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Republic of the Philippines COMMISSION ON AUDIT Regional Office No. VIII OFFICE OF THE AUDIT TEAM LEADER LGS B- Province of Leyte I, Team R8-01 Capitol Building, Tacloban City
AOM No. 2019- 0_ (2018) Date: February 28, 2019 AUDIT OBSERVATION MEMORANDUM For: HON. LEOPOLDO DOMINICO L. PETILLA Governor Province of Leyte Capitol Bldg, Tacloban City Attention:
MA. DORIS M. BELOY Provincial Accountant
GERARDO R. AVORQUE Provincial Treasurer
We have conducted review of compliance with Tax Laws and withholding and remittance of GSIS and HDMF contributions of the Provincial Government of Leyte and observed that: The Provincial Government of Leyte (Province) was not fully compliant with the (a) Bureau of Internal Revenue (BIR) regulations on the withholding and remittance of taxes from payments of purchases and business contracts; (b) RA No. 8291 or Government Service Insurance System law, on the withholding of GSIS monthly premiums from employees’ compensation and in the remittance thereof together with the government share and (c) RA No. 9679, the Home Development Mutual Fund law, on the withholding of Pag-IBIG monthly premiums from employees’ compensation and in the remittance thereof together with the government share within the prescribed period. Compliance with Tax Laws As prescribed by the BIR RMC No. 23-2012 dated February 14, 2012, the government withholding agent should withhold tax on compensation, on income payments subject to expanded withholding tax and final withholding tax and on government money payments to VAT-registered taxpayer and Non-VAT registered taxpayers subject to percentage tax. Further, the above circular also requires that the responsible officials and employees, as withholding agents, should see to it that taxes withheld are accordingly remitted on or before their due dates.
Records showed that the balance of the Due to BIR account as of December 31, 2018 amounted to ₱20,498,634.9 as shown in Table 1 below: Table 1 Due to BIR account Balance as of December 31, 2018 Fund General Fund Special Education Fund Trust Fund Total
Balance ₱ 16,815,430.72 116,381.67 3,566,822.53 ₱ 20,498,634.92
During the year, the Province has withheld and remitted taxes on compensation and payments to suppliers/contractors amounting to ₱168,453,981.80 and ₱164,531,775.19, respectively, the details of which are given in Table 2 below. Table 2 Analysis of Tax Withheld and Taxes Remitted For the period from January to December 31, 2018
January
Due to BIR (beginning) (2) ₱16,576,428.31
February
8,081,848.83
11,935,404.93
20,017,253.76
6,774,700.77
13,242,552.99
March
13,242,552.99
16,489,357.48
29,731,910.47
12,792,213.28
16,939,697.19
April
16,939,697.19
13,643,894.34
30,583,591.53
15,658,448.57
14,925,142.96
May
14,925,142.96
18,367,917.61
33,293,060.57
13,270,972.13
20,022,088.44
June
20,022,088.44
10,948,471.57
30,970,560.01
18,966,607.26
12,003,952.75
July
12,003,952.75
18,011,668.58
30,015,621.33
11,766,393.87
18,249,227.46
August
18,249,227.46
12,229,040.60
30,478,268.06
17,704,500.22
12,773,767.84
September
12,773,767.84
10,787,282.62
23,561,050.46
12,462,770.48
11,098,279.98
October
11,098,279.98
14,201,885.03
25,300,165.01
10,055,670.75
15,244,494.26
November
15,244,494.26
15,964,438.72
31,208,932.98
11,731,741.02
19,477,191.96
December Total
19,477,191.96
18,171,222.92 ₱168,453,981.80
37,648,414.88
17,149,779.96 ₱164,531,775.19
20,498,634.92
Month (1)
Taxes Withheld (3) ₱7,703,397.40
(4) ₱24,279,825.71
Taxes Remitted (5) ₱16,197,976.88
Due to BIR (ending) (6) ₱8,081,848.83
Total
However, verification with the general ledger as of January 31, 2019, the Province has remitted only the total amount of ₱19,654,026.86, hence, leaving a total unremitted balance from December 2018 taxes withheld of ₱844,608.06. In addition, review of the General Ledger of the account Due to BIR for the period from January to December 2018 disclosed that the taxes withheld for the month were not remitted intact or in full in the ensuing month with an average monthly unremitted balance of ₱1,129,741.48 as shown in the Table 3: Table 3 Schedule of Monthly Unremitted Balance from Previous Month’s Taxes Withheld
Month Beginning Balance
Taxes Remitted
January 2018
₱16,576,428.31
₱16,197,976.88
February
8,081,848.83
6,774,700.77
March
13,242,552.99
12,792,213.28
April
16,939,697.19
15,658,448.57
May
14,925,142.96
13,270,972.13
June
20,022,088.44
18,966,607.26
July
12,003,952.75
11,766,393.87
August
18,249,227.46
17,704,500.22
September
12,773,767.84
12,462,770.48
October
11,098,279.98
10,055,670.75
November
15,244,494.26
11,731,741.02
December 19,477,191.96 17,149,779.96 Average Monthly Unremitted Balance
Unremitted Balance from previous month’s taxes withheld ₱378,451.43 1,307,148.06 450,339.71 735,248.62 1,654,170.83 1,055,481.18 237,558.88 544,727.24 310,997.36 1,042,609.23 3,512,753.24 2,327,412.00 ₱1,129,741.48
Compliance with GSIS Regulations At the start of the year, the account had an outstanding balance of ₱24,608,590.95. The GSIS contributions withheld and remitted by the Province totaled to ₱176,742,909.11 and ₱172,397,250.65 respectively, leaving an ending balance of ₱28,954,249.41 as of yearend as shown on the Table 4:
Table 4 Analysis of GSIS Remittances For the period from January to December 31, 2018 Month
Due to GSIS (beginning)
Amount Withheld
Total
Amount Remitted
Due to GSIS (ending)
(1)
(2)
(3)
(4)
(5)
(6)
January
₱24,608,590.95
₱13,735,732.02
₱38,344,322.97
₱11,901,133.63
₱26,443,189.34
February
26,443,189.34
13,492,936.50
39,936,125.84
8,142,003.27
31,794,122.57
March
31,794,122.57
16,884,107.14
48,678,229.71
10,981,003.44
37,697,226.27
April
37,697,226.27
14,075,277.49
51,772,503.76
19,341,147.36
32,431,356.40
May
32,431,356.40
13,743,776.12
46,175,132.52
11,668,325.63
34,506,806.89
June
34,506,806.89
13,308,552.50
47,815,359.39
17,853,333.70
29,962,025.69
July
29,962,025.69
15,919,800.44
45,881,826.13
16,732,296.94
29,149,529.19
August
29,149,529.19
17,136,586.80
46,286,115.99
16,378,030.31
29,908,085.68
September
29,908,085.68
15,033,080.09
44,941,165.77
14,175,259.35
30,765,906.42
October
30,765,906.42
14,590,488.96
45,356,395.38
16,930,964.80
28,425,430.58
November
28,425,430.58
14,509,348.69
42,934,779.27
20,012,369.90
22,922,409.37
December
22,922,409.37
14,313,222.36 ₱176,742,909.11
37,235,631.73
8,281,382.32 ₱172,397,250.65
28,954,249.41
Total
Section 6 of RA No. 8291, the GSIS law, states that: Section 6 - The employer shall report to the GSIS the names of all its employees, their corresponding employment status, positions, salaries and such other pertinent information, including subsequent changes therein, if any, as may be required by the GSIS; the employer shall deduct each month from the monthly salary or compensation of each employee the contribution payable by him in accordance with the schedule prescribed in the rules and regulations implementing this Act. Each employer shall remit directly to the GSIS the employees' and employers' contributions within the first ten (10) days of the calendar month following the month to which the contributions apply. The remittance by the employer of the contributions to the GSIS shall take priority over and above the payment of any and all obligations, except salaries and wages of its employees.
