l. - ncmb.phncmb.ph/transparency/NCMBAdditionalTransparency/Actions Taken on... · NCMB-NCR as of December 31, 2010. Concerned accountable officers continued ... the Supply Off,rcer

NATIONAL CONCILIATION AND MEDIATION BOARI)SUMMARY OF CONSOLIDATED AUDIT FINDINGS, RECOMMENDATIONS AND ACTIONS TAKEN

ON 2011 ANNUAL AUDIT REPORT

AUDIT FINDINGS R.ECOMMENDATIONS AGENCY ACTIONS/COMMENTSAs of October 31,2012

l. Timely submission of year-end financial reports

Year-End Preliminary and Final Trial Balances and itssupporting schedules and the accompanying financialstatements for CY 2011 were submitted on January 27,2012or 16 days earlier than the due date of February 14,2012pursuant to Section 7l (Seq 23 Note 8) of the Manual on theNew Government Accounting System and Section 5.1 of COACircular No. 92-89E dated March 8, 1992, which resulted tothe timely preparation of the audit report.

While the preparation of the financialreports did not conform with the existingaccounting principles and standards, we stillcommended the Accounting Analyst for theearly submission of the year-end financialreports for the second time since last year.

We also recommended that Managementadvise same offrcial to strictly follow theregulations in the preparation of thefinancial statements pursuant to theMNGAS, Volume II, the New Chart ofAccounts and COA Circular No. 2003-1dated June I7, 2003, the UpdatedDescription of Accounts under the NewGovernment Accounting System.

The Board shall continue the timelysubmission of financial reports.

The Board has complied with the auditor'srecommendations.

2. Cash Advance

Cash advances for salaries and other benefits under the PayrollFund and Advances to Officers and Employees account were

fully liquidated by the concerned accountable officers ofNCMB-NCR as of December 31, 2010.

Concerned accountable officers continuedthe strict compliance with therequirements/regulations of COA No. 97-002 dated February 10, 1997 andAccounting Circular No. 2006-001 datedNovember 9, 2006, on the liquidation of

The Board shall continue to comply withthe rules and regulations on the liquidationofcash advances.

AUDIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/COMMENTSAs of October 31,2012

paid payroll and for travel since there wereno unliquidated cash advances at the end ofthe year.

3. Unreliable balances of Property, Plant andEquipment accounts

The balances of Property, Plant and Equipment (PPE)accounts in the books of NCMB-Central Offrce and RCMB-Vtotaling P12,019,090.09 and P1,957,865.40 per accountingrecords differed from the balances per count ofPl1,450,599.83 and P1,999,000.05 by P568,490.26 and

P41,134.65, respectively, due to the non-reconciliation ofinventory report with the accounting records and erroneousclassification of accounting entries contrary to Sections 441

and 491 of Government Accounting and Auditing Manual(GAAM), Volume 1 and Section 2 of COA Circular No. 2005-002 dated April 4, 2005.

We recommend that the Managementrequire the Inventory Committee, theAccountant and the Budget Officer inNCMB-Central Office and RCMB-V to:

give priority to the physical inventoryreport with the accounting records forthe remaining two PPE accounts, andfurnish a copy of the revisedreconciled report to the COA AuditTeam in accordance with Section 490of the Govemment Accounting andAuditing Manual, Volume I;

Stop the practice of charging PPEpurchases to MOOE allotment in theprocurement of PPE at RCMB-V toavoid further disallowance in audit.Make the necessary corrections and/oradjustments, if any, on the affectedaccounts duly supported withdocuments; and

Request from the NCMB Head Officethe realignment of MOOE allotmentto Capital Outlay for the purchase ofPPE in RCMB-V. which were charsed

b.

Verification of records was already done bythe Central Office Accountant and SupplyOfficer. Adjustments were made to reflectthe correct balances ofPPE accounts.

While RCMB-V Accountant-Designate has

reconciled the PPE balances in the bookswith that of the inventory report as ofDecember 2011. Adjustment was madeunder JEV no.20l2-0L-012 dated January27,2012.

The Branch will stop the practice ofcharging PPE purchases to MOOEallotment for the ensuing year.

Realignment from MOOE to Capital Outlayallotment and/or request for capital outlaywill first be secured by the agency foraooroval from NCMB Head Office if

AUDIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/COMMENTSAs of October 31.2012

to MOOE or request for CO allotmentif purchase of equipment is necessaryin the operation of the Office.

purchase of equipment is necessary.

4. Unreliable balances of Property, Plant andEquipment accounts of RCMB-NCR

While efforts were taken to reconcile the balances of PPEaccounts of RCMB-NCR amountingto P3,716,516.31 in thebooks of accounts as of December 31,2011 with the physicalinventory reports pursuant to Section 66 of the MNGAS,Volume II, the balances were still unreliable due todeficiencies/errors noted in the inventory reports.

