COA Circular No. 2011-002 and Proclamation No. 303

January 6, 2012 BLGF MEMORANDUM CIRCULAR NO. 002-12 TO : All BLGF Officials and Employees, Regional Directors for Local Government Finance and Others Concerned SUBJECT : COA Circular No. 2011-002 and Proclamation No. 303 For the information and guidance of all concerned, attached are copies of the above-mentioned subject: COA-Circular No. 2011-002 dated July 22, 2011 entitled "Lifting of Pre-audit of Government Transactions." Proclamation No. 303 dated December 20, 2011 from the Office of the President entitled "Declaring a State of National Calamity." The Central and Regional Directors of this Bureau are hereby instructed to take note of the above and disseminate the contents to all concerned offices. Be guided accordingly. caHASI (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director ATTACHMENT DEPARTMENT OF FINANCE August 16, 2011 Memo for : Heads of Offices This Department Heads of Bureaus/Attached Agencies Department of Finance From : Director Lourdes Z. Santiago Subject : Lifting of Pre-audit of Government Transactions Attached for information and guidance is a copy of COA Circular No. 2011-002 dated July 22, 2011 from Chairperson Ma. Gracia M. Pulido Tan, Commission on Audit, on the above-captioned subject. (SGD.) LOURDES Z. SANTIAGO Director IV Central Administration Office December 26, 2011 Memo for : Heads of Offices This Department Heads of Bureaus/Attached Agencies Department of Finance From : Director Lourdes Z. Santiago Subject : Declaring a State of National Calamity Attached for information and guidance is a copy of Proclamation No. 303 dated December 20, 2011 of the Office of the President on the above-captioned subject. cIHSTC (SGD.) LOURDES Z. SANTIAGO Director IV Central Administration Office COMMISSION ON AUDIT July 22, 2011 COA CIRCULAR NO. 002-11 TO : All Heads of Departments, Bureaus, Offices, Agencies and Instrumentalities of the National Government; Managing Heads of Government-Owned and/or Controlled Corporations and Government Financial Institutions and their Subsidiaries; Heads of Local Government Units; COA Assistant Commissioners, Directors, Auditors; and All Others Concerned SUBJECT : Lifting of Pre-audit of Government Transactions The 1987 Constitution vests in the Commission on Audit the power, authority, and duty to 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, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations; and where the internal control system of the audited agencies is inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. (Section 2 [1] Article IX-D) HSTCcD Likewise, Section 2 (2) Article IX-D of the 1987 Constitution empowers the Commission to have the exclusive authority to define the scope of its audit and examination and establish the techniques and methods required therefor, and 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. Pursuant to such constitutional authority, this Commission, under COA Circular No. 2009-002 dated May 18, 2009 re-instituted pre-audit of selected government transactions, which it perceived to be an effective, although temporary remedy, against irregularities and anomalies in government operations. Subsequent developments however have shown the heightened vigilance by government agencies in safeguarding their resources. After an evaluation thereof and a re-assessment of COA Circular No. 2009-002, this Commission has resolved to re-affirm the concept that fiscal responsibility resides with agency management. Such concept is clearly provided in Section 2 of Presidential Decree No. 1445, the Government Auditing Code of the Philippines, thus: "all resources of government shall be managed, expended or utilized in accordance with law or regulations and safeguarded against loss or wastage resulting from illegal or improper disposition with a view to ensuring efficiency, economy and effectiveness in the operations of government. The primary responsibility for faithful adherence to this policy rests with the chief or head of the government agency concerned." Guided by the foregoing, and in order to accelerate the delivery of public services and ensure facilitation of government transactions, this Commission hereby withdraws selective pre-audit under COA Circular No. 2009-002 and thereby lifts all pre-audit activities presently being performed on financial transactions of the national government agencies, government owned and/or controlled corporations and local government units, except those required by existing law. HIAcCD Pre-audit activities shall henceforth be the responsibility of the agencies concerned as part of their accounting and fiscal control processes. All agencies shall establish and maintain an adequate internal control system in order to achieve economy, efficiency and effectiveness in the management and utilization of their resources, and prevent illegal, irregular, unnecessary, excessive, extravagant and unconscionable expenditures and uses of funds and property and ensure the legality and propriety of collection of what is due the government. However, whenever circumstances warrant, such as where the internal control system of a government agency is inadequate, this Commission may re-institute pre-audit or adopt such other control measures as are necessary and appropriate to protect the funds and property of the government. Likewise, this Commission shall intensify the evaluation of internal control systems of government agencies to ensure that government resources are safeguarded against loss or wastage, and that government operations are efficient, economical and effective. All transactions submitted for or otherwise pending pre-audit by this Commission as of July 22, 2011 shall no longer be pre-audited and shall be returned to the agency concerned for its appropriate action. This Circular shall take effect immediately. Quezon City, Philippines. ScHAIT (SGD.) MA. GRACIA M. PULIDO TAN Chairperson (SGD.) JUANITO G. ESPINO, JR. Commissioner (SGD.) HEIDI L. MENDOZA Commissioner Office of the President MALACAANG RECORDS OFFICE Manila, December 21, 2011 HON. CESAR V. PURISIMA Secretary Department of Finance Manila Sir: I have the honor to transmit for your information and guidance, a certified copy of Proclamation No. 303 dated December 20, 2011 entitled "DECLARING A STATE OF NATIONAL CALAMITY." For this purpose, all concerned departments shall undertake measures to disseminate said Proclamation to your component units/bureaus including agencies attached to or under your administrative supervision. Thank you. Very truly yours, (SGD.) MARIANITO M. DIMAANDAL Director IV MALACAAN PALACE BY THE PRESIDENT OF THE PHILIPPINES December 20, 2011 PROCLAMATION NO. 303 DECLARING A STATE OF NATIONAL CALAMITY WHEREAS, the devastating rains and floods caused by typhoon "Sendong" (international codename: Washi) have brought death, destruction, and incalculable damage to the lives and properties of Filipinos; HECTaA WHEREAS, due to the severe gravity of the damage, particularly in Regions VII, IX, X, XI, and the CARAGA, the government is spearheading the entire nation's efforts to undertake immediate rescue, recovery, relief and rehabilitation; WHEREAS, a declaration of a state of national calamity will hasten the rescue, relief and rehabilitation efforts of the government and the private sector, including any international humanitarian assistance, and will effectively control the prices of basic goods and commodities for the affected areas; WHEREAS, this declaration also necessitates that the mechanisms for international humanitarian assistance are implemented pursuant to Republic Act No. 10121; and WHEREAS, such declaration will further afford the local government units ample latitude to utilize their calamity fund for the rescue, relief and rehabilitation of their constituents. NOW, THEREFORE, I, BENIGNO S. AQUINO III, President of the Republic of the Philippines, by virtue of the powers vested in me by law, hereby declare a state of national calamity. All departments and other government agencies concerned are hereby directed to implement and execute medical assistance, relief and rehabilitation work in accordance with existing operational plans and directives and orders issued in connection with the occurrence of calamities. AIHDcC IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. DONE in the City of Manila, this 20th day of December, in the year of Our Lord, Two Thousand and Eleven.