Article 106p. 106

ADMINISTRATIVE CODE AND LAW OF PUBLIC OFFICERS TEXT AND RULES

balance. For this purpose, it may require any account,

vouchers or other papers connected with the matter to

be forwarded to it;

(2) When any settled account appears to be tainted

with fraud, collusion, or error of calculation, or when new

and material evidence is discovered, the Commission

may, within three (3) years after the original settlement,

open the account and, after a reasonable time for reply or

appearance of the party concerned, certify thereon a new

balance. An auditor may exercise the same power with

respect to settled accounts pertaining to the agencies

under his audit jurisdiction; and

(3) Accounts once finally settled shall in no case be

opened or reviewed except as herein provided.

CHAPTER 6 Government Auditing and Accounting

SECTION 38. Definition of Government Auditing . —

Government auditing is the analytical and systematic

examination and verification of financial transactions,

operations, accounts and reports of any government

agency for the purpose of determining their accuracy,

integrity

and

authenticity,

and

satisfying

the

requirements of law, rules and regulations.

SECTION 39. General Standards . — (1) The audit shall

be performed by a person possessed with adequate

technical training and proficiency as auditor;

(2) In all matters relating to the audit work, the auditor

shall maintain complete independence, impartiality and

objectivity and shall avoid any possible compromise of his

independence

or

any

act

which

may

create

a

presumption of lack of independence or the possibility of

undue influence in the performance of his duties; and

(3) The auditor shall exercise due professional care and

be

guided

by

applicable

laws,

regulations

and

the

generally

accepted

principles

of

accounting

in

the

performance

of

the

audit

work

as

well

as

in

the

preparation of audit and financial reports.

SECTION 40. Definition of Government Accounting .

— Government accounting includes the processes of

analyzing,

recording,

classifying,

summarizing

and

communicating all transactions involving the receipt and

dispositions of government funds and property, and

interpreting the results thereof.

SECTION 41. Objectives of Government Accounting .

—

Government

accounting

shall

aim

to

produce

information

concerning

past operations and present

conditions;

provide

a

basis

for

guidance

for

future

operations; provide for control of the acts of public bodies

and officers in the receipt, disposition and utilization of

funds and property; and report on the financial position

and the results of operations of government agencies for

the information of all persons concerned.

CHAPTER 7 Receipt and Disposition of Funds and Property

SECTION 42. Accounting for Money and Property

Received by Public Officials . — Except as may otherwise

be specifically provided by law or competent authority, all

moneys and property officially received by a public officer

in any capacity or upon any occasion must be accounted

for

as

government funds and government property.

Government property shall be taken up in the books of

the agency concerned at acquisition cost or an appraised

value.

SECTION 43. Special, Fiduciary and Trust Funds . —

Receipts shall be recorded as income of Special, Fiduciary

or Trust Funds or Funds other than the General Fund only

when authorized by law as implemented pursuant to law.

SECTION 44. Issuance of Official Receipts . — (1) No

payment of any nature shall be received by a collecting

officer without immediately issuing an official receipt in

acknowledgment thereof. The receipt may be in the form

of postage, internal revenue or documentary stamps and

the like, or officially numbered receipts, subject to proper

custody, accountability and audit; and

(2)

Where

mechanical

devices

are

used

to

acknowledge

cash

receipts,

the

Commission

may

approve,

upon

request,

exemption from the use of

accountable forms.

CHAPTER 8 Application of Appropriated Funds

SECTION 45. Disbursement of Government Funds . —

(1) Revenue funds shall not be paid out of any public

treasury

or

depository

except

in

pursuance

of

an

appropriation law or other specific statutory authority;

(2) Trust funds shall not be paid out of any public

treasury or depository except in fulfillment of the purpose

for which the trust was created or funds received, and

upon authorization of the legislative body, or head of any

other agency of the government having control thereof,

and

subject

to

pertinent

budget

laws,

rules

and

regulations;

(3) National revenue and trust funds shall not be

withdrawn

from

the

National Treasury except upon

warrant or other instruments of withdrawal approved by

the

Secretary

of

Finance

as

recommended

by

the

Treasurer of the Philippines; and

(4) Temporary investment of investible cash in the

National Treasury in any securities issued by the National

Government

and

its

political

subdivisions

and

instrumentalities,

including

government-owned

or

controlled corporations as authorized by the Secretary of

Finance, shall not be construed as disbursements of

funds.

SECTION

46.

Appropriation

Before Entering into

Contract . — (1) No contract involving the expenditure of

public funds shall be entered into unless there is an

appropriation therefor, the unexpended balance of which,

free

of

other

obligations,

is

sufficient

to cover the

proposed expenditure; and

(2) Notwithstanding this provision, contracts for the

procurement of supplies and materials to be carried in

stock may be entered into under regulations of the

Commission provided that when issued, the supplies and

materials shall be charged to the proper appropriations

account.

SECTION 47. Certificate Showing Appropriation to

Meet Contract . — Except in the case of a contract for

personal service, for supplies for current consumption or

to be carried in stock not exceeding the estimated

consumption

for

three

(3)

months,

or

banking

transactions of government-owned or controlled banks,

no contract involving the expenditure of public funds by

any

government

agency

shall

be

entered

into

or

authorized unless the proper accounting official of the

agency concerned shall have certified to the officer

entering into the obligation that funds have been duly

appropriated

for

the purpose and that the amount

necessary to cover the proposed contract for the current

calendar year is available for expenditure on account

thereof, subject to verification by the auditor concerned.

The certificate signed by the proper accounting official

and the auditor who verified it, shall be attached to and

become an integral part of the proposed contract, and

the sum so certified shall not thereafter be available for

expenditure for any other purpose until the obligation of

the government agency concerned under the contract is

fully extinguished.

SECTION 48. Void Contract and Liability of Officer . —

Any contract entered into contrary to the requirements of

the two (2) immediately preceding sections shall be void,

and the officer or officers entering into the contract shall

be liable to the Government or other contracting party for

any consequent damage to the same extent as if the

transaction had been wholly between private parties.

SECTION 49. Countersigning of Warrants or Checks

by Auditors . — No warrant or check shall be paid by the

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