MALACAANG

M 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 residential !ecree "o# $%$ have rendered more &ressing
the long'felt need to codify in revised and u&dated form, in (ee&ing with modern trends of government auditing
and &rogressive legislation on the sub)ect, various scattered auditing laws, rules and regulations, and to
incor&orate therein &residential decrees, orders, &roclamations, and instructions germane and relevant thereto
for integrated effect*
"+W, ,HERE-+RE, ., -ER!."A"! E# MARC+S, resident of the hili&&ines, by virtue of the &owers vested
in me by the Constitution, do hereby order and decree/
PRELIMINARY TITLE
GENERAL PROVISIONS
Section 1. Title. ,his law shall be (nown and cited as the 01overnment Auditing Code of the hili&&ines#0
Section . Declaration of Policy. .t is the declared &olicy of the State that all resources of the government shall
be managed, e2&ended or utilized in accordance with law and regulations, and safeguard against loss or
wastage through illegal or im&ro&er dis&osition, with a view to ensuring efficiency, economy and effectiveness
in the o&erations of government# ,he res&onsibility to ta(e care that such &olicy is faithfully adhered to rests
directly with the chief or head of the government agency concerned#
Section !. Definition of terms. Wherever used in this Code, the following terms shall be ta(en and understood
in the sense indicated hereunder, unless the conte2t otherwise re3uires/
4# 0-und0 is a sum of money or other resources set aside for the &ur&ose of carrying out s&ecific
activities or attaining certain ob)ectives in accordance with s&ecial regulations, restrictions, or
limitations, and constitutes an inde&endent fiscal and accounting entity#
5# 01overnment funds0 includes &ublic moneys of every sort and other resources &ertaining to any
agency of the government#
6# 0Revenue -unds0 com&rises all funds derived from the income of any agency of the government
and available for a&&ro&riation or e2&enditure in accordance with law#
7# 0,rust funds0 refers to funds which have come officially into the &ossession of any agency of the
government or of a &ublic officer as trustee, agent, or administrator, or which have been received for
the fulfillment of some obligation#
8# 0!e&ository funds0 com&rises funds over which the officer accountable therefore may retain control
for the lawful &ur&oses for which they came into his &ossession# .t embraces moneys in any and all
de&ositories#
9# 0!e&ository0 means any financial institution lawfully authorized to receive government moneys u&on
de&osit#
:# 0Resources0 refers to the actual assets of any agency of the government such as cash, instruments
re&resenting or convertible to money, receivables, lands, buildings, as well as contingent assets such
as estimated revenues a&&lying to the current fiscal &eriod not accrued or collected and bonds
authorized and unissued#
$# 01overnment agency0 or 0agency of the government,0 or 0agency refers to any de&artment, bureau
or office of the national government, or any of its branches and instrumentalities, or any &olitical
subdivision, as well as any government'owned or controlled cor&oration, including its subsidiaries, or
other self'governing board or commission of the government#
Section 4. Fundamental principles. -inancial transactions and o&erations of any government agency shall be
governed by the fundamental &rinci&les set forth hereunder, to wit/
4# "o money shall be &aid out of any &ublic treasury of de&ository e2ce&t in &ursuance of an
a&&ro&riation law or other s&ecific statutory authority#
5# 1overnment funds or &ro&erty shall be s&ent or used solely for &ublic &ur&oses#
6# ,rust funds shall be available and may be s&ent only for the s&ecific &ur&ose for which the trust was
created or the funds received#
7# -iscal res&onsibility shall, to the greatest e2tent, be shared by all those e2ercising authority over the
financial affairs, transactions, and o&erations of the government agency#
8# !isbursements or dis&osition of government funds or &ro&erty shall invariably bear the a&&roval of
the &ro&er officials#
9# Claims against government funds shall be su&&orted with com&lete documentation#
:# All laws and regulations a&&licable to financial transactions shall be faithfully adhered to#
$# 1enerally acce&ted &rinci&les and &ractices of accounting as well as of sound management and
fiscal administration shall be observed, &rovided that they do not contravene e2isting laws and
regulations#
TITLE I
THE COMMISSION ON AUDIT
CHAPTER 1
ORGANI"ATION
Section 5. Composition of the Commission on Audit qualifications, term, and salary of members.
4# ,he Commission on Audit, hereinafter referred to as the Commission, shall be com&osed of a
Chairman and two Commissioners, who shall be natural'born citizens of the hili&&ines and, at the
time of their a&&ointment, at least forty years of age and certified &ublic accountants or members of
the hili&&ine ;ar for at least ten years#
5# ,he Chairman and the Commissioners shall be a&&ointed by the rime Minister for a term of seven
years without rea&&ointment# +f the Commissioners first a&&ointed, one shall hold office for seven
years, another for five years, and the third for three years# A&&ointment to any vacancy shall only be
for the une2&ired &ortion of the term of the &redecessor#
6# ,he Chairman and each Commissioner shall receive as annual salary of si2ty thousand &esos and
fifty thousand &esos, res&ectively, which shall not be decreased during their continuance in office#
Section #. The Commission Proper.
4# -or &ur&oses of this Code and as a com&onent of the organizational structure of the Commission,
the Chairman and the two Commissioners shall together be (nown as the Commission ro&er and as
such shall be distinguished from the other com&onents of the Commission consisting of the central
and regional offices which are hereinafter created#
5# ,he Commission ro&er shall sit as a body to determine &olicies, &romulgate rules and regulations,
and &rescribe standards governing the &erformance by the Commission of its &owers and functions#
6# ,he Chairman shall act as the &residing officer of the Commission ro&er and the chief e2ecutive
officer of the Commission# As such chief e2ecutive officer, he shall be res&onsible for the general
administration of the Commission#
7# ,he Chairman and each Commissioner shall have such technical and clerical &ersonnel in their
res&ective offices as may be re3uired by the e2igencies of the service#
Section $. Central and regional offices.
4# ,he Commission shall have the following central offices/
<a= Administrative +ffice
<b= lanning, -inancial, and Management +ffice
<c= >egal +ffice
<d= Accountancy +ffice
<e= "ational 1overnment Audit +ffice
<f= >ocal 1overnment Audit +ffice
<g= Cor&orate Audit +ffice
<h= erformance Audit +ffice
<i= Man&ower !evelo&ment +ffice
<)= ,echnical Service +ffice
,hese offices shall &erform &rimarily staff functions, e2ercise technical su&ervision over the
regional offices in matters &ertaining to their res&ective functional areas, and &erform such
other functions as may be assigned by the Chairman#
5# ,he Commission shall (ee& and maintain such regional offices as may be re3uired by the
e2igencies of the service in accordance with the .ntegrated Reorganization lan for the national
government, or as may be &rovided by law, which shall serve as the immediate re&resentatives of the
Commission in the regions under the direct control and su&ervision of the Chairman#
6# ,he central and regional offices shall each be headed by a Manager and a Regional !irector,
res&ectively# ,he Manager of the >egal +ffice shall also be (nown and shall act as the 1eneral
Counsel of the Commission#
Section %. Commission Secretariat. ,here shall be a Commission Secretariat to be headed by the Secretary to
the Commission who shall have the ran( and &rivileges of central office manager#
Section &. The Administrative ffice. ,he Administrative +ffice shall &erform the following functions/
4# !evelo& and maintain a &ersonnel &rogram which shall include recruitment, selection, a&&ointment,
&erformance evaluation, em&loyee relations, and welfare services* and
5# rovide the Commission with services related to &ersonnel, records, su&&lies, e3ui&ment, medical,
collections and disbursements, security, general and other related services#
Section 1'. The Planning, Financial, and !anagement ffice. ,he lanning, -inancial, and Management
+ffice shall have the following functions/
4# -ormulate long'range and annual &lans and &rograms for the Commission*
5# -ormulate basic &olicies and guidelines for the &re&aration of the budget of the Commission,
coordinate with the ;udget Commission and the +ffice of the resident <rime Minister= in the
&re&aration of the said budget*
6# Maintain and administer the accounting system &ertaining to the accounts of the Commission*
7# !evelo& and administer a system for monitoring the &rices of materials su&&lies, and e3ui&ment
&urchased by the government*
8# !evelo& and maintain the management information system of the Commission* and
9# !evelo& and administer a management im&rovement &rogram, including a system for measurement
of &erformance of auditing units on which an annual re&ort shall be submitted to the Chairman not later
than the thirty'first day of ?anuary each year#
Section 11. The "egal ffice. ,he >egal +ffice shall be charged with the following res&onsibilities/
4# erform advisory and consultative functions and render legal services with res&ect to the
&erformance of the functions of the Commission and the inter&retation of &ertinent laws and auditing
rules and regulations*
5# Handle the investigation of administrative cases filed against the &ersonnel of the Commission,
evaluate and act on all re&orts of involvement of the said &ersonnel in anomalies or irregularities in
government transactions, and &erform any other investigative wor( re3uired by the Commission u&on
assignment by the Chairman*
6# Re&resent the Commission in &reliminary investigations of malversation cases discovered in audit,
assist and collaborate with the Solicitor 1eneral and the ,anod ;ayan in handling cases involving the
Chairman or any of the Commissioners, and other officials and em&loyees of the Commission in their
official ca&acity* and
7# Coordinate, for the Commission and with the a&&ro&riate legal bodies of government, with res&ect to
legal &roceedings towards the collection and enforcement of debts and claims, and the restitution of
funds and &ro&erty, found to be due any government agency in the settlement and ad)ustment of its
accounts by the commission#
Section 1. The Accountancy ffice. ,he Accountancy +ffice shall have the following functions/
4# re&are, for the Commission, the annual financial re&ort of the 1overnment, its subdivisions,
agencies and instrumentalities, including government'owned or controlled cor&orations, and such
other financial or statistical re&orts as may be re3uired by the Commission*
5# @erify a&&ro&riations of national government agencies and control fund releases thereto* and
6# re&are statements on revenues and e2&enditures of local government units, and on their legal
borrowing and net &aying ca&acities for reclassification and other &ur&oses#
Section 1!. The #ational $overnment Audit ffice. ,he "ational 1overnment Audit +ffice shall &erform the
following functions*
4# -ormulate and develo& &lans, &rograms, o&erating standards, and administrative techni3ues for the
im&lementation of auditing rules and regulations in de&artments, regions, bureau, and offices of the
"ational 1overnment*
5# -ormulate accounting rules and regulations for de&artments, regions, bureaus, and offices of the
"ational 1overnment* and
6# Advise and assist the Chairman on matters &ertaining to the audit of the de&artments, regions,
bureaus, and offices of the "ational 1overnment#
Section 14. The "ocal $overnment Audit ffice. ,he >ocal 1overnment Audit +ffice shall have the following
functions*
4# -ormulate and develo& &lans, &rograms, o&erating standards, and administrative techni3ues for the
im&lementation of auditing rules and regulations for local government units*
5# -ormulate accounting rules and regulations for local government units* and
6# Advise and assist the Chairman on matters &ertaining to the audit of local government units#
Section 15. The Corporate Audit ffice. ,he Cor&orate Audit +ffice shall &erform the following functions/
4# -ormulate and develo& &lans, &rograms, o&erating standards, and administrative techni3ues for the
im&lementation of auditing rules and regulations in government'owned or controlled cor&orations and
self'governing boards, commissions, or agencies of the government, as well as for the conduct of audit
of financial o&erations of &ublic utilities and franchises*
5# -ormulate accounting rules and regulations for government'owned or controlled cor&orations and
self'governing boards, commissions, or agencies of the government*
6# Advise and assist the Chairman on matters &ertaining to the audit of government'owned or
controlled cor&orations and self'governing boards, commissions, or agencies of the government* and
7# Consolidate the cor&orate audit re&orts from all the regions for inclusion in the annual re&ort of the
Commission#
Section 1#. The Performance Audit ffice. ,he erformance Audit +ffice shall have the following functions/
4# Conduct, consistently with the e2ercise by the Commission of its visitorial &owers as hereinafter
conferred, variable sco&e audit of non'governmental firms subsidized by the government or
government authority, or those re3uired to &ay levies or government share those funded by donations
through the government, and those for which the government has &ut u& a counter&art fund/ rovided,
,hat such audits shall be limited to the funds or subsidies coming from the government* and
5# Anderta(e audits of the legality of government e2&enditures, with &articular em&hasis on the
statutory authority governing the usage of a&&ro&riated funds#
Section 1$. The !anpo%er Development ffice. ,he Man&ower !evelo&ment +ffice shall &erform the
following functions/
4# -ormulate long'range &lans for a com&rehensive training &rogram for all &ersonnel of the
Commission and &ersonnel of the agencies of government, with res&ect to Commission rules and
regulations and audit matters*
5# re&are and im&lement annual training &rograms, consistent with its long'range &lans*
6# !evelo& its ca&ability to im&lement training &rograms*
7# Set u& and maintain a library for the Commission* and
8# ublish the &rofessional )ournal of the Commission#
Section 1%. The Technical Service ffice. ,he ,echnical Service +ffice shall &erform the following functions*
4# !evelo& and &ro&ose auditing systems for im&lementation in the government*
5# Render consultancy services related to the discharge of government auditing functions*
6# Assist in the formulation of accounting rules and regulations and in seeing to it that these are
observed by agencies of government, in coordination with the Accountancy +ffice*
7# Review and evaluate contracts, and ins&ect and a&&raise infrastructure &ro)ects* and
8# .nitiate s&ecial studies on auditing matters#
Section 1&. The &egional ffices. Each regional office shall &erform the following functions/
4# E2ercise su&ervision and control over the im&lementation of auditing rules and regulations in any
agency of the government with &rinci&al offices or &lace of o&erations within the region, including the
"ational Assembly*
5# Review, analyze and consolidate local, national and cor&orate audit re&orts &ertaining to the region*
6# A&on delegation by the Commission ro&er, e2ercise authority on internal Commission
administration on &ersonnel, &lanning, financial <budgetary and accounting=, and legal matter
&ertaining to the region* and
7#erform such other related functions as may be assigned by the Chairman#
Section '. Auditing units' qualifications and assignment of heads.
4# ,here shall be in each agency of the government an auditing unit which shall be &rovided by the
audited agency with a suitable and sufficient office s&ace together with su&&lies, e3ui&ment, furniture,
and other necessary o&erating e2&enses for its &ro&er maintenance, including e2&enses for travel and
trans&ortation#
5# ,he auditing unit shall be headed by an auditor assigned by the Commission who shall be a certified
&ublic accountant or a member of the ;ar or a holder of a college degree in commerce or business
administration* ma)or in accounting#
6# ,he corres&onding assignment orders issued by the Commission to such auditors and their su&&ort
&ersonnel holding core auditing &ositions shall be su&&lementary to their a&&ointments which are
without s&ecifications of station#
7# ,he Commission shall have the authority to ma(e changes in such assignments and to effect a
&eriodic reshuffle of heads of auditing units as well as their su&&ort &ersonnel whenever the e2igencies
of the service so re3uire# However, such changes and reshuffle shall not affect the tenure of office of
the incumbents of the &ositions involved and shall not constitute a demotion or reduction in ran( or
salary, nor result in a change in status#
Section 1. Auditing units for ne%ly(created agencies. ,he creation of every new agency shall be construed to
include the establishment of an auditing unit therein, and the a&&ro&riation or allotment therefor is deemed to
include the amounts necessary to &rovide such agency with ade3uate auditing services as determined by the
Commission#
Section . #umber and compensation of auditing personnel.
4# ,he assignment of Commission re&resentatives and su&&ort &ersonnel to agencies of the
government shall be determined solely by the Commission#
5# ,he salaries and other forms of com&ensation of the &ersonnel of the Commission shall follow a
common &osition classification and com&ensation &lan regardless of agency of assignment, and shall
be sub)ect to #!# "o# %$8#
6# All officials and em&loyees of the Commission, including its re&resentatives and su&&ort &ersonnel
shall be &aid their salaries, emoluments, and allowances directly by the Commission out of its
a&&ro&riations and contributions, as &rovided in this Code#
Section !. Professionali)ation of audit service. ,he Commission shall develo& and ado&t for its officials and
em&loyees a com&rehensive and continuing man&ower and develo&ment &rogram#
Section 4. Appropriations and funding.
4# ,he amount of a&&ro&riations for the annual o&erating e2&enses of the Commission, including the
salaries, allowances and other emoluments of all its officials and em&loyees and its central and
regional offices as well as in the auditing units in the various national and local government agencies,
including government'owned or controlled cor&oration, shall be included in the annual general
a&&ro&riations law# ,he usage of these funds shall be government by the general a&&ro&riations and
other budget laws*
5# All government'owned or controlled cor&orations, including their subsidiaries, and self'governing
boards, commissions, or agencies of the government shall a&&ro&riate in their res&ective budgets and
remit to the "ational ,reasury an amount at least e3uivalent to the a&&ro&riation for the salaries and
allowances of the re&resentative and staff of the Commission during the &receding fiscal year*
6# A ma2imum of one'half of one &er'centum <4B5 of 4C= of the collections from national internal
revenue ta2es not otherwise accruing to S&ecial -unds or S&ecial Accounts in the 1eneral -und of the
"ational 1overnment, u&on authority from the Minister <Secretary= of -inance, shall be deducted from
such collections and shall be remitted to the "ational ,reasury to cover the cost of auditing services
rendered to local government units*
7# ,he amount estimated to be earned as a result for the assessments on government'owned or
controlled cor&orations, local government units, and other agencies as &rovided for in this Section shall
be ta(en into consideration in the &re&aration of the annual budget of the Commission, in accordance
with &ertinent budget laws# ,he 1eneral A&&ro&riations law shall &rovide each year for the cost of
Commission o&erations as may be su&&orted by available funds, in order to meet the audit
re3uirements of national and local government units and of government'owned or controlled
cor&orations and other agencies covered by this Code#
CHAPTER
(URISDICTION) PO*ERS AND FUNCTIONS OF THE COMMISSION
Section 5. Statement of ob*ectives. .n (ee&ing with its Constitutional mandate, the Commission adheres to
the following &rimary ob)ectives/
4# ,o determine whether or not the fiscal res&onsibility that rests directly with the head of the
government agency has been &ro&erly and effectively discharged*
5# ,o develo& and im&lement a com&rehensive audit &rogram that shall encom&ass an e2amination of
financial transactions, accounts, and re&orts, including evaluation of com&liance with a&&licable laws
and regulations*
6# ,o institute control measures through the &romulgation of rules and regulations governing the
recei&ts, disbursements, and uses of funds and &ro&erty, consistent with the total economic
develo&ment effort of the government*
7# ,o &romulgate auditing and accounting rules and regulations so as to facilitate the (ee&ing, and
enhance the information value, of the accounts of the government*
8# ,o ado&t measures calculated to hasten the full &rofessionalization of its services*
9# ,o institute measures designed to &reserve and ensure the inde&endence of its re&resentatives*
and
:# ,o endeavor to bring its o&erations closer to the &eo&le by the delegation of authority through
decentralization, consistent with the &rovisions of the new Constitution and the laws#
Section #. $eneral *urisdiction. ,he authority and &owers of the Commission shall e2tend to and com&rehend
all matters relating to auditing &rocedures, systems and controls, the (ee&ing of the general accounts of the
1overnment, the &reservation of vouchers &ertaining thereto for a &eriod of ten years, the e2amination and
ins&ection of the boo(s, records, and &a&ers relating to those accounts* and the audit and settlement of the
accounts of all &ersons res&ecting funds or &ro&erty received or held by them in an accountable ca&acity, as
well as the e2amination, audit, and settlement of all debts and claims of any sort due from or owing to the
1overnment or any of its subdivisions, agencies and instrumentalities# ,he said )urisdiction e2tends to all
government'owned or controlled cor&orations, including their subsidiaries, and other self'governing boards,
commissions, or agencies of the 1overnment, and as herein &rescribed, including non'governmental entities
subsidized by the government, those funded by donations through the government, those re3uired to &ay levies
or government share, and those for which the government has &ut u& a counter&art fund or those &artly funded
by the government#
Section $. Appointing po%er. ,he Commission ro&er shall a&&oint, sub)ect to Civil Service >aw the officials
and em&loyees of the Commission whenever they are stationed or assigned#
Section %. +,amining authority. ,he Commission shall have authority to e2amine boo(s, &a&ers, and
documents filed by individuals and cor&orations with, and which are in the custody of, government offices in
connection with government revenue collection o&erations, for the sole &ur&ose of ascertaining that all funds
determined by the a&&ro&riate agencies as collectible and due the government have actually been collected,
e2ce&t as otherwise &rovided in the .nternal Revenue Code of 4%::#
Section &. -isitorial Authority.
