Professional Documents
Culture Documents
1. PURPOSE:
2. DECLARATION OF POLICY:
In the exercise of the regulatory power vested upon it under the aforequoted provision of
Section 2, Article XII-D of the Constitution, and conformably to the injunction embodied in
Presidential Decree No. III dated January 26, 1973, the Commission on Audit adheres to the
policy that government funds and property should be fully protected and conserved and that
irregular unnecessary, excessive, or extravagant expenditures or uses of such funds and
property should be prevented. On the proposition that improper or wasteful spending of public
funds or immoral use of government property, for being highly irregular or unnecessary, or
scandalously excessive or extravagant, offends the sovereign people's will, it behooves the
Commission on Audit to put a stop thereto.
In undertaking this assigned task, the Commission on Audit shall consider and attach
equal importance to the goals and objectives of the audited agency, entity or instrumentality in
terms of economy, effectiveness and efficiency.
An essential feature of auditing rules and regulations designed "for the prevention of
irregular, unnecessary, excessive, or extravagant expenditures or uses of funds and property"
would comprise the definitions of these terms within the context of the enabling constitutional
provision. It is desirable that the distinguishing characteristics of each of these types of fund
expenditures or property uses be clearly outlined or spelled out.
Thus -
A transaction conducted in a manner that deviates or departs from, or does not accord
with such standard is deemed as "irregular". An anomalous transaction, or one that fails or
omits to follow, or violates appropriate and necessary rules of procedure, is likewise "irregular".
Irregularity should be distinguished from, not being synonymous with, illegality which denotes a
radical defect that taints the transaction with nullity.
An expenditure for something that is not essential, or can be dispensed with without loss
or damage, or not responsive to the exigencies of the service, or is useless, or not needed or
required by the circumstances of the case is "unnecessary".
4. EXEMPLIFICATION:
Hereunder enumerated are typical cases and situations illustrating the four (4) types of
transactions as hereinabove defined and conceptualized. This exemplification is by no means
exclusive. A variety of other similar situations may arise and the determination of the type or
category to which they may belong shall be guided by the particulars of each case on the basis
of the standards set therefor.
I. Expenditures of funds
A. "Irregular" -
19. Repair of private motor vehicles of officials in the motor pool of the
agency.
B. "Unnecessary"-
1. Claims for travel expenses where the travel is not for a very urgent
official business, or can be dispensed with, or not required by exigencies of
the service.
3. Grant of overtime pay for work that is not of such an urgent nature
as to require completion within a specified time, or that can very well be
undertaken during regular office hours.
C. "Excessive"-
D. "Extravagant"-
A. "Irregular" -
B. "Unnecessary" -
3. Use of table lamps while working in the office even though the
room is adequately illuminated from ceiling lights.
C. "Excessive"/"Extravagant" -
5. RESPONSIBILITIES:
6. AUDITORIAL ACTION:
Whenever, in the course of audit and guided by the set of standards aforementioned, an
auditor is convinced and has satisfied himself that the transaction in question is irregular,
unnecessary, excessive, or extravagant, he may pursue any of the following alternative courses
of action:
In-pre-audit -
a) The auditor may tentatively suspend payment on the proposed expenditure and
require compliance with certain auditing requirements within the period prescribed by existing
regulations. After the lapse of said period without the requirements having been complied with,
such tentative suspension shall become a final disallowance; or
In post-audit -
The auditor may outright disallow payment or follow alternative step no. 2 for pre-audit,
supra.
7. AGENCY ACTION:
The audited agency, entity or instrumentality may take exception to the adverse findings
of the auditor within a period of thirty (30) days from date of notice of the suspension or
disallowance made by the latter.
Should the auditor insist on the position he has taken, he may elevate the matter to the
Commission on Audit, thru proper channels, for final decision. On its part, the audited agency,
entity or instrumentality may, on its own accord, likewise elevate the matter to the Commission
on Audit. Thereafter, if said audited agency, entity or instrumentality is not satisfied with the
decision of this Commission, it may further avail itself of the appropriate legal remedies by way
of seeking
relief against such decision.
8. REPEALING CLAUSE:
Any provision of existing rules and regulations inconsistent herewith is hereby amended
or repealed accordingly.
9. EFFECTIVITY: