Presidential Decree No. 898 (PD 898) — Providing for the Restructuring of the Commission on Audit.
WHEREAS, on September 19, 1975, the Commission on Audit was
singled out as one of the offices in the, government which has to be
"completely reorganized";
WHEREAS, there is an imperative need to restore, strengthen,
and preserve the integrity, objectivity, and independence of the
Commission on Audit, including its representatives and personnel
assigned to all government entities, in order to effectuate the
constitutional design for a truly independent auditing arm of
government;
WHEREAS, there is a pressing need to hasten the full
professionalization of the government audit service so as to enable the
Commission on Audit to effectively discharge its expanded audit
responsibility under the New Constitution;
WHEREAS, in order to align itself to re-oriented government
operations, it now behooves the Commission on Audit to bring its own
operations closer to the people;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution
and pursuant to Proclamation No. 1081 dated September 21, 1972, and
General Order No. 1 dated September 22, 1972, do hereby order and decree
as follows:
SECTION 1. STATEMENT OF OBJECTIVES
In keeping
with its constitutional mandate, the Commission on Audit adopts the
following primary objectives :
Fiscal responsibility rests directly with the chief or
head of the government subdivision agency, or
instrumentality. The role of the Commission on Audit is tn
determine whether such fiscal responsibility has been properly and
effectively discharged;
The Commission on Audit shall develop and
implement a comprehensive audit program which shall encompass
an examination of financial transactions, accounts, and
reports, including evaluation of compliance with
applicable laws and regulations; a review of efficiency and
economy in the use of resources; and a review to determine
whether desired results have been effectively achieved;
The Commission on Audit shall institute control
measures through the promulgation of rules and regulations
governing the receipts, disbursements, and uses of funds
and property, consistent with the total economic development
effort of the Government;
The Commission on Audit shall promulgate rules and
regulations to facilitate the keeping and enhance the
information value of the accounts of the Government;
The Commission on Audit shall take measures to hasten the full
professionalization of its services, consistent with its expanded
audit responsibility;
In order to protect the independence of its
representatives, the Commission on Audit shall institute measures to
safeguard its appointing power, and rationalize and standardize
the salaries of its personnel; and
The Commission on Audit shall take steps to
bring its operations closer to the people by the
delegation of authority through decentralization, consistent
with the provisions of the New Constitution and the laws.
SEC. 2. JURISDICTION OF THE COMMISSION ON AUDIT.
The authority and powers of the Commission on Audit shall
extend to and comprehend all matters relating to auditing and accounting
procedures, systems, and controls, including inquiry into the
utilization of resources and operating performance, the keeping of the
general accounts of the Government, the preservation of vouchers
pertaining thereto, the examination and inspection of the books,
records, and papers relating to those accounts; and the audit and
settlement of the accounts of all persons respecting funds or property
received or held by them in an accountable capacity, as well as the
examination, audit, and settlement of all debts and claims of any sort
due from or owing to the Government or any of its subdivisions,
agencies, and instrumentalities. The said jurisdiction extends to all
government-owned or controlled corporations and other self-governing
boards, commissions, or agencies of the Government, and as herein
prescribed, including nongovernmental entities subsidized by the
Government, those funded by donations through the Government, those
required to pay levies or government share, and those partly funded by
the Government.
SEC. 3. VISITORIAL POWERS OF THE COMMISSION ON AUDIT.
The Commission shall have visitorial authority over all books,
papers and documents filed by individuals and corporations with
government offices in connection with government revenue collection
operations, for the sole purpose of ascertaining that all funds
determined by the appropriate agencies as collectible and due the
government, have actually been collected. This authority shall also
extend to non-government entities subsidized by the government, those
which have received counterpart funds from the government, and those
funded by donations through the government, the said authority however
pertaining insofar only to the audit of those funds or subsidies coming
from or through the government.
SEC. 4. ORGANIZATIONAL COMPONENTS OF THE COMMISSION
ON AUDIT.
The Commission on Audit, hereinafter referred to as the
Commission, shall consist of the Commission Proper as constituted
pursuant to Section 1, Article XII-D, of the new Constitution, and the
central and regional offices as hereinafter created.
SEC. 5. THE COMMISSION PROPER.
The Commission Proper shall sit as a body to promulgate
policies, rules, and regulations; and prescribe standards governing the
performance by the Commission of its powers and functions in accordance
with the new Constitution. It shall appoint all the officials and
employees of the Commission in accordance with the Civil Service Law,
pursuant to Section 4, Article XII-A, of the new Constitution.
SEC. 6. THE CHAIRMAN.
The Chairman of the Commission shall act as the presiding
officer of the Commission Proper and the chief executive officer of the
Commission. As such chief executive officer, he shall be responsible for
the general administration of the Commission.
The Chairman shall appoint such technical and clerical
personnel, assigned to his office, as are essential for the proper
performance of his functions.
SEC. 7. REORGANIZATION.
For the efficient and effective formulation and implementation
of the programs of the Commission, the following central offices are
hereby created:
Administrative Office
Planning, Financial, and Management Office
Legal Office
Accountancy Office
National Government Audit Office
Local Government Audit Office
Corporate Audit Office
Performance Audit Office
Manpower Development and System Office
These offices shall perform primarily staff functions, exercise
technical supervision over the regional offices in matters pertaining to
their respective functional areas, and perform such other functions
that the Chairman may assign.
In addition, the Commission shall keep and
maintain such regional offices as the exigencies of the
service so require in accordance with the pertinent provisions
of Chapter III, Part II of the Integrated Reorganization Plan,
or as may be provided by law. The regional offices shall
be under the direct control and supervision of the
Chairman and will serve as the immediate representatives of
the Commission in the regions.
The Commission may reorganize or create such other
offices, divisions, sections, or units as may be deemed
necessary, and appoint personnel thereto.
SEC. 8. FUNCTIONS OF THE ADMINISTRATIVE OFFICE.
The Administrative Office shall have the following functions:
Develop and maintain a personnel program which shall include
recruitment, selection, appointment, position classification and
compensation, performance evaluation, employee relations, and welfare
services; and
Provide the Commission with services related to personnel,
records, supplies, equipment, medical, collection and disbursements,
security, general and other related services.
SEC. 9. FUNCTIONS OF THE PLANNING, FINANCIAL, AND
MANAGEMENT OFFICE.
The Planning, Financial, and Management Office shall have the
following functions:
Formulate long-range and annual plans and programs
for the Commission;
Formulate basic policies and guidelines for the
preparation of the Commission's budget; coordinate with the Budget
Commission and the Office of the President in the
preparation of said budget;
Maintain and administer the accounting system
pertaining to the Commission's accounts;
Develop and administer a system for monitoring the
prices of materials, supplies, and equipment purchased by
government; and
Develop and administer a management improvement program.
SEC. 10. FUNCTIONS OF THE LEGAL OFFICE.
It
shall be the responsibility of the Legal Office to:
Render legal services and perform advisory and
consultative functions with respect to the performance of the functions
of the Commission and the interpretation of general auditing
rules and regulations, and pertinent laws;
Handle the investigation of the 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 perform such other
investigative work as may be assigned by the Chairman;
Represent the Commission in preliminary investigations of
malversation cases discovered in audit; assist and collaborate with the
Solicitor General and the Tanodbayan in handling cases involving
the Chairman or any of the Commissioner, and other officials
and employees of the Commission in their official capacity; and
Initiate, for the Commission, the institution of any legal
proceeding, whenever deemed necessary, toward the collection and
enforcement of debts and claims, and the restitution of funds and
property, found to be due the Government or any subdivision, agency, or
instrumentality thereof, including any government-owned or
controlled corporation or other self-governing board, commission,
or agency of the government, in the settlement and adjustment of its
accounts by the Commission.
SEC. 11. FUNCTIONS OF THE ACCOUNTANCY OFFICE.
The Accountancy Office shall perform the following functions:
Prepare the annual financial report of the Government, its sub
divisions, agencies, and instrumentalities, including government-owned
or controlled corporations, and other financial and/or
statistical reports as may be required by the Commission;
Exercise technical supervision over government accounting
functions;
Verify appropriations of national government agencies and
control fund releases thereto; and
Prepare statements on local government's revenues and
expenditures, and on their legal borrowings and net paying capacities
for reclassification and other purposes.
