Unrecorded Step Increment

The Management has no adequate control system and procedures to ensure the regular grant
of the step increments based on length of service to the qualified personnel of the City Schools
Division of Laoag City as provided under Section 6.1, 10 and 12.3 of the CSC-DBM Joint
Circular No. 1 s. 2012 thus resulting in underpayment and/or delayed payment of authorized
salaries amounting to ₱112,855.61.

Section 6.1 of CSC-DBM Joint Circular No. 1 s. 2012 states that –

“One (1) Step Increment Due to Length of Service shall be granted to qualified personnel
for every three (3) years of continuous satisfactory service in the present position. X xxx”

Also, Section 10 of CSC-DBM Joint Circular No. 1 s. 2012 requires that-

“The Human Resource Management Officer (HRMO) or Administrative Officer(AO)

concerned shall prepare the Notice of Step Increment/s Due to Meritorious Performance
or Notice of Step Increment Due to Length of Service, as the case may be, following the
formats attached as Annex “A” and “B”. The Agency Head shall issue such Notices to
the personnel concerned, copy furnished the Government Service Insurance System
(GSIS).”

Likewise, Section 12.3 of CSC-DBM Joint Circular No. 1 s. 2012 mandates that-

“Agency Heads shall also be responsible for the development and review of the agency
system and procedure in the recommendation, evaluation, and approval of the grant of
step increments to ensure the proper implementation of this Joint Circular.”

A random sampling to test the accuracy of the paid authorized salaries of teachers in the
DepEd-City Schools Division of Laoag was made and drew up the DepEd - Elementary
as a sample from the randomly listed employees in the Division. Payrolls for personnel in
the DepEd – DOLC (Elementary) were compared against their Personal Services
Itemization and Plantilla of Personnel (PSIPOP) as at September 30, 2017. Our audit
revealed that there were 128 discrepancies in the actual payment of authorized salaries
amounting to 112,855.61 as of December 31, 2017. (see Annex “C” for the detailed
computation)

The observations were limited to the supporting documents submitted by the Agency. The
requested copies of Service Records concerning the sample employees (elementary
teachers), were not submitted. Consequently, employees’ absence/s or approved vacation
leave/s without pay of more than 15 days for CY 2017 as well as promotions from
September 30, 2017 to December 31, 2017 were not considered in Annex “A” which
could have significantly affected the start and end of salary step increment .

Further, there were employees who received salaries in excess of the authorized amount
based on the approved PSIPOP. (see Annex “D” for the details)

The result of audit implied that AO/ HRMO and other personnel in-charge have not
installed proper systems and control procedures on the grant of step increments/s as
provided under CSC-DBM Joint Circular No. 1, s. 2012. It revealed that there was no
data bank maintained by Management as basis in the inclusion of fund requirement
 during the annual preparation of budget and as an automatic reference for the preparation
of the payroll on step increment and its corresponding payment /settlement.

Furthermore, as at December 31, 2017, there were sufficient cash allocation amounting to
₱1,520,287.35 which could have been used in paying the authorized step increment on
the employees’ salaries. As to availability of funds, records show that that Agency has an
available allotment totaling ₱411,000 for step increment of employees. Moreover, the
Agency has an unobligated allotment for Personnel Services as at December 31, 2017
amounting to Php 4.5M including automatic appropriations. Indeed, availability of cash
allocations and allotment were not factors on the unpaid obligations.

As a consequence, the officials, teachers and other personnel of the Division were
deprived to receive promptly the authorized basic salary they are supposed to receive and
the corresponding government premium to be remitted to the Government Service
Insurance System.

We recommended that Management require the Administrative Officer/ Human

Resource Management Officer to make an annual cut-off date in updating the
Service Records of the personnel of the Division and install a data bank as a
ready reference in including the funding requirement of the step increments in
the preparation of the annual budget and grant the regular payment/ settlement
of the aforementioned benefits to all qualified personnel and issue the
required Notices of Step Increment Due to Length of Service.

In addition, we required the AO/ HRMO to complete the computation of step

increments that are due to all qualified personnel before the year ends regularly
and direct the payment/settlement of the current year step increment due to
length of service to the qualified personnel of DepEd – City Schools Division of
Laoag chargeable against the savings for Personal Services. Apply this
procedure regularly for the ensuing years and for the CY 2017 if still applicable.

In this regard, management is also reminded that prior years unbooked

obligations may be paid by submitting a request for money claims to the
Commission on Audit.

Also, we recommended that the Management to direct the affected personnel to

refund the amount of P3,275.00, representing the excess payment of salaries.

17.1 Finally, we reminded the proper discharge of the responsibilities of the

Management and the Administrative Management Officials of DepEd-City
Schools Division of Laoag as embodied in the CSC-DBM Joint Circular No. 1,
s. 2012. Further, it is hereby suggested that Management may request to DepEd
RO I RPSU, being the Office tasked to prepare the computerized payrolls, to
maintain the same databank needed for the computation/preparation of step
increments whenever these benefits fall due to qualified personnel of the
Department in order to assure Management on the proper check and balance
on the implementation of the CSC-DBM Joint Circular No. 1, s. 2012.
 Management Comment:.

Moreover, management informed that a letter of advisory for the refund

representing the excess payment of salaries had already been sent to teachers.
Management also promised to comply with the provisions of aforesaid rules and
regulations.

17.2 Auditor’s Rejoinder:

17.3 During the exit conference that there were several employees affected on the non-
payment of step increment in CY 2017. Although the LOEGSI as at September
30, 2017 has been approved, no update yet has been made as to payment/
obligation thereof.