July 25, 1987

EXECUTIVE ORDER NO. 271

AMENDING SECTION 2 OF EXECUTIVE ORDER NO. 19 AND SECTION 20 OF PRESIDENTIAL DECREE NO. 1445

WHEREAS, Section 2 of asia dc

"in the case of government-owned or controlled corporations and its subsidiaries, the cost of audit services shall be fixed at an amount equivalent to one fourth of one per centum (1/4 of 1%) of the operating budgets of these corporations/subsidiaries;"

WHEREAS, if implemented, such audit cost will result in iniquitous assessment to some corporations;

WHEREAS, there is a need to amend further the first paragraph of Section 20 of asia dc

WHEREAS, it is necessary to establish a reasonable rate of assessment based on auditing services rendered to government corporations;

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order:

Section 2, first paragraph of

"SEC. 2. The cost of audit services rendered to government agencies by the Commission on Audit shall be covered by the fund sources provided in Section 24 of Presidential Decree No. 1445 which shall be incorporated in the national government budget and included in the annual General Appropriations Law; Provided, That in the case of government-owned and/or controlled corporations and its subsidiaries, the cost of audit services shall be based on the actual cost of the audit function in the corporation concerned, plus a reasonable rate to cover overhead expenses. The actual audit cost shall include personal services, maintenance, and other operating expenses, depreciation on capital and equipment and out-of-pocket expenses." cd i

SECTION 2. In view of the provisions under Section 1 above, Section 20, first paragraph of

SECTION 3. All provisions of the aforementioned

SECTION 4. The rules and regulations to implement this Executive Order shall be jointly issued by the Commission on Audit and the Department of Budget and Management. cdt

SECTION 5. This Executive Order shall take effect on January 1, 1987.

DONE in the City of Manila, this 25th day of July, in the year of Our Lord, Nineteen Hundred and Eighty-Seven.

Published in the Official Gazette, Vol. 83 No. 31, 3528-84 Supp., on August 3, 1987.