ADJUDICATION PROCESS

Atty. Ma. Charizma B. Madriaga

ADJUDICATION PROCESS
GOVERNING RULES:
1.2009 REVISED RULES OF PROCEDURE OF THE COMMISSION ON
AUDIT (RRPC)
2. RULES AND REGULATIONS ON THE SETTLEMENT OF ACCOUNTS
(RRSA) (COA CIRCULAR NO. 2009-006 DATED SEPT. 15, 2009)
3. OTHER COA ISSUANCES AND SUPPLETORILY BY THE RULES OF
COURT

ADJUDICATION PROCESS
CAUSES OF FILING AN APPEAL
1.NOTICE OF DISALLOWANCE (ND)
A. WHEN ISSUED?
- Issued
for
transactions
found
irregular/unnecessary/excessive and extravagant

to

be

- Also issued for transactions that are illegal (contrary to law) and
unconscionable (unreasonable/immoderate )

ADJUDICATION PROCESS
2. NOTICE OF CHARGE (NC)
A. WHEN ISSUED?
-If the amount assessed/appraised/ billed/ collected is less
than what is due the government, the difference shall be a
proper audit charge.

ADJUDICATION PROCESS
B. CONTENTS OF THE ND/NC
(Sections 10.2 and 11.2, RRSA)
- Transaction disallowed/charged
- Amount disallowed/charged
- Laws, rules and regulations violated
- Reason/explanation for the disallowance/charge
- Persons Liable

ADJUDICATION PROCESS
NOTE:

-It is not enough to state that a transaction was irregular,

unnecessary, etc. It is necessary to cite the law and/or
regulation that was violated AND, more importantly, the
transactions that constitute the violation thereof.

ADJUDICATION PROCESS
- AVOID simply stating lack of legal basis as a ground for
disallowance without specifying the law/rules violated.
EX. The total amount of P1,000,000.00 representing
payment of RATA for CY 2015 is disallowed in audit for lack of legal
basis.
-

ADJUDICATION PROCESS
NOTE:

-Be careful in determining the persons liable to avoid

injustice. There have been cases where some persons
without having anything to do with the disallowed
transactions were made liable for NDs which subsequently
matured into NFDs.

ADJUDICATION PROCESS
C. TO WHOM ND/NC ADDRESSED?
- Head of the Agency
- Accountant
D. TO WHOM SERVED?
- Head of the Agency, Accountant, Persons Liable

ADJUDICATION PROCESS
E. HOW SERVED?

- The ND, NC, NS, order, or decision shall be served to each

of the persons liable/responsible by the Auditor, through personal
service, or if not practicable through registered mail. In case
there are several payees, as in the case of a disallowed payroll,
service to the accountant who shall be responsible for informing
all payees concerned, shall constitute constructive service to all
payees listed in the payroll. (Sec. 12.1, RRSA and Sec. 7, Rule IV,
RRPC)

ADJUDICATION PROCESS
NOTE:
- It is required that the ND or NC (or even the Notice of
Suspension)
be personally delivered/served to the persons
responsible/ liable; the date of their receipt must be legibly written
or stamped on the face of the said NS, ND or NC.

ADJUDICATION PROCESS
- Personal service is done by delivering personally a copy to the
party or by leaving it in his office with his clerk or with a person
having charge thereof. If no person is found in his office, or his
office is not known, or he has no office, then by leaving the copy
between the hours of eight in the morning and six in the evening
at the party's residence, if known, with a person of sufficient age
and discretion then residing therein. (Sec. 12.2, RRSA)

ADJUDICATION PROCESS
- If it is not practicable to serve an audit decision by personal
delivery/ service, it may be served by registered mail.
- Service by registered mail is done by sending a copy by
registered mail to the office address of the party, if known;
otherwise at his residence with instruction to the
Postmaster to return the mail to the sender after ten (10)
days, if undelivered. If no registry service is available in the
locality of either the sender or the addressee, service may
be done by ordinary mail. (Sec. 12.3, RRSA)

ADJUDICATION PROCESS
NOTE:

Section 12.4, RRSA: The Auditor shall maintain a record

of the date of actual or constructive service of notices for
purposes of determining the running of the ninety (90)
days maturity period of the suspension and the six (6)
months period to appeal the disallowances and charges.
These information shall be included in the Record of COA
Decisions (ROCD).

ADJUDICATION PROCESS
F. ND/NC SIGNATORIES
- the Audit Team Leader and
- Supervising Auditor
G. PERIOD TO SETTLE ND/NC
- 6 months (180 days) from receipt by the persons liable of
the ND/NC

ADJUDICATION PROCESS
H. HOW SETTLED?
- Payment of the amount disallowed/charged
- Other modes of extinguishing obligations (propriety of other
modes may be referred to the General Counsel for evaluation or
advice)
- COA Resolution No. 2015-031 (Policy on Settlement of Audit
Disallowances by Persons Liable) allows monthly installment payment
up to a maximum of 24 months for disallowances above P40,000

ADJUDICATION PROCESS
I. EFFECT OF SETTLEMENT

- Notice of Settlement of Disallowance/Charge will be issued

J. EFFECT OF NON-SETTLEMENT

- In case no appeal was filed, a Notice of Finality of Decision will be

issued

ADJUDICATION PROCESS
APPEAL
- An appeal must be filed within 6 months (180
days) from receipt of the ND/NC appealed from
- With attached proof of payment of filing fee and
proof of service

ADJUDICATION PROCESS
FILING FEE:
- COA Resolution No. 2013-016, Aug. 23, 2013
APPEALS from NDs/NCs, Requests
for Relief from Accountability,
Write-Off

1/10 of 1% of the amount involved provided

that the total filing fee shall not exceed
P20,000

Money Claims

1/10 of 1% of the amount involved provided

that the total filing fee shall not exceed
P50,000, subject to certain exceptions as may
be provided by the CP

- Legal Research Fee 1% of the filing fee but in no case lower than P10.00

ADJUDICATION PROCESS
ANSWER
- The Director shall, within five (5) days after receipt of the
Appeal Memorandum, order the Auditor to submit an Answer
together with the entire records of the case including the EDSE,
every page of which shall be numbered at the bottom. The Auditor
shall comply with the order within fifteen (15) days from receipt
thereof. (Sec. 6, Rule V, RRPC)

ADJUDICATION PROCESS
FORM OF ANSWER
- Sec. 1, Rule IX, RRPC states that: Pleadings, motions and other
petitions shall contain a caption setting forth the name and address of the
Commission on Audit, the title of the case, the docket number and the
description of the pleading. They shall be printed or typewritten doublespaced on legal size bond paper. Proof of service of such papers on the
adverse party or auditor, Director, or other parties having a direct interest
in the case is necessary and must be shown therein.

ADJUDICATION PROCESS
NOTE:
-In case the Auditor cannot file an Answer within the prescribed
period, file a MOTION FOR EXTENSION OF TIME TO FILE ANSWER
-The Motion must be filed before the lapse of the period to file an
Answer, otherwise there is nothing more to extend
-Under Sec. 18 of the RRSA, the Appellant/s may file a REPLY within
15 days from receipt of the Answer

ADJUDICATION PROCESS
DECISIONS
NOTE:
- Under COA MEMORANDUM NO. 2010-013 dated April 13, 2010,
considering that Decisions of the Directors reversing, modifying or
altering the Decisions of the Auditor are not final, as they are still
subject to automatic review of the CP, the same shall not be
furnished the appellants.
- However, the Directors concerned shall, upon submission of the
said Decision to CP, inform the appellants that their appeals have
been elevated to the CP for automatic review, as provided under
Section 7, Rule V of the 2009 RRPC.

ADJUDICATION PROCESS
NOTICE OF FINALITY OF DECISION (NFD) (Sec. 2, Rule XIII, RRPC)
- An NFD directing the persons liable to pay/refund the amount
disallowed/charged shall be issued by the following officials:
1. Supervising Auditor for ND/NC issued by him/her
2. Director for Decisions rendered by him/her
3. Commission Secretary for Decisions of the CP

ADJUDICATION PROCESS
COA ORDER OF EXECUTION (COE) (Sec, 3, Rule XIII, RRPC)
- In case of failure of the person(s) liable to refund the amount
disallowed/charged, the COE directing the Cashier/Treasurer/ Disbursing
Officer to withhold payment of any money due such person(s) shall be
issued by the following:
1. Director for NFDs issued by him and by the Auditor
2. General Counsel for NFD issued by the Commission Secretary,
and for judgments rendered by the Supreme Court

ADJUDICATION PROCESS
NON-COMPLIANCE WITH THE COE (Sec. 4, Rule XIII, RRPC)
- In case of failure by the Cashier/Treasurer/Disbursing Officer to
comply with the COE, the Auditor shall notify the agency head
concerned of the non-compliance. At the same time, the Auditor
shall report the matter through the COA Director concerned, to
the General Counsel who shall take any or all of the following
actions:

ADJUDICATION PROCESS
Recommend to the Commission Proper to cite defaulting party
in contempt;
Refer the matter to the Solicitor General for the filing of
appropriate civil suit; or
Refer the case to the Ombudsman for the filing of appropriate
administrative or criminal action.

