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PUBLIC ACCOUNTABILITY

The Philippine Constitution emphasizes the importance of accountability in the government.


Article XI simply and bluntly begins:
Public office is a public trust,
officials and employees should serve the people with responsibility, integrity, loyalty
and efficiency.
In the government budget cycle, accountability is laid down by the need for government
agencies and departments submit:
quarterly and monthly income statements;
statements of allotment, obligations and balances along with other financial reports and
documents
audit - a formal process whereby the authenticity, accuracy and reliability of financial
Financial Auditing - financial transactions and accounts are checked to ensure the submitting
government agency has complied with the rules and regulations, specifically the pre-agreed and
government accounting system
Performance Auditing whereby one is looking at the systems of the agency to assess it has
delivered on its institutional purpose and mandate by linking the budgets with results or results-
based budgets.
An internal audit -an internal check on agency systems and processes.
External Auditing involves an outside audit body being brought in to look at the agency.
Pre-auditing refers to auditing by agencies before approval of transactions while post-auditing
is auditing by an independent body after.
Government accountability agencies
1. Office of the Ombudsman
protectors of the people who shall act promptly on complaints filed against officers or
employees of the government including members of the Cabinet, local government units and
government-owned and controlled corporations and enforce their administrative, civil and
criminal liability in every case where the evidence warrants in order to promote efficient service
by the government to the people.
Section 13 of Republic Act 6770 or the Ombudsman Act of 1989 states it shall give priority to
high-profile complaints to high-ranking and supervisory officials involved with grave offenses
and large sums of money and/or properties.
The Ombudsman does not only cover officials and employees of the government, but also
private individuals who have participated or in conspiracy with them in the filed complaints.
2. Sandiganbayan
The Sandiganbayan, or the governments anti-graft court, is mandated by the 1973 and 1987
Constitutions
criminal and civil cases against graft and corrupt practices and other offenses committed
by public officers and employees with Salary Grade 27 and above,
employees in local government units and government-owned or controlled corporations,
which are related to their official duties as determined by law.
Crimes and civil cases filed against public officers below Salary Grade 27 are covered by
the Regional Trial Court but Sandiganbayan is vested with Appellate Jurisdiction over its
final judgments, resolutions or orders.
Private individuals can also be sued before this special court if they are alleged to be in
conspiracy with public officers. The Sandiganbayan is also entrusted to have original
exclusive jurisdiction over special laws such as
RA 3019 (Anti-graft and Corrupt Practices Law),
RA 1379 (Forfeiture of Illegally Acquired Wealth),
Batasang Pambansa 871. An Act Amending Articles Two Hundred Ten
And Two Hundred Eleven Of Act Numbered Thirty-eight Hundred And
Fifteen, Otherwise Known As The Revised Penal Code, As Amended, To
Increase The Penalty For The Offense Of Bribe

3. Presidential Anti-Graft Commission
The Presidential Anti-Graft Commission (PAGC) is mandated by Executive Order No. 12
assist the President in the campaign against graft and corruption.
It investigates and conducts hearings of administrative cases and complaints
against Presidential appointees in the Executive Branch with Salary
Grades 26 and higher
members of the Armed Forces of the Philippines
Philippine National Police of directed by the President,
government-owned and controlled corporations
public officers, employees and private persons in conspiracy with alleged
public officials.
PAGCs jurisdiction includes the following laws: RA 3019, RA 1379,
6713 - AN ACT ESTABLISHING A CODE OF CONDUCT AND ETHICAL
STANDARDS FOR PUBLIC OFFICIALS AND EMPLOYEES, TO UPHOLD THE
TIME-HONORED PRINCIPLE OF PUBLIC OFFICE BEING A PUBLIC TRUST,
GRANTING INCENTIVES AND REWARDS FOR EXEMPLARY SERVICE,
ENUMERATING PROHIBITED ACTS AND TRANSACTIONS AND PROVIDING
PENALTIES FOR VIOLATIONS THEREOF AND FOR OTHER PURPOSES

E.O. 292. INSTITUTING THE "ADMINISTRATIVE CODE OF 1987"


