QuestionsQuestions (COA Resolution No. 2015-014)
Section 2, paragraph 2, Article IX-D of the 1987 Constitution grants the Commission on Audit (COA) exclusive authority to define the scope of its audit and examination, establish the techniques and methods required, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of government funds and properties.
COA Resolution No. 2015-014 repealed COA Resolution No. 91-52 (dated September 17, 1991) because COA determined that new guidelines were needed for the validity and regularity of government infrastructure contracts, particularly on contract cost reasonableness.
The Approved Agency Estimate served as the reference value for the formulation of the COA cost estimate, and the total contract price was considered reasonable if it was equal to or less than the total COA estimate plus ten percent (10%); otherwise, the contract price would be deemed excessive.
The IRR requires that all construction quantities be computed to a reasonable accuracy of not more than plus or minus ten percent (10%) of the final quantities of the as-built structure, based on reasonable approved current prices projected over the proposed construction period—so the Approved Budget for the Contract (ABC) is already inclusive of a ten percent allowance.
Because allowing another ten percent (10%) variance over the COA cost estimate—when the ABC already includes a ten percent allowance—may result in unnecessary or excessive expenditures, especially considering the magnitude of infrastructure contract costs.
The ABC shall serve as the reference value of the COA cost estimate. Unlike the old approach, the COA cost estimate shall be computed without any allowable variance.
The auditor concerned must ascertain strict compliance by the auditee agency with the pertinent requirements under RA No. 9184 and its IRR, as amended, and other relevant issuances.
The auditor or representative should attend all stages of the procurement process as an observer in accordance with Section 13.1 of the IRR of RA No. 9184.
The auditor must prepare a report assessing the extent of BAC compliance with the pertinent requirements under RA No. 9184 and its IRR, as amended, and other relevant issuances.
The auditor must furnish a copy of the report to the Director who has jurisdiction over the auditee agency (in addition to the submissions required under Section 13.4.b of the IRR of RA No. 9184).
The auditor must first render a report that the contract has been found in order as to the legal and auditorial review before the conduct of the technical review.
The technical review and evaluation shall be guided by Annex A-Aa (Detailed Engineering for the Procurement of the Infrastructure Project) of the IRR of RA No. 9184, and other relevant COA issuances.
The auditor shall use the Technical Evaluation Report of the technical personnel as reference in conducting the audit.
The auditor must communicate the defects or errors, together with pertinent reasons—especially those that would adversely affect the contract price—in writing to the auditee.
Any discrepancy in the technical review (contract review and inspection) unfavorable to the government should be disallowed in audit.
It took effect immediately and superseded COA Resolution No. 91-52 dated September 17, 1991. All other issuances inconsistent with it are repealed or modified accordingly.