Republic of the Philippines COMMISSION ON AUDIT

Commonwealth Avenue, Quezon City

ANNUAL AUDIT REPORT

on the

HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL

For the Year Ended December 31, 2012

i

EXECUTIVE SUMMARY

A. Introduction

The House of Representatives Electoral Tribunal (HRET) was constituted

under Section 17, Article VI of the 1987 Philippine Constitution to act as the sole

judge of all contests relating to the election, returns and qualifications of Members

of the House of Representatives. The major function of the HRET and its principal

program, project and activity is the adjudication of electoral contests involving

Members of the House of Representatives.

B. Financial Highlights

A comparative analysis of the financial condition and the allotments and

utilization of funds for the years 2012 and 2011 is presented below:

Particulars

2012

2011

Increase/

(Decrease)

Financial Condition

Assets 18,097,207.69 30,784,284.47 (12,687,076.78)

Liabilities 13,174,669.93 22,269,726.27 (9,095,056.34)

Equity 4,922,537.76 8,514,558.20 3,592,020.44

Particulars 2012 2011 Increase

(Decrease)

Allotments Received 138,551,688.20 130,279,364.91 8,272,323.29

Continuing

Appropriations

4,870,311.80

0.00

4,870,311.80

Obligations Incurred 138,214,961.71 128,260,596.29 9,954,365.42

Unexpended Balance 5,207,038.29 2,018,768.62 3,188,269.67

The Statement of Allotments, Obligations and Balances for calendar year

2012 is shown in Annex A.

C. Scope of Audit

The audit was conducted on the accounts and operations of the HRET for

the CY 2012. It was aimed to ascertain the propriety of the financial transactions

and determine the fairness of the presentation of the financial statements of the

agency.

ii

D. Auditor’s Report

The Auditor rendered an unqualified opinion on the fairness of presentation

of the financial statements of HRET as of December 31, 2012.

E. Observations and Recommendations

The following are the audit observations and corresponding

recommendations, which were discussed with management officials concerned

during the exit conference on May 23, 2013 and their comments were incorporated

in the report, where appropriate:

1. Other Maintenance and Operating Expenses amounting to P28,019,640.21

included the additional allowance of P82,000 given monthly to the Chairman

and eight Members of the Electoral Tribunal or a total of P8,856,000 with no

documents to support the expenditures but only a certification that the amounts

were expended in the performance of the official duties.

We recommended that Management immediately cause the submission of the

supporting documents for the liquidation vouchers for December 2012.

Further, strict compliance with Section 4 (6) of PD 1445 be adhered to for all

transactions of the HRET starting January 1, 2013.

2. The agency had no programs/projects related to senior citizens and the

differently-abled persons and did not allocate at least one per cent of its budget

as required under Section 29 of the General Provisions of RA No. 10155, GAA

for CY 2012.

We recommended that Management prepare programs/projects related to the

senior citizens and differently-abled persons and allocate at least one percent of

its budget as required in the GAA provision.

F. Implementation of Prior Years Recommendations

Out of the five audit recommendations contained in the 2011 Annual

Audit Report, two were implemented, one was partially implemented and two were

not implemented as of December 31, 2012.

TABLE OF CONTENTS

PART PARTICULARS PAGE

I

Audited Financial Statements

Independent Auditor’s Report

Statement of Management’s Responsibility

for Financial Statements

Balance Sheet

Statement of Income and Expenses

Statement of Cash Flows

Notes to Financial Statements

1

2

3

5

7

9

II

Observations and Recommendations 16

III Status of Implementation of Prior Year’s Audit

Recommendations

19

IV Annexes

Statement of Allotments, Obligations and Balances

Breakdown of Expenditure/Obligations Incurred

Obligations Liquidated/Disbursement and Unliquidated

Obligations

PART I

AUDITED FINANCIAL STATEMENTS

PART II

OBSERVATIONS AND RECOMMENDATIONS

PART III

STATUS OF IMPLEMENTATION OF PRIOR

YEAR’S AUDIT RECOMMENDATIONS

PART IV

ANNEXES

INDEPENDENT AUDITOR’S REPORT

Honorable PRESBITERO J. VELASCO, JR.

