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LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Purpose of the Template:

• LGICD template is a useful tool for understanding and documenting the a) existing condition of the LGU’s internal control
system, and b) how it operates as a public service organization.
• Serve as easy reference of information gathered and documented.

How to accomplish the Template:

1) PART I - From the documents gathered, fill-in the background information of the Department in the spaces provided;

2) PART II - Column (1) Plot the elements of NGICS as checklist and criteria;
Column(2-3) From the laws, rules, regulations (LRRs), policies and guidelines relevant to the Department/Program, document the
following across appropriate boxes: references and dates of document; Column (4) salient points of relevant LRRs, policies,
guidelines, and include as Annex to this Column any relevant Internal Control Checklists prepared for BAICS; and
Column (5) auditor notes for any significant issue for further verification and/or reporting (e.g. relationship of LRRs).

3) PART III – 1) Describe the strategic goals of the LGU;


2) Describe the Major Final Outputs, Programs, Projects and Activities to achieve the strategic goals;
3) quantify targets and accomplishments per KPI or group of KPIs;
4) calculate the percentage of accomplishment and variances, if any; and
5) include in this Template any trending, benchmarking or comparative analysis made on accomplishments. This part
will give the IA idea on possible audit areas for operations audit.
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Local Government Unit :__________________________________________________


Address:____________________________________________________________________
As of Dec. 31, 2016

PART I - BACKGROUND INFORMATION


COMPONENT DESCRIPTION
(1) (2)
Creation and Mandate List down the mandate of the PEO
Organizational Objective/s Describe the PEO’s objective in line with the LGU’s mandate or goal
Vision/ Mission Copy vision and mission of the LGU and PEO
Functions List specific functions of the PEO
Leadership Organizational Structure of listing of hierarchy of positions from Local Chief Executive (LCE) to
the Department, Office, Unit Heads (note: can be a separate Annex)
Personnel Complement Staffing pattern broken into type (permanent, contractual, job order) and type of engineer
Financial Highlights Annual investment plan for infrastructure and other sources
Major Programs and Projects Major Programs and Projects of the PEO including budgetary requirements
Significant Accomplishments Aggregate listing of significant accomplishments, highlight specific projects if needed
Public Service Sector Context
a) Public Service Organization Public entities generally pertain to: 1. Agencies of government, and 2. Public offices, agencies
Providing Public services of government
 Public Entities –government Private entities include 1. Utility and service providers, 2. Withholding tax agents, 3.
agencies and offices Procurement observers, 4 private contractors, and 5 volunteers
 Private Entities providing
public services

b) Constituents or Public to Serve


Profile including demographics of the Constituents
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

COMPONENT DESCRIPTION
(1) (2)
c) Stakeholders (indicate their
interest/stake)
 Internal Individuals and groups that can affect and be affected by the LGU’s operation within a
particular public service sector. In terms of relationship, the IAS/U basically coordinates with
internal stakeholders and collaborates with external stakeholders

 External
Those who may have an interest and can influence the achievement of the sectoral goals of
the LGU. They must always deal with the LCE and not directly with the IAS/U.
Suppliers and Contractors Existing bidders, and current contractors and suppliers
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

PART II – DOCUMENTATION OF INTERNAL CONTROLS

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions
CONTROL ENVIRONMENT
Comprises the organizational
structure and the staffing
complement that enable an
organization to carry out its
functions. This plan defines and
distributes powers, functions
and responsibilities to various
units and personnel to enable
them to meet overall
objectives.
Organizational Structure
NGICS 3.1.2 – p.22

An organizational structure
provides the framework within
which the activities of an
agency are planned, executed,
controlled, and reviewed. It
considers key areas of authority
and responsibility and the
appropriate lines of reporting.
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions
Management & Personnel
NGICS 3.1.2 – p.22
Section 32 Chap 9 Book I
Administrative Code of 1987

Relates to accountability, norms


of conduct and ethical
standards and performance.
Coordinated Methods and
Measures
NGICS p.22

Control processes that are


implemented and which form part
of the normal recurring operations
of an organization. Comprise the
policies, rules and regulations in
every agency management system
that support and become integral
to the operations (HRM, FMS,
RMS, QMS).
Control Policies and Measures
NGICS p.27
 Delegation of authority and
supervision
 Segregation of duties
 Access over resources, assets
and facilities
 Checking completeness of
transaction documents and
reports
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions
 Verification
 Reconciliation of financial and
non-financial data
Human Resource Management
System
Hiring
NGICS – HRM p23

The HRMS encompasses the


processes from recruitment,
retention, training, supervision and
discipline, until an employee’s
severance from the service either
through retirement, resignation, or
separation.

Sec 7 Chap2 Book V


Administrative Code – entrance
based on merit and fitness,
examination and technical
qualifications.

