PRESIDENTIAL DECREE No. 1445 ORDAINING AND INSTITUTING A GOVERNMENT AUDITING CODE OF THE PHILIPPINES
TITLE II GOVERNMENT AUDITING
CHAPTER 1 BASIC POLICIES AND STANDARDS
Section 53. 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.
The conduct of government audit shall conform with the auditing standards set forth in the following three sections.
Section 54. 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 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.
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 55. Examination and evaluation standards. - 1. The audit work shall be adequately planned and assistants shall be properly supervised.
2. A review shall be made of compliance with legal and regulatory requirements.
3. An evaluation shall be made of the system of internal control and related administrative practices to determine the extent they can be relied upon to ensure compliance with laws and regulations and to provide for efficient, economical and effective operations.
4. The auditor shall obtain through inspections, observation, inquiries, confirmation and other techniques, sufficient competent evidential matter to afford himself a reasonable basis for his opinions, judgments, conclusions, and recommendations.
Section 56. Reporting standards. - 1. Audit reports shall be dated, signed manually and shall be issued and distributed in the manner provided by regulations of the Commission.
2. Audit reports shall contain basically the transmittal statement, scope and objectives of the audit and time period examined highlights, financial information, findings, recommendations and conclusions as well as other data that may provide the management of the audited agency with the necessary input for the decision-making process. Tables, charts, graphs and other data to detail the conditions and facts shall be used in proper cases.
3. Audit reports shall meet the following reporting criteria:
(a) Factual matter must be accurately, completely and fairly presented.
(b) Findings must be presented objectively and in language as clear and simple as the subject matter permits.
(c) Findings must be adequately supported by evidence in the audit working papers.
(d) Reports must be concise yet complete enough to be readily understood by the users.
(e) Information on underlying causes of problems must be included so as to assist in implementing or devising corrective actions.
4. Audit reports shall:
(a) Put primary emphasis on improvement; critical comments shall be presented in balanced perspective, recognizing unusual difficulties or circumstances faced by officials concerned.
(b) Identify and explain issued and questions needing further study and consideration by the auditor, the agency or others.
(c) Include recognition or noteworthy accomplishments particularly when management improvements in one area or activity may be applied elsewhere.
(d) Include recognition of the views of responsible officials of the agency audited on the auditors findings, conclusions and recommendations. Except where the possibility of fraud or other compelling reason may require different treatment, the auditor's tentative findings and conclusions should be reviewed with officials. When possible, without undue delay, their view should be obtained in writing and objectively considered and presented in the final report.
(e) State whether any significant pertinent information has been omitted because it is deemed confidential. The nature of such information should be described and the law or other basis under which it is withheld should be stated.
5. Audit reports accompanying financial reports shall:
(a) State whether the audit was made in accordance with generally accepted auditing standards, and shall disclose the omission of any auditing procedure generally recognized as normal or deemed necessary by him under the circumstances of a particular case, as well as the reasons for the omission. Nothing in this section, however, shall be construed to imply authority for the omission of any procedure which auditors would ordinarily employ in the course of audit.
(b) Express the auditor's opinion with respect to
i. whether the financial report have been presented fairly in accordance with applicable laws and regulations and the generally accepted accounting principles applied on a consistent basis.
ii. material changes in accounting principles and practices and their effect on the financial reports.
(c) Identity any matter to which he takes exception and shall specifically and clearly state his exceptions together with a statement on the effect thereof, to the extent practicable, on the related financial report.
(d) Contain appropriate supplementary explanatory information about the contents of the financial report as may be necessary for full and informative disclosure about the financial operations of the agency audited.
(e) Explain violations of legal or other regulatory requirements, including instances of non-compliance.
CHAPTER 2 AUDIT OBJECTIVES
Section 57. Determination of audit procedures. In the determination of auditing procedures and techniques to be followed and the extent of examination of vouchers and other documents by government auditors, the Commission shall give due regard to generally accepted principles of auditing and accounting organizations and systems, including consideration of the effectiveness of internal control and related administrative practices of the audited agencies.