4# ,he Commission shall have visitorial authority over non'government entities subsidized by the
government, those re3uired to &ay levies or government share, those which have received counter&art
funds from the government or are &artly funded by donations through the government, the said
authority however &ertaining only to the audit of those funds or subsidiaries coming from or through
the government#
5# A&on direction of the resident <rime Minister=, the Commission shall li(ewise e2ercise visitorial
authority over non'governmental entities whose loans are guaranteed by the 1overnment, &rovided
that such authority shall &ertain only to the audit of the governmentDs contingent liability#
Section !'. Fees for audit and other services.
4# ,he Commission shall fi2 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, counter&art funding by government, or where audited records become the basis for a
government levy or share# -ees of this nature shall accrue to the 1eneral -und and shall be remitted
to the ,reasurer of the hili&&ines within 4E days following com&letion of the audit#
5# Whenever the Commission contracts with any government entity, to render audit and related
services beyond the normal sco&e of such services, the Commission is em&owered to fi2 and collect
reasonable fees# Such fees shall either be a&&ro&riated in the agencyDs current budget, charged
against its savings, or a&&ro&riated in its succeeding yearDs budget# Remittance shall accrue to the
1eneral -und and shall be made to the ,reasurer of the hili&&ines within the time &rovided for in the
contract of service, or in the billing rendered by the Commission#
Section !1. Deputi)ation of private licensed professionals to assist government auditors.
4# ,he Commission may, when the e2igencies of the service so re3uire, de&utize and retain in the
name of the Commission such certified &ublic accountants and other licensed &rofessionals not in the
&ublic service as it may deem necessary to assist government auditors in underta(ing s&ecialized
audit engagements#
5# ,he de&utized &rofessionals shall be entitled to such com&ensation and allowances as may be
sti&ulated, sub)ect to &ertinent rules and regulations on com&ensation and fees#
Section !. $overnment contracts for auditing, accounting, and related services.
4# "o government agency shall enter into any contract with any &rivate &erson or firm for services to
underta(e studies and services relating to government auditing, including services to conduct, for a
fee, seminars or wor(sho&s for government &ersonnel on these to&ics, unless the &ro&osed contract is
first submitted to the Commission to enable it to determine if it has the resources to underta(e such
studies or services# ,he Commission may engage the services of e2&erts from the &ublic or &rivate
sector in the conduct of these studies#
5# Should the Commission decide not to underta(e the study or service, it shall nonetheless have the
&ower to review the contract in order to determine the reasonableness of its costs#
Section !!. Prevention of irregular, unnecessary, e,cessive, or e,travagant e,penditures of funds or uses of
property' po%er to disallo% such e,penditures. ,he Commission shall &romulgate such auditing and accounting
rules and regulations as shall &revent irregular, unnecessary, e2cessive, or e2travagant e2&enditures or uses
of government funds or &ro&erty#
Section !4. Settlement of accounts bet%een agencies. ,he Commission shall have the &ower, under such
regulations as it may &rescribe, to authorize and enforce the settlement of accounts subsisting between
agencies of the government#
Section !5. Collection of indebtedness due the government. ,he Commission shall, through &ro&er channels,
assist in the collection and enforcement of all debts and claims, and the restitution of all funds or the
re&lacement or &ayment at a reasonable &rice of &ro&erty, found to be due the 1overnment, or any of its
subdivisions, agencies or instrumentalities, or any government' owned or controlled cor&oration or self'
governing board, commission or agency of the government, in the settlement and ad)ustment of its accounts# .f
any legal &roceeding is necessary to that end, the Commission shall refer the case to the Solicitor 1eneral, the
1overnment Cor&orate Counsel, or the legal staff of the creditor government office or agency concerned to
institute such legal &roceeding# ,he Commission shall e2tend full su&&ort in the litigation# All such moneys due
and &ayable shall bear interest at the legal rate from the date of written demand by the Commission#
Section !#. Po%er to compromise claims.
4# When the interest of the government so re3uires, the Commission may com&romise or release in
whole or in &art, any claim or settled liability to any government agency not e2ceeding ten thousand
&esos and with the written a&&roval of the rime Minister, it may li(ewise com&romise or release any
similar claim or liability not e2ceeding one hundred thousand &esos, the a&&lication for relief therefrom
shall be submitted, through the Commission and the rime Minister, with their recommendations, to
the "ational Assembly#
5# ,he res&ective governing bodies of government'owned or controlled cor&orations, and self'
governing boards, commissions or agencies of the government shall have the e2clusive &ower to
com&romise or release any similar claim or liability when e2&ressly authorized by their charters and if
in their )udgment, the interest of their res&ective cor&orations or agencies so re3uires# When the
charters do not so &rovide, the &ower to com&romise shall be e2ercised by the Commission in
accordance with the &receding &aragra&h#
6# ,he Commission may, in the interest of the government, authorize the charging or crediting to an
a&&ro&riate account in the "ational ,reasury, small discre&ancies <average or shortage= in the
remittances to and disbursements of the "ational ,reasury, sub)ect to the rules and regulations as it
may &rescribe#
Section !$. &etention of money for satisfaction of indebtedness to government. When any &erson is indebted
to any government agency, the Commission may direct the &ro&er officer to withhold the &ayment of any
money due such &erson or his estate to be a&&lied in satisfaction of the indebtedness#
Section !%. Authority to e,amine accounts of public utilities.
4# ,he Commission shall e2amine and audit the boo(s, records, and accounts of &ublic utilities in
connection with the fi2ing of rates of every nature, or in relation to the &roceedings of the &ro&er
regulatory agencies, for &ur&oses of determining franchise ta2es#
5# !uring the e2amination and audit, the &ublic utility concerned shall &roduce all the re&orts, records,
boo(s of accounts and such other &a&ers as may be re3uired# ,he Commission shall have the &ower
to e2amine under oath any official or em&loyee of the said &ublic utility#
6# Any &ublic utility refusing to allow an e2amination and audit of its boo(s of accounts and &ertinent
records, or offering unnecessary obstruction to the e2amination and audit, or found guilty of concealing
any material information concerning its financial status shall be sub)ect to the &enalties &rovided by
law#
Section !&. Submission of papers relative to government obligations.
4# ,he Commission shall have the &ower, for &ur&oses of ins&ection, to re3uire the submission of the
original of any order, deed, contract, or other document under which any collection of, or &ayment
from, government funds may be made, together with any certificate, recei&t, or other evidence in
connection therewith# .f an authenticated co&y is needed for record &ur&oses, the co&y shall u&on
demand be furnished#
5# .n the case of deeds to &ro&erty &urchased by any government agency, the Commission shall
re3uire a certificate of title entered in favor of the government or other evidence satisfactory to it that
the title is in the government#
6# .t shall be the duty of the officials or em&loyees concerned including those in non'government
entities under audit, or affected in the audit of government and non'government entities, to com&ly
&rom&tly with these re3uirements# -ailure or refusal to do so without )ustifiable cause shall constitute a
ground for administrative disci&linary action as well as for disallowing &ermanently a claim under
e2amination, assessing additional levy or government share, or withholding or withdrawing
government funding or donations through the government#
Section 4'. .nvestigatory and inquisitorial po%ers' po%er to punish for contempt.
4# ,he Chairman or any Commissioner of the Commission, the central office managers, the regional
directors, the auditors of any government agency, and any other official or em&loyee of the
Commission s&ecially de&uted in writing for the &ur&ose by the Chairman shall, in com&liance with the
re3uirement of due &rocess, have the &ower to summon the &arties to a case brought before the
Commission for resolution, issue sub&oena and sub&oena duces tecum, administer oaths, and
otherwise ta(e testimony in any investigation or in3uiry on any matter within the )urisdiction of the
Commission#
5# ,he Commission shall have the &ower to &unish contem&ts &rovided for in the Rules of Court, under
the same &rocedure and with the same &enalties &rovided therein# Any violation of any final and
e2ecutory decision, order or ruling of the Commission shall constitute contem&t of the Commission#
Section 41. Annual report of the Commission.
4# ,he Commission shall submit to the resident, the rime Minister, and the "ational Assembly not
later than the last day of Se&tember of each year an annual re&ort on the financial condition and
results of o&eration of all agencies of the government which shall include recommendations of
measures necessary to im&rove the efficiency and effectiveness of these agencies#
5# ,o carry out the &ur&oses of this section, the chief accountant or the official in charge or (ee&ing the
accounts of a government agency shall submit to the Commission year'end trial balances and such
other su&&orting or subsidiary statements as may be re3uired by the Commission not later than the
fourteenth day of -ebruary# ,rial balances returned by the Commission for revision due to non'
com&liance with accounting rules and regulations, shall be resubmitted within three days after the date
of recei&t by the official concerned#
6# -ailure on the &art of any official or em&loyee to com&ly with the &rovisions of the immediately
&receding &aragra&h shall cause the automatic sus&ension of the &ayment of his salary and other
emoluments until he shall have com&lied therewith# ,he violation of these &rovisions for at least three
times shall sub)ect the offender to administrative disci&linary action#
Section 4. Statement of monthly receipts and disbursements. ,he Commission shall forward to the Minister
<Secretary= of -inance, as soon as &racticable and within si2ty days after the e2&iration of each month, a
statement of all recei&ts of the national government of whatever class, and &ayments of moneys made on
warrants or otherwise during the &receding month#
Section 4!. Po%ers, functions, and duties of auditors as representatives of the Commission.
4# ,he auditors shall e2ercise such &owers and functions as may be authorized by the Commission in
the e2amination, audit and settlement of the accounts, funds, financial transactions, and resources of
the agencies under their res&ective audit )urisdiction#
5# A re&ort of audit for each calendar year shall be submitted on the last wor(ing day of -ebruary
following the close of the year, by the head of each auditing unit through the Commission to the head
or the governing body of the agency concerned, and co&ies thereof shall be furnished the government
officials concerned or authorized to receive them# Sub)ect to such rules and regulations as the
Commission may &rescribe from time to time, the re&ort shall set forth the sco&e of audit and shall
include a statement of financial condition* a statement of sur&lus or deficit analysis* a statement of
o&erations* a statement of changes in financial &osition* and such comments and information as may
be necessary together with such recommendations with res&ect thereto as may be advisable, including
a re&ort of any im&airment of ca&ital noted in the audit# .t shall also show s&ecifically any &rogram,
e2&enditure, or other financial transaction or underta(ing observed in the course of audit which in the
o&inion of the auditor has been carried out or made without authority of law# ,he auditor shall render
such other re&orts as the Commission may re3uire#
6# .n the &erformance of their res&ective audit functions as herein s&ecified, the auditors shall em&loy
such auditing &rocedures and techni3ues as are determined by the Commission under regulations that
it may &romulgate#
7# ,he auditors in all auditing units shall have the custody, and be res&onsible for the safe(ee&ing and
&reservation of &aid e2&ense vouchers, )ournal vouchers, stubs of treasury warrants or chec(s, re&orts
of collections and disbursements and similar documents together with their res&ective su&&orting
&a&ers, under regulations of the Commission#
Section 44. Chec/ and audit of property or supplies. ,he auditor shall from time to time conduct a careful and
thorough chec( and audit of all &ro&erty or su&&lies of the agency to which he is assigned# Such chec( and
audit shall not be confined to a mere ins&ection and e2amination of the &ertinent vouchers, inventories, and
other &a&ers but shall include an ocular verification of the e2istence and condition of the &ro&erty or su&&lies#
,he recommendation of the auditor shall be embodied in the &ro&er re&ort#
Section 45. Annual audit and %or/ program. Each auditor who is the head of an auditing unit shall develo& and
devise an annual wor( &rogram and the necessary audit &rogram for his unit in accordance with regulations of
the Commission#
Section 4#. Sei)ure of office by auditor.
4# ,he boo(s accounts, &a&ers and cash of any local treasurer or other accountable officer shall at all
times be o&en to the ins&ection of the Commission or its duly authorized re&resentative#
5# .n case an e2amination of the accounts of a local treasurer discloses a shortage in cash which
should be on hand, it shall be the duty of the e2amining officer to seize the office and its contents,
notify the Commission and the local chief e2ecutive and thereu&on immediately ta(e full &ossession of
the office and its contents, close and render his accounts to the date of ta(ing &ossession, and
tem&orarily continue the &ublic business of such office#
6# ,he auditor who ta(es &ossession of the office of the local treasurer under this section shall i&so
facto su&ersede the local treasurer until the officer involved is restored, or other &rovision has been
lawfully made for filling the office#
Section 4$. Constructive distraint of property of accountable ffice.
4# A&on the discovery in audit of a shortage in the accounts of any accountable officer and u&on a
finding of a &rima facie case of malversation of &ublic funds or &ro&erty against him, in order to
safeguard the interest of the 1overnment, the Commission may &lace under constructive distraint
&ersonal &ro&erty of the accountable officer concerned where there is reasonable ground to believe
that the said officer is retiring from the government service or intends to leave the hili&&ines or
remove his &ro&erty therefrom or hide or conceal his &ro&erty#
,he constructive distraint shall be effected by re3uiring the accountable officer concerned or any other
&erson having &ossession or control of the &ro&erty to accom&lish a recei&t in the form &rescribed by
the Commission, covering the &ro&erty distrained and obligate himself to &reserve the same intact and
unaltered and not to dis&ose of it in any manner whatever without the e2&ress authority of the
Commission#
5# .n case the said accountable officer or other &erson having the &ossession and control of the
&ro&erty sought to be &laced under constructive distraint refuses or fails to accom&lish the recei&t
herein referred to, the re&resentative of the Commission, effecting the constructive distraint shall
&roceed to &re&are a list of such &ro&erty and in the &resence of two witnesses leave a co&y thereof in
the &remises where the &ro&erty distrained is located after which the said &ro&erty shall be deemed to
have been &laced under the constructive distraint#
CHAPTER !
DECISIONS OF THE COMMISSION
Section 4%. Appeal from decision of auditors. Any &erson aggrieved by the decision of an auditor of any
government agency in the settlement of an account or claim may within si2 months from recei&t of a co&y of the
decision a&&eal in writing to the Commission#
Section 4&. Period for rendering decisions of the Commission. ,he Commission shall decide any case brought
before it within si2ty days from the date of its submission for resolution# .f the account or claim involved in the
case needs reference to other &ersons or offices, or to a &arty interested, the &eriod shall be counted from the
time the last comment necessary to a &ro&er decision is received by it#
Section 5'. Appeal from decisions of the Commission. ,he &arty aggrieved by any decision, order or ruling of
the Commission may within thirty days from his recei&t of a co&y thereof a&&eal on certiorari to the Su&reme
Court in the manner &rovided by law and the Rules of Court# When the decision, order, or ruling adversely
affects the interest of any government agency, the a&&eal may be ta(en by the &ro&er head of that agency#
Section 51. Finality of decisions of the Commission or any auditor. A decision of the Commission or of any
auditor u&on any matter within its or his )urisdiction, if not a&&ealed as herein &rovided, shall be final and
e2ecutory#
Section 5. pening and revision of settled accounts.
4# At any time before the e2&iration of three years after the settlement of any account by an auditor,
the Commission may motu &ro&io review and revise the account or settlement and certify a new
balance# -or that &ur&ose, it may re3uire any account, vouchers, or other &a&ers connected with the
matter to be forwarded to it#
5# When any settled account a&&ears to be tainted with fraud, collusion, or error calculation, or when
new and material evidence is discovered, the Commission may, within three years after the original
settlement, o&en the account, and after a reasonable time for re&ly or a&&earance of the &arty
concerned, may certify thereon a new balance# An auditor may e2ercise the same &ower with res&ect
to settled accounts &ertaining to the agencies under his audit )urisdiction#
6# Accounts once finally settled shall in no case be o&ened or reviewed e2ce&t as herein &rovided#
TITLE II
GOVERNMENT AUDITING
CHAPTER 1
+ASIC POLICIES AND STANDARDS
Section 5!. Definition of government auditing. government Auditing is the analytical and systematic
e2amination and verification of financial transactions, o&erations, accounts, and re&orts of any government
agency for the &ur&ose of determining their accuracy, integrity, and authenticity, and satisfying the
re3uirements of law, rules and regulations#
,he conduct of government audit shall conform with the auditing standards set forth in the following three
sections#
Section 54. $eneral standards.
4# ,he audit shall be &erformed by a &erson &ossessed with ade3uate technical training and
&roficiency as auditor#
5# .n all matters relating to the audit wor(, the auditor shall maintain com&lete inde&endence,
im&artiality and ob)ectivity shall avoid any &ossible com&romise of his inde&endence or any act which
may create a &resum&tion of lac( of inde&endence or the &ossibility of undue influence in the
&erformance of his duties#
6# ,he auditor shall e2ercise due &rofessional care and be guided by a&&licable laws, regulations and
the generally acce&ted &rinci&les of accounting in the &erformance of the audit wor( as well as in the
&re&aration of audit and financial re&orts#
Section 55. +,amination and evaluation standards.