SEC. 12. FUNCTIONS OF THE NATIONAL GOVERNMENT
AUDIT OFFICE.
The National Government Audit Office shall perform the following
functions:
Formulate and develop plans, programs, operating standards,
and administrative techniques for the implementation of auditing and
accounting rules and regulations in departments, regions,
bureaus, and offices of the National Government;
Advise and assist the Chairman on matters pertaining to
the audit of the departments, regions, bureau, and offices
of the National Government.
SEC. 13. FUNCTIONS OF THE LOCAL GOVERNMENT AUDIT
OFFICE.
The Local Government Audit Office shall perform the following
functions:
Formulate and develop plans, programs, operating
standards, and administrative techniques for the implementation of
auditing and accounting rules and regulations in local
government units; and
Advise and assist the Chairman on matters pertaining to
the audit of local government units.
SEC. 14. FUNCTIONS OF THE CORPORATE AUDIT OFFICE.
The Corporate Audit Office shall perform the following functions:
Formulate and develop plans, programs, operating standards,
and administrative techniques for:
the implementation of auditing and accounting rules and
regulations in government-owned or controlled corporations and
self-governing boards, commissions, or agencies of the National
Government; and
the conduct of audit of financial operations of public
utilities and franchises.
Advise and assist the Chairman on matters pertaining to the
audit of government-owned or controlled corporations and other self-
governing boards, commissions, or agencies of the National Government;
and
Consolidate the corporate audit reports from all the regions for
inclusion in the annual report of the Commission.
SEC. 15. FUNCTIONS OF THE PERFORMANCE AUDIT OFFICE.
The Performance Audit Office shall perform the following
functions:
Conduct, consistent with the provisions of Section
3, variable scope audits of non-government firms subsidized by the
government or government authority, those funded by donors through the
government, and those for which the government has put up a counterpart
fund; and
Undertake, on a selective basis, economy, compliance and
effectiveness audits of national and local government units, including
government-owned or controlled corporations, other self-governing
boards, commissions, or agencies of government, as well as specific
programs and projects of government.
SEC. 16. FUNCTIONS OF THE MANPOWER DEVELOPMENT
AND SYSTEMS OFFICE.
Formulate long-range plans for a comprehensive training
program for all personnel of the Commission as well as all accounting,
collecting, disbursing, internal auditing, and budgetary personnel of
the government, in coordination with the Budget Com mission and the
Civil Service Commission;
Prepare and implement annual training programs, consistent with
its long-range plans;
Develop its capability to implement training programs;
Set up and maintain a library for the Commission;
Publish the professional journal of the Commission;
Develop systems for government accounting, auditing, and
related fiscal controls; and
Provide technical assistance in the design and
installation of internal control systems and internal auditing units.
SEC. 17. FUNCTIONS OF REGIONAL OFFICES. Each
Regional Office shall perform the following functions :
Exercise supervision and control over the implementation of
auditing rules and regulations in
departments, bureaus, offices, and other instrumentalities of
the National Government, including the National Assembly,
local government units, and
government-owned or controlled corporations and
self-governing boards, commissions, or agencies of the government within
the region;
Conduct audits of all accounts and trial balances pertaining to
the revenues and receipts, expenditures and uses of funds and
property owned or held in trust by, or pertaining to, National
Government agencies and instrumentalities within the region,
including the National Assembly;
Provide auditing services to local government
units, including schools and hospitals maintained by such units;
Review and analyze corporate audit reports and
prepare the consolidated audit report of the region (for Greater
Manila regional offices only);
Upon delegation by the Commission Proper, exercise
authority on personnel, planning, financial, (budgetary and
accounting), and legal matters pertaining to the region; and
Perform such other related functions as may be assigned by the
Chairman.
SEC. 18. APPOINTMENT OF CORPORATE AUDIT
PERSONNEL.