We recommended that Management:

a. create an Inventory Committee togive priority to the conduct of anannual physical inventory in thesucceeding year and coordinatewith the accounting personnel forthe immediate reconciliation of thephysical inventory report with theaccounting records. Submit thereconciled report to the COA AuditTeam in accordance with Section490 of the GAAM, Vol.I.

b. require the members of the createdInventory Committee to coordinatewith the Accounting Analyst for thepossible revision of the RPCPPE ofCY 2011 and effect in the ledgerbooks and in the inventory reportthe deficiencies noted in audit.

Fully Implemented

5. Non-maintenance of Property, plant and EquipmentLedser Cards and Pronerfv Cards

AUDIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/CO MMENTSAs of October 31,2012

Property, plant and Equipment Ledger Cards (PPELC) andProperty Cards (PC) were not maintained by the Accountantand Supply Officer of RCMB-CAR, respectively, contrary toSections 12 and 42 of the New Govemment Accountingsystem (NGAS) Manual, Volume II, thus the accuracy andvalidity of the PPE account of P1,462,892.88, could not bereadilv ascertained and control over DroDertv is weak.

We recommended and Management agreedto require the Supply Officer and theAccountant to prepare and maintain PCsand PPELCs/PPELCs (SI) for each type ofproperty in compliance with Section 42 ofthe NGAS Manual, Volume II and tooeriodicallv reconcile the two records.

Fully Implemented

6. Non-provision of depreciation

The Accounting Analyst of RCMB-NCR failed to recognizedepreciation for Communication Equipment and Other PPEaccounts valued at P35,998.00 and P39,542.00, respectively,thus the expense accounts are understated while the pertinentPPE accounts were overstated by the same amounts.

We recommended and Management agreedto require the Accounting Analyst toprepare adjusting entries in the ensuingyear to provide/recognize the depreciationto the accounts Communication Equipmentand Other PPE.

Fully Implemented

7. Overstatement of Office Supplies Inventory account

The failure of the Inventory Committee of NCMB-CentralOffice to reconcile the inventory of unused supplies per recordand per count due to the delayed submission and incompleteReport on the Physical Count of Inventories (RPCD as well as

inappropriate costing of office supplies used rendered thereported year-end balance of the account Office SuppliesInventory amounting to P438,239.70 unreliable. The cost ofthe ending inventory per audit of P516,015.15 is over byP77,775.45 compared to the balance per record.

We recommended and Managementagreed to:

Require the Inventory Committee torevise the RCPI and coordinate withthe Accountant for the appropriatecosting of the ending inventoryusing the moving average methodand every year thereafter to arrive atthe correct balance/cost ofinventories per record and per count;

b. Instruct the Accountantevaluate the costins used

toin

re-the

The Accounting unit is currently using theeNGAS software, thus, costing per unit is asystem generated cost.

As to the un-reconciled office supplies, theAccountant and the Storekeeper arereconciling the supplies inventory perrecord and per count. Once completed, thereconciliation report and the corrected andRCPI shall be submitted to the Office of theResident Auditor.

AUDIT FINDINGS RECOMMEI\DATIONS AGENCY ACTIONS/COMMENTSAs of October 31.2012

Reports of Supplies and MaterialsIssued (RSMI) to ensure thatappropriate method of costing isalready applied in the ensuing year;

Require concerned officials tostrictly monitor the reconciliation ofthe inventory report with theaccounting records jointly

d.

prepared/done by the Accountantand Inventory Committee;

Direct the Inventory Committee toinvestigate discrepancies noted andcoordinate with the Accountant forthe preparation of necessaryadjustments in the ledger books; and

Require the Inventory Committee tosubmit the corrected and reconciledRCPI to the Audit Team inaccordance with existing COAresulations.

8. Overstatement of Office Supplies Inventory account

Inappropriate costing of inventories, eroneous computationsand failure to maintain required records at RCMB-NCRresulted in the overstatement of the year-end balanceamounting to P166,967.66 of the account Office SuppliesInventory by P87,150.33 as of December 3 1, 20 I I

We recommended that Management requirethe Inventory Committee to :

re-evaluate the costing used for theending inventory and direct themembers and the AccountingAnalyst to apply/adopt the movingaverase method even in the

Fully Implemented

AUDIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/COMMENTSAs of October3l,2Ol2

b.

succeeding years to arrive at thecorrect balance/cost of inventoriesper record and per count;

investigate the discrepancies notedand coordinate with the AccountingAnalyst for the preparation ofnecessary adjustments in the ledgerbooks; and

submit the corrected and reconciledreport to the COA Audit Team inaccordance with Section 490 of theGAAM, Vol. L

c.

