Law Summary
Existing Regulatory Framework: Rules and Regulations on the Settlement of Account (RRSA)
- The RRSA sets guidelines on how audit disallowances should be settled.
- Section 23.1, Chapter V, of RRSA mandates the issuance of a COA Order of Execution (COE) when liable persons fail or refuse to settle disallowances after a final and executory decision.
- Section 13.1.2 provides that disallowances can be settled by payment or other lawful means to extinguish the obligation.
Purpose of the Policy on Installment Settlement of Audit Disallowances
- There have been numerous requests from liable persons for the option to settle audit disallowances through installment payments.
- The COA recognizes the need for uniform guidelines to regulate and standardize the acceptance and processing of such installment payment requests.
Scope and Applicability of Installment Settlement Policy
- The policy permits installment payments only for disallowed amounts pertaining to salaries, personal benefits, allowances, or emoluments.
- Other forms of disallowances are not eligible for installment settlement under this policy.
Schedule and Limits on Installment Payments
- The maximum number of monthly installments is based on the amount of the disallowance as follows:
- Not exceeding ₱1,000.00: up to 3 installments
- Over ₱1,000.00 up to ₱10,000.00: up to 6 installments
- Over ₱10,000.00 up to ₱20,000.00: up to 12 installments
- Over ₱20,000.00 up to ₱40,000.00: up to 18 installments
- Above ₱40,000.00: up to 24 installments
Mechanism for Payment Deductions and Deficiencies
- Monthly installment payments shall be deducted directly from the salary of the person liable.
- The deductions must comply with the minimum take-home pay requirements set forth in the General Appropriations Act.
- If the salary deduction is insufficient for the required monthly payment, the deficiency must be paid directly to the agency cashier within five (5) days after the installment due date.
Procedures on Separation from Service
- If the person liable retires, resigns, or is separated from service before completing the installment payments, they must execute an undertaking authorizing:
- Application of remaining salary,
- Utilization of accrued leave credits,
- Application of other separation benefits to cover any remaining balance.
- Any unsettled balance after application of these benefits must be paid directly to the agency cashier within fifteen (15) days from receipt of notice or demand.
Administrative Action and Oversight
- Requests to pay audit disallowances in installments shall be acted upon by the Director of the Prosecution and Litigation Office.
- Such actions are subject to review by the Assistant Commissioner of the Legal Services Sector (LSS).
- The Assistant Commissioner, LSS, is required to submit monthly reports to the Commission Proper detailing requests received and their resolution.
Effectivity and Formal Adoption
- The policy was approved unanimously by the Commission on August 20, 2015, and took effect immediately upon approval.
- The policy formalizes a standardized, equitable approach to the settlement of audit disallowances on an installment basis, enhancing enforcement and compliance mechanisms.