PART III - STATUS OF IMPLEMENTATION OF

PRIOR YEARS’ RECOMMENDATIONS

Of the 148 audit recommendations contained in prior years’ Consolidated Annual

Audit Reports, 42 or 28.38 per cent were fully implemented, 75 or 50.68 per cent were
partially implemented and 31 or 20.95 per cent were not implemented.

The observations which recommendations were not implemented are reiterated in

Part II of this Report. Details of the status of implementation of prior years’
recommendations are as follows:

Observations and Action Taken by Auditor’s Validation

Reference
Recommendations Management Results
CY 2015
1. FMR Projects Not
Implemented on time

We recommended that
Management require the
concerned RFOs to:
2015
a) direct the IAs to complete Conducted an assessment Partially Implemented
CAAR
immediately the meeting with the IAs to fast Issues encountered by
Pages 55-
construction/rehabilitation of tract the implementation of Management include the
57
FMRs to provide the target the project and give them a failure of bidding,
beneficiaries easy access to deadline. problems on the right of
2014
markets and address all ways and delayed approval
CAAR
constraint in the non- of the change in site from
Pages
attainment thereof (RFO VI); the central office.
130-131
Reiterated in RFO VI 2016
ML.
2014
Pages 67-
b) closely monitor and discuss Sent series of Fully Implemented
73
with IAs the effective communications to the IAs Management is
strategies on how to execute to fast tract the submission continuously monitoring
2013
the projects efficiently and of the necessary supporting the implementation of the
Page 185
effectively to meet the documents in order to projects.
targeted dates of facilitate the release of funds.
2012
completion(RFO IX);
Page 96
c) require the projects’ Advised the implementing Not Implemented
contractors to rectify and agencies to return the funds No action taken.
refund the amount of to the DA RFO 6 for projects
₱2,385,125.52 for the that were not implemented
deficiencies noted(RFO and/or completed.
CAR); and

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results

d) exercise due prudence in the Management wrote the Fully Implemented

preparation of the detailed contractors to install or Management has already
estimate for the Program of refund the deficiencies. exercise due prudence
Work and ABC of all during CY 2016.
projects; and submit written RFO IX
explanation and detailed Management has already
justification on the exercise due prudence during
deficiencies noted per COA CY 2016
Technical Evaluation Report
for review and RFO XIII
validation(RFOs IX and Management ensure that the
XIII). computation of the project
cost particularly the POW,
which should be properly
reviewed before the funds
for the project
implementation are released
to LGUs and ensure that
duties and responsibilities of
DA XIII as stipulated in the
implementing guidelines as
embodied in the DA’s
Department Orders and
MOA are strictly complied
with.

2. Implementation of ACEF
Scholarship Program
2015
CAAR
We recommended and Validation and evaluation Fully Implemented
Pages 58-
Management agreed to require was conducted by Monitoring was already
60
the ACEF National Technical Management. conducted.
Secretariat to ensure timely
2013
execution of the MOA with
CAAR
complete supporting documents;
Page 156
and establish an effective
monitoring system of the
scholars and the SUCs.

3. Deficiencies in the RFO I

2015
implementation of With the strict selection
CAAR
Postharvest Facilities process, there will be
Pages 60-
Program expeditious distribution of
64
these farm machineries and

105
 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
We recommended that equipment, thus stocking of
Managementdirect the RFOs I, the units procured in our
III, VI and VII to require the stations will then be avoided.
concerned project officials to:
RFO III
a) conduct screening of The following are the actions Partially Implemented
beneficiaries so that only taken by management: The submission of the
those qualified and interested necessary supporting
farmers can avail of the a) Required LGUs to submit documents is enforced.
projects; and require the list of farmer-
submission of necessary beneficiaries with ready
documents to expedite the counterparts;
implementation/completion b) Reminded LGUs to
of projects; withdraw the farm
b) prepare adequate equipment of farmer- Partially Implemented
procurement program to recipients in their Stocking is avoided thru
ensure that only the needed respective province; the expedite distribution of
farm equipment are c) Repaired the damaged farm machineries.
purchased and until the structures to serve as
equipment are issued to warehouses of procured
farmer beneficiaries to avoid farm equipment; and
unnecessary over-stocking of d) Coordinated with
property for a longer period; suppliers for the repair of
c) provide proper safety equipment which were Partially Implemented
protection to farm equipment damaged by typhoon Management ensured that
stored at the stock yard open Santi with no additional farm equipment were in
area, including the conduct of cost to the government. good condition prior to
regular preventive and distribution.
maintenance work to prevent RFO VI
further damages and Conducted an assessment
deterioration of property meeting with the IAs to fast
prior to distribution; tract the implementation of
d) require the Regional the project and give them a Partially Implemented
Agricultural Engineering deadline. Strict monitoring is being
Division (RAED) personnel implemented.
and program coordinators to Distributed the machineries
strengthen the monitoring of and conducted trainings o
project implementation with the recipients upon
adequate feedback distribution. This activity is
mechanism for management still on-going.
to immediately address the
problems encountered; and RFO VII
e) coordinate/require the AMAD already made Partially Implemented
farmer- negotiations to the concerned Appropriate actions were
beneficiaries/contractors/end- LGUs to transfer the idle being made/coordinated to

