Updates/Status of Actions Taken/Management Comments/Compliance/Implementation
On the 2012 COA Annual Audit Report and Prior Years Audit Findings and Recommendations
Office/Attached Agency: NATIONAL CONCILIATION AND MEDIATION BOARD
Auditor’s Opinion: Qualified Opinion on the fairness of the presentation of the financial statements
COA AUDIT FINDINGS
1.
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
Unrestored amount of cash and liability for
unreleased checks at year end – Central Office and
NCR
The reported balances of cash and accounts payable
in the books of the Central Office and NCR were both
understated
by
P202,563.06
and
P90,583.01,
respectively, due to the non-restoration of the cash
equivalent of the unreleased checks of that amount as of
year-end and non-recognition of the appropriate
payable/liability therefrom as prescribed by Government
Accountancy and Financial Management Information
System (GAFMIS) Circular Letter No. 202-001 dated
December 16, 2002.
2.
COA AUDIT RECOMMENDATIONS
We recommend to require the Cashiers
and the Accountants of the Central Office
and NCR to strictly comply with the
provisions of the aforementioned COA
circular in reporting and recording
unreleased checks.
Partially Implemented
We recommended that the Heads of Office
at the Central Office, NCR and Region XIII
comply with the following courses of action:
Partially Implemented
The NCMB-NCR had not implemented the audit
recommendation as it again failed to restore and
recognize the cash and liability accounts relative to the
checks issued but unreleased as of Dec. 31, 2013.
Fully Implemented at the NCMB-Main
Unreconciled and unreliable balance of inventory
accounts – Central Office, NCR and Region XIII
Out of the P1,716,877.94 balance of inventory
accounts, a total of P976,987.97 or 56% as recorded in
the books of the Central Office, NCR and RB XIII is
noted with deficiencies like the absence of actual
physical stock-taking, unreconciled balances, errors in
recording, weak control and monitoring over inventory
management, were contrary to the pertinent provisions of
the Manual on the New Government Accounting System
(NGAS), and rendered doubtful the accuracy and
existence of the balance.
Noted deficiencies are
summarized below:
Central Office

Eleven items of office supplies posted negative
a. the reconciliation of records and
elimination of discrepancies noted in
the office supplies inventory per count
and stock cards as against the
inventory ledger cards maintained at
the accounting unit. Henceforth, a
regular reconciliation be made
between the accounting records and
the property for the stocks on hand;
No inventory report was submitted on Jan. 31, hence, no
physical stock-taking and reconciliation between the
property and accounting records was conducted at the
NCR.
Fully Implemented at the NCMB-Main and RB XII.
1
COA AUDIT FINDINGS





NCR


beginning balances as of January 1, 2012.
Twenty items of office supplies were listed in the
December 31, 2012 balance but the items were
neither part of the beginning balances nor were
these purchases during the year.
Twenty items of inventories listed in the Report
of Supplies and Materials Issued still posted
balances in the property stock cards and in
physical count, and from where such supplies
were issued. However, in the accounting ledger
cards, these items posted zero balances, thus
the value of the items were already recorded as
expense.
Thirty three non-moving items in the office
supplies inventory due to obsolescence and/or
spoilage, have not been disposed of thus
depriving the agency the use of additional
space inside the stockroom as well as
overstating the balance of inventory account by
P55,968.28.
Fifty-one library books valued at P38,517.40
that have been missing/unaccounted still
formed part of the inventory.
Errors in recording receipts and issuances of
inventories at the accounting unit resulted in the
overstatement of the account balance by
P104,948.19.
No actual physical count of inventories was
undertaken. The agency’s designated Supply
Officers managed to submit a Report on the
Physical Count of Inventories as of December
31, 2012 but with incomplete information on the
inventory items listed.
The columns for
Balances per Card and Per Count as well as
shortages and/or overages and the Remarks
Column were left blank.
A discrepancy of P78,019.43 existed between
the balance of the account per inventory report
and book balance. Where the books posted a
balance of P264,889.99, the reported inventory
COA AUDIT RECOMMENDATIONS
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
b. the disposal of all obsolete and
unserviceable
office
supplies
following the guidelines prescribed in
the GAAM, to free the stockroom of
all these items and to render the
office supplies inventory balance
accurate;
c. the employees accountable for the
unaccounted books to present the
items to the inventory committee for
purposes of physical stock-taking or
direct the employees responsible for
the items to request for relief from
accountability following the guidelines
prescribed in the Government
Accounting and Auditing Manual, if
warranted, or direct the payment for
the cost of the missing books in the
event that the same have been lost in
their possession;
d. the conduct of physical count of
inventories every six months and
submission of report with the Stock
Cards (SC) and Supplies Ledger
Cards (SLC) using the form
prescribed in Appendix 62 of the
Manual on NGAS, Volume II; and
2
COA AUDIT FINDINGS


amounted to only P186,870.56.
