ISO 9001:2015 Certified Organization RO1-SDOIN-F29-01-00

with Certificate No. AJA18-0119 Effectivity Date: 11April2018

________________________________________________________________________________
January 11, 2019
IMELDA B. JAGTO
Audit Team Leader

ATTY. ROMULO P. RIVERA

Regional Supervising Auditor

MADAM/SIR:

Greetings!

This is in relation to the AUDIT OBSERVATION MEMORANDUM (AOM) with AOM No.:
SDOIN 2018-009-101, dated October 23, 2018 issued by your good office and which was
received on November 15, 2018, requiring this office to file its comments on the foregoing audit
observations within fifteen (15) calendar days from receipt hereof. However, this office
requested extensions for the preparation of the said response and/or comment. Hence, this
comment.

In response thereto, this office would humbly present the following

explanation/comment on the said AOM:

1. ISO PREPAREDNESS JOURNEY, MODULES I TO XI does not fall under the category
of consultancy. Thus, the rules on consultancy does not apply.

Consultancy refer to services for infrastructure projects and other types of projects
or activities of the GoP requiring adequate external technical and professional expertise
that are beyond the capability and/or capacity of the GoP to undertake such as, but not
limited to: (i) advisory and review services; (ii) preinvestment or feasibility studies; (iii)
design; (iv) construction supervision; (v) management and related services; and (vi)
other technical services or special studies.1

Furthermore, the Annex “B” of the Implementing Rules and Regulations of RA 9148
states that:

“6. Types of Consulting Services The services to be provided by consultants can be

divided into six (6) broad categories, namely: (a) advisory and review services; (b) pre-
investment or feasibility studies; (c) design; (d) construction supervision; (e)
management and related services; and (f) other technical services or special studies.

1
2016 Implementing Rules and Regulations of RA 9184
ISO 9001:2015 Certified Organization RO1-SDOIN-F29-01-00
with Certificate No. AJA18-0119 Effectivity Date: 11April2018

________________________________________________________________________________
6.1. Advisory and Review Services. These services include advice on particular
projects or problems. These will include advice on and review of, among others,
planning, design and other professional services, as well as management, production,
inspection, testing and quality control. They also include such services as appearances
before commissions, boards or other judicial bodies to give evidence or otherwise submit
professional opinions.

6.2. Pre-Investment or Feasibility Studies. These are the studies which normally
precede decisions to go (or not to go) forward with specific projects. These studies may
have as their objectives: a) To establish investment priorities and sector policies - Studies
for this objective include, among others, basic resource inventories, such as, river basin
surveys, transport sector surveys, and studies of alternative development patterns and
of sectors on a regional or nationwide scale. b) To determine the basic features and the
feasibility of individual projects - Studies for this objective include, among others, the
functional design, project site selection, architectural and space programming and
physical layout of specific projects, preliminary design and cost estimates, and the
economic, financial and environmental impact analyses required for project evaluation.
c) To define and propose changes in governmental policies, operations and institutions
necessary for the successful implementation or functioning of investment projects -
Studies for this objective include, among others, analysis of project related
organizations, administrative problems, planning machinery, regulatory and marketing
policies, accounting, and management systems, manpower resources and training
requirements.

6.3. Design. This type of services normally consists of three (3) phases: a) Pre-Design
Phase – establishes the general size and scope of the project and its location on the site.
The services include but are not limited to reconnaissance, topographical and other
engineering and land surveys, soils investigations, preparation of preliminary
architectural/engineering designs, layouts, outline specifications, preliminary cost
estimates and specific recommendations prior to actual design; b) Basic Design Phase –
includes the preparation of detailed plans, designs, working drawings, specifications,
detailed cost estimates and tender documents required for invitations of bids for
construction works and equipment; and c) Support Services During Construction –
includes assistance and advice in securing bids, tabulation and analysis of bid results,
and making recommendations on the award of construction contracts, and in preparing
formal contract documents; preparation of supplementary drawings required to suit
actual field conditions; checking detailed construction and as-built drawings, shop and
erection drawings submitted by contractors; making periodic visits to check on the
general progress of work and quality of materials and workmanship; observing
performance tests and start-up and making report thereon; and making a final
inspection and reporting of completed project.
ISO 9001:2015 Certified Organization RO1-SDOIN-F29-01-00
with Certificate No. AJA18-0119 Effectivity Date: 11April2018

________________________________________________________________________________
6.4. Construction Supervision. These include the following: a) Inspection and
expediting of the work; b) Verification and checking of quantities and qualities of work
accomplished by the contractor as against the approved plans, specifications, and
programs of work; c) Issuance of instruction for corrections of defects on the work; d)
Verification and recommendation for approval of statements of work accomplished and
certificate of project completed by the contractor; e) Review and recommendation for
approval of progress and final billings of the contractor; and f) Provision of record or as-
built drawings of the completed projects. The above do not mean direction,
superintendence, or management of construction.

