and offices that have been granted fiscal 
autonomy under the Constitution;   
 
(b) Autonomous state colleges and universities;   
 
(c) Other government corporations and their subsidiaries; and   
 
(d) Such non-governmental entities receiving subsidy or equity directly or indirectly, from 
or through the government, which are required by law or the granting institution to 
submit to such audit as a condition of subsidy or equity.   
 
However, where the internal control system of the audited agencies is inadequate, the 
Commission may adopt such measures, including temporary or special pre-audit, as are 
necessary and appropriate to correct the deficiencies. It shall keep the general accounts of 
the government, and for such period as may be provided by law, preserve the vouchers and 
other supporting papers pertaining thereto.   
 
The Commission, under Section 2(2), Article IX-D of the 1987 Philippine Constitution, 


 
 
 
 
 
 
 
 
shall have exclusive authority subject to the limitations in Article IX of the Constitution, to define 
the scope of its audit and examination, establish the techniques and methods required 
therefor, and promulgate accounting and auditing rules and regulations including those for the 
prevention and disallowance of irregular, unnecessary, excessive, extravagant, or 
unconscionable expenditures, or uses of government funds and properties.  
 
SECTION 23. Examining Authority. – The Commission shall have authority to examine in 
the course of audit, books, papers, documents pertaining to the income of individuals and 
corporations in connection with government revenue collection operations, for the purpose of 
ascertaining that all revenues determined to be collectible and due the Government have 
actually been collected.  
 
SECTION 24. Limited Jurisdiction over Private Entities. – The Commission shall have 
authority to examine and audit the books and records of private entities in connection with 
their contracts, agreements, or dealings with the government for which they: (i) received 
subsidies, counterpart funding, government equity, donation or grant, fund transfer; (ii) were 
allowed to use government properties or facilities; and/or (iii) were required to pay revenue 
share such as, but not limited, to levy, franchise fees, income share, or other forms.   
 
SECTION 25. Authority to Examine Accounts of Public Utilities. – The Commission may 
conduct a special audit of the books, records, and accounts of all public utilities for the 
purpose of determining reasonableness of rates charged to the public, or in relation to the 
proceedings of the proper regulatory agencies for purposes of determining franchise taxes 
and other fees. The Commission shall issue the audit guidelines to implement this provision.   
 
SECTION 26. Authority to Examine Accounts of Public-Private Partnership (PPP). – 
Nongovernment entities which have contracts with the government under a Public-Private 
Partnership (PPP) Agreement or any of its variants, as regards to the determination of the 
following:   
 
(a) Existence of value-for-money in procurement through PPP;  
 
(b) Compliance with the terms and conditions of the contract or agreement;   
 
(c) Reasonableness of the sharing of the risks and rewards between the private sector 
and the government; or  
  
(d) Absence of disadvantage to the government in the agreement relating to the 
operation, maintenance and handover of the public infrastructure or project.  
 
SECTION 27. Deputization of Government Licensed Professionals or Experts to Assist 
Government Auditors. – The CP may, when the exigencies of the service so require, 
deputize, and retain in the name of the Commission such certified public accountants and 
other government licensed professionals or experts as it may deem necessary, to assist its 
auditors in undertaking specialized audit engagements.  
 
The deputized professionals or experts shall be entitled to such compensation and 
allowances as may be stipulated in the contract, subject to pertinent rules and regulations on 
compensation and fees.  
 
The CP shall issue guidelines in contracting deputized professionals or experts 


 
 
 
 
 
 
 
 
referred to in this section.  
 
SECTION 28. Participation of Civil Society Organizations in the Conduct of Audit. – The 
COA Chairperson may deputize duly accredited Civil Society Organizations (CSOs) in the 
conduct of audit to help auditors in the ocular inspection, validation, evaluation, collection of 
data or information and monitoring of projects or located in remote and critical areas to 
enhance credibility, accountability, and transparency in audit processes.  
 
SECTION 29. Prohibition of Person or Entity from Rendering Auditing and Related 
Services to Government Entities. – No person or entity shall enter into a contract to render 
accounting or auditing related services for a fee to any government agency or conduct of 
seminars or workshops on accounting and auditing for government personnel on these topics 
without clearance from COA to enable it to determine if it has the resources and capability to 
undertake the same.   
 
Should the Commission decide not to undertake the study or service, it shall 
nonetheless have the power to review the proposed contract in order to determine the 
necessity, capability or expertise of the private party and the reasonableness of its fees.  
  
Any contract entered into without the approval of the Commission shall be considered 
null and void and the related expenditures incurred thereon shall be disallowed in audit and 
become the personal liability of the officials concerned.  
 
SECTION 30. Government Contracts for the Hiring of a Private Lawyer or Law Firm to 
Handle Legal Cases or Render Legal Services to Government Agencies. – No contract 
involving public funds shall be entered into for the services of a private lawyer or law firm to 
represent government agencies in court or to render legal services for them. If hiring of such 
legal services cannot be avoided, or is justified under extraordinary or exceptional 
circumstances, the written conformity and acquiescence or clearance of the OSG or the Office 
of the Government Corporate Counsel (OGCC), as the case may be, and the written 
concurrence of the COA shall first be secured before the engagement of a private lawyer or 
law firm, unless exempted under the rules of the Commission.   
 
In the absence of above-stated requirements, any payment thereof shall be disallowed 
in audit and the same shall be the personal liability of the officials concerned.  
 
SECTION 31. Prohibition of Private Foundations and Entities to Use the Name and 
Resources of the Government to Solicit and/or Receive Donations, Grants, Financial 
Assistance from Private Domestic and International Donors. – Private foundations and 
entities organized and managed by government officials and employees are prohibited from 
using the name, resources, insignia, or logo of a government agency for whatever enterprise 
to solicit and/or receive donations, grants, financial assistance from the public or other donors.  
 
Any violation of the preceding paragraph shall subject the said foundation or entity to 
special audit by the Commission as if the funds so received are public funds which should be 
recognized in the books of the concerned government agency. Refusal to submit itself to such 
audit shall constitute an offense punishable under Section 101 of this Act.  
 
SECTION 32. Prevention of Illegal, Irregular, Unnecessary, Excessive, Extravagant or 
Unconscionable Expenditures or Uses of Government Funds of Property; Power to 
Disallow such Expenditures. – The Commission shall promulgate accounting and auditing 


 
 
 
 
 
 
 
 
rules and regulations for the prevention and disallowance of illegal, irregular, unnecessary, 
excessive, extravagant, or unconscionable expenditures or uses of government funds or 
property. Any violation of such rules and regulations shall be a ground for disallowance without 
prejudice to administrative, civil and/or criminal sanctions against the persons liable therefor.  
 
