SUPPLEMENTING PRESIDENTIAL DECREE NO. 111, DATED JANUARY 26, 1973, ENTITLED "DECLARING THE EFFECTIVITY OF THE CREATION OF THE COMMISSION ON AUDIT AS PROVIDED IN THE NEW CONSTITUTION AND PROVIDING GUIDELINES FOR THE OPERATION THEREOF"

• Number: Presidential Decree No. 111-A
• Sections: 15

Preamble

WHEREAS, Presidential Decree No. 111, dated

January 26, 1973, has declared that the Commission on Audit created in

the new Constitution is now in existence, and provided guidelines for

its operations;

WHEREAS, the General Auditing Office may serve

as the nucleus of the Commission on Audit; and

WHEREAS, there is an imperative need to set up

an organization for the Commission on Audit that shall most effectively

and economically carry out its powers and functions;

NOW, THEREFORE, I, FERDINAND E. MARCOS,

President of the Philippines, by virtue of the powers vested in me by

the Constitution as Commander-in-Chief of all the Armed Forces of the

Philippines and pursuant to Proclamation No. 1081, dated September 21,

1972, and General Order No. 1, dated September 22, 1972, do hereby order

and decree:

Section 1

SECTION 1. The Commission on Audit,

hereinafter referred to as the Commission, shall consist of the

Commission Proper to be constituted pursuant to Section 1, Article

XII-D, of the new Constitution; an Administrative Service; a Legal

Service; an Accountancy Service; a Systems and Training Service; a

Program Audit Office; three National Government Audit Offices; a Local

Government Audit Office; and a Corporate Audit Office.

Section 2

SEC. 2. The Commission Proper shall sit as a body

and promulgate policies, rules, regulations, and standards governing

the performance of the powers and functions of the Commission in

accordance with the new Constitution. It shall appoint the officials and

employees of the Commission in accordance with the Civil Service Law,

pursuant to Article XII-A, Section 4, of the new Constitution. It is

authorized to make changes in the Composition, distribution and

assignment of auditing units as well as the personnel whenever the needs

of the service so require.

Section 3

SEC. 3. The Chairman shall act as the

presiding officer of the Commission Proper and the chief executive

officer of the Commission.

Section 4

SEC. 4. The Administrative Service shall be

responsible for providing the Commission with services relating to

budgeting, accounting, personnel, records, supplies, equipment,

collecting and disbursing, housekeeping, and other related services. It

shall have a Budget, Cash and Property Division; an Accounting Division;

a Personnel Division; a Records Division; and a General Services

Division.

The Budget, Cash and Property Division shall provide

budgeting, collecting and disbursing, and property management services

for the Commission,

The Accounting Division shall maintain the books of

accounts of the Commission and provide other related accounting

services.

The Personnel Division shall provide personnel

management services for the Commission.

The Records Division shall provide records management

services for the Commission.

The General Services Division shall provide housekeeping,

security, messengerial, transportation and other related services for

the Commission.

Section 5

SEC. 5. The Legal Service shall be responsible

for performing advisory and consultative functions and rendering legal

services with respect to the performance of the functions of the

Commission and to the interpretation of general auditing rules and

regulations and pertinent laws. It shall handle the investigation of

administrative cases filed against the personnel of the Commission,

evaluate and act on all reports of involvement of said personnel in

anomalies and/or irregularities in government transactions, and such

other investigative work to be ordered by the Commission. In addition,

it shall represent the Commission in preliminary investigations of

malversation cases discovered in audit, and assist the Solicitor General

and the Tanodbayan in handling cases involving the Chairman or any of

the Commissioners, and other officials and employees of the Commission.

It shall have a National Government Division, a Local Government

Division, a Corporate Division, each performing the functions of the

Legal Service as they pertain to their respective clientele area, and an

Investigation and Prosecution Division.

Section 6

SEC. 6. The Accountancy Service shall be

responsible for preparing the annual financial report of the Government,

its subdivisions, agencies and instrumentalities, including

government-owned or controlled corporations (as consolidated by the

Corporate Audit Office) and other financial and/or statistical reports

as may he required by the Commission; verifying appropriations of

National Government agencies and controlling fund releases thereto; and

preparing statements on local governments' revenues, legal borrowings,

and net paying capacities for reclassification and other purposes. It

shall have an Accounts Division, a National Government Accountancy

Division, a Local Government Accountancy Division, and a Treasury Vault

and Banking Audit Division.

The Accounts Division shall control the release of

allotments out of appropriations provided under various appropriations

acts, and undertake overall National Government cash reconciliation.

