PD 1445 - Government Auditing Code of the Philippines (1978)

1. "Fund" is a sum of money or other resources set aside for the purpose of carrying out specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations, and constitutes an independent fiscal and accounting entity.

2. "Government funds" includes public moneys of every sort and other resources pertaining to any agency of the government.

3. "Revenue Funds" comprises all funds derived from the income of any agency of the government and available for appropriation or expenditure in accordance with law.

4. "Trust funds" refers to funds which have come officially into the possession of any agency of the government or of a public officer as trustee, agent, or administrator, or which have been received for the fulfillment of some obligation.

5. "Depository funds" comprises funds over which the officer accountable therefore may retain control for the lawful purposes for which they came into his possession. It embraces moneys in any and all depositories.

6. "Depository" means any financial institution lawfully authorized to receive government moneys upon deposit.

7. "Resources" refers to the actual assets of any agency of the government such as cash, instruments representing or convertible to money, receivables, lands, buildings, as well as contingent assets such as estimated revenues applying to the current fiscal period not accrued or collected and bonds authorized and unissued.

8. "Government agency" or "agency of the government," or "agency refers to any department, bureau or office of the national government, or any of its branches and instrumentalities, or any political subdivision, as well as any government-owned or controlled corporation, including its subsidiaries, or other self-governing board or commission of the government.

1. No money shall be paid out of any public treasury of depository except in pursuance of an appropriation law or other specific statutory authority.

2. Government funds or property shall be spent or used solely for public purposes.

3. Trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received.

4. Fiscal responsibility shall, to the greatest extent, be shared by all those exercising authority over the financial affairs, transactions, and operations of the government agency.

5. Disbursements or disposition of government funds or property shall invariably bear the approval of the proper officials.

6. Claims against government funds shall be supported with complete documentation.

7. All laws and regulations applicable to financial transactions shall be faithfully adhered to.

8. Generally accepted principles and practices of accounting as well as of sound management and fiscal administration shall be observed, provided that they do not contravene existing laws and regulations.

1. The Commission on Audit, hereinafter referred to as the Commission, shall be composed of a Chairman and two Commissioners, who shall be natural-born citizens of the Philippines and, at the time of their appointment, at least forty years of age and certified public accountants or members of the Philippine Bar for at least ten years.

2. The Chairman and the Commissioners shall be appointed by the Prime Minister for a term of seven years without reappointment. Of the Commissioners first appointed, one shall hold office for seven years, another for five years, and the third for three years. Appointment to any vacancy shall only be for the unexpired portion of the term of the predecessor.

3. The Chairman and each Commissioner shall receive as annual salary of sixty thousand pesos and fifty thousand pesos, respectively, which shall not be decreased during their continuance in office.

1. For purposes of this Code and as a component of the organizational structure of the Commission, the Chairman and the two Commissioners shall together be known as the Commission Proper and as such shall be distinguished from the other components of the Commission consisting of the central and regional offices which are hereinafter created.

2. The Commission Proper shall sit as a body to determine policies, promulgate rules and regulations, and prescribe standards governing the performance by the Commission of its powers and functions.

3. The Chairman 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.

4. The Chairman and each Commissioner shall have such technical and clerical personnel in their respective offices as may be required by the exigencies of the service.

1. The Commission shall have the following central offices:

2. The Commission shall keep and maintain such regional offices as may be required by the exigencies of the service in accordance with the Integrated Reorganization Plan for the national government, or as may be provided by law, which shall serve as the immediate representatives of the Commission in the regions under the direct control and supervision of the Chairman.

3. The central and regional offices shall each be headed by a Manager and a Regional Director, respectively. The Manager of the Legal Office shall also be known and shall act as the General Counsel of the Commission.

1. Develop and maintain a personnel program which shall include recruitment, selection, appointment, performance evaluation, employee relations, and welfare services; and

2. Provide the Commission with services related to personnel, records, supplies, equipment, medical, collections and disbursements, security, general and other related services.