The Commission Proper is empowered to appoint its
representatives in any government-owned or controlled corporation as
well as in any other self-governing board, commission, or agency. In
addition, the Commission Proper has the power to fix the size and
composition of, and to appoint the personnel to assist said
representatives in their work. This appointing power of the Commission
Proper shall be subject only to the Civil Service Law, pursuant to
SEC. 19. COMPENSATION OFF PERSONNEL.
The number of the representatives and support personnel of the
Commission, assigned to the different departments and agencies of the
national government as well as in government-owned or controlled
corporations, self-governing boards, commission, or agencies of the
government and in provinces, cities and municipalities shall be
determined and fixed by the Commission, any provision of the General
Appropriations Decree (Presidential Decree No. 733), laws, decrees,
executive orders, or regulations to the contrary notwithstanding.
All officials and employees of the Commission, including the Commission
representatives and support personnel, shall be paid their salaries and
allowances directly by the Commission out of its appropriations and
contributions, as provided for in this decree.
SEC. 20. COMPENSATION
OF MANAGERS.
Starting with the calendar year 1976, the
central office managers of the Commission, including the Secretary to
the Commission, shall receive an annual salary of P36,000.00 each; Provided,
however, that the Commission Proper may recommend to the President
of the Philippines subsequent salary increases in order to bring the
annual salaries of the above mentioned officials to an amount not
exceeding P42,000.00 each; and: Provided, finally that should the
above ceiling of P42,000.00 be lower than the salary subsequently
recommended by the government study group standardize salaries of
government officials, the Commission shall be empowered to adjust the
salary ceiling accordingly.
SEC. 21. OFFICE OF THE
AUDITING UNITS.
The auditing units in the different
departments and agencies of the national government, as well as in
government-owned or controlled corporations and self-governing boards,
commissions, or agencies of the government, and in provinces, cities,
and municipalities shall be provided by the audited agency with a
suitable and sufficient office space together with supplies, equipment,
furniture, and other necessary operating expenses for its proper
maintenance.
SEC. 22. FUNDING.
The Commission Proper is hereby authorized to restructure and
use the appropriations provided for in Presidential Decree No. 733 and
balances of existing certifications to accounts payable, including prior
years which have not yet been reverted to the unappropriated surplus,
to carry out the provisions of this decree.
Commission Proper and Auditing Units in National Government
Offices.
Thereafter, the amount of appropriations for the salaries of the
officials and employees of the Commission, its equipment, maintenance
and other operating expenses as well as the salaries and allowances of
the auditors and personnel of the auditing units in the different
departments or agencies of the national government, as fixed according
to law, shall be included in the annual General Appropriations Decree.
Government-Owned or Controlled Corporations,
Self-Governing Boards, Commissions, or Agencies of the Government.
All government-owned or controlled corporations, self-governing
boards, commissions, or agencies of the government shall appropriate and
remit to the National Treasury for credit to the account of the
Commission an amount equivalent to but not less than the appropriation
for the salaries and allowances of the representative and staff of the
Commission during the preceding fiscal year, subject to whatever changes
as may be authorized by the Commission: Provided, That until
such time that this decree shall have been implemented, the Commission
representative and his subordinate personnel shall continue to be paid
directly by the corporation, board, commission, or agency of the
government concerned.
Local Governing Units.
One-half of one percentum (½ of 1%) of the collections
from national internal revenue taxes not otherwise accruing to special
accounts in the general fund of the national government shall accrue to
the Commission as a fee for auditing services rendered to local
government units, excluding maintenance, equipment, and other operating
expenses as provided for in Section 21 above, thereby amending
Presidential Decree No. 144.
The Secretary of Finance is hereby
authorized to deduct from the monthly internal revenue tax collections
an amount equivalent to the percentage as herein fixed, and to remit the
same direct to the Commission under such regulations as may be
promulgated by the Secretary of Finance and the Chairman of the
Commission.
SEC. 23. FEES FOR AUDIT SERVICES RENDERED
TO NON-GOVERNMENT ENTITIES.
The Commission shall fix 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, counterpart
funding by government, or where audited records become the basis for a
government levy or share. Fees of this nature shall be remitted to the
Treasurer of the Philippines within 10 days following completion of the
audit and credited to the account of the Commission.
SEC. 24.
FEES FOR OTHER SERVICES RENDERED TO GOVERNMENT ENTITIES.
Whenever the Commission renders to any government entity, audit and
related services beyond the normal scope of such services, the
Commission is empowered to fix and collect reasonable fees. These fees
shall be remitted by the audited agency to the Treasurer of the
Philippines within the time provided for in the contract of service, and
credited to the account of the Commission.
SEC. 25. GOVERNMENT CONTRACTS FOR AUDITING,
ACCOUNTING, AND RELATED SERVICES.
To enable the Commission to effectively discharge its
responsibilities under the New Constitution, no government subdivision,
agency, or instrumentality, including government-owned or controlled
corporation, and self-governing board, commission, or agency shall enter
into any contract with any private person or firm for services to
undertake studies relating to government accounting, auditing, and
management systems and services, including services to conduct, for a
fee, seminars or workshops for groups of government accounting,
auditing, collecting, disbursing, internal audit, supply management, and
budgeting, personnel on any of the topics just enumerated, unless the
proposed contract is first submitted to the Commission to enable the
Commission to determine whether it has the resources to undertake such
studies or services. The Commission may engage the services of experts
from the private sector in the conduct of these studies and shall
co-ordinate its work with the Budget Commission and Civil Service
Commission.
Should the Commission decide not to undertake the
study or service, it shall nonetheless have the power to review the
contract in order to determine the reasonableness of its. cost.
SEC.
26. COLLECTION OF DEBT DUE THE GOVERNMENT.
In aid of
its responsibility to see to it that government funds and property are
fully protected and conserved, as explicitly mandated by Presidential
Decree No. 111, dated January 26, 1973, the Commission shall, through
proper channels, supervise and procure the collection and enforcement of
all debts and claims, and the restitution of all funds and property,
found to be due the Government, or any of its subdivisions, agencies, or
instrumentalities, or any government-owned or controlled corporation or
self-governing board, commission or agency of the government, in its
settlement and adjustment of its accounts. If any legal proceeding is
necessary to that end, the Commission may institute it or request the
Solicitor General, the Government Corporate Counsel, or the legal staff
of the creditor government office or agency concerned to institute such
legal proceeding. All such monies due and payable shall bear an annual
interest at six per cent p.a. from the date of written demand by the
Commission.
The Commission shall be entitled to collect and
receive 20% of the amount of debts collected when such collection is
made from a judgment in a case intended and handled by the Commission,
as assistance in the professionalization of its services and the
computerization of its accounting and data gathering functions. These
receipts shall be deposited with the National Treasury to the credit of
the Commission.
The Chairman is hereby authorized to augment any
item in the appropriation for the Commission in the General
Appropriation Decree from savings in other items of said appropriation.
SEC. 27. INSTALLATION OF A SOUND INTERNAL CONTROL
SYSTEM.
It shall be the direct responsibility of the chief or
head of each government subdivision, agency, or instrumentality,
including government-owned or controlled corporation and other
self-governing board, commission, or agency, to in-stall, implement, and
monitor a sound system of internal control. For this purpose, the chief
or head of agency may seek the assistance of the Commission in the
design and installation of the internal control system.
SEC. 28. TRANSITORY PROVISION.
In order to carry out the powers and functions set forth in
this Decree, the Commission is hereby authorized to reorganize the
Commission on Audit within one year from the approval of this Decree.
SEC. 29. REPEALING CLAUSE.
All laws,
proclamations, orders, decrees, instructions, rules and regulations or
parts thereof, which are or may be inconsistent or in conflict with any
of the provisions of this Decree are hereby repealed or modified
accordingly.
SEC. 30. EFFECTIVITY.
This Decree shall take effect immediately.
Done in the City of Manila, Philippines, this 3rd day of March,
in the year of Our Lord, nineteen hundred and seventy-six.
(Sgd.)
FERDINAND E. MARCOS
President
Republic of the Philippines
By the President:
(Sgd.)
JUAN C. TUVERA
Presidential Assistant
Section 4, Article XII-A, of the New Constitution, and shall not be
subject to approval or review by any other official corporation, board,
commission, or agency concerned.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
