Revised ML Format 2011.doc

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Republic of the Philippines

COMMISSION ON AUDIT

NATIONAL GOVERNMENT SECTOR

Cluster C Social Services

OFFICE OF THE SUPERVISING AUDITORDepartment of Health Audit Group

Sta. Cruz, Manila

April 15, 2012

DIR. TOMAS M. OSIAS

Executive Director

Commission on Population Main Office

Addition Hills, Welfareville Compound,MandaluyongCityDearDirector Osias:

Management Letter on the Audit of the

Commission on Population Main Office

for the Calendar Year 2011

1. Pursuant to Section 2, Article IX-D of the Constitution of the Philippines and Section 43

of the Government Auditing Code of the Philippines (PD No. 1445), we have audited theaccounts and operations of the Commission on Population (POPCOM) Main Office for the

period ended December 31, 2011. The audit was conducted in accordance with applicable legal

and regulatory requirements and generally accepted auditing standards. Those standards require

that we plan and perform the audit to obtain a reasonable basis for our conclusions.

2. The audit was conducted by the audit team led by Mr./Ms. _______, State Auditor IV, to

(a) verify the level of assurance that may be placed on managements assertions on the financialstatements; (b) recommend agency improvement opportunities; and (c) determine the extent of

implementation of prior years audit recommendations.

3. The Agencys financial conditions, results of operations and cash flows as of December

31, 2011 are shown in the attached audited financial statements (Annexes A-E).

4. Deficiencies observed in the course of the audit were earlier communicated through

Audit Observation Memoranda (AOM) and discussed in an exit conference with concernedCommission on Population Main Office officials and employees on _______. Their comments

were incorporated in this Management Letter, where appropriate. The significant audit

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observations and recommendations shall be incorporated in the Consolidated Annual Audit

Report (CAAR) of the Commission on Population for CY 2011.

A. INTRODUCTION

5. Agencys mandate and personnel complement

6. Major accomplishments

7. Financial Profile

B. SUMMARY OF RECOMMENDATIONS

(Applicable if there are two or more observations)

8. For the significant deficiencies observed in the course of the audit, we recommended

that:

a. The Accountant (i) secure bank statements from the depository banks for all the

bank accounts, including those with reported negative balances; (ii) verify, analyze the

subsidiary accounts reconcile the same with secured bank statements and make theneeded adjustments; and (iii) remit the unexpended balances to the National Treasury in

compliance with EO No.338, s. of 1996 and COA Circular No. 97-001 dated February 5,

1997 or return to the donors, as the case may be.

b. The BAC (i) render explanation on the noted excessive procured price of the

two (2) Units Commuter Vans; and (ii) as allowed by the IRR of R.A. No. 1984, updatethe APP as often as the need arises to have a reliable and updated price references in

obtaining the most advantageous offers for items to be procured.

C. DETAILED OBSERVATIONS AND RECOMMENDATIONS

FINANCIAL AND COMPLIANCE

The Cash in Bank Local Currency, Current Account with book balance of P884,934.26

still includes the P753,347.55 balances of terminated/completed ten projects as these were

not yet remitted to the National Treasury as required under Executive Order No. 338 and

COA Circular No. 97-001. Further, the causes of the disparity between the book and bank

balances of cash balances totaling P38,778.11 could not be ascertained due to non-

preparation of the bank reconciliation statements prescribed by COA Circular 92-125A

which rendered the reported cash in bank balance as of year-end unreliable.

9. Xxx

10. Xxx

11. Xxx

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12. We recommended and the Accountant agreed to (i) secure bank statements from the

depository banks for all the bank accounts, including those with reported negative

balances; (ii) verify, analyze the subsidiary accounts reconcile the same with secured bank

statements and make the needed adjustments; and (iii) remit the unexpended balances to

the National Treasury in compliance with EO No.338, s. of 1996 and COA Circular No. 97-001 dated February 5, 1997 or return to the donors, as the case may be.

VALUE FOR MONEY

The procured price of P2,820,000.00 of the two commuter vans was excessive by

P420,000.00 or 17.5 percent when compared with the prevailing Sales Retail Price from the

same brand dealers which was beyond the 10% price variance between the procured and

canvassed price allowed by COA Circular No. 85-55A.

13. Xxx

14. Xxx

15. Xxx

16. We recommended that the BAC:

a. Render an explanation on the noted excessive procured price of the two (2) Units

Commuter Vans; and

b. As allowed by the IRR of R.A. No. 1984, update the APP as often as the need arises

to have a reliable and updated price references in obtaining the most advantageous

offers for items to be procured.

17. The POPCOM Management presented the following explanations, to wit:

18. Xxx (Auditors rejoinder)

GENDER AND DEVELOPMENT

19. Xxx

20. Xxx

SENIOR CITIZENS AND DIFFERENTLY ABLED PERSONS

21. Xxx

22. Xxx

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COMPLIANCE WITH TAX LAWS

23. Xxx

24. Xxx

SETTLEMENT OF SUSPENSIONS, DISALLOWANCES AND CHARGES

25. Xxx

26. Xxx

D. STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT

RECOMMENDATIONS

27. We made a follow-up on the action taken by the Management to implement the

recommendations of prior years and noted the following:

Status of Implementation No. of Recommendations

Fully Implemented 3

Partially Implemented 15

Not Implemented 1

Total 19

28. The results of the validation of the implementation of prior years recommendations arepresented in Annex H.

E. ACKNOWLEDGEMENT

29. We wish to express our appreciation to the Management and staff of POPCOM MainOffice for the cooperation and assistance extended to our audit team during the audit.

30. We request a status report on the action taken on the audit recommendations within 60

days from the date of receipt hereof pursuant to Section 95, General Provisions, GeneralAppropriations Act FY 2011 (R.A. 10147).

Very truly yours,

MA. CORAZON S. GOMEZ Supervising Auditor

DOH Audit Group

Copy Furnished:

The Cluster Director

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Cluster C Social Services

National Government Sector

Commission Audit

Quezon City

The Honorable Secretary

Department of HealthManila

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ANNEXES

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Annex

LetterParticulars

A Statement of Managements Responsibility for Financial

Statements

B Detailed Balance Sheet for CY 2011 with Comparative

Figures for CY 2010

C Detailed Statement of Income and Expenses for CY 2011

with Comparative Figures for CY 2010

D Detailed Statement of Cash Flows for CY 2011 with

Comparative Figures for CY 2010

E Notes to Financial Statements

F

G

H Status of Implementation of Prior Years AuditRecommendation


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Annex H

STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT

RECOMMENDATIONS

Observations and

Recommendations

Ref.Managements

Action

Status of

Implementation

(Full, Partial,

Not

Implemented)

Reason for

Partial or Non-

Implementation

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Documents

Revised ML Format 2011.doc