1. Formulate long-range and annual plans and programs for the Commission;

2. Formulate basic policies and guidelines for the preparation of the budget of the Commission, coordinate with the Budget Commission and the Office of the President (Prime Minister) in the preparation of the said budget;

3. Maintain and administer the accounting system pertaining to the accounts of the Commission;

4. Develop and administer a system for monitoring the prices of materials supplies, and equipment purchased by the government;

5. Develop and maintain the management information system of the Commission; and

6. Develop and administer a management improvement program, including a system for measurement of performance of auditing units on which an annual report shall be submitted to the Chairman not later than the thirty-first day of January each year.

1. Perform advisory and consultative functions and render legal services with respect to the performance of the functions of the Commission and the interpretation of pertinent laws and auditing rules and regulations;

2. Handle the investigation of administrative cases filed against the personnel of the Commission, evaluate and act on all reports of involvement of the said personnel in anomalies or irregularities in government transactions, and perform any other investigative work required by the Commission upon assignment by the Chairman;

3. Represent the Commission in preliminary investigations of malversation cases discovered in audit, assist and collaborate with the Solicitor General and the Tanod Bayan in handling cases involving the Chairman or any of the Commissioners, and other officials and employees of the Commission in their official capacity; and

4. Coordinate, for the Commission and with the appropriate legal bodies of government, with respect to legal proceedings towards the collection and enforcement of debts and claims, and the restitution of funds and property, found to be due any government agency in the settlement and adjustment of its accounts by the commission.

1. Prepare, for the Commission, the annual financial report of the Government, its subdivisions, agencies and instrumentalities, including government-owned or controlled corporations, and such other financial or statistical reports as may be required by the Commission;

2. Verify appropriations of national government agencies and control fund releases thereto; and

3. Prepare statements on revenues and expenditures of local government units, and on their legal borrowing and net paying capacities for reclassification and other purposes.

1. Formulate and develop plans, programs, operating standards, and administrative techniques for the implementation of auditing rules and regulations in departments, regions, bureau, and offices of the National Government;

2. Formulate accounting rules and regulations for departments, regions, bureaus, and offices of the National Government; and

3. Advise and assist the Chairman on matters pertaining to the audit of the departments, regions, bureaus, and offices of the National Government.

1. Formulate and develop plans, programs, operating standards, and administrative techniques for the implementation of auditing rules and regulations for local government units;

2. Formulate accounting rules and regulations for local government units; and

3. Advise and assist the Chairman on matters pertaining to the audit of local government units.

1. Formulate and develop plans, programs, operating standards, and administrative techniques for the implementation of auditing rules and regulations in government-owned or controlled corporations and self-governing boards, commissions, or agencies of the government, as well as for the conduct of audit of financial operations of public utilities and franchises;

2. Formulate accounting rules and regulations for government-owned or controlled corporations and self-governing boards, commissions, or agencies of the government;

3. Advise and assist the Chairman on matters pertaining to the audit of government-owned or controlled corporations and self-governing boards, commissions, or agencies of the government; and

4. Consolidate the corporate audit reports from all the regions for inclusion in the annual report of the Commission.

1. Conduct, consistently with the exercise by the Commission of its visitorial powers as hereinafter conferred, variable scope audit of non-governmental firms subsidized by the government or government authority, or those required to pay levies or government share those funded by donations through the government, and those for which the government has put up a counterpart fund: Provided, That such audits shall be limited to the funds or subsidies coming from the government; and

2. Undertake audits of the legality of government expenditures, with particular emphasis on the statutory authority governing the usage of appropriated funds.

1. Formulate long-range plans for a comprehensive training program for all personnel of the Commission and personnel of the agencies of government, with respect to Commission rules and regulations and audit matters;

2. Prepare and implement annual training programs, consistent with its long-range plans;

3. Develop its capability to implement training programs;

4. Set up and maintain a library for the Commission; and

5. Publish the professional journal of the Commission.

1. Develop and propose auditing systems for implementation in the government;

2. Render consultancy services related to the discharge of government auditing functions;

3. Assist in the formulation of accounting rules and regulations and in seeing to it that these are observed by agencies of government, in coordination with the Accountancy Office;

4. Review and evaluate contracts, and inspect and appraise infrastructure projects; and

5. Initiate special studies on auditing matters.

1. Exercise supervision and control over the implementation of auditing rules and regulations in any agency of the government with principal offices or place of operations within the region, including the National Assembly;

2. Review, analyze and consolidate local, national and corporate audit reports pertaining to the region;

3. Upon delegation by the Commission Proper, exercise authority on internal Commission administration on personnel, planning, financial (budgetary and accounting), and legal matter pertaining to the region; and

4.Perform such other related functions as may be assigned by the Chairman.

