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Nineteenth Congress
Second Regular Session
HOUSEB|LLNo.9548
Introduced by Representatives Ferdinand Martin G. Romualdez,
Aurelio "Dong" D. Gonza]es, Manue[ Jose "Mannix" M. Dalipe,
Ferdinand Alexander A. Marcos, Yedda Marie K. Romualdez,
Jude A. Acidre
EXPLANATORY NOTE
This bill seeks to strengthen and upgrade the function of the Commission
on  Audit  by  providing   a  revised  Philippine   Government  Auditing   Code,
repealing for the purpose, Presidential Decree Q'D) No.  1445, as amended.
On  June  11,1978,  PD  No.1445,  entitled   "Ordcr7.#7.ng cr#c7 J#sfz.fw/z.ng c7
Government Auditing Code  Of the  Philippine" was iss;NIed.   On lurty 259 +9&] ,
PD No.  1445 was amended with the issuance of Executive Order @0) No. 292,
orfuerwise krmo`NrL as tlue  "Administrative Code Of 1987. "
Forty-five (45) years have passed and up to the present, PD No.  1445, as
amended, remains the reference and centeapiece of government auditing.
Fast-forwarding to this time's rapid development of frontier and cutting -
edge  electronic  technologies,   and  as  we  rise  up  from  the  vestiges  of the
pandemic  alongside the challenges  caused by the global economic  crises,  it is
crucial and imperative for Commission on Audit to upgrade its organizational
structure  and  functions  to  ensure  the  accountability  and  transparency  of the
public sector.
While  it  is  true  that  the  mandate  of the  Commission  on  Audit  is  not
tackling   corruption  per  se,  there   is   a  growing   awareness  that  its  role   in


overseeing  the  country's  financial  management  of  public  funds  gives  this
constitutional   body   an   important   role   to   play   in   deterring   and   detecting
comiption in the public sector.
Consonant to the State policy enunciated under Article 11,  Section 27 of
the  1987  Constitution  which  provides  that  "7lfee  Sl/c7/e  sfec7// fflczj.#/z#.#  feo#erty
and  integrity  in  the  public  service  and  take  positive  and  effective  measur6s
c7grrJ.#sf  grcz/Z  c7#c7  corr#pZ7.o#, "  this  bill  seeks  to  reinforce  and  toughen  the
capabilities of the Commission on Audit as part of the convergent efforts of the
country's    key    anti-corruption    institutions    including    the    Office    of   the
Ombudsman, Department of Budget and Management, Presidential Anti-Graft
Commission, Civil Service Commission, and Career Executive Service Board.
Auditing  is  an  indispensable  element  in  the  govemment's  thrust  in
upholding  the  public  sector's  accountability.     Thus,  as  a  way  of  fostering
efficiency,  economy,  and effectiveness of the national government, the role of
the   Commission   on   Audit   in   examining   the   government   revenues   and
expenditures should be revised and strengthened.
In view of the foregoing, approval of this measure is earnestly sought.


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Nineteenth Congress
Second Regular Session
HOUSE BILL No.  9548
Introduced by Representatives Ferdinand Martin G. Romuald€z,
Aurelio "Dong" D. Gonzales, Manuel Jose "Mannix" M. Dalipe,
Ferdinand Alexander A. Marcos, Yedda Marie K. Romualdez,
Jude A. Acidre
1                                                                    AN ACT
2     PROVIDING FOR THE REVISED  GOVERNMENT AUDITING CODE
3     0F THE PHILIPPINES
4
5      Be it enacted by the senate and House of Representatives of the philippines in
6      Congress assembled:
7
TITLE I
Chapter I
GENERAL PROVISIONS
SECTION  1.  SJ!o7t  r!tJe.  -This  Act  shall  be  known  and  cited  as  the
T3      "Revised Governmehi Auditing code Act."
14                 SEC.  2.    DecJ¢r¢#.on  a/PoJ!.cj}.  -It  is  the policy  of the  State that  all
15      resources   of  the   government   shall   be   managed,   expended   or  utilized   in
16      accordance  with  law,  rules  and  regulations,  and  safeguarded  against  loss  or
17      wastage  through  illegal  or  improper  disposition  in  order to  ensure  efficiency,


1      economy and effectiveness in the operations of goverrme.nt.   The responsibility
2     to ensure that such policy is faithfully adhered to rests directly with the chief or
3     head of the government agency concerned.
4                SEC. 3.  Dcf#z.ffo# a/rerms. -As used in this Act:
5                 (a)      4ccow#f  refers  to  a  list  or  statement  of  monetary  transactions
•   6     pertaining to .fund, property,  obligation,  equity, revenue,  collection or expense,
7     whether  or  not  entered  as  item  of debit  or  credit  in  the  books  of accounts,
8     registry or any other record;
9                (b)      4ccow#fob/c oJ7j7rcer refers to the officer of a government agency
1o      who  by  the  nature  of the  duties  and  responsibilities  or  participation  in  the
11    . collection or receipt and expenditure or use of govellilnent funds,  custody  and
12      disposal  of government  property,  is  required  by  law  or  regulation  to  render
13     account to the commission on Audit, hereinafter referred to as the commission,
14     which  includes  any public  officer  or private  person  or  entity  who  may  have
15      direct or indirect participation in the transaction;
16                 (c)      4ggH'giveo'p¢rty refers  to a person or entity  fldversely  dffected by
17      any decision,  order, resolution or ruling of the Commission or any of its duly
18      authorized representative;,
19                (d)      4##w¢/  AwdJt  jRepo#  (AAR)  refers  to  the  fmal  output  of  the
2o     regular yearly audit conducted by the auditor on the accounts and operations of a
21      govelnmeni entity  and .basicaiiy  consists  of the  Independent Auditor's  Report,
2


1     the     audited     financial     statements     and     the     audit     observations     and
2      recommendations;
3                (e)      M¢"¢geme#f I,e#er (Mj) refers to the final output of a regular or
4     periodic  audit  conducted  by  the  auditor  on  the  accounts  and  operations  of a
5     government entity which is in the  form of a letter to the auditee management
•   6      contalningjulst basically the zrudit observations and recormendations;
7                 (D       fpccJ.a/4wdz.f jRcporf (SAR) refers to the fmal output of the special
8      audit conducted by the auditor assigned to audit specific accounts, transactions,
9     projects, programs or activities of a government entity and basically consists of
1o      audit observations and recommendations;
11                 (g)      .4Hproprj.#ffoH  refers  to  an  a-uthorizfltion  by  law,   appropriation
12      ordinance,  or other enactments,  or the corporate operating budget directing the
13     payment of personal services,  maintenance  and other operating expenses,  and
14      capital outlay out ofgovemment funds under specified conditions or purposes;
15                (h)      4pe¢/ refers to the process of elevating to a higher authority any
16      decision,  order,  resolution  or  rulillg  of the  Cormission  or  any  .of  its  duly
17      authorized representatives;
18                 (i)       4wdl.f refers to the examination, verification, and adjustment of an
19      account;  the  evaluation  of intemal  control  systems;  the  determination  of the
2o      government entity's  compliance with applicable  laws, rules  and regulations;  as
21      well   as  .the   examination   and   e`valuation   of  the   econom.y,   efficiency   and
3


• 1      effectiveness  of management  systems,  operzitions  and  decisions.  It  may  also
2      cover other special audits as may be prescribed by the commission;
3                a)       4wdl.for refers to any officer or employee of the commission duly
4      appointed or designated as such;
5                 (k)      4wdz.f growp  refers  to  a  cluster  of audit  teams  that  are  grouped
6      together,   headed  by  a  supervibting  auditor  (SA),   which  is  responbTible   for
7     planning, managing, supervising and quality control of the audit work as well as
8     ensuring the prompt submission of audit reports;
9                 (I)       4wdi.f fgfl!" refers  to  the  basic  organizational unit responsible  for
10     the audit of government entities  consisting of an audit team leader (ATL) and
11 .    audit learn members (ATMs);
12                 (in)     4#di.f worfr p¢pcrs refer to the documentation or evidences of the
13     work  done  and  the  results  thereof,  consisting  of relevant  or  pertinent  data,
14      analyses,  computations,  calculations,  notes,  schedules,  excerpts,  confinnation
15      and other documents or materials gathered, prepared and compiled in the course
16      bfanaudii;
17                 (n)       C¢§fo   refers   to  money   or  its   equivalent   currencies,   negotiable
18     checks,  or  balances  in  bank  accounts  or  in  the  possession  or  custody  of  a
ig      collecting or disbursing officer;
2o                 (o)       Cfearge  refers  to  an  inclusion  or  addition  to  an  accountability
2i      pertaining to the  ;ssessment,  appraisal  or coiiection of revenues,  receipts  and
4


i      o`Lher income  arising  frun  under-appraisal,  under-assessment,  under-coiiecLion
2     or failure to collect or remit collection which are found in the course of audit of
3     revenues or receipts;
4                (p)      Order a/ E];ecwfro#  /COB/  refers  to  a written  instruction  to  the
5     head of agency to withhold payment of salary and other money due to persons
6      liable,  for seLLiemenL oif their liaJDiliLy as indicaJied in the Noiice ofDisaliowance
7      or Charge  and issued after the  issuance  of the Notice  of Finality of Decision
8     quD);
9                (q)      Co""i.ssz.o# refers to the commission on Audit as a constitutional
1o     body created under Article Ix-D of the 1987 Philippine constitution;
11                  (r)        Z}cc.i.6'i.ci»  or reb'o/«fro» refers  to an adjudication or scLLiemenl of a
12     clain or controversy by the authorized official of the Commission which shall
13     embody the facts of the case, the issues to be resolved, and the laws. regulations,
14      or precedents on which the ruling is based;
15                 (s)       Deposj/ory refers to any financial institution lawfully authorized to
16  .  receive deposit.ofgovemment moneys;
17                 (t)       Dis¢//ow¢»ce is the disapproval in audit of a transaction, either in
18     whole or in part involving government disbursement or property;
19                (u)      GotJer#me"f ¢ge"cj; refers to any department, bureau, or office of
2o     the  national  government,  or  any  of its  branches  and  instrumentalities,  local
21      govemmeni units and its political subdivision, including entities created 'Dy il, as
5


i      weii  as  govemmenL  fin.ancidl  insLi`Lulions  and  other  goverlimenl  coxporalions,
2      with or without original charter, including its subsidiaries, other self-governing
3     boards  or  commissions  of the  government,  constitutional  bodies  with  fiscal
4      autonomy and autonomous educational institutions;
5                (v)      GotJcr#"c#f/##ds refer to public moneys of every sort and other
6      resouLrces  per`Laining  or  accruing  Lo  any  agency  of the  govemmenJi;  including
7      funds transferred to private sectors as a subsidy, equity, or counterpart fund for
8     implementation of specific projects;
9                 (w)     £i.obz./rty  refers  to  a  personal  obligation  arising  from  an  audit
1o      disallowance,  charge,  or decision which may be  satisfied through payment or
il      reslilulion   as   determined   toy   compelenl   authorily   or   by   other   modes   of
12      extinguishment of an obligation as provided by law;
13                (x)      fl4lo"ey cJ¢im refers to a demand for payment of a sun of money,
14     reimbursement  or  compensation  arising  from  law,  contract,  quasi-contract  or
15      quasi-delict due from a government agency or owing to a claimant;
-+6                   (y`)       iNTutice    Of   Flnultry    Of   Declsiijn    `RTFTT}`)   IeF¢Is    to    .a   wliitlw¢n
17     notification addressed to the agency head that a decision of the comrfussion has
18     become fmal and executorv:
19                 (z)      Perso#s /i.¢b/c refer to the persons determined to be answerable for
2o      an audit disallowance, charge or decision by the commission;


i                  (flu)     Perb'o"b`   rexpo"b`i.bfe   refer   lo   the   persons   determined   lo   be
2     answerable for the compliance with the audit requirements as called for in the
3     notice of suspension (NS);
4                 (bb)    J*ib/I.cpwrpose refers to any purpose or use directly available to the
5      general  public  as  a  matter  of right  which  includes  traditionally  viewed  as
6      essenlialiy govelnmenL functions such as the building of roads and the delivery
7      of basic  services,  and  other  purposes  designed  to  promote  social justice  and
8      public interest;
9                 (cc)    Reve#wc  refers  to  income  or  receipts  derived  by  a  goveriment
1o      agency from taxes,  excise, custom duties,  fees, royalties, rents,  sales of goods,
11      or servlces and coiiecLions from other sources;
12                 (dd)    Sc#/eme#f  refers   to   the  payment,   restitution   or   other   act   of
13     extinguishing  an obligation  as provided by  law in  satisfaction of the  liability
14     under a Notice ofDisallowance or Notice of charge (ND/NC) or in compliance
15     with the requirements ofa Notice of suspension (NS);
i6                 (ee)     Sefff'e!mt!»f  o/' "c...ti««fb'  refers  lo  the  process  of deJiermining  the
17     status  or  balance  of the  account  of  an  accountable  officer  after  audit  and
18     examination: and
19                (fry      rrwsf /w"ds  refer  to  funds  which,  by  operation  of  law  or  by
2o      contract, have come officially into the possession of any government agency or


1      public oiTicer as  lrus`iee,  agent or adminisLralor,  and received in fuifi.llmenL of
2      certain obligations or a specific puxpose.
3                SEC. 4.  Fk"drme"toJ princl.pies. -Financial transactions and operations
4     of any  government  agency  shall  be  governed  by  the  following  fimdanental
5      principles:
6                  (zi)       No  money  shall  be paid  out  of any  public  treasury  or  dcposi`Lory
7     except in pursuance of an appropriation law,  appropriation ordinance,  or other
8     specific statutory authority, or a board-approved corporate operating budget;
9                 (b)      Government  funds  or property  shall  be  spent  or  used  solely  for
1o      publicpulposes;
1i                  (c)       Trust funds  shall be spent only  for  `Lhe specific purpose for which
12      the trust was created or the funds were received;
13                 (d)      Fiscal responsibility  shall,  to  the  greatest extent,  be  shared by  all
14     those exercising authority over the fmancial affairs, transactions, and operations
15      of the government agency;
16                  (e)       Disbursements or disposition ofgovemmenJL funds or property shall
17     be approved by the proper official of the government agency;
18                 (i)       Claims   against  government  funds   shall  be  suooorted  with  the
19      complete required documentation;
2o                 (g)      All laws,  rules and regulations applicable to financial transactions
2i      shall be faithfuiiy ad'nered lo; and
8


i                 (h)      Generally accepted principles and standards of accounting as well
2      as of sound management and fiscal administration shall be observed, provided
3     that they do not contravene existing laws and regivlations.
4                                                               TITLE II
5                                           THE COMMISSION ON AUDIT
6                                                                 Chapter I
7                                                        ORGANIZATION
8
9                SEC. 5.  Comndssion on Audit -Composition, Qualif ications, Term and
1o     Sfl!/¢ryo/AfeJ#bers'. -(a)The   Commission   on   Audit,    is    composed   of   a
11      Chairperson  and  two  Commissioners,  who  are  natural-born  citizens  of the
12     Philippines,  either certified public  accountants  with not less  than ten years  of
13      auditing experience, or members of the philippine Bar engaged in the practice of
14      law for at least ten years,  and must not have been candidates  for any elective
15      positions in the elections immediately preceding their appoininienls.   Al no Lime
16     shall all members of the commission belong to the sane profession;
17                 (b)      The chairperson and the commissioners shall be appointed by the
18     President of the Philippines, subject to the confirmation of the Commission on
19     Appointments, for a term of seven years without reappointment.   Appointment
2o      1o  any  vacancy  shall  be  only  for  the  unexpired  portion  of  the  lelm  of  the
21      predecessor.    In  no  case  shall  any  member  be  appointed  or  designated  in  a
22      temporary or acting capacity;
9


1                 (c)      No members of the commission shall, during their tenure, hold any
2      other office or employment in the government.   Neither shall they engage in the
3     practice  of  any  profession  or  in  the  active  management  or  control  of  any
4     business  which  in  any  way  may  affect  their  functions  as  members  of the
5      Commission,  nor shall they be  financially interested,  directly or indirectly,  in
6     any  contract  with,  or  in  any  franchise  or  privilege  granted  by  the  national
7     government,  any  of  its  political  subdivisions,  agencies  or  instrumentalities,
8     including government-owned or controlled corporations  and their subsidiaries;
9and
1o                 (d)      The salary of the chairperson and the corrmissioners shall be fixed
11      by law and shall not be decreased during their tenu.re.
12                SEC. 6.   Co""i.ssi.o# Proper. -The commission proper is composed of
13     the Chairperson and two Commissioners.   They shall sit as a collegial body to
14      fomulate  policies,  rules  and  regulations,  prescribe  standards  governing  the
15      discharge of its powers and functions.
T6                SEC. 7.   Specif iic f unctions  of the  comrrdssiof.  Proper. -.The apedlfro
17      functions of the commission proper are the following:
18                 (a)       Promulgate the rules concerning pleadings and practices before the
19      Commission  or  any  of its  offices.     Such  rules  however  shall  not  diminish,
2o      increase, or modify substantive rights;
10


1                 (b)      Decide,  by  a  majority  vote  of all  members  of the  commission
2     Proper, any case or matter brought before it within sixty (60) days from the date
3     of submission for decision or resolution;
4                 (c)        Appoint,   in   accordance   with   the   civil   service   laws   and   the
5      applicable career executive development programs, the officials and employees
6     of the commission.  Appointment oflower non-core positions may be delegated
7     by the  Commission Proper to the  appropriate officials  of the  Commission.   It
8     shall  have  original  jurisdiction  over  administrative  cases  filed  against  the
9     personnel of the commission;
10                 The Commission Proper shall determine the  salaries  and other forms of
11      compensation and  other benefits,  inc`luding  medical,  dental,  optical  and other
12      health  benefits  of  the  personnel  of  the  Commission,  pursuant  to  its  fiscal
13     autonomy as provided in the constitution.
14                The commission proper may re-organize the  organizational  structure of
15      the  Commission as  the need arises  and to effectively attain the  Commission's
16  .   mandate in keeping with the demands of.the service.
17                 The  Commission Proper shall  develop  and inplement  a comprehensive
18     and  continuing  education,  manpower  training  and  development  program  for
19     officials and employees of the commission.
2o                 (d)      Promulgate auditing rules and regulations for the detemination of
21      the   scope   an.d   type   of`audit   and   examination.by   the   Commission,   .the
11


1      establishment of the techniques and methods required therefor,  including those
2      for the prevention and disallowance of illegal, irregular, unnecessary, excessive,
3     extravagant,  or unconscionable  expenditures  or  uses  of government  funds  or
4      property;
5                 The    Commission   Proper   shall    also   promulgate    accounting   rules,
6     regulations   and   standards   in   conformity   with   International   Public   Sector
7     Accounting standards and htemational Financial Reporting standards.
8                 (e)       Issue policies, rules and procedures in the custody and preservation
9     of the general accounts of the national government;
1o                 (I)       Issue regulations pertaining to the responsibility and accountability
11      of the audited agency in the custody and preservation of disbursement vouchers,
12     journal  vouchers  and  their  supporting  papers,  official  receipts  and  report  of
13     collection, accounting records and reports, whether audited or not, for a period
14      often (10) years or for a longer prescriptive period, as may be provided by law
15      orregulations; and
16                 (g)      Perform such other functions as may be necessary for the effective
17      implementation of this Act.
T8                EEC;.   8.      Duties   and   Responsibilities   Of  the   Cl.alxperson.   -  The
19      Chairperson  shall  act  as  the  presiding  officer  of the  Commission Proper  and
2o      chief executive  officer  of the  Commission.    As  chief executive  officer,  the
21      Chairperson shall:
12


1                 (a)       Control    and    s`upervise    the    ge.neral    administration    of   the
2      Commission;
3                (b)      Direct and manage the implementation and execution of policies,
4      standards, rules and regulations promulgated by the commission proper;
5                 (c)       Sign     appointments,     promotions,     office     orders     for     audit
6     engagements, assigrmlent, reassignmenl of officials and employees, or any other
7     personnel  movement  in  any  office  or  station  of  the  Commission  without
8     additional remuneration, except those authorized by law;
9                 (d)      Exercise  control  and supervision over the  audit of intelligence  or
10     confidential transactions or accounts of government agencies;
11                 (e)       Delegate to the commissioners,  assistant corrmissioners,  directors
12      and other officials of the Commission such authority on intemal administration
13     concerning personnel, planning, financial, legal, and other matters pertaining to
14     their  respective  functional  areas  as  may  be  determined  by  the  Commission
15      Proper;
16                 ®       Submit   an   armual   budget   to   the   Commission   Proper   for   its
17      approval;
18                (g)      Submit to the office of the president of the philippines, Congress
19      and other oversight agencies, the annual financial reports covering the financial
2o      condition   and   results   of  operations   of  the   Government,   its   subdivisions,
21      agencies,   and   instrumentalities,   including   govemmenl-owned   or   cunirolled
13


1      corporations subject -to its audit, together with recommefidations or measures Lo
2     improve the economy, efficiency and effectiveness of their operations, and such
3     other reports as may be required by law;
4                 (h)      Authorize  the  re-opening  of  settled  accounts  in  case  of  fraud,
5      collusion,   or  error  of  calculation  or  when  new   and  material   evidence  is
6     discovered.    The  auditor may  cefiify  thereon  a new  balance  within  thee  (3)
7     years  after the  original  settlement of any  account by the  auditor or discovery
8     thereof but not to exceed ten years from the date of transaction;
9                 (i)       Summon any person or public official for the purpose of gathering
1o     data or inquiring  into matters  pertinent to the  formulation,  implementation or
11     enforcement  of  any  order,   decision,  policy,   standard,   or  regulation  of  the
12      Commissionproper; and
13                (j)       Perform such other functions as may be required by law or policy
14      of the commission.
T5                EEC.  9.     Duties  and  Responsibilities  Of  the  Commissioners.  -The
16     Commissioners,   as   members   of  'the   Commission   Proper,   shall   have   the
17      following duties and responsibilities:
18                (a)      Formulate  and  propose  policies,  accounting  and  auditing  rules;
19     review,   evaluate   and  update   existing  regulations   of  the   Commission;   and
2o     prescribe standards governing the performance by the commission of its powers
21      and functions;
14


1                 (b)      Review and deliberate cases submitted for decision or resolution;
2                (c)      Approve  the   appointment  and  promotion   of  the   officials   and
3     employees of the commission, subject to civil service rules;
4                 (d)      Assist in the general administration of the commission upon proper
5      delegation by the chairperson;
6                (e)      Act    as    officer-inicharge    of   the    Comlnission    upon   proper
7      designation by the chairperson, in case of the latter's absence; and
8                (f)       Perform such  other  functions  as  may be provided by  law,  rules,
9     regulations or policies of the commission.
co               SEC.  +0.    Organizational structure,  Compensedon  of personnel  and
11      Fw`#c#.o#s'.   -  The   Commission  Proper   shall   determine   the   organizational
12      structure of the commission; and fix the salaries, allowances, and other benefits
13     of  its   officials   and   employees,   which   shall   be   exempt   from   the   Salary
14     Standardization  Law,   and  in  accordance  with  the  fiscal  autonomy  of  the
15      Commission.
16                  SEC.11.    S£¢ffd¢ITds. Bo¢IJds.  -The  public  sector  accounting  standards
17     board  and the public  sector  auditing  standards  board  shall be  created  directly
18     under the Commission Proper, the members of which shall function in an ex-
19      ojffcz.a capacity.
2o                 SEC.12.  ,4ssz.sfo#f co"ml.ssl.o#ers. -The organizational structure of the
21      Commission shall be composed of sectors  consisting of offices  or clusters,  as
15


1     may be determined by `the commission proper.   Each sector shall be headed by
2      an Assistant commissioner who shall have the following functions:
3                (a)      Formulate,  develop,  update,  and supervise the  implementation of
4     the  operational  plan  and  performance  commitment  of the  sector  which  are
5      aligned with  the  Commission's  strategic  plan  and  annual  holistic  operational
6      pian;
7                 (b)      Supervise the general administration of offices or cluster of offices
8     under histherjurisdiction;
9                 (c)      Formulate, evaluate and recommend policies, rules and regulations
1o     for consideration by the commission proper; and
11                 (d)      Perform such other fun.ctions as may be necessary in the effective
12      implementation of this Act.
13                 SEC.13.   Ge"er¢J Cow#sel -One of the Assistant Commissioner shall
14     head the legal services sector of the commission and concurrently designated as
15      the General counsel of the commission who, as such, shall:
16                 (a)       Perform advisory and consultative services on legal matters;
17                 (b)      Render   legal   service   with  respect  to   the  performance   of  the
18     functions  of  the  Commission  and  the  interpretation  of  pertinent  laws  and
19     auditing rules and regulations, with the exception of purely accounting matters
2o     which shall be acted upon by the commission's government accountancy sector;
16


1                 (c)       Handle 'the investigation of administrative complaints or cases filed
2      against  a  personnel  of the  Commission;  evaluate  and  act  on  all  reports  of
3     involvement of the personnel of the Commission in anomalies or irregularities
4     in government transactions; and perform any other investigative work required
5     by the commission upon assignment by the chaixperson;
6                 (d)      Represerfu   the    Cormmission    in    preliminary    investigations    of
7     malversation  and  other  criminal  or  administrative  cases  discovered  in  audit;
8     assist  and  collaborate  with  the   Solicitor  General  and  the  Ombudsman  in
9     handling cases involving the chairperson or any of the commissioners, or other
lo     officials and employees of the commission in their official capacity;
11                 (e)       Coordinate,  for  the  commission  and  with  the  appropriate  legal
12     bodies of government, with respect to legal proceedings towards the collection
13     and enforcement of debts and claims, and the restitution of funds and property,
14     found  to  be  due  any  government  agency  which  are  pending  settlement  or
15      adjustment by the commission; and
16                 (I?       Supervise   the   enforcement   and   scttlement   of   disallowances,
17      charges  and  decisions  of the  Commission  covered  by  a notice  of fmality  of
18     decision  and order of execution.   For this purpose, the  General Counsel shall
19     have   control   and   supervision   over   the   Office   of  the   Commission   Chief
2o     Enforcement officer.
17


1
EEC. 14.  Commission Chiof Eiif iorcement Of f icer. -(a) TtleFe shaall be .a,
2      Chief Enforcement Officer who shall have the rank and privileges of a central
3     office  cluster director.    The powers  and authority  Chief Enforcement  Officer
4     shall be similar to that of a sheriff of a regular court, with additional tasks as
5     may be defined by the commission proper.  The chief Enforcement officer and
6      the deputies shaii be under `the corfurol and supervision Of the General Counsel;
7and
(b)      There  shall  be  a regional  enforcement  officer  in  every  regional
9     office in accordance with the guidelines issued by the commission proper.
1o                SEC.15.   Cc#/ra/ a//3cei -The commission shall have offices as may be
11      established and organized by the coHrmission proper.
12                 The  existing  organizational  set-up  and  functions  of  the  Commission,
13     together with the duties presently assigned to each office, shall continue to be
14      observed  unless  otherwise  provided  in  this  Act.    The  existing  sectors  in  the
15      Central office are as follows:
16
17
18
19
20
21
(a)       Administration sector (AS);
(b)      Planning, Finance and Management sector ¢FMS);
(c)       Professional and Institutional Development sector Q?IDS);
(d)       Government Accountancy sector (GAS);
(e)       Special services sector (SSS);
(I)       Legal services sector (LSS);
18


1(g)       Commission proper Adjudication sector (CPAS):
(h)       Systems and Technical services sector (STSS);
(i)       National Government Audit sector (NGAS);
¢)       Corporate Government Audit sector (CGAS); and
(k)      Local Government Audit sector (L-GAS).
Each sector shall discharge their existing duties and such other duties and
7     functions as may be prescribed by the commission proper.
8                 SEC.16.   Com"issI.o# Secretorl.¢f. -The Commission Secretariat shall
9     be headed by a director who shall have the same rank and privileges ofa central
1o      office cluster director.
171                 The colrmission secietaria`i shall perform the <following functions:
12                 (a)       Prepare the agenda for the sessions of the commission proper;
13                 (b)      Prepare, keep and preserve the minutes of all sessions, hearings and
14     conferences of the commission proper;
15                 (c)      Maintain and preserve the records of the commission proper; and
16                 (d)      Perform   such   related   functions   as   may   be   assigned   by   the
17      Chairperson or the commission proper.
T8               S;EC;.17.   Dndes and responsibilities of the central of i ice Directors. -
19      The  duties  and responsibilities  of the central  office  directors,  as head of their
2o      respective offices or clusters, are as follows:
19


1                 (a)       Formulate,   develop,   and   supervise   the   implementation   of  the
2     annual Operational Plan and Office Performance Commitment of the office or
3     cluster,   both   aligned  with  the   sector's   operational  plan   and  performance
4     commitment, and in accordance with the commission's strategic plan;
5                 (b)      Manage the general administration of the office, including matters
6     pertaining   .to   workioad,   `work   accomplishment,   and   managemen\t   of   the
7     resources of the office or cluster;
8                (c)      Direct and manage the implementation and execution of laws, and
9     policies,  standards, rules  and regulations promulgated by the Commission and
1o     memoranda issued by the offlce of the chairperson;
11                 (d)      Submit annual performance report and other reports as directed by
12     the commission proper or by the chairperson; and
13                (e)      Perform  other  functions  that  may  be  assigned  by  higher  and
14      competent    authorities    in    the    Commission    relevant    to    the    effective
15      implementation of this Act.
16            .   EEC. `L8`.   Regior.al owices.. Structure and Functioi.s. -® TTREe shjall
17     be COA regional offices as may be established or organized by the commission
18     Proper.     Until  otherwise  provided  by  the  Commission  Proper,  the  existing
19      regional offices are as follows:
20
21
( 1 )         CORDILLERA ADhAINISTRATIVE REGION (CAR);
(2)         REGION I;
20


1(3)         REGION II;
(4)         REGION Ill;
(5)         REGION IV-A (CALABARZON);
(6)        REGION Iv-B orlMAROpA);
(7)         REGION V;
(8)         REGION VI;
(9)        REGIONAL    SATELLITE    AUDIT    OFFICE    REGROS
8                 ISLAND :
10
11
12
13
14
15
16
(10)       REGIONVII;
(11)       REGIONVIII;
(12)       REGIONIX;
(13)       REGIONX;
(14)       REGIONXI;
(15)       REGIONXII;
(16)       REGIONXIII; and
(17)      BANGSAMORO AUTONOMOUS  REGION IN MUSLIM
17                MINDANAO @ARMM).
18                 (b)      Each  regional  office  shall  be  headed  by  a  director  who  shall
19     perform the following functions:
2o                          (1)         Formulate, develop, and supervise the implementation of the
21                 0peratio.Hal  Plan  and  Office  Performance  Commitment  of the  regional
21


1
10
11
12
13
14
Offiice,  both aligned with the  sector's  oper.ational plan  arid performance
commitment, as well as the Commission's strategic plan;
(2)        Exercise supervision and control over the implementation of
auditing  rules  and  regulations  in  any  agency  of the  government  with
principal offices or place of operations within the region;
(3)         Review,. analyze    and    consolidate    local,    national    and
corporate audit reports and audited fmancial statements of agencies in the
region as may be required;
(4)         Exercise authority over internal administration of personnel,
planning,   financial   (budgetary   and   accounting),   and   legal   matters
pertaining to the region upofl delegation by the Commission Proper; and
(5)         Perform such other related functions as may be assigned by
the Chairperson.
SEC.  19.    Audit  Groups  and Audit  Teams.  - in  accordance wTh the
15      policies approved by the Commission Proper, audit groups and audit teams are
16      created as the exigencies of^the service may require.
17                (a)      Audit  groups  may  be  constituted  for  the  audit  of  a  group  of
18     agencies to be determined by the commission proper.  Each audit group shall be
19     headed  by  a  supervising  auditor,  who  shall  report  directly  to  the  cluster  or
2o      regional director;
22


1                  (b)       Audit Learns may be cons`Lituted to audit various agencies as may be
2     detemined by the CP.   Each audit team shall be headed by a team leader who
3     shall report to the supervising auditor of the concerned audit group;
4                 (c)       The  audit team supervisor (ATS)  or the  audit teani leader (ATL)
5      who signs the independent auditor's report shall be a certified public accountant;
6                 (d)      The cp shall review the composition of the audit groups and audit
7     teams  and may make  changes  or modifications in the  exigency of the service
8      andastheneed arises;
9                 (e)      Until such time that the commission shall have adequate provincial
1o      satellite audit offices (PSAO) in each province to house the audit teams for the
11   .  national  government  or  local  government  agencies,  the  audited  agency  shall
12      continue to provide suitable and sufficient office and storage space together with
13     supplies,  equipment,  furniture,  and other necessary  operating  expenses  for  its
14     maintenance  as  determined  by  the  supervising  auditor  and  approved  by  the
15      concerned director; and
16                 ®       Upon the physical transfer of the audit `teams from the premises of
17     the national government or local government auditee to the PSAO, the auditee
18     shall continue to support the annual logistical  and operating expenses of their
19      audit teams.   They shall transfer such amounts budgeted for auditing services to
2o     the regional or central office having supervision over the audit team assigned to
21      theauditee.
23


1                EEC. 20.   Powers, FunctioiBs, and Duties of Auditors. -® rFbe truditol
2      shall   exercise   such   powers   and   functions   as   may   be   authorized   by  the
3     Commission in the examination,  audit and settlement of the accounts,  funds,
4     property,   financial   transactions,   resources   and   physical   operations   of  the
5      agencies under histher respective audit jurisdiction;
6                 (b)      The auditor shall employ such auditing procedures and techniques
7     as it may prescribe under the regulations of the commission;
8                (c)      The ATL shall submit an audit report to the head of the audit group
9     on the date and in the manner that the Commission may prescribe and render
10     such other reports as the commission may require;
11                 (d)      The ATL shall, after the audit, retain custody and responsibility for
12     the safekeeping  and preservation of paid expense  vouchers, journal vouchers,
13     stubs of checks, reports of collections and disbursements and similar documents
14     together with  their respective  supporting papers,  which  are  the  subject  of an
15      audit  observation  memoranda,  notice  of suspension,  notice  of disallowance,
16      notice  Of charge,  complaint,  or a pending  audi\L or investigation  or  court case
17     until these audit or legal evidence shall have been tuned over to a central Audit
18     Evidence Management services (CAEMS) in the central office or the Regional
19     Audit   Evidence   Management   Unit   (RAEMU)   which   are   created   by   the
2o      Commission; and
24


1                 (e)       The  audit  Learn  shall  retain  a  digital  copy  Of  the  post-audited
2     vouchers and supporting papers,  official receipts,  and other documents/reports
3     upon  turn  over/return  of  the  originals  to  the  auditee  for  safekeeping  and
4     preservation in accordance with the guidelines promulgated by the commission
5      Proper.
6                 SEC. 21.  4##w¢JAwd*.f &#¢ W'o7.4 Progr¢m -The ATL shall develop or
7     formulate an annual audit plan and the necessary audit programs for auditee in
8     accordance with the regulations of the Commission.   The annual audit plan of
9     the audit team shall be aligned with the cluster or regional office's operational
10     plan and performance commitment.
11                SEC;. Z2.   Assignment and comperisation of Auditi"g personnel. -(a,)
12     The assignment of representatives and support personnel of the commission to
13     agencies   of  the   government   shall   be   determined  by   the   Chairperson   in
14     accordance with the policy promulgated by the commission proper; and
15                 (b)      The salaries  and other forms  of compensation of the persomel of
16     the Commission shall be, determined by the Commission Proper which shall be
17     exempt  from  the  Salary  Standardization  Law  pursuant  to  the  Commission's
18     fiscal autonomy as provided in the constitution.
T9                SEC. 2:3.  Legal Assistance to COA of f iicials and Employees. -(al)  The
2o     officials   and  employees  of  the   Commission  are   authorized  to  engage  the
25


1      services of private lawyers for a fee in accordance with the guidelines issued by
2     the commission proper; and
3                (b)      For this purpose,  the  commission  shall  include  in its budget the
4      amount to be set aside as alegal assistance fund.
5                EEC. 24.  Professionalization of Audit services. -The co:mmission shall
6      develop,  adopt and implement .for i.1s officials and employees a comprehensive
7     and continuing manpower training and development prograni, which may follow
8     a ladderized system.    For this  purpose,  it shall  continue  its  capacity  building
9     program  in  coordination  with  international  professional  bodies  such  as  the
1o     International organization of supreme Audit Institutions, Asian organization of
11      Supreme  Audit  Institutions,  Association  of Southeas.I Asian Nations  Supreme
12     Audit Institutions and other supreme audit institutions.
13                                                                Chapter Il
14                 APPROPRIATIONS, FUNDING AND FISCAL AUTONOMY
15                 SEC.  25.    Appropriations  and  Funding.  -  (a)  The  anouzLl  aperzwing
16     budget of the Coffimission as provided in the General Appropriations Act shall
17      be sourced from the following:
18                            (1)  One-half of one percent (1/2  of l%) of the annual collections
19                 from national internal revenue taxes;
26


1                             (2)  A  fixed  amount  equivalent  `to  the  actual  cost  o`f  the  audit
services  in the government corporations, plus  a reasonable rate to cover
overhead expenses; and
(3)  Other sources such as but not limited to collections of audit fees
from  water  districts  and  special  audits,  consultancy  fees  and  retained
income.
(b)      The budget proposal may be subject to review by the Department
8     of Budget and Management but in no case shall it be lower than the approved
9     budget of the commission for the previous year; and
lo                 (c)      All government corporations, including their subsidiaries, and self-
ll      governing boards shall appropriate in their respective budgets and remit not later
12     than the  end  of the  second  quarter of each  year an  amount  equivalent to the
13     appropriation for personal services to the National Treasury and shall transfer to
14     the commission, the amount for the MOOE and capital outlay to be utilized by
15      the assigned audit team of the commission during the calendar year.   Should the
16      assigned  audit  team  remain  in  residency  in  the..premises  o.f the  GOCC,  the
17     Capital outlay and MOOE budget by the audit team shall continue to be directly
18     providedby the agency.
19                 SEC.  26.    F..sco/ 4wfo#o"jJ.  -(a)  The  Commission  shall  enjoy  fiscal
2o      autonomy.   Its   approved   annual   appropriation   shall   be   automatically   and
21      regularly released.   The commission. Proper may be authori'zed to augment any
27


1     item in the general appropriations for `the colrmission from savings in any item
2      in the same appropriation;
3                (b)      Any  savings  from the  approved budget under the  GAA  shall be
4     retained by the commission until fully spent; and
5                 (c)       Violation  of this  section  shall  subject  the  concerned  responsible
6      o`fficials.to appropriate admiris.trative sanctions.
7                                                            Chapter Ill
8      JURISDICTION, POWERS ANI) FUNCTIONS OF THE COMMISSION
9                 SEC.   27.     Sffl!femc"f  a/  Otyiect.veg.   -  Pursuant  to  its  constitutional
1o     mandate, the commission adheres to the following objectives:
11                 (a)       Determine  whether  the  fiscal  responsibility  which  rests  directly
12     with  the  head  of the  government  agency  has  been  properly,  efficiently  and
13      effectively discharged;
14                 (b)      Develop  and  implement  a  comprehensive  audit  plan  that  shall
15      encompass the exaniination of financial and nonlfmancial transactions, accounts
16      and reports, including evaluation of the internal control sys`tem of the agency;
17                 (c)       Institute control measures through the promulgation of auditing and
18     accounting rules and regulations governing the revenue, receipts, disbursements,
19      and uses of funds and property,  including evaluation of projects under public-
2o     private-partnership  agreements  or  the  like,  fund  transfers  to  non-government
21      organizations OitGOs), peoples o.rganizations Cos) or other private entities. for
28


1      specific puxpose, consistent with the `tctal economic development efforts of the
2      Goverrment;
3                (d)      Promulgate   accounting   and   auditing   rules   and   regulations   to
4     facilitate the safekeeping of the accounts of the government and enhance their
5      information value using state of the art technology;
6                 (e)       Institute    measures    designed    to    preserve    and    ensure    the
7     independence of the commission's officials and employees; and
8                 (I)       Bring  its  operations  closer  to  the  people  by  the  delegation  of
9      authority,  consistent  with  the  provision  of the  Constitution  and  the  national
1o      policy on decentralization.
11                SEC. 28.   Jurisdiction of the commission. -® rThe cormmission shall
12     have the power,  authority,  and duty to examine,  audit,  and settle  all  accounts
13     pertaining to the assessments and collections ofrevenues and receipts, and to the
14     expenditures  or  uses  of funds  and  property,  owned  or  held  in  trust  by,  or
15     pertaining  to  the  national  goverrment,  or  any  of its  subdivisions,  agencies,
16      including    state    univ.ersities    and    colleges,    instrumentalities,    governffient
17      corporations and their subsidiaries, including water districts;
18                 (b)      The   Commission   shall   also   have   audit  jurisdiction   over   the
19      following:
20
( 1 )          Public utilities;
29


1
10
11
12
13
14
(2)         Nor-goverrment   efitities   such   as   electric   cooperatives,
NGOs,   POs;   private   foundations,   educational   institutions   and   other
entities receiving subsidy  or equity,  donation or grant,  or fund transfer
directly or indirectly from or through the government, those which have
government shares, or counterpart funds from the government, and those
which are required by  law  or the  granting  institution  to  submit to  such
audit  as  a  condition  of subsidy  or  equity,  donation  or  grant,  or  fund
transfer.   This authority, however, shall pertain only to the audit of these
funds or subsidies coming from or through the government;
(3)         Leagues  of provinces,  cities,  municipalities  and  barangays;
and
(4)         Private    entities    collecting   revenues    in   behalf   of   the
goverrment.
(c)       The  Commission  shall  have  exclusive  authority,  subject  to  the
15      limitations of Article Ix of the 1987 Constitution, to define the scope of its audit
16      and  exaniinatiofl,  establish  the techniques  and methods  required  therefor,  and
17     promulgate  accounting  and auditing rules  and regulations,  including those  for
18     the  prevention  and  disallowance  of illegal,  irregivlar,  unnecessary,  excessive,
19     extravagant,  or unconscionable expenditures,  or uses of government funds and
20      property;
30


1
10
11
12
13
14
15
16
17
18
19
20
(d)      No entity  of the government,  or its  instrumentalities,  subsidiaries,
shall   be   exempted  in  any   guise   whatsoever  from  the  jurisdiction  of  the
Commission;
(e)      The  authority  and power of the  Commission  shall  extend to  and
comprehend all matters relating to:
( i )         Auditing procedures, systems and controls;
(2)        Keeping of the general accounts of the government;
(3)        Examination and inspection of the books, records, and papers
relating to those accounts and operations under audit;
(4)        Audit and settlement of the accounts of all persons respecting
funds or property received or held by them in an accountable capacity;
(5)         Settlement  of accounts  subsisting  between  agencies  of the
goverrment; and
(6)         Examination, audit, and settlement of all debts and claims of
any sort, including set-off, due from or owing to the government or any of
its subdivisions, agencies and instrumental.ities.
(I)       The commission shall have visitorial authority over the following:
(1)        Non-government   entities   subsidized  by   the   government,
those required to pay levies or government share; royalties or fees from
exploitation,   exploration  and  development  of  natural  resources.   This
31


1
10
11
12
13
14
15
16
17
18
19
authority pertains only to the determination of the amount to be assessed,
collected and remitted to the government;
(2)        Non-government entities whose loans are guaranteed by the
goverrment, provided that such authority shall pertain only to the audit of
the govemment's contingent liability;
(3)        Nor-government  entities   operating  and  charging  fees   or
tariffs to the public for the use of public facilities or utilities in so far as
the reasonableness  of the rates  charged to  the users  of the  facilities  or
utilities; and
(4)        Non-government  entities   which  have   contracts   with  the
govemmerfu under a Public - Private Partnership @PP) Agreement or any
of its variants, insofar as the determination of the:  existence of value-for
money  in  procurement  through  PPP;  compliance  with  the  terms  and
conditions of the contract or agreement; reasonableness of the sharing of
the risks and rewards between the private sector and the government; and
absence of disadvantage to -the government in the agreelnent relating to
the operation,  maintenance and handover of the public infrastructure  or
project.
SBC. 29.  Feesfior Audit and Other Services. -(a) The Cornmiss±on shall
2o      assess  and  collect reasonable  fees  for the  different  services  rendered  to  non-
21      govemmerfu entities that shall be audited in cormection with their dealings with
32


1     the goverrment, arising from but not lifflited to subsidies, couuterpart funding,
2      government equity, donation, grant, fund transfer, directly or indirectly from or
3     throuth  the  government,  or  where  audited  records  become  the  basis  for  a
4      government  levy  or  share.    Fees  of this  nature  shall  accrue  directly  to  the
5      Commission  within  ten  (10)  working  days  following  the  completion  of the
6      audit;and
7                 (b)      Whenever   the   Commission   enters   into   a   contract   with   any
8     government entity, to render audit and deliver services beyond the normal scope
9      of such services, the commission is empowered to assess and collect reasonable
1o      fees.  Such  fees  shall  likewise  accrue  directly to the  funds  of the  Commission
11     within the time provided for in the contract or in the billing statement rendered
12      bythe commission.
T3                EEC. 30.   Deputization of Licensed professionals or Experts. -(`a}.} The
14      Commission proper may, when the exigencies of the service so require, deputize
15      and retain in the name of the commission such certified public accountants and
16      other govelrmenl li€eHsed profe.ssionals or experts not in the public service, to
17      assist its auditors in undertaking specialized audit engagements;
18                (b)      The   deputized   professionals   or   experts   are   entitled   to   such
19      compensation and allowances as may be stipulated in an agreement or contract,
2o      subject to pertinent rules and regulations on compensation and fees;
33


1                 (c)       The   CoHimission   Proper   shall   issue   guidelines. in   contracting
2      deputized professionals or experts referred to in this section.
3                SEC. 3+.  Civil society organizndons (CSO} in the conduct of Audit. -
4      The  Chairperson  may   deputize   duly   accredited  civil   society   organizations
5      (CSOs)  in  the  conduct  of  audit  to  help  auditors  in  the  ocular  inspection,
6     validation, evaluation and moni'toring of projects imbued with public interest or
7     located   in   remote   and   critical    areas    in   order   to    enhance    credibility,
8     accountability and transparency in audit processes.
9                SEC. 32.   Disalloiwance of unconscionable Expenditures of Funds or
1o     tJses a/Property. -The commission shall promulgate accounting and auditing
11     rules  and regulations  for the prevention and  disalloivance  of illegal,  irregular,
12     unnecessary, excessive, extravagant or unconscionable expenditures, or uses of
13     government funds or property.  Any violation of such rules and regulations shall
14     be  a  ground  for  disallowance  without  prejudice  to  administrative,  civil  and
15      criminal sanctions against the persons liable.
T6                SEC. 3.3.  Auditing Transactions with private persons. -No goverrrmenl
17      agency  or  government  employees  association  shall  enter  into  any  contract  or
18     transaction with any private person or firm for services to undertake studies and
19      services relating to government auditing and accounting,  including services to
2o     conduct,  for a fee,  seminars  or workshops  for government personnel  on these
21      topics,  unless  the  proposed  colitract  is  firsrL  submit`ted  to  the  Commission  to
34


1      enable  it to  determine i.f i`t has the resources  and capability to undertake such
2      studies or services.   The Commission may engage the services of experts from
3     the public or private sectors in the conduct of such studies.
4                 Should the commission decide not to undertake the study or service, the
5      Commission shall nonetheless have the power to review the proposed contract
6      in order to determine.the necessity,  capability  or expertise of the private party
7      and the reasonableness of its fees.
8                Any contract entered into without the approval of the commission shall
9      be considered null and void and the related expenditures incurred thereon shall
1o     be   disallowed  in  audit  and  become  the  personal  liability  of  the   officials
11      coflcemed.
12                SEC. 34.  Legal services of private Low Firms. -No contraict invoMng
13     public funds shall be entered into for the services of a private law firm or lawyer
14     to represent government agencies in court or to render legal services for them. In
15      the  event  that  such  legal  services  cannot  be  avoided  or  is  justified  under
16     extraordinary    or   exceptional   circumstances,    the   written   conformity   and
17     acquiescence or clearance of the solicitor General or the Government corporate
18     Counsel,  as the case may be,  and the written concurrence of the Commission
19      shall first be secured before the hiring or employment of a private lawyer or law
2o     frm;and
35


1                 In the  absence  of the  said  requirements,  any  paymellt  thereof shall  be
2      disallowed in audit and the same shall be the personal liability of the officials
3      concerned.
4                SEC;. 35.   Prohibition in Soliciting, Grants, or Financial Assistance. -
5     Private foundations and entities organized and managed by government officials
6      and  emplo.yees   are  prchibited  from  using  the  name  and  resources  of  the
7     government  agency  in  soliciting  or  receiving  donations;  grants,  or  financial
8     assistance from private, domestic and international donors.
9                Any violation of the preceding paragraph shall subject the said foundation
1o     or  entity to  special  audit by  the  Commission  as  if the  funds  so  received  are
11     public   funds   which   should   be   recorded   in   the   books   of  the   concerned
12      government agency.   Refusal to submit itself to  such audit shall  constitute an
13     offense punishable under section 102 of this Act.
L4                SEC.    36.    Submission    Of    Documents    Relative    to    Government
15      0b/I.g¢fro«s. -The corrmission shall have the power, 'for audit and examination
16     purposes,  to  require  the  submission  of the  original  of any:  (a)  order,  deed,
17     contract, or other document which is the basis for any collection of, or payment
18     from government funds,  together with any certificate  of ownership  in case  of
19      investments; (b) official receipts and assessment notices issued by the Bureau of
2o     Internal Revenue, Bureau of Customs, Land Transportation Office and sinilar
36


1      agencies  and  the  related  cofflprormise  agreements,  if any;  (c)  copies  of hoard
2      resolutions  or council resolutions in case of GOCCs or LGUs, respectively;  or
3     (d)  other records  and papers  or other evidence  in cormection with a financial
4      transaction involving public funds.
5                 In the case of deeds to property purchased by any government agency, the
6     Commission shall require a ceftificate of title entered in favor of the goverrment
7     or other evidence satisfactory to it that the title is in the name of the goverrment.
8                It  shall  be  the  duty  of the  officials  or  employees  concerned,  including
9     those  in  non-government  entities  under  audit,   or  affected  in  the  audit  of
1o     government   and  non-government   entities,   to   comply  promptly  with  these
11      requiremerfus.
12                 Failure  or  refusal  to  do  so  without justifiable  cause  shall  constitute  a
13     ground for administrative disciplinary action as well as for disallowance of the
14      claim under examination, assessment of additional levy or government share, or
15     withholding  or  withdrawal  of government  funding  or  donations  through  the
16      govemmeHt, as well as for penal or adminis'trative sanctions as provided by law.
17                EEC. 37.  Investigatory and contempt powers. -The chaixperson or arry
18     Commissioner of the commission, the Assistant commissioners, central office
19      directors,  regional  directors,  the  auditors  assigned to  any  government  agency,
2o     and  any  other  official  or  employee  of the  Commission  specially  deputed  in
21      wri'ting  for  the  ptxpose  by  the  Chairperson  shall,   in  compliance  with  the
37