4# ,he audit wor( shall be ade3uately &lanned and assistants shall be &ro&erly su&ervised#
5# A review shall be made of com&liance with legal and regulatory re3uirements#
6# An evaluation shall be made of the system of internal control and related administrative &ractices to
determine the e2tent they can be relied u&on to ensure com&liance with laws and regulations and to
&rovide for efficient, economical and effective o&erations#
7# ,he auditor shall obtain through ins&ections, observation, in3uiries, confirmation and other
techni3ues, sufficient com&etent evidential matter to afford himself a reasonable basis for his o&inions,
)udgments, conclusions, and recommendations#
Section 5#. &eporting standards. 4# Audit re&orts shall be dated, signed manually and shall be issued and
distributed in the manner &rovided by regulations of the Commission#
5# Audit re&orts shall contain basically the transmittal statement, sco&e and ob)ectives of the audit and
time &eriod e2amined highlights, financial information, findings, recommendations and conclusions as
well as other data that may &rovide the management of the audited agency with the necessary in&ut
for the decision'ma(ing &rocess# ,ables, charts, gra&hs and other data to detail the conditions and
facts shall be used in &ro&er cases#
6# Audit re&orts shall meet the following re&orting criteria/
<a= -actual matter must be accurately, com&letely and fairly &resented#
<b= -indings must be &resented ob)ectively and in language as clear and sim&le as the sub)ect
matter &ermits#
<c= -indings must be ade3uately su&&orted by evidence in the audit wor(ing &a&ers#
<d= Re&orts must be concise yet com&lete enough to be readily understood by the users#
<e= .nformation on underlying causes of &roblems must be included so as to assist in
im&lementing or devising corrective actions#
7# Audit re&orts shall/
<a= ut &rimary em&hasis on im&rovement* critical comments shall be &resented in balanced
&ers&ective, recognizing unusual difficulties or circumstances faced by officials concerned#
<b= .dentify and e2&lain issued and 3uestions needing further study and consideration by the
auditor, the agency or others#
<c= .nclude recognition or noteworthy accom&lishments &articularly when management
im&rovements in one area or activity may be a&&lied elsewhere#
<d= .nclude recognition of the views of res&onsible officials of the agency audited on the
auditors findings, conclusions and recommendations# E2ce&t where the &ossibility of fraud or
other com&elling reason may re3uire different treatment, the auditorDs tentative findings and
conclusions should be reviewed with officials# When &ossible, without undue delay, their view
should be obtained in writing and ob)ectively considered and &resented in the final re&ort#
<e= State whether any significant &ertinent information has been omitted because it is deemed
confidential# ,he nature of such information should be described and the law or other basis
under which it is withheld should be stated#
8# Audit re&orts accom&anying financial re&orts shall/
<a= State whether the audit was made in accordance with generally acce&ted auditing
standards, and shall disclose the omission of any auditing &rocedure generally recognized as
normal or deemed necessary by him under the circumstances of a &articular case, as well as
the reasons for the omission# "othing in this section, however, shall be construed to im&ly
authority for the omission of any &rocedure which auditors would ordinarily em&loy in the
course of audit#
<b= E2&ress the auditorDs o&inion with res&ect to
i# whether the financial re&ort have been &resented fairly in accordance with
a&&licable laws and regulations and the generally acce&ted accounting &rinci&les
a&&lied on a consistent basis#
ii# material changes in accounting &rinci&les and &ractices and their effect on the
financial re&orts#
<c= .dentity any matter to which he ta(es e2ce&tion and shall s&ecifically and clearly state his
e2ce&tions together with a statement on the effect thereof, to the e2tent &racticable, on the
related financial re&ort#
<d= Contain a&&ro&riate su&&lementary e2&lanatory information about the contents of the
financial re&ort as may be necessary for full and informative disclosure about the financial
o&erations of the agency audited#
<e= E2&lain violations of legal or other regulatory re3uirements, including instances of non'
com&liance#
CHAPTER
AUDIT O+(ECTIVES
Section 5$. Determination of audit procedures. .n the determination of auditing &rocedures and techni3ues to
be followed and the e2tent of e2amination of vouchers and other documents by government auditors, the
Commission shall give due regard to generally acce&ted &rinci&les of auditing and accounting organizations
and systems, including consideration of the effectiveness of internal control and related administrative &ractices
of the audited agencies#
Section 5%. Audit of assets. ,he e2amination and audit of assets shall be &erformed with a view to ascertaining
their e2istence ownershi&, valuation and encumbrances as well as the &ro&riety of items com&osing the
res&ective asset accounts, determining their agreement with records, &roving the accuracy of such records*
ascertaining if the assets were utilized economically, efficiently and effectively* and evaluating the ade3uacy of
controls over the accounts#
Section 5&. Audit of "iabilities. .n his audit of liabilities the auditor shall see( to establish that all obligations of
the agency have been accurately recorded* only bonafide obligations of the agency have been included* the
obligations incurred are &ro&erly authorized* all &rovisions of trust indentures or mortgages are com&lied with*
and mortgages and other encumbrances are fully disclosed#
Section #'. Audit of revenue accounts. ,he e2amination and audit of revenue accounts shall be &erformed
with a view to ascertaining that earned revenues have been duly recorded* and all recorded revenues have
been earned and a&&ro&riate classifications of revenues have been consistently followed#
Section #1. Audit of e,pense accounts. ,he e2amination of e2&ense accounts shall be underta(en to ascertain
that all e2&enses incurred have been duly authorized* ade3uately funded and documented* &ro&erly recorded*
all recorded e2&enses have been actually incurred* and the classifications of e2&enses are a&&ro&riate and
have been consistently followed#
Section #. Audit of surplus or net%orth. ,he audit of sur&lus or networth shall see( to determine the nature of
the sur&lus, whether current or invested sur&lus* the amount of current sur&lus available to cover
a&&ro&riations for the o&erational e2&enses of the government, the &ro&riety of the ledger accounts and
balance sheet &resentation account* and the &ro&er authority and recording of changes in the ca&ital structure
made during the &eriod under audit#
CHAPTER !
RECEIPT AND DISPOSITION OF FUNDS AND PROPERTY
Section #!. Accounting for moneys and property received by public officials. E2ce&t as may otherwise be
s&ecifically &rovided by law or com&etent authority all moneys and &ro&erty officially received by a &ublic officer
in any ca&acity or u&on any occasion must be accounted for as government funds and government &ro&erty#
1overnment &ro&erty shall be ta(en u& in the boo(s of the agency concerned at ac3uisition cost or an
a&&raised value#
Section #4. Designation of collecting officers for government agencies. ,he head of an agency may designate
such number of collecting officers or agents may be deemed necessary# ,hey shall render re&orts of their
collections, under the regulations of the Commission, to be submitted &rom&tly to the auditor concerned who
shall conduct the necessary e2amination land audit within thirty days from recei&t thereof#
Section #5. Accrual of income to unappropriated surplus of the $eneral Fund. <4= Anless otherwise s&ecifically
&rovided by law, income accruing to the agencies by virtue of the &rovisions of law, orders and regulations shall
be de&osited in the "ational ,reasury or in any duly authorized government de&ository, and shall accrue to the
una&&ro&riated sur&lus of the 1eneral -und of the 1overnment#
<5= Amounts received in trust and from business'ty&e activities of government may be se&arately
recorded and disbursed in accordance with such rules and regulations as may be determined by a
ermanent Committee com&osed of the Secretary <Minister= of -inance as Chairman, and the
Commissioner of the ;udget and the Chairman, Commission of Audit, as members#
Section ##. Special, Fiduciary and Trust Funds. Recei&ts shall be recorded as income of S&ecial -iduciary of
,rust -unds or -unds other than the 1eneral -und only when authorized by law as im&lemented by rules and
regulations issued by the ermanent Committee created in the &receding section#
Section #$. 0arrants and chec/s receivables in payment for ta,es or other indebtedness to the government.
4# An office charged with the collection of revenue or the receiving of moneys &ayable to the
government shall acce&t &ayment for ta2es, dues or other indebtedness to the government in the form
of chec(s and warrants issued in &ayment of government obligations, u&on &ro&er indorsement and
identification of the &ayee or indorsee# Chec(s drawn in favor of the government in &ayment of any
such indebtedness shall li(ewise be acce&ted by the officer concerned#
5# When a chec( drawn in favor of the government is not acce&ted by the drawee ban( for any reason,
the drawer shall continue to be liable for the sum due and all &enalties resulting from delayed
&ayment# Where the reason for non'acce&tance by the drawee ban( is insufficiency of funds, the
drawer shall be criminally liable therefore#
6# At no instance should money in the hands of the collecting officer be utilized for the &ur&ose of
encashing &rivate chec(s#
Section #%. .ssuance of fficial receipt..
4# "o &ayment of any nature shall be received by a collecting officer without immediately issuing an
official recei&t in ac(nowledgment thereof ,he recei&t may be in the form of &ostage, internal revenue
or documentary stam&s and the li(e, or officially numbered recei&ts, sub)ect to &ro&er custody,
accountability, and audit#
5# Where mechanical devices are used to ac(nowledge cash recei&ts, the Commission may a&&rove,
u&on re3uest, e2em&tion from the use of accountable forms#
Section #&. Deposit of moneys in the treasury.
4# ublic officers authorized to receive and collect moneys arising from ta2es, revenues, or recei&ts of
any (ind shall remit or de&osit intact the full amounts so received and collected by them to the treasury
of the agency concerned and credited to the &articular accounts to which the said moneys belong# ,he
amount of the collections ultimately &ayable to other agencies of the government shall thereafter be
remitted to the res&ective treasuries of these agencies, under regulations which the Commission and
the !e&artment <Ministry= of -inance shall &rescribe#
5# When e2igencies of the service so re3uire, under such rules and regulations as the Commission and
the !e&artment <Ministry= of -inance may &rescribe, &ostmasters may be authorized to use their
collections to &ay money orders, telegra&hic transfer and withdrawals from the &ro&er de&ository ban(
whenever their cash advance funds for the &ur&ose have been e2hausted# ,he amount of collections
so used shall be restored u&on recei&t by the &ostmaster of the re&lenishment of his cash advance#
6# ending remittance to the &ro&er treasury, collecting officers may tem&orarily de&osit collections
received by them with any treasury, sub)ect to regulations of the Commission#
7# ,he res&ective treasuries of those agencies shall in turn de&osit with the &ro&er government
de&ository the full amount of the collections not later than the following ban(ing day#
Section $'. Ac/no%ledgment of receipt for funds. Ander such rules and regulations as the Commission and
the !e&artment <Ministry= of -inance may &rescribe, the ,reasurer of the hili&&ines and all authorized
de&ository ban(s shall ac(nowledge recei&t of all funds received by them, the ac(nowledgment bearing the
date of actual remittance or de&osit and indicating from whom and on what account it was received#
Section $1. Creditors1 unclaimed balances.
