WHEREAS, on
September 19, 1975, the Commission on Audit was singled out as one of
the offices in the government which has to be "completely reorganized";chanroblesvirtualawlibrary
WHEREAS, there is an imperative need to restore, strengthen, and
preserve the integrity, objectivity, and independence of the Commission
on Audit, including its representatives and personnel assigned to all
government entities, in order to effectuate the constitutional design
for a truly independent auditing arm of government; chanroblesvirtualawlibrary
WHEREAS, there is a pressing need to hasten the full
professionalization of the government audit service so as to enable the
Commission on Audit to effectively discharge its expanded audit
responsibility under the New Constitution;chanroblesvirtualawlibrary
WHEREAS, in order to align itself to re-oriented government operations,
it now behooves the Commission on Audit to bring its own operations
closer to the people;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution and pursuant
to Proclamation No. 1081 dated September 2, 1972, and General Order No.
1 dated September 22, 1972, do hereby order and decree as follows:cralaw:red
Section 1. Statement of Objectives. —
In keeping with its constitutional mandate, the Commission on Audit
adopts the following primary objectives:cralaw:red
a. Fiscal responsibility rests directly with the
chief or head of the government subdivision, agency, or
instrumentality. The role of the Commission on Audit is to determine
whether such fiscal responsibility has been properly and effectively
discharged;chanroblesvirtualawlibrary
b. The Commission on Audit shall develop and
implement a Comprehensive audit program which shall encompass an
examination of financial transactions, accounts, and reports, including
evaluation of compliance with applicable laws and regulations; a review
of efficiency and economy in the use of resources; and a review to
determine whether desired results have been effectively achieved;chanroblesvirtualawlibrary
c. The Commission on Audit shall institute control
measures through the promulgation of rules and regulations governing
the receipts, disbursements, and uses of funds and property, consistent
with the total economic development effort of the Government;chanroblesvirtualawlibrary
d. The Commission on Audit shall promulgate rules and
regulations to facilitate the keeping and enhance the information value
of the accounts of the Government;chanroblesvirtualawlibrary
e. The Commission on Audit shall take measures to
hasten the full professionalization of its services, consistent with
its expanded audit responsibility;chanroblesvirtualawlibrary
f. In order to protect the independence of its
representatives, the Commission on Audit shall institute measures to
safeguard its appointing power, and rationalize and standardize the
salaries of its personnel; and chanroblesvirtualawlibrary
g. The Commission on Audit shall take steps to bring
its operations closer to the people by the delegation of authority
through decentralization, consistent with the provisions of the New
Constitution and the laws.
Section 2. Jurisdiction of the Commission on Audit. —
The Authority and powers of the Commission on Audit shall extend to and
comprehend all matters relating to auditing and accounting procedures,
systems, and controls, including inquiry into the utilization of
resources and operating performance, the keeping of the general
accounts of the Government, the preservation of vouchers pertaining
thereto, the examination and inspection of the books, records, and
papers relating to those accounts; and the audit and settlement of the
accounts of all persons respecting funds or property received or held
by them in an accountable capacity, as well as the examination, audit,
and settlement of all debts and claims of any sort due from or owing to
the Government or any of its subdivisions, agencies, and
instrumentalities. The said jurisdiction extends to all
government-owned or controlled corporations and other self-governing
boards, commissions, or agencies of the Government, and as herein
prescribed, including non-governmental entities subsidized by the
Government, those funded by donations through the Government, those
required to pay levies or government share, and those partly funded by
the Government.
Section 3. Visitorial Powers of the Commission on
Audit. —
The Commission shall have visitorial authority over all books, papers
and documents filed by individuals and corporations with government
offices in connection with government revenue collection operations,
for the sole purpose of ascertaining that all funds determined by the
appropriate agencies and collectible and due the government, have
actually been collected. This authority shall also extend to
non-government entities subsidized by the government, those which have
received counterpart funds from the government, and those funded by
donations through the government, the said authority however pertaining
insofar only to the audit of those funds or subsidies coming from or
through the government. chanroblesvirtualawlibrary
Section 4. Organizational Components of the
Commission on Audit. —
The Commission on Audit, hereinafter referred to as the Commission,
shall consist of the Commission Proper as constituted pursuant to
Section 1, Article XII-D, of the new Constitution, and the central and
regional offices as hereinafter created.