1     requirement  of due process,  have the power to  summofl the parties to  a case
2     brought  before  the  Commission  for resolution,  issue  subpoena  and  subpoena
3     duces   tecum,    administer   oaths,    and   otherwise   take   testimony   in   any
4     investigation or inquiry on any matter within the jurisdiction of the commission.
5                 The commission shall have the power to punish for contempt as provided
6     for in the Revised Rules  of Coufl  and 'the Revised Rules  of Procedure of the
7      Commission,  under the same procedure  and with the  same penalties provided
8     therein.  Any violation of any final and executory decision, order or ruling of the
9      Commission shall constitute as indirect contempt.
1o                 SEC. 38.   Power fo 4djwd!.cofe A4lo#ej/ C7¢z."s. -The commission shall
11      have the power to adjudicate money claims filed agains`L the government arising
12      from law, contract, quasi-contract or quasi-delict.
13                SEC. 39.  Power fo co"proml.se cJ¢I.i"s.  -(a)  When the interest of the
14     government so requires, the CP may compromise or release in whole or in part,
15      any  settled  claim  or  liability  to  any  government  agency  not  exceeding  Ten
16      million  (Plo,000,000.00)  pesos  arisilig  out of any  matter  or  case  before  it  or
17     within  its  jurisdiction.   In  case  the  claim  or  liability  exceeds   Ten  million
18     010,000,000.00)      pesos,      the      Commission      shall      submit      with      its
19      recommendations, the application for relief to congress; and
2o                 (b) The respective governing bodies of government fmancial institutions
21      and other government corporations  and self-governing boards,  commissions or
38


1      agencies of the government shall have the authority to condone, compromise or
2     release any similar clain or liability when expressly authorized by their charters,
3     subject to timely review and post-audit by the Commission.  When the charters
4      do  not  so  provide,  the  power  to  condone  or  compromise  shall  be  exercised
5      exclusively by the commission in accordance with the preceding paragraph.
6                F5EC.  40.   Collection  of Indebtedness  due the  Government. -®I) The
7      Commission   shall,   through   proper   channels,   assist   in   the   collection   and
8     enforcement  of all  debts  and  claims,  and  the  restitution  of all  funds  or  the
9     replacement or payment at a reasonable price, of property found to be due the
1o     government agency in the settlement and adjustment of its accounts.
11                 I`f  any   legal   proceeding   in   court   is   necessary,   involving   fmal   and
12      executory audit disallowances or charges, the prosecution and Litigation office
13     of the Commission shall handle the sane.   All other cases shall be handled by
14     the Office of the Solicitor General or the Office of the Government Corporate
15      Counsel,  as the case may be.   The Commission shall extend full support in the
16      litigation.  All  motley  cl;ims  due  and payable  shall  bear the  legal  interest rate
17     from  the  date  of receipt  of the  Order  of Execution  or  upon  demand  by  the
18      Commission; and
19                 (b)  The  Commission  may  further  refer  the  case  to  the  Office  of the
2o     Ombudsman  for  the  filing  of the  proper  administrative  and  criminal  actions
39


1      against   agency   persormel   concerned   and  private   persons   in   case   of  any
2      irregularity or illegality in the incurTence of such debts and claims.
3                F5EC;.  41.    Ratendon  of Money Ior  satisifaedon  of Indebtedness. -(OLD
4     When  any person  or  entity  is  indebted to  any  goverrment  agency,  including
5      fmal and executory audit disallowances or charges, the commission may direct
6     the head of ageney or public officer concerned to withhold the payment of any
7     money  due  from  such  entity  or  person  or  the  estate,  in  satisfaction  of the
8     indebtedness, disallowances and charges; and
9                 (b) Failure on the part of the head of agency or public officer to withhold
1o     the said money to satisfy such indebtedness or audit disallowances and charges
11      shall  make  the  head  of  agency  or. public  o'fficer  personally  liable  therefor
12     without prejudice to administrative action that may be filed for neglect of duty.
13                 SEC.  42.    j4##w¢J Repord  -  (a)  The  Commission  shall  submit  to  the
14     President and the  Congress  of the Philippines,  not later than September 30 of
15      each year, an annual report on the financial condition and results of operation of
16      all  government  agencies,  which  shall  iflclude  recommendations  of measures
17     necessary to improve economy, efficiency and effectiveness of these agencies;
18                (b)      To carry out the purposes of this section, the chief accountant or the
19     official in charge of keeping the accounts of the government agency shall submit
2o     to the Commission the year-end financial statements and such other supporting
21      or subsidiary  statements as may be required by the Commission not later than
40


1March 31  of each year.   Financial statements rctumed by 'the Comfflission for
revision due to non-compliance with accounting standards, rules and regulations
shall be resubmitted within three (3) days after the date of receipt by the official
concerned; and
(c)   Failure on the part of any official or employee to comply with the
6     provisions   of  the   immediately   preceding  i]aragraph   shall   cause   automatic
7     suspension of the payment of the salary and other emoluments until the official
8     or employee shall have complied therewith.   The violation of these provisions
9      for at least three times shall subject the offender to administrative disciplinary
10      action.
11                SEC.  43.   Authority to  Exunine Accounts  Of Public  Utilities.  -   The
12      Commission  shall  exanine  and  audit  the  books,  records  and  accounts  of all
13     public  utilities  such  as  water  concessionaires,  franchise  holders  and  electric
14      distribution,    and   transmission   utilities    including    generation   utilities,    in
15      connection  with  the  fixing  of  rates  of  every  nature,  or  in  relation  to  the
16     proceedings  of  the  proper  regulatory  agencies  for  purposes  of  determining
17      franchise taxes and other fees.   The examination and audit shall be conducted
18     any time after a provisional or fmal rate increase is approved or implemented by
19     the Energy Regulatory commission.   Any authorized government agency may,
2o     without any need of prior request of the said government agency, examine and
21      audit subject to the guidelines o'fthe commission.
41


1                 (a)      During the examination and audit,  any official or employee of the
2     public utility concerned shall produce all the reports, records, books of accounts
3      and  such  other  papers  as  may  be  required.  The  Commission  shall  have  the
4     power to take testimony under oath from any official or employee of the said
5     public utility on matters pertaining to the audit; and
6                 (b)      Any  official  or  employee  of  the  public  utility  who  refuses  the
7     examination and audit of the books of accounts and pertinent records, or causes
8     unnecessary  obstruction  to  the  examination  and  audit,  or  found  guilty  of
9      concealing  any  material  information  concerning  its  financial  status  shall  be
1o      subject to the penalties provided under section 102 hereof.
11                SEC. 44.   Powers,  Functions urld Duties of Audit Groups. -The.ay]idr+
12      groups in government agencies shall perform the following functions and duties:
13                 (a)      Examine,  audit  and  settle  accounts:  funds=  financial  transactions,
14      and resources of the agencies under the respective audit jurisdiction and exercise
15      such powers and functions as may be authorized by the commission;
16                 (b)      Stlbmit   an   audit   report   for   each   calendar   year   on   the   dates
17     prescribed by the Commission but not later than June 30 following the close of
18      theyear;
19                 (c)      In  the  performance  of the  respective  audit  functions  as  herein
2o      specified,  employ auditing procedures  and techniques  in  consonance  with the
21      applicable philippine and International standards adopted by the commission;
42


1                 (d)      Conduct audit of the transactions and accounts submitted for audit
2     within such period prescribed by the commission in the guidelines and issue the
3     results,    findings    and    observations    thereon   through   Audit    Observation
4     Memoranda, Notice of Suspension,  Disallowances  and  Charges  in accordance
5      with the rules and regulations on settlement of accounts;
6                 (e)      Keep   and   preserve   disbursement   vouchers,   journal   vouchers,
7      original  copies  of paid  checks,  bank  statements,  reports  of  collections  and
8     disbursements   and  similar  documents  together  with  the  supporting  papers
9      evidencing  transactions  that  are  disallowed,  charged  or  suspended  in  audit,
1o     including  those  that  are  the  subject  of audit  observations  or  cout  cases  or
11      investigations by the Office of the Ombudsman or other investigative bodies in
12      accordance with the rules and regulations of the commission;
13                The safekeeping and preservation of other audited documents not falling
14     under   the   preceding   paragraph   shall   be   returned   to   the   custody   and
15      responsibility  of  the  management  subject  any  time  to  the  access   of,   and
16      examination  by  the  authorized  representative  of the  Commission.  Under  no
17      circumstances  shall  said  documents  be  removed  or  disposed  of without  the
18     approval of the commission or the authorized representative; and
19                ®        Perform such other functions as may be assigned by the superiors.
2:o                F5EC. 45.  Exo[ndnation of cash and Accounts of Accountable oifI i:Iicer. -
21      (a)  The  cashbooks,   accounts,  papers  and  cash  in  the  aecountability  o.f  an
43


1      accountable officer shall at all times be open +o the audit and examinaLion of the
2      Commission and its duly authorized representatives; and
3                (b)      In case an exaniination of the cash and accounts of an accountable
4     officer discloses a shortage, the auditor shall immediately demand in writing the
5     restitution  of the  shortage,  and notify in writing the head  of the  government
6      agency  concerned  of said  shortage  in  accordance  with  the  regulations  of the
7     Commission.   The head of the government agency shall immediately relieve the
8     accountable officer and assign another officer to assume the former's duties and
9     responsibilities.  A complete report on the cash examination of the accounts of
1o     the  accountable  officer with cash shortage  shall be  submitted immediately by
-1~1      the auditor to the  director for purposes of filing the appropriate administrative
12     and criminal case against the said defalcating accountable officer with the office
13     of the ombudsman, as the evidence may warrant.
L4                SBC.   46.       Withholding   Of   Salaries   and   other   Emoluments   Of
15     4ccow#fob/c OJj7icers. -  Whenever an accountable officer has been found short
16      of  the  accounLabilities   during  cash  examination  or  audit  of the  cash  and
17     accounts,  the  auditor  shall  order  the  withholding  of the  salaries  and  other
18     emoluments due the accountable officer found to have incurred cash shortage
19     until the fmal determination of the latter's accountability by the Commission or
2o     fmal judgment by a competent court. In the event that the accountable officer is
21      found.not liable for.the cash shchage, `the withheld salary and other emoluments
44


1      shall  be  released to  the  accountable  offroer,  otherwise,  it  shall  be  applied  in
2     payment of the officer's indebtedness.
3                SEC. 4].   Constructive Distro[wi of property of Accountable oiffi:fi.cer. -
4      (a)  Upon discovery in audit of a shortage  in the  accounts  of any accountable
5      officer, and upon fmding a prima facie case of malversation of public funds or
6     property  against  an  accountable  officer,  the  Commission  may  place  under
7     constructive distraint the personal property of the accountable officer concerned
8     where there is reasonable ground to believe that the said officer is retiring from
9     the  government  service,  or  intends  to  leave  the  Philippines  or  remove  the
1o     property there from, or hide or conceal the property;
11                 (b)      The   constructive   distraint   shall   be   effected   by   requiring   the
12      accountable  officer  or  any  other  person  having  possession  or  control  of the
13     property  to  accomplish  a receipt  in the  form prescribed by  the  Commission,
14      covering  the  property  distrained  and  obligating  the  accountable  officer  to
15     preserve the same intact and unaltered,  and not to dispose of it in any manner
16     whatsoever without the express authority of the colrmissioH;
17                 (c)     In  case  the  said  accountable  officer  or  any  person  having  the
18     possession and control of the property sought to be placed under constructive
19      distraint  refuses  or  fails  to  accomplish  the  receipt  herein  referred  to,  the
2o     representative  of the  Commission,  effecting  the  constructive  distraint,  shall
21      proceed to I)repare a list of suck property  and in the presence of two witnesses
45


1      leave  a copy  thereof in  the premises  where the propert`y  distrained  is  located.
2     Thereafter,  the  said  property  shall  be  deemed  to  have  been  placed  under
3     constructive  distraint,  in  accordance  with  the  rules  and  regulations  of  the
4      Commission; and
5                 (d)  The  auditor  shall  submit to  the  chairperson,  through the  director,  a
6     report on any  distraint effected pursuant to this  section not later than  five  (5)
7     calendar days from the date of the distraint of the property. A copy of the report
8     shall be furnished the General counsel of the commission.
10
Chapter IV
DECISIONS OF THE COMMISSION
11                EEC. 48.   Appeal f ron Decis'ion of Auditors. -(a) Arty person a;ggrieved
12     by the decision of an auditor of any government agency in the settlement of an
13     account or claim may, within  180 calendar days from receipt of a copy of the
14      decision,  appeal in writing to the  Commission.  The procedures of appeal shall
15      be  governed  by  the  internal  rules  concerning  pleadings  and  practices  of the
16      Commission;
17                 (b)      The  commission  shall  impose  reasonable  appeal  filing  fees  and
18     legal research fee. These fees shall be assessed by the office where the appeal is
19      filed and paid to the commission's Treasury office.  The corresponding receipts
2o      shall be attached to the appeal or petition for review, which shall form part of
21      the record of the appeal. Appeal or pctition for review not supported with receipt
46


