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SETTLEMENT OF ACCOUNTS SETTLEMENT OF ACCOUNTS SETTLEMENT OF ACCOUNTS.

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Presentation on theme: "SETTLEMENT OF ACCOUNTS SETTLEMENT OF ACCOUNTS SETTLEMENT OF ACCOUNTS."— Presentation transcript:

1 SETTLEMENT OF ACCOUNTS SETTLEMENT OF ACCOUNTS SETTLEMENT OF ACCOUNTS

2 RRSA and Pertinent Provisions under the 2009 RRPC Resource Person: Atty. LITO Q. MARTIN Director III Commission on Audit

3 SESSION OBJECTIVE To orient AGAP convention participants on the provisions of COA Circular No dated September 15,2009 on RRSA & 2009 RRPC which is effective October 28, 2009.

4 BACKGROUND/Previous Issuances COA Circular Restating the Requirements for the Use of the CSB and Providing Guidelines on Its Issuance Including the Accounting Treatment Thereof

5 Previous Issuances … COA Circular B Prescribing the Use of the Manual on CSB COA Circular Prescribing the Use of the 1993 Revised Manual on CSB

6 Previous Issuances … COA Memorandum Guidelines on the Delineation of Auditing and Adjudication Functions COA Resolution , 1/31/06 Responsibility to Issue NS/ND/NC Arising From the Settlement of Accounts and Audit of Transactions

7 Chapter I - Introduction

8 Section 1. Title The set of rules shall be known as the RRSA

9 Sec. 2 - Legal Authority 1. Power/authority/duty t o examine/ audit/settle all accounts pertaining to revenues & receipts of & expenditures or uses of funds, owned or held in trust by, or pertaining to the Govt. [Sec. 2 (1), Art. IX-D, Constitution]

10 Legal Authority [Sec. 2 (2), Art. IX-D) 2. Exclusive authority to define the scope of its audit & examination; 3. Establish the techniques & methods required therefore; 4. Promulgate accounting & auditing rules & regulations, including those for the prevention & disallowance of IEEUU expenditures, or uses of govt. funds & property.

11 Other Legal Authority … 5. To certify the balances in the accounts of AOs (Sec. 81, PD 1445) 6. To notify in writing the officer whose accounts have been audited & settled (Sec. 82, PD 1445) 7. To render accounts by local auditors (Sec. 347, RA 7160)

12 Sec. 3 - Scope of RRSA All accounts audited pertaining to revenues & receipts of & expenditures or uses of govt. funds Settlement of property accounts not covered.

13 Chapter II - General Principles, Rules and Regulations

14 Settlement of Accounts is the process of determining the balance of the account of an AO, thru an audit, to determine the transactions that may be allowed or not allowed. The balance refers to total suspensions, disallowances & charges (SDC) which shall be his accountability.

15 Settlement of Accounts … Audit shall be done in accordance with LRR (laws/rules/regulations) & standards to determine whether transactions may be allowed, suspended, disallowed or charged.

16 When to issue an AOM 1. audit decision cannot yet be made due to incomplete documentation or information; 2. the deficiencies noted refers to financial/operational matters w/c do not involved pecuniary loss.

17 Auditors Adverse Decisions 1. Suspension of a transaction that needs more requirements, & w/c may result in pecuniary loss to the govt., until such requirements are complied with. A NS shall be issued indicating the requirements to be complied w/ by the officers concerned.

18 Sec. 4. Definition … Suspension is a temporary disallowance of a transaction w/c appear illegal, improper or irregular unless satisfactorily explained/justified by the responsible officers or until the requirements on matters raised in the course of audit are submitted or complied with

19 Sec. 4, Rule IV of RRPC NS may be issued for transactions of doubtful legality/ validity/propriety to obtain further explanation or documentation.

20 Auditors Adverse Decisions … 2. Disallowance of a transaction on expenditure, either in whole or in part, for being an IIEEUU. A ND is issued for the disallowed amount

21 Auditors Adverse Decisions … 3. Charge of a transaction when the correct amount of revenue/receipt due the govt. is not received as a result of under-appraisal/ assessment/ collection. A NC is issued for the uncollected amount

22 Evidence of Audit By appropriate markings in the documents audited If allowed in audit, indicate Allowed in Audit. If not allowed, issue NS/ND/NC, & indicate amount suspended/ disallowed/ charged in the documents audited.

23 Suggested Post-Audit Stamp POST-AUDITED Transaction Amount : __________ Allowed : __________ Disallowed/Charged/ Suspended : ___________ ND/NC/NS Number: ___________ Dated: ___________ Audited by: (ATL)_________Date: ___________ Standard size is _ by __ cms Auditor sign using RED ink

24 How Notices are Settled NS - by persons responsible thru compliance w/ requirements ND/NC - by persons liable thru payment, restitution or by other modes of extinguishment of obligation, such as compensation, dation in payment, condonation.

25 Notice of Settlement The auditor issue an NSSDC for settled NS/ND/NC

26 Balance of Account The auditor shall issue : SASDC within 15 days after the end of each QTR; Updated list of outstanding SDC within 5 days from receipt of request by a retiring/ transferring officer.

27 Linkages to the AAR Total unsettled SDC at the end of CY as reflected in the 4 th QTR SASDC shall be reported in the AAR Other deficiencies noted as indicated in the AOM shall be included in Part II of the AAR

28 Responsibilities for Audit and Settlement of Accounts

29 Responsibilities of Agency Head Primarily responsible for all govt. funds & property pertaining to his agency. Fiscal responsibility rests directly with him.

30 Responsibilities of Agency Head … 1) Ensure that: a) Required financial/other reports/ statements are submitted by the concerned agency officials in prescribed form and within the prescribed period; b) Settlement of disallowances/ charges is made within the prescribed period;

31 Responsibilities of Agency Head … c) Requirements of transactions suspended are complied with; d) Appropriate actions are taken on the deficiencies noted as contained in the AOM.

32 Responsibilities of Agency Head … 2) Initiate the necessary administrative and/or criminal action in case of unjustified failure/refusal to effect compliance with the foregoing requirements by subordinate officials.

33 Responsibilities of Agency Head … Gross negligence in disciplining subordinates who are the subject of repeated adverse audit findings shall subject him to disciplinary action by proper authorities.

34 Responsibilities of Agency Head … 3) Enforce the COE by requiring the withholding of salaries/other compensation due the person liable in satisfaction of the disallowance/charge. 4) Ensure that all employees who are retiring/transferring shall first settle the disallowances & charges for w/c they are liable.

35 Responsibilities of Agency Accountants/Bookkeepers 1. Ensure that reports & supporting documents submitted by the AOs are immediately recorded & submitted to the Auditor w/in 1 st 10 days of the ensuing month;

36 Responsibilities of Accountants … 2. Ensure that financial records are made accessible at reasonable hours to the auditors when needed;

37 Powers & functions of Auditors (Sec. 3, Rule II of RRPC) To exercise such powers & functions as provided by law & as may be authorized by COA in the audit & settlement of the accounts, funds, financial transactions & resources of the agencies under their respective audit jurisdiction.

38 Role of Auditors (Sec. 2, Rule IV of RRPC) To maintain complete independence & exercise professional care & be guided by applicable LRR & the GAAAP in the performance of audit work & preparation audit reports.

39 Responsibilities of Auditors (Sec. 3, Rule IV of RRPC) To obtain sufficient evidence to provide an appropriate factual bases for his opinions, conclusions, judgments & recommendations; To safeguard this evidence to support his findings, which may include physical, testimonial, documentary, analytical & electronic evidences.

40 Responsibilities of Auditor (Sec. 7.3 of RRSA) 1. Enforce submission of prescribed/ necessary reports of receipts/ disbursements w/ all paid vouchers, ORs, & supporting documents;

41 Responsibilities of Auditor … 2. Conduct audit on the above- submitted documents covering transactions under the identified audit areas; 3. Prepare, as a result of audit, the pertinent NS/ND/NC/AOM/NFD;

42 Responsibilities of Auditor … 4. Prepare the COE for disallowances/charges issued by him for his Directors signature 5. Serve the NS/ND/NC/ AOM/NFD/COE to persons concerned/responsible/liable;

43 Responsibilities of Auditor … 6. Monitor the enforcement of COE issued & report to Director the action taken by the agency thereon pursuant to Sec. 24; 7. Issue the NSSDC when there is settlement pursuant to Sec. 13;

44 Responsibilities of Auditor … 8. Prepare & transmit SASDC to the agency head & the Accountant pursuant to Sec. 14; 9. Others

45 Responsibilities of Director 1. Exercise general supervision & review in audit & settlement of accounts; 2. Act on appeals pursuant to Sec. 18; 3. Sign the NFD for decisions rendered pursuant to Sec. 22;

46 Responsibilities of Director … 4. Sign the COE for decisions rendered by him & by the Auditor pursuant to Sec. 23; 5. Consolidate the SASDC for all auditees under his jurisdiction ;

47 Payment of Filing Fees 2009 RRPC Every petition/appeal filed before an adjudicating body/office of COA pertaining to the following cases shall be imposed a filing fee equivalent to 1/10 of 1% (0.1%) of the amount involved, but not exceeding P10,000.

48 Filing Fees … a) Appeal from audit disallowance/charge b) Appeal from disapproval of request for relief from accountability c) Money claims, except if the claimant is a govt. agency d) Request for condonation of settled claim or liability except if between govt. agencies

49 Legal Research Fund (Section 4, RA 3870, as amended, & LOI 1183 dated Dec. 16, 1981 ) In addition, LRF of 1% of filing fee imposed, but not lower than P10 shall be collected

50 Where to Pay Fees At the Cashier of COA Central Office or Regional Office if not practicable, may be remitted thru postal money order payable to the Commission on Audit

51 Payment of Fees OR shall be attached to the pleading If no OR, adjudicating bodies/offices shall not take action thereon

52 Chapter III Guidelines in issuance of AOM/NS/ND/NC and SASDC

53 Sec. 8 – AOM & Management Reply 1. The Auditor shall issue an AOM (Form 1) for observation relating to financial/operational deficiencies such as accounting, internal control or property management which do not involve pecuniary loss, including for documentary or other information requirements to enable the auditor to make a decision in audit.AOM (Form 1)

54 Sec. 8 - AOM & Mngt. Reply … 2. AOM is addressed to agency head and officers concerned stating the deficiencies noted and/or requirements to be complied with and requiring a response thereon. Signed both by the ATL and SA. AOM 3. AOM shall be replied to by agency officials concerned w/in 15 CDs from receipt thereof.

55 Sec. 8 - AOM and Management Reply … 4. If agency officials failed to reply, the observation shall be deemed accepted and shall be included in the audit report (ML and/or AAR). In case of failure to submit documents/ information needed to reach an audit decision, an NS/ND/NC may be issued after a re-evaluation of those available.

56 Sec. 8 - AOM & Mngt. Reply … 5. The Auditor shall evaluate the agencys reply/comments and shall inform the agency head and officer concerned in writing of the results of evaluation. 6. The documents/information submitted in response to an AOM may provide basis for the allowance, SDC in audit.

57 Sec. 9 – Notice of Suspension 1. The Auditor may issue an NS (Form 2) for transactions of doubtful legality/propriety/ regularity which may result in pecuniary loss of the government to obtain further explanation or documentation.NS (Form 2)

58 Sec. 9 – Notice of Suspension …Notice of Suspension … 2. Addressed to agency head and the Accountant; served on the persons responsible; stated the amount suspended, the reason/s for suspensions, the justification/ explanation/legal basis/documents needed to lift the suspension, and the persons responsible for compliance. Signed both by the ATL and SA.

59 Sec. 9 – Notice of Suspension … 3. Issued as often as suspensions are made 4. Suspension shall be settled within 90 CDs from date of receipt by the responsible officers; otherwise, the transaction shall be disallowed/ charged after the Auditor shall had satisfied himself of such action and consequently, issue the ND/NC.

60 Sec. 10 – Notice of Disallowance 1. The Auditor shall issue an ND (Form 3) for transactions w/c are IEEU (COA Circ A) and illegal (contrary to law) and unconscionable (unreasonable and immoderate; no man in his right sense would make, nor fair and honest man would accept as reasonable; and those incurred in violation of ethical and moral standards)ND (Form 3)

61 Sec. 10 – Notice of Disallowance … 2. Addressed to agency head and the Accountant; served on the persons liable; indicated the transaction and amount disallowed, the reasons for disallowance, the LRR violated, and the persons liable. Signed both by the ATL and SA.

62 Sec. 10 – Notice of Disallowance … 3. Issued as often as disallowances are made. 4. Disallowances shall be settled within 6 months from date of receipt by the persons liable.

63 Sec. 11 – Notice of Charge (NC) 1. The Auditor shall issue the NC (Form 4) on the difference of the following, which are proper audit charge:NC (Form 4) a) Amount assessed/appraised is less than what is due; b) Amount billed is less than what is due; c) Amount collected is less than what is due.

64 Sec. 11 – Notice of Charge …Notice of Charge … 2. Addressed to agency head and the Accountant; served on the persons liable; indicated the transaction and amount charged, the reasons for the charge, the LRR violated, and the persons liable. Signed both by the ATL and SA.

65 Sec. 11 – Notice of Charge … 3. Issued as often as charges are made. 4. Charge shall be settled within 6 months from date of receipt by the persons liable.

66 ND/NC … ND/NC shall be adequately established by evidence and the conclusion, recommendations or dispositions shall be supported by applicable LRR, jurisprudence and the GAAAP.

67 ND/NC/NS/decisions/other orders Shall be prepared in such number of copies as may be necessary for: 1) head of audited agency (original); 2) Auditor for record (duplicate);

68 ND/NC/NS/decisions/other orders 3) agency officials directly affected by the decision and from whom specified action/response is expected.

69 Sec. 12 – Service of Copies of ND/NS/NC 1. To each persons liable/responsible, by the Auditor, thru personal service. If not practicable, by registered mail. If several payees, such as disallowed payroll, service to the Accountant, who shall be responsible for informing all payees concerned, constitute constructive service to all payees in the payroll.

70 Sec. 12 – Service of Copies … 2. Personal service by: a) delivering personally to the party, b) leaving in his office w/ his clerk or with a person having charge thereof.

71 Sec. 12 – Service of Copies … c) by leaving at the partys residence between 8 AM to 6 PM, with a person of sufficient age and discretion then residing thereon.

72 Sec. 12 – Service of Copies … 3. Register mail by a) sending to the office address of the party, if known; otherwise, b) at his residence with instruction to the Postmaster to return the mail to sender after 10 days, if undelivered. Ordinary mail, if no service is available in locality of either sender or addressee.

