COA

COMMISSION
ON AUDIT
Presented by: MATEO, Ma. Justine S.
PART I: TABLE OF CONTENTS

APPOINTED CONSTITUTIONAL
01 CHAIRPERSON 02 PROVISIONS

VISION, MISSION,
PRINCIPAL AND CORE
03 DUTIES 04
VALUES
 Chairperson Gamaliel Asis
Cordoba was appointed by
President Ferdinand R. Marcos,
Jr. as Chairperson (the
equivalent of Auditor-General)
of the Commission on Audit
(COA) on 21 October 2022.

Chairperson Cordoba holds a Bachelor of Arts

degree in Economics from the Ateneo de
Manila University. He also finished his Juris
Doctor in 1996 from the same University and
subsequently passed the Philippine Bar
Examination the following year.
 COMMISSION ON AUDIT (COA)
The Philippine Commission on Audit, also known as COA,
is a constitutional body in the Philippines responsible for
promoting transparency, accountability, and good
governance in public funds. It was established in 1935
and operates independently from the government's
executive, legislative, and judicial branches. The COA
ensures that government agencies and officials comply
with laws, regulations, and policies on financial
management and the use of public resources. Through its
audits and investigations, the COA helps prevent
corruption, fraud, and waste in government operations.
ARTICLE IX-D THE COMMISSION ON AUDIT

SECTION 1 (1). There shall be a Commission on Audit composed of a Chairman and two
Commissioners, who shall be natural-born citizens of the Philippines and, at the time of
their appointment, at least thirty-five years of age, certified public accountants with not less
than ten years of auditing experience, or members of the Philippine Bar who have been
engaged in the practice of law for at least ten years, and must not have been candidates for
any elective position in the elections immediately preceding their appointment. At no time
shall all Members of the Commission belong to the same profession.

SECTION 1 (2). The Chairman and the Commissioners shall be appointed by the President
with the consent of the Commission on Appointments for a term of seven years without
reappointment. Of those first appointed, the Chairman shall hold office for seven years, one
Commissioner for five years, and the other Commissioner for three years, without
reappointment. Appointment to any vacancy shall be only for the unexpired portion of the
term of the predecessor. In no case shall any Member be appointed or designated in a
temporary or acting capacity.
ARTICLE IX-D THE COMMISSION ON AUDIT

SECTION 2 (1). The Commission on Audit shall have the power, authority, and duty 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, or any of its subdivisions, agencies, or instrumentalities, including
government-owned or controlled corporations with original charters, and on a post-audit
basis: (a) constitutional bodies, commissions and offices that have been granted fiscal
autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other
government-owned or controlled corporations and their subsidiaries; and (d) such
non-governmental entities receiving subsidy or equity, directly or indirectly, from or
through the Government, which are required by law or the granting institution to submit to
such audit as a condition of subsidy or equity. However, where the internal control system of
the audited agencies is inadequate, the Commission may adopt such measures, including
temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies.
It shall keep the general accounts of the Government and, for such period as may be
provided by law, preserve the vouchers and other supporting papers pertaining thereto.
ARTICLE IX-D THE COMMISSION ON AUDIT

SECTION 2 (2). The Commission shall have exclusive authority, subject to the limitations in
this Article, to define the scope of its audit and examination, establish the techniques and
methods required therefor, and promulgate accounting and auditing rules and
regulations, including those for the prevention and disallowance of irregular, unnecessary,
excessive, extravagant, or unconscionable expenditures, or uses of government funds and
properties.
SECTION 3. No law shall be passed exempting any entity of the Government or its
subsidiary in any guise whatever, or any investment of public funds, from the jurisdiction of
the Commission on Audit.
SECTION 4. The Commission shall submit to the President and Congress, within the time
fixed by law, an annual report covering the financial condition and operation of the
Government, its subdivisions, agencies, and instrumentalities, including
government-owned or controlled corporations, and non-governmental entities subject to
its audit, and recommend measures necessary to improve their effectiveness and
efficiency. It shall submit such other reports as may be required by law.
PRINCIPAL DUTIES OF THE COMMISSION