4. Civil Service Commission
The Civil Service Commission (CSC) is the central personnel agency of the government and
is tasked in the recruitment, building, maintenance and retention of a highly-competent and
professional workforce. It is also one of the three independent commissions established by
the Constitution with adjudicative powers to render final disputes and personnel actions on
Civil Service. It covers all national government agencies, local government units and
government-owned and -controlled corporations.
5. Commission on Audit
The Commission on Audit (COA) is the constitutional commission mandated to be the
supreme audit institution of the government. It has jurisdiction over national government
agencies, local government units, government-owned and controlled corporations and non-
government organizations receiving benefits and subsidies from the government.
The Constitution identified the following functions for the Commission:
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;
1. 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;
2. Submit annual reports to the President and the Congress on the financial condition and
operation of the government;
3. Recommend measures to improve the efficiency and effectiveness of government
operations;
4. Keep the general accounts of government and preserve the vouchers and supporting
papers pertaining thereto;
5. Decide any case brought before it within 60 days;
6. Perform such other duties and functions as may be provided by law. COA, as the other
constitutional commissions are mandated, is headed by a Chairman and two
Commissioners appointed by the President and the Commission on Appointments of
Congress. It also enjoys fiscal autonomy which means its appropriations must be released
regularly and automatically. The Commission also deploys resident auditors in all
national government agencies, local government units and government-owned and
controlled corporations pursuant to its mandate to review each agencys financial
operations in a risk-based audit approach.

COA reports
1. Regular Annual Audit Report of each NGA, LGU and GOCC
2. Consolidated Annual Financial Report for NGAs, LGUs and GOCCs
3. Special Audit Reports
4. Circulars and other Issuances
The Annual Audit Reports contain the results of the audit conducted on the financial
statements submitted by agencies, local government units and government-owned and
controlled corporations to COA auditors. The results are shown in the form of audit opinions
indicating how the agencies faired with their financial statements at the end of each fiscal
year. The types of audit opinions are: Unqualified (U), Qualified (Q), Adverse (A) and
Disclaimer (D).
The Consolidated Annual Financial Reports on the other hand show the financial
performance of the public sector in general. Each level has a volume of the consolidated
financial report, one each for NGAs, LGUs and GOCCs. These are based on the audit reports
of each entity. These reports contain the financial condition and highlights of agencies, local
government units and government corporations. These reports also reflect the financial
resources of the government, even the off-budget accounts or funds that are not subject to
annual appropriations. Interestingly, these reports are the only source where one can be
informed about funds that are not sourced out from appropriations.
Special Audit Reports are purposely for investigation, in response to a request by interested
parties or by a directive from Congress. The Commission has already undergone special audit
reports on the countrys outstanding debt and special purpose funds such as the Agriculture
and Fisheries Modernization Act and procurement of the Department of Public Works and
Highways.
The Government Accountancy and Financial Management I nformation System
(GAFMI S)
is a financial database which keeps the general accounts of the government.
the appropriations are verified and allotment releases to agencies are ensured not to
exceed the appropriations. From the Department of Budget Management (DBM), copies
of Agency Budget Matrices (ABM) and Special Allotment release Orders (SARO) are
submitted to GAFMIS and these make up the Registry of Appropriations and Allotments.
it assists government agencies with the Electronic New Government Accounting System
(e-NGAS). It is a computerized program of the New Government Accounting System
wherein budget transactions, allotments and obligations are recorded and monitored
electronically.
It also helps in streamlining the New Government Accounting System which provides the
new accounting policies in the government. Some of the basic features of the new system
are the Accrual accounting and One-fund concept.
Internal control and the internal control system
Internal control is defined as a process effected by an organization's structure, work and
authority flows, people and management information systems which are designed to help it
accomplish its goals. It is a means by which an organization's resources are directed,
monitored, and measured. It plays an important role in preventing and detecting fraud and
protecting the organization's resources.
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Internal audit is an integral part of internal control.
It maintains efficiency and effectiveness in operations. It looks at the reliability of financial
transactions in reports by making sure that they are in accordance with rules and regulations.
Several provisions in the Philippines have signified the internal control in the government
such as Section 123 of the amended Presidential Decree 1445, the Administrative Code 1987
and Government Accounting and Auditing Manual guided by worldwide standards thru the
International Organization for Standardization (ISO) and International Organization for
Supreme Audit Institutions (INTOSAI). The INTOSAI also formulated standards for the
internal control systems in the public sector. It has emphasized that internal control systems
shall be in line with the characteristics, values and context of the public organizations.
In line with these provisions, the Government has formulated the National Government
Internal Control System (NGICS) through the efforts of the DBM and resource and reference
panels from various government agencies. It serves as a guide to government agencies in
putting up internal control systems. It aims to strengthen accountability, safeguard assets,
promote efficiency, economy and effectiveness in the operations and adhere with the policies
of the organization.
Issues and limitations

The audit and accountability system in the Philippines have issues and limitations that affect the
status of checks and balances in the countrys financial resources.
A comparative assessment of government accountability agencies has identified the following
factors that affect the performance of their operations:
1. Personnel, budget and organization
As of September 2009, the Ombudsman has 1,007 employees, 30 percent of whom are lawyers
and 70 percent are investigators, technical and administration staff. The agency experiences
difficulty in hiring good lawyers due to uncompetitive salaries against the private sector.
Likewise, Sandiganbayan lacks human resources while CSC lacks sufficient budget for salaries
and programs. In PAGC, it is reported that employees have no security of tenure. Akbayan
Representative Risa Hontiveros-Baraquel also reported that the COA had its budget cut by
government in 2009
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even though this is technically illegal since it has fiscal autonomy from the
administration under the Constitution.
Other organizational problems that were reported to exist were the unclear organizational goals,
lack of prioritization among concerns and values that are not service-oriented.
2. Questions over political neutrality
The Office of the Ombudsman has been continuously involved in controversy. Ombudsman
Merceditas Gutierrez has been accused of being unduly influenced by Malacanang Palace
something she denies. PAGC is also seen as being very political but then again it is a
presidential and not a constitutional body.
3. Cooperation among agencies and the public
The Sandiganbayans performance on cases was said to be affected by a lack of cooperation
with other accountability agencies such as the Ombudsman, PAGC, Court of Appeals and Court
of Tax Appeals. These agencies have imposed programs that encourage the public to be vigilant
about the unethical behavior of public officials yet they have been receiving little feedback from
them.
4. Backlog of cases
According to CENPEGs study on the effectiveness of the judicial system in combating
corruption
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, The Ombudsman and Sandiganbayan are both overloaded with a large number of
pending cases every year. The Ombudsman had a total of 78,700 old and new criminal and
administrative cases filed between 2001 and May 2006 while the Sandiganbayan had 7,324 cases
out of which 1,700 were dismissed. The majority of the cases (3,909 or 53.4 percent) are still
pending as of December 2008. Out of the total cases filed at Sandiganbayan, staggering numbers
of only 0.6 percent ended in convictions: There is also an issue that complaints against high-
profile officials are few, their cases do not move, and that only so-called small fish were
being prosecuted.
On COAs mandate, the accounting and auditing system
The late Professor Emilia Boncodin stressed some issues on COAs mandate and the accounting
and auditing system of the government. These are the following:
1. Auditing is not based on the budget
The audit system looks only at the agencys compliance with the accounting standards and laws
in the financial reports instead of finding if the agencies have properly allocated their
appropriated budgets.

2. Reporting of GOCCs entire budget
What is reported in the government budget documents regarding the GOCCs are the budgetary
support to government corporations or subsidies only. Yet, COA audits the corporate operating
expenses or the entire budget of government corporations.

3. Lax in penalizing because COA is limited to recommendatory functions only
Adverse/Disclaimer audit opinions and recommendations by COA to government agencies do
not have the corresponding penalties or sanctions if they are not acted upon and followed. An
example is DPWHs audit report where it has been given an adverse opinion for the past 16
years.

4. Pre-audit vs. Post-audit
Each type of audit has its own problems. Post-audit is disadvantageous because it involves final
evaluation of financial transactions that is after the funds have already been disbursed. Pre-audit
however, ironically defeats the overall essential purpose of auditing because financial
transactions are assessed beforehand. In the past, COA had been operating on post-audit basis
since 1995 until 2009 when COA Circular 2009-002 reinstituted the selective pre-auditing due to
the rising incidents of anomalous disbursements. However, Circular 2009-003 in June 16, 2009
suspended some of the provisions in the earlier circular to ensure uniformity and consistency in
its implementation.
On COA reports
1. Timeliness
COAs deadline on the submission of reports is not parallel to the schedule of budget
preparation. Audit and financial reports must be submitted by end of September while budget
preparation time ends in July when the Congress session opens. The timings would thus work
best if reversed since the reports should serve as aids in reviewing the agencies budgets in time
for budget legislation. Given the reality, the value of COAs reports being used as tools to
determine the status of government entities in terms of financial performance and compliance
with rules are nullified.

2. Completeness
Audit reports of agencies are not completed on time due to inability of personnel and time
constraints. In effect, this puts problems in reviewing the budget and in making the annual
financial reports.

3. Availability
Although COAs website is useful in terms of the reports posted, many reports from agencies
including those from LGUs and GOCCs are currently missing.