73 Sec. 12 – Service of Copies … 4. Record of date of actual or constructive service for purpose of determining the running of 90 days maturity period of the suspension & the 6 months period to appeal the disallowance/charges. These information shall be included in the Record of COA Decisions (ROCD)

74 Sec. 13 – NSSDCNSSDC 1. The Auditor shall issue the NSSDC (Form 5) whenever a SDC is settled.NSSDC (Form 5) 2. Addressed to agency head and the Accountant; copy furnished the persons responsible/liable; indicated the NS/ND/NC settled, amount, nature of transaction and mode of settlement. Signed both by the ATL and SA.

75 Responsibility of Auditor.... Under Section 7.3 Auditor shall issue a Notice ofNotice of Finality of Decision (NFD) Finality of Decision (NFD) to inform the agency head that a decision of COA or its authorized representative has become final & executory, which shall be the basis for recording the disallowance/charge in the agencys books.

76 Sec. 13 – NSSDC … 3. Settlements - a) Suspension – by submission of justification/explanation and/or documentation required and after the Auditor is satisfied that the transaction is regular/legal/proper. If the Auditor is not satisfied, he shall issue the ND/NC;

77 Sec. 13 – Settlement … b) Disallowance/charge – i) by payment of the amount disallowed; ii) by such other applicable modes of extinguishment of obligation as provided by law, w/c the Auditor may refer to the General Counsel, for evaluation & advice, the propriety of the settlement;

78 Sec. 13 – Settlement … b) Disallowance/charge – iii) from a decision of the Director, the ASB, or the CP, lifting the same.

79 Sec. 14 – SASDCSASDC 1. The Auditor shall prepare the SASDC (Form 6) summarizing the total SDC for the current period. It shall indicate beginning balance for each NS/ND/NC, the NS/ND/NC and NSSDC for the period and the ending balance of the NS/ND/NC. Signed both by the ATL and SA.SASDC (Form 6)

80 Sec. 14 – SASDC …SASDC 2. Issued to agency head & the Accountant within 15 CDs from the end of each QTR, copy furnished the COA Director concerned. 3. The Auditors SASDC shall be the basis for the preparation by the Directors consolidated quarterly SASDC for his cluster/region showing the total unsettled SDC per auditee.

81 Sec. 14 – SASDC … 4. The Sector Ascom shall be furnished copy of the consolidated SASDC of each cluster/region for purpose of national consolidation into a Sector SASDC as an input into a database to be maintained by the ITO showing the total unsettled SDC per Sector.

82 Liable for Audit Disallowances/Charges 1. Determined on the basis of: a) nature of disallowance/charge; b) duties/responsibilities or obligations of officers/employees concerned; c) extent of participation in the transaction; d) amount of damage or loss to the govt.; (Sec. 16.1)

83 Liability of Public Officers (POs) a) Custodians of government funds are liable for failure to ensure that funds are safely guarded against loss or damage; expended, utilized, disposed of or transferred in accordance w/ LRR; and on the basis of prescribed documents and necessary records.

84 Liability of POs b) Who certify as to the necessity, legality and availability of funds or adequacy of documents are liable according to their respective certifications.

85 Liability of POs c) Who approve or authorize expenditures are liable for losses arising out of their negligence or failure to exercise the diligence of a good father of a family.

86 Liability of POs & Other Persons d) Who confederated or conspired in a transaction which is disadvantageous or prejudicial to the government are liable jointly and severally w/ those who benefited therefrom.

87 Liability of the PAYEE e) Personally liable for a disallowance where the ground thereof is his failure to submit the required documents, and the Auditor is convinced that the disallowed transaction did not occur or has no basis in fact.

88 Liability for Audit Charges 2. Measured by the individual participation and involvement of POs whose duties require appraisal/assessment/ collection of govt. revenues & receipts in the charged transaction. (Sec. 16.2)

89 Liability of persons determined to be liable under an ND/NC 3. Solidary. COA may go against any person liable without prejudice to the latters claim against the rest of the persons liable.

90 DECISIONS AND APPEALS WHAT CASES WHOSE JURISDICTION/ APPROVING OFFICIAL FILING FEE REQUIRED Request for write-off of unliquidated cash advances and dormant accounts receivables - not exceeding P1 M - exceeding P1 M - ASB (original) - CP (original) - None

91 WHAT CASES WHOSE JURISDICTION/ APPROVING OFFICIAL FILING FEE REQUIRED Request for relief from cash and property accountabilities -not exceeding P100,000 [fortuitous events and natural calamities or acts of man (theft, robbery, arson)] -exceeding P100,000 for losses due to fortuitous event or natural calamities (no limit) - Auditor (original) - Director (original) None - None DECISIONS AND APPEALS

92 WHAT CASES WHOSE JURISDICTION/ APPROVING OFFICIAL FILING FEE REQUIRED Request for relief from cash and property accountabilities - exceeding P100,000 but not more than P500,000 for acts of man - exceeding P500,000 but not more than P5M (for acts of man) - exceeding P5M (for acts of man) - Director (original) - ASB (original) - CP (original) - None DECISIONS AND APPEALS

