ANNEX A

DOLE – REGION IV-A

Updates/Status of Actions Taken/Management Comments/Compliance/Implementation
On the 2015 COA Annual Audit Report and Prior Years Audit Findings and Recommendations
As of June 30, 2016

Actions Taken/Management Supporting Documents Internal Audit Service

COA Audit Findings COA Audit Recommendations Comments/Compliance/ Timeline Attached (IAS) Validation
Implementation

Prior Year/s
1. The Administrative Officer
V/Cashier withheld cash
collections totalling P112,655.00
for the month of January 2014
thereby violating the provisions of
COA-MOF Joint Circular No. 1-81
and COA Circular No. 97-002 as
regards the intact and daily or not
later than the next banking day
deposit of collections that could
result in mishandling or misuse of
government funds.
(1) Relieve the Administrative
Officer V/Cashier and transfer
her to a position not involving
money or property.
(2) Create a fact-finding
committee to investigate the
reason for the withheld cash
collections.
(3) Instruct the Cashier to
maximize the amount of
collections to be deposited
and ensure that all collections
are deposited, if possible,
before the weekend or a long
holiday.
 A fact finding committee
headed by the Assistant
Regional Director, this
office, was created to
review and validate the
findings and submit the
results/report as soon as
the proceedings are
complete.
 A memorandum dated
11 November 2014 was
issued to the Cashier
instructing her to submit
an explanation/report
regarding the said audit
observation
memorandum (AOM)
and strictly comply with
the provisions of COA-
MOF Joint Circular No. 1-
81 and COA Circular No.
 97-002.

 Series of meetings were

Notice of meetings/
conducted by the fact
Minutes of Meetings
finding committee
covering the CY 2015
to 2016 to discussed the
issues and concerns
contained in the audit
findings and
recommendations,
review and re-validate
the records/reports
issued by the COA
Resident Auditor. The
results/minutes of the
said meetings were
already submitted to
COA as of April 2016.

 To strengthen internal
control with the
recommendations made
as corrective and
preventive measures to
address the issues, the
Committee will make an
alternative measures as
basis for the monitoring
and evaluation of
internal auditing
procedures, techniques
and accounting controls
 and to review and
appraise controls of
systems and procedures
and the financial and
management records.
The detailed guidelines
and procedures of this
measures will be
forwarded to the
Committee Chair for
further comments before
the final report will be
issued and submitted to
the Regional Director for
approval and
implementation.

2. The balances of the current Direct the Accountant III to:  In compliance to
accounts being maintained by GAFMIS Circular Letter
DOLE Region IV-A at LBP Parian, (1) Strictly comply with the No. 2002-001, the
management directed
Calamba City were overstated by provisions of GAFMIS
the Cashier to prepare .
P1,222,257.02 due to the Circular Letter No. 2002-
the Monthly Check
Accountants erroneous treatment 001 and the proper Disbursement Record
of the reconciling items in the treatment of reconciling and Schedule of
Bank Reconciliation Statements items. Unreleased Checks and
contrary to the provisions of ensure its timely
GAFMIS Circular Letter No. 2002- (2) Trace the unreconciled submission to the
differences totaling Accounting Unit.
001 and the generally accepted
P(2,921,278.96). Consequently, the
accounting principles.
 Accountant is recording
(3) Satisfactorily explain, the total amount of
supported by unreleased checks to the
valid/relevant documents, working paper based on
for the following: the submitted schedule.

 Unclaimed, cancelled and  At the end of 2014,

stale checks being entries were prepared
deducted from the balance per JEV# 2014-12-137 for
per bank instead of being regular MDS account and
added to the balance per
JEV# 2014-12-138 for
books;
trust accounts
 Some stale checks being
treated as outstanding (Writ/SPES) to record the
checks; recognition of cash
 Two LBP current accounts equivalent to the
(i.e., LBP Calamba CA unreleased checks and
0542-1053-21 and LBP recognition of the
Parian CA 0542-1056-66)
appropriate liability
with balances per audit
account. In January
totaling P665,694.18
cannot be traced in the 2015, JEV# 2015-01-002
Statement of Financial for regular MDS account
Position. and JEV# 2015-01-003
for trust accounts were
prepared to reverse the
entries made for CY
2014.

 The Accountant noted

the unreconciled
differences and the
proper treatment of the
reconciling items, thus,
 submitted a revised Bank
Reconciliation Statement
to the Office of the
Resident Auditor for
review.

