COMMISSION ON AUDIT CIRCULAR NO.

81-162 July 1, 1981

TO

All Heads of Ministries; Chiefs of Bureaus, Agencies and Offices; Managing

Heads of Government-Owned and/or Controlled Corporations; Provincial
Governors and City Mayors; Provincial and City Treasurers; COA Managers and
Regional Directors; Corporate, Provincial, City, Ministry and Bureau Auditors and
Other Heads of Auditing Units and their Assistants; and all Others Concerned.

SUBJECT :

Delineating the Duties and Responsibilities of the Head and the Assistant Head
of the Auditing Unit with respect to the Pre-Audit and Post-Audit of Accounts.

In order to emphasize the importance and enhance the effectiveness of post-audit work
and to provide a counter-check for the inter-related function of pre-audit, the duties and
responsibilities of the Head and Assistant Head of the Auditing Unit with respect to the pre-audit
and post-audit of the accounts of the audited agency are hereunder defined and delineated.
A.

DEFINITION AND SCOPE OF PRE-AUDIT AND POST-AUDIT

1.
Pre-audit is the examination of financial transactions before
consummation. It is basically a Special development of the control aspect of
accountancy. It is an integral part of the accounting and payment process. However, the
findings and determination made therein are tentative in nature as they are subject to
review in post-audit.
Pre-audit operates as follows:
a) determination that the proposed expenditure is for a purpose in
compliance with the appropriation law and other laws and regulations;
b) assurance that sufficient funds are available to enable payment of the
voucher;
c) determination that the proposed expenditure is not unreasonable or
extravagant and that the unencumbered and unexpended balance of
the appropriation it would be charge to is sufficient to cover all probable
costs;
d) determination that the transaction is approved by proper authority and
duly supported by authentic underlying evidences.
2. Post-audit covers the same areas aside from tracing the transaction under
audit to the books of accounts. In general and wherever practical, the scope of postaudit work embraces the three components of comprehensive audit, namely, (a)
financial and compliance,(b) economy and efficiency, and(c) program results or
effectiveness.

B.

DUTIES AND RESPONSIBILITIES OF THE ASSISTANT HEAD OF THE

AUDITING UNIT WITH RESPECT TO PRE-AUDIT

1.
All claims, transactions and accounts which, under existing regulations
are subject to pre-audit, shall be acted upon/approved by the Assistant Head of the
Auditing Unit, and no longer by the Head of the Unit, except as provided in Section F of
this Circular.
2.
Checks and treasury warrants issued in payment of claims and
transactions approved in pre-audit by the Assistant Head of the Auditing Unit shall be
countersigned by him in amounts not exceeding that amount authorized for the
incumbent head of the Unit under COA Circular No. 79-94 dated January 5, 1979, as
amended. If the amount of the check or warrant is in excess of the countersigning
authority of the Assistant Head of the Auditing Unit as herein provided, the same shall be
countersigned by the supervisors concerned, in accordance with the aforecited COA
Circular and other issuances. Unless otherwise provided herein, Heads of Auditing Units
shall not countersign checks or treasury warrants covering claims and transactions
subject to pre-audit.
3.
All other activities related to pre-audit, whether or not the claims and
transactions involved are subject to pre-audit, shall be acted upon or approved by the
Assistant Head of the Auditing Unit and no longer by the Head of the Auditing Unit.
Included in this provision are such matters as acting as witness to public biddings and
other procurement procedures, inspection of properties delivered and projects
completed, review of contracts, and verification of availability of funds. In this regard, the
extent of his authority shall correspond to that granted or delegated to the incumbent
Head of the Auditing Unit under existing COA issuances.
4.
The Assistant Head of the Auditing Unit shall no longer perform functions
pertaining to the post-audit of claims, transactions and accounts which have been acted
upon by him in pre-audit. However, the Head of the Auditing Unit may assign him to
perform post- audit work on claims, transactions and accounts which were
consummated without pre-audit (COA Circular No. 76-26, as amended).
C.

DUTIES AND RESPONSIBILITIES OF .THE HEAD OF THE AUDITING UNIT

WITH RESPECT TO POST-AUDIT

1.
The Head of the Auditing Unit shall concentrate on the post-audit of
claims, transactions and accounts.
2.
The Head of the Auditing Unit shall be responsible for the up-dating of
post-audit, as well as for the preparation of the Certificates of Settlement and Balances
and the Financial Audit Reports, and all other activities related to financial audit.

D.

SUPERVISION OVER THE WORK AND ASSIGNMENT OF PERSONNEL OF

THE AUDITING UNIT

1.
The Head of the Auditing Unit shall continue to exercise direct control and
supervision over his Assistant and all other personnel of the Unit on all aspects of work,
except in the matter of approval or disapproval of transactions subject to pre-audit. He
shall be responsible for the assignments of the personnel of the unit, including those
who will help in the pre-audit work.
2.
In case there are two or more assistant heads in the unit, the Regional
Director/Manager concerned shall, upon consultation with the Head of the Unit,
designate the Assistant Head who shall be responsible for the pre-audit work treated of
in this Circular.
E.

QUERIES AND APPEALS PERTAINING TO PRE-AUDIT

1.
In case of doubt pertaining to the pre-audit action to be taken on claims
and transactions submitted for pre-audit, the Assistant Head of the Auditing Unit may
make formal written queries directly to the immediate supervisor of the Head of the Unit.
Also, queries from claimants or other parties pertaining to the propriety, legality and
validity of claims, transactions and accounts subject to pre-audit, shall be acted upon by
the Assistant Head of the Unit.
2.
Appeals from actions taken by the Assistant Head of the Auditing Unit on
matters pertaining to his pre- audit functions may be taken directly to the Regional
Director/Manager concerned.
F.

EXCEPTIONS TO THE PROVISIONS OF THIS CIRCULAR

1.
The delineation of the duties and responsibilities of the Head and
Assistant Head of the Auditing Unit shall not be applicable or shall be suspended, in the
following cases:
a) in one-man auditing units;
b) in Auditing Units where the rank of Assistant Head is below that of
Auditing Examiner I;
c) in case of the temporary absence either of the Head of the Unit or the
Assistant Head. Thus, where the Assistant Unit Head is absent for not
more than five (5) working days, the Head of the Unit shall perform the
pre-audit functions and all the related pre-audit activities which, in
paragraph B above are assigned to the Assistant Head. However, if
such absence will be for more than five (5) working days, the Head of
the Auditing Unit shall notify immediately the Regional
Director/Manager concerned so that the latter can take appropriate
action under the circumstances. Conversely, in the absence of the Unit

Head, the functions pertaining to post-audit shall be discharged by the

Assistant Unit Head as In- charge of the Unit, except for transactions or
accounts pre-audited by him.
G.

REPEALING CLAUSE AND EFFECTIVITY

1.
COA Circular No. 79-94 dated January 5, 1979, as amended, prescribing
the use of the Manual on Countersigning Authority; COA Circular No. 76-26 dated April
6, 1976, as amended, on the partial withdrawal of pre-audit and full implementation of
post-audit, and all other COA Circulars, Memoranda, rules and regulations which are
inconsistent herewith are hereby repealed, amended, or modified accordingly.
2.
This Circular shall take effect on September 1, 1981 with respect to all
Auditing Units situated within Metropolitan Manila. With respect to Auditing Units outside
Metropolitan Manila, this Circular shall take effect on October 1, 1981.

(SGD.) SILVESTRE D. SARMIENTO, Commissioner

(SGD.) FRANCISCO S. TANTUICO, JR., Acting Chairman