DEALING WITH COA

DISALLOWANCES
Aug. 13, 2019
Monday’s convocation
DENR RO1

SANTIAGO L. PAGADDUT, JR.

ATTY III, LEGAL DIVISION
DENR RO1
RELEVANT COA CONSTITUTIONAL MANDATES
(Article IX-D of the 1987 Philippine Constitution)

 Examine, audit and settle all accounts pertaining to the

revenue and receipts of, and expenditures or uses of
funds and property owned or held in trust by, or
pertaining to, the government. [Section 2(1)]
 Promulgate accounting and auditing rules and
regulations including those for the prevention and
disallowance of irregular, unnecessary, excessive,
extravagant or unconscionable expenditures, or uses of
government funds and properties. [Section 2(2)]
 Recommend measures to improve the efficiency and
effectiveness of government operations. (Section 4)
DEFINITIONS

Disallowance - the
disapproval in audit of a
transaction, either in whole or in part. The
term applies to the audit of disbursements
as distinguished from “charge” which
applies to the audit of revenues/ receipts.
(Section 4.16, Rules and Regulations on Settlement of
Accounts)
BACKGROUND
THE FUNDAMENTAL PRINCIPLES GOVERNING FINANCIAL
TRANSACTIONS (sec 4 of PD 1445 or THE DECREE ORDAINING AND INSTITUTING A
GOVERNMENT AUDITING CODE OF THE PHILIPPINES)

1. No money shall be paid out of any public treasury or

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 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
5. Disbursements or disposition of government funds and
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 accounting principles and practices as
well as of sound management and fiscal administration shall be
observed, provided that they do not contravene existing laws
and regulations.
BACKGROUND

GENERAL REQUIREMENTS FOR ALL TYPES OF DISBURSEMENTS

1. Certificate of Availability of Funds issued by the Chief
Accountant
2. Existence of lawful and sufficient allotment duly
obligated by authorized officials
3. Legality of transactions and conformity with laws, rules or
regulations
4. Approval of expenditure by Head of Office or or his
authorized representative
5. Sufficient and relevant documents to establish validity of
claim
REMEDIES

1. APPEAL TO THE COA REGIONAL DIRECTOR 6 MONTHS

2. APPEAL TO THE COMMISION
3. JUDICIAL REVIEW (SUPREME COURT) 30 DAYS
MOTION FOR EXTENSION OF TIME

 Non-extendible period of 15 days

 Most compelling or justifiable reasons

 It is a basic rule of remedial law that a motion for

extension of time to file a pleading must be filed
before the expiration of the period sought to be
extended. Since the motion for extension was filed after the
lapse of the prescribed period, there was no more period to extend.
citing Philippine National Bank vs. Deang Marketing Corporation,
G.R. No. 177931, December 8, 2008)
APPEAL TO THE DIRECTOR (appeal memorandum)

 An aggrieved party may appeal from the

decision of the Auditor to the Director who has
jurisdiction over the agency under audit, except
for ND/NC of the audit team under the FAO, SAO
or ICFAU, which shall be appealed directly to
the Commission Proper (Rule V, Section 1, 2009 Revised
Rules of Procedure of the Commission on Audit (RRPC)
Interruption of Time to Appeal

 The receipt by the Director of the Appeal Memorandum

shall stop the running of the period to appeal which shall
resume to run upon receipt by the appellant of the
Director’s decision.
How appeal is taken

 The appeal to the Director shall be taken by filing an Appeal

Memorandum with the Director, copy furnished the Auditor.
 proof of service of a copy to the Auditor shall be attached to the
Appeal Memorandum.
 proof of payment of the filing fee prescribed under the Rules shall
likewise be attached to the Appeal Memorandum.
When appeal is taken

 An
Appeal must be filed within six (6)
months after receipt of the decision
appealed from.
Power of Director on Appeal

 The Director may affirm, reverse, modify or alter the

decision of the Auditor.
 If the Director reverses, modifies or alters the decision of
the Auditor, the case shall be elevated directly to the
Commission for automatic review of the Directors’
decision.
APPEAL BEFORE THE COMMISSION (petition for review)

 Any person aggrieved by the decision of

an auditor of any government agency in
the settlement of an account or claim may
within six months from receipt of a copy of
the decision appeal in writing to the
Commission. Sec. 48 of PD 1445 or THE DECREE ORDAINING
AND INSTITUTING A GOVERNMENT AUDITING CODE OF THE PHILIPPINES
MOTION FOR RECONSIDERATION
TO THE COMMISSION

 May be filed within thirty (30) days from notice of the

decision or resolution
 Grounds for the motion
1. evidence is insufficient to justify the decision;
2. the decision is contrary to law.
3. raises new matters
 Only one (1) motion for reconsideration shall be
entertained.
Effect/Disposal of the MR
 Suspends the running of the period to elevate the matter
to the Supreme Court
 Minute Resolution – if the recommendation is to deny the
motion for:
Filed out of time
Failure to raise a new matter
Failure to show sufficient ground to justify a
reconsideration of the assailed decision or resolution
JUDICIAL REVIEW
petition (for special civil action) for certiorari under
Rule 65 of the Rules of Court
 The party aggrieved by any decision, order or ruling of
the Commission may within thirty days from his receipt of
a copy thereof appeal on certiorari to the Supreme
Court in the manner provided by law and the Rules of
Court. When the decision, order, or ruling adversely
affects the interest of any government agency, the
appeal may be taken by the proper head of that
agency. (Sec. 50 of PD 1445 )
JUDICIAL REVIEW
petition for special civil action for certiorari under Rule 65 of
the Rules of Court

 The filing of a petition for certiorari shall not stay the

execution of the judgment or final order sought to be
reviewed, unless the Supreme Court shall direct
otherwise upon such terms as it may deem just. (Section 9,
(as amended), Rule X, 2009 Revised Rules of Procedures of the
Commission on Audit (RRPC)
FILING FEE

 Payment of filing fee is jurisdictional.

 1/10 of 1% of the amount involved, provided the total

filing fee shall not exceed P20,000
EFFECT OF NON-PAYMENT PAYMENT OF
FILING FEE

 appeal is not perfected

 does not suspend the running of the period to appeal.
 appeal will be dismissed
 renders judgment final and executory
EFFECTS OF FAILURE TO APPEAL

 A decision of the Commission or of any auditor upon any

matter within its or his jurisdiction, if not appealed as
herein provided, shall be final and executory. Sec. 51 of
PD 1445
 Unsettled COA Order of Execution shall be referred to the
General Counsel for appropriate action, including
referral to the Office of the Solicitor General and the
Ombudsman
GENERAL CONTENTS OF AN APPEAL

 Concise statement of facts and issues

 Grounds
 Material dates
GOOD FAITH AS A DEFENSE

 Good faith is a state of mind denoting "honesty of

intention, and freedom from knowledge of
circumstances which ought to put the holder upon
inquiry; an honest intention to abstain from taking any
unconscientious advantage of another, even through
technicalities of law, together with absence of all
information, notice, or benefit or belief of facts which
render transaction unconscientious."
DBP vs. COA (GR 221076. March 13,
2018
 Good faith of responsible officers - Requisites
1. they believed that they could disburse the disallowed
amounts based on the provisions of the law; and
2. they lacked knowledge of facts or circumstances which
would render the disbursements illegal when:
2.1. there is no similar ruling by this Court prohibiting a
particular disbursement or
2.2. there is no clear and unequivocal law or administrative
order barring the same.
THANK YOU VERY MUCH!!!