AARRepublic of the PhilippinesCOMMISSION ON AUDIT Region XCagayan de Oro City

AAR REVIEW CHECKLISTReviewers/ ATLs initialsDateAgency:ReceivedCompletedReturnedAudit Team Leader:Period Covered:Date Submitted:

ParticularsYesNoRemarksI. For structure and presentationA. AAR Arrangement1. Are the contents of the AAR arranged in the following sequence?a. Draft transmittal letter of the Regional Director to the Agency Head.b. Coverc. Executive summaryd. Flyleaf (blank sheet)e. Table of contentsf. "Part I - Financial Statements" flyleafg. State Auditor's Report on the Financial Statementsh. Statement of Management's Responsibility for Financial Statementsi. Financial statements i. Consolidated Detailed Balance Sheetii. Consolidated Detailed Statement of Income and Expensesiii. Consolidated Statement of Cash Flowsiv. Notes to Financial Statementsj. "Part II - Comments and Observations" flyleafi. Financial and Complianceii. Value for Moneyiii. Compliance with Tax Lawsiv. Gender and Developmentk. "Part III - Status of Implementation of Prior Years' Audit Recommendations" flyleafl. Status of Implementation of Prior Years' Audit Recommendationsm. "Part IV - Annexes" flyleafn. AnnexesB. Application Software, Page set-up and Fonts1. In the FS preparation, are the following used:a. MS Excel software?b. Font "Times New Roman"?c. Font size "14" for captions and headings?d. Font size "12" for account titles and amounts?2. Is the paper size "8 1/2 by 11"?3. Is the page numbering bottom-centered?4. Are "1.5" left margin,and "1" for right, top, and bottom margins observed?5. Is "Times New Roman" font size "12" used in the text of the report?C. Packaging1. Are the material, design and color of the cover of the AAR as prescribed for uniform use of the LGS/SUCs/Water Districts?a. Are the front and back plastic covers transparent and colorless?b. Is the cover title printed in the prescribed manner?c. Is the font used in the cover "Arial"?d. Is the printed title vertically and horizontally centered?e. Is the logo colored?f. Is the printed title in black?

II Transmittal LettersA. Transmittal letter (TL) of SA to RD.B. Draft TL of the RD to the Agency Head.1. Is the draft TL properly addressed to the Agency Head?2. Does it include the following?a. Authority for the audit?b. Coverage of the audit in terms of accounting period?c. Contents of the AAR?3. Does it include a statement that the auditor's significant comments and recommendations were discussed with concerned Management Officials and staff?4. Does it contain a statement that the audit:a. Was conducted in accordance with generally accepted state auditing standards?b. Provided a reasonable basis for the results thereof?5. Does it contain a statement acknowledging the assistance / cooperation extended by the agency to the audit team?6. Does it contain a request for the auditee to have their actions taken on the recommendations be reported within a period of time?7. Is the TL initialed by the ATLs/SAs concerned?

III Executive Summary (ES)A. Introduction - Does the ES contain a brief discussion of the agency's creation, mandate and organizational set-up?B. Financial Highlights - Does the ES contain comparative information on the financial highlights showing:a. Group of accounts (assets, liabilities and government equity) comparative of the previous year?b. Sources and application of funds?C. Operational Highlights: Does the ES contain operational highlights with targets, accomplishments and percentage of accomplishments for major activities for the year in comparison with the previous year?D. Scope of Audit - Does the ES contain a statement of the coverage of the audit, including the accounting period and the limitations, if any?E. State Auditor's Report on the Financial Statements - Does the ES contain a brief statement of the Auditor's opinion on the FS? If other than an unqualified opinion is rendered, did it include the substantive reason/s supporting such opinion?F. Comments and Observations1. Does the ES contain brief but clear discussion of each of the comments and recommendations (including favorable observations in the draft AAR only), arranged according to significance?2. Does it include a statement that the auditor has discussed the comments and recommendations with the auditee, and that management's comments were incorporated in the report, where appropriate?G. Status of Implementation of Prior Years' Audit Recommendations:1. Does the ES include a summary statement of the implementation by the auditee of prior years' audit recommendations, and an information on the overall impact of their implementation of the immediately preceding year's recommendations?2. Does it include brief statements on the positive effects of the recommendations implemented?H. Length - Does the ES consist of not more than three pages?

IV. State Auditor's Report on the Financial StatementsA. Form and Structure1. Does the audit certificate (AC) include the following parts:a. Introduction paragraphb. Scope paragraphc. Opinion paragraphd. Signature of the SA showing the Printed Name, Position and Designation e. Date of the certificate2. Is the AC prepared using COA letterhead?3. Does the addressee state only the designation of the agency head followed by the agency's official name and addressee?B.. Introductory Paragraph1. Does it state the legal basis for the conduct of the audit?2. Does it state the name of the audited agency?3. Does it specifically identify the financial statements covered by the audit report and the period corresponding to the financial statements?4. Does it express the auditee's responsibility for the financial statements?5. Does it state the scope of the auditor's responsibility to render an opinion thereon based on his audit?C. Scope paragraph1. Standards/criteria used in audit -a. Does it include the auditor's statement that the audit is conducted in accordance with generally accepted state auditing standards?b. Does it state that the generally accepted state auditing standards require that the auditor plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement/s?2. Extent of the auditor's examination - Does it specify the extnt of the examination done on evidences supporting the amounts and disclosures in the financial statements?3. General nature of the audit procedures involved - Does it state that the audit includes assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation?4. Adequacy of the audit procedures - Does it express belief in the adequacy of audit procedures employed to support the opinion?D. Explanatory paragraph for opinion other than unqualified:1. Does the report clearly set out in an explanatory paragraph placed between the scope and opinion paragraphs, the nature and effect of :a. inability to obtain essential information (i.e. nature of scope limitation and the auditor's non-satisfaction with the alternative procedures applied)?b. Accounting deficiencies, including:- failure to disclose significant information?- failure to apply a generally accepted accounting principle?- failure to consider significant audit issues in the "Comments and Observations " which materially affect the FS?- inconsistencies in the application of accounting principles?- disagreement as to valuation?- disagreements as to the appropriateness of accounting principles?- Existence of unusual uncertainties, the outcome of which is not susceptible of reasonable estimation at the date of the auditor's report?- other similar significant instances? (Pls. specify?)E. Opinion paragraph1. Do the AFS include the auditor's adjustments and reclassifications as appearing in the working trial balance, if any?2. Opinion rendered:a. Unqualified?b. Qualified?c. Adverse?d. Disclaimer?

V. Statement of Management's Responsibility for the Financial StatementIs the Statement signed by the Head of Finance Management Services Office or equivalent, and the agency head?VI Financial Statements (FS)A. Common to all audited FS 1. Are the audited FS presented in accordance with the prescribed format under the Manual on NGAS?2. Do account titles conform to the Revised Chart of Accounts as prescribed?3. Are the FS presented on a comparative basis showing the figures for the preceding year?4. Are the figures presented up to the last centavo?5. Does the heading of the FS include the following:a. Departmentb. Official agency namec. Title of FS4. Period covered or date of statement6. Is the caption "See accompanying Notes to Financial Statements" indicated at the bottom of the FS?7. Are Note Reference Numbers enclosed in parenthesis placed beside the particular account titles for easy reference to the notes?B. Consolidated Detailed Balance Sheet (no need to show by Fund of LGUs)C. Consolidated Detailed Statement of Income and Expenses (Same note in BS)D. Consolidated Statement of Cash Flows (same note in BS)E. Notes to Financial Statements (NFS)1. Does the NFS conform to the Checklist, to wit:a. Agency Profile- Basis of FS presentation- Offices/units included in the consolidated FS, if applicable- Summary of significant accounting policies- Correction of fundamental errors, if any- Subsequent events, if any- Additional and necessary information on specific accounts- Prior year's adjustments- Subsidy Income from National Government, if any- Receipt on NCA, if applicable- Inter-agency Fund Transfers, if any- Proceeds from sale of PPE, if anyb. Does the NFS provide information on the following:- Allotments, Obligations and Balances- Income and Receivables recorded in the NG books (for NGS)- Portion of the NG income collected and remitted to the BTr (for NGS)