93 WHAT CASES WHOSE JURISDICTION/ APPROVING OFFICIAL FILING FEE REQUIRED Request for COAs concurrence on the hiring of legal consultants and appeals/Motion for Reconsiderations thereto - CP (exclusive)- None Appeals from audit dis- allowance/charge involving amounts: - not exceeding P1,000,000 - exceeding P1,000,000 - Director (appellate) - ASB (appellate) - CP (appellate) - 1/10 of 1% but not less than P10 but not to exceed P10,000 - Do - DECISIONS AND APPEALS

94 WHAT CASES WHOSE JURISDICTION/ APPROVING OFFICIAL FILING FEE REQUIRED Appeals from disapproved request for relief from accountability -for acts of God (no limit) -for acts of man exceeding P100,000 but not more than P500,000 -For acts of man exceeding P500,000 - ASB (appellate) - CP (appellate) - 1/10 of 1% but not less than P10 but not to exceed P10,000 - Do - DECISIONS AND APPEALS

95 WHAT CASES WHOSE JURISDICTION/ APPROVING OFFICIAL FILING FEE REQUIRED Money claims, except if claimant is a government agency (regardless of amount) Request for condonation of settled claims or liability except if between government agencies Approval of private sale of government property in LGUs - CP (original) - 1/10 of 1% but not less than P10 but not to exceed P10,000 - Do - DECISIONS AND APPEALS

96 LEVEL OF APPEALS Director ASB CP

97 Sec. 17 – Period to Appeal Any person aggrieved may within 6 months from receipt of ND/NC appeal in writing; If not appealed within the prescribed period shall become final & executory; Filing of an appeal will suspend the running of the prescribed period; Running of 6 month period shall resume upon receipt of a decision from the Director or the ASB.

98 Proceedings before the Director 1) An aggrieved party may file an Appeal Memorandum (AM) from an Auditors Decision/ND/ NC to the Director concerned, copy furnished the Auditor, within 6 months from receipt of Decision/ND/NC;

99 2. Caption – Proceedings before the Director Appellant - party appealing Appellee - Auditor who rendered the decision

100 3) The receipt by the Director of the AM shall stop the running of the period to appeal which shall resume to run upon receipt by the appellant of the Directors decision. Proceedings before the Director

101 4) Within 5 CDs from receipt of the AM, the Director shall order the Auditor to submit his Answer, copy furnished the appellant, together with the entire records of the case including the EDSE, duly numbered at the bottom of each page.

102 5) The Auditor shall comply w/ the Directors Order within 15 CDs from receipt. The appellant may file a Reply within the same period from receipt of the Answer. Proceedings before the Director

103 6) The Director shall decide the Appeal within 15 CDs from receipt of the complete documents necessary for evaluation & decision. Proceedings before the Director

104 The Director may affirm the decision of the Auditor; If he reverses, modifies or alters, the case shall be elevated directly to the CP for automatic review of the Directors Decision. The dispositive portion shall categorically state that the decision is not final & is subject to automatic review of the CP. Proceedings before the Director 7)

105 8) The Director shall not entertain a motion for reconsideration (MR) of his decision. Proceedings before the Director

106 Sec. 19 – Proceedings before the ASB 1) Any person aggrieved by a Directors Decision involving an amount not exceeding P1 Million may appeal to the ASB within the time remaining of the 6 months period to appeal.

107 2) Upon receipt of the AM, the ASB, thru the Ascom of LSS, shall require the Director to submit an Answer, copy furnished the Appellant, together w/ the entire records of the case including the EDSE, duly numbered at the bottom of each page. Sec. 19 – Proceedings before the ASB

108 3) The Director shall comply w/ the ASBs Order within 15 CDs from receipt. The appellant may file a Reply within the same period from receipt of the Answer. Sec. 19 – Proceedings before the ASB

109 4) The ASB shall decide the Appeal within 15 CDs from receipt of the complete documents necessary for evaluation & decision. Sec. 19 – Proceedings before the ASB

110 5) The ASB may affirm, reverse, modify or alter the Directors Decision. 6) The ASB shall not entertain an MR of its Decision. Proceedings before the ASB

111 Proceedings before the CP 1) The party aggrieved by a decision of the Director or the ASB may appeal to the CP by filing a Petition for Review.

112 2) A party aggrieved by a Directors Decision involving ND/NC exceeding P1 Million may file an appeal to the CP within the time remaining of the 6 months period taking into consideration the suspension of the running thereof. 3) The CP shall decide within 60 CDs from the date of its submission for decision or resolution. Proceedings before the CP

113 4) A case is deemed submitted for decision/resolution upon the filing of last pleading/brief/memorandum required by COA rules. 5) If the account/claim involved in the case needs reference to other persons, office, or party interested, the period shall be counted from the time the last comment necessary to a proper decision is received by it. Proceedings before the CP

114 Automatic Review of Directors Decision a) The CP shall within 60 CDs from receipt of the Directors Decision & the entire records of the case, review the same & render its own decision.