Chairperson

House of Representatives Electoral Tribunal

Quezon City

Pursuant to Section 2, Article IX-D of the Philippine Constitution and pertinent

provisions of the Government Auditing Code of the Philippines (PD 1445), we have

audited the accompanying balance sheet of the House of Representatives Electoral

Tribunal as of December 31, 2012 and the related statements of income and expenses and

cash flows for the year ended. These financial statements are the responsibility of the

Auditee. Our responsibility is to express an opinion on these financial statements based

on our audit.

We conducted our audit in accordance with generally accepted state auditing

standards. Those standards require that we plan and perform the audit to obtain

reasonable assurance that the financial statements are free from material misstatement/s.

Our audit includes examining, on a test basis, evidence supporting the amounts and

disclosures in the financial statements; assessing the accounting principles used and the

significant estimates made by the auditee, as well as, evaluating the overall financial

statements presentation. We believe that our audit provides reasonable basis for our

opinion.

In our opinion, the financial statements referred to above present fairly, in all

material respects, the financial position of the House of Representatives Electoral

Tribunal as of December 31, 2012, and the results of its operations and its cash flows for

the year then ended in conformity with applicable generally accepted state accounting

principles.

April 15, 2013

Republic of the Philippines

COMMISSION ON AUDIT Commonwealth Avenue, Quezon City

2

Notes 2012 2011

Current Assets

Cash 5

Petty Cash Fund 4,533.30 47,483.79

Cash - National Treasury - MDS 2,465,071.44 3,168,249.03

Cash in Bank - Local Currency, Current Account 6,752,698.47 17,055,772.01

Total Cash 9,222,303.21 20,271,504.83

Receivables 6

Due from NGAs 19,555.32 92,802.59

Advances to Officers and Employees 166,055.64 21,744.15

Total Receivables 185,610.96 114,546.74

Inventories 7

Office Supplies Inventory 221,857.63 353,986.22

Other Supplies Inventory 722.59 1,293.58

Spare Parts Inventory 5,152.00 5,152.00

Total Inventories 227,732.22 360,431.80

Prepayments 8

Other Prepaid Expenses 9,200.00 0.009,200.00 0.00

Other Current Assets 9

Guaranty Deposits 54,709.75 54,709.75

54,709.75 54,709.75

Total Current Assets 9,699,556.14 20,801,193.12

Investments 10

Investments in Stocks 24,500.00 24,500.00

Property, Plant and Equipment 11

Leasehold Improvements, Buildings 3,589,274.21 3,589,274.21

Office Equipment 4,592,149.86 4,791,848.86

Furniture and Fixtures 3,006,586.06 3,003,006.06

IT Equipment and Software 8,200,918.40 8,028,358.40

Library Books 1,131,124.30 1,096,164.30

Communication Equipment 1,451,532.92 1,291,532.92

Firefighting Equipment and Accessories 105,902.85 105,902.85

HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL

Balance Sheet

As of December 31, 2012

(With comparative figures for CY 2011)

(In Philippine Peso)

ASSETS

3

Notes 2012 2011

Other Machineries and Equipment 20,992.20 20,992.20

Motor Vehicles 1,945,642.17 1,945,642.17

Total Property, Plant and Equipment 24,044,122.97 23,872,721.97

Less: Total Accumulated Depreciation 15,998,408.57 14,241,567.77

Property, Plant and Equipment- Net 8,045,714.40 9,631,154.20

Other Assets 12

Other Assets 327,437.15 327,437.15

Total Other Assets 327,437.15 327,437.15

TOTAL ASSETS 18,097,207.69 30,784,284.47

Current Liabilities 13

Accounts Payable 6,338,852.93 5,096,581.15

Due to Officers and Employees 5.53 5.53

Due to National Treasury 5,899.67 18,667.00

Due to BIR 0.00 27,504.00

Due to GSIS 4,910.27 41,326.73

Due to Pag-IBIG 300.00 94,939.76

Due to PhilHealth 675.00 37,425.00

Performance Bonds Payable 21,000.00 0.00

Other Payables 6,803,026.53 16,953,277.10

Total Current Liabilities 13,174,669.93 22,269,726.27

Equity 14

Government Equity, Beginning 8,514,558.20 8,058,069.62

Retained Operating Surplus

Current Operations (3,495,572.86) 633,885.43

Prior Years' Adjustments (96,447.58) (177,396.85)

Total Retained Operating Surplus (3,592,020.44) 456,488.58

Government Equity, End 4,922,537.76 8,514,558.20

TOTAL LIABILITIES AND EQUITY 18,097,207.69 30,784,284.47

LIABILITIES AND EQUITY

See accompanying Notes to Financial Statements

4

9

HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL

Notes to Financial Statements December 31, 2012

1. General/Agency Profile

1.1 The House of Representatives Electoral Tribunal (HRET) was constituted

under the 1987 Constitution (Section 17, Article VI) to act as the sole judge of

all contests relating to the election, returns and qualifications of Members of

the House of Representatives (HREP).

1.2 The major function of the HRET and its principal program/project/activity is

the adjudication of electoral contests involving Members of the HREP. No

target is set for the number of electoral cases to be resolved each year because

the adjudication depends upon the progress of each proceeding strictly

followed in each case.

1.3 The Tribunal is composed of nine members, three of whom are Justices of

Supreme Court and the rest are Members of the HREP. The Senior Justice

acts as the Chairman.

The following are the incumbent officers of the Tribunal Proper as of

December 31, 2012:

Hon. Justice Presbitero J. Velasco, Jr. Chairman

Hon. Justice Diosdado M. Peralta Member

Hon. Justice Lucas P. Bersamin Member

Hon. Congressman Franklin P. Bautista Member

Hon. Congressman Rufus B. Rodriguez Member

Hon. Congressman Joselito Andrew R. Mendoza Member

Hon. Congressman Justin Marc SB. Chipeco Member

Hon. Congresswoman Ma. Theresa B. Bonoan-David Member

Hon. Congressman Rodolfo B. Albano Member

1.4 The HRET has a total personnel complement of 127 as of December 31, 2012,

as follows:

Permanent 82

Co-terminus 45

Total 127

10

2. Basis of Financial Statements Presentation

The Financial Statements have been prepared in accordance with generally

accepted state accounting principles and standards.

3. Summary of Significant Accounting Policies

3.1 The Tribunal uses accrual basis of accounting. All expenses are recognized

when incurred and income is reported upon receipt. Income is generally

composed of filing fees, photocopying and certification charges and sale of

Transcript of Stenographic Notes (TSNs), HRET Rules, CDs and Reports of

the Tribunal.

3.2 Notice of Cash Allocation (NCA) is recorded in the Regular Agency (RA)

books. The agency does not have authority to use whatever income it

receives. All collections are therefore recorded in the National Government

(NG) books and remitted to the National Treasury.

3.3 The modified obligation system is used to record allotments received and

obligations incurred. Separate registries are maintained to control allotments

and obligations for each class of allotment.

3.4 Petty Cash Fund (PCF) account is maintained under the Imprest System.

All replenishments are directly charged to the expense account. The PCF is

not used to purchase regular inventory items for stock.

3.5 The moving average method is used in the valuation of inventories.

3.6 Supplies and materials purchased are recorded using the Perpetual Inventory

System.

3.7 Property, Plant and Equipment (PPE) are carried at cost less accumulated

depreciation. Regular maintenance, repair and minor replacements are

charged against Maintenance and Other Operating Expenses (MOOE) as

they are incurred.

3.8 Straight Line Method of depreciation is used in depreciating the PPE with

estimated useful lives ranging from 5 to10 years as provided for in COA

Circular No. 2003-07 dated December 11, 2003 and as amended by COA

Circular No. 2004-005 dated August 9, 2004. A residual value of 10 per cent

of the cost of the asset is set and depreciation starts on the next month after

purchase.

3.9 Payable accounts are recognized and recorded in the books of account only

upon acceptance of the goods/inventory/other assets and rendition of

services to the agency.

11

3.10 Accounts were reclassified to conform with the revised Chart of Accounts

per COA Circular No. 2003-001 dated June 17, 2003 and Updated

Description of Accounts under the NGAS per COA Circular No. 2004-008

dated September 20, 2004.

