_ Republic of the Bbilippines

COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City, Philippines

CIRCULAR No. : 2020 005

Date

TO All Heads of Departments, Bureaus, Offices, Agencies and

Instrumentalities of the National Government, Heads of the
Local Government Units, Managing Heads of Government-
Owned and/or Controlled Corporations, including its
subsidiaries, State Universities and Colleges, COA Assistant
Commissioners, COA Directors, COA Auditors, and All Others
Concerned

SUBJECT : Establishing the Criteria to Determine the Actionability of

Complaints, Information of Fraud, Requests for Audit and
Other Cases Alleging Fraudulent or Anomalous Government
Transactions, and the Manner of Filing Thereof Before the
Commission on Audit

1. RATIONALE

Ll Section 2[2], Article [X-D ofthe 1987 Philippine Constitution vests in the
Commission on Audit (COA)the exclusive authority to, among others and
subject to limitations, promulgate accounting and auditing rules and
regulations, including those for the prevention and disallowance of
irregular, unnecessary, excessive, extravagant, or unconscionable
expenditures, or uses of government funds and properties.

1.2 In line with this mandate and in furtherance of good governance and for
the promotion of transparency and accountability in all government
transactions, COA has encouraged the public to report fraudulent or
anomalous governmenttransactionsthrough the COA Citizens Desk or by
filing complaints and/or requests for fraud audit.

1.3 COAhasreceived andis continually receiving an increasing number of

complaints, requests for fraud audit, or information of fraud, some of
which have been or may be found to contain unverifiable allegations,
involve insignificant amounts, non-auditable issues, or those beyond the
jurisdiction of the COA.
 1.4 This Circular establishes the criteria or conditions that will be used to
determine the actionability ofall information/ complaints/requests or other
cases received by this Commission.

2. SCOPE

This Circular establishes the criteria in determining the actionability of

information of fraud, requests for fraud audit, and complaints alleging fraud or
anomaly in the use of public funds or property obtained by orfiled before the
COA,including cases referred by the Office of the Ombudsman (OMB) and
other governmentagencies, and the manneroffiling thereof by the public.

3. FILING OF COMPLAINTS OR REQUESTS FOR FRAUD AUDITS

3.1 Any person who has knowledge that the transactions of, or the
projects/programs/activities implemented by any government agency is
tainted with fraud or anomaly,or that public officials or employees have
committed or are committing fraud or anomaly in transactions involving
disbursementor receipt/collection of public funds or use of government
properties and other government transactions, may file a written
information, complaint or request for fraud audit before the Fraud Audit
Office (FAO) at the COA Central Office for agencies located in the
National Capital Region (NCR) or the Office of the COA Regional
Directors for agencies located in the regions, either personally or through
mail. They may also send the same to the COA Citizens Desk Reporting
System at ‘

3.2 Any government agency, including the Office of the Ombudsman, before
whom the complaints or cases were originally filed, shall refer the same to
the FAO for government agencies in the NCR or COA Regional Offices
for government agenciesin the regions.

3.3. Fraud refers to an act of deceii, trickery, concealment or breach of

confidence used to gain some unfair or dishonest advantage; an unlawful
interaction between twoentities where one party intentionally deceives the
other through meansof false representation in order to gain illicit and
unjust advantage.! It refers to all kinds of deception - whether through
insidious machination, manipulation, concealment or misrepresentation -
that would lead an ordinarily prudent person into error after taking the
circumstances into account.?

' XVIInternational Congress of Supreme Audit Institutions INCOSAI

? Tankeh vs. Development Bank of the Philippines, et al., G.R. No. 171428, November 11, 2013 citing
Solidbank Corporationv. Mindanao Ferroalloy Corporation, et al., 502 Phil. 651, 669 [2005]

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 3.4 Complaint, information of fraud, request for fraud audit or those
referred by other government agencies, which are herein collectively
referred to as cases, refer to written statements of any person who has
knowledge that the transactions of, or the projects/programs/activities
implemented by any government agency is tainted with fraud or anomaly,
or that public officials or employees have committed or are committing
fraud or anomaly in transactions involving disbursement or
receipt/collection of public funds or use of government properties and
other governmenttransactions.

4, REQUISITES FOR ACTIONABLE CASES

4.1 Cases are actionable providedthat the following requisites are complied:
a. They mustbe in writing, whether on paperorin electronic form;
b. They must allege fraudulent or anomalous disbursement or
receipt/collection of public funds and/or use of governmentproperty;
c. The transaction/s or account/s involved must be described with
sufficient particularity, such as but not limited to: the name of the
projects/programs/activities; amount involved; location in case of
infrastructure projects; year the transaction transpired or project was
implemented; name of the person/s involved, if known; the
government agency involved; or such other verifiable
information/details as shown from documents which must beattached,
if available; and
d. They must not merely solicit a general audit ofall transactionsof the
agency complained of.

Cases found actionable based on these requisites shall be further

verified/evaluated by concerned COAofficials or employees.

4.2 The Commission shall refer to appropriate government agencies

allegationsofviolation of laws, rules and regulations, or act/s complained
of that are not within its jurisdiction, such as land disputes involving
ownership/boundaries, personnel actions, administrative complaints
against agency personnel, tifestyle checks, andthe likes.

4.3 Casesshall be dismissedif:

a. They involve transactions that have been the subject of a duly
issued/released investigation report, or of an ongoing audit
investigation of the FAO and Fraud Audit Services of the COA
Regional Offices.

L
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 b. The transaction/issue has been verified to have already been
investigated by the OMBor other competent authority and a Notice of
Disallowance/Charge/Suspension was already issued by the Audit
Team.
c. The transactions have transpired more than 10 years agoat the time of
filing the case.

4.4 Documents or any form of evidence pertinent to the transactions or

projects/programs/activities complained of may be provided by the
complainant/requester in support of the allegations.

4.5 The Commission Proper may direct the conduct of fraud audit of a
transaction or projects/programs/activities, in the exercise ofits discretion.

5. GUIDELINES IN TAKING ACTION ON CASES

The guidelines prescribing the rules of procedure shall be issued to

implementthis Circular.

6. REPEALING CLAUSE

Anyprovision of COA issuances inconsistent with any provisions ofthis

Circular are hereby modified, amendedor repealed accordingly.

7. EFFECTIVITY

This Circular shall take effect 15 days after its publication in a newspaper
of general circulation.

fi CONMISSION ON AUDIT

ch ee
|) OFFICE OF THE COMMISSION SECRETARIET

JOSE A. FABIA ROLAND C. PONDOC

Commissioner Commissioner

SSS/FAO
ABJ/BRS

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