DEPARTMENT OF EDUCATION



DEPARTMENT OF EDUCATION

SUMMARY OF SIGNIFICANT FINDINGS

CY 2010

|FINDINGS |RECOMMENDATIONS |CONCERNED REGIONS |LEGAL BASIS |MANAGEMENT ACTIONS |

|ECONOMY AND EFFICIENCY | |

|Failure to monitor and evaluate the implementation of the DepEd Computerization Program (DCP) | |

|The Program Management Committee of |OSEC |OSEC, NCR ( DO-QC), |DepEd Computerization Program |TS-ICTU explained that the conduct of monitoring and |

|OSEC in coordination with the Regional| | |(DCP) |evaluation (M & E) was deferred for a later |

|and Division ICT Coordinators failed |mobilize the PMC to monitor the | | |implementation to address the coverage first, before |

|to monitor and evaluate the |proper implementation of the | | |improving thru augmentation and replacement of |

|implementation of the DCP, thus |program and provide feedback on | | |unserviceable units. The previous administration was |

|effectiveness of the program was not |the status of implementation as | | |to fastrack the deployment of computers to public |

|ensuredF:\for presentation |well as recommendations to | | |secondary schools to ensure that all high schools shall|

|zamboanga\DCP - finding No. 1.doc |appropriate officials; and | | |have at least one computer laboratory by SY 2009-2010. |

| | | | | |

| |ensure that the criteria on the | | |Management explained that DCP budget for 2008 was only |

| |selection of school recipients | | |for Capital Outlay while the MOOE component in 2009 was|

| |prescribed in the DepEd guidelines| | |earmarked solely for internet connectivity. It is only |

| |are strictly followed. | | |the 2010 MOOE component that was allotted for M & E; |

| | | | |however, the execution of the budget was given the go |

| |DO Quezon City | | |signal only on May 31, 2011. |

| | | | | |

| | | | |On the feedback issues, management reasoned that |

| |coordinate with the DepEd Central | | |winning bidders were asked not to deliver unless an |

| |Office to address the delayed | | |orientation is conducted and the schools have completed|

| |delivery of computer units to the | | |the counterpart requirements. It further informed that|

| |target schools to afford the | | |in principle, all secondary schools are entitled to |

| |present batch of students the | | |have at least one computer laboratory to achieve the |

| |immediate use of these computers; | | |100 percent completion of the project in HS. There are |

| | | | |instances that the recipients are being replaced with |

| |conduct an intensive information | | |another school because of wrong declarations of the |

| |dissemination drive of the | | |required information which was found out normally |

| |programs for school authorities to| | |during orientation seminars. |

| |be properly informed and be | | | |

| |adequately prepared to ensure | | |DepEd Memo Nos. 13, 16, 71, 75 re: Implementation of |

| |maximum benefits from the program;| | |DepEd Computerization Program (for Batches 6, 12, 8, |

| |and | | |11) and DepEd Memo Nos. 31 and 112 re: |

| | | | |Orientation/Briefings on DCP, all series of 2011 were |

| |assign an ICT Coordinator to | | |issued to enhance skills of users for instructional |

| |properly assess the computer needs| | |purposes and effective governance through an ICT-aid |

| |of the schools on the basis of the| | |environment and augmentation of computer laboratories |

| |criteria set under DO 78 series | | |for secondary schools. The other batches will follow |

| |2010 and make proper | | |first quarter of 2012. |

| |recommendations to the DepEd for | | | |

| |inclusion in its priority list of | | | |

| |recipient schools. Meanwhile, | | | |

| |schools found to be in dire need | | | |

| |of the computer units but lack the| | | |

| |necessary space to acquire and | | | |

| |maintain them must be properly | | | |

| |informed beforehand to afford | | | |

| |adequate preparations prior to the| | | |

| |delivery of the equipment. | | | |

|Delayed Implementation of the DepEd Internet Connectivity Program (DICP) | |

|Guidelines for the implementation of |OSEC |OSEC, NCR (QC, Makati City|Deped Order No. 113 s. 2009 |TS-ICTU informed of the issuance of DepEd Order No. 46 |

|the DICP pursuant to Section 2 of | |and Mandaluyong City) | |s. 2011 dated June 1, 2011 prescribing the revised |

|DepEd Order No. 113, s. 2009 were not |thresh out issues hindering the | | |guidelines on the implementation of the DICP. |

|properly adhered to resulting in |smooth implementation of DICP; and| | | |

|delayed implementation of the project | | | |The DCP budget for 2008 was only for Capital Outlay |

|in 31 sampled schools in the NCR. |ensure that funds are readily | | |while the MOOE component in 2009 was earmarked solely |

|F:\for presentation zamboanga\DICP - |available to fast track | | |for internet connectivity. It was only in 2010 that |

|Finding No. 2.doc |implementation of the Project. | | |MOOE component was allotted for M & E; however, the |

| | | | |execution of the budget on the capital outlay and the |

| |DO | | |MOOE (DICP) components were only approved in April 14, |

| | | | |2011 and May 31, 2011, respectively. |

| |make proper representation with | | | |

| |the DepEd Central Office to | | |TS-ICTU had already drafted and programmed the |

| |facilitate release of funds for | | |monitoring and evaluation component of the program |

| |the connection of internet | | |which started in July 2011. |

| |facilities in the schools to avoid| | | |

| |delay of payments and possible | | |The Program Management Committee composed of ICT-TC, |

| |disconnections of internet | | |TS-ICTU and Bureau (ES and SS) reiterated strict |

| |services by the existing service | | |adherence to DepEd Order Nos. 5 and 113, series 2009 |

| |providers; | | |and No. 46 series 2011 re: Guidelines on DICP and |

| | | | |selection criteria on school-recipients were strictly |

| |ensure that the Schools concerned | | |followed. |

| |strictly adhere to the guidelines | | | |

| |on the the DICP pursuant to DepEd| | | |

| |Order No. 50, s. 2009 and DepEd | | |(Partially Implemented) |

| |Order No. 113, s. 2009; and | | | |

| | | | | |

| |discontinue paying in advance the | | | |

| |service provider using the regular| | | |

| |MOOE so as not to deplete the | | | |

| |funds. | | | |

|Ineffective management of canteen funds | | |

|The lack of effective controls over |enforce strict adherence in all |NCR (DO Manila, Paranaque,|DepEd Order No. 8 s. 2007 |Strict compliance to DepEd Order No. 8 s. 2007 |

|the management of canteen funds |aspects of the guidelines |TAPAT & Caloocan), RO I | |(Revised Implementing Guidelines on the Operation and |

|resulted to non-compliance with policy|prescribed under DepEd Order No. |(Dagupan, Vigan & Ilocos | |Management of School Canteens in Public Elementary and |

|requirements, under collection of |8, s. 2007; |Sur), III, IX (Polanco | |Secondary Schools). |

|P365,103.18, and improper accounting | |NHS, Pnan NHS, Zamboanga | | |

|of revenues from canteen share F:\for| |del Sur & Isabela City), | |RO 1 justified that the canteen operations were already|

|presentation zamboanga\canteen funds -|promote consistency and accuracy |CAR | |in compliance of the DepEd Order and the books of |

|finding no. 3.doc |in the implementation of the DepEd| | |accounts were maintained. The canteen funds were |

| |policies on canteen operations; | | |deposited at PVB, annual budget is prepared based on |

| | | | |expected income and disbursements are in accordance |

| |compel the school canteen managers| | |with the approved budget. However, some schools had no|

| |of DOs Manila, Parañaque and TAPAT| | |available TLE teachers to manage the canteen |

| |to remit the under collections | | |operations, hence, the canteen was leased to private |

| |totaling P365,103.18, share of the| | |individuals to avoid involvement of the teachers in |

| |school to be appropriated per | | |canteen operations which would paralyze classes and |

| |school program in accordance with | | |sacrifice the quality teaching time and education of |

| |DepEd Order No. 8, s. 2007 to help| | |the students. |

| |augment the maintenance and other | | | |

| |operating needs of the school; | | |RO IX and CAR oriented school canteen personnel on the |

| | | | |provisions of DepEd Order No., 8 especially on the |

| |develop/implement corrective | | |health permit requirements. |

| |action plans for resolution of the| | | |

| |problematic/legal issue at the | | |RO IX and NCR created monitoring team to assure |

| |Lakandula High School, and provide| | |compliance of he DepEd Order and assimilate problems |

| |general guidance on how to avoid | | |encountered as well as the solutions for the |

| |or deal with similar situations in| | |improvement of operations of the canteen. |

| |the future; | | | |

| | | | |RO III - no comments yet submitted |

| |review the Cooperative’s financial| | | |

| |reports to provide assurance that | | |(Partially implemented) |

| |the reported data are correct, and| | | |

| |require maximum collection | | | |

| |efficiency by imposing actual rate| | | |

| |due the School; | | | |

| | | | | |

| |maintain a system of expenditure | | | |

| |which conforms to the expenditure | | | |

| |allocation; and | | | |

| | | | | |

| |institute effective monitoring | | | |

| |procedures to ensure that all | | | |

| |canteen revenues are properly | | | |

| |managed with proper | | | |

| |accountability. | | | |

|Unnecessary conduct of regular orientation seminar-workshop for NAT, PEPT and NCAE | | |

|The conduct of preparatory orientation|stop the regular conduct of the |NETRC | |The Division Testing Coordinators (DTCs) are designated|