4# ,here shall be maintained in the boo(s of the Commission an account designated 0CreditorsD
Anclaimed ;alances0 to the credit of which shall be de&osited all moneys for which there is no &resent
rightful claimant# Money accruing to this account shall be held e2clusively for the &ayment of &ertinent
obligations against it, when certified by the Commission, not in e2cess of the res&ective amounts
which accrued to that account by reason of these obligations#
5# After remaining unclaimed for a &eriod of ten years, money in this account shall revert as treasury
funds, to the agency that made the de&osit, or, in the absence thereof to the national government#
Section $. Shipment of government funds or property by carrier' notation of evidence of loss. When
government funds or &ro&erty are trans&orted from one &lace to another by carrier, it shall be u&on &ro&er bill
of lading or recei&t from the carrier, it shall be the duty of the consignee or his re&resentative to ma(e full
notation of any evidence of loss, shortage, or damage, u&on the bill of lading or recei&t before accom&lishing it#
Section $!. Credit for loss occurring in transit or due to casualty or forces ma*eure.
4# When a loss of government funds or &ro&erty occurs while they are in transit or the loss is caused
by fire, theft, or other casualty or force ma)eure, the officer accountable therefore or having custody
thereof shall immediately notify the Commission or the auditor concerned and, within thirty days or
such longer &eriod as the Commission or auditor may in the &articular case allow, shall &resent his
a&&licable for relief, with the available su&&orting evidence# Whenever warranted by the evidence
credit for the loss shall be allowed# An officer who fails to com&ly with this re3uirement shall not be
relieved of liability or allowed credit for any loss in the settlement of his accounts#
5# ,he Commission shall &romulgate rules and regulations to im&lement the &rovisions of this section#
Section $4. !onthly reports of depositories to agency head. At the close of each month, de&ositories shall
re&ort to the agency head, in such from as he may direct, the condition of the agency account standing on their
boo(s# ,he head of the agency shall see to it that a reconciliation is made between the balance shown in the
re&orts and the balance found in the boo(s of the agency#
Section $5. Transfer of funds from one officer to another. ,ransfer of government funds from one officer to
another shall, e2ce&t as allowed by law or regulation, be made only u&on &rior direction or authorization, of the
Commission or its re&resentative#
Section $#. Transfer of property bet%een government agencies. Any government &ro&erty that is no longer
serviceable or needed by the agency to which it belongs may be transferred without cost, or at an a&&raised
value, to other agencies of the government u&on authority of the res&ective heads of agencies in the national
government, or of the governing bodies of government'owned or controlled cor&orations, other self'governing
boards or commissions or the government, or of the local legislative bodies for local government units
concerned#
Section $$. .nvoice and receipt upon transfer of funds or property. When government funds or &ro&erty are
transferred from one accountable officer to another, or from an outgoing officer to his successor, it shall be
done u&on &ro&erly itemized invoice and recei&t which shall invariably su&&ort the clearance to be issued to the
relieved or out'going officer, sub)ect to regulations of the Commission#
Section $%. Disposition of funds or property held by deceased, incapacitated, absconding, or superseded
accountable officer.
4# When an officer, accountable for government funds or &ro&erty absconds with them dies, or
becomes inca&acitated in the &erformance of his duties, the &ro&er agency head shall designate a
custodian to ta(e charge of the funds or &ro&erty until a successor shall have been a&&ointed and
3ualified# ,he agency head may a&&oint a committee to count the cash and ta(e an inventory of the
&ro&erty for which the officer was accountable and to determine the res&onsibility for any shortage
therein# +ne co&y of the inventory and of the re&ort of the Committee duly certified shall be filed with
the Commission but the findings of the committee shall not be conclusive until a&&roved by the
Commission or its duly authorized re&resentative#
5# .f the absconding, deceased, inca&acitated, or su&erseded officer is accountable for funds or
&ro&erty of a &rovince or city, the custodian and committee shall be designated by the Minister
<Secretary= of -inance, and if accountable for munici&al or barrio <barangay= funds or &ro&erty, by the
&rovincial treasurer# .n all other res&ects, the above'&rescribed &roceedings shall be observed#
6# .f the absconding, deceased, inca&acitated, or su&erseded officer is res&onsible to another who is
accountable, the latter may himself designate the committee or ta(e other lawful measures for the
&rotection of his interest#
Section $&. Destruction or sale of unserviceable property. When government &ro&erty has become
unserviceable for any cause, or is no longer needed, it shall, u&on a&&lication of the officer accountable
therefor, be ins&ected by the head of the agency or his duly authorized re&resentative in the &resence of the
auditor concerned and, if found to be valueless or unsalable, it may be destroyed in their &resence# .f found to
be valuable, it may be sold at &ublic auction to the highest bidder under the su&ervision of the &ro&er
committee an award or similar body in the &resence of the auditor concerned or other duly authorized
re&resentative of the Commission, after advertising by &rinted notice in the +fficial 1azette, or for not less than
three consecutive days in any news&a&er of general circulation, or where the value of the &ro&erty does not
warrant the e2&ense of &ublication, by notices &osted for a li(e &eriod in at least three &ublic &laces in the
locality where the &ro&erty is to be sold# .n the event that the &ublic auction fails, the &ro&erty may be sold at a
&rivate sale at such &rice as may be fi2ed by the same committee or body concerned and a&&roved by the
Commission#
Section %'. Final report of accountable officers.
4# An accountable officer, u&on ceasing to act in his official ca&acity as such, shall submit to the
auditor of the agency concerned a re&ort of his accountability#
5# Any remaining balance of such accountability shall be de&osited in the &ro&er treasury without
unnecessary delay#
Section %1. Auditor1s certificate of balance. Auditors of all government agencies, shall certify the balances
arising in the accounts settled by them to the Commission and to the &ro&er treasurer, collecting officer, or
disbursing officer, in such form as the Commission may &rescribe, within si2ty days from the date of recei&t of
those accounts from the treasurer, collecting officer, or disbursing officer concerned#
Section %. Auditor1s notice to accountable officer of balance sho%n upon settlement. ,he auditor concerned
shall, at convenient intervals, send a written notice under a certificate of settlement to each officer whose
accounts have been audited and settled in whole or in &art by him, stating the balances found due thereon and
certified, and the charges or differences arising from the settlement by reason of disallowances, charges, or
sus&ensions# ,he certificate shall be &ro&erly itemized and shall state the reasons for disallowance, charge, or
sus&ension of credit# A charge of sus&ension which is not satisfactorily e2&lained within ninety days after
recei&t of the certificate or notice by the accountable officer concerned shall become a disallowance, unless the
Commission or auditor concerned shall, in writing and for good cause shown, e2tend the time for answer
beyond ninety days#
Section %!. Transcript of auditor1s record as evidence of liability. .n any criminal or civil &roceeding against an
officer for the embezzlement or misa&&ro&riation of government funds or &ro&erty, or to recover an amount due
the government from an accountable officer it shall be sufficient, for the &ur&ose of showing a balance against
him, to &roduce the wor(ing &a&ers of the auditor concerned# A showing in this manner of any balance against
the officer shall be &rima facie evidence of the misa&&ro&riation of the funds or &ro&erty unaccounted for or of
civil liability of the officer as the case may be# ,he e2istence or contents of bonds, contracts, or other &a&ers
relating to or connected with the settlement of any account may be &roved by the &roduction of certified co&ies
thereof but the court may re3uire the &roduction of the original when this a&&ears to be necessary for the
attainment of )ustice#
CHAPTER 4
APPLICATION OF APPROPRIATED FUNDS
Section %4. Disbursement of government funds.
4# Revenue funds shall not be &aid out of any &ublic treasury or de&ository e2ce&t in &ursuance of an
a&&ro&riation law or other s&ecific statutory authority#
5# ,rust funds shall not be &aid out of any &ublic treasury or de&ository e2ce&t in fulfillment of the
&ur&ose for which the trust was created or funds received, and u&on authorization of the legislative
body, or head of any other agency of the government having control thereof, and sub)ect to &ertinent
budget law, rules and regulations#
6# "ational revenue and trust funds shall not be withdrawn from the "ational ,reasury e2ce&t u&on
warrant or other instruments of withdrawal a&&roved by the Minister <Secretary= of -inance as
recommended by the ,reasurer of the hili&&ines#
7# ,em&orary investment of investible cash in the "ational ,reasury in any securities issued by the
"ational 1overnment and its &olitical subdivisions and instrumentalities including government'owned
or controlled cor&orations as authorized by the Secretary <Minister= of -inance, shall not be construed
as disbursements of funds#
Section %5. Appropriation before entering into contract.