VII Comments and ObservationsA. Are the deficiencies discussed in the OR significant enough to warrant inclusion in the AAR?B. Are the critical accounts identified during the planning conference reported on?C. Are identified critical accounts which audited balances are unqualified (no deficiencies observed) adequately supported with working papersD. Are the significant observations presented or arranged starting with those which are the reasons for the rendering of an adverse/qualified/disclaimer of opinion, followed by deficiencies on real accounts and nominal accounts?E. Are the observations headed by a one-liner caption? Or; Are the observations headed by a topic sentence containing the gist of the criteria, condition, cause and effect?F. Do the support paragraphs contain the statements of condition, criteria, cause and effects on the fair presentation of the FS?1. Is the statement of condition adequately supported by competent and relevant audit evidence in the form of working papers?2. Is the reported deficiency quantified, if applicable?3. Is the citation of the criteria in the support paragraph correct?4. Is the cause of the deficiency clearly stated?5. Is the office responsible for the process/activity causing the deficiency identified?6. Is the effect of the deficiency quantified, if applicable?7. Is the effect of the deficiency traceable to the working papers?8. Is the reported deficiency traceable for the audit conclusion?9. Does the audit conclusion proceed logically from the results of the audit procedures performed?10. Does the audit conclusion answer the objectives of the audit program?G. Are the effects of unacted significant prior years' deficiencies integrated in the current year's observations on the same account balance?H. Does the recommendation address the real cause of the issue?1. Is it doable?2. Does it state precisely what needs to be changed or rectified?3. Is it directed to the process/activity owner who is capable of taking action on the deficiency?I. Are management's comments and the auditor's rejoinder, if any, properly presented in the CR?1. Are the management comments agreeing to the recommendations presented after the "Comments" portion?2. Are the management comments agreeing to the recommendations presented after the "Recommendations" portion?J. Have all facts and observations contained in the draft report been cross referenced to the AOM and the AOM to supporting working papers?K. Do annexes attached in support of the observations reconcile with the detailed working papers submitted for review?

VII Working papersA. Do working papers adequately:1. describe work performed?2. and support findings and recommendations?B. Do the figures in the working papers tally with those presented in the AAR.C. Are top schedules for each critical account prepared to summarize all audit adjustments affecting the account?D. Are working papers:1. neatly, orderly and logically arranged?2. indexed at the lower right corner?3. signed and dated by preparer?4. reviewed by the ATL and SA?5. bound with a cover sheet and a table of contents?E. Does the working papers file contain separators with tabs for each account for easy retrieval?F. Are working papers properly indexed and cross-indexed to the supporting schedules and annexes?G. Do the working trial balance show a "Difference" column representing the adjustments not accepted by management, that explain the difference between the audited balances appearing therein and the amounts in the final FS submitted by Management?VIII Follow-up of prior years audit recommendationsA. Are prior years' recommendations as lifted from the audit report correctly and completely stated in the Matrix of Follow-up of PYAR with indicated references?B. Does the matrix contain the following columns:1. Observations and Recommendations2. Reference (paragraph number of the prior year's report)3. Actions taken by management4. Auditor's validation resultsC. Is the status of implementation by management indicated either by "fully implemented", "partially implemented", or "not implemented"? Is the nature of the action taken by management briefly discussed thereafter?D. Are the validation procedures performed by the auditor adequate?E. Dos the auditor's opinion consider the effect on current balances of the unacted significant prior years' deficiencies?

IX TimelinesFor individual agency AAR1. Does the ATL submit the draft AAR to the SA within the prescribed deadline set by the RD?2. For stand alone agencies including Provinces and Cities, does the SA submit the reviewed draft AAR to the RD not later than February 28, 2012?INSTRUCTIONS:1For AARs of stand alone agencies including Provinces and Cities.i. The following documents are to be submitted with one (1) copy of the draft AAR for RD's review.aCompletely accomplished checklist (for the folder of each SA as input in their PRS).bAOMs/NS/ND/NC issued pertinent to comments/observations contained in Part II of the AAR.cAudit working papers of accounts and transactions with deficiencies/observations contained in the AAR, topped with the working trial balance.dAudited financial statements with complete attachments.ii. For transmitted AARs.aTransmitted AAR in six (6) copies for stand alone agencies and ten (10) copies for Provinces and Cities.bSoft copy of transmitted AAR - COA-web ready.cCopy of duly received transmittal letter to agency head. dCopy of duly received transmittal letters to CAR Regional Offices of the DBM, NEDA, DILG & BLGF. 2For AARs of Municipalities.aTransmitted AAR in five (5) copies..bSoft copy of transmitted AAR - COA-web ready.cCopy of duly received transmittal letter to agency head. dCopy of duly received transmittal letters to CAR Regional Offices of the DBM, NEDA, DILG & BLGF. 3The AAR should only be reported once in the Quarterly Accomplishment Report by the Audit Group, even if they were returned for corrections for several times.

MLRepublic of the PhilippinesCOMMISSION ON AUDIT Region XCagayan de Oro City

ML REVIEW CHECKLISTReviewers/ ATLs initialsDateAgency:ReceivedCompletedReturnedAudit Team Leader:Period Covered:Date Submitted:ParticularsYesNoRemarksI. For structure and presentationA. ML Arrangement1. Are the contents of the ML arranged in the following sequence?a. Cover.b. Flyleaf (blank sheet)c. ML proper.d. AnnexesB. Application Software, Page set-up and Fonts1. Is the paper size "8 1/2 by 11"?2. Is the page numbering bottom-centered?3. Are "1.5" left margin, and "1" for right, top, and bottom margins observed?4. Is "Times New Roman" font size "12" used in the text of the report?C. Packaging1. Are the material, design and color of the cover of the ML as prescribed for uniform use of the NGS/LGS/CGS?a. Are the front and back plastic covers transparent and colorless?b. Is the cover title printed in the prescribed manner?c. Is the font used in the cover "Arial"?d. Is the printed title vertically and horizontally centered?e. Is the logo colored?f. Is the printed title in black?

