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PRELIMINARY AUDIT FINDINGS

BASED ON THE INQUIRIES and EXAMINATION OF DOCUMENTS CONDUCTED THE FOLLOWING WERE NOTED:
1. FAILURE TO BACK-UP THE PERTINENT FILES OF THE BOOKKEEPER.
Cash Receipts Journals, Cash Monitoring, Cash Disbursements and Bank Reconciliations Reports were all corrupted after the bag down of
the Bookkeepers computer.
SUGGESTION:
The Accountant/Bookkeeper should regularly make a back-up of their pertinent files on a daily basis especially on their Quickbooks and
have a printed copy of their Reports for filing and recovery purposes.
2. FAILURE TO OBSERVE THE PROPER SOPS ON RECORDING PERTINENT REPORTS
A. REVENUE JOURNALS
MADE BY OFFICER AND STAFFS:
1ST Semester Revenue Journal was
already
reflected/recorded
in
the
Quickbooks but not yet checked by the
Accountant. Based on my interview with
the Bookkeeper, she informed the
Accountant in recording the Revenue
Journal to the Quickbooks, and the
Accountant authorizes to do so without
actual printing of hard copy for
checking and verification to the
registration forms (Pink form).

SHOULD
BE
(CORRECT
PROCEDURE):
The Bookkeeper summarizes all the
statement charges and Tuition fees of
the students that compose the
Revenue Journals. Print a hard copy of
the Revenue Journal for checking to be
compared with the Registration forms.
Then, to be forwarded to the
Accountant, for double checking and
goes back to the Bookkeeper for
recording to Quickbooks.

RISKS/
DANGERS
OF
ACTION
1. Inconsistency of amounts
entered into Quickbooks
VS Registration forms.
2. Inaccurate recognition of
Revenue Amortization.
3. Prone to incorrect Student
Ledger balances.
4. Incorrect financial reports.

SUGGESTIONS/
SOLUTIONS
PRINT A HARD COPY
OF THE 1ST SEMESTER
REVENUE
JOURNAL
FOR CHECKING AND
RECONCILIATION TO
THE
REGISTRATION
FORMS (PINK FORMS).

3. FAILURE TO RECORD ALL CASH COLLECTION IN THE 1ST SEMESTER 2014-2015 TO THE QUICKBOOKS.
Based on my interview with the Bookkeeper, the collections made in the 1 st Semester 2014-2015 is not yet reflected in the Quickbooks
resulting for Cash Records and Students Subsidiary Records not to be updated.

It was already noted by the internal auditors of CLI Dagupan in the audit during the tenure of Mr. Jefferson Ramos, previous Accountant,
that collections should be properly recorded and reflected to the Quickbooks on the day of collection. As per my inquiry to Mr. Jefferson
Ramos, during his transition period to the incoming accountant, he properly briefs the accountant for the said control procedure.
4. NO REVENUE JOURNALS YET PRODUCED FOR THE 2ND SEMESTER 2014-2015.
It was already January 2015, but up until now there is still no summary of Statement Charges, Tuition Fees and Funds Payables prepared
by the Bookkeeper and no follow up made by the Accountant for the preparation of Revenue Journal. As per my inquiry to the previous
accountant, the average time to prepare the Revenue Journal is 1 month after the closing of the enrolment period.
5. FAILURE TO CHECK, RECORD and MONITOR THE SUBMITTED LIQUIDATION REPORT ON A TIMELY BASIS
RESULTS OF THE FAILURE
Employee Advances accounts were not updated, still floating in the records and appears that employees who requested the funds
are still unclear in the records wherein fact they are already cleared.
Inaccurate information regarding fund balances and expenditures of the Institution.
SAMPLE OF LIQUIDATION REPORTS EXAMINED:
REQUESTING
PERSONNEL
EA-Daisy Rose Recide

AUDIT FINDINGS
SSC Election
AMOUNT: P1,525
CV#7494, MB 7702277
Date Liquidated JULY 2, 2014

EA-Ruth Leah Casana

Annual Orientation
AMOUNT: P1,950
CV#7481, MB 7702268
Date Liquidated NO DATE

No Signature of the Requesting personnel


in the Cash count sheet.
Liquidated July 2, 2014 but the excess cash
was only deposited on July 11, 2014
Not yet checked by the Accountant and no
approval yet by the OIC-CD and the
President
No date in the cash count sheet and when
it was counted.
No Signature of the Requesting personnel
in the Cash count sheet.
Excess cash was deposited on July 11,
2014

EA-Daisy Rose Recide

EA-Mark Gil C. Dichoso

EA-Mark Gil C. Dichoso

EA-Ricky A. Cera

EA-Maria Fe Abalos

CHED Seminar
AMOUNT: P1,300
CV#7637, MB 8199725
Date Liquidated NO DATE

CHED SEMINAR
AMOUNT: P1,500
CV#7496, MB 7702278
Date Liquidated JULY 7, 2014
REGIONAL EXECUTIVE CONFERENCE
AMOUNT: P1,700
CV#7532, MB 7702292
Date Liquidated AUGUST 2, 2014
PICPA ACCOUNTANCY WEEK
AMOUNT: P1,050
CV#7515, MB 7702282
Date Liquidated JULY 19, 2014
ANNUAL FACULTY MEETING
AMOUNT: P8,300
CV#7519, MB 7702284
Date Liquidated NO DATE

Checked by the Accountant but no


approval yet by the OIC-CD and the
President
No proper tracing of dates for the violation
of 3-day liquidation report policy.
Liquidated July 7, 2014 but the excess cash
was only deposited on July 11, 2014

Liquidated August 2, 2014 but the excess


cash was only deposited on August 15,
2014

Liquidated July 19, 2014 but the excess


cash was only deposited on August 15,
2014

Excess cash was deposited July 28, 2014

NOTED:
1. Based on the above sample liquidation report examined, many liquidation reports has NO DATE and not all pertinent information were
properly filled up by the officer-in-charge of the cash count.
2. DATE OF LIQUIDATION REPORT and CASH COUNT is not the same with the DATE OF CASH DEPOSIT to the Bank. As a rule, Date of
Liquidation Report and Cash Count should be the same with Date of Cash Deposit to avoid usage of the EXCESS FUND.

6. BOOKS OF ACCOUNTS MAINTAINED FOR BUREAU OF INTERNAL REVENUE PURPOSES ARE NOT UPDATED.
NAME OF BOOKS
CASH RECEIPTS JOURNAL

RESPONSIBLE FOR
RECORD KEEPING
BOOKKEEPER

MONITORING/
CHECKING
ACCOUNTANT

GENERAL LEDGER

BOOKKEEPER

ACCOUNTANT

CHECK REGISTER
GENERAL JOURNAL

BOOKKEEPER
ACCOUNTING CLERK

CHECK
REGISTER

ACCOUNTING CLERK

ACCOUNTANT
BOOKKEEPER
ACCOUNTANT
BOOKKEEPER
ACCOUNTANT

VOUCHER

and
and

COMMENTS/AUDIT
FINDINGS
NO
posting
from
December to January
2015
NO POSTING AT ALL from
June up to present
NO posting for January
NO posting from August
to January 2015
NO posting from October
to January 2015

IMPLICATIONS

Penalty of P1,000 will


arise when a surprise
TAX Mapping Program
of BIR will be conducted
because
of
delayed
posting of transactions.
Reputation
of
the
Institution to BIR being a
non-compliant
if
happened.

NOTE: IN CASE OF WORK OVERLOAD ON THE PART OF THE BOOKKEEPER, THE ACCOUNTANT MUST ASSIST.
7. INEFFECTIVE IMPLEMENTATION OF LIQUIDATION REPORT PROCEDURES AND CV FILING.
PRESENT LIQUIDATION REPORT CONTROL PROCEDURES (FLOWCHART PRESENTATION) (IMPLEMENTED BY THE PRESENT ACCOUNTANT)
REQUESTING PERSONNEL
ACCOUNTANT
CASHIER
BOOKKEEPER
ACCOUNTING
CLERK
8.
Submits the Liquidation Report to
the Accountant (3 days after the
event)
LIQUIDATION
REPORT
(SUMMARY OF ALL
EXCESS CASH
EXPENSES)

Checks the Liquidation Report for


its completeness and validity of
expenses and cash count for the
excess.
LIQUIDATION
REPORT
(SUMMARY OF ALL
CASH COUNT
EXPENSES)
SHEET
EXCESS CASH

