SUMMARY OF INTERNAL AUDIT ACTIVITIES AND REPORTS

JANUARY TO DECEMBER 2018

 For CY 2018, FOAD conducted several types of audit and follow-ups

in Central Office and Field Offices specifically:
Finance Section
OFFICE UNIT/SCOPE AUDIT
Central Office Cash Division Financial Documentation
Budget Division Financial Documentation
SRIP Projects Follow-up (LDs)
Uniform Follow-up
Field Offices 1, 2, 4A, 4B, MARIIS, Disbursement Audit
CAR Validation of COA CY
2017 Implementation of
Recommendations

INTERNAL AUDIT REPORTS ISSUED IN 2018

I. Audit of Disbursement:
The main objectives of the audit were: to assess the effectiveness of
the Agency’s of financial reporting, improve the financial documentation,
check whether the financial regulations are being followed and make
recommendations where weakness or inefficiencies are observed.
Audit identified some areas for improvement:
a. ASA/ADA - control weakness in preparation, release and
monitoring (CO)
- procedural lapses on the release of ASA (CO)
b. BAC – laxity in the review and confirmation of contractor’s
eligibility requirement leading to several disallowances
(RIO 4A, 4B)
c. Overpayment of claims of contractor’s progress payments
- understated recoupment of advance payment and
withheld retention totaling Php 1,128,007.42 (CAR), such
project was inspected and accepted complete but per field
validation project was not actually accomplished (IOAM
CAR -003-2019)
- overstated drawn check by Php 20,000.00 (RIO4B)
d. Processing of payments without valid supporting documents
- expired PCAB licenses (RIO 1, 2, CAR, 4A, 4B)
II. Validation of implementation of COA recommendations:
a. Non-compliance with COA Circular 2009-001 particularly Annex E
– project time extension and variation orders were not
submitted timely to COA for review and technical
evaluation leading to adverse findings such as
disallowances (submit within 5 days – COA will not
 consider time extension thus delays are determined from
original contract and LD is imposed from that original date
of contract expiry) (CAR, RIO 1, 2
b. Non-reclassification of CIP Account (temporary account) – that
misrepresent the actual financial status of the Agency.
CY 2008 Php 36,460,150,959
CY 2017 125,525,569,432 (3.44X)
Observations/Reasons for non-reclassification:
- No project completion reports (RIO1)
- Failure to forward PCR to accounting (CAR/RIO 11)
- Non-reclassification, awaiting full utilization of cash for
the particular allotment
- Non-acceptance of projects by IAs due to:
= projects were damaged/washed out before turnover
= IAs cannot accept due to existing contract with NIA
= contract was made by prior IA president
c. Unreconciled variance in physical and accounting records
Observations
- Inadequate property records
- Untimely conduct of physical inventory
- Competency to undertake assigned responsibility
III. Follow-up Engagements
a. FAS CO-2017-009 -UCA – no formulated guidelines or office
resolution for the procurement and expenditures of office
uniforms/materials per DBM Circular 2012-1, Section 7.1.1 –
procurement thru bidding process under RA 9184.
Refund Php258,145 undelivered uniform materials to several
employees.
b. Collection of Liquidated Damages – submitted status report
3/4/2019

Project LD Remarks
ZRIS 25,399,645.76 Per DV 10,000,525.23
was collected, remaining
works were repackaged
and bid out at RO

UCRIS 14,741,760.68 Per DV P20,258,096.21

was collected ( )
Remaining works were
repacked ( )and bid out
at RIO; 3 contract
packages were
 completed as of Nov. 30,
2018
Umayam Per verbal inquiry,
awaiting request for
payment by the
contractor
SJPIP 2,610,214.57 Awaiting request for
payment of contractors
Tangub Awaiting request for
final payment of
contractor
Barotac Viejo 11,702,658.80
Hibulangan
 Per verbal inquiry, collected LD were remitted to BTR…..
2019 AUDIT ISSUES/CONCERNS
a.