1. There shall be in each agency of the government an auditing unit which 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, including expenses for travel and transportation.

2. The auditing unit shall be headed by an auditor assigned by the Commission who shall be a certified public accountant or a member of the Bar or a holder of a college degree in commerce or business administration; major in accounting.

3. The corresponding assignment orders issued by the Commission to such auditors and their support personnel holding core auditing positions shall be supplementary to their appointments which are without specifications of station.

4. The Commission shall have the authority to make changes in such assignments and to effect a periodic reshuffle of heads of auditing units as well as their support personnel whenever the exigencies of the service so require. However, such changes and reshuffle shall not affect the tenure of office of the incumbents of the positions involved and shall not constitute a demotion or reduction in rank or salary, nor result in a change in status.

1. The assignment of Commission representatives and support personnel to agencies of the government shall be determined solely by the Commission.

2. The salaries and other forms of compensation of the personnel of the Commission shall follow a common position classification and compensation plan regardless of agency of assignment, and shall be subject to P.D. No. 985.

3. All officials and employees of the Commission, including its representatives and support personnel shall be paid their salaries, emoluments, and allowances directly by the Commission out of its appropriations and contributions, as provided in this Code.

1. The amount of appropriations for the annual operating expenses of the Commission, including the salaries, allowances and other emoluments of all its officials and employees and its central and regional offices as well as in the auditing units in the various national and local government agencies, including government-owned or controlled corporation, shall be included in the annual general appropriations law. The usage of these funds shall be government by the general appropriations and other budget laws;

2. All government-owned or controlled corporations, including their subsidiaries, and self-governing boards, commissions, or agencies of the government shall appropriate in their respective budgets and remit to the National Treasury an amount at least equivalent to the appropriation for the salaries and allowances of the representative and staff of the Commission during the preceding fiscal year;

3. A maximum of one-half of one per-centum (1/2 of 1%) of the collections from national internal revenue taxes not otherwise accruing to Special Funds or Special Accounts in the General Fund of the National Government, upon authority from the Minister (Secretary) of Finance, shall be deducted from such collections and shall be remitted to the National Treasury to cover the cost of auditing services rendered to local government units;

4. The amount estimated to be earned as a result for the assessments on government-owned or controlled corporations, local government units, and other agencies as provided for in this Section shall be taken into consideration in the preparation of the annual budget of the Commission, in accordance with pertinent budget laws. The General Appropriations law shall provide each year for the cost of Commission operations as may be supported by available funds, in order to meet the audit requirements of national and local government units and of government-owned or controlled corporations and other agencies covered by this Code.

1. To determine whether or not the fiscal responsibility that rests directly with the head of the government agency has been properly and effectively discharged;

2. To develop and implement a comprehensive audit program that shall encompass an examination of financial transactions, accounts, and reports, including evaluation of compliance with applicable laws and regulations;

3. To 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;

4. To promulgate auditing and accounting rules and regulations so as to facilitate the keeping, and enhance the information value, of the accounts of the government;

5. To adopt measures calculated to hasten the full professionalization of its services;

6. To institute measures designed to preserve and ensure the independence of its representatives; and

7. To endeavor 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.

1. The Commission shall have visitorial authority over non-government entities subsidized by the government, those required to pay levies or government share, those which have received counterpart funds from the government or are partly funded by donations through the government, the said authority however pertaining only to the audit of those funds or subsidiaries coming from or through the government.

2. Upon direction of the President (Prime Minister), the Commission shall likewise exercise visitorial authority over non-governmental entities whose loans are guaranteed by the Government, provided that such authority shall pertain only to the audit of the government's contingent liability.