4# "o contract involving the e2&enditure of &ublic funds shall be entered into unless there is an
a&&ro&riation therefor, the une2&ended balance of which, free of other obligations, is sufficient to cover
the &ro&osed e2&enditure#
5# "otwithstanding this &rovision, contracts for the &rocurement of su&&lies and materials to be carried
in stoc( may be entered into under regulations of the Commission &rovided that when issued, the
su&&lies and materials shall be charged to the &ro&er a&&ro&riation account#
Section %#. Certificate sho%ing appropriation to meet contract. E2ce&t in the case of a contract for &ersonal
service, for su&&lies for current consum&tion or to be carried in stoc( not e2ceeding the estimated consum&tion
for three months, or ban(ing transactions of government'owned or controlled ban(s no contract involving the
e2&enditure of &ublic funds by any government agency shall be entered into or authorized unless the &ro&er
accounting official of the agency concerned shall have certified to the officer entering into the obligation that
funds have been duly a&&ro&riated for the &ur&ose and that the amount necessary to cover the &ro&osed
contract for the current fiscal year is available for e2&enditure on account thereof, sub)ect to verification by the
auditor concerned# ,he certificate signed by the &ro&er accounting official and the auditor who verified it, shall
be attached to and become an integral &art of the &ro&osed contract, and the sum so certified shall not
thereafter be available for e2&enditure for any other &ur&ose until the obligation of the government agency
concerned under the contract is fully e2tinguished#
Section %$. -oid contract and liability of officer. Any contract entered into contrary to the re3uirements of the
two immediately &receding sections shall be void, and the officer or officers entering into the contract shall be
liable to the government or other contracting &arty for any conse3uent damage to the same e2tent as if the
transaction had been wholly between &rivate &arties#
Section %%. Prohibition against advance payment on government contracts.
4# E2ce&t with the &rior a&&roval of the resident <rime Minister= the government shall not be obliged
to ma(e an advance &ayment for services not yet rendered or for su&&lies and materials not yet
delivered under any contract therefor# "o &ayment, &artial or final, shall be made on any such contract
e2ce&t u&on a certification by the head of the agency concerned to the effect that the services or
su&&lies and materials have been rendered or delivered in accordance with the terms of the contract
and have been duly ins&ected and acce&ted#
5# "otwithstanding the foregoing &aragra&h, any government agency, with the a&&roval of the &ro&er
de&artment head, may furnish su&&lies and materials to any &arty who has a contract with that agency
if the su&&lies and materials are needed in the &erformance of the services being contracted for and
the value thereof does not e2ceed in any one month ten &ercent of the value of the services already
rendered due and unsettled as com&uted by the agency concerned#
Section %&. "imitations on cash advance. "o cash advance shall be given unless for a legally authorized
s&ecific &ur&ose# A cash advance shall be re&orted on and li3uidated as soon as the &ur&ose for which it was
given has been served# "o additional cash advance shall be allowed to any official or em&loyee unless the
&revious cash advance given to him is first settled or a &ro&er accounting thereof is made#
Section &'. Payment of re%ards. When a reward becomes &ayable by authority of law for information given
relative to any offense or for any act done in connection with the a&&rehension of the offender, the reward shall,
in the absence of s&ecial &rovisions, be &aid in such manner as shall be &rescribed by e2ecutive order# ,he
final determination by the &ro&er administrative authority &ursuant to law or any such order, as to whether or
not the &ersons concerned are entitled to any reward and the amount thereof, shall be conclusive u&on the
e2ecutive agencies concerned as regards the liability of the government#
Section &1. Payments to creditors. ayments to creditors shall be made only u&on the s&ecific a&&roval of the
head of the agency concerned or his duly authorized re&resentative, or if there be no such officer, u&on the
a&&roval of the de&artment head endorsed u&on the warrant or chec( or voucher effecting the &ayment#
Section &. Persons authori)ed to dra% %arrants or chec/s for payment out of government funds.
4# Warrants u&on the "ational ,reasury or chec(s draw against duly authorized ban( accounts shall
be drawn by the agency head having control of the a&&ro&riation or fund against which the warrants or
chec(s are chargeable, or by such subordinate officer as shall be designated for that duty by the said
agency head, who shall all be duly de&utized for the &ur&ose by the ,reasurer of the hili&&ines#
Co&ies of the designation shall be furnished the ,reasurer of the hili&&ines and the re&resentative of
the Commission# "otice shall li(ewise be given to the ,reasurer of the hili&&ines and the Commission
when the designation is revo(ed# "o member of the accounting unit or the internal control unit of the
agency may be designated to &erform the duty#
5# Warrants chargeable to national a&&ro&riations or funds not under the control of an agency shall be
drawn by such officer as shall be s&ecified by law, or, in the absence of that officer, by an officer
designated by the resident <rime Minister=#
Section &!. To %hom %arrants or chec/s payable. Warrants chargeable to revenue or trust funds of the
national government or chec(s drawn against the ,reasury Chec(ing Account for Agencies maintained with
any government de&ository shall be made &ayable either directly to the creditor to whom the money is due or to
a disbursing officer for official disbursement#
Section &4. Countersigning of %arrants or chec/s by auditors. "o warrant or chec( shall be &aid by the
,reasurer of the hili&&ines, local treasurer, or any government de&ository unless it is countersigned by a duly
authorized official of the Commission# When in the o&inion of the Commission, the interest of the service so
re3uires the warrant or chec( may be &aid without the countersignature under such rules and regulations as it
may &rescribe from time to time#
Section &5. Treasurer1s responsibility for indorsements. ,he ,reasurer of the hili&&ines shall, within three
years from the date of &ayment by him, be res&onsible for the indorsements on all warrants and chec(s and
shall retain them in his custody, after which they shall be dis&osed of under &ertinent regulations/ rovided, that
they are not needed for &ending civil, criminal or administrative &roceedings#
Section &#. Payment of lost or fraudulently encashed treasury %arrants or chec/s. When any chec( or warrant
is lost, stolen or destroyed, the issuing officer may issue a du&licate chec( or warrant which shall be &aid under
regulations of the Commission in regard to issuance and &ayment and u&on the e2ecution of a bond to
indemnify the issuing agency in such amount and with such security as the Commission may re3uire#
,reasury Warrant or chec( encashed under forged or fraudulent indorsement shall be re&laced by the
,reasurer of the hili&&ines even before the recovery of the e3uivalent amount under rules and regulations that
the Commission and the !e&artment <Ministry= of -inance shall &rescribe#
,he Clearing or ayment of ,reasury warrant and chec( &aid by ban( or other holder in due course and
subse3uently lost may be allowed under regulations of the Commission and the !e&artment <Ministry= of
-inance#
Section &$. Disposition of stale %arrants or chec/s.
4# A ,reasury warrant or chec( which remains outstanding after two years from date of its issue shall
not be &aid by the ,reasurer of the hili&&ines or by any duly authorized de&ository# ,he issuing
agency shall ta(e u& in its boo(s of accounts the amount of this warrant or chec( as sur&lus
ad)ustment of the fund against which it was &reviously charged# A&on &resentation of a stale warrant
or chec(, the issuing agency shall cancel it and issue to the &ayee a substitute warrant or chec( in lieu
thereof#
5# Such sum as may be necessary to meet the obligation arising out of the issuance of substitute
warrants or chec(s chargeable against the general fund shall be charged to the current yearDs 1eneral
A&&ro&riations law, sub)ect to &ertinent budget rules and regulations# Substitute warrants or chec(s
&ayable from funds other than the general fund shall be &aid from the a&&ro&riate funds#
Section &%. &eversion of unliquidated balances of accounts payable. ,he Commission u&on notice to the head
of agency concerned may revert to the una&&ro&riated sur&lus of the general fund of the national government,
any unli3uidated balance of accounts &ayable in the boo(s of the national government, which has been
outstanding for two years or more and against which no actual claim, administrative or )udicial, has been filed
or which is not covered by &erfected contracts on record# ,his section shall not a&&ly to unli3uidated balances
of accounts &ayable in trust funds as long as the &ur&oses for which the funds were created have not been
accom&lished#
Section &&. Transfer of une,pended balances to the general fund. ,he Commission may transfer at any time,
from moneys a&&ro&riated for a s&ecific &ur&ose, to the una&&ro&riated general fund any sur&lus balance
standing to the credit of any a&&ro&riation or fund when the officer having administrative control thereof certifies
to the Commission that there is a sur&lus in e2cess of the re3uirements, or that the wor( or &ur&ose for which
the a&&ro&riation was made has been com&leted, indefinitely &ost&oned or abandoned, and that there is no
outstanding obligation to be &aid therefrom#
Section 1''. &eports of disbursing officers in a government agency. !isbursing officers in any government
agency shall render monthly re&orts of their transactions &ursuant to regulations of the Commission to be
submitted not later than the fifth day of the ensuing month to the auditor concerned who shall conduct the
necessary e2amination and audit within thirty days from recei&t thereof#
CHAPTER 5
ACCOUNTA+ILITY AND RESPONSI+ILITY FOR GOVERNMENT FUNDS AND PROPERTY.
Section 1'1. Accountable officers' bond requirement.
4# Every officer of any government agency whose duties &ermit or re3uire the &ossession or custody of
government funds or &ro&erty shall be accountable therefor and for the safe(ee&ing thereof in
conformity with law#
5# Every accountable officer shall be &ro&erly bonded in accordance with law#
Section 1'. Primary and secondary responsibility.
4# ,he head of any agency of the government is immediately and &rimarily res&onsible for all
government funds and &ro&erty &ertaining to his agency#
5# ersons entrusted with the &ossession or custody of the funds or &ro&erty under the agency head
shall be immediately res&onsible to him, without &re)udice to the liability of either &arty to the
government#
Section 1'!. $eneral liability for unla%ful e,penditures. E2&enditures of government funds or uses of
government &ro&erty in violation of law or regulations shall be a &ersonal liability of the official or em&loyee
found to be directly res&onsible therefor#
Section 1'4. &ecords and reports required by primarily responsible officers. ,he head of any agency or
instrumentality of the national government or any government'owned or controlled cor&oration and any other
self'governing board or commission of the government shall e2ercise the diligence of a good father of a family
in su&ervising accountable officers under his control to &revent the incurrence of loss of government funds or
&ro&erty, otherwise he shall be )ointly and solidarily liable with the &erson &rimarily accountable therefore# ,he
treasurer of the local government unit shall li(ewise e2ercise the same degree of su&ervision over accountable
officers under his su&ervision otherwise, he shall be )ointly and solidarily liable with them for the loss of
government funds or &ro&erty under their control#
Section 1'5. !easure of liability of accountable officers.
