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CoA circular legal, says SC

Manila, Philippines – The Supreme Court (SC) has affirmed the legality of Circular No. 89-299 of the Commission on Audit (CoA) that lifted the agency’s system of pre-audit of all government financial transactions of national government agencies (NGAs) and government-owned or -controlled corporations (GOCCs).

In a decision penned by Justice Maria Lourdes P. A. Sereno, the SC dismissed the petition filed by taxpayer Gualberto J. dela Llana who claimed that CoA’s pre-audit duty cannot be lifted by a mere circular, considering that it is a constitutional mandate enshrined in Section 2, Article IX-D of the 1987 Constitution.

According to the SC, “There is nothing in the said constitutional provision that requires the CoA to conduct a pre-audit of all government transactions and for all government agencies.”

It said, “The only clear reference to a pre-audit requirement is found in Section 2, Paragraph 1, which provides that a post-audit is mandated for certain government or private entities with state subsidy or equity and only when the internal control system of an audited entity is inadequate; and in such a situation, the CoA may adopt measures, including a temporary or special pre-audit, to correct the deficiencies.”

Thus, the SC said, the conduct of a pre-audit is not a mandatory duty that it may compel the CoA to perform, considering the commission’s exclusive authority to define the scope of its audit and examination.

Circular No. 82-195 was issued by CoA on October 26, 1982. It lifted the system of pre-audit of government financial transactions, with certain exception.

In 1986, CoA issued Circular No. 86-257 which reinstated the pre-audit of selected government transactions. The circular stated that selective pre-audit was perceived to be an effective, although temporary, remedy against the anomalies. (Rey G. Panaligan)

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  • COA Circular 2012-03 (14)
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