QuestionsQuestions (COA CIRCULAR NO. 2011-002)
Under Article IX-D, Section 2(1) of the 1987 Constitution, COA has the authority and duty to examine, audit, and settle all accounts pertaining to government revenue, receipts, expenditures/uses of funds and property. Section 2(2) empowers COA to define the scope of audit and examinations, establish techniques/methods, and promulgate accounting and auditing rules, including those to prevent disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures.
COA Circular No. 2009-002 re-instituted pre-audit of selected government transactions as a temporary remedy against irregularities. COA Circular No. 2011-002 re-assessed and withdraws that selective pre-audit, lifting all current pre-audit activities under 2009-002.
It reaffirms that fiscal responsibility resides with agency management—meaning agencies (through their heads and systems) bear primary responsibility for lawful and proper management, expenditure, and use of government resources.
Section 2 of PD 1445 is quoted: all government resources must be managed/expended/utilized in accordance with law and safeguarded against loss or wastage from illegal or improper disposition, to ensure efficiency, economy, and effectiveness. The primary responsibility for faithful adherence rests with the chief or head of the government agency concerned.
It withdraws selective pre-audit under COA Circular No. 2009-002 and lifts all pre-audit activities presently being performed on financial transactions of national government agencies, GOCCs, and LGUs, except those required by existing laws.
No. It lifts selective pre-audit activities under the 2009-002 framework, except those required by existing laws. Also, COA may re-institute pre-audit or adopt other control measures when circumstances warrant, such as inadequate internal controls.
Those required by existing laws. The circular states that lifting applies to transactions covered by the withdrawn selective pre-audit activities, except where laws require otherwise.
Pre-audit activities are to be the responsibility of the agencies themselves as part of their accounting and fiscal control process.
All agencies must establish and maintain an adequate internal control system to achieve economy, efficiency, and effectiveness, prevent illegal/irregular/unnecessary/excessive/extravagant/unconscionable expenditures and uses, and ensure the legality and propriety of collections due the government.
Whenever circumstances warrant—specifically where an agency’s internal control system is inadequate—COA may re-institute pre-audit or adopt other necessary and appropriate control measures to protect government funds and property.
All transactions submitted for or otherwise pending pre-audit by COA as of July 22, 2011 shall no longer be pre-audited and shall be returned to the concerned agency for appropriate action.
It took effect immediately upon adoption on July 22, 2011.
It shifts the primary responsibility for pre-audit/control from COA’s selective pre-audit approach to agency management’s internal accounting and fiscal control systems, while still preserving COA’s constitutional power to audit and to intervene (including re-instituting pre-audit) when needed.
COA’s role is constitutionally to examine, audit, and settle accounts and to define audit scope and methods. The circular emphasizes that agencies must rely on adequate internal control systems for day-to-day legality and propriety of transactions and collections, with COA stepping in only when circumstances warrant, such as inadequate controls.