Thus
reconciliation between the accounting and
supply records were not undertaken.
Postings to the stock cards were not updated by
the Supply Officer and stock ledger cards were
not maintained by the Accounting Analyst.
Issuances of office and other supplies were not
based on the requisitioned items and approved
Requisition and Issue Slips (RIS) so that the
monitoring and control over inventories were
rendered inadequate.
COA AUDIT RECOMMENDATIONS
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
e. preparation and update of the SC and
SLC for inventory accounts and
issuance of office and other inventory
items based on duly approved
Requisition Issuance Slips (RIS).
RB XIII

Supplies Ledger Cards and Stock Cards were
not maintained by the Accountant and Supply
Officer Designates, respectively, for the office
supplies inventory items, rendering the validity
of balances in the books doubtful.
3.
Deficiencies on property management such as nonreconciliation
of
the
accounting
and
property/inventory
records/reports,
nonreclassification and/or disposal of unserviceable
properties of P847,941.81 as well as other lapses
noted were contrary to Section 490 of Government
Accounting and Auditing Manual, Volume I and of
other existing rules and regulations.
Office
Central
Office
NCR
Deficiencies
A
total
discrepancy
of
P2,407,378.86
existed
between the accounting and
property
records/inventory
reports for a number of PPE
account balances:
CO
P2,095,639.00
We recommended that the Heads of the
above offices comply with the following
courses of action:
a.
b.
the creation of an Inventory
Committee to regularly conduct
physical count of PPE and submit
report thereon in accordance with
the guidelines on inventory taking
prescribed under COA rules and
regulations;
Partially Implemented
Not implemented at the NCMB-NCR. Balances remain
unreconciled and four PPE accounts were not covered
with inventory report.
Fully implemented at the NCMB-Main and RB II.
Partially Implemented at the NCMB-RBIVA.
the Accountant and the Property
Officer to (i) exert efforts toward the
immediate reconciliation of their
respective records; (ii) maintain and
update PPELC and PC; and (iii)
henceforth,
conduct
periodic
reconciliation of their records to
detect
any
errors
and/or
discrepancies in the PPE balances
and the causes thereof for
3
COA AUDIT FINDINGS
NCR
NCR
COA AUDIT RECOMMENDATIONS
NCR
Region II
a. The Property, Plant and
Equipment Ledger Cards
(PPELC)
and
Property
Cards (PCs) were neither
updated nor maintained by
the
Accounting
and
Property
Offices,
respectively.
Hence,
regular reconciliation was
not made between their
respective records.
NCR
a.
Region IV-
a. Unserviceable properties
with
a
total
value
of
REASON FOR PARTIAL OR NON- IMPLEMENTATION
correction, to ensure reliability of the
accounts in financial statements;
311,739.86
a. There was no actual
physical count of PPE units
conducted during the year
to support the inventory
report submitted and no
new inventory tags were
attached to the units.
b. The
Inventory
Report
submitted
not
in
accordance
with
the
prescribed format under
Appendix 63, Vol. II of the
MNGAS.
c. Small tangible assets with
serviceable life of more
than one year but small
enough to be considered as
PPE in the total amount of
P25,430.00
were
still
classified as PPE instead of
charging the same to
appropriate
expense
accounts, respectively.
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
c.
the Accountants to prepare JEV to
reclassify the cost of small tangible
items from Furniture and Fixtures to
inventory accounts and to record
these items as expense upon
issuance; and the Property Officer
prepare separate inventory report for
small tangible items for control and
monitoring purposes;
d.
the Property Officer prepare the
IIRUP
for
the
unserviceable
properties;
e.
the Accountants reclassify the value
of the unserviceable equipment from
PPE to Other Assets account based
on the IIRUP;
f.
prompt disposal of items that do not
have economic value which are
recommended
for
immediate
condemnation or destruction; and
g.
the Property Officer facilitate the
preparation and submission of an
updated list of all insurable
properties to the GSIS for insurance
coverage to ensure indemnification
of the equivalent value thereof in
case of loss or damages; and
thereafter, ensure prompt renewal of
the
insurance
properties
for
continuity of coverage.
4
COA AUDIT FINDINGS
A
COA AUDIT RECOMMENDATIONS
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
P772,289.50, were not yet
reclassified to Other Assets
account:
b.
NCR
56,209.00
IV-A 716,080.50
Central
Office
NCR
Region IVA
4.
5.
a. Unserviceable
properties
with a net book value of
P847,941.81
CO
NCR
IV-A
75,652.31
56,209.00
716,080.50
Absence of insurance coverage over the Region’s
insurable assets - NCR
Out of the recorded PPE of ₱4,572,360.83 at NCR as of
December 31, 2012, only ₱1,198,036.00 or 26.20%
covering motor vehicles were covered with insurance,
thereby exposing the agency to the risk of not being
indemnified or compensated for any damage to, or loss
of its property in case of destruction thereof through fire,
flood or other force majeure for insurable properties not
covered by insurance.
We recommend that the Property Officer
facilitate the preparation and submission of
an updated list of all insurable properties to
the GSIS for insurance coverage to ensure
indemnification of the equivalent value
thereof in case of loss or damages
thereafter, ensure prompt renewal of the
insurance properties for continuity of
coverage.
Fully Implemented
Absence of reports on fuel consumption – Central
Office, NCR and RB III
We recommend that the Heads of the
Central Office, NCR and Region III direct
the submission to the COA Audit Team the
required Monthly Report of Official Travels
and Monthly Report of Fuel Consumption
with supporting Driver’s Trip Tickets from
January to December 2012 and onwards.
Partially Implemented.
The validity of the account Gasoline, Oil and Lubricants
Expenses as of December 31, 2012 in the total amount
of ₱495,141.29 of the Central Office, NCR and Region III
is doubtful due to absence of the Monthly Report of
Official Travels and of Monthly Report of Fuel
Consumption as provided in COA Circular No. 77-61
dated September 26, 1977 as well as the absence of
strict monitoring and control on the use of motor vehicles.
The use of government vehicle at the NCMB-Main had not
been properly controlled and regulated in the absence of
duly accomplished driver’s trip tickets and Monthly Report
of Official Travels.
Fully implemented at the NCMB-NCR and RB III.
a.
in addition the marking at the NCR
official vehicles with “For Official USE Only”
and the corresponding name of agency and
for its drivers and respective passengers to
5
COA AUDIT FINDINGS
Office/Region
NCMB-Main
NCR
Region III
Total
No. of
Vehicles
4
2
3
Amount
₱268,095.79
₱61,650.00
₱165,395.50
₱495,141.29
COA AUDIT RECOMMENDATIONS
accomplish the
properly; and
Driver’s
Trip
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
Tickets
b.
the officials responsible at the
Central Office to prepare and submit the
required reports covering trips made for all
motor vehicles.
6
COA AUDIT FINDINGS
6.
COA AUDIT RECOMMENDATIONS
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
Deficiencies in Procurement Process – Regions I,
VIII, XI and XII
The Management of Regions I, VIII, XI and XIII did not
substantially comply with the pertinent provisions of the
IRR of RA 9184 on procurement activities that the same
may not have been economical for the government.
We recommend that
responsible officials –
the
agency’s
Partially Implemented
Fully Implemented in RBs I, VIII and XII.
Partially Implemented in RB XI.
a.
should resort to the alternative mode
of shopping only when the
aforementioned conditions exist and
should refer to Republic Act 9184 for
their guide in the procurement of
supplies to save time and effort in
the payment of piece meal
purchases and the agency may also
avail of discounts if supplies
purchased are in a greater quantity.
b.
procure common-use supplies and
equipment only at the DBM. PS
Depot, as mandated by AO No. 17
dated July 28, 2011 and DBM
Circular Letter No. 2011-6 dated
August 25m 2011. Common-use
supplies not available at the PS
Depot should be procured in
accordance with the IRR of RA
9184.
c.
(i) refund the total amount of
₱4,025.00 in Region XI; and (ii)
management should strictly comply
with
the
existing
government
accounting rules and regulations to
avoid the transactions to be
suspended or disallowed in audit.
Management
commented
that
the
irregularity
in
the
procedural process flow
of the transaction will be
taken into consideration.
Personnel concerned will
be given due process in
accordance with law.
Moreover, Management
has recognized their
shortcomings
7
COA AUDIT FINDINGS
COA AUDIT RECOMMENDATIONS
d.
7.
