part iii - status of implementation of prior year’s audit ... · and facilities to the isfs in...

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Part III - STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT RECOMMENDATIONS

We have followed up the actions taken by the Agency to implement the prior years’ audit recommendation and noted that:

Status of Implementation No. of Recommendation

Fully Implemented 78

Partially Implemented 45

Not Implemented 8

Total 131

The results of our validation are as follows:

Observations and Recommendations Ref. Management Action Status of

Implementation

Reason for

Non/Partial

Implementation

1. Implementation of Assistance to

Informal Settler Families (AISFs)

funds

The commitment of the government to

provide adequate, decent and

affordable housing with basic services

and facilities to the ISFs in Metro

Manila may not be attained due to the:

(a) reversion to the General Fund of

unobligated allotment of ₱2.026

million; (b) reversion to the Bureau of

the Treasury of the unutilized funds

transferred to DSWD amounting to

₱350 million for the construction of

Pages

44-53

of

CAAR

2015

2


Implementation

Reason for

Non/Partial

Implementation

Micro-Medium Rise Building

(MMRB); and (c) non-utilization of the

total current year appropriations

amounting to ₱1.245 billion for the

construction of MMRBs and

distribution of financial assistance to

26,367 target beneficiaries.

We recommended that Management:

a. fast track the implementation of the

2015 ISF projects left undone

giving priority to the construction

of the MMRB to enable the ISF

living in danger areas to transfer to

safe, decent and affordable housing

units;

Releases to the LGUs for the construction of

MMRB and the status of implementation are

shown below:

LGU Amount Date

released to

LGUs

Remarks/ Status as of

June 30, 2017

Muntinlupa 80M 6/21/16 LIAC to schedule

bidding and consult w/

beneficiaries

San Juan 90M 6/27/16 LPMT to meet re:

changes in building

design

Pasay 90M 6/27/16 Awaiting bidding

results

Paranaque 90M 6/29/16 Change in target site and

building design

Total 350M

For the P350M estero housing to be implemented

by SHFC, the MOA was signed on June 27, 2016

and the fund was released in September 2016.

Partially

Implemented

Delayed

implementation

was due to non-

provision of land

by LGUs and

pending approval

by ISF PMO of

changes in the

Peoples Plan and

List of

beneficiaries.

3


Implementation

Reason for

Non/Partial

Implementation

b. devise a plan for effective

implementation of identified

projects;

c. establish disbursement guidelines

for the distribution of the 2015

informal settlers fund;

d. direct the ISF-PMO to submit

explanation on the variance

between the number of ISF

relocated and the number of ISF

who were granted financial

assistance; and

e. direct the ISF-PMO to coordinate

with the:

DWSD to fast track the

implementation of the Oplan Likas-

Interim Shelter fund for CY 2014;

A monitoring and evaluation tool was developed

to monitor LGU compliance on documentary

requirements. On the other hand, DILG NCR

and Region 3 have identified respective focal

persons to monitor the LGU FA

implementation.

The guidelines for the distribution of Interim

Shelter Fund was signed on June 21 2016. It was

agreed that NHA and PCUP will disburse the

fund to ISF beneficiaries

The variance included those relocated ISFs but

with pending endorsement from DILG to

DSWD and those that were already endorsed but

were not yet paid after the cut-off date set by

DSWD.

The grant of financial assistance to 26,367 ISFs

was fully disbursed by DSWD as of December

2016.

Fully

Implemented

Fully

Implemented

Fully

Implemented

Fully

Implemented

Percentage of

completion as of

June 30, 2017

follows:

4


Implementation

Reason for

Non/Partial

Implementation

concerned offices to fast track the

implementation of the construction

of the MMRB for LGUs.

The status of disbursement follows:

Project Amount Status as of June 30, 2017

Construction

of Micro-

Medium Rise Buildings

700,000,000 P90,000,000.00 - downloaded to the

local government

of Paranaque on March 29, 2016

90,000,000.00 - downloaded to the

local government of San Juan on

March 29, 2016

90,000,000.00 - downloaded to DILG-NCR June 2,

2016for the local

government of Pasay subject to

the LGUs

completion of documentary

requirements

80,000,000.00 - downloaded DILG NCR on May 30,

2016 for the local government of

Muntinlupa subject

to the LGUs completion of

documentary

requirements 350,000,000.00 - released to Social

housing Finance

Corporation (SHFC) for the

estero housing

project

Partially

Implemented

Paranaque-

23.22 percent

San Juan-

started ground

breaking on

March 6, 2017

Pasay- not yet

started

Muntinlupa-not

yet started

SHFC- not yet

started

5


Implementation

Reason for

Non/Partial

Implementation

2. Implementation of Projects under

the Bottom-Up Budgeting (BuB)

Program

Despite the utilization of ₱8,844.56

billion out of the total appropriations of

₱9,573.96 billion for BuB projects for

CYs 2013 to 2015 or financial delivery

rate of 92.38 percent, the

implementation of the same appears

slow as indicated by the low physical

delivery rate of 54.19 percent at year-

end, thereby the delivery of the

development needs of the LGUs

identified in the poverty reduction plan

for the benefit of their constituents was

delayed.

We recommended that management:

a. fast track the project

implementation and strengthen

monitoring to accelerate the

completion of the projects;

Pages

53-63

of

CAAR

2015

As of June 30, 2017, physical accomplishment was

posted at 71.75 percent while financial delivery rate

was 88.63 percent.

To fast track project implementation, the following

actions were undertaken:

Partially

Implemented

Low absorptive

capacity of the

LGUs to

implement the

projects and

delay in the

submission of

POWs and DED

6


Implementation

Reason for

Non/Partial

Implementation

b. regularly post the financial and

physical accomplishments reports

of BuB projects on the DILG

website in compliance with the

special provision of GAA 2015;

and

c. strictly adhere to COA Circular

2013-004 requiring the posting of

projects at project location to

Conducted regional consultative conference to

resolve issues and provide strategies to help fast

track the implementation;

Prepared official letter to LGUs with delayed

implementation of subprojects prioritizing the

regions with most critical projects;

Deployed Special Action Team to provide

technical assistance to LGUs especially with

water projects for the preparation of feasibility

study; and

For water supply projects, engaged 16 Regional

Hubs to assist the LGUs in the preparation of FS

and DED through government to government

modality.

Quarterly reports on financial and physical status of

projects were posted on the open BuB portal

administered by the DBM, as well as at the PPMS

website of the DILG. Regular updating of status in

the PPMS website of the DILG was undertaken by

the DILG field officers.

DILG issued memorandum reminding ROs to

advise the LGUs to strictly follow the said circular.

Fully

Implemented

Fully

Implemented

by the LGUs

caused the slow

implementation

of the projects.

7


Implementation

Reason for

Non/Partial

Implementation

inform the public of the program,

project and activity undertaken by

the agency.

Posting and updating of billboards is being

monitored by the DILG field officers.

3. Financial assistance to government

employees affected by calamities

Of the ₱109.190 million funds received

by the DILG from the Office of the

President (OP) to support the

employees of various government

agencies affected by typhoon Yolanda

and the 7.2 magnitude earthquake in

different regions, only ₱22.420 million

or 20.53 percent was transferred to

various Implementing Agencies (IAs)

during the year while the balance of

₱86.770 million or 79.47 percent has

not yet been transferred at year-end

caused by the failure of the concerned

IA to process the required document.


a. coordinate with the concerned IAs

to fast-track the release of funds to

the intended beneficiaries;

Pages

63-67

of

CAAR

2015

For PNP, financial assistance to personnel

amounting to P86,770,000.00 was released on May

24, 2016.

Fully

Implemented

8


Implementation

Reason for

Non/Partial

Implementation

b. monitor the submission of

liquidation reports/documents by

the IAs to facilitate the release of

the second tranche; and

c. require the Accountant to reconcile

the discrepancy noted with the

record of the BFP.

For PPSC, funds were released to their employees/

beneficiaries on December 07, 2015. Liquidation

reports were submitted by PPSC to DILG on April

21, 2016.

For BJMP, out of the funds transferred of

P6,205,000.00, the amount of P6,130,000.00 has

been liquidated, leaving a balance of P75,000.00.

Liquidation reports and supporting documents were

already submitted by the IAs and subsequently

forwarded to the Office of the President to liquidate

the same. The release of the 2nd tranche was

requested per letter dated November 4, 2015 for

those beneficiaries who have complied with the

documentary requirements and the same was

reiterated in the letters dated February 3, and July

19, 2016, respectively.

