Revised Government Auditing Act

Sendit On ee of the earn 2 TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) First Regular Session AUG -4 P5:52 SENATE RECEIVED BY. S. No. - Introduced by Senator Jinggoy Ejercito Estrada AN ACT REVISING PRESIDENTIAL DECREE NO. 1445, SERIES OF 1978, AS AMENDED, OTHERWISE KNOWN AS THE GOVERNMENT AUDITING CODE OF THE PHILIPPINES, AND FOR OTHER PURPOSES EXPLANATORY NOTE Auditing is an essential component in promoting good governance. It ensures that public funds are spent judiciously, in compliance with the law, and for the benefit of the people. For legislators, audit findings about government entities' financial mismanagement, negligence or underperformance support their oversight functions. Overall, state auditing is an integral part in maintaining effective and efficient government operations. During the colonial era, auditing had been practiced to assess the leadership of outgoing administrators and to look into books of accounts, primarily to identify anomalies in handling public coffers. State auditing has since become a permanent fixture in the bureaucracy, with the Commission on Audit (COA) being tasked to be the supreme auditing arm of the Philippine government. COA has the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of

its subdivisions, including constitutional bodies, autonomous state colleges and universities, local government units, and non-governmental entities receiving subsidy or equity from or through the government. As of December 2024, COA has 8,758 employees, mostly certified public accountants and employees from the career service, as its workforce is augmented by lawyers, engineers, and other professionals. This measure, which was reported out by the Senate Committee on Constitutional Amendments and Revision of Codes during the 19th Congress, aims to update the 47-year-old policy - Presidential Decree No. 1445 of 1978 or the Government Auditing Code of the Philippines - which has guided the conduct of state audit in the country, and to make it more relevant with the changing times. The proposed legislation acknowledges the evolving ways of payment, collection, and documentation, particularly the use of online systems and digital platforms, hence the introduction of terms like electronic official receipts (eOR) and the installation of safeguards against online banking fraud and security breach. We are also incorporating in this bill the best practices, specifically the International Standards for Supreme Auditing Institutions (ISSAIs), which are considered as the authoritative international standards on public sector auditing, taking note of the good reputation and expertise of our state auditors, as well as their exposure and participation as external auditor of attached agencies of the United Nations. Finally, the measure respects and strengthens the commission's fiscal autonomy, thereby ensuring that it can fully carry out its mandate with integrity, competence and armed with adequate resources, without fear or pressure from political actors. 1 Article IX (D), Section 2 (1) of the 1987 Philippine Constitution

In view of further reinforcing mechanisms for accountability, transparency and enhanced delivery of services to the Filipino people, the passage of this bill is earnestly recommended. risest. 1 JINGGOY EJERCITO ESTRADA

cognat Offur of time TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session AUG -4 P5:52 SENATE RECENED BY: S. No. - Introduced by Senator Jinggoy Ejercito Estrada AN ACT REVISING PRESIDENTIAL DECREE NO. 1445, SERIES OF 1978, AS AMENDED, OTHERWISE KNOWN AS THE GOVERNMENT AUDITING CODE OF THE PHILIPPINES, AND FOR OTHER PURPOSES Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled: TITLE I GENERAL PROVISIONS

Section 1. Title. - This Act shall be known as the " Revised Government Auditing

4 Act.

Sec. 2. Declaration of Policy. - It is the policy of the State to ensure efficiency,

6 economy, and effectiveness in the operations of government by ensuring that 7 resources of the government shall be managed or utilized in accordance with law, 8 rules, regulations, and shall be safeguarded against loss or wastage from illegal or 9 improper disposition. The responsibility to take care that such policy is faithfully adhered to rests directly with the chief or head of the government agency concerned.

Sec. 3. Definition of Terms. - As used in this Act:

a) Account refers to a list or statement of monetary transactions pertaining to fund, property, obligation, equity, revenue, collection, or expense, whether or not entered as item/s of debit or credit in the books of accounts, registry, or any other record;

b) Accountable Officer refers to the officer of any government agency or instrumentality who, by the nature of duties and responsibilities or participation in the collection or receipt and expenditure or use of government funds, custody, and disposal of government property, is required by law or regulation to render account to the Commission on Audit (COA). This shall include any public officer or private person or entity who may have participation in the transaction; c) Advice to Debit Account (ADA) refers to an authorization issued by the government entity that serves as an instruction to government servicing banks to debit a specified amount from its available account balance for the payment of creditors/payees; d) Aggrieved Party refers to a person or entity adversely affected by any decision, order, resolution or ruling of the Commission or any of its duly authorized representatives; e) Appropriation refers to an authorization by law, appropriation ordinance, or other enactments, or the corporate operating budget directing the payment of Personnel Services (PS), Maintenance and Other Operating Expenses (MOOE), and Capital Outlay (CO) out of government funds under specified conditions and/or purposes; f) Appeal refers to the process of elevating to a higher authority any decision, order, resolution or ruling of the Commission or any of its duly authorized representatives; 9) Audit refers to the examination, verification, evaluation and analysis of the accounts or financial records; the determination of the government entity's compliance with applicable laws, rules, and regulations; the evaluation of the economy, efficiency, and effectiveness of management systems, operations, and programs, activities, or projects (PAPs); and it may also cover other special audits as may be prescribed by the Commission, and the evaluation of the effectiveness of internal control systems for purposes of determining the nature, extent, and timing of the audit; h) Auditor refers to any officer or employee of the COA duly appointed or designated to conduct an audit;

i) Audit Group refers to a cluster of Audit Teams that are grouped together headed by a Supervising Auditor (SA). The audit group shall plan, manage, conduct the audit work, and ensure prompt submission of the audit report; j) Audit Decision refers to the action of the auditor as a result of the audit to allow, disallow, or charge a particular transaction; k) Audit Report refers to the final output of an audit on the accounts, financial records, systems, and operations of a government entity; 1) Audit Team refers to the basic organizational unit responsible for the audit of government and non-government entities; m) Audit Work Papers refers to the documentation or evidence, either in physical or electronic form, of the work done and the results thereof, consisting of relevant or pertinent data, analyses, computations, calculations, notes, schedules, excerpts, confirmations and other documents or materials gathered, prepared, and compiled in the course of an audit; n) Cash refers to money or its equivalent currencies, negotiable checks, or balances in bank accounts or in the possession or custody of a collecting and/or disbursing officer; 0) Cash Advances refer to regular or special advances granted to public officers and employees for a public purpose; P) Charge refers to accountability pertaining to the assessment, appraisal, or collection of revenues, receipts, and other income such as those arising from under-appraisal, under-assessment, or under-collection or failure to collect or remit collection which is found in the course of audit of revenues or receipts; q) COA Order of Execution (COE) refers to a written instruction to the head of agency to withhold payment of salary and other money due to persons liable, for settlement of their liability as indicated in the Notice of Disallowance or Notice of Charge issued after the issuance of the Notice of Finality of Decision (NFD); r) Cost of Audit Services refers to the cost of discharging the audit function, taking into consideration the nature and complexity of operations, size of the government entity, and the volume of transactions being audited;

5) Decision or Resolution refers to an adjudication of any case or matter brought before any authorized official or body in the Commission which shall embody the facts of the case, the issue/s to be resolved, the ruling, and the law, regulations, or precedent on which the ruling is based; t) Depository refers to any financial institution lawfully authorized to receive the deposit of government moneys; u) Direct Electronic Payment (DEP) refers to an electronic payment scheme where the payments are made by the government entity itself, using the intermediary's technology or infrastructure, including the use of ADA; v) Disallowance refers to the disapproval in the audit of a transaction, either in whole or in part, involving government disbursement or property; w) Electronic Collection (e-Collection) refers to a method or manner wherein revenue, fees, assessments, or obligations due to the government entity are collected using a mechanical device, electronic device, or computer-based system wherein no actual money, check, or any physical note is handed through the hands of the government entity's collecting officer: Provided, That this shall include collections performed by a financial intermediary; x) Electronic Payment (e-Payment) refers to the disbursement of money or equivalent electronic representations of legal tender, for purposes of paying government expenditures, solely through electronic means as opposed to the use of cash, check or physical notes to accomplish the same, including the manner by which an obligation is extinguished by means of sending instruction for the debit of the government entity's account and the corresponding credit to the payee's account, and the transfer of funds to a financial intermediary for the purpose of distribution; y) Excessive Expenditures refer to unreasonable expenses that are incurred at an immoderate quantity and exorbitant price; exceed what is usual or proper, are unreasonably high and beyond just measure or amount; and/or are in excess of reasonable limits; z) Extravagant Expenditures refer to expenditures that are incurred without restraint, judiciousness and economy; are extravagant and exceed the

bounds of propriety; and/or immoderate, prodigal, lavish, luxurious, grossly excessive, and injudicious; aa) Financial Reporting Framework refers to a set of accounting principles, standards, interpretations, and pronouncements adopted by the Commission on Audit (COA) as prescribed by the international standards- setting body which are followed in the preparation of the financial statements that define how and when to recognize, measure, present and disclose transactions in the financial statements; bb) Government Agency refers to any department, bureau, or office of the national government, or any of its branches and instrumentalities, local government units (LGUs) and its political subdivision, including other entities it created, and government-owned or -controlled corporations (GOCC), including their subsidiaries; Cc) Government Funds and Properties refer to any form of public moneys and other resources pertaining or accruing to any agency of the government; including funds transferred to private entities as a subsidy, equity, donation, grant, or counterpart fund for implementation of PAPs; dd) Illegal Expenditures refer to expenses incurred in violation of the law; ee) Irregular Expenditures refer to expenditures that are incurred without adhering to established rules, regulations, procedural guidelines, policies, and generally-accepted principles or practices; and/or are incurred when funds are disbursed without conforming with prescribed usages and rules of discipline or incurred without observance of an established pattern, course, procedure, mode of action, behavior, conduct or standard; ff) Liability refers to either an obligation arising from audit decisions or from contracts or quasi-contracts; 99) Money Claim refers to a demand for payment of a sum of money, reimbursement, or compensation arising from law, contract, or quasi- contract due from a government agency or owing to a claimant; hh) Notice of Finality of Decision (NFD) refers to a written notification addressed to the head of the agency that a decision of the Commission has become final and executory;

il) Persons Liable refers to the persons determined to be answerable for an audit disallowance, charge, or decision by the Commission; jj) Persons Responsible refers to the persons determined to be answerable for the compliance with the audit requirements as called for in the Notice of Suspension (NS); kk) Programs, Activities, Projects (PAPs) refer to any work progress or group of work progress undertaken to realize the outputs and outcomes of an agency which is represented by an item of appropriation in the national budget, appropriation ordinances in the case of LGUs, and corporate operating budgets in the case of GOCCs; ) Public Officer refers to any person holding any public office in the government by virtue of an appointment, election, or contract vested with sovereign functions of the government; mm) Public Purpose refers to any purpose or use directly available to the general public as a matter of right, including those traditional viewed as essentially government functions such as the building of roads and the delivery of basic services, and those purposes designed to promote social justice and public interest as provided for by law or jurisprudence; nn) Regular Cash Advances refer to those granted to cashiers, disbursing officers, paymasters, and/or property/supply officers for any of the following purposes: 1) Salaries and wages; 2) Commutable allowances; 3) Honoraria and other similar payments to officials and employees; and 4) Petty operating expenses, consisting of small payments for maintenance and operating expenses cannot be paid conveniently by check or are required to be paid immediately. 00) Revenue refers to income or receipts derived by a government agency from taxes, excise, custom duties, fees, royalties, grants, rents, sale of goods or services, sale of assets and collections from other sources; pp) Settlement of Liability refers to the payment, restitution, or other act of extinguishing an obligation as provided by law in satisfaction of the liability

under a Notice of Disallowance or Notice of Charge (ND/NC) or in compliance with the requirements of a Notice of Suspension; 9q) Settlement of Accounts refers to the process of determining the status or balance of the account of an accountable officer after audit and examination; rr) Settled Account refers to a transaction which after audit does not result to any adverse audit decision; ss) Special Cash Advances refer to those granted on the explicit authority of the head of the agency only to duly designated disbursing officers or employees for other legally authorized purposes, as follows: 1) Current operating expenditures of the agency field office or of the activity of the agency undertaken in the field when it is impractical to pay to the same by check, such as - (a) Salaries, Wages and Allowances; (b) Maintenance and other operating expenses; and 2) Travel Expenditures, including transportation fare, travel allowance, hotel room/lodging expenses and other expenses incurred by the officials and employees in connection with official travel. tt) Suspension refers to a temporary disallowance of a transaction or accounts which appear illegal or improper or irregular unless satisfactorily explained or justified by the persons responsible or until the requirements on matters raised in the course of audit are submitted or complied with; uu) Trust Funds refer to funds which are by operation of law or by contract are officially in the possession of any government agency or of a public officer as trustee, agent, or administrator, which are for the fulfillment of certain obligations or a specific purpose; vv) Transfer-Distribute-Liquidate (TDL) refers to an electronic payment scheme where the government entity's funds are first transferred to the intermediary's possession and control, which the latter thereafter uses to distribute payments to the intended payees of the principal government entity; ww) Unconscionable Expenditures refer to expenditures which are unreasonable and immoderate, which no fair and honest man in his right

sense would make or accept as reasonable, and which are incurred in violation of ethical and moral standards; and xx) Unnecessary Expenditures refer to expenditures which i) does not satisfy the test of prudence or the diligence of a good father of a family, thereby denoting non-responsiveness to the exigencies of the service; ii) are not supportive of the objectives and mission of the agency relative to the nature of its operation; iii) are not dictated by the demands of good government; and/or iv) the utility cannot be ascertained at a specific time, are not essential and can be dispensed with without loss or damage to property, and/or contrary to the mission and thrusts of the agency incurring the expenditures.

Sec. 4. Fundamental Principles. - Financial transactions and operations of any

government agency shall be government by the fundamental principles set forth hereunder: a) No money shall be paid out of any public treasury or depository except in pursuance of an appropriation law, appropriation ordinance, or other specific statutory authority, or a Department of Budget and Management (DBM)-approved corporate operating budget; b) Government funds or property shall be spent or used solely for public purposes; c) Trust Funds shall be spent only for the specific purpose for which the trust was created, or the funds received; d) Fiscal responsibility shall, to the greatest extent, be shared by all those exercising authority over the financial affairs, transactions, and operations of the government agency; e) Disbursements or disposition of government funds or property shall be approved by the proper official of the government agency; f) Claims against government funds shall be properly authorized and supported with the complete required documentation; 9) All laws, rules, and regulations applicable to financial transactions shall be faithfully adhered to; and

h) Applicable financial reporting framework adopted by the Commission, as prescribed by international standards-setting body, as well as sound management and fiscal administration, shall be observed: Provided, That they do not contravene existing laws, rules, and regulations. TITLE II CHAPTER I ORGANIZATION

Sec. 5. Composition of the Commission on Audit, Qualifications, Term and

Salary of Members. - The Commission shall be headed by a Chairperson and two (2) 10 Commissioners, who shall be natural-born citizens of the Philippines and, at the time 11 of their appointment, at least thirty-five (35) years of age, either certified public accountants with at least ten (10) years of auditing experience, or members of the 13 Philippine Bar who have been engaged in the practice of law for at least ten (10) 14 years, and must not have been candidates for any elective position in the elections 15 immediately preceding their appointment. At no time shall all members of the 16 Commission belong to the same profession. The Chairperson and the Commissioners shall be appointed by the President of 18 the Philippines, subject to the confirmation of the Commission on Appointments, for a 19 term of seven (7) years without reappointment. Appointments to any vacancy resulting 20 from death, permanent disability, resignation or removal from office shall be only for the unexpired portion of the term of the predecessor. In no case shall any member be appointed or designated in a temporary or acting capacity. In case of vacancy pending the appointment of a Chairperson, the senior 24 member, as to appointment, shall perform the functions of the Chairperson until a new one is appointed and assumes office. No member of the Commission shall, during their tenure, hold any other office or employment in the government. They shall neither be in the practice of any profession or in the active management or control of any business which in any way 29 may affect their functions as members of the Commission, nor shall they be financially 30 interested, directly or indirectly, in any contract with, or in any franchise or privilege granted by the national government, any of its political subdivisions, agencies or instrumentalities, including GOCCs and their subsidiaries.

The salary of the Chairperson and the Commissioners shall be fixed by law and 2 shall not be decreased during their tenure.

Sec. 6. The Commission Proper. - The Commission Proper shall be composed

4 of the Chairperson and two (2) Commissioners sitting as a collegial body in the 5 discharge of the powers and functions of the Commission.

Sec. 7. Functions of the Commission Proper. - The following shall be the

functions of the Commission Proper: a) Promulgate auditing rules and regulations for the determination of the scope and type of audit and examination by the Commission, establish the techniques and methods required therefor, including those for the prevention and disallowance of illegal, irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds or property; b) Promulgate accounting and auditing policies, rules, and regulations, including standards on internal auditing and internal control system, and authorize the adoption of the international accounting and auditing standards prescribed by the international standards-setting body; c) Promulgate its own rules concerning pleading and practices filed before the Commission or any of its offices: Provided, That such rules shall not diminish, increase, or modify substantive rights; d) Decide by a majority vote of all its members any case or matter brought before it; e) Appoint and promote the officials and employees of the Commission in accordance with the Civil Service laws, rules, and regulations; f) Prescribe the duties and responsibilities of the officials and employees of the Commission; g) Exercise original and concurrent jurisdiction over administrative cases filed against COA personnel; h) Recommend to Congress its retirement benefits system pursuant to its fiscal autonomy; i) Reorganize or rightsize, when necessary, the organizational structure of the Commission, create new positions, transfer plantilla items, or make

adjustments in the Personnel Services Itemization in accordance with the organization, staffing and position classification standards and subject to approval of the DBM; j) Authorize the conduct of special audits including re-opening of settled accounts in case of fraud, collusion, or error of calculation or when new and material evidence is discovered, and other investigations as may be prescribed by the rules of the Commission; and k) Perform such other functions as may be provided by law.

Sec. 8. Duties and Responsibilities of the Chairperson. - The Chairperson shall

act as the presiding officer of the Commission Proper and chief executive officer of the Commission. As chief executive officer, the Chairperson shall: a) Control and supervise the general administration of the Commission; b) Direct and manage the implementation and execution of policies, standards, rules, and regulations promulgated by the Commission Proper; c) Sign appointments for recruitment and promotions, and office orders for audit engagements; d) Authorize the transfer, reassignment, secondment, and other forms of personnel movement of the officials and employees of the Commission in accordance with the Civil Service laws, rules, and regulations; e) Delegate to the Commissioners, Assistant Commissioners, Directors, and other officials of the Commission such authority on internal administration concerning personnel, planning, financial, legal, and other matters pertaining to their respective functional areas as may be determined by the Commission Proper; f) Submit a proposed annual or supplemental budget of the Commission to the DBM for approval of the Congress; g) Summon any person or public official for the purpose of gathering data or inquiring into matters pertinent to the formulation, implementation or enforcement of any order, decision, policy, standard, or regulation of the Commission Proper; h) Designate appropriate official as head of the Public Sector Accounting Standards Board and the Public Sector Auditing Standards Board;

i) Exercise control and supervision over the audit of intelligence and/or confidential transactions or accounts of government agencies; j) Exercise control and supervision over the audit of foreign-assisted projects; and k) Perform such other functions as may be required by law, rules, regulations, or policies of the Commission.

Sec. 9. Duties and Responsibilities of the Commissioners. - The following are

the duties and responsibilities of the Commissioners: a) Participate in the proceedings of the Commission Proper in the discharge of its powers and functions; and b) Perform such other functions as may be provided by law, rules, regulations, or policies of the Commission.

Sec. 10. Duties and Responsibilities of the Assistant Commissioners. - The

following are the duties and responsibilities of the Assistant Commissioners: a) Formulate, develop, update, and supervise the implementation of the operational plan and performance commitment of the Sector headed which are aligned with the Commission's strategic plan; b) Supervise the general administration of offices under the jurisdiction of the Assistant Commissioner; c) Serve as a member of an Assistant Commissioners Group which shall work as a collegial body to study, review, and recommend policies, rules, and regulations for consideration by the Commission Proper or the COA Chairperson; and d) Perform such other functions as may be assigned.

Sec. 11. The General Counsel. - The Assistant Commissioner of the Legal

Services Sector shall be the General Counsel of the Commission.

Sec. 12. The Central and Regional Offices. - The operations of the Commission

under Section 16 of this Act shall be further carried out by the various offices under each Sector in the Central and Regional Offices. Each office in the Central and the Regional offices shall be headed by a Director with a rank of Director IV. All offices under the audit sectors shall supervise their respective audit groups and audit teams. The COA Regional Offices shall serve as representatives of the Commission in

1 the regions and shall be under the direct control and supervision of the Assistant Commissioner of Local Government Audit Sector.

Sec. 13. Duties and Responsibilities of the Commission Secretary. - The

Commission Secretary shall have the rank of a Director IV and shall provide secretariat 5 and administrative support to the Commission Proper.

Sec. 14. Duties and Responsibilities of the Chief Executive Staff. - The Chief

Executive Staff in the Office of the Chairperson shall have the rank of an Assistant 8 Commissioner and shall be responsible for the general administration and supervision 9 of the following offices: a) Office of the Chief Executive Staff shall monitor dissemination of the regulations, instructions, and directives issued by the Chairperson; monitor transmittal of audit reports and annual financial reports; maintain schedule, agenda, and make necessary arrangements for the Chairperson as Chairperson/Member of inter-agency committees; and ensure that the Chairperson is fully informed in a timely manner of all matters of importance in relation to the conduct of the day-to-day operations of the Commission to include accomplishment of targets and significant deviation from performance commitments and established goals and objectives; b) Internal Audit Office shall provide independent and objective assurance and advisory services to obtain reasonable assurance on the adequacy and effectiveness of governance, risk management, and control processes of the Commission based on its approved Strategic and Annual Audit Plan and establish guidelines to ensure conformance with applicable code of ethics and standards for internal auditing; c) International and Audit Relations Office shall coordinate and supervise the work involving the functions of the COA relating to international audit and relations, and audit of foreign-based government agencies; d) Internal Affairs Office shall evaluate and investigate complaints filed against COA personnel and recommend the filing of administrative cases or dismissal and/or termination of the complaint; e) Project Management Office shall evaluate, integrate, monitor, and act as secretariat for the priority projects of the COA and coordinate the resources

of the Commission and liaise with the development partners in the implementation of various projects and programs; f) Public Information Office shall manage engagement with internal and external stakeholders, specifically media and the general public, to contribute to the achievement of organizational goals, and provide electronic communication needs of the Commission; and g) Quality Assurance Office shall conduct quality assurance reviews to provide reasonable assurance that the quality management system of the Commission is working effectively and in accordance with professional standards and best practices.

Sec. 15. Duties and Responsibilities of the Directors. - The Directors of the

Commission shall have the following duties and responsibilities: a) Formulate, develop and supervise the implementation of the annual operational plan, in accordance with the Commission's strategic plan; b) Manage the administrative operations of their office; c) Implement and execute laws, policies, standards, and rules and regulations promulgated by the Commission or the Chairperson; d) Submit annual performance report and other reports as directed by the Commission Proper or the Chairperson; e) Adjudicate on cases within their jurisdiction; f) Publish audit reports in the website of the Commission; and g) Perform other functions that may be assigned by higher and competent authority.

Sec. 16. Operations of the Commission. - The operations of the Commission

shall be undertaken through the following sectors which shall each be headed by an Assistant Commissioner who shall exercise supervision over various offices under it: a) Local Government Audit Sector shall be responsible for the audit of LGUs; b) National Government Audit Sector shall be responsible for the audit of NGAs; C) Corporate Government Audit Sector shall be responsible for the audit of GOCCS; d) Special Audit Services Sector shall be responsible for the conduct of performance audit, fraud audit, and special audit;

e) Systems and Technical Audit Services Sector shall be responsible for technical audit and conduct of other technical-related services; and audit of information technology and systems and conduct of other services related to information and communications technology resources and services of government agencies; f) Government Accountancy Sector shall be responsible for the keeping of the general accounts of the government, preparation and submission of Annual Financial Reports and other financial reports, and providing technical assistance pertaining to accounting and financial management; recommendation on the adoption and implementation of accounting standards, policies, rules and regulations; and development, implementation and maintenance of computerized systems and tools related to government accounting and financial management vital to its operation including systems essential for its technical oversight function over government accountants; g) Legal Services Sector shall be responsible for rendering legal opinions and legal services; review of legal retainers and other contracts, and COA issuances; preparation of comments on proposed congressional bills and issuances of government agencies; conduct of formal hearing and drafting of decisions on administrative cases; enforcement of COA decisions, assistance in the prosecution and litigation of cases involving COA and its personnel acting as witnesses, including preparation of pertinent comments and pleadings; coordination with the Office of the Solicitor General (OSG), Office of the Ombudsman (OMB) and other agencies pertaining to cases involving COA; legal assistance to COA personnel subjected to harassment suits; h) Commission Proper Adjudication Sector shall be responsible for drafting of decisions or resolutions for consideration of the Commission Proper; i) Planning, Finance and Management Sector shall be responsible for the formulation of long-term and annual plans and programs of the Commission; providing budget services to the Commission; and formulation, recommendation, and implementation of policies on the processing of

claims, assessment of cost of audit services, and personnel payroll management; j) Administration Sector shall be responsible for the development and maintenance of the information system of the Commission, and human resources management program; and providing general administrative services and support to the Commission; and k) Professional and Institutional Development Sector shall be responsible for the formulation, recommendation, and implementation of policies and programs on learning and development of personnel of the Commission; and providing capacity building of other government agencies' personnel pertaining to accounting and auditing matters, and other policies, rules and regulations issued by the Commission, including those concerning internal auditing and internal control systems standards. The Commission Proper may effect changes in the organization and functions of the Commission as it may deem necessary in the exercise of its fiscal autonomy in order to carry out its constitutional mandate.

Sec. 17. Legal Assistance to Current and Former Officials and Employees. -

18 Current and former COA officials and employees are authorized to engage the services 19 of private lawyers for a fee on cases filed against them in relation to the performance 20 of their official functions in accordance with the guidelines issued by the Commission Proper. For this purpose, the Commission shall provide a legal assistance fund to be included in its annual appropriation.

Sec. 18. Professionalization of Audit Services. - The Commission shall develop,

adopt, and implement a competency-based capacity building and continuing education. It shall participate and support the activities of international professional organizations such as the International Organization of Supreme Audit Institutions, 29 Asian Organization of Supreme Audit Institutions, Association of Southeast Asian 30 Nations (ASEAN) Supreme Audit Institutions, and other supreme audit institutions. For this purpose, the capacity building shall include courses on accounting standards, rules, and regulations relevant to auditing services.

Sec. 19. Professionalization of Accounting and Other Services. - For accounting

2 services, the Commission shall conduct capacity building in coordination with 3 international professional bodies on accounting services such as the International Public Sector Accounting Standards Boards, Financial and Sustainability Reporting 5 Standards Council, and other international professional bodies relevant to accounting 6 services. The Commission shall likewise provide similar capacity building for other services.

Sec. 20. Fiscal Autonomy. - The Commission shall enjoy fiscal autonomy and

10 its approval annual appropriations shall be automatically and regularly released. The 11 Chairperson of the COA is authorized to augment any item in the general appropriations for the Commission from savings in any item in the same appropriation.

Sec. 21. Statement of Objectives. - In keeping with its constitutional mandate,

the Commission adheres to the following objectives: a) Determine whether the fiscal responsibility which rests directly with the head of the government agency has been properly, efficiently, and effectively discharged; b) Develop and implement a comprehensive audit plan that shall encompass the examination of financial transactions, accounts, and reports, including compliance with applicable laws and regulations, as well as evaluation of the economy, efficiency and effectiveness of programs, activities, and projects; c) Institute control measures through the promulgation of auditing and accounting rules and regulations governing the revenue, receipts, disbursements, and uses of funds and properties, including audit of fund transfers to non-government organizations, people's organizations (POs), or other private entities for specific purpose; d) Promulgate accounting and auditing rules and regulations to facilitate the keeping of the accounts of the Government and enhance their information value; e) Institute measures designed to preserve and ensure the independence of the Commission, ensure transparency and accountability in government

operations, and promote service excellence and quality in all aspects of its work; and f) Bring its operations closer to the people by the delegation of authority through decentralization and participatory governance, consistent with the provision of the Constitution.

Sec. 22. General Jurisdiction. - Pursuant to Section 2 (1), Article IX (D) of the

1987 Constitution, the Commission shall have the power, authority, and duty to examine, audit and settle all accounts pertaining to the revenues and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining 10 to the government, or any of its subdivisions, agencies, or instrumentalities, including 11 GOCCs, and on a post-audit basis: a) Constitutional bodies, commissions and offices that have been granted fiscal autonomy under the Constitution; b) Autonomous state colleges and universities; c) Other GOCCs and their subsidiaries; and d) Such non-governmental entities receiving subsidy or equity directly or indirectly, from or through the government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity. Provided, however, That in case where the internal control system of the audited agencies is deemed inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep the general accounts of the government, and for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto. The Commission, under Section 2 (2), Article IX (D) of the 1987 Constitution, shall have exclusive authority subject to the limitation in Article IX of the Constitution, to define the scope of its audit and examination, establish the techniques and methods required therefor, 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.

Sec. 23. Examining Authority, - The Commission shall have authority to

2 examine in the course of audit, books, papers, documents pertaining to the income of individuals and corporations in connection with government revenue collection 4 operations, for the purpose of ascertaining that all revenues determined to be 5 collectible and due the government have actually been collected.

Sec. 24. Limited Jurisdiction over Private Entities. - The Commission shall have

7 authority to examine and audit the contracts, agreements, or dealings of private entities with the government for which such private entities: i) received subsidies, counterpart funding, government equity, donation or grant, fund transfer or were 10 allowed to use government properties or facilities; or ii) were required to pay government share such as, but not limited to, levy, franchise fees, or income share.

Sec. 25. Deputization of Government Licensed Professionals or Experts to Assist

Government Auditors. - The Commission Proper may, when the exigencies of the service so require, deputize and retain, in the name of the Commission, certified public 15 accountants and such other government licensed professionals or experts as it may 16 deem necessary to assist its auditors in undertaking specialized audit engagements. The deputized professionals or experts shall be entitled to such compensation and allowances as may be stipulated in the contract, subject to pertinent rules and regulations on compensation and fees. The Commission Proper shall issue guidelines in contracting deputized professionals or experts referred to in this section.

Sec. 26. Participation of Civil Society Organizations in the Conduct of Audit. -

The COA Chairperson may deputize duly accredited civil society organizations in the conduct of audit to help auditors perform ocular inspection, validation, evaluation, collection of data or information and monitoring of projects located in remote and critical areas to enhance credibility, accountability, and transparency in audit processes.

Sec. 27. Prohibition of Person or Entity from Rendering, Auditing and Related

Services to Government Entities. - No person or entity shall enter into a contract to render accounting or auditing related services for a fee to any government agency or conduct of seminars or workshops on topics relating to accounting, auditing and internal control system and internal auditing standards for government personnel

1 without securing clearance from COA. Should the Commission decide not to undertake 2 the study or service, it shall nonetheless have the power to review the proposed contract in order to determine the necessity, capability or expertise of the private party and the reasonableness of its fees. Any contract entered into without the approval of the Commission shall be 6 considered null and void and the related expenditures incurred thereon shall be 7 disallowed in audit and shall become the personal liability of the official concerned.

Sec. 28. Government Contracts for the Hiring of a Private Lawyer or Law Firm

9 to Handle Legal Cases or Render Legal Services to Government Agencies. - No 10 contract involving public funds shall be entered into by any government agency to secure the services of a private lawyer or law firm for the purpose of representing the government agency concerned in court or for rendering legal services: Provided, That if hiring of such legal services cannot be avoided, or is justified under extraordinary or exceptional circumstances, the written conformity and acquiescence or clearance of the OSG or the Office of the Government Corporate Counsel, as the case may be, and the written concurrence of the COA shall first be secured before the engagement of private legal services: Provided, further, That in case of LGUs, only the written approval of the Commission shall be required: Provided, furthermore, That the Commission shall issue guidelines for the implementation of this provision: Provided, finally, That in case of non-compliance with the above requirements and the relevant rules of the Commission, any payment thereof shall be disallowed in audit and the same shall be the personal liability of the officials concerned. The request for written concurrence shall be acted upon by the Commission within sixty (60) days from the receipt of all documents necessary to evaluate such request. The Commission shall be deemed to have approved the request for written concurrence should it fail to act thereon after the lapse of the sixty (60) day period.

Sec. 29. Prohibition of Private Foundations and Entities to Use the Name and

Resources of the Government to Solicit and/or Receive Donations, Grants, Financial Assistance from Private Domestic and International Donors. - Private foundations and entities organized and managed by government officials and employees are prohibited from using the name, resources, insignia, or logo of a government agency for

1 whatever enterprise to solicit and/or receive donations, grants, financial assistance 2 from the public or other donors. Any violation of the preceding paragraph shall subject the said foundation or 4 entity to special audit by the Commission as if the funds so received are public funds 5 which should be recognized in the books of the concerned government agency. 6 Refusal to submit itself to such audit shall constitute an offense punishable under 7 Section 100 of this Act.

Sec. 30. Prevention and Disallowance of Illegal, Irregular, Unnecessary,

9 Excessive, Extravagant or Unconscionable Expenditures or Uses of Government Funds 10 or Property. - The Commission shall promulgate accounting and auditing rules and 11 regulations for the prevention and disallowance of illegal, irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds or property. Any violation of such rules and regulations shall be a ground for disallowance without prejudice to administrative, civil and/or criminal sanctions against the persons liable therefor.

Sec. 31. Settlement of Accounts Between Agencies. - The Commission shall

17 have the power, under such regulations as it may prescribe, to authorize and enforce the settlement of accounts subsisting between agencies of the government.

Sec. 32. Collection of Indebtedness Due to the Government. - The Commission,

through proper channels, shall assist in the collection and enforcement of all debts and claims and the restitution of all funds or the replacement or payment to the government of any property lost or destroyed.

Sec. 33. Power to Adjudicate Money Claims Against the Government. - The

Commission shall have the power to adjudicate money claims filed against the government or any of its subdivisions, agencies, and instrumentalities in relation to liquidated claims and quantum meruit cases. Unliquidated money claims against the government shall be filed before the proper courts, tribunals, and other adjudicative bodies. Liquidated claims refer to those determined or readily determinable from vouchers, invoices, and such other papers within reach of accounting officers.

When the Commission is in the exercise of its power to execute judgments on 2 money claims, the Commission shall, at all times, respect the principle of immutability 3 of judgments.

Sec. 34. Power to Compromise Claims. - When the interest of the Government

5 so requires, the Commission Proper may compromise or release in whole or in part, 6 any settled claim or liability to any government agency not exceeding Ten million 7 pesos (Php 10,000,000.00) arising out of any matter or case pending before the 8 Commission or falling within its jurisdiction. In case the claim or liability exceeds Ten 9 million pesos (Php 10,000,000.00), the Commission shall submit an application for 10 relief to Congress with its recommendations. The threshold amount subject to compromise shall be reviewed and adjusted to inflation every five (5) years. The respective governing bodies of GOCCs and self-governing boards, commissions or agencies of the government shall have the authority to condone, compromise or release any similar claim or liability when expressly authorized by their charters, subject to timely review and post-audit by the Commission: Provided, however, That if the power to condone, compromise or release claims or liabilities is 17 not explicitly provided under the charter of the government agency concerned, the same shall be exercised exclusively by the Commission in accordance with the 19 provision of this Act.

Sec. 35. Satisfaction of Indebtedness Arising from Final and Executory Audit

Decisions. - When any person or entity is indebted to any government agency by reason of a final and executory audit decision, the Commission shall direct the head of agency to withhold the salary or any money due to such entity or person liable or from the estate, in satisfaction of the indebtedness under the said decision. In case any money due to the liable entity or person is insufficient to satisfy the indebtedness from the final and executory audit decision, the Commission shall have the power to levy property or garnish bank accounts to the extent of the unpaid balance. Failure on the part of the head of agency concerned to comply with the preceding paragraphs shall render the head of agency personally liable without prejudice to the filing of administrative action for neglect of duty.

Sec. 36. Authority to Require Submission of Documents Relative to Government

2 Transactions. - The Commission shall have the power to require the submission of the 3 original, in whatever form, of any order, deed, contract, or other document under which any collection of, or payment from, government funds may be made, together 5 with any certificate, receipt, or other evidence in connection therewith. If an 6 authenticated copy is needed for record purposes, the copy shall upon request be 7 furnished. In the case of deeds of property purchased by any government agency, the 9 Commission shall require a certificate of title entered in favor of the government or 10 other evidence that would provide substantial proof that the title is in the name of the 11 government. It shall be the duty of the officials or employees concerned, including those in non-government entities under audit, or affected in the audit of government and non- 14 government entities, to comply promptly with these requirements.

Sec. 37. Investigatory and Inquisitorial Powers; Power to Punish for Contempt.

16 - The Chairperson and other officials and employees specially deputized in writing for 17 the purpose by the Chairperson shall, in compliance with the requirement of due process, have the power to summon the parties to a case brought before the 19 Commission for resolution, issue subpoena and subpoena duces tecum, administer 20 oaths, and otherwise take testimony in any investigation or inquiry on any matter within the jurisdiction of the Commission. The Commission shall have the power to cite for contempt as provided for in the Revised Rules of Court and the Revised Rules of Procedure of the COA, under the same procedure and with the same penalties provided therein. Any violation of any final and executory decision, order or ruling of the Commission shall constitute as indirect contempt.

Sec. 38. Annual Financial Report of the Commission. - The Commission shall

submit to the President and the Congress of the Philippines not later than the last day of September of each year an annual report on the financial condition and operation of all government agencies, which shall include recommendation of measures necessary to improve economy, efficiency, and effectiveness of these agencies.

To carry out the purposes of this Section, the Chief Accountant or the official in 2 charge of keeping the accounts of the government agency shall submit to the 3 Commission, year-end financial statements and such other supporting or subsidiary 4 statements as may be required by the Commission not later than the 14th day of 5 February of each year. Financial statements returned by the Commission for revision 6 due to non-compliance with accounting standards, rules and regulations shall be 7 resubmitted within five (5) working days after the date of receipt by the official 8 concerned.

Sec. 39. Annual Report on Appropriations, Allotments, Obligations and

10 Disbursements, Including Off-Budgetary Funds and Trust Receipts. - Within one 11 hundred twenty (120) days after the end of every fiscal year, the Commission shall submit to the President and the Congress of the Philippines an annual report on appropriations, allotments, obligations, and disbursements of NGAs and GOCCS maintaining Special Accounts in the General Fund and receiving budgetary support 15 from the government. For the purpose stated under this Section, agencies are required to submit 17 accountability reports to the Commission in compliance with the pertinent sections of 18 the General Provisions of the General Appropriations Act and Republic Act No. 7226.

Sec. 40. Powers, Functions, and Duties of Auditors, - The following are the

20 powers, functions, and duties of auditors as representatives of the Commission: a) Exercise such powers and functions as may be authorized by the Commission in the examination of cash and accounts of accountable officers; conduct financial, compliance, performance, and other special audits; settle accounts of the agencies under the respective audit jurisdiction; b) Submit an audit report on the date and in the manner prescribed by the Commission and render such other reports as the Commission may require; c) For transactions subject of Audit Observation Memorandum, NS, ND, NC, complaint or a pending audit or investigation or court case, retain custody and be responsible for the safekeeping and preservation of paid expense vouchers, journal entry vouchers, stubs of checks, reports of collections and disbursements, and similar documents together with their respective

supporting papers, until the final disposition thereof. The Commission shall prescribe the manner for preservation of these audit or legal evidence; d) Retain a digital copy of the audited vouchers and supporting papers, official receipts, and other documents or reports upon turnover or return of the originals to the auditee for safekeeping and preservation in accordance with the guidelines promulgated by the Commission Proper; e) Act as witness in proceedings before the courts, the OMB, and other quasi- judicial bodies; and f) Perform such other functions as may be assigned to them by the Commission.

Sec. 41. Examination of Cash and Accounts of Accountable Officer. - The

cashbooks, accounts, papers and cash in the accountability of an accountable officer shall be opened at all times to audit and examination of the Commission and its duly 14 authorized representatives. In case a shortage has been discovered during an examination of the cash and 16 accounts of an accountable officer, it shall be the duty of the auditor to immediately 17 demand in writing the restitution of the shortage and notify in writing the head of the 18 government agency concerned of said shortage in accordance with the regulations of 19 the Commission. The head of the agency may immediately relieve the accountable 20 officer and assign another officer to assume the former's duties and responsibilities. A complete report on the cash examination of the accounts of the accountable officer with cash shortage shall immediately be submitted by the auditor to the Director concerned for purposes of referral to the OMB for investigation and filing of the appropriate administrative and/or criminal case against the accountable officer concerned, as the evidence may warrant. For the purpose of this Section, the auditor shall be regarded as a witness only in cases filed before the OMB and the regular courts, and in no case shall the auditor 28 be named as the complainant therein.

Sec. 42. Withholding of Salaries and Other Emoluments of Accountable Officers.

30 - Whenever an accountable officer has been found short of any accountability during cash examination or audit and after failure to explain satisfactorily or to produce the missing funds within the period prescribed by the rules of the Commission, the auditor

1 shall order the head of the agency to direct the withholding of the salaries and other 2 emoluments due the accountable officer concerned up to the extent of the liability 3 until the final determination of the latter's accountability by the Commission or by final 4 judgment of a competent court.

Sec. 43. Constructive Distraint of Property of Accountable Officer. - Upon

6 discovery in audit of a shortage in the accounts of any accountable officer and upon 7 a finding of a prima facie case of malversation of public funds or property against such accountable officer, the Commission may, in order to safeguard the interest of the government, place the personal property of the accountable officer concerned under 10 constructive distraint when there is reasonable grounds to believe that the said officer 11 intends to retire from the government service or leave the Philippines, or remove, 12 hide, or conceal the property therefrom. The constructive distraint shall be effected by requiring the accountable officer concerned or any other person having possession or control of the property to 15 accomplish a receipt in the form prescribed by the Commission, covering the property distrained and obligating to preserve the same intact and unaltered and not to dispose of it in any manner whatsoever without the express authority of the Commission. In case the said accountable officer or other person having the possession and control of the property sought to be placed under constructive distraint refuses or fails to accomplish the receipt herein referred to, the representative of the Commission effecting the constructive distraint shall proceed to prepare a list of such property; and in the presence of two witnesses, leave a copy thereof in the premises where the property distrained is located. Thereafter, the said property shall be deemed to have been placed under constructive distraint, in accordance with the rules and regulations of the Commission. The auditor shall submit a report to the Chairperson on any distrained effected pursuant to this Section not later than five (5) calendar days from the date of the distraint of the property.

Sec. 44. Appeals from Decisions of Auditors. - Any person aggrieved by the

decision of an auditor, may within one hundred eighty (180) calendar days from the receipt of a copy of the decision, appeal in writing to the Commission. The procedures of appeal shall be governed by the internal rules concerning pleadings and practices

1 of the Commission, including the imposition of reasonable filing and legal research 2 fees.

Sec. 45. Period Rendering Decisions of the Commission. - The Commission

Proper shall decide any case brought before the Commission within sixty (60) days 5 from the date of its submission for decision or resolution. For the purpose of this 6 Section, a case or matter is deemed submitted for decision or resolution upon the 7 filing of the last pleading, brief or memorandum required by the rules of the 8 Commission or by the Commission itself. CHAPTER II DECISION OF THE COMMISSION

Sec. 46. Appeal from Decisions of the Commission. - Any decision, order, or

ruling of the Commission may be brought to the Supreme Court on certiorari within thirty (30) days from the receipt of a copy thereof. When the decision, order, or ruling adversely affects the interest of the government agency, the remedy may be taken by 15 the proper head of that agency.

Sec. 47. Finality of Decisions of the Commission and the Responsibility of the

17 Head of the Agency. - A decision of the Commission upon any matter within its 18 jurisdiction, if not appealed as herein provided, shall be final and executory. The General Counsel or any authorized official of the Commission shall issue an 20 order of execution for final and executory decisions, resolutions, or order of the Commission. For final and executory decisions on money claims, the claimant shall initiate the process of payment with the agency concerned pursuant to existing rules and regulations.

Sec. 48. Enforcement of Decisions of the Auditor or Commission Proper. - The

head of agency shall ensure the immediate settlement of final and executory decisions of the Commission. Unreasonable failure or refusal of the head of the agency or concerned official to implement the final and executory decision of the Commission shall render the former administratively liable for neglect of duty.

Sec. 49. Re-audit of Audited Transactions. - All transactions and accounts shall

be open for audit within ten (10) years after the date of transaction except for intelligence and/or confidential transactions or accounts which may be authorized to

1 be re-audited by the Chairperson. The Commission shall issue the appropriate 2 guidelines for this purpose. TITLE 111 CHAPTER I BASIC POLICIES AND STANDARDS

Sec. 50. Government Auditing. - Government auditing shall cover financial,

7 compliance, and performance audits, and shall be performed in accordance with the prevailing International Standards for the Supreme Auditing Institutions (ISSAIs) for the purpose of assessing whether the financial information, transactions, programs, operations, accounts, and reports of any government agency are in accordance with the applicable international accounting framework.

Sec. 51. Principles of Government Auditing. - The auditor shall be guided by

the following general principles as prescribed under international standards related to 14 the audit process: a) Comply with the relevant ethical principles of integrity, independence, and objectivity, competence, professional behavior, and confidentiality and transparency; b) Maintain appropriate professional behavior by applying professional skepticism, professional judgment, and due care throughout the audit; c) Perform the audit in accordance with professional standards on quality control; d) Possess collectively the knowledge, skills, expertise, ability and experience to exercise professional judgment necessary to successfully complete the audit; e) Manage the risks of providing a report that is inappropriate in the circumstances of the audit; f) Consider materiality throughout the audit process, in relation to stakeholder concerns, public interest, regulatory requirements and consequences for society; g) Prepare audit documentation that is sufficiently detailed to provide a clear understanding of the work performed, evidence obtained, and conclusions reached; and

h) Establish effective communication throughout the audit process. CHAPTER II RECEIPTS AND DISPOSITION OF FUNDS AND PROPERTIES

Sec. 52. Accounting for Moneys and Property Received by Public Officials. - All

5 moneys and properties officially received by a public officer in any capacity and in 6 connection with his or her office, must be accounted for as government funds and property, except as may be otherwise be specifically provided by law or competent authority. The recognition of such money and property in the books of accounts of the 9 agency concerned shall be in accordance with pertinent laws, policies, rules and 10 regulations, and applicable financial reporting framework.

Sec. 53. Designation of Collecting or Disbursing Officers for Government

Agencies. - The head of agency may designate such number of collecting and 13 disbursing officers or agents as may be deemed necessary. They shall render reports 14 of their collections and disbursements pursuant to the regulations of the Commission, 15 to be submitted promptly to the auditor concerned who shall conduct the necessary 16 examination and audit.

Sec. 54. Time and Mode of Rendering Account. - In the absence of specific

provision of law, all accountable officers, through the agency accountants, shall render their accounts, submit their vouchers, and make deposits of money they have collected 20 or held at such time and manner as prescribed in the rules and regulations of the 21 Commission. The auditor concerned shall then conduct the necessary examination and audit thereof.

