Summary Of Internal Audit Activities And Reports.docx

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 Central Office

Field Offices

UNIT/SCOPE Cash Division Budget Division SRIP Projects Uniform 1, 2, 4A, 4B, MARIIS, CAR

AUDIT Financial Documentation Financial Documentation Follow-up (LDs) Follow-up Disbursement Audit 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 CY

2008 2017

Php

36,460,150,959 125,525,569,432 (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 ZRIS

UCRIS

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

Umayam

SJPIP Tangub Barotac Viejo Hibulangan

completed as of Nov. 30, 2018 Per verbal inquiry, awaiting request for payment by the contractor 2,610,214.57 Awaiting request for payment of contractors Awaiting request for final payment of contractor 11,702,658.80

 Per verbal inquiry, collected LD were remitted to BTR….. 2019 AUDIT ISSUES/CONCERNS a.