Ordaining and Instituting a Government Auditing Code of the Philippines
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Ordaining and Instituting a Government Auditing Code of the Philippines
Presidential Decree No. 1445
June 11, 1978
Case Overview and Summary
Title: Government Auditing Code of the PhilippinesSummary:
- Declares the policy that government resources shall be managed properly and safeguarded against loss or wastage. (Section 2)
- Defines key terms like "fund", "government funds", "revenue funds", "trust funds", "depository funds", "depository", "resources", and "government agency". (Section 3)
- Outlines fundamental principles for financial transactions and operations of government agencies. (Section 4)
Commission on Audit:
- Establishes the Commission on Audit (COA) and its composition, qualifications, terms, and salaries of members. (Section 5)
- Defines the Commission Proper and its functions. (Section 6)
- Establishes the central and regional offices of the COA and their respective functions. (Sections 7-19)
- Provides for auditing units in government agencies, qualifications of heads, and their assignment. (Sections 20-22)
- Mandates the professionalization of the audit service. (Section 23)
- Outlines the appropriations and funding for the COA's operations. (Section 24)
Jurisdiction, Powers, and Functions of the COA:
- States the objectives of the COA. (Section 25)
- Defines the general jurisdiction of the COA. (Section 26)
- Grants the COA appointing power, examining authority, visitorial authority, and the power to fix and collect fees. (Sections 27-30)
- Allows the COA to deputize private professionals to assist government auditors. (Section 31)
- Requires government agencies to obtain COA approval for auditing and accounting services contracts. (Section 32)
- Empowers the COA to prevent irregular expenditures, disallow such expenditures, settle accounts between agencies, collect indebtedness, compromise claims, and examine accounts of public utilities. (Sections 33-39)
- Grants the COA investigatory and inquisitorial powers, including the power to punish for contempt. (Section 40)
- Requires the COA to submit an annual report on the financial condition and operations of government agencies. (Section 41)
- Mandates the COA to provide a monthly statement of receipts and disbursements. (Section 42)
- Outlines the powers, functions, and duties of auditors as COA representatives. (Sections 43-47)
Decisions of the COA:
- Establishes procedures for appealing decisions of auditors and the COA. (Sections 48-50)
- Declares the finality of unappealed decisions of the COA or auditors. (Section 51)
- Allows the COA to open and revise settled accounts under certain conditions. (Section 52)
Government Auditing:
- Defines government auditing and outlines general standards, examination and evaluation standards, and reporting standards. (Sections 53-56)
- Specifies the determination of audit procedures and objectives for auditing assets, liabilities, revenue accounts, expense accounts, and surplus or net worth. (Sections 57-62)
Receipt and Disposition of Funds and Property:
- Requires accounting for moneys and property received by public officials. (Section 63)
- Allows the designation of collecting officers and requires reports of collections. (Section 64)
- Outlines the accrual of income to the general fund and exceptions for special, fiduciary, and trust funds. (Sections 65-66)
- Permits the acceptance of warrants and checks as payment for taxes or indebtedness. (Section 67)
- Mandates the issuance of official receipts for payments received. (Section 68)
- Requires the deposit of moneys in the treasury and acknowledgment of receipt. (Sections 69-70)
- Provides for the handling of creditors' unclaimed balances. (Section 71)
- Establishes procedures for the shipment of government funds or property and credit for losses. (Sections 72-73)
- Requires monthly reports from depositories to agency heads. (Section 74)
- Regulates the transfer of funds between officers and the transfer of property between agencies. (Sections 75-77)
- Outlines procedures for handling funds or property of deceased, incapacitated, absconding, or superseded accountable officers. (Section 78)
- Allows the destruction or sale of unserviceable property. (Section 79)
- Requires final reports from accountable officers and auditor's certificates of balance. (Sections 80-81)
- Establishes procedures for auditor's notice to accountable officers and the use of auditor's records as evidence of liability. (Sections 82-83)
Application of Appropriated Funds:
- Regulates the disbursement of government funds, including revenue funds and trust funds. (Section 84)
- Requires appropriation before entering into contracts and obtaining a certificate showing available appropriation. (Sections 85-86)