Training
Motivation and Incentive
Norms of Behavior and Ethical
Standards
Performance Evaluation System
NGICS – HRM p23
Sec. 33 Chap 1, Subtitle A, Title I,
Book V of Administrative Code
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions
1st and 2nd level - Performance
Evaluation System

3rd level – CESO – Career Executive


Service Performance Evaluation
System (CESPES)
Policy on Discipline
NGICS p23

Sec 346 Chap 6 Subtitle A, Title1,


Book V of the Administrative Code

“a) No officer or employee in the


Civil Service shall be suspended or
dismissed except for cause as
provided by law and after due
process.”
FINANCIAL MANAGEMENT
SYSTEM
The NGICS mentioned Sec. 3,
Chapter 2, Book VI of the
Administrative Code as the legal
policy on financial management.
The Code provides that “the
budget shall be supportive of and
consistent with the socio-
economic development plan and
shall be oriented towards the
achievement of explicit objectives
and expected results, to ensure
that funds are utilized and
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions
operations are conducted
effectively, economically and
efficiently.” Expected result means
the service, product, or benefit
that will accrue to the public,
estimated in terms of performance
measures or targets.

RISK MANAGEMENT SYSTEM


DBM Circular Letter 2006-
08 dated 23 October
2008 on the National
Guidelines on Internal
Control Systems stated
about risk assessment.
 RM Policy
 RM Manual
 RM Process

QUALITY MANAGEMENT SYSTEM


Executive Order No. 605 dated
February 23, 2007
(Institutionalizing the Structure,
Mechanisms and Standards to
Implement the Government
Quality Management Program)
was issued to ensure quality in the
methods, systems and processes in
government operations.

RISK ASSESSMENT
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions
Risk Identification

Risk Analysis

Risk Evaluation

CONTROL ACTIVITIES
Risk Response

Response to Recommendations of
External Reviewers

INFORMATION AND
COMMUNICATION
NGICS 3.4.1 p 34
Information:

Prompt recording and proper


classification of transactions and
events.

Appropriate, accurate and current


information.

Timely information.
NGICS p.34
GQMSS mechanisms:

 Issuance, revision and approval


of internal documents;
 Control of external documents
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions

 Access to documents
NGICS p 35
Performance Information

Performance Reports
NGICS p 35
Sec 6 of RA 9485 – Citizens’
Charter
NGICS p35
Section 8(A) of RA 6713/ Sec 7 of
RA 3019

Statement of Assets and Liabilities


NGICS 3.4.2 p 36
Communication

Sec 8 Rule III of RA 6713


Consultation and dialogue
between officials and staff

NGICS p 37
Communication and Feedback
Mechanism between the public
service organization and its
customers and other interested
parties

NGICS 3.4.3 p.37


Information Technology

General Controls
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions
Application Controls
MONITORING
NGICS 3.5 Monitoring
3.5.1 Ongoing Monitoring
Regular and real-time basis done
by
Top management
Operating Units

Done by Management Division of


FMS
NGICS 3.5.2 Separate Evaluation

Conducted by the Internal Audit


Service

IAS Staffing
Circular Letter No. 2008-5,
“Guidelines of the Organization
and Staffing of an Internal Audit
Service/Unit and Management
Division/Unit in Departments/
Agencies/GOCCs/GFI Concerned”
14 April 2008

IAS Functions

NGICS Section 3.5.2 The IAS is


mandated to conduct a separate
evaluation or appraisal of the ICS
to determine whether IC are well
designed and properly operated.
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Criteria Per NGICS Laws, Rules and Ref. and Date Subject, purpose, objective Audit Notes
Regulations (LRRs) and salient provisions
Specifically, per DBM Circular
Letter No. 2008-5:

“c. Review and appraise systems


and procedures/processes,
organization structure, asset
management practices, financial
and management records, reports
and performance standards of the
agencies/units covered.”

NGICS 3.5.2 p39


Management Audit Division
(MAD)
Separate evaluation of the
effectiveness of IC of
management systems
(HRM,FMS,QMS & HRM)

Operations Audit Division (OAD)


Evaluates the 4Es of operations

Monitoring by Oversight Title of Report Date Internal Control Issue Audit Notes
LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Agencies
DBM

COA

OMB

PAGC

CSC

NEDA

PART III - Review of Performance


LGU INTERNAL CONTROL DOCUMENT (LGICD) Template #1

Strategic Goals:
1) ___________________________________________________________________________________________
2) ___________________________________________________________________________________________
3) ___________________________________________________________________________________________

PROGRAM / Percentage of Variance/


Major Final Output PROJECT/ KPIs TARGET ACCOMPLISHMENT Accomplishme IA
ACTIVITY nt Comment
MFO 1: Engineering and Construction/
Infrastructure Management improvement of
Services road/bridges and 1. Total
1. Five (5) 1. Five projects 1. 100 %
FMR implemented numbers of
projects for 6 accomplished accomplished
according to project
months within 6 months projects
accepted completed
government
standards
MFO 2:

TOTAL

Prepared by Reviewed by
Name: Name:
Position/Designation: Position/Designation:
Office: Office:
Date Date

*Target and Accomplishment: physical and processes, financial flows, timeline