Deficiencies in the operation of foreign-based government agencies

1. Audit of foreign-based government agencies disclosed deficiencies due to

inadequate controls in the areas of cash and property management and
operational efficiency.

Audit of foreign-based government agencies for the period June 2015 to November
2017 disclosed deficiencies in the areas of cash management, property management
and its performance (value for money), to wit:
Observation Audit period Country
A. Cash Management
Unutilized Cash Advances - SG$ 7,210.75
Unutilized/unspent cash advances amounting to SG$ Jun. 2015 – Nov. Singapore
7,210.75 still remained in the bank account of the 2017
Foreign Service Trade Representative (STR) and not
returned to the DTI Head Office (HO) contrary to
COA Circular No. 97-002 dated February 10, 1997.
Non-maintenance/Improper Form of Cash Disbursement Register (CDR)
The Philippine Trade Investment Center (PTIC) did Aug. 2015 – Aug. Washington D.C.,
not maintain/improperly maintained CDR to record, 2017 USA
monitor and report transactions on the cash advances
received, payments charged thereto and liquidations Nov. 2016 – Oct. New York, USA
thereof, contrary to COA Circular No. 2004-003 2017
dated June 24, 2004.
Sept. 2015 – Oct. Taiwan
2017
Incurrence of bank charges and penalties due to non-consolidation and untimely remittance of
operating funds
The amount of US$527 (P26,589.96) of bank Nov. 2016 – Oct. New York, USA
charges and at least US$730.95 (P36,896.92) of 2017
penalty charges for delayed bill payments could have
been avoided had the Post requested the DTI-HO to
consolidate the monthly remittances instead of three
separate remittances for the MOOE, PSP salaries and
lease of office equipment and to remit operating
funds on time.
Delayed submission of liquidation reports
The delayed submission of liquidation reports by the Nov. 2016 – Oct. New York, USA
Post from two days to 73 days resulted in the 2017
accumulated cash advance balance of the STR by
P1,249,342.73 or US$24,437.02 as of October 31,
2017.
Non-stamping of “PAID” to supporting documents
Supporting documents were not stamped “PAID” Sept. 2015 – Oct. Taiwan
after payment, contrary to Section 2(Q) of COA 2017
Circular No. 92-389 preventing the possible re-use
or double payment of the same claim.
B. Property Management
Inclusion of leased and inexistent assets in the RPCPPE
The Post inadvertently included in the Report on Aug. 2015 – Aug. Washington D.C.,
Physical Count of Property, Plant and Equipment 2017 USA
(RPCPPE) and assigned property number, one copier
 Observation Audit period Country
which is being leased and one cellphone which is no
longer in its possession.
No cost/valuation indicated for PPE
Items in the RPCPEE were found existing, Aug. 2015 – Aug. Washington D.C.,
adequately described and property tagged in the 2017 USA
physical inspection conducted. However, the
properties inventoried have no value indicated Apr. 2016 – Sept. Paris, France
therein. 2017
Inclusion (in the RPCPPE)/Non-accounting of semi-expendable property - NT$ 152,349.00
Semi-expandable property amounting to Sept. 2015 – Oct. Taiwan
NT$139,460.00 were still included in the RPCPPE 2017
while the amount of NT$12,889.00 were not
included therein.
Inclusion of unserviceable properties in the RPCPPE - NT$ 16,000.00
Unserviceable property totaling NT$16,000.00 were Sept. 2015 – Oct. Taiwan
still included in the RPCPPE and were not disposed 2017
of contrary to Section 79 of PD No. 1445, thus,
occupying a considerable space in the bodega which
could have been utilized for other purposes.
C. Operational Efficiency
Financial budget not included in the Work Plan
The Work Plan submitted by the Post showed only Aug. 2015 – Aug. Washington D.C.,
the plans and activities to be performed during the 2017 USA
year without the corresponding financial budget
indicated thereon, thus, difficulty to gauge the
economy and efficiency of its operation arises.
Programmed activities not included in the Accomplishment Report
Targeted activities were not provided in the Nov. 2016 – Oct. New York, USA
accomplishment report, hence, the audit team cannot 2017
assess whether its accomplishments matched with
the programmed activities.

We recommended and Management agreed to direct the:

a. Commercial Attachés (CAs), through the concerned STR/Commercial

Counselor/SDO/AO to:

i. close the bank account under the former STR’s name and return the
unutilized cash advances to the DTI-HO for proper accounting and
determination of his cash accountability;

ii. maintain CDR in the prescribed form to record and report the grant,
utilization and liquidation of cash advances;

iii. submit liquidation reports within the reglementary period to avoid

accumulation of accountability;

iv. stamp “PAID” the supporting documents after payment to preclude

possible re-use or double payment for the same transaction;
 v. segregate the property being leased from rest of the PPE owned by the
Post and transfer the accountability for the cellphone of the previous AO
who was already transferred to Canada to the incumbent Trade Attaché
by requiring the former to return the equipment;

vi. determine the cost or appraised value of the PPE by considering their age
and actual condition and submit to DTI-HO an updated inventory
report;

vii. exclude on the RPCPPE all property below P15,000.00 and prepare a
separate form similar to the RPCPPE for semi-expendable property for
monitoring purposes and submit it to DTI-HO for reconciliation in the
books of accounts;

viii. submit IIRUP to the DTI-HO and dispose the unserviceable property in
accordance with existing rules and regulations;

ix. prepare and submit a Work and Financial Plan indicating the plans,
programs and activities with set targets and corresponding financial
budget to gauge the economy and efficiency of its operation;

x. include programmed activities in the Accomplishment Report to

facilitate assessment of their accomplishments for the year; and

b. Accounting Division of DTI-HO to:

i. consolidate the remittance of the Post’s operating funds for MOOE, PSP-
Salaries and lease rental of equipment either monthly or quarterly to
save on bank charges; and

ii. remit timely such operating funds to be able to pay the bills of the Post
when due and avoid penalties.