Prepare the Deposit Slips


(3copies) Deposits the
EXCESS CASH

Checking and posting to


Quickbooks and other
pertinent records
LIQUIDATION
REPORT
(SUMMARY OF ALL
EXPENSES)
CASH COUNT
SHEET

Deposit
Slips
Deposited

Deposit
Slip

Forwarded for approval of


Liquidation Report to the OICCD and President
LIQUIDATION
REPORT
(SUMMARY OF ALL
EXPENSES)
CASH COUNT
SHEET

4
Deposit
Slip

Forwarded back for CV


FILING

OBSERVATIONS NOTED:
1. The Accountant is the first to check the Liquidation report, it should be noted that the Accountant should be the last personnel to verify
and double check the validity of the expenses incurred before approval of the OIC-College Director and the College President. END
2. This also creates a threat of alteration of records unknown to the Accountant since the last personnel to check is the Bookkeeper.
3. ALL Liquidation Reports and other accounting transactions should be properly APPROVED first before posting to the records
(Quickbooks).
4. Aside from the weaknesses identified in the present control procedures, the Bookkeeper presented a list of Employee Advances still
floating in the records (Quickbooks) where in fact, those advances were already liquidated and Liquidation reports have been properly
submitted to the Accounting Office. Based on the examination, liquidation reports were not properly turnover to the Bookkeeper by the
Accountant, it was found out that it was given directly to the Accounting Clerk which mean, it has already been filed but not yet
recorded.
PROPOSED LIQUIDATION REPORT CONTROL PROCEDURES (FLOWCHART PRESENTATION)
REQUESTING PERSONNEL
BOOKKEEPER
ACCOUNTANT
CLERK

CASHIER

ACCOUNTING

9.
Submits the Liquidation Report to
the Accountant (3 days after the
event)
LIQUIDATION
REPORT
(SUMMARY OF ALL
EXPENSES)

Checks the Liquidation Report


for its completeness and
validity of expenses
LIQUIDATION
REPORT
(SUMMARY OF ALL
EXPENSES)

EXCESS CASH

Recording of the Liquidation


Report in the
Quickbooks/records

Counter-checked the Liquidation


Report and do the cash count for
the excess fund.
LIQUIDATION
REPORT
(SUMMARY OF ALL
EXPENSES)
CASH COUNT
SHEET
EXCESS CASH

Prepare the Deposit Slips


(3copies) Deposits the
EXCESS CASH

Deposited
Deposit
Slips

Forwarded for approval of


Liquidation Report to the OICCD and President
LIQUIDATION
REPORT
(SUMMARY OF ALL
EXPENSES)
CASH COUNT
SHEET

Deposit
Slip
5

LIQUIDATION
REPORT
(SUMMARY OF ALL
EXPENSES)
CASH COUNT
SHEET

Forwarded back for CV


FILING

Deposit
Slip

END

CONCLUSION:
With the revised/proposed Liquidation Report Control Procedures, all weaknesses identified in the present system will be resolved:
1. The College Accountant is the final checker of the Liquidation Report.
2. Prevention of altered/revised Liquidation reports unknown to the College Accountant.
3. Strict and better control on NON-POSTING of TRANSACTIONS NOT DULY APPROVED. All posting/recording of Liquidation reports and
other similar transactions made by the Bookkeeper should be properly approved.
4. There is a smooth and clear flow of duties and responsibilities of every member of the Accounting Office.

8. FINDINGS ON SAMPLE OFFICIAL RECEIPTS WITH CHANGE TO THE STUDENTS (SUKLI)


PRESENT SYSTEM ON TRANSACTIONS WITH STUDENTS CHANGE (SUKLI) IN THEIR PAYMENTS.
Based on the interviews and inquiries conducted, if a student transacts with the Accounting office specifically with the cashier for payment of
his/her tuition fees and other fees and happened that their cash is more than the required payment, the cashier should give a change to the
said student, but there are times that the cashier has no cash available to give the change because her cash on hand are all in a higher bill
denominations, so the students were just asked to return in the afternoon for their change and as a proof that the student is entitled for the
change, his/her official receipts has a marked with amount of change in the upper right part of the OR. When the cashier has given the change
of the student, the amount written in the upper right part of the OR is crossed out as a sign of claimed change by the student.
WEAKNESS OF THE SYSTEM IDENTIFIED BASED ON THE SAMPLE OFFICIAL RECEIPTS (OR) INSPECTED FOR AUDIT
UNDER BOOKLET NO. 20
INITIAL FINDINGS

INTERVIEWS WITH THE STUDENTS

OR # 45692-December 2, 2014
CABALLERO, MICHELLE JOY R. BSA II

P350 CHANGE cannot be identified whether


returned or not yet returned because it was
not crossed out.

