COMMISSION ON

AUDIT
Ridzanna M. Abdulgafur
Alayka A. Anuddin
Stephany A. Polinar
Composition
1 Chairman
2 Commissioners
COA as a collegial
body.
- MISON v. COA
 The decision of the Manager of the Technical
Service Office of the COA is void ab initio.
 He had no power to render and promulgate a
decision of or for the Commission.
 The power is lodged in the COA, as a collegial
body, composed of a Chairman and 2 members.
3
Sec. 1. Qualifications

▪ Natural-born citizen of the Philippines;

▪ At least 35 years of age;
▪ Certified Public Accountant with not less than 10 years of
auditing experience, or member of the Philippine Bar who have
been engaged in the practice of law for at least 10 years;
▪ Must not have been candidate for any elective position
immediately preceding their appointment.

4
Sec. 1. Term

▪ 7 years without reappointment

▪ The Chairman shall hold office for 7 years
▪ 1 Commissioner for 5 years
▪ 1 Commissioner for 3 years

▪ In no case shall any member be appointed or

designated in a temporary or acting capacity 5
Sec. 2 General Functions; Powers and Duties

Section 2, Article IX-D of the 1987 Philippine

Constitution

6
Sec. 2 General Functions; Powers and
Duties

1. To examine and audit all forms of government

revenues;
2. To examine and audit all forms of government
expenditures;
3. To settle government accounts;
4. To promulgate accounting and auditing rules
“including those for the prevention and
disallowance of irregular, unnecessary,
excessive, extravagant, or unconscionable
expenditures”; and
5. To decide administrative cases involving
7
expenditures of public funds.
Private entities who handle
government funds
- BLUE BAR COCONUT PHIL v.
TANTUICO
 Private entities who handle
government funds or subsidies in trust
may be examined or audited in their
handling of said funds by the
government auditor. 8
Post-audit authority
- DBP v. COA
 Article IX (D) , Section 2of the
Constitution expressly grants COA the
power to conduct a post- audit.

9
Limitation on post-audit
authority
- ESLAO v. COA
 COA is not authorized under its
constitutional mandate to substitute its
own judgment for any applicable law
or administrative regulation with the
wisdom or propriety of which.
10
Prevention of
unnecessary expenses
- POLLOSO v. GANGAN
 The COA Circular No. 86-255 which requires that the
contract for service should obtain first a written
conformity and acquiescence of the Solicitor General is
constitutional.
 The circular was merely a safeguard to prevent irregular,
unnecessary, excessive, extravagant and unconscionable
expenditures. 11
Independent Admin Ruling
- AGUINALDO v. SANDIGANBAYAN
 COA’s approval of petitioner’s disbursement only
relates to the administrative aspect of the matter
of accountability but it does not foreclose the
Ombudsman’s authority to investigate and
determine whether there is a crime to be
prosecuted for which petitioner is answerable.

12
Audit Jurisdiction

13
Enforcement of the
rules and regulations
- CALTEX V. COA
 There can be no doubt, however, that the audit power of the Auditor
General under the 1935 Constitution and the Commission on Audit
under the 1973 Constitution authorized them to disallow illegal
expenditures of funds or uses of funds and property. Our present
Constitution retains that same power and authority, further
strengthened by the definition of the COA's general jurisdiction in
Section 26 of the Government Auditing Code of the Philippines and
Administrative Code of 1987.

14
Extends to non-
accountable officers
- MAMARIL v. DOMINGO
 The Commission has authority not just over accountable officers
but also over the officers who perform functions related to
accounting such as verification of evaluations and computation
of fees collectible, and the adoption of internal rules of control.
(An Evaluator/Computer, for instance is an indispensable part of
the process of assessment and collection and comes within the
scope of the Commission’s jurisdiction.

15
Coverage to agencies
or instrumentalities
- PAL v. COA
 The authority granted under this constitutional provision, being
broad and comprehensive enough, enables COA to adopt as its
own, simply by reiteration or by reference, without the necessity
of repromulgation, already existing rules and regulations.
 It may also expand the coverage thereof to agencies or
instrumentalities under its audit jurisdiction.

16
To settle government accounts

▪ The power to settle liquidated accounts, that is, those

accounts which may be adjusted simply by an
arithmetical process. It does not include the power to
fix the amount of an unfixed or undetermined debt.
(Compania General de Tabacos v. French and
Unison, 1919)

17
To settle government accounts
- PHILIPPINE OPERATIONS, INC. v. AUDITOR
GENERAL

 All that is vested in the Auditor General is the settlement

of accounts.
 "Accounts," because of the absence of any reasons to the
contrary, must be deemed to have the same meaning as
accounts under the laws in force before the approval of
the Constitution.
18
To settle government accounts
▪ To secure the release of funds from the Treasury, a warrant must be drawn by the
proper administrative official and countersigned by the Commission on
Audit.631 This counter-signature may be compelled if it can be shown that:
1. The warrant has been legally drawn by the officer authorized by law to do so;
2. An appropriation to which the warrant may be applied exists by virtue of law;
3. An unexpected balance of the amount appropriated is available. (Yncausti v.
Wright, 47 Phil. 866)
▪ The duty to countersign the warrant in this case is merely ministerial .

