11 July 2003 - Department of Tourism - The Philippines ... · Web view... Resolution No. 020790 and DBM Budget Circular No. 2010-1, dated April 28, 2010, hence, considered an irregular

Annex AML CY 2014

Status of Implementation of Prior Years’ Audit Recommendations

Of the 23 prior year’s audit recommendations, five were fully implemented, 17 were partially implemented and one was not acted upon/implemented. Some of the unimplemented audit recommendations are reiterated in Part II of this Report. Details are as follows:

Audit Observation and Recommendations Ref. No. Action Taken by Management Auditor’s Validation Results

1. In the absence of database on Tourism Enterprises (TEs) in most DOT Regional Offices (ROs) and the low rate of accreditation of 46 and 38 percent for the Primary and Secondary Tourism Enterprises, respectively, for those Regions with complete TEs listings, there is no assurance that all TEs were accredited and checked/monitored as to their adherence to international standards for quality and efficiency in operations. Instances of poor or below standards services of the un-accredited TEs would affect the tourism initiatives of the government and ultimately cause the decrease or loss of income from tourism activities. Moreover, there is no gauge to determine how the Department exercised its mandated functions on this accreditation program.

CAAR CY

2013 Pages 54-56

Status of PYs Audit RecommendationsPage 1 of 40


We recommended and Management agreed to direct the officials in charge of the accreditation of tourism enterprises to:

(a) create and maintain an updated information/ database of tourism enterprises operating within their jurisdiction for realistic planning and monitoring purposes, thus, ensuring full realization of the goals of the accreditation, that is to make sure that TEs operate based on international standards;

(b) fast tract the processing of all applications for accreditation to ensure that all TEs are checked and monitored as to their compliance to standards; and

(c) intensify campaign activities for heightened awareness of as many stakeholders to maximize accreditation.

Region I The Management conducted Mobile accreditation in Ilocos Sur, Ilocos Norte and Pangasinan, training on Basic Innkeeping for Homestay Program in Pagudpud, Ilocos Norte, and Professional Tour Guiding Seminar in La Union.

DOT-DILG Joint Memorandum Circular No. 2014-001 dated January 16, 2014 was issued adopting a convergence program on tourism as a vehicle a vehicle towards Local Economic Development. One area of convergence is the enforcement by the LGUs of mandatory DOT accreditation of primary tourism enterprises. The DILG and DOT shall regularly review and enhance the procedure for prior requirement of accreditation certificate in the issuance of business licenses.

Partially Implemented

Fully Implemented

The DOT RO I was able to meet their expected output through increased percentage of accreditation from 52% to 72%.



CARManagement commented that although the 565 TEs can be used as a reference to set a target, not all establishments in the list are accreditable and cannot even meet the minimum standards, thus, cannot be included as a targeted establishment for accreditation.

Region IVThe DOT Region IV had conducted briefing/orientation with LGUs on RA 9593 to encourage full implementation of mandatory accreditation of primary and secondary enterprises.

It has also undertaken the accreditation on wheels project in response to the difficulty of other tourism establishments’ owners/ operators in applying for accreditation thru on-line registration. Puerto Princesa had been the pilot province.

Region XIManagement commented that they

Not Implemented


The agency still cannot get hold of the actual number of tourism establishments in the region through the LGUs; hence, the reported accreditation cannot be gauged properly.




are strictly implementing the recommendations in late 2014.

Region XIIIManagement contended that the Office has exerted tremendous efforts to seek the cooperation of LGUs and has conducted roadshows on Tourism Accreditation among LGUs on top of the regular visits to tourism enterprises; that RA 9593 does not diminish the supremacy of LGU on matters of governance under RA 7160, the Local Government Code, including the decision to make accreditation a prerequisite to the issuance of business permit which may have implications to the generation of local income; that this matter has been a major issue not only in Caraga, but also at the national level; and that dialogues with the LGUs at wider national scale are undertaken to harmonize the merits of both RAs given different interests of both parties.

There were still minimal observations on accreditation during the year.

Partially Implemented. Similar observations/deficiencies were observed in the current year’s audit.

2. The total Assets was overstated by P11,850,966.57 due to the erroneous

Page 57



use of Cash National Treasury as an account to record the unused fund for the Aichi Exposition. At year-end, the amount was recorded both under Cash National Treasury and Due from National Treasury accounts.

We recommended and Management agreed to direct the OIC - Chief Accountant to adjust the balance of the Cash-National Treasury account for a more accurate presentation of the account balance in the financial statements.

Management adhered with the given recommendation. The Accounting Division prepared the necessary adjustment to reclassify the Cash-National Treasury account to Due from National Government Agencies account.

Fully Implemented

3. The unreleased/unclaimed checks as of December 31, 2013 aggregating P5,977,961.43 were not restored to the cash account and the corresponding liabilities were not recognized as required under GAFMIS Circular No. 2002-001 dated December 16, 2002, thus understating the Cash, National Treasury-Modified Disbursement Scheme (MDS) and Cash in Bank-Local Currency, Current Account (LCCA) by P5,911,992.37 and P65,969.06, respectively and Accounts Payable by P5,977,961.43.

We recommended and the

Pages 57-59

Unreleased checks at year end were Fully Implemented



Management of DOT Regions II, VII and XIII agreed to require their Accountants to restore the cash and recognize the liability equivalent to the amount of unreleased checks at year-end in order to fairly present the balances of the cash and liability accounts in the financial statements.

reverted to cash account. The DOT ROs were committed to implement the audit recommendation.

4. The Cash in Bank-LCCA year-end balance of P468,861,433.42 was unreliable due to the: (a) non-recording of reconciling items amounting to P16,530,641.52; (b) unreconciled difference of P409,132.95; (c) inadequately documented transfer of deposit of P5,247,182.89 from the closed PNB account to the DBP – Trust Liability account; and (d) non-maintenance of subsidiary records.

We recommended and Management agreed to instruct the concerned Accountants to:

(a) record the reconciling items in their books and to coordinate on a regular basis with the concerned banks the items for reconciliation to clear the variance between the

Pages 59-62

Management informed that the reconciliation of balances per books and per banks was conducted.


Management reconciliation is still ongoing.



balances per books and per banks;

(b) review related transactions and records to establish the details of the unreconciled difference in the DBP-RT account and the cash transferred/ deposited to the DBP - TLA, otherwise, remit the same to the National Treasury;

(c) prepare the Monthly Bank

Reconciliation Statements for the PCSSD accounts and submit to the Auditor within 15 days after the end of each month; and

(d) maintain subsidiary records to facilitate monitoring and evaluation of funds.

NCRManagement remitted to the National Treasury the amount of P135,866.42 under Official Receipt No. 2919944 dated June 20, 2014.

PCSSD submitted the required Monthly Bank Reconciliation Statements.

ROIXManagement informed that they already requested the Philippine Veterans Bank for snap shot copies of the Bank Statements from January 1, 2010 to December 31, 2013 to facilitate immediate reconciliation.

RO XThe Management complied with the recommendation.

Fully Implemented


Late submissions of Monthly Bank Reconciliation Statements were still observed in CY 2014.


Fully Implemented



5. The balances of fund remittances to the different Philippine Tourism Offices (PTOs) aggregating P300,774,940.03 were inaccurate and unreliable due to the: (a) unreconciled difference of P27,526,317.02 between the General and Subsidiary Ledgers; (b) negative account balances of seven Accountable Officers (AOs) aggregating P11,787,870.83; (c) erroneous postings to the SL of fund transfers amounting to P2,946,204.26; and (d) non-submission of the monthly bank statements and cashbook/disbursement records as basis for reconciliation of balances. Moreover, remittances of P118,378,127.71 remained unliquidated for more than three to six years.

We reiterated our previous years’ recommendation and Management agreed to instruct the Director of the Financial and Management Service and Acting Chief Accountant to: (a) establish the cause/s of the unreconciled difference between the GL and SL balances and the negative balances of the seven AOs; (b) adjust the SL postings and draw correcting

Pages 62-64

Management exerted effort to reconcile the difference between GL and SL balances and the negative balances in the audit report.

SLs for each PTOs is now being maintained and recorded

Partially Implemented.

Unreconciled difference between GL and SL balances decreased from P27,526,317.02 to P24,435,418.22 in CYs 2013 and 2014, respectively.

Analysis/Schedule of Cash Advance was prepared and



entries, as necessary to adjust the errors in recording; and (c) require the monthly submission by PTOs of the copy of the bank statements and cashbook/disbursement records for audit and reconciliation purposes.

transactions are periodically reviewed and analyzed.

Management commented that they are continuously monitoring the PTOs’ liquidations and compelling the AO to adhere with the DOT Operations Manual. The Accounting Division and Financial Management Service Office are conducting Financial and Management Audit on the AOs account disbursements and liquidations.

submitted to the Audit Team in lieu of the required SLs.

Deficiencies still observed in CY 2014 are reiterated in Par. 28 of the Management Letter (ML).

6. The funds aggregating P12,059,884.21 pertaining to the (a) unutilized and unobligated balance of PCSSD Operating Funds amounting to P10,892,471.66; (b) collections of various fees and charges totaling P683,189.42; and (c) interest income from bank deposits of P484,223.13 were not remitted to the National Treasury contrary to Section 3 of the GAA of FY 2013.

We recommended and the Management agreed to direct the OIC for Finance and the concerned Accountants to immediately remit all collections and unused fund balances

Pages 64-66

PCSSDManagement commented that for the balance of the fund transfer amounting to P368,579.59 from P2,250,000.00 fund transferred by




to the National Treasury. TIEZA to PCSSD as financial assistance to World Dive Expo on April 18-21, 2013 at Mactan Cebu, the balance was liquidated only after the various bills from suppliers were forwarded to PCSSD in March 2014.

The collections of fees and other charges aggregating P675,025.00 including interest income from bank deposits of P10,660.90 came from accreditation and hyperbaric chamber treatment fees. The accuracy of this amount shall be determined after the monthly reports are made. They are also to determine the total amount for remittance to the Bureau of Treasuries.

