COMMISSION ON AUDIT CIRCULAR NO.

90-327 March 19, 1990

TO : The Chairman, Metro Manila Authority, Provincial Governors, City and Municipal
Mayors, Chief Accountants, Provincial, City and Municipal Treasurers; COA
Directors, COA Auditors Concerned and Provincial, City, Municipal Unit Auditors;
and Circuit Municipal Unit Auditors, and All Others Concerned.

SUBJECT: Revising the "Proof of Correctness of the Post-Closing Trial Balances of Local
Government Units" as prescribed in COA Circular No. 79-96A dated October 5,
1979.

In view of the projected computerization of the Annual Financial Reporting System aimed
at facilitating the preparation of the Annual Financial Report for Local Government and the
early submission thereof to the President and the Congress of the Philippines, there is hereby
prescribed a revised Guide in Proving the Correctness of the Post Closing Trial Balance of
Local Government Units, a copy of which is attached hereto and incorporated as an integral
part of this Circular.

The Guide serves as an aid in the correct preparation of the trial balances and supporting
schedules, and facilitates the verification and analysis thereof. It is understood that the
Guidance is intended to prove the correctness of the trial balances as to compliance with
prescribed accounting rules regulations, and procedures only. Therefore, other procedures
necessary in the audit of financial statements shall continue to be performed.

The form prescribed for the Guide shall be accomplished and certified by the Provincial,
City or Municipal Treasurer concerned and shall be attached to each trial balance as an
additional requirement under Section 11.02, Rendition of Trial Balances", of the Local
Government Manual of Accounts, 1977 edition.

Provincial, City, Municipal, and Circuit Municipal Audit Unit Auditors are hereby instructed
not to accept year-end post-closing trial balances of the local government units without the
accompanying form for proving the correctness of the trial balances. The Auditors concerned
shall also verify the proof of correctness of the trial balances.

Strict compliance with this Circular is hereby enjoined in order to carry out effectively the
computerized data processing of the year-end trial balances and supporting schedules in
generating the Annual Financial Report for Local Government.

This Circular shall take effect immediately. All provisions of existing circulars, memoranda
and orders inconsistent herewith are hereby amended or modified accordingly.

(SGD.) ALBERTO P. CRUZ, Commissioner

(SGD.) BARTOLOME C. FERNANDEZ, JR., Commissioner
(SGD.) EUFEMIO C. DOMINGO, Chairman

NOTE: See Attachment

GUIDE IN PROVING THE CORRECTNESS OF THE POST-CLOSING TRIAL BALANCES
OF LOCAL GOVERNMENT UNITS.