SECTION 33. Settlement of Accounts Between Agencies. – The Commission shall have 
the exclusive power, under such regulations as it may prescribe, to authorize and enforce the 
settlement of accounts subsisting between agencies of the government.  
 
SECTION 34. Collection of Indebtedness Due to the Government. – The Commission, 
through proper channels, may assist in the collection and enforcement of all debts and claims 
and the restitution of all funds or the replacement or payment to the government of any 
government property lost or destroyed.  
 
SECTION 35. Power to Adjudicate Money Claims Against the Government. – The 
Commission shall have the power to adjudicate money claims filed against the government or 
any of its subdivisions, agencies, and instrumentalities in relation to liquidated claims and 
quantum meruit cases. Unliquidated money claims against the government shall be filed 
before the proper courts, tribunals, and other adjudicative bodies.   
 
Liquidated claims refer to those determined or readily determinable from vouchers, 
invoices, and such other papers within reach of accounting officers.   
 
When the Commission is in the exercise of its power to execute judgments on money 
claims, the Commission shall, at all times, respect the principle of immutability of judgments.  
 
SECTION 36.  Power to Compromise Claims. – When the interest of the Government so 
requires, the CP may compromise or release in whole or in part, any settled claim or liability 
to any government agency not exceeding Ten million pesos (P10,000,000.00) arising out of 
any matter or case before it or within its jurisdiction.  In case the claim or liability exceeds Ten 
million pesos (P10,000,000.00), the Commission shall submit with its recommendations, the 
application for relief to Congress.  
 
The respective governing bodies of government corporations and self-governing 
boards, commissions or agencies of the government shall have the authority to condone, 
compromise or release any similar claim or liability when expressly authorized by their 
charters, subject to timely review and post-audit by the Commission. When their charters do 
not so provide, the power to condone or compromise shall be exercised exclusively by the 
Commission in accordance with the preceding paragraph.  
 
SECTION 37. Satisfaction of Indebtedness Arising from Final and Executory Audit 
Decisions. – When any person or entity is indebted to any government agency by reason of 
a final and executory audit decision, the Commission shall direct the head of agency  to 
withhold the salary or any money due to such entity or person liable or from the estate, in 
satisfaction of the indebtedness under the said decision.  
 
In case the money due is not sufficient or there is no such money due to the entity or 
person liable to satisfy the indebtedness from the final and executory audit decision, the 
Commission shall have the power to levy property or garnish bank accounts to the extent of 
the unpaid balance.  
  


 
 
 
 
 
 
 
 
Failure on the part of the head of agency concerned to comply with the preceding 
paragraphs shall make the head of agency personally liable without prejudice to administrative 
action that may be filed for neglect of duty.  
 
SECTION 38. Authority to Require Submission of Documents Relative to Government 
Transactions. – The Commission shall have the power to require the submission of the 
original, in whatever form, of any order, deed, contract, or other document under which any 
collection of, or payment from, government funds may be made, together with any certificate, 
receipt, or other evidence in connection therewith. If an authenticated copy is  needed for 
record purposes, the copy shall upon demand be furnished.  
 
In the case of deeds to property purchased by any government agency, the 
Commission shall require a certificate of title entered in favor of the government or other 
evidence satisfactory to it that the title is in the name of the government.   
  
It shall be the duty of the officials or employees concerned, including those in 
nongovernment entities under audit, or affected in the audit of government and 
nongovernment entities, to comply promptly with these requirements.   
 
SECTION 39. Investigatory and Inquisitorial Powers; Power to Punish for Contempt. –
The Chairperson, and other officials and employees specially deputed in writing for the 
purpose by the Chairperson shall, in compliance with the requirement of due process, have 
the power to summon the parties to a case brought before the Commission for resolution, 
issue subpoena and subpoena duces tecum, administer oaths, and otherwise take testimony 
in any investigation or inquiry on any matter within the jurisdiction of the Commission.  
 
The Commission shall have the power to punish for contempt as provided for in the 
Revised Rules of Court and the Revised Rules of Procedure of the COA, under the same 
procedure and with the same penalties provided therein. Any violation of any final and 
executory decision, order or ruling of the Commission shall constitute as indirect contempt.  
 
SECTION 40. Annual Financial Report of the Commission. – The Commission shall submit 
to the President and the Congress of the Philippines not later than the last day of October of 
each year an annual report on the financial condition and results of operation of all government 
agencies, which shall include recommendation of measures necessary to improve economy, 
efficiency, and effectiveness of these agencies.  
 
To carry out the purposes of this Section, the Chief Accountant or the official in charge 
of keeping the accounts of the government agency shall submit to the Commission, yearend 
financial statements and such other supporting or subsidiary statements as may be required 
by the Commission not later than the 31st day of March of each year.  Financial statements 
returned by the Commission for revision due to non-compliance with accounting standards, 
rules and regulations shall be resubmitted within five (5) working days after the date of receipt 
by the official concerned.  
 
SECTION 41. Annual Report on Appropriations, Allotments, Obligations and 
Disbursements, including Off-Budgetary Funds and Trust Receipts. – Within one 
hundred twenty (120) days after the end of every fiscal year, the Commission shall submit to 
the President and the Congress of the Philippines an annual report on appropriations, 
allotments, obligations and disbursements of national government agencies and government 
corporations maintaining Special Accounts in the General Fund and receiving budgetary 


 
 
 
 
 
 
 
 
support from the government.   
 
For the purpose stated in this section, agencies are required to submit financial 
accountability reports to this Commission in compliance with the pertinent sections of the 
General Provisions of the General Appropriations Act (GAA) and Republic Act No. 7226.  
 
SECTION 42. Powers, Functions, and Duties of Auditors. – The following are the powers, 
functions, and duties of auditors as representatives of the Commission:  
 
(a) Exercise such powers and functions as may be authorized by the Commission in 
the examination of cash and accounts of accountable officers; conduct financial, 
compliance, performance, and other special audits; settle accounts of the 
agencies under the respective audit jurisdiction;  
  
(b) Submit an audit report on the date and in the manner prescribed by the 
Commission and render such other reports as the Commission may require;  
 
(c) For transactions subject of Audit Observation Memorandum (AOM), NS, ND, NC, 
complaint or a pending audit or investigation or court case, retain custody and be 
responsible for the safekeeping and preservation of paid expense vouchers, 
journal entry vouchers, stubs of checks, reports of collections and disbursements, 
and similar documents together with their respective supporting papers, until the 
final disposition thereof. The Commission shall prescribe the manner for 
preservation of these audit or legal evidence;  
 
(d) Retain a digital copy of the audited vouchers and supporting papers, official 
receipts, and other documents or reports upon turnover or return of the originals 
to the auditee for safekeeping and preservation in accordance with the guidelines 
promulgated by the CP; 
 
(e) Act as witness in proceedings before the courts, the OMB, and other quasi-judicial  
bodies; and 
 
(f) Perform such other functions as may be assigned to them by the Commission. 
 
