COA

Budget proposal and missing capital funding: COA proposed about PHP 17.2 billion for FY 2027; its NEP allocation was PHP 16.046527 billion, including roughly PHP 14.774 billion in the agency-specific budget and PHP 1.272 billion for retirement and life-insurance premiums. The agency-specific component contained PHP 14.036 billion for personnel services and PHP 737.977 million for operating expenses, with no capital outlay. Against COA's proposal, personnel funding increased by PHP 179.185 million for authorized positions and the fourth salary-standardization tranche, while operating expenses fell by PHP 254.420 million, a reduction concerning first-year information-systems-plan implementation and additional citizen-participatory-audit requirements. Its capital-outlay proposal was not included.

Budget execution: COA reported obligating PHP 14.703 billion of its PHP 15.102 billion allotment in 2025, a 97.36% obligation rate, and disbursing PHP 14.310 billion, or 97.33% of obligations. In the first half of 2026, obligations reached PHP 8.054 billion against a full-year allotment of PHP 15.774 billion, or 51.06%; disbursements were PHP 7.849 billion, or 97.45% of obligations. Unobligated allotments stood at about PHP 398.909 million for 2025 and PHP 7.719 billion at midyear 2026.

Audit reports and publication: COA reported transmitting 2,663 annual audit reports, 43 fraud reports, 10 special reports and three performance reports in 2025. In the first half of 2026, it transmitted 2,605 annual reports, 10 fraud reports, four special reports and three performance reports. It also reported publishing 2,255 annual audit reports in 2025. COA Assistant Commissioner Nilda B. Plaras distinguished transmission from public posting, citing a June 30 transmission deadline and an October 31 publication deadline. She said first-half publication figures were not yet available; the year label in that passage is inconsistent with the surrounding presentation.

Accounting support and case decisions: COA described its reporting to the President and Congress, accounting rules and assistance with government accounting systems. It trained or assisted 3,817 system users in 2025 and 2,148 in the first half of 2026, and reported two circulars in each period. The Commission Proper decided 811 cases in 2025 and 448 in the first half of 2026, alongside decisions at the national, corporate and local-government audit-sector levels.

Capital omission and original proposal: Rep. Antonino B. Roman III read COA's original FY 2027 proposal, and Assistant Commissioner Nilda B. Plaras confirmed the amount used in the presentation comparison. The NEP omitted proposed capital outlay; the personnel and operating lines changed in opposite directions. Members later sought restoration and further costing.

Capital restoration and pre-audit staffing: Rep. Percival "Perci" Cendaña urged the committee to restore COA capital outlay and asked what pre-audit staffing and systems would cost. Cordoba estimated about PHP 2.5 billion for the package and offered to submit it. Rep. Mauricio G. Domogan later pressed for an augmentation to support 146 additional pre-audit teams and geotagging; Cordoba gave about PHP 2.2 billion, then referred to PHP 2.1 billion, and said COA would resubmit its costing. No appropriation was approved in these exchanges.

Operating and capital wish list: Plaras identified omitted operating requests of PHP 213.686 million for semi-expendable ICT and software and PHP 40.734 million for citizen participatory audit. She listed selected capital items totaling PHP 656.528 million: PHP 525.405 million for ICT equipment and software, PHP 125.523 million for Building 2 furniture, and PHP 5.6 million for vehicles. She said a reconsideration letter was subject to the COA chairperson approval. The hearing did not establish approval of these items. This selected list is distinct from the roughly PHP 1.18 billion full capital-outlay proposal Suansing cited later.

Augmentation motion and amendment follow-up: After COA agreed to add pre-audit personnel to its wish list, Domogan formally moved to ask House leadership and Appropriations to augment COA funding for anti-corruption priorities. A second is transcribed, but the presiding officer gave no recorded ruling before proceeding to the next member. Suansing later asked COA for a prioritized list of capital items omitted from the NEP for the Budget Amendments Review Subcommittee, noting that limited fiscal space would prevent funding every request. The hearing records no adopted budget increase or final amendment.

Independent audit and institutional capacity: Cagas framed COA's budget as support for independent public audit, stronger audit operations, modernized systems and staff capacity. He emphasized using audit to improve government performance and prevent waste, as well as detect irregularities.

Auditor shortages and flood-control investigations: Cendaña asked whether COA had addressed staffing gaps exposed by flood-control controversies. Cordoba said the central Fraud Audit Office had examined about 50 transactions in Bulacan and supplied findings used by the Ombudsman, with auditors serving as witnesses. COA Assistant Commissioner Lorna Cabochan reported that DBM restored 332 of 716 previously removed positions, including 141 in BARMM and 123 in Region III. This was restoration of positions, not a count of new hires. She acknowledged continued shortages and departures for better pay, proximity to home, flexible work and retirement.

