SUPPLEMENTING PRESIDENTIAL DECREE NO. 111, DATED JANUARY 26, 1973, ENTITLED “DECLARING THE EFFECTIVITY OF THE CREATION OF THE COMMISSION ON AUDIT AS PROVIDED IN THE NEW CONSTITU…

WHEREAS, Presidential Decree No. 111, dated
January 26, 1973, has declared that the Commission on Audit created in
the new Constitution is now in existence, and provided guidelines for
its operations;

WHEREAS, the General Auditing Office may serve
as the nucleus of the Commission on Audit; and

WHEREAS, there is an imperative need to set up
an organization for the Commission on Audit that shall most effectively
and economically carry out its powers and functions;

NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers vested in me by
the Constitution as Commander-in-Chief of all the Armed Forces of the
Philippines and pursuant to Proclamation No. 1081, dated September 21,
1972, and General Order No. 1, dated September 22, 1972, do hereby order
and decree:

SECTION 1. The Commission on Audit,
hereinafter referred to as the Commission, shall consist of the
Commission Proper to be constituted pursuant to Section 1, Article
XII-D, of the new Constitution; an Administrative Service; a Legal
Service; an Accountancy Service; a Systems and Training Service; a
Program Audit Office; three National Government Audit Offices; a Local
Government Audit Office; and a Corporate Audit Office.

SEC. 2. The Commission Proper shall sit as a body
and promulgate policies, rules, regulations, and standards governing
the performance of the powers and functions of the Commission in
accordance with the new Constitution. It shall appoint the officials and
employees of the Commission in accordance with the Civil Service Law,
pursuant to Article XII-A, Section 4, of the new Constitution. It is
authorized to make changes in the Composition, distribution and
assignment of auditing units as well as the personnel whenever the needs
of the service so require.

SEC. 3. The Chairman shall act as the
presiding officer of the Commission Proper and the chief executive
officer of the Commission.

SEC. 4. The Administrative Service shall be
responsible for providing the Commission with services relating to
budgeting, accounting, personnel, records, supplies, equipment,
collecting and disbursing, housekeeping, and other related services. It
shall have a Budget, Cash and Property Division; an Accounting Division;
a Personnel Division; a Records Division; and a General Services
Division.

1. The Budget, Cash and Property Division shall provide
   budgeting, collecting and disbursing, and property management services
   for the Commission,
2. The Accounting Division shall maintain the books of
   accounts of the Commission and provide other related accounting
   services.
3. The Personnel Division shall provide personnel
   management services for the Commission.
4. The Records Division shall provide records management
   services for the Commission.
5. The General Services Division shall provide housekeeping,
   security, messengerial, transportation and other related services for
   the Commission.

SEC. 5. The Legal Service shall be responsible
for performing advisory and consultative functions and rendering legal
services with respect to the performance of the functions of the
Commission and to the interpretation of general auditing rules and
regulations and pertinent laws. It shall handle the investigation of
administrative cases filed against the personnel of the Commission,
evaluate and act on all reports of involvement of said personnel in
anomalies and/or irregularities in government transactions, and such
other investigative work to be ordered by the Commission. In addition,
it shall represent the Commission in preliminary investigations of
malversation cases discovered in audit, and assist the Solicitor General
and the Tanodbayan in handling cases involving the Chairman or any of
the Commissioners, and other officials and employees of the Commission.
It shall have a National Government Division, a Local Government
Division, a Corporate Division, each performing the functions of the
Legal Service as they pertain to their respective clientele area, and an
Investigation and Prosecution Division.

SEC. 6. The Accountancy Service shall be
responsible for preparing the annual financial report of the Government,
its subdivisions, agencies and instrumentalities, including
government-owned or controlled corporations (as consolidated by the
Corporate Audit Office) and other financial and/or statistical reports
as may he required by the Commission; verifying appropriations of
National Government agencies and controlling fund releases thereto; and
preparing statements on local governments’ revenues, legal borrowings,
and net paying capacities for reclassification and other purposes. It
shall have an Accounts Division, a National Government Accountancy
Division, a Local Government Accountancy Division, and a Treasury Vault
and Banking Audit Division.