Section 58. Audit of assets. The examination and audit of assets shall be performed with a view to ascertaining their existence ownership, valuation and encumbrances as well as the propriety of items composing the respective asset accounts, determining their agreement with records, proving the accuracy of such records; ascertaining if the assets were utilized economically, efficiently and effectively; and evaluating the adequacy of controls over the accounts.
Section 59. Audit of Liabilities. In his audit of liabilities the auditor shall seek to establish that all obligations of the agency have been accurately recorded; only bona fide obligations of the agency have been included; the obligations incurred are properly authorized; all provisions of trust indentures or mortgages are complied with; and mortgages and other encumbrances are fully disclosed.
Section 60. Audit of revenue accounts. The examination and audit of revenue accounts shall be performed with a view to ascertaining that earned revenues have been duly recorded; and all recorded revenues have been earned and appropriate classifications of revenues have been consistently followed.
Section 61. Audit of expense accounts. The examination of expense accounts shall be undertaken to ascertain that all expenses incurred have been duly authorized; adequately funded and documented; properly recorded; all recorded expenses have been actually incurred; and the classifications of expenses are appropriate and have been consistently followed.
Section 62. Audit of surplus or networth. The audit of surplus or networth shall seek to determine the nature of the surplus, whether current or invested surplus; the amount of current surplus available to cover appropriations for the operational expenses of the government, the propriety of the ledger accounts and balance sheet presentation account; and the proper authority and recording of changes in the capital structure made during the period under audit.
CHAPTER 3 RECEIPT AND DISPOSITION OF FUNDS AND PROPERTY
Section 63. Accounting for moneys 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 64. Designation of collecting officers for government agencies. The head of an agency may designate such number of collecting officers or agents may be deemed necessary. They shall render reports of their collections, under the regulations of the Commission, to be submitted promptly to the auditor concerned who shall conduct the necessary examination land audit within thirty days from receipt thereof.
Section 65. Accrual of income to unappropriated surplus of the General Fund. (1) Unless otherwise specifically provided by law, income accruing to the agencies by virtue of the provisions of law, orders and regulations shall be deposited in the National Treasury or in any duly authorized government depository, and shall accrue to the unappropriated surplus of the General Fund of the Government.
(2) Amounts received in trust and from business-type activities of government may be separately recorded and disbursed in accordance with such rules and regulations as may be determined by a Permanent Committee composed of the Secretary (Minister) of Finance as Chairman, and the Commissioner of the Budget and the Chairman, Commission of Audit, as members.
Section 66. Special, Fiduciary and Trust Funds. Receipts shall be recorded as income of Special Fiduciary of Trust Funds or Funds other than the General Fund only when authorized by law as implemented by rules and regulations issued by the Permanent Committee created in the preceding section.
Section 67. Warrants and checks receivables in payment for taxes or other indebtedness to the government. - 1. An office charged with the collection of revenue or the receiving of moneys payable to the government shall accept payment for taxes, dues or other indebtedness to the government in the form of checks and warrants issued in payment of government obligations, upon proper indorsement and identification of the payee or indorsee. Checks drawn in favor of the government in payment of any such indebtedness shall likewise be accepted by the officer concerned.
2. When a check drawn in favor of the government is not accepted by the drawee bank for any reason, the drawer shall continue to be liable for the sum due and all penalties resulting from delayed payment. Where the reason for non-acceptance by the drawee bank is insufficiency of funds, the drawer shall be criminally liable therefore.
3. At no instance should money in the hands of the collecting officer be utilized for the purpose of encashing private checks.
Section 68. Issuance of Official receipt. - 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.
2. Where mechanical devices are used to acknowledge cash receipts, the Commission may approve, upon request, exemption from the use of accountable forms.
Section 69. Deposit of moneys in the treasury. - 1. Public officers authorized to receive and collect moneys arising from taxes, revenues, or receipts of any kind shall remit or deposit intact the full amounts so received and collected by them to the treasury of the agency concerned and credited to the particular accounts to which the said moneys belong. The amount of the collections ultimately payable to other agencies of the government shall thereafter be remitted to the respective treasuries of these agencies, under regulations which the Commission and the Department (Ministry) of Finance shall prescribe.
