AUDIT

OBSERVATION
MEMORANDUM
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Section 4.9 of the 2009 Rules and
Regulations on Settlement of Accounts,
as embodied in COA Circular No. 2009-
006, defines Audit Observation
Memorandum

“a written notification to the agency head and concerned

officer/s informing of the deficiencies noted in the audit of
accounts, operations or transactions and requiring comments
thereto and/or submission of documentary and other
information and requirements within a reasonable period”.
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Guidelines in the
Issuance of AOM
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Guidelines in the Issuance of AOM

1. The Auditor will issue the observation and will

require documentary and information
requirements to enable the auditor to reach a
decision in audit.

2. It is addressed to the head of agency and officer/s

concerned officials stating the deficiencies noted
and/or the requirements to be complied with and
the requirement to response thereto.
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Sample AOM
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Guidelines in the Issuance of AOM

3. It shall be replied to by the agency officials concerned within

fifteen (15) calendar days from receipt thereof.

4. If the agency officials fail to reply within the period, the audit
observation on financial/operational deficiency shall be deemed
accepted and shall be included in the Management Letter
and/or Audit Report. In case of failure to submit the required
documents or information needed to reach audit decision, a
Notice of Suspension (NS)/Notice of Disallowance (ND) may be
issued by the Auditor, as warranted, after a reevaluation of
available documents/information.
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Guidelines in the Issuance of AOM

5. The agency reply/comment will be evaluated by the

Auditor vis-à-vis the audit observations and he/she shall
inform the head of the agency and concerned official in
writing, of the result of the evaluation.

6. The documents and information submitted in response to

the requirements of an AOM may, after audit and
examination, provide a basis for the allowance in audit of
the transaction, or subsequent suspension or
disallowance thereof, as warranted.
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THANK YOU!