Rationale for Revising Funding Scheme
- Existing provisions led to inequitable assessments for audit costs among government corporations.
- Need recognized to establish a reasonable, fair basis for audit funding.
New Basis for Audit Cost Assessment
- Cost of audit services for government agencies to be covered by fund sources in Section 24 of PD No. 1445, included in the national budget.
- For government-owned or controlled corporations and subsidiaries, audit cost shall be based on the actual cost incurred by the Commission on Audit (COA) in auditing the specific corporation.
- Actual cost includes:
- Personal services
- Maintenance and other operating expenses
- Depreciation on capital and equipment
- Out-of-pocket expenses
- A reasonable rate to cover overhead expenses will be added to these actual costs.
Exemption from Certain Provisions
- Section 20, first paragraph, of PD No. 1445 shall not apply to government-owned or controlled corporations due to the amended audit cost computation.
Preservation of Other Relevant Provisions
- Except as amended, all other provisions of Executive Order No. 19 and PD No. 1445 remain effective and in full force.
Implementation and Effectivity
- Rules and regulations for implementation to be jointly issued by the Commission on Audit and the Department of Budget and Management.
- The amendment takes effect retroactively from January 1, 1987.