A ‘Watchdog’: How does COA protect public funds?

The Commission on Audit (COA) plays a vital role in protecting taxpayers’ money. Some call the agency as the ‘watchdog’ of the government, some call it as enabler in safeguarding public funds, some call the Commission as guardian of public coffers.

But, just how exactly does the Commission protects taxpayers’ hard earned money?

Here we give you five (5) of the various ways how COA safeguards public funds:

1) It’s the constitutional mandate of COA 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. This is the reason why all financial transactions of the government are post-audited by the constitutional Commission.

2) It’s also COA’s power to release accounting and auditing rules and regulations to prevent and disallow “irregular, unnecessary, excessive, extravagant or unconscionable” use of government funds. These rules and regulations are issued through Circulars, Accounting and Auditing Manuals, and other similar issuances.

3) COA flags, recommends, and/or file charges against government officials and employees who misuse or public funds.

The commission can recommend the filing of charges before the Office of the Ombudsman against government officials and employees found to be violating laws. These recommendations are based on the results of meticulous annual auditing procedures applied to several agencies. 

Currently, COA conducts audits to around 54,600 government agencies which include national government agencies (NGAs), local government units (LGUs), state colleges and universities (SUCs), and water districts, among others.

4) COA suspends or disallows disbursements which are found to be irregular, unnecessary, excessive, extravagant or unconscionable (IUEEU).

A Suspension is a temporary disallowance of a transaction which is of doubtful legality/validity/propriety or may result to pecuniary loss to the government and appears illegal, improper or irregular unless —

(a) satisfactorily explained/justified by the responsible officers; or

(b) until additional documentation or the requirements on matters raised in the course of audit are submitted or complied with.

Once received, the Notice of Suspension should be settled within 90 calendar days from date of receipt by the responsible officers; otherwise, the transaction shall be disallowed/charged after the Auditor shall have satisfied himself that such action is appropriate and consequently, issue the Notice of Disallowance (ND) or Notice of Charge (NC).

The Auditor shall issue a Notice of Disallowance for transactions which are found to be illegal, irregular, excessive, extravagant, unnecessary and unconscionable (IIEEUU).

Disallowances shall be settled within 6 months reckoned from date of receipt by the person liable or his authorized representatives.

5) COA issues Audit Observation Memorandum (AOM) to call the attention of government agencies on the deficiencies noted in audit related to financial/operational matters which do not involve pecuniary/monetary loss.

The AOM is issued when the audit decision cannot yet be made due to incomplete documentation or information.

[Read: 10 Ways How to Avoid Receiving AOM]

[You May Also Like: Effective Tips in Answering AOM]

As the guardian of public funds, COA has a huge responsibility in auditing government expenses. It may have its own shortcomings and omissions but it is, undoubtedly, one of the government agencies that Filipinos can rely on for information on the use of public funds.