|seminar-workshop on the administration|orientation seminar-workshop | | |only by the Schools Division Superintendents (SDSs). |

|of NAT, PEPT and NCAE in Luzon, |preparatory to the scheduled | | |NETRC has no counterpart in the Regions and Divisions. |

|Visayas and Mindanao that incurred a |test/examination, unless it is | | |DTC is not a plantilla item. Hence, the involvement has|

|total cost of P8,821,469.00 is deemed |extremely necessary and urgent; | | |no job description and holding on to their commitment |

|unnecessary and may not be taken as a |and | | |and accountability becomes a problem, the very reason |

|regular activity inasmuch as the | | | |for conducting the regular orientation seminar-workshop|

|respective standard rules and |come up with an updated manual on | | |preparatory to the administration of the national |

|procedures of test administration have|the rules, procedures, and | | |examinations. |

|already been established. Any revision|policies of test administration, | | | |

|in the procedure can be disseminated |and disseminate the same to the | | |Personalize discussion of these is deemed more |

|through the provision of updated |different regional offices, | | |effective since resource speakers/persons can |

|manuals and the use of internet |through the internet access. | | |personally interact with the participants/DTCs such |

|access. | | | |that problems/queries can be addressed immediately |

| | | | |especially for the newly designated DTCs. |

| | | | | |

| | | | |With the centralized release of allotment for testing |

| | | | |programs, downloading of funds to Division Office is |

| | | | |made based on the submitted data of the DTCs during |

| | | | |orientation activities. Amount of funding requirements |

| | | | |is variable and dependent on the number of schools and |

| | | | |examinees for the given school year hence computations |

| | | | |of their budget is thoroughly discussed as well as the |

| | | | |proper utilization of the amount. |

|Improper utilization of Special Education (SPED) Program Fund | | |

|In DO Manila, SPED funds for MOOE |We recommended that Management |NCR (DO Manila) |DepEd Order No. 63, s. 2008, and |The SDS requested proper representation to the DBM on |

|totaling P6.9M received during 2009 |make representations with the DBM | |DepEd Order No. 13, s. 2009 |the realignment of said amount from MOOE to Capital |

|and 2010 intended for the Division’s |for the realignment of funds from | | |Outlay per letter to the Secretary dated June 15, 2011.|

|Pilot School for the Arts and schools |MOOE to Capital Outlay so the | | |They further justified that the purchased equipment and|

|offering Special Education, were |schools can fund activities of the| | |other related expenses incurred were vital in the |

|utilized for the purchase of various |program judiciously. | | |teaching-learning process and were considered as |

|equipment amounting to P1,634,960.85 | | | |assistive devices. |

|inconsistent with the existing | | | | |

|budgetary accounting rules. | | | |DepEd Order No. 69 s. 2011 dated Sept. 2, 2011 |

| | | | |(Guidelines on Sustaining Special Education on |

| | | | |elementary levels) was issued to continuously support |

| | | | |quality educational services to children with special |

| | | | |need and implement the activities of the SPED Program |

| | | | |under the approved School Improvement Plan. |

| | | | | |

| | | | |Also DepEd Order No. 98 s. 2011 re: Revised Guidelines |

| | | | |on the Utilization of the Financial Support to the |

| | | | |Secondary Schools with Special Education Program was |

| | | | |also issued. |

|Unreleased funds for elementary and secondary schools’ MOOE | | |

|Out of the P39,705,000.00 MOOE funds |We recommended that Management |RO VIII (DO of Eastern |FY 2010 Agency Budget Matrix, |To enhance the effectiveness of fund release policies |

|due to elementary and secondary |discontinue the practice of |Samar) |Section 8.1 (b), Rule VIII of |DBM Circular No. 2011-7 dated September 28, 2011 was |

|schools without fiscal autonomy as |withholding funds due to the | |IRR of RA 9155 |issued, adopting the quarterly validity of NCAs under |

|provided for in the FY 2010 Agency |elementary and secondary schools | | |Regular MDS accounts instead of the current month-end |

|Budget Matrix, only P10,583,898.22 or|without fiscal autonomy, but | | |validity effective October 1, 2011. |

|26.66 percent was released by the |instead release the full amount of| | | |

|Division of Eastern Samar, RO VIII |funds allotted to them pursuant to| | |DO Easter Samar justified that one of the reasons for |

|thru cash advance depriving the |Section 8.1 (b), Rule VIII, IRR of| | |the non-release of MOOE to schools is the failure of |

|schools the use of the unreleased |RA 9155. | | |the school heads to liquidate their cash advances on |

|amount of P29,121,101.78 in the | | | |time, so that funds intended for them were either used |

|schools’ normal operations and also | | | |for other MOOE or reverted back to the DBM. They |

|defeating the objective of | | | |assured to implement the COA recommendation and had |

|decentralization of fiscal management | | | |downloaded 100% MOOE to the elementary and secondary |

|as embodied in Section 8.1 (b), Rule | | | |schools thru payroll instead of individual vouchers and|

|VIII, IRR of RA 9155, otherwise known| | | |was not subjected to pre-audit to expedite the release |

|as the Governance of Basic Education | | | |of funds effective April 2011. Moreover, the release |

|Act of 2001. | | | |of DBM Circular No. 2011-7 will alleviate the problem |

| | | | |or burden of lapsing of funds. |

| | | | | |

| | | | |The Implementing Guidelines on the Direct Release of |

| | | | |MOOE Allocations of Schools to the Respective |

| | | | |Implementing Units was release per DepEd Order No. 60 |

| | | | |s. 2011. |

| | | | | |

|FINANCIAL AND COMPLIANCE | | |

|Cash in Bank – LCCA | | | |

|The non-adherence to existing regulations with regard to cash management | | | |

|and unauthorized maintenance of Cash-in-Bank Current Account which | | | |

|resulted to a) idle funds and/or unremitted collections of | | | |

|P157,440,024.25 to the National Treasury exposing funds to possible | | | |

|misuse, and b) unreconciled differences of cash balances affecting the | | | |

|reliability and existence of the account balance of Cash in Bank – Local | | | |

|Currency, Current Account (LCCA). | | | |

|A. Idle Funds/Unremitted Collections |refrain from depositing the |OSEC, NCR (ROP, Caloocan, |Section 3 of the General |NCR-ROP commented that the total amount of |

|to the National TreasuryF:\for |collections received from any |Pasay, QC, Manila, CAR |Provisions of Republic Act No. |P2,079,547.87 were returned to the BTr while P634,000 |

|presentation zamboanga\Idle Funds.doc |sources to the current account and|(ROP, Benguet, Apayao), |9970 (General Appropriations Act |PEI for 2010 of the ROP were returned to Central |

| |remit the balance/fund mentioned |VIII, IX (Zamboanga del |for 2010) |Office under Check No. 203335 dated March 2, 2011. |

| |to the National Treasury in |Norte) | | |

| |compliance with the aforementioned| |Section 4.6 of Joint Circular No.|DO Caloocan explained that part of the excess funds |

| |regulations; | |2004-01 dated January 1, 2004 of |amounting to P1,277,543.66 was already remitted to the |

| | | |the DBM and DepEd |National Treasury. The balance of P822,674.38 will |

| |strictly adhere to the provisions | | |be released to claimants upon submission of the |

| |of Section 3 of the GAA and | |DBM Circular Letter No. 2008-11 |required liquidation documents by the |

| |Section 4.6 of the Joint Circular | |dated December 8, 2008 |teachers/personnel and any excess amount will be |

| |of DBM and DepEd; and | |specifically Section 3.1.3 |remitted this April 2011. |

| | | | | |

| |implement a sound cash management | | |The accountant of DO Marikina commented that the amount|

| |system by stopping the practice of| | |of P913,261.70 which remained deposited in the current |

| |transferring unused balances of | | |account is composed of a) funds for DepEd Projects |

| |NCAs to current account without | | |such as SPED Centers, ALS, Preschool, Special |

| |proper basis. | | |Science-Elementary Level and ECARP which are still |

| | | | |subject for implementation; and b) revenue from various|

| | | | |sources such as field study, shooting and salvage |

| | | | |materials which shall be used for the payment of BAC |

| | | | |members’ honorarium, purchase of supplies needed, |

| | | | |augmentation for the purchase of other office supplies |

| | | | |and materials and for future projects. |

| | | | | |

| | | | |DO Zamboanga del Norte gave assurance to remit the |

| | | | |amount of P1,189,826.59 out of the P10,389,826.59 since|

| | | | |the remainder was already used to execute the program |

| | | | |under DepEd Order No. 56, s. 2009 Re: Immediate |

| | | | |Construction of Water and Handwashing Facilities in all|

| | | | |Schools for the Prevention of Influenza A (H1N1) |

| | | | |authorizing the utilization of SBRMS Fund or from any |

| | | | |available local funds for the accomplishment of said |

| | | | |order. |

| | | | | |

| | | | |In CAR, the ROP had remitted to the BTr the amount of |

| | | | |P845,137.58. Dos of Benguet and Apayao is still |

| | | | |analyzing the reason for the built-up of unutilized |

| | | | |NCA, updated and pay-off all outstanding obligations |

| | | | |due for personal services. |

|B. Unreconciled Cash Balance and |require the Accountants to prepare|Unreconciled |Section 74 of P.D. 1445 |The approval of the authority to hire one contract of |

|delay submission of BRS F:\for |and submit the monthly Bank |CO (OSEC, BSE, NETRC, | |service for each Region and Division Offices per |