 Cancelled/stale checks
of the regular MDS
account were being
deducted from the
balance per bank as
these checks were
previously adjusted to
the book balance. The
adjustments to the book
is in compliance to DBM
Circular Letter No. 2013-
12 dated November 21,
2013 wherein all notice
of cash allocation (NCA)
for regular MDS sub-
accounts for any month,
whether part of the
comprehensive releases
or constituting additional
NCA releases, shall be
valid until the last
working day of the third
month of that quarter.
Since the cash allocation
for these cancelled/stale
checks already lapsed,
journal entry
adjustments as reflected
to the Bank
 Reconciliation
Statements were made.

 For trust accounts, stale

checks being treated as
outstanding checks were
adjusted on the Bank
Reconciliation Statement
last March 31, 2015.

 The two CA#’s, 0542-

1053-21 and 0542-1056-
66, are accounts
maintained at the LBP for
Social Amelioration
Program funds intended
for the payment of
administrative expenses
and unclaimed cash
bonus. These funds
were incorporated in the
Statement of Financial
Position of the Bureau of
Workers with Special
Concern (BWSC). As of
January 2016, the said
SAP funds were already
booked up and included
in the book of accounts
in the financial statement
of the Region.
3. The CY 2014 GIP/TUPAD
allocation of P80,500,000.00 net
of the P805,000.00 or 1%
administrative cost, could not be
matched with the GIP and TUPAD
disbursements of P34,663,325.34
and P43,541,307.16, respectively,
due to lack of breakdown of
allocation for GIP and TUPAD.
Further, the government’s goal of
inclusive growth through massive
job generation and poverty
reduction could have been
achieved if an even higher
percentage of the CY 2014 lump
sum allocation for GIP/TUPAD was
disbursed for TUPAD rather than
for GIP.
Make proper representation,  With regards to GIP and
through channels, with the DOLE TUPAD, the utilization of
Secretary as regards the specific each project is based on
allocations for GIP and TUPAD the
with recommendation for a higher commitment/preference
allocation for TUPAD. and approved project
proposal of the
requesting
partners/stakeholders
from the proponents
Local Government
Units/National
Government Agencies
(LGUs/NGAs).
 Likewise, the total
allotted fund for the said
projects transferred by
DOLE-Central Office was
through Advice of
Disbursement Limit (ADL)
and there was no request
coming from our office
as to segregation of fund.
 The office cannot
recommend for higher
allocation for any of the
two projects. As far as
job generation is
concerned, TUPAD can
generate more jobs since
it is a short term project
(15-30days). However,
for poverty reduction,
 GIP is more
advantageous since this
lasts for 3-6 months.

Actions Taken/Management Supporting Documents Internal Audit Service

 COA Audit Findings COA Audit Recommendations Comments/Compliance/ Timeline Attached (IAS) Validation
Implementation