1. 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.
2. Promulgate accounting and auditing rules
and regulations including those for the
prevention and disallowance of irregular,
unnecessary, excessive, extravagant or
unconscionable expenditures, or uses of
government funds and properties.
3. Submit annual reports to the President and
the Congress on the financial condition and
operation of the government.
ARTICLE IX-D
4. Recommend measures to improve
the efficiency and effectiveness of
government operations.
5. Keep the general accounts of government
and preserve the vouchers and supporting
papers pertaining thereto.
6. Decide any case brought before
it within 60 days.
7. Performs such other duties and
functions as may be provided by law.
 COA VISION CORE VALUES
A trustworthy, respected ● God Centeredness
and independent audit institution ● Patriotism
that is an enabling partner
● Excellence
of government in ensuring a
better life for every Filipino.
● Integrity
● Professionalism
● Courtesy, Modesty and
Humility
COA MISSION ● Reverence for Truth
To ensure accountability for public
resources, promote transparency, and
and the Rule of Law
help improve government operations,
in partnership with stakeholders, for the
benefit of the Filipino people.
 COA
PART II
Presented by: MATEO, Ma. Justine S.
 PRINCIPAL DUTIES

FINANCIAL COMPLIANCE
AUDITING AUDITING

PERFORMANCE SPECIAL
AUDITING AUDITING
UNDERSTANDING THE AUDIT OPINION
To provide additional information, the following are the different types of opinion issued in
connection with financial audit based on ISSAI 2700 and ISSAI 2705 which were crafted
from International Standards on Auditing (ISA) 700 and ISA 705:

● Unmodified Opinion (also referred to as unqualified opinion) – this opinion is issued when
the auditor concludes that the financial statements are prepared, in all material respects, in
accordance with the applicable financial reporting framework (i.e., PFRS, IPSAS).

● Modified Opinion:

Auditor’s Judgment about the Pervasiveness of the Effects

Nature of the Matter Giving or Possible Effects on the Financial Statements
Rise to the Modification
Material but NOT pervasive Material AND pervasive

Financial statements are

Qualified Opinion Adverse Opinion
materially misstated

Inability to obtain sufficient

Qualified Opinion Disclaimer of Opinion
appropriate audit evidence
COMPLIANCE
AUDITING
IN THE
PHILIPPINE
PUBLIC
SECTOR
OBJECTIVES OF FINANCIAL AUDIT
The objectives of a financial audit in the public sector are often broader than
expressing an opinion whether the financial statements have been prepared, in all
material respects, in accordance with the applicable financial reporting framework
(i.e. the scope of the ISSAIS). The audit mandate, or obligations for public sector
entities, arising from legislation, regulation, ministerial directives, government
policy requirements, or resolutions of the legislature may result in additional
objectives. These additional objectives, which may be of equal importance to the
opinion on the financial statements, may include audit and reporting
responsibilities, for example, relating to I reporting whether public sector auditors
found any instances of non-compliance with authorities including budgets and
accountability frameworks, and/or reporting on the effectiveness of internal control.
However, even when there are no such additional objectives, there may be general
public expectations in regard to public sector auditors' reporting of non-compliance
with authorities or reporting on effectiveness of internal control. Such additional
responsibilities would be reported in a separate section of the auditor's report.
AUDIT ACTIVITIES BY PHASE
CONDUCT OF FINANCIAL AUDIT
 FINANCIAL AUDITING: CLIENT STEPS

1. Auditee submits financial statements and other financial reports duly supported with
documents and/or schedules on or before: February 14 – for NGAs
2. Auditee attends the entrance conference to understand the audit engagement agenda and
receives the Engagement Letter.
3. Auditee receives AOM, ND, NS, NC and submits comments/ justifications/ additional
supporting documents/ files an appeal
4. Auditee submits Updated Agency Action Plan and Status of Implementation (AAPSI) for prior
year audit with supporting documents as proof of compliance to prior years audit
recommendation recommendations
5. Auditee attends the exit conference to agree or clarify some matters on the results of audit.
 FINANCIAL AUDITING: CLIENT STEPS

6. Auditee submits comments and/or additional documents.

7. Auditee submits Management Representation Letter
8. Auditee receives the AAR/ ML
9. Management submits the Auditee Feedback Sheet duly
signed and dated
10. Auditee submits AAPSI within 60 days from receipt of the
AAR/ML
CONDUCT OF PERFORMANCE AUDIT
In line with these mandates, and pursuant to COA 2016-2022 Strategic
Plan, the Commission issued COA Resolution No. 2017-012 dated
August 17, 2017, which established the Performance Audit Office under
the Special Services Sector to promote economical, efficient, and
effective governance through performance audits.
 PERFORMANCE AUDITING: CLIENT STEPS
Agency Fees to be Processing Person
Client Steps
Actions Paid Time Responsible
1.) Submit 1.) Receive None 0.625 WDs Administrative
request for request, either Staff Auditor or
performance through the PAO Staff
audit through: Office of the
Service Chief
● Personal Chairperson or
● Mail directly PAO Directors
transmitted to
the Performance
Audit Office
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.1.) Log the request and None 0.625 WDs Administrative