1      of the  filing fee  shall be  a ground  for the  dismissal  of the  case,  except those
2      appeals  that may be  allowed by the  Commission.    In no  case  shall  expenses
3     related to the  appeal from the  decisions  of the  auditor or director be  charged
4      againstpublic funds.
5               SEC. 49.   Period for Rendering Decisions of the commission. -The
6     Commission Proper shall  decide  any  case brought before  it within  sixty  (60)
7      days  from the  date  of its  submission  for resolution.    If the  account  or  claim
8     involved  in the  case  needs  referral  to  other  persons  or  offices,  or to  a party
9      interested,  the  period  shall  be  counted  from  the  time  the  last  comment  or
1o      pleading necessary to a proper decision is received by it.
tt                SEC.  50.    Appeal  firom  Decisions  Of  the  Ct>mmission.  -  The  party
12      aggrieved by any decision, order or ruling of the commission may, within thirty
13     (30) days from the receipt ofa copy thereof, appeal on certiorari to the supreme
14     Court  in  the  manner  provided  by  law  and  the  Rules  of Court.     When  the
15      decision,  order,  or  ruling  adversely  affects  the  interest  of  any  goverrment
16      ageney, the appeal may be taken by the proper head of that agenc.y. The Office
17      of the  Solicitor  General  shall  at  all  times  represent the  Commission  in  all  its
18     decisions appealed to the supreme court.
T9                EEC. 51.  Finality of Decisions of the commission. -(a), The decision o£
2o     the   Commission,   director   or   auditor   upon   any   matter   within   the   audit
21     jurisdiction, if not appealed as herein provided, shall be `rmal and executory; and
47


1                (b)      The General counsel or any authorized officer of the commission
2     shall issue an order of execution requiring the sheriffs or enforcement offlcers of
3     the Commission to execute its fmal decisions, resolutions: orders or claims and
4      awards.
5                SEC;.  52.    Erforcement  Of  Decisions  Of the  Auditor  or  Commission
6     P7ithper.  -The  agency head shall  ensure the immediate settlement Of the .fmal
7     and executory decision of the auditor, director or the CP.   Unreasonable failure
8     or refusal of the head of agency or concerned officer to implement the final and
9     executory  decision of the  auditor,  director or the  CP,  shall render the  former
1o      administratively liable for neglect of duty.
11                SEC.  53.    Reopening  uTld  re-audit  Of tLudited  transactions.  -®  A;Il
12     transactions and accounts are open for audit within ten (10) years after the date
13      of transaction; and
14                  (b)     When any transaction appears to be tainted with fraud, collusion, or
15      error of assessment,  or when new and material evidence is discovered, the CP
16      may mc7Zzfprc7pz.a or upon. the instance of a party in interest, order the reopening
17     or  re-audit  thereof within  three  (3)  years  after  the  original  audit  but  not  to
18     exceed ten (10) years from the date of the transaction.   The concerned auditor
19      shall prepare an audit report thereon and submit the sane to the chairperson or
2o     the authorized representative.
48


TITLE Ill
GOVERNMENT AUDITING
Chapter I
BASIC POLICIES AND STANDARDS
5                 EEC. 54.    Def lknition of Government Auditing. -Goverrrmerut erndhing
6     is  the  analytical   and  systematic  examination  and  verification  of  financial
7      transactions, operations, accounts, and reports of any government agency for the
8     pulpose  of determining  the  accuracy,  integrity,  authenticity,  and  compliance
9     with the requirements of law, rules and regulations, International Public Sector
lo     Accounting  Standards  (IPSAS)  or  Philippine  Financial  Reporting  Standards
11     0FRS), and the standards in auditing or the Intemational standards for supreme
12     Audit hstitutious (ISSAls).
13                 SEC.  55.    Ge"er¢/ Srn!#d¢rds.  -(a)  The  audit shall be performed by a
14     person with adequate technical training and proficiency in auditing;
15                 (b)      In all matters relating to the audit work, the auditor shall maintain
16      complete independence, impartiality and objectivity and shall avoid any possible
17     compromise of the independence or any act that creates a presumption oflack of
18      independence, or the possibility of undue influence in the perforinance of duties;
19      and
2o                 (c)       The   auditor   shall   exercise   due   professional   care   guided   by
21      applicable laws, regulations and the intemationally adopted standards of audit or
22     the ISSAls, which guide the planning, performance and execution of the audit
49


1     work, reporting of the results of the audit, mondoring and quality assurance in
2     the conduct of all phases of the audit.
Chaptel. 11
RECEIPT AND DISPOSITION 0F FUNDS AND PROPERTY
5                fsEC.   56.  Accounting   Of  Money   and  Property   Received  by   Public
6     a//;c!.¢Js`.   -  All ffioneys and property officiaily received by a public officer in
7     any capacity or upon any occasion must be accounted for as government finds
8     and government property2 except as may otherwise be specifically provided by
9     law  or  competent  authority.  The  recognition  in  the  books  of accounts  of the
1o      concerned  agency  shall  be  in  accordance  with the  International Public  Sector
11     Accounting standards or philippine Financial Reporting standards.
T2                SEC.   57.      Designoition   Of  Colleedng   or   Disbursing   Officers  for
13     Govermme"f 4ge"cl.es.  - The head of any government agency may designate
14     such number of collecting or disbursing officers  or agents  as may be  deemed
15      necessary.
L6                SEC. 58.     Time and Mode of Rendering Account. -I:n the a;bsen®e of
17     specific  provision  of law,  all  accountable  officers  shall,  throuch  the  agency
18     accountants, render their accounts, submit their vouchers, and make deposits of
19     money collected or held by them at such time and in such manner as  shall be
2o     prescribed  in  the  rules   and  regulations   of  the   Commission.     The   auditor
21      concerned shall th.en conduct the necessary exaniination and audit thereof.
50


1                F5EC;.  59.  Accrual of Income or Revenues to uiiuppropriated surplus of
2     £„c Ge#ero/ Fw"d  - (a) All income or revenues  accruing to the agencies by
3     virtue of the provisions of law, orders and regulations shall be deposited in the
4     National  Treasury or in any duly  authorized goveriiment depository  and shall
5      accrue to the unappropriated  surplus  of the  General  Fund of the  government,
6      unless otherwise specifically provided by law; and
7                 (b)      Income  or  revenues  from  business-type  activities  and  revolving
8     funds  of government  agencies  may  be  separately  recorded  and  disbursed  in
9      accordance  with   such  rules   and  regulations   as   may  be   determined  by   a
1o     Permanent  Committee  composed of the  Secretary  of Finance  as  Chairperson,
11      Chairperson  of the  Commission  on  Audit  and  the  Secrctary  of Budget  and
12      Management, as members.
13                 SEC.  60.   fpecz.¢J,,  FI.dwcl.¢ry ¢md rrwsf Fw#ds.  -(a) Receipts  shall be
14     recorded  as  income  of Special,  Fiduciary  or Trust Funds  or  funds  other than
15      General Fund only when authorized by law in accordance with the rules  and
16      regulations.issued b.y the permanent committee;
17                 (b)      Revenues  collected  from  particular  taxes,levy  and  royalties  for
18     special  purpose  shall  be  treated  as  a special  fund  or  Special  Account  in  the
19      General Fund and paid out for such purpose  only.  If the purpose for which a
2o      special fund was  created has been fulfilled or abandoned,  the balance,  if any,
21      shall be transfeITed to the General Fund of the govemmeut; and
51


1
(c)      In case any government agency fails or refuses to implement such
2     reversion and closure, the Permanent Committee may recommend for approval
3     of the president the reversion and closure of the special Account in the General
4     Fund, Fiduciary or Trust Funds on any of the following grounds:
10
11
12
13
(1)           when  the  terms   have   expired   or  when   it   is   no   longer
necessary   .for  attainment  of  the  purpose  'for  which  the   funds   were
established;
(2)          when  the  funds  have  remained  dormant  for  unreasonable
length of time;
(3)           when the General Fund is needed in times of emergency; or
(4)           when used in violation o'f the rules and regulations issued by
the Permanent Committee.
EEC. 61.  Receipts and Revenues Of Local Government Units a.GUs). -
14     All receipts and income accruing to the LGUs shall be deposited in the account
15     maintained in the authorized government depository bank or private bank with
16     the prior approval of the secretry.ofFinance.
T]                f5EC. 62.   Receipts and Revenues of Government corpora[tions. -AIL
18     receipts and income accruing to government corporations shall be deposited in
19     the account maintained in the authorized government depository bank.
20                SBC. 63.  Issuance of ottgrtcial Receipts. -(aL) "o pay"eat of any na:rfure
21      shall be received by a collecting officer wi,thout immediately issuing an official
52


1receipt in acknowledgemen.i thereof. The receipt may be in the form of postage,
intemal revenue or documentary stamps or such other forms as the law or the
Commission may allow.   Temporary or provisional receipts shall not be issued
to acknowledge the receipt of public funds;
(b)    Where  digital  or  electronic  devices  are  used to  acknowledge  cash
6        receipt,   the   same   shall  be   s.ubject  to   inspection  and   verification  by   the
7        Commis sion;
8                 (c)  The same is acceptable provided the document maintains its integrity
9        and  reliability  and  may  be  authenticated  so  as  to  be  usable  for  subsequent
1o        reference, in that:
•11
12
13
14
15
16
17
(1)       the  electronic  document  remains  complete  and  unaltered,
apart from the addition of any endorsement and any authorized change,
or  an  change  which  arises  in  the  normal  course  of  communication,
storage and display; and
(2)     the electronic document is reliable for the purpose for which
it was generated and 'for all relevant circumstances.
S;EC.  64.    Check  Payments for  Taxes  or  Other  Indebtedness  to  the
18     Gover#"e"£  - (a)  An officer  charged with the  collection  of revenue  or the
19     receipt ofmoneys payable to the government shall accept a payment in the form
2o     of checks issued in favor of the government agency, upon proper indorsement
21      and  identification  of the  payee  or  indorsee.    Checks  drawn  in  fa`vor  of the
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1     government for payment of any indebtedness shall likewise be accepted by the
2     officer concerned, provided it shall be made payable to the agency or the official
3     title or designation of the official concerned as the payee;
4                 (b)      When a check drawn in favor of the government is not accepted by
5        the drawee bank for any reason, the drawer shall continue to be liable for the
6        sum due and all penalties resulting from delayed paymelit.  WThere the reasons
7        for non-acceptance  by the  drawee bank are  insufficiency  of funds  or  closed
8        accounts, the drawer shall be criminally liable therefor; and
9                  (c)     Money in the hands or custody of the collecting officer shall not be
1o     utilized for the pulpose ofencashing private checks.
11                   SEC. 65.  Deposit of Money in.the Treasury or Authorized Government
12     Dcpos!tory Bfl!#fr. -(a) Public officers authorized to receive and collect moneys
13     arising from taxes, revenues, or receipts of any kind shall remit or deposit intact
14     the full amounts so received and collected by the officers to the account of the
15     National  Treasury or in the  account of agencies maintained in the  authorized
16     government depository  bank not later than the following banking  day,  except
17     when it is inpractical to do so due to distance and the amount to be deposited is
18     minimal; and
19                   (b)    The  collections  shall  not  be  used  for  purposes  of disbursements
2o     except when authorized by law or regulations.
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1                 S;EC.  66.     Acknowledgement  Of  Receipt  Of  Money   by   Goverrlment
2     Dcpasjforl.es. -All authorized government depository banks shall acknowledge
3     receipt of all the money received, for the account of the national treasurer or the
4      agency concerned.   The acknowledgement receipt shall bear the date of actual
5      deposit  and  shall  indicate  from  whom,  and  on  what  account the  money  was
6      received.     The  money  received  shall  be  governed  by   the  Treasury   Single
7     Account system established pursuant to Executive order No. 55, Series of2011.
8                fsEC;.  6].    Shipmeut  Of  Governmeut  Money  or  Property  by  Carrier.,
9     Notation  Of Evidence  Of Loss.  -  `When  gore:rnmeat  rmoney  or  praperty  is
1o     transported  from  one  place  to  another by  carrier,  it  shall  be  the  duty  of the
11      consignee or the representative to make notations on the bill of lading or receipt
12      on any evidence of loss, shortage, or damage.
T3                SEC.   68.   Credit f tor Loss Occurring in Transit or Due to  Fire, Thef i,
14     jRobbery or Force A4l¢/.ewre.  - In case  of loss  of government funds,  property,
15      documents evidencing fmancial transactions, or records of accountabilities occur
16     while in transit,  or loss  is  caused by  fie,  theft,  robbery  or 'force majeure, the
17     officer or employee accountable or in custody thereof, shall immediately notify
18     the auditor concerned and, within thirty days from the occurrence of loss, shall
19     present the application for relief, together with the required supporting evidence.
2o     When warranted,  credit for the loss shall be allowed.   An officer or employee
55