|presentation zamboanga\Unreconciled |Reconciliation Statements of all |EDPITAF), |Sections 3.1 and 3.2 of COA |unnumbered memo dated Nov. 18, 2008 and Apr. 13, 2011 |

|cash balance.doc |its bank accounts, take up |NCR ( Marikina and |Circular No. 96-001 |which took effect January 2009 and July 2011, |

| |reconciling items, and adjust the |Manila), II (ROP, Quirino | |respectively, were deemed to resolve the manning |

| |books for errors, if any, to |& Nueva Vizcaya), III | |shortage of financial staff handling the monthly |

| |reflect the correct balance of the|(ROP), VII (ROP), IX | |preparation of bank reconciliation statements and other|

| |cash account in the financial |(ROP), XII (Sarangani) | |financial reports. |

| |statements; | | | |

| | |Delayed Submission of BRS | |As of December 2011, the Central Office’s OSEC, bureaus|

| |coordinate with the Depository | | |and agencies latest BRS updates was October 2011 due to|

| |Bank for the prompt delivery of |CO (BALS), I (La Union, | |the delayed delivery of bank statements. |

| |the monthly bank statements with |Ilocos Sur, Vigan City & | | |

| |the supporting documents to |Urdaneta), VIII (Leyte, | |On-going reconciliation of balance per books against |

| |facilitate the timely |Samar & Calbayog), DO XII | |the Bank Statements/records as well as updating of the |

| |reconciliation of its bank |(Cotabato) | |Bank Reconciliation Statement is being undertaken by |

| |accounts; and | | |concerned region/division offices down to the school |

| | | | |levels. |

| |designate a regular accounting | | | |

| |personnel of the Division/School | | |In RO I, the Dos of Vigan, Urdaneta and Ilocos and its |

| |to regularly prepare monthly Bank | | |various schools, submitted BRS as soon as the Bank |

| |Reconciliation Statements. | | |Statements are available except for DO La Union. |

| | | | | |

| | | | |RO XII agreed to the recommendation. The Accountant |

| | | | |only maintains a working paper as her subsidiary ledger|

| | | | |for the accounts but committed to maintain subsidiary |

| | | | |ledgers this ensuing year. Also, they will follow up |

| | | | |their enrollment with the “WeACCESS” facility of the |

| | | | |Land Bank of the Philippines’ so they could access |

| | | | |their accounts since the bank statements coming from |

| | | | |LBP were received by them two to three months late. As|

| | | | |of September 13, 2011, most of the accounts had been |

| | | | |prepared with BRS as of June 30, 2011 except for those |

| | | | |without bank statements to date. |

|Unauthorized booking up of prior years’ obligation | | |

|In DepEd-NCR, the provisions for the |The Head of the Budget and Finance|NCR - ROP |DepEd Order No. 37, s. 2004 as |The Chief of the Budget & Finance Division informed the|

|payment of prior years’ Over and |Division submit the following to | |amended |concerned DepEd-CO Accountants to submit the DBM |

|Above Allowances and unpaid GSIS |the Audit Team: | | |authority to book up prior years' unpaid GSIS |

|Contributions of teachers out of | | | |contributions. The processing of supporting documents |

|savings in the amount of |A copy of the DBM Authority as | | |at the CO is on-going. The RO is wating for the |

|P513,004,732.45 are not in accordance |supporting document to book up | | |endorsement of the documents (duly certified by the |

|with Sections 21 and 58 of the General|prior years’ unpaid GSIS | | |Chief Accountant and verified by the auditor) addressed|

|Provisions of Republic Act 9970 and |contributions amounting to | | |to the Regional Director for request of DBM Authority. |

|the Department of Budget and |P411,206,542.64 in accordance with| | |The transfer of fund to DepEd-CO shall take effect only|

|Management letter dated July 15, 2008;|the General Provisions of Republic| | |upon receipt of authority from DBM. Further, the |

|hence, the reliability of the accounts|Act 9970; and | | |computation for over and above allowances prepared by |

|Due to Officers and Employees of | | | |the Payroll Services Division, CO was forwarded to the |

|P101,798,189.81 and Due to Central |Summary of Claims certified by the| | |concerned DOs for verification by their respective |

|Office of P411,206,542.64 to record |Chief Accountant and verified by | | |Accountant and Auditor. |

|the liability accounts for the Over |the Auditor as supporting document| | | |

|and Above Allowances and GSIS |to record the payable of the over | | |The Prior Years' unpaid GSIS contributions amounting to|

|Contributions, respectively, cannot be|and above allowances amounting to | | |P411,206,542.64 was remitted to the Bureau of Treasury |

|assured. |P101,798,189.81 in accordance with| | |last June 30, 2011 under Check No. 219363 dated June |

| |DBM letter dated July 15, 2008. | | |28, 2011. |

|Unliquidated cash advances | | |

|Non-adherence to the provisions |direct the Accountant to monitor |CO (OSEC, LCC, BALS, BSE, |Sec. 89 of PD 1445 |The management had minimized the outstanding balances |

|embodied under Sec. 89 of PD 1445 and |and strictly enforce the |BEE, FAPs), NEAP, NCR | |of unliquidated cash advances for strictly enforcing |

|COA Circular No. 97-002 dated February|liquidation of cash advances |(Paranaque, Manila & |COA Cir. 97-002 dated February |the no liquidation, no cash advance policy. |

|10, 1997 and other pertinent |within the prescribed period in |Pasig), CAR (Abra, |10, 1997 | |

|regulations on the granting, |compliance with Section 89 of PD |Benguet, Flora NHS, ANIA | |Unnumbered Memo dated Sept. 5, 2011 was issued by the |

|utilization and liquidation of cash |1445 and COA Circular No. 97-002 |NHS, Hingyon, Banawe & |Sec. 16 Title III of Executive |Accounting Division to further enforce internal control|

|advances, laxity in the maintenance of|and see to it that no additional |Benguet NHS), I (ROP, |Order 248 and Par. 5.1.3 of COA |on cash advances prohibiting the grant of cash advances|

|accounting records and absence of |cash advance shall be allowed |Pangasinan I & II, |Cir. 97-002 |to Contract of Service Employees. |

|proper monitoring had resulted in the |unless the previous ones are |Alaminos, Candon & San | | |

|accumulation of P805,051,186.93 |settled or properly accounted for;|Carlos), II (ROP, Batanes,|Section 73 of the Manual on the |The OSEC, Bureaus and Centers had liquidated as of |

|unliquidated or unsettled Advances to | |Cagayan, Cauyan City, |New Government Accounting System |November 2011 total amount of P83.3 million out of the |

|Officers and Employees which likewise,|conduct extensive monitoring of |Isabela & Nueva Vizcaya, |(Vol. I) |P171.3 million unliquidated balance for CY 2010. |

|misstated the expense and income |the grant and liquidation of cash |Alfonso Cataneda Dupax del| | |

|accounts as of year-end. F:\for |advances; and send demand letter |Sur NHS), III (Zambales, |Section 12 on the Manual on the |FAPs and NEAP had liquidated P4.4 million and P42,556 |

|presentation zamboanga\unliquidated |to officers and employees with |Nueva Ecija, Malolos, |New Government Accounting System |out of the P5.9 million and |

|cash advance.doc |long outstanding accounts, and |Bulacan, Tarlac, Tarlac |(Vol. II) |P775,773 unliquidated cash advances, respectively. |

| |impose sanctions when necessary |City & Olongapo City), VI | | |

| |such as withholding/suspending |(ROP, Roxas City, | |In RO I, most of the concerned officials had submitted |

| |their salaries as provided under |Guimaras, Cadiz City, | |and recorded their liquidation. DO Pangasinan I |

| |Executive Order No. 248 and COA |Silay City, Iloilo City, | |conducted seminar for Proper Accounting, Disbursement |

| |Circular No. 97-002; |Negros Occ., Capiz, | |and Liquidation of Government Funds last March 7, 2011.|

| | |Bacolod City, Iloilo, | | |

| |ensure the settlement of all cash |DMLMHS, Iloililo City NHS,| |The accounting staff of BALs is currently working on |

| |advances at year-end so that |Mandurriao NHS, Himamaylan| |the individual SLs and monitors the cash advances. |

| |appropriate expense account will |NHS, Tigbao NHS, Hinigaran| |Adjustment has been made on the negative balances. |

| |be recognized in the books, and |NHS, Binucuil NHS, | | |

| |instruct the concerned accountable|Bungsuan NHS, Panitan NHS,| |RO II and other offices and schools to abide and adhere|

| |officers and employees to deposit |villacin NHS, Tiglawigan | |to the provisions of Sec. 89 of PD 1445. DO Cauayan to|

| |or return immediately to the |NHS and Lemery NHS), VIII | |communicate with their officials and employees with |

| |cashier/collecting officer any |( ROP, Naval School of | |outstanding cash advances to require them to liquidate |

| |unused portion of their cash |Fisheries & Maripipi | |at the earliest possible time. |

| |advance; and |National Vocational | | |

| | |School), IX (ROP, | |RO III had stopped granting cash advances to concerned |

| |instruct the Accounting section to|Zamboanga City, Zamboanga | |officers with unsettled accounts and submitted |

| |take up as receivable account all |del Norter, Zamboanga del | |liquidations. l |

| |cash advances granted to officers |Sur, Zamboanga Sibugay, | | |

| |and employees and to prepare and |Dipolog, Dapitan City, | |RO VI and XI commented that demand letters were already|

| |maintain a complete and up-to-date|Southcom NHS, Katipunan | |sent to employees with unliquidated cash advances. |

| |subsidiary records for control and|NHS & Manukan NHS), X | | |

| |monitoring purposes. |(ROP, Bukidnon, Lanao del | |RO VIII commented that demand letters were already |

| | |Norte, Misamis Oriental, | |issued but no actions received. One accountable |

| | |Cagayan de Oro City, | |officer commented that the CA was not in her possession|

| | |Oroquieta Ctiy, Tangub | |but with some DepEd officials who just used her name |

| | |City and Ozamiz NHS, XI | |for she was then the Disbursing Officer at that time. |

| | |(ROP, Davao City, Davao | | |

| | |Oriental, Panabo City, | |RO IX commented that instruction was already given to |

| | |Davao del Norte, Comval, | |the accountant to refrain from granting additional cash|

| | |Digos City and AO | |advance to school heads and officers and employees who |

| | |Floriendo NHS), XII (ROP, | |have outstanding CA. As of July 31, 2011, 97 percent |

| | |Cotabato City, Koronadal | |was already liquidated. |

| | |City, Tacurong City, | | |

| | |Kidapawan City, Sultan | |RO XII commited to maintained subsidiary ledgers and |

| | |Kudarat, South & North | |had already issued demand letters . |

| | |Cotabato), XIII (Agusan | | |

| | |del Surl, Bislig City, | |RO XIII committed to direct all officials and employees|

| | |Dinagat Islands, Surigao | |concerned to immediately settle their unliquidated cash|

| | |City, Surigao del Norte & | |advances and sanction such as the withholding of their |

| | |del Sur) | |salaries and other benefits for such overdue |

| | | | |unliquidated cash advances. |

| | | | | |

| | | | |In CAR, the Accounting unit recorded cash advances as |

| | | | |such and recognized expenses only upon submission of |

| | | | |liquidation reports. |

| | | | | |

| | | | |NCR management strictly enforce the no liquidation no |

| | | | |cash advance policy. The DO Paranaque was amenable |

| | | | |to the findings and will comply with COA rules and |

| | | | |recommendations. |

|Unutilized Cash Advances | | |

|In OSEC, BALS and SHNC, there were |ensure that project implementers |CO (OSEC, BALS and SHNC) |Sec. 5.7 of COA Circular 97-002 |The Chief Accountant of OSEC commented that the |

|excessive grant of cash advances for |observe prudence in the | | |Accounting Division had already implemented measures to|

|special/specific purpose due to |preparation of budget estimates so| | |minimize the excess cash advance such as limiting the |

|management’s failure to exercise |that cash excesses could be | | |budgets for supplies and contingencies and excluding |

|judicious and effective budgeting |avoided or minimized; | | |from the cash advance the amounts for board and lodging|

|which resulted in the return of | | | |and travelling expenses of staff. They have already |

|unutilized portion amounting to |require the accountable officers | | |reminded the accountable officers to immediately refund|

|P17,119,521.13, foregoing the |to immediately return thru the | | |unexpended balance, however, due to several reasons |

|opportunity to implement other urgent |Cashier unexpended balance of | | |such as lack of NCA the unexpended balance were |

|or priority programs/projects of the |their cash advances as required | | |utilized and not refunded. Others such as postponed |

|department. Moreover, the unutilized |under aforementioned regulation | | |acitivities due to non-availability of venue, speakers |

|funds remained in the custody of the |and remit the same to the BTr; | | |etc. |

|accountable officers, ranging from 4 | | | | |

|days to 36 months, contrary to Sec. |undertake review of the existing | | |Further, demand letters were already sent to the |

|5.7 of COA Circular No. 97-002 |budget system or process when | | |accountable officers. |

|exposing government funds to possible |necessary. Stricter policies must | | | |

|loss and misuse. F:\for presentation |be instituted to ensure compliance| | |In SHNC, the excess funds were attitbuted to discounts |

|zamboanga\Unutilized Cash Advance.doc |on the timely liquidation of cash | | |on plance fares, non attendance of some participants |

| |advances; and | | |due to conflicting schedules and re-scheduling of |

| | | | |activities. They had instructed all the |

| |establish controls and proper | | |program/project coordinators with their division chiefs|

| |monitoring of cash advances to | | |to review, validate budget allocation and to confirm |

| |ensure that programs and projects | | |the total number of participants before the preparation|

| |of the government are accomplished| | |of the budget allocation. |

| |and the goals/objectives are | | | |

| |achieved. Alternative courses of | | |While BALS management reasoned that returns/refunds |

| |action be readied and identified | | |were attributed to moving of activities to another |

| |at the onset to avoid possible | | |dates, reduced number of planning meetings, reduce |

| |derailment and wastage of | | |live-in workshops or less supplies used. Refunds were |

| |government funds. | | |not immediately made due to the request of authority to|

| | | | |reschedule such activity and use the remaining balance.|

|Uncollected Receivable Accounts | | |

|Regional Education Learning Centers |comply strictly with the |I, II, VIII and Baguio |Sections 60, 61, 63 and 64 of |Management to comply strictly to the provisions of Sec.|

|(RELCs) of ROs I, II, VIII and the |guidelines on billing, credit, |Teachers Camp |GAAM Vol. 1 |64 of GAAM Vol. 1, Regional Memorandum No. 182, s. of |

|Baguio Teachers Camp (BTC) incurred |collection and monitoring of | | |2009 dated June 1, 2009, and the guidelines on billing,|

|loss of income totaling P9,370,533.75 |receivables for the use of BTC | | |credit, collection and monitoring of receivables and |

|due to accumulated long overdue |facilities. Determine proper | | |the contract agreement. |

|accounts from dormitory operations, |responsibility and accountability | | | |

|lodging and catering services, of |of concerned units; | | | |

|which P7,368,382.75 are collectibles | | | |Management of RO I commented that they had instructed |

|of Baguio Teachers Camp aging 12 to 29|intensify collection efforts and | | |the OIC – RELC Manager and the Clerk-in-charge to |

|years, which was attributed to a) lack|institute legal remedies, if | | |immediately collect overdue and outstanding accounts |

|of written policies on billing, credit|warranted. Seek assistance of the | | |receivable and prepare demand letters to follow up |

|and collection; b) lack of supervision|DepEd Central Office in the | | |until such time that accounts due be fully paid. As of|

|and monitoring of receivables; c) |collection of long outstanding | | |December 2011, the amount of P94,800 have been |

|undocumented / unsupported receivable |receivables, especially from other| | |collected out of the P1,349,860 receivables. |

|accounts; and d) non-adherence to |national government agencies. | | | |

|Sections 60, 61, 63 and 64 of GAAM |Follow-up the action taken by the | | |At BTC, management informed that a meeting will be |

|Vol. I. F:\for presentation |DepEd Secretary on PSC unpaid | | |conducted with the concerned personnel assigned at the |

|zamboanga\Uncollected Receivables.doc |accounts; | | |registration, assessment, billing and collection units |

| | | | |to address the audit observation and the PSC account to|

| |instruct the Dorm Manager to | | |be discussed with the Secretary. Management already |

| |prepare monthly statements of | | |transmitted through facsimile the Statement of Account |

| |accounts (copy furnished the | | |of the PSC as of August 31, 2011 to the Office of Usec |

| |Accountant) to remind the lodgers | | |Varela on Sept. 6, 2011. As to the other receivables |

| |of their obligations; | | |of the Camp, the Accounting Section has sent several |

| | | | |collection letters to debtors at their last known |

| |ensure strict adherence of the | | |address. A letter request for write off of accounts of|

| |provisions in Sec. 64 of GAAM Vol.| | |debtors with unknown addresses has been drafted and |

| |I, Regional Memorandum No. 182, s.| | |supporting papers are being gathered. |

| |of 2009 dated June 1, 2009, and | | | |

| |the contract agreement especially | | |In Region I, management disclosed that out of the |

| |to those clients coming from the | | |P1.3million receivables P0.948 million have been |

| |private sector; | | |collected. |

| | | | | |

| |see to it that all transactions | | |While the Dorm Manager of Region II already prepared |

| |are properly documented and | | |monthly statement of accounts and issued notices to |

| |supported with billing | | |lodges to remind them of their obligations. |

| |statements/contracts; | | | |

| | | | | |

| |exert efforts to locate records of| | | |

| |receivables which remained dormant| | | |

| |so that appropriate action can be | | | |

| |undertaken; and | | | |

| | | | | |

| |determine all dormant accounts | | | |

| |that are deemed uncollectible and | | | |

| |request for the write-off in | | | |

| |accordance with COA Circular | | | |

| |97-001 and COA Memo 2009-082. | | | |

|Unreconciled reciprocal accounts | | |

|The reciprocal accounts were not |prepare schedules of the |NCR (ROP) and all Regions | |OSEC prepared adjustment per JEV No. 2011-06-359 dated |

|reconciled at year-end thus, affecting|reciprocal accounts, maintain | | |June 30, 2011 amounting to P18,054,280. (released in CY|

|the fair presentation of the accounts |subsidiary ledgers for the | | |2005 for the Palarong Pambansa). |

|in the financial statements. F:\for |unused/unliquidated downloaded | | | |

|presentation zamboanga\Unreconciled |MOOE funds to schools without | | |On-going reconciliation and updating of subsidiary |

|Reciprocal Accounts.doc |complete set of books and | | |ledgers and immediate booking of liquidation reports |