6.5. Management and Related Services. These may include the following: a) Sector
policy and regional development studies; b) Planning, feasibility, market, economic,
financial, technical, operations and sociological studies; c) Project management,
including procurement advisory services, impact monitoring, and post-evaluation
services; d) Production management, inventory control, and productivity improvement;
e) Marketing management and systems; f) Information and communications technology
services, including but not limited to, information systems design and development, and
network design and installation; g) Institutional strengthening, organization
development, manpower requirements, training and technology transfer; h) General
management consultancy; and i) Other related services.

6.6. Other Technical Services or Special Studies. The Technical Services may include
the following: a) Institution building, including organization and management studies,
and business process re-engineering and development; b) Design and execution of
training programs at different levels; c) Provision of staff to carry out certain functions
and to train their replacements; and d) Tasks relating to economic and financial studies
such as those of tariff structures. The Special Studies may include the following and other
studies not covered under any of the services and studies described above: a) Soils
investigation; b) Studies, tests and process determination performed to establish design
criteria for water facilities; c) Detailed mill, shop, and/or laboratory inspection of
materials and equipment; d) Land surveys, establishment of boundaries and
monuments, and related office computations and drafting; e) Parcellary surveys; f)
Engineering surveys (for design and construction) and photogrammetry; g) Assistance
in litigation arising from the development or construction of projects and in hearings
before various approving and regulatory agencies; h) Investigation involving detailed
consideration of the operation, maintenance, and overhead expenses; and the
preparation of rate schedules; earning and expense statements, feasibility studies,
appraisals, evaluations, and material audits or inventories required for certification of
force account construction performed by the agencies; i) Preparation of environmental
statements and assistance to the agencies in public hearings; j) Preparation of operating
instructions and manuals for facilities and training of personnel and assistance in initial
operation of facilities; k) Designs to meet unique and/or above normal requirements
brought about by severe earthquakes, tornadoes, or blasts, or satisfy unique or
ISO 9001:2015 Certified Organization RO1-SDOIN-F29-01-00
with Certificate No. AJA18-0119 Effectivity Date: 11April2018

________________________________________________________________________________
abnormal tolerances, safety requirements, etc.; l) Site and physical planning; m)
Environmental and other aspects of planning; n) Housing; o) Interior design; p) Studies
on preservation and restoration of historical, cultural, and artworks; q) Landscaping; r)
Construction management; and s) Defense systems design, including self-reliance
defense program.”

Moreover, a professional that has expertise requested for a fee. They work as an
advisor but is not responsible for the outcome.2 In here, the ISO Preparedness Journey,
Modules I to XI is a program proposed by the Human Resources Development of this
Office in consideration of the development of the personnel of this office. It was
carefully studied and projected by the HR of this office. As seen in the Project Proposals3
hereto attached. In the said proposal the rationale and the objective was specifically
stated. All the results of the training and the supposed outcome are indicated. KATRINA
STA. MARIA, ELISIER FONTANILLO, ARCIE MALLARI, and all other speakers were only
invited to become the resource speaker of the said program to talk on specific topics
which is in line with her expertise. Overall, the HR maintains control and management
of the training.

Due to these trainings of the office personnel of the SDOIN, this office is already one
of the few government offices which is already ISO Accredited. Also, because of this this
office received several awards. In addition, it is too obvious that since the said training
and accreditation personnel in this division are more effective and efficient in the
delivery of services to the public.

Finally, the decision and the outcome has already been defined. Considering that
the decision and the outcome being defined before the training THERE IS NO MORE
NEED TO CONSULT anybody. Hence, the rules on consultancy does not apply in this
particular case.