3.11 Accounts for cash transactions were reclassified in compliance with COA

Accounting Circular No. 2006-001 dated November 9, 2006. Cash Advance

for Payroll recorded as Cash-Disbursing Officers was reclassified to Payroll

Fund. Cash Advance for Special Purpose/Time bound Undertaking

recorded as Cash-Disbursing Officers or as Due from Officers and

Employees were also reclassified to Advances to Officers and Employees.

4. Correction of Fundamental Errors

Fundamental errors of prior years are corrected by using the Prior Years’

Adjustments account. Errors affecting current year’s operation are charged to the

current year’s account.

5. Cash

The Petty Cash Fund of P4,533.30 is maintained for emergency, petty

expenses and urgent requirements of the Tribunal.

The Cash - National Treasury, MDS of P2,465,071.44 represents the

balance of the restored cash equivalent of all unreleased checks at year end.

The Cash in Bank - Local Currency, Current Account of P6,752.698.47 are

deposits of protestants and protestees who are both parties to electoral cases for

expenses incidental to the adjudication of their cases, which are held-in-trust by the

Tribunal.

6. Receivables

Due from NGAs of P19,555.32 consists of prepayments to the Procurement

Service for various office supplies.

Advances to Officers and Employees of P166,055.64 pertains to excess of

cash advances over expenses incurred for travels and other special purposes/time-

bound undertakings embarked on by the HRET officials and employees, which has

already been refunded on the first week of January 2013.

12

7. Inventories

This group of accounts totaling to P227,732.22 includes office supplies and

materials, spare parts, and other supplies inventory on hand as of December 31,

2012.

8. Prepayments

The Other Prepaid Expenses account amounting to P9,200 represents

prepayments to Central Book Supply, Inc. for Supreme Court Reports Annotated

(SCRA) Volumes 672 to 676 which have not yet been delivered as of December

31, 2012.

9. Other Current Assets

Guaranty Deposits account of P54,709.75 pertains to deposits for PLDT

telephone lines, MWSS water lines, and cellular phones.

10. Investments

Investment in Stocks of P24,500 pertains to the investment in PLDT stocks

which are carried at cost in connection with the telephone line for HRET’s use.

11. Plant, Property and Equipment

This group of accounts consists of the following:

Account

Description

Balance

12/31/11

2012 Addition /

(Deduction)

Balance

12/31/12

Accumulated Depreciation

12/31/12

Net Book Value

12/31/12

Leasehold

Improvement,

Building

P3,589,274.21 P3,589,274.21 P 673,379.16 P2,915,895.05

Office Equipment 4,791,848.86 (199,699) 4,592,149.86 3,682,492.94 909,656.92

Furniture and

Fixtures

3,003,006.06

3,580

3,006,586.06

2,360,341.19

646,244.87

IT Equipment and Software

8,028,358.40 172,560

8,200,918.40 6,488,927 1,711,991.40

Library Books 1,096,164.30 34,960 1,131,124.30 909,253.03 221,871.27

Communication

Equipment

1,291,532.92

160,000

1,451,532.92

900,478.36

551,054.56

Firefighting Equipment and

Accessories

105,902.85

105,902.85

88,573.51

17,329.34

13

Account

Description

Balance

12/31/11

2012

Addition /

(Deduction)

Balance

12/31/12

Accumulated

Depreciation

12/31/12

Net Book

Value

12/31/12

Other Machineries

and Equipment

20,992.20 20,992.20 14,547.26 6,444.94

Motor Vehicles 1,945,642.17 1,945,642.17 880,416.12 1,065,226.05

Total P23,872,721.97 P171,401 P24,044,122.97 P15,998,408.57 P8,045,714.40

12. Other Assets

The Other Assets account of P327,437.15 represents the net book value of

reclassified unserviceable property and equipment with a total acquisition cost of

P3,272,276.78. The said property are no longer utilized and are for disposal.

13. Current Liabilities

This group of accounts consists of the following:

Accounts Payable totaling P6,338,852.93 consists of obligations to various

suppliers arising from the purchase of goods and services amounting to

P3,780,136.22, the restored cash equivalent of various unreleased checks drawn

from the Cash National Treasury, MDS account of P2,465,071.44, and prior year’s

accounts payable of P93,645.27.