1      who 'fails to comply with this requirement shall not be relieved from liability nor
2      shall be allowed credit for any loss thereof.
3               SEC;. 69.  Transifer of Funds I tom one Agency to Another or From one
4     a//Fcer fo 4#of„cr. -Transfer ofgovemment funds from one agency to another
5      or from one officer to another shall, except as allowed by law or regulation, be
6     made only  upon prior direction or authorization of the agency head following
7     the accountability and accounting guidelines issued by the commission.
8                SEC;. 70.    Transifer  of property  between  government  agencies.  -A]ny
9      government property that is no longer serviceable or needed by the agency to
1o     which it belongs may be transferred without cost,  or at an appraised value, to
11      other govemmeut agencies upon authority of the respective agency heads.
T2.                 EEC.  71.    Inwoice  and  Receipt  upon  Tranof ;er  Of  Property.  -`Whe;n
13     government property is transferred from one accountable officer to another, or
14      from  an  outgoing  officer  to  the  successor,  it  shall  be  done  upon  properly
15      itemized invoice and receipt which shall invariably support the clearance to be
16      issued  to   the   relieved   or   outgoing   officer,   subject  to   regulations   by   the
17      Commission.    The  head  of agency  shall  ensure  the  proper turn-over  of their
18      accountabilities.
y9                S;EC.  72.     Destruction  or  Sale  Of  Unserviceable  Property.  -  Wlo!en
2o     government property has become unserviceable for any cause, an inventory shall
21     be   made,   and   upon   application   by   the   officer   accountable   ,therefor   for
56


1      des`truction,  the  property  shall  be  inspected  and  appraised  by  the  appraisal
2      committee created by the head of the agency, subject for review by the auditor
3     concerned and, if found to be valueless, unserviceable or unsalable, the property
4     may be destroyed or disposed of in the presence of the auditor.
5                 If found to be valuable, the property may be sold thru public bidding to
6     the  highest  bidder  .under  the  supervision  of the  Disposal  Committee  of the
7     government agency, after advertising the sane for two (2) consecutive days in
8     any national newspaper of general circulation.   Where the value of the property
9      does not warrant the expense of publication, as determined by said Committee,
1o     the notice of sale shall be posted for the sane period in at least three (3) public
11      places  in the  locality  where the property  is to  be  sold.    In  the  event  that the
12      public bidding fails, the property may be sold at a negotiated sale at such price
13     as may be fixed by the sane committee, subject to the immediate audit of the
14      auditor concerned in accordance with the regulations of the commission.
T5                 SEC.  73.     Disposition  Of  Government  Property.  -  Arry   gorve:rmrrmeat
16     property that is no longer needed by the agency to which it belongs as certified
17     by the head of the said agency may, after appraisal thereof by management, and
18     review by the Commission,  be sold thni public bidding to the hi_chest bidder.
19      Such sale shall be under the supervision of the proper committee on award or
2o     similar body of the government agency, after publication for not less than two
21      (2)  consecutive days  in any national newspaper of general circulation.   Where
57


1      the  value  of the  property  does  not  warrarfu  the  expense  of publication,  as
2      detemined by the said proper committee, notices of said sale shall be posted for
3     a like period in the website of the agency and in at least three (3) public places
4      in the locality where the property is located, or where the sale will be conducted.
5      In  the  event  that  the  public  bidding  fails,  the  property  may  be  sold  at  a
6     negotiated sale at such price as may be fixed by the s.anne committee, subject to
7     the immediate audit of the auditor concerned in accordance with the regulations
8     of the commission.
9                 Sale or any mode of disposition of real properties shall be subject to the
1o     prior approval by the commission.
LI                FSEC;. 74.   Dispbsition  of Foreclosed Assets or collaterals Acquired in
T2     the   Regular   Course   Of  Business   by   Government   Corporations.   -  Th!dr
13     Charters notwithstanding, foreclosed assets or collaterals acquired in the regular
14      course  of business  by  government  corporations  shall  be  sold through  public
15     bidding to the highest bidder after appraisal thereof by an independent appraiser
16      and review by the commission.   Such sale shall be under the supervision of the
17     proper committee on award or similar body of the government corporation, after
18     publication for not less than two (2) consecutive days in any national newspaper
19      of general circulation.
2o                In the event that the public bidding fails, the property may be sold at a
21     negotiated sale at such price as may be fixed by the same committee, subject to
58


1      the immediate audit of the auditor concerned in accordance with the regulations
2     of the commission.   If the property remains unsold for at least one year, it shall
3     be  subject  for reappraisal  and  shall be  offered  again  for  sale  through public
4      bidding.
5                 Government property may be disposed of as payment of dividend,  after
6      appraisal thereof by an independent appraiser and review by the commission.
7                 FSEC;.  75.      Disposidon   Of  Funds   or   Property   Held   by   Deceased,
8     Incapacitated  or  Absconding  Accountable  Oiff ij.cer.  -(a).)  `Nhe;A  an  officer
9      accountable  for  government  funds  or  property  absconds,   dies,   or  becomes
1o     incapacitated  in the performance  of duties,  the  agency head shall  designate  a
11      custodian  to take  charge  of the funds or property  until a successor shall have
12     been  appointed  and  qualified.  The  agency  head may  appoint  a  committee  to
13     count the cash and take an inventory of the property for which the officer was
14      accountable  and to  determine the responsibility  for any  shortage therein.  One
15      copy of the inventory and of the report of the committee duly certified shall be
16      filed with the auditor concerned but the 'fmdings of the collrmittee shall not be
17      conclusive  until  audit  thereon  is  completed.     The  agency  head,  whenever
18     necessary, shall be responsible for securing a  "flo/d c7epczrfc{re orcJer" from the
19     proper government agency to prevent the  absconding officer from leaving the
2o      country; and
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1                 (b)          If   the    absconding,    deceased    or    incapacitated    officer    is
2        accountable for funds  or property of a province  or city,  the acting custodian
3        and  committee  shall  be  designated  by  the  local  chief executive,  furnishing
4        notice  to  the  Secretary  of Finance,  who  shall  thereafter  appoint  a  regular
5        accountable officer through the Bureau of Local Government Finance.
6               EEC. 76.   Final Report of Accountable of f icers. -® An accounka;bhe
7     officer, upon ceasing to act as such, shall submit to the auditor of the agency a
8     report  of  the  accountability  within  one  (1)  month  after  ceasing  to  act  as
9      accountable officer.   Upon receipt of the report, the auditor shall conduct a cash
10     exanination on the accountability; and
11                 (b)       Any   remaining   balance   of  the   cash   accountability   shall   be
12      deposited in the proper treasury immediately.
T3                S;EC. 77.  Auditor's Notice of Disatlowances, Charges and suspensions
14     fo 4ccow#ffl!b/a  a//5cer.  -  (a)  At  the  end  of every  period prescribed by  the
15      Commission, the auditor shall send a written notice of disallowance, charge, or
16     suspension, if any, to each accountable officer,.through the agency head, whose
17      accounts have been audited and settled in whole or in part.  An audit suspension
18     which is not satisfactorily explained within ninety (90) days after receipt of the
19      notice by the accountable officer shall become a disallowance.
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1                 (b)      Any person aggrieved by the decision of the auditor pertaining to
2      disallowances, charges, or suspensions, may appeal the case in accordance with
3     the rules of procedure of the cormission.
4                                                                 Chapter Ill
5                                   APPLICATION OF APPROPRIATED FUNDS
6                EEC. 78.  Appropriation Ref ore Entering into contract. -The corfu.act
7     involving the expenditure of public funds shall not be entered into unless there
8     is  an  appropriation therefor,  the unexpended balance  of which,  free  of other
9      obligations, is sufficient to cover the proposed expenditure.
co                SEC.  79.     Certificate  Showing  Appropriation  to  Meet  Contract.  -
11      Except  in  the  c'ase  of  a  contract  for  personal  services  or  for  supplies  for
12     immediate consumption, no contract involving the expenditure of public funds
13     by any government agency shall be entered into or authorized unless the proper
14     accounting official of the agency shall have certified to the officer entering into
15     the obligation that funds have been duly appropriated for the purpose and that
16     the  aniount  necessary  to  cover  the  proposed  contract  for  the  fiscal  year  is
17      available  for  expenditure  on  account  thereof.    The  certificate  signed  by  the
18     proper accounting official shall be attached to and become an integral part of the
19      contract,   and   the   sum   so   certified   shall   not   thereafter   be   available   for
2o     expenditure for any other puxpose until the obligation of the government agency
21      under`the contract is fully extinguished.
61


1
EEC. 80.   Void Contruct and Liability Of Offllcer. -Arty coITtrtftyo± eITkeled
2     into  contrary  to  the  requirements  of the  two  irrmediately  preceding  sections
3     shall  be  void  and  not  binding  to  the  government.     The  officers  of  any
4     government agency responsible for the contract shall be personally liable to the
5     government or other contracting party as if the transaction had been entered into
6     between private paties.
7                S;EC.  81.    Restrictions  on  Payment  Under  Governmertt  Procurement
8     CoHfrocts.  - No payment,  partial or final,  shall be made  on any  government
9     procurement contract except upon a certification by the head of the agency or
1o     the  duly  authorized  representative  to  the  effect  that  the  services  have  been
11      rendered,    supplies,    materials    or    equipment    have    been    delivered    and
12     infrastructure projects have been implemented or completed in accordance with
13     the  terms  and  conditions  of the  contract  and  have  been  duly  inspected  and
14      accepted.
T5                S;EC.   82.      Prohihition   against   adwance   payment   on   government
16     co#!r¢cJs..  -  Except  when  authorized  by  law,  the  government  shall  not  be
17     obliged to make an advance payment for contracts for:
18
19
20      and
(a)       services not yet rendered;
(b)       supplies  and  materials  not yet  delivered,  inspected  and  accepted;
62


1                 (c)       infrastructure projects not yct implemented or completed, inspected
2      and accepted other than for l5% mobilization as provided for in RA 9184.
3                 SEC.  83.   £frolto#.o"s o# cusfo ¢dv¢#ce. -(a) Cash advance shall not be
4     given unless for a legally authorized specific purpose.   A cash advance shall be
5     reported on, and liquidated, as soon as the purpose for which the cash advance
6      was given has been served. Additional cash advance shall not be allowed to any
7      official or employee unless the previous cash advance given has been settled or
8     a proper accounting has been made;
9                 (b)      The failure of the official or employee to liquidate the cash advance
1o        after  due  demand by  an  authorized  officer,  is  a prima  facie presumption  of
11        malversation   despite   the   absence   of  a  fmding  of  actual   damage   to  the
12        government ;
13                (c)      The transfer of cash advance by a disbursing officer to another does
14        not constitute an expenditure for which the disbursing officer may claim credit
15        in the accounts, but the responsibility continues to attach until the anount has
16        been fully accounted for; and
17                 (d)      Cash   advance   shall   not   be   granted   for   the   procurement   or
18        implementation of infrastructure projects.
19                 Any violation of the foregoing provisions shall constitute a valid cause for
2o     the withholding of the salary of the accountable officer without prejudice to the
63


1      imposition of administrative or civil sanction and criminal prosecution of both
2     the authorizing and the accountable officials, as may be warranted.
3                SEC.   84.      Limitcitions   on   Cash   or   Fund   Transifers   firom   One
4     Gover"me#f4gr"ey to 4#ofrfecr. -(a) Cash or fund transfers shall not be given
5      unless for legally authorized specific purpose as embodied in a memorandum of
6     agreement executed between the source and implemenling agencies;
7                 (b)  The  cash  or  fund  transfers  shall  be  reported  and  liquidated  by  the
8     implementing agencies as soon as the purpose for which they have been granted
9     have been served, but not later than the end of the year;
1o                 (c)  Additional or new cash or fund transfers shall not be made unless the
11     previous transfers had been fully liquidated as ceriified by the head of agency;
12      and
13                 (d)   The   heads   of  the   source   and   implementing   agencies   shall   be
14     responsible for compliance with the foregoing requirements.
15                 Failure on the part of the foregoing officials or persons to comply with the
16      above mentioned responsibility  shall  constitute  a ground for administrative  or
17      criminal action, as evidence may warrant.
T8               SEC.   85.      Lindtatlons   on   Cash   or   Fund   Transifers   from   Any
T9     Government Agenay to a Private Organization  or Entity. - (a,) Cash or fund
2o     transfers from a government agency shall not be given to a private organization
21      or  entity  unless  authorized  by  law  'for  a  specific  purpose  which  should  be
64


1     embodied  in  a  Memorandum  of  Agreement  executed  between  the  source
2     government agency and the implementing private organization or entity;
3                 (b)      Only duly registered, accredited and reputable private organizations
4        or entities shall be granted cash or fund transfers;
5                 (c)      The cash or fund transfers  shall be reported on and liquidated by
6     the  implemeflting  private  organizations  or  entities  to  the  source  goverrment
7      agency as  soon as the project has been completed or not later than sixty (60)
8     days  after project  completion.    If the project  implementation will  go  beyond
9      December 31Stofthe year, a partial liquidation report as of December 31St of that
1o     year shall be submitted to the source government agency not later than January
11      15 oftheensuingyear;
12                (d)       No additional  or new cash or fund transfers shall be made unless
13     the previous cash or fund transfers have been fully liquidated as certified by the
14     head of the agency; and
15                (e)  The heads of the source government agency and implementing private
16     organizations or entities shall be responsible for compliance with the foregoing
17      requirements.
18                Failure on the part of the officials or persons to comply with the above-
19     mentioned  responsibility  shall  constitute  a  ground  for  administrative  or  civil
20      sanction or criminal prosecution, as warranted.
65


