COMMISSION ON AUDIT CIRCULAR NO.

80-147 October 1, 1980

TO : The Governor, Metropolitan Manila Commission; the Commissioner for Finance,

Metropolitan Manila Commission; the City and Municipal Mayors, the City and
Municipal Treasurers, All of Metropolitan Manila; the COA Regional Director,
National Capital Region; All City Auditors of Metropolitan Manila; and All Others
Concerned.

SUBJECT : Pre-Audit of Accounts of Municipalities within Metropolitan Manila

1. Purpose

In view of the accessibility of the Offices of the City Auditors of Metropolitan Manila to
the municipalities within their respective jurisdictions, and the considerably expanded fiscal
operations of these municipalities, their accounts shall be subject to pre-audit as provided
herein.

2. Transactions Subject to Pre-Audit

City Auditors of Metropolitan Manila, or their authorized representatives, shall pre-

audit the following transactions of the municipalities under their respective jurisdictions:

a. First payment of fixed expenditures such as rentals, subscriptions to

periodicals, and other expenditures which are recurring and fixed in nature;

b. Payments amounting to more than P10,000.00 of consumable items such as

printed forms, office supplies, accounting forms, motor vehicle fuel, lubricants,
tires, batteries, spare parts, construction materials, medical supplies,
ammunition, electricity, gas, water, and other expendable property normally
consumed within one year after being put to use, or converted in the process of
manufacture or construction.

c. First payment of salaries and wages of officers and employees, whether under
original appointment, promotional appointment, appointment by transfer,
appointment by reinstatement, or employment under labor payroll chargeable
against project funds; payment of last salary and commutation of all vacation and
sick leave, including gratuities, which require the submission of a clearance
certificate;

d. The first and last payments of all claims pertaining to infrastructure and other
construction projects, provided that in no case shall the amount of the claims
for the last payments be less than 20% of the original/adjusted contract cost.

First payment subject to pre-audit shall include only the first billing which
represents the first collection on the work accomplished in a particular project.
Advances for mobilization expenses, downpayments and other forms of advance
payments, if authorized by proper authorities, shall not be subject to pre-audit.
 In the post-audit of transactions pertaining to infrastructure and other
construction projects, the City Auditors shall see to it that the refund of advances is
properly complied with as stipulated in CI 4 of the Implementing Rules and Regulations
for Government Infrastructure in pursuance of P.D. 1594 quoted hereunder:

"The first refund of the advance payment shall be done when the
contract value of the work executed and the materials delivered shall
equal or have exceeded twenty percent (20%) of the contract price or
three (3) months after the date of notice to commence work whichever
comes first and further refunds shall be done thereafter at monthly
intervals." (See also COA Circular No. 101-B dated April 23, 1980)

e. Payments of expenditures involving more than P20,000.00 other than those

enumerated in paragraphs (a) to (d).

f. All refunds, including refunds of forfeited cash bonds of aliens and temporary
visitors, etc., and releases of retention fees regardless of amount; except
refunds of bail bonds not exceeding the amount of P10,000.00 in each case,
provided that the claimant submits the original of the official receipt issued in
acknowledgment of the deposit, duly indorsed by the depositor, as well as an
authenticated copy of the court order authorizing the withdrawal of the deposit.

g. Payment of cash advances irrespective of amount;

h. Withdrawals of municipal deposits involving more than P10,000.00, except if

such withdrawal is intended to pay claims not subject to pre-audit;

i. All Special Journal Vouchers except those covering adjustments for supplies
inventory and undistributed collections, before these are taken up in the books
of accounts of municipal treasurers.

3. Inspection of Deliveries and Other Pre-Audit Functions

City Auditors, or their authorized representatives, shall inspect all deliveries to the
Metropolitan Manila municipalities under their respective jurisdictions, of supplies, materials
and equipment within the limits of their authority. They shall also perform such other pre-audit
functions as are or may be required by law or competent authority.

4. Transaction Not Subject to Pre-Audit

The following transactions of municipalities within Metropolitan Manila are not subject to
pre-audit by the City Auditors: (a) all disbursements other than those enumerated in Section 3
above; and (b) all payments irrespective of amounts to government agencies, government-
owned and/or controlled corporations and other government units. Disbursements for these
types of transaction shall be paid either by cash or checks in accordance with existing
regulation without pre-audit; provided, however, the accounting and the auditing rules and
regulations, are fully complied with by agency management and no splitting of requisitions,
orders or contracts, deliveries and/or payments are made for the purpose of circumventing the
provisions of this circular.
 In cases where disbursements/payments/advances are required by government
agencies, corporations, local units before the supplies and services are to be delivered or
rendered, the corresponding special journal voucher prepared to adjust this account shall
be submitted to the City Auditor concerned for pre-audit within five days from the date of the
completion of the delivery/rendition of the supplies/services, together with the original copy of
the invoice and the report of inspection.

5. Action by City Auditors on Claims Not Subject to Pre-Audit

When the Municipal Treasurer entertains doubts on the legality and/or propriety of a
claim not subject to pre-audit, he may refer the voucher to the City Auditor concerned,
accompanied by a letter stating specifically the grounds or reasons for the referral. The Auditor
shall return the same with his opinion on the matter. In no case shall the Auditor pre-audit a
transaction not subject to pre-audit notwithstanding the doubts expressed by the treasurer,
or even if requested to do so for accommodation.

6. Effectivity

This Circular shall take effect immediately. Section 629 (9), as amended, of the
Revised Manual of Instructions to Treasurers, 1954 Edition; COA Circular No. 79-26(E)
dated September 6, 1979; and all other circulars, memoranda and orders previously issued
by this Commission which are inconsistent herewith, insofar as municipalities within
Metropolitan Manila are concerned, are hereby modified or amended accordingly.

(SGD.) FRANCISCO S. TANTUICO, JR., Acting Chairman