Due to National Treasury of P 5,899.67 represents the unremitted balance of

the interest income earned for the 4th

quarter of 2012 from the HRET Trust Account

maintained at the Land Bank-COA Branch. The said interest income was credited

by the bank on December 28, 2012 and was remitted to the National Treasury in

January 2013.

Other Payables amounting to P6,803,026.53 pertains to the cash deposits

made by various Protestants and Protestees for expenses to be incurred in

connection with the adjudication of their cases filed with the Tribunal. The decrease

in this account was due mainly to the return of unused cash deposits of parties.

14. Government Equity

The Government Equity account amounting to P4,922,537.76 includes the

Prior Years’ Adjustments account with a debit balance of P96,447.58 representing

prior year’s expense paid in CY 2012.

14

15. Subsidy Income from National Government (SING)

This account includes the following:

NCA received from DBM for operational

requirements

P129,464,374.00

Tax Remittance Advice (TRA) issued to BIR 8,662,313.90

Total P138,126,687.90

Less: Return of Salaries and Cash Advances and

overpayment of Expenses

272,249.52

Reversion of unused NCA 1,402,384.44

Net SING P136,452,053.94

16. Income and Expenses

As of December 31, 2012, Income and Expenses amounted to

P136,452,053.94 and P139,947,626.80, respectively, resulting to an excess of

expense over income of P3,495,572.86.

17. Consultancy Services

The increase in Consultancy Services of P2,330,958.02 is due to the

increase in the number of consultants from 18 in CY 2011 to 20 in CY 2012, as

well as in the total number of months the consultants served the Tribunal, as shown

below:

No. of

Consultants

No. of Months

in Service

Total No. of

Months Served

CY 2012

15 12 180

1 11 11

1 7 7

2 2 4

1 4 4

Total 20 206

CY 2011

6 12 72

9 4 36

1 6 6

1 2 2

Total 18 116

Increase 2 90

15

18. Allotments, Obligations and Balances

Total allotments available during the year including allotment in CY 2011

carried over in CY 2012 was P143,422,000, while obligations incurred amounted to

P138,214,961.71, details of which are as follows:

Allotment Class Allotments Obligations Balance

PS P 92,886,437.75 P 92,549,711.26 P 336,726.49

MOOE 50,280,492.25 45,410,180.45 4,870311.80

CO 255,070.00 255,070.00 0.00

Total P143,422,000.00 P138,214,961.71 P5,207,038.29

Breakdown of Obligations Incurred:

Obligations Paid P134,434,825.49

Due and Demandable 3,780,136.22

Total P138,214,961.71

For CY 2012, there was no unbooked obligations.

16

OBSERVATIONS AND RECOMMENDATIONS

Insufficient documents to support disbursements

1. Other Maintenance and Operating Expenses amounting to P28,019,640.21

included additional allowance of P82,000.00 given monthly to the Chairman

and eight Members of the Electoral Tribunal or a total of P8,856,000 with no

documents to support the expenditures but only a certification that the

amounts were expended in the performance of the official duties.

Item 6, Section 4 of PD 1445 states that, “Claims against government

funds shall be supported with complete documentation.”

Our audit of the Other Maintenance and Operating Expenses amounting to

P28,019,640.21 disclosed that this includes the additional allowance of

P8,856,000 given monthly to the Members of the Electoral Tribunal. Further

verification disclosed that there were no documents to support the expenditures

but only a certification which stated “that the amounts were expended in the

performance of the official duties”, contrary to Item (6), Section 4 of PD 1445.

Further verification revealed that the said practice of supporting

expenditures with only a certification was anchored on the Concurrent Resolution

No. 10 adopted by the Senate of the Philippines and the House of Representatives

on August 24, 2011 and February 1, 2012, respectively. The said Concurrent

Resolution specifically states that:

“...in recognition of the delicate and unique nature of the functions,

operational and organizational structures of the Senate, the House of

Representatives, the Commission on Appointments and the Senate and

House Electoral Tribunals, the Commission on Audit has consistently

allowed the current system of liquidation by way of certification, duly

signed by each Senator and Member of the House of Representatives,

that such amounts allocated to each Member of Congress as part of

their Maintenance and Other Operating Expenses (MOOE) were

utilized or expended in the performance of their legislative functions.”