On January 9, 2019, the amount totaling ₱15,132,596.08 under the general fund was remitted to the GSIS. However, the balance of ₱10,096.46 and ₱187,225.54 under the SEF and Trust Fund, respectively were still not remitted as of January 31, 2019, hence a total unremitted balance of ₱14,018,975.33. In the same manner as the account Due to BIR, review of the General Ledger of the account Due to GSIS disclosed that the premiums and contributions deducted from employees were not remitted in full or intact in the ensuing month as required by law, vis: Table 5 Schedule of Monthly Unremitted Balance from Previous Month’s Deductions
Month
Beginning Balance
Amount Remitted
January
₱24,608,590.95
₱11,901,133.63
February
26,443,189.34
8,142,003.27
March
31,794,122.57
10,981,003.44
April
37,697,226.27
19,341,147.36
May
32,431,356.40
11,668,325.63
June
34,506,806.89
17,853,333.70
July
29,962,025.69
16,732,296.94
August
29,149,529.19
16,378,030.31
September
29,908,085.68
14,175,259.35
October
30,765,906.42
16,930,964.80
November
28,425,430.58
20,012,369.90
December
22,922,409.37
8,281,382.32
Average Monthly Unremitted Balance
Unremitted Balance from Previous Month’s Deductions
₱12,707,457.32 18,301,186.07 20,813,119.13 18,356,078.91 20,763,030.77 16,653,473.19 13,229,728.75 12,771,498.88 15,732,826.33 13,834,941.62 8,413,060.68 14,641,027.05 ₱15,518,119.06
Compliance with R.A. No. 9679 or Home Development Mutual Fund Law of 2009 At the start of the year, the account had an outstanding balance of ₱2,537,905.46. The Pag-IBIG contributions withheld and remitted by the Province totaled to ₱16,089,646.11 and ₱15,319,751.97, respectively, leaving an ending balance of ₱3,307,799.60 as of year-end as shown in Table 6:
Table 6 Analysis of Pag-Ibig Remittances For the period from January to December 31, 2018 Month (1) January February March April May June July August September October November December Total
Due to PagIBIG (beginning) (2)
Amount
Total
Withheld (3)
Amount Remitted
Due to PagIBIG (ending)
(4)
(5)
(6)
₱2,537,905.46
₱1,245,436.55
₱3,783,342.01
₱1,039,520.21
₱2,743,821.80
2,743,821.80
1,200,760.32
3,944,582.12
1,930,826.91
2,013,755.21
2,013,755.21
2,193,242.09
4,206,997.30
1,342,493.67
2,864,503.63
2,864,503.63
1,254,902.02
4,119,405.65
1,228,903.79
2,890,501.86
2,890,501.86
1,238,069.45
4,128,571.31
1,106,427.61
3,022,143.70
3,022,143.70
1,189,322.22
4,211,465.92
1,453,521.44
2,757,944.48
2,757,944.48
1,246,354.80
4,004,299.28
1,156,148.68
2,848,150.60
2,848,150.60
1,352,019.42
4,200,170.02
1,257,894.41
2,942,275.61
2,942,275.61
1,348,008.09
4,290,283.70
1,298,961.29
2,991,322.41
2,991,322.41
1,306,602.36
4,297,924.77
1,323,568.73
2,974,356.04
2,974,356.04
1,268,158.50
4,242,514.54
1,174,211.25
3,068,303.29
3,068,303.29
1,246,770.29 ₱16,089,646.11
4,315,073.58
1,007,273.98 ₱15,319,751.97
3,307,799.60
Section 25 of RA No. 9679 or the HDMF law, states that: Section 25 - Refusal or failure without lawful cause or with fraudulent intent to comply with the provisions of said law and these Rules, particularly with respect to registration of employees, collection and remittance of employee-savings as well as the required employer contributions, or the correct amount due, within the time set under these Rules or the policies and guidelines adopted by the Board, or specific call or extension made by the Fund Management, shall constitute an offense punishable by a fine of not less than, but not more than twice, the amount involved or imprisonment of not more than six (6) years, or both such fine and imprisonment, in the discretion of the Court, apart from the civil liabilities and/or obligations of the offender or delinquent. In case of government instrumentalities, agencies or corporations, the treasurer, finance officer, cashier, disbursing officer, budget officer or other official or employee who fails to include in the annual budget the
