SETTLEMENT OF ACCOUNTS

(Liability for Audit Disallowances)

ELIZABETH S. ZOSA
ASSISTANT COMMISSIONER
GENERAL COUNSEL
 CRITERIA FOR DETERMINING
PERSONS LIABLE

Nature of the disallowance/charge

Duties and responsibilities or obligations of officers/

employees concerned

Extent of participation in the disallowed/charged

transaction

Amount of damage or loss to the government

 PERSONS LIABLE- IN GENERAL

Custodian of government funds- failure to

safeguard funds against loss/damage; or to ensure
that funds are utilized /transferred/disposed in
accordance with law and regulations
Certifying official- according to certification
Approving official- negligence or lack of due
diligence
 AriasDoctrine- G.R. No. 81563, Dec. 19, 1989
 Cruz vs. Sandiganbayan- G.R. No. 134493, Aug. 16, 2005

 Leycano Case- G.R. No. 154665, Febuary 10, 2006

 PERSONS LIABLE- IN GENERAL

Acts done by subordinate under the direction of

superior officer
 Sec. 106, PD 1445

Conspiracy for disallowed transaction- solidary

with beneficiaries
 “The act of one is the act of all”

Payee- up to the amount received

 PERSONS LIABLE FOR SPECIFIC
TRANSACTIONS
Defective/deficient/non-complying deliveries
 Accepting Officer
 Inspecting Officer
 Officer certifying that expenses are lawful
 Payee
Overpriced Contracts/ deliveries
 Canvassing/ Negotiating Officer
 Recommending Officer/Body to Contract Price
 Contracting Officer
 Officer certifying that expenses are lawful
 Payee
 PERSONS LIABLE FOR SPECIFIC
TRANSACTIONS

Lack of public bidding/ non-compliance with

requirements of the procurement mode
adopted
 Officer/s who recommended non-bidding
 Contracting Officer
 Officer certifying as to completeness, propriety of
supporting documents
 Officer/s certifying that expenses are lawful
 PERSONS LIABLE FOR SPECIFIC
TRANSACTIONS
Unnecessary/excessive procurements
 Requisitioner

 Procurement Officer
 Contracting Officer

 Officer who certified as to necessity of expenses

Overpayment of salaries/ allowances

 Officer/employee who computed the payments
 Reviewing officer for the computations

 Officer who certified as to legality/necessity of expenses

 Payee
 PERSONS LIABLE FOR SPECIFIC
TRANSACTIONS

 Illegal/unauthorized allowances
 Officer/s recommending /authorizing illegal/irregular
payment
 Officer certifying legality/propriety of expenses
 Accountant
 Payee
 Under -collection of fees
 Employees/official who computed the fees
 Reviewing officials for the computation
 Employees who collected a lesser amount than
assessment/appraisal
 Officer certifying as to propriety/correctness of fees
 Official/body that determined the fee
 PERSONS LIABLE FOR SPECIFIC
TRANSACTIONS

 Non-imposition of liquidated damages

 Project Engineer/Manager or official charged with or
supervising the project
 Employee charged with computation of liquidated
damages
 Supervisor reviewing computation
 Officer certifying as to propriety/legality of payment
 Accountant
 NATURE OF LIABILITY FOR AUDIT
DISALLOWANCES
SOLIDARY to the creditor-government
Also termed, Joint & Several
 Meaning of solidary- “One For All”
 Art 1216, NCC- the creditor may proceed against any one,

or some, or all of the solidary debtors simultaneously

until debt is fully collected
 Why solidary- Article 1207, NCC- the law requires

solidarity
 Section 49, P.D. 1177- Budget Reform Decree
 Sec. 347, RA 7160- Local Government Code
 “Narciso Mamaril vs. Eufemio C. Domingo,” G.R. No.
100284, October 13, 1993
 NATURE OF LIABILITY FOR AUDIT
DISALLOWANCES

Among themselves, persons liable are JOINT

debtors

 Meaning of Joint- “All for One”

 Art. 1217, NCC- debtor may claim from co-debtors the

share which corresponds to each

 When one debtor cannot reimburse his share to the

debtor paying the obligation, such share shall be borne by
all co-debtors in proportion to the debt of each
ENFORCEMENT OF LIABILITY FOR
AUDIT ALLOWANCES
COE
 Cashier to deduct from salaries/ other receivables
 Installment payment to be approved by GC/CP

Any one among the persons liable can be

proceeded against
 Dead officer- estate
 Retired/resigned/separated officer or private person-
collection suit
 Contractor- withhold payments due from the same
project or other projects in the agency
 Incumbent officer/employee- salary deduction
ENFORCEMENT OF LIABILITY FOR AUDIT
DISALLOWANCES

Other Options
 Referral to OSG for collection suits
 Filing of criminal/administrative case with
Ombudsman/ CSC
LIABILITY FOR AUDIT DISALLOWANCES

Related Criminal Actions

 Violation of R.A. 3019
 Malversation of public funds
 Failure of accountable officer to render accounts
 Illegal use of public funds
 Falsification by public officer
 Frauds against the public treasury
 Violation of special laws- P.D. 1594, RA 7160
 Infidelity in the custody of documents
 Auditor’s Responsibility / Evidence for
Audit Disallowances

RULE IV , RRPC
Auditor as representative of the Commission
Role of the Auditor
Responsibility to obtain sufficient evidence
-physical
- Testimonial
- Documentary
- Analytical
- Electronic