OR # 45657-December 2, 2014
VESQUIRA, ADRIAN JIM BSA II

P330 CHANGE cannot be identified whether


returned or not yet returned because it was
not crossed out.

OR # 45977-December 5, 2014
GINEZ, DANICA CAREGIVER

Cancelled without any explanation or note for


cancellation.

Experience twice the transaction of


delayed change from the former
cashiers Ms. Dona Rausa and Ms.
Mariel Sison.
She said there was no effort of finding
ways to give the change at once. Ang
sabi,
balikan
nalang
mamayang
hapon.
The change was claimed afternoon of
the same day.
Cashier was Ms. Mariel Sison
The student pays his fees in the
morning and was asked to claim his
change in the afternoon but STILL no
change.
He received his change afternoon of
the next day.
The student felt dismayed Nadismaya
po ako because he is expecting that
change for his payment on his project
contribution.
Properly voided with Accountants
signature
Original and the duplicate copy were in
tact
No explanation why it was voided.

I have identified two options on how can we improve the present system.
1. NO DELAYED CHANGE POLICY

The Cashier is no longer allowed to defer the change of the students simply because of unavailability of smaller bills and coins. It
is the responsibility of the cashier to find ways on how to meet the needed change of a student.
In times of numerous transactions, the cashier can asked support/help of the accounting clerk or any student assistant available
to change the bigger bills collected to small bills and coins outside the Institution to serve as a change fund.

2. SETTING UP OF CHANGE FUND


The Institution will set up a fund called Change Fund. The fund is restricted specifically for change transactions. It cannot be used for
other purposes and other disbursements.

COMPARISON OF TWO IDENTIFIED ALTERNATIVE SOLUTIONS:


NO DELAYED CHANGE POLICY

ADVANTAGES
1. No fund needed to set aside/up.
2. No monitoring and liquidation of another fund.
3. No risks of additional fund that maybe subject to
employee embezzlement.
DISADVANTAGES
1. Difficulty in meeting the change of students
(especially in times of exam periods).
2. Might create a long waiting line since, before
proceeding to the next customer/student, his/her
change must be given first.

SETTING UP CHANGE FUND

ADVANTAGES
1. Minimizes waiting of students for their change.
2. Strengthen customer satisfaction
DISADVANTAGES
1. Create an avenue/ risk for fund embezzlement of
employees.
2. Additional work for fund monitoring and liquidation.
3. Foregone benefits of interest that should be earned if
not set aside for change fund.
4. Additional accountability of the cashier personnel.

RECOMMENDATIONS:
Based on the presented advantages and disadvantages of the two options, it will be more beneficial and cost effective on the part of the
Institution to implement the NO DELAYED CHANGE POLICY. Since no cash funds involve being set-up, the cashier will be just informed and
properly monitored by the Accountant that all transactions with change should be given at once to the student/customer.

10.LATE LIQUIDATION REPORT AND MIS-USE OF EXCESS FUND OF INTRAMURALS 2014

QUESTIONS
1. Who is the responsible and
accountable person for the
Cash Advance of Intramurals
2014?

AUDIT FINDINGS
PAYEES NAME: MARIEL FAYE N. SISON
Position: Accounting Clerk
Check and CV Number: BDO 243239
CV#7622
Amount: P28,500

2. Why did it take so many


months to liquidate the
budgeted Intramural fund
and is the Accountant aware
of the delayed liquidation?

