Brief Outline on the Selective Pre-audit on Government Transactionstions (Part II)

Transfer of funds between and among government agencies
- all transfers of funds either thru funding check or bank transfer between and among bank accounts of agencies or between different bank accounts of the same government agency.

Exceptions:
- Routinary fund transfers between government banks
- Transfers of funds to address an emergency or existing calamity
- Releases of NCAs and NTAs

Disbursements from trust funds of LGUs
- Only disbursements of trust funds released by the national government or by GOCCs are subject to pre-audit
Disposal of real property, unserviceable property and those no longer needed
- Include only those undertaken through negotiated sale for NGAs/GOCCs and private sales for LGUs
- Real property - at least P1 million for NGAs and GOCCs regardless of amount for LGUs
Unserviceable property/those no longer needed
- at least P500,000 for NGAs/GOCCs
- acquisition/transfer cost of at least P50,000 for provinces/cities and P25,000 for municipalities/barangays
Acquired assets of GFIs – at least P50M
Exception: Disposal to previous owners in the exercise of the right of redemption

RESPONSIBILITY TO CONDUCT PRE-AUDIT
 The head of the auditing unit or audit team shall be responsible to conduct pre-audit.
 The head may either be a Supervising Auditor or an Audit Team Leader depending on the agency involved

DUTIES AND RESPONSIBILITIES OF AGENCY OFFICIALS
 no transactions are paid without evidence of the pre-audit action
 all disbursement vouchers, advices/instructions, MOAs, MOUs, contracts, purchase/letter orders, loan agreements, bond flotation/certificates of indebtedness, appraisal reports and their supporting documents are submitted
 disbursement vouchers for infrastructure projects are accompanied by duly accomplished relevant checklist for technical review
 copies of delivery documents are furnished to the auditor within 24 hours after acceptance of deliveries
 the agency’s Annual Procurement Plan and its amendments are submitted within the first quarter
 a separate logbook of transactions subject to and submitted for pre-audit is maintained.

EVIDENCE OF AUDIT ACTION
 Pre-audit action is evidenced by a pre-audit stamp impressed upon the face of the disbursement voucher and its supporting documents with the following statement:
Pre-audited pursuant to COA Circular
No. 2009-002 dated May 18, 2009

 In case of deficiencies or defects, the disbursement voucher and its supporting documents should be returned to the head of the agency within 24 hours from such determination informing him of the action taken and indicating the reasons therein

 Credit Notice for cash advances

APPEAL
 Adverse action of the auditor may be appealed to the Cluster/Regional Director
 Decision of the Cluster/Regional Director shall not be subject to appeal to higher authorities
 Agency may pursue the proposed transaction notwithstanding the adverse action of the auditor or director.
 Appeal is permitted as an extraordinary remedy to afford the aggrieved party another opportunity to ventilate its cause.
 Appeal is limited to the Cluster/Regional Director because the proposed transaction is not yet consummated and the CP does not act on hypothetical issues.

OVERSIGHT COMMITTEE
 The Assistant Commissioners’ Group
 Authority and responsibility
- recommend to CP the inclusion/exclusion of transactions subject to pre- audit
- develop mechanism for evaluating progress of agencies in enhancing/improving their internal control
- develop mechanism/process by which agencies may be exempted from pre-audit using the risk-calibrated agency audit framework

PENAL PROVISIONS

 Non-liquidation of cash advances subjects the accountable officer to liability under Sec. 128 in relation to Sec. 89 of PD 1445 and/or other applicable laws and administrative regulations.
 Non-submission of transaction for pre-audit before consummation is a ground for initiating administrative disciplinary action in accordance with Section 127 of PD 1445 and Section 55, Title I-B, Book V of EO No. 292, without prejudice to disallowance, if warranted.

This briefing on the Selective Pre-audit on Government Transactions was given by COA Assistant Commissionner Lourdes M. Castillo, Administration Sector, on July 1, 2009 and which I attended together with other COA Region VI audit team leaders.