Technology, capital outlay and preventive audit: Cendaña pressed COA on its capacity to audit flood-control spending despite zero capital outlay, and urged restoration of funding. COA Commissioner Douglas Michael N. Mallillin described data-analytics training, accounting-process reform, geotagging coordinated with DPWH and efforts toward continuous audit. COA was also expanding citizen participation, although that program faced funding constraints. Cordoba offered to submit an approximately PHP 2.5 billion pre-audit proposal covering salaries and other needs; he gave inconsistent team counts of 146 and 148. To illustrate the scale of audit work, he cited PHP 107.771 billion in DPWH notices of suspension and PHP 51.27 billion in notices of disallowance issued that year, emphasizing that these were at different stages, including appeal. Cendaña supported additional resources.

Contractor licensing and concentration: Cendaña asked how audit reforms would address license renting and contractor monopolies. Mallillin described checks on contractor qualifications and possible conflicts of interest, coordination with DPWH, and linking contracting and bidding data to licensing information. He said COA was broadening compliance and performance audit work around the weaknesses identified. Cendaña requested a progress report to the committee on these efforts.

When annual audit reports become public: Asked how many annual audit reports were ready for publication, Plaras explained that reports were transmitted to audited agencies by June 30, followed by 60 days for management to report action on recommendations. Those responses would accompany reports published by October 31. She clarified that transmission was to the audited agencies; the exchange did not establish the percentage ready for publication that Cendaña sought.

Pre-audit and geotagging before payment: Domogan sought funding and COA support for his bill making pre-audit with geomapping a prerequisite for payment on government projects. Cordoba supported the bill, offered COA's assistance as a resource agency and promised to resubmit its staffing and cost proposal. He specified 146 additional pre-audit teams and twice estimated PHP 2.2 billion, although a later remark used PHP 2.1 billion. Domogan supported increasing COA's budget. In discussing audit results, Cordoba cited roughly PHP 158 billion in DPWH audit notices and acknowledged that the transactions had already been paid. He also stressed geotagging's importance: changing project coordinates made it difficult for fraud auditors to locate projects and establish whether they existed.

Adding pre-audit staffing to the funding request: At Domogan's request, Plaras restated COA's unfunded needs: PHP 213.686 million for semi-expendable ICT and software subscriptions, PHP 40.734 million for citizen participatory audit, and PHP 656.528 million in capital outlay for ICT equipment and software, furniture and vehicles. Domogan challenged the omission of additional pre-audit personnel despite its stated priority. Plaras explained that the list covered items omitted from the NEP and committed to add the chairperson's pre-audit funding proposal. Domogan then moved to ask House leadership, through the Speaker and appropriations process, to augment COA's budget. The motion drew a second, but no express ruling or approved amount appears in this block.

Getting current audit reports to Congress: Montes asked how annual audit reports are prepared and why newer reports were not yet on COA's website for budget scrutiny. Mallillin described submission of agency financial statements by February 14 of the following year, audit planning and conferences, consolidation across regional offices, and completion by June 30. He distinguished earlier delivery to Congress from later public posting, and said the publication deadline had been advanced in 2026 from the previous December 31 deadline. COA Assistant Commissioner Martha Roxana C. Sese said COA met its reporting deadlines, issuing management letters where complete financial statements were unavailable. She said reports had reached oversight bodies, but could not give the actual submission dates; DPWH required additional work and received advance copies.

Funding preventive audit and digital systems: Montes argued that COA already had authority to conduct pre-audit and questioned whether its budget reflected anti-corruption priorities. Cordoba said personnel shortages prevented this work. Domogan intervened to distinguish his proposed mandatory payment prerequisite from COA's existing power; Montes accepted that the bill would strengthen implementation. Plaras explained that DBM supplied operating and capital budget ceilings and determined personnel funding; COA submitted justified additional proposals, but items were omitted from the NEP. Montes said she would question DBM during floor deliberations. Asked what the unfunded information-systems plan covered, Plaras identified ICT and office-productivity items under operating expenses and equipment and software under capital outlay.

Citizen participation limited by funding: Asked how citizen participatory audit works, Mallillin said NGOs, civil-society organizations and other private citizens assist COA, with the commission covering certain costs. Limited funding had kept the program small and continued to constrain its reach. Willing participants could shoulder their own costs, but COA could not spend beyond its allocation. He described expansion as a way to supplement scarce audit personnel with community knowledge and networks.

Audit deadlines and reports useful for budget scrutiny: Montes returned to timely annual audit reports, asking how the June 30 deadline relates to COA's citizen-charter processing period. Cabochan distinguished the publication process, governed by the GAA, from other processes: reports were transmitted to agencies by June 30 and supplied to congressional oversight bodies, with website publication by October 31 after management comments and action plans. The exchange identified the Speaker's office as the congressional recipient but did not directly reconcile the cited 120-day charter period. Montes sought accessible reports tracking agencies' repeated noncompliance and implementation of audit recommendations, to inform budget decisions and assessment of spending capacity. She supported additional operating funds while urging priority for clear, useful reporting; no specific commitment to the proposed tracking format followed.

