Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 1445)
The official title is the "Government Auditing Code of the Philippines."
The State declares that all government resources shall be managed, expended, or utilized in accordance with law and regulations, safeguarded against loss or wastage through illegal or improper disposition to ensure efficiency, economy, and effectiveness in government operations. The chief of the government agency is directly responsible for adhering to this policy.
The Commission on Audit is composed of a Chairman and two Commissioners, all of whom must be natural-born citizens of the Philippines, at least forty years old at appointment, and certified public accountants or members of the Philippine Bar for at least ten years.
They are appointed for a seven-year term without reappointment. The Chairman receives an annual salary of sixty thousand pesos, and each Commissioner receives fifty thousand pesos, which shall not be decreased during their term.
Key principles include that no money shall be paid out without appropriation or authority; government funds or property are for public purposes only; trust funds are spent solely for specific purposes; fiscal responsibility is shared; proper approvals are needed for disbursements; claims must be documented; laws and regulations must be adhered to; and generally accepted accounting principles shall be observed.
The objectives include determining proper fiscal responsibility of agency heads, implementing comprehensive audit programs, promulgating rules to control funds and property, adopting professionalization measures, preserving the independence of its representatives, and decentralizing operations to be closer to the people.
The Commission has authority over auditing procedures, the keeping of general government accounts, examination and inspection of books and records related to public funds and property, audit and settlement of accounts of persons handling government funds, audit of debts and claims due to government, and visitorial authority over certain non-government entities subsidized or funded by the government.
The Commission may compromise or release settled claims or liabilities up to ten thousand pesos on its own motion. With written approval from the Prime Minister, it may compromise claims up to one hundred thousand pesos. Claims exceeding this amount require submission with recommendations to the National Assembly.
Violations are punishable by a fine not exceeding one thousand pesos or imprisonment not exceeding six months, or both, at the discretion of the court.
Failure to comply results in the automatic suspension of payment of their salaries and other emoluments until compliance. Repeated violations may lead to administrative disciplinary actions and such officer may be considered notoriously undesirable.