| |reconcile the difference of the | | |submitted by regions, divisions, and school heads. |

| |reciprocal accounts. | | | |

| | | | |RO V made adjustments to record deposits not reported |

| |Prepare a regular periodic | | |by operating units using the BRS for Net Pay and RO V |

| |quarterly reconciliation to | | |authorized deductions accounts. |

| |immediately correct any | | | |

| |discrepancies noted; | | |In RO IX, the DO Sibugay had fully reconciled fund |

| | | | |transfers to RO and updated the ledgers. |

| |draw a Journal Entry Voucher to | | | |

| |correct the balances of accounts | | |Of the four SDO’s and 35 secondary schools implementing|

| |affected after reconciliation; and| | |the ATM payroll system of mRO XI, only Davao del Sur |

| |record the adjustment of unused | | |has not fully implemented. The Region submitted the |

| |subsidy of the Division Office of | | |masterfile to the bank and started the mass opening and|

| |Apayao to account Due from | | |expects full implementation by year-end. |

| |Operating Units; and | | | |

| | | | |In RO XIII, the Due from OUs represents the outstanding|

| |submit to the concerned NCR | | |cash advance to schools for their regular MOOE, per COA|

| |Division Offices, particularly | | |guidelines on the proper recording of releases of |

| |Parañaque and Muntinlupa, the | | |regular operating expenses of schools without separate |

| |Cash in Bank Register in order to | | |set of books. |

| |record the appropriate expenses of| | | |

| |the downloaded MOOE funds. | | | |

|Overstatement of Due from Regional Offices/Staff Bureaus | | |

|The Due from Regional Offices/Staff |Management instruct the Accountant|OSEC | |JEV No. 2011-06-359 dated June 30, 2011 was prepared |

|Bureaus (ROs/SBs) account of |to conduct immediate | | |adjusting the amount of P18,054,280.00 released in CY |

|DepEd-OSEC was overstated by |reconciliation of accounts; to | | |2005 for the Palarong Pambansa. As to the remaining |

|P46,921,378.59 due to prior year’s |record proper | | |balance of P28,867,098.59, on-going reconciliation and |

|erroneous entry made on the transfer |reclassification/adjustment in the| | |verification is being made prior to booking. |

|of funds through funding check and the|books, particularly those error | | | |

|absence of proper monitoring and |committed involving Prior Years | | | |

|coordination with the various ROs/SBs |transactions; and to strictly | | | |

|in the reconciliation of accounts and |observe appropriate accounting | | | |

|records. |rules and regulations to avoid | | | |

| |similar mistakes in the future. | | | |

| | | | | |

|Doubtful balances of inventory accounts | | |

|The validity, accuracy, and existence |require the Supply Officer to |A) V (ROP), VI (ROP, Silay|Section 43 & 46, Vol. 1 of the |OSEC will closely coordinate in the reconciliation and |

|of the Inventory Accounts are doubtful|submit the Report of Physical |City, Roxas City, Capiz, |Manual on New Government |maintenance of the subsidiary and property ledger |

|due to absence of inventory reports |Count of Inventory (RPCI) |Negros Occidental and |Accounting System (NGAS) |cards. It is also requested for approval from COA to |

|and records on inventories totaling |pursuant to the New Government |Cadiz City Division), VII,| |write-off the unaccounted prior year's balances of the |

|P295,749,181.67, unrecorded issuances |Accounting System and coordinate |VIII ( Northern Samar and |COA Circular No. 2005-002 dated |Office Supplies and Spare Parts which have been dormant|

|amounting to P48,000,687.31, direct |with the Accounting Section for |Biliran Division Office), |April 14, 2005 |for several years. |

|charge to expense of purchases |the reconciliation of the said |IX (ROP, Dapitan City, | | |

|totaling P60,844,186.65, and |account and submit the same to the|Commonwealth NHS, |Section 111 of PD 1445, the |The Biliran Division Office commented that they will |

|unreconciled difference of |Audit Team within the prescribed |Zamboanga del Sur |Government Auditing Code of the |comply with the audit recommendation. |

|P60,099,709.27. |period; |Division, Zamboanga del |Philippines | |

| | |Norte and Zamboanga City | |The Supply Officer of RO V reasoned that the |

|A. Absence of physical inventory |require the Property Officers |Division Office), X ( Div.|Section 65 of the NGAS Manual |non-reconciliation of the account could be due to |

|taking and non-submission of report |concerned to submit regularly the |Of Lanao del Norte & | |purchases made through reimbursements which were |

|thereof |RSMI which is the basis of the |Iligan City), XII (Banga | |treated as outright expenses and no longer recorded as |

| |Accounting Unit in recording the |NHS), CAR (Baguio City | |inventories. |

|B. Unrecorded deliveries/issuances of |supplies expenses for the period. |NHS, Benguet NHS, DO | | |

|supplies resulting in net |Maintain stock cards and update |Apayao, Bacarri National | |Zamboanga del Norte Division disclosed in the Notes to |

|overstatement of P48,000,687.31 |them periodically to solve or |Trade Agricultural HS), | |the Financial Statements that the inventory account |

| |minimize the perennial problem of |EDPITAF and SHNC | |cannot be reduced because of the failure of the |

| |unreconciled Accounting and | | |Accountable Officer to present the required RIS as |

| |Property records; |B) NCR (DO Marikina and | |attachment to the RSMI despite repeated demand |

| | |QC), OSEC, BSE, CAR (ROP),| |resulting to an alarming ballooning of said accounts. |

| |require the Accountant/Bookkeeper |I (ROP, Urdaneta, San | | |

| |to record the purchase of supplies|Carlos City, Pangasinan I,| |RO XI was amenable to the observations and reconciled |

| |and materials as inventories upon |& San Fernando City | |both records fully per JEV No. 2011-05-002320 to 22, |

| |acquisition. Record the related |Division Offices), II | |2011-05-002306, 2011-05-002361, 2011-05-002365. |

| |expense accounts upon issuance of |(ROP), III (San Jose Del | |2011-05-00239 and 2011-05-00234. |

| |inventories based on the RSMI in |Monte), V (ROP), VI (silay| | |

| |accordance with Section 43 of the |City), VIII (Samar, | |At OSEC the accounting and Property Divisions will |

| |NGAS Manual and COA Circular No. |Biliran, Tacloban and | |conduct a reconciliation of inventory accounts |

| |2005-002 and draw a JEV to adjust |Calbayog City Division | |tentative on Oct. 17 to 21, 2011. |

| |the affected accounts; and |Offices), IX (Regional | | |

| | |Science High Schoo) and XI| | |

| |direct the Accountant and the | | | |

| |Supply Officer to monitor and | | | |

| |reconcile their records and make | | | |

| |the necessary adjustments on the | | | |

| |discrepancies noted to reflect the| | | |

| |true balances of the Inventory | | | |

| |accounts in the financial | | | |

| |statements. | | | |

|Overstatement of Textbooks and Instructional Materials Inventory account | | |

|The validity and accuracy of Textbooks|monitor the submission of duly |NCR, III (Bulacan & |COA Circular No. 2004-008 |The Accounlting and Property Division will schedule a |

|and Instructional Materials Inventory |acknowledged Invoice Receipt of |Angeles), VIII (Samar & | |reconciliation of the inventory accounts, tentatively |

|account cannot be ascertained due to |Property by the recipients or |Biliran) , X, XIII (ROP | |on Oct. 17 to 21, 2011. Property Division is on its |

|the unrecorded issuances/receipts, |issued Inventory Custodian Slip to|and Agusan del Sur), and | |implementation of Asset Management System (AMS) |

|erroneous recording, and unrecorded |transfer accountability. All |CAR | |therefore all current transactions are now recorded |

|differences between accounting and |Property and Accounting staff | | |thru the AMS, while for prior years the validated |

|inventory records resulting in net |concerned should reconcile records| | |transactions from 2006 to 2009 are being encoded. |

|overstatement of P29,087,182.55 and |and books of each office/unit; | | |Thus, Property Division strongly recommends the |

|absence of necessary reports and | | | |implementation of AMS in the regions and divisions to |

|records, such as the physical |direct the Supply Officer to | | |avoid overstatement of textbook account. |

|inventory report, stock cards and |prepare all necessary documents | | | |

|supplies ledger cards. |required in the disposal of | | |The Accounting Unit needs additional personnel who will|

| |unusable textbooks and make | | |take charge in the maintenance of the supplies card and|

|The deficiencies noted above were |necessary adjustments in the books| | |subsidiary ledgers. |

|attributed to the following: |of accounts in order to reflect | | | |

| |correct balances in the financial | | | |

|Failure to conduct physical inventory |statements; | | | |

|No physical inventory reports/records | | | | |

|submitted |direct the Accountant/Bookkeeper | | | |

|Non-submission of RIS to the |to record the purchase of the | | | |

|accounting unit |textbooks as inventories upon | | | |

|No request for dropping of |acquisition. Record the related | | | |

|Obsolete/Unused textbooks |expense accounts upon issuance | | | |

|F:\for presentation |based on the RSMI in accordance | | | |

|zamboanga\textbooks materials |with Section 43 of the NGAS | | | |

|inventory.doc |Manual and COA Circular No. | | | |

| |2005-002 and draw a JEV to adjust | | | |

| |the affected accounts; and | | | |

| | | | | |

| |direct the Accountants and Supply | | | |

| |Officers to regularly reconcile | | | |

| |their records and to maintain an | | | |

| |updated and complete Supplies | | | |

| |Ledger Cards and Stock Cards as | | | |

| |prescribed in the NGAS to | | | |

| |facilitate reconciliation and | | | |

| |adjustment of discrepancies. | | | |

|Misstatements of Property, Plant and Equipment | | |

|The reliability, accuracy and |direct the Accountant to maintain |CO (OSEC, NEAP, BEE, BSE, |Chapter 2, Section 490 of the |In OSEC the Accountant effected the necessary |