2. When exigencies of the service so require, under such rules and regulations as the Commission and the Department (Ministry) of Finance may prescribe, postmasters may be authorized to use their collections to pay money orders, telegraphic transfer and withdrawals from the proper depository bank whenever their cash advance funds for the purpose have been exhausted. The amount of collections so used shall be restored upon receipt by the postmaster of the replenishment of his cash advance.
3. Pending remittance to the proper treasury, collecting officers may temporarily deposit collections received by them with any treasury, subject to regulations of the Commission.
4. The respective treasuries of those agencies shall in turn deposit with the proper government depository the full amount of the collections not later than the following banking day.
Section 70. Acknowledgment of receipt for funds. Under such rules and regulations as the Commission and the Department (Ministry) of Finance may prescribe, the Treasurer of the Philippines and all authorized depository banks shall acknowledge receipt of all funds received by them, the acknowledgment bearing the date of actual remittance or deposit and indicating from whom and on what account it was received.
Section 71. Creditors' unclaimed balances. - 1. There shall be maintained in the books of the Commission an account designated "Creditors' Unclaimed Balances" to the credit of which shall be deposited all moneys for which there is no present rightful claimant. Money accruing to this account shall be held exclusively for the payment of pertinent obligations against it, when certified by the Commission, not in excess of the respective amounts which accrued to that account by reason of these obligations.
2. After remaining unclaimed for a period of ten years, money in this account shall revert as treasury funds, to the agency that made the deposit, or, in the absence thereof to the national government.
Section 72. Shipment of government funds or property by carrier; notation of evidence of loss. When government funds or property are transported from one place to another by carrier, it shall be upon proper bill of lading or receipt from the carrier, it shall be the duty of the consignee or his representative to make full notation of any evidence of loss, shortage, or damage, upon the bill of lading or receipt before accomplishing it.
Section 73. Credit for loss occurring in transit or due to casualty or forces majeure. - 1. When a loss of government funds or property occurs while they are in transit or the loss is caused by fire, theft, or other casualty or force majeure, the officer accountable therefore or having custody thereof shall immediately notify the Commission or the auditor concerned and, within thirty days or such longer period as the Commission or auditor may in the particular case allow, shall present his applicable for relief, with the available supporting evidence. Whenever warranted by the evidence credit for the loss shall be allowed. An officer who fails to comply with this requirement shall not be relieved of liability or allowed credit for any loss in the settlement of his accounts.
2. The Commission shall promulgate rules and regulations to implement the provisions of this section.
Section 74. Monthly reports of depositories to agency head. At the close of each month, depositories shall report to the agency head, in such from as he may direct, the condition of the agency account standing on their books. The head of the agency shall see to it that a reconciliation is made between the balance shown in the reports and the balance found in the books of the agency.
Section 75. Transfer of funds from one officer to another. Transfer of government funds from one officer to another shall, except as allowed by law or regulation, be made only upon prior direction or authorization, of the Commission or its representative.
Section 76. Transfer of property between government agencies. Any government property that is no longer serviceable or needed by the agency to which it belongs may be transferred without cost, or at an appraised value, to other agencies of the government upon authority of the respective heads of agencies in the national government, or of the governing bodies of government-owned or controlled corporations, other self-governing boards or commissions or the government, or of the local legislative bodies for local government units concerned.
Section 77. Invoice and receipt upon transfer of funds or property. When government funds or property are transferred from one accountable officer to another, or from an outgoing officer to his successor, it shall be done upon properly itemized invoice and receipt which shall invariably support the clearance to be issued to the relieved or out-going officer, subject to regulations of the Commission.
Section 78. Disposition of funds or property held by deceased, incapacitated, absconding, or superseded accountable officer. - 1. When an officer, accountable for government funds or property absconds with them dies, or becomes incapacitated in the performance of his duties, the proper agency head shall designate a custodian to take charge of the funds or property until a successor shall have been appointed and qualified. The agency head may appoint a committee to count the cash and take an inventory of the property for which the officer was accountable and to determine the responsibility for any shortage therein. One copy of the inventory and of the report of the Committee duly certified shall be filed with the Commission but the findings of the committee shall not be conclusive until approved by the Commission or its duly authorized representative.
2. If the absconding, deceased, incapacitated, or superseded officer is accountable for funds or property of a province or city, the custodian and committee shall be designated by the Minister (Secretary) of Finance, and if accountable for municipal or barrio (barangay) funds or property, by the provincial treasurer. In all other respects, the above-prescribed proceedings shall be observed.
3. If the absconding, deceased, incapacitated, or superseded officer is responsible to another who is accountable, the latter may himself designate the committee or take other lawful measures for the protection of his interest.
Section 79. Destruction or sale of unserviceable property. When government property has become unserviceable for any cause, or is no longer needed, it shall, upon application of the officer accountable therefor, be inspected by the head of the agency or his duly authorized representative in the presence of the auditor concerned and, if found to be valueless or unsalable, it may be destroyed in their presence. If found to be valuable, it may be sold at public auction to the highest bidder under the supervision of the proper committee an award or similar body in the presence of the auditor concerned or other duly authorized representative of the Commission, after advertising by printed notice in the Official Gazette, or for not less than three consecutive days in any newspaper of general circulation, or where the value of the property does not warrant the expense of publication, by notices posted for a like period in at least three public places in the locality where the property is to be sold. In the event that the public auction fails, the property may be sold at a private sale at such price as may be fixed by the same committee or body concerned and approved by the Commission.
Section 80. Final report of accountable officers. - 1. An accountable officer, upon ceasing to act in his official capacity as such, shall submit to the auditor of the agency concerned a report of his accountability.
2. Any remaining balance of such accountability shall be deposited in the proper treasury without unnecessary delay.
Section 81. Auditor's certificate of balance. Auditors of all government agencies, shall certify the balances arising in the accounts settled by them to the Commission and to the proper treasurer, collecting officer, or disbursing officer, in such form as the Commission may prescribe, within sixty days from the date of receipt of those accounts from the treasurer, collecting officer, or disbursing officer concerned.
Section 82. Auditor's notice to accountable officer of balance shown upon settlement. The auditor concerned shall, at convenient intervals, send a written notice under a certificate of settlement to each officer whose accounts have been audited and settled in whole or in part by him, stating the balances found due thereon and certified, and the charges or differences arising from the settlement by reason of disallowances, charges, or suspensions. The certificate shall be properly itemized and shall state the reasons for disallowance, charge, or suspension of credit. A charge of suspension which is not satisfactorily explained within ninety days after receipt of the certificate or notice by the accountable officer concerned shall become a disallowance, unless the Commission or auditor concerned shall, in writing and for good cause shown, extend the time for answer beyond ninety days.
Section 83. Transcript of auditor's record as evidence of liability. In any criminal or civil proceeding against an officer for the embezzlement or misappropriation of government funds or property, or to recover an amount due the government from an accountable officer it shall be sufficient, for the purpose of showing a balance against him, to produce the working papers of the auditor concerned. A showing in this manner of any balance against the officer shall be prima facie evidence of the misappropriation of the funds or property unaccounted for or of civil liability of the officer as the case may be. The existence or contents of bonds, contracts, or other papers relating to or connected with the settlement of any account may be proved by the production of certified copies thereof but the court may require the production of the original when this appears to be necessary for the attainment of justice.
CHAPTER 4 APPLICATION OF APPROPRIATED FUNDS
Section 84. 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 law, 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 Minister (Secretary) of Finance as recommended by the Treasurer of the Philippines.
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 (Minister) of Finance, shall not be construed as disbursements of funds.
Section 85. 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.
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 appropriation account.
Section 86. 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 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 fiscal 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 87. Void contract and liability of officer. Any contract entered into contrary to the requirements of the two 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 88. Prohibition against advance payment on government contracts. - 1. Except with the prior approval of the President (Prime Minister) the government shall not be obliged to make an advance payment for services not yet rendered or for supplies and materials not yet delivered under any contract therefor. No payment, partial or final, shall be made on any such contract except upon a certification by the head of the agency concerned to the effect that the services or supplies and materials have been rendered or delivered in accordance with the terms of the contract and have been duly inspected and accepted.