2. The payment of the honoraria of the speaker is not irregular.

The Budget Circular No. 2007-14 dated April 23, 2007 provides that:

“Relevant thereto, Budget Circular 2007-1 dated April 23, 2007-1 dated April 23, 2007
provides guidelines on the grant of honoraria to lecturers, resource persons, coordinators and
facilitators, as follows:

4.2 In view of the expertise of lecturers, resource persons, coordinators or facilitators,

the minimum honoraria rates shall be two (2) times the hourly rates based on their monthly

2
https://thelawdictionary.org/consultant/ (January 07, 2018)
3
Annex “A”
4
DBM “Guidelines on the Grant of Honoraria to Lecturers, Resource Persons, Coordinators and Facilitators”
ISO 9001:2015 Certified Organization RO1-SDOIN-F29-01-00
with Certificate No. AJA18-0119 Effectivity Date: 11April2018

________________________________________________________________________________
salaries at 22 work days per month, and 8 work hours per day. Such honoraria rates may be
raised further but not exceeding the maximum honoraria rates of two (2) times the hourly rate
for a position of Professor VI, step 1 of SG-29, depending on the difficulty and complexity of the
subject matter, the professional qualifications of the lecturers, resource persons, coordinators
and facilitators, and the position levels of the participants. Furthermore, the honoraria to be
paid shall correspond to the number of actual lecture/training hours plus equal number of hours
of preparation.
The following formula shall serve as a guide in the computation of the minimum and
maximum honoraria to be paid given a group of fifty (50) seminar/workshop/training
participants:

● Total Minimum Honorarium = (2) MSR min x 1 month x 1 day (2) (THours)
1 month 22 days 8 hours

= (.023) (MSR min) (T)

● Total Miximum Honorarium = (2) MSR max x 1 month x 1 day (2) (THours)
1 month 22 days 8 hours

= (.023) (MSR max) (T)

Where:

MSR min = monthly salary rate of the lecturer/resource person/coordinator/facilitator

MSR max = monthly salary rate of a position of Professor VI, step 1 of SG-29

T = number of actual lecture/training hours

The total honoraria may be proportionately increased depending on the number of

seminar/workshop/training participants in excess of fifty (50) participants.

4.3 Lecturers, resource persons, coordinators and facilitators from the private sector
may be paid honoraria at such rates as may be determined by the agency authorities
concerned by using the above formula as guides. (emphasis supplied)

4.4 In addition to the honoraria, lecturers, resource persons, coordinators and

facilitators in out-of-town seminars, training programs and similar activities may be entitled to
travelling and other expenses incidental hereto, subject to existing rules and regulations.”

It should be taken into consideration that different speakers in the ISO Preparedness
Module are NOT government employees. The different speakers were only requested to share
ISO 9001:2015 Certified Organization RO1-SDOIN-F29-01-00
with Certificate No. AJA18-0119 Effectivity Date: 11April2018

________________________________________________________________________________
their ideas and knowledge on their field of expertise. For which expertise would be laid down
and would have positive impact on the personnel of this office.

The different computation of this office in relation to the said salary of the speakers are
hereto attached as Annex B (Please, see attached copies). According to the per day basis of the
different speakers it is well within the said rules. In fact, it is much less than what has been
indicated for in the rules.

Finally, he daily salary was fixed despite having way more than fifty (50) participants in
a day. Considering that as per project proposal indicates that the projected participants is one
hundred (100) and the actual would be the same.

3. The travel and hotel accommodation rates are not covered by EO 298.

This office did not implement EO No. 2985 simply because the said executive order is
used for government personnel travels. As indicated earlier, the several speakers for the said
program are not government employees. Thus, the executive order does not apply to her.

In lieu of this, this office procured, through alternative mode of procurement, hotel for
the accommodation of the speaker. Also, this office paid the actual travel expenses going to
Ilocos Norte and going back. All payment is evidence with the proper airline tickets, receipts
and other necessary documents which are also part of the records forwarded to your good
office.

Despite all of this comment, this office humbly takes note of all the observations of your
good office.

This office hopes that this humble comment/compliance to the AOM is sufficient to
justify the actions taken by this office.

Thank you and God bless.

Very Truly Yours,

VILMA D. EDA, CESO V

Schools Division Superintendent
Received by:
____________________
Date received: ________

5
Amending further Executive Order No. 248 dated May 29, 1995, As Amended by Executive Order No. 248-A
Dated August 14, 1995, which prescribes Rules and Regulations and New Rates of Allowances for Officials Local
and Foreign Travels of Government Personnel.