QuestionsQuestions (PRESIDENTIAL DECREE NO. 1445)
The State policy is 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. Responsibility rests directly with the chief or head of the government agency concerned.
A “Fund” is a sum of money or other resources set aside for specific activities or objectives under special regulations, restrictions, or limitations. It constitutes an independent fiscal and accounting entity to ensure proper accounting and accountability.
Among others: (1) no money paid out of public treasury/depository without appropriation law or specific statutory authority; (2) government funds/property used solely for public purposes; (3) trust funds used only for their specific purpose; (4) fiscal responsibility shared by those exercising financial authority; (5) disbursements/dispositions require approval of proper officials; (6) claims must be supported with complete documentation; (7) laws and regulations must be faithfully adhered to; (8) generally accepted accounting principles and sound fiscal administration must be observed when consistent with law.
COA is composed of a Chairman and two Commissioners, all natural-born citizens, at least forty years old at appointment, and certified public accountants or members of the Philippine Bar for at least ten years.
The Chairman and Commissioners are appointed for seven years without re-appointment. For vacancies, the appointment is only for the unexpired portion of the predecessor’s term.
It provides legal services and advisory functions; handles investigation of administrative cases against COA personnel and evaluates reports of involvement in anomalies; represents COA in preliminary investigations of malversation cases discovered in audit and assists relevant prosecutorial bodies for cases involving COA officials; and coordinates for legal proceedings to collect/enforce debts/claims and restitution of funds/property due to government agencies.
It prepares COA’s annual financial report of the government and other required reports; verifies appropriations of national government agencies and controls fund releases; and prepares statements on LGUs’ revenues/expenditures and their legal borrowing and net paying capacities for reclassification and other purposes.
It conducts variable scope audits of non-government entities subsidized by government or required to pay levies/government share, those funded by donations through the government, and those with government counterpart funds—limited to government-sourced funds/subsidies. It also audits the legality of government expenditures, emphasizing statutory authority governing the use of appropriated funds.
COA’s authority extends to auditing procedures/systems/controls; keeping of general accounts; preserving vouchers for ten years; examining books and papers; auditing and settling accounts of persons regarding accountable funds/property; and examining debts/claims due from government agencies and subdivisions. It covers government-owned or controlled corporations (including subsidiaries) and other government boards/commissions/agencies, and also certain non-government entities (subsidized by government; funded through donations through government; required to pay levies or government share; and those with government counterpart funds or partial government funding) as prescribed.
An aggrieved person may appeal in writing to COA within six months from receipt of a copy of the auditor’s decision regarding settlement of an account or claim.
COA must decide within sixty days from the date the case is submitted for resolution. If the account/claim needs reference to other persons/offices or a party interested, the period is counted from the time the last necessary comment is received.
The party may appeal on certiorari to the Supreme Court within thirty days from receipt of a copy of the COA decision/order/ruling, in the manner provided by law and the Rules of Court.
A decision of COA or an auditor upon matters within its or his jurisdiction, if not appealed as provided, shall be final and executory.
Before expiration of three years after settlement, COA may motu proprio review and revise and certify a new balance, requiring submission of relevant accounts/vouchers/papers. If tainted with fraud, collusion, or error of calculation, or new and material evidence is discovered, COA may open the account within three years after original settlement and certify a new balance after reasonable time for reply/appearance.
Government auditing is the analytical and systematic examination and verification of financial transactions, operations, accounts, and reports of a government agency to determine accuracy, integrity, authenticity, and compliance with legal requirements.
Auditors must maintain complete independence, impartiality, and objectivity and avoid acts that could compromise independence or create presumption of lack of independence/undue influence. They must exercise due professional care and be guided by applicable laws/regulations and generally accepted accounting principles in performing audit work and preparing audit/financial reports.
COA has authority to examine books, papers, and documents filed with government offices for revenue collection purposes (to ascertain collectible funds are actually collected), and has visitorial authority over certain non-government entities limited to government-sourced funds/subsidies. In investigations/inquiries, COA officials (Chairman/Commissioners, managers, regional directors, auditors specially deputized) may summon parties, issue subpoenas/subpoena duces tecum, administer oaths, and take testimony (subject to due process). COA can also punish contempt under Rules of Court procedure and penalties.