|existence of Property, Plant and |and update subsidiary ledgers, |EDPITAF, FAPs), NCR (Las |Government Accounting and |adjustments dropping from the School Building account |

|Equipment (PPE) recorded in the books |equipment ledger and property |Pinas, Muntinlupa, |Auditing Manual (GAAM) |P214,208,771.43 and transferred the accountabilities to|

|of OSEC, Bureaus, ROs, DOs and Schools|cards; |Mandaluyong, Marikina, | |the recipient Division/Schools. Likewise, adjustment |

|cannot be established due to: a) |conduct regular physical inventory|Pasig, Pasay, |Section 66 of the Manual on the |was made as regards the project implemented by the |

|absence of physical inventory of |taking of PPEs and reconcile with |Taguig/Pateros), CAR, I, |NGAS, Volume II |FCCCI. Management coordinated with the said |

|balances totaling P4,900,537,860.69, |the accounting records to ensure |II, III, V, VI, VIII, IX, | |organization to furnish them certificate of |

|b) incomplete documentation and |completeness and accuracy of the |XI, XII & XIII |Sections 12, 41, 43, & 73 Volume |completion/acceptance for some completed projects for |

|unreconciled inventory report with |recorded PPE accounts; | |I of the Manual on NGAS |proper recording. |

|the books of account with a difference| | | | |

|of P5,120,707,330.91, c) unrecorded |exert efforts for the titling of | |Section 63 of P.D. No. 1445 |PFSED in collaboration with the Property Division will |

|PPE accounts totaling |the acquired land thru purchase | | |make the necessary appraisal of all the existing office|

|P3,016,105,385.34, d) |and donation to have an absolute | |Philippine Accounting Standard |building/other structures of DepEd. The final report |

|misclassification and recording of |ownership and establish its | |(PAS) No. 16 |of the activity shall be the basis for adjusting the |

|accounts without basis resulting to |propriety in the financial | | |property and accounting records. They agreed to review|

|overstatement of P3,233,562,913.46, |reports; | |Section 143 of the NGAS Manual, |its existing policies completion/acceptance of school |

|and e) unsupported with subsidiary | | |Vol. III |building project to properly identify and record all |

|ledgers and records of the balance |determine the cost of the land | | |the completed projects in the inventory records and |

|totaling P895,586,338.27 thus, |for purposes of recording. The | | |books of accounts. |

|resulting to misstatements in the |prevailing market value of lands | | | |

|financial statements. |in the locality and the BIR zonal | | |DepEd Order Nos. 109 and 82, both series 2011 dated |

| |values may be considered in the | | |12/29/11 and 10/24/11 were issued as Guideline on the |

|F:\for presentation zamboanga\PPE.doc |initial assessment of the lot’s | | |Proper Recording and booking up of school building and |

| |value prior to its registration | | |all donated properties. Management also created the |

| |for tax declaration/titling; and | | |National Task Force on School Sites Titling per DepEd |

| |require the Accountant to prepare | | |Order No. 33 s. |

| |a JEV to reclassify and adjust the| | |2011 to firmly establish the ownership of school sites |

| |misclassified asset accounts to | | |occupied by public elementary and secondary schools |

| |their appropriate account. | | |nationwide. |

| | | | | |

| | | | |Region V commented that they have their own Task Force |

| | | | |for Regional and Division Offices and Secondary Schools|

| | | | |that conducts physical inventory. All identified |

| | | | |properties are already in the possession of DOs and |

| | | | |Schools and JEV were drawn to record the transfer. |

| | | | | |

| | | | |RO VI will resume the physical inventory after the |

| | | | |repair of its Office. While the Accounting Section of |

| | | | |DO Capiz regularly posted the depreciation of PPE |

| | | | |accounts but records were not reconciled regularly. DO |

| | | | |Cadiz on the other hand failed to conduct physical |

| | | | |inventory due to voluminous workload but will work out |

| | | | |to conduct the same. |

| | | | | |

| | | | |DO Zamboanga del Sur, RO IX had created an inventory |

| | | | |team to conduct Physical Inventory of PPE account |

| | | | |during the summer vacation. Although unserviceable |

| | | | |properties were dropped from the property cards, the |

| | | | |Supply Officer failed to furnish the documents to the |

| | | | |Accounting Unit. |

| | | | | |

| | | | |RO XIII instructed and issued memoranda to concerned |

| | | | |officers to reconcile their records as soon as physical|

| | | | |inventories are conducted. |

| | | | | |

| | | | |In NCR, the Division Supply Officer committed to |

| | | | |prioritize the conduct of physical inventory. |

| | | | | |

| | | | |In RO I, (DO Ilocos Sur and Norte) , the |

| | | | |Ownerships of the land was already transferred in the |

| | | | |name of the school and correspondingly recorded it in |

| | | | |the books of accounts. The Donated computers in DO |

| | | | |Candon were already recorded while in DO San Carlos |

| | | | |advised the recipients of the donated equipment to |

| | | | |furnish the accounting office of the documents to |

| | | | |record the donation. |

| | | | | |

| | | | |BTC committed to take concrete on the matter in the |

| | | | |ensuing year. |

| | | | |Reconciliation between the Accounting Section, Supply |

| | | | |Section and Engineering and Physical Facilities Section|

| | | | |is still on-going. Discrepancies found will be |

| | | | |reflected in the next preparation of Financial |

| | | | |Statements. |

| | | | | |

| | | | |BEE is finalizing the complete inventory of PPE. |

| | | | | |

| | | | |NEAP justified that the Physical Inventory was not |

| | | | |completed due to lack of personnel and multi tasking |

| | | | |responsibilities of personnel and assured to take |

| | | | |concrete action. |

| | | | | |

|Overvaluation of PPE accounts | | |

|Property, Plant and Equipment (PPE) is|recompute the depreciation of PPEs|OSEC (LCC), CAR, I, II, |Sections 67 and 68 of the Manual |LCC Management complied with the aforesaid |

|overvalued by P3,735,419.98 due to |in accordance with the NGAS Manual|III, XIII & NEAP |on the New Government Accounting |recommendation by drawing a JEV to effect the necessary|

|inaccurate computation and |and prepare the necessary | |System, Volume I |adjustments. |

|non-recording of depreciation for the |adjustments; and | | | |

|year which likewise, resulted in the | | | |In NEAP, JEV No. 101-11-06-00 dated June 30, 2011 was |

|understatement of Depreciation Expense|exercise due diligence in the | | |prepared to take up depreciation expense of |

|and Accumulated Depreciation accounts.|timely recording of depreciation | | |P172,767.20. |

|Moreover, no depreciation were |expense to ensure that accounts | | | |

|allocated for the PPE accounts of NEAP|are fairly presented. | | |RO XIII recorded the equivalent depreciation expense in|

|and the three regions as required | | | |the books. |

|under Sections 67 and 68 of the Manual| | | | |

|on NGAS, thus rendering the account | | | |CAR had adjusted the accounting records. |

|balances unreliable.F:\for | | | | |

|presentation | | | | |

|zamboanga\depreciation.doc | | | | |

|Misstatements of School Building and Construction-in-Progress Accounts | | |

|In OSEC, NCR, CAR, Regions II and |prepare the necessary adjustments |OSEC, NCR, CAR, II and |Paragraph 2, Section G.I of the |OSEC management informed that JEVs were prepared to |

|XIII, completed school building |in the books to take up the |XIII |Manual on the NGAS, Volume I |book up those completed projects to the corresponding |

|projects remained in the |completed school building | | |school building and other structures accounts and the |

|Construction-in-Progress (CIP) account|projects; and | | |dropping from the books the subsequent transfer. COA |

|and were not transferred to the School| | | |will be furnished with the JEVs once adjustments of CIP|

|Building account contrary to the |verify from the recipient Division| | |account for CY 2010 including the prior years balance |

|provisions of Paragraph 2, Section G.I|Offices and/or implementing units | | |is being done. |

|of the Manual on the National |(IUs) whether the completed school| | |DO QC had already classified to the account School |

|Government Accounting System (NGAS) |building projects were recorded in| | |Building and was dropped from CIP for prior year's |

|Volume I resulting in the |their books of accounts upon | | |completed projects. The current year balance is still |

|overstatement of the account CIP and |transfer to avoid further | | |for reconciliation with the Infrastructure Office. |

|understatement of the School Building |overstatement of the asset account| | |RO XIII ensured that the documents needed for the |

|account by P345,577,421.82. |and to submit the corresponding | | |booking up of the completed school building will be |

| |documents as basis of the OSEC | | |submitted to the Accounting Office and adjusting |

| |Accountant in preparing the | | |entries will be effected in the books of accounts not |

| |necessary adjusting entries to | | |later than the 1st quarter of CY 2011. |

| |come up with the accurate balances| | | |

| |of the CIP and School Building | | | |

| |accounts. | | | |

|Office | | | |

|No. of SB Proj. Completed | | | |

|Amount | | | |

| | | | |

|OSEC | | | |

|29 | | | |

|229,593,542.97 | | | |

| | | | |

|NCR – DO QC | | | |

|17 | | | |

|51,098,242.90 | | | |

| | | | |

|CAR | | | |

|1 | | | |

|271,003.38 | | | |

| | | | |

|II | | | |

|5 | | | |

|18,832,465.96 | | | |

| | | | |

|XII – Surigao del Sur | | | |

|24 | | | |

|45,782,166.61 | | | |

| | | | |

|Total | | | |

|76 | | | |

|345,577,421.82 | | | |

| | | | |

|Unrecorded completed DPWH school building projects | | |

|Completed DPWH school buildings in |require the Division Physical |NCR (Pasig and Marikina) |DepEd Order No. 28, s. 2008 and |PFSED in OSEC informed that they will reiterate strict |

|NCR-Divisions of Pasig and Marikina |Facilities Coordinator to strictly|and RO I |DepEd Order No. 1, s. 2010 |compliance of DepEd Order No. 1 s. 2010 and instructed |

|were not yet recorded/turned-over to |monitor and assess the completed | | |the Division Physical Facilities Coordinator and DepEd |

|DepEd due to late submission of the |and/or on-going construction | |Section 3.1.3 , 3.3 and 4.1.1 of |Project Engineer to montor and inspect on-going and |

|required documents as provided under |through an on the spot ocular | |the Joint DepEd-DPWH Memorandum |completed DPWH school building projects. |

|DepEd Order No. 28, s. 2008 and DepEd |inspection to validate existence | |on the Amended Guidelines for the|They will also involved the Civil Society Group through|

|Order No. 1, s. 2010 resulting in the |and status of the projects and to | |coordination and monitoring of |the issuance of DepEd Order nO. 21 s. 2011 and close |

|understatement of the School Building |prepare a report to be | |DPWH-constructed school building |coordination between DPWH and DepEd Division Accountant|

|account by P247,836,380.56. While in |communicated to the concerned DPWH| |under the Regular School Building|in the transfer and booking up of DPWH-constructed |

|RO I, the constructed school buildings|District Offices to ensure proper | |Program of DepEd for CY 2010 |School Building. |

|were not in accordance with required |compliance in future undertakings.| | |In NCR-DO Marikina, the 19 completed DPWH-SB were |

|specifications as provided under Joint| | | |already booked up and the JEVs together with the |

|DepEd-DPWH Memorandum. |require the Division Accountant to| | |supporting documents were already submitted to COA, |

| |immediately record the transferred| | |Division Accountant and PFSED. Also 6 projects were |

|Deficiencies in RO I DPWH Projects: |DPWH constructed school buildings | | |dropped from FMMED books of accounts and transferred to|

| |in the books of accounts of the | | |DO Marikina, making the number of completed projects to|

|No installation of complete set of |Division Office to reflect the | | |25 from CY 2008 to 2010. |

|windows in DO Alaminos City |correct balance of the School | | |The Facilities Officer of RO I was instructed to verify|

|Walls, ceiling and roofing not painted|Building and Government Equity | | |the completeness of construction of school buildings |

|in DO Ilocos Norte |accounts in the financial | | |implemented by DPWH. |

|No electrical wires and fixtures in DO|statements. | | | |

|Ilocos Norte and Alaminos City | | | | |

|No blackboard in DO Ilocos Norte and | | | | |

|Ilocos Sur | | | | |

|Unremitted Inter-Agency Payables | | |

|Inter-Agency Payables totaling |Management require the Accountant |OSEC, V, IX & XII |Section c.b of GSIS Memorandum |OSEC Management submitted the list of TRAs prepared in |

|P44,326,345.33 were not remitted as |to strictly observe the timely | |Circular No. 4-97 dated July 7, |2011 for the remittance to the BIR of 2009 and 2010 |

|of year end to the GSIS, PAG-IBIG, |remittance of the inter-agency | |1997 |balances totaling P12,515,123.07. It is informed that |

|PHILHEALTH and BIR in violation of |payables such as GSIS, PAG-IBIG, | | |the balance of P17,567,135.49 is still for |

|GSIS Memorandum Circular No. 4-97 and |PhilHealth and BIR. | |Paragraph E(4) of HDMF Circular |verification. |

|similar issuances of Government | | |No. 275 (Implementing Guidelines | |

|Financing Institutions (GFIs) on the | | |on Employer Registration, |RO V informed that analysis of the account is on going.|

|prompt remittance of withheld monies,| | |Contribution, and Remittances |A Worksheet on Taxes Withheld and Remitted as of |

|deductions and contributions due them,| | |under RA 9679 |February 28, 2011 prepared by the Account Analyst was |

|which may result in unnecessary | | | |submitted to the Auditor for perusal. |

|payment of penalties. Likewise, the | | |HIC Circular No. 01, s. 2005 | |

|agency’s failure to remit the taxes | | |regarding New Premium |RO IX already remitted the total amount of |

|withheld to the BIR deprived the | | |Contribution Schedule for the |P3,386,997.10 to GSIS, Pag-Ibig and Philhealth same |

|government of additional resources to | | |employed sector starting calendar|with RO XII. |

|finance priority projects. F:\for | | |year 2006 | |

|presentation zamboanga\unremitted | | | | |

|payables.doc | | |BIR Memorandum Circular No. | |

| | | |5-2006 | |

|Overstatement of the Payable Accounts | | |

|In OSEC, SHNC, Regions I, II, III, |prepare the entries to adjust the |OSEC, SHNC, I, II, III, |Section 98 of PD 1445 |In Region I, X and XIII JEVs were prepared in 2011 to |

|VIII, X and XIII, the balance of |balances of the affected accounts;|VIII, X and XIII | |record payments of accounts payable totaling |

|Payable accounts was overstated by a | | |Section 46 of PD 1177 and Section|P1,088,484.06. |

|net amount of P842,646,791.23 due to |revert all outstanding balance | |157 of the Government Accounting |RO II Accountant assured to effect the adjustment. |

|unrecorded payments of liabilities, |which are more than two years | |and Auditing Manual (Volume I) | |

|erroneous/omission of entries and |without valid creditors/claims to | | | |

|inclusion of undocumented/invalid |the retained operating surplus; | |DBM Circular Letter No. 2005-02 | |

|claims, thus affecting the reliability|and | |dated January 28, 2005 | |

|of the accounts.F:\for presentation | | | | |

|zamboanga\overstatement of accounts |analyze the payable accounts and | |Section 43, 73 and 144 of the | |

|payable.doc |drop from the books those without | |National Government Accounting | |

| |valid claimant; and record | |System (NGAS) Manual | |

| |transactions/set up liability | | | |

| |based on valid obligations with | | | |

| |complete documentation. | | | |

|Doubtful Validity of Due to Other NGAS | | |

|Out of the P502,497,942.34 balance of |make the necessary adjustments to |OSEC |The General Appropriations Act of|In OSEC, the accountant had already prepared the JEVs |

|the account Due to Other NGAs, |record the identified completed | |FY 2009 and 2010 |to book up the completed projects to the corresponding |

|P450,248,574.90 could not be |and transferred school building | | |school building and other structures accounts and |

|ascertained due to the failure of the |projects to the recipients in the | | |dropping from the books the subsequent transfer. COA |

|Accountant of OSEC to reconcile the |amount of P52,249,367.44; | | |shall be furnished copies of JEVs once adjustments of |

|accounts with PFSED. Moreover, the | | | |CIP account for CY 2010 including the reconciliation of|

|difference of P52,249,367.44 was |exert efforts to reconcile thru | | |prior years’ balances is being done. |

|identified as completed projects but |updating of records such as SL; | | | |

|were not dropped/adjusted from the |and | | | |

|account due to failure to submit the | | | | |

|required documents from the |coordinate with PFSED or the | | | |

|implementing units resulting to |implementing units on the status | | | |

|overstatement of the account by the |of the SBP and submission of the | | | |

|same amount. F:\for presentation |required documents. | | | |

|zamboanga\Due to Other NGAS.doc | | | | |

|Unreliable balance of Subsidy to Operating Units account | | |

|The correctness of account balance of |require the Central Office to |All Regions |Government Auditing Code of the |Management commented that the transfer of funds made to|

|”Subsidy to Operating Units” for NPSBE|conduct reconciliation of accounts| |Philippines (P.D. 1445) Section |Operating Units under SPHERE Project are being recorded|

|project amounting P338,820,997.40 |with the Division Offices for | |58 |by the Central Office as Subsidy to Operating Units. |

|could not be ascertained due to |NPSBE Project to determine the | | |Consequently, Implementing Units should have recorded |

|different accounting treatments of the|fund transfers are recorded in | |DepEd Order No. 6, s. 2009 |the receipts of the same as Subsidy from the Central |

|Regional and Division Offices on the |the books of Region/Division under| |provision No. 1 |Office. The said transaction and proper journal entries|

|receipt of the fund transfer from the |proper account Subsidy from | | |to be used for other transactions affecting the SPHERE |

|Central Office (CO) resulting to |Central Office and effect the | |Paragraph 8.32 and 8.9 of the |Project have been thoroughly discussed and explained |

|unreconciled balance of |appropriate adjustment in the | |Project Operations Manual |during the orientation of the mentioned project last |

|P49,156,747.93.F:\for presentation |books; | | |August 2007, the same are being reiterated in other |

|zamboanga\subsidy to operating | | | |activities especially during the monitoring of |