The National Government Accountancy Division shall prepare

required annual and other financial and/or statistical reports on the

operations and financial conditions of the National Government and

reconcile public debt.

The Local Government Accountancy Division shall prepare

required annual and other financial and/or statistical reports on the

operations and financial conditions of Local Governments and hospitals

maintained by local government units.

The Treasury Vault and Banking Audit Division shall audit

cash transactions in the vault of the Bureau of the Treasury.

Section 7

SEC. 7. The Systems and Training Service shall

be responsible for developing general accounting, auditing, and related

fiscal control systems, and formulating and implementing the

Commission's training programs. It shall have a Systems Division and a

Training Division.

The Systems Division shall conduct researches and

studies along modern procedures and techniques in, and develop systems

for government accounting, auditing, and related fiscal controls.

The Training Division shall develop and implement the

training programs of the Commission.

Section 8

SEC. 8. The Program Audit Office shall be

responsible for conducting selective post audit of accounts and

financial operations of the Government and technical property audit. It

shall have a National Government Special Audit Division, a Local

Government Special Audit Division, a Corporation Special Audit Division

and a Property Audit Division.

The National Government Special Audit Division shall

conduct selective post audit of accounts and financial operations of

National Government agencies and instrumentalities.

The Local Government Special Audit Division shall conduct

selective post audit of accounts and financial operations of local

governments.

The Corporation Special Audit Division shall conduct

selective post audit of accounts and financial operations of

government-owned and/or controlled corporations.

The Property Audit Division shall undertake technical

inspection of deliveries of government purchases and appraisal of

government property.

Section 9

SEC. 9. The National Government Audit Offices

shall be responsible for exercising supervision and control over the

implementation of auditing and accounting rules and regulations in

departments, bureaus, and offices of the National Government, pursuant

to Article XII-D, Section 2(1) and Article VIII, Section 8(2) of the new

Constitution. There shall be the National Government Audit Office "A,"

the National Government Audit Office "B" and the National Government

Field Audit Office. The National Government Audit Offices "A" and "B"

shall conduct continuous audit of all accounts and trial balances

pertaining to the revenues and receipts of, expenditures and uses of

funds and property owned or held in trust by, or pertaining to, central

offices of National Government agencies and instrumentalities, including

the National Assembly. The National Government Field Audit Office shall

conduct continuous audit of all accounts and trial balances pertaining

to the revenues and receipts of, expenditures or uses of funds and

property owned or held in trust by, or pertaining to regional and field

offices of the National Government, including national high schools,

national vocational schools, national field general hospitals, and state

colleges and universities.

Section 10

SEC. 10. The Local Government Audit Office

shall be responsible for exercising supervision and control over the

implementation of auditing and accounting rules and regulations in local

government units. It shall have provincial or city auditing units which

shall provide auditing services to provinces, cities, municipalities

and barrios as well as schools and hospitals maintained by them.

Section 11

SEC. 11. The Corporate Audit Office shall be

responsible for exercising supervision and control over the

implementation of auditing and accounting rules and regulations in

government-owned and/or controlled corporations, and self-governing

boards, commissions, or agencies of the National Government, and in the

conduct of audit of financial operations of public utilities and

franchises. It shall review and analyze corporate audit reports

and-prepare the consolidated report thereof for inclusion in the annual

report of the Commission to be prepared by the Accountancy Service. It

shall have a Public Utility Rate and Franchise Tax Audit Division and

corporate auditing units in all government corporations and similar

instrumentalities.

The Public Utility Rate and Franchise Tax Audit Division

shall audit financial operations of public utilities for rate

determination and franchise taxes as required by pertinent laws or upon

request of proper authorities.

The corporate auditing units shall conduct continuous audit

of all accounts and trial balances and financial statements pertaining

to the revenues and receipts of, expenditures or uses of funds and

property owned or held in trust by, government corporations or

instrumentalities and submit annual reports to the Commission.

Section 12

SEC. 12. The General Auditing Office shall

constitute the nucleus of the Commission, and all applicable

appropriations, records, equipment, property and such personnel as may

be necessary are transferred to the Commission.

Section 13

SEC. 13. Pending the constitution of the

Commission on Audit, the incumbent Auditor General shall continue in

office and shall exercise the powers properly appertaining to the

Commission.

Section 14

SEC. 14. This Decree shall take effect

immediately.

Done in the City of Manila, this 9th day of September, in the

year of Our Lord, nineteen hundred and seventy-three.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) ROBERTO V. REYES

Acting Executive Secretary