Question & AnswerQ&A (COA CIRCULAR NO. 2009-002)
The State declares that all government resources shall be managed, expended or utilized in accordance with law and regulations and safeguarded against loss or wastage resulting from illegal or improper disposition, ensuring efficiency, economy, and effectiveness in government operations.
Under Section 2(2), Article IX-D of the 1987 Constitution, COA has the exclusive authority to define the scope of its audit and examination, establish the necessary techniques and methods, and promulgate accounting and auditing rules and regulations.
Pre-audit is the examination of documents supporting a transaction or series of transactions before payment and recording. It ensures compliance with appropriations, sufficiency of funds, legality, and proper approval and support of transactions.
Transactions such as cash advances, payments of salaries and terminal leave benefits, payments for infrastructure projects, road right-of-way payments, procurement of goods and capital assets, payments through automatic debit advice, releases to NGOs/POs, transfers of funds between government agencies, disbursements from trust funds of LGUs, and disposal of real and unserviceable property are subject to selective pre-audit.
Agency officials must ensure no covered transaction is paid without audit evidence, submit necessary documents to auditors, ensure timely liquidation of cash advances, maintain records, avoid splitting of requisitions or contracts, and comply with all requirements for pre-audit coverage.
Pre-audit of infrastructure projects, procurements, and disposals requiring technical evaluation should be done within five working days, while other transactions covered by pre-audit should be acted upon within two working days from receipt of complete transaction documents.
Any violation of rules on cash advances as prescribed in item 4.1 renders the accountable officer liable under Section 128 in relation to Section 89 of Presidential Decree No. 1445, which includes fines up to one thousand pesos or imprisonment of up to six months, or both.
The auditor must execute an affidavit stating the nature and amount of cash advances unliquidated, cite violations of P.D. 1445, and submit the affidavit to the COA Director who then refers it to the Office of the Ombudsman or Deputy Ombudsman for appropriate filing of criminal proceedings.
Post audit refers to the audit conducted after payment and recording of a transaction, covering financial, compliance, and value-for-money audits, including tracing transactions in the books of accounts and final determination of legality, regularity, and reasonableness.
Pre-audit action is evidenced by a pre-audit stamp placed on each page of disbursement vouchers or disposal contracts and their supporting documents, indicating the circular reference, date, and signed by the auditor.