Restoring operating and capital priorities: Roman asked which operating and capital items COA would prioritize for restoration from its original request. Plaras attributed the overall increase to personnel funding, while operating expenses were reduced and capital outlay omitted. She said COA learned that capital outlay was omitted when the NEP was issued. Its proposed reconsideration letter, then subject to the chairperson's approval, sought PHP 213.686 million for semi-expendable items, PHP 40.734 million in additional operating requirements, PHP 525.405 million for ICT equipment, PHP 125.523 million for furniture and fixtures, and PHP 5.6 million for vehicles. Pressed to prioritize, she placed vehicles last and retained operating needs, ICT and furniture. Cordoba clarified that roughly 300 restored positions were already included in personnel funding.

From audit observations to prosecution: Roman asked how COA turns findings into cases and measures success. Cordoba explained that audit observation memoranda give agencies an opportunity to explain or correct findings, followed where warranted by suspension or disallowance notices and referral of suspected graft to the Ombudsman. The Ombudsman conducts its own investigation before filing cases. Cordoba described COA's success rate as high but did not have the figures requested.

Including revenue in end-to-end accountability: Roman sought COA's position on his Cadena bill and argued that an end-to-end system should cover revenue as well as expenditure, so underreported collections could be detected. Cordoba agreed that revenue collection falls within COA's mandate, explained that failures to collect can lead to notices of charge, and committed to submit a position paper supporting the draft bill.

Earmarked cash and the one-fund concept: Nazal challenged whether COA tracks the actual cash behind earmarked balances while Treasury holds or temporarily uses pooled cash. Using spectrum-user fees intended for free Wi-Fi, he argued that unchanged accounting balances do not prove cash remains available. Mallillin said COA monitors collections, remittances, movements in special funds and their eventual use, and coordinates with DBM and Treasury; release and cash-management decisions remain executive functions. He cited DBM's commitment to greater portal transparency and described a holistic check of spending against authorized budgets and fund balances. Nazal remained dissatisfied and called for tracking cash movements whether or not charged to the earmarked account. Citing reported DICT service shutdowns and unreleased funding, he sought scrutiny of actual availability; Mallillin offered to look into the case and coordinate with Treasury. The exchange did not establish an end-to-end cash-tracing mechanism.

Withheld project releases and manufactured savings: Nazal questioned DPWH's withholding of sub-allotment advice for projects he said already had allotment authority, bidding and readiness certifications. He warned that nonimplementation followed by cancellation and augmentation could manufacture savings and undermine Congress's appropriations. COA Director III Tracy Ann D. Sunico initially said she knew of no such audit case apart from missing supporting documents, then described released sub-allotments returned because district or regional offices were not ready. Nazal disputed that explanation for the projects he had in mind. Sunico agreed to submit a project list and coordinate with DPWH to flag the issue. Cordoba agreed with Nazal's observations. No project-specific justification for the alleged withholding was established; off-budget accounts were deferred to Nazal's next appearance.

Checking the reasons projects remain unimplemented: Returning to alleged manufactured savings, Nazal asked what COA independently checked before accepting that validated DPWH projects could not proceed. Sunico described bridge projects whose implementing office changed between the NEP and GAA, late allotment releases, unready implementing offices, and projects suspended or facing termination following license revocations. She said auditors recommended prompt rebidding or contract takeover and confirmed that declared savings are checked. Nazal maintained that some ready projects were simply waiting for sub-allotment releases. Sunico committed to confirm those cases with the central office and report back; the exchange did not establish their project-specific cause.

Off-budget balances, cash access and interest: Nazal asked whether off-budget balances in the BESF represent usable cash and whether COA traces temporary use and restoration while Treasury holds it. COA Assistant Commissioner Roy L. Orsal described legally authorized agency revenues outside the NEP, audited by COA and included in its annual financial report. He tentatively agreed that the one-fund concept applies at Treasury and said COA's intrusion into executive cash management is limited, while agency disbursements are audited. Discussing deposits in authorized government banks, he said agencies control their accounts and movements can be seen in audit. His view that interest accrues to the agency was qualified, and he was unsure whether the national government could use that interest for another purpose. He agreed that off-budget funds are restricted to their authorized purpose and that cross-use can be discovered in audit. Nazal's specific CHED fund-transfer example was not resolved.

Accumulated balances and a monitoring protocol: Nazal warned that Congress could deny an agency funding because its books show a large balance even when it cannot access the cash. Mallillin said COA flags excessive accumulation and may recommend changes to the executive or Congress, but accumulation alone does not warrant disallowance without irregular use. He distinguished compliance review of release restrictions from financial findings on spending outside a fund's purpose. At the close, he agreed to examine Nazal's concern and develop a protocol to monitor fund balances, with DBM and Treasury coordination if Congress needs visibility into fund movements. No completed cash-tracing system or implementation timetable was presented.

Digital records and physical storage pressure: Hernandez sought funding for phased upgrades to COA's recording and filing systems. Plaras said there was no capital outlay for the coming year. Cordoba supported the concern, explaining that COA must retain documents for ten years and still lacked physical storage despite a new building. He sought an amendment allowing digital storage. Hernandez urged the committee and COA to pursue funding, even for a partial upgrade, or include it in the following budget if it could not be funded now.

DPWH notices and the flood-control breakdown: Co requested updated counts and amounts of DPWH audit notices. Cordoba cited PHP 107.771 billion in suspension notices and PHP 51.277 billion in disallowance and charge notices from 2025 to mid-2026. Sunico reported 4,378 suspension notices for 2025 and 614 for 2026, 220 and 166 disallowance transactions respectively, and 111 and four charge notices. She stressed that notice issuance years do not identify the underlying transaction or appropriation years. COA could not isolate the flood-control component during the exchange and agreed to submit the breakdown through the committee.

Flood-control effectiveness and missing master planning: Co questioned projects that could worsen flooding and asked how COA turns findings into policy action. Cordoba said COA had previously flagged the lack of a holistic flood-control master plan, tentatively dating the finding to around 2016, and offered the records. A current performance audit was unfinished; he separately offered compliance-audit material. He said COA repeatedly raised the issue, while changes in DPWH management and administrations could interrupt follow-through. Co pressed for action on longstanding findings and asked how soon harmful structures could be removed; no removal timetable was given. Cordoba also offered 50 completed fraud audit reports used by the Ombudsman in cases.

Confidential and intelligence funds: notices and rule changes: Asked for audit notices since 2015, Cordoba had figures only from 2021 onward: 3,016 audit observation memoranda, 92 suspension notices and 22 disallowance notices. He promised to compile the earlier years, and Co requested the affected expenditures through the committee. Mallillin said COA had proposals to address weaknesses in the joint circular but needed discussion with the other issuing agencies and their operational concerns. Subjects included acknowledgment receipts, identities and aliases, evidence supporting rewards, procurement, allowable spending, audit scope and auditors' security clearances. These were proposed refinements, not adopted rules. Co urged action on gaps she said had been exploited.

Citizen audit teams and complaint channels: Pleyto supported COA's budget and asked how citizens could report anomalies, join inspections and have their evidence included in formal audits. Mallillin distinguished complaints routed through COA's complaints desk to the responsible audit sector from citizen participatory audit, where trained volunteers from NGOs, civil-society groups and the public become part of the audit team. COA guides their examination and report writing and covers part of their expenses. He described project-signboard photographs and other public feedback as useful inputs for infrastructure audits and geotagging. He did not specify a complainant-feedback timetable or a new access mechanism.

Technical staffing for more complex programs: Pleyto asked whether COA had enough engineers, IT specialists, data analysts, forensic auditors and other experts for larger programs, digital transactions and public-private partnerships. He urged Congress to supply the necessary resources. The round ended without a substantive COA answer to this staffing question.

Prioritizing capital requests for budget amendments: Suansing recalled congressional support for COA's building safety needs and asked why its roughly PHP 1.18 billion capital proposal was entirely omitted. Plaras said DBM gave no explanation. Suansing requested the updated ICT plan and a detailed capital list. Cabochan described a new plan focused on digital operations, software subscriptions and equipment; her five-year description differed from the 2027-2029 period Suansing cited. Plaras outlined building renovation, fire protection, records storage, regional offices and training facilities, electrical upgrades, furniture, vehicles and ICT. Suansing asked for a prioritized institutional-amendment request that week ahead of the budget amendments review subcommittee; Cordoba agreed. She stressed that fiscal space would not cover every item and expressly declined to promise a higher budget.

Missing audit reports for upcoming budget hearings: Suansing said the committee still lacked reports for DPWH, NHA and the Judiciary and requested them promptly for budget scrutiny. Cordoba said DPWH's report had reportedly been submitted the previous day, undertook to check NHA and the Judiciary, and offered to resend the reports the next morning. Suansing noted that the DPWH budget hearing was the next day and thanked COA for earlier submission arrangements intended to support congressional oversight.

Budget briefing concluded; proceedings suspended: Escudero moved to terminate COA's budget briefing. Suansing referred the ruling to Cagas, who declared the motion carried after it was seconded. On Escudero's further motion, Cagas suspended the proceedings at Andaya Hall and announced resumption at 9 a.m. the next day. The motion and ruling contain different calendar dates; the digest retains the stated next-day schedule without selecting between them.