Section 5. The Commission Proper. —
The Commission Proper shall sit as a body to promulgate policies,
rules, and regulations; and prescribe standards governing the
performance by the Commission of its powers and functions in accordance
with the new Constitution. It shall appoint all the officials and
employees of the Commission in accordance with the Civil Service Law,
pursuant to Section 4, Article XII-A, of the new Constitution.
Section 6. The Chairman. —
The Chairman of the Commission shall act as the presiding officer of
the Commission Proper and the chief executive officer of the
Commission. As such chief executive officer, he shall be responsible
for the general administration of the Commission.
The Chairman shall appoint such technical and clerical personnel,
assigned to his office, as are essential for the proper performance of
his functions.
Section 7. Reorganization. —
a. For the efficient and effective formulation and
implementation of the programs of the Commission, the following central
offices are hereby created:cralaw:red
1) Administrative Office
2) Planning, Financial, and Management Office
3) Legal Office
4) Accountancy Office
5) National Government Audit Office
6) Local Government Audit Office
7) Corporate Audit Office
8) Performance Audit Office
9) Manpower Development and System Office
These offices shall perform primarily staff functions, exercise
technical supervision over the regional offices in matters pertaining
to their respective functional areas, and perform such other functions
that the Chairman may assign.
b. In addition, the Commission shall keep and
maintain such regional offices as the exigencies of the service so
require in accordance with the pertinent provisions of chapter III,
Part II of the Integrated Reorganization Plan, or as may be provided by
law. The regional offices shall be under the direct control and
supervision of the Chairman and will serve as the immediate
representatives of the Commission in the regions.
c. The Commission may reorganize or create such other
offices, divisions, sections or units as may be deemed necessary, and
appoint personnel thereto.
Section 8. Functions of the Administrative Office. —
The Administrative Office shall have the following
functions: chanroblesvirtualawlibrary
1. Develop and maintain a personnel program which
shall include recruitment, selection, appointment, position
classification and compensation, performance evaluation, employee
relations, and welfare services; and
2. Provide the Commission with services related to
personnel, records, supplies, equipment, medical collection and
disbursements, security, general and other related services.
Section 9. Functions of the Planning, Financial and
Management Office. —
The Planning, Financial, and Management Office shall have the following
functions:cralaw:red
a. Formulate long-range and annual plans and programs
for the Commission;chanroblesvirtualawlibrary
b. Formulate basic policies and guidelines for the
preparation of the Commission's budget; coordinate with the Budget
Commission and the Office of the President in the preparation of said
budget;chanroblesvirtualawlibrary
c. Maintain and administer the accounting system
pertaining to the Commission's accounts;chanroblesvirtualawlibrary
d. Develop and administer a system for monitoring the
prices of materials, supplies, and equipment purchased by government;
and
e. Develop and administer a management improvement
program.
Section 10. Functions of the Legal Office. —
It shall be the responsibility of the Legal Office to: chanroblesvirtualawlibrary
a. Render legal services and perform advisory and
consultative functions with respect to the performance of the functions
of the general Commission and the interpretation of general auditing
rules and regulations, and pertinent laws;chanroblesvirtualawlibrary
b. Handle the investigation of the administrative
cases filed against the personnel of the Commission; evaluate and act
on all reports of involvement of said personnel in anomalies and/or
irregularities in government transactions; and perform such other
investigative work as may be assigned by the Chairman;chanroblesvirtualawlibrary
c. Represent the Commission in preliminary
investigations of malversation cases discovered in audit; assist and
collaborate with the Solicitor General and the Tanodbayan in handling
cases involving the Chairman or any of the Commissioners, and other
officials and employees of the Commission in their official capacity;
and
d. Initiate, for the Commission, the institution of
any legal proceeding, whenever deemed necessary, toward the collection
and enforcement of debts and claims, and the restitution of funds and
property, found to be due the Government or any subdivision, agency, or
instrumentality thereof, including any government-owned or controlled
corporation or other self-governing board, commission, or agency of the
government, in the settlement and adjustment of its accounts by the
Commission. chanroblesvirtualawlibrary
Section 11. Functions of the Accountancy Office. —
The Accountancy Office shall perform the following functions:cralaw:red
a. Prepare the annual financial report of the
Government, its subdivisions, agencies, and instrumentalities,
including government-owned or controlled corporations, and other
financial and/or statistical reports as may be required by the
Commission;chanroblesvirtualawlibrary
b. Exercise technical supervision over government
accounting functions;chanroblesvirtualawlibrary
c. Verify appropriations of national government
agencies and control fund releases thereto; and
d. Prepare statements on local government's revenues
and expenditures, and on their legal borrowings and net paying
capacities for reclassification and other purposes.