Intramurals happened last October 1014, 2014, the expected submission of


liquidation report should be on or before
October 17, 2014 in accordance with the
3-day Liquidation Report Policy but there

COMMENTS/OPINIONS
All School-wide activity (e.g., Intramurals) of the
Institution with budget/check preparation should be
named to the Accountant for encashment purposes
and for fund accountability but to be transferred to
the Accounting Clerk for the custody of the fund and
preparation of Liquidation Report.
REASONS WHY IT SHOULD BE NAMED TO THE
ACCOUNTANT
1. The primary reason is the materiality of the
funds needed, in case of losses or shortages,
fortuitous events or faulted actions made by the
Accountant, funds can be easily recovered.
In this case, the fund amounting to P28,500 is
named after the Accounting Clerk, which should
not be the case because of the materiality of the
amount. In time of loss the Institution may not
recover the loss or if recovered not on a timely
basis.
2. For quick and strict monitoring of the
expenses. Since the check was prepared in the
name of the Accountant, monitoring of the
preparation of liquidation report and submission of it
on a timely manner will be properly observed.
3. To prevent misappropriation of excess funds of
the requesting personnel.

Violation of 3-day Liquidation Report Policy.


Accountant and Bookkeeper are fully aware of the
shortage and delay of the liquidation report with no
appropriate actions was taken.

3. Why it was
monitored
Accountant?

not
by

closely
the

4. What was the accounting


treatment
to
the
cash
shortage and penalty of
water incurred?

was no liquidation report submitted until


January 10, 2014 and the excess fund
was also deposited on the same day.
MAIN REASON OF DELAYED LIQUIDATION:
The Accounting Clerk incurred a cash
shortage on the fund.
The excess fund was used to pay the
penalty of water bill last October 17,
2014. (see CASE ON PENALIZED WATER
BILLS)
Based on the interview conducted by the
HR with the Accounting personnel, the
Accountant does not properly supervise
and monitor her staffs because of her
teaching loads. Even the Accountant
itself admits in her interview that her
measure of supervision is only 70%.
The Accounting Clerk paid for the cash
shortage incurred and the penalty of the
water was equally divided among the
Accounting personnel.

Violation of Unauthorized Use of Funds.


The use of the excess fund for payment of penalty
was authorized and approved by the Accountant but
unknown to the College Director and President.
Malpractice committed by the Accounting personnel.

Accountant must be around of the office most of the


time, especially her staffs are new and supervision is
highly needed.
Focus on the Accounting Office, lessen the teaching
load, if possible, temporarily remove the teaching
load to meet all the backlogs in the Accounting
Office.
The excess fund was deposited only January 10,
2015.

THE FOLLOWING WERE NOTED IN THE LIQUIDATION REPORT OF INTRAMURALS 2014


1. Unorganized Liquidation Report
o No prenumbered PCV were used in the liquidation report.
o Disbursements have no identified PCV.
o Supporting documents are not reliable, especially in the Transportation Expenses, no PCV was used and no identified requesting
personnel.
2. Failure to comply the proper procedures and format of a sound and reliable liquidation report.
Below is the detailed analysis and observation on expenses incurred in the Liquidation Report of Intramurals 2014. (Please see attached
Liquidation Report after the Audit Report).

10

DATE

NATURE OF EXPENSE

SUPPORTING
DOCUMENTS
PCV was used

AMOUNT

DEFICIENCIES/COMMENTS

800.00

post-it paper scrap paper


with signature of
requesting personnel

1,200.00

No control number on PCV.


Audited but not checked on the PCV.
No approval on the PCV- Cash was taken
before it was properly approved.
No PCV was used.
No signature of the Officiating Officers only
Sir Willy- Faculty in charge of the Intrams.
No proof of approval because of nonissuance of PCV.
No PCV was used.
No signature of the Officiating Officers only
Sir Willy- Faculty in charge of the Intrams.
No proof of approval because of nonissuance of PCV.
No PCV was used.
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used.
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No approval on PCV.
No date and PCV number identified
No approval on PCV.
Not Checked and Audited on PCV
No PCV was used.
No signature of the requesting personnel

10-10-14

Drum & Lyre-Transportation

10-14-14

Professional
Officers

10-10-14

Payment for Referee

post-it paper scrap paper


with signature of
requesting personnel

1,800.00

No Date

Transportation Expense
(To Order Trophies and Medals)

post-it paper scrap paper


no signature

20.00

No Date

Transportation Expense
(To
Canvass
Trophies
Medals)

post-it paper scrap paper


no signature

20.00

PCV

30.00

PCV with receipts

1,285.00

post-it paper scrap paper

1,500.00

10-09-14

Fee-Officiating

10-09-14

Transportation Expense
(Deliver Invitations)
MASS

No Date

Sound System

and

11

10-10-14

Foods (Jollibee)

