30.

Over and Under Deduction of Salaries and Contributions

Teachers’ on leave of absence without pay (LWOP) covering June 1, 2016 to May 31, 2017 (SY 2016-2017) of the Schools’
Division Offices of La Union and City of San Fernando were not in accordance with CSC Memorandum Circular No. 08 s.
2014 and DepEd Order No. 97 s. 2017 dated May 26, 2017 which resulted to over deductions of salaries, PERA and
government contributions due to GSIS RLIP/ECC, HDMF, and PHIC amounting to ₱ 217,161.39 and overpayment
amounting ₱3,783,162.15

Pursuant to CSC Resolution No 1400454 dated March 31, 2014, the Commission adopts the following formula in the
computation of salaries of employees who incur leave of absence without pay:

NO. OF DAYS PAID STATUS

SALARY = X MONTHLY SALARY
22 DAYS

*Where “number of days paid status” refers to 22 days less number of days without pay

Moreover, DepEd Order No. 97 dated May 26, 2017 requires that teachers who incurred leaves without pay during the SY
2016-2017 shall have corresponding deductions in the proportionate vacation pay (PVP) by using the factor of 0.244 in the
computation.

In addition, Section 48, Volume I of the Government Accounting Manual (GAM) mandates that-

Accounting for Overpayments. Sometimes overpayments or even double payment of expenditures do happen in
agencies. These could be avoided with the institution of proper controls but some could not be avoided because
of built-in procedures. One example is the payment of payrolls. Payrolls are prepared in advance and some
agencies pay their employees through the banking system. All these are done before reports of attendance are
submitted, making it impossible to know the exact amount to be paid in case there are absences without pay
during the pay periods. In case of overpayments, refunds shall be demanded of the employees concerned.
 Recomputation of payrolls prepared by the DepEd RO I RPSU revealed that leaves without pay (LWOP) were
deducted using the total number of days in a month (30 or 31 days, as the case maybe) as divisor in getting the monetary value
of leaves without pay which is not in accordance with the formula prescribed by CSC Memorandum No. 08 s. 2014/CSC
Resolution No. 1400454 dated March 21, 2014. Likewise, the corresponding deductions on the proportionate vacation pay
(PVP) of teachers who incurred LWOP were not accurately deducted during the SY 2016-2017.

As a result, the current absences representing deductions on LWOP and the overpayment of PVP revealed that there
was an over deductions and under deductions of regular salaries and personnel economic relief allowance (PERA) and
government contributions due to Government Financial Institutions as stated below:

Amount of Over
Division/School Audit Deficiencies Noted Amount of Overpayment
deduction
Wrong computation of LWOP
San Fernando City ₱(159,885.56) 3,417,122.51
and underpayment of salaries
Wrong computation of LWOP
La Union (57,275.83) 366,039.64
and underpayment of salaries
TOTAL ₱(217,161.39) ₱3,783,162.15

The Audit Team had constantly reminded the Financial Management Personnel on their responsibilities to comply
strictly on the mandate of the Section 48, Volume I of the Government Accounting Manual (GAM). However, they failed to
recheck/review properly the payrolls prepared by DepEd-RPSU and account/record the under/over deductions of
salaries/PERA and other personnel benefits and to report any corrections required therein as a result of the re computation that
should have been made by the Division Budget Officer and/or the Accountant.

Analysis also revealed that the payroll system of DepEd, Region I is circuitous because there was no responsibility
being assumed by DepEd RO 1 Payroll Service Unit (RPSU) nor the Management of DepEd –Division Office. It is hereby
emphasized that the DepEd RO I RPSU prepares the computerized payrolls for teachers and employees in the various Division
Offices and Schools without complete sets of books of accounts. Consequently, Management transfer the payroll fund
requirement on deductions to DepEd, RO I payroll account and in the government authorized depository bank for the payroll
ATM accounts of the various teachers and employees covering their net pay.

Further, the DepEd RO I RPSU assumed no responsibility in the preparation of the payroll by intentionally not signing
the required certification in the preparation of the payroll and the DepEd- Division Offices of San Fernando City and La Union
did not also sign the required certifications at the bottom of the payrolls such as certification as to correctness and accuracy of
payroll computations, obligations as to availability of fund, validity of the expenditures and approval of the transactions.
Because of the foregoing, the audit team plans to return the payrolls to require the certifications that should be signed by the
concerned officials.

We recommended the following:

(1) Refund the over deduction of ₱217,161.39 and require the settlement of ₱3,783,162.15 representing the unsettled
overpayment of regular salaries, personnel relief allowance and government contributions to GSIS, HDMF and
PHIC;

(2) Direct the Accountant to adjust in the books of accounts the related overpayment by drawing a journal entry. to
recognize the receivables due from the concerned teachers of the DepEd Division Offices of La Union and San
Fernando, City.

(3) Coordinate with the RPSU to effect the adjustments/changes of payrolls upon submission of the CSC Form 7
together with the Daily Time Records and approved application for leaves without pay and to deduct the full amount
in the payroll all monetary value of leaves without pay using the formula prescribed under CSC Circular No. 08 s
2014 and DepEd Order No.17-097 dated May 26, 2017.

(4) Division Management should also make strong representation in the establishment of
responsibilities/accountabilities of the DepEd RO I RPSU as to the accuracy, propriety, validity and completeness of
computations and to sign in the required certifications embodied in the payrolls.

Management Comment: