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1. Rationale
2. Definition/Description of Terms
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2.5 Category A, B, C, or D classification of WDs is based on the
Revised Local Water District Manual on Categorization and
Other Related Matters (LWD-Macro) issued by the Department
of Budget and Management (DBM) CY 2011 which considers the
number of active service connections and points rating based on
Gross Revenues, Total Assets, Net Income before Interest and
Depreciation, as well as Staff Productivity Index, to distinguish
between each classification. In general, category A refers to
Large WDs with 75-100 points rating earned; category B refers
to Big WDs with 50-74 points rating earned; category C refers
to Medium WDs with 25-49 points rating earned; and category
D refers to Small WDs with 1-24 points rating earned.
3. Guidelines
3.1 The cost of regular audit services by the COA shall be based on
the actual cost of audit work rendered in the WDs based on the
COA computation of man-hours and MOOE used.
3.2 The computation of the PS component of the audit cost for WDs
under categories A, and B, shall follow the computation being
applied to regular GOCCs pursuant to existing COA guidelines
issued by the Planning Finance and Management Sector (PFMS),
COA, for the assessment of cost of audit services to regular
GOCCs.
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b. Office supplies to be used by the audit team for the
duration of the audit shall be as follows (subject to 1%
annual increase on account of inflation):
d. Out-of-pocket expenses.
4. Responsibilities
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4.3 The RD shall transmit the Billing Statement to the WD thru the
SA within 15 days after the transmittal of the AAR to the WD
Management. A copy of the PS Billing Assessment shall be
furnished the Bureau of Treasury (BTr) and the Department of
Budget and Management (DBM).
4.4 The SA shall cause the remittance of the PS cost of audit by the
WD to the BTr, and the MOOE cost of audit to the concerned
COA Regional Office.
6. Effectivity
This Memorandum shall take effect fifteen (15) days after publication
in the Official Gazette or newspaper of general circulation.
MIC
Chairperson
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AnnexA
FINANCIAL INDICATORS
The financial capability of WDs may be measured through financial ratios reflective
of the profitability and liquidity computed from the WD's current financial
statements.
a. Net Profit Margin shows how much profit is derived from every
peso of total sales. It indicates how well the WD has managed its
operating expenses. It also indicates whether the WD is
generating enough sales volume to cover minimum fixed costs
and still leave an acceptable profit margin.
2. To measure liquidity, Quick Ratio gauges the ability of a WD to pay for its
current liabilities by using its most liquid current assets.