115 MR of CP Decision a) Only one MR shall be entertained on the basis of new & material evidence, or that the evidence is insufficient to justify the decision, or the said decision is contrary to law. b) The MR shall be filed within the remaining of the 6 months period to appeal.

116 Appeal to the SC 1) The party aggrieved may appeal the CPs decision/order/ruling within 30 days from his receipt, appeal on Certiorari to the SC in the manner provided by law & Rules of Court. 2) When the CPs decision/order/ruling adversely affects the interest of any govt. agency, the appeal may be taken by the agency head.

117 LACHES Defined as the failure or neglect, for an unreasonable length of time, to do that by which by exercising due diligence could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. Relief has been denied to litigants who, by sleeping on their rights for an unreasonable length of time – either by negligence, folly or inattention – have allowed their claims to become stale. The laws aid the vigilant, not those who slumber on their rights.

118 ELEMENTS OF LACHES 1. Conduct on the part of the defendant that gave rise to the situation complained of; or the conduct of another which the defendant claims gave rise to the same; 2. Delay by the complainant in asserting his right after he has had knowledge of the defendants conduct and after he has had an opportunity to sue;

119 ELEMENTS OF LACHES 3. Lack of knowledge by or notice to the defendant that the complainant will assert the right on which he bases his suit; and 4. Injury or prejudice to the defendant in the event relief is accorded to the complainant.

120 SUPREME COURT RULING: Soliva vs. Intestate Estate of Marcelo M. Villaliba, G.R. No , Dec. 8, 2008 …even a registered owner of property may be barred from recovering possession of property by virtue of laches… …The same is not true with regard to laches…. …stale demand.

121 TEOTIMO EDUARTE vs. CA, G.R. No , July 22, 1999 It has been consistently held that laches does not concern itself with the character of the defendants title, but only with the issue of whether or not the plaintiff – by reason of long inaction or inexcusable neglect – should be barred entirely from asserting the claim, because to allow such action would be inequitable and unjust to the defendant. (underscoring and emphasis ours)

122 EXCEPTION TO THE GENERAL RULE: Durban Apartments Corp. vs. Catacutan, G.R. No , Dec 14, 2005 …the Court may disregard procedural lapses so that a case may be resolved on its merits. Rules of Procedure should promote, not defeat, substantial justice. A strict and rigid application of the rules that would result in technicalities that tend to frustrate rather than promote justice must be avoided.

123 CANDO vs. Olazo, G.R. No , March 22, 2007 Ultimately, the interest of substantial justice must transcend rigid observance of the rules of procedure.xxx

124 Department of Agrarian Reform vs. Ma. Regina I. Samson, et al., G.R , June 17, 2008 It is well-settled that rules of procedure are construed liberally in proceedings before administrative bodies and are not to be applied in a very rigid and technical manner, ….

125 Finality and Enforcement of Decisions

126 EXECUTION OF DECISION Execution shall issue upon a decision that finally disposes of the case. Such execution shall issue as a matter of right upon the expiration of the period to appeal there from if no appeal has been fully perfected. (Section 1 Rule XIII, Revised Rules of Procedure)

127 Finality and Enforcement of Decisions a) Notice of Finality of Decisions

128 NOTICE OF FINALITY OF DECISION (NFD) 1) A decision of the CP, ASB, Director or Auditor upon any matter within their respective jurisdiction, if not appealed, shall become final & executory. 2) The NFD (Form 7) shall be issued by the authorized COA official to agency head to notify that a decision has become final & executory, there being no appeal or MR filed within the reglementary period.

129 NOTICE OF FINALITY OF DECISION (NFD) Republic of the Philippines COMMISSION ON AUDIT JKL City, Manila Date: December 12, 2009 NOTICE OF FINALITY OF DECISION (NFD) Hon. Lito M. Paras City Mayor JKL City, Metro Manila Attention: Mr. Lauro T. Lorenzo City Accountant Reference: ND/NC No. - _________________ Date of NC - _________________ Amount- _________________ Nature of ND/NC - Collection of City License tax in the amount of P63, which was deficient by P2, since the correct amount should be P65, Persons Liable and date1. Edna P. Gamba – Assessment Clerk II - ______________ of receipt of ND/NC2. Joseph R. Santos – Chief, License Division - ______________ 3. ABC Enterprise – payor - ______________ Please be informed that the above ND/NC has become final and executory, there being no appeal filed within the reglementary period. Accordingly, the above named persons liable shall pay the above amount immediately to the agency cashier. Failure to pay the same shall authorize the agency cashier to withhold payment of salary and other money due to persons liable in accordance with COA Order of Execution to be issued to the agency cashier. Carlito G. Odullo CARLITO G. ODULLO Audit Team Leader Gina H. Landicho GINA H. LANDICHO Supervising Auditor PROOF OF SERVICE OF NFD TO PERSONS LIABLE Name Position Received byDate 1. Edna P. Gamba_______________ _____________ ___________ 2. Joseph R. Santos _______________ _____________ ___________ 3. ABC Enterprise _______________ _____________ ___________ Copy furnished: The Director Local Government Sector