 
SECTION 43. Examination of Cash and Accounts of Accountable Officer. – The 
cashbooks, accounts, papers, and cash in the accountability of an accountable officer shall be 
opened at all times to audit and examination of the Commission and its duly authorized 
representatives.  
 
In case an examination of the cash and accounts of an accountable officer discloses 
a shortage, it shall be the duty of the auditor to immediately demand in writing the restitution 
of the shortage and notify in writing the head of the government agency concerned of said 
shortage in accordance with the regulations of the Commission. The head of the agency may 
immediately relieve the accountable officer and assign another officer to assume the former's 
duties and responsibilities. A complete report on the cash examination of the accounts of the 
accountable officer with cash shortage shall immediately be submitted by the auditor to the 
Director concerned for purposes of referral to the OMB for investigation and filing of the 
appropriate administrative and/or criminal case against the said defalcating accountable 
officer, as the evidence may warrant.   


 
 
 
 
 
 
 
 
 
 
For this purpose, the auditor shall, at all times, be regarded as a witness only in cases 
filed before the OMB and the regular courts. In no case shall the auditor be named as the 
complainant therein.  
 
SECTION 44. Withholding of Salaries and Other Emoluments of Accountable Officers. 
– Whenever an accountable officer has been found short of any accountability during cash 
examination or audit and after failure to explain satisfactorily or to produce the missing funds 
within the period prescribed by the rules of the Commission, the auditor shall order  the head 
of the agency to direct the withholding of the salaries and other emoluments due the 
accountable officer found to have incurred cash shortage up to the extent of the liability until 
the final determination of the latter’s accountability by the Commission or by final judgment of 
a competent court.   
 
SECTION 45. Constructive Distraint of Property of Accountable Officer. – Upon discovery 
in audit of a shortage in the accounts of any accountable officer and upon a finding of a prima 
facie case of malversation of public funds or property against such accountable officer, in order 
to safeguard the interest of the government, the Commission may place under constructive 
distraint the personal property of the accountable officer concerned where there is reasonable 
ground to believe that the said officer is retiring from the government service or intends to 
leave the Philippines or remove the property therefrom or hide or conceal such property.  
 
The constructive distraint shall be effected by requiring the accountable officer 
concerned or any other person having possession or control of the property to accomplish a 
receipt in the form prescribed by the Commission, covering the property distrained and 
obligating to preserve the same intact and unaltered and not to dispose of it in any manner 
whatsoever without the express authority of the Commission.  
 
In case the said accountable officer or other person having the possession and control 
of the property sought to be placed under constructive distraint refuses or fails to accomplish 
the receipt herein referred to, the representative of the Commission effecting the constructive 
distraint shall proceed to prepare a list of such property; and, in the presence of two witnesses, 
leave a copy thereof in the premises where the property distrained is located. Thereafter, the 
said property shall be deemed to have been placed under constructive distraint, in accordance 
with the rules and regulations of the Commission.  
 
The auditor shall submit a report to the Chairperson on any distraint effected pursuant 
to this Section not later than five (5) calendar days from the date of the distraint of the 
property.  
 
SECTION 46. Appeals from Decisions of Auditors. – Any person aggrieved by the decision 
of an auditor, may within one hundred eighty (180) calendar days from receipt of a copy of the 
decision, appeal in writing to the Commission. The procedures of appeal shall be governed by 
the internal rules concerning pleadings and practices of the Commission, including the 
imposition of reasonable filing and legal research fees.  
 
SECTION 47. Period Rendering Decisions of the Commission. – The CP shall decide any 
case brought before it within sixty (60) days from the date of its submission for decision or 
resolution. A case is deemed submitted for decision or resolution upon receipt of the last 
comment on the draft decision from any member of the CP necessary for a proper decision.  
 
 


 
 
 
 
 
 
 
 
CHAPTER II 
DECISION OF THE COMMISSION 
  
 
SECTION 48. Appeal from Decisions of the Commission. – The party aggrieved by any 
decision, order or ruling of the Commission may within thirty (30) days from the receipt of a 
copy thereof, appeal on certiorari to the Supreme Court in the manner provided by law and 
the Rules of Court. When the decision, order, or ruling adversely affects the interest of any 
government agency, the appeal may be taken by the proper head of that agency.  
 
The OSG shall at all times represent the Commission in all its decisions appealed to 
the Supreme Court.   
 
SECTION 49. Finality of Decisions of the Commission and Responsibility of Head of the 
Agency. – A decision of the Commission, upon any matter within its jurisdiction, if not 
appealed as herein provided, shall be final and executory.  
 
The General Counsel or any authorized official of the Commission shall issue an order 
of execution for final and executory decisions, resolutions, or orders of the Commission.  
 
For final and executory decisions on money claims, the claimant shall initiate the 
process of payment with the agency concerned pursuant to existing rules and regulations.  
 
SECTION 50. Enforcement of Decisions of the Auditor or Commission Proper. – The 
head of agency shall ensure the immediate settlement of final and executory decisions of the 
Commission. Unreasonable failure or refusal of the head of agency or concerned official to 
implement the final and executory decision of the Commission shall render the former 
administratively liable for neglect of duty.  
 
SECTION 51. Re-audit of Audited Transactions. – All transactions and accounts are open 
for audit within ten (10) years after the date of transaction.  
  
 
TITLE III 
CHAPTER I 
BASIC POLICIES AND STANDARDS 
  
 
SECTION 52. Definition of Government Auditing. – Government auditing is a systematic, 
independent, and objective process that involves obtaining and evaluating evidence in 
accordance with the prevailing International Standards for the Supreme Auditing Institutions 
(ISSAIs) for the purpose of assessing whether the financial information, transactions, 
programs, operations, accounts, and reports of any government agency are in accordance 
with the applicable international accounting framework. Government audits cover three audit 
streams: financial audits, compliance audits, and performance audits which are guided 
respectively by separate ISSAIs.  
 
SECTION 53. Principles of Government Auditing. – The auditor shall be guided by the 
general principles and the prescribed international standards related to the audit process:  
 
(a) Comply with the relevant ethical principles of integrity, independence and 


 
 
 
 
 
 
 
 
objectivity, 
competence, 
professional 
behavior, 
and 
confidentiality 
and 
transparency;  
 
(b) Maintain appropriate professional behavior by applying professional skepticism, 
professional judgment, and due care throughout the audit;  
 
(c) Perform the audit in accordance with professional standards on quality control;  
 
(d) Possess collectively the knowledge, skills, expertise, and ability and experience to 
exercise professional judgment necessary to successfully complete the audit; 
 
(e) Manage the risks of providing a report that is inappropriate in the circumstances of 
the audit;  
 
(f) Consider materiality throughout the audit process, in relation to stakeholder 
concerns, public interest, regulatory requirements and consequences for society; 
 
(g) Prepare audit documentation that is sufficiently detailed to provide a clear 
understanding of the work performed, evidence obtained, and conclusions 
reached; and 
 
(h) Establish effective communication throughout the audit process.  
 