Sec. 55. Accrual of Income or Revenues to Unappropriated Surplus of the

General Fund. - All income or revenues accruing to the agencies by virtue of the provisions of laws, order and regulations shall be deposited in the National Treasury or in any duly authorized government depository and shall accrue to the unappropriated surplus of the General Fund of the government, unless otherwise provided by law. Income or revenues from business-type activities and revolving funds of government agencies may be separately recorded and disbursed in accordance with such rules and regulations as may be determined by the Permanent Committee

1 created by law, composed of the Secretary of Finance as Chairperson, Secretary of 2 Budget and Management, and Chairperson of the Commission, as members.

Sec. 56. Special, Fiduciary and Trust Funds. - Receipts shall only be recorded

4 as income of Special, Fiduciary or Trust Funds or Funds other than General Fund when 5 the same is duly authorized by law and performed in accordance with the rules and 6 regulations issued by the Permanent Committee. Revenues collected from particular taxes, levy, and royalties for special purpose 8 shall be treated as a special fund or Special Account in the General Fund and shall be paid out only for such purpose: Provided, That the Permanent Committee may recommend for approval of the President the reversion and closure of the Special 11 Account in the General Fund, Fiduciary or Trust Funds on any of the following grounds: a) The purpose for which a special fund was created has been fulfilled, terminated or abandoned; b) The terms have expired or no longer necessary for the attainment of the purpose for which said funds were established; c) The account remained dormant for unreasonable length of time; d) The funds in the account are needed by the Government in times of emergency; or e) The funds in the account are being used in violation of the rules and regulations issued by the Permanent Committee.

Sec. 57. Receipts and Revenues of Local Government Units. - All receipts and

income accruing to the LGUs shall be deposited in their account maintained in the authorized government depository bank or private bank with the prior approval of the Department of Finance (DOF).

Sec. 58. Receipts and Revenues of GOCCS. - All receipts and income accruing

to GOCCs shall be deposited in their account maintained in the authorized government depository bank, unless otherwise specifically provided by law or agreements.

Sec. 59. Collections by the Government. - No payment of any nature shall be

received by a collecting officer without immediately issuing an official receipt in acknowledgment thereof. The receipt may be in the form of postage, internal revenue or documentary stamps or such other digital forms as the law or the Commission may

1 authorize: Provided, That in no instance shall temporary or provisional receipts be issued to acknowledge the receipt of public funds. Where digital or electronic devices are used to acknowledge cash receipt, an electronic official receipt (eOR) shall be issued and the electronic copies of the pieces 5 of evidence of the e-collection through Self-Collect and Credit or Collect-Aggregate- 6 Remit or other modes of electronic collection allowed by the rules of the COA. Such e- 7 ORS shall be kept in electronic archives, and shall be subject to inspection and verification by the Commission, in accordance with its prescribed guidelines on the use 9 of eORs to acknowledge collection of income and other receipts of government. The eORs shall be acceptable provided the document maintains its integrity and reliability and can be authenticated so as to be usable for subsequent reference: Provided, That the electronic document has remained complete and unaltered, apart from the addition of any endorsement and any authorized change, or any change which arises in the normal course of communication, storage and display; and that the electronic document is reliable for the purpose for which it was generated and for all relevant circumstances. Collections in the form of checks in favor of the government shall be governed by the rules of the Commission. In no instance shall money in the hands of the collecting officer be utilized for whatever purpose but should be deposited intact with an authorized government depository bank.

Sec. 60. Payment in Settlement. - Electronic payment through TDL, credit card,

Direct Electronic Payment (DEP) such as Advice to Debit Account (ADA) and other modes may be used to settle all obligations of the government in accordance with the guidelines of the Commission and other Public Financial Management agencies of the government. Electronic payment to a person not duly authorized to receive such payment shall subject the accountable officer concerned to administrative/civil sanctions or criminal prosecution, as may be warranted. In instances when checks are drawn against the checking account of the government agencies maintained with any government depository in payment of an obligation:

a) The check shall be made payable directly to the creditor to whom the money is due, or to the disbursing officer or employee for an official disbursement; b) Checks drawn in payment of any indebtedness shall likewise be accepted by the officer concerned, provided it shall be made payable to the entity or the authorized official of the payee; and c) When a check drawn in favor of the government is not accepted by the drawee bank for any reason, the drawer shall continue to be liable for the sum due and all penalties resulting from delayed payment. Where the reasons for non-acceptance by the drawee bank are insufficiency of funds and/or closed accounts, the drawer shall be criminally liable therefor.

Sec. 61. Deposit of Money in the Treasury or Authorized Government

Depository Bank. - Public officers authorized to receive and collect moneys arising from taxes, revenues or receipts of any kind shall remit or deposit the full amount received and collected to the account of the National Treasury or in the agencies account maintained in the authorized government depository bank not later than the following banking day, except when it is impractical to do so due to distance or when the amount to be deposited is minimal. Fifty percent (50%) share on proceeds from the community tax certificates collected by duly deputized barangay treasurers shall be automatically retained and deposited intact in the authorized depository banks of the barangay where the tax is collected pursuant to the Republic Act No. 7160, as amended, otherwise known as the "Local Government Code of 1991." No collections shall be used for the purpose of disbursements except when authorized by law or regulation.

Sec. 62. Acknowledgment of Receipt of Money by Government Depositories. -

All authorized government depository banks shall acknowledge receipt of all money received for the account of the National Treasurer or the agency concerned. The acknowledgment shall bear the date of actual deposit and indicate from whom and on what account it was received. Such moneys received shall be governed by the Treasury Single Account System established pursuant to law.

Sec. 63. Access to Bank Statements for Audit Purposes, - The authorized

agency official shall regularly furnish the monthly bank statements of the agency to

1 the auditor. In the event that the agency fails or refuses to comply with this 2 requirement, the auditor shall be authorized to directly request such bank statements 3 from the government depository bank concerned. In such case, the bank shall promptly provide the requested statements, and shall waive any pertinent bank fee 5 that may be imposed on such request.

Sec 64. Shipment of Government Money or Property by a Carrier; Notation of

7 Evidence of Loss. - When government money or property is transported from one place to another by a carrier, it shall be the duty of the consignee or duly authorized representative to make notation or notations on the bill of lading or receipt on any 10 evidence of loss, shortage, or damage.

Sec. 65. Credit for Loss Occurring in Transit or Due to Fire, Theft, Robbery or

12 Force Majeure. - When loss of government funds, property, documents evidencing 13 financial transactions, or records of accountabilities occurs while they are in transit or loss is caused by fire, theft, robbery or force majeure, the officer or employee accountable therefor or having custody thereof shall immediately notify the auditor concerned and, within thirty (30) days from the occurrence of loss, shall file an 17 application for relief, together with the required supporting evidence. When 18 warranted, credit for the loss shall be allowed. An officer or employee who fails or 19 refuses to comply with this requirement shall not be relieved of liability or allowed 20 credit for any loss thereof. The procedures on application for relief shall be governed by the rules and regulations of the Commission.

Sec. 66. Disposal of Government Property. - When property of the government

becomes unserviceable or is no longer needed, it may be disposed of in the following manner, adhering to the guidelines issued by the Commission: a) Transfer of property between government agencies; b) Destruction or sale of unserviceable property; c) Sale through public auction of unserviceable property; d) Sale through public auction of government property that is no longer needed; and e) Other modes as may thereafter be approved and prescribed in the guidelines issued by the Commission, or by the joint guidelines issued by the Commission and the DBM.

Sec. 67. Disposal of Real Property. - The disposal of real property through sale

2 shall require prior approval of the Commission: Provided, however, That government agencies specifically authorized by law or rules to dispose real properties without need of prior approval of the Commission may proceed with such disposal.

Sec. 68. Disposal of Goods and Properties Seized or Confiscated by Law

6 Enforcement Agencies. - The destruction or disposal of goods and properties seized 7 or confiscated by law enforcement agencies and presented as evidence in cases before the courts shall be carried out by such agencies in accordance with their respective rules and regulations.

Sec. 69. Funds or Property Held by Deceased, Incapacitated or Absconding

11 Accountable Officer. - When an officer accountable for government funds or property 12 dies, becomes incapacitated, or absconds in the performance of duties, the head of the agency shall designate a custodian to take charge of the funds or property until 14 the appointment of a qualified successor. The head of the agency may appoint a 15 committee to conduct an inventory of the cash and property for which the officer was 16 accountable and to determine the responsibility for any shortage therein. A duly 17 certified copy of the inventory and the report of the committee shall be filed with the 18 auditor concerned: Provided, That the findings of the committee shall not be 19 conclusive until the completion of an audit thereon. The head of the agency, whenever 20 necessary, shall be responsible for filing appropriate case and securing thereof a hold departure order from the court to prevent the absconding officer from leaving the country. If the deceased, incapacitated, or absconding officer is accountable for funds or property of an LGU, the acting custodian and committee shall be designated by the local chief executive, furnishing notice to the Secretary of Finance or the authorized appointing official as prescribed under the Local Government Code.

Sec. 70. Disposal of Foreclosed Assets or Collaterals Acquired in the Regular

Course of Business by GOCCs. - Notwithstanding their respective charters, foreclosed 29 assets or collaterals acquired in the regular course of business by GOCCs shall be sold through public bidding following the appraisal thereof by an independent appraiser. Such sale shall be under the supervision of the proper committee on award or similar

1 body by the GOCC. Notice of such sale shall be published for not less than two (2) 2 consecutive days in any national newspaper of general circulation. In the event that the public bidding fails, the property may be sold at a negotiated sale at such price as may be fixed by the same committee subject to the immediate audit of the auditor concerned in accordance with the regulations of the 6 Commission. If the property remains unsold for at least one (1) year, this will be 7 subject to reappraisal and offered again for sale through public bidding. Government property may be disposed of as payment of dividend, after 9 appraisal thereof by an independent appraiser and review by the Commission, subject 10 to the approval of the DOF.