1. 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 accrue to the General Fund and shall be remitted to the Treasurer of the Philippines within 10 days following completion of the audit.

2. Whenever the Commission contracts with any government entity, to render audit and related services beyond the normal scope of such services, the Commission is empowered to fix and collect reasonable fees. Such fees shall either be appropriated in the agency's current budget, charged against its savings, or appropriated in its succeeding year's budget. Remittance shall accrue to the General Fund and shall be made to the Treasurer of the Philippines within the time provided for in the contract of service, or in the billing rendered by the Commission.

1. The Commission may, when the exigencies of the service so require, deputize and retain in the name of the Commission such certified public accountants and other licensed professionals not in the public service as it may deem necessary to assist government auditors in undertaking specialized audit engagements.

2. The deputized professionals shall be entitled to such compensation and allowances as may be stipulated, subject to pertinent rules and regulations on compensation and fees.

1. No government agency shall enter into any contract with any private person or firm for services to undertake studies and services relating to government auditing, including services to conduct, for a fee, seminars or workshops for government personnel on these topics, unless the proposed contract is first submitted to the Commission to enable it to determine if it has the resources to undertake such studies or services. The Commission may engage the services of experts from the public or private sector in the conduct of these studies.

2. 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 costs.

1. When the interest of the government so requires, the Commission may compromise or release in whole or in part, any claim or settled liability to any government agency not exceeding ten thousand pesos and with the written approval of the Prime Minister, it may likewise compromise or release any similar claim or liability not exceeding one hundred thousand pesos, the application for relief therefrom shall be submitted, through the Commission and the Prime Minister, with their recommendations, to the National Assembly.

2. The respective governing bodies of government-owned or controlled corporations, and self-governing boards, commissions or agencies of the government shall have the exclusive power to compromise or release any similar claim or liability when expressly authorized by their charters and if in their judgment, the interest of their respective corporations or agencies so requires. When the charters do not so provide, the power to compromise shall be exercised by the Commission in accordance with the preceding paragraph.

3. The Commission may, in the interest of the government, authorize the charging or crediting to an appropriate account in the National Treasury, small discrepancies (average or shortage) in the remittances to and disbursements of the National Treasury, subject to the rules and regulations as it may prescribe.

1. The Commission shall examine and audit the books, records, and accounts of public utilities in connection with the fixing of rates of every nature, or in relation to the proceedings of the proper regulatory agencies, for purposes of determining franchise taxes.

2. During the examination and audit, the public utility concerned shall produce all the reports, records, books of accounts and such other papers as may be required. The Commission shall have the power to examine under oath any official or employee of the said public utility.

3. Any public utility refusing to allow an examination and audit of its books of accounts and pertinent records, or offering unnecessary obstruction to the examination and audit, or found guilty of concealing any material information concerning its financial status shall be subject to the penalties provided by law.

1. The Commission shall have the power, for purposes of inspection, to require the submission of the original of any order, deed, contract, or other document under which any collection of, or payment from, government funds may be made, together with any certificate, receipt, or other evidence in connection therewith. If an authenticated copy is needed for record purposes, the copy shall upon demand be furnished.

2. In the case of deeds to property purchased by any government agency, the Commission shall require a certificate of title entered in favor of the government or other evidence satisfactory to it that the title is in the government.

3. It shall be the duty of the officials or employees concerned including those in non-government entities under audit, or affected in the audit of government and non-government entities, to comply promptly with these requirements. Failure or refusal to do so without justifiable cause shall constitute a ground for administrative disciplinary action as well as for disallowing permanently a claim under examination, assessing additional levy or government share, or withholding or withdrawing government funding or donations through the government.

1. The Chairman or any Commissioner of the Commission, the central office managers, the regional directors, the auditors of any government agency, and any other official or employee of the Commission specially deputed in writing for the purpose by the Chairman shall, in compliance with the requirement of due process, have the power to summon the parties to a case brought before the Commission for resolution, issue subpoena and subpoena duces tecum, administer oaths, and otherwise take testimony in any investigation or inquiry on any matter within the jurisdiction of the Commission.