Fully Implemented

9. Inadequate internal control on inventories

Supplies Ledger Cards at RCMB-CAR were maintained bythe Supply Officer, not by the Accountant, and no Stock Cardswere maintained, contrary to Section 12 and 41 of the newGovernment Accounting System G\fGAS) Manual, Volume II,thus control on inventory items is inadequate and the validityof inventory balances in the books is doubtful.

V/e had recommended and Managementagreed to require the Supply Officer and theAccountant to prepare and maintain SupplyLedger Cards and Stock Cards incompliance with Sections 12 and 41 of theNGAS Manual, Volume II and toperiodically reconcile the two records.

Fully Implemented

10. Unreconciled records/reports with the Accountingand Supply Units

The inventory of supplies per record of the Supply Unit ofRCMB-V and per recount did not reconcile with theAccounting record which resulted to an overstatement of theinventory account by P71,305.20 as of December 37,2011,

We recommended that Management requirethe Supply Off,rcer to reconcile therecord/report on inventory of supplies in theSupply Unit and also the physical count

Fully Implemented


contrary to Section 43 and 62 of the NGAS Manual, VolumesI and II, respectively, thus cast doubts on the fair presentationof the inventory account in the financial statement.

with the accounting record. Prepare andsubmit promptly to the accounting unitmonthly report of requisition and issue slipfor supplies and materials as basis forrecording in the books.

11. Purchases directly recorded as Expenses instead ofInventories

Purchases of supplies and materials of RCMB-X amounting toP210,048.03 were recorded directly and automatically as

expenses instead of inventories in violation of Section 43 ofCOA Circular No. 2002-002 dated June 18, 2002, thus assets

are understated and expenses are overstated.

We recommended that Management requirethe Accountant Designate to record allpurchases of supplies and materials in theinventory account for control purposes as

mandated in COA Circular No. 2002-002.

Fully Implemented

12. Unserviceable property not reclassified/not yetdisposed/unrecorded disposed properfy

The non-reclassification of unserviceable properties totalingP2,203,132.83 as of December 31, 20ll pursuant to Section143 of the Manual on the New Govemment AccountingSystem (MNGAS), Volume III and the non-disposal of thesame contrary to Section 79 of PD 1445 overstated thebalances of PPE accounts while understated that of OtherAssets account. In addition, the non-disposal exposed theproperties to further deterioration and deprived the agency ofany benefit/income that maybe derived from such disposal.

recommend that management require

Accountant to reclassifo the reportedunserviceable property As ofDecember 31, 2011 to Other Assetsaccount and effect the necessaryadjustments in the affected PPEaccounts; and

Inventory Committee to conductimmediate disposal of all unserviceableproperties after inspection and

Wethe:

b.

Review of records showed that the SupplyOfficer mistakenly placed in the summaryof Other Assets the acquisition cost insteadof the net book value. The correct balanceper count of Other Assets is P350,535.62.Attached is the Revised Summary of OtherAsset, for your reference.

The Disposal Committee is now on its finalstage of disposing of said properties.

AUDIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/CO MMENTSAs of October 31.2012

While unserviceable fumiture and IT equipment at RCMB-NCR costing P39,542.00 were classified under Other Assets

account, the agency failed to conduct proper disposition ofthesame contrary to the provisions of Section 79, PD 1445.Moreover, the Inventory Committee was not able to prepare

the IIRUP as of December 3 l, 201 I as required in part II-H ofDBM National Budget Circular No. 425 dated January 28,1992 and Section 64 of the MNGAS.

The Other Asset account of RCMB-II was overstatedP484,048.10 due to non-adjustment of the costunserviceable properties already disposed ofby the agency.

byof

evaluation ofthe appraised value oftheitems.


a. create a Disposal Committee to handlethe proper disposal of the subjectunserviceable properties.

b. instruct the Inventory Committee touse the prescribed IIRUP form in thepreparation of annual physicalinventory report of unserviceableproperty. Henceforth, strictly observeexisting rules and procedures ondisposal of unserviceable propertiesprior to dropping them from the agencybooks.

We recommended that Managementrequire the Accountant Designate to preparejoumal entry voucher to drop from thebooks the cost of the items based on theduly accomplished IIRUP in order topresent an accurate balance of the PPEaccount.

Fully Implemented

Fully Implemented

Fully Implemented

13. Deficiencies in the grants and utilization of cashadvances

In NCMB-Central Office, cash advance amounting to We recommended that concemed Fully Implemented

AUDIT F'INDINGS RECOMMENDATIONS AGENCY ACTIONS/CO MMENTSAs of October 31,2012

P3,71 1.00 was granted to a private person in violation of COACircular No. dated February l0,ll97 .

