2009 REVISED RULES

OF
PROCEDURE

SALIENT FEATURES
1. No MFR at all levels except in CP
2. New level of appeal - the ASB
3. Auditors Order is now COA Order of

Execution (COE)
4. Notice of Finality of Decision (NFD) is
issued to support the COE

SALIENT FEATURES
5. Auditor authorized to act on request

for relief - not over P100,000

6. Period to decide appeals shortened
except for those in the CP.
7. Filing fee is jurisdictional.

Revised Rules
on
Settlement of Accounts

RRSA Salient Features

Covers all audited accounts pertaining to
revenues and receipts
2. Does not cover settlement of property
accounts
3. Appeals are to Director, to ASB, to CP, to
Supreme Court. For ND/NC/NS of SAT, to
FAIO Director, to ASB, CP, SC.
1.

RRSA Salient Features

4. AOMs no longer required for transactions
with possible pecuniary loss
5. NSs should not be issued to require
submission of supporting documents

JURISDICTION

Jurisdiction - AUDITOR
Original and exclusive
a.
b.

Audit of all transactions of the agency

Requests for relief from accountability not
exceeding P100,000 for all causes

No appellate or shared jurisdiction

Jurisdiction - DIRECTOR
Original and exclusive

Requests for relief from accountability

a. fortuitous event/natural calamity
over P100,000 (no maximum)
b. acts of man over P100,000 but not
more than P500,000
Appellate
From any and all decisions of auditor

Jurisdiction - ASB
Original and exclusive
1.
2.

Write off of UCA and DAR P1 M or lower

Request for relief from accountability
> FE/NC none: Directors jurisdiction no
maximum limit
> Acts of man over P500,000 but not over
P5 Million

Jurisdiction - ASB
Appellate
1.
2.

Decision of Director for ND/NC P 1 M

or lower
Decision of Director for request for
relief from accountability

Jurisdiction - CP
Original and exclusive
1.
2.
3.
4.
5.

Money claims
Concurrence in hiring of private lawyers*
Approval of sale of government property
Write off of UCA over P 1 Million
Request for relief from accountability
> acts of man over P 5 Million

Jurisdiction - CP
Appellate
1.
2.
3.

Decision of ASB
Decision of Director for ND/NC over P 1
Million
Decision of Gen. Counsel denying
concurrence for hiring of private counsel*

Summary of Original Jurisdiction over

Relief from Accountability
Auditor - all causes not over P100,000
2. Director
1.

Acts of man over P100,000 to

P500,000
FE/NC over P100,000 (no limit)

ASB - Acts of man over P500,000 to P5 M

4. CP acts of man over P5 M
3.

Interlocutory Orders
1.

AOM not a decision because it does not

finally dispose of an issue
- For observations relating to financial/
operational deficiencies which do not involve
pecuniary loss or
- To require submission of documents or other
information to enable auditor to form opinion
or decision

Interlocutory Orders
1.

AOM
- addressed to agency head and officers
concerned

- Signed by both ATL and SA

- Reply must be within 15 CD from receipt
- Deemed accepted if no reply and included in
ML or audit report.

Interlocutory Orders
1.

AOM
- If required documents/information not
submitted, may result to NS/ND/NC
- ATL should inform management of result of
evaluation of reply in writing

Interlocutory Orders
2. NS interlocutory because not final, not
appealable

For transactions of doubtful validity or

propriety which may result in pecuniary loss
To be signed by both ATL and SA
Addressed to agency head and accountant
and served on persons liable

Interlocutory Orders
2. NS interlocutory because not final, not
appealable

State the amount suspended, the reason

therefor and the justification/explanation
required to settle it
Should be settled within 90 calendar days
from receipt.

Interlocutory Orders
2. NS

NC/ND should be issued if not justified or not

settled
Maturity not automatic; ND/NC must be
issued for purposes of reckoning 6-month
appeal period

Adjudicatory Notices
1. ND

Outright for IUUEE transactions

To be signed by both ATL and SA
Addressed to agency head and
accountant and served on
persons liable

Adjudicatory Notices
1. ND

State the amount disallowed, the

reason therefor, the
laws/rules/regulations violated,
and the persons liable
Settled or appealed within 6
months

Adjudicatory Notices
2. NC
For

unbilled/uncollected amount due to

underassessment
To be signed by both ATL and SA
Addressed to agency head and
accountant and served on persons liable

Adjudicatory Notices
2. NC
State

the amount charged, reason

therefor, the laws/rules/regulations
violated, and the persons liable
Settled or appealed within 6 months

Other Notices
NFD written notification that a decision of
COA or auditor is final and executory
2. NSSDC written notification that an
NS/ND/NC has been settled
3. COE written instruction to withhold
payment of salary and other moneys due to
persons liable (if person liable does not
settle)
1.

Other Notices
4. SASDC summary of the total balance of
the audited accounts at the end of each
quarter. Shows total issued NS/ND/NC and
settlements for the Q and the running
balance of the S/D/C as of the Q ended.

Service of Notices
- Personal service to the persons liable by

delivering personally or leaving in his office

with clerk or person having charge thereof
- By registered mail to his office or residence
with instruction to Post master to RTS within
10 days if undelivered

Service of Notices
- By ordinary mail if no available registry

service
- In case of numerous persons liable, to
accountant who shall notify the persons liable
(constructive service)
- If no office or office not known, in his
residence to a person of sufficient age and
discretion

Service of Notices
Distribution of copy:
a. Original to the head of agency
b. Duplicate to the Auditor for his record
c. Other copies agency officials directly
affected and from whom specified action or
response is expected

Persons Liable
Nature of liability

Solidary or joint and several government

may go after any one for the whole amount
with right of subrogation for the paying one
Joint government should go after each for
the proportionate share

Persons Liable
For ND

those who certified as to the necessity, legality

and availability of funds or adequacy of
documents
Public officers and other persons who
conspired in a transaction disadvantageous or
prejudicial solidarily with beneficiaries thereof

Persons Liable
For ND
Payee where the ground for disallowance is failure to
submit documents and the auditor is convinced that the
transaction did not occur or has no basis in fact
Those who approved the payment like board or
governing body (no refund doctrine not available)
For NC

Measured by the individual participation and

involvement of officers whose duties require
appraisal/assessment/collection

Persons Liable
For loss of government funds

Custodian who failed to ensure that funds are

safeguarded against loss or damage, or
expended, utilized, disposed of or transferred
in accordance with law or regulations, and on
the basis of prescribed documents and
necessary records

Principles on Liability
Public officer not civilly liable for acts done
in the performance of his official duties,
unless there is a clear showing of bad faith,
malice or gross negligence.

 Superior officer not civilly liable for wrongful

acts, omissions of duty, negligence, or

misfeasance of his subordinates unless he
actually authorized by written order the
specific act or misconduct complained of.
(Arias doctrine)

Principles on Liability
Subordinate not civilly liable for acts done
by him in good faith in the performance of
his duties.
- He shall be liable for willful or negligent acts
done by him which are contrary to laws,
morals, public policy and good customs even
if he acted under the orders or instructions of
his superiors.

Principles on Liability
General Liability for Unlawful Expenditures. -

Expenditures of government funds or uses of

government property in violation of law or
regulation shall be a personal liability of the
official or employee found to be directly
responsible therefor. (Sec.106, P.D. 1445)

Principles on Liability
No AO shall be relieved from liability by reason of his having
acted under the direction of a superior in paying out, applying or
disposing of funds or property with which he is chargeable,
unless prior to that act, he notified his superior in writing of the
illegality of the payment, application, or disposition.

The officer directing illegal payment or disposition of funds

or property primarily liable for the loss, while the AO who fails
to serve the required notice shall be secondarily liable

Principles on Liability
Other officers who though not accountable by

the nature of their duties, may be similarly

held accountable or responsible for
government funds through participation in use
or application thereof (Leycano vs. COA,
2/10/06)

Principles on Liability
Sec. 104. The head of any agency or

instrumentality shall exercise the diligence

of a GFF in supervising AOs under his control
to prevent the incurrence of loss of
government funds or property, otherwise he
shall be jointly and solidarily liable with the
person primarily accountable therefor.

Auditors responsibilities
Obtain Sufficient Evidence - to provide
factual basis for his opinion, conclusion,
judgment and recommendation
2. Safeguard evidence
The technicalities of law and the rules
governing admissibility and sufficiency of
evidence in the courts of law shall not
strictly apply.
1.

Auditors responsibilities
Kinds of evidence to gather:
Physical the thing itself or sample thereof;
Documentary letters, contracts, reports,
photographs, extracts from books of
accounts, invoices, receipts, and computer
print-outs;

Auditors responsibilities
Testimonial sworn statements, depositions,

signed interview notes;

analytical analysis sheets/working papers;
electronic e-mail, text or MMS

Auditors responsibilities
3. Grant or deny request for relief from
accountability within his jurisdictional limit
4. Issue NSSDC when ND/NC/NS is settled
5. Issue NC/ND if NS not settled
6. Prepare and sign NFD for ND/NC issued
7. Prepare COE for signature of his Director

Auditors responsibilities
8. Prepare and issue SASDC within 15 CD after
end of each quarter to inform agency of total
S/D/C as of the end of quarter
9. Issue updated list of outstanding S/D/C within
5 CD for retiring/ transferring officer

Auditors responsibilities
10.Enforce submission of records of receipt
and disbursement and paid DVs, Ors,
reports and supporting documents
11. Monitor enforcement of COE and report to
Director action taken by Agency
12. Report in the AAR total unsettled S/D/C as
reflected in the last quarter SASDC

Appeals Procedure

Filing fee paid first before appeal is entertained

Filing fee required for every appeal in all levels
Amount -1/10 of 1% but not over P10,000 for
a. Appeal from ND/NC
b. Appeal from disapproval of request for relief
from accountability
c. Money claim except if claimant is government
agency
d. request for condonation of settled claim or
liability except between government agencies

Appeals Procedure
A.

Auditor to Director
1. Aggrieved files Appeal Memorandum to Director
concerned within 6 months from receipt of decision
2. Within 5 CD from receipt of AM, the Director
orders auditor to file Answer, cc: Appellant
3. Auditor files Answer within 15 CD and submits
entire records numbered at the bottom of each
page and with EDSE. Appellant may file Reply
within 15 CD

Appeals Procedure
4. Director decides within 15 CD from receipt of
complete documents
5. Power of Director on appeal: affirm, reverse, modify,
alter (ARMA) auditors decision

RMA, automatic review direct to CP

Decision must state this decision is not
final and is subject to review by the CP
Affirm, ND/NC sustained; aggrieved may or
may not appeal

6. No MFR. He shall advise movant to appeal to the

ASB/CP. No filing fee necessary.

Appeals Procedure
Director to ASB
1. Aggrieved files AM for ND/NC not more than P1
Million within remainder of 6-month period
2. Upon receipt of AM, the ASB orders Director to file
Answer, cc: Appellant
3. Director files Answer within 15 CD and submits entire
records of case numbered at the bottom of each page
and with EDSE.
Appellant may answer within 15 CD

Appeals Procedure
Director to ASB
4. ASB decides within 15 CD from receipt of
complete documents needed for evaluation
and decision
5. ASB may ARMA the Directors decision.
No automatic review.
6. No MFR.

Appeals Procedure
Director/ASB to CP
1. Aggrieved files AM for ASB decision, or
for Directors decision for ND/NC more than
P1 M, within remainder of 6 months
2. CP decides within 60 CD from date of its
submission for decision/resolution
3. Period is counted from time last comment
needed for proper decision is received

Appeals Procedure
Director/ASB to CP
4. Only one MFR entertained based on new
and material evidence or that the evidence
is insufficient to justify decision, or the said
decision is contrary to law
5. MFR must be filed within remainder of 6month period

APPEALS PERIOD
The actual appeal period is much longer than

the statutory appeal period of 6 months

The 6-month period is from receipt of ND/NC
all the way to the CP.

The 6-month period shall be interrupted when

appeal is filed. The number of days the paper
is with appellant is deducted from that period.

APPEALS PERIOD
The

CP should render a decision within

60 CD from the time the case is
submitted for resolution. (last pleading
of all the parties have been submitted)
Party cannot go directly to court from
the auditor or to other courts than
Supreme Court

APPEALS PERIOD
Rule: when record is with COA, period stops to run;

running resumes when decision is received by the

appellant

1 month = 30 days

6 months x 30 = 180 days

ENFORCEMENT OF ND/NC
1.

Disallowance/charge must be final and

executory
no appeal filed before the Director/ASB/CP
no MFR filed with the CP,
no petition filed with Supreme Court

ENFORCEMENT OF ND/NC
2.

NFD issued to agency head attn accountant by

> ATL/SA for their ND/NC
> Director for ND/NC issued by SAT under him and
for his decision
> GC for decision of ASB
> ComSec for decision of the CP

3. COE issued by Director/GC if persons liable

refuse to refund

ENFORCEMENT OF ND/NC
COE

3.

issued when those liable refuse to

refund
Not earlier than 5 days from receipt of
NFD by agency head
To the agency head attn: Treasurer/
Cashier

ENFORCEMENT OF ND/NC
COE

3.

Issued by:
> Director for his or his auditors NFD
> GC for his NFD
> Comsec for SC decision
Auditor shall monitor enforcement of COE
Unsettled COE referred to GC who may
refer it to OSG/OMB

ENFORCEMENT OF ND/NC
Non compliance with COE

3.

Auditor should notify agency head of noncompliance

Auditor also notifies GC thru his Director
GC shall take any or all of:
> Recommend to CP to cite for contempt the
defaulting party
> Refer to Solgen for filing of civil suit
> Refer to OMB for admin or criminal suit

Record of COA Decisions

Auditor shall maintain ROCD showing

ND/NC issued to agency,

> appeals taken thereon
>decision on the appeal
> NFD/COE
> NSSDC

>

OPENING SETTLED ACCOUNTS

When - within 3 years after the settlement of

any account:

By the CP motu proprio

By the auditor for settled accounts of his agency
after securing an authority from the Chairman
By SAT; Office Order is sufficient authorization

Grounds:
for any reason, or
For fraud, collusion, or error of calculation, or
when new and material evidence is discovered

Value of Auditors WP
Sec. 83, PD 1445
In any criminal or civil proceeding against an

AO, it shall be sufficient, for the purpose of

showing a balance against him, to produce
the working papers of the auditor concerned.
It shall be prima facie evidence of the
misappropriation of the funds or property
unaccounted for or of civil liability of the
officer as the case may be.