What is an AOM, NS, ND, NC, NSSDC, SASDC, NFD, and COE?

1. Audit Observation Memorandum (AOM)

The AOM is issued to inform the auditee of deficiencies noted in audit related  to financial/operational matters which do not involve pecuniary/monetary loss.

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

Once received, the AOM shall be replied to by agency officials concerned within 15 calendar days (CDs) from receipt thereof.

[Read: 10 Reasons Why You Receive AOM from the Commission on Audit]

2. Notice of Suspension (NS)

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 NS 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 ND/NC.

The 90 days period shall be reckoned from the date of receipt of the NS by the responsible officers or their authorized representatives.

3. Notice of Disallowance (ND)

The Auditor shall issue an 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.

4. Notice of Charge (NC)

There  is a charge against a revenue transaction when the correct amount of revenue/receipt due the government is not billed/assessed/collected resulting to under-appraisal/assessment/ collection. An NC should be issued for the uncollected amount.

A Charge shall be settled within 6 months from date of receipt of the NC by the persons liable. Such date of receipt shall likewise be the reckoning period for counting the 6-month period to  appeal.

5. Notice of Settlement of Suspension/Disallowance/Charge (NSSDC)

Whenever a Suspension, Disallowance, or Charge is settled, the Auditor shall issue the Notice of Settlement of Suspension/ Disallowance/Charge (NSSDC).

A suspension is settled when the Auditor is satisfied that the transaction is regular/legal/proper upon examination of the justification/explanation and/or documentation submitted by persons responsible in compliancew/ requirements.

A disallowance or charge may be settled by the person(s) liable either by:

a) payment of the amount disallowed; restitution; or such other applicable modes of extinguishment of obligation (e.g.: compensation, dation in payment, condonation), w/c the Auditor may refer to the Government Cluster, for evaluation and advice as to propriety of the settlement; or

b) a decision of the Director or the Commission Proper, lifting the same.

6. Statement of Audit Suspensions, Disallowances and Charges (SASDC)

The SASDC is prepared by the Auditor to summarize the total S/D/C for the current period, indicating the following:

(a) beginning balance of NS/ND/NC issued;

(b) the NS/ND/NC for the period;

(c) NSSDC for the period; and

(d) ending balance of the total SDC.

7. Notice of Finality of Decision (NFD)

The NFD is a notice issued to the agency head to inform that a decision of the Auditor, Director or Commission Proper has become final and executory, there being no appeal or motion filed within the reglementary period.

8. COA Order of Execution (COE)

The COE is issued to enforce the settlement of disallowance/charge, whenever the persons liable refuse or fail to settle them after the decision become final & executory.

The above information were shared to us by our colleague from the Commission on Audit.