2. The Commission shall have the power to punish contempts provided for in the Rules of Court, under the same procedure and with the same penalties provided therein. Any violation of any final and executory decision, order or ruling of the Commission shall constitute contempt of the Commission.

1. The Commission shall submit to the President, the Prime Minister, and the National Assembly not later than the last day of September of each year an annual report on the financial condition and results of operation of all agencies of the government which shall include recommendations of measures necessary to improve the efficiency and effectiveness of these agencies.

2. To carry out the purposes of this section, the chief accountant or the official in charge or keeping the accounts of a government agency shall submit to the Commission year-end trial balances and such other supporting or subsidiary statements as may be required by the Commission not later than the fourteenth day of February. Trial balances returned by the Commission for revision due to non-compliance with accounting rules and regulations, shall be resubmitted within three days after the date of receipt by the official concerned.

3. Failure on the part of any official or employee to comply with the provisions of the immediately preceding paragraph shall cause the automatic suspension of the payment of his salary and other emoluments until he shall have complied therewith. The violation of these provisions for at least three times shall subject the offender to administrative disciplinary action.

1. The auditors shall exercise such powers and functions as may be authorized by the Commission in the examination, audit and settlement of the accounts, funds, financial transactions, and resources of the agencies under their respective audit jurisdiction.

2. A report of audit for each calendar year shall be submitted on the last working day of February following the close of the year, by the head of each auditing unit through the Commission to the head or the governing body of the agency concerned, and copies thereof shall be furnished the government officials concerned or authorized to receive them. Subject to such rules and regulations as the Commission may prescribe from time to time, the report shall set forth the scope of audit and shall include a statement of financial condition; a statement of surplus or deficit analysis; a statement of operations; a statement of changes in financial position; and such comments and information as may be necessary together with such recommendations with respect thereto as may be advisable, including a report of any impairment of capital noted in the audit. It shall also show specifically any program, expenditure, or other financial transaction or undertaking observed in the course of audit which in the opinion of the auditor has been carried out or made without authority of law. The auditor shall render such other reports as the Commission may require.

3. In the performance of their respective audit functions as herein specified, the auditors shall employ such auditing procedures and techniques as are determined by the Commission under regulations that it may promulgate.

4. The auditors in all auditing units shall have the custody, and be responsible for the safekeeping and preservation of paid expense vouchers, journal vouchers, stubs of treasury warrants or checks, reports of collections and disbursements and similar documents together with their respective supporting papers, under regulations of the Commission.

1. The books accounts, papers and cash of any local treasurer or other accountable officer shall at all times be open to the inspection of the Commission or its duly authorized representative.

2. In case an examination of the accounts of a local treasurer discloses a shortage in cash which should be on hand, it shall be the duty of the examining officer to seize the office and its contents, notify the Commission and the local chief executive and thereupon immediately take full possession of the office and its contents, close and render his accounts to the date of taking possession, and temporarily continue the public business of such office.

3. The auditor who takes possession of the office of the local treasurer under this section shall ipso facto supersede the local treasurer until the officer involved is restored, or other provision has been lawfully made for filling the office.

1. Upon the discovery in audit of a shortage in the accounts of any accountable officer and upon a finding of a prima facie case of malversation of public funds or property against him, in order to safeguard the interest of the Government, the Commission may place under constructive distraint personal property of the accountable officer concerned where there is reasonable ground to believe that the said officer is retiring from the government service or intends to leave the Philippines or remove his property therefrom or hide or conceal his property.

The constructive distraint shall be effected by requiring the accountable officer concerned or any other person having possession or control of the property to accomplish a receipt in the form prescribed by the Commission, covering the property distrained and obligate himself to preserve the same intact and unaltered and not to dispose of it in any manner whatever without the express authority of the Commission.

2. In case the said accountable officer or other person having the possession and control of the property sought to be placed under constructive distraint refuses or fails to accomplish the receipt herein referred to, the representative of the Commission, effecting the constructive distraint shall proceed to prepare a list of such property and in the presence of two witnesses leave a copy thereof in the premises where the property distrained is located after which the said property shall be deemed to have been placed under the constructive distraint.

1. At any time before the expiration of three years after the settlement of any account by an auditor, the Commission may motu propio review and revise the account or settlement and certify a new balance. For that purpose, it may require any account, vouchers, or other papers connected with the matter to be forwarded to it.

2. When any settled account appears to be tainted with fraud, collusion, or error calculation, or when new and material evidence is discovered, the Commission may, within three years after the original settlement, open the account, and after a reasonable time for reply or appearance of the party concerned, may certify thereon a new balance. An auditor may exercise the same power with respect to settled accounts pertaining to the agencies under his audit jurisdiction.

3. Accounts once finally settled shall in no case be opened or reviewed except as herein provided.

1. The audit shall be performed by a person possessed with adequate technical training and proficiency as auditor.

2. In all matters relating to the audit work, the auditor shall maintain complete independence, impartiality and objectivity shall avoid any possible compromise of his independence or any act which may create a presumption of lack of independence or the possibility of undue influence in the performance of his duties.

3. The auditor shall exercise due professional care and be guided by applicable laws, regulations and the generally accepted principles of accounting in the performance of the audit work as well as in the preparation of audit and financial reports.

1. The audit work shall be adequately planned and assistants shall be properly supervised.

2. A review shall be made of compliance with legal and regulatory requirements.

3. An evaluation shall be made of the system of internal control and related administrative practices to determine the extent they can be relied upon to ensure compliance with laws and regulations and to provide for efficient, economical and effective operations.

4. The auditor shall obtain through inspections, observation, inquiries, confirmation and other techniques, sufficient competent evidential matter to afford himself a reasonable basis for his opinions, judgments, conclusions, and recommendations.

2. Audit reports shall contain basically the transmittal statement, scope and objectives of the audit and time period examined highlights, financial information, findings, recommendations and conclusions as well as other data that may provide the management of the audited agency with the necessary input for the decision-making process. Tables, charts, graphs and other data to detail the conditions and facts shall be used in proper cases.

3. Audit reports shall meet the following reporting criteria:

4. Audit reports shall:

(2) Amounts received in trust and from business-type activities of government may be separately recorded and disbursed in accordance with such rules and regulations as may be determined by a Permanent Committee composed of the Secretary (Minister) of Finance as Chairman, and the Commissioner of the Budget and the Chairman, Commission of Audit, as members.

1. An office charged with the collection of revenue or the receiving of moneys payable to the government shall accept payment for taxes, dues or other indebtedness to the government in the form of checks and warrants issued in payment of government obligations, upon proper indorsement and identification of the payee or indorsee. Checks drawn in favor of the government in payment of any such indebtedness shall likewise be accepted by the officer concerned.

2. When a check drawn in favor of the government is not accepted by the drawee bank for any reason, the drawer shall continue to be liable for the sum due and all penalties resulting from delayed payment. Where the reason for non-acceptance by the drawee bank is insufficiency of funds, the drawer shall be criminally liable therefore.

3. At no instance should money in the hands of the collecting officer be utilized for the purpose of encashing private checks.

1. No payment of any nature shall be received by a collecting officer without immediately issuing an official receipt in acknowledgment thereof The receipt may be in the form of postage, internal revenue or documentary stamps and the like, or officially numbered receipts, subject to proper custody, accountability, and audit.

2. Where mechanical devices are used to acknowledge cash receipts, the Commission may approve, upon request, exemption from the use of accountable forms.

1. Public officers authorized to receive and collect moneys arising from taxes, revenues, or receipts of any kind shall remit or deposit intact the full amounts so received and collected by them to the treasury of the agency concerned and credited to the particular accounts to which the said moneys belong. The amount of the collections ultimately payable to other agencies of the government shall thereafter be remitted to the respective treasuries of these agencies, under regulations which the Commission and the Department (Ministry) of Finance shall prescribe.

2. When exigencies of the service so require, under such rules and regulations as the Commission and the Department (Ministry) of Finance may prescribe, postmasters may be authorized to use their collections to pay money orders, telegraphic transfer and withdrawals from the proper depository bank whenever their cash advance funds for the purpose have been exhausted. The amount of collections so used shall be restored upon receipt by the postmaster of the replenishment of his cash advance.