For the unutilized operating funds amounting to P6,771,237.78 CY 2013 and unobligated CIB-LCCA amounting to P4,121,233.88 in CY 2012, which was transferred from DOT to PCSSD, these amounts were used to cover PCSSD’s operating expenses even after the year had ended. This was a practice even before the time that PCSSD



was under PTA.

RO VUnutilized balances of financial assistance for completed projects were returned to the source agencies amounting to P26,773.11.

Fully Implemented

7. The funds transferred to various NGAs, GOCCs, LGUs, NGOs/POs, and DOT ROs for projects which were already completed/ undertaken aggregating P193,500,781.73 continue to remain unliquidated for less than one year to over 19 years, in violation of the provisions of COA Circular Nos. 94-013 and 2007-001, and the Memorandum of Agreement executed by the parties.

We recommended and Management agreed to require the concerned IAs/NGOs/POs to immediately submit their final liquidation/fund utilization reports and return any unused funds. Otherwise, no additional transfers/grants should be made unless the previous ones have already been fully accounted for and settled and if necessary, initiate sanctions against the officials of the IAs/NGOs/POs who shall fail to render reports and/or

Pages 67-68

OSEC Management commented that unutilized fund transfers were refunded by various regional offices in 2014 from the completed projects.

NCRThe Management performed the following:



Reiterated under Par. 41 of the ML.




settle their outstanding accounts, despite due notice.

We also recommended that Management direct the concerned Accountants to monitor, evaluate and enforce timely submission of liquidation and terminal reports to prevent accumulation of long outstanding balances.

(a) Forwarded a follow-up letter on March 28, 204 to Ms. Charito J. Magpantay, Chief, City Accounting Department of Mandaluyong relative to the Liquidation Report of the fund transfer.

(b) Provided the City Accounting Department on April 1, 2014 with the documents which they requested, relative to the fund transfer.

(c) To date, DOT NCR has not received response from the City Accounting Department.

RO I The Accountant made follow-ups thru phone calls to various LGUs. The Municipality of Pugo subsequently submitted Certificate of Completion on the construction of gymnasium amounting to P200,000.00. Likewise, the Municipality of Alcala submitted Fund Utilization Report and Certificate of Completion on the improvement of the municipal


The Audit Team verified the Certificate of Completion submitted by the LGU but there was no Certificate of Turn-over/ Acceptance executed between DOT Region I and the Municipality of Pugo and Alcala.



plaza for P1 million.

Management commented that some funds transferred to the Regions have already been liquidated but when verified with the concerned Regional Offices, they have not reflected in their books. Furthermore, some Regional Office booked up their liquidation without transmitting the liquidation reports to the Central Office.

RO IIManagement prepared demand letter to St. Ferdinand College for the immediate submission of the liquidation reports but has not been mailed as of report date.

RO IIIThe concerned project officer submitted the required liquidation/terminal report.

RO XIManagement sent demand letters to LGUs concerned.

Not Implemented


For CY 2014, the Accountant recorded the financial assistance under expense accounts instead of setting up an inter-agency receivable.




RO XIIIManagement informed that the recommendations were noted and assured that corresponding actions shall be done. Demand letters have already been sent to the concerned parties and the reclassification of Other Receivables to the proper accounts had been already made.


Out of the amount of P1,000,500.00 as of December 31, 2013, P800,000.00 was liquidated in CY 2014. No legal action was undertaken to the remaining balance. Reclassified Other Receivables account to Due from LGUs/NGOs accounts.

8. The year-end balance of the receivables of P1,628,919,535.20 was inaccurate and unreliable due to the: (a) misclassification of fund transfers and financial assistance that resulted in the net overstatement of Due from NGOs/POs by P299,500.00; overstatement of Other Receivables by P1,000,500.00; and understatement of Due from LGUs by P1,300,000.00; and (b) accounting errors in recording Duty Free Philippines Corporation (DFPC) transactions and adjustments that caused the understatement of Due from GOCCs by P596,866,723.68 and overstatement of Government Equity by P30,328,127.06.

We recommended and Management

Pages 69-73



agreed to direct the Chief Accountant to:

(a) re-classify the financial assistance/fund transfers erroneously taken up under accounts Due from NGOs/POs and Other Receivables;

(b) draw a correcting entry to reflect the accurate balances of the receivables from the DFPC and Government Equity;

(c) reverse/adjust the receivables from TPB as of December 31, 2013 and effect full transfer of the TPB share upon receipt of the DFPC remittance and record the same as deduction to the liability account established in recognizing receivables from the DFPC;

(d) maintain SLs with complete information/details of transactions and periodically monitor, analyze and reconcile the accounts with the concerned IAs for early identification and correction of errors; and

Management commented that errors in reclassifying previous entries were already adjusted and complied in CY 2014.

The adjustments for the understatement of the account Due from GOCCs and overstatement of Government Equity were already taken up in the books this CY 2014 as of the receipt of the AOM. Journal entries were prepared by the Accounting Division on January, June and August of 2014.

Overstatement of the receivables in the amount of P1,352,407.25 was adjusted per JEV No. 2014-01-002 dated January 31, 2014.

Management committed to comply with the maintenance of subsidiary ledger.




(e) provide periodic reports on the status of long-outstanding accounts so that appropriate actions may be taken thereon.

Management commented that will comply with recommendation.

9. The difference of P2,754,896.44 between the balances of the accounts Due from Regional Office and Due to Central Office remained unreconciled as of year-end.

We recommended and Management agreed to direct the concerned Accountants to reconcile the discrepancies noted and undertake periodic reconciliation of balances for early detection and correction of errors.

Pages 73-74

Management commented that some funds transferred to the Regions have already been liquidated.


10. The unsettled cash advances to officers and employees accumulated to P15,930,163.24 as of December 31, 2013. The amount of P12,247,041.74 thereof had been outstanding for over three to 21 years, of which P10,911,302.57 pertains to the accounts of former/retired officials and employees. The slow rate of settlement is attributed to Management’s failure to demand

Pages 74-79



liquidation and to properly monitor and enforce appropriate policies and rules on the grant, utilization and reporting of cash advances. In effect, the related expenses were not taken up in the books in the period these were incurred.

We reiterated our previous years’ recommendations and Management agreed to:

(a) oblige the concerned officials and employees to immediately liquidate their cash advances and/or refund any unused balance to enable the recording of actual expenses incurred. Otherwise, direct the Accountants to withhold the salaries or any amount due to the concerned officers and employees until their accountabilities have been fully settled;

(b) send demand letters via registered mail with return card to officials and employees no longer connected with the agency to compel them to liquidate their

RO IThe Regional Director partially settled his cash advance for P199,107.19 leaving a remaining balance of P122,096.33.

OSECManagement sent thru registered mail demand letters to concerned former officials and employees to settle their respective outstanding accounts. Management will serve final notice after three sets of demand letters and thereafter, unsettled accounts shall be referred



Partial liquidation of P199,107.19 and subsequent settlement of P10,000.00 was made on January 8, 2015.


Copy of various Final Demand Letters and the Memorandum creating a Cash Advance/Fund Transfer Settlement Monitoring Team dated October 23, 2014 was furnished to COA.



accountabilities;

(c) instruct the Director of the Legal Service to file appropriate cases under Articles 217 and 218 of the Revised Penal Code and related COA regulations, against those present and former officers and employees who continue to fail to liquidate despite demands and notices served; and

(d) direct the Accountants to henceforth, ensure strict enforcement of Section 89 of P.D. No. 1445 and COA Circular Nos. 97-002 and 2012-004, and to formulate and implement an effective monitoring system for the grant, utilization and accounting of cash advances to prevent the accumulation of unliquidated accounts

to the Department’s Legal Affairs Service for filing of appropriate cases in compliance with COA’s recommendation.

A team with specific functions of monitoring the grant, utilization and settlement of cash advances was created by the FMS Director. The Team issued demand letters and received reports of liquidations as positive reactions of the officials and employees.

The Management commented that they maintain up-to-date reports on the cash advances, dormant accounts through the years will be referred to the Legal Affairs Service for appropriate legal actions, hence, indicate a high rate of liquidations of cash advances.

RO IISome granted cash advances were not liquidated on time due to delay in the completion documents. Also a cash advance was granted prior to liquidation of previously granted cash advances due to conduct of several activities.


The observation was still noted in the current year’s audit.



RO VThe amount of P50,000.00 was liquidated.

RO VIIAccounting is yet to reconcile with liquidation without supporting documents.

RO XIThe Management made follow-ups on personnel concerned.

Fully Implemented


Fully Implemented

11. The year-end balances of the Office Supplies and Other Supplies Inventory accounts were inaccurate and unreliable due to: (a) discrepancy of P1,130,488.89 between the books and physical count balances; (b) errors in recording procurements and issuances of supplies that resulted in the overstatement of the accounts Office Supplies Inventory and Other Supplies Inventory by P18,838.70 and P24,852.83, respectively; (c) recording of promotional materials worth P4,383,263.72 as outright expense; and (d) other noted weaknesses such as failure to conduct semestral physical count, render the prescribed

Pages 79-83


fvbermudez, 06/24/15,

Pls consolidate the finding with no. 12 and present the discussion per finding series Pls follow the format used for PPE


Report of Physical Count of Inventories (RPCI), maintain the supplies ledger and stock cards, and prepare the Report of Supplies and Materials Issued (RSMI).

We recommended and Management of the concerned offices agreed to direct the concerned Accountants and Property Officers to:

(a) DOT-OSEC, NCR and Region IX – determine the cause/s of the discrepancy between the book balance and physical count and effect the necessary adjustments. Henceforth, conduct periodic review, analysis and reconciliation of records, in coordination with the Inventory Committee and GSD/Property personnel, to enable the early determination and correction of errors, thus, ensuring accurate presentation of the inventory account balances;

OSECThe recommendation was duly noted and prepared JEV No. 2014-08-275 and 2014-10-383 dated August 15, 2014 and October 31, 2014 were issued for the purpose. The remaining balance is subject to verification.

NCRManagement prepared and submitted the RPCI as of December 31, 2014 and partially prepared Supplies Ledger Card and Stock Card.

Management reclassified to Other Supplies and Materials Inventory



Ongoing review, reconciliation and analysis of discrepancies between records are still performed by the Accounting and General Services Division (GSD).


The difference between the balance per books and per actual count was reduced from P187,050.65 in CY 2013 to P7,904.22 in CY 2014.

There was no JEV prepared to reclassify the amount of P54,776.47



Pls adjust the recom to include finding 12 recom


(b) DOT-OSEC – prepare the correcting entries on the erroneous recording of the purchases and issuances and revert to the Inventory account the unused promotional materials at year-end and record as expenses the usages as they occur;

(c) DOT-OSEC and Region VIII- conduct the physical count on a semestral basis and prepare and submit the prescribed RPCI to report the results of the inventory; and

(d) Region VIII and IX- maintain the required stock and ledger cards and prepare monthly the RSMI.

the amount of P565,297.00 and to Information and Communication Technology Equipment the amount of P89,630.00, both under JEV No. 14-008D dated August 31, 2014.

Management also prepared JEV Nos. 2014-09-351 and 2014-10-384 dated September 30, 2014 and October 31, 2014 for the double recording of purchases.

Management directed the Accountant and the Supply Officer to adhere to the given recommendations.

from expense to inventory account.

The physical count of inventories was conducted only annually. The RPCI for CY 2014 was submitted on April 13, 2015 for DOT OSEC.

12. The year-end balances of the Property, Plant and Equipment (PPE) accounts aggregating P287,650,964.92 were inaccurate and unreliable in view of the: (a) unreconciled difference of P99,205,048.48 between the accounting records and the physical inventory; (b) understated provision of

2013 Pages 83-90



allowance for depreciation for items procured in CY 2013 by P567,285.49; (c) undocumented reclassification of various assets to Other Assets account worth P2,743,616.70; (d) non-disposal or reclassification to Other Assets of unserviceable properties valued at P4,188,674.31; (e) failure to conduct physical count; (f) late submission of Report on the Physical Count of Property, Plant and Equipment (RPCPPE); and (g) non-maintenance of Property, Plant and Equipment Ledger Cards (PPELC).

We recommended and Management agreed to direct the concerned:

(a) Accountants to:

i. review/verify the recorded transactions to determine the causes of the unreconciled balances and make the necessary adjustments, as necessary and henceforth, periodically analyze and reconcile accounting records and schedules/subsidiary records to avoid inconsistencies/discrepancies;

OSECThe GSD-Supply and Property Section is currently updating Property Cards of all PPEs which includes the newly acquired office equipment, furniture and fixtures relative to JB Building.

The Inventory Committee and



Unreconciled difference decreased by 40 percent from the reported discrepancy of P94,995,067.94 in CY 2013 to P37,933,761.56 in CY 2014.



Spell out


ii. adjust the Allowance for Depreciation provided and thereafter, provide depreciation starting on the following month after the purchase, regardless of the date;

iii. ensure that the reclassification of unserviceable properties to Other Assets are completely/ appropriately documented; and

iv. maintain an updated Ledger Cards for all PPEs and work/coordinate closely with the Inventory Committee and the Property Officer on the reconciliation of PPE balances.

(b) Property Officers to:

i. maintain an updated Property Cards for all PPEs and reconcile the PPE balances with the records of the Accounting Division and the results of physical count of the Inventory Committee;

ii. submit the RPCPPE within the

GSD-Supply and Property Section are continuously coordinating with Accounting Division on the reconciliation of PPE balances.

The GSD-Supply and Property Section shall submit the RPCPPE within the prescribed timeline/due date.

NCRManagement reclassified to Office Equipment the amount of P3,068.00 under JEV No. 14-006D dated June 30, 2014; to Information and Communication Technology Equipment the amount of P89,630.00 under JEV No. 14-008D dated August 31, 2014; and updating of Property Ledger Card and Property Card is ongoing.

RO IIManagement commented that:

(a) Actual Inventory Count was conducted last June 2014, but no inventory count was

The RPCPPE submitted for CY 2014 was submitted on April 06, 2015 showing delay of 65 calendar days from the prescribed date of submission.





prescribed time and ensure that it is prepared in accordance with the prescribed format and complete with the required data/information and duly approved by the Secretary; and

iii. work/coordinate closely with the Accountant and the Inventory/Disposal Committee to facilitate reclassification and disposal of unserviceable assets.

(c) Inventory Committee to:

i. conduct physical count of all PPE as of December 31 of each year and submit the RCPPE to the Auditor not later than January 31 of the following year.

conducted for the year ending December 31, 2014. The officers concerned were again reminded to conduct physical count of all PPE every year-end.

(b) Management will hire a Job Order starting January 2015 to help/ assist in the updating of property cards and henceforth maintain the property card as well as office and other supply cards.

(c) Adjusting entry was made by the Accountant to reclassify the procured laptops and printers.

CARActual physical inventory of PPE was conducted on November 2014 by the personnel from DOT Head Office and adjustments were made by the Property Officer accordingly.

RO VThe RPCPPE was submitted by the Property Officer as of December 31, 2014.


Copy of physical inventory conducted by the DOT Head Office not yet submitted.

Updating of PPELC and PC still ongoing.




Reiterated in Par. 49 of this ML.

13. Of the P485,864,002.37 recorded Accounts Payables of DOT-OSEC, the amount of P8,203,608.07 were not supported with complete documents and not reverted to the Government Equity account in compliance with the provisions of Section 59 of Presidential Decree (PD) No. 1445 and DBM and COA Joint Circular No. 99-6 of COA and DBM dated November 13, 1999.

We recommended and Management agreed to direct the Accountant to immediately revert all undocumented Accounts Payables and to ensure that only valid obligations are recorded in the books of accounts.

OSECThe reversion of Accounts Payable to Government Equity has already been complied as of the receipt of the audit observation memorandum except for the amount of P124,134.00 payable to R. Manalo, Mannen Gowns and Christine Elauria.

Management agreed with the given recommendations and will comply with the prescribed Section 3.2 of COA Circular No. 99-004 dated August 17, 1999.

Management commented that they

Fully Implemented

The amount was reverted per JEV No. GJ 2014-10-365 on October 31, 2014.



Can we not recommend first for the verification of the propriety of these payables?


had fully complied with the reversion of all undocumented accounts payable and will ensure that only bonafide obligation are recorded on the book of accounts.

14. Capital outlay funds aggregating P5,577,600.00 were used for other purposes in violation of Sections 15 and 54 of the General Provisions of the FY 2013 GAA. We recommended and Management agreed to direct the:

(a) Executive Director of PCSSD to return the capital outlay transferred funds; and

(b) Budget Officer to secure from the DBM post facto approval of the utilization of the capital outlay funds for purposes other than what were authorized, otherwise, officers and employees who approved and permitted such disbursements shall be held personally liable for the full amount obligated or actually spent.

Not Implemented



15. The payment of 13th month pay aggregating P4,934,940.52 to Job Order (JO) personnel of DOT- OSEC, NCR, CAR, and Regions I, IX and XI was in violation of the provisions under the Civil Service Commission (CSC) Resolution No. 020790 and DBM Budget Circular No. 2010-1, dated April 28, 2010, hence, considered an irregular expenditure not allowed in audit pursuant to COA Circular No. 2012-003 dated October 29, 2012.

We recommended and the Management of the concerned offices agreed to:

(a) require the concerned JOs to refund the 13th month pay received by them, otherwise, the officials who approved the payments shall be held liable thereof; and

(b) instruct the Director of Legal Affairs Service to delete from the Service Contract the provision entitling the JOs to year-end bonus and other benefits not allowed under existing CSC and DBM

Pages 94-96

OSECThe Management submitted justification/ explanation on the noted observation. Likewise, Management deleted the contract provision entitling the JOs and contractual personnel with 13th

month pay.

RO IManagement required the



The Management refrained from payment of 13th month pay or bonus to JO personnel in CY 2014.




Did you issue NDs as basis for the directive to refund?


regulations. settlement of the disallowed 13th

month pay thru salary deduction for 12 months starting October 2014.

NCRManagement submitted letter of explanation/justification to the DOT Auditor on March 11, 2014.

CARManagement collected the amount of 13th month pay given to five JO personnel except for one who had already retired.

XIFull amount refunded/returned.

Deductions from the payroll of the JO personnel were started from October to December 2014 totaling P11,871.30.

Not Implemented

Awaiting the result of appeal on ND No. NCR-2014-101-001 (2012) dated February 2, 2014 and received by NGS Cluster 7 on August 11, 2014 re: Disallowed payment of 2012 bonus to job order personnel in the amount of P217,302.00


The amount of P12,718.33 remained uncollected. Notice of Disallowance was issued for the said amount.

Fully Implemented

16. The payments of honoraria to the officers and members of the DOT-OSEC Project Evaluation Committee (PEC) and its Secretariat aggregating P456,300.00 lacked legal basis and in violation of Section 5.2 of the

Pages 96-97



Compensation Policy Guideline No. 80-4; COA Decision Nos. 2007-01 and 2010-08; and Department of Budget and Management (DBM) Budget Circular (BC) No. 2007-2.

We recommended and Management agreed to stop the payment of the honoraria to PEC officers, members, and its secretariat and to direct the concerned personnel to refund the payments received.

The Management submitted justification/explanation with regard to the payments of honoraria to the Members of the Project Evaluation Committee (PEC).


No payments for honoraria to the officers and members of the DOT-OSEC Project Evaluation Committee (PEC) and its Secretariat were observed in CY 2014.

17. There was a discrepancy of P332,995,168.74 between the DOT and DPWH records on the liquidation of DAP funds transferred to the latter due to the absence of regular monitoring and reconciliation of records undertaken by both Departments, thus, the accuracy of the reported liquidations was not established.

We recommended and Management agreed to direct the OIC Accountant to monitor the fund transfers and the timely submission of the liquidation reports and initiate monthly reconciliation with the counterpart

Pages 98-100

The Management commented that per DOT’s books, the total liquidation received from DPWH as of June 30, 2014 was P456,701,648.58 while the COA’s report showed that DPWH has

Fully Implemented



Consider my comments on the CN


accounting official in the DPWH to permit early discovery and correction of discrepancies on their records.

liquidated a total of P464,236,560.91. The DOT will require DPWH to furnish the copies of its liquidation reports for the P7,534,912.33 difference.

The DOT likewise proposed that DPWH must submit liquidation reports regularly, preferably every quarter, for early detection and correction of discrepancies found on records.

The Management assured that DOT has been closely monitoring the implementation of the DOT-DPWH Convergence Program which is extremely necessary to support the DOT’s effort towards the development of tourism industry.

18. The funds transferred to the DPWH and National Parks Development Committee aggregating P1,631,269,607.83 for the implementation of infrastructure projects were allowed to remain unliquidated in violation of Section 4.6 of COA Circular No. 94-013.

We recommended and Management

Pages 100-101

In line with the COA’s Fully Implemented



agreed to make representations with the concerned DPWH officials and direct the NPDC Executive Director for the monthly/complete submission of the liquidation documents for the transferred funds.

recommendation, the DOT set a meeting with their counterpart in DPWH to gather updates on the actual state of accomplishment of the project’s implementation. The DOT FMS made a follow up on the submission of Credit Notices to support the JEV drawn by DOT to record the P108,848,251.66 liquidation reports submitted by DPWH.

The DOT will likewise propose that DPWH must submit liquidation reports regularly, preferably every quarter, for early detection and correction of discrepancies found on records.

The Management commented that the DOT Oversight and Review Committee closely monitored NPDC’s funds management through constant coordination and communication. The original copy of the liquidation report, together with the supporting documents, was submitted to the NPDC-COA. The Committee instructed the NPDC’s Accounting Division to immediately submit to the DOT its



full liquidation of the fund transfer upon completion of the project, duly audited by NPDC-COA.

19. Audit disallowances and suspensions as of December 31, 2013 amounted to P183,353,999.11 and P185,526,512.17 respectively. Of the total disallowances, P177,297,368.09 are under appeal and P6,327,388.40 are already final and executory, out of which, P270,757.38 or 4.47 percent were settled in CY 2013. On the other hand, the amount of P1,985,200,446.19, or 91.45 percent of the total audit suspensions of P2,170,726,958.36 were settled. The low rate of settlement of the disallowances that are already final and executory and the incomplete settlement of audit suspensions indicate Management’s failure to strictly enforce immediate settlement thereof as prescribed under the COA Revised Rules and Regulations on the Settlement of Accounts (RRSA).

We reiterated our prior year’s recommendation and Management agreed to enforce immediate settlement of the audit disallowances that are already final and executory by

Pages 101-104

RO IVSettlement was enforced on persons liable that lead to a balance of only P38,301.05 as of December 31, 2014.

Partially Implemented in OSEC, RO IV, VII and XI, while Not Implemented in NCR.




This amount is already deducted from the balance of P183,353,999.11.


Tally all figures with the figures in the discusions


directing the Accountants to: (a) withhold the salary and other claims of incumbent officials and employees; and (b) exert all efforts to locate the whereabouts and ensure that demand letters are sent to former/retired officials and employees, other individuals and entities determined liable to the disallowances. In case of failure to settle, file appropriate charges as necessary.

We also recommended and Management agreed to cause for the immediate submission of documents to settle the audit suspensions to avoid the same maturing into audit disallowances.

RO VIINecessary data are still being gathered.

RO XIThe amount of P50,585.11 was settled in CY 2014.

20. Taxes withheld aggregating P1,486,961.42 was not remitted to the Bureau of Internal Revenue (BIR) and appropriate taxes amounting to P3,654,146.58 was not deducted from the payments of CNA and other benefits in excess of the P30,000 threshold, in violation of Revenue Regulation Nos. 2-98 and 14-2005 and BIR Revenue Memorandum Circular No. 46-2013, respectively.

Pages 104-107



We recommended and Management agreed to direct the Accountants to:

(a) complete the review and analysis of the unremitted balance; make the necessary adjustments, as necessary; and immediately remit the established correct amount due for remittance to the BIR ;

(b) collect from the concerned officials and employees and remit to the BIR the tax deficiency on the payments of other benefits; and

(c) ensure strict compliance with the BIR regulations, otherwise, hold the concerned officials liable for the penalties that may be imposed in accordance with the Tax Code.

OSECManagement commented that the unremitted balance corresponds to the tax withheld from the payments made to various creditors and cancelled checks not yet taken up in the books.

Also, analysis and verification of the unremitted tax withheld balances is still ongoing. JEV will be prepared and will remit the identified unremitted tax withheld.

The Personnel Division is now withholding taxes due from payment of Other Benefits to officers and employees through salary deduction.

NCRThe Accounting Staff analyzed/evaluated the account Due to BIR.



Verification showed that unremitted taxes increased from P1,233,133.07 to P2,382,030.49 in CY 2013 and 2014 respectively.

Management was not able to collect taxes due from the payment of Other Benefits which accumulated to P5,086,938.45, comprising the amounts of P1,432,791.87 and P3,654,146.58 for CYs 2014 and 2013 respectively.


The PYs balance of P179,248.70 was reduced to P169,216.84 or by P10,031.86 only.



RO IVThe Accountant has based the amount of monthly withholding tax on all projected payments to employees for the year. Adjustments whenever necessary, are made at the end of the year.

RO VThe Management withhold from the concerned officials and employees the amount of tax deficiencies from the payment of benefits.

RO XIPending transfer of RDO of an employee. Follow up BIR RDO in Butuan.

Fully Implemented

Fully Implemented

Partially Implemented.

Reiterated in Par. 85 of this ML.21. The DOT again failed to include in its

GAD plan and budget the related activities mainstreamed with other projects/programs, thus, the required allocation of five percent of the total appropriation was not presented in the GAD budget as prescribed under Section 28 of the General Provisions (GP) of the GAA for FY 2013. The GAD budget showed only P22,530,700.00 or 0.92 percent of its

Pages 107-110



total authorized appropriation while expenditures totaled P19,236,516.32. Moreover, RO VIII did not prepare and implement its GAD Plan while RO IX did not pursue its planned GAD activities.

We recommended and Management agreed to direct the GAD Focal Persons to:

(a) make certain that all activities relative to gender issues and concerns that are mainstreamed with other projects/programs are incorporated in the GAD Plan and Budget and ensure that the budget corresponds to at least five percent of the total appropriation; and

(b) ensure that GAD Plan and Budget are prepared by all Regional Offices and activities are quantified to facilitate monitoring of performance.

OSECThe Management informed that the Harmonized Gender and Development Guidelines for Tourism (HGGT) and DOT GAD Policy are already formulated and now being used to examine regular programs and projects of the Department to ensure it is gender-sensitive.

RO IManagement had utilized only 3.56 percent of their budgets for GAD activities during CY 2014.

NCR






Management closely coordinated with the Philippine Commission on Women for the conduct of a GAD Planning and Budgeting Workshop to better appreciate, understand and learn how attributions are made to incorporate these in the regular programs, projects and activities of the office.

RO XIIIManagement committed implementation of the audit recommendations.

22. DOT did not again prepare/formulate plans to implement programs and projects that will address the concerns of senior citizens and differently-abled persons as required under Section 29 of the GAA for FY 2013. Nevertheless, it was able to accomplish some activities and projects benefiting some recipients of this sector of society.

We recommended and Management agreed to formulate plans and allocate at least one percent of its budget in order to implement more programs

Pages 111-112

OSEC





and projects for senior citizens and the differently-abled citizens.

The Human Resource Division furnished the COA copy of their FY 2013 Work Program and admitted that budgetary requirements of the seminars/activities were sourced from unprogrammed funds of the agency as approved by the Secretary. Management likewise committed to implement projects in compliance with such laws.

NCRThe Management reported accomplishments and the related expenses.

RO IManagement was able to conduct two activities during CY 2014 for Senior Citizens and differently-abled persons utilizing 0.62 percent of their budgets.

RO II

In CY 2014, Management conducted three activities with disbursements aggregating P101,370.00 in support to the projects for the differently-abled persons and senior citizens.

Partially Implemented The Focal Person was unable to prepare and implement a plan containing programs/projects/activities for senior citizens and PWDs that are more client-focused or those that relate to its functions and regular activities.


Not Implemented



Management committed to assign a focal person for CY 2015.

RO XThe Region included plan, programs or projects for senior citizens and the differently-abled persons in their accreditation program for hotels.

XIII – Management admitted that it did not provide nor prepare plans, programs and projects to address the interests of the senior citizens and the differently-abled individuals, however, it was able to coordinate the conduct of a seminar-workshop for senior citizens. The audit recommendation was well taken.

Fully Implemented

Not Implemented.

23. Out of the total withheld GSIS

premium contributions of P29,840,681.54, the amount of P29,781,655.95 was remitted in CY 2013, leaving an unremitted amount of P59,025.29 at year-end.

We recommended and Management agreed to facilitate the reconciliation

Management exerted effort to reconcile and remit the balances to




Pls give disclosure if the remittances were in accordance with the deadline set


to clear the books of the unremitted balances.

GSIS. The weakness was still observed in the current year’s audit.


Documents

11 July 2003 - Department of Tourism - The Philippines ... · Web view... Resolution No. 020790 and DBM Budget Circular No. 2010-1, dated April 28, 2010, hence, considered an irregular