Constitutional and legal foundation
- Article IX-D of the 1987 Constitution vests COA with authority to examine, audit, and settle government accounts and to recommend measures to improve efficiency and effectiveness of government operations.
- COA’s constitutional mandate requires the conduct of a comprehensive audit composed of financial, compliance, and performance audits.
- COA recognizes that, for the prior four (4) years, the audit focus has centered on financial audits with compliance audit subsumed, while performance audit became a primary responsibility of Management Services.
Purpose of comprehensive audits
- COA requires auditors to conduct compliance and performance/value-for-money (VFM) audits as complementary to financial audit under a Risk Based Audit Approach.
- COA mandates the integration of significant findings by requiring inclusion of the gist of significant findings, observations, and recommendations in the Annual Audit Report.
- COA directs Management Services to continue the Government Wide and Sectoral Performance Audits, and to coordinate with audit sectors for performance audit efforts.
Audit scope and audit approach
- Auditors must conduct compliance audits and performance or value-for-money (VFM) audits in addition to financial audit.
- These compliance and performance/VFM audits must be conducted as complementary to the financial audit.
- Compliance and performance/VFM audits must be conducted under the Risk Based Audit Approach.
- Auditors must report the gist of significant findings, observations, and recommendations in the Annual Audit Report under the required section.
- COA continues to structure performance audit primarily through Management Services via Government Wide and Sectoral Performance Audits (GWSPA).
Reporting requirements in Annual Audit Report
- Auditors must include the gist of their significant findings, observations, and recommendations in the Annual Audit Report.
- The required content must be placed in the Comments and Observation Section.
- The Comments and Observation Section is the section prescribed in COA Memorandum No. 2002-047 dated August 13, 2002.
- Separate reports on the compliance/VFM audits must be understood to exist in more detail and are treated as available in addition to the Annual Audit Report gist.
Responsibilities for Management Services
- Management Services must continue conducting Government Wide and Sectoral Performance Audits.
- Management Services must coordinate with the audit sectors when necessary.
- Coordination must be directed toward more concerted efforts in conducting performance audits in agencies implementing government programs and/or projects.
Implementation and guidelines; incorporation of prior COA actions
- The Chairman must issue the necessary guidelines to implement the resolution.
- COA points to earlier restructuring through COA Resolutions Nos. 2005-004 dated March 17, 2005, which included audit strategies requiring the conduct of financial, compliance, and performance audits in government agencies.
- COA also references COA Resolution No. 2006-001 dated January 31, 2006, which delineates responsibility to issue notices of suspension, disallowance or charges.