Republic of the Philippines

COMMISSION ON AUDIT
Name of the Agency

AOM No. ____________

Date: ____________

AUDIT OBSERVATION MEMORANDUM (AOM)

For: Name
Designation
Name of Agency
Pili, Camarines Sur

Attention: Name
Accountant III

We have audited the Due to BIR Account as of December 31, 2016 and observed the
following deficiency/error:

Withheld taxes aggregating ________ were not remitted to the Bureau of Internal
Revenue (BIR) within the prescribed period.

Revenue Regulations (RR) No. 2-98 dated May 17, 1998 provides the rules on the
withholding of tax on income subject to the expanded withholding tax and final withholding
tax, withholding of income tax on compensation, withholding of creditable value-added tax
and other percentages taxes. Likewise, Joint Circular No. 1-2000 dated January 3, 2000 of the
DOF, DBM and COA provides the guidelines on the remittance of all taxes withheld by the
National Government to the Bureau of Treasury thru the use of Tax Remittance Advice and
the Authority to Debit Account issued by the DBM.

Moreover, BIR RR No. 10-2008, specifically Section 5 (2) as amended, stipulates that
the employer who is required to collect, account for and remit any tax imposed by the
National Internal Revenue Code, as amended, who willfully fails to collect such tax, or
account for and remit such tax or willfully assist in any manner to evade any payment
thereof, shall in addition to other penalties provided for in this Code, as amended, be liable,
upon conviction, to a penalty equal to the amount of tax not collected nor accounted for or
remitted.

Under the above mentioned Circulars, all taxes withheld and payable to the BIR shall
be remitted on or before the 10 th day of the month following the month such taxes were
withheld, except for taxes withheld for the month of December which shall be filed on or
before the 15th day of the succeeding month. All these regulations are in conformity with the
provisions of RA 8424, otherwise known as An Act Amending the Internal Revenue Code.

Analysis of the Due to BIR account disclosed the following information:

Beg. Balance 1/1/16 .

Add : Taxes withheld during the year 2016 .
Total
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 Deduct: Remittances during the year 2016
Ending Balance 12/31/16 prior year’s Tax withheld

For the Main Campus, of the P4,053,469.04 current year ending balance of the
account Due to BIR, a total of P4,078,720.76 was remitted on January 10, 2014, with an
unreconciled difference of P25,251.72 for the account. The accounting personnel explained
that they are currently accounting for the difference and reconstructing the accounts.

Likewise, in Calabanga Campus, out of the P422,160.53 unremitted amount as of the

end of the year, P373,399.67 was remitted on January 10, 2014 while P43,429.17 was
remitted on January 13, 2014, leaving a balance of P5,331.69 composed of prior years’ taxes
of P6,654.27 and a negative balance for current year of (P1,322.58).

Similarly, at Sipocot Campus, out of the P588,016.27, P151,820.99 remained

unremitted beyond the prescribed period to remit the same.

In summary, there is unremitted amount of P200,581.85 to BIR within the prescribed

period, which is detailed as follows:

Calabanga Campus
(P422,160.53 – P373,399.67) P 48,760.86
Sipocot Campus 151,820.99
Total Unremitted P200,581.85

Failure to remit the taxes withheld within the prescribed period deprived the
government of the immediate use of funds for its various programs and projects and exposed
the same to risks of misappropriation or unauthorized use.

We recommended that management direct the concerned personnel to remit the taxes
withheld in accordance with the schedules of remittances provided under RA 8424 to avoid
penalties and surcharges.

May we have your comment in the foregoing audit observation within five (5)
calendar days from receipt hereof.

Name of ATL
State Auditor IV
Audit Team Leader

Name of SA
State Auditor V
Supervising Auditor
Proof of Receipt of AOM:
Copy for Received By Date

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