2. Notwithstanding the foregoing paragraph, any government agency, with the approval of the proper department head, may furnish supplies and materials to any party who has a contract with that agency if the supplies and materials are needed in the performance of the services being contracted for and the value thereof does not exceed in any one month ten percent of the value of the services already rendered due and unsettled as computed by the agency concerned.
Section 89. Limitations on cash advance. No cash advance shall be given unless for a legally authorized specific purpose. A cash advance shall be reported on and liquidated as soon as the purpose for which it was given has been served. No additional cash advance shall be allowed to any official or employee unless the previous cash advance given to him is first settled or a proper accounting thereof is made.
Section 90. Payment of rewards. When a reward becomes payable by authority of law for information given relative to any offense or for any act done in connection with the apprehension of the offender, the reward shall, in the absence of special provisions, be paid in such manner as shall be prescribed by executive order. The final determination by the proper administrative authority pursuant to law or any such order, as to whether or not the persons concerned are entitled to any reward and the amount thereof, shall be conclusive upon the executive agencies concerned as regards the liability of the government.
Section 91. Payments to creditors. Payments to creditors shall be made only upon the specific approval of the head of the agency concerned or his duly authorized representative, or if there be no such officer, upon the approval of the department head endorsed upon the warrant or check or voucher effecting the payment.
Section 92. Persons authorized to draw warrants or checks for payment out of government funds. - 1. Warrants upon the National Treasury or checks draw against duly authorized bank accounts shall be drawn by the agency head having control of the appropriation or fund against which the warrants or checks are chargeable, or by such subordinate officer as shall be designated for that duty by the said agency head, who shall all be duly deputized for the purpose by the Treasurer of the Philippines. Copies of the designation shall be furnished the Treasurer of the Philippines and the representative of the Commission. Notice shall likewise be given to the Treasurer of the Philippines and the Commission when the designation is revoked. No member of the accounting unit or the internal control unit of the agency may be designated to perform the duty.
2. Warrants chargeable to national appropriations or funds not under the control of an agency shall be drawn by such officer as shall be specified by law, or, in the absence of that officer, by an officer designated by the President (Prime Minister).
Section 93. To whom warrants or checks payable. Warrants chargeable to revenue or trust funds of the national government or checks drawn against the Treasury Checking Account for Agencies maintained with any government depository shall be made payable either directly to the creditor to whom the money is due or to a disbursing officer for official disbursement.
Section 94. Countersigning of warrants or checks by auditors. No warrant or check shall be paid by the Treasurer of the Philippines, local treasurer, or any government depository unless it is countersigned by a duly authorized official of the Commission. When in the opinion of the Commission, the interest of the service so requires the warrant or check may be paid without the countersignature under such rules and regulations as it may prescribe from time to time.
Section 95. Treasurer's responsibility for indorsements. The Treasurer of the Philippines shall, within three years from the date of payment by him, be responsible for the indorsements on all warrants and checks and shall retain them in his custody, after which they shall be disposed of under pertinent regulations: Provided, that they are not needed for pending civil, criminal or administrative proceedings.
Section 96. Payment of lost or fraudulently encashed treasury warrants or checks. When any check or warrant is lost, stolen or destroyed, the issuing officer may issue a duplicate check or warrant which shall be paid under regulations of the Commission in regard to issuance and payment and upon the execution of a bond to indemnify the issuing agency in such amount and with such security as the Commission may require.
Treasury Warrant or check encashed under forged or fraudulent indorsement shall be replaced by the Treasurer of the Philippines even before the recovery of the equivalent amount under rules and regulations that the Commission and the Department (Ministry) of Finance shall prescribe.
The Clearing or Payment of Treasury warrant and check paid by bank or other holder in due course and subsequently lost may be allowed under regulations of the Commission and the Department (Ministry) of Finance.
Section 97. Disposition of stale warrants or checks. - 1. A Treasury warrant or check which remains outstanding after two years from date of its issue shall not be paid by the Treasurer of the Philippines or by any duly authorized depository. The issuing agency shall take up in its books of accounts the amount of this warrant or check as surplus adjustment of the fund against which it was previously charged. Upon presentation of a stale warrant or check, the issuing agency shall cancel it and issue to the payee a substitute warrant or check in lieu thereof.