Sec. 71. Final Report of Accountable Officers. - An accountable officer, shall

12 after one month upon ceasing to act in official capacity, shall submit to the auditor of the agency concerned a report of accountability. Upon receipt of the report, the auditor shall conduct a cash examination on the accountability of such accountable 15 officer. Any remaining balance on cash accountability shall be deposited immediately 17 in the treasury.

Sec. 72. Notice of Disallowances, Charges and Suspensions Issued by the

19 Auditor to Accountable Officer. - Whenever there is a finding of pecuniary loss or 20 damage on the part of the government, the auditor concerned shall issue a written notice of suspension, disallowance or charge through the head of the agency to each accountable officer, whose accounts have been audited in whole or in part. Within ninety (90) days after the receipt of the notice of audit suspension, failure to submit satisfactory explanation, justification, or evidence to settle or disprove the initial findings of an auditor with regard to irregularity or illegality of the covered transaction shall render the audit suspension into disallowance. Any person aggrieved by the decision of the auditor pertaining to disallowances or charges may appeal the case in accordance with the rules and regulations on settlement of accounts of the Commission. TITLE IV CHAPTER I GOVERNMENT ACCOUNTING

Sec. 73. Appropriation Before Entering into a Contract. - No contract involving

2 the expenditure of public funds shall be entered into unless there is an appropriation or approved budget therefor, the unexpended balance of which, free of other obligations, shall be sufficient to cover the proposed expenditure.

Sec. 74. Certificate Showing Appropriation to Meet Contract. - Except in the

6 case of a contract for personnel services or for supplies for immediate consumption, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized without a certification issued by the proper budget officer of the agency concerned that funds have been duly appropriated for the purpose and 10 that the amount necessary to cover the proposed contract for the fiscal year is 11 available for expenditure on account thereof. The certificate signed by the proper budget officer shall be attached to and become an integral part of the contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract 15 is fully extinguished. The funding guidelines of the DBM shall be followed for multi-year contracts.

Sec. 75. Void Contract and Liability of Officer. - Any contract entered into

without satisfying the requirements provided under this Act shall be void ab initio and 19 shall not be binding to the government. The officer of any government agency 20 responsible for the said contract shall be personally liable to the government or other contracting party as if the transaction had been entered into between private parties.

Sec. 76. Prohibition Against Advance Payment on Government Contracts. -

Except when authorized by law or its implementing rules and regulations, the government shall not be obliged to make an advance payment on contracts for: a) Services not yet rendered; b) Supplies and materials not yet delivered, inspected, and accepted, except in lease of venues and catering services as provided for in the procurement law and its implementing rules and regulations; and c) Infrastructure projects not yet implemented or satisfactorily completed, inspected, and accepted, other than for mobilization as provided for in the procurement law and its implementing rules and regulations.

Sec. 77. Limitations on Cash Advance. - The following shall be the limitations

on cash advance: a) No cash advance shall be given unless for a legally authorized specific purpose, b) Cash advances shall be reported on and liquidated as soon as the purpose for which it was given has been served; c) No additional cash advance shall be granted or allowed unless the previous cash advance has been settled/liquidated, or after the conduct of a proper accounting thereof; d) Except for cash advance for official travel, no officer or employee shall be granted cash advance unless such officer or employee is properly bonded in accordance with existing laws or regulations. The amount of cash advance which may be granted shall not exceed the maximum cash accountability covered by bond of an officer or employee; e) Only permanent appointed officials shall be designated as disbursing officers; f) Only duly appointed or designated disbursing officers may perform disbursing functions. Officers and employees who are given cash advances for official travel need not be designated as disbursing officers; g) Transfer of cash advance from one accountable officer to another shall not be allowed; h) The cash advance shall be used solely for specific legal purpose for which it was granted, and under no circumstance shall it be used for encashment of checks or for liquidation of a previous cash advance; i) The failure of the concerned official or employee to liquidate the cash advance after due demand by an authorized officer is a prima facie presumption of malversation despite the absence of a finding of actual damage to the government; j) The transfer of cash advance by a disbursing officer to another does not constitute an expenditure for which the disbursing officer may claim credit in accounts, but the responsibility of such disbursing officer continues to attach until the amount has been fully accounted for; or

k) No cash advance shall be granted for the procurement or implementation of infrastructure projects. Any violation of foregoing provisions shall constitute a valid cause for the 4 withholding of the salary of the accountable officer without prejudice to the imposition 5 of administrative/civil sanctions and criminal prosecution of both the authorizing and 6 the accountable officials, as may be warranted.

Sec. 78. Transfer of Funds Between Public Officers. - Transfer of government

funds from one officer to another shall, except as allowed by law or regulation, be made only upon prior direction or authorization of the head of the agency following 10 the accountability and accounting guidelines issued by the Commission.

Sec. 79. Limitations on Fund Transfers Between Government Agencies and

Instrumentalities. - The following shall be the limitations on transfer of funds from one government agency to another: a) No fund transfers shall be given except for legally authorized specific purpose as embodied in a Memorandum of Agreement (MOA) executed between the source and implementing agencies; b) The fund transfers shall be reported on and/or liquidated by the implementing agencies as soon as the purpose for which they have been granted has been served, but not later than the end of the year; c) No additional or new fund transfers shall be made unless the previous transfers have been fully liquidated as certified by the head of agency concerned; d) The heads of the source and implementing agencies shall be responsible for compliance with the foregoing requirements. Failure on the part of the foregoing officials/persons to comply with the abovementioned responsibilities shall constitute a ground for administrative, civil, or criminal action, as evidence may warrant.

Sec. 80. Limitations on Fund Transfers from Any Government Agency to a

Private Organization or Entity. - The following shall be the limitations on transfer of funds from any government agency to any private organization or entity: a) No fund transfer from a government agency shall be given to a private organization or entity unless authorized by law for a specific purpose which

should be embodied in a MOA executed between the source government agency and the implementing private organization or entity; b) Only duly registered, accredited, and reputable private organizations or entities shall be granted fund transfers; c) Fund transfers shall be reported on and liquidated by the implementing private organizations or entities to the source government agency as soon as the project has been completed or not later than sixty (60) days after project completion. If the project implementation will go beyond December 315t of the year, a partial liquidation report as of December 31st of that year shall be submitted to the source government agency not later than January 15 of the ensuing year; d) No additional or new fund transfers shall be made unless the previous fund transfers have been fully liquidated as certified by the head of the agency; or e) The heads of the source government agency and implementing private organizations or entities shall be responsible for compliance with the foregoing requirements. Failure on the part of any public officer, employee, or any person to comply with the abovementioned responsibility shall constitute a ground for administrative or civil action or criminal prosecution.

Sec. 81. Payment of Rewards. - When a reward becomes payable by authority

of law for information given relative to any offense or any illegal activity, or for any act done in connection with the apprehension of the offender, the reward shall be paid as prescribed by law or regulations. Such payment of reward shall be subject to audit in accordance with the regulations of the Commission.

Sec. 82. Loss Through Electronic Collection or Payment. - Government agencies

utilizing e-Collection and/or payment systems shall formulate internal policy guidelines to implement reasonable and appropriate organizational, technical, and personnel 29 controls to prevent loss of funds caused by internet connectivity issues, errors in 30 payment instructions, online banking fraud, security breach, or other similar events. 31 Any loss due to the foregoing shall be the liability of the erring party.

Sec. 83. Replacement of Lost, Stolen or Destroyed Checks. - When payment is

2 made through check and the same was lost, stolen, or destroyed, the issuing officer may issue a replacement check as payment for the same obligation. Replacement shall be made upon the execution of an affidavit of loss and submission of stop payment 5 order to the drawee bank. If destroyed, presentation of the destroyed check to the 6 issuing officer is also required. The chief accountant of the agency shall be responsible for seeing to it that no double payment is made as a result thereof.

Sec. 84. Reversion of Unpaid Trade Payables Aged More Than Two (2) Years.

9 - The head of NGAs, LGUs, and GOCCs classified as non-commercial public sector 10 entities shall cause the reversion of trade payables aged more than two (2) years to the Unappropriated Surplus or Accumulated Surplus/(Deficit). The head of GOCCs classified as commercial public sector entity shall revert any unpaid trade payables aged more than two (2) years to retained earnings. In both instances, the reversion shall only be made when there is no actual 15 claim or is not supported by a valid contract. CHAPTER II ACCOUNTABILITY AND RESPONSIBILITY FOR GOVERNMENT FUNDS AND PROPERTY

Sec. 85. Accountable Officers; Bond Requirement. - Every officer of any

government agency whose duties permit or require the possession or custody of government funds or property shall be accountable therefor and for the safekeeping thereof in conformity with law. Other government officers who, though not accountable by the nature of their duties, may likewise be similarly held accountable for government funds or property through their participation in the use or application thereof. Every accountable officer shall be properly bonded in accordance with law and the pertinent rules or regulations.

Sec. 86. Primary Responsibility and Fiscal Accountability of the Head of the

Agency. - The head of the agency who is primarily responsible for all government funds and property pertaining to the agency, shall ensure that:

a) The required financial and other reports and statements are submitted by the concerned agency officials in such form and within the period prescribed by the Commission; b) The settlement of disallowances and charges is made within the prescribed period; c) The requirements of transactions suspended in audit are complied with; and d) Appropriate actions are taken on the deficiencies noted in the course of audit. Persons entrusted with the possession or custody of the funds or property under the head of the agency shall be accountable thereof and immediately responsible to the head of the agency, without prejudice to the liability of either party to the government.

