Republic of the Philippines COMMISSION ON AUDIT NATIONAL GOVERNMENT SECTOR Cluster 5 Education and Employment Department of Education - ____________

_ Address Date MS. ___________________________ Schools Division Superintendent Department of Education Division Office of ________________ Address Dear Ms._____________: Management Letter on the Audit of the _____________________________________ for the Calendar Year _____ 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 No. 1445), we have audited the accounts and operations of the __________________________________________ for the period ended December 31, _____. 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 verify the level of assurance that may be placed on managements assertions on the financial statements, recommend agency improvement opportunities, and determine the extent of implementation of prior years audit recommendations. 3. The Agencys financial conditions, results of operations and cash flows as of December 31, _____ are shown in the attached audited financial statements (Annexes A-E). 4. Deficiencies observed in the course of the audit were earlier communicated through Audit Observation Memoranda (AOM) and discussed in an exit conference with concerned ________________________________ officials and employees on _______. Their comments were incorporated in this Management Letter, where appropriate. The significant audit observations and recommendations shall be incorporated in the Consolidated Annual Audit Report (CAAR) of the Department of Education for CY _____.
1

A. INTRODUCTION 5. Agencys mandate and organizational structure (limit to 3 paragraphs only)

The Department of Education established the Division Office of ________ by virtue of ________________. Xxx. The personnel complements of the Division Office-Proper and the schools under its supervision are summarized, to wit: Operating Unit Division Office-Proper Non-Implementing Units Secondary Schools Elementary Schools Implementing Units: Secondary Schools Total 6. Major accomplishments (limit to 1 to 6 only) For CY _____, major accomplishments of ________ including all the schools under its supervision are presented as follows: Target
Accomplishment
Percentage (%) of Accomplishment

No. of Schools

Plantilla Position

Filled-up

Vacant

Major Final Output (MFOs) Access to Education A. Enrollment Public School Pre-School Elementary Secondary Balik-Aral Enrollment Elementary Secondary SPED Enrollment Alternative Learning System Accuracy and Efficiency Basic Literacy Program B. Number of Teachers (National Paid) Elementary
2

Major Final Output (MFOs) Secondary C. Facilities Constructed Classrooms Repairs of Facilities Total 7. Financial Profile

Target

Accomplishment

Percentage (%) of Accomplishment

The appropriations, allotments, obligations and the unexpended balances of allotment of __________ and its implementing units as of December 31, _____ are shown below. Particulars Personal Services Maintenance and Other Operating Expenses Capital Outlay Total The NCAs, as well as their utilization and balances, are presented below. Particulars NCAs for Regular Allotment Accounts Payable Internal and External Creditors Terminal Leave Benefits Trust Account (Bidders/ Performance Bonds) Others Total Amount Received Disbursements Unutilized Balance Reverted to National Treasury Appropriations Allotment Received Obligations Incurred Unobligated Balance of Allotment

B. SUMMARY OF RECOMMENDATIONS (Applicable if there are two or more observations) 8. that: a. For the significant deficiencies observed in the course of the audit, we recommended The Management (i) secure bank statements from the depository banks for all the bank accounts; (ii) verify, analyze the subsidiary accounts, reconcile the same with bank statements and make the necessary adjustments; and (iii) remit the unexpended balances to the National Treasury in compliance with EO No.338, s. of 1996 and COA Circular No. 97-001 dated February 5, 1997 or return to the donors, as the case may be. Xxxx. C. DETAILED OBSERVATIONS AND RECOMMENDATIONS FINANCIAL AND COMPLIANCE The Cash in Bank Local Currency, Current Account xxx. 9. 10. 11. Xxx Xxx Xxx

b.

12. We recommended and the Management agreed to (i) secure bank statements from the depository banks for all the bank accounts; (ii) verify, analyze the subsidiary accounts, reconcile the same with bank statements and make the necessary adjustments; and (iii) remit the unexpended balances to the National Treasury in compliance with EO No.338, s. of 1996 and COA Circular No. 97-001 dated February 5, 1997 or return to the donors, as the case may be. VALUE FOR MONEY Topic sentence 13. 14. 15. 16. 17. Xxx Xxx Xxx We recommended that Management xxx. Management justified that _________.
4

18.

Xxx (Auditors rejoinder)

GENDER AND DEVELOPMENT 19. 20. Xxx Xxx

SENIOR CITIZENS AND DIFFERENTLY ABLED PERSONS 21. 22.