 
CHAPTER II 
RECEIPTS AND DISPOSITION OF FUNDS AND PROPERTIES 
 
 
SECTION 54. Accounting for Moneys and Property Received by Public Officials. – All 
moneys and properties officially received by a public officer in any capacity or upon any 
occasion, or those received in connection with the office, must be accounted for as  
government funds and property, except as may otherwise be specifically provided by law or 
competent authority. Their recognition in the books of accounts of the agency  concerned shall 
be in accordance with pertinent laws, policies, rules and regulations, and applicable financial 
reporting framework.  
 
SECTION 55. Designation of Collecting or Disbursing Officers for Government 
Agencies. – The head of agency may designate such number of collecting and disbursing 
officers or agents as may be deemed necessary. They shall render reports of their collections 
and disbursements pursuant to the regulations of the Commission, to be submitted promptly 
to the auditor concerned who shall conduct the necessary 30 examination and audit.  
 
SECTION 56. Time and Mode of Rendering Account. – In the absence of specific provision 
of law, all accountable officers, through the agency accountants, shall render their accounts, 
submit their vouchers, and make deposits of money collected or held by them at such time 
and in such manner as shall be prescribed in the rules and regulations of the Commission. 
The auditor concerned shall then conduct the necessary examination and audit thereof.  
 
SECTION 57. Accrual of Income or Revenues to Unappropriated Surplus of the General 
Fund. – All income or revenues accruing to the agencies by virtue of the provisions of law, 
orders and regulations shall be deposited in the National Treasury or in any duly authorized 


 
 
 
 
 
 
 
 
government depository and shall accrue to the unappropriated surplus of the General Fund of 
the government, unless otherwise specifically provided by law.  
 
Income or revenues from business-type activities and revolving funds of government 
agencies may be separately recorded and disbursed in accordance with such rules and  
regulations as may be determined by the Permanent Committee created by law, composed of 
the Secretary of Department of Finance as Chairperson, Secretary of Department of Budget 
and Management, and Chairperson of Commission on Audit, as members.   
 
SECTION 58. Special, Fiduciary and Trust Funds. – Receipts shall be recorded as income 
of Special, Fiduciary or Trust Funds or Funds other than General Fund only when authorized 
by law in accordance with the rules and regulations issued by the Permanent Committee.  
 
Revenues collected from particular taxes, levy and royalties for special purpose shall 
be  treated as a special fund or Special Account in the General Fund and paid out for such 
purpose only. If the purpose for which a special fund was created has been fulfilled or 
abandoned, the balance, if any, shall be transferred to the General Fund of the government.  
  
In case any government agency fails or refuses to implement such reversion and 
closure, the Permanent Committee may recommend for approval of the President the 
reversion and closure of the Special Account in the General Fund, Fiduciary or Trust Funds 
on any of the following grounds:  
 
(a) The terms have expired or no longer necessary for attainment of the purpose for which 
said funds were established;  
 
(b) Dormant for unreasonable length of time;  
 
(c) Needed by the General Fund in times of emergency; or  
 
(d) Used in violation of the rules and regulations issued by the Permanent Committee.  
 
SECTION 59. Receipts and Revenues of Local Government Units (LGUs). – All receipts 
and income accruing to the LGUs shall be deposited in their account maintained in the 
authorized government depository bank or private bank with the prior approval of the 
Department of Finance.  
 
SECTION 60. Receipts and Revenues of Government Corporations (GCs). – All receipts 
and income accruing to GCs shall be deposited in their account maintained in the authorized 
government depository bank.  
 
SECTION 61. Collections by the Government. – No payment of any nature shall be received 
by a collecting officer without immediately issuing an official receipt in acknowledgment 
thereof. The receipt may be in the form of postage, internal revenue or documentary stamps 
or such other digital forms as the law or the Commission may allow.  At no instance shall 
temporary or provisional receipts be issued to acknowledge the receipt of public funds.  
 
Where digital or electronic devices are used to acknowledge cash receipt, an electronic 
official receipt (eOR) shall be issued and the electronic copies of the pieces of evidence of the 
e-collection through Self-Collect and Credit (SCC) or Collect-Aggregate-Remit (CAR) or other 
modes of electronic collection allowed by the rules of the COA, shall be kept in electronic 


 
 
 
 
 
 
 
 
archives. The same shall be subject to inspection and verification by the Commission, in 
accordance with its prescribed guidelines on the use of eORs to acknowledge collection of 
income and other receipts of government.  
  
The same is acceptable provided the document maintains its integrity and reliability 
and can be authenticated so as to be usable for subsequent reference: Provided, That the  
electronic document has remained complete and unaltered, apart from the addition of any 
endorsement and any authorized change, or any change which arises in the normal course of 
communication, storage and display; and that the electronic document is reliable for the 
purpose for which it was generated and for all relevant circumstances.  
  
Collections in the form of checks in favor of the government shall be governed by the 
rules of the Commission.  
  
At no instance should money in the hands of the collecting officer be utilized for 
whatever purpose but should be deposited intact with an authorized government depository 
bank.  
 
SECTION 62. Payment in Settlement. – Electronic payment through TDL, credit card, DEP 
such as ADA and other modes may be used to settle all obligations of the government in 
accordance with the guidelines of the Commission and other Public Financial Management 
agencies of the government.   
 
Electronic payment to a person not duly authorized to receive such payment shall 
subject the concerned accountable officer to administrative/civil sanctions or criminal 
prosecution, as may be warranted.  
  
In instances when checks are drawn against the checking account of the government 
agencies maintained with any government depository in payment of an obligation:  
 
(a) The check shall be made payable directly to the creditor to whom the money is due, or 
to the disbursing officer or employee for an official disbursement;   
 
(b) Checks drawn in payment of any indebtedness shall likewise be accepted by the officer 
concerned, provided it shall be made payable to the entity or the authorized official of 
the payee; and  
 
(c) When a check drawn in favor of the government is not accepted by the drawee bank 
for any reason, the drawer shall continue to be liable for the sum due and all penalties 
resulting from delayed payment. Where the reasons for nonacceptance by the drawee 
bank are insufficiency of funds and/or closed 13 accounts, the drawer shall be 
criminally liable therefor.  
 