Limit the procurement of goods on
reimbursement
basis
and
or
charging to PCF to prevent the nonwithholding of creditable valueadded tax due to the Bureau of
Internal Revenue; and comply strictly
with the provisions of Republic Act
9184 in the application of any of the
alternative modes of procurement,
subject to the approval of the head
of the procuring entity and upon the
recommendations of the Bids and
Award Committee. If reimbursement
could not be avoided, shopping can
be applied in this case, as an
alternative mode of procurement,
provided, the required conditions for
the application thereof, stated in
Republic Act (RA) 9184, are
indicated and at least three price
quotations
from
known
and
responsible suppliers should be
secured.
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
and emphasized that to
defraud the government
in spending the funds
was
not
the
real
intention.
Perfect Attendance Incentive
The provision on Perfect Attendance Incentive
incorporated under the Collective Negotiation Agreement
(CNA) of the NCMB Employees Association with the
Board, at the NCMB – Central Office covering the period
2009-2012, which grants one day leave for each month
of perfect attendance did not comply with the existing
rules and regulations issued by the Civil Service
Commission on the Revised Omnibus Rules on Leave.
We recommend that Management deduct
from the balances of accumulated leave
credits the total leave of absences availed
of by the agency personnel on account of
the Perfect Attendance Incentive provided
under the CNA.
Fully Implemented
8
COA AUDIT FINDINGS
8.
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
Liquidation Report of Cash Advances – RB XIII
Report of Disbursements which serves as the liquidation
report of the cash advances granted to the Disbursing
Officer were not prepared in violation to Section 37 of
New Government Accounting System (NGAS) Volume I.
9.
COA AUDIT RECOMMENDATIONS
We recommend that Management instruct
the designated Cashier and Accountant to
comply strictly with the regulations on the
cash management, particularly on the
proper procedure in the liquidation of cash
advances as prescribed under Section 37
of NGAS, Volume I.
Fully Implemented
Gender and Development
Lack of information and awareness on Gender and
Development (GAD) at the NCMB-Main and Regions,
non-preparation of Plan and Budget as well as improper
allocations of funds, failure to implement programs and
activities and/or to report expenses relative thereto were
not in accordance with Joint-Circular No. 2004-1 of the
DBM, NEDA and PCW.
We recommended that the Head of the
Agency –
Reiterated in 2013 CAAR
a.
at the NCR designate a GAD
Chairperson/Focal Person and direct
the preparation of GAD Plan and
Budget for the succeeding year to
conform with the guidelines/policies
set forth in DBM-NEDA-NCRFW
(now PCW) Joint Circular No. 20041 and identify activities/projects that
clearly specify the gender issues to
be addressed. Henceforth, direct the
timely
submission
of
duly
accomplished Annual Gad Plan and
Accomplishment Reports following
the
format
prescribed
under
regulations;
b.
at Regions I, III and VI to direct the
respective Budget Officer to allocate
funds for GAD programs and
activities to at least five percent of
the total Regional Office budget
appropriations; and
c.
maximize utilization of amount
allotted for the purpose on
Partially Implemented
(CO & RBs)
9
COA AUDIT FINDINGS
COA AUDIT RECOMMENDATIONS
ACTIONS
TAKEN/MANAGEMENT
COMMENTS/COMPLIA
NCE/
IMPLEMENTATION
REASON FOR PARTIAL OR NON- IMPLEMENTATION
implementing GAD programs and
projects.
10. Senior Citizens and Differently-Abled persons
The NCMB – Central Office, Region XII and NCR have
neither provided programs and projects related to Senior
Citizens and Differently-Abled Persons contrary to
Section 29 of the General Provisions of RA 10155 or the
General Appropriations for Fiscal Year 2012.
We
recommend
that
Management
undertake programs and projects to
address the concerns of senior citizens and
differently-abled persons in order to
improve their well-being as well as provide
means of livelihood.
Partially Implemented
We recommend that the Heads of offices –
Partially Implemented
The Regional Branches have not provided funds nor
implemented programs and projects related to Senior
Citizens and differently-Abled Persons
Fully Implemented at the NCMB-Main
11. Status of Suspension and Disallowances
Audit suspensions and disallowances in the amount of
₱50,426.14 and ₱57,363.18 respectively remained
unsettled at the end of the year.
Office
Main Office
NCR
Region VII
Region XIII
Total
Suspension
₱50,426.14
₱50,426.14
Disallowance
₱28,253.27
7,965.10
6,870.00
14,274.81
₱57,363.18
a.
direct the Accountants to monitor
settlement of audit suspensions and
disallowances; and
Disallowances of NCMB-Main, RBs VII and XIII have
been settled during the year.
NCR -
b.
enforce
settlement
of
disallowances following the pertinent
provisions of the RRSA.
10