|units.doc |intensify the adequate | | |Statement of Expenditures (SOEs) including the issues |

| |dissemination of the guidelines on| | |and updates on the implementation of other Foreign |

| |the accounting entries of the | | |Assisted Projects (FAPs). In the event that there were |

| |program and properly monitor the | | |lapses and misinterpretation of accounting entries |

| |implementation of the same; and | | |resulting to the improper recording of transactions, |

| | | | |Management shall properly inform the operating units to|

| |require the recipient | | |make the necessary adjustments in their respective |

| |Regions/Division Offices of SPHERE| | |books of accounts and currently making reconciliation |

| |funds for the timely submission of| | |of the transfer of funds to all the implementing units |

| |the financial statements to | | |of the Project to come up with a consolidated Financial|

| |Central Office-Accounting Division| | |Reports. |

| |to facilitate the complete | | | |

| |consolidation of books of accounts| | | |

| |for SPHERE Project. | | | |

|Unauthorized Payment of Professional Fee/Honoraria | | |

|In OSEC, NETRC, SHNC, BEE, BSE, BALS, |stop the payment of professional |OSEC, NETRC, SHNC, BEE, |Par. 4.5, 4.6 and 7 of Budget |NETRC management appealed that the questioned |

|NEAP, ROs VI, VII and IX |fee/honorarium/incentives to |BSE, BALS, NEAP, VI, VII |Circular No. 2007-1 dated April |professional fee/honoraria be not subjected to refund |

|honoraria/professional fees totaling |officers and employees involved in|and IX |23, 2007 |in view that it will financially burden their employees|

|P9,197,153.69 were paid to officers |their own regular activities which| | |where salaries are the main source of income. |

|and staff for services rendered during|are in line with their officially | |Budget Circular No. 2007-2 dated |Management had already implemented the recommendation |

|orientation/training, |mandated functions; | |October 1, 2007 |to stop the payment of honoraira/professional |

|seminar-workshop, and other similar | | | |fees/incentives to NETRC offices and employees |

|activities conducted in line with the |comply strictly with the existing | |COA Circular 85-55A |effective January 2011. |

|performance of the respective Agency’s|rules and regulations on payment | | |SHNC management commented that Sec. 15 of the GAA for |

|primary mandated functions, contrary |of honoraria to avoid audit | | |FY 2000 and DBM Budget Circular No. 2007-001 are |

|to Budget Circular Nos. 2007-1 and |disallowance; and | | |superseded by Section 47(b) of the GAA FY 2008. |

|2007-2 and COA Circular 85-55A. | | | |BEE/BALS management noted that the source of funds in |

| |institute the refund, without | | |paying honoraria came from funds appropriated for 2010 |

| |prejudice to the | | |budget hence it is also proper to rely on the |

| |accountability/liability of Agency| | |provisions stated in CY 2010 GAA. Nevertheless, |

| |Head under Sec. 7 of DBM Cir. | | |payment of honoraria has been stopped and requested |

| |2007-1. | | |that amount received in good faith not be refund |

| | | | |considering the economic crisis. |

| | | | |Region VI commented that the granting of Honoraria was |

| | | | |based on the approved memorandum of request signed by |

| | | | |USEC Bacani for Regional Programs and Projects. |

| | | | |RO VII implemented the require refund, yet |

| | | | |justification was duly submitted. |

| | | | |Region IX management contented that with regard to the |

| | | | |honoraria given during the conduct of both the national|

| | | | |and barangay elections, the same are valid and within |

| | | | |the purview of the cited rules and regulations. |

|Irregular and unnecessary hiring of Consultants | | |

|The OSEC and Baguio Teachers Camp |Management strictly comply with |OSEC & Baquio Teachers |Section 7 of Executive Order No. |In BTC, during the exit conference members of the BAC |

|(BTC) contracted/hired the services of|the pertinent provisions of the |Camp |366 |disclosed that the hiring of consultants was directly |

|consultants with an aggregate contract|GAA and RA 9184 and its | |DBM Circular Letter No. 2007-8 |negotiated by the then Asec/OIC of the BTC. No referral|

|price amounting to P14,285,009.68 and|implementing rules, and COA | |dated May 28, 2007 and lately |was made with the BAC; hence, there was no resolution |

|P380,000.00 respectively despite the |Circular 98-002 and 85-55A on the | |Circular Letter No. 2009-13 dated|made regarding the method of procurement. The concerned|

|moratorium order embodied under |hiring of consultants. | |December 18, 2009 |consultants were already informed of the observations |

|Executive Order No. 366 dated October | | | |and management did not pay the consultancy fee of the |

|4, 2004 and reiterated under Circular | | |Section 81 of RA 9970, otherwise |museum consultant for the months of July to December |

|Letters No. 2007-8 and 2009-13 of the | | |known as the General |2010. |

|Department of Budget and Management. | | |Appropriations Act of 2010 | |

|Likewise, hiring was not in accordance| | | | |

|with the provisions of General | | |Section 2 of the Revised IRR of | |

|Appropriations Act of 2010 and RA | | |Republic Act No. 9184 dated July | |

|9184, hence, amount expended are | | |22, 2009 | |

|considered as irregular and to some | | | | |

|extent can be viewed as unnecessary as| | |Section 48.1 of the Revised | |

|defined under COA Circular No. 85-55A.| | |Implementing Rules and | |

| | | |Regulations of R. A. 918 | |

| | | | | |

| | | |COA Circular 85-55A | |

|Unnecessary and excessive hiring of OSG Lawyers | | |

|The Memorandum of Agreement (MOA) |determine the tasks performed by |OSEC |P.D. 478 dated June 4, 1974 |Hiring of OSG Lawyers is an imperative need for cases |

|executed among the 32 legal officers |the OSG lawyers whether special or| | |where the DepEd is a party considering that the Central|

|and staff of the Office of the |additional in order to be | |COA Circular 85-55A |Office has more than a thousand employes and DepEd is|

|Solicitor General (OSG), represented |qualified for the authorized | | |the biggest government organization in the Philippines.|

|by the Solicitor General and the |allowances or compensation; | |Memorandum of Agreement executed |The monthly allowance granted to OSG lawyers are not |

|DepEd, to represent the latter’s | | |between the DepEd and the legal |paid on the basis of court appearance, but are paid in |

|cases and provide legal advice, |require the submission of | |staff of the Office of the |consideration of the gamut of services performed by |

|appears to be a continuous and |documents to support payment as | |Solicitor General (OSG) |them. This is the basis for the grant of monthly |

|regular undertaking, regardless of the|required in Section 4 of P.D. | | |allowances, thus there is no need for certificates of |

|need or necessity, for which the DepEd|1445; and | | |appearance as Section 1 of PD No. 478 and Section |

|has to spend a total cost of legal |submit justification why the | | |35(a), Title III, Book IV of EO No. 292 do not require |

|assistance/allowance of P2,894,000.00,|expenditures cannot be considered | | |them. |

|is viewed to be irregular, unnecessary|irregular, unnecessary and | | |There is no law requiring that special or additional |

|and excessive, thus, violating COA |excessive in order not to subject | | |tasks should be performed by the OSG Lawyers before |

|Circular No. 85-55A and Sec. 4 of P.D.|the disbursement to suspension or | | |they can be entitled to a monthly allowance. |

|1445.F:\for presentation zamboanga\OSG|disallowance | | |As to the increase of the monthly allowance for the OSG|

|Lawyers.doc | | | |Lawyers, it was mentioned that the increase was |

| | | | |approved by the officials of previous administration. |

|Non-observance of R.A. 9184 | | |

|The Procurement System of the DepEd |strictly enforce the provisions of|OSEC, NCR (ROP & DO-QC), |Section 7.2 of the IRR of R.A. |Management to strictly enforce the provisions of RA |

|showed control weaknesses brought |the Government Procurement Reform |CAR, VI, VII, VIII, IX, & |9184 |9184 and compliance with the conditions set for the in |

|about by non-observance of existing |Act (R.A. 9184) to address the |X | |Rule XVI of the IRR of RA 9184. |

|rules and regulations prescribed in |above observations; and | |Section 7.4 |Management of NCR-ROP commented that in compliance with|

|R.A. 9184, otherwise known as | | | |the audit recommendation the OIC of the Office of the |

|Government Procurement Reform Act thus|ensure compliance with all the | | |Regional Director has sent letters on March 11, 2011 to|

|affecting the regularity, |conditions set forth in Rule XVI | | |concerned contractors requesting payment of liquidated |

|reasonableness, necessity and |of the IRR of R.A. 9184, as | | |damages.112 s. 2009 and |

|timeliness of the procurement. F:\for|amended before resorting to | | |RO VIII shall adhere to DepEd Order No. 112 s. 2009. |

|presentation zamboanga\non-observance |alternative methods of | | |The practice of purchasing supplies and other items |

|of ra 9184.doc |procurement. | | |during conduct of seminar/workshops was discontinued |

| | | | |and notice of suspension was settled. |

| | | | |RO VII justified that the suppliers own the copyrights |

| | | | |for the publication of said textbooks as indicated in |

| | | | |Sec. 50 of RA 9184, hence resorted to direct |

| | | | |contracting. |

| | | | |RO IX explained that the funds used to purchase the |

| | | | |materials came from MOOE resulted to splitting because |

| | | | |purchases depended on the availability of funds for the|

| | | | |month. |

| | | | |CAR prepared supplemental procurement plan. |

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