amount corresponding to the employers’ contributions, or who fails or refuses or delays by more than thirty (30) days from the time such amount becomes due and demandable or to deduct the monthly contributions of the employee shall, upon conviction by final judgment, suffer the penalties of imprisonment of not more than six (6) years, and a fine of not less than, but not more than twice the amount involved. As of January 31, 2019, the amount of P 997,681.36 was remitted to Pag-IBIG representing HMDF premiums and contribution, hence, leaving a balance of P 2,310,118.214. Moreover, review of the General Ledger of the account Due to Pag-IBIG disclosed that Pag-IBIG premiums and contributions were not remitted in full in the ensuing month, with an average monthly unremitted balance of P 1,527,936.01 as shown in the Table 7. Table 7 Schedule of Monthly Unremitted Balance from Previous Month’s Deductions
Month
Beginning Balance
Amount Remitted
Unremitted Balance from Previous Month’s Deductions
January
₱2,537,905.46
₱1,039,520.21
₱1,498,385.25
February
2,743,821.80
1,930,826.91
812,994.89
March
2,013,755.21
1,342,493.67
671,261.54
April
2,864,503.63
1,228,903.79
1,635,599.84
May
2,890,501.86
1,106,427.61
1,784,074.25
June
3,022,143.70
1,453,521.44
1,568,622.26
July
2,757,944.48
1,156,148.68
1,601,795.80
August
2,848,150.60
1,257,894.41
1,590,256.19
September
2,942,275.61
1,298,961.29
1,643,314.32
October November
2,991,322.41 2,974,356.04
1,323,568.73 1,174,211.25
1,667,753.68 1,800,144.79
December
3,068,303.29
1,007,273.98
2,061,029.31
Average Monthly Unremitted Balance
1,527,936.01
We recommend that the Provincial Accountant and Provincial Treasurer to immediately remit the unremitted balance to BIR, GSIS and Pag-IBIG and henceforth, be compliant in the withholding and remittance of the appropriate taxes as well as the withholding and remittance of GSIS and Pag-IBIG contributions within the prescribed period pursuant to pertinent tax laws, R.A. 8291 and R.A. 9679 by remitting in full the total amount withheld for the month in the ensuing month.
May we have your comments on the foregoing audit observations within fifteen (15) calendar days from receipt hereof.
JUDITH E. REGAÑON State Auditor IV Audit Team Leader
LEONIDES B. MODESTO State Auditor V Supervising Auditor Proof of Receipt of AOM:
Name of Office Governor's Office Provincial Accountant Provincial Treasurer
Name of Receiving Officer
Signature
Date Received
AOM No. 2019- 0_ (2018) Date: February 28, 2019 AUDIT OBSERVATION MEMORANDUM For: HON. LEOPOLDO DOMINICO L. PETILLA Governor Province of Leyte Capitol Bldg, Tacloban City Attention:
MA. DORIS M. BELOY Provincial Accountant
GERARDO R. AVORQUE Provincial Treasurer
We have conducted review of compliance with Tax Laws and withholding and remittance of GSIS and HDMF contributions of the Provincial Government of Leyte and observed that: The Provincial Government of Leyte (Province) was not fully compliant with the (a) Bureau of Internal Revenue (BIR) regulations on the withholding and remittance of taxes from payments of purchases and business contracts; (b) RA No. 8291 or Government Service Insurance System law, on the withholding of GSIS monthly premiums from employees’ compensation and in the remittance thereof together with the government share and (c) RA No. 9679, the Home Development Mutual Fund law, on the withholding of Pag-IBIG monthly premiums from employees’ compensation and in the remittance thereof together with the government share within the prescribed period. Compliance with Tax Laws As prescribed by the BIR RMC No. 23-2012 dated February 14, 2012, the government withholding agent should withhold tax on compensation, on income payments subject to expanded withholding tax and final withholding tax and on government money payments to VAT-registered taxpayer and Non-VAT registered taxpayers subject to percentage tax. Further, the above circular also requires that the responsible officials and employees, as withholding agents, should see to it that taxes withheld are accordingly remitted on or before their due dates.
Records showed that the balance of the Due to BIR account as of December 31, 2018 amounted to ₱20,498,634.9 as shown in Table 1 below: Table 1 Due to BIR account Balance as of December 31, 2018 Fund General Fund Special Education Fund Trust Fund Total
Balance ₱ 16,815,430.72 116,381.67 3,566,822.53 ₱ 20,498,634.92
During the year, the Province has withheld and remitted taxes on compensation and payments to suppliers/contractors amounting to ₱168,453,981.80 and ₱164,531,775.19, respectively, the details of which are given in Table 2 below. Table 2 Analysis of Tax Withheld and Taxes Remitted For the period from January to December 31, 2018
January
Due to BIR (beginning) (2) ₱16,576,428.31
February
8,081,848.83
11,935,404.93
20,017,253.76
6,774,700.77
13,242,552.99
March
13,242,552.99
16,489,357.48
29,731,910.47
12,792,213.28
16,939,697.19
April
16,939,697.19
13,643,894.34
30,583,591.53
15,658,448.57
14,925,142.96
May
14,925,142.96
18,367,917.61
33,293,060.57
13,270,972.13
20,022,088.44
June
20,022,088.44
10,948,471.57
30,970,560.01
18,966,607.26
12,003,952.75
July
12,003,952.75
18,011,668.58
30,015,621.33
11,766,393.87
18,249,227.46
August
18,249,227.46
12,229,040.60
30,478,268.06
17,704,500.22
12,773,767.84
September
12,773,767.84
10,787,282.62
23,561,050.46
12,462,770.48
11,098,279.98
October
11,098,279.98
14,201,885.03
25,300,165.01
10,055,670.75
15,244,494.26
November
15,244,494.26
15,964,438.72
31,208,932.98
11,731,741.02
19,477,191.96
December Total
19,477,191.96
18,171,222.92 ₱168,453,981.80
37,648,414.88
17,149,779.96 ₱164,531,775.19
20,498,634.92
Month (1)
Taxes Withheld (3) ₱7,703,397.40
(4) ₱24,279,825.71
Taxes Remitted (5) ₱16,197,976.88
Due to BIR (ending) (6) ₱8,081,848.83
Total
However, verification with the general ledger as of January 31, 2019, the Province has remitted only the total amount of ₱19,654,026.86, hence, leaving a total unremitted balance from December 2018 taxes withheld of ₱844,608.06. In addition, review of the General Ledger of the account Due to BIR for the period from January to December 2018 disclosed that the taxes withheld for the month were not remitted intact or in full in the ensuing month with an average monthly unremitted balance of ₱1,129,741.48 as shown in the Table 3: Table 3 Schedule of Monthly Unremitted Balance from Previous Month’s Taxes Withheld
Month Beginning Balance
Taxes Remitted
January 2018
₱16,576,428.31
₱16,197,976.88
February
8,081,848.83
6,774,700.77
March
13,242,552.99
12,792,213.28
April
16,939,697.19
15,658,448.57
May
14,925,142.96
13,270,972.13
June
20,022,088.44
18,966,607.26
July
12,003,952.75
11,766,393.87
August
18,249,227.46
17,704,500.22
September
12,773,767.84
12,462,770.48
October
11,098,279.98
10,055,670.75
November
15,244,494.26
11,731,741.02
December 19,477,191.96 17,149,779.96 Average Monthly Unremitted Balance
Unremitted Balance from previous month’s taxes withheld ₱378,451.43 1,307,148.06 450,339.71 735,248.62 1,654,170.83 1,055,481.18 237,558.88 544,727.24 310,997.36 1,042,609.23 3,512,753.24 2,327,412.00 ₱1,129,741.48
Compliance with GSIS Regulations At the start of the year, the account had an outstanding balance of ₱24,608,590.95. The GSIS contributions withheld and remitted by the Province totaled to ₱176,742,909.11 and ₱172,397,250.65 respectively, leaving an ending balance of ₱28,954,249.41 as of yearend as shown on the Table 4:
Table 4 Analysis of GSIS Remittances For the period from January to December 31, 2018 Month
Due to GSIS (beginning)
Amount Withheld
Total
Amount Remitted
Due to GSIS (ending)
(1)
(2)
(3)
(4)
(5)
(6)
January
₱24,608,590.95
₱13,735,732.02
₱38,344,322.97
₱11,901,133.63
₱26,443,189.34
February
26,443,189.34
13,492,936.50
39,936,125.84
8,142,003.27
31,794,122.57
March
31,794,122.57
16,884,107.14
48,678,229.71
10,981,003.44
37,697,226.27
April
37,697,226.27
14,075,277.49
51,772,503.76
19,341,147.36
32,431,356.40
May
32,431,356.40
13,743,776.12
46,175,132.52
11,668,325.63
