City welcomes pre-audit by COA

CEBU, Philippines - Mayor Tomas Osmeña and some other city officials welcomed the move of the Commission on Audit to subject to pre-audit all major government transactions because it will prevent government officials from committing violations of state audit procedures.

The mayor said he is very supportive to the move of the COA officials “even though it takes weeks, sometimes months to get approval”.

Councilor Edgardo Labella said to subject all major government transactions to a pre-audit is good because preemptive measures are much better than just to punish those who failed to comply with the state audit procedures.

Labella, who used to be a director of the Office of the Ombudsman-Visayas, explained that even if the government will criminally charge those who committed graft and corruption, the government resources lost will no longer be recovered.

He said the pre-audit system is a good safeguard against loss of government resources as this would caution public officials against entering into questionable deals that may violate the provision of the state audit rules and regulations.

Labella quoted Article 9 of the Constitution that provides where the internal control system of a government agency is inadequate, COA may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies.

Supervising state auditor Helen Hilayo said effective August 1, 2009 COA will start conducting pre-audits to selected major government transactions, not only in Cebu City but throughout the country, as ordered by the COA officials in Manila.

It was reported that the COA officials have decided to restore the old practice of pre-audit in a bid to check what it described as the “rising incidents of irregular, illegal, wasteful and anomalous” releases of public money and disposal of government property.

Government transactions that will be subjected to a pre-audit will be scrutinized first by the auditors before funds are released and recorded in the government’s books.

The policy of conducting pre-audit was suspended in 1995 and the job of making pre-audit was assigned only to the internal auditors who are also employees of the agency or local government units whose transactions are subject for their scrutiny.

Although senior COA auditors acknowledged the restoration of the pre-audit as a possible deterrent to financial malfeasance, they said they cannot curb the questionable activities of some public officials if no charges are filed in court against them.

A state auditor said they were also discouraged from suspending and disallowing transactions even when they documented some irregularities, but were told only to prepare audit observation reports.

The law provides that all officials of government agencies, including local government units, are required to furnish the state auditors a copy of their perfected contracts and purchase orders within five working days upon their approval, but many officials are not complying with it.

But some government officials said the requirement for a pre-audit system also has disadvantages because it can cause delay the delivery of public services. — Rene U. Borromeo/BRP (THE FREEMAN)