1                 SEC.  86.   Poe);me#f a/Rev;¢rds'.  -When a reward becomes payable by
2     authority  of law  for  infomation  given  relative  to  any  offense  or  any  illegal
3     activity, or for any act done in cormection with the apprehension of the offender,
4     the reward shall be paid as prescribed by law or regulations.   Such payment of
5     reward  shall  be  subject  to  audit  in  accordance  with  the  regulations  of the
6      Commission.
7                 S;EC. &].  Replacemerit of Lost, Stolen or Destroyed checks. -Who:n ar[ry
8     check is lost,  stolen or destroyed, the issuing officer may issue a replacement
9     check as payment for the same obligation upon the execution of an affidavit of
1o     loss,  submission of stop payment order to the drawee bank and a surety bond
11      issued by the  Government  Service  hisurance  System (GSIS) to  indemnify  the
12     issuing  agency of the  amount  of the  check.    If destroyed,  presentation of the
13     destroyed check to the issuing officer is also required.  The chief accountant or
14      internal  auditor of the  agency  shall be responsible that no  double payment is
15      made as aresult thereof.
16                  SEC.  88.    ro  W7!om  Crfecc.ds'  ¢re P&);¢bJe.  -Checks  drawn against  the
17     government  agencies'   Checking  Account  maintained  with  any  government
18     depository shall be made payable directly to the creditor to whom the money is
19      due, or to a disbursing officer or employee for an official disbursement.
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1                 Release of checks to a person not duly  authorized to receive such check
2      shall  subject  the  accountable  officer  to  administrative  or  civil  sanctions  or
3      criminal prosecution3 as warranted.
4               SEC. g9.   Reversion of unliquidated Balances of Accounts payable. -
5      The head of agency shall  cause the reversion to the unappropriated surplus  of
6     the general fund of the national govemmenl or of LGUs,  and for GOCCs, to
7     their retained  earnings,  any unliquidated balance  of accounts payable  in their
8     books of accounts, which has been outstanding for two years or more and which
9     no actual valid claim, administrative orjudicial, has been filed.
10                                                                   Chapter Iv
11                              ACC0tINTABILITY AND RESPONSIBILITY FOR
12                                 GOVERNMHNT FUNDS AND PROPERTY
T3                SEC. 90.   Accountable of f i\cers; Bond Requirement. -(tLD ENery oELcel
14     of any  government  agency  whose  duties  permit  or require  the  possession  or
15      custody   of  government   funds   or   property   shall   be   accountable   for   the
16     safekeeping  thereof .in  conformity  with  law.    Other  goverrmeut  officers  not
17     accountable by the nature of their duties, may be similarly held accountable for
18     government   funds   or  property   throuch   their   participation   in   the   use   or
19      application thereof; and
2o                 (b)      Every accountable officer shall be properly bonded in accordance
21     with law and the peflinent rules or regulations.
67


1                SEC.  91.    Primary  Responsibility  and  Accountabiltry  Of the  Agenay
2     He¢d  -  (a)  The head  of any  agency  of the  government  is  immediately  and
3     prinarily responsible  for all  government funds  and property pertaining to the
4      agency;and
5                 (b)  Persons  entrusted  with  the  possession  or  custody  of the  funds  or
6     property  under  the  agency  head  shall  be  ilrmediately  responsible,   without
7     prejudice to the liability of either party to the government.
8               SEC. 92.   General Liability f or unlowiful Expenditures. -Expendinles
9     of government  funds  or uses  of government  property  in  violation  of law  or
1o     regulations shall be the personal liability of the official or employee found to be
11      directly responsible therefor.
T2.                EEC. 93.  Degree of supervision over Accountable of f i:leers. -The heed
13     of any  government  agency  shall  exercise the  diligence  of a good father  of a
14      family  in  supervising  accountable  officers  under  his  control  to  prevent  the
15      incurence of loss of government funds or property, otherwise liability shall be
16     joint and solidary with the person primarily accountable therefor.   The treasurer
17     of  the   local   government  unit  shall  likewise   exercise  the   same   degree   of
18     supervision  over  accountable  officers  under  his  oversight,  otherwise  liability
19      shall be joint and solidary with the head of government agency for the loss of
2o     government funds or property.
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1               SEC. 94.    Measure  of Liabilfty  of Accountable oJ:I icers.  -® Every
2     officer accountable for government property shall be liable for its money value
3     in case of improper, unauthorized use or misapplication thereof, by the officer or
4     any person  for whose  acts  the  officer may  be  responsible.    The  accountable
5      officer shall also be liable for all losses, damages, or deterioration occasioned by
6     negligence  in the keeping or use  of the property regardless  of whether or not
7     there is actual custody; and
8                (b)      Every officer accountable for government funds shall be liable for
9      all losses resulting from the unlawful deposit, use, or application thereof and for
1o      all losses attributable to negligence in the keeping of the funds.
TI                F5EC;. 95.     Liability f or Acts Doirle by Direction of superior off.icer. -
12      The accountable officer shall not be relieved from liability by reason of acting
13     under the direction of a superior officer in paying out, applying, or disposing of
14     the funds or property for which the officer is accountable, unless prior to that
15      act,  the  accountable  officer  notified  the  superior  officer  in  writing  of  the
16      illegality  of the  payment,  application,  or  disposition.     The  superior  officer
17     directing  any  illegal payment  or  disposition  of the  funds  or property  and the
18     accountable  officer who fails to serve the required notice  shall be jointly and
19      solidarity liable.
2o                EEC. 96.  Prohibition Against pecuniary Interest. -The heed of a;geney,
21     board of directors, accountable officer or public official shall not have pecuniary
69


1      interest,  directly  or  indirec`tly,  in  any  contract  or transaction  of the  agency  in
2     which he/she is an officer, or in any other office where he/she has influence.
3                This prohibition shall apply to the accountable officer's immediate family
4      and relatives up to the third civil degree by consanguinity or affinity.
5                                                                     TITLE IV
6                                                GOVERNMENT ACCOUNTTING
7                                                                     Chapter I
8                SEC.    97.        Gover""e"f   Accow#&.#g.    -    Government    accounting
9      encompasses  the  processes  of analyzing,  recording,  classifying,  summarizing
1o      and  communicating  all  transactions  involving  the  receipt  and  disposition  of
11     government funds and property, and interpreting the results thereof.
12                 SEC. 98.   Accounting Rules and Regulations. -The Cornrmission shall
13     promulgate accounting rules  and regulations in accordance with the  Generally
14     Accepted   Accounting   Principles,    International   Public   Sector   Accounting
15      Standards and Intemational Financial Reporting Standards, as applicable.  Such
16     rules and regulations shall be updated from time to time as the commission may
17     deem proper, to meet the changing government accounting requirements.
18
19
Chapter 11
ACCOUNTING REPORTS
2o                SBC. 99.   Financial Reports and statements, -(a) The fmimanctall rapotts
21      prepared  by  the   agencies   shall   comply  with  the   specific  requirements   of
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1      applicable   laws   and   regulations   as   to   nature,   accounting   basis,   content,
2      frequency, and distribution as well as with all applicable restrictions pertaining
3     to information that is classified for national security purposes; and
4                 (b)      The  financial  statements  shall  be  based  on  official  accounting
5     records   and   registries   kept   in   accordance   with   law,   regulations   of  the
6     Commission,  and  the  International  Public  Sector  Accounting  Standards  and
7     International Financial Reporting standards, as applicable.
8                SEC.100.   Swb"issl.o" a/ reports. -(a) Whenever deemed necessary in
9     the exigencies of the service, the commission may, under regulations issued by
1o     it,   require  the   agency  heads,   chief  accountants,   budget  officers,   cashiers,
11      disbursing officers,  administrative or persormel officers,  and other responsible
12      officials   of  the   various   agencies   to   submit   financial   statements,   physical
13     inventory reports, current plantilla of persomel3 and such other reports as may
14      be necessary for the exercise of its functions;
15                (b)       In case offailure on the part of the officials concerned to submit the
16      documents and reports mentioned herein within the prescribed period, the head
17     of the agency shall cause the suspension of the payment of the salaries until the
18     officials shall have complied with the requirements of the commission without
19     prejudice to any disciplinary action that may be instituted against such official
2o     or  employee  in  accordance  with  the  applicable  rules  on  administrative  cases
21      issued.by the civil service commission; and
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1               (c)       Failure  on  the  part  of  the  head  of  the  govemmeut  agency  to
2      implement,  without justifiable  cause,  the  sanctions provided in the immediate
3     preceding paragraph shall constitute as a ground for this Commission to file the
4      appropriate administrative charge against the erring official.
5                                                                  Chapter Ill
6                                             INTERNAL CONTROL SYSTEMS
7                 SEC.10+.   Internal control system and Its Installation. -(aL) Tri:termal
8     control is the plan of organization and all the coordinate methods and measures
9      adopted  within  an  organization  or  agency  to  safeguard  its  assets,  check  the
1o     accuracy  and  reliability  of its  accounting  data,  and  encourage  adherence  to
11      prescribed managerial policies;
12                (b)        It shall be the direct responsibility of the agency head to establish
13     an intemal control unit that shall install, implement and monitor a sound intemal
14      control system in that government agency; and
15                (c)        Failure  on  the  part  of  the  head  of  the  government  agency  to
16      implement the preceding paragraph, without justifiable cause, shall constitute as
17     a  ground  for  this  Commission  to  file  the  appropriate  administrative  charge
18     against the erring official.
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1                                                                 TITLE V
FINAL PROVISIONS
3                SEC.102.   Pendr ProvisfoH.  -The  penalty  of fine not exceeding One
4     hundred thousand ¢100,000.00) pesos or imprisonment not exceeding one (1)
5     year, or both such fine and imprisonment at the discretion of the court, shall be
6      imposed  upon  any  public .officer  or  private  person  committing  any  of the
7      following acts or omissions declared as obstruction of audit:
8                (a)      Refusing or neglecting to render or settle an account as required by
9     law   or   regulation   after   demand   by   the   Commission   or   its   authorized
10      representatives;
11                 (b)      Denying  access  to  or  failing  to  produce  documents,  records,  or
12     papers under the custody of such public officer or private person within fifteen
13     (15) days after demand by the Commission or its authorized representatives in
14      connection with the conduct of audit; and
15                 (c)       Destroying or concealing documents, records, or papers which are
16      o-fficially  entrusted  to  such public  officer  or  private  person,  pertaining  to  the
17      collection, receipt, expenditure, or disbursement of public funds and utilization
18     or disposal of government property in connection with the conduct of audit.
T9                SEC.103.  Duty to Respect the commission's Independence. -It shadrlbe
2o     the duty of every person to respect, protect and preserve the independence of the
21      Commission.
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1                 SEC.  +04.    Administrative  Disciplinary  Action.  -  (a)  Ar\y  \mjustified
2      failure by the public  officer to  comply with the requirements  imposed in this
3     Code,  shall  constitute  neglect  of duty  or  grave  misconduct,  and  shall  be  a
4     ground for the commission to file appropriate administrative disciplinary action
5      against the public officer who, upon being found guilty after hearing,  shall be
6     meted the penafty commensurate withthe degree of  the guilt in accordance with
7     the civil service laws, without prejudice to crininal prosecution whenever the
8     evidence warrants; and
9                 (b)      The   auditor  shall   report  to  the   director  any  violation   of  the
1o     preceding paragraph for referral of the case to the office of the ombudsman, or
11      other government disciplining authorities.
12                 SEC.105.  Sep¢r¢bl./rty c7¢w§e. -If any provision or part of this code is
13     declared  invalid  or  unconstitutional,  the  remaining  parts  or  provisions  not
14      affected shall remain in full force and effect.
15                  SEC.106.   Repc¢/I.#g cJ¢wsci -Presidential Decree No.1445, otherwise
T6     1an!orwri  .as  Ike   "Goverrrment  Auditing  Code   Of  the   Philippines,"   is  herchry
17      expressly  repealed.  All  other  laws,  executive  orders,  proclamations,  decrees,
18     instructions, rules and regulations, or parts thereof which are inconsistent or in
19      conflict  with  any  provision  of  this  Code  are  hereby  repealed  or  modified
2o      accordingly.
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1                 SEC.107.  E/Tec#.tJrty. -This code shall take effect fifteen (15) days after
2      its  publication  in  the  Q#?c7.c7/  Gcrze/Ze  or  in  two  (2)  newspapers  of general
3      circulation.
4                Approve d,
BELL - REvlsED AunlTING CODE SFMGR ET AL.
JAG/MMCAIAD/ACB/mcs/mmt
11.13 . 23/3 : 52 PM
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