SECTION 63. Deposit of Money in the Treasury or Authorized Government Depository 
Bank. – Public officers authorized to receive and collect moneys arising from taxes, revenues, 
or receipts of any kind shall remit or deposit intact the full amounts so received and collected 
by them to the account of the National Treasury or in the agencies account maintained in the 
authorized government depository bank not later than the following banking day, except when 
it is impractical to do so due to distance and the amount to be deposited is minimal.  
 
Fifty percent (50%) share on proceeds from the community tax certificates collected 


 
 
 
 
 
 
 
 
by duly deputized barangay treasurers shall be automatically retained and deposited intact  
in authorized depository banks of the barangay where the tax is collected pursuant to the 
Republic Act No. 7160, as amended, otherwise known as the “Local Government Code of 
1991.”  
  
No collections shall be used for purposes of disbursements except when authorized 
by law or regulations.  
 
SECTION 64. Acknowledgment of Receipt of Money by Government Depositories. – All 
authorized government depository banks shall acknowledge receipt of all money received by 
them, for the account of the National Treasurer or the agency concerned. The 
acknowledgment shall bear the date of actual deposit and indicate from whom and on what 
account it was received. Such moneys received shall be governed by the Treasury Single 
Account System. established pursuant to law.   
 
The authorized agency official shall regularly furnish the monthly bank statements to the 
auditor.   
 
SECTION 65. Shipment of Government Money or Property by a Carrier; Notation of 
Evidence of Loss. – When government money or property is transported from one place to 
another by a carrier, it shall be the duty of the consignee or duly authorized representative to 
make notation or notations on the bill of lading or receipt on any evidence of loss, shortage, or 
damage.  
 
SECTION 66. Credit for Loss Occurring in Transit or Due to Fire, Theft, Robbery or Force 
Majeure. – When a loss of government funds, property, documents evidencing financial 
transactions, or records of accountabilities occurs while they are in transit or loss is caused by 
fire, theft, robbery or force majeure, the officer or employee accountable therefor or having 
custody thereof shall immediately notify the auditor concerned and, within thirty (30) days from 
the occurrence of loss, shall file an application for relief, together with the required supporting 
evidence. When warranted, credit for the loss shall be allowed. An officer or employee who 
fails to comply with this requirement shall not be relieved of liability or allowed credit for any 
loss thereof. The procedures on application for relief shall be governed by the rules and 
regulations of the Commission.  
 
SECTION 67. Disposal of Government Property. – When property of the government 
becomes unserviceable or is no longer needed, it may be disposed of in the following manner, 
following the guidelines issued by the Commission:   
 
(a) Transfer of property between government agencies;  
 
(b) Destruction or sale of unserviceable property;  
 
(c) Sale through public auction of unserviceable property;  
 
(d) Sale through public auction of government property that is no longer needed; and  
  
(e) Other modes as may thereafter be approved and prescribed in the guidelines issued 
by the Commission.  
 
SECTION 68. Disposal of Real Property. – Whenever the subject of the disposal by sale is 


 
 
 
 
 
 
 
 
real property, the same shall require prior approval of the Commission.  
 
SECTION 69. Disposal of Goods and Properties Seized or Confiscated by Law 
Enforcement Agencies. – The destruction or disposal of goods and properties seized or 
confiscated by law enforcement agencies and presented as evidence in cases before the 
courts shall be carried out by such agencies in accordance with their respective rules and 
regulations.  
 
SECTION 70. Funds or Property Held by Deceased, Incapacitated or Absconding 
Accountable Officer. – When an officer accountable for government funds or property dies, 
becomes incapacitated, or absconds in the performance of duties, the head of the agency 
shall designate a custodian to take charge of the funds or property until a successor shall have 
been appointed and qualified. The head of the agency may appoint a committee to count the 
cash and take an inventory of the property for which the officer was accountable and to 
determine the responsibility for any shortage therein. One copy of the inventory and the report 
of the committee, duly certified, shall be filed with the auditor concerned but the findings of the 
committee shall not be conclusive until audit thereon is completed. The head of the agency, 
whenever necessary, shall be responsible for securing a “hold departure order” from the 
proper government agency to prevent the absconding officer from leaving the country.  
 
If the deceased, incapacitated, or absconding officer is accountable for funds or 
property of a local government unit, the acting custodian and committee shall be designated 
by the local chief executive, furnishing notice to the Secretary of the Department of Finance 
or the authorized appointing official as prescribed under the Local Government Code.  
 
SECTION 71. Disposal of Foreclosed Assets or Collaterals Acquired in the Regular 
Course of Business by Government Corporations. – Notwithstanding their respective 
charters, foreclosed assets or collaterals acquired in the regular course of business by 
government corporations shall be sold thru public bidding to the highest bidder after appraisal 
thereof by an independent appraiser. Such sale shall be under the supervision of the proper 
committee on award or similar body of the government corporation, after publication for not 
less than two (2) consecutive days in any national newspaper of general circulation.  
 
In the event that the public bidding fails, the property may be sold at a negotiated sale 
at such price as may be fixed by the same committee, subject to the immediate audit of the 
auditor concerned in accordance with the regulations of the Commission. If the property 
remains unsold for at least one year, this will be subject to reappraisal and offered again for 
sale through public bidding.  
 
Government property may be disposed of as payment of dividend, after appraisal 
thereof by an independent appraiser and review by the Commission.  
 
SECTION 72. Final Report of Accountable Officers. – An accountable officer, upon ceasing 
to act in official capacity, shall submit to the auditor of the agency concerned a report of 
accountability within one (1) month after such cessation. Upon receipt of the report, the auditor 
shall conduct a cash examination on the accountability of such accountable officer.  
 
Any remaining balance on cash accountability shall be deposited immediately in the 
proper treasury.  
 
SECTION 73. Notice of Disallowances, Charges and Suspensions Issued by the Auditor 


 
 
 
 
 
 
 
 
to Accountable Officer. – Whenever there is a finding of pecuniary loss or damage on the 
part of the government, the auditor concerned shall issue a written notice of disallowance or 
charge through the head of the agency to each accountable officer, whose accounts have 
been audited in whole or in part.   
 
Within ninety (90) days, an audit suspension which is not settled either by satisfactory 
explanation, justification, or submission of evidence to prove the contrary to the initial findings 
of an auditor on the irregularity or illegality of the transaction after receipt of the notice shall 
become a disallowance.  
  
Any person aggrieved by the decision of the auditor pertaining to disallowances, 
charges, 5 or suspensions, may appeal the case in accordance with the rules and regulations 
on settlement of accounts of the Commission.  
 