PCV with Official receipts

445.00

10-10-14

No specific nature of expense


(payment for ice)

Small paper scrap paper

40.00

10-14-14

Transportation Expense
(NO Purpose)

Scrap paper (at the back of


the paper Equipment Gate
Pass of PASS College)

50.00

No date

Transportation and Welding of


Basketball Ring

Small paper scrap paper

150.00

10-14-14

Welding Fee

Official receipts

75.00

10-09-14

PCV with Official receipt

100.00

No date

Tarpaulin Posting
(payment for tali (rope))
Purchase of Microphone

PCV with Official receipt

449.75

10-10-14

Honorarium for POSO/PNP

PCV

1,000.00

as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No approval on the PCV.
Not Checked and audited on the PCV.
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used
No purpose of travel, no destination
identified.
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used
No proof of approval because of nonissuance of PCV.
Not checked and audited.
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
Not checked and audited on the PCV.
Actual amount was not written in the PCV.
No date and PCV number
No approval on the PCV
Not checked and audited
No approval on the PCV

12

10-10-14

No specific nature of expense


(purchase of straw)

Official receipt

18.00

10-11-14

Score Board in Intramurals


(purchase of manila paper)

Temporary receipt with


small scrap paper

15.00

10-10-14

Honorarium (Drum & Lyre)

PCV

3,500.00

10-10-14

No specific nature of expense


(purchase of masking tape)

Official receipt

136.00

10-09-14

Token for judges

Official receipt

280.00

10-10-14

Snacks for Drum and Lyre

PCV with Official receipts

738.30

10-14-14

Additional Trophies

Official Receipts

810.00

10-13-14

Trophies
transpo.

Official receipt and small


paper

7,528.00

and

Medals

and

Not checked and audited on the PCV


No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No approval on PCV
Not checked and audited on PCV
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No approval on PCV
Not checked and audited on PCV
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used
No signature of the requesting personnel

13

10-09-14

Mr & Ms Intrams Trophies

Official receipt

2,540.00

10-10-14

Sash for Mr & Ms Intrams

Official receipt

1,500.00

10-10-14

Balloons

Official receipt and job


order

360.00

as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.
No PCV was used
No signature of the requesting personnel
as a proof of receipt.
No proof of approval because of nonissuance of PCV.

3. Incorrect liquidation report.


The reported excess fund in the liquidation report was P1,629.95 but based on my audit of the liquidation report, the excess amount that
should be deposited to was P2,159.95. There is still a cash shortage of P530.00 as a result of double posting of the purchased microphone
worth P500.00 and transportation of P30.00 without supporting document.
ACTIONS TO BE TAKEN:
1. Collect the cash shortage of P530.00 from the previous Accounting Clerk Ms. Mariel Sison.
2. The Bookkeeper and the Accountant must explain, why still it turned out that the Liquidation Report was still erroneous where in fact,
they have already affixed their signatures as checked by and noted by.

14

11.CASE ON PENALIZED WATER BILLS


The Water bill of the Institution was penalized last October 17, 2014 for the September 2014 water consumption, amounting to P703.29
because of late payment. Below are the issues raised and uncovered during the Interview conducted by the HR and the document
examination by the undersigned.
QUESTIONS
RAISED/UNCOVERED
1. What causes the delay of
payment of water bill which
resulted to penalty?

ACCOUNTANTS RESPONSE

Bills usually reach our


office 5 days before its due
date.
Accounting
clerk
prepare the entries to be
checked
by
the
bookkeeper,
Accountant
and be approved by the
OIC-CD
and
President.
Once approved, that is the
only time check is being
prepared. Once check is
prepared by the Clerk, it
will be checked by the
bookkeeper
and
accountant
and
again
noted by OIC-CD and
approved and signed by
the
President
and
Treasurer. As much as we

AUDIT FINDINGS

The
summary
and
preapproval form of water bill for
the month of September was
prepared by the Accounting
clerk October 7 and checked
by the Bookkeeper at the
same date, noted by the
Accountant October 8 and
approved by the CD and the
President. Checks and CV
were
prepared
by
the
bookkeeper October 11 and
checked by the Accountant on
the same date and rechecked by the CD on
October 13 then passed it to
the
President
for
check
signing and for transmittal to
Dagupan
for
treasurers

COMMENTS/OPINIONS

The Water bill reached the


Accounting Office October 7
and the due date for
payment is October 16,
2014. The Accounting Office
has ample time to prepare
the check. They have more
than a week (9days) to
prepare it is unjustifiable the
reason of time constraint.
The result of long period of
processing the payment of
water bill is due to lack of
monitoring and follow-ups of
the Accountant to her staffs
and
to
the
approving
personnel.
Based on my experience as a
previous
accountant,
all

15

want to finish the check


before
its
due
date,
sometimes
the
time
constraints will not permit
us to do so.

