Republic of the Philippines

COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City
National Government Sector
Cluster 6 Health and Science
Department of Health

(Agency Name)
(Agency Address)

CONFIDENTIAL
(Date)____________
Head of Auditee____
_________________
_________________
Dear __________:
Management Letter on the Cash Examination conducted
on the cash and accounts of -----(name of accountable officer)---,
designated as ----(designation)---- of the ----(office/unit)--for the Period -----------------------1.
Pursuant to (Authority or Office Order to conduct the cash examination and
date) (Annex A), an examination on the cash and accounts of (Name of AO),
(Position/Designation), was conducted on (Date cash examination was conducted) and
covered the period (Period covered of the cash examination).
2.
The cash examination was conducted by the Audit Team led by (name of ATL),
(Position and Designation), to determine whether: (a) all government funds and
accountable forms in the hands of the accountable officer (AO) are actually existing and
properly accounted for; (b) the agency and its AOs are adhering strictly to prescribed
rules and regulations on cash transactions; and (c) the agencys practices and procedures
provide adequate safeguards against fraud and losses of government funds.
3.
The examination was conducted in accordance with the 2013 Revised Cash
Examination Manual. It included testing and evaluating the agencys internal control
structure on cash management using the Internal Control Questionnaire (ICQ), cash
count, reconciliation of ledgers and records and such other procedures necessary under
the circumstances. The extent of implementation of prior years examination
recommendations was also validated.
Page 1 of 4

4.
Deficiencies observed in the course of the examination were earlier
communicated through Audit Observation Memorandum (AOM) and discussed with the
concerned agency officials and the AO. Their comments were incorporated in this
Management Letter, where appropriate.
The significant audit observations and
recommendations shall be incorporated in the audit report of the (agency name) for CY
___.
A. Introduction
5.
(Name of AO) was designated as (Designation) to handle cash advance not
exceeding (amount of cash advance) for the (purpose of cash advance or
accountability), effective (Effectivity of designation) under (authority of the AO and
date) (Annex B).
6.
The AO was bonded under (Bond No. and date) in the amount of (Bond
amount), effective from (bond start) to (bond end) (Annex C). During the period
covered by the examination, the AO was granted a total cash advance/replenishments of
(amount) and total disbursements amounted to (amount of disbursement), leaving a
balance of (amount)(Annex D).
B. Observations and Recommendations
7.
The AO complied with the rules, regulations and controls pertaining to recording,
reporting and handling of cash accountabilities, as shown in the accomplished ICQ
(Annex ---), except as discussed in the ensuing paragraphs. No cash shortage was
discovered during the examination as shown in Report on Cash Examination (Gen. Form
No. 74-A) and supporting schedules (Annex ---).
Caption (Short description of deficiency, such as: non-maintenance of records; nonpreparation of report)
Topic Sentence (As much as possible, it should contain the four elements of an audit
observation: condition, criteria, cause and effect.)
8.
(In discussing the audit observation, observe its elements: condition, criteria,
cause and effect.)
9.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.
10. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxx.
11. Management explained that . (Discuss Management comment in the
observation paragraph.)

Page 2 of 4

12. We maintain, however, that or We believe, however,

that, or We are of the opinion, however, that. or, etc. (The audit
rejoinder, if any, should always follow managements comments or justification.)
13.
We recommend that Management require/direct the (official or employee
responsible for implementing the recommendation) to ..

C. Status of Implementation of Prior Years Examination Recommendations

14.
We made a follow-up on the action taken by the (Auditee) to implement the
recommendations of prior years and noted the following:
Status of Implementation
Fully Implemented
Partially Implemented
Ongoing
Not Implemented

No. of Recommendation

15. The results of the validation of the implementation of prior years

recommendations are presented in Annex ___. Partially and not implemented
recommendations are reiterated and discussed in Part B of this letter.
D. Acknowledgment
16. We wish to express our appreciation to the Management and staff of (Agency
Name) for the cooperation and assistance extended to our audit team during the cash
examination.
17. We would appreciate receiving your reply, both hard and electronic copies, within
fifteen days from receipt of this letter.
Very truly yours,
________________
Supervising Auditor
Copy furnished:
The Accountable Officer
The ATL, (Agency)

Page 3 of 4

Annexes:
A
B
C
D
E
F1
F2
G
H
I
J
K

Authority or Office Order to conduct the cash examination and date

Authority of the AO and date
Copy of Approved Bond
Internal Control Questionnaire
Report on Cash Examination (Gen. Form No. 74-A)
Cash Production Notice & Cash Count Sheet
Inventory of Cash Items
Working Paper on Cash Advances &
Replenishments Per Audit
Working Paper on Cash Advances & Replenishments Per Cash
Disbursement Record
Reconciliation Statement of Accountability
Certification of Subsidiary Ledger Balance
Validation of the Implementation of Prior Years Recommendations

Page 4 of 4