Section 12. Functions of the National Government
Audit Office. —
The National Government Audit Office shall perform the following
functions:cralaw:red
a. Formulate and develop plans, programs, operating
standards, and administrative techniques for the implementation of
auditing and accounting rules and regulations in departments, regions,
bureaus, and offices of the National Government;chanroblesvirtualawlibrary
b. Advise and assist the Chairman on matters
pertaining to the audit of the departments, regions, bureau, and
offices of the National Government.
Section 13. Functions of the Local Government Audit
Office. —
The Local Government Audit Office shall perform the following
functions:cralaw:red
a. Formulate and develop plans, programs, operating
standards, and administrative techniques for the implementation of
auditing and accounting rules and regulations in local government
units; and chanroblesvirtualawlibrary
b. Advise and assist the Chairman on matters
pertaining to the audit of local government units.
Section 14. Functions of the Corporate Audit Office.
—
The Corporate Audit Office shall perform the following functions:cralaw:red
a. Formulate and develop plans, programs, operating
standards, and administrative techniques for:cralaw:red
(1) the implementation of auditing and accounting
rules and regulations in government-owned or controlled corporations
and self-governing boards, commissions, or agencies of the National
Government; and
(2) the conduct of audit of financial operations of
public utilities and franchises.
b. Advise and assist the Chairman on matters
pertaining to the audit of government-owned or controlled corporations
and other self-governing boards, commissions, or agencies of the
National Government; and
c. Consolidate the corporate audit reports from all
the regions for inclusion in the annual report of the
Commission. chanroblesvirtualawlibrary
Section 15. Functions of the Performance Audit
Office. —
The Performance Audit Office shall perform the following functions:cralaw:red
a. Conduct, consistent with the provisions of Section
3 variable scope audits of non-government firms subsidized by the
government or government authority, those funded by donors through the
government, and those for which the government has put up a counterpart
fund; and
b. Undertake, on a selective basis, economy,
compliance and effectiveness audits of national and local government
units, including government-owned or controlled corporations, other
self-governing boards, commissions, or agencies of government, as well
as specific programs and projects of government.
Section 16. Functions of the Manpower development and
Systems Office. —
a. Formulate long-range plans for a comprehensive
training program for all personnel of the Commission as well as all
accounting, collecting, disbursing, internal auditing, and budgetary
personnel of the government, in coordination with the Budget Commission
and the Civil Service Commission;chanroblesvirtualawlibrary
b. Prepare and implement annual training programs,
consistent with its long-range plans;chanroblesvirtualawlibrary
c. Develop its capability to implement training
programs;chanroblesvirtualawlibrary
d. Set up and maintain a library for the Commission;chanroblesvirtualawlibrary
e. Publish the professional journal of the
Commission;chanroblesvirtualawlibrary
f. Develop systems for government accounting,
auditing, and related fiscal controls; and
g. Provide technical assistance in the design and
installation of internal control systems and internal auditing units.
Section 17. Functions of Regional Offices. —
Each Regional Office shall perform the following functions:cralaw:red
a. Exercise supervision and control over the
implementation of auditing rules and regulations in
(1) department, bureaus, offices, and other
instrumentalities of the National government, including the National
Assembly,
(2) local government units, and
(3) government-owned or controlled corporations and
self-governing boards, commissions, or agencies of the government
within the region;chanroblesvirtualawlibrary
b. Conduct audits of all accounts and trial balances
pertaining to the revenues and receipts, expenditures and uses of funds
and property owned or held in trust by, or pertaining to, National
Government agencies and instrumentalities within the region, including
the National Assembly;chanroblesvirtualawlibrary
c. Provide auditing services to local government
units, including schools and hospitals maintained by such units;chanroblesvirtualawlibrary
d. Review and analyze corporate audit reports and
prepare the consolidated audit report of the region (for Greater Manila
regional offices only); chanroblesvirtualawlibrary
e. Upon delegation by the Commission Proper, exercise
authority on personnel, planning, financial, (budgetary and
accounting), and legal matters pertaining to the region; and
f. Perform such other related functions as may be
assigned by the Chairman.