Sec. 87. General Liability for Unlawful Expenditures. - Expenditures of

government funds or uses of government property in violation of law or regulations shall be the personal liability of the official or employee found to be directly responsible therefor.

Sec. 88. Degree of Supervision over Accountable Officers. - The head of any

government agency shall exercise due diligence in supervising accountable officers under the control of such head of the agency to prevent the incurrence of loss of 20 government funds or property, otherwise the head of the agency shall be jointly and solidarily liable with the person primarily accountable therefor. The treasurer of the LGU shall likewise exercise the same degree of supervision over accountable officers under the oversight of the treasurer, otherwise the treasurer shall be jointly and solidarily liable with them for the loss of government funds or property under their stewardship.

Sec. 89. Measure of Liability of Accountable Officers. - Every officer

accountable for government property shall be liable for its money value in case of improper or unauthorized use or misapplication thereof by such accountable officer or by any person whose acts such accountable officer may be responsible for. 30 Accountable officer shall likewise be liable for all losses, damages, or deterioration occasioned by negligence in the keeping or use of the property regardless of whether or not it is in the actual custody of such accountable officer.

Every accountable officer for government funds shall be liable for all losses 2 resulting from the unlawful deposit, use, or application thereof and for all losses 3 attributable to negligence in the keeping of the funds.

Sec. 90. Liability for Acts Done by Direction of Superior Officer. - No

5 accountable officer shall be relieved from liability by reason of acting under the 6 direction of a superior office in paying out, applying, or disposing of the funds or 7 property for which such accountable officer is accountable, unless prior to such act, the accountable officer notified the superior officer in writing that the expenditure is illegal, irregular, excessive, extravagant, unnecessary, and unconscionable. The officer 10 directing any illegal payment or disposition of the funds or property and the accountable officer who fails to serve the required notice shall be jointly and solidarily liable.

Sec. 91. Prohibition Against Pecuniary Interest. - No head of agency, members

of the board or commission, accountable officer or public official shall have direct or 15 indirect pecuniary interest in any contract or transaction of the agency when such public officer is appointed, or in any office where the public officer has influence. This prohibition shall likewise apply to the accountable officer's immediate family and relatives up to the third civil degree of consanguinity or affinity. TITLE V CHAPTER I BASIC PRINCIPLES

Sec. 92. Government Accounting. - Government accounting shall encompass

the processes of analyzing, recording, classifying, summarizing, and communicating all transactions involving the receipt and disposition of government funds and property in accordance with the applicable international accounting framework, International Public Sector Accounting Standards or Philippine Financial Reporting Standards, as the case may be, and interpreting the resuits thereof.

Sec. 93. Recognition of Financial Transactions. - Each government agency shall

recognize its financial transactions and operations in accordance with pertinent laws, policies, rules, and regulations, and applicable financial reporting framework.

Sec. 94. Accounting Policies, Rules and Regulations. - The Commission shall

promulgate accounting policies, rules and regulations in accordance with the applicable international accounting framework, which shall be updated from time to time as the Commission may deem proper. CHAPTER II ACCOUNTING REPORTS

Sec. 95. Financial Reports and Statements. - The financial reports prepared by

the agencies shall comply with the applicable financial reporting framework to the government agency. The financial statements shall be based on official accounting records and 11 registries kept in accordance with pertinent laws, policies, rules and regulations of the 12 Commission, and the applicable financial reporting framework to the government 13 agency.

Sec. 96. Submission of Reports. - The Commission shall require the head of

15 agencies, chief accountants, budget officers, cashiers, disbursing/collecting officers, 16 administrative or personnel officers, and other responsible officials of the various 17 agencies to submit financial statements, financial accountability reports, physical inventory reports, current staffing pattern, and such other reports as may be 19 necessary for the exercise of its functions. In case of failure or refusal on the part of the officials concerned to submit the documents and reports mentioned herein within the prescribed period, the head of the agency shall cause the suspension of the payment of their salaries until they complied with the requirements of the Commission, without prejudice to any disciplinary action that may be instituted against such official or employee in accordance with the applicable rules on administrative cases issued by the Civil Service Commission. Failure or refusal on the part of the head of the government agency to implement, without justifiable case, the sanctions provided in the immediately preceding paragraph shall constitute as a ground for the Commission to file the appropriate administrative charge against the erring official concerned. CHAPTER III INTERNAL CONTROLS

Sec. 97. Internal Control System. - Internal control shall comprise the integral

process effected by those charged with governance, agencies' management and personnel designed to provide reasonable assurance regarding the achievement of objectives relating to operations, compliance, reporting and safeguarding of assets. It shall be the direct responsibility of the agency head to install, implement, 6 and monitor a sound system of internal control. TITLE VI FINAL PROVISIONS

Sec. 98. Duty to Respect the Independence of the Commission. - It shall be

10 the duty of every person to respect, protect, and preserve the independence of the 11 Commission.

Sec. 99. Administrative Disciplinary Action. - Any unjustified failure or refusal

13 by the public officer concerned to comply with any requirement imposed in this Act 14 shall constitute neglect of duty or grave misconduct, as the case may be, and shall be 15 a ground for the Commission to file appropriate administrative disciplinary action 16 against the said public officer who, upon being found guilty thereof after hearing, shall be meted out such penalty commensurate with the degree of guilt in accordance with the civil service law, without prejudice to criminal prosecution whenever the evidence warrants. The auditor shall report any violation of the preceding paragraph to the Director of the Commission concerned for referral of the case to the OMB, or other government disciplining authorities.

Sec. 100. Penal Provisions. - Any person who shall commit any of the following

acts shall, upon conviction, suffer imprisonment of not less than six (6) years and one (1) to twelve (12) years or a fine of not less than One hundred thousand pesos (Php 100,000.00) but not more than One million two hundred thousand pesos (Php 1,200,000.00), or both at the discretion of the court: a) Refusing or neglecting to render or settle an account as required by law or regulation after demand by the Commission or its authorized representatives; b) Denying access to databases or information technology systems, or failing to produce documents, records, or papers under custody within fifteen (15)

days after demand by the Commission or its authorized representatives in connection with the conduct of audit; c) Destroying or concealing documents, records, or papers which are officially entrusted to such person, pertaining to the collection, receipt, expenditure, or disbursement of public funds and utilization or disposal of government property in connection with the conduct of audit; d) Failing or refusing to submit documents required in audit without justifiable cause shall constitute a ground for disallowance of the claim under examination, assessment of additional levy or government share, or withholding or withdrawal of government funding or donations through the government, as well as for administrative or penal sanctions; or e) Committing other similar acts that impede, frustrate or delay the efficient conduct of audit. If a violation of this Act constitutes an offense or crime punished under Act No. 3815, otherwise known as the Revised Penal Code, as amended, or other special laws which impose a higher penalty, the latter shall prevail. If the offender is a corporation, partnership or association or other juridical entity, the penalty may, in the discretion of the court, be imposed upon such juridical entity and upon the officer or officers of the corporation, partnership, association, or entity responsible for the violation.

Sec. 101. Implementing Rules and Regulations. - The Commission Proper shall

promulgate the necessary rules and regulations for the effective implementation of this Act.

Sec. 102. Appropriations. - The amount necessary for the implementation of

this Act shall be included in the annual GAA. The COA is hereby authorized to collect the following: a) One-half (1/2) of one percent (1%) from the annual national tax collections not otherwise accruing to special funds or special accounts in the general fund of the national government, upon authority from the Secretary of Finance, shall be deducted from such collections and shall be remitted to the National Treasury to cover the cost of auditing services rendered to LGUs;

b) A fixed amount equivalent to the annual cost of the audit services in the GOCCS; and c) From other sources such as, but not limited to, collections of audit fees from water districts and special audits, consultancy fees and retained income. All GOCCs, including their subsidiaries, and self-governing boards shall appropriate in their respective budgets and remit not later than the end of the second quarter of each year an amount equivalent to the appropriation for personnel services of the audit team to the National Treasury. The amount for the MOOE and capital outlay to support the annual or the actual 10 audit operations of the audit teams assigned to NGAs, LGUs, and GOCCs which form part of the approved budget of the audited agency for auditing services under the 12 GAA, appropriations ordinances or annual operating budget, respectively, shall be remitted directly to the COA Central Office. All internally generated income of the Commission from other sources shall accrue to its retained income fund to be exclusively utilized for the operation and 16 performance of its mandate.

Sec. 103. Franking Privilege. - All official mail matters and telegrams of the

COA addressed for delivery within the Philippines shall be received, transmitted, and 19 delivered free of charge: Provided, That mail matters addressed to private persons or non-government offices shall not exceed one hundred twenty (120) grams.

Sec. 104. Repealing Clause. - Presidential Decree No. 1445, otherwise known

as the Government Auditing Code of the Philippines; Subtitle B, Title I, Book V of Executive Order No. 292 or the Administrative Code of 1987; and all other laws, executive orders, proclamations, decrees, instructions, rules and regulations, or parts thereof which are inconsistent or in conflict with any provision of this Act shall be deemed amended, repealed, or modified accordingly.

Sec. 105. Separability Clause. - If for any reason, any provision of this Act is

declared unconstitutional or invalid, such parts not affected thereby shall remain in full force and effect.

Sec. 106. Effectivity. - This Act shall take effect fifteen (15) days following

completion of its publication in the Official Gazette or in any newspaper of general circulation.