On January 31, 2013, an Audit Instructions on the Audit of the Senate of

the Philippines and the House of Representatives was issued by the Chairperson

of the Commission on Audit, which was amended on February 8, 2013 to include

the Senate and House of Representatives Electoral Tribunals, which states that:

“xxx It is understood that the practice on liquidation of

accountability by mere “certification” are considered insufficient as

all claims against government funds shall be supported with complete

documentation (Section 4(6) of Presidential Decree No. 1445).”

17

“xxx The result of your audit which shall include, among

others, issues on augmentation and realignment of funds shall be

included in the 2012 Annual Audit Report of your respective agency.”

Consequently, a Memorandum dated March 25, 2013 was issued by the

Supervising Auditor requesting submission of supporting documents for all the

disbursement vouchers and respective liquidation vouchers for CY 2012 of all

transactions with only the “Certification that the amounts were expended in the

performance of their official duties” as supporting documents to facilitate our audit.

However, in consideration of the foregoing circumstances and that the audit

instructions was issued only in January 31, 2013, Management was required to

submit complete supporting documents for additional allowances of P82,000 given

in December 2012 only.

Considering that as of to date, no supporting documents were submitted in

spite of the instructions/directives to submit the same, the validity of the

transactions cannot be ascertained.

We recommended that Management immediately cause the

submission of the supporting documents for the liquidation vouchers for

December 2012. Further, strict compliance with Section 4(6) of PD 1445 be

adhered to for all transactions of the HRET starting January 1, 2013.

Non-compliance with Budget Requirement for Programs/Projecst Related to Senior

Citizens and Differently-Abled Persons

2. The agency had no programs/projects related to senior citizens and the

differently-abled persons and did not allocate at least one per cent of its budget

as required under Section 29 of the General Provisions of RA No. 10155, GAA

for CY 2012.

Section 29 of RA 10155 (GAA CY 2012), provides that, “Programs and

Project Related to Senior Citizens and Differently-Abled. All agencies of the

government shall formulate plans, programs and projects intended to address the

concerns of citizens and differently-abled persons, and integrate the same in their

regular activities, which shall be at least one percent (1%) of their budget.”

For CY 2012, the agency did not implement any activity specific to senior

citizens and differently-abled persons.

Moreover, all government facilities, including infrastructure, non-

infrastructure and civil works projects of the government, as well as office

buildings, streets and highways, shall provide architectural facilities or structural

features and designs that shall reasonably enhance the mobility, safety and welfare

18

of differently-abled persons pursuant to B.P. Blg. 344 and R.A. No. 7277.

We recommended that Management prepare programs/projects

related to the senior citizens and differently-abled persons and allocate at least

one percent of its budget as required in the above cited GAA provision.

3. Compliance with Tax Laws

In compliance with DOF-DBM-COA Joint Circular 1-200 dated January 3,

2000 and Presidential Memorandum Order No. 219 dated February 13, 1989, taxes

withheld from 2012 disbursements were remitted to the Bureau of Internal Revenue

(BIR) on or before due dates. The total taxes remitted to BIR amounting to

P8,662,313.90 consist of taxes withheld from salaries and expanded and final taxes

withheld from payment of goods and services.

19

STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT

RECOMMENDATIONS

Out of the five audit recommendations contained in the 2011 Annual Audit

Report, two was implemented, one was partially implemented and two were not

implemented, details as follows:

Observations and

Recommendations

Reference

2011

AAR

Page No.

Action Taken by

Management

Auditor’s

Validation

Results

1. a. Payments out of the

Petty Cash Fund (PCF)

exceeded the P15,000

ceiling contrary to

Section 4.3.2 of COA

Circular No. 97-002 dated

February 10, 1997.

We recommended that

Management require the

accountable officers with

unliquidated cash

advances to immediately

settle their accounts, in

compliance with COA

Circular No. 97-002 and

EO No. 298.

We recommended and

Management agreed to

ensure that the SDO

comply with the

requirement that payment

out of the PCF shall be

allowed only for small

amounts not exceeding

the limit of P 15,000

per transaction as

provided in COA Circular

No. 97-002.