 
TITLE III 
CHAPTER I 
GOVERNMENT ACCOUNTING 
  
 
SECTION 74. Appropriation Before Entering into a Contract. – No contract involving the 
expenditure of public funds shall be entered into unless there is an appropriation or approved 
budget therefor, the unexpended balance of which, free of other obligations, shall be sufficient 
to cover the proposed expenditure.  
 
SECTION 75. Certificate Showing Appropriation to Meet Contract. – Except in the case of 
a contract for personnel services or for supplies for immediate consumption, no contract 
involving the expenditure of public funds by any government agency shall be entered into or 
authorized unless the proper budget officer of the agency concerned shall have certified to the 
officer entering into the obligation that funds have been duly appropriated for the purpose and 
that the amount necessary to cover the proposed contract for the fiscal year is available for 
expenditure on account thereof. The certificate signed by the proper budget officer shall be 
attached to and become an integral part of the contract, and the sum so certified shall not 
thereafter be available for expenditure for any other purpose until the obligation of the 
government agency concerned under the contract is fully extinguished. The funding guidelines 
of the DBM shall be followed for multi-year contracts.  
 
SECTION 76. Void Contract and Liability of Officer. – Any contract entered into contrary to 
the requirements of the two immediately preceding sections shall be void and not binding to 
the government. The officer of any government agency responsible for the said contract shall 
be personally liable to the government or other contracting party as if the transaction had been 
entered into between private parties.  
 
SECTION 77. Prohibition Against Advance Payment on Government Contracts. – Except 
when authorized by law, the government shall not be obliged to make an advance payment 
on contracts for:  
 
(a) Services not yet rendered;  
 


 
 
 
 
 
 
 
 
(b) Supplies and materials not yet delivered, inspected, and accepted, except in lease of 
venues and catering services as provided for in the procurement law and its 
implementing rules and regulations; and  
 
(c) Infrastructure projects not yet implemented or completed, inspected, and accepted, 
other than for mobilization as provided for in the procurement law and its implementing 
rules and regulations.   
 
SECTION 78. Limitations on Cash Advance. – The following shall be the limitations on cash 
advance:  
 
(a) No cash advance shall be given unless for a legally authorized specific purpose;  
 
(b) A cash advance shall be reported on and liquidated as soon as the purpose for which 
it was given has been served;  
 
(c) No additional cash advance shall be granted or allowed unless the previous cash 
advance has been first settled/liquidated or a proper accounting thereof is made;  
 
(d) Except for cash advance for official travel, no officer or employee shall be granted cash 
advance unless such officer or employee is properly bonded in accordance with 
existing laws or regulations. The amount of cash advance which may be granted shall 
not exceed the maximum cash accountability covered by bond of an officer or 
employee;  
 
(e) Only permanent appointed officials shall be designated as disbursing officers;  
 
(f) Only duly appointed or designated disbursing officers may perform disbursing 
functions. Officers and employees who are given cash advances for official travel need 
not be designated as disbursing officers;  
 
(g) Transfer of cash advance from one accountable officer to another shall not be allowed;  
 
(h) The cash advance shall be used solely for specific legal purpose for which it was 
granted. Under no circumstance shall it be used for encashment of checks or for 
liquidation of a previous cash advance;  
 
(i) The failure of the concerned official or employee to liquidate the cash advance after 
due demand by an authorized officer is a prima facie presumption of malversation 
despite the absence of a finding of actual damage to the government;  
 
(j) The transfer of cash advance by a disbursing officer to another does not constitute an 
expenditure for which the disbursing officer may claim credit in accounts, but the 
responsibility of such disbursing officer continues to attach until the amount has been 
fully accounted for; or  
 
(k) No cash advance shall be granted for the procurement or implementation of 
infrastructure projects.  
  
Any violation of the foregoing provisions shall constitute a valid cause for the 
withholding of the salary of the accountable officer without prejudice to the imposition of 


 
 
 
 
 
 
 
 
administrative/civil sanction and criminal prosecution of both the authorizing and the 
accountable officials, as may be warranted.  
 
SECTION 79. Transfer of Funds from One Officer to Another. – Transfer of government 
funds from one officer to another shall, except as allowed by law or regulation, be made only 
upon prior direction or authorization of the head of the agency following the accountability and 
accounting guidelines issued by the Commission.  
 
SECTION 80. Limitations on Fund Transfers from One Government Agency to Another. 
– The following shall be the limitations on transfer of funds from one government agency to 
another:  
 
(a) No fund transfers shall be given except for legally authorized specific purpose as 
embodied in a Memorandum of Agreement (MOA) executed between the source and 
implementing agencies;  
 
(b) The fund transfers shall be reported on and/or liquidated by the implementing agencies 
as soon as the purpose for which they have been granted have been served, but not 
later than the end of the year;  
 
(c) No additional or new fund transfers shall be made unless the previous transfers have 
been fully liquidated as certified by the head of agency concerned;  
 
(d) The heads of the source and implementing agencies shall be responsible for 
compliance with the foregoing requirements.  
 
Failure on the part of the foregoing officials/persons to comply with the above-
mentioned responsibilities shall constitute a ground for administrative or criminal action, as 
evidence may warrant.  
 
SECTION 81. Limitations on Fund Transfers from Any Government Agency to a Private 
Organization or Entity. – The following shall be the limitations on transfer of funds from any 
government agency to any private organization or entity:  
  
(a) No fund transfer from a government agency shall be given to a private organization or 
entity unless authorized by law for a specific purpose which should be embodied in a 
MOA executed between the source government agency and the implementing private 
organization or entity;  
 
(b) Only duly registered, accredited, and reputable private organizations or entities shall 
be granted fund transfers;  
 
(c) Fund transfers shall be reported on and liquidated by the implementing private 
organizations or entities to the source government agency as soon as the project has 
been completed or not later than sixty (60) days after project completion. If the project 
implementation will go beyond December 31st of the year, a partial liquidation report 
as of December 31st of that year shall be submitted to the source government agency 
not later than January 15 of the ensuing year;  
 
(d) No additional or new fund transfers shall be made unless the previous fund transfers 
have been fully liquidated as certified by the head of the agency; or  


 
 
 
 
 
 
 
 
 
(e) The heads of the source government agency and implementing private organizations 
or entities shall be responsible for compliance with the foregoing requirements.  
 
Failure on the part any public officer, employee, or any person to comply with the 
abovementioned responsibility shall constitute a ground for administrative or civil sanction or 
criminal prosecution.  
 
SECTION 82. Payment of Rewards. – When a reward becomes payable by authority of law 
for information given relative to any offense or any illegal activity, or for any act done in 
connection with the apprehension of the offender, the reward shall be paid as prescribed by 
law or regulations. Such payment of reward shall be subject to audit in accordance with the 
regulations of the Commission.  
 