Unclaimed Productivity Incentive Bonus (PIB) at RCMB-NCR for CY 2009 and excess cash advances totalingP9,000.00 was refunded by the Cash Disbursing Officer onlyin February and April 2011 and recorded in the books ofaccounts in July 201I, in violation of COA Circular No. 97-002 dated February 10,1997 and Section 48 (e) of the GAAM,Volume IIL

Courier services of NCMB-CO totaling P91,261.80 for CY2011 were not paid by check but through Petty Cash Fund(PCF) established for the purpose when the disbursements are

considered regular expense ofthe agency, contrary to Sections3.1.4 and 4.3.2 of COA Circular No. 97-002 dated February10, 1997 while the mode of procurement used was not inconformity with the requirements of Section 10 of RepublicAct 9184.

Management officials refrain from grantingcash advances to private individuals.Strictly observe the provisions of COACircular No. 97-002 on the grant of cash

advance.

We recommended that Management directthe Disbursing Officer to adhere the strictlyto existing COA rules and regulations, andrefrain from drawing cash advances if notduly supported with the required documentsand from keeping balances ofcash advancesfor a long period of time to avoid misuse ofthe same.

We recommended that the concemedaccountable officer discontinue maintaininga PCF for courier services. The agency'sBids and Awards Committee should initiatethe procurement of courier services throughpublic bidding as required by RA 9184.

Fully Implemented

Fully Implemented

14. Irregular Transactions

PERA and Clothing Allowance in the total amount ofP26,000.00 was not paid to an official posted abroad in CY2010 by RCMB-NCR in violation of Sections 128(d) and 193

of Department of Foreign Affairs (DFA) Order No. 19A-95dated April 28.1995. and parasraph 1.3 of DBM Circular No.

We recommended that Management agreedto strictly adhere to the rules and regulationson the grant of allowances for foreignservice personnel. Require the concernedofficial to refund the amount of P26,000.00

Fully Implemented


20ll-2 governing compensation scheme for foreign servicepersonnel.

Emergency purchases amounting to P28,561.00 and payment

of expenditures in the aggregale amount of P45,891.90 inRCMB-XI were considered irregular due to the charges ofexpenditures that were not in accordance with specificpurposes for which the funds were obligated in violation ofCOA Circular No. 85-55-4.

Per diems with an aggregate amount of P5,680.00 claimed bypersonnel of RCMB-XI for traveling within their officialstation were contrary to the provisions of Section 6 (6) ofExecutive Order No. 248 datedMay 29,1995 as amended byEO No. 298 dated March 23,2004.

for PERA and Clothing Allowance in CY2010.

We recommended that Management requireall personnel to be imbued with deep sense

of responsibility, integrity andprofessionalism in the discharge of theirrespective functions and should strictlycomply with existing COA regulations in allits disbursements to avoid audit suspensionand disallowances in the succeedingtransactions.

We recommended that Management requirethe:

b.

concerned personnel to refund theentire amount and the

corresponding Official Receiptshould be issued. Appropriateaccounting adjusting entries shouldbe prepared for the said refund;

agency personnel should refrainfrom collecting per diems especiallywhen traveling within the cityproper where their oflicial station islocated; and

concemed official to makerepresentation with Central Officeas to the formulation of internal

c.

a.

Fully Implemented

The concerned personnel are currentlyrefunding the amount disallowed. Prioryear adjustments have been made andrecorded thereto.

The Branch has also initiated theinformation dissemination to all personnelby providing them hard copies of E.O. 298for their ready references.

The Branch has consulted NCMB-CO ofsaid internal policies and will prepare a

draft of the same copy furnish them for

10

AUDIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/CO MMENTSAs of October 3l-2012

policies on allowable per diem to becollected when an employee leaveshis post to travel within the city onofficial business.

comment and review.

15. Unrecorded refunds for irregular claims for PERA

The receipt and deposit of refunds made by an official ofRCMB-NCR for disallowable PERA totaling P20,000.00 werenot taken up in the books of accounts contrary to Sections 16

and 20(3) of the MNGAS, Volume I, thus overstating thebalances of the pertinent expenses and government equity as

of December 31,2011.

We recommended and Managementconcurred to require the Accounting Unit toprepare adjusting entries to take up in thebooks the refunds of PERA to reflect theaccurate balances ofthe affected accounts.

