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SETTLEMENT OF ACCOUNTS
SETTLEMENT OF ACCOUNTS
SETTLEMENT OF ACCOUNTS
SETTLEMENT OF ACCOUNTS
RRSA
and
Pertinent Provisions
under the 2009 RRPC
Resource Person:
Atty. LITO Q. MARTIN
Director III
Commission on Audit
SESSION OBJECTIVE
To orient AGAP convention
participants on the provisions of
COA Circular No. 2009-006 dated
September 15,2009 on RRSA &
2009 RRPC which is effective
October 28, 2009.
BACKGROUND/Previous Issuances
COA Circular 81-156
Restating the Requirements for
the Use of the CSB and Providing
Guidelines on Its Issuance
Including the Accounting
Treatment Thereof
Previous Issuances
COA Circular 85-156B
Prescribing the Use of the
Manual on CSB
COA Circular 94-001
Prescribing the Use of the 1993
Revised Manual on CSB
Previous Issuances
COA Memorandum 2002-053
Guidelines on the Delineation of
Auditing and Adjudication Functions
COA Resolution 2006-001, 1/31/06
Responsibility to Issue NS/ND/NC
Arising From the Settlement of
Accounts and Audit of Transactions
Chapter I -
Introduction
Section 1. Title
The set of rules
shall be known as
the RRSA
Sec. 2 - Legal Authority
1. Power/authority/duty to examine/
audit/settle all accounts pertaining
to revenues & receipts of &
expenditures or uses of funds,
owned or held in trust by, or
pertaining to the Govt. [Sec. 2 (1),
Art. IX-D, Constitution]
Legal Authority [Sec. 2 (2), Art. IX-D)
2. Exclusive authority to define the scope of
its audit & examination;
3. Establish the techniques & methods
required therefore;
4. Promulgate accounting & auditing rules
& regulations, including those for the
prevention & disallowance of IEEUU
expenditures, or uses of govt. funds &
property.
Other Legal Authority
5. To certify the balances in the
accounts of AOs (Sec. 81, PD 1445)
6. To notify in writing the officer whose
accounts have been audited & settled
(Sec. 82, PD 1445)
7. To render accounts by local auditors
(Sec. 347, RA 7160)
Sec. 3 - Scope of RRSA
All accounts audited pertaining to
revenues & receipts of &
expenditures or uses of govt.
funds
Settlement of property accounts
not covered.
Chapter II -
General Principles, Rules and
Regulations
Settlement of Accounts
is the process of determining the
balance of the account of an AO,
thru an audit, to determine the
transactions that may be allowed or
not allowed.
The balance refers to total
suspensions, disallowances &
charges (SDC) which shall be his
accountability.
Settlement of Accounts
Audit shall be done in
accordance with LRR
(laws/rules/regulations) &
standards to determine
whether transactions may be
allowed, suspended,
disallowed or charged.
When to issue an AOM
1. audit decision cannot yet be made
due to incomplete
documentation or
information;
2. the deficiencies noted refers to
financial/operational matters w/c
do not involved pecuniary loss.
Auditors Adverse Decisions
1. Suspension of a transaction that
needs more requirements, & w/c may
result in pecuniary loss to the govt.,
until such requirements are complied
with.
A NS shall be issued indicating the
requirements to be complied w/ by
the officers concerned.
Sec. 4. Definition
Suspension is a temporary
disallowance of a transaction w/c
appear illegal, improper or irregular
unless satisfactorily
explained/justified by the responsible
officers or until the requirements on
matters raised in the course of audit
are submitted or complied with
Sec. 4, Rule IV of RRPC
NS may be issued for
transactions of doubtful
legality/ validity/propriety to
obtain further explanation
or documentation.
Auditors Adverse Decisions
2. Disallowance of a
transaction on expenditure,
either in whole or in part, for
being an IIEEUU. A ND is
issued for the disallowed
amount
Auditors Adverse Decisions
3. Charge of a transaction when
the correct amount of
revenue/receipt due the govt. is
not received as a result of
under-appraisal/ assessment/
collection. A NC is issued for the
uncollected amount
Evidence of Audit
By appropriate markings in the
documents audited
If allowed in audit, indicate Allowed
in Audit.
If not allowed, issue NS/ND/NC, &
indicate amount suspended/
disallowed/ charged in the
documents audited.
Suggested Post-Audit Stamp
POST-AUDITED
Transaction Amount : __________
Allowed : __________
Disallowed/Charged/
Suspended : ___________
ND/NC/NS Number : ___________
Dated : ___________
Audited by: (ATL) _________ Date: ___________
Standard size is _ by __ cms
Auditor sign using RED ink
How Notices are Settled
NS - by persons responsible thru
compliance w/ requirements
ND/NC - by persons liable thru
payment, restitution or by
other modes of extinguishment
of obligation, such as
compensation, dation in payment,
condonation.
Notice of Settlement
The auditor issue an
NSSDC for settled
NS/ND/NC
Balance of Account
The auditor shall issue :
SASDC within 15 days after the
end of each QTR;
Updated list of outstanding
SDC within 5 days from receipt of
request by a retiring/ transferring
officer.
Linkages to the AAR
Total unsettled SDC at the end
of CY as reflected in the 4
th
QTR
SASDC shall be reported in the
AAR
Other deficiencies noted as
indicated in the AOM shall be
included in Part II of the AAR
Responsibilities for
Audit and
Settlement of
Accounts
Responsibilities of
Agency Head
Primarily responsible for all
govt. funds & property
pertaining to his agency.
Fiscal responsibility rests
directly with him.
Responsibilities of Agency Head
1) Ensure that:
a) Required financial/other reports/
statements are submitted by the
concerned agency officials in
prescribed form and within the
prescribed period;
b) Settlement of disallowances/ charges
is made within the prescribed period;
Responsibilities of Agency Head
c) Requirements of
transactions suspended are
complied with;
d) Appropriate actions are
taken on the deficiencies
noted as contained in the
AOM.
Responsibilities of Agency Head
2) Initiate the necessary
administrative and/or criminal
action in case of unjustified
failure/refusal to effect
compliance with the
foregoing requirements by
subordinate officials.
Responsibilities of Agency Head
Gross negligence in
disciplining subordinates who
are the subject of repeated
adverse audit findings shall
subject him to disciplinary
action by proper authorities.
Responsibilities of Agency Head
3) Enforce the COE by requiring the
withholding of salaries/other
compensation due the person liable
in satisfaction of the
disallowance/charge.
4) Ensure that all employees who are
retiring/transferring shall first settle
the disallowances & charges for w/c
they are liable.
Responsibilities of Agency Accountants/Bookkeepers
1. Ensure that reports &
supporting documents
submitted by the AOs are
immediately recorded &
submitted to the Auditor
w/in 1
st
10 days of the
ensuing month;
Responsibilities of Accountants
2. Ensure that financial
records are made
accessible at
reasonable hours to the
auditors when needed;
Powers & functions of Auditors
(Sec. 3, Rule II of RRPC)
To exercise such powers &
functions as provided by law & as
may be authorized by COA in the
audit & settlement of the accounts,
funds, financial transactions &
resources of the agencies under
their respective audit jurisdiction.
Role of Auditors
(Sec. 2, Rule IV of RRPC)
To maintain complete
independence & exercise
professional care & be guided
by applicable LRR & the
GAAAP in the performance
of audit work &
preparation audit reports.
Responsibilities of Auditors
(Sec. 3, Rule IV of RRPC)
To obtain sufficient evidence to
provide an appropriate factual bases
for his opinions, conclusions,
judgments & recommendations;
To safeguard this evidence to
support his findings, which may
include physical, testimonial,
documentary, analytical & electronic
evidences.
Responsibilities of Auditor
(Sec. 7.3 of RRSA)
1. Enforce submission of
prescribed/ necessary
reports of receipts/
disbursements w/ all paid
vouchers, ORs, &
supporting documents;
Responsibilities of Auditor
2. Conduct audit on the above-
submitted documents covering
transactions under the identified
audit areas;
3. Prepare, as a result of audit,
the pertinent
NS/ND/NC/AOM/NFD;
Responsibilities of Auditor
4. Prepare the COE for
disallowances/charges issued by
him for his Directors signature
5. Serve the NS/ND/NC/
AOM/NFD/COE to persons
concerned/responsible/liable;
Responsibilities of Auditor
6. Monitor the enforcement of
COE issued & report to Director
the action taken by the agency
thereon pursuant to Sec. 24;
7. Issue the NSSDC when there
is settlement pursuant to Sec. 13;
Responsibilities of Auditor
8. Prepare & transmit
SASDC to the agency head
& the Accountant pursuant
to Sec. 14;
9. Others
Responsibilities of Director
1. Exercise general supervision &
review in audit & settlement
of accounts;
2. Act on appeals pursuant to
Sec. 18;
3. Sign the NFD for decisions
rendered pursuant to Sec. 22;
Responsibilities of Director
4. Sign the COE for decisions
rendered by him & by the
Auditor pursuant to Sec. 23;
5. Consolidate the SASDC for all
auditees under his jurisdiction;
Payment of Filing Fees
2009 RRPC
Every petition/appeal filed before an
adjudicating body/office of COA
pertaining to the following cases shall be
imposed a filing fee equivalent to 1/10
of 1% (0.1%) of the amount involved,
but not exceeding P10,000.
Filing Fees
a) Appeal from audit disallowance/charge
b) Appeal from disapproval of request for relief
from accountability
c) Money claims, except if the claimant is a
govt. agency
d) Request for condonation of settled claim or
liability except if between govt. agencies
Legal Research Fund
(Section 4, RA 3870, as amended, & LOI 1183
dated Dec. 16, 1981)
In addition, LRF of 1% of
filing fee imposed, but not
lower than P10 shall be
collected
Where to Pay Fees
At the Cashier of COA Central
Office or Regional Office
if not practicable, may be
remitted thru postal money
order payable to the
Commission on Audit
Payment of Fees
OR shall be attached to
the pleading
If no OR, adjudicating
bodies/offices shall not take
action thereon
Chapter III
Guidelines in issuance
of AOM/NS/ND/NC
and SASDC
Sec. 8 AOM & Management Reply
1. The Auditor shall issue an AOM (Form
1) for observation relating to
financial/operational deficiencies such as
accounting, internal control or property
management which do not involve
pecuniary loss, including for
documentary or other information
requirements to enable the auditor to
make a decision in audit.
Sec. 8 - AOM & Mngt. Reply
2. AOM is addressed to agency head and
officers concerned stating the
deficiencies noted and/or requirements
to be complied with and requiring a
response thereon. Signed both by the
ATL and SA.
3. AOM shall be replied to by agency
officials concerned w/in 15 CDs from
receipt thereof.
Sec. 8 - AOM and Management Reply
4. If agency officials failed to reply, the
observation shall be deemed accepted
and shall be included in the audit report
(ML and/or AAR). In case of failure to
submit documents/ information needed
to reach an audit decision, an NS/ND/NC
may be issued after a re-evaluation of
those available.
Sec. 8 - AOM & Mngt. Reply
5. The Auditor shall evaluate the agencys
reply/comments and shall inform the
agency head and officer concerned in
writing of the results of evaluation.
6. The documents/information submitted in
response to an AOM may provide basis for
the allowance, SDC in audit.
Sec. 9 Notice of Suspension
1. The Auditor may issue an NS
(Form 2) for transactions of
doubtful legality/propriety/
regularity which may result in
pecuniary loss of the government to
obtain further explanation or
documentation.
Sec. 9 Notice of Suspension
2. Addressed to agency head and the
Accountant; served on the persons
responsible; stated the amount
suspended, the reason/s for
suspensions, the justification/
explanation/legal basis/documents
needed to lift the suspension, and the
persons responsible for compliance.
Signed both by the ATL and SA.
Sec. 9 Notice of Suspension
3. Issued as often as suspensions are made
4. Suspension shall be settled within 90
CDs from date of receipt by the
responsible officers; otherwise, the
transaction shall be disallowed/ charged
after the Auditor shall had satisfied
himself of such action and consequently,
issue the ND/NC.
Sec. 10 Notice of Disallowance
1. The Auditor shall issue an ND (Form 3)
for transactions w/c are IEEU (COA Circ.
85-55A) and illegal (contrary to law) and
unconscionable (unreasonable and
immoderate; no man in his right sense
would make, nor fair and honest man
would accept as reasonable; and those
incurred in violation of ethical and moral
standards)
Sec. 10 Notice of Disallowance
2. Addressed to agency head and the
Accountant; served on the persons
liable; indicated the transaction and
amount disallowed, the reasons for
disallowance, the LRR violated,
and the persons liable. Signed both
by the ATL and SA.
Sec. 10 Notice of Disallowance
3. Issued as often as
disallowances are made.
4. Disallowances shall be settled
within 6 months from date
of receipt by the persons
liable.
Sec. 11 Notice of Charge (NC)
1. The Auditor shall issue the NC (Form 4)
on the difference of the following, which
are proper audit charge:
a) Amount assessed/appraised is less than
what is due;
b) Amount billed is less than what is due;
c) Amount collected is less than what is due.
Sec. 11 Notice of Charge
2. Addressed to agency head and the
Accountant; served on the persons
liable; indicated the transaction and
amount charged, the reasons for
the charge, the LRR violated, and
the persons liable. Signed both by
the ATL and SA.
Sec. 11 Notice of Charge
3. Issued as often as charges
are made.
4. Charge shall be settled within
6 months from date of
receipt by the persons liable.
ND/NC
ND/NC shall be adequately
established by evidence and the
conclusion, recommendations or
dispositions shall be supported
by applicable LRR, jurisprudence
and the GAAAP.
ND/NC/NS/decisions/other orders
Shall be prepared in such number of
copies as may be necessary for:
1) head of audited agency (original);
2) Auditor for record (duplicate);
ND/NC/NS/decisions/other orders
3) agency officials directly affected
by the decision and from whom
specified action/response is
expected.
Sec. 12 Service of Copies of ND/NS/NC
1. To each persons liable/responsible, by
the Auditor, thru personal service.
If not practicable, by registered
mail. If several payees, such as
disallowed payroll, service to the
Accountant, who shall be
responsible for informing all payees
concerned, constitute constructive
service to all payees in the payroll.
Sec. 12 Service of Copies
2. Personal service by:
a) delivering personally to the party,
b) leaving in his office w/ his clerk or with
a person having charge thereof.
Sec. 12 Service of Copies
c) by leaving at the partys residence
between 8 AM to 6 PM, with a person of
sufficient age and discretion then
residing thereon.
Sec. 12 Service of Copies
3. Register mail by a) sending to the
office address of the party, if known;
otherwise, b) at his residence with
instruction to the Postmaster to return
the mail to sender after 10 days, if
undelivered. Ordinary mail, if no
service is available in locality of either
sender or addressee.
Sec. 12 Service of Copies
4. Record of date of actual or constructive
service for purpose of determining the
running of 90 days maturity period of
the suspension & the 6 months period
to appeal the disallowance/charges.
These information shall be included in
the Record of COA Decisions (ROCD)
Sec. 13 NSSDC
1. The Auditor shall issue the NSSDC
(Form 5) whenever a SDC is settled.
2. Addressed to agency head and the
Accountant; copy furnished the persons
responsible/liable; indicated the
NS/ND/NC settled, amount, nature of
transaction and mode of settlement.
Signed both by the ATL and SA.
Responsibility of Auditor . . . .
Under Section 7.3
Auditor shall issue a Notice of
Finality of Decision (NFD) to inform the
agency head that a decision of COA or its
authorized representative has become final &
executory, which shall be the basis for
recording the disallowance/charge in the
agencys books.
Sec. 13 NSSDC
3. Settlements -
a) Suspension by submission of
justification/explanation and/or
documentation required and after
the Auditor is satisfied that the
transaction is regular/legal/proper.
If the Auditor is not satisfied, he
shall issue the ND/NC;
Sec. 13 Settlement
b) Disallowance/charge
i) by payment of the amount disallowed;
ii) by such other applicable modes of
extinguishment of obligation as provided
by law, w/c the Auditor may refer to the
General Counsel, for evaluation & advice,
the propriety of the settlement;
Sec. 13 Settlement
b) Disallowance/charge
iii) from a decision of the Director, the ASB,
or the CP, lifting the same.
Sec. 14 SASDC
1. The Auditor shall prepare the SASDC
(Form 6) summarizing the total SDC for
the current period. It shall indicate
beginning balance for each NS/ND/NC,
the NS/ND/NC and NSSDC for the period
and the ending balance of the
NS/ND/NC. Signed both by the ATL and
SA.
Sec. 14 SASDC
2. Issued to agency head & the Accountant
within 15 CDs from the end of each QTR,
copy furnished the COA Director
concerned.
3. The Auditors SASDC shall be the basis
for the preparation by the Directors
consolidated quarterly SASDC for his
cluster/region showing the total
unsettled SDC per auditee.
Sec. 14 SASDC
4. The Sector Ascom shall be furnished
copy of the consolidated SASDC of each
cluster/region for purpose of national
consolidation into a Sector SASDC as an
input into a database to be maintained
by the ITO showing the total unsettled
SDC per Sector.
Liable for Audit Disallowances/Charges
1. Determined on the basis of:
a) nature of disallowance/charge;
b) duties/responsibilities or obligations of
officers/employees concerned;
c) extent of participation in the
transaction;
d) amount of damage or loss to the govt.;
(Sec. 16.1)
Liability of Public Officers (POs)
a) Custodians of government funds
are liable for failure to ensure that
funds are safely guarded against
loss or damage; expended, utilized,
disposed of or transferred in
accordance w/ LRR; and on the
basis of prescribed documents and
necessary records.
Liability of POs
b) Who certify as to the
necessity, legality and
availability of funds or
adequacy of documents are
liable according to their
respective certifications.
Liability of POs
c) Who approve or authorize
expenditures are liable for
losses arising out of their
negligence or failure to
exercise the diligence of a
good father of a family.
Liability of POs & Other Persons
d) Who confederated or
conspired in a transaction
which is disadvantageous or
prejudicial to the government
are liable jointly and severally
w/ those who benefited
therefrom.
Liability of the PAYEE
e) Personally liable for a
disallowance where the ground
thereof is his failure to
submit the required
documents, and the Auditor is
convinced that the disallowed
transaction did not occur or
has no basis in fact.
Liability for Audit Charges
2. Measured by the individual
participation and involvement
of POs whose duties require
appraisal/assessment/
collection of govt. revenues &
receipts in the charged
transaction. (Sec. 16.2)
Liability of persons determined
to be liable under an ND/NC
3. Solidary. COA may go
against any person liable
without prejudice to the
latters claim against the
rest of the persons liable.
DECISIONS AND APPEALS
WHAT CASES
WHOSE
JURISDICTION/
APPROVING
OFFICIAL
FILING FEE
REQUIRED
Request for write-off of
unliquidated cash advances
and dormant accounts
receivables
- not exceeding P1 M
- exceeding P1 M
- ASB (original)
- CP (original)
- None
- None
WHAT CASES
WHOSE
JURISDICTION/
APPROVING
OFFICIAL
FILING FEE
REQUIRED