106
 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
users to initiate appropriate cold storage to other the concerned units/
actions to fast track interested operators. Several persons without incurring
completion work/make the LGUs already signified their additional cost to the
equipment operational/ to interest in operating the government.
determine the extent of their project. The cold storage in
functionality; and if Mandaue will be transferred
warranted, consider the to Candijay, Bohol while the
possibility to pull-out the one in Consolation, Cebu
facilities to be awarded to will be transferred to
other deserving proponents. Panglao, Bohol. The
remaining cold storage will
be transferred either in
Bohol or Negros, as long as
the interested LGUs are
qualified and capable to
operate.

4. Non-attainment of
objectives in the
implementation of DA
projects

o RFO VI
a) Undertake procurement Issued a Special Order Partially Implemented
activities upon approval of creating Procurement The designated
the NEP; and require Coordinators who will procurement coordinators
submission of necessary facilitate and coordinate with assist in the submission of
2015
documents, between the the offices and personnel the necessary
CAAR
budget preparation and involved in the procurement, documentation.
Pages 64-
budget execution to expedite implementation and
67
the disbursement process.
implementation/completion
ML CY
of projects.
2015, pp.
13-16
o RFO IX The balance of undistributed Fully Implemented
b) Conduct necessary farm inputs was reduced Conducted assessment for
assessment on the kind from 13,896 to 6,322 seeds the CY 2016
and/or preference of the as of March 29, 2016. An implementation.
farmers on the variety of Affidavit of Undertaking
seedlings before the conduct was already instituted by one
of actual procurement of the suppliers to replace
activity to avoid wastage of the damaged seedlings and
government funds; would closely monitor the Partially Implemented
c) undertake procurement proper undertaking of it. Still the CY 2016 targets

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
activities efficiently in time Delay was not in the were not fully realized.
for distribution of planting procurement activities but in
materials to the farmers the finalization of Purchase
during planting season; and Request wherein various Not Implemented
d) expedite the termination of changes have been made on Management did not
the contract with the Agri- the specifications of the expedite the termination of
Component Corporation and seedlings. the contract.
consider taking over the
contracts; avail of all the
legal remedies to recover
damages arising from the
contractor’s failure to comply
with the terms of the
contracts; and initiate the
blacklisting of the contractor.

o BPI BPI adapted the Fully Implemented

e) fast track the procurement of recommendation. Early procurement
planting materials to avoid scheduling was
delay and monitor closely the implemented.
scheduled and programmed
accomplishments.
ATI RTC VII
o ATI Management justified the Fully implemented
f) stop the procurement of the procurement of service of No transactions with the
services of Remnant Institute RIAM but starting CY 2016, said supplier were recorded
of Alternative Medicine for they no longer availed of the in CY 2016.
Health and Wellness services of the said supplier.
Training Seminars; and Fully Implemented
g) submit written explanation Justification accepted.
on the deficiencies noted.

o ATI-CAR The projects referred to as Fully Implemented

h) conduct periodic monitoring not monitored had already Consultation and
and supervision during the been completed. For 2016, coordination with the
implementation of the project the center programmed LGUs were made to fast
to make sure that projects are quarterly monitoring of track project
implemented in accordance operations of the projects implementation and
with the set objectives and to aside from the monitoring imposition of liquidated
ensure sustainability of the visits undertaken in between damages to the contract for
project for at least five years; quarters. the delays incurred.
and
Accomplishments/ activity Fully Implemented
i) require the farmer- reports were already being Recording is complied.
cooperators to comply with done regularly with the

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
their obligations particularly frequency of monitoring
on the (i) submission of visits and Utilization Reports
monthly were already collected/
accomplishment/activities submitted. Likewise,
report/fund utilization report beneficiaries were provided
to ensure that funds are with logbooks and other
utilized for the purpose for supplies to ensure their
which it was given; and (ii) recording.
maintenance of farm records,
among others.