DOCUMENTARY REQUIREMENTS
REQUEST FOR RELIEF FROM
ACCOUNTABILITY,
MONEY CLAIMS, WRITE-OFF &
CONDONATION

REQUEST FOR RELIEF FROM ACCOUNTABILITY

JURISDICTION
GROUNDS
Losses
due
to
fortuitous events or
natural calamities

AUDITOR

DIRECTOR
Amounts exceeding
P100,000
(Sec. 8, Rule V, RRPC)

Amounts
not
exceeding P100,000
Acts of man (theft, (Sec. 5, Rule IV, RRPC) Amounts
exceeding

robbery,
arson,
P100,000 but not more
etc.)
than P500,000
(Sec. 8, Rule V, RRPC)

COMMISSION PROPER

Amounts
exceeding
P500,000
(Sec. 4, Rule VI and Sec.
1, Rule VIII, RRPC)

REQUEST FOR RELIEF FROM ACCOUNTABILITY

- COA MEMORANDUM NO. 92-751 DATED FEB. 24, 1992
(Documentation
on
Petitions/Requests
for
Relief
from
Accountability)
- Request must be accompanied by a categorical
determination by the Director/Auditor concerned on the absence of
fault or negligence on the part of the accountable officer in the
handling, safekeeping, etc. of the funds and properties under his
custody as evidenced by a recital of the precautionary/security
measures adopted to protect or safeguard them and the like.

MONEY CLAIM
- filed directly with the Commission Proper
- Under Sec. 2, Rule X of the RRPC, within five (5) days from
receipt of the complete records of the case, the Commission
Secretary shall refer the said records to the Director of the
appropriate office in the Central/Regional Office who shall, within
fifteen (15) days from receipt thereof, submit his comment and
recommendation to the Commission Secretary.

MONEY CLAIM
- no prescribed form for the comment and recommendation
- determine the propriety of the claim, i.e., if the petitioner
has personality to file the petition and if supported with required
documents e.g., official receipts, delivery receipts, DVs, etc.
- if procured through public bidding, determine if it
conformed with R.A. No. 9184 and its implementing rules

MONEY CLAIM
- COA Resolution No. 2012-011 dated October 15, 2012
(Requirement of Certification from the Concerned
Government Agency on Non-Payment of Money Claim as
Additional Supporting Document to the Petition Filed Before
this Commission)
- it is necessary that a certification from the concerned
government agency of the non-payment of the money claim
shall be attached to the petition.

WRITE-OFF
- directly filed with the Commission Proper
- COA Circular No. 97-001 dated February 5, 1997 provides for
the guidelines on the proper disposition/closure of dormant funds
and/or accounts of national government agencies (NGAs)

WRITE-OFF

- In order for a dormant account receivable to be written off, the

same must be dormant for more than 5 yrs., however, take note
that under Art. 1144 of the Civil Code (right of action upon a written
contract, upon an obligation created by law, or upon judgment
prescribes in 10 yrs.)

WRITE-OFF

- the request should comply with the requirements of

Section 5, Rule VI, RRPC, which include a complete
citation of the facts of the case, the grounds for the
action sought, laws, rules and regulations relied upon and
accompanied by all documents referred to in the request
and necessary for its adjudication

CONDONATION

-The authority of COA to approve requests for condonation

is sanctioned under Section 36(1) of Presidential Decree
No. 1445, as amended by Section 20, Chapter 4, Subtitle
B, Title I, Book V of Executive Order No. 292, the
Administrative Code of 1987

CONDONATION
SEC. 20. Power to Compromise Claims.- (1) When the interest of the
government so requires, the Commission may compromise or release in
whole or in part, any settled claim or liability to any government agency
not exceeding ten thousand pesos arising out of any matter or case before
it or within its jurisdiction, and with the written approval of the President,
it may likewise compromise or release any similar claim or liability not
exceeding one hundred thousand pesos. In case the claim or liability
exceeds one hundred thousand pesos, the application for relief therefrom
shall be submitted, through the Commission and the President, with their
recommendations, to the Congress.

CONDONATION

- approval of condonation is limited to interests and

penalties where the principal loan is paid, considering that
this will not result in loss on the part of the government.

CONDONATION
NOTE:
audit disallowance is not subject to condonation following the
principle that what is prohibited directly is also prohibited
indirectly. The audit disallowance cannot be circumvented and
legitimized by resorting to condonation. (Philippine Deposit
Insurance Corporation vs. COA, G.R. No. 171548, February 22, 2008)

THE END
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