Section 18. Appointment of Corporate Audit Personnel.
—
The Commission Proper is empowered to appoint its representatives in
any government-owned or controlled corporation as well as in any other
self-governing board, commission, or agency. In addition, the
Commission Proper has the power to fix the size and composition of, and
to appoint the personnel to assist said representatives in their work.
This appointing power of the Commission Proper shall be subject only to
the Civil Service Law, pursuant to Section 4, Article XII-A, of the New
Constitution, and shall not be subject to approval or review by any
other official, corporation, board, commission, or agency concerned.
Section 19. Compensation of Personnel. —
The number of the representatives and support personnel of the
Commission, assigned to the different departments and agencies of the
national government as well as in government-owned or controlled
corporations, self-governing boards, commission, or agencies of the
government and in provinces, cities and municipalities shall be
determined and fixed by the Commission, any provision of the General
Appropriations Decree (Presidential Decree No. 733), laws, decrees,
executive orders, or regulations to the contrary
notwithstanding. chanroblesvirtualawlibrary
All officials and employees of the Commission, including the Commission
representatives and support personnel, shall be paid their salaries and
allowances directly by the Commission out of its appropriations and
contributions, as provided for in this decree.
Section 20. Compensation of Managers. —
Starting with the calendar year 1976, the central office managers of
the Commission, including the Secretary to the Commission, shall
receive an annual salary of P36,000.00 each; Provided, however, That
the Commission Proper may recommend to the President of the Philippines
subsequent salary increases in order to bring the annual salaries of
the above mentioned officials to an amount not exceeding P42,000.00
each; and: Provided, finally, That should the above ceiling of
P42,000.00 be lower than the salary subsequently recommended by the
government study group standardize salaries of government officials,
the Commission shall be empowered to adjust the salary ceiling
accordingly.
Section 21. Office of the Auditing Units. —
The auditing units in the different departments and agencies of the
national government, as well as in government-owned or controlled
corporations and self-governing boards, commissions, or agencies of the
government, and in provinces, cities, and municipalities shall be
provided by the audited agency with a suitable and sufficient office
space together with supplies, equipment, furniture, and other necessary
operating expenses for its proper maintenance.
Section 22. Funding. —
The Commission Proper is hereby authorized to restructure and use the
appropriations provided for in Presidential Decree No. 733 and balances
of existing certifications to accounts payable, including prior years
which have not yet been reverted to the unappropriated surplus, to
carry out the provisions of this decree. chanroblesvirtualawlibrary
a) Commission Proper and Auditing Units in National
Government Offices.
Thereafter, the amount of appropriations for the salaries of the
officials and employees of the Commission, its equipment, maintenance
and other operating expenses as well as the salaries and allowances of
the auditors and personnel of the auditing units in the different
departments or agencies of the national government, as fixed according
to law, shall be included in the annual General Appropriations Decree.
b) Government-Owned or Controlled Corporations,
Self-Governing Boards, Commissions, or Agencies of the Government.
All government-owned or controlled corporations, self-governing boards,
commissions, or agencies of the government shall appropriate and remit
to the National Treasury for credit to the account of the Commission an
amount equivalent to but not less than the appropriation for the
salaries and allowances of the representative and staff of the
Commission during the preceding fiscal year, subject to whatever
changes as may be authorized by the Commission; Provided, That until
such time that this decree shall have been implemented, the Commission
representative and his subordinate personnel shall continue to be paid
directly by the corporation, board, commission, or agency of the
government concerned.
c) Local Government Units.
One-half of the per centum (1/2 of 1%) of the collections from national
internal revenue taxes not otherwise accruing to special accounts in
the general fund of the national government shall accrue to the
Commission as a fee for auditing services rendered to local government
units, excluding maintenance, equipment, and other operating expenses
as provided for in Section 21 above, thereby amending Presidential
Decree No. 144.
