COMMISSION ON AUDIT MEMORANDUM NO. 94-016 February 28, 1994
SUBJECT:
Implementing Guidelines for the Adoption of the Non-Resident Audit Policy in
Hospitals, State Colleges and Universities, and DPWH Regional and
Engineering District Offices in Metro Manila and the Utilization of the Team Audit
Approach.
In its continuing efforts at improving the effectiveness and efficiency in the discharge of
its audit functions, among others, through its non-resident audit policy, this Commission has
decided to adopt the said policy in hospitals, state colleges and universities, and DPWH
regional and engineering district offices in Metro Manila, and utilize the team audit approach for
these agencies, per COA Resolution No. 94-50, in accordance with the following guidelines and
timetable:
A.
General Guidelines
The following general guidelines shall be observed for the conduct of audit of the
agencies whose auditing units are herein proposed to be withdrawn:
1.
The hospitals, state colleges and universities, and DPWH regional and engineering district
offices whose auditing units shall be withdrawn shall continue to be under the audit jurisdiction
of their respective COA operating offices.
2.
The audit teams composed of personnel from the withdrawn units shall render auditing
services on an engagement basis.
3.
A staff of at least two (2) State Auditors shall be left in residence for the custody of
documents and to perform functions still required by law to be undertaken for the agency.
4.
The Resident Staff shall continue to have custody of the storage space and equipment
provided for the safekeeping and security of records and documents received from
management.
5.
There shall be an appraisal of the system of internal control for the purpose of determining
its adequacy as well as the frequency and scope of audit necessary.
6.
An evaluation of the different systems, programs, and projects of the audited agency shall
be undertaken in relation to achieving economy, efficiency and effectiveness of its operations
and use of resources.
7.
The system of examination of the financial transactions shall be on a post-audit basis
except transactions which still require pre-audit as mandated by law and regulations.
8.
Certificates of Settlement and Balances (CSB) shall be issued as provided under COA
Circular No. 001, dated January 20, 1994.
9.
The Commission, upon the proper justification and recommendation of the Team
Supervisor, reserves the right to pre-audit transactions whenever circumstances warrant.
B.
Organization of Audit Teams, Functions and Responsibilities:
In an audit engagement using the team approach, each team shall be composed of a
Team Supervisor, a Team Leader, and such number of Team Members as may be deemed
necessary to accomplish the audit tasks. Their respective duties and responsibilities shall be
as follows:
1.
The Team Supervisor shall be responsible for the review of the Team's audit program and
timetable, including the amendments thereto, the working papers, as well as the audit report.
2.
The Team Leader shall be responsible for the preparation of the audit program and
timetable, including the amendments thereto, and their implementation, the review and
evaluation of financial statements and controls, the conduct of the audit, the preparation of
working papers, the preparation of the audit report, the application of established performance
standards, and the identification of activities and operations for which performance standards
can be developed or formulated.
3.
The Team Members shall be responsible for the timely accomplishment of the tasks
assigned to them by the Team Leader.
Overall supervision of the audit teams pertaining to a functional group shall be
undertaken by a Director III who shall, accordingly, perform the following functions:
1.
Supervise the preparation of and sign the Auditor's report, including the audit opinion. For
this purpose, he shall review the audit program for substantive adherence with the common
audit program, the working papers, and other evidentiary matters related to the audit of the
agency.
2.
Direct the preparation of, and sign, the Management Letters and other interim reports to
the management of the audited agency.
3.
Supervise the preparation and issuance of the Certificates of Settlement and Balances
(CSB), and sign the same for the Commission.
4.
Supervise the resident staff which has custody of documents from, and continues to
undertake other duties mandated by law for, the agency.
5.
Supervise and encourage the development of a common audit program and performance
standards applicable to agencies pertaining to a functional group.
6.
C.
Perform other functions as may be specifically assigned from time to time.
Resident Staff, Functions and Responsibilities:
The two (2) COA State Auditors remaining in the agency shall have the following duties
and responsibilities:
1.
To witness the opening of bids conducted by management.
2.
To conduct inspection of deliveries of equipment and supplies within their competence.
3.
To witness physical inventory-taking by management.
4.
To conduct cash examination and if necessary, with the assistance of the other members
of the audit team.
5.
To post-audit revenue and disbursement vouchers.
6.
To act as custodian of vouchers and other papers and documents.
7.
To prepare Certificates of Settlement and Balances for the signature of the Director III
concerned.
8.
To act initially on requests for relief from property and money accountability such as
determining compliance with documentation requirements and preparing the appropriate action
instrument for signature of the Director concerned.
9.
Such other functions still required to be performed in the audited agencies or as may be
assigned from time to time.
D.
Implementation Timetable
In view of the deadline for submission of Annual Audit Reports for 1993, on February 24,
1994, and the impending completion of the SAADO wing reconstruction to provide the needed
office space, the tentative date for the implementation of this directive shall be April 11, 1994.
The Unit Auditors of the auditing units concerned, while working on their annual audit
reports for submission on deadline, shall already make the necessary preparations for their
eventual withdrawal to the COA Central Office.
Accordingly, they shall each submit to their respective Directors/Officers-in-Charge the
complete list of all personnel in their units with their recommendation on the two (2) state
auditors to remain in their present offices for custodial, inspection, and other functions that still
have to be performed at agency premises, as specified herein.
On the basis of these lists submitted by the Unit Auditors, the Directors/Officers-inCharge concerned shall forthwith submit to the undersigned the proposed office orders for the
withdrawal of the personnel concerned, by auditing unit, and for the creation of the audit teams
to conduct audit of the agencies concerned prospectively.
The Directors/Officers-in-Charge of the Corporate Audit Office I, the National
Government Audit Office II, and the Administrative Office, shall supervise the proper
implementation of this memorandum.
(SGD.) PASCASIO S. BANARIA, Chairman
See Attachment: COA Resolution No. 94-56