2. Where did the Accounting


Office get the payment for the
penalty of the water bill?

We dont have available


cash that time to pay the
penalty
amounting
to
P703.29 (We used the
excess fund of Intramurals
not yet liquidated to pay
the penalty.) and make
entry AR-Acctg. Staff.

signature. The Accounting


Office paid the bill October
17, 2014 while the due date
is October 16, 2014.

I checked the Quickbooks and


no entries have been reflected
regarding the penalty on
water. I have not seen ARAcctg. Staff account in the Trial
balance and even in the
liquidation
report
of
Intramurals presented. (There
is no trail or note of penalty
happened.)

urgent bills are placed in a


one folder marked URGENT
for the approving officer to
be notified that it should be
done
ASAP.
On
my
observation,
no
URGENT
folder
maintain
in
the
Accounting Office at present.
All penalties incurred by the
office should be shouldered
by the Accounting personnel
not the Institution.
There is an intension to
charge the penalty as part of
expenses of the Institution
since they did not replaced
the cash used in payment of
penalty until such time it was
discovered.
The head of the Accounting
Office must be the promoter
of transparency and credibility
within her workplace and
subordinates.

GENERALIZATION:
Based on the noted deficiencies and non-compliance of existing SOPs of the Accounting Office, these are the following violations committed
by the following Accounting personnel:

16

ACCOUNTING CLERK (Ms. Mariel Sison)


1.
2.
3.
4.
5.
6.

Failure to observe the proper disbursement of institutional funds.


Violation of 3-day Liquidation Policy
Violation of Unauthorized Usage of Funds (Use of excess fund for Water Penalty)
Failure to record and update the Book of Accounts of PASS College for BIR purposes.
Failure to file Check and Check Vouchers properly.
Collusion among accounting personnel.

BOOKKEEPER (Ms. Roxelle Mundo)


1.
2.
3.
4.
5.
6.
7.
8.
9.

Failure to check the reported liquidation report with proper diligence.


Failure to record and update the revenue journal in the Quickbooks for 2 nd Semester 2014-2015
Failure to record and update the collections in the Quickbooks for 1 st Semester 2014-2015 up to present.
Failure to record and update the Books of Accounts of PASS College for BIR purposes.
Failure to update the records in the Quickbooks.
Failure to close all liquidated employee advances in the Quickbooks.
Violation of Unauthorized Usage of Funds (Use of excess fund for Water Penalty)
Failure to provide reliable financial statements for decision making purposes.
Failure to uncover the errors and deficiencies in the Liquidation Report of Intramurals made by Ms. Mariel Sison.

ACCOUNTANT (Ms. Shirley Dulay)


1. Lack of monitoring and supervision of her subordinate in discharging their duties and responsibilities.
2. Failure to observed and strictly implement their own standard operating procedures on 3-day Liquidation Policy.
3. Failure to observed and strictly implement their own standard operating procedures on No unauthorized usage of Funds
4. Failure to provide accurate and reliable financial information for decision making purposes.
5. Failure to assist and monitor the Bookkeeper in recording of all pertinent financial information.
6. Failure to improve the internal control procedures in the Accounting office. (SEE Audit Finding No. 7)
7. Failure to monitor the Books of Accounts of PASS College for BIR purposes.
8. Failure to report and update the status of their accounting records and Quickbooks.
9. Failure to uncover the errors and deficiencies in the Liquidation Report of Intramurals made by Ms. Mariel Sison
10.Collusion among accounting personnel (Water Penalty)

17

ATTACHED ALSO IN THIS REPORT ARE THE FOLLOWING:


1. Investigation Report conducted by the Human Resource regarding the issue of cash shortage and unauthorized use of funds to pay
Water penalty.
2. Scanned Liquidation Report of Intramurals.
PREPARED BY:
RICKY A. CERA
Appointed Internal Auditor

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