RMC No. 47-2009: Publishes the full text of Circular No. 2009-002 issued by the Commission on Audit entitled “Reinstituting Selective Pre-Audit on Government Transactions”

Summary

RMC No. 47-2009 publishes the full text of Commission on Audit (COA) Circular No. 2009-002 dated May 18, 2009, which reinstitutes selective pre-audit on government transactions.

Key points

1. Coverage. Pre-audit is selectively reinstituted in national government agencies, local government units and government-owned and controlled corporations with original charters. Transactions that may be covered include cash advances, salary and terminal leave payments, infrastructure and road right-of-way payments, procurement, ADA payments, fund releases to NGOs/POs, fund transfers between agencies, LGU trust fund disbursements, and disposal of real and unserviceable property.
2. Agency selection and exemptions. Which agencies and transactions are included or excluded follows an evaluation of each agency’s internal control system. National high schools, GOCCs audited under the team approach, and barangays are initially exempt.
3. Cash advances. All cash advances pass through pre-audit, except those for payroll, intelligence funds, petty cash and local travel expenses. Guidelines include no advance without a legally authorized specific purpose, no additional advance until the previous one is liquidated, and full liquidation at the end of each year.
4. Infrastructure and procurement thresholds. Infrastructure projects are covered at set contract amounts, for example P 25 Million and above for NGA head offices and P 1 Million and above for municipalities. Only advance payments to contractors and the first and last progress billings are pre-audited. First and last payments of procured contracts of at least P 2 Million (NGAs, GOCCs, Metro Manila cities, other highly urbanized cities, first class provinces), P1 Million (provinces and cities below first class) or P 500,000.00 (municipalities) are covered.
5. Other transactions. All claims for road right-of-way, all releases of funds to NGOs/POs, and all transfers between government bank accounts are pre-audited, with stated exceptions such as transfers between government banks and emergency transfers. Disposal of real property is covered only for negotiated sales of at least P 1 Million, and unserviceable property for negotiated sales of at least P 500,000.00.

Who is affected

• National government agencies
• Local government units
• GOCCs with original charters

Deadlines and effectivity

• Circular issued August 20, 2009
• COA Circular dated May 18, 2009

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.