4. Contestability of findings
There are issues on COAs findings on its reports. First is that the some of the past findings have
not been resolved yet or the so-called hereditary balance sheets. An example is the
disallowances that must be deducted by agencies to employees. However, these have not been
resolved even if some personnel have already left the service or died. Secondly, there is the
inconsistency of audit rules by resident auditors. In some agencies, the rules of past auditors and
new auditors differ like deductions that were not present in the past have already been installed at
the time the new auditor comes to office. The third issue is the unreasonable application of rules
and regulations in auditing. Some expenses are disallowed even if it yields good results. The last
issue is the inability of auditors to understand the situation of agencies operations. The
operations have complexities that emergencies become inevitable and it is hard for them to look
at the reasons for the issues in operations.

5. Feasibility of recommendations
The COAs recommendations on reports are not always being followed by agencies and these
are already beyond the control of the institution.

6. Conflict of interest
COA auditors are still considered as mere mortals that may experience biases, influences and
errors in judgment. There are often claims that some auditors are complicit in bribery and graft.
On internal control and the internal control system
The NGICS has identified the following limitations of internal control:
Human error, i.e., errors in judgment such as internal auditors biases/conflict of interest,
negligence, misunderstanding, fatigue, distraction, collusion, abuse, etc.
1. Shifts in government policies or programs
2. Resource constraints
3. Organizational changes; and
4. Management attitude
International accountability mechanisms
There have been evidence-based evaluations of public expenditure practices of governments,
including the Philippines, thru the international indexes of different programs from international
agencies:
Open Budget I ndex (OBI )
The Open budget Index is an advocacy of the International Budget Partnerships (IBP) Open
Budget Initiative promoting public access to budget information and adopting accountable
budget system.
The open budget index survey is being demonstrated in 85 countries around the world, one of
which is the Philippines, to determine if information is publicly available and to monitor the
practice of budget execution. The survey is formulated to measure the following aspects of the
budget system:
Dissemination of budget information
1. Executives annual budget proposal
2. Availability of other information
3. Budget process
Questions in the survey are further segmented into the following:
Executives budget proposal
a. Citizens budget
b. Pre-budget statement
c. In-year reports
d. Mid-end review
e. Year-end report
f. Audit report
In the report of the 2008 Open Budget Survey, findings show that 80 percent of the worlds
governments do not provide adequate budget information to citizens. Most countries have weak
formal oversight institutions. They have recommended some immediate measures to the
governments to improve budget transparency and accountability:
Disseminate budget information in forms and through methods and media that are
understandable and useful to the wider population. This should include disseminating
information through radio or other broadcast media, and in languages spoken by the majority of
the population.
1. Institutionalize mechanisms for public involvement in the budget process, including
public hearings during formulation and discussion of the Executives budget proposal,
and at regular intervals throughout the budget cycle.
2. Expand opportunities for media coverage of the budget process, for example, by opening
budget hearings to journalists or broadcasting these hearings on radio, television, and the
Internet.
3. Support relevant reforms to improve the independence and capacity of the legislature and
supreme audit institution to play their formal oversight role. Reforms should address the
political and financial independence of these institutions, as well as their analytical
capacity, access to the executive, and other legal powers required to fulfill their mandate.
4. Build effective public finance information systems that enhance the quality and
timeliness of available budget information, for example, through the use of clear,
standardized classification systems and appropriate Information Technology (IT).
Public Financial Management-Performance Measurement Framework
The PFM-Performance Measurement Framework is a project of the Public Expenditure and
Financial Accountability (PEFA) partnership composed of the World Bank, European
Commission, and the Department for International Development of the United Kingdom, the
Swiss State Secretariat for Economic Affairs, the French Ministry of Foreign Affairs, the Royal
Norwegian Ministry of Foreign Affairs, and the International Monetary Fund. It aims to support
integrated and harmonized approaches to assessment and reform in the field of public
expenditure, procurement and financial accountability.
The Framework was developed to assess and develop essential public financial management
systems. The following are the critical dimensions that serve as indicators in the performance of
an open and orderly public financial management system.
Credibility of the budget
1. Comprehensiveness and transparency
2. Budget cycle
a. Policy-based Budgeting
b. Predictability and Control in Budget Execution
c. Accounting, Recording and Reporting
d. External Scrutiny and Audit
Donor Practices
Report on the observance of standards and codes of fiscal transparency
The Fiscal ROSC is a project of the International Monetary Fund which takes a look at how the
countries observe the international standards and codes. It focuses on twelve areas, one of which
is fiscal transparency.
The Code of Good Practices on Fiscal Transparency is based on the following principles
Roles and responsibilities in government should be clear.
Information on government activities should be provided to the public.
Budget preparation, execution, and reporting should be open.
Fiscal information should attain widely accepted standards of data quality and be subject
to independent assurances of integrity. Philippine Public Transparency Reporting
Project

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