4# Every officer accountable for government &ro&erty shall be liable for its money value in case of
im&ro&er or unauthorized used or misa&&lication thereof, by himself or any &erson for whose acts he
may be res&onsible# He shall li(ewise be liable for all losses, damages, or deterioration occasioned by
negligence in the (ee&ing or use of the &ro&erty whether or not it be at the time in his actual custody#
5# Every officer accountable for government funds shall be liable for all losses resulting from the
unlawful de&osit, use, or a&&lication thereof and for all losses attributable to negligence in the (ee&ing
of the funds#
Section 1'#. "iability for acts done by direction of superior officer. "o accountable officer shall be relieved from
liability by reason of his having acted under the direction of a su&erior officer in &aying out, a&&lying, or
dis&osing of the funds or &ro&erty with which he is chargeable, unless &rior to that act, he notified the su&erior
officer in writing of the illegality of the &ayment, a&&lication, or dis&osition# ,he officer directing any illegal
&ayment or dis&osition of the funds or &ro&erty shall be &rimarily liable for the loss, while the accountable
officer who fails to serve the re3uired notice shall be secondarily liable#
Section 1'$. Time and mode of rendering account. .n the absence of s&ecific &rovision of law, all accountable
officers shall render their accounts, submit their vouchers, and ma(e de&osits of money collected or held by
them at such times and in such manner as shall be &rescribed in the regulations of the Commission#
Section 1'%. Prohibition against pecuniary interest. "o accountable or res&onsible officer shall be &ecuniary
interested, directly or indirectly, in any contract or transaction of the agency in which he is such an officer#
TITLE III
GOVERNMENT ACCOUNTING
CHAPTER 1
+ASIC PRINCIPLES AND O+(ECTIVES
Section 1'&. Definition. 1overnment accounting encom&asses the &rocesses of analyzing, recording,
classifying, summarizing and communicating all transactions involving the recei&t and dis&osition of
government funds and &ro&erty, and inter&reting the results thereof#
Section 11'. b*ectives of government accounting. 1overnment accounting shall aim to
4# &roduce information concerning &ast o&erations and &resent conditions*
5# &rovide a basis for guidance for future o&erations*
6# &rovide for control of the acts of &ublic bodies and officers in the recei&t, dis&osition and utilization
of funds and &ro&erty* and
7# re&ort on the financial &osition and the results of o&erations of government agencies for the
information of all &ersons concerned#
CHAPTER
ACCOUNTS AND ACCOUNTING
Section 111. 2eeping of accounts.
4# ,he accounts of an agency shall be (e&t in such detail as is necessary to meet the needs of the
agency and at the same time be ade3uate to furnish the information needed by fiscal or control
agencies of the government#
5# ,he highest standards of honesty, ob)ectivity and consistency shall be observed in the (ee&ing of
accounts to safeguard against inaccurate or misleading information#
Section 11. &ecording of financial transaction. Each government agency shall record its financial transactions
and o&erations conformity with generally acce&ted accounting &rinci&les and in accordance with &ertinent laws
and regulations#
Section 11!. Chart of accounts. ,he chart of accounts for government agencies shall be &rescribed by the
Commission and shall be so designed as to &ermit agency heads to review their activities according to selected
areas of res&onsibility* allow for a clearer definition of obligation accounting leading to more &recise budgetary
control* &rovide for a wider range of analytical information designed for use in management audit or legislative
review* furnish information regarding the &roduction of income and the investment in ca&ital items which is of
value in fiscal and economic &lanning* enable tighter accounting control to be e2ercised over agenciesD
financial relationshi& with the ,reasury* &ermit a more sim&lified &re&aration of trial balances and a sim&ler and
more orderly &re&aration of trial balances and a sim&ler and more orderly &rocess of national consolidation and
facilitate the a&&lication of mechanized accounting &rocedures for more effective &rotection against error and
irregularity and yielding economies in o&eration#
Section 114. The general ledger.
4# ,he government accounting system shall be on a double entry basis with a general ledger in which
all financial transactions are recorded#
5# Subsidiary records shall be (e&t where necessary#
Section 115. Terminology and classification. A common terminology and classification shall be used
consistently throughout the budget, the accounts and the financial re&orts#
Section 11#. Accounts classification. ,o &ermit effective budgetary control and to establish uniformity in
financial re&orts, accounts shall be classified in balanced fund grou&s# ,he grou& for each fund shall include all
accounts necessary to set forth its o&erations and condition# All financial statements shall follow this
classification#
Section 11$. 3udgetary control accounts. ,he general accounting system shall include budgetary control
accounts for revenues, e2&enditures and debt, as &rovided by #!# "o# 44::#
Section 11%. Accounting for unreali)ed revenues. Estimated revenues which remain unrealized at the close of
the fiscal year shall not be boo(ed or credited to the una&&ro&riated sur&lus or any other account#
Section 11&. Accounting for obligations and e,penditures. All lawful e2&enditures and obligations incurred
during the year shall be ta(en u& in the accounts of that year#
CHAPTER !
ACCOUNTING REPORTS
Section 1'. &eporting requirements. ,he Commission shall issue the &ertinent accounting rules and
regulations whenever the re&orting re3uirements to be &rescribed by the ;udgetary Commission &ursuant to
the budget law affect accounting functions of the various agencies of the government#
Section 11. Financial reports and statements.
4# ,he financial re&orts &re&ared by the agencies shall com&ly with the s&ecific re3uirements of
a&&licable laws and regulations as to nature, accounting basic, content, fre3uency, and distribution as
well as with all a&&licable restrictions &ertaining to information that is classified for national security
&ur&oses#
5# ,he financial statements shall be based on official accounting records (e&t in accordance with law
and the generally acce&ted accounting &rinci&les and standards#
Section 1. Submission of reports. Whenever deemed necessary in the e2igencies of the service, the
Commission may under regulations issued by it re3uire the agency heads, chief accountants, budget officers,
cashiers, disbursing officers, administrative or &ersonnel officers, and other res&onsible officials of the various
agencies to submit trial balances, &hysical inventory re&orts, current &lantilla of &ersonnel, and such other
re&orts as may be necessary for the e2ercise of its functions#
<5= -ailure on the &art of the officials concerned to submit the documents and re&orts mentioned
herein shall automatically cause the sus&ension of &ayment of their salaries until they shall have
com&lied with the re3uirements of the Commission#
<6= "o a&&ro&riation authorized in the 1eneral A&&ro&riations Act shall be available to &ay the salary
or any official or em&loyee who violates the &rovisions of this section, without &re)udice to any
disci&linary action that may be instituted against such official or em&loyee#
CHAPTER 4
INTERNAL CONTROL SYSTEMS
Section 1!. Definition of internal control. .nternal control is the &lan of organization and all the coordinate
methods and measures ado&ted within an organization or agency to safeguard its assets, chec( the accuracy
any reliability of its accounting data, and encourage adherence to &rescribed managerial &olicies#
Section 14. .nstallation. .t shall be the direct res&onsibility of the agency head to install, im&lement, and
monitor a sound system of internal control#
TITLE IV
FINAL PROVISIONS
Section 15. Transitory provisions.
4# Antil such time as the Commission shall have been fully constituted, the incumbent Chairman or his
successor shall continue to e2ercise all the &ower and functions &ro&erly a&&ertaining to the
Commission#
5# ending im&lementation of the &rovisions of Section 57, &aragra&h 5 of this Code, the agencies
concerned shall continue to &rovide the necessary amounts for the salaries, allowances and other
benefits for the re&resentative and staff of the Commission#
Section 1#. Duty to respect the Commission1s independence. .t shall be the duty of every &erson to res&ect,
&rotect and &reserve the inde&endence of the Commission#
Section 1$. Administrative disciplinary action. Sub)ect to rules and regulations as may be a&&roved by the
resident <rime Minister=, any un)ustified failure by the &ublic officer concerned to com&ly with any
re3uirement im&osed in this Code shall constitute neglect of duty and shall be a ground for administrative
disci&linary action against the said &ublic officer who, u&on being found guilty thereof after hearing, shall be
meted out such &enalty as is commensurate with the degree of his guilt in accordance with the Civil Service
>aw# Re&eated un)ustified failure to com&ly with the re3uirements im&osed in this Code shall be conclusive
&roof that the &ublic officer concerned is notoriously undesirable#
Section 1%. Penal provision. Any violation of the &rovisions of Sections 9:, 9$, $%, 4E9, and 4E$ of this Code
or any regulation issued by the Commission im&lementing these sections, shall be &unished by a fine not
e2ceeding one thousand &esos or by im&risonment not e2ceeding si2 <9= months, or both such fine and
im&risonment in the discretion of the court#
Section 1&. Separately clause. Should any &rovision of this Code or any &art thereof be declared invalid, the
other &rovisions, so far as they are se&arable from the invalid one, shall remain in force and effect#
Section 1!'. &epealing clause. Cha&ter 59 <Accounting >aw= of Act 5:44 is hereby re&ealed# All other laws,
e2ecutive orders, &roclamations, decrees, instructions, rules and regulations, or &arts thereof which are
inconsistent or in conflict with any &rovision of this Code shall be deemed re&ealed or modified accordingly#
Section 1!1. +ffectivity clause. ,his Code shall ta(e effect three months after the com&letion of its &ublication
in the +fficial 1azette#
!one in the City of Manila, this 44th day of ?une, in the year of +ur >ord, nineteen hundred and seventy'eight#