SECTION 83. Loss Through Electronic Collection or Payment. – Government agencies 
utilizing e-Collection and/or payment systems shall formulate internal policy guidelines to 
implement reasonable and appropriate organizational, technical, and personnel controls to 
prevent loss of funds caused by internet connectivity issues, errors in payment instructions, 
online banking fraud, security breach, or other similar events. Any loss due to the foregoing 
shall be the liability of the erring party.  
 
SECTION 84. Replacement of Lost, Stolen or Destroyed Checks. – When payment is 
made through check and the same was lost, stolen, or destroyed, the issuing officer may issue 
a replacement check as payment for the same obligation. Replacement shall be made upon 
the execution of an affidavit of loss and submission of stop payment order to the drawee bank. 
If destroyed, presentation of the destroyed check to the issuing officer is also required. The 
chief accountant or internal auditor of the agency shall be responsible for seeing to it that no 
double payment is made as a result thereof.  
 
SECTION 85. Reversion of Unpaid Trade Payables Aged More Than Two (2) Years. – The 
head of national government agencies, LGUs and government corporations classified as non-
commercial public sector entities shall cause the reversion of trade payables aged more than 
two (2) years to the Unappropriated Surplus or Accumulated Surplus/(Deficit).  
 
The head of government corporations classified as commercial public sector entity 
shall revert unpaid trade payables aged more than two (2) years to retained earnings. In both 
instances the reversion shall only be made when there is no actual claim or is not supported 
by a valid contract. 
 
 
CHAPTER II 
ACCOUNTABILITY AND RESPONSIBILITY FOR GOVERNMENT FUNDS AND 
PROPERTY 
 
 
SECTION 86. Accountable Officers; Bond Requirement. – Every officer of any government 
agency whose duties permit or require the possession or custody of government funds or  
property shall be accountable therefor and for the safekeeping thereof in conformity with law. 
Other government officers who, though not accountable by the nature of their duties, may 
likewise be similarly held accountable for government funds or property through their 
participation in the use or application thereof.  


 
 
 
 
 
 
 
 
 
Every accountable officer shall be properly bonded in accordance with law and the 
pertinent rules or regulations.  
 
SECTION 87. Primary Responsibility and Fiscal Accountability of the Head of the 
Agency. – The head of any agency who is primarily responsible for all government funds and 
property pertaining to the agency, shall ensure that: 
 
(a) the required financial and other reports and statements are submitted by the concerned 
agency officials in such form and within the period prescribed by the Commission;   
 
(b) the settlement of disallowances and charges is made within the prescribed period;   
 
(c) the requirements of transactions suspended in audit are complied with; and   
 
(d) appropriate actions are taken on the deficiencies noted in the course of audit.  
 
Persons entrusted with the possession or custody of the funds or property under the 
head of the agency shall be accountable therefor and immediately responsible to the head of 
the agency, without prejudice to the liability of either party to the government.  
 
SECTION 88. General Liability for Unlawful Expenditures. – Expenditures of government 
funds or uses of government property in violation of law or regulations shall be the personal 
liability of the official or employee found to be directly responsible therefor.  
 
SECTION 89. Degree of Supervision over Accountable Officers. – The head of any 
government agency shall exercise due diligence in supervising accountable officers under the 
control of such head of the agency to prevent the incurrence of loss of government funds or 
property, otherwise the head of the agency shall be jointly and solidarily liable with the person 
primarily accountable therefor.  
 
The treasurer of the LGU shall likewise exercise the same degree of supervision over 
accountable officers under the oversight of the treasurer, otherwise the treasurer shall be 
jointly and solidarily liable with them for the loss of government funds or property under their 
stewardship.  
 
SECTION 90. Measure of Liability of Accountable Officers. – Every officer accountable for 
government property shall be liable for its money value in case of improper or unauthorized 
use or misapplication thereof by such accountable officer or by any person for whose acts 
such accountable officer may be responsible for.  Accountable officer shall likewise be liable 
for all losses, damages, or deterioration occasioned by negligence in the keeping or use of the 
property regardless of whether or not it is in actual custody of such accountable officer.  
 
Every accountable officer for government funds shall be liable for all losses resulting 
from the unlawful deposit, use, or application thereof and for all losses attributable to 
negligence in the keeping of the funds.  
 
SECTION 91. Liability for Acts Done by Direction of Superior Officer. – No accountable 
officer shall be relieved from liability by reason of acting under the direction of a superior officer 
in paying out, applying, or disposing of the funds or property for which such accountable officer 
is accountable, unless prior to that act, the accountable officer notified the superior officer in 


 
 
 
 
 
 
 
 
writing that the expenditure is illegal, irregular, excessive, extravagant, unnecessary, and 
unconscionable. The officer directing any illegal payment or disposition of the funds or property 
and the accountable officer who fails to serve the required notice shall be jointly and solidarily 
liable.  
 
SECTION 92. Prohibition Against Pecuniary Interest. – No head of agency, members of 
the board or commission, accountable officer or public official shall have pecuniary interest, 
directly or indirectly, in any contract or transaction of the agency in which such public officer 
is an officer, or in any other office where the public officer has influence.  
This prohibition shall likewise apply to the accountable officer’s immediate family and 
relatives up to the 3rd civil degree by consanguinity or affinity.  
 
 
TITLE IV 
CHAPTER I 
BASIC PRINCIPLES 
  
 
SECTION 93. Definition of Government Accounting. – Government accounting 
encompasses the processes of analyzing, recording, classifying, summarizing, and 
communicating all transactions involving the receipt and disposition of government funds and 
property in accordance with the applicable international accounting framework, International 
Public Sector Accounting Standards (IPSAS) or Philippine Financial Reporting Standards 
(PFRS), as the case may be, and interpreting the results thereof.  
 
SECTION 94. Recognition of Financial Transactions. – Each government agency shall 
recognize its financial transactions and operations conformably with pertinent laws, policies, 
rules and regulations, and applicable financial reporting framework.  
 
SECTION 95. Accounting Policies, Rules and Regulations. – The Commission shall 
promulgate accounting policies, rules, and regulations in accordance with the applicable 
international accounting framework. Such policies, rules and regulations shall be updated from 
time to time as the Commission may deem proper.  
  
 
CHAPTER II 
ACCOUNTING REPORTS 
  
 
SECTION 96. Financial Reports and Statements. – The financial reports prepared by the 
agencies shall comply with the applicable financial reporting framework to the government 
agency.  
 
The financial statements shall be based on official accounting records and registries 
kept  in accordance with pertinent laws, policies, rules and regulations of the Commission, and 
the applicable financial reporting framework to the government agency.  
 