assign to auditor/ Staff Auditor
evaluator
1.1.1.) Log the request or PAO Staff
and forward to the PAO Service Chief
Director PAO Directors
1.1.2.) Assign to Assistant
Director/ Service Chief/
Auditor/ Evaluator
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.2.) Evaluate the None 5.000 WDs Auditor/PAO

request for Staff Service
performance audit if it Chief
will be subjected for
pre-study for
consideration in the
Performance Audit
Portfolio
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible
1.3.) Review/sign None 2.500 WDs Service Chief
memorandum/letter to PAO Directors
requesting party

1.4.) Release None 0.125 WDs Administrative

memorandum/ letter to staff
requesting party and file
documents for
consideration in the
preparation of topic
proposal, if warranted
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.5.) Prepare and None Processing Auditor/PAO

review audit topic time depends Staff Service
proposal for on the Chief PAO
consideration in the
complexity of Directors
Performance Audit
Portfolio
the audit topic

1.6.) Approve/Issue the None Commission

Performance Audit Proper
Portfolio
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.7.) Create Audit None PAO

teams based on OAC-SSS
Performance Audit
Portfolio
1.8.) Notify the None Within 10 Audit Team
auditee(s) of the working days PAO Directors
planned performance upon receipt of
audit signed Office
Order
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.9.) Conduct audit None Processing time Audit Team

planning, which depends on the PAO Directors
include the following complexity of
activities: the audit topic,
scope and the
1.9.1.) Develop audit
number of
design matrix, work
auditors
plan, audit program, available to
budget, and indexing conduct the
scheme. audit
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.9.2.) Conduct None Processing time Audit Team

depends on the PAO Directors
audit design complexity of
summit; and the audit topic,
1.9.3.) Plan and scope and the
number of
schedule entrance auditors
conference. available to
conduct the
audit
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.10.) Execute None Processing time Audit Team

actual audit which depends on the PAO Directors
complexity of
include the following the audit topic,
activities: scope and the
1.10.1.) Conduct number of
entrance auditors
available to
conference;
conduct the
audit
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.10.2.) Gathering of None Processing time Audit Team

evidence using depends on the PAO Directors
applicable data complexity of
collection methods; the audit topic,
scope and the
1.10.3.) Prepare audit
number of
finding matrices; and
auditors
1.10.4.) Conduct available to
message agreement. conduct the
audit
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible

1.11.) Prepare None Processing time Audit Team

Performance Audit depends on the PAO Directors
Report which include complexity of
the following activities: the audit topic,
scope and the
1.11.1.) Prepare draft
number of
audit report with
auditors
quality control review; available to
1.11.2.) Prepare audit conduct the
highlights; audit
PERFORMANCE AUDITING: CLIENT STEPS
Client Fees to be Processing Person
Agency Actions
Steps Paid Time Responsible
1.11.3.) Conduct exit
conference; and
1.11.4.) Finalize and
issue performance audit
report.

1.12) Publish None Within 15 Audit Team PAO

performance audit report working days Directors
and distribute copies to upon issuance of
oversight bodies report to the
audited agencies
 GUIDELINES IN THE CONDUCT
OF COMPLIANCE AUDIT

Sec. 2, Article IX-D of the 1987 Philippine Constitution vests upon the COA the
exclusive authority to define the scope of its audit and examination, establish the
techniques and methods required therefor, and promulgate accounting and
auditing rules and regulations, including those for the prevention and disallowance
of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or
uses of government funds and properties.

Likewise, Section 25(2) of Presidential Decree No. 1445, otherwise known as the
Government Auditing Code of the Philippines, mandates the COA to develop and
implement a comprehensive program that shall encompass an examination of
financial transactions, accounts, and reports, including evaluation of compliance
with applicable laws and regulations.
CIRCULAR NO. 2009-006

SECTION 7. RESPONSIBILITIES FOR

AUDIT AND SETTLEMENT OF ACCOUNTS
● Responsibility of the Agency Head
● Responsibility of the Agency
Accountant
● Responsibility of the Auditor
● Responsibility of COA Director
GUIDELINE IN THE ISSUANCE OF
AUDIT OBSERVATION MEMORANDUM

GUIDELINE IN THE ISSUANCE OF

NOTICE OF SUSPENSION
GUIDELINE IN THE ISSUANCE OF
NOTICE OF DISALLOWANCE
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