Republic of the Philippines

COMMISSION ON AUDIT
OFFICE OF THE AUDITOR
Construction Industry Authority of the Philippines
5/F 369 Executive Bldg, Sen. Gil Puyat Avenue, Makati City

AOM No.: 2018-

Date : October 10, 2018

AUDIT OBSERVATION MEMORANDUM (AOM)

For: ARCH. RAMON L. ABIERA

Executive Director
Construction Industry Authority of the Philippines (CIAP)

Attention: RUFINO H. TIVIDAD

Chief Administrative Officer
Administrative, Financial and Management Division (AFMD)

PERLITA M. RASING
Accountant III

Subject: Result of Cash Examination

We have conducted a cash examination on the cash and accounts of Ms. Nenita E.
Celso, Cashier II, Collecting Officer (CO) and Special Disbursing Officer (SDO) on
September 5, 2018.

Ms. Celso is duly bonded per Risk No. D3-B17-1849R effective December 1,
2017 until December 1, 2018. Her approved amount of bond amounted to P225,000.00,
thus, the maximum cash accountability is P500,000.00.

During the cash examination we observed the following deficiencies:

a) Non-liquidation of cash advances within the prescribed period

Item 1.2 of COA Circular No. 2012-001 dated June 14, 2012, Revised Guidelines
and Documentary Requirements for Common Government Transactions, which provides
that “The accountable officer shall liquidate cash advances within the following period:

 xxx
 Special purpose – as soon as the purpose of the cash advance has been
served.”

Result of the cash examination disclosed that various cash advances granted to
Ms. Celso were not liquidated within the prescribed period as required by the
abovementioned COA Circular. Validation of the Liquidation Reports and Official
Receipts of the refunds of the unused cash advances disclosed that the full liquidation of
the said funds ranges from 4 to 100 days upon the completion of the their respective
purposes. Details are shown in Annex A.

Ms. Nenita E. Celso, designated as CO and SDO, is duly bonded under Risk No.
D3-B17-1851R with maximum accountability of P500,000.00.

Zenaida L. Retome was designated as an Special Disbursing Officer (SDO) on

March 1, 2017 and has a maximum cash accountability of P90,000.00. She is authorized
to carry advance for special time-bound undertakings related to human resource
development. Validation of the Liquidation Reports and Official Receipts of the refunds
of the unused cash advances disclosed that the full liquidation of the said funds ranges
from 4 to 100 days upon the completion of the their respective purposes. Verification of
the Subsidiary Ledger revealed that the special cash advances granted to her for the entire
period covered by the examination, were not liquidated within the prescribed period.
Details shown below:

Nature/Purpose/Timeline Amount Date of Prescribed date Date of Number of

of undertaking granted grant of of liquidation actual days delay
cash liquidation
advance
1 National Women’s Day 76,600.00 3/6/2017 3/9/2017 4/11/2017 23
and Stress Management
Seminar on March 8,
2017
2 GAD Planning and 15,000.00 6/2/2017 6/10/2017 7/3/2017 23
Budgeting Workshop on
June 7-9, 2017
3 Seminar on Earthquake 49,000.00 7/17/2017 7/26/17 8/15/17 20
Preparedness, July 25,
2017
4 CSC Fun Run, Sept. 3, 26,000.00 8/10/2017 9/4/17 9/27/17 23
2017

Attention is invited to Item 1.2 of COA Circular No. 2012-001 dated June 14,
2012, Revised Guidelines and Documentary Requirements for Common Government
Transactions, which provides that “The accountable officer shall liquidate cash advances
within the following period:
 xxx
 Special purpose – as soon as the purpose of the cash advance has been
served.”

b) Non-maintenance of Cash Disbursement Record (CDRec)

The SDO did not use/maintain CDRec contrary to Section 17, Chapter 6 of
Government Accounting Manual (GAM), Volume I.

During the examination, the audit team also noted the Ms. Retome did not
use/maintain CDRec to record and monitor her cash advances.
 Section 17, Chapter 6 of GAM, Vol. I states that “The Disbursing Officer shall
maintain the Cash Disbursements Record (CDRec) to monitor the cash advances/payroll,
current operating expenses, and special purpose/time-bound undertakings and prepare
the Report of Cash Disbursements (RCDisb) to report its utilization.”

c) Non-reconciliation of accountability with accounting records

The AO did not reconcile her accountability with the Accounting Section at
least quarterly basis, which is not in consonance with Item No. 7, Chapter II of the
Revised Cash Examination Manual.

Due to the AO’s non-maintenance of the CDRec, she also failed to reconcile her
accountability at least quarterly with the Accountant as provided Item No. 7, Chapter II of
the Revised Cash Examination Manual which states that “An AO shall maintain his
cashbook/CRR/CDR/CkDR and such other records or their equivalents as may be
prescribed by the agency’s operating procedures, and reconcile with the accounting
records at least quarterly, unless the agency requires a more frequent reconciliation.”

In view of the foregoing, we recommend that the Management instruct the

SDO to:

a. liquidate her cash advance as soon as the purpose of which has been already
served;
b. use/maintain CDRec to record and monitor her cash advance and
disbursements; and

c. reconcile her accountability with the Accounting Section at least on a

quarterly basis.

May we have your comments on the foregoing audit observations within five (5)
calendar days from receipt hereof.

LORELIE M. PLACIDO
State Auditor III
Audit Team Leader

MARIA LOURDES C. CENTENO

State Auditor IV
OIC, Supervising Auditor
DTI Audit Group

Proof of Receipt of AOM:

Received by
Name of Official Position Date
(Pls. print and sign)
1) Ramon L. Abiera Executive Director,
 CIAP
2) Rufino H. Tividad Chief, AFMD
3) Perlita M. Rasing Accountant III
4) Zenaida L. Retome Admin. Asst. II