The Secretary of Finance is hereby authorized to deduct from the
monthly internal revenue tax collections an amount equivalent to the
percentage as herein fixed, and to remit the same direct to the
Commission under such regulations as may be promulgated by the
Secretary of Finance and the Chairman of the Commission.
Section 23. Fees for Audit Services Rendered to
Non-Government Entities. —
The Commission shall fix and collect reasonable fees for the different
services rendered to non-government entities that shall be audited in
connection with their dealings with the government arising from
subsidies, counterpart funding by government, or where audited records
become the basis for a government levy or share. Fees of this nature
shall be remitted to the Treasurer of the Philippines within 10 days
following completion of the audit and credited to the account of the
Commission.
Section 24. Fees for other Services, Rendered to
Government Entities. —
Whenever the Commission renders to any government entity, audit and
related services beyond the normal scope of such services, the
Commission is empowered to fix and collect reasonable fees. These fees
shall be remitted by the audited agency to the Treasurer of the
Philippines within the time provided for in the contract of service,
and credited to the account of the Commission.
Section 25. Government Contracts for Auditing,
Accounting and Related Services. —
To enable the Commission to effectively discharge its responsibilities
under the New Constitution, no government subdivision, agency, or
instrumentality, including government-owned or controlled corporation,
and self-governing board, commission, or agency shall enter into any
contract with any private person or firm for services to undertake
studies relating to government accounting, auditing, and management
systems and services, including services to conduct, for a fee,
seminars or workshops for groups of government accounting, auditing,
collecting, disbursing, internal audit, supply management, and
budgeting, personnel on any of the topics just enumerated, unless to
proposed contract is first submitted to the Commission to enable the
Commission to determine whether it has the resources to undertake such
studies or services. The Commission may engage the services of experts
from the private sector in the conduct of these studies and shall
coordinate its work with the Budget Commission and Civil Service
Commission.
Should the Commission decide not to undertake the study or service, it
shall nonetheless have the power to review the contract in order to
determine the reasonableness of its cost.
Section 26. Collection of Debt Due the Government. —
Ind of its responsibility to see to it that government funds and
property are fully protected and conserved, as explicitly mandated by
Presidential Decree No. 111, dated January 26, 1973, the Commission
shall, through proper channels, supervise and procure the collection
and enforcement of all debts and claims, and the restitution of all
funds and property, found to be due the government, or any of its
subdivisions, agencies, or instrumentalities, or any government-owned
or controlled corporation or self-governing board, commission or agency
of the government, in its settlement and adjustment of its accounts. If
any legal proceeding is necessary to that end, the Commission may
institute it or request the Solicitor General, the Government Corporate
Counsel, or the legal staff of the creditor government office or agency
concerned to institute such legal proceeding. All such monies due and
payable shall bear an annual interest at six per cent p.a. from the
date of written demand by the Commission.
The Commission shall be entitled to collect and receive 20% of the
amount of debts collected when such collections is made from a judgment
in a case intended and handled by the Commission, as assistance in the
professionalization of its services and the computerization of its
accounting and data gathering functions. These receipts shall be
deposited with the National Treasury to the credit of the Commission.
The Chairman is hereby authorized to augment any item in the
appropriation for the Commission in the General Appropriations Decree
from savings in other items of said appropriation.
Section 27. Installation of a Sound Internal Control
System. —
It shall be the direct responsibility of the chief or head of each
government subdivision, agency, or instrumentality, including
government-owned or controlled corporation and other self-governing
board, commission, or agency, to install, implement, and monitor a
sound system of internal control. For this purpose, the chief or head
of agency may seek the assistance of the Commission in the design and
installation of the internal control system.
Section 28. Transitory Provision. —
In order to carry out the powers and functions set forth in this
Decree, the Commission is hereby authorized to reorganize the
Commission on Audit within one year from the approval of this Decree.
Section 29. Repealing Clause. —
All laws, proclamations, orders, decrees, instructions, rules and
regulations or parts thereof, which are or may be inconsistent or in
conflict with any of the provisions of this Decree are hereby repealed
or modified accordingly.
Section 30. Effectivity. —
This Decree shall take effect immediately.
Done in the City of Manila,
Philippines, this 3rd day of March, in the year of Our Lord, nineteen
hundred and seventy-six.
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