- Declares void contracts entered into contrary to appropriation requirements and establishes liability. (Section 87)
- Prohibits advance payments on government contracts, with exceptions. (Section 88)
- Limits cash advances and requires their liquidation. (Section 89)
- Outlines procedures for the payment of rewards. (Section 90)
- Requires approval for payments to creditors. (Section 91)
- Specifies persons authorized to draw warrants or checks for payment and requirements for countersigning. (Sections 92-94)
- Establishes the treasurer's responsibility for indorsements and procedures for lost or fraudulently encashed warrants or checks. (Sections 95-96)
- Provides for the disposition of stale warrants or checks. (Section 97)
- Allows the reversion of unliquidated balances of accounts payable. (Section 98)
- Permits the transfer of unexpended balances to the general fund. (Section 99)
- Requires reports of disbursing officers in government agencies. (Section 100)
Accountability and Responsibility for Government Funds and Property:
- Defines accountable officers and requires them to be properly bonded. (Section 101)
- Establishes primary and secondary responsibility for government funds and property. (Section 102)
- Imposes general liability for unlawful expenditures. (Section 103)
- Requires records and reports from primarily responsible officers. (Section 104)
- Outlines the measure of liability for accountable officers. (Section 105)
- Establishes liability for acts done by direction of a superior officer. (Section 106)
- Requires accountable officers to render accounts, submit vouchers, and make deposits. (Section 107)
- Prohibits accountable or responsible officers from having pecuniary interests in agency transactions. (Section 108)
Government Accounting:
- Defines government accounting and its objectives. (Sections 109-110)
- Requires the keeping of accounts in detail and with honesty, objectivity, and consistency. (Section 111)
- Mandates the recording of financial transactions in conformity with generally accepted accounting principles and laws. (Section 112)
- Provides for a chart of accounts prescribed by the COA. (Section 113)
- Requires a general ledger and subsidiary records. (Section 114)
- Establishes the use of common terminology and classification. (Section 115)
- Classifies accounts into balanced fund groups. (Section 116)
- Requires budgetary control accounts for revenues, expenditures, and debt. (Section 117)
- Prohibits the booking of unrealized revenues. (Section 118)
- Requires the accounting for obligations and expenditures in the appropriate year. (Section 119)
Accounting Reports:
- Requires the COA to issue accounting rules and regulations related to reporting requirements. (Section 120)
- Outlines requirements for financial reports and statements. (Section 121)
- Allows the COA to require the submission of reports from agency officials and imposes penalties for non-compliance. (Section 122)
Internal Control Systems:
- Defines internal control and requires agency heads to install, implement, and monitor a sound system of internal control. (Sections 123-124)
Final Provisions:
- Includes transitory provisions for the COA's transition. (Section 125)
- Imposes a duty to respect the COA's independence. (Section 126)
- Provides for administrative disciplinary action for non-compliance. (Section 127)
- Establishes penal provisions for certain violations. (Section 128)
- Contains a separability clause. (Section 129)
- Repeals inconsistent laws and regulations. (Section 130)
- Sets the effectivity date. (Section 131)
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Ordaining and Instituting a Government Auditing Code of the Philippines
Presidential Decree No. 1445
•June 11, 1978
MALACAÑANGM a n i l a
PRESIDENTIAL DECREE No. 1445
ORDAINING AND INSTITUTING A GOVERNMENT AUDITING CODE OF THE PHILIPPINES
WHEREAS, the creation and establishment of the Commission on Audit under the new Constitution and its recent reorganization and restructuring by virtue of Presidential Decree No. 898 have rendered more pressing the long-felt need to codify in revised and updated form, in keeping with modern trends of government auditing and progressive legislation on the subject, various scattered auditing laws, rules and regulations, and to incorporate therein presidential decrees, orders, proclamations, and instructions germane and relevant thereto for integrated effect;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree:
PRELIMINARY TITLE
GENERAL PROVISIONS
Section 1. Title. This law shall be known and cited as the "Government Auditing Code of the Philippines."
Section 2. Declaration of Policy. It is the declared policy of the State that all resources of the government shall be managed, expended or utilized in accordance with...
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