Xxx Xxx

COMPLIANCE WITH TAX LAWS 23. 24. Xxx Xxx

SETTLEMENT OF SUSPENSIONS, DISALLOWANCES AND CHARGES 25. 26. Xxx Xxx D. STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT RECOMMENDATIONS 27. We made a follow-up on the action taken by the Management to implement the recommendations of prior years and noted the following: Status of Implementation Fully Implemented Partially Implemented Not Implemented Total No. of Recommendations

28. The results of the validation of the implementation of prior years recommendations are presented in Annex H. E. ACKNOWLEDGEMENT 29. We wish to express our appreciation to the Management and staff of ____________ for the cooperation and assistance extended to our audit team during the audit.
5

30. We request a status report on the action taken on the audit recommendations within 60 days from the date of receipt hereof pursuant to Section ____, General Provisions, General Appropriations Act FY 2012 (R.A. _______). Very truly yours, NAME OF AUTHORIZED SIGNATORY IN THE ML Designation Audit Group
Copy Furnished: The Cluster Director Cluster 5 Education and Employment National Government Sector Commission Audit Quezon City The Regional Director Division Office of ________________ Department of Education Address

ANNEXES Annex Letter A B C D E F G H

Particulars Statement of Managements Responsibility for Financial Statements Detailed Balance Sheet for CY 2012 with Comparative Figures for CY 2011 Detailed Statement of Income and Expenses for CY 2012 with Comparative Figures for CY 2011 Detailed Statement of Cash Flows for CY 2012 with Comparative Figures for CY 2011 Notes to Financial Statements Status of Implementation of Prior Years Audit Recommendation

Annex H
STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT RECOMMENDATIONS Status of Implementation (Full, Partial, Not Implemented)
Partial implemented

Observations and Recommendations 1. Construction of School building

One (1) unit Gabaldon building at Galas Elementary School, Dipolog City was partially demolished and/or renovated/repaired without adhering to the guidelines and procedures required under DepEd Order No. 107 series of 2010 and other pertinent laws on the matter. 1. We recommend that the Principal of Galas

Ref.
CAAR 2011

Management s Action

Reason for Partial or NonImplementation

Observations and Recommendations

Elementary School be required to explain in writing the circumstances surrounding the repair/renovation/demo lition of the Gabaldon building in his school. Require the PFSED to closely monitor all ongoing repairs and/or construction of buildings under the jurisdiction of the Division Office. Direct all school heads to strictly follow the procedures/processes in the repair and/or demolition of school buildings and to closely coordinate and seek first the approval of the Division Office authorities before commencing any work on any building/structure of their respective schools. of

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

2.

2. Procurement Instructional Materials

CAAR 2011

Partial implemented

Certain deficiencies were noted in the purchase of pre-school and elementary education materials of the amounting to P 2,255,850.00 by the Zamboanga del Norte Division Schools, contrary to DepEd Order No. 112 series of 2009. 1. We recommend that management should stop from purchasing supplementary reading materials 9

Observations and Recommendations

which are not included in the List of Approved Supplementary Reading and Reference Materials per DepEd Order No. 112, series of 2009. Require strict adherence to the guidelines set forth under DO No.112, s. 2009. 3. Refrain from purchasing supplementary reading materials which are not requested by the schools under the division offices jurisdiction. Exercise prudence in the use of MOOE funds to purchase supplementary reading materials to avoid unnecessary expenditures. Require the attachment and/or submission of requisition and issue slips and inventory custodian slips of all supplementary reading materials purchased. 3. CASH - MDS Transfer of funds from MDS fund account to PNB current account totaling to P2,774,722.65 of the Division of Dapitan City have no valid and justifiable basis and considered as irregular transactions. 1. We recommend that management should stop the practice of depositing NCAs in

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially implemented

10

Observations and Recommendations

the current account of the Division Office to prevent the risk of misappropriating these funds. Instead, management should look into and monitor closely the projects and programs of the Division Office and process corresponding claims right away. We also recommend that all unused funds/balances pertaining to MDS funds deposited in the current account be remitted to the Bureau of National Treasury. 4. CASH IN BANK - LCCA The Cash in Bank LCCA balance of the Regional Office Proper and Zamboanga del Norte Division does not reconcile with its subsidiary ledger balances amounting to P176,598,012.27 and P893,972.89, respectively, while cash in bank account of Sindangan National Agricultural School (SNAS) amounting to P94,510.47 remained dormant for more than five (5) years. The School does not have any records of such bank account, thereby affecting the fair presentation of the financial condition of the School. Likewise, trust collection of CY 2009 2.

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially implemented

11

Observations and Recommendations

amounting to P18,110.00 are still in the books of Zamboanga City Division Office and remained undeposited. 1. Management of the Regional Office, through its Accounting personnel should continue to regularly update its subsidiary ledger for individual cash balances on a per fund and bank account basis to monitor charges to the account. Inform the bank for errors on their part to facilitate reconciliation. Management of Zamboanga del Norte Division Office should require the Accountant to prepare and submit the bank reconciliation statements of all the cash accounts monthly as required. It is recommended to assign one (1) competent accounting personnel whose main task is to prepare and submit these reports. Require the bookkeeper to adjust the reconciling items in the books of accounts and to verify, trace and adjust accordingly, if

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

2.

12

Observations and Recommendations

found necessary, the unaccounted P893,972.89. The Bookkeeper was also instructed to make the necessary adjustments to book up the understated amount by debiting Cash in Bank, Local Currency, Current Account and crediting Prior Years Adjustment amounting to P 893,972.89. 3. Management of the Sindangan National Agricultural School should require the Sr. Bookkeeper to comply with the provisions of COA Circular 97-001, dated February 5, 1997 on the proper disposition of the dormant account. 4. Management of Zamboanga City Division Office should require the Accountant to reconstruct the account and make the necessary adjusting entries to close this account. 5. Long outstanding unliquidated cash advances for payroll fund and advances to officers and employees of prior years still remained at P115,249,521.14 or 43% of the total unliquidated cash advances of P265,066,664.76 as of December 31, 2011

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially implemented

13

Observations and Recommendations

which are over 1 year to 3 years, due to failure from the accounting unit to enforce liquidation to some employees and officers. It includes cash advances for time bound undertaking and receivables from separated employees due to death, resignation, and transfers to other agency, thus, the probability of collection or liquidation is doubtful. Long outstanding unliquidated cash advances for payroll fund and advances to officers and employees of prior years still remained at P115,249,521.14 or 43% of the total unliquidated cash advances of P265,066,664.76 as of December 31, 2011 which are over 1 year to 3 years, due to failure from the accounting unit to enforce liquidation to some employees and officers. It includes cash advances for time bound undertaking and receivables from separated employees due to death, resignation, and transfers to other agency, thus, the probability of collection or liquidation is doubtful. 1. Management should adopt stricter measures to account for outstanding unliquidated cash advances like imposing sanctions against accountable officers/employees who continue to neglect their

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

14

Observations and Recommendations

obligations in accordance with the provisions of COA Circular No. 97-002 dated February 10, 1997 and EO No. 298 dated March 23, 2004. 2. Management should demand immediate liquidation on settlement of the unliquidated cash advance from the accountable officers who have retired or transferred. Otherwise, hold liable the signatories on the clearance issued to those officials and employees. 3. Effect automatic deduction of the unliquidated cash advance made by the concerned employees from the reimbursement of travel claim or any claim from Deped. 6. Validity, existence and correctness of Inventories, Property, Plant and Equipment (PPE), in the financial statements amounting to P174,825,132.23 and P3,549,932,560.91 respectively, cannot be ascertained due to the failure of the agency to conduct and submit a complete Report of the Physical Count of Inventory (RCPI) and Physical Count of Property, Plant and Equipment (RPCPPE)

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially implemented

15

Observations and Recommendations

amounting to P125,997,236.99 and P1,894,739,439.18, respectively, in violation of Section 65 and 66, Volume II of the New Government Accounting System (NGAS) Manual. 1. Management should strengthen its property management system by ensuring that it adheres strictly to the policy of timely and accurately recording of purchases and issuances of supplies inventories and direct the Supply section to retrieve the source documents of the transactions to adequately support the adjustments of the inventory account 2. Instruct the Supply section to conduct inventory taking periodically of all properties and submit an inventory report on time to support the validity and reliability of the account balances of the PPE. 3. The School Principal should cause the proper control and accounting of all properties donated to the school by instructing the Property Custodian and Bookkeeper to maintain property/equipment ledger card for each

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

16

Observations and Recommendations

donated property and to book all donated properties for accountability and control purposes. 4. Require the Accounting Division to prepare journal entry vouchers (JEVs) with complete documentations to reflect the correct balances of PPE accounts and the appropriate accounts for completion of construction building; unserviceable properties still recorded under PPE accounts; disposed properties still recorded under PPE accounts; and unrecorded equipment, if any. 7. Assets and Liabilities of the Regional Office amounting to P23,295,917.56 and P350,960,666.41 respectively, which are over one (1) year to three (3) years remained dormant and are not supported with subsidiary ledger, thus, validity and reliability of the accounts in the financial statements are doubtful of existence. 1. Management should conduct a thorough review of the recorded assets and liabilities accounts in order to determine whether or not assets

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

17

Observations and Recommendations

do really exists and are owned by the Agency and liabilities are legal and valid obligations to warrant payment. 2. Revert, any balance of the Payables in the books for more than two years by debiting the Payable account and crediting Prior Years Adjustments. 8. Accounts Payable Expenses of the Division of Dapitan City, Ilaya and Punta National High School incurred in calendar year 2010 in the total amount of P1,541,359.65 were charged to the current years appropriations in violation of Section 119 of P.D. 1445 and Section 4.1 of the Manual on the New Government Accounting System. Likewise, payables of Zamboanga del Sur Division amounting to P88,472.15 remained outstanding beyond two years contrary to Section 98 of PD 1445, resulting in the overstatement of the current liabilities and affected asset/expense accounts by the same amount. 1. Management of Dapitan City Division, Ilaya and Punta NHS that henceforth all expenses should be recognized in the year these were incurred, in order to ensure accuracy and reliability of the

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially implemented

18

Observations and Recommendations

financial statements generated at year end. The Accounting Office should book unpaid deliveries, services rendered and travel expenses incurred and other expenses as of yearend as accounts payable. We further recommend that in order to come up with a correct yearend accounts payable, the Accounting Office should inform all concerned personnel of the Division to submit expenses incurred before closing of the books of accounts. 2. Management of Zamboanga del Sur Division School should conduct a thorough review of the recorded liabilities accounts in order to determine whether they are legal and valid obligations to warrant payment. 9. Due to GSIS The Dipolog City Division Office failed to regularly remit to the GSIS, the employee contributions deducted from the salaries of some employees and the government share resulting to an unremitted GSIS contributions as of December 31, 2011 amounting to

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

19

Observations and Recommendations

P2,118,239.93. This is contrary to Section 5 and 6 of RA 8291, the GSIS law. Likewise, personal share for compulsory contributions on GSIS Life & Retirement Gratuity of Malangas NHS employees were not deducted from regular salaries and salary differentials in the amount of P200, 971.36, paid directly to employees through disbursement vouchers in violation of Republic Act No. 8291 1. We recommend that management of Dipolog City Division Office should regularly remit GSIS deductions and the corresponding government share of employees contributions to the GSIS. This is to avoid penalties and to allow the personnel concerned to avail of GSIS benefits which are rightfully theirs. 2. We also recommended that the Bookkeeper of Malangas NHS who is responsible for the non-deduction of the personal share of life & retirement contributions should take steps to personally collect the same from the employees and remit the same to the GSIS otherwise, the

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

20

Observations and Recommendations

corresponding amount due shall be the personal liability of the officials or employee concerned responsible for the deduction thereof. 10. Expenses Procurement of Olyset screen/net amounting to P1,674,737.51 of the Division of Dapitan City was irregular and

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

violated the pertinent provisions of the

Implementing Rules and Regulations (IRR) of Republic Act (R.A.) 9184. 1. We recommend the following: a. As much as possible, all procurement shall be done thru competitive bidding. Alternative modes of procurement may be resorted to if conditions provided in the IRR of R.A. 9184 are present and it is more advantageous to the government. Members of the BAC should explain/justify why direct contracting was resorted to in the procurement of Olyset screen/net even if the conditions required to justify 21

b.

Observations and Recommendations

procurement thru direct contracting did not exist. 11. Disbursements for repair of service vehicle of the Division of Dapitan City in the total amount of P216,349.84 were excessive and made contrary to Section 412, Volume I of the Government Accounting and Auditing Manual, COA Circular No. 85-55A dated September 8, 1985 and Section 10 of the Implementing Rules and Regulations (IRR) of Republic Act (R.A.). 1. Management of the Division School of Dapitan City should exercise more prudence in the disbursement of its funds and see to it that these are disbursed in accordance with existing laws, rules and regulations; required supporting documents to support the reasonableness of the repairs made. The Accountant should strictly evaluate the completeness of documentary requirements in processing all claims. 12. Expenses for unnecessary travel in the total amount of P158,960.00 were incurred by the Division Office of Dapitan