34,506,806.89
June
34,506,806.89
13,308,552.50
47,815,359.39
17,853,333.70
29,962,025.69
July
29,962,025.69
15,919,800.44
45,881,826.13
16,732,296.94
29,149,529.19
August
29,149,529.19
17,136,586.80
46,286,115.99
16,378,030.31
29,908,085.68
September
29,908,085.68
15,033,080.09
44,941,165.77
14,175,259.35
30,765,906.42
October
30,765,906.42
14,590,488.96
45,356,395.38
16,930,964.80
28,425,430.58
November
28,425,430.58
14,509,348.69
42,934,779.27
20,012,369.90
22,922,409.37
December
22,922,409.37
14,313,222.36 ₱176,742,909.11
37,235,631.73
8,281,382.32 ₱172,397,250.65
28,954,249.41
Total
Section 6 of RA No. 8291, the GSIS law, states that: Section 6 - The employer shall report to the GSIS the names of all its employees, their corresponding employment status, positions, salaries and such other pertinent information, including subsequent changes therein, if any, as may be required by the GSIS; the employer shall deduct each month from the monthly salary or compensation of each employee the contribution payable by him in accordance with the schedule prescribed in the rules and regulations implementing this Act. Each employer shall remit directly to the GSIS the employees' and employers' contributions within the first ten (10) days of the calendar month following the month to which the contributions apply. The remittance by the employer of the contributions to the GSIS shall take priority over and above the payment of any and all obligations, except salaries and wages of its employees.
On January 9, 2019, the amount totaling ₱15,132,596.08 under the general fund was remitted to the GSIS. However, the balance of ₱10,096.46 and ₱187,225.54 under the SEF and Trust Fund, respectively were still not remitted as of January 31, 2019, hence a total unremitted balance of ₱14,018,975.33. In the same manner as the account Due to BIR, review of the General Ledger of the account Due to GSIS disclosed that the premiums and contributions deducted from employees were not remitted in full or intact in the ensuing month as required by law, vis: Table 5 Schedule of Monthly Unremitted Balance from Previous Month’s Deductions
Month
Beginning Balance
Amount Remitted
January
₱24,608,590.95
₱11,901,133.63
February
26,443,189.34
8,142,003.27
March
31,794,122.57
10,981,003.44
April
37,697,226.27
19,341,147.36
May
32,431,356.40
11,668,325.63
June
34,506,806.89
17,853,333.70
July
29,962,025.69
16,732,296.94
August
29,149,529.19
16,378,030.31
September
29,908,085.68
14,175,259.35
October
30,765,906.42
16,930,964.80
November
28,425,430.58
20,012,369.90
December
22,922,409.37
8,281,382.32
Average Monthly Unremitted Balance
Unremitted Balance from Previous Month’s Deductions
₱12,707,457.32 18,301,186.07 20,813,119.13 18,356,078.91 20,763,030.77 16,653,473.19 13,229,728.75 12,771,498.88 15,732,826.33 13,834,941.62 8,413,060.68 14,641,027.05 ₱15,518,119.06
Compliance with R.A. No. 9679 or Home Development Mutual Fund Law of 2009 At the start of the year, the account had an outstanding balance of ₱2,537,905.46. The Pag-IBIG contributions withheld and remitted by the Province totaled to ₱16,089,646.11 and ₱15,319,751.97, respectively, leaving an ending balance of ₱3,307,799.60 as of year-end as shown in Table 6:
Table 6 Analysis of Pag-Ibig Remittances For the period from January to December 31, 2018 Month (1) January February March April May June July August September October November December Total
Due to PagIBIG (beginning) (2)
Amount
Total
Withheld (3)
Amount Remitted
Due to PagIBIG (ending)
(4)
(5)
(6)
₱2,537,905.46
₱1,245,436.55
₱3,783,342.01
₱1,039,520.21
₱2,743,821.80
2,743,821.80
1,200,760.32
3,944,582.12
1,930,826.91
2,013,755.21
2,013,755.21
2,193,242.09
4,206,997.30
1,342,493.67
2,864,503.63
2,864,503.63
1,254,902.02
4,119,405.65
1,228,903.79
2,890,501.86
2,890,501.86
1,238,069.45
4,128,571.31
1,106,427.61
3,022,143.70
3,022,143.70
1,189,322.22
4,211,465.92
1,453,521.44
2,757,944.48
2,757,944.48
1,246,354.80
4,004,299.28
1,156,148.68
2,848,150.60
2,848,150.60
1,352,019.42
4,200,170.02
1,257,894.41
2,942,275.61
2,942,275.61
1,348,008.09
4,290,283.70
1,298,961.29
2,991,322.41
2,991,322.41
1,306,602.36
4,297,924.77
1,323,568.73
2,974,356.04
2,974,356.04
1,268,158.50
4,242,514.54
1,174,211.25
3,068,303.29
3,068,303.29
1,246,770.29 ₱16,089,646.11
4,315,073.58
1,007,273.98 ₱15,319,751.97
3,307,799.60
Section 25 of RA No. 9679 or the HDMF law, states that: Section 25 - Refusal or failure without lawful cause or with fraudulent intent to comply with the provisions of said law and these Rules, particularly with respect to registration of employees, collection and remittance of employee-savings as well as the required employer contributions, or the correct amount due, within the time set under these Rules or the policies and guidelines adopted by the Board, or specific call or extension made by the Fund Management, shall constitute an offense punishable by a fine of not less than, but not more than twice, the amount involved or imprisonment of not more than six (6) years, or both such fine and imprisonment, in the discretion of the Court, apart from the civil liabilities and/or obligations of the offender or delinquent. In case of government instrumentalities, agencies or corporations, the treasurer, finance officer, cashier, disbursing officer, budget officer or other official or employee who fails to include in the annual budget the
amount corresponding to the employers’ contributions, or who fails or refuses or delays by more than thirty (30) days from the time such amount becomes due and demandable or to deduct the monthly contributions of the employee shall, upon conviction by final judgment, suffer the penalties of imprisonment of not more than six (6) years, and a fine of not less than, but not more than twice the amount involved. As of January 31, 2019, the amount of P 997,681.36 was remitted to Pag-IBIG representing HMDF premiums and contribution, hence, leaving a balance of P 2,310,118.214. Moreover, review of the General Ledger of the account Due to Pag-IBIG disclosed that Pag-IBIG premiums and contributions were not remitted in full in the ensuing month, with an average monthly unremitted balance of P 1,527,936.01 as shown in the Table 7. Table 7 Schedule of Monthly Unremitted Balance from Previous Month’s Deductions
Month
Beginning Balance
Amount Remitted
Unremitted Balance from Previous Month’s Deductions
January
₱2,537,905.46
₱1,039,520.21
₱1,498,385.25
February
2,743,821.80
1,930,826.91
812,994.89
March
2,013,755.21
1,342,493.67
671,261.54
April
2,864,503.63
1,228,903.79
1,635,599.84
May
2,890,501.86
1,106,427.61
1,784,074.25
June
3,022,143.70
1,453,521.44
1,568,622.26
July
2,757,944.48
1,156,148.68
1,601,795.80
August
2,848,150.60
1,257,894.41
1,590,256.19
September
2,942,275.61
1,298,961.29
1,643,314.32
October November
2,991,322.41 2,974,356.04
1,323,568.73 1,174,211.25
1,667,753.68 1,800,144.79
December
3,068,303.29
1,007,273.98
2,061,029.31
Average Monthly Unremitted Balance
1,527,936.01
We recommend that the Provincial Accountant and Provincial Treasurer to immediately remit the unremitted balance to BIR, GSIS and Pag-IBIG and henceforth, be compliant in the withholding and remittance of the appropriate taxes as well as the withholding and remittance of GSIS and Pag-IBIG contributions within the prescribed period pursuant to pertinent tax laws, R.A. 8291 and R.A. 9679 by remitting in full the total amount withheld for the month in the ensuing month.
May we have your comments on the foregoing audit observations within fifteen (15) calendar days from receipt hereof.
JUDITH E. REGAÑON State Auditor IV Audit Team Leader
LEONIDES B. MODESTO State Auditor V Supervising Auditor Proof of Receipt of AOM:
Name of Office Governor's Office Provincial Accountant Provincial Treasurer
Name of Receiving Officer
Signature
Date Received
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