Government agencies are given the opportunity to respond to audit findings of the Commission of Audit and submit additional evidence before COA conducts an exit conference with an agency and writes up its findings as an annual report.
President Rodrigo Duterte overlooked this when he branded COA’s exit conference—he wrongly called it exit “call"— as a “problem” in his Aug. 16 recorded briefing. He said government agencies are told how to address audit results during the exit conference.
The president was taking issue with a COA report flagging deficiencies in the Department of Health’s handling of its P67.3 billion COVID-19 funds.
The president said:
Alam mo kasi ‘yung iyong exit call nila ‘yan ang problema. Kasi ‘yung exit call would point out what needs to --- what needs to be done further to completethe papers, or… Alammo ang COA every now and then maraming regulasyon eh. Naghahabol ang bureaucracy niyan (You know their [COA’s] exit call is a problem. Because the exit call wound point out what needs to—what needs to be done further to complete the papers, or---You know COA has numerous regulations every now and then. The bureaucracy has to catch up with these).
Duterte also urged COA to refrain from auditing ongoing activities, saying supporting documents are still insufficient at that stage. He said:
Ang problema kasi diyan (The problem there), I said, the paper that they are holding, or papers that they are --- in their custody, are really insufficient and deficient kung kailan ang ano. Huwag ka munang mag-audit hanggang hindi pa natapos ang trabaho ko (Do no conduct an audit until the work has been completed).
He further advised COA against flagging agencies or publishing its results, saying this would “condemn” the agencies:
You make a report. Do not flag and do not publish it because it will condemn the agency or the person that you are flagging. The flagging is spelled f-l-a-g-g-e-d (sic).
COA’s Procedures and Work Instructions Manual shows that before the annual audit report of a government agency is drafted, its audit team first communicates all the audit findings to the agency’s management to ensure it got everything “factually correct.” It also asks the agency to submit “additional audit evidence” if the latter disagrees with the findings.
According to the 2016 manual:
The Audit Team discusses each audit finding with the appropriate level of agency management to confirm that the understanding of the nature and cause of the audit finding is factually correct, and what actions the agency can take to prevent an error’s occurrence.
If the agency disagrees that there is an audit finding, the Audit Team asks the agency to support its position by providing additional audit evidence.”
The procedures require the audit team to discuss again with the agency its audit results and recommendations through an exit conference before it drafts the audit report.
The draft audit report goes through a three-tier review before it is finalized and sent to the agency that was audited. The review is undertaken by the supervising auditor or the regional supervising auditor; assistant cluster director or assistant regional director; and the cluster director or the regional director.
Under the 1987 Constitution, COA by and large conducts post-audits on government funds. That means when payments for financial transactions are completed and recorded.
COA defines post-audit as:
the examination of a financial transaction after payment and the recording thereof. It involves the tracing of the transaction to the pertinent books of account. The scope of post-audit work embraces the three components of comprehensive audit, namely, financial and compliance, efficiency and economy, and program results or effectiveness.
COA, however, is empowered under the Constitution to conduct a pre-audit when the internal control system of an audited agency is inadequate to enable it to correct deficiencies. A pre-audit is:
the examination of a financial transaction before payment either through cash, warrant, check, or other instruments.
Annual audit reports have been routinely published on COA’s websites for a decade in keeping with transparency and good governance.
The Constitution also requires COA to submit to the president and Congress an annual report on the government’s financial condition and recommend measures to improve its effectiveness and efficiency.
Commission on Audit. (2016). Procedures and work instructions manual. https://www.coa.gov.ph/phocadownload/userupload/transparency/QMS/COA_QMS_Policies_and_Procedures/COA_QMS_PAWIM.pdf
Commission on Audit. (1982). Circular No. 82–195. https://www.coa.gov.ph/index.php/2013-06-19-13-06-41/1-circulars/category/4484-cy-1982?download=17148:cy-1982&start=20
Presidential Communications Operations Office. (2021, August 16). Talk to the people of President Rodrigo Roa Duterte on Coronavirus Disease 2019 (COVID-19). https://pcoo.gov.ph/wp-content/uploads/2021/08/20210817-Talk-to-the-People-of-President-Rodrigo-Roa-Duterte-on-COVID.pdf