Current Year
That the Regional Director:
1. None of the cash advances The following are the actions
granted way back in 2001 up to taken made on the audit
(1) Explore the legal remedies
2014 totaling P40,466,171.67 was against the NGOs/POs with the recommendations:
liquidated, while only P764,616.00 outstanding cash advances prior
or 24% of the current year’s cash to January 1, 2015.  Laguna Provincial Office
advances of P3,155,149.75 was  For this CY 2016, eleven Status of liquidation
liquidated contrary to Section 5.4 (2) Ensure the immediate (11) and one (1) report as of March and
of COA Circular No. 2007-001. liquidation of the cash advances livelihood projects on June 2016
Further, the said current year’s granted in CY 2015 and onwards prior years and current
cash advances were to eight through regular monitoring and year outstanding
the prompt issuance of Demand
NGOs/POs for the implementation balances submitted their
Letters.
of livelihood projects despite the liquidation reports with a
lack of some documentary total amount of
(3) Justify why a MOA was entered
requirements and certain into by DOLE IV-A with Now P4,078,274.07 and
deficiencies in the Memorandum Moving for Better Philippines P4,920.00 respectively.
of Agreement contrary to Section Multi-Purpose Cooperative  For the period May to
Monthly Progress Report
2 of COA Circular No. 2012-001 despite the lack of June 2016, thirteen (13)
for the period May to
and Sections 4(6), 85 to 87 of P. D. appropriation in CY 2014 . proponents/grants June 2016
No. 1445, thus, rendering the amounting to
propriety and regularity of the (4) Direct the following personnel: P5,259,844.20 had
transactions doubtful. conducted project
1.  The Heads of the Provincial monitoring and for this
Offices
3rd quarter of 2016, there
 To be strict in the initial
are eighteen (18) grants
evaluation of the Schedule of Monitoring
for prior years releases for the 3rd qtr of 2016
necessary documents
for the grant of cash amounting to
 advances to NGOs/POs
 To conduct frequent
monitoring of the
implementation of the  As of March 2016, eighty
projects by the
NGOs/POs so that the
problems, if any, may
be addressed as early
as possible
 One (1) proponent under
 The Chief, Technical Support
and Services Division (TSSD)
 To be stricter in the
final evaluation of the
necessary documents
for the grant of cash
advances to NGOs/POs
 To blacklist the
NGOs/POs with prior
years’ unliquidated cash
advances
 The Chief, Accounting Unit  Another
 To justify why two or
three checks were
granted to five
NGOs/POs under the
same Allotment and
Obligation Slip (Alobs)
and for the same
purpose
 To ensure that the basic
P3,004,923.00 will be
scheduled for
monitoring.
List of LGUs/NGOs POs
six (86) demand letters
with issued demand
had already been made
letters
and issued to various
proponents.
Report from TSSD with
the name “ EAST & WEST
Matrix
CENTER FOR EXCELLENCE
IN TRAINING CORP.” with
a total grant amounting
to P468,710.00 dated
October 23, 2014 has
submitted their
liquidation last February
2016 and returned the
balance of P389,313.01
per OR # 9771804 dated
February 11, 2016.
one (1)
proponent under the
name “CADIWA” with the
amount of grant of
P300,000.00, issued
demand letters for three
consecutive times
however, ACP did not
comply. Thus, we
requirements scheduled them for a
prescribed under case conference through
existing laws, rules and a formal communication
regulations are but it did not prosper.
complied with before
The ACP did not receive
processing claims for
the letter since they are
payments.
no longer occupying the
business address
indicated.

 Quezon Provincial Office

 Status of unliquidated Status of unliquidated
grants for Due from grants as of June 30,
NGAs/LGUs and 2016
NGOs/POs as of June 30,
2016 are stated in the
attached reports.
 For item number 11.5 on
Memorandum RE: Noted
the detailed observations
observations in the
and recommendations,
approved project
pertaining to proposal of New Gumaca
discrepancies of certain Woodcraft Multi-Purpose
relevant data as reflected Coop.
in the related documents
re: New Gumaca
Woodcraft Multi-Purpose
Cooperative (Annex D),
attached are
justifications/clarification
s to address the
 observations.

 Cavite Provincial Office

 As of 29 June 2016, three
(3) Local Government
Units (LGUs) namely, Status of unliquidated
Municipal Gov’t. of Gen. funds for LGUs as of June
Trias, City Gov’t. of 29, 2016
Tagaytay and City Gov’t.
of Imus that were
granted the amount of
P1,962,221.50,
P1,007,580.00 and
P994,200.00 respectively
were monitored. Of
which, two (2) submitted
their liquidation
requirements last 28
March 2016 and one (1)
with incomplete
documentary
requirements waiting for
the additional
requirements to be
submitted (refund of
unutilized
fund/liquidation report).
 Rizal Provincial Office
 For the period March to
June 2016, there are four
 (4) proponents under Status of liquidation of
BUB and DILP Projects grants for the period
granting the total March to June 2016
amount of Nine Million
One Hundred Twenty
Five Thousand Nine
Hundred Ninety Two
Pesos & 10/100
(P9,125,992.10) were
liquidated. (status of
liquidation attached).

Last 14 June 2016, TSSD issued

memorandum to all Provincial
Heads/Directors regarding the
submission of list of Memorandum No. TSSD
E/W-DILP-2016-010
unliquidated livelihood projects
which have given three (3)
demand letters.

This Office is continuously

working on for the liquidation of
livelihood projects. Additional
updates on this effort shall be
submitted soonest upon
receiving the reports from our
Provincial Offices.
 As per instruction of
DOLE-Central Office, TRA
2. The “Subsidy from National That the Regional Director direct shall be recognized in the
Government” per books
amounting to P256,687,710.24 as
of December 31, 2015 was
understated by P1,434,025.97 due
to the non-recognition of the Tax
Remittance Advice for the month
of December 2015, among others,
contrary to the qualitative
characteristics of financial
information as regards verifiability
and faithful representation. On
the other hand, the “Cash –
Modified Disbursement System,
Regular” was understated by
P225,113.34 due to the under-
recognition by P125,243.67 of the
lapsed NCAs/NTAs for the third
quarter, the over-recognition by
P53,664.46 of the lapsed
NCAs/NTAs for the first and fourth
quarters, the under-recognition by
P50,000.00 of the NCAs/NTAs
received for CY 2015 and the
adjustments made by DOLE IV-A
regarding the cancellation of ten
checks totalling P246,692.57 and
the alleged P0.02 understatement
of Check No. 511256.
the Accountant III to:
(1) Justify why:
 The TRA amounting to
P1,014,233.28 for the
month of December 2015
was not recognized in the
books of accounts;
 The cancellation of ten
checks totalling
P246,692.57 was debited
to “Subsidy from National
Government” instead of
“Cash – MDS, Regular”;
 The balance of
P675,707.03 re: taxes
withheld for the month of
March 2015 was
filed/remitted on May 4-7,
2015 along with the taxes
withheld for the month of
April 2015 amounting to
P705,117.12 or for a total
amount of P1,380,824.15
that lead to the non-
computation of the
additional penalties of
P216,091.60 for the late
filing/remittance of the
books only upon
remittance, that is, on
the following month.
Therefore, the December
2015 TRA was accounted
as “Due to BIR” since it
was remitted in the 1st
week of January 2016.
Recognition of TRA was
booked up per JEV#
2016-01-001-03.
 Debiting cash will only be
possible if those checks
were disbursed under
“Cash in Bank-LCCA” and
only if the cancellation
was made within the
same quarter of the year
it was issued. Under
DBM Circular No. 2013-
12 4.0, “Starting January
1, 2014, all NCA crediting
to Regular MDS Sub-
Accounts for any month,
whether part of the
comprehensive releases
or constituting additional
NCA releases, “shall be
valid until the last
working day of the 3rd
 balance of taxes withheld
for the month of March
2015;
 The deposits totalling
P194,679.35 to the Bureau
of the Treasury was
recognized as debits to
“Subsidy from National
Government” instead of
“Cash- Treasury/Agency
Deposit, Regular”;
 The lapsed NCAs/NTAs for
the 3rd quarter amounting
to P125,620.14 was
recognized as P376.47 or
for an understatement of
P125,243.67;
 The lapsed NCAs/NTAs for
the 1st and 4th quarters
totalling P4,442,723.89
were recognized in the
total amount of
P4,496,388.35 or for an
overstatement of
P53,664.46;
 The NCAs/NTAs received
for CY 2015 totaling
P254,770,938.89 was
recognized as
P254,720,938.89 or for an
month of that quarter”.
Cancellation of those
checks was debited to
“Subsidy from National
Government” because its
cash allocation was
already part of the
lapsed NCA and
automatically reverted to
the National Treasury.
 The deadline of monthly
tax remittance was
unwillingly and
unmindfully forgotten in
March 2015. The online
remittance was newly
handled by the
Accountant II and there
was no seminar attended
yet. When realized that
it was past due, the
Accountant II
immediately proceeded
to the Bureau of Internal
Revenue to inquire/seek
for an advice for the best
thing to do. The
remittance of a little
amount just to minimize
the penalty in April and
 understatement of the full remaining
P50,000.00; and amount in May was
 The alleged P0.02 actually discussed with
understatement of the the BIR personnel
Check No. 511256 was without neither
debited to “Due to BIR” objection nor a warn of
and credited to “Subsidy violation to the National
from National Revenue Code was
Government” instead of heard.
debiting the same to “Due  Cash – Treasury / Agency
from Officers and Deposit, Regular is used
Employees” (since the if the deposit is an
correct amount of the Income Account. The
check should have been amount of P194,679.35
P116,741.96 and not corresponds to the total
P116,741.98) and crediting refund from cash
“Cash-MDS, Regular”. advances, payments
from personal call and
(2) Study the proposed fines, therefore, cannot
Adjusting Journal Entries be accounted as an
under Annex F-I and make Income.
the necessary adjustments.  The said understatement
does not account for the
reverted cash from MDS
Trust Account amounting
to P0.33 and
P125,244.00 payment for
Philstar Daily which was
disbursed in September
22, 2015 with Check #
 511510. The latter, was
cancelled upon finding
out in November 2015
that no Advice of Checks
was issued. This
therefore cannot be
accounted as reversion in
the third quarter since it
was recorded only in
November per JEV #
2015-11-138-25.
 The difference of
P50,000.00 comprised of
two NCA requests for
payment of Cash Bond
amounting to P25,000.00
each. This was not
recognized as NCA/NTA
received because it is not
a Subsidy from National
Government but a Trust
Receipt.
 Necessary adjustment
will made this CY 2016
for 0.02 understatement
of check# 511256.

 Recommended adjusting
entry will be used.
3. The DOLE IV-A remitted on April
17,2015 the amount of P1,127.52
for the alleged taxes withheld for
the month of March 2015 instead
of P676,834.55 which is penalized
under Sections 254 and 255 of the
NIRC of 1997. Further, the full
remittance of the taxes withheld
for the month of March 2015 was
made along with the remittance
for April 2015. Thus, no
computation was made for the
additional penalties of
P216,091.60
That the Regional Director, the
Accountant III and the Accountant
II justify why they should not be
held jointly liable for the payment
of the remaining penalties of
P216,091.60 for the delayed
remittance of the full amount of
the taxes withheld for the month
of March 2015 and also why they
should not be charged with the
criminal penalties imposed under
Sections 254 and 255 of the NIRC
of 1997.
No one of us intended to evade
the tax in March 2015. Upon
realizing the past due remittance
for the month, the Accountant II
immediately proceeded to the
Bureau of Internal Revenue to
inquire/seek for an advice for
the best thing to do. This, in
fact, is an apparent will to abide
the law. Also, the action made,
that is, the remittance of a little
amount just to minimize the
penalty in April and the full
remaining amount in May was
actually discussed with the BIR
personnel without neither
objection nor a warn of violation
to the National Revenue Code
was heard. Since full amount
was immediately remitted and
no single centavo was neither
distorted nor lost from the
government, and in fact that a
fine was already paid from own
pockets, an appeal of not
imposing another fine is prayed for.
4. DOLE IV-A did not comply with
the provisions of COA Circular No.
89-300 in the payment of
Extraordinary and Miscellaneous
Expenses totaling P117,600.00 to
its Regional Director for the period
January to December 2015 by
basing it on mere certifications.
That the Regional Director submit All expenses incurred were
a detailed list of the expenses related in the performance of
incurred, supported by the actual duties as Regional
corresponding receipts and/or Director such as, but not limited
other documents evidencing to attending:
disbursement, that were charged
to EME for the period January to  After office meetings to
December 2015 or a certification deal with erring labor
specifically stating the purposes of unions for possible
the expenses incurred and the solutions to their
reasons why no receipts can be demands.
produced.  Meetings with Local
Chief Executives (LCEs),
Congressional
Representatives and
other government
officials
 Extended meetings with
stakeholders and
partners in
implementation of the
Department’s programs
 Occasional meetings with
community groups/civil
society organizations
 Side meetings and
follow-up meetings to
advance our agenda in
solving disputes/concerns
 raised by interested
groups

 Expenses incurred as
regards to any travel to
different provinces

Inasmuch as the Regional

Director wish to provide the
receipts and other proofs for the
expenditures up to the last
detail, she cannot possibly do
so. She unfortunately failed to
keep the said documents
because in usual practice, we
just give certification that all
expenses incurred are official in
nature. Rest assured that on
this day onwards, all activities
will be calendared and attendant
receipts will be kept to conform
to the rules as obliged.
 5. Despite the issuance of AOM
No. DOLE4A 15-02-101(11-15), the
DOLE IV-A’s balance of “Due from
NGAs – PS-DBM” as of December
31, 2015 amounting to P42,046.82
was still overstated by P33,572.71
or 396% of the account’s audited
balance of P8,474.11 because the
Accountant III was not able to
recognized the necessary
adjustments to the account as of
June 30, 2015.
Prepared/Submitted by:
EDGAR M. MAGTAGÑOB
Accountant III
Date :
That the Regional Director direct The Accountant already
the Accountant III to: validated the deficiencies noted
by the Auditor and necessary
(1) Validate the adjustment will be made this CY
observations/deficiencies 2016 upon completion of
noted and make the supporting documents.
necessary adjustments.
(2) Ensure the timely To date, the office is using the
recognition of transactions Asset Method in recognition of
in the books of accounts supplies delivered.
based on supporting
documents.
(3) Adopt the “Asset Method”
in the recognition of
supplies delivered and use
it consistently.
(4) Hasten the adjustment of
the subject account since
the related AOMs were
duly supported by the
necessary documents form
DOLE IV-A and PS-DBM.
Certified by:
MA. ZENAIDA A. ANGARA-CAMPITA
Regional Director
Date :