Guidelines to Implement COA Circular No. 2017-003 Dated October 25, 2017 Amending Section 197 and Prescribing Additional Guidelines Thereon SUBJECT : Guidelines to Implement Commission on Audit (COA) Circular No. 2017-003 dated October 25, 2017 Amending Section 197, Title VI — Miscellaneous Provisions and Administrative Instructions, of COA Circular No. 92-386 1 Dated October 20, 1992 and Prescribing Additional Guidelines Thereon

June 25, 2019

COA CIRCULAR NO. 2019-003

 

Commission on Audit (COA) Circular No. 2017-003 dated October 25, 2017 specifically amended Section 197, Title VI of COA Circular No. 92-386, to wit:

Disposal of Real Property and Improvements. — Real estate and their improvements by the local government units may be sold to other government or private entity under sealed bids, or by negotiation if sealed bid has failed as defined herein at a price to be determined by the Committee on Awards. The contract of conveyance shall be executed by the local chief executive in behalf of the local government unit concerned in accordance with the formalities required by law on the matter and shall be approved by the local sanggunian. The disposal shall also be subject to the approval of the Commission on Audit in case the disposal is through negotiation regardless of the value of the property to be disposed [of]. The request for approval shall be made prior to the perfection of the contract of sale through negotiation.

Expenses relative to the registration and transfer of ownership from the local government unit to the vendee shall be borne by the vendee.

For uniformity in the application of said Section, the following guidelines shall be observed:

1. The request of Local Government Units (LGUs) for approval of the negotiated sale/disposal of real property and their improvements shall be made prior to the perfection of the contract of sale. The request shall be made upon the LGU's determination of the necessity of disposal and of the selling price, but before the acceptance of the buyer. This is to avoid any consequences arising from a contract already perfected but still subject to the approval of this Commission.

2. Documentary requirements. All requests for approval of negotiated sale/disposal of real property by LGUs shall be accompanied by the following documents:

a. Letter-request by the Local Chief Executive (LCE) of the LGU concerned;

b. Copy of the Sanggunian resolution/ordinance authorizing the LCE to enter into negotiated sale, and approving the minimum negotiated price of the property to be sold/disposed of;

c. Certification issued by the Zoning Administrator of the LGU, declaring that the real property sought to be sold is no longer needed for any project or program by the LGU;

d. Certification issued by the LGU's Committee on Awards, attesting that two (2) sealed bids had failed as defined in COA Circular No. 92-386, and verified by the Audit Team Leader (ATL) of the COA Auditing Unit in the LGU concerned.

In the event that the foregoing requirement is not applicable due to impracticability of public bidding, as in the case where there are already longtime occupants inhabiting the particular property of the LGU and the intent of the latter is to sell said property through negotiation, a separate certification and/or resolution should be issued by the proper authority to such effect;

e. Sufficient proof of ownership over the real property for negotiated sale/disposal, such as certified copy of Certificate of Title/Transfer Certificate of Title, Tax Declaration of the Property, and the like;

f. Copy of the vicinity map of the portion of the lot or real property subject of the disposition;

g. Copy of the proposed Contract of Conveyance (Deed of Sale), which shall be in accordance with the formalities required by law;

h. Real Estate Inspection Report issued by a qualified COA Technical Audit Specialist (TAS);

i. Appraisal Report of the LGU's Appraisal Committee, stating the Fair Market Value (FMV) of the real property;

j. Appraisal/Valuation Review Report conducted by the concerned Technical Service Office (TSO) on the reasonableness of the negotiated selling price. The report shall be for COA's reference;

k. Documents showing the FMV of the real property as determined by the Committee on Awards;

l. Documents showing the zonal valuation and assessed value of the real property;

m. List of the names of the homeowners/beneficiaries, the respective lot areas awarded, and the selling price or price of sale for each lot granted to said homeowners/beneficiaries, if the negotiated sale was resorted to without conducting an auction pursuant to Item (d) above;

n. Comments and/or recommendations of the ATL, Supervising Auditor (SA), and Regional Director (RD) on the legality and propriety of the transaction and the reasonableness of the selling price in accordance with existing rules and regulations; and SDAaTC

o. Copy of the Official Receipt showing payment of filing fee.

3. Pursuant to Section 4, Rule VIII of the 2009 Revised Rules of Procedure of the COA, the approval of a private sale of government property is within the original jurisdiction of the Commission Proper (CP). Thus, all LGU requests for approval of a negotiated sale of real property shall be filed with the Commission Secretary. The Commission Secretary shall refer the case to the Central/Regional Office concerned for comment and recommendation, and thereafter, to the Commission Proper Adjudication and Secretariat Support Services Sector, for preparation of the draft decision for consideration of the CP.

4. Additional Guidelines. Upon receipt of the pertinent documents from the Commission Secretary, the ATL/SA/RD shall:

a. Seek the assistance of the TSO/Division (TSOD) in the Central/Regional Office in determining the reasonableness of the negotiated selling price of the real property, which shall be appraised by a qualified COA TAS; AIDSTE

b. Review the LGU's procedures for the negotiated sale of real property to assess propriety and conformity with existing laws and regulations;

c. The TSOD shall review the Appraisal Report of the LGU for reasonableness, thereafter transmitting its comments/action thereon to the ATL/SA/RD concerned; and

d. The ATL/SA/RD shall pass upon the legality and propriety of the transaction, including the reasonableness of the selling price in accordance with existing auditing regulations. He/she shall forward the disposal documents to the Commission Secretary.

5. Payment of Filing Fees. Pursuant to COA Resolution No. 2013-016 dated August 23, 2013, all requests for approval of sale shall be subject to payment of 1/10 of 1% of the amount involved, provided that the total filing fee shall not exceed P50,000.00, subject to certain exceptions as may be approved by the CP.

6. Finally, it has come to the attention of this Commission that there were disposals of real property through negotiated sale made by some LGUs without the required approval from COA. Henceforth, in order to ensure strict compliance by LGUs with this policy, LGUs shall submit to the ATL concerned a Semi-Annual Report of their respective real property disposals for the preceding semester, stating the description of the property, the mode of disposal used, and in case of negotiated sale, whether the required approval of COA was sought. Likewise, the ATL shall submit to the Assistant Commissioner of the Local Government Sector (LGS), through the RD concerned, an annual report on the compliance with this policy by the LGU(s) assigned to his/her auditing unit. The ATL shall also include any significant findings in his/her Annual Audit Report. The Assistant Commissioner of LGS may recommend reevaluation and reassessment of this policy to the CP.

This Circular shall take effect immediately.

(SGD.) MICHAEL G. AGUINALDOChairperson

(SGD.) JOSE A. FABIACommissioner

(SGD.) ROLAND C. PONDOCCommissioner

Attested by:

(SGD.) NILDA B. PLARASDirector IV

Footnotes

1. Rules and Regulations on Supply and Property Management in the Local Governments.