Fully Implemented

16. Unreconciled balances between the Board's ledgerbooks and Procurement Servicerecords/inappropriate accounting entries

The reported balance of Due from NGAs account ofP278,727.21 in the financial statements of RCMB-NCR couldnot be relied upon as it differed with the confirmed balance ofP34,882.58 from the Procurement Service (PS), or a differenceof P6,155.67. Moreover, check payments for the procurementof supplies from PS were inappropriately recorded in thebooks of accounts, thus casting doubt on the correctness of theaccount's year-end balance.

We recommendedconcurred to:

and Management

instruct the Accounting Analyst tocoordinate with the concernedaccounting officials of the PS forthe reconciliation of the account'sbalance.

require the Accounting Analyst tostrictly adhere to the COA rules andregulations in the recording oftransactions to avoid the chaotic

b.

Fully Implemented

Fully Implemented

LI

AUDIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/COMMENTSAs of October3l,20l2

accumulation of information thatwill affect in the presentation ofaccounts in the financial statements.

17. Unsettled/undocumented other receivables

Other receivables of RCMB-NCR amounting to P25,000.00remained unsettles as of December 3l,20ll and considered ofdoubtful validity due to the absence of necessaryreport/records to enforce its collection.

We recommended that Managementrequire the Accounting Analyst to exertutmost effort to document the receivableaccount and immediately submit copy of thesame to the COA Audit Team for reviewand evaluation.

We likewise recommended thatManagement instruct concerned officials tosubmit information on actions taken toenforce the settlement of the outstandingaccount from the erring accountable offrcer,including updated status of the estafa case

allegedly filed against said officer, if thereis any.

We would like to reiterate that the Branchexerted all efforts to settle and clear theaccountabilities of Ms. Adelfa Lacema.

We have provided the Audit Team alldocuments on file with regard to Ms.Lacema's case.

T2

AT]DIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/COMMENTSAs of October 31.2012

18. Non-compliance with existing laws, rules andregulations on procurement (RA 9184)

Procurement of common-used supplies at RCMB-NCRthrough alternative methods was not in conformity with theimplementing rules and regulations of RA 9184.

NCMB-NCR CY 2011 Annual Procurement Plan/Program(APP) contained only the commodities/items to be purchased

for the year without other information required under Sections7.7.2 and 7.3 of RA 9184.

We recommended and Management agreedto:

require the BAC to be responsiblein undertaking the requiredprocurement process of the agencynot only during procurementthrough bidding but also in usingthe Altemative Methods ofProcurement;

advise all designated members ofthe BAC to strictly observe theprovisions of RA 9184 includingthe penalty clause under Section 65of the law; and

require the Supply/Property Offi certo strictly follow the requirementsof RA 9184 for future procurementof supplies.

'We recommend and Management agreed torequire the BAC Secretariat to beresponsible for the preparation of theagency's APP and ensure that it contain allthe information required under Section 7 ofRA 9184.

Fully Implemented

Fully Implemented

13


The requirement of posting in the Govemment ElectronicProcurement System (PhilGEPS) website in all procurementof goods and services was not strictly observed by themanagement of RCMB IX due to non-registration withPhiIGEPS resulting in non-compliance of pertinent provisionsof the revised IRR of RA 9184 and Sections 16 & 91 of theGeneral Provisions of the General Appropriations Act (GAA)for FY 2011.

We recommended and Management agreed

to strictly observe the provisions under RA9184 and its revised IRR and General

Provisions of RA 10147 in the procurementof goods and services in the succeedingyears.

Fully Implemented

19. Procurement of common-use supplies from privatesuppliers other than the Procurement Service

In RCMB-XII, of the total purchases of common-use suppliesand equipment amounting to P107,096.12 from January 20llto December 2011, only P29,874.55 or 28o/o was procuredthrough the PS of the DBM while RB-IX had not purchased

any common-use supplies and equipment from PS contrary toAdministrative Order No. 17 and DBM Circular Letter No.20tt-6.

We recommended that the RCMBs procdretheir common-use supplies and equipmentthrough the PS to protect the interest ofthegovemment and achieve the objectives ofAO No. 17 nd DBM Circular Letter No.2011-6.

Fully Implemented

20. Approved contracfs without the benefit of publicbidding/su ffi cient autho rity

Psychometric assessment services of NCMB-CO amounting toP69,776.00 were procured without the benefit of publicbidding contrary to Section 3 and 10 of Republic Act (RA)9184. Moreover, the contract provisions for such serviceswere deficient as these were all in favor of the serviceorovider.


to direct the newly created Bids and AwardCommittee:

To adhere strictly to the requirementsof RA 9184 in order to address the

Fully Implemented

A copy of the contract was submitted to theoffice of the Auditor on June 21,2012.