2. Such sum as may be necessary to meet the obligation arising out of the issuance of substitute warrants or checks chargeable against the general fund shall be charged to the current year's General Appropriations law, subject to pertinent budget rules and regulations. Substitute warrants or checks payable from funds other than the general fund shall be paid from the appropriate funds.
Section 98. Reversion of unliquidated balances of accounts payable. The Commission upon notice to the head of agency concerned may revert to the unappropriated surplus of the general fund of the national government, any unliquidated balance of accounts payable in the books of the national government, which has been outstanding for two years or more and against which no actual claim, administrative or judicial, has been filed or which is not covered by perfected contracts on record. This section shall not apply to unliquidated balances of accounts payable in trust funds as long as the purposes for which the funds were created have not been accomplished.
Section 99. Transfer of unexpended balances to the general fund. The Commission may transfer at any time, from moneys appropriated for a specific purpose, to the unappropriated general fund any surplus balance standing to the credit of any appropriation or fund when the officer having administrative control thereof certifies to the Commission that there is a surplus in excess of the requirements, or that the work or purpose for which the appropriation was made has been completed, indefinitely postponed or abandoned, and that there is no outstanding obligation to be paid therefrom.
Section 100. Reports of disbursing officers in a government agency. Disbursing officers in any government agency shall render monthly reports of their transactions pursuant to regulations of the Commission to be submitted not later than the fifth day of the ensuing month to the auditor concerned who shall conduct the necessary examination and audit within thirty days from receipt thereof.
CHAPTER 5 ACCOUNTABILITY AND RESPONSIBILITY FOR GOVERNMENT FUNDS AND PROPERTY
Section 101. Accountable officers; bond requirement. - 1. Every officer of any government agency whose duties permit or require the possession or custody of government funds or property shall be accountable therefor and for the safekeeping thereof in conformity with law.
2. Every accountable officer shall be properly bonded in accordance with law.
Section 102. Primary and secondary responsibility. - 1. The head of any agency of the government is immediately and primarily responsible for all government funds and property pertaining to his agency.
2. Persons entrusted with the possession or custody of the funds or property under the agency head shall be immediately responsible to him, without prejudice to the liability of either party to the government.
Section 103. General liability for unlawful expenditures. Expenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible therefor.
Section 104. Records and reports required by primarily responsible officers. The head of any agency or instrumentality of the national government or any government-owned or controlled corporation and any other self-governing board or commission of the government shall exercise the diligence of a good father of a family in supervising accountable officers under his control to prevent the incurrence of loss of government funds or property, otherwise he shall be jointly and solidarily liable with the person primarily accountable therefore. The treasurer of the local government unit shall likewise exercise the same degree of supervision over accountable officers under his supervision otherwise, he shall be jointly and solidarily liable with them for the loss of government funds or property under their control.
Section 105. Measure of liability of accountable officers. - 1. Every officer accountable for government property shall be liable for its money value in case of improper or unauthorized used or misapplication thereof, by himself or any person for whose acts he may be responsible. He shall likewise be liable for all losses, damages, or deterioration occasioned by negligence in the keeping or use of the property whether or not it be at the time in his actual custody.
2. Every officer accountable for government funds shall be liable for all losses resulting from the unlawful deposit, use, or application thereof and for all losses attributable to negligence in the keeping of the funds.
Section 106. Liability for acts done by direction of superior officer. No accountable officer shall be relieved from liability by reason of his having acted under the direction of a superior officer in paying out, applying, or disposing of the funds or property with which he is chargeable, unless prior to that act, he notified the superior officer in writing of the illegality of the payment, application, or disposition. The officer directing any illegal payment or disposition of the funds or property shall be primarily liable for the loss, while the accountable officer who fails to serve the required notice shall be secondarily liable.
Section 107. Time and mode of rendering account. In the absence of specific provision of law, all accountable officers shall render their accounts, submit their vouchers, and make deposits of money collected or held by them at such times and in such manner as shall be prescribed in the regulations of the Commission.
Section 108. Prohibition against pecuniary interest. No accountable or responsible officer shall be pecuniary interested, directly or indirectly, in any contract or transaction of the agency in which he is such an officer.