15-16

Implemented

Management had

instructed the PCF

custodian to

strictly observe

what is provided

for in the said

Circular, and had

exerted effort not

to exceed the

P15,000

Expenses out of

PCF did not

exceed the

P15,000 ceiling

as shown in the

subsequent

liquidation

reports.

20

Observations and

Recommendations

Reference

2011

AAR

Page No.

Action Taken by

Management

Auditor’s

Validation

Results

1.b. The Cashier was

designated as SDO to

handle PCF contrary to

the specific standard of

Internal Control on

Segregation of duties and

functions.

We recommended and

Management agreed that

for the purpose of sound

internal control system of

the agency, the PCF should

be transferred back to the

custody of the SDO,

General Service since the

purpose for which the PCF

was issued is appropriately

the functions of the said

Office.

16-17 Implemented

The PCF was

already transferred

from the Chief of

the Cash

Management

Service to the LSO

IV of the Legal

Service on detail

with the Office of

the Secretary.

Upon resignation

of the LSO IV, the

PCF was

transferred to the

Ballot Examiner

of the Canvass

Board Service on

detail with the

Office of the

Secretary.

The PCF was

transferred to

Mr. Nino

Emmanuel

Magdalita, Ballot

Examiner of the

Canvass Board

Service, detailed

at the Office of

the Secretary.

2. Management was still

using the traditional cash

payroll scheme in paying

the salaries, allowances

and other personnel

benefits of its officers and

employees instead of the

automated payroll-thru-

bank system, thus,

incurring unnecessary

manpower resources and

exposing payroll money

to risks of losses through

theft or robbery.

We recommended that

Management consider

adopting payment of

salaries thru automated

bank scheme to

17-19

Not implemented

The HRET has

only 127

employees and

payment of

salaries,

allowances and

other personnel

benefits is more

convenient using

the traditional

cash payroll

scheme.

Management

contended that

using the

Automated Bank

Scheme would

entail much time

queuing at the

bank. And if

they use such

scheme,

employees

assigned at the

Cash

Management

Service will have

no more duties to

perform.

Moreover, their

depository bank is

21

Observations and

Recommendations

Reference

2011

AAR

Page No.

Action Taken by

Management

Auditor’s

Validation

Results

strengthen internal

control on cash and to

promote operational

efficiency. Initiate

arrangements/coordinate

with government

depository bank to

implement the payroll

thru ATM.

very near the

HRET.

3. The agency has not

created an Internal Audit

Service/Unit contrary to

Administrative Order

Nos. 278 and 70 dated

April 28, 1992 and April

14, 2003, respectively.

We reiterated our

previous recommendation

that Management

organize an IAS pursuant

to Administrative Order

Nos. 278 and 70.

Otherwise, Management

should request an

exemption from the

application of these

regulations.

19-21

Not implemented

In compliance

with the

provision of

Administrative

Order Nos. 278

and 70, the

Tribunal will

create an IAS to

be supervised by

the Section Chief

of the Accounting

Service, who will

be relieved of her

work in the

Processing Unit.

Management is

considering

implementing the

recommendation

in CY 2013.

22

Observations and

Recommendations

Reference

2011

AAR

Page No.

Action Taken by

Management

Auditor’s

Validation

Results

4. Management was not

able to comply with the budget requirement of providing at least five percent equivalent to P5,604,800 of the total appropriation of P112,096,000 for Gender and Development (GAD), as provided under Sec. 31, General Provision of the FY 2011 GAA or RA No. 10147.

We recommended that Management comply with the mandatory provision of the GAA in allocating at least five percent of the total budget and to accomplish the plans and programs relative to GAD. Moreover, it should add more plans and programs relative to GAD for FY 2012. Further, Management should be guided by Joint Circular No. 2004-1 issued by the DBM, NEDA and NCRFW and other issuances on GAD Planning and Budgeting that may come from other concerned oversight agencies.

21-22

Partially

Implemented

The Tribunal

started with its

GAD program in

November 2011,

with a seminar

conducted by a

resource person

from the CSC.

However,

activities lined up

for the

implementation

of the said

program were not

allowable as

indicated in the

letter received

from the National

Commission on

Women.

.

The agency is

conducting a

Wellness

Program through

a one-hour

physical fitness

activity three

times a week.

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25

26

27

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