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Republic of the Philippines
COMMISSION ON AUDIT
NGS, Cluster 5 – Education and Employment
Regional Office No. XIII
Butuan City
Ref. No.: ML- DOLE-ROXIII-2018-01
Date: March 1, 2018
CHONA M. MANTILLA, CESO III
Regional Director
Department of Labor and Employment
Region XIII, Butuan City
Dear Director Mantilla:
Management Letter on the Audit of the
Department of Labor and Employment
Regional Office No. XIII, Butuan City
for the period January 1 to December 31, 2017
1. Pursuant to Section 2, Article IX-D of the Constitution of the Philippines and
Section 43 of the Government Auditing Code of the Philippines (PD 1445), we have
audited the accounts and operations of the Department of Labor and Employment
(DOLE), Regional Office XIII for the period ended December 31, 2017. The audit was
conducted in accordance with applicable legal and regulatory requirements, and generally
accepted auditing standards. Those standards require that we plan and perform the audit
to obtain a reasonable basis for our conclusions.
2. The audit was conducted to (a) verify the level of assurance that may be placed on
management’s assertions on the financial statements; (b) recommended agency
improvement opportunities; and (c) determine the extent of implementation of prior
year’s audit recommendations.
3. The Agency’s statements financial position and financial performance for
calendar year 2017 are shown in the attached audited financial statements labeled as
Annexes A.1 – A.6.
4. Deficiencies observed in the course of the audit were earlier communicated
through Audit Observations Memoranda (AOMs) and discussed with concerned DOLE-
ROXIII officials and employees in an exit conference conducted on March 1, 2018. Their
comments were incorporated in this Management Letter, where appropriate. The
significant audit observations and the recommendations shall be incorporated in the
Consolidated Annual Audit Report (CAAR) of DOLE for CY 2017.
2
A. INTRODUCTION
Agency Mandate
5. The Department of Labor and Employment (DOLE) became a department on
December 8, 1933 with the passage of Act 4121. A national government agency
mandated to formulate policies, implement programs and services, and serve as the
policy-coordinating arm of the Executive Branch in the field of labor and employment.
The organization and functions of the DOLE are provided under Executive Order No.
126, as amended by the Labor Code of the Philippines, and other relevant and pertinent
legislations.
6. The DOLE has exclusive authority in the administration and enforcement of labor
and employment laws and such other laws as specifically assigned to it or to the
Secretary of Labor and Employment.
7. Consistent with the National Development Plan, the Department of Labor and
Employment’s vision is to attain a full decent and productive employment for every
Filipino worker. DOLE is also mandated to promote gainful employment opportunities,
develop human resources, protect workers and promote their welfare and maintain
industrial peace.
Personnel Complement
8. As of December 31, 2017, the DOLE-ROXIII is manned by 42 regular and 20
contractual personnel headed by the Regional Director, who oversees the operations of
DOLE in the Region including the four (4) provincial field offices, namely: Agusan del
Norte; Agusan del Sur; Surigao del Norte and Dinagat Island Province; and Surigao del
Sur:
Name Position/Designation
Chona M. Mantilla Regional Director
Naomi Lyn C. Abellana Assistant Regional Director
Herminigildo L. Daytoc Chief, TSSD
Raymond Fel F. Sajor Chief, IMSD
Giovanni S. Paredes Accountant III
Estrello B. Espina Budget Officer
Ana B. Delos Reyes Cashier-Designate
Ruth N. Sanchez Supply Officer
Buhawe C. Correa Planning Officer III
Keith C. Duran Chief, ADNFO
Jocelyn L. Bastareche Chief, ADSFO
May C. Velonta Chief, SDNFO
Genebelle B. Bal Chief, SDSFO
Verlan V. Diaz Chief,PDISO
Atty. Rechell Bazar-Apao Mediator-Arbiter
3
Major Accomplishments
9. During the year, the DOLE-ROXIII reported among others, the following
accomplishments, which focused on three Major Final Outputs (MFOs):
By Organizational Outcome:
PERFORMANCE INDICATORS
(PIs)
ACTUAL
ACCOMPLISHMENTS
(CY 2017)
TARGETS
(CY 2017)
(SHORT)/
OVER
(CY 2017)
ORGANIZATIONAL OUTCOME
1. Employability of Workers and Competitiveness of Enterprise Enhanced
Percentage of Special Program
for the Employment of Students
(SPES) beneficiaries graduated
from Tech-Voc or college
3%
1-2%
1-2%
Percentage of jobseekers placed
for employment
82% 80% 2%
2. Cooperation between Labor and Employers Sustained
Compliance rate with labor laws
of establishments that employed
10 or more
70%
Increase in number of Industry
Tripartite Councils (ITCs)
established in industries reached
by labor Education
- - -
Percentage increase in Industrial
Tripartite Councils adopting
Voluntary Code of Good Practices
(VCGPs)
- - -
3. Social Protection for Vulnerable Workers Strengthened
Percentage of beneficiaries
provided livelihood formation
assistance with continued
employment and income after six
months of availment
2%
(75 out of 4,686
beneficiaries)
No target N/A
4
By Major Final Output (MFO):
MFO KEY PERFORMANCE
INDICATORS (KPIs)
ACTUAL ACCOMPLISHMENT
(CY 2017)
2017
TARGETS
(SHORT)/
OVER
(CY 2017)
MFO 2: EMPLOYMENT FACILITATION
AND CAPACITY BUILDING
SERVICES
No. of qualified persons referred
for placement
No. of individual reached through
Labor Market Information (LMI)
Percentage of individual who rate
the services provided as
satisfactory or better
Percentage of individuals provided
services within the prescribed
process cycle time (PCT)
No. of beneficiaries provided of
livelihood assistance (₱20,000 on
the average capital cost/project)
No. of beneficiaries under Special
Program for the Employment of
Student (SPES)
Percentage increase in livelihood
income due to improved
production for the first year of
implementation
Percentage of beneficiaries who
rate the services provided as
satisfactory or better
Percentage of workers provided
services within the prescribed PCT
118,833
101,520
82.50%
100%
4,686
11,452
-
82.50%
100%
87,525
61,000
70%
100%
2,158
9,294
-
70%
100%
31,308
40,520
12.50%
-
2,528
2,158
-
12.50%
-
MFO 3: LABOR FORCE WELFARE
SERVICES
No. of workers served
Percentage of workers who rate the
services provided as satisfactory or
better
Percentage of affected workers
provided services within the
prescribed PCT
17,864
82.50%
100%
3,340
70%
100%
14,524
12.50%
-
5
MFO KEY PERFORMANCE
INDICATORS (KPIs)
ACTUAL ACCOMPLISHMENT
(CY 2017)
2017
TARGETS
(SHORT)/
OVER
(CY 2017)
MFO 4: EMPLOYMENT REGULATION
SERVICES
No. of establishments inspected
No. of workers covered as a result
of inspections conducted
Percentage of establishments with
deficiencies given appropriate
assistance leading to compliance
Percentage of appealed labor
disputes disposed (SpeEd)
Percentage of application for
permits/licenses/registrations
processed within prescribed PCT
Percentage of complaints and
request for assistance settled within
30 days from filing (Single Entry
Approach)
966
23,646
100%
100%
100%
100%
950
No Target
100%
100%
100%
100%
16
N/A
-
-
-
-
Financial Profile
10. The comparative financial condition, sources, allocationand utilization of funds
and the Notice of Cash Allocation for CY 2017 of DOLE Regional Office XIII are
presented below:
a. Financial Condition
Account 2017 2016 Increase (Decrease)
Amount %
Asset ₱114,592,497.06 ₱122,220,901.23 (7,628,404.17) (6.24%)
Liabilities 31,570,958.13 23,901,397.57 7,669,560.56 32.09%
Net Assets/ Equity 83,021,538.93 98,319,503.66 (15,297,964.73) (15.56%)
b. Sources and Application of Funds
Account 2017 2016 Increase (Decrease)
Amount %
Revenue ₱3,199,450.00 ₱691,920.00 2,507,530.00 362.40%
Less: Current Operating
Expenses 150,300,160.63 158,427,365.70 (8,127,205.07) (5.13%)
Surplus/(Deficit) from current
operations (147,100,710.63) (157,735,445.70) 10,634,735.07 (6.74%)
Net Financial
Assistance/Subsidy
151,730,476.13
176,649,645.75
(24,919,169.62)
(14.11%)
Surplus/(Deficit) for the period 4,629,765.50 18,914,200.05 (14,284,434.55) (75.52%)
6
c. Sources and Utilization of Funds
c.1. Current Year Appropriations
Source of Funds Amount in Pesos
Appropriations Allotments
Obligations
Incurred
Unobligated
Balance
A. Agency Specific
Budget
Personal Services 26,542,775.81 26,542,775.81 26,481,331.40 61,444.41
Maintenance and
Other Operating
Expenses 154,342,598.81 154,342,598.81 138,842,681.00 15,499,917.81
Capital Outlay 565,000.00 565,000.00 564,470.00 530.00
B. Special Purpose Funds
Personal Services 1,372,323.00 1,372,323.00 1,372,321.49 1.51
C. Automatic
Appropriations
RLIP 2,277,202.82 2,277,202.82 2,271,149.49 6,053.33
Total 185,099,900.44 185,099,900.44 169,531,953.38 15,567,947.06
c.2. Continuing Appropriations
Source of Funds Amount in Pesos
Appropriations Allotments
Obligations
Incurred
Unobligated
Balance
A. Agency Specific
Budget
Personal Services
Maintenance and
Other Operating
Expenses (MOOE) 40,149,779.93 40,149,779.93 21,526,816.30 18,622,963.63
Capital Outlay 771,990.00 771,990.00 667,040.00 104,950.00
B. Special Purpose Funds
MOOE
C. Automatic
Appropriations
RLIP
Total 40,921,769.93 40,921,769.93 22,193,856.30 18,727,913.63
d. Notice of Cash Allocation
Particulars Amount Received Disbursements Unutilized
Balance
Reverted to
National
Treasury
NCA 125,186,262.17 96,260,787.63 28,925,474.54 28,925,474.54
NTA 60,873,181.56 50,710,176.99 10,163,004.57 10,163,004.57
Total 186,059,443.73 146,970,964.62 39,088,479.11 39,088,479.11
7
B. Summary of Recommendations
11. For the deficiencies observed in the course of the audit, we recommended that
Management:
a. Instruct the focal person to devise a mechanism to fast track the timely conduct of
information and orientation/dissemination activities to all Higher Educational
Institutions (HEIs) and partner agencies.
b. Make proper representation in Commission on Higher Education (CHED);
Department of Education (DepED) and Technical Education and Skills
Development Authority (TESDA) offices and gather the names of HEI displaced
workers and validate if they were indeed absorbed or were provided with
scholarship grants under the DOLE-AMP Program and determine the reasons in
case of non-availment.
c. Conduct close and regular monitoring on the implementation of the DOLE-AMP
Program by submitting regularly the monthly progress reports. Likewise,
maintain an updated data base of HEI displaced personnel to ensure that all are
given the necessary assistance and intervention.
d. Ensure that the HEIs and implementing agencies shall have copies of the list of
the requirements and application forms ready for distribution to the HEIs
displaced personnel.
e. Instruct the program focal person to check right away the completeness of the
attachments to the application form so that processing can be completed within
the prescribed period of ten days. Likewise, close monitoring of the
implementation of the program should be undertaken.
f. Issue an Office Memorandum to the Provincial Officers and all others concerned
indicating therein strict adherence to the procedures outlined in the processing of
applications and project proposals and by taking into consideration the importance
of all the documentary requirements.
g. Instruct the Regional Focal person and the Chief of Technical Services and
Support Division (TSSD) to conduct regular and close monitoring to ensure
efficient and effective implementation of various PAPs and undertake timely
corrective measures on issues encountered, if there’s any.
h. Require the members of the “task force liquidation” to determine the reason/s for
the non/delayed submission of liquidation reports by the Implementing Agencies
(IAs) and exhaust all means to teach/assist them as to what, how and when to
8
prepare the said report and its requirements so that they can learn on their own
how to prepare and submit succeeding liquidation reports on time.
i. Stop the practice of transferring funds to the IAs with unliquidated balances
without requiring first to settle the outstanding balance. Likewise, ensure that the
IAs understood their indispensable obligation and the related accountability on the
utilization and liquidation of the funds transferred to them.
j. Require all concerned to closely observe at all times the prescribed guidelines on
fund transfers as mandated in Section 4.6 of COA Circular No. 94-013 and
Section 5.4 of COA Circular No. 2007-001.
k. Direct the Accountant to immediately take-up the adjustments for all reconciling
items in the books of accounts through the preparation of Journal Entry Voucher
(JEV) and thereon, reconcile the ledger and cashbook (audited) balances.
l. Direct the Accountant to prepare the necessary journal entries to effect the
adjustments and correct the balances of the Due from LGU and Accumulated
Surplus/Deficit Accounts.
m. Faithfully observe the stipulations on proper and timely recording of stale checks
in the respective accounts and the preparation and maintenance of the SLs for
easy monitoring and verification in audit.
n. Direct the Accountant to record the total audit disallowances of ₱247,781.00 and
make the necessary adjustments for Notices of Disallowance (NDs) erroneously
recorded in the books to present an accurate and reliable balances of the accounts
as presented in the financial statements.
o. Observe strict compliance on the pertinent regulations in recording of audit
disallowances as stipulated in Section 22.6 of COA Circular No. 2009-006 dated
September 15, 2009 to ensure proper recognition of the same, and immediately
effect adjustments, if any.
p. Direct the Supply Officer-designate to furnish the required Inventory Custodian
Slip (ICS) and Requisition and Issue Slip (RIS) to the Accounting Section as basis
for the proper recording of expenses for semi-expendable inventories amounting
₱2,331,124.89.
q. Exert extra effort to ascertain the correctness of the balance per books of
₱6,552,145.76 against the records of the Supply Officer. Require the Inventory
Committee to conduct physical count of all inventories on hand and those that are
still carried in the books but confirmed to be non-existing and already issued/used
shall be dropped from the books.
9
r. Direct the Accountant and the Supply Officer-designate to properly account all
inventories on hand, and that the individual Subsidiary Ledger (SL) Cards and
Stock Cards shall be maintained by the Accounting and Supply Section,
respectively and ending balances should be reconciled regularly by both offices to
ensure accuracy and reliability of the account balances.
s. Direct the Accountant and the Supply Officer-designate to faithfully observe the
pertinent provisions of the Government Accounting Manual (GAM) with regards
to the recording and issuance of inventories and semi-expendable properties.
t. Require the Accountant and the concerned personnel to ensure that all
Disbursement Vouchers (DVs) are all supported with necessary documentation in
compliance with the foregoing provisions of PD 1445 and COA Circular No.
2012-001 as processing of DVs for payment with incomplete documentation is a
ground for suspension and/or disallowance in audit.
u. Revisit COA Circular No. 2012-001 for reference of applicable documentary
requirements of all types of disbursements to be undertaken in the future.
v. Assess the availability of manpower and the corresponding workloads both of the
accounting and cashiering sections and increase the personnel assigned thereto, if
necessary.
w. Instruct the Accountant to stop the practice of granting additional cash advances
without requiring to liquidate previous advances.
x. Direct the Special Disbursing Officers (SDOs) to minimize or restrict the practice
of allowing Job Order personnel to keep the receipts and other documents and to
allow the preparation of the liquidation reports without their direct supervision.
y. Install a sound internal control system over the granting, utilization and
liquidation of cash advances by observing strictly the pertinent guidelines in the
granting, utilization and liquidation of cash advances.
z. Direct the Accountant and the Supply Officer to devise a mechanism and fast
track the preparation of the prescribed ledger cards and the stock/property cards,
respectively and require its proper maintenance/updating of records to warrant
completeness of information.
aa. Install a sound internal control system over the preparation and maintenance of
the required ledger/stock and property cards alongside the regular monitoring in
its execution. Regular reconciliation of the balances per item shall also be
conducted to ensure accuracy of the recorded transactions.
10
bb. Direct the Accountant to prepare and maintain SLs for the Cash – Collecting
Officer and Advances to SpecialDisbursingOfficer accounts to support the GL
balances.
cc. Direct the SDOs to record the transactions daily in the related CDRec and to
reconcile the cashbook balance with cash on hand at the close of each day.
dd. Direct the SDOs to foot the balances daily and accomplish the certification
portion of the CDRec at the end of each month.
ee. Ensure that the Expanded Modified Direct Payment Scheme (ExMDPS), for all
accounts payable due to creditors/payees of the agency is fully implemented.
ff. Strictly adhere with the guidelines prescribed by the DBM Circular Letter Nos.
2013-16, dated December 23, 2013, as stipulated.
gg. Direct the Accountant to immediately remit all the remaining cash balances to the
National Treasury, and correspondingly close the current accounts maintained at
Philippine Veterans Bank (PVB) and Land Bank of the Philippines (LBP).
hh. Remit or deposit all trust receipts to the National Treasury and disburse it by
means of separate MDS check series subject to the issuance of a Notice of
Allocation (NCA) and in accordance with existing accounting and auditing rules
and regulations.
ii. Direct the BAC to amend or modify the MOA entered into between DOLE-
ROXIII and M. Lhuillier Financial Services, Inc. by inserting a specific provision
pertaining to the issuance of Official Receipts with emphasis as to the prescribed
period and the related sanctions among others, if the first party failed to comply.
jj. Conduct regular and close monitoring on the implementation of the MOA and
ensure that faithful compliance of the terms and conditions are adhered to by both
parties to safeguard the best interest of the government.
11
C. Detailed Observations and Recommendations
Value-for-Money Audit
Efficiency and Effectiveness
Low utilization of DOLE-AMP Funds
Late conduct of advocacy campaigns/information dissemination relating to the
implementation of the DOLE-AMP resulted in the low utilization of funds
amounting to ₱858,408.35 or only 67% out of the total appropriations of
₱1,288,033.25, thus, the program’s objective to enhance the employability and
competitiveness of HEI displaced personnel particularly in CY 2017, to mitigate the
adverse economic impacts caused by the K to 12 Curriculum, was not fully attained.
12. Section 2 of DOLE Department Order No. 177 series of 2017 or Expanding
DOLE AMP sets the program’s objective:
“The program aims to provide assistance and interventions to displaced HEI
personnel, enhance their employability and competitiveness, and mitigate the
adverse economic impacts of the implementation of Republic Act 10533.”
13. Likewise, Section 3 of Article 5 Program Management provides for the specific
functions of the DOLE Regional office:
a. Monitor displacements through Reports of Potential Displacements;
b. Facilitate the provision of assistance to displaced personnel;
c. Conduct advocacy campaigns and information dissemination activities;
d. Ensure timely delivery of services to beneficiaries;
e. Coordinate with regional counterparts from DepEd, CHED and TESDA;
f. xxx
14. Review of the fund utilization and implementation of the DOLE-AMP disclosed a
utilization rate of only 67% or ₱858,408.35 out of the total current and continuing
appropriations of ₱1,288,033.25 as at December 31, 2017. It was also noted that there
were only four (4) HEI displaced personnel who were afforded with financial assistance
or a total payment of ₱129,245.00, as presented below:
Table A. DOLE-AMP Fund Utilization as at December 31, 2017
Particulars
Appropriation
(Current and
Continuing)
Allotment
Obligation
Balance
% of
Utilization
Financial
Support ₱230,755.00 ₱230,755.00 ₱129,245.00 ₱101,510.00 56%
12
Particulars
Appropriation
(Current and
Continuing)
Allotment
Obligation
Balance
% of
Utilization
Administrative
Cost 594,832.57 594,832.57 590,677.11 4,155.46 99%
Salary of K-12
technical
staffs
462,445.68 462,445.68 138,486.24 323,959.44 30%
Total ₱1,288,033.25 ₱1,288,033.25 ₱858,408.35 ₱429,624.90 67%
15. The preceding table showed the total appropriation of DOLE-AMP of
₱1,288,033.25 composed of financial support, administrative costs and salary payments
of two (2) technical staffs as at December 31, 2017. The financial support was granted to
only four (4) out of the 23 targeted HEI displaced personnel based on CHED-ROXIII
report as of CY 2016.
16. A letter dated January 11, 2018 was communicated by the audit team to
Management requesting submission of pertinent documents along with the status on the
program’s implementation. Verification of the submitted documents showed that the
required monthly progress reports were only prepared starting September 2017 and that
there was no gathered information on the total number of displaced HEI personnel for CY
2017. It was also observed that there were no advocacy campaigns conducted neither
there were any information dissemination activities/orientations held at various HEIs as
well as in the partner agencies which comprised of CHED,DepEd, TESDA and PESO
offices, in the earlier part of 2017 but it was only undertaken in October and November
2017.
17. Inquiry with the incumbent focal person who just assumed post in the middle of
September 2017, revealed that there were no monthly progress reports nor a list of
displaced HEI personnel that was turned over by the previous program in-charge. The
Regional DOLE-AMP focal team immediately sent out letters to HEIs and PESOs in
October 2017 informing them of the Expanded K-12 DOLE AMP and carried out five (5)
orientations within CaragaRegion from November 13-17, 2017. The team also plans to
conduct HEI visitations and orientations to other PESOs on the first quarter of CY 2018.
18. The foregoing conditions could also be attributed to Management’s lack of
regular monitoring and laxity in its execution. It was opined that the necessitated
information campaign and orientations were conducted late, thus, the required
data/information as to the total number of displaced HEI personnel in CY 2017 was not
obtained.
19. As a result, DOLE-AMP was not able to address fully the objective to support all
displaced HEI personnel particularly in CY 2017 by extending necessary assistance and
interventions to enhance their employability and competitiveness and to mitigate the
13
adverse economic impacts due to the implementation of K to 12 Curriculum, was not
fully attained.
20. We recommended that Management: Instruct the focal person to devise a
mechanism to fast track the timely conduct of information and
orientation/dissemination activities to all HEIs and partner agencies.
21. Make proper representation in CHED,DepEd and TESDA offices and gather
the names of HEI displaced workers and validate if they were indeed absorbed or were
provided with scholarship grants under the program and determine the reasons in case
of non-availment.
22. Henceforth, conduct close and regular monitoring on the implementation of the
program by submitting regularly the monthly progress reports. Likewise, maintain an
updated data base of HEI displaced personnel to ensure that all are given the necessary
assistance and intervention.
23. Management replied that they are appreciative of the recommendations and will
implement the same.
Delayed processing of DOLE-AMP applications
The processing of the application of four (4) DOLE-AMP HEI displaced personnel
was delayed ranging from 29 to 58 days, thus, the objective for a timely and efficient
facilitation of services to the beneficiaries as provided for in item d, Section 3 of
Article 5 of the Department Order No. 177-17 series 2017 “Expanding the DOLE-
AMP”, was not achieved.
24. Section 3 of Article 5 Program Management provides for the specific functions of
the DOLE Regional office:
a. Monitor displacements through Reports of Potential Displacements;
b. Facilitate the provision of assistance to displaced personnel;
c. Conduct advocacy campaigns and information dissemination activities;
d. Ensure timely delivery of services to beneficiaries;
e. Coordinate with regional counterparts from DepEd, CHED and TESDA;
f. xxx
25. Likewise, Section 3 Article 4 of DO 152-16 s. 2016 which outlines the
Application Procedure for DOLE-AMP:
“a. The client shall submit a duly notarized K to 12 DOLE AMP application
from, notarized notice of termination issued by the HEI, photocopy of HEI
employee ID, and his or her latest income tax return (ITR), if applicable,
within one (1) month from displacement or after receipt of the notarized
14
HEI K to 12 Termination Report issued by the HEI to the nearest DOLE
RO, FO, or PESO. Only applications with complete documentary
requirement will be accepted. Applications filed at PESO shall be
forwarded within two (2) working days to the nearest DOLE RO or FO for
evaluation;
b. The concerned DOLE RO or FO shall evaluate and validate all
applications with the notarized HEI K to 12 Termination Report submitted
by the HEO within ten (10) working days upon receipt of documentary
requirements.”(underscoring supplied)
26. Verification of submitted documents relating the DOLE-AMP implementation
disclosed delay on the processing of four (4) beneficiaries’ financial assistance totaling
₱129,245.00 as at December 31, 2017. It was learned that the delay incurred ranged from
29-58 days before the final approval of the mentioned applications, as summarized
below:
Table A. Schedule on Processing of Beneficiaries’ Applications
Name of
Displaced
HEI
Personnel
Applica
tion Date
DOLE RO
XIII Date of
Initial
Evaluation
Approval
Date
Target
Date of
Approval
(within 10
days per
DO 152-16
s.2016)
No.
of
days
delay
First
Salary
Received
Total
Amount
Received
Melody
Cabilogan 31-May-17 5-Jun-17 10-Jul-17 10-Jun-17 30 31-Jul-17 ₱30,240.00
Jan
Williammae
Gonato
1-Jun-17 6-Jun-17 10-Jul-17 11-Jun-17 29 1-Aug-17 10,125.00
Mark Daniel
Paa 30-May-17 5-Jun-17 10-Jul-17 9-Jun-17 31 2-Aug-17 30,240.00
Mary Grace
M. Tan 3-May-17 5-Jun-17 10-Jul-17 13-May-17 58 3-Aug-17 58,640.00
Total ₱129,245.00
27. The above table depicted the list of four (4) HEI displaced personnel which
availed of the DOLE-AMP financial assistance totaling ₱129,245.00 as at December
15
2017. It also showed the date and number of days the applications were submitted,
processed and validated. Moreover, it showcased the incurrence of delay which ranged
from 29 to 58 days in disregard of the prescribed10 working days processing period.
28. Further, the displacedHEI personnel lack documentary requirements. These
include the following:
a. Notice of termination was not notarized;
b. No copies of the notice of approval;
c. No copies of client progress reports;
d. Non-preparation and submission of monthly progress reports from January-
August, 2017
29. Inquiry from the previous DOLE-AMP focal person disclosed that the delay was
due to incomplete documents submitted by the beneficiaries. Some of the basic
requirements were not attached to the application right away and it took some time for
the beneficiaries to comply since their residences are far-off from the city proper.
Nevertheless, the current DOLE-AMP focal person makes it a point that the HEIs and the
implementing agencies shall have copies of the list of the documentary requirements
along with the application forms ready for distribution to the displaced personnel to
ensure complete documentation upon submission.
30. As a result, the objective for a timely and efficient facilitation and delivery of
services to the HEI displaced personnel was not obtained.
31. We recommended that Management: Ensure that the HEIs and implementing
agencies shall have copies of the list of the requirements and application forms ready
for distribution to the HEIs displaced personnel.
32. Instruct the program focal person to check right away the completeness of the
attachments to the application form so that processing can be completed within the
prescribed period of 10 days. Likewise, close monitoring of the implementation of the
program should be undertaken.
33. Management agreed with the recommendations.
Descending FundUtilization for Eight (8) PAPs from CYs 2015-2017
Poor planning and laxity in the implementation of the established guidelines
attributed to the low utilization of funds for eight (8) PAPs as at December 31, 2017,
which ranged from 0 to 79% inconsistent with Sections 1 and 2 of National Budget
Circular (NBC) 562, thus, the non-attainment of the set targets and
accomplishments in the implementation of the said priority poverty reduction
projects.
16
34. Rules on the release of funds, Sections 1 and 2 of NBC 562 dated January 4, 2016
explicitly pointed out that:
1.1 The government continues to explore measures to ensure the timely
delivery of goods and services to the public. These include the adoption of
the General Appropriations Act as a release document (GAARD), a reform
initiative authorizing implementation of programs and projects in the GAA
immediately upon its enactment.
2.2 To synchronize fund release with the implementation of the overall
physical and financial plans, targets and schedules submitted by the
departments, agencies, and/or operating units (OUs).
35. Section 1 of DOLE Department Order No. 137-14 dated March 28, 2014
prescribes the program description of DOLE Integrated Livelihood and Emergency
Employment Program (DILEEP) as “the Department’s contribution to the government
agenda of inclusive growth through massive job generation and poverty reduction.”
36. Likewise, Sections 12 and 13 of the same order provides for the action on the
application and project proposal through ACP and Direct Administration and pointed out
that “The procedures in the provision of KABUHAYAN assistance shall be completed
within fifteen (15) working days from receipt of complete documentary requirements, as
prescribed for in the DOLE Manual for the Provision of Livelihood Project Funding
Assistance.”
37. Moreover, Section 1 of DBM-DILG-DSWD-NAPC Joint Memorandum Circular
No. 6 dated Feb. 27, 2015 provides for the BUB Policy, as follows:
In pursuit of attaining the Philippine Development Plan's goal of inclusive
growth and poverty reduction, and promoting good governance at the local
level, the Human Development and Poverty Reduction Cluster (HDPRC),
through the Bottom-up Budgeting (BuB) Oversight Agencies, shall
implement the Bottom-up Budgeting (BuB) program. This program seeks to
increase citizens' access to local service delivery through a demand-driven
budget planning process and to strengthen government accountability in
local public service provision.
The BuB oversight and participating agencies are tasked to ensure the
implementation of priority poverty reduction projects as identified at the
city/municipal level through a participatory planning and budgeting
process.
38. Review of the Agency’s Fund Utilization Report and other pertinent records
disclosed utilization rates ranging from 0% to 79% for eight (8) PAPs in CY 2017. The
eight (8) identified PAPs from CY 2015-2017 are composed of the following:
17
1. DILEEP-Kabuhayan
2. Government Internship Program (GIP)
3. AMP-TUPAD (KSA)
4. Public Employment ServiceOffice (PESO)
5. National Reintegration Center for OFWs (NRCO)
6. National Skills Registry
7. SPES (Regular and BUB)
8. K-12 AMP
39. Further verification revealed that the overall utilization rate of the eight (8) PAPs
was only 36% or ₱46,281,692.71 out of the total allotments/fund transfer of
₱127,712,481.70. The summary of the utilization along with the data for the last three (3)
year period from CYs 2015 to 2017 is shown on below:
Table A. Schedule of Fund Utilization from CY 2015-2017
Particulars
Percentage of
Disbursements over
Allotment Appropriations/Allotments Disbursements
2015 2016 2017 2015 2016 2017 2015 2016 2017
CURRENT
APPROPRIATIONS
A. PROGRAM
MFO 2:
Employment
Facilitation and
Capacity Building
Services
1.DOLE Integrated
Livelihood &
Emergency
Employment Program (DILEEP-BUB)
₱30,588,000.00 ₱46,664,000.00 ₱45,421,000.00 ₱29,129,872.06 ₱20,610,640.70 ₱12,874,818.86 95% 44% 28%
ADDITIONAL
A. Notice of
Transfer of
Allocation (NTA)
MOOE
2. Government
Internship Program
(GIP)
16,955,700.00 95,550,000.00 37,240,000.00 16,832,514.24 75,046,914.88 19,169,716.46 99% 79% 51%
3. AMP-TUPAD-
(KSA) 11,760,000.00
2,832,859.31
24%
4. PESO 530,000.00 85,949.00 1,063,333.33 493000 83,949.00 644,583.33 93% 98% 61%
5. NRCO 1,536,600.00 2,093,150.00 1,180,448.75 899,272.07 77% 43%
6. National Skills
Registry
1,671,000.00 - 1,301,480.48 1,671,000 914,890.70 100% 70%
CONTINUING
APPROPRIATIONS
MFO 2:
Employment
Facilitation and
Capacity Building
Services
7. Special Program
for the Employment of Student (SPES)
Regular Fund 3,936,155.80 2,579,469.40 66%
18
Particulars
Percentage of
Disbursements over
Allotment Appropriations/Allotments Disbursements
2015 2016 2017 2015 2016 2017 2015 2016 2017
BuB Project 1,000,000.00 0%
1.a DOLE Integrated
Livelihood & Emergency
Employment Program
BuB Project 2,038,843.00 3,115,000.00 3,716,410.00 2,038,843.00 3,115,000 - 100% 100% 0%
Interfund Transfer
from Central Office
MOOE
Government
Internship Program (GIP)
16,955,700.00 123,185.76 18,876,237.34 16,832,514.24 123,185.76 5,818,522.35 99% 100% 31%
8. K to 12 (AMP) 413,757.00 341,622.57 72,135.00 270,845 79%
2. 2017 Interfund -Continuing funds
MOOE
K to 12 (AMP) 946,410.68 276,715.23 29%
GRAND TOTAL -
OVERALL ₱70,275,843.00 ₱145,951,891.76 ₱127,695,800.20 ₱68,178,192.29 ₱99,051,825.34 ₱46,281,692.71 97% 68% 36%
40. The preceding table disclosed the allotment/fund transfers and the related
disbursements of the eight (8) identified PAPs from CY 2015 to 2017. It was noted that
GIP and DILEEP programs had the highest current allotment aggregating to
₱149,745,700.00 and ₱122,673,000.00, respectively from CYs 2015 to 2017. Analysis of
the same also indicated a descending fund utilization rate of only 51% for GIP in CY
2017 from 95% to 44% in CYs 2015 and 2016. While, utilization rate for DILEEP is at
28% as compared to 99% in 2015 and 79% in 2016. Moreover, SPES-BUB and DILEEP-
BUB with continuing allotment of ₱1,000,000.00 and ₱3,716,410.00, respectively, both
had 0 % utilization rates as at December 31, 2017.
41. Inquiry with the concerned officers and the Regional focal person revealed that
the low utilization of funds was due to incomplete documentation of forwarded project
proposals coming from the provincial offices. They affirmed that they failed to enforce
the prescribed procedures in processing the applications of the program beneficiaries as
outlined in DO No. 137-14. Likewise, they informed that initially they submitted the
proposals without the documentary requirements as one of the strategies to accomplish
their work faster as well as yield a high utilization rate, but still they were not able to
maximize the utilization of the above funds.
42. Management also averred that they had already obligated almost 90% of the GIP
current allotment since beneficiaries for this program were already contracted up to CY
2018. Similarly, a communication dated September 15, 2017 was forwarded to the
Regional Director of DILG-RO XIII informing the same on the status of funds and
reasons on the non-implementation of both the SPES-BUB and DILEEP-BUB programs.
43. Nonetheless, the foregoing conditions can be attributed to Management’s poor
planning and laxity in the enforcement of the prescribed guidelines. It was observed that
19
procedures in the processing of applications and project proposals as stipulated in each
respective DOs were not persistently adhered to. The submitted proposals were
haphazardly prepared and submitted, thus, either these were sent back to the field offices
for completion or pending at the desk of the Regional Focal person due to incomplete
documentary requirements resulting in delayed processing and implementation.
Furthermore, absence of regular and close monitoring also attributed to the low
utilization of funds which further affected the efficient and effective attainment of the
objectives of the foregoing PAPs.
44. We recommended that Management: Issue an Office Memorandum to the
Provincial Officers and all others concerned indicating therein strict adherence to the
procedures outlined in the processing of applications and project proposals and by
taking into consideration the importance of all the documentary requirements.
45. Instruct the Regional Focal person and the Chief TSSD to conduct regular and
close monitoring to ensure efficient and effective implementation of various PAPs and
undertake timely corrective measures on issues encountered, if there’s any.
46. Management responded that lack of manpower attributed to the noted
observation. Added, that they are appreciative of the recommendations and will
implement the same.
Delayed liquidation of fund transfers released to LGUs and NGOs/POs
Laxity in the enforcement of pertinent rules and regulations on the liquidation of
fund transfers released to LGUs and GOs/POs from CYs 2002-2017 under the
DILEEP-Kabuhayan and BUB programs resulted in the delayed and minimal
liquidation of only ₱21,491,732.31and ₱5,240,924.64 out of the ₱116,751,987.12 and
₱12,837,142.12 or by 18% and 41%, respectively, contrary to Section 4.6 of COA
Circular No. 94-013 and Section 5.4 of COA Circular No. 2007-001, thus, timely
verification of the fund utilization and detection of any deficiencies could not be
right away undertaken which may lead to the misappropriation or possible loss or
misuse of the resources.
47. Section 4.6 of COA Circular No. 94-013 on the grant, utilization and reporting of
fund transfers released to LGUs pointed out that “Within ten (10) days after the end of
each month/end of the agreed period for the Project, the IA shall submit the Report of
Checks Issued (RCI) and the Report of Disbursement (RD) to report the utilization of the
funds. Only actual project expenses shall be reported. The reports shall be approved by
the Head of the IA.”
48. Likewise, Section 5.4 of COA Circular No. 2007-001which regulates the grant,
utilization and reporting of fund transfers made to NGOs/POs stressed that “ Within sixty
(60) days after the completion of the project, the NGO/PO shall submit the final Fund
Utilization Report certified by its Accountant and approved by its President/Chairman to
20
the GO, together with the inspection reports and certificate of project completion
rendered/issued by the GO authorized representative, list of beneficiaries with their
acceptance/acknowledgment of the project/funds/goods services rendered. xxx”
49. Review of the submitted schedules of fund transfers along with pertinent
documents disclosed delayed submission both by the LGUs and NGOs/POs on the
required liquidation reports from CYs 2002-2017. It was noted that the LGUs’ and
NGOs/POs’ liquidations were only ₱221,491,732.31 and ₱5,240,924.64 out of the total
fund transfers of ₱116,751,987.12 and ₱12,837,142.12, or an equivalent of 18% and
41%, respectively. Summary of which are presented in the following tables:
Table A. Schedule of LGUs Fund Transfer and Liquidation
CY
Number
of
Impleme
nting
Agencies
(IAs)/LG
Us
Total Amount
Transferred
Total Amount
Liquidated
Balance/
Unliquidated
Amount
%
Liquid
ation
Aging of
Fund Transfer
2002 3 ₱245,000.00 ₱166,937.65 ₱78,062.35 68% Over 10 years
2004 1 100,000.00 100,000.00 0% Over 10 years
2005 1 60,000.00 60,000.00 0% Over 10 years
2006 2 95,000.00 94,619.00 381.00 99.5% Over 10 years
2007 2 100,000.00 100,000.00 0% Over 5 - 10
years
2008 12 1,635,896.00 1,063,394.91 572,501.09 65% Over 5 - 10
years
2009 35 5,710,675.00 3,448,206.60 2,262,468.40 60% Over 5 - 10
years
2010 19 4,457,450.91 877,340.00 3,580,110.91 20% Over 5 - 10
years
2011 19 8,593,074.56 3,804,139.02 4,788,935.54 44% Over 5 - 10
years
2012 18 6,721,528.82 559,534.85 6,161,993.97 8% Over 5 - 10
years
2013 19 13,172,080.64 2,578,035.51 10,594,045.13 20% Over 1 -5 years
2014 82 30,203,830.67 7,371,777.42 22,832.053.25 24% Over 1 -5 years
2015 31 10,399,897.97 1,527,715.00 8,872,182.97 15% Over 1 -5 years
2016 55 25,946,675.85 32.35 25,946,643.50 0% Over 1 -5 years
2017 20 9,310,876.70 9,310,876.70 0% Over 31 days to
1 year
Total ₱116,751,987.12 ₱21,491,732.31 ₱95,260,254.81 18%
Table B. Schedule of NGOs/POS Fund Transfer and Liquidation
21
CY
Number
of
Impleme
nting
NGOs/P
Os
Total Amount
Transferred
Total
Amount
Liquidated
Balance
%
liquidation
per
amount
Aging of Fund
Transfer
2004 1 ₱ 180,000.00 ₱ 0.00 ₱ 180,000.00 0%
2007 4 337,193.67 207,691.00 129,502.67 62%
2008 8
1,469,959.75
435,989.00
1,033,870.75 30% Over 5-10 years
2009 17 2,608,038.68
852,271.25 1,755,767.43
33% Over 5- 10 years
2010 15 1,780,020.00
236,000.00 1,564,029.00
13% Over 5- 10 years
2011 2
198,380.39
198,280.39 100.00
99.5% Over 5- 10 years
2012 2
222,500.00 - 222,500.00
0% Over 5- 10 years
2013 8 1,900,647.63
899,900.00 1,000,747.63
25% Over 1-5 years
2014 9 3,807,093.00
2,410,793.00 1,396,300.00
59% Over 1-5 years
2017 1 333,300.00 333,300.00
0% Over 31 days -1
years
Total
₱12,837,142.12 ₱5,240,924.64 ₱7,616,217.48 41%
50. The preceding tables showed the total amount of fund transfers, the corresponding
liquidation and the outstanding ending balance for each calendar year. It also showed the
aging of unliquidated fund transfers which ranged from over 31 days to more than 10
years. Moreover, it was noted that Management continuously released fund transfers to
IAs despite the non-liquidation of prior releases as required which resulted in the
accumulation of fund transfers booked under Due from LGUs and Due from NGOs/POs
accounts amounting to ₱92,102,980.50 and ₱6,437,579.31, respectively. The Summary
data is reflected below: (details of outstanding fund transfers are herein attached as
Appendices 1 and 2)
Table C. Frequency of Fund transfers released to LGUs
Name of IA Fund Transfers
No. of times Year Granted
LGU-Butuan City 5 2002-2016
BLGU-Alegria 2 2011 and 2017
BLGU-San Isidro 3 2013 and 2016
BLGU-Villa Kanangga 2 2016
LGU-Barobo 3 2016 and 2017
LGU-BArobo 3 2015-2016
LGU-Bislig 10 2014-2016
LGU-Buenavista 4 2012;11;14 and 16
LGU-Butuan City 6 2002; 2011; 13 and 16
22
Name of IA Fund Transfers
No. of times Year Granted
LGU-Cagdianao 3 2014-2016
LGU-Cagwaiit 6 2007-2015
LGU-Carrascal 3 2010
LGU-Carrascal 5 2006-2010
LGU-Cortez 7 2015
LGU-Del Carmen 7 2008-2009
LGU-Esperanza 3 2017,2012 and 2014
LGU-Hinatuan 13 2013;2014;2016 & 2017
LGU-Placer 2 2010 and 2012
LGU-Placer 2 2010-2011
LGU-Province of ADS 2 2012
LGU-San Jose, Dinagat 3 2013-2016
LGU-San Miguel 3 2010 and 2015
LGU-Socorro 8 2009-2014
LGU-Surigao City 12 2012-2014
LGU-Surigao City 11 2012 and 2014
LGU-Tago 6 2014 and 2016
LGU-Tandag 3 2009 and 2015
LGU-Trento 4 2010-2017
LGU-Veruela 2 2010 and 2016
51. Demand letters dated June 7 and 8, 2017 and August 16, 2017 were sent both to
Management and the concerned IAs informing the status of the unliquidated fund
transfers and requesting immediate settlement of the respective accountabilities. The
audit team also conducted series of verbal follow-up with the Regional Accountant, the
Program Focal person and the concerned field personnel for them to take necessary
actions and measures to help resolve identified issues to facilitate the liquidation.
52. Management explained that they have previously informed the IAs on the need to
immediately submit the liquidation reports, but still only a few heeded. Relative to this, a
“task force liquidation” was established sometime in July 2017 to fast track and assist the
IAs in the preparation and submission of long overdue liquidation reports. However,
members of the task force admitted that it will take some time before they can complete
the submission due to the voluminous workloads they currently perform. Nonetheless,
they promised to continually exhaust all means to assist the IAs in the submission of
liquidation reports.
53. The foregoing conditions could be attributed to the Management’s laxity in
enforcing the requisite rules and regulations in granting, utilization and liquidation of
fund transfers and due to lack of regular monitoring. It was observed further, that the
continuous release of fund transfers despite non-submission of long overdue liquidation
reports pertaining to previous fund transfers aggravated the accumulation of unliquidated
23
balances. Similarly, Management’s failure to conduct regular and close monitoring on the
timely submission of required reports also contributed to the noted deficiencies.
54. As a result, the apparent delayed liquidation of fund transfers for DILEEP and
BuB programs from CYs 2002 to 2017, may lead to the misappropriation of funds, loss
or misuse of resources if continuously practiced, thus, depriving the intended
beneficiaries and defeating the purpose for which the programs were created.
55. We recommended that Management: Require the members of the “task force
liquidation” to determine the reason/s for the non/delayed submission of liquidation
reports by the IAs and exhaust all means to teach/assist them as to what, how and
when to prepare the said report and its requirements so that they can learn on their
own how to prepare and submit succeeding liquidation reports on time.
56. Stop the practice of transferring funds to the IAs with unliquidated balances
without requiring first to settle the outstanding balance. Likewise, ensure that the IAs
understood their indispensable obligation and the related accountability on the
utilization and liquidation of the funds transferred to them.
57. Require all concerned to closely observe at all times the prescribed guidelines
on fund transfers as mandated in Section 4.6 of COA Circular No. 94-013 and Section
5.4 of COA Circular No. 2007-001.
58. The Management is amenable with the recommendations. They also added that
they will conduct training/workshop to the ACPs/beneficiariespertaining to the
liquidation of fund transfers; reward the LGU and NGO/PO who can achieve 100%
liquidation rate; and will visit/follow-upLGUs and NGOs/POs with low liquidation rate
of fund transfers.
Financial and Compliance
Financial
Stale checks were not reverted back to cash account
Stale checks with an aggregate amount of ₱124,892.25 were not cancelled and
recorded back to the Cash account contrary to the provisions set forth under Vol. 1,
Chapter 6 of the GAM, which resulted in the understatement of the Cash account by
the same amount and affected the correctness of the reported cash balances.
59. Volume I, Chapter 6, Section 44 of the GAM provides for the accounting of stale
checks. It states that a stale check shall be marked cancelled on its face and reported as
cancelled in the List of Unreleased Checks that will be attached to the Report of Checks
Issued (RCI).
24
60. Likewise, the depository bank considers a check stale if it has been outstanding
for a period of more than six (6) months from date of issue or as prescribed.
Consequently, journal entries shall be prepared to record the cancellation of checks and
the restoration of cash to Cash in Bank Account.
61. Verification of the Bank Reconciliation Statements (BRS) for the Cash in Bank –
LCCA-PVB and LBP accounts covering the months of December 31, 2016 and March
31, 2017 revealed that there were 64 stale checks totaling ₱124,892.25 which were still
reported as outstanding checks and presented in the BRS as part of the reconciling items
as shown below:
Table A. Summary of Stale Checks
Month
Account
No. of Stale
Checks
Amount
February 2016 PVB-0033-004224-001 1 ₱ 12,656.25
May 2016 PVB-0033-004224-001 1 9,660.00
January 2014 LBP-0362-1022-35 2 3,448.00
February 2014 LBP-0362-1022-35 1 1,600.00
July 2014 LBP-0362-1022-35 20 29,464.00
August 2014 LBP-0362-1022-35 1 1,600.00
September 2014 LBP-0362-1022-35 19 32,864.00
October 2014 LBP-0362-1022-35 1 1,840.00
November 2014 LBP-0362-1022-35 8 12,720.00
December 2014 LBP-0362-1022-35 10 19,040.00
Total 64 ₱124,892.25
62. Moreover, in as much as the above mentioned stale checks were reported as
outstanding, it was deducted from the bank balance instead of adding back the amount of
₱124,892.25 to the book balance. The Accountant should have prepared a JEV to record
the cancellation of the checks, and in the same manner, restored it back in the cash
balance per books.
63. Furthermore, there were other reconciling items that were not taken-up in the
books, like errors in recording of deposits and disbursements. These items should have
been taken-up in the books as adjustments to show the correct book balance reflected in
the BRS.
64. As a result, stale checks that were not recorded back in the Cash account
understates the account by the same amount and further affected the correctness of the
reported cash balances.
65. We recommended that Management: Direct the Accountant to immediately
take-up the adjustments for all reconciling items in the books of accounts through the
preparation of JEV and thereon, reconcile the ledger and cashbook (audited) balances.
25
66. Management commented that they are amenable of the recommendations and
related adjustments will be taken up in the books of accounts.
Non-adjustment of stale checks in the Due from LGUs account
Financial Assistance in the total amount of ₱1,465,000.00 which has become stale
remained in the Due from Local Government Account as at December 31, 2017 due
to lack of regular monitoring, non-maintenance of SLs and consequently the non-
adjustment of the account at year-end inconsistent with Sections 111 and 112 of PD
1445 and Section 15, Chapter 2, Vol. I of GAM, thus, overstating the Receivable and
Accumulated Surplus/Deficit accounts by the same amount and affects the fair
presentation in the financial statements.
67. Section 111, Chapter 2 of PD 1445 states that (1) the accounts of an agency shall
be kept in such detail as is necessary to meet the needs of the agency and at the same time
be adequate to furnish the information needed by fiscal or control agencies of the
government; and (2) the highest standards of honesty, objectivity and consistency shall be
observed in the keeping of accounts to safeguard against inaccurate or misleading
information.
68. Section 112, Chapter 2 of the same decree also states that in recording of financial
transactions, each government agency shall record its financial transactions and
operations conformably with generally accepted accounting principles and in accordance
with pertinent laws and regulations.
69. Likewise, Section 15, Chapter 2, Volume I of GAM provides that “The FSs shall
present fairly the financial position, financial performance and cash flows of an entity.
Fair presentation requires the faithful representation of the effects of transactions, other
events, and conditions in accordance with the definitions and recognition criteria for
assets, liabilities, revenue, and expenses set out in PPSAS. The application of PPSAS,
with appropriate disclosures, if necessary, would result in fair presentation of the FS.”
70. More so, Section 44 of the same Manual lays the Accounting for Cancelled
Checks- “Checks may be cancelled when they become stale, voided or spoiled. The
depository bank considers a check stale, if it has been outstanding for over six months
from date of issue or as prescribed.”
71. Review of the submitted financial statement and the corresponding books of
account showed the balances both of the Due from LGU and Accumulated Surplus
accounts of ₱77,547,988.37 and ₱83,101,362.38, respectively as at December 31, 2017.
However, supporting schedules relative to the account, disclosed four (4) stale checks in
26
the total amount of ₱1,465,000.00 which remained in the Due from LGU account, as
detailed on the next page.
Table A: List of Staled Checks Recorded in the Due from LGU Account
No. Name of
IA/LGU Project Title Amount
Check
Date
Reference
Check# Balance
1
LGU-
Cabadbaran
Mini Hardware w/
vulcanizing shop for
La Union Motorized
Drivers & operators
Ass. ₱500,000.00 12/29/14 284945 ₱500,000.00
2
LGU-RTR,
Agusn del
Norte
" Additional Capital
for Food Terminal" to
RTR Terminal food
Vendors Ass. 190,000.00 12/29/14 284948 190,000.00
3
LGU-RTR,
Agusn del
Norte
" Catering services" to
Anawin Self Help
Ass. 475,000.00 12/29/14 284949 475,000.00
4
LGU-
TUBAY
" Water Refilling
Station" to working
youth club of Tubay 300,000.00 12/29/14 284950 300,000.00
Total ₱1,465,000.00 ₱1,465,000.00
72. The above data pertain to the financial assistance released to four (4) LGUs in CY
2014 in the total amount of ₱1,465,000.00 which has become stale but remained
unadjusted in the books of accounts for almost three (3) years.
73. The Accountant reasoned out that he overlooked the enlisted stale checks in the
supporting schedules and failed to effect the necessary adjustments for its reversion. Yet,
confirmed that he was able to adjust the cash account, as follows:
Debit- Cash, Regular MDS
Credit- Accumulated Surplus/Deficit
74. However, the Accountant was not able to adjust the Due from LGUs account in
view of the above journal entry and disclosed that the individual subsidiary ledgers for
the account were not also maintained. Nonetheless, he assures to revise the financial
statements and effect the adjustments as of December 31, 2017.
75. The foregoing conditions prevail due to lack of regular and close monitoring on
the releases of financial assistance to LGUs and non-maintenance of the corresponding
subsidiary ledgers, thus, overstating the Due from LGU and the Accumulated
27
Surplus/Deficit Accounts as at year end, and affecting the fair presentation of the said
accounts in the financial statements.
76. We recommended that Management: Direct the Accountant to prepare the
necessary journal entries to effect the adjustments and correct the balances of the Due
from LGU and Accumulated Surplus/Deficit Accounts.
77. Faithfully observe the above cited stipulations on the proper and timely
recording of stale checks in the respective accounts and the preparation and
maintenance of the SLs for easy monitoring and verification in audit.
78. Management commented that they agree with the recommendations and effected
the necessary adjustments for financial assistance which had become stale.
Non-recording of Notice of Disallowance which have become final and executory
Audit disallowances issued with Notice of Finality of Decision (NFD) amounting to
₱247,781.00 remained unrecorded in the books of accounts of the Agency
inconsistent with Section 22.6 of COA Circular No. 2009-006, thus, understating the
Receivables-Disallowance/Charges and Accumulated Surplus/(Deficit) accounts by
the same amount as presented in the financial statements at year-end.
79. Section 22.6 of COA Circular No. 2009-006 provides that “the Chief Accountant
shall, on the basis of NFD, records in the books of accounts, the disallowance and/or
charge as a receivable.”
80. The financial statements and the related books of accounts of the Agency showed
a balance of Receivables-Disallowance/Charges in the amount of ₱4,354,387.43 as at
December 31, 2017. Verification of the supporting schedule of the said account disclosed
unrecorded audit disallowances issued with NFDs in the amount of ₱247,781.00. Details
are shown below:
Table A: List of NDs with NFD which are not recorded in the books:
ND No. Date Amount Date of
NFD
Date received
by Mgt
Date of
COE
2010-016-101-
(2009)
09/30/10 ₱206.00 12/15/2015 05/13/2016 05/19/2016
2012-020-101-
(2009)
05/22/12 198,000.00 12/15/2015 05/13/2016 05/19/2016
2012-037-101-
(2009)
05/24/12 30,000.00 12/15/2015 05/13/2016 05/19/2016
2012-050-101-
(2010)
08/08/12 3,495.00 12/15/2015 05/13/2016 05/19/2016
2016-002-101-
(2015)
05/17/16 2,412.00 10/04/2017 10/26/2017 11/20/2017
2016-006-101- 05/17/16 4,422.00 10/04/2017 10/26/2017 11/20/2017
28
ND No. Date Amount Date of
NFD
Date received
by Mgt
Date of
COE
(2015)
2016-007-101-
(2015)
05/17/16 4,623.00 10/04/2017 10/26/2017 11/20/2017
2016-008-101-
(2015)
05/17/16 2,211.00 10/04/2017 10/26/2017 11/20/2017
2016-009-101-
(2015)
05/17/16 2,412.00 10/04/2017 10/26/2017 11/20/2017
Total ₱247,781.00
81. The foregoing table indicated that four (4) NFDs dated and received by
Management on December 15, 2015 and May 13, 2016, respectively, remained
unrecorded in the books of accounts for more than one (1) year, while five (5) NFDs
dated and received by Management on October 4 and 26, 2017, respectively, were
likewise not booked as at year-end.
82. Moreover, review of the supporting schedule also disclosed six (6) NDs with a
total amount of ₱490,978.00 were erroneously recognized under the Receivables-
Disallowances/Charges account, as follows:
Table B: List of NDs erroneously recognized in the books:
ND No. Date Amount Remarks
2012-015-101-
(2009)
May 22, 2012 ₱430,375.00 Recorded twice in the
books of accounts
2012-002-101 (AP)-
(2011)
February 7, 2012 40,000.00 Recorded in the books
without issued NFD
2012-064-101
(2011)
August 9, 2012 8,000.00 No issued NFD; not
recorded in the books
of accounts but
settlement credited
under Receivables-
Disallowances/charges
account
2012-065-101
(2011)
August 9, 2012 12,000.00
2016-003-101
(2015)
May 16, 2016 201.00
2016-004-101
(2015)
May 16, 2016 402.00
Total ₱490,978.00
83. The Accountant confirmed that some of the prior year’s NDs with issued NFDs
remained unrecorded in the books of accounts. He also reasoned out that he overlooked
to record the same due to the voluminous transactions of the office. However, the process
of reconciling the affected accounts shall be undertaken in January of 2018.
84. It is emphasized that pursuant to Section 111, Chapter 2 of PD 1445, it is the
responsibility of the accountant to keep the details of the accounts accurate in order to
avoid misleading information. As a result, the Receivables-Disallowance/Charges and
Accumulated Surplus/(Deficit) accounts were both understated, thus, are not fairly
presented in the financial statements as at year-end.
29
85. We recommended that Management: Direct the Accountant to record the total
audit disallowances of ₱247,781.00 and make the necessary adjustments for NDs,
erroneously recorded in the books to present an accurate and reliable balances of the
accounts as presented in the financial statements.
86. Strict compliance of the pertinent regulations in recording of audit
disallowances as stipulated in Section 22.6 of COA Circular No. 2009-006 dated
September 15, 2009 should be observed to ensure proper recognition of the same, and
adjustments, if any, are immediately effected.
87. The management responded that they will comply with the recommendations and
assured that unrecorded notices of disallowance which have become final and executory
will be recorded in the books of accounts.
Non-recording of expenses for issued/consumed inventories/semi-expendables
The Inventories and Semi-Expendable Inventory accounts which were already issued
and used in the total amount of ₱6,552,145.76 and ₱2,331,124.89, respectively were
both not recorded as expenses in the books of accounts as of December 31, 2017,
inconsistent with Sections 111 and 112 of PD 1445 and Section 10, Volume I of
GAM, thus, overstating the related asset accounts and understating the expense
accounts by the same amount, thereby affecting the fair presentation of the accounts
in the financial statements.
88. Section 111, Chapter 2 of PD 1445 states that (1) the accounts of an agency shall
be kept in such detail as is necessary to meet the needs of the agency and at the same time
be adequate to furnish the information needed by fiscal or control agencies of the
government; and (2) the highest standards of honesty, objectivity and consistency shall be
observed in the keeping of accounts to safeguard against inaccurate or misleading
information.
89. Section 112, Chapter 2 of the same decree also states that in recording of financial
transactions, each government agency shall record its financial transactions and
operations conformably with generally accepted accounting principles and in accordance
with pertinent laws and regulations.
90. Section 10, Chapter 8, Volume I of GAM defines Semi-Expendable Property as
tangible items below the capitalization threshold of ₱15,000.00 which shall be recognized
as expenses upon issue to the end-user.
91. The Inventory Custodian Slip (ICS), as stated in Appendix 59, Volume II of the
GAM, is a form used by the Supply and/or Property Custodian to issue tangible items
amounting to less than ₱15,000.00 to end-user to establish accountability over them.
30
92. Likewise, Appendix 63, Volume II of the GAM states that the RIS shall be used
by the Requisitioning Division/Office to request supplies/goods/ equipment/property
carried in stock and by the Supply and/or Property Division/Unit to issue the items
requested.
93. Appendix 63, Volume II of the same Manual also defines that the RSMI is a form
prepared by the Supply and/or Property Division/Unit to report/summarize all issues of
inventories (by stock number) during the day. It also states that at the end of the month,
all RSMIs shall be consolidated by the Accounting Division/Unit for the preparation of
the JEV. Then finally, the Accounting Division/Unit and Supply and/or Property
Division/Unit shall conduct periodic reconciliation of the SLC and SC to identify and
adjust any discrepancy.
94. The financial statement as at December 31, 2017 of the Agency showed a total of
₱6,554,055.76 and ₱2,331,124.89 for Inventories and Semi-Expendable Accounts,
respectively. Details of which are presented below.
Table A: Ledger Balances of Inventories as at December 31, 2017
Account Beginning
Balance
Purchases
CY 2017
Issued/Cons
umed
CY 2017
Ending
Balance
Office Supplies Inventory ₱1,479,436.06 ₱57,139.55 ₱55,229.55 ₱1,481,346.06
Accountable Forms, Plates and
Stickers Inventory 366,580.00 0.00 0.00 366,580.00
Construction Materials
Inventory
28,681.00 0.00 0.00 28,681.00
Other Supplies & Materials
Inventory
4,677,448.70 152,212.40 152,212.40 4,677,448.70
Total ₱6,552,145.76 ₱209,351.95 ₱207,441.95 ₱6,554,055.76
Table B: Ledger Balances of Semi-Expendable Accounts as at December 31, 2017
Account Beginning
Balance
Purchases
CY 2017
Issued
CY 2017 Amount
Semi-Expendable Office
Equipment
₱31,345.75 ₱126,090.00 ₱0.00 ₱ 157,435.75
Semi-Expendable ICT
Equipment
536,262.00 1,038,593.04 0.00 1,574,855.04
Semi-Expendable Furniture
&Fixtures
56,675.00 542,159.10 0.00 598,834.10
Total ₱624,282.75 ₱1,706,842.14 ₱0.00 ₱2,331,124.89
95. As presented in the table above, ₱6,552,145.76 out of ₱6,554,055.76 or 99.97% of
the ending balances of Inventory Accounts pertains to prior year records, as purchases
made in CY 2017 were almost expensed during the year. On the other hand, the semi-
expendable accounts comprised of the cumulative balances both of the prior and current
year purchases, and none was expensed during the year.
96. Interview with the concerned officers confirmed the issuance of all the semi-
expendable inventories to the end users, yet were not expensed pending submission of
31
ICS and RIS by the Supply and Property Officer, of which the latter assured that the
required documents will be furnished to the Accountant as soon as possible.
97. Moreover, the incumbent Accountant reasoned out that the inventory account
balances in the total amount of ₱6,552,145.76 were already reflected in the books of
accounts from the time he assumed post and neither information nor disclosures were
afforded by the previous accountant. In addition, the previous audit team has also
informed him of the noted deficiencies, but was not able to make the necessary
adjustments due to the absence of the necessary supporting documents e.g copies of
RIS/RSMI pertaining to issuances of those inventories, which could not be provided by
the Supply Officer. Further, the inventory accounts have no SLs or supporting schedules
that could show details/breakdown of the amount.
98. The foregoing condition was due to the failure of the concerned personnel in
observing the prescribed guidelines in recording the issuances of inventories and semi-
expendable items. The same can also be attributed to the lack of control measures over
the proper and regular keeping of accounts.
99. As a result, Inventory and Semi-Expendable Accounts are overstated, while the
related expense accounts are understated, thereby affecting the fair presentation of the
related accounts in the financial statements.
100. We recommended that Management:Direct the Supply Officer- designate to
furnish the required ICS and RIS to the Accounting Section as basis for the proper
recording of expenses for semi-expendable inventories amounting ₱2,331,124.89.
101. Exert extra effort to ascertain the correctness of the balance per books of
₱6,552,145.76 against the records of the Supply Officer. Require the Inventory
Committee to conduct physical count of all inventories on hand and those that are still
carried in the books but confirmed to be non-existing and already issued/used shall be
dropped from the books.
102. All inventories on hand should be properly accounted for and individual
Subsidiary Ledger Cards and Stock Cards shall be maintained by the Accounting and
Supply Section, respectively and ending balances should be reconciled regularly by
both offices to ensure accuracy and reliability of the account balances.
103. Direct the Accountant and the Supply Officer-designate to faithfully observe the
pertinent provisions of the GAM with regards to the recording and issuance of
inventories and semi-expendable properties.
104. Management replied that a Memorandum Order No. 045 was issued directing the
concerned personnel to comply with the requirements provided for in the GAM relative to
proper recording of purchases and issuance of inventories and semi-expendables.
32
Compliance
Unsubmitted DVs and its supporting documents
2,613 DVs and its supporting documents under the Regular Fund in the total
amount of ₱65,519,072.43 remained unsubmitted as of December 31, 2017 and delay
ranged from 21-355 days, inconsistent with COA Circular No. 2009-006, thus,
hindered the timely review and verification of the transactions, the early detection
of deficiencies, if there’s any and instituting the corresponding correcting measures.
105. Section 7.2.1 of COA Circular No. 2009-006 dated September 15, 2009 provides
that the Chief Accountant, Bookkeeper or other authorized official performing
accounting and/or bookkeeping functions of the audited agency shall ensure that:
“a. the reports and supporting documents submitted by the Accountable
Officers are immediately recorded in the books of accounts and submitted
to the Auditor within the first ten (10) days of the ensuing month.”
106. Further, Section 122 of PD 1445 provides that failure of the officials concerned to
submit the documents and reports mentioned shall automatically cause suspension of
payment of their salaries until they shall have complied with the requirements of the
Commission.
107. Audit of transactions covering the period January to December 31, 2017 under
Fund 101-MDS Regular disclosed that 2,613 DVs and its supporting documents with an
aggregate amount of ₱65,519,072.43 remained unsubmitted to COA as at January 31,
2018. It was noted that the delay ranged from 21-355 days, as shown below:
Table A: Summary of Unsubmitted DVs
Period (2017) No. Amount Number of
days delayed
January 124 ₱ 187,825.00 355
February 3 335,709.00 327
March 6 296,350.00 296
April 4 30,000.00 266
May 13 1,102,547.02 235
June 28 1,715,834.00 205
July 8 30,570.22 174
August 36 1,009,093.50 143
September 286 12,530,055.85 113
October 860 8,516,102.56 82
November 547 18,952,951.46 52
December 698 20,812,033.82 21
Total 2,613 ₱65,519,072.43
33
108. The preceding table clearly indicated the incurrence of delay in the submission of
the required DVs and its supporting documents. Likewise, monitoring of reports showed
that some of the unsubmitted DVs pertained to payment of allowances/wages to SPES
and GIP beneficiaries covering the months January to September 2017, as well as the
release for livelihood assistance. More so, DVs for all transactions from October to
December 2017 remained unsubmitted to COA to date.
109. Inquiry with the concerned officer revealed that he acknowledged the noted
deficiency and explained that the cause was due to lack of manpower in employing the
time-consuming process of finalizing the DVs and its supporting documents which
included stamping of DVs as “paid”, updating the Obligation Status, and the attachment
of official receipts.
110. This observation has been the subject of the Audit Team’s findings in CYs 2015
and 2016 and is being reiterated because the recommendation to submit the DVs within
the prescribed period remained partially implemented. The prevailing condition is an
indication that control measures in the processing of transactions are not in place as not
all supporting documents are completely attached to the voucher before payment was
made, thereby prevented its early submission to COA.
111. As a result, transactions totaling to ₱65,519,072.43 as at December 31, 2017 were
not reviewed and evaluated in a timely manner, and the legality and propriety of the
claims could not be ascertained.
112. We recommended that Management: Require the Accountant and the
concerned personnel to ensure that all DVs are all supported with necessary
documentation in compliance with the foregoing provisions of PD 1445 and COA
Circular No. 2012-001 as processing of DVs for payment with incomplete
documentation is a ground for suspension and/or disallowance in audit.
113. Revisit COA Circular No. 2012-001 for reference of applicable documentary
requirements of all types of disbursements to be undertaken in the future.
114. Assess the availability of manpower and the corresponding workloads both of
the accounting and cashiering sections and increase the personnel assigned thereto, if
necessary.
115. Management commented that monitoring of submission of DVs is intensified. In
the event the DVs are not submitted within the prescribed period, the management will
immediately issue a memorandum to concerned personnel to require for an explanation
for non-submission, and for an immediate submission of such to the COA.
Grant of Cash Advances with previous unliquidated cash advances
34
Multiple cash advances to as much as 116 times in a month were granted to the SDO
for the payment of GIP/SPES and TUPAD allowances/wages without requiring the
settlement of previous advances that resulted in the accumulation of unliquidated
balance of ₱31,765,068.84 as of December 31, 2017, contrary to the pertinent
guidelines in the granting, utilization and liquidation of cash advances, thus,
exposing public funds to misappropriation and possible loss/misuse and delayed
recording of expenses.
116. Section 14.C, Chapter 6 Disbursements of GAM stressed that:
“No additional cash advance shall be allowed to any official or employee
unless the previous cash advance given to him/her is first settled/liquidated or
a proper accounting thereof is made xxx”
117. Likewise, Section 30 of the same Manual describes the Cash Advance for
Specific Purpose/Time-Bound Undertaking as:
“Cash advance for special purpose/time-bound undertaking shall be
granted only to duly authorized accountable officer/special disbursing officer.
It shall be accounted for in the books of accounts as “Advances to Special
Disbursing Officer.” It shall be liquidated by the accountable officer within a
specified period. Any unutilized cash advance shall be refunded and an OR
shall be issued to acknowledge collection thereof.”
118. Review of the disbursement vouchers on the grant of cash advances disclosed that
SDOs of the five provinces in Caraga Region were granted multiple cash advances up to
116 times in a month which accumulated to ₱31,765,068.84 as at December 31, 2017. It
was noted that the SDOs were granted additional cash advances despite of their
unsettled/unliquidated prior cash advances. Summary of which is presented in the table
below:
Table A. Schedule of Cash Advances Granted to SDOs
Name of
SDO Province
Total CA
granted
No of
times in a
month
Unliquidated
Amount
No. of days
Unliquidated
Arnaldo A.
Anito
Dinagat
Province
₱3,348,669.97
3-11
times
₱72,144.00
Unliquidated for
over 31-90 days
Nida A.
Baybay SDN
4,836,853.07
4-116
times 252,560.00
Unliquidated for
over 31-90 days
Norman C.
Bersalote ADN
5,285,478.40
1-30
times 69,587.11
Unliquidated for
over 31-90 days
Maximo C.
Magallen ADS
8,903,419.67
1-21
times 516,563.72
Unliquidated for
over 31-90 days
35
Name of
SDO Province
Total CA
granted
No of
times in a
month
Unliquidated
Amount
No. of days
Unliquidated
Orlando C.
Rosit SDS
9,390,647.73
2-45
times 247,465.94
Unliquidated for
over 31-90 days
Total
₱31,765,068.84
₱1,158,320.77
119. The preceding table presented the total cash advances granted and the outstanding
unliquidated balance amounting to ₱31,765,068.73 and ₱1,158,320.77, respectively as at
December 31, 2017. It was also observed that due to the multiple granting of cash
advances, the SDOs were having a hard time in the preparation of the liquidation reports
and incurring delay in its submission which ranged from 31 to 90 days after the grant.
120. Inquiry from the concerned SDOs disclosed that they had rendered the payment to
the beneficiaries but unable to submit the liquidation reports due to some minor
incomplete documentation. In addition, they have forwarded the required reports thru the
receiving section but were not informed of its status. Moreover, the Accountant opined
that some of the reports were retrieved and will be forwarded soon to the audit team.
Likewise, Management has already employed a private financial institution to facilitate
the payment of allowances/wages to the beneficiaries and similarly to minimize the
granting of cash advances to SDOs.
121. The foregoing condition could be attributed to the agency’s weakness in
instituting control measures over the granting, utilization and liquidation of cash
advances to SDOs. It was also noted that some of the concerned SDOs assigned the JOs
to keep the liquidation documents and even prepared the reports but were not properly
submitted to the SDO before the termination of JOs’ contracts.
122. As a result, the SDOs accumulated huge amount of outstanding cash advances
which may result in the misappropriation or joggling of funds and the possibility of loss
or misuse and hinders the prompt preparation and submission of the liquidation reports
123. We recommended that Management: Instruct the Accountant to stop the
practice of granting additional cash advances without requiring to liquidate previous
advances.
124. Direct the SDOs to minimize or restrict the practice of allowing Job Order
personnel to keep the receipts and other documents and to allow the preparation of the
liquidation reports without their direct supervision.
125. Install a sound internal control system over the granting, utilization and
liquidation of cash advances by observing strictly the pertinent guidelines in the
granting, utilization and liquidation of cash advances.
126. Management is amenable with the recommendations and issued a Memorandum
Order No. 13 entitled “Preparation and Submission of Tentative Schedule of
36
Disbursements and Liquidation of Cash Advances by Special Disbursing Officers”. The
Memo is said to eliminate multiple cash advances as the FOs plan out their
disbursements for stipends in CY 2018 for those beneficiaries that cannot avail the
service of M. Lhullier.
Non-maintenance of Supplies and PPE Cards
Supplies and Property Ledger Cards, Stock and Property Cards to be maintained
by the Accounting and Supply Offices, respectively, where all acquisitions and
issuances of supplies and materials and PPE accountsshould be recorded were not
undertaken by both offices as required under Section 17, Chapter 8 and Section 42,
Chapter 10 of GAM, hence, accuracy and reliability of the inventory and PPE
account balances cannot be ascertained due to the absence of necessary information
and reconciliation of both balances.
127. Section 17 Chapter 8, Volume I of GAM, provides for the Records, Forms and
Reports to be prepared and/or maintained:
“Supplies Ledger Card (SLC) (Appendix 57) – shall be used to record
materials received, issued and the balance both in quantity and amount at any time.
It shall be maintained by the Accounting Division/Unit for each kind of supplies and
materials. The IAR, RIS, RSMI, PO and DR serve as the original sources of
information for making entries on the card.
Stock Card (SC) (Appendix 58) – shall be used to record all receipts and
issues of supplies and the balance in quantity at any time. It shall be maintained by
the Property and/or Supply Division/Unit for each item in stock. The IAR, RIS, PO
and DR serve as the original sources of information for making entries on the card.”
128. Likewise, GAM Volume II lays the various accounting, supply and budgetary
forms and the related instructions on how to utilize and accomplish the mentioned forms:
“Appendix 57- Supplies Ledger Cards
xxx
C. Transactions shall be posted promptly from source documents.
D. The agency shall conduct physical count of inventories every semester.
The semestral physical inventory of supplies shall be reconciled with the
SLCs and controlling accounts and Supply and/or Property records. Any
discrepancies shall be immediately verified and adjusted.
Appendix 58- Stock cards
xxx
37
E. The balance per stock card shall be reconciled regularly with the SLC
maintained by the Accounting Division/Unit.”
129. More so, Section 42, Chapter 10 Properties, Plant and Equipment (PPEs) Volume
I of the same Manual states that:
“The Chief Accountant shall maintain the Property Ledger Cards (PPELC)
for each category of PPE including work and other animals, livestock etc.
The PPELC shall be kept to record promptly the acquisition, description,
custody, estimated useful life, depreciation, impairment loss, disposal and
other information about the asset. For check and balance, the Property and
Supply Office/Unit shall likewise maintain PC for PPE in their custody to
account for the receipt and disposition of the same. The balance per PC
shall be reconciled with PPELC maintained by the Accounting
Division/Unit. They shall also be reconciled with other property records like
PAR.”
“Appendix 71-Property, Plant and Equipment Ledger Card (PPELC) – this
card shall be used for each class of PPE to record the acquisition,
description, custody, estimated life, depreciation, impairment, disposal,
transfer/adjustment, repair history and other information about the
property. It shall be kept and maintained by the Accounting Office/Unit.”
“Appendix 70- Property Card (PC) – this card shall be used by the Supply
and/or Property Division/Unit to record the description, acquisition,
transfer, disposal, and other information about the PPE. It shall be kept for
each class of PPE.”
130. Further, Section 13 Chapter 8 and Section 38 Chapter 10, both of Volume I of
GAM stress the importance of the physical count. Accordingly, the physical count of
inventory and PPE, which is required semi-annually and annually respectively, is an
indispensable procedure for checking the integrity of property custodianship, and to
ascertain the existence assertion of the management over the assets.
131. The Report on the Physical Count of Inventories (RPCI) shall be prepared to
report the physical count of supplies by type of inventory as at a given date. It shows the
balance of inventory items per card and per count and shortage/overage, if any. These
include the semi-expendable property wherein the issue is covered by ICS.
132. While the Report on the Physical Count of Property, Plant and Equipment
(RPCPPE) shall also be prepared to report the physical count and condition of PPE by
type as at a given date, including those which are unrecorded and those which could not
be accounted for. It shows the balance of PPE per property cards and per count and the
shortage/overage, if any. It shall be rendered by the Inventory Committee, on its yearly
physical count of properties owned by the entity.
38
133. Review of the financial statements of DOLE ROXIII showed balances both of the
Inventories and PPE accounts amounting to ₱8,885,180.65 and ₱19,014,897.57,
respectively, as at December 31, 2017. Details of which is indicated below:
Table A. Schedule for Purchases Made during the Year and Balance as at Year-
end
Account Name Purchase during the
year
Balance as at
12/31/2017
Office Supplies Inventory ₱57,139.55 ₱1,481,346.06
Accountable Forms - 366,580.00
Construction Materials Inventory - 28,681.00
Other Supplies & Materials Inventory 152,212.40 4,677,448.70
Sub-Total – Inventory Held for
Consumption
₱209,351.95 ₱6,554,055.76
Semi-Expendable-Office Equipment 126,090.00 157,435.75
Semi-Expendable-ICT Equipment 1,038,593.04 1,574,855.04
Semi-Expendable-Furniture & Fixtures 542,159.10 598,834.10
Sub-Total – Semi-Expendables ₱1,706,842.14 ₱2,331,124.89
Total ₱1,916,194.09 ₱8,885,180.65
Table B. Schedule of PPEs Procured during the Year and Balance as at Year-end
Account Name Purchase during the
year
Balance at year-end
Office Equipment ₱ 45,000.00 ₱ 1,270,863.70
ICT Equipment & Software 58,100.00 5,822,583.71
Communication Equipment 54,596.95
Firefighting Equipment & Accessories 3,000.00
Motor Vehicles 5,879,921.06
Furniture & Fixtures 539,264.00
Other PPE 5,444,668.15
Total ₱103,100.00 ₱19,014,897.57
134. Verification of the records disclosed that inventories and PPEs procured for CY
2017 which amounted to ₱1,916,194.09 and ₱103,100.00 respectively, were not recorded
in the respective supply and property ledger cards as at December 31, 2017. Also, the
corresponding stock cards and property cards were not prepared nor maintained by the
concerned Supply Officer-Designate.
135. The Accountant however, maintains a supporting schedule for PPEs but it fails to
disclose the relevant information required in the GAM such as acquisition, description,
custody, estimated useful life, depreciation, impairment loss, disposal and other
information about the asset.
136. Inquiry from the concerned officers divulged that they were able to prepare and
submit monthly the RSMI. Similarly, the Accountant used the RSMI as the basis for the
preparation of the JEV for the issued supplies. Moreover, added that the newly acquired
39
PPEs and related monthly depreciations were directly recorded in the JEV and posted in
the Trial balance. Nonetheless, confirmed that they were cognizant on the required
ledgers and property/stock cards but overlooked compliance thereof due to workload and
lack of personnel both of the Supply and Accounting Sections.
137. Further, the conduct of physical inventory-taking of PPE accounts for CY 2017
was not completed which resulted to the non-preparation of the RPCPPE. Similarly, the
physical count on inventories was not conducted by the concerned personnel. It should be
noted that physical count on inventories is an obligatory procedure which should be done
semi-annually to determine the integrity of property custodianship.
138. The foregoing deficiency could be caused by the weakness of internal control
system over the preparation of required reports as well as management’s laxity in the
monitoring of its implementation.
139. Consequently, the details and movements of the inventory and PPE accounts
(debits and credits) during the year were not monitored due to the absence of the
prescribed ledger cards. Likewise, the accuracy of the balances of the inventory and PPE
accounts per books of accounts as of year-end cannot not be ascertained due to the non-
reconciliation of the accounts balances per ledger cards maintained by the accounting
section vis a vis the stock/property cards maintained by the supply unit. Further, the
purpose of providing check and balance between the accounting and the supply records
was not obtained.
140. We recommended that Management: Direct the Accountant and the Supply
Officer to devise a mechanism and fast track the preparation of the prescribed ledger
cards and the stock/property cards, respectively and require its proper
maintenance/updating of records to warrant completeness of information.
141. Install a sound internal control system over the preparation and maintenance of
the required ledger/stock and property cards alongside the regular monitoring in its
execution. Regular reconciliation of the balances per item shall also be conducted to
ensure accuracy of the recorded transactions.
142. The management agreed with the recommendations. A Memorandum Order No.
46 was issued directing concerned personnel to prepare and maintain the required
records and ledgers, and to regularly reconcile these records.
Non-maintenance of SLs for Cash-CO and Advances to SDO Accounts
Subsidiary ledgers (SLs) for Cash-Collecting Officer and Advances to SDO were not
maintained by the Accounting Section as required under Vol. 1, Chapter 2 of GAM,
thereby no proper reconciliation of balances per account could be effected between
the SLs and the controlling account in the General ledger (GL).
40
143. Section 12, Chapter 2, Volume I of GAM requires government agencies to
maintain books of accounts and registries which include Journals, Ledgers, and
Registries. Ledgers include General Ledgers and Subsidiary Ledgers.
144. Subsidiary Ledgers show detail for each control account in the GL which is
maintained per account and fund cluster by the Accounting Division/Unit.
145. At the end of each month, after all transactions in the journals have been posted,
the debit and credit columns of each account shall be footed in pencil and the balance
indicated in ink. The totals of the SL balances shall be reconciled with the corresponding
GL controlling account. At the end of the fiscal year, each SL shall be ruled and closed.
All totals shall be written legibly in ink and the balance of the account carried forward as
the opening balance of the new SL for the next fiscal year.
146. Review of the books of the Agency revealed absence of subsidiary ledgers of cash
collecting officer account to record the collections and deposits of the accountable
officers. The same is true for the account Advances to SDO, wherein, grants and
liquidations of cash advances were not recorded in the respective SLs to show the details
of the balances of the controlling accounts in the GL.
147. Nonetheless, it was noted that in lieu of SLs, the Accountant prepared a detailed
schedule for all the cash advances granted and the corresponding liquidation of each
SDO.
148. Thus, absence of SLs espoused the non-reconciliation of the balances per account
from the controlling account in the GL, and any discrepancies in the account balance per
GL and cashbook could not be easily identified.
149. We recommended that Management direct the Accountant to prepare and
maintain SLs for the Cash – CollectingOfficer and Advances to
SpecialDisbursingOfficer accounts to support the GL balances.
150. The Management issued a memorandum (Memo Order No. 077 dated Sept 11,
2017) directing the concerned officials to prepare and maintain CDRec and SL.
Not updated CDRec
Cash Advances granted to four (4) SDOs and the corresponding liquidations were
not regularly recorded in the Cash Disbursement Record (CDRec) as prescribed
under Section 17, Chapter 6 of GAM which has accumulated to ₱24,217,085.90 as of
April 20, 2017. Thus, the SDOs cannot immediately conduct monitoring and
reconciliation of the cashbook balances against the cash on hand and any deficiency
cannot be right away detected at the close of each day which may expose the cash to
risk of loss through theft and/or misappropriation.
41
151. Section 17, Chapter 6, Volume I of GAM provides for the Accounting Books,
Records, Forms and Reports to be Prepared and Maintained. It specifically points out
that:
“The Disbursing Officer shall maintain the Cash Disbursements Record
(CDRec) (Appendix 40) to monitor the cash advances/payroll, current
operating expenses, and special purpose/time-bound undertakings and
prepare the Report of Cash Disbursements (RCDisb) (Appendix 41) to
report its utilization. Xxx.”
152. Examination conducted on the cash and accounts of four (4) SDOs at four (4)
provincial offices of DOLE-RO XIII on April 18 and 20, 2017, disclosed that the cash
advances granted and corresponding liquidations were not regularly recorded in the
CDRec neither the book was updated. It was noted that these cash advances were drawn
for payment of GIP and TUPAD beneficiaries which totaled ₱24,217,085,90 from CY
2016 to April 20, 2017, as summarized in the table next page:
Table A. Summary of Cash Advances Granted
Name of SDO Field Office
Amount of Cash Advances
Total
CY 2016
As of April 18
and 20, 2017
Norman C.
Bersalote
Agusan del
Norte
6,304,457,02
176,393.01
6,480,850.03
Maximo C.
Magallen
Agusan del
Sur
3,512,435.00
1,252,294.00
4,764,729.00
Rhium Truce C.
Salvador
Surigao del
Norte
7,531,439.71
245,196.67
7,776,636.38
Orlando C. Rosit
Surigao del
Sur
3,410,285.99
1,784,584.50
5,194,870.49
Total ₱14,454,160.70 ₱3,458,468.18 ₱24,217,085.90
153. Interview with the respective SDOs revealed that they took cognizance on their
failure to update the required CDRec, and reasoned out that in addition to being the SDO
and the petty cash custodian, they are also designated as one of the programs focal
persons. Tied up with those functions, they barely had time to update the CDRec since
they had also to prepare and submit various office reports of which each spearheads.
Nonetheless, pointed out that they prepared a monthly schedule for cash advances
granted and correspondingly input its liquidation. Yet promised, they will record all the
related transactions and regularly update the CDRec, as prescribed.
154. Consequently, the SDO cannot immediately conduct regular monitoring as well as
reconciliation of the cashbook balances against the cash on hand at the close of each day.
As a result, any deficiencies cannot be right away detected and efforts to trace or uncover
42
any error will be delayed which may further expose the cash to risk of loss through theft
and/or misappropriation.
155. We recommended that Management: Direct the SDOs to record the transactions
daily in the related CDRec and to reconcile the cashbook balance with cash on hand at
the close of each day.
156. Henceforth, the balances shall be footed daily and the certification portion of
the CDRec should be accomplished and signed at the end of each month.
157. The management commented on a letter dated Sept 12, 2017 that a memorandum
(Memo Order No. 077 dated Sept 11, 2017) has been issued directing the concerned
officials to prepare and maintain CDRec.
Inconsistent practice of the implementation of ExMDPS
Implementation of the Expanded Modified Direct Payment Scheme (ExMDPS) for
Accounts Payable was not consistently practiced in settling accounts payable for
both internal and external creditors as a total of ₱90,153,994.78 or 66% of its total
obligations of ₱144,766,544.09 were still paid in checks, thus, the objectives to
reduce substantially the due and demandable Accounts Payables and minimize the
volume of outstanding checks was not attained.
158. Section 1.0 of DBM Circular Letter No. 2013-16 dated December 23, 2013
specifies that payment of payables thru ExMDPS has contributed to the substantial
reduction of agencies’ due and demandable APs and has minimized the volume of
outstanding checks. In addition, said scheme has addressed cash programming concerns
relative to resource predictability requirements by providing specific schedule of
payments.
159. Section 6.2 of the same Circular also states that starting January 1, 2014,
Accounts Payable due to creditors/payees of all NGAs/OUs shall be settled thru the
ExMDPS chargeable against the NCAs credited under the regular MDS sub-account
(Common Fund) of the NGA.
160. The Agency’s disbursements under MDS Account for the period January to
December 2017 showed a total amount of ₱144,766,544.09. However, verification of the
Report of Checks and ADA Issued disclosed that of the total 5,237 DVs processed for
payment, only 1,781 or 34% were paid thru ADA-LDDAP, while 3,456 or 66% were
paid thru checks, as summarized in the table below:
Table A. Summary of Monthly Disbursements as of CY 2017:
Month Total amount Breakdown of disbursement
43
disbursed No. of
DVs
paid
thru
Checks
Amount
No of
DVs
paid
thru
ADA-
LDDAP
Amount
January ₱ 7,679,716.91 585 ₱ 4,642,767.79 146 ₱ 3,036,949.12
February 4,075,121.14 140 2,367,325.70 97 1,707,795.44
March 7,830,382.69 207 5,956,959.33 114 1,873,423.36
April 12,733,006.86 206 10,928,440.29 90 1,804,566.57
May 9,838,255.59 247 6,525,825.26 99 3,312,430.33
June 16,191,852.53 276 14,264,433.48 114 1,927,419.05
July 3,580,168.61 123 1,704,376.04 70 1,875,792.57
August 15,763,462.07 354 13,179,613.42 139 2,583,848.65
September 18,655,989.85 389 8,979,347.37 166 9,676,642.48
October 8,611,102.56 181 3,006,692.12 249 5,604,410.44
November 18,995,451.46 299 8,512,755.47 248 10,482,695.99
December 20,812,033.82 449 10,085,458.51 249 10,726,575.31
Total ₱144,766,544.09 3,456 ₱90,153,994.78 1,781 ₱54,612,549.31
161. As gleaned from the table above, the Agency failed to consistently implement the
above policy in compliance with the aforementioned circular. It was observed that there
were several payables, like payment of travelling expenses, and payment to suppliers,
which may be conveniently paid thru ADA-LDDAP but were still paid thru checks. As a
result, the purpose to reduce substantially the due and demandable Accounts Payables
and minimize the volume of outstanding checks was not attained.
162. Inquiry with the concerned personnel revealed that the Agency actually applied
the ADA-LDDAP scheme, however, there were uncontrolled circumstances wherein
payment thru checks were more convenient. The instance included transactions during
quarter end in which any cash balances will be reverted back to the treasury account.
Likewise, the agency was not able to meet the bank’s servicing requirement of three (3)
days cut off in the submission of ADA-LDDAP before the end of the quarter, thus, they
opted to issue checks for payment of payables. Nonetheless, the concerned officers
agreed to observe the prescribed scheme in all their transactions in CY 2018 and
onwards.
163. We recommended that Management: Ensure that the ExMDPS, for all
accounts payable due to creditors/payees of the agency is fully implemented; and
164. Strictly adhere with the guidelines prescribed by the DBM Circular Letter Nos.
2013-16, dated December 23, 2013, as stipulated.
165. The Management agreed with the recommendations and issued memorandum to
concerned personnel directing compliance to said DBM Circular.
44
Non-remittance to National Treasury
Management continues to maintain their Current Accounts both at the Philippine
Veterans Bank (PVB) and Land Bank of the Philippines (LBP) with outstanding
balances of ₱7,450,502.58 and ₱624,746.80, respectively as of April 2017 and were
not remitted back to the Bureau of Treasury in violation of RA 10924 (CY 2017
GAA) and EO No. 338, s. 1996, thus depriving the government to use the said funds
for other priority projects.
166. Section 6 of the General Provision of RA10924, the CY 2017 General
Appropriations Act (GAA) states that receipts collected from non-tax sources, such as
insurance proceeds, acting as trustee, agent or administrator; as a guaranty for the
fulfillment of an obligation; or from donations authorized by law or contract with a term
not exceeding one (1) year; and those classified by law or regulations as trust receipts,
shall be deposited with the National Treasury and recorded as trust receipts.
167. Likewise, EO 338 directs that “all government offices and agencies are hereby
required to immediately transfer all public moneys deposited with depository banks and
other institutions to the Bureau of the Treasury, regardless of income source.”
168. Examination of the cash accounts of DOLE Regional Office XIII, showed that the
office continues to maintain two (2) current accounts from the PVB and LBP with
Account Nos. 0033-004224-001 and 0362-1022-35, respectively. The PVB account is
being used for all collections held in trust, while the LBP account is kept for SPES Fund.
169. Inquiry with the Accountant disclosed that these accounts are actually due for
closure as recommended by the previous audit team. Nonetheless, partial remittance was
made to the National Treasury pending final instruction from the Management.
170. Consequently, the preceding condition limits and deprives the government of
other beneficial use of the said funds.
171. We recommended that Management: Direct the Accountant to immediately
remit all the remaining cash balances to the National Treasury, and correspondingly
close the mentioned current accounts.
172. Henceforth, remit or deposit all trust receipts to the National Treasury and
disburse it by means of separate MDS check series subject to the issuance of a Notice
of Allocation (NCA) and in accordance with existing accounting and auditing rules
and regulations.
173. Management responded that closing of accounts (and the eventual remittance of
the funds to the National Treasury) is still on process. A memorandum (Memo Order No.
078 dated Sept 11, 2017) was also issued directing the concerned officials to remit all
remaining funds to the Treasury.
45
Unenforceability of the MOA due to incomplete specific provisions
Submission of 240 DVs in the total amount of ₱20,733,822.00 was delayed from 21-
113 days due to the absence of a specific provision in the MOA entered into between
DOLE RO XIII and M. Lhuillier Financial Services, Inc. for the delivery or pay out
of remittances for GIP, TUPAD and SPES beneficiaries contrary to the prevailing
regulations, thus, enforceability on the prompt issuance of Official Receipts (ORs)
could not be imposed to the disadvantage of the government.
174. Art. 1305, Book 4, Obligations and Contracts of the Civil Law of the Philippines
provides that “A contract is a meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some service”. (1254a)
175. Art. 1306 of the same Law states that “The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided they
are not contrary to law, morals, good customs, public order, or public policy”. (1255a)
176. Likewise, Section 7.2.1 of COA Circular No. 2009-006 dated September 15, 2009
pointed out that “The Chief Accountant, Bookkeeper or other authorized official
performing accounting and/or bookkeeping functions of the audited agency shall ensure
that:
“a. the reports and supporting documents submitted by the Accountable
Officers are immediately recorded in the books of accounts and submitted
to the Auditor within the first ten (10) days of the ensuing month.”
177. More so, Section 122 of PD 1445 stressed that “Failure of the officials concerned
to submit the documents and reports mentioned shall automatically cause suspension of
payment of their salaries until they shall have complied with the requirements of the
Commission.”
178. The Management’s mode of paying the wages/allowances of beneficiaries for
SPES program was anchored under Section 2, Rule VI of DOLE Department Order No.
175 series of 2017, as provided:
“b. the DOLE ROs shall pay the salaries or wages of SPES beneficiaries in
the form of cash through:
1. Financial or banking institutions’ facility such as:
a. Payroll
b. Automated Teller Machine (ATM) cards
c. Cash cards
d. Check
e. Any other acceptable means of facility
46
2. Other payment facilities or payment intermediaries such as, but not
limited to, private payment or remittance center subject to existing rules
on procurement.
Transaction and service fees and charges incurred in the processing of
payment shall be borne by the DOLE ROs through SPES budget.”
179. The preceding provisions were Management’s consideration in resorting the
services of a private remittance center as one of the payment schemes for a timely
transfer of the beneficiaries’ allowances/wages in the Caraga Region. Accordingly, and
after effecting the required procurement process, a Memorandum of Agreement (MOA)
dated September 25, 2017 was entered into between the M. Lhuillier Financial
Institutions (M. Lhuillier), as the First party and DOLE-ROXIII, Second party. However,
review of the MOA showed some unclear terms and conditions specifically on the
submission of ORs from the first party:
D. Costs and Taxes
“2. Second party shall submit to the First party, for purposes of the issuance
of the Official Receipt by the First Party to the former for the service fees
received covering the services rendered, its duly accomplished BIR Form
No. 2307.”
180. Clearly, the terms and responsibilities of the First party on the submission of ORs
at DOLE-ROXIII after a successful transfer of remittances to the beneficiaries were not
profoundly defined in the MOA nor absence of sanctions in the non-performance of
which. Thus, the instance attributed to unsubmitted 240 DVs totaling to ₱20,733,822.29
from September-December 2017. Summary of which is presented below:
Table A: Summary of Payments made to M. Lhuillier Financial Institution
Month
No.
of
DVs
Amount paid for
to M. Lhuillier
Financial
Services, Inc.
(₱20/beneficiary)
Amount paid
to
Beneficiaries
Total
Reason for
Delayed
Submission of
DVs
Sep-17 30 ₱48,060.00 ₱5,398,230.39 ₱5,446,290.39
No official
receipts from M.
Lhuillier Financial
Services, Inc./
unsubmitted for
113 days
Oct-17 70 30,860.00 2,807,012.51 2,837,872.51
No official
receipts from M.
Lhuillier Financial
Services,
Inc./unsubmitted
for 82 days
47
Month
No.
of
DVs
Amount paid for
to M. Lhuillier
Financial
Services, Inc.
(₱20/beneficiary)
Amount paid
to
Beneficiaries
Total
Reason for
Delayed
Submission of
DVs
Nov-17 57 104,860.00 5,578,342.11 5,683,202.11
No official
receipts from M.
Lhuillier Financial
Services,
Inc./unsubmitted
for 52 days
Dec-17 83 38,280.00 6,728,177.28 6,766,457.28
No official
receipts from M.
Lhuilier Financial
Services,
Inc./unsubmitted
for 21 days
Total 240 ₱222,060.00 ₱20,511,762.29 ₱20,733,822.29
181. The foregoing table also disclosed the number of days delay these DVs remained
unsubmitted which ranged from 21-113 days as of January 31, 2018. Similarly, it showed
payment of service fees of ₱20.00/beneficiary to the private remittance center amounting
₱222,060.00 from September-December, 2017, lest, the ORs for all these transactions
were not forwarded at DOLE-ROXIII as of date.
182. Management averred absence of a clear-cut and defined terms and conditions on
the submission of ORs and related sanctions in the MOA. They also confirmed the need
to modify some of the stipulations under Section C. 7 Operational Requirements in the
MOA. In addition, an addendum shall be prepared to rectify the noted deficiencies or an
immediate amendment of the MOA shall be ensued.
183. Thus, the foregoing condition caused the non-enforcement of the prompt issuance
of ORs and the imposition of the related sanction, resulting in the delayed submission of
240 DVs totaling to ₱20,733,822.29, which hindered the conduct of a timely review and
verification of the said transactions.
184. We recommended that Management: Direct the BAC to amend or modify the
MOA entered into between DOLE-ROXIII and M. Lhuillier Financial Services, Inc. by
inserting a specific provision pertaining to the issuance of ORs with emphasis as to the
prescribed period and the related sanctions among others, if the first party failed to
comply.
185. Conduct regular and close monitoring on the implementation of the MOA and
ensure that faithful compliance of the terms and conditions are adhered to by both
parties to safeguard the best interest of the government.
48
186. The Management responded that they are favorable with the recommendations.
They have already met with the representatives of M. Lhuillier Financial Services, Inc. to
discuss amendment to the Memorandum of Agreement.
Compliance with Gender and Development (GAD) Laws
187. DOLE-ROXIII has established its GAD Focal Point System (GFPS) in
compliance with the prior year audit recommendation. However, further validation shall
be effected on the transactions outlined in the GAD Plan and Budget and related
accomplishments, and its submission at the PCW.
Compliance with Tax Laws
188. DOLE-ROXIII considerably complied with EO No. 651 dated February 16, 1981
and its related rules and regulations. In CY 2017, total taxes withheld from employees’
compensation and from procurement of goods and services amounted to ₱4,759,511.51
and remitted the amount of ₱4,759,511.51. Details are shown on below:
Month
Taxes Withheld Remittance to BIR
From
suppliers
From
Compensation Total
Amount per
TRA TRA No.
Beg.
Bal
214,976.76 214,976.76
Jan
23,219.09
8,918.28
271,633.79 271,633.79
23,219.09
8,918.28
271,633.79
23,219.09
8,918.28
0171032017621060
0171032017622976
0171032017623087
Feb
26,283.61
11,499.71
290,439.86
290,439.86
26,283.61
11,499.71
290,439.86
26,283.61
11,499.71
0171032017639566
0171032017639471
0171032017639521
Mar
63,131.82
39,565.29
303,681.45 303,681.45
63,131.82
39,565.29
303,681.45
63,131.82
39,565.29
0171032017657214
0171032017657231
0171032017657259
April
34,391.33
19,976.46
308,140.46 308,140.46
34,391.33
19,976.46
308,140.46
34,391.33
19,976.46
0171032017671178
0171032017671359
0171032017610775
May
63,542.94
25,892.43
308,140.46 308,140.46
63,542.94
25,892.43
308,140.46
63,542.94
25,892.43
0171032017688977
0171032017689139
0171032017689208
June
41,844.30
25,249.78
307,163.68 307,163.68
41,844.30
25,249.78
307,163.68
41,844.30
25,249.78
0171032017703185
0171032017703138
0171032017703166
July
42,959.09
24,976.52
301,351.35 301,351.35
42,959.09
24,976.52
301,351.35
42,959.09
24,976.52
0171032017711124
0171032017722007
0171032017721944
Aug
92,913.15
30,982.18
300,269.81 300,269.81
92,913.15
30,982.18
300,269.81
92,913.15
30,982.18
0171032017738475
0171032017738457
0171032017738469
Sept
58,200.97
309,884.70 309,884.70
58,200.97
309,884.70
58,200.97
0171032017756055
0171032017756143
49
Month
Taxes Withheld Remittance to BIR
From
suppliers
From
Compensation Total
Amount per
TRA TRA No.
21,285.22 21,285.22 21,285.22 0171032017756188
Oct
91,312.22
32,375.10
316,072.58 316,072.58
91,312.22
32,375.10
316,072.58
91,312.22
32,375.10
0171032017770558
0171032017770585
0171032017770608
Nov
80,376.09
30,596.80
333,169.04 333,169.04
80,376.09
30,596.80
333,169.04
80,376.09
30,596.80
0171032017784643
0171032017784660
0171032017784669
Dec
175,726.44
56,868.95
287,476.56 287,476.56
175,726.44
56,868.95
287,476.56
175,726.44
56,868.95
0171032018804330
0171032018804449
0171032018804490
Total 1,337,064.53 3,637,423.74 4,974,488.27 4,759,511.51
Compliance with GSIS Law
189. DOLE-ROXIII complied with the existing law, rules and regulations particularly
on the deductions of GSIS premiums from salaries of its employees and the remittances
of these deductions to the GSIS in accordance with RA 8291.For CY 2017, the total
contributions and loan amortization withheld and remitted amounted to ₱6,370,626.95.
Details of which is presented in the table below:
Month Contributions/Deductions Amount
Remitted RLIP-GS RLIP-PS ECC Loans
repayment
Total
Beg. Bal
Jan 167,813.16 125,859.87 3,700.00 165,197.69 462,570.72 462,570.72
Feb 176,390.28 132,292.71 3,800.00 181,544.77 494,027.76 494,027.76
Mar 186,005.16 139,503.87 4,000.00 189,123.96 518,632.99 518,632.99
Apr 190,288.32 142,716.24 4,100.00 191,827.67 528,932.23 528,932.23
May 190,288.32 142,716.24 4,200.00 199,724.64 536,929.20 536,929.20
Jun 187,733.64 140,800.23 4,000.00 206,486.67 539,020.54 539,020.54
Jul 181,838.52 136,378.89 3,800.00 199,984.66 522,002.07 522,002.07
Aug 181,838.52 136,378.89 3,800.00 198,387.17 520,404.58 520,404.58
Sep 189,879.12 142,409.34 4,000.00 199,795.47 536,083.93 536,083.93
Oct 202,357.08 151,767.81 4,400.00 202,731.52 561,256.41 561,256.41
Nov 210,152.52 157,614.39 4,400.00 197,773.89 569,940.80 569,940.80
Dec 213,987.89 160,490.92 4,400.00 201,946.91 580,825.72 580,825.72
Total 2,278,572.53 1,708,929.40 48,600.00 2,334,525.02 6,370,626.95 6,370,626.95
Compliance with RA 9679 or the HDMF Law of 2009
190. During the year, DOLE-ROXIIIwithheld a total of ₱1,180,347.39 for premiums
and loan repayments, ₱1,179,962.16 of which were remitted to Pag-IBIG as of year-end.
Of the total amount remitted, ₱48,985.23 pertains to government share for premium;
₱160,531.84 pertains to personal share for premium; while ₱970,445.09 pertains to the
total loan repayments. The schedule for deductions and remittances made each month is
presented below:
50
Month OR No. Date Amount Withheld
Amount
Remitted
GS PS Loan Total
Jan 6984642-46
7183541
Jan
2017
4,185.23 10,419.32 79,244.01 93,848.56 93,463.33
Feb 8562539-43
8762587-89
Feb
2017
3,800.00 11,519.32 79,416.14 94,735.46 94,735.46
Mar ADA-101-03-
15-2017;
9542054-56
Mar
2017
4,000.00 11,719.32 79,416.14 95,135.46 95,135.46
Apr ADA-101-04-
09-2017;
0475104-06
April
2017
4,100.00 11,819.32 79,655.45 95,574.77 95,574.77
May ADA-101-05-
18-2017;
1068351-53
May
2017 4,100.00 11,819.32 79,817.12 95,736.44 95,736.44
Jun ADA-101-06-
14-2017;
1693919-21
June
2017 4,100.00 11,819.32 79,817.12 95,736.44 95,736.44
Jul ADA-101-07-
11-2017;
2623297-99
July
2017 4,000.00 14,119.32 83,083.48 101,202.80 101,202.80
Aug ADA-101-08-
11-2017;
4153022-24
Aug
2017 4,000.00 14,119.32 83,867.40 101,986.72 101,986.72
Sep ADA-101-09-
23-2017;
6649120-22
Sept
2017 4,100.00 15,719.32 84,506.18 104,325.50 104,325.50
Oct ADA-101-10-
26-2017;
6702261-63
Oct
2017 4,200.00 15,819.32 80,473.42 100,492.74 100,492.74
Nov ADA-101-11-
22-2017;
7784404-06
Nov
2017 4,200.00 15,819.32 80,766.93 100,786.25 100,786.25
Dec ADA-101-12-
11-2017
Dec
2017 4,200.00 15,819.32 80,766.93 100,786.25 100,786.25
Total 48,985.23 160,531.84 970,830.32 1,180,347.39 1,179,962.16
Settlement of Accounts
191. The Statement of Audit Suspensions, Disallowances and Charges as of
December 31, 2017 is presented in the following table:
Audit Action
BeginningBalance
(as of Dec. 31,
2016)
Issued this Period
(Jan. 1 to Dec. 31)
NS/ND/NC
Settlement/Adjust
ment this Period
(Jan. 1 to Dec. 31)
NSSDC
Ending Balance
(as of Dec. 31,
2017)
Notice of
Suspension ₱ 8,261,908.81 ₱18,800,801.57 ₱6,071,571.02 ₱20,991,139.36
Notice of
Disallowance 11,474,133.87 136,310.07 1,696,957.01 9,913,486.93
Notice of
Charge - - - -
Total ₱19,736,042.68 ₱18,937,111.64 ₱7,768,528.03 ₱30,904,626.29
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IV. STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT
RECOMMENDATIONS
192. We have evaluated the extent of implementation of the audit recommendations
embodied in the CY 2016 Management Letter (ML) and in the previous years’ MLs of
the DOLE-ROXIII. The status of implementation of these recommendations as of
December 31, 2017 are shown below:
Status of Implementation No. of Recommendations
Fully Implemented 16
Partially Implemented 43
Not Implemented -
Total 59
193. The Agency Action Plan and Status of Implementation is presented in Annex B.
V. ACKNOWLEDGMENT
194. We wish to express our appreciation to the Management and staff of DOLE-RO
XIII for the cooperation and assistance extended to our audit team during the audit.
195. We would appreciate receiving your reply, both hard and electronic copies,
within 60 days from receipt of this report, pursuant to Section 88 of the General
Provisions of the General Appropriation Act of 2017 (RA No. 10924).
Very truly yours,
AMY JOANE C. TABINAS
State Auditor III
OIC-Audit Team Leader
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Copy furnished:
ATTY. USMIN P. DIAMEL
Regional Director
Commission on Audit
Regional Office XIII
Butuan City
MS. CECILIA B. CAMON
Cluster Director
NGS Cluster 5 – Education and Employment
Commission on Audit
Commonwealth Ave., Quezon City
MS. TERESA C. ATIS
State Auditor V/Supervising Auditor
COA-DOLE Central Office
4th Floor Department of Labor and Employment Building
Muralla Wing corner General Luna Street
Intramuros Manila