II. Management LetterA. Form and Structure1. Is the ML prepared using COA letterhead?2. Is the ML marked "Confidential"?3. Does the addressee state only the designation of the agency head followed by the agency's official name and addressee?B.. Introductory Paragraphs1. Does it state the legal basis for the conduct of the audit?2. Does it state the name of the audited agency?3. Does it specifically identify the period covered by the audit?4. Standards/criteria used in audit -a. Does it include the auditor's statement that the audit was conducted in accordance with generally accepted state auditing standards?b. Does it state that the generally accepted state auditing standards require that the auditor plan and perform the audit to obtain reasonable assurance for their conclusions?5. Extent of the auditor's examination - Does it specify the extent of the examination done on evidences supporting the amounts and disclosures in the financial statements?6. Does it state that AOMs were issued and discussed in an exit conference with management at a specific date?7. Does it state that management's comments are incorporated in the letter?8. Does it state that the significant observations will be incorporated in the Consolidated ML of their department?C. Part A - Summary of Recommendations1. Does it contain a summary of audit recommendations arranged in accordance to its significance?D. Part B Detailed Observations and Recommendations1. Are the deficiencies discussed in Part B significant enough to warrant inclusion in the ML?2. Are the critical accounts identified during the planning conference reported on?3. Are the significant observations presented or arranged by account starting with real accounts and ending with nominal accounts?4. Are the observations headed by a topic sentence containing the gist of the criteria, condition, cause and effect?5. Do the support paragraphs contain the statements of condition, criteria, cause and effects on the accounts affected?a. Is the statement of condition adequately supported by competent and relevant audit evidence in the form of working papers?b. Is the reported deficiency quantified, if applicable?c. Is the citation of the criteria in the support paragraph correct?d. Is the cause of the deficiency clearly stated?e. Is the office responsible for the process/activity causing the deficiency identified?f. Is the effect of the deficiency quantified, if applicable?g. Is the effect of the deficiency traceable to the working papers?h. Is the reported deficiency traceable to the audit conclusion?i. Does the audit conclusion proceed logically from the results of the audit procedures performed?j. Does the audit conclusion answer the objectives of the audit program?6. Does the recommendation address the real cause of the issue?a. Is it doable?b. Does it state precisely what needs to be changed or rectified?c. Is it directed to the process/activity owner who is capable of taking action on the deficiency?7. Are management's comments and the auditor's rejoinder, if any, properly presented ?8. Have all facts and observations contained in the draft report been cross referenced to the AOM and the AOM to supporting working papers?9. Do annexes attached in support of the observations reconcile with the detailed working papers submitted for review?E. Part C Status of Implementation of Prior Year's Audit Recommendations1. Are prior years' recommendations followed-up and a status report presented in the ML?2. Does the validation matrix duly appended contain the following?a. Observations and Recommendationsb. Reference (paragraph number of the prior year's report)c. Actions taken by managementd. Status of Implementatione. Reason for Partial/non implementation.3. Is the status of implementation by management indicated either by "fully implemented", "partially implemented", or "not implemented"? Is the nature of the action taken by management briefly discussed thereafter?4. Are the validation procedures performed by the auditor adequate?

III Working papersA. Do working papers adequately:1. describe work performed?2. and support findings and recommendations?B. Do the figures in the working papers tally with those presented in the AAR.C. Are top schedules for each critical account prepared to summarize all audit adjustments affecting the account?D. Are working papers:1. neatly, orderly and logically arranged?2. indexed at the lower right corner?3. signed and dated by preparer?4. reviewed by the ATL and SA?5. bound with a cover sheet and a table of contents?E. Does the working papers file contain separators with tabs for each account for easy retrieval?F. Are working papers properly indexed and cross-indexed to the supporting schedules and annexes?G. Do the working trial balance show a "Difference" column representing the adjustments not accepted by management, that explain the difference between the audited balances appearing therein and the amounts in the final FS submitted by Management?H. For consolidated MLs, did the ATL:1. submit the consolidated working trial balance?2. submit a copy of the elimination worksheet prepared by the accountant for consolidation purposes?3. verify the accuracy of the elimination worksheet?4. submit the matrix with the following columns:- audit observations- recommendations- management comments- auditor's rejoinder

IV TimelinessA. For individual agency ML.1. Does the ATL submit the draft ML to the SA within the prescribed deadline set by the RD?B. For consolidated Management Letters1. Does the ATL of the field unit in the provinces/city submit their ML within the prescribed deadline?2. Does the Regional ATL submit the consolidated Regional Consolidated ML to the SA within the prescribed deadline?3. Does the SA submit the reviewed consolidated ML to the RD within the prescribed deadline (March 15, 2012)

INSTRUCTIONS:1Submit the following:aTransmitted ML in two (2) copies for agencies.bTransmitted Consolidated ML in two (2) copies.cCopy of duly received transmittal letter to agency head. dCopy of duly received transmittal letter to regional director concerned for Consolidated MLs.2The ML/CML should only be reported once in the Quarterly Accomplishment Report by the Audit Group, even if they were returned for corrections for several times.

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