L4

AUDIT F'INDINGS RECOMMENDATIONS AGENCY ACTIONS/COMMENTSAs of October 31.2012

The lease agreement of the office occupied by RCMB-CARwas entered into by and between the Board's officials andrepresentative of the lessor even in the absence of a specificauthority, contrary to the regulations of Section 28 of theMNGAS, Volume I, thus affecting the validity andenforceability of the contract, to the disadvantage of thegovemment.

procurement needs of the NCMB-Central Office and its regional officesparticularly on hiring of services.Cease from following the practice ofother agencies in undertaking theprocurement process as NCMB isconsidered as a separate agency; and

b. Conduct separate public bidding forthe procurement of outsourcedservices in the ensuing year andensure that contract provisions are fairand reasonable.

We recommended and management has

agreed to require the representative tosecure a Special Power of Attomey wherehis authority to lease out the building willbe stated in categorical terms to ensure theenforceability of the terms and conditions ofthe contracts and safeguard the interests ofthe government.

The representative of the lessor furnishedthe Branch with a Special Power ofAttomey stating therein his authority tolease out the building.

21. Improper/inappropriate classification of expenseaccounts

Various expenses amounting to P467,790.72 of RCMB-NCRwere improperly classified under Other Maintenance and

Operating Expenses (969) account contrary to the provisionsof the MNGAS as circularized in COA Circular No. 2004-008

We recommend that Management advisethe Accounting Analyst to exercise duediligence in the analyzing and recording oftransactions in the books of accounts to

The Branch committed to adherewith the rules and regulationsaccounting of expenses.

strictlyon the

15


dated September 20,2004, thus, affecting the accuracy ofthereported operating expenses balance in the financialstatements.

avoid misclassification and inclusion ofirregular expenditures. Strictly adhere to theMNGAS on the proper accounting ofexpenses. Require the refund of P19,847.00deemed as personal expenses.

With regard to Other MOOE (969)Improperly Classified Expenses, we wish toclarify two items:

Section 271 of MNGAS provided that:

"Training and Seminar Expenses - Thisaccount shall be used to record expensesincurred for participation/attendsnce ofpersonnel to training, conventions andseminar/workshops".

The total of amount of P250,091.00 wasspent for the conduct of Area-WideSeminars and Skills Trainings for clientsand labor force in the private sector. Theseseminars arc part of the Board's program inpromoting harmonious relationship in the

ParticulanImproperlyClassified

Personaltr'.rnense Total

Reported balanceas of 12-3 1-l 1 P495.766.07

Office SuppliesFxnenses 45.727.15 45"727.15

RepresentationFxnenses 86.737.90 86 737 90

TrainingExnenses 250 091.00 250.091.00

Transportrationand Delivery

3.302.00 3.302.00Repairs andMaintenanceMotor Vehicle 180.00 t8000Repairs andMaintenanceOffice Buildine 6.t55.67 6.155.67Repairs and

Maintenance - ITF,orrinment -594 00 594 00

workplace. Thus, charged to Other MOOEaccount and not to Training and Seminar

OtherProfessionalF.vnerqeq 75.000.00 75.000.00

Expenses.

Other Professional Expenses - out of thetotal amount of PhP 75,000, PhP 42,500 ofwhich were already re-classified in theGeneral Joumal for the amounts of PhP32,500 and 10,000 on October andDecember 201 1, respectively.

Flowers and MassCards 2.310.00 2.310.00

Meals forSkeletal ForcePersonnel onDOLEAnniversarydated l2/8/11

4,972.20 4.972.20

Meals expensesreported incurredduring the sportsevent whichculminated onDec. 2. 2011 but

16


The failure of the Accountant Designate of RCMB-NCR toclassiff the procured other supplies and materials P4,864.00 tothe appropriate pertinent accounts which was inadvertentlyrecorded under Office Supplies Expenses account and theerroneous recording of the amount P3,000.00 instead ofP1,486.00 resulted in the overstatement of Office SuppliesExpenses by P4,864.00 and understatement of accounts OtherSupplies Inventory, Other Supplies Expenses and TelephoneExpenses Mobile by P1,392.50, P1,958.00 and Pl,514.00,respectively.

the attachedreceiptssupporting thetransactions weredated Dec. 16-23,2011


.. advise the Accounting Analyst to bemore careful in the recording oftransactions in the ledger books andaccounting reports to avoid therecurrence of the deficiencies noted inaudit and the reporting ofinaccurate/misleading information in theyear-end financial statements;

b. require the Accounting Analyst toprepare the necessary adjusting entries tocorrect the erroneous entries made to theaccounts Office Supplies Expenses andTelephone Expenses - Mobile at thestart ofthe next calendar year;

The Accounting Analyst was instructed tobe more careful in recording transactions inthe books ofaccounts.