5. National Organic
Agriculture Program
(NOAP)

o RFO VI
a) Adopt adequate measures to No action taken. Not Implemented
supervise and monitor the No action taken.
proper implementation of the
programs and projects to
ensure that these are fully
accomplished during the
target period and within the
budgeted allocation.

o RFO X RFO X
2015
b) require the project The Management commits to Partially Implemented
CAAR
proponents to comply with be more conscientious, To meet the project
Pages 67-
R.A. 9184 and its IRR in all observant, and compliant of timeline, meeting between
69
their procurements as funds the prescribed period set in management and the
transferred to them retained IRR of RA 9184 & COA stakeholders were
their character as public Circular No. 2012-001. conducted.
funds;
c) be meticulous in evaluating The Management will Partially Implemented
the project proponents to endeavor in a thorough and Proposals are carefully
avoid changing of project careful review of succeeding reviewed.
proponents or cancellation of proposals.
the project; and
d) require the OAP focal person Monitoring Report Partially Implemented
to submit the monitoring completed already while Submission is on-going.
reports on the progress of the Report on Completed
OAF projects and final projects still on-going.
appraisal reports for
completed OAF projects.

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results

6. Unutilized NCA - ₱656.865

million

We recommended that
Management direct the FAPsO,
RTC XII and RFO VIII to
require the concerned budget,
accounting and project officials
to:

a) formulate a realistic and No action taken. Not Implemented

attainable work plan and FAPs, RTC XII and RFO
budget to ensure that the VIII did not implement the
Monthly Disbursement 2015 recommendation
Program (MDP) match the CAAR
budgetary and disbursement Pages 69-
requirements of the DA by: 71
a) ensuring that programs,
projects and activities are 2014
ready for implementation CAAR
upon the release of the Pages 82-
allocated funds; and b) 83
installing budget
performance tracking system
to monitor the utilization of
allotments in order to prevent
the lapsing of cash
allocations; and
b) fast track the disbursement No action taken. Not Implemented
process in order to settle as No action was taken.
soon as possible the due and
demandable obligations to
fully utilize available NCA
balances.

7. Dormant/unauthorized/unn BAI
ecessary cash in bank The Chief, Accounting
accounts – ₱697.201 2015 Section commented that the
million CAAR account is supported by
Pages 71- schedule and refunded to
We recommended that 73 concerned companies upon
Management direct the consummation of the
concerned DA Offices and contract.

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 Observations and
Reference
Recommendations
Bureaus to require their:
a) Accountants to close the
dormant, unauthorized, and
unnecessary cash in bank
accounts and remit the
balances to the National
Treasury and/or return to the
source agency, as the case
maybe; and
b) Cashiers to remit the
performance/bidders bonds
and deposits filed or posted
by private persons or entities
to the National Treasury.
Action Taken by Auditor’s Validation
Management Results
RFO V
Focal persons and project Partially Implemented
leaders maintained that the Agencies requested for the
balances reported by the extension of the reversion
accounting section was not of the unutilized fund
the same amount as transfer until the end of CY
appearing in their records; 2016.
Accountant to reconcile
accounting records with
those of project leaders and Partially Implemented
Budget Officer and to refund With the current policy
the unutilized fund balances that the liquidation of
only if these amounts are funds would be based on
free of any financial per project basis,
obligations. liquidation of FT from IAs
had been relaxed. There
RFO VI was a marked increase of
Returned some of the the account by 26% in
unexpended balance of fund 2016 from 2015 figure and
transfers to the Source account aged more than 1
Agencies/BTr. year had increased also by
17.9% from ₱284.8 million
RFO IX in 2015 to ₱338.9 million
Management has already in 2016 for RFO VIII.
remitted some of its
depository balances during The Management of RFO
CY 2016.Reiterated in CY XI had already refunded
2016 ML KOICA account in one of
the PVB account to the
BTr with an amount of
RFO VIII
₱320,129.15 per check no.
The Chief of Finance, and 267540 dated April 26,
Administrative Division 2016
stated that they had stopped
implementing and returned
the fund to the SA. It was no
longer reasonable to accept
funds from Other National
Government Agency because
of its low absorption
capacity.
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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
RFO XI
In relation to the non-deposit
of bonds to the Bureau of the
Treasury (BTr), management
asked for consideration due
to previous experience of
delay on the part of the BTr,
wherein it took a year or two
before the bond was
released.