SECTION 97. Submission of Reports. – The Commission shall, under regulations issued by 
it, require the head of the agencies, chief accountants, budget officers, cashiers, 
disbursing/collecting officers, administrative or personnel officers, and other responsible 
officials of the various agencies to submit financial statements, financial accountability reports, 


 
 
 
 
 
 
 
 
physical inventory reports, current staffing pattern, and such other reports as may be 
necessary for the exercise of its functions.  
 
In case of failure on the part of the officials concerned to submit the documents and 
reports mentioned herein within the prescribed period, the head of the agency shall cause the 
suspension of the payment of their salaries until they shall have complied with the 
requirements of the Commission without prejudice to any disciplinary action that may be 
instituted against such official or employee in accordance with the applicable rules on 
administrative cases issued by the Civil Service Commission.  
  
Failure on the part of the head of the government agency to implement, without 
justifiable cause, the sanctions provided in the immediately preceding paragraph shall 
constitute as a ground for this Commission to file the appropriate administrative charge against 
the erring official concerned.  
 
 
CHAPTER III 
INTERNAL CONTROLS 
 
  
SECTION 98. Internal Control System and its Installation. – Internal control is an integral 
process that is effected by an agency’s management and personnel and is designed to 
address risks and provide reasonable assurance that in pursuit of the agency’s mission, the 
general objectives are being achieved.  
 
It shall be the direct responsibility of the head of the agency to establish an internal 
control unit that shall install, implement, review, and monitor a sound internal control system 
in accordance with Internal Control Standards for the Philippine Public Sector.  
  
The head of agency shall sign the Statement of Internal Control (SIC). Failure on the 
part of the head of the government agency to implement the preceding paragraph, without 
justifiable cause, shall constitute as a ground for this Commission to file the appropriate 
administrative charge against the erring official concerned.  
  
 
TITLE IV 
FINAL PROVISIONS 
 
  
SECTION 99. Duty to Respect the Independence of the Commission. – It shall be the duty 
of every person to respect, protect and preserve the independence of the Commission.  
 
SECTION 100. Administrative Disciplinary Action. – Any unjustified failure by the public 
officer concerned to comply with any requirement imposed in this Act shall constitute neglect 
of duty or grave misconduct, as the case may be, and shall be a ground for this Commission 
to file appropriate administrative disciplinary action against the said public officer who, upon 
being found guilty thereof after hearing, shall be meted out such penalty commensurate with 
the degree of guilt in accordance with the civil service law, without prejudice to criminal 
prosecution whenever the evidence warrants.  
 
The auditor shall report to the concerned Director any violation of the preceding 


 
 
 
 
 
 
 
 
paragraph for referral of the case to the OMB, or other government disciplining authorities.  
 
SECTION 101. Penal Provisions. – Any person who shall commit any of the following acts 
shall, upon conviction, suffer imprisonment of not less than six (6) months and one (1) day but 
not more than six (6) years or a fine of not less than One hundred thousand pesos 
(P100,000.00) but not more than One million two hundred thousand pesos (P1,200,000.00) 
or an imprisonment of six (6) years and one (1) day to twelve (12) years, or both at the 
discretion of the court. If the offender is a corporation, partnership or association or other 
juridical entity, the penalty may in the discretion of the court be imposed upon such juridical 
entity and upon the officer or officers of the corporation, partnership, association, or entity 
responsible for the violation.  
 
(a) Refusing or neglecting to render or settle an account as required by law or regulation 
after demand by the Commission or its authorized representatives.  
 
(b) Denying access to databases or information technology systems, or failing to produce 
documents, records, or papers under custody within fifteen (15) days after demand by 
the Commission or its authorized representatives in connection with the conduct of 
audit.  
 
(c) Destroying or concealing documents, records, or papers which are officially entrusted 
to such person, pertaining to the collection, receipt, expenditure, or disbursement of 
public funds and utilization or disposal of government property in connection with the 
conduct of audit.  
 
(d) Failing or refusing to submit documents required in audit without justifiable cause shall 
constitute a ground for disallowance of the claim under examination, assessment of 
additional levy or government share, or withholding or withdrawal of government 
funding or donations through the government, as well as for administrative or penal 
sanctions.  
 
(e) Committing other similar acts that impede, frustrate, or delay the efficient conduct of 
audit.  
 
If a violation of this Act constitutes an offense or crime punished under Act No. 3815, 
otherwise known as the Revised Penal Code, as amended, or other special laws which 
imposes a higher penalty, the latter shall prevail.  
 
SECTION 102. Implementing Rules and Regulations. – The CP shall promulgate the 
necessary rules and regulations for the effective implementation of this Act.  
 
SECTION 103.  Appropriations. – The amount necessary for the implementation of this Act 
shall be included in the annual General Appropriations Act.  
The Commission on Audit is authorized to:  
 
(a) Collect one-half (1/2) of the one percent (1%) from the annual national tax collections 
not otherwise accruing to special funds or special accounts in the general fund of the 
national government, upon authority from the Secretary of Finance, shall be deducted 
from such collections and shall be remitted to the National Treasury to cover the cost 
of auditing services rendered to local government units;  
 


 
 
 
 
 
 
 
 
(b) A fixed amount equivalent to the annual cost of the audit services in the government 
corporations; and  
 
(c) Other sources such as, but not limited to, collections of audit fees from water districts 
and special audits, consultancy fees and retained income.  
 
All government corporations, including their subsidiaries, and self-governing boards 
shall appropriate in their respective budgets and remit not later than the end of the second 
quarter of each year an amount equivalent to the appropriation for personnel services of the 
audit team to the National Treasury.  
 
The amount for the MOOE and capital outlay to support the annual or the actual audit 
operations of the COA audit teams assigned to NGAs, LGUs and government corporations 
which form part of the approved budget of the audited agency for auditing services under the 
General Appropriations Act, appropriations ordinance or annual operating budget, 
respectively, shall be remitted directly to the Commission on Audit Central Office.  
 
All internally generated income from other sources shall accrue to its general fund to 
be exclusively utilized for the operation and performance of its mandate.  
 
SECTION 104. Repealing Clause. – Presidential Decree No. 1445, otherwise known as the 
Government Auditing Code of the Philippines, and Subtitle B, Title I, Book V, of Executive 
Order No. 292, or the Administrative Code of 1987, are hereby repealed. All other laws, 
executive orders, proclamations, decrees, instructions, rules and regulations, or parts thereof 
which are inconsistent or in conflict with any provision herewith shall be deemed repealed or 
modified accordingly.  
 
SECTION 105. Separability Clause. – Should any provision of this Act or any part thereof be 
declared invalid, the other provisions, insofar as they are separable from the invalid provision, 
shall remain in force and effect.  
 
SECTION 106. Effectivity. – This Act shall take effect fifteen (15) days following completion 
of its publication in the Official Gazette or in any newspaper of general circulation.  
 
 
Approved,