The discrepancy between the balances per books of

BFP and DILG in the amount of P50,000.00 has

been adjusted in the DILG books per JEV No.

2016-04-000282 dated April 30, 2016.

Partially

Implemented

Fully

Implemented

Documentary

requirements

were partially

submitted by IAs

to support the

request for

release of the 2nd

tranche.

9


Implementation

Reason for

Non/Partial

Implementation

4. Asia-Pacific Economic Cooperation

(APEC) Funds

Unliquidated fund transfers intended to

support the activities of the APEC

meeting on November17 to 20, 2015

have accumulated to ₱1.050 billion at

year-end due to the failure of the

implementing agencies (IAs) to submit

liquidation reports/documents within

the timeline set and delayed release of

funds to IAs. Moreover, there was a

discrepancy of ₱420.705 million

between the recorded balances of fund

transfers in the DILG books and in the

books of nine IAs.

We recommended that management

require the:

a. Accountant to: (i) closely monitor

the liquidation of fund transfers by

the IAs and see to it that

liquidations are properly taken up

in the books; (ii) draw a Journal

Entry Voucher to restore the cash

equivalent of the unreleased checks

for fair presentation of the affected

Pages

67-74

of

CAAR

2015

Unliquidated Fund Transfer

The unliquidated balance of P1,050,438,683.43 as

of December 31, 2015 was fully liquidated as of

December 31, 2016. The amount refunded by the

IAs for the unexpended portion of the fund transfers

were returned to the Office of the President.

Fully

Implemented

10


Implementation

Reason for

Non/Partial

Implementation

accounts in the financial

statements; and (iii) reconcile the

discrepancy noted in the APEC

funds; and

Unreleased Checks

The unclaimed checks were cancelled under JEV

Nos. 2016-01-000033 and 2016-02-000056 dated

January 29 and February 15, 2016, respectively.

Unreconciled Balances

Liquidations submitted by PNP and DSWD

which were recorded twice have been adjusted

under JEV Nos. 2016-04-00000250 and 2016-

04-000251 both dated April 14, 2016.

The difference noted in the balance of AFP

amounting to P42,191,657.00 represents the

unclaimed check which was already adjusted in

the DILG books.

The suspended amount of BFP and PNP

amounting to P8,326,857.00 and

P60,716,947.76, respectively, will be reflected

in DILG book upon submission of verified

RODs and Credit Notice by the concerned IAs.

Fully

Implemented

Fully

Implemented

Fully

Implemented

Partially

Implemented

Settlement of

suspensions by

IAs is on-going.

11


Implementation

Reason for

Non/Partial

Implementation

b. IAs to; (i) submit RODs and

Terminal Report considering that

the activities of the APEC meeting

have long been completed; and

(ii)refund/return the amount

disallowed in audit.

The submission of RODs and refund of excess fund

transfers have been made by the IAs while Terminal

Report was already submitted.

Fully

Implemented

5. DILG Bohol Earthquake Assistance

(BEA) funds

Target completion rate of 93.41 percent

(completion of 993 out of 1,063

projects) as of December 31, 2015 was

not achieved despite the full release of

Bohol Earthquake Assistance funds of

₱2.389 billion to the Province of Bohol,

having posted project delivery rate of

51 percent (completion of 542 out of

1,063 projects) which is 42.41 percent

lower than the target rate caused by (a)

the low absorptive capacity of the

LGUs to implement the project; (b) no

interested bidders for small projects;

and (c) scarcity of construction

materials. Moreover, the reports on the

utilization of funds transfered to LGUs

and DILG Region VII were not

Pages

74-80

of

CAAR

2015

12


Implementation

Reason for

Non/Partial

Implementation

submitted to DILG Central Office,

contrary to DILG Memorandum

Circular No. 68 dated June 3, 2014.


a. intensify the monitoring of project

implementation to hasten the

completion of the projects; and

DILG is continuously implementing the following

strategies to intensify project monitoring :

Uploaded the BEA projects in the PPMS which

can be viewed by the public. Status of the

projects are updated regularly

Institutionalized the Weekly Project Status

Reporting. Weekly status of the projects are

reported by the MLGOO and consolidated by

the DILG Provincial and Regional Offices and

submitted to the Central Office.

Tested the process of computerized reporting

system which will be able to generate list of

projects that are at risk.

Developed a Responsibility Matrix which will

define the action to be taken by all DILG Offices

on the “projects at risk” identified in the

computerized reporting system

Called the attention of concerned Local Chief

Executives (LCEs) through letter directing the

Municipal Mayors to fast track the

implementation;

Partially

Implemented

As of June 30,

2017, the

physical delivery

rate was only

92.31 percent.

13


Implementation

Reason for

Non/Partial

Implementation

b. require the DILG Region VII to

submit the following:

Conducted regular monthly meeting of the

municipal engineers and weekly meeting of the

Provincial Project Monitoring Team (PPMT) to

resolve project issues;

Conducted quarterly consultative meeting with

Municipal Mayors;

Conducted regular site inspection with DILG-

Bohol Provincial Director;

Conducted regular site monitoring of the

ongoing project by the BEA-hired Engineers,

Provincial Engineers Office (PEO) and

Provincial Government of Bohol;

Enhanced the commitment of LGUs on the

actions to be taken regarding the report of

findings, observations and recommendation;

and

Deployed BEA-hired Engineers for the

preparation of POWs and other documents in

the LGU.

The report on fund utilization of cash transfers to

LGU was included in the regular report submitted

by DILG Regional Office every 15th and end of the

month.

Fully

Implemented

14


Implementation

Reason for

Non/Partial

Implementation

Report of Fund Utilization as of

December 31, 2015 by LGUs on the

implementation of subprojects; and

Report of Disbursement as of

December 31, 2015 on funds

transferred for administrative and

operational expenses.

DILG Operational Fund

DILG Regional Office is submitting regularly the

status of fund utilization for the monitoring of BEA

subprojects. Of the P71.028 million funds released,

the amount of P27.592 million was utilized by the

DILG Provincial Office in the monitoring of

projects.

Fully

Implemented

6. Recovery Assistance on Yolanda

(RAY)

The projects under RAY Batch 2

posted low physical delivery rate of

43.37 percent due to: (a) prioritization

by the LGUs of the projects under RAY

Batch 1; (b) failure to set the

completion date of the projects; (c)

implementation of other projects by the

LGUs along with the projects under

RAY; (d) no interested bidders for

small projects which resulted in the

failure of bidding; and (e) realignment

of projects for barangay. Moreover,

funds transferred to DPWH totaling

₱853.816 million remained

unliquidated as of year-end due to the

failure of the agency to submit

Pages

80-86

of

CAAR

2015

15


Implementation

Reason for

Non/Partial

Implementation

liquidation reports within the

prescribed period.

We recommended that Management

require the:

a. PMO to strengthen its monitoring

function of project

accomplishments and

implementation;

b. LGUs to set a target date of

completion for every project; and

c. require the DPWH to submit

Quarterly Liquidation Report in

compliance with the MOA.

The PMO continued to gather data in coordination

with the DILG Regional Offices and have already

sent letters to the LGUs relative to the target

completion date.

The PMO had coordinated with the Regional

PDMUs to ensure inclusion of target completion

date for each sub-projects in their reports.

As of June 30, 2017, DPWH submitted additional

liquidation of P185,066,883.72 leaving an

unliquidated balance of P668,748,652.61.

Partially

Implemented

Fully

Implemented

Partially

Implemented

To date, the

PMO database

showed 60

percent

accomplishment

on the data

gathering on

LGUs adjusted

completion date.

The adjusted

completion date

was submitted to

NEDA for

approval.

The PMO is

closely

coordinating

with DPWH for

the submission of

Quarterly

16


Implementation

Reason for

Non/Partial

Implementation

Accomplishment

and Liquidation

Report.

7. Performance Challenge Fund

The full benefits of the projects

espoused under the Performance

Challenge Fund program may not be

obtained by the intended beneficiaries

due to the non-compliance by the

concerned LGUs and DILG Regional

Offices to the pertinent provisions of

DILG Memorandum Circular Nos.