8. Unliquidated cash advances OSEC

to officers and employees – Demand letters were
₱111.54 million prepared/sent by the Chief
Accountant. Salary
We recommend that deductions are imposed. For
Management direct the liquidations which were not
concerned offices to: supported by the necessary
documents, demand letters
a) strictly enforce the period of will be sent to comply with Partially Implemented
liquidation as prescribed in the COA requirements. If no Cash advances for Special
COA Circular No. 97-002; response is received, these Disbursing Officer and to
will be deducted from their Officers and Employees
personal accounts. Adoption were already liquidated,
of the petty cash system is however, advances for
suggested for cash advances operating expenses still not
2015
granted to the Agricultural liquidated
CAAR
Attaches so that that AO can
Pages 73-
b) send demand letters to still operate pending Fully Implemented
76
concerned officials and reimbursement of the 75 Demand letters are sent to
employees and require the percent fund spent. officers and employees
immediate refund/return of with outstanding cash
any excess amount thereof ATI advances to facilitate
and/or deduct from their All ATI RTC CAR SDOs immediate liquidation
salaries any unsettled were not able to liquidate which also indicates the
accountability and adopt their cash advances within starting period their
mechanisms to monitor the the prescribed period due to salaries will be withheld in
prompt liquidation to avoid the delay in the conduct of case of non-liquidation.
accumulation of unliquidated trainings and activities and
cash advances; and completion of supporting
documents.
c) refrain from granting Partially Implemented
additional cash advances to RFO V Still continue to grant
officers and employees who Demand letters will be additional cash advances to

112
 Observations and
Recommendations
have previous
accountabilities to avoid
accumulation of the same.
9. Unliquidated Fund
Transfers to Implementing
Agencies
a) require their Accountants to
(i) require the IAs to
immediately submit the
liquidation reports and refund
the unutilized fund transfers
for completed projects, if
any; (ii) send demand letters
to the IAs to settle their
accountabilities with DA and
confirm the actual fund
utilization; and (iii) request
for write-off for dormant
accounts; and
b) include in the MOA (i) the
timelines of project activities
and liquidation of funds
received; (ii) penalty clause
on the non-compliance with
the provisions of the MOA;
and (iii) refrain from
releasing additional funds
unless the previous fund
transfers are first settled.
Action Taken by Auditor’s Validation
Reference
Management Results
issued to concerned officers and employees
officials/employees for the who have unliquidated
immediate liquidation of cash advances.
their cash advances. The
policy on no granting of
additional cash advance will
be strictly implemented until
such time that the concerned
accountable officers
liquidate the previous cash
advances.
Will adhere to discontinue Partially Implemented
the release of additional fund Unliquidated fund transfers
transfer to NGO/PO with still exist.
outstanding balances.
ATI
The ATI consistently sends
demand letters informing
them of their unsettled
balances.
2015
CAAR BSWM
Pages 77- Management already sent
80 demand letters to various Partially Implemented
recipients requesting their Extensions to implement
submission of the Certified the projects were
Correct/Approved/Audited requested.
Liquidation Report together
with the Report of Checks
Issued and Report of
Disbursements and the return
to BSWM of the unspent
balance, if any.
RFO XI
Monitoring & Evaluation of
the projects are still on-going
conducted by the program
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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
coordinators except for FMT
and livestock whose report
were already submitted

10. Non-compliance with laws,

rules and regulations

We recommended and
Management agreed to require
the concerned officials of:

o ATI, three bureaus and four

RFOs
- to submit the complete Partially Implemented
documents to support the Some liquidation reports
payment/recording of were submitted within the
transactions in the books; prescribed period.

o DA-OSEC
- review the monthly Additional cash advances for Partially Implemented
requirement for petty different purposes were still Refund was made for
operating expenses, refund granted to the accountable unused cash advances.
unused cash advances officer without increasing
after two months of non- the bond.
utilization and reduce the
amount of cash advance
granted to the Special
Disbursing Officers;

o RFO I
- stop the practice of The cash advance was Fully Implemented
drawing checks in granted for the payment of Management complied
advance in order to avoid operating expenses but with the recommendation
lapsing of unutilized NCA disbursements such as and committed to disburse
and ensure that cash benefits of employees and funds in accordance to the
advances shall be used infrastructure projects were purpose of the cash
solely for the specific paid out of the cash advance advance.
purpose for which it was with the intention to
granted; immediately liquidate the
said cash and without any
intention to evade or
disregard any accounting and
auditing rules and
regulations.

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 Observations and
Reference
Recommendations
o ATI
- to require the FPDI to
submit certificate of
accreditation issued by
DSWD to comply with
regulations;
o ATI, DA FAPS and six RFOs
- to submit to the Auditor
the Purchase Orders/
Contracts together with its
supporting documents
within five working days
from execution thereof;
list of all on-going and
those that are to be
implemented projects in
CY 2016 and inform the
Audit Team within 10
days after the award of the
infrastructure project that
the appropriate project
signboards and/or public
notices are already posted
for validation.
o RFO VI
- management identify the
personnel accountable for
Action Taken by Auditor’s Validation
Management Results
The FPDI submitted the Fully Implemented
Certification of DSWD-CSO ACRN No