1. The Accounts Division shall control the release of
   allotments out of appropriations provided under various appropriations
   acts, and undertake overall National Government cash reconciliation.
2. The National Government Accountancy Division shall prepare
   required annual and other financial and/or statistical reports on the
   operations and financial conditions of the National Government and
   reconcile public debt.
3. The Local Government Accountancy Division shall prepare
   required annual and other financial and/or statistical reports on the
   operations and financial conditions of Local Governments and hospitals
   maintained by local government units.
4. The Treasury Vault and Banking Audit Division shall audit
   cash transactions in the vault of the Bureau of the Treasury.

SEC. 7. The Systems and Training Service shall
be responsible for developing general accounting, auditing, and related
fiscal control systems, and formulating and implementing the
Commission’s training programs. It shall have a Systems Division and a
Training Division.

1. The Systems Division shall conduct researches and
   studies along modern procedures and techniques in, and develop systems
   for government accounting, auditing, and related fiscal controls.
2. The Training Division shall develop and implement the
   training programs of the Commission.

SEC. 8. The Program Audit Office shall be
responsible for conducting selective post audit of accounts and
financial operations of the Government and technical property audit. It
shall have a National Government Special Audit Division, a Local
Government Special Audit Division, a Corporation Special Audit Division
and a Property Audit Division.

1. The National Government Special Audit Division shall
   conduct selective post audit of accounts and financial operations of
   National Government agencies and instrumentalities.
2. The Local Government Special Audit Division shall conduct
   selective post audit of accounts and financial operations of local
   governments.
3. The Corporation Special Audit Division shall conduct
   selective post audit of accounts and financial operations of
   government-owned and/or controlled corporations.
4. The Property Audit Division shall undertake technical
   inspection of deliveries of government purchases and appraisal of
   government property.

SEC. 9. The National Government Audit Offices
shall be responsible for exercising supervision and control over the
implementation of auditing and accounting rules and regulations in
departments, bureaus, and offices of the National Government, pursuant
to Article XII-D, Section 2(1) and Article VIII, Section 8(2) of the new
Constitution. There shall be the National Government Audit Office “A,”
the National Government Audit Office “B” and the National Government
Field Audit Office. The National Government Audit Offices “A” and “B”
shall conduct continuous audit of all accounts and trial balances
pertaining to the revenues and receipts of, expenditures and uses of
funds and property owned or held in trust by, or pertaining to, central
offices of National Government agencies and instrumentalities, including
the National Assembly. The National Government Field Audit Office shall
conduct continuous audit of all accounts and trial balances pertaining
to the revenues and receipts of, expenditures or uses of funds and
property owned or held in trust by, or pertaining to regional and field
offices of the National Government, including national high schools,
national vocational schools, national field general hospitals, and state
colleges and universities.

SEC. 10. The Local Government Audit Office
shall be responsible for exercising supervision and control over the
implementation of auditing and accounting rules and regulations in local
government units. It shall have provincial or city auditing units which
shall provide auditing services to provinces, cities, municipalities
and barrios as well as schools and hospitals maintained by them.

SEC. 11. The Corporate Audit Office shall be
responsible for exercising supervision and control over the
implementation of auditing and accounting rules and regulations in
government-owned and/or controlled corporations, and self-governing
boards, commissions, or agencies of the National Government, and in the
conduct of audit of financial operations of public utilities and
franchises. It shall review and analyze corporate audit reports
and-prepare the consolidated report thereof for inclusion in the annual
report of the Commission to be prepared by the Accountancy Service. It
shall have a Public Utility Rate and Franchise Tax Audit Division and
corporate auditing units in all government corporations and similar
instrumentalities.

1. The Public Utility Rate and Franchise Tax Audit Division
   shall audit financial operations of public utilities for rate
   determination and franchise taxes as required by pertinent laws or upon
   request of proper authorities.
2. The corporate auditing units shall conduct continuous audit
   of all accounts and trial balances and financial statements pertaining
   to the revenues and receipts of, expenditures or uses of funds and
   property owned or held in trust by, government corporations or
   instrumentalities and submit annual reports to the Commission.

SEC. 12. The General Auditing Office shall
constitute the nucleus of the Commission, and all applicable
appropriations, records, equipment, property and such personnel as may
be necessary are transferred to the Commission.

SEC. 13. Pending the constitution of the
Commission on Audit, the incumbent Auditor General shall continue in
office and shall exercise the powers properly appertaining to the
Commission.

SEC. 14. This Decree shall take effect
immediately.

Done in the City of Manila, this 9th day of September, in the
year of Our Lord, nineteen hundred and seventy-three.