Republic of the Philippines COMMISSION ON AUDIT National Government Sector Cluster 2 — Oversight and Public Debt Management Agencies Commonwealth Avenue, Quezon City 25 June 2018 Hon. BENJAMIN E. DIOKNO Secretary Department of Budget and Management General Solano St., San Miguel, Manila Dear Secretary Diokno: We are pleased to transmit the Consolidated Annual Audit Report on the Department of Budget and Management for the Calendar Year 2017 prepared by the team headed by Ms. Anniely P. Ibafiez, as Audit Team Supervisor, and concurrent Audit Team Leader, in compliance with Section 2, Article IX-D of the Philippine Constitution and Section 43 of Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the Philippines. The audit was made to ascertain the propriety of financial transactions, compliance of the Agency with prescribed laws, rules, and regulations, and the fairness of presentation of the financial statements (FSs). Furthermore, the audit was conducted in accordance with Intemational Standards of Supreme Audit Institutions (ISSAls). We believe that our audit provides a reasonable basis for rendering a qualified opinion on the fairness of the presentation of the FS. The audit findings include accounting errors and deficiencies that materially affect the fair presentation of the FS, as summarized in the Analysis of the Effect of Misstatements on the Financial Statements (Annex B). The attached report consists of the Executive Summary, the Independent Auditor's Report, the audited FS, the Observations and Recommendations, which were discussed with the concemed Management officials and staff, and the Status of Implementation of Prior Year’s Audit Recommendations. ‘We request a status report on the actions taken on the audit recommendations within sixty (60) days from the date of receipt hereof, pursuant to Section 88 of the General Provisions of the General Appropriations Act of FY 2017 (Republic Act No. 10924), using the attached Agency Action Plan and Status of Implementation (AAPSI). ‘We express our appreciation for the valuable support and cooperation extended by the officials and staff of the Agency. DEN-CENTRAL RECORDS DIVISION Very truly yours, 10:32 JUN 26; 2018 aceon by a Carat CORA LEA A. DELA CRUZ 4 Director