2015-111, 2013-48 and 2012-68

caused by: (a) the failure of some

LGUs to complete the projects costing

₱262.993 million within the timeline;

(b) grant of additional incentives

totaling ₱117.600 million to same

LGUs despite non-

completion/implementation of projects

previously funded by PCF; and (c) non-

utilization of funds amounting to

₱1.830 million allocated for the

production of Regional

Compendium/Magazine to document

the PCF projects. Moreover, delayed

uploading and updating of

Pages

86-95

of

CAAR

2015

17


Implementation

Reason for

Non/Partial

Implementation

information/data by the Regional Team

resulted in unreliable status of projects

implementation posted in the website.


a. require the responsible official/s to

closely monitor compliance of the

recipient LGUs on the prescribed

timeline in the completion of the

project to ensure the timely

completion of the same;

b. submit explanation on the release of

additional funds to LGUs whose

previous PCF funded projects were

still on on-going implementation or

not yet completed status;

Three Memoranda dated June 1, August 16, 2016,

and October 24, 2016 were issued to DILG

Regional Directors requiring information on the list

of LGU beneficiaries under 2011-2013 whose

project status are still on-going or not yet started in

PCF website.

For 2011-2013 projects, as of June 30, 2017, 121

PCF funded projects were already completed while

seven projects are on-going and four have not yet

started.

Two LGU projects (Nueva Vizcaya Province and

Dumaguete City) were still on on-going status per

report from PCF website as of June 30, 2017. Per

validation conducted, the LGU of Dumaguete City

agreed to return the P100,000.00 unutilized balance

to the National Treasury intended for the

Installation of Local Flood Warning System with

Sensors at the Headwaters of Valencia to Banica,

Ocoy and Dumaguete – Bacong Waterways.

Partially

Implemented

Partially

Implemented

Not all PCF

funded projects

for CYs 2011-

2013 were

completed as of

June 30, 2017.

Additional funds

were released to

LGUs whose

previous PCF

funded projects

were still on on-

going status.

18


Implementation

Reason for

Non/Partial

Implementation

c. include in the OPB for the coming

year the monitoring of the

completion and implementation of

projects undertaken in CYs 2011 to

2012 reported as not yet completed;

d. require the concerned PCF

Regional Team to regularly update

and upload the status of project

implementation and necessary data

in the PCF website for reliable

information;

e. monitor compliance by LGUs on

the installation of permanent

marker on the completed

infrastructure projects;

Validation was conducted in the 1st semester of

2016 wherein the status of majority of the PCF

funded project for CY 2011-2013 are still on-going.

Validation of PCF funded projects for CYs 2011-

2013 was conducted in the 2nd semester of 2016

with status of on-going. Monitoring of the

remaining PCF projects for CYs 2011-2013 with

not yet completed status will be included in the

OPB for 2017.

Four Memoranda dated June 1, August 16,

September 30 and October 24, 2016 duly signed by

the Undersecretary for Local Government were

issued to DILG Regional Directors to regularly

update and upload the status of project

implementation.

The BLGD through the Regional Focal Persons

required the LGUs to install permanent markers on

PCF completed projects.

The PCF website upgrading will include a tool

wherein the status of project will not be considered

complete unless a picture of the marker is uploaded

in the website.

Fully

Implemented

Fully

Implemented

Fully

Implemented

19


Implementation

Reason for

Non/Partial

Implementation

f. direct the concerned regions to

comply with Section IX of DILG

MC 2015-111 requiring the

production of Regional

Compendium /Magazine of

documented PCF projects; and

g. submit explanation on the

discrepancy noted in the number of

projects reflected in 2015

Accomplishment Report against the

uploaded data in the website.

DILG MC No. 2016-PCF Operations

Guidelines included the installation of

permanent markers as part of the Program of

Works.

Six Regional Offices (Region I, II, III, X, XII and

XIII) have submitted copies of their produced

magazine/compendium to BLGD.

The discrepancy on the number of projects was due

to constant updating and/or editing of projects by

the concerned focal persons to the PCF website

system which automatically computes the number

of projects.

The 2014 and 2015 projects in Rosario and

Taysan, Batangas were already encoded by the

concerned Regional Field Officer. The two

projects validated for PCF 2015 of Taysan,

Batangas was only a single project per

submitted project proposal of the LGU which is

“Maintenance of Local Access Road at Taysan,

Batangas”.

Fully

Implemented

Fully

Implemented

20


Implementation

Reason for

Non/Partial

Implementation

The status of project for Tarlac Province was

updated last January 28, 2016 from on-going to

completed status at the PCF website by the

Focal Person.

The BLGD conducted a hands-on training to

Regional Focal Persons on December 21-23, 2016

and will be re-echoed to Field Officers in 2017 to

minimize the deficiencies with regard to the

uploading of data.

8. Implementation of Payapa at

Masaganang Pamayanan

(PAMANA) projects

In DILG CAR, PAMANA projects for

CY 2011 with an aggregate cost of

₱15.200 million, funded from the

Development Acceleration Program

fund, were not implemented due to: (a)

the inability of the Provincial

Government of Kalinga to comply with

the documentary requirements; (b)

declaration of the unconstitutionality of

the DAP fund by the Supreme Court;

and (c) realignment of two

proposed projects; hence, defeating the

purpose of improving the socio-

Pages

96-99

of

CAAR

2015

21


Implementation

Reason for

Non/Partial

Implementation

economic condition of the intended

beneficiaries in conflict-affected and

vulnerable communities.


a. adequately plan and re-evaluate the

projects to be undertaken;

b. take into consideration the ability of

the Local Government Units to

comply with documentary

requirements in the implementation

of the projects; and

DILG CAR exerted efforts to implement the

projects in 2014 after OPAPP transferred the funds

in the 1st quarter of 2014. The amount of P12.160

M (80% of P15.20M) was returned to OPPAP per

check no. 1184258 dated February 23, 2015 under

Official Receipt No. 397972 dated March 16, 2015.

No action taken by management.

Partially

Implemented

Not

Implemented

The

implementation

was overtaken by

the Supreme

Court decision

on DAP.

Problems were

encountered on

who will

implement the

project and who

will prepare the

documentary

requirements.

22


Implementation

Reason for

Non/Partial

Implementation

c. closely monitor and supervise the

implementation of the PAMANA

projects from the onset, to avoid

further delays in its

implementation.

For CY 2016, the status of the three sub-projects

follows:

Project Cost Percentage of

Completion

Construction of Warehouse and Multi-

Purpose Pavement in Gimma, Bababanoy,

Tanudan

P.6M 100

Cosntruction of Warehouse and Multi-

Purpose Pavement in Poray, Babbanoy,

Tanudan

.6M 100

Cosntruction of Warehouse and Multi-

Purpose Pavement in Pugo. Lower Lubo,

Tanudan

.6M 100

Fully

Implemented

9. Implementation of Sagana at Ligtas

na Tubig sa Lahat (SALINTUBIG)

project

In DILG CAR, the proponent Local

Government Units (LGUs) for

SALINTUBIG projects failed to

submit Water Potability Test Result

contrary to the Philippine National

Standard for Drinking Water under

Department of Health (DOH)

Administrative Order (AO) No. 2007-

0012.

Pages

99-101

of

CAAR

2015

23


Implementation

Reason for

Non/Partial

Implementation


a. require the concerned LGUs to

submit the Water Potability Test

Result;

b. monitor closely the compliance of

the proponent LGUs to the

Department of Health (DOH)

Administrative Order (AO) 2007-

0012; and

c. make sure that funds are transferred

to implementing partners for

SALINTUBIG sub-projects that

have shown evidence of passing the

National Water Standards for

Drinking Water along with other

documentary requirements.

Management of DILG CAR issued a Memorandum

dated March 4, 2016 to all concerned MLGOOs on

the fast tracking of the submission of latest Water

Potability Test Result together with other lacking

documents.

Regular monitoring is being conducted by the

Regional Office and Provincial Office.

Some of the required documents were submitted to

COA on Nov. 10, 2015 and May 5, 2016.

Fully

Implemented

Fully

Implemented

Partially

Implemented

Not all

documents were

submitted as of

June 30, 2017.

10. Implementation of Citizen

Satisfaction Index in Region IV-B

Pages

101-

103 of

24


Implementation

Reason for

Non/Partial

Implementation

In DILG Region IV-B, the expected

outputs for the Citizen Satisfaction

Index from the Mindoro State College

of Agriculture and Technology

(MinSCAT) and Western Philippine

University of Palawan (WPUP) were

submitted one to two years delayed

from the agreed date of submission in

the Memorandum of Agreement; thus,

affecting the timeliness and usefulness

of the report. Likewise, the funds

transferred to the two IAs were not

fully liquidated as at year-end despite

the completion of the undertaking.


a. ensure that all projects to be

executed by implementing

agencies are properly monitored to

avoid any delay in its

implementation and that the

monitoring and liquidation reports

are submitted on time; and

b. require the Accountant to prepare

the necessary adjustment to

reclassify the outstanding balance

CAAR

2015

The Western Philippine University of Palawan

(WPUP) already submitted the report of

disbursement. Thus, the release of funds has been

facilitated last May 2016. Mindoro State College

of Agriculture and Technology (MinsCAT) already

submitted the required reports to DILG IV- B.

DILG IV-B already prepared the necessary

adjustment in 2016

Fully

Implemented

Fully

Implemented

.

25


Implementation

Reason for

Non/Partial

Implementation

of the Due from NGOs/ POs to the

Due from NGAs account.

11. Unreliable Cash accounts balances

The balance of the Cash in Bank-Local

Currency Current Account (LCCA),

Cash- MDS, Special Account and

Cash- MDS,Regular totaling ₱676.246

million as at year-end was mistated due

to the: (a) difference of ₱6.872 million

between the book and bank balances;

(b) non-cancellation of stale checks

totaling ₱86,111.33; and (c) non-

preparation and non-submission of

Bank Reconciliation Statements in

Central Office and three regions.


a. require the concerned Accountant

to reconcile the noted difference

and make the necessary adjustment

in the books, if appropriate.

Pages

103-

109 of

CAAR

2015

The difference between the book and bank balances

in NCR and Region III was already reconciled as of

December 31, 2016.

Fully

Implemented

26


Implementation

Reason for

Non/Partial

Implementation

b. prepare the necessary adjustment

for the cancellation of stale checks;

c. remit/deposit to the Bureau of the

Treasury the amount of

₱874,991.89 pursuant to the

aforementioned regulation.

Office Amount Status

NCR ₱6,551,173.45 Fully Reconciled

III 320,370.63 Fully Reconciled

Total ₱6,871,544.08

In Region IV-A, all stale checks pertaining to

LCCA of DILG Batangas and Laguna Provincial

Offices and stale checks under MDS-Regular

account of DILG Regional Office were cancelled as

of June 30, 2016.

All interest earned in Central Office and collections

in Region III were remitted to BTR.

Off

ice

Particulars Amount Remitted

Amount

Remarks

C.O.

Interest earned from

two current

accounts

97,612.04 97,612.04 Recorded in the books and remitted to

the BTR in January

and February 2016.

III Collection

of seminar

fees, refunds and

other

collections

777,379.85 493,106.47

Per Regional Office

book, the total

unremitted amount is only 493,106.47

instead of

P777,379.85 which represents the excess

fund from Trust

account. This was remitted to the

National Treasury on

May 24, 2016.

Fully

Implemented

Fully

Implemented

27


Implementation

Reason for

Non/Partial

Implementation

d. stop the practice of drawing checks

even without supporting

documents.

e. direct the concerned Accounting

Processor to prepare bank

reconciliation statement regularly

and submit to the Auditor for

verification within 15 days after the

end of each month.

f. close the said account and remit

the amount to the Bureau of the

Treasury.

Total 874,991.89 874,991.89

Out of P17,733,500.00 disbursements for locally

funded projects in Region IV-B, the amount of

P16,000.000.00 was released to LGU with

complete requirements while the remaining

P1,633,500.00 was cancelled due to non-liquidation

of previous fund transfer and non-compliance with

physical accomplishments (Rizal, Coron and

Quezon, Palawan).

As of December 31, 2016, bank reconciliation

statements of DILG CO, NCR, ROs II and VI for

January to December 2015 were already submitted

to COA, however, the Accounting Division found

it difficult to comply on time due to late release of

bank statements by the Land Bank.

The bank account maintained with Philippine

Veterans Bank in Region IX with a balance of

P462,642.28 belonged to a separated employee.

Continuous follow-up to the concerned person is

being done to settle the account so that the same

may be returned to the National Treasury.

Fully

Implemented

Fully

Implemented

Fully

Implemented

12. Inaccurate balance of Due from

NGAs, LGUs and ROs

Pages

109-

28


Implementation

Reason for

Non/Partial

Implementation

The accuracy of the balance of Due

from National Government Agencies,

Due from Local Government Units and

Due from Regional Offices totaling

₱15.53 billion at year-end was doubtful

due to the: (a) discrepancy of ₱423.68

million between the DILG book

balances and those of the implementing

agencies/regional offices; (b)

unrecorded deliveries by PS-DBM of

₱2.624 million; (c) accounting errors of

₱31,472.30 in recording

deliveries/liquidations by PS-DBM;

(d) unaccounted difference of ₱7.667

million between the DILG and PS-

DBM records without supporting

documents; (e) erroneous recording of

fund transfers to LGUs totaling

₱117.693 million as Financial

Assistance to LGUs instead of Due

from LGUs; and (f) variance of

₱233.859 million between the balance

per books and supporting schedule of

the account in Region IX.


require the:

121 of

CAAR

2015

29


Implementation

Reason for

Non/Partial

Implementation

a. concerned national government

agencies, local government units

and regional offices to submit the

liquidation documents pursuant to

COA Circular 94-013 and refund

the unexpended balance, if any; and

b. accountant to closely monitor the

liquidation of funds transferred by

sending follow-up/demand letters

and see to it that liquidations are

properly taken up in the books.

c. require the Accountant to reconcile

the discrepancy noted in the Due

from National Government

Agencies and Due from Regional

The balance of Due from NGAs of

₱2,279,860,491.32 and Due from ROs of

₱9,492,961.47 was reduced to ₱768,143,497.19

and ₱2,646,855.90, respectively as of June 30,

2017 while the balance of fund transfer to PS-DBM

of P63,561,334.98 was reduced to P53,096,419.36.

The following measures were undertaken:

Conducted regular monitoring project

implementation;

Sent regularly thru emails the FOUs project

status per subproject and updated list of

lacking supporting documents for funds

transferred;

Issued demand letters to recipient LGU of

project funds from 2012 to 2015;

Massive fast tracking of the submission of

required documents for the liquidation of

previous releases. Liquidation reports

received are immediately accounted

for/booked by the Accounting Section.

The breakdown of the difference between DILG

book balance and the result of confirmation from

the implementing agencies are reconciled as

follows:

Partially

Implemented

Partially

Implemented

Partially

Implemented

Funds transfers

were not

liquidated due to

delayed

implementation

of projects.

Liquidation

documents were

not submitted by

recipient LGUs

despite the

issuance of

demand letters.

The difference of

₱1,767,163.54

pertained to

unreconciled

30


Implementation

Reason for

Non/Partial

Implementation

Offices for fair presentation of the

accounts in the financial statements

d. require the Regional Accountant to

prepare the necessary adjustment to

correct the entries made.

Due from NGAs Due from ROs

Per confirmation 391,570,262.21 2,872,489.80

Adjusted per JEV#

2016-04-000282

50,000.00

No liquidation

report submitted

400,000.00

Cancelled:

Unreleased as of

Dec. 31, 2015 but

already recorded in

the books

30,335,071.00

Total 422,355,333.21 2,872,489.80

The Accountant in Region V inadvertently posted

in the Check Disbursement Journal the fund transfer

to LGUs as Financial Assistance to LGUs,

however, it was adjusted under General Journal No.

2015-04-01-A dated April 30, 2015.

As of September 30, 2016, the balance of Due from

LGU account of ₱279,519,060.76 was reconciled

with the schedule of unliquidated fund transfer.


Fully

Implemented

Partially

Implemented

Not

Implemented

amount in

Regions III, V,

VIII, IX and XII

and subject to

reconciliation.

The remaining

discrepancy is

subject to

reconciliation.

No adjustment

was made

31


Implementation

Reason for

Non/Partial

Implementation

e. review the supporting schedule and

determine the correct balance of the

account; and

f. prepare the necessary adjustment in

the books, if warranted.

g. Chief Accountant to: (i) reconcile

its records with the PS-DBM;

(ii) account for and substantiate the

noted discrepancies; and

(iii) prepare the necessary

adjustments to record valid

reconciling items in the books; and

As of June 30, 2017, the balance of fund transfer to

PS-DBM was reduced to ₱52.8 million from

₱63.56 million due to reconciliation of records.

The difference of ₱10,328,516.88 was reduced to

₱48,079.29 as of June 30, 2017.

Particulars Difference Remaining

Difference

Comments and Action/s

Taken

Balance, December 31,

2015

10,328,516.88

Fund transfer by LGA

erroneously recorded in

the DILG account

99,086.00 0.00 This was already

communicated to PS-DBM

for adjustment.

Unrecorded fund transfer

in the PS-DBM books

(104,860.50) 0.00

Unrecorded deliveries in

2015

(2,624,299.11) 0.00 The unrecorded deliveries by

PS-DBM of ₱2.624 million

were already recorded under

various Journal Entry

Vouchers (JEVs);

Erroneous recording of

liquidation

(31,472.30) 0.00 Accounting errors of

₱31,472.30 in recording

deliveries/liquidations by PS-

DBM were already recorded

and adjusted accordingly;

Unaccounted difference

without supporting

documents

(7,666,970.97) (48,079.29) The unaccounted difference

of ₱7.667 million between

the DILG and PS-DBM was

reduced to 48,079.29;

Total - (48,079.29)

To promote reliable and secured communication,

enhance interconnectivity, information

dissemination and reduce travel cost within the

Partially

Implemented

Reconciliation of

records with PS-

DBM is on going

32


Implementation

Reason for

Non/Partial

Implementation

h. Chief, Procurement Section to

make representation with PS-DBM

for the immediate return of the

advances made for undelivered ICT

hardware and equipment and the

unutilized balance and delivery of

common-use supplies.

participating agencies, a letter/request dated May 9,

2017 was prepared for the proposed set up of a

Video Conference Infrastructure (VideoConInfra)

in the amount of P9,787,388.66 to PS-DBM.

Partially

Implemented

Specifications

will be submitted

to PS-DBM for

the acquisition,

testing,

installation of

hardware

amounting to

₱37,047,000.00.

13. Dormant Receivables Account

The validity of the receivable accounts

in Central Office and two regions with

an aggregate balance of ₱4 billion as of

December 31, 2015 cannot be

ascertained due to the inclusion of

dormant accounts totaling ₱689.368

million which are not fully

documented.


a. require the Chief Accountant to:

exert extra effort to locate the

required documents to support the

recorded amounts;

Pages

122-

127 of

CAAR

2015

In Central Office, the following actions were

taken:

Account Title Comments and Action/s Taken

Partially

Implemented

Documents can

no longer be

found to support

the request for

write off of

33


Implementation

Reason for

Non/Partial

Implementation

enforce collection by sending

demand letters; and

review and analyze the dormant

accounts;

Accounts

Receivable

The account already existed since 1980 and

no documents can be found

Due from NGAs DECS - 200,000.00, claimed that they did

not receive the cash advances.

LGA - 375,561.00, claimed that it was not

recorded in the LGA books because the

check is in the name of the Cashier who has

been on AWOL status since 2001, instead of

LGA.

PCFP - 400,000.00, claimed that the fund

was unutilized and deposited to BTr.

However, no proof of deposit has been made.

PS-DBM 51,000.00, the Department has

been requesting for the refund of the said

amount but there were no settlements made

by PS-DBM.

NRDC - 44,012.75

Due from LGUs EDLP - 537,187,025.95, demand letters

were sent to the LGUs but only few have

responded and other LGUs have requested

condonation of their loans.

NRDP - 20,808,035.99, on May 26, 2014, a

request for write-off was sent to COA

considering that the said amount was given

as financial assistance to the rebel returnees

but taken up as Receivables, and requiring

these RRs to liquidate the assistance

extended to them appears no longer possible

Infra Projects 35,365,313.81, similar to

NDRP accounts, sending of demand letter is

no longer possible due to more than 27 years

that have lapsed.

Due from

Regional

Offices

This account represents fund transfer to

ARMM for the implementation of various

projects. Demand letters were already sent.

accounts and

sending demand

letters is no

longer possible

since the

accounts were

outstanding for

more than 27

years.

34


Implementation

Reason for

Non/Partial

Implementation

Receivables-

Disallowances/

Charges

The Department is gathering information on

the present addresses of former officials and

employees of the Department who have

already retired/ resigned to enable us to send

demand letters to them. Included therein are

the accountabilities of deceased officials and

employees which were requested for write-

off. However, request for writing off in the

amount of ₱110,552.20 was denied by the

COA as per letter dated December 8, 2015.

Due from

NGOs/ POs

The amount of ₱750,000.00n was released to

Liga ng Mga Barangay in the name of former

President Marty Lim last 2012. The

Department exerted effort to locate Mr. Lim

but to no avail. The case is already in the

Office of the Ombudsman.

Other

Receivables

A large portion of the account existed as

early as 1980. Some of the balances are

merely forwarding balances without the

details of the amount involved. Retrieving of

documents is no longer possible since the

stock room of Accounting Division located

at the basement of the previous office

building was damaged by flood during the

typhoon Ondoy last CY 2009.

Total

In Region IV-A, the Accountant exerted all efforts

to locate the required documents to support the

recorded amounts but found to be futile, however,

request for write off of dormant accounts will be

submitted to COA duly supported with necessary

documents .

Partially

Implemented

Documents to

support the

amount could no

longer be

located.

35


Implementation

Reason for

Non/Partial

Implementation

b. request authority from COA for the

write-off of dormant accounts

which could no longer be collected

duly supported with the required

documents pursuant to COA

Circular No. 97-001 dated February

5, 1997.

In Region VII, request for write off of dormant

accounts was submitted and demand letters were

sent to former employees to settle their liabilities.

The Central Office, Regions IV-A and VII have

requested authority to write off dormant accounts.

Partially

Implemented

Fully

Implemented

Dormant

receivable

pertained to

disallowance with

finality of

decision wherein

the persons liable

are former

employees of

DILG already

separated from

the service.

36


Implementation

Reason for

Non/Partial

Implementation

14. Inventories

The accuracy of the balance of

Inventory accounts totaling ₱3.854

million as of December 31, 2015 was

doubtful due to: (a) direct recording of

procured office supplies totaling

₱8.927 million as expense instead of

inventories in Regions IV-A and IV-B;

and (b) non-recording of issued

inventories totaling ₱243,591.17 in

Region III. Moreover, physical count of

supplies and materials totaling ₱1.897

millionwas not conducted in Regions II

and III contrary to Section 65 of

MNGAS Volume II. Furthermore,

Supplies Ledger Card and Stock Cards

were not maintained by the Accounting

Unit and Supply Unit in Region III.


a. require the concerned Accountant

to observe strictly the existing rules

and regulations in recording

purchases/receipts and issuances of

inventories.

Pages

127-

129 of

CAAR

2015

Procured supplies and materials of Regions IV-A

and IV-B were recorded as inventories instead of

expenses as of December 31, 2016.

Fully

Implemented

37


Implementation

Reason for

Non/Partial

Implementation

b. Property Officer to submit the

RSMI to the Accounting Unit

regularly as basis in the recording

of supplies/inventories issued; and

c. Accounting Unit and the Property

Unit to maintain Supplies Ledger

Card and Stock Card for each item

of inventory and conduct periodic

reconciliation of records.

d. require the Supply Officer to

conduct physical count of

inventories every six months

pursuant to the aforementioned

regulations.

RSMIs for issued supplies in Region III were

submitted to the Accounting Unit and the

corresponding adjustment was made in the books of

accounts.

Supply Ledger Card (SLC) and Stock Card (SC)

were maintained by the Accounting Unit and

Supply Unit in Region III

Physical count of supplies and materials was

conducted in Region II while in Region III,

management will create a committee to conduct

physical count of inventories.

Fully

Implemented

Fully

Implemented

Partially

Implemented

Physical count of

supplies in

Region III has

not yet been

conducted.

15. Unliquidated Cash Advances

Failure of management to implement

Section 89 of PD No. 1445 and

pertinent provisions of COA Circular

No. 97-002 resulted in the unliquidated

cash advances totaling ₱13.990 million

as at year-end granted for operating

expenses, overtime pay and other

Pages

129-

133 of

CAAR

2015

38


Implementation

Reason for

Non/Partial

Implementation

allowances, travel and other time-

bound undertaking. Of the said

amount, ₱1.403 million remained

unliquidated for more than five years.


a. adhere strictly to the rules and

regulations on the grant,

utilization and liquidation of

cash advances pursuant to

Section 89 of PD No. 1445 and

COA Circular No. 97-002; and

b. require the Chief Accountant to

monitor the liquidation of cash

advances and send demand

letter to all accountable officers

with unsettled accounts.

Other deficiencies noted in the audit of

cash advances are as follows:

The P13.990 million cash advance balance as of

December 2015 was reduced to P368,899.30 as of

June 30, 2017, or liquidation rate of 96 percent.

Management will monitor the liquidation of cash

advances and send demand letters to all accountable

officers with unsettled accounts.

Partially

Implemented

Partially

Implemented

The remaining

balance

represents the

dormant

accounts of

DILG personnel

who are no

longer in service.

Management will

inform and

remind all

concerned SDOs

to liquidate cash

advances and

will issue

demand letters.

39


Implementation

Reason for

Non/Partial

Implementation

In Region II, cash advance of

₱51,000.00 granted to Mr. John Patrick

Cababain was recorded as outright

expense instead of Advances to

Officers and Employees which resulted

in the overstatement of expense

account and the understatement of

Advances to Offices and Employees.


require the Accountant to prepare the

necessary adjustment in the books for

fair presentation of the affected

accounts in the financial statements

In Region IV-B, three (3) personnel

with unsettled cash advances totaling

₱199,132.62 were cleared from their

accountabilities and responsibilities

and allowed to transfer to other offices,

contrary to COA Circular No. 90-331

dated May 03, 1990.


require the concerned personnel to

immediately settle/refund the

Upon submission of liquidation report, expenses

were reclassified to Advances to Officers and

Employees.

The amount was fully liquidated.

Fully

Implemented

Fully

Implemented

40


Implementation

Reason for

Non/Partial

Implementation

outstanding balances and require all

personnel who will transfer to other

agencies to secure clearance from their

accountabilities.

In Region VIII, the Accountable

Officer was not provided with

functional safety vault thus government

funds and accountable

forms/documents were exposed to the

risk of loss contrary to sound internal

control.


provide the concerned AO with a safety

vault to prevent the possible loss of

government funds and accountable

forms/documents in his/her possession.

In Region X, cash advances for travel

totaling ₱41,944.00 were granted and

paid to contractual and job order

personnel contrary to DILG Circular

No. 2012-12 dated July 2, 2012.


require the Regional Accountant to

Provincial Offices were advised to include in the

APP the purchase of their respective vault.

Management issued an advisory reiterating DILG

Circular No. 2012-12 that travel expenses of

personnel hired through Contract of Service/Job

Orders shall be allowed if necessary and justified

on reimbursement basis only.

Fully

Implemented

Fully

Implemented

41


Implementation

Reason for

Non/Partial

Implementation

strictly adhere to the guidelines set

under the DILG Circular No. 2012-12.

16. Doubtful balance of Property, Plant

and Equipment (PPE) accounts

The accuracy and reliability of the

Property, Plant and Equipment

accounts with an aggregate balance of

₱903.858 million as of December 31,

2015 were doubtful due to: (a) untitled

land and building valued at ₱34.490

million; (b) unreconciled discrepancy

of ₱182.185 million between the

accounting and property records; (c)

accounting errors totaling ₱1.56

million resulting in the understatement

of PPE accounts and the

understatement/overstatement of

related accounts; and (d) failure to

conduct physical count of PPE at year-

end in Region V; and non-maintenance

of PPE Ledger Card and Property Card.


a. continuously undertake the

necessary action to resolve the issue

Pages

133-

137 of

CAAR

2015

Management is continuously undertaking the

necessary action to resolve the issue of ownership.

Partially

Implemented

Management is

waiting for the

42


Implementation

Reason for

Non/Partial

Implementation

of ownership on the subject land

and building currently occupied by

the LMP.

b. require Accounting and Property

Offices to conduct periodic

reconciliation of their records and

prepare the necessary adjustments,

if necessary.

c. require the concerned Accounting

Office to prepare the necessary

adjustment of accounting errors for

fair presentation of the affected

accounts in the financial

statements; and

A position paper was prepared recognizing the

LMP as the beneficial owner of the land and

building. The subject land and building shall be

removed from the DILG books of account upon

completion of the transfer of the title of the property

to the LMP.

The unreconciled discrepancy of ₱182.473 million

was reduced to P75 million or due to reconciliation

of records.

The accounting errors amounting to ₱1.56 million

was reduced to P216,581.92 due to adjustments

made in the books of accounts.

Partially

Implemented

issuance of the

certified true

copy of the Deed

of Absolute Sale.

In the meantime,

preparation of

the Petition to

transfer the title

of the subject

property in the

name of the

League is on

going.

Reconciliation of

records and

physical count of

PPE in Regions

IV-A, IV-B and

VII is on going

43


Implementation

Reason for

Non/Partial

Implementation

d. require the Property Office to

prepare Invoice Receipt for

Property to support the transfer of

properties to the Regional Offices.

Office Particulars Amount

(With

Accounting

Errors)

Unadjusted

Amounts As

of June 30,

2017

Comments

and Action/s

Taken

C.O. Provision of depreciation

for

properties transferred

to the Regional

Offices

216,581.92 216,581.92 The two motor

vehicles

already transferred to

the DILG Regional

Office

remained in the books of

the CO.

NCR Double

recording of disposed

motor

vehicles

1,116,000.00

0.00 Adjusted per

JEV No. 16-01-009.

XIII Procured

equipment

recorded as expense

instead of

PPE

229,824.13 Adjustments

were made

under various JEVs and

AREs and

ICS were issued for

various

equipment were issued.


Partially

Implemented

Fully

Implemented

Fully

Implemented

Not

Implemented

The cost of two

motor vehicles

were not adjusted

in the books.

No Invoice

Receipt was

issued for

property

transferred to

Regional Office.

44


Implementation

Reason for

Non/Partial

Implementation

e. conduct physical count of all PPE

to determine the existence and

condition of PPE and prepare the

RPCPPE.

f. require the concerned officer to

immediately renew the insurance of

the Toyota Innova and strictly

monitor the insurance of all other

properties to protect the interest of

the government.

g. require the concerned Accountant

and Property Officer to maintain

PPELC and PC, respectively.

In Region V, physical count of PPE has been

conducted. A copy of the RPCPPE for CY 2014

was submitted on September 14, 2015.

In Region VII, the insurance of Toyota Innova-2.5

E DSL with plate number SLC 882 was renewed on

March 17, 2016.

In NCR, PPELC and PC were maintained in excel

form..

In Region IV-B, the concerned office conducted

physical count of PPE. Reconciliation of records

was conducted by the Accounting unit and Supply

unit. Likewise, subsidiary ledgers were maintained

and lapsing schedules were prepared

Fully

Implemented

Fully

Implemented

Partially

Implemented

Fully

Implemented

The Supply

Section in NCR

conducted

physical count of

PPE and will

submit the list of

unserviceable

PPE for disposal.

45


Implementation

Reason for

Non/Partial

Implementation

17. Other Assets

The accuracy of the balance of Other

Assets account of ₱77.599 million at

year-end was doubtful due to: (a)

inclusion of untitled land valued at

₱770,000.00; and (b) classification as

Other Assets of (i) various PPE

totaling ₱44.442 million; (ii) various

serviceable but fully depreciated PPE

totaling ₱4.668 million; and (iii)

unserviceable PPE totaling ₱11.503

million. Moreover, various

unserviceable properties totaling

₱10.697 million remained not disposed

of as at year-end; thus exposed to

damage and further deterioration which

could diminish its sale/scrap value.


a. cause the transfer of title of the

aforesaid land under the name of

the DILG Region XI; and

Pages

137-

140 of

CAAR

2015

Verification of the subject property was conducted

by the designated Regional Task Force.

Partially

Implemented

Transfer of title

was not made as

of June 30, 2017.

46


Implementation

Reason for

Non/Partial

Implementation

b. require the Accountant to reclassify

to appropriate PPE accounts the

serviceable/unserviceable PPEs

recorded under the Other Assets

account.

c. require the concerned Accountant

to prepare the appropriate

adjustment for fair presentation of

the affected accounts in the

financial statements.

No information on the action taken by management

in Region X.

Office Comments and Action/s Taken

C.O. The Other Assets account is composed of the

book value of unserviceable Beech SuperKing

Air 200, Model E-200 9975, S# BB-66 Aircraft

in the amount of ₱3,853,216.80 which was

reclassified in CY 2009. Included also were

unserviceable ENP Equipment as of December

31, 2014.

X Subject IT and Motor vehicles were already

disposed as of November 2016.

XIII The Inventory Team conducted the annual

physical count of PPE and prepared the Inventory

List of PPE including the unserviceable

properties. Prepared adjustments of records

accordingly.

Antenna located at Mainit, Surigao del Norte, the

Punong Barangay of Silop had already issued a

certification that the unit is no longer existing in

the area

Not

Implemented

Fully

Implemented

Fully

Implemented

Fully

Implemented

No action was

taken by

management

47


Implementation

Reason for

Non/Partial

Implementation

d. cause the immediate disposal of the

unserviceable properties in

accordance with existing rules and

regulations to avoid further

deterioration and loss of resale

value.


I Negotiated sale of unserviceable equipment was

conducted on April 27, 2016 with a sale value of

₱5,000.00 under OR No. 6453165.

IV-A Management will direct the concerned unit to

prepare the Inventory and Inspection Report of

Unserviceable Property (IIRUP) for the disposal

of the unserviceable properties.

VII Conducted disposal of unserviceable properties

in 2015 and another disposal of the same was

tentatively scheduled within this year. Disposal

will be done after the conduct of physical count

of PPE.

XIII Management will schedule the disposal of

unserviceable PPE and the necessary adjustment

shall be made thereon.

Fully

Implemented

Fully

Implemented

Partially

Implemented

Partially

Implemented

Partial disposal

of unserviceable

properties was

made.

\

Disposal was

scheduled on the

first semester of

2017.

18. Unreliable Liabilities Account

In Region IV-B, the accuracy of the

balance of the liabilities accounts

aggregating ₱38.470 million as at year-

end was doubtful due to: (a) the

recognition of liability to LGUs

amounting to ₱33.386 million for the

implementation of RAY Batch 3

Pages

140-

141 of

CAAR

2015

48


Implementation

Reason for

Non/Partial

Implementation

projects without valid claim; and (b)

inclusion of Other Payables amounting

to negative ₱0.810 million.


a. recognize as Accounts Payable

those transactions that are due and

demandable and with valid claim

only; and

b. prepare the necessary adjustment to

correct the entry made.

c. instruct the Accountant to analyze

and investigate the abnormal

balance of the Other Payables

account and make the necessary

adjustment for fair presentation of

the account.

In Region IV-B, necessary adjustment on the

P33.86 million liabilities for RAY Batch 3 fund was

already made.

The Accountant prepared the necessary adjustment

in the books of accounts.

Analysis of abnormal balances was already

completed and adjusting entries were made.

Fully

Implemented

Fully

Implemented

Fully

Implemented

19. Non-compliance with certain

provisions of RA 9184

The retention money of ₱3.651 million

for the rehabilitation and improvement

of Road Network of PNP at Camp

Bagong Diwa, Taguig City was

Pages

141-

146 of

CAAR

2015

49


Implementation

Reason for

Non/Partial

Implementation

released to the contractor even without

the certificate of final acceptance of the

project and the certificate from the end-

user that project was completed and

accepted in violation of Section 6.2 of

Annex E of the Revised Implementing

Rules and Regulations of RA 9184 and

Section 9.1.1.5 of COA Circular No.

2012-001 dated June 14, 2012.


a. require the Chief Accountant and

the Chief, General Services

Division to submit explanation on

the release of retention money even

without the final acceptance of

works and certification from PNP-

NCR Regional Director that the

project is completed and inspected

as supporting documents; and

b. require the Chief, General Services

Division to submit the status of the

said project as of December 31,

2015.

Management requested the contractor to renew the

surety bond but the contractor requested the

renewal of the same until the issue on the variation

order amounting to ₱4,876,791.78 has been settled.

The project was 100 percent completed based on

the Statement of Work Accomplished as of May 23,

Fully

Implemented

Fully

Implemented

50


Implementation

Reason for

Non/Partial

Implementation

Other deficiencies noted in the audit of

procurement in the Central Office and

Regional Offices.

In CO, the provisions of the Revised

Implementing Rules and Regulations

(IRR) of Republic Act (R.A.) 9184

regarding the award and

implementation of the contract were

not strictly followed; hence, delay in

the procurement process.


a. require the Chief, General Services

Division to submit copy of Notice

to Proceed bearing the date of

issuance and the date of receipt by

the winning bidder; and

2016 while the certificate of project completion was

issued on May 24, 2016.

Final inspection was conducted on May 23, 2016

and the warranty security in the form of surety bond

amounting to ₱21,903,722.00 was issued by E.

Garcia Construction Corporation valid until June

15, 2017.

In Central Office, locating the said NTP may take a

considerable period of time.

Not

Implemented

NTP was not yet

submitted.

51


Implementation

Reason for

Non/Partial

Implementation

b. Strictly adhere to the provisions of

the above mentioned regulations on

the period of action on procurement

activities

In CO, the unpaid balance of the

contract cost of the project amounting

to P565,610.31 was taken up in the

books by debiting Due to NGAs

account and crediting Accounts

Payable account; hence, resulted in

the understatement of the Due to

NGAs account and the overstatement

of the Accounts Payable both by

₱565,610.31.


require the Chief Accountant to

prepare the necessary adjustment on

the affected accounts in the financial

statements.

In Region I, failure of bidding was

declared on the repair/rehabilitation

of the Regional Office Building on

the basis of the non-conduct of pre-

bid conference.

The agency inferred that the actual date of receipt

of NTP is sometime between August 28, 2013 (date

of contract execution) and September 4, 2013 (start

of the project).

Affected accounts were adjusted under Journal

Entry Voucher (JEV) No. 2016-03-000181 dated

March 14, 2016.

Not

Implemented

Fully

Implemented

Date of receipt

was not indicated

in the NTP.

52


Implementation

Reason for

Non/Partial

Implementation


comply with the pertinent provisions

of RA 9184. Failure of bidding

should be declared based on the

conditions set under Section 35 of

RA 9194.

In Region II, pertinent documents

that formed part of various contracts

costing ₱8.503million for various

infrastructure projects were not

submitted to COA.


require the BAC to submit the

lacking documents to COA.

Procurement of fuel, oil and

lubricants amounting to

₱4,044,125.53 for CYs 2012 to 2015

were made without competitive

bidding contrary to Section 10 of the

revised IRR of RA 9184.The agency

continuously procured its fuel

requirement from St. Francis Shell

Station whose contract with DILG

Region XI as supplier of the same

has already lapsed in 2011.

It was agreed by the BAC that declaration of failure

of bidding should be in compliance with Section 35

of RA 9184.

Lacking documents for various contract costing

P8.503 million for various infrastructure projects

were submitted to COA as of June 30, 2016.

Fully

Implemented

Fully

Implemented

53


Implementation

Reason for

Non/Partial

Implementation


conduct public bidding in the

procurement of fuel, oil and

lubricants and submit explanation on

the procurement of fuel, oil and

lubricants from St. Francis Shell

Station which contract with DILG

Region XI has already lapsed in

2011.

The FAD already adhered to Section 10 of RA

9184. Consequently, the contract for the provision

of services and supplies for fuel, oil and other

lubricants was awarded to TKS Gasoline Station

effective May 1, 2016.

Fully

Implemented

20. Documentation and Compliance

Claims totaling ₱804.611 million were

paid even without complete

documentation contrary to COA

Circular 2012-001 and Section 4 (6) of

PD 1445


submit immediately the necessary

documents to support the disbursement

to avoid suspensions and

disallowances.

Pages

146-

149 of

CAAR

2015

Of the P804.611 million with documentation and

compliance deficiencies, P525 million or 65.3

percent were supported with required documents.

In Region VIII, management has stopped procuring

tickets from travel agencies and will make

necessary actions to trace and match each DV with

plane tickets and travel claims.

Partially

Implemented

Partial

submission of

documents was

made.

54


Implementation

Reason for

Non/Partial

Implementation

In Region XI, management has partially submitted

copies of JEVs with supporting documents on

March 11, 2016. Compliance to the documentary

requirements of the remaining P279.5 million is in

progress.

21. Financial reports and supporting

documents/schedules were submitted

to COA beyond the prescribed period

under Section 41 of PD 1445, COA

Circular Nos. 95-006 and 2009-001

causing delay in the verification of

accounts and the timely

communication of the noted

deficiencies to Management.


strictly comply with the reglementary

period of submission of the required

reports, supporting documents and

contracts in compliance with the

abovementioned regulations.

Pages

150-

151 of

CAAR

2015

The following offices have submitted the required

reports and documents and committed to comply

within the reglementary period of submission.

Region VIII is in the process of preparing the

required reports/documents for submission to COA.

Office Reports/Documents Comments and Action/s Taken

C.O Report of Checks Issued, and

ADA

Reports of Checks Issued and Report

of ADA from October to December

2015 were submitted to COA-DILG

on November 5 and December 10,

2015 and January 12, 2016.

I Accounts and reports of the

provincial offices of Ilocos

Norte, Ilocos Sur, La Union and

Pangasinan

Region 1 is monitoring the

compliance of each provincial offices

in the submission of the required

Fully Implemented

Fully Implemented

55


Implementation

Reason for

Non/Partial

Implementation reports within the reglementary

period

II Contracts costing

₱11,204,432.13 for the

rehabilitation of potable water

in Basco, DILG Regional

Office & various infra in

Cagayan

Reports and supporting documents

were already submitted to the Office

of the Resident Auditor.

Contract for the local access

road costing ₱1,588,346.93 DVs of the provincial office of

Quirino amounting to

₱880,866.28

IV-B Monthly Report of Checks

Issued (RCI) together with the

DVs

The concerned office has already

complied with the recommendation

of the Resident Auditor.

V DVs and supporting documents

for the months of August to

December 2015

Disbursement Vouchers for the month

of December were transmitted to

COA in July 2016

VI Trial Balance, DVs and

supporting documents for Trust

Fund and field offices for the

month of July to December

2015; Monthly Report of Fuel

Consumption; and Monthly

Report of Official Travels for

each motor vehicle

Financial Reports for January to May

2016 were submitted on June 30,

2016.

VIII Trial Balance and Financial

Statement as of December 31,

2015

Already submitted to COA.

XI Copies of MOA for the

obligated funds to LGUs

amounting to

P1,109,437,337.67 in the

implementation of the

PAMANA, Salintubig, PCF,

and BUB projects.

Copies of MOA of subprojects

implemented under FYB 2014 GPBP,

FY 2014 SALINTUBIG, FY 2014

PAMANA and FY 2015

SALINTUBIG were submitted to

COA on February 17, 2016. Copies of

notarized MOA shall be submitted to

COA.

XII Copies of required documents were

already submitted to COA within the

prescribed period.

XIII Quarterly Physical Report of

Operation (BAR No.1) for 1st-

3rd quarter of 2015

The Planning officer already

submitted the BAR-1 to COA as of

December 31, 2015.

Fully Implemented

Fully Implemented

Fully Implemented

Fully Implemented

Fully Implemented

Fully Implemented

Fully Implemented

Fully Implemented

56


Implementation

Reason for

Non/Partial

Implementation

22. Disbursement Vouchers/ Liquidation

Reports and supporting documents

were not stamped “PAID” or marked

with similar indication contrary to

sound internal control on cash

disbursements.


require the concerned Accountable

Officer to stamp “PAID” all paid

vouchers/liquidation reports and its

supporting documents pursuant to

COA Circular No. 92-389 to prevent

possible reuse.

Pages

151-

152 of

CAAR

2015

All paid vouchers and the supporting documents in

Regions I and IX were stamped “PAID” to prevent

possible re-use.

Fully

Implemented

23. In Region VIII, the mandatory monthly

net take home pay of Three Thousand

Pesos (₱3,000.00) was not observed

resulting in the payroll payments of

below ₱3,0000.00 to various personnel,

contrary to Section 48 of the General

Appropriations Act, FY 2015.


comply with the provisions of Section

48 of the GAA FY 2015 and strictly

observe the monthly take home pay of

₱3,000.00 of each personnel.

Pages

152-

153 of

CAAR

2015

Management has complied with the audit

recommendation effective July 2016.

Fully

Implemented

57


Implementation

Reason for

Non/Partial

Implementation

24. Status of Audit Disallowances and

Suspensions

Audit disallowances totalling ₱49.991

million remained unsettled as at year-

end due to the failure of management

to strictly enforce settlement thereof,

contrary to the Sections 7.1.1, 7.1.4 and

10.4 of COA Circular No. 2009-006

dated September 15, 2009.


enforce the settlement of all audit

disallowances pursuant to the above-

cited regulations.

Pages

153-

154 of

CAAR

2015

The disallowances of P48 million as of December

31, 2015 was reduced to P42.76 million as of June

30, 2017.


C.O Bulk of the suspended amount represents the

unliquidated fund transfer of P1.4 million to

DPWH. The supporting documents required

for the lifting of suspension on the honoraria

amounting to P284,089.00 were already

submitted to COA.

Partially

Implemented

The Accounting

Division is

gathering

information on

the present

addresses of

former officials

and employees

with

58


Implementation

Reason for

Non/Partial

Implementation

NCR Amount suspended was already settled.

CAR Some documents on disallowances and

charges have been found while others are

continuously being located.

I Full settlement has been made.

II The disallowance of P5,500 has already been

paid by the concerned accountable

employees. The request for authority to write-

off the accounts pertaining to the

disallowance amounting to ₱1,021,776.48 has

been granted by the Commission on Audit

under Decision No. 2016-223 dated August

16, 2016.

III Salary deduction scheme in the settlement of

disallowance is being implemented.

Fully Implemented

Partially

Implemented

Fully Implemented

Fully Implemented

Partially

Implemented

disallowances to

facilitate the

issuance of

demand letters.

Documents on

disallowances

and charges are

continuously

being located.

Partial settlement

has been made

for disallowance.

59


Implementation

Reason for

Non/Partial

Implementation

IV-A Partially settlement of disallowance was

made.

IV-B The accountable employees have already

started paying their respective disallowed

liabilities.

V The balance of P5,908.06 will be paid through

salary deduction starting January 2017.

VI Demand letters were continuously sent to

retired/transferred DILG personnel for the

settlement of disallowance.

VII The settlement of this account is still on going

thru payroll deduction.

VIII Management requested the write off of

dormant disallowance but the request was

denied by COA. The dormant balance of

disallowance has been existing even before

the Regional Office building was destroyed

by fire on December 20, 2014.

Partially

Implemented

Partially

Implemented

Partially

Implemented

Partially

Implemented

Partially

Implemented

Partially

Implemented

Settlement of

disallowance is

on going.

Settlement of

disallowance is

on going.

Disallowance

was paid through

salary deduction

Settlement of

disallowance is

on going

Settlement of

disallowance is

on going

Still existing in

the books and no

payment has

been made.

60


Implementation

Reason for

Non/Partial

Implementation IX Prior years’ disallowances mostly belong to

officials who are no longer in-service.

Majority of these were balances of officials

from the ARMM region whose whereabouts

are unknown and could no longer be located.

X Payment of disallowances will be effected

starting January 2017.

XI Enforce the settlement of all audit

disallowance

XII Disallowances in the amount of ₱69,949.00

was reduced to ₱2,300.00 as June 30, 2017.

XIII Disallowances was fully settled as of June 30,

2016.

Not Implemented

Partially

Implemented

Partially

Implemented

Partially

Implemented

Fully Implemented

No action was

taken by

management to

settle the

disallowance.

Partial payment

has been made

through salary

deduction.

The remaining

balance is

continuously

being deducted

from the monthly

salary.

61


Implementation

Reason for

Non/Partial

Implementation

25. Programs/ Projects for the Senior

Citizens and the Differently-Abled

Persons

Except for Regional Office Nos. II, IV-

A, IV-B and NCR, the rest of the

regional offices including the Central

Office formulated activities, programs

and projects for senior citizens and

differently-abled persons in

compliance with Section 35 of the

General Appropriations Act of 2015.


agreed to comply with the provision of

Section 35 of the GAA and ensure the

provision for architectural and

structural facilities, features and

designs that shall reasonably enhance

the mobility, safety and welfare of the

senior citizen and the differently-abled

persons in the different DILG regional,

provincial and field offices.

Pages

157-

159 of

CAAR

2015

Office Expenditures Activities/Programs/Projects

Undertaken

NCR 0.00 The recommendation will be considered in

the 2016 realignment of funds and budget. Plans and programs for senior citizens and

differently –abled person will be

incorporated in the succeeding activities of NCR. The structural facilities, features and

designs that will reasonably enhance the

mobility, safety and welfare of the differently-abled person will be included in

the Phase 2 renovation of NCR’s office

subject to available funds and savings.

II 0.00 Programs and project concerning citizen and person with disabilities were included

in the program of the activity of the agency

IV-A 0.00 The recommendation will be considered in the 2016 budget.

Not Implemented

Fully Implemented

Fully Implemented

Not Implemented

No action was

taken by

management.

62


Implementation

Reason for

Non/Partial

Implementation

IV-B 0.00 The concerned office will provide plans, programs, and projects concerning senior

citizens and person with disabilities that

will be included in the activities of the agency.

No action taken

by management

for the year.

26. Compliance with tax laws

While appropriate taxes due from

suppliers and contractors as well as

from the compensation of DILG

officials and personnel were withheld

and remitted to BIR by the Central

Office and 16 regional offices,

however, taxes for other personnel

benefits of officials and employees in

Regional Office No. II totaling

₱9,592,584.94 were not withheld

contrary to Revenue Memorandum

Circular No. 23-2012.

We recommended that Management of

Region II comply with the provisions

pertinent to BIR regulations requiring

the employer to deduct/withhold taxes

from other personnel benefits of

officials and employees.

Pages

160 of

CAAR

2015

The DILG Regional Office directed the Payroll

Officer to deduct the corresponding amount of tax

every payroll period and remit to BIR.

Fully

Implemented