Management Letter

__________________________________________________________________

(Date)____________

Head of Auditee____

_________________

_________________

Dear __________:

Management Letter on the Audit of the

(Name of Auditee)

for the period January 1 to December 31, 20xx_1. Pursuant to Section 2, Article IX-D of the Constitution of the Philippines and Section 43 of the Government Auditing Code of the Philippines (PD 1445), we have audited the accounts and operations of the (Name of the Agency) for the period ended December 31, 20XX. The audit was conducted in accordance with applicable legal and regulatory requirements, and generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain a reasonable basis for our conclusions.2. The audit was conducted to: (a) verify the level of assurance that may be placed on managements assertions on the financial statements; (b) recommend measures to improve the efficiency and effectiveness of the agencys operations; and (c) determine the extent of implementation of prior years audit recommendations.3. The Agencys financial conditions and results of operations for calendar year XX compared with that of preceding year are shown in the attached audited financial statements (Annexes A-F). The accounting errors and deficiencies affecting the fair presentation of the financial statements are summarized in Annex G.4. Deficiencies observed in the course of the audit were earlier communicated through Audit Observation Memoranda (AOMs) and discussed in an exit conference conducted on (Date of Exit Conference) with concerned (Name of Agency) officials and employees. Deficiencies corrected during the year are no longer included in this report (if applicable). Their comments were incorporated in this letter, where appropriate. The significant audit observations and recommendations shall be incorporated in the Consolidated Annual Audit Report (CAAR) of the Department of Xxx for CY 20XX.

A. Summary of Recommendations 5. For the significant deficiencies observed in the course of the audit, we recommended that Management:a. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (para.---);b. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (para.---);

c. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx(para.---) ; and

d. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (para.---).

B. Detailed Observations and Recommendations

Financial and Compliance Audit

Caption

Topic Sentence 6. (In discussing the audit observation, observe its elements: condition, criteria, cause and effect.)

7. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.8. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. 9. Management explained/commented that .10. We maintain, however, that or We believe, however, that, or We are of the opinion, however, that. or, etc. 11. We recommend that Management require/direct the (official or employee responsible for implementing the recommendation) to ..

Value for Money Audit

Caption Topic Sentence

12. (In discussing the audit observation, observe its elements: condition, criteria, cause and effect.)

13. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.14. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. 15. Management explained/commented that

16. We maintain, however, that or We believe, however, that, or We are of the opinion, however, that. or, etc. 17. We recommend that Management require/direct the (official or employee responsible for implementing the recommendation) to ---------------.

OTHERS

Gender and Development

18. Joint Circular No. 2004-1 of DBM, National Economic Development Authority and National Commission on the Role of Filipino Women dated April 5, 2004 provides the following: Section 3.2 (e) - The GAD Focal Point shall advocate for, coordinate, guide and monitor the development and implementation of the agencys GAD plan and GAD-related programs, activities and projects.

Section 4.4 - At least five percent (5%) of the total agency budget appropriations as authorized under the annual General Appropriations Act shall correspond to activities supporting GAD. Agency heads shall be responsible for ensuring that GAD activities are provided with adequate resources.

19. The agency did not designate any GAD Focal Point Officer to catalyze and facilitate the institutionalization of gender mainstreaming and womens empowerment since 20XX, hence, no report was submitted on GAD.

20. For CY 20--, the agency prepared its Annual Gender and Development (GAD) Plan with an estimated budget of P----------- or --- percent of the CY 20-- total budget appropriation of P-------------- or a deficiency of P------------- from the required P-------------- or at least five percent of the total appropriation. 21. Of the programmed budget of P--------------, a total amount of P---------------- or --- percent was actually incurred with accomplishments, as follows:

GAD Activities ConductedNo. of ParticipantsAmount

1.

2.

3.

4.

5.

6.

7.

Total

22. We recommend that Management:

designate a GAD Focal Point Officer for the DOH-CO; and

direct the GAD Focal Point Person to prepare an annual GAD plan and budget following the policy guidelines set forth by DBM, NEDA and NCRFW Joint Circular No. 2004-1 and allocate funds for GAD Plans activities of at least five percent of the total agency budget appropriations.Senior Citizen and Differently-Abled Program

23. Section -- of the General Provision of the 20-- GAA, provides that plans, programs and projects intended to address the concerns of senior citizens and differently-abled persons shall be integrated in the regular activities of the agencies.

24. Furthermore, Section 34 provides that all government facilities, including infrastructure, non-infrastructure and civil works projects of the government, as well as office buildings, streets and highways, shall provide architectural facilities or structural features and designs that shall reasonably enhance the mobility, safety and welfare of differently-abled persons pursuant to B.P. Blg. 344 and R.A. No. 7277.

25. For the year 20--, the agency allocated --- percent (--%) of its budget or a total amount of P--------------- for plans, programs and projects intended to address the concerns of senior citizens and differently-abled persons, of which -- percent or P-------------- was actually spent for the following activities:

Training/Seminar Conducted and Activity AttendedNo. of ParticipantsAmount

1.

2.

3.

4.

5.

6.

7.

8.

Total

26. In compliance with Section --- of the 20-- GAA, the (Agency Name) has provided ramps which enhance the mobility, safety and welfare of differently-abled persons who visit the office.27. We recommend that Management give importance to the implementation of the program/ project/activities, particularly the provision of facilities which will reasonably enhance the mobility, safety and welfare of the senior citizens and the differently-abled persons.:

Enforcement of Settlement of Accounts

28. The total audit suspensions, disallowances and charges found in the audit of various transactions as of December 31, 20XX, based on the Notice of Suspension (NS)/Notice of Disallowance (ND)/Notice of Charge (NC)/Notice of Settlement of Suspensions and Disallowances/charges (NSSDC) issued by this Commission, is summarized below: ParticularsBeginning Balance

(As of 12/31/20XX)This period

January 1 to December 31, 20XXEnding Balance

(As of 12/31/20XX)

NS/ND/NCNSSDC

NSP 0.00P 1,453,852.31 P496,095.14 P 957,757.17

ND 73,156.57223,979.34158,356.03 138,779.88

NC ----

TotalP 73,156.57P 1,677,831.65P 54,451.17 P 1,096,537.05

29. Please discuss here the nature of suspensions and disallowances issued in 2013.

30. The Hospital again incurred an overpayment of P77,608.64 hazard pay benefit in 2014 to its officials and employees with Salary Grades 20 and above which were disallowed in audit in 2015, broken down as follows:

ND No.

DatePeriod Covered

Amount

2014-001-(14)2/14/15January, 2013P 6,058.02

2014-002-(14)2/14/15February & March, 2013 12,116.03

2014-003-(14)2/14/15April to June, 2013 18,386.68

2014-004-(14)2/14/15July to September, 2013 18,386.68

2014-005-(14)4/2/15October to December, 2013 22,661.23

P 77,608.64

31. ND/NC/NS issued prior to effectivity of the 2009 Rules and Regulations on the Settlement of Accounts (RRSA) are not included in the reflected balance but are deemed disallowances/charges which shall continue to be enforced in accordance with these Rules as provided under Sec. 28 thereof.

Compliance with tax laws

32. For CY 20XX, the agency (withheld/did not withhold) taxes from salaries and wages, suppliers/contractors and remitted the same to the Bureau of Internal Revenue through Tax Remittance Advices per Revenue Regulation No. 14-2002 dated September 9, 2002 and Revenue Memorandum Circular No. 5-2006 dated November 2, 2005.

Compliance with GSIS Act of 1997

33. The agency remitted directly to the GSIS the employees and government agencys contributions within the first Ten (10) days of the calendar month following the month to which the contributions apply, pursuant to RA 8291. Hiring of Job Orders

34. Explain the authority to hire, purpose, how many were hired, and compliance with minimum wage law (to include non-cash benefits).

C. Status of Implementation of Prior Years Audit Recommendations

35. We made a follow-up on the action taken by the (Auditee) to implement the recommendations of prior years and noted the following:Status of ImplementationNo. of Recommendations

Fully Implemented

Partially Implemented/Ongoing

Not Implemented

Total

36. The results of the validation of the implementation of prior years recommendations are presented in Annex H. 37. Audit observations and recommendations with impact on the financial statements and compliance issues which are continuously monitored are reiterated with modification in Part B of this report.D. Acknowledgment38. We wish to express our appreciation to the Management and staff of (Agency Name) for the cooperation and assistance extended to our audit team during the audit.39. We request a status report (in hard and soft copy) on the actions taken on the audit recommendations within sixty (60) days from the date of receipt hereof, pursuant to Section --- of the General Provisions of the General Appropriations Act of 20-- (RA No. --------), using the attached Agency Action Plan and Status of Implementations (Annex I).Very truly yours,

________________

Supervising Auditor

Copy furnished:

The DOH Secretary

The Director, Cluster 6, NGSThe Supervising Auditor, DOH Audit Group

The ATL, AgencyAnnexes:

A - Statement of Management Responsibility on the Financial Statements

B - Statement of Financial PositionC - Statement of Financial PerformanceD - Cash Flow StatementE - Statement of Changes in Net Assets/EquityF - Notes to Financial StatementsG - Matrix of Accounting Errors and Deficiencies

H - Validation of Implementation of Prior Years RecommendationsI - Agency Action Plan and Status of Implementation Annex _____

(Name of Auditee)

Validation of Implementation of Prior Years Audit Recommendations

As of (Last Day of Fieldwork)

OBSERVATIONS AND

RECOMMENDATIONSREF.MANAGEMENT

ACTIONSTATUS OF IMPLEMENTATION

(Full, Partial, Ongoing or Non-Imp) RESULTS OF VALIDATION

Note: Partial Not fully implemented and no further action was taken by the Management(Name of the Agency and Address)

AGENCY ACTION PLAN AND STATUS OF IMPLEMENTATION

Audit Observations and Recommendations

For the Calendar Year 20XX

As of _______________

Ref.Audit ObservationsAudit

RecommendationsAgency Action PlanStatus of ImplementationReason for Partial/ Delay/ Non-implementation, if applicableAction Taken/Action to be Taken

Action PlanPerson/Office ResponsibleTarget Implementation Date

FromTo

Agency Sign-off:

Date:

_____________________________________

__________________________

Name, Position and Signature of Agency Head

Status of Implementation may be either (a) Fully Implemented; (b) Ongoing; (c) Not-Implemented; (d) Partially Implemented; or (e) Delayed

Republic of the Philippines

COMMISSION ON AUDIT

Office of the Regional Supervising Auditor

National Government Sector

Cluster 5, Education and Employment

Regional Office No. IX, Zamboanga City

This is the date of the transmittal of the ML.

This is the paragraph number where the said audit recommendation can be found.

The deficiencies discussed in the Observations and Recommendations are significant enough to warrant inclusion in the ML

The observations and recommendations on financial and compliance audit shall be presented or arranged by account starting with real accounts (BS presentation sequence) and ending with nominal accounts (SIE presentation sequence). Observations on cash examination which were already communicated in a separate ML and without impact on the FS and are not significant or material should no longer be reported in this ML.

Short description or gist of the observation or effect. Example, Bank reconciling items not recorded or Unauthorized/dormant bank accounts.

As much as possible, it should contain the four elements of an audit observation: condition, criteria, cause and effect. . If will exceed five lines, only the conditions and effects should be stated. The amounts should be stated in nearest millions or billions. Example, P50.5M or 64.1B or P0.40M. However, the amounts in the discussion paragraph shall be the exact amount.

The reported deficiency (condition) should be quantified.

The citation of the criteria in the support paragraph should be correct.

The cause of the deficiency should be clearly stated.

The Office responsible for the process/activity causing the deficiency should be identified.

The effect of the deficiency should be quantified.

Present here the explanation/s or comment/s of management regarding the observation, based on reply to the AOM or comments, verbal or written, during or after the exit conference, respectively. This/These is/are usually the cause/s of the condition observed, which was/were not identified/obtained during the audit.

The audit rejoinder, if any, should always follow managements comments or explanation.

If management agreed with the recommendation/s, as stated in the AOM, this paragraph should be revised as follows: We recommended and Management agreed to ------------. The original recommendation should be revised considering the comments/explanations of management, which should be addressed here.

The recommendation/s should:

address the real cause of the issue

be doable

state precisely what needs to be changed or rectified

directed to the process/activity owner who is capable of taking action on the deficiency.

This pertains to the audit of a program or project.

Same as above.

Same as above.For consolidation purposes.of a program or project.nd compliance audit shall be in the order o.ution.

Same as above.

Same as above.

Same as above.

Same as above.

These are the mandatory areas to be commented in the audit.

Same as above.

Same as above.

A table may be used to summarize the nature (with brief description of LRR not observed) and amount of suspensions and disallowances .

Discuss here the disallowances/suspensions pertaining to audit period but issued only in succeeding year (as of first quarter or as of report date).

Provide separate table and discussion for NS issued.

If the nature of disallowances or suspensions are varied, this could be titled as Particulars.

A table same as above may be used to present the ND/NC/NS issued prior to 2009, if data is available.

If complied, a one paragraph may be sufficient to explain compliance, as suggested below. If not complied, the AOM issued should be presented here.

The prior year's recommendations as lifted from the audit report should be correctly and completely stated in the Matrix of Validation of Implementation of Prior Years Audit Recommendations with indicated references

The matrix should contain the following columns:

a. Observations and Recommendations

b. Reference (Paragraph Number of the Prior Years' Report(s)

c. Action taken by Management

d. Auditor's Validation Results

The status of implementation by Management should be indicated either as "fully implemented", or "partially implemented", or "not implemented". The nature of the action taken by Management should be briefly discussed thereafter.

The validation procedures performed by the auditor should be adequate.

The effect on current balances of the unacted significant prior years' deficiencies should be considered.

This varies each year, hence, ensure that this is updated.

If the signatory of the ML is the Sub-Audit Group SA.

Enumerate the Annexes as how they are referred to in the report.

This will be used for rendering audit opinion for the CAAR.

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