19
To settle government accounts

▪ The following have been held to be discretionary:

1. The duty to pass audit a salary voucher. (Gonzales v. Provincial
Auditor of Iloilo, 12 SCRA 711)
2. The duty of the Commission on Audit to issue a certificate of
clearance to any accountable officer seeking to leave the
Philippines. (Lamb v. Philipps, 22 Phil. 473)

20
 Money Claims

The Department of National Defense entered

into a contract with Raintree Corporation for
the supply of ponchos to the AFP, stipulating
that, in the event of breach, action may be filed
in the proper courts in Manila. Suppose the AFP
fails to pay for delivered ponchos, where must
Raintreee Corporation file its claim? Why?

21
 Money Claims

Raintree Corporation must file its claim with

the COA. Under Article IX-D, Section 2(1), the
COA has the authority to settle all the accounts
pertaining to expenditure of public funds.
Raintree Corporation cannot file a case in court.

22
Interpretation to
"public bidding" and
its "failure."
- DANVILLE MARITIME v. COA
 No less than the Constitution has ordained that the COA shall
have exclusive authority to define the scope of its audit and
examination, establish the techniques and methods required
therefore, and promulgate accounting and auditing rules and
regulations, including those for the prevention and disallowance
of irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures, or use of government funds and
properties. 23
To define the scope of its audit an examination, establish techniques and methods

▪ The SC said that the power of the Commission to define the scope of its audit
and to promulgate auditing rules and regulations and the power to disallow
unnecessary expenditures is exclusive. (But its power to examine and audit is
not exclusive)
▪ It was held that COA may stop the payment of the price stipulated in
government contracts when found to be irregular, extravagant or
unconscionable. (Sambeli v. Province of Isabela, 210 SCRA 80)
▪ COA Circular No 75-6, prohibiting the use of government vehicles by officials
who are provided with transportation allowance was held to be a valid exercise
of its powers under Section 2, Article IX-D of the Constitution; and the
prohibition may be made to apply to officials of the NPC.
24
Decide administrative cases
involving expenditures of
public funds
- NCMH v. COA
 The service mission, size, systems, structure, strategy,
skills, style, spirit and financial performance of
government agency are the primary considerations in
determining whether or not their expenditures are
irregular, unnecessary, excessive or extravagant.

25
Decide administrative cases
involving expenditures of
public funds
- RAMOS v. AQUINO
 The Auditor General is not only vested with the duty to
examine or audit all expenditures of funds of the
Government, but also to audit or investigate and "bring
to the attention of the proper administrative officer
expenditures of funds or property which in his opinion
are irregular, unnecessary, excessive, or extravagant."
26
Salva vs. Carague
▪ Circumstances of time and place, behavioral and ecological
factors, as well as political, social and economic conditions,
would influence any such determination. Viewed from this
perspective, transactions under audit are to be judged on the
basis of not only the standards of legality but also those of
regularity, necessity, reasonableness and moderation.

27
▪ this light, it cannot be said that the additional
expense incurred for the construction were
irregular or excessive, unnecessary or
unconscionable. It is evident that the additional
expense was for the benefit of the PSU, as it was
spent for the construction of Phase II of the PSU
Multi-Purpose Building, and there is no indication
that it was used for ay other nefarious endeavor.

28
City of Basilan vs. Hechanova

▪ "The Auditor General shall examine, audit, and settle all

accounts pertaining to the revenues and receipts from
whatever source, including trust funds derived from bond
issues; and audit, in accordance with law and administrative
regulations, all expenditures of funds or property pertaining
to or held in trust by the Government or the provinces or
municipalities thereof.

29
Sec. 3. COA Jurisdiction
▪ The Commission on Audit has audit jurisdiction over
“government-owned and controlled corporations with
original charters, as well as government-owned or
controlled corporations without original charters. The
nature or purpose of the corporation is not material in
determining COA’s audit jurisdiction. Neither is the
manner of creation of a corporation, whether under a
general or special law.
30
“
“No law shall be passed
exempting any entity of the
Government, or any
investment of public funds,
from the jurisdiction of the
Commission on Audit.”

31
Audit of Private Entities
▪ Facts: Petitioners were end-users of copra. PD 276 imposed a levy
on copra to be collected by the end-users from the sellers of the
copra. The fund was to be used to subsidize the purchase of copra
to maintain the stability of the price. The COA audited the
petitioners and found that there was a deficiency in their collection
of the levy. Petitioners argued that the COA had no authority to
audit as they were not government-owned or controlled
corporation.

32
Audit of Private Entities

▪ Held: The argument has no merit. Under the

Constitution, the COA has the power to audit non-
governmental entities receiving subsidy from or
through the government. (Blue Bar Coconut
Philippines v. Tantuico)

33
Sec. 4. Annual Report to the President and Congress
▪ The President and the Congress shall be informed of the
financial status of the government and the manner in which
revenues have been collected, appropriation laws have been
implemented, and expenditures or uses of public funds and
properties undertaken. Information contained in this report and
the recommendations made by the Commission on Audit will be
useful in enabling the government to improve its financial
operations.

34
Thanks!
Ridzanna M. Abdulgafur
Alayka A. Anuddin
Stephany A. Polinar

35