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

CAAR 2011

Partially Implemented

22

Observations and Recommendations

City which is prohibited under COA Circular No. 85-55A dated September 8, 1985 and Section 2 of Executive Order No. 248 as amended by Executive Order No. 298. 1. Management of Dapitan City Division School should suspend all local travels unless urgent and extremely necessary and will involve minimum expenditure. We further recommend to limit expenses on those which are supportive of the implementation of the objectives and mission of the Department of Education. 13. Payment of honorarium to the members of Bids and Awards Committee (BAC), Technical Working Group, BAC Secretariat, officials and personnel of the Division of Dapitan City were not in accordance to DBM Budget Circular No. 2004-5A dated October 7, 2005. 1. We recommend that Management should adhere to the guidelines provided in DBM Budget Circular No. 20045A dated October 7, 2005 in granting of honoraria to the members of the BAC and other personnel of the Division involved in

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

23

Observations and Recommendations

procurement. We further recommend that in lieu of honoraria, payment of overtime services maybe paid to members of the BAC Secretariat whose positions are in the Procurement Unit of the Division. 14. Failure of the Isabela City Division Office HRMO to prepare Notice of Salary Step Increment on time resulted in the delayed payments of benefits to deserving personnel and prior years adjustments amounting to P1.7M in the books of accounts. 1. The HRMO of the Isabela City Division Schools is required to formulate systems/strategies such as establishment of computerized data bank of all personnel and augmentation of personnel, if necessary, to come up with prompt preparation of NOSSIs and other reports which are needed as supporting documents of any claims pertaining to personnel benefits. The Accountant and Budget Officer shall see to it that all obligation and expenses which are incurred during the year are recorded in the books of the

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

24

Observations and Recommendations

same year, for a fair presentation of financial statements. 15. The inability of the Bids and Awards Committee (BAC) of the Regional Office and Dipolog City Division Office, Zamboanga Sibugay Division, Isabela Division Office and Begang NHS, to perform in accordance with the provisions of Implementing Rules & Regulations (IRR) of RA 9184 resulted to the incurrence of irregular expenditures amounting to P3,362,126.15. 1. We recommend that the BAC members and the BAC Secretariat be required to adhere strictly to the provisions of RA 9184 and correctly adopt the applicable mode of procurement in each case of procurement activity. 2. Management should strictly adhere to the law on procurement to avoid suspensions and disallowances in audit. 16. Various disbursements of the Basilan NHS amounting to P101,303.76 were made through reimbursements without indicating the purpose in violation of Sections 4(2) and 4(6) of PD 1445 which cast doubt on the propriety of the transactions. 1. We recommend to refrain from resorting to

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

CAAR 2011

Partially Implemented

25

Observations and Recommendations

reimbursement as this violates provisions of R.A. 9184 which provides that all procurement should be through competitive bidding. In case some small items need to be procured in case of emergency, where delay would results to damage to life or property, it should be paid out of petty cash fund to be established for the purpose. 17. Processing of transactions was not properly scrutinized by the Accountant of the Division Office of Isabela City, resulting in incomplete documentation or documentation not in accordance with laws, rules and regulations, thus casting doubt on the propriety of the disbursements totalling P1,058,129.90. 1. We recommend that the Accountant should review, check and recompute all claims and supporting documents to insure their correctness, validity and completeness and whether expenses conform with existing laws and regulations before affixing her signature on Box A of the disbursement

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

26

Observations and Recommendations

voucher. Claims with incomplete documentation and of doubtful validity should not be processed for payment. 2. We recommend that the agency head of the division offices and implementing national high schools in Region IX should make sure that all information in the supporting documents are completely filled-up by the concerned officers and employee, before processing the payment of claim or upon liquidation of the cash advances made. Follow strictly the rules and procedures as provided for in COA Circular No. 2002002. 3 We recommend that the Senior Bookkeeper Kabasalan, Buayan, Titay, Surabay NHS shall ensure that travelling expenditures were made within the prescribed limits as provided under EO # 298 to avoid the incurrence of unnecessary and excessive expenditures. 4. The Accountant should also check

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

27

Observations and Recommendations

whether payrolls were duly signed by each and every employees listed therein or his duly authorized representative and submit the payrolls within ten (10) days after the transactions have been posted in the books of accounts such as Cash Disbursements Journal. Moreover, the Accountant and the Cashier should take efforts to inform payees assigned in far flung areas through the Principal/Supervisor to ensure that all vouchers/payrolls listed in the Report of Checks/Cash Disbursements are complete before submitting them to the audit team. 18. The Regional Office and the division offices including its implementing units did not procure their commonuse supplies and materials amounting to P75,778,675.35 as of December 31 , 2011 from the Procurement Service of the Department of Budget and Management (DBM), contrary to the provisions of Republic Act 9184 and its Implementing Rules and Regulations (IRR), as well as Administrative Order No. 17 dated July 28, 2011 and DBM Circular Letter No. 2011-6 dated August 25,

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

28

Observations and Recommendations

2011 directing the use of the Procurement Service (PS) and the Philippine Government Electronic Procurement System (PhilGEPS) in procurement activities. 1. We recommend that the agency ensure that procurement of common use supplies shall be made from the PS-DBM, in compliance with RA 9184, Administrative Order No. 17 and DBM Circular Letter No. 2011-6 dated August 25, 2011. This way, the agency is one with the government in its support of transparency, competitiveness, streamlined procurement process, system of accountability, and public monitoring. 19. The Bids and Awards Committee (BAC) Secretaria of the Regional Office, Division Offices of Zamboanga del Sur, Zamboanga Sibugay, Pagadian City, BasilanNHS and Zamboanga del Sur School of Arts & Trade failed to send invitation letters to bonafide observers in all stages of the procurement process contrary to Section 13.1 of RA 9184. 1. We recommend strict adherence to the provisions of RA 9184 on the attendance of observers in all stages

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

29

Observations and Recommendations

of the bidding process. The presence of observers in the conduct of bidding provides more credence and authenticity to the activities undertaken. 20. The Regional Office, Zamboanga del Sur and Pagadian City Division Office did not adopt the set of customized bidding documents for goods, in violation of Section 17.1 and Section 6.2 of the Implementing Rules & Regulations (IRR) of RA 9184 as amended on September 2, 2009. 1. We recommend that the BAC of Regional Office, Zamboanga del Sur and Pagadian City Division Office should adopt the customized bidding documents for goods as prescribed by the GPPB to ensure transparency in the procurement process 21. The Bids and Award Committee (BAC) of Regional Office, Zamboanga del Sur and Pagadian City Division Office failed to notify the losing bidders and post the Notice of Award within the prescribed period in violation of Section 37.1.2 and Section 37.1.6 of the Implementing Rules and Regulation (IRR) of RA 9184. 1. We recommend that the BAC of Regional Office, Zamboanga del

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2013

Partially Implemented

CAAR 2011

Partially Implemented

30

Observations and Recommendations

Sur and Pagadian City Division Office strict adherence to the provisions of RA 9184, specially Section 37.1.2 and Section 37.1.6 to provide more credence and authenticity to the activities undertaken. 22. Compliance to RA # 9184 The Division Offices and its implementing national high school do not strictly follow the implementing rules and procedures as contained in the IRR of RA 9184. Review of the procurement process of the agencies revealed the following deficiencies other than those listed above. 1. Direct the BAC of the Zamboanga, Dapitan, Dipolog Cities and its implementing units to abide by the rules and regulations provided for in Sections 27, 31 and 39 of the revised IRR of RA 9184. Scrutinize and review the procurement process done to determine its regularity and legality before approving its payment. 23. The accountable officer of the Regional Office IX failed to submit to the Office of the Auditor the Report of Accountability for Accountable Forms (RAAF) in violation of Section 98, GAAM Vol. 1 and do not

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

CAAR 2011

Partially Implemented

CAAR 2011

Partially Implemented

31

Observations and Recommendations

maintain a cashbook/records for each fund handled to facilitate verification of her accountability, in violation of Section 52 , NGAS, Vol. 1. 1. Require the Accountable Officer to submit the RAAF as provided for in Section 98, GAAM, Vol. 1 and maintain a cashbook and permanent record book for accountable forms.

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

24. Provident Fund The outstanding balance of Loans Receivables of the Provident Fund could not be determined due to none submission of reports including the Financial Statements as of December 31,2011. Further, Status of Funds and Schedule of Outstanding Loans Receivable Schedule and subsidiaries were not prepared, hence, the correctness and completeness of the account balances reported as of December 31,2011 could not be ascertained. 5. We recommend that the Accountant of the Provident Fund: Prepare all the required 32

Observations and Recommendations

reports on time; Update the subsidiary records of loans granted for repayments; Coordinate with the RPSU for the updating of deductions on loans; Pursue collections of loans in accordance with the existing rules and regulations of a Provident Fund.

Ref.

Management s Action

Status of Implementation (Full, Partial, Not Implemented)

Reason for Partial or NonImplementation

33