3. Pending remittance to the proper treasury, collecting officers may temporarily deposit collections received by them with any treasury, subject to regulations of the Commission.

4. The respective treasuries of those agencies shall in turn deposit with the proper government depository the full amount of the collections not later than the following banking day.

1. There shall be maintained in the books of the Commission an account designated "Creditors' Unclaimed Balances" to the credit of which shall be deposited all moneys for which there is no present rightful claimant. Money accruing to this account shall be held exclusively for the payment of pertinent obligations against it, when certified by the Commission, not in excess of the respective amounts which accrued to that account by reason of these obligations.

2. After remaining unclaimed for a period of ten years, money in this account shall revert as treasury funds, to the agency that made the deposit, or, in the absence thereof to the national government.

1. When a loss of government funds or property occurs while they are in transit or the loss is caused by fire, theft, or other casualty or force majeure, the officer accountable therefore or having custody thereof shall immediately notify the Commission or the auditor concerned and, within thirty days or such longer period as the Commission or auditor may in the particular case allow, shall present his applicable for relief, with the available supporting evidence. Whenever warranted by the evidence credit for the loss shall be allowed. An officer who fails to comply with this requirement shall not be relieved of liability or allowed credit for any loss in the settlement of his accounts.

2. The Commission shall promulgate rules and regulations to implement the provisions of this section.

1. When an officer, accountable for government funds or property absconds with them dies, or becomes incapacitated in the performance of his duties, the proper agency head shall designate a custodian to take charge of the funds or property until a successor shall have been appointed and qualified. The agency head may appoint a committee to count the cash and take an inventory of the property for which the officer was accountable and to determine the responsibility for any shortage therein. One copy of the inventory and of the report of the Committee duly certified shall be filed with the Commission but the findings of the committee shall not be conclusive until approved by the Commission or its duly authorized representative.

2. If the absconding, deceased, incapacitated, or superseded officer is accountable for funds or property of a province or city, the custodian and committee shall be designated by the Minister (Secretary) of Finance, and if accountable for municipal or barrio (barangay) funds or property, by the provincial treasurer. In all other respects, the above-prescribed proceedings shall be observed.

3. If the absconding, deceased, incapacitated, or superseded officer is responsible to another who is accountable, the latter may himself designate the committee or take other lawful measures for the protection of his interest.

1. An accountable officer, upon ceasing to act in his official capacity as such, shall submit to the auditor of the agency concerned a report of his accountability.

2. Any remaining balance of such accountability shall be deposited in the proper treasury without unnecessary delay.

1. Revenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority.

2. Trust funds shall not be paid out of any public treasury or depository except in fulfillment of the purpose for which the trust was created or funds received, and upon authorization of the legislative body, or head of any other agency of the government having control thereof, and subject to pertinent budget law, rules and regulations.

3. National revenue and trust funds shall not be withdrawn from the National Treasury except upon warrant or other instruments of withdrawal approved by the Minister (Secretary) of Finance as recommended by the Treasurer of the Philippines.

4. Temporary investment of investible cash in the National Treasury in any securities issued by the National Government and its political subdivisions and instrumentalities including government-owned or controlled corporations as authorized by the Secretary (Minister) of Finance, shall not be construed as disbursements of funds.

1. No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure.

2. Notwithstanding this provision, contracts for the procurement of supplies and materials to be carried in stock may be entered into under regulations of the Commission provided that when issued, the supplies and materials shall be charged to the proper appropriation account.

1. Except with the prior approval of the President (Prime Minister) the government shall not be obliged to make an advance payment for services not yet rendered or for supplies and materials not yet delivered under any contract therefor. No payment, partial or final, shall be made on any such contract except upon a certification by the head of the agency concerned to the effect that the services or supplies and materials have been rendered or delivered in accordance with the terms of the contract and have been duly inspected and accepted.

2. Notwithstanding the foregoing paragraph, any government agency, with the approval of the proper department head, may furnish supplies and materials to any party who has a contract with that agency if the supplies and materials are needed in the performance of the services being contracted for and the value thereof does not exceed in any one month ten percent of the value of the services already rendered due and unsettled as computed by the agency concerned.