130 If decision of the Director/ASB or CP attains finality, par 1 may be restated as follows: Please be informed that the decision of the Director/ Adjudication and Settlement Board/Commission Proper No. __________ dated _________ has become final and executory in the absence of an appeal filed within the prescribed period. The said decision affirmed the above ND/NC. (Signatory shall be the Director, General Counsel or Commission Secretary as provided under Section 22.3 of these Rules. A copy of the CFD issued by the Commission Secretary shall be furnished the General Counsel)

131 3) Signing Authority: ATL & SA for their ND/NC; Director for ND/NC issued by SAT under his supervision; Director for his decision; General Counsel for ASB decision; Commission Secretary for CP decision 4) Addressed to the Agency Head, Attention: the Chief Accountant & shall indicate the particulars of the COA decision that has become final & executory & the persons liable. NOTICE OF FINALITY OF DECISION (NFD)

132 5) A copy shall be served by the Agency Auditor on the persons liable or their authorized representatives who shall indicate their printed name & signature & the date of receipt. 6) The Chief Accountant shall, on the basis of the NFD, record the disallowance/charge as a receivable. NOTICE OF FINALITY OF DECISION (NFD)

133 b) COAs Order of Execution Finality and Enforcement of Decisions

134 COA Order of Execution (COE) COE (Form 8) 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.

135 COA Order of Execution (COE) Republic of the Philippines COMMISSION ON AUDIT Office of the General Counsel Date: July 20, 2010 COA ORDER OF EXECUTION (COE) Mr. Romeo Formoso President, GHI Corp. Roxas Blvd., Manila Attention: Ms. Erlinda Manrique Cashier Reference: CP/ASB Decision No. & date dated March 10, 2009 ND No. & date dated July 14, 2006 Amount - P42, Date of NFD - July 5, 2008 Nature of transaction - Payment for sports equipment under DV No dated 5/28/2006 in the total amount of P142, Persons Liable 1. Jose L. Unciano – Property Inspector - ___________ 2. Gloria G. Manalili – Chief, General Services - ___________ 3. Sandra P. Baylon – Chief, Research Division - ___________ You are hereby instructed to withhold the payment of the salaries or any amount due to the above-named persons liable, for the settlement of their liabilities pursuant to the ND/Decision referred to above, copy attached and made an integral part hereof. Payment of salaries or any money due them in violation of this instruction will be disallowed in audit and you will be held liable therefore. Wilma C. Jardin WILMA C. JARDIN Assistant Commissioner General Counsel PROOF OF SERVICE OF COE TO AGENCY OFFICIALS Name PositionReceived byDate 1. Mr. Romeo FormosoPresident, GHI Corp.____________________________ 2. Ms. Erlinda ManriqueCashier____________________________ Copy furnished: Persons liable: Mr. Jose L. Unciano Ms. Gloria G. Manalili Ms. Sandra P. Baylon All of GHI Corp., Manila The Accountant GHI Corp. The Auditor GHI Corporation, Manila The Director, Cluster C Corporate Government Sector

136 COE shall be approved not earlier than 5 days from receipt of the NFD by the agency head, by the following: Director – for NFD issued by him or by the Auditor; General Counsel – for NFD issued by him or by the Commission Secretariat, or for judgment rendered by the SC COA Order of Execution (COE)

137 Addressed to the agency head, Attention: the Cashier/ Treasurer, & shall indicate the NFD, the particulars of the decision being enforced & the persons liable. COA Order of Execution (COE)

138 The Auditor monitor the implementation of the COE & report to the Director the action taken by the agency. Unsettled COEs shall be referred to the GC for appropriate action, including referral to the OSG & the Ombudsman. COA Order of Execution (COE)

139 Non-Compliance with the COE Section 3. Non-compliance with the COE. - In case of failure by the Cashier/Treasurer/Disbursing Officer to comply with the COE, the Auditor shall notify the agency head concerned of the non- compliance. At the same time, the Auditor shall report the matter through the COA Director concerned, to the General Counsel who shall take any or all of the following actions: – Recommend to the Commission Proper to cite defaulting party in contempt; – Refer the matter to the Solicitor General for the filing of appropriate civil suit; – Refer the case to the Ombudsman for the filing of appropriate administrative or criminal action.

140 Remedies for Non-Compliance with the COE Section 4. Holding the Defaulting Party in Contempt. – Any party who fails to comply with the COE may be held in contempt pursuant to Section 2, Rule XI of these Rules. The LSS shall study and evaluate the report of such non-compliance as cited in the preceding section and submit its recommendation to the Commission Proper within fifteen (15) days from receipt thereof (Section 4 Revised Rules of Procedure)

141 Section 1. Direct Contempt Punished Summarily. - A person guilty of misbehavior in the presence of or so near the Commission Proper or any of its members as to obstruct or interrupt the proceedings before it or them, including disrespect toward the Commission or its members, offensive personalities toward others or refusal to be sworn or to answer as a witness, or to subscribe to an affidavit or deposition when lawfully required to do so, may be summarily adjudged in contempt by the Commission or any of its members and shall be punished in accordance with the penalties prescribed in the Rules of Court.(Section 1 Rule XI, Revised Rules of Procedure) Remedies for Non-Compliance with the COE

142 Section 2. Indirect Contempt. – After a charge in writing has been filed by an aggrieved party before the Commission Proper or its members, and after an opportunity shall have been given to respondent to be heard by himself or counsel, a person guilty of the following acts may be punished for contempt: – Misbehavior of any officer of the Commission in the performance of his official duties or in his official transactions; – Disobedience of or resistance to a lawful writ, process, order, judgment or command of the Commission or any of its members; – Any abuse of or any unlawful interference with the process or proceedings of the Commission or any of its members not constituting direct contempt under Section 1 of this rule; – Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice by the Commission or any of its members; – Failure to obey a subpoena duly served. Remedies for Non-Compliance with the COE

143 Section 3. Penalty for Indirect Contempt. - If adjudged guilty, the accused may be punished in accordance with the penalties prescribed in the Rules of Court.(Sections 2 and 3, Revised Rules of Procedure) Remedies for Non-Compliance with the COE

144 Section 5. Referral to the Solicitor General. - To enforce civil liability, the Auditor shall submit to the Director concerned a report on COEs which have not been complied with. The report shall be duly supported with certified copies of the subsidiary records, and the payrolls/vouchers disallowed and collections charged, together with all necessary documents for the filing of the appropriate civil suit. The Director shall forward the report to the General Counsel who shall study and evaluate the same and submit his recommendations to the COA Chairman within fifteen(15) days from receipt thereof. Referral to the Office of the Solicitor General for its appropriate action may be made. (Section 5, Rule XIII, Revised Rules of Procedure) Remedies for Non-Compliance with the COE

145 Section 6. Referral to the Ombudsman. - The Auditor shall report to his Director all instances of failure or refusal to comply with the decisions or orders of the Commission contemplated in the preceding sections. The COA Director shall see to it that the report is supported by the sworn statement of the Auditor concerned, identifying among others, the persons liable and describing the participation of each. He shall then refer the matter to the Legal Services Sector who shall refer the matter to the Office of the Ombudsman or other appropriate office for the possible filing of appropriate administrative or criminal action. Remedies for Non-Compliance with the COE

146 Section 7. Effect of Non- compliance. - Any delay in complying or refusal to comply with the order or decision of the Commission shall constitute a ground for contempt, and/or administrative disciplinary action against the officer or employee concerned. Remedies for Non-Compliance with the COE

147 Section 1. Applicability of Civil Service Law and Other Rules. - The procedures set forth in the pertinent provisions of the Civil Service Law, The Omnibus Rules Implementing Executive Order 292 and COA Memorandum No , in administrative cases against officers and employees of the Commission, are hereby adopted and read into these rules. (Section 1, Rule IV of the Revised Rules of Procedure) Remedies for Non-Compliance with the COE

148 Dropping from the Books of Accounts of Settled ND/NC Recorded final disallowances/charges w/c are settled shall be dropped from the books upon receipt by the Accountant of the NSSDC (Section 24 Rules and Regulations on the Settlement of Accounts)

149 Record of COA Decisions (ROCD) 1. Maintained by the Auditor showing the ND/NCs issued, appeals taken, decisions on appeals, NFDs & COE issued & the NSSDC; 2. The Director & the LSS Ascom shall keep copies of the Decisions rendered by their respective offices, & the NFD & COEs;

150 The Director, LSS Ascom & Commission Secretary shall ensure that the Auditor is furnished w/ copies of their decisions, & NFDs & COEs, to update the ROCD. Record of COA Decisions (ROCD)

151 Opening/Revision of Settled Accounts 1. In no case shall finally settled accounts be opened or reviewed by COA, except on the following before the expiration of the 3 years after the settlement of any account: a) motu propio review & revise the account or settlement & certify a new balance. It may require any account, voucher or other papers connected w/ the matter be forwarded to it.

152 b) Open the account when appearing to be tainted w/ fraud, collusion, or error of calculation, or when new & material evidence is discovered, & after a reasonable time for reply or appearance of the party concerned, may certify thereon a new balance. An Auditor may exercise the same upon prior authorization of the COA Chairman. Opening/Revision of Settled Accounts 2. If a settled account is re-opened/ reviewed, & a new balance is certified in accordance w/ Sec. 52 of PD 1445, the aggrieved party may appeal in accordance w/ Rule IV of RRSA.

153 As Accountants – Let us consider 3 simple rules…. 1 - Do no harm… 2 - Do good… 3- Stay in love with GOD…

154 OPEN FORUM

155 THANK YOU!!! THANK YOU!!!


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