Fully Implemented

Groceries for theOffice of theDirector 9.135.70 9135.70

AUDIT F'INDINGS RECOMMENDATIONS AGENCY ACTIONS/COMMENTSAs of October 31.2012

direct the Supply Officer Designate andthe Accounting Analyst to adhere strictlyto the requirements of COA Circular No.2005-002 dated April 14,2005 relativeto the recording of procured tangibleitems as well as the preparation andkeeping the files of ICS, RIS and RSMIupon its issuance to the end user.

The concerned personnel were instructed tostrictly adhere to the requirements of COACircular No. 2005-002.

22. Inadequate Fidelity Bond

The fidelity bond of the Cashier - Designate at RCMB-CARis insufficient pursuant to the Revised Schedule of PremiumsRates or Annex C of Treasury Circular No. 02-200, thus cashis not adequately safeguarded.


to:

increase the cashier's bond incompliance with the RevisedSchedule of Premium Rates orAnnex C of Treasury No. 02-2009;and

regularly review the Cashier'saccountability and apply theappropriate bond.

b.

Fully Implemented

Fully Implemented

23. Missing properties with no request for relief fromaccountability

Two properties with total cost of P30,950.00 were reportedmissing in the RCPPE of RCMB-II but no requests for relieffrom accountability were filed for the missing units as ofDecember 31.2011.

We recommended and Management agreedto require the concemed personnel torequest for relief from accountability inorder to relieve them from proDertv

Fully Implemented

18

AUDIT FINDINGS RECOMMENDATIONS AGENCY ACTIONS/CO MMENTSAs of October 31.2012

accountability, otherwise a replacement orpayment of the value of the missing itemsshall be made by the concerned accountableofficer.

24. Delryed preparationStatements

of Bank Reconciliation

The Accountant of RCMB-VI was delayed in the preparationof the Bank Reconciliation Statements for the agency's twodepository bank accounts contrary to Section 74 ofPresidential Decree No. 1445 and COA Circular No. 92-1254,thus, the reliability and existence of the year-end balances ofP182,206.05 of the account Cash-Local Currency, CurrentAccount is doubtful.

We recommended that Management requirethe Accountant to:

a. comply with the provision of Section 74of PD 1445 in the reconciliation of bankaccounts so that the reliability andexistence of the year-end balance of Cashin Bank - Local Currency Current Accountis assured;

b. request Land Bank of the Philippines toenroll NCBM in the bank's we-Access.This will address the delay in receiving themonthly bank statements. The we-Accessfacilitates the prompt preparation of thebank reconciliation statements since theagency, thru the internet, is given access byLBP to download and print their monthlybank statements. The agency will stillcontinue to receive, albeit late, theirmonthly bank statements and clearedchecks; and

c. Make written request from the bank for

Fully Implemented

Fully Implemented

t9


the immediate corrections of errors.

25. Absence of necessary monthly/documents to supportthe validity of claims

The accuracy, validity and propriety of the year-end balanceof P195, 680.90 of the Gasoline, Oil and Lubricants Expensesaccount of NCMB-Central Office could not be ascertained dueto the absence of the Monthly Report of Fuel Consumptioncontrary to COA Circular No. 77-61 dated September 26,1977.

The validity of claims under traveling expenses by RCMB-XIpersonnel concerned with an aggregate amount of P14,641.50cannot be ascertained due to non-submission of requireddocuments, thus in clear violation of COA-Circular No. 2004-006.

We recommended and Management directall concemed officials to comply with therequirements of COA Circular No. 77-61dated September 26, 1977 on fuelconsumptions and official travels. SubmitMonthly Report of Official Travels andMonthly Report of Fuel Consumption withits supporting Driver's Trip Tickets.

We recommended that Management requirethe:

a. concemed personnel refund theentire amount and thecorresponding OR should be issued,and appropriate accounting

b.

adjusting entries should be preparedfor the said refund; and

accounting official to be diligentand cautious in the review of thecompleteness of supportingdocuments required in everydisbursement so as to establish the

The Board issued Office Order No. 45adopting COA rules and regulations on thecontrol and use of govemment vehicles.

The Branch has already complied with thesaid refund on a monthly installment basis.As such, prior year adjustments has beenmade and recorded thereto.

The Branch is already complying with theauditor's recommendations.

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propriety and correctness of theamount to be paid.

26. Delayed/untimely submission of monthly financialreports/vouchers/suppo rting docu ments

Delayed submission of DVs, Financial Reports and supportingschedules/documents by RCMB-VI and RCMB XII to theAudit Teams deprived the Auditors of the timely conduct ofsubstantive test, validation oftransactions and the detection ofmaterial elrors, thus the accuracy of the affected accounts inthe financial statements could not be ascertained.