1. Warrants upon the National Treasury or checks draw against duly authorized bank accounts shall be drawn by the agency head having control of the appropriation or fund against which the warrants or checks are chargeable, or by such subordinate officer as shall be designated for that duty by the said agency head, who shall all be duly deputized for the purpose by the Treasurer of the Philippines. Copies of the designation shall be furnished the Treasurer of the Philippines and the representative of the Commission. Notice shall likewise be given to the Treasurer of the Philippines and the Commission when the designation is revoked. No member of the accounting unit or the internal control unit of the agency may be designated to perform the duty.

2. Warrants chargeable to national appropriations or funds not under the control of an agency shall be drawn by such officer as shall be specified by law, or, in the absence of that officer, by an officer designated by the President (Prime Minister).

1. A Treasury warrant or check which remains outstanding after two years from date of its issue shall not be paid by the Treasurer of the Philippines or by any duly authorized depository. The issuing agency shall take up in its books of accounts the amount of this warrant or check as surplus adjustment of the fund against which it was previously charged. Upon presentation of a stale warrant or check, the issuing agency shall cancel it and issue to the payee a substitute warrant or check in lieu thereof.

2. Such sum as may be necessary to meet the obligation arising out of the issuance of substitute warrants or checks chargeable against the general fund shall be charged to the current year's General Appropriations law, subject to pertinent budget rules and regulations. Substitute warrants or checks payable from funds other than the general fund shall be paid from the appropriate funds.

1. Every officer of any government agency whose duties permit or require the possession or custody of government funds or property shall be accountable therefor and for the safekeeping thereof in conformity with law.

2. Every accountable officer shall be properly bonded in accordance with law.

1. The head of any agency of the government is immediately and primarily responsible for all government funds and property pertaining to his agency.

2. Persons entrusted with the possession or custody of the funds or property under the agency head shall be immediately responsible to him, without prejudice to the liability of either party to the government.

1. Every officer accountable for government property shall be liable for its money value in case of improper or unauthorized used or misapplication thereof, by himself or any person for whose acts he may be responsible. He shall likewise be liable for all losses, damages, or deterioration occasioned by negligence in the keeping or use of the property whether or not it be at the time in his actual custody.

2. Every officer accountable for government funds shall be liable for all losses resulting from the unlawful deposit, use, or application thereof and for all losses attributable to negligence in the keeping of the funds.

1. produce information concerning past operations and present conditions;

2. provide a basis for guidance for future operations;

3. provide for control of the acts of public bodies and officers in the receipt, disposition and utilization of funds and property; and

4. report on the financial position and the results of operations of government agencies for the information of all persons concerned.

1. The accounts of an agency shall be kept in such detail as is necessary to meet the needs of the agency and at the same time be adequate to furnish the information needed by fiscal or control agencies of the government.

2. The highest standards of honesty, objectivity and consistency shall be observed in the keeping of accounts to safeguard against inaccurate or misleading information.

1. The government accounting system shall be on a double entry basis with a general ledger in which all financial transactions are recorded.

2. Subsidiary records shall be kept where necessary.

1. The financial reports prepared by the agencies shall comply with the specific requirements of applicable laws and regulations as to nature, accounting basic, content, frequency, and distribution as well as with all applicable restrictions pertaining to information that is classified for national security purposes.

2. The financial statements shall be based on official accounting records kept in accordance with law and the generally accepted accounting principles and standards.

(2) Failure on the part of the officials concerned to submit the documents and reports mentioned herein shall automatically cause the suspension of payment of their salaries until they shall have complied with the requirements of the Commission.

(3) No appropriation authorized in the General Appropriations Act shall be available to pay the salary or any official or employee who violates the provisions of this section, without prejudice to any disciplinary action that may be instituted against such official or employee.

1. Until such time as the Commission shall have been fully constituted, the incumbent Chairman or his successor shall continue to exercise all the power and functions properly appertaining to the Commission.

2. Pending implementation of the provisions of Section 24, paragraph 2 of this Code, the agencies concerned shall continue to provide the necessary amounts for the salaries, allowances and other benefits for the representative and staff of the Commission.