We recommended that Management directthe respective Accounting Designates torefrain from submitting incomplete reportsand adhere strictly to the rules andregulations on the prompt submission ofvouchers/documents and financial reports.Continuous non-compliance with thepertinent COA regulations will constrainthe Auditors to suspend the salary of theconcerned accountable officers until therecuirements were alreadv complied with.

The concemed regional branches havecomplied with the auditor'srecommendation.

27. Ineffective accounting controls

Non preparation of comprehensive accounting manual, deskprocedures manual, and complete written office guidelines byRCMB-XI to standardize the operation of the Branch resultedto various questionable transactions amounting toP208,649.98.

We recommended and Management agreedthat a written documentation of the

Branch's policies, procedures and practicesin the form of an updated comprehensiveaccounting policy and procedures manualshould be prepared.

We also recommended that a simple deskprocedure manual may also be prepared.This manual is beneficial in clarifuins

The intemal control manual of NCMBstill subject for review.

2T

AUDIT FINDINGS RECOMMEIIDATIONS AGENCY ACTIONS/CO MMENTSAs of October 31,2012

procedures and aiding the cross-training ofemployees to assure continuity in theperformance during employee absences dueto illness or vacation and when employeetumover occurs.

28. Gender and Development

Delayed submission of the Annual GAD Plan and Budget ofthe NCMB-Central Office and its regional branches preventedthe timely endorsement of the Annual GAD Plan and Budgetby the PCW Executive Secretary contrary to Section 3.2,Paragraph 3.2.3, 4.2 and 4.3 of the DBM-NEDA-NCRFWJoint Circular No. 1, series of 2004. Likewise, expensesincurred for the implementation of CY 2011 GAD Planamounted to only P1,356,470.15 or 66.27 percent of theapproved budget of P2,046,732.75 manifesting that onlyminimal GAD projects/activities were undertaken during theyear. Thus, allowable budget for the purpose was notmaximized and gender issued intended to be addressed andresolved during the year were not accomplished.

We recommended and Managementrepresented by the GAD Focal Personagreed to:

a. prepare a more comprehensive GADPlan for the succeeding year tooptimize the use of allowable budgetfor the purpose and to conform to theguidelines/policies set forth in DBM-NEDA-PCW Joint Circular No. 2004-l; and

b. ensure that GAD Plan and Budget are

timely submitted to PCW for reviewand endorsement and that all approvedprograms/projects/activities under thePlan are actually implemented duringthe vear.

The Board's 2012 GAD Plan and Budgetwas approved by the PCW on July 12,2011.

The NCMB GAD Focal Person shall ensurethe continued implementation and

monitoring of GAD programs and activities

29. Prior year's disallowances not yet settled

The prior year's disallowances of RCMB-VI and RCMB-VIIIamounting to Pl36,616.08 and P4,074.21, respectively or atotal of P140,690.29 remained unsettled at year-end due to thefailure of concerned officials to institute a reasonable oavment

We recommended that Management devisea reasonable payment scheme for theimmediate settlement of the disallowancesin RCMB-VI and the full settlement for

The uncollected receivable of RCMB-VIIIrepresents the disallowances incurred bythen Conciliator-Mediator Atty. Arturo M.Camiller, who transferred to the NLRC as

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scheme, thus depriving the govemment coffer on the use ofthe funds.

RCMB-VIII, despite of the decrease, duethe huge unsettled amount pursuantexisting COA rules and regulations.

toto

Labor Arbiter in 1998. His clearance wassigned with verbal agreement in front of ourResident Auditor Damiana Pelino, thatdespite his transfer he will continue payinghis disallowance until fully settled.Although, partial payments were made,Atty. Camiller failed to pay hisdisallowances in full, hence, the remainingbalance of P4,074.21. Letters of demandhave been sent to Atty. Camiller. Likewise,a letter was sent to NLRC to request thatpayment of the disallowance be facilitated.However, all letters were not acted upon.

A demand letter for the fulI settlement ofthe disallowance was also sent to NLRC-RAB8 ELA Jesselito Latoja with copiesfurnished to the COA.

As of August 31,2012, the total amount ofPl 18,675.55 or 5l% of the totaldisallowances was settled by the RCMB-VI.The concemed personnel committed tosettle the remaining balance on or before theend of20l4.

Submitted by:

baldoExecutive D/rector IV

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Documents

l. - ncmb.phncmb.ph/transparency/NCMBAdditionalTransparency/Actions Taken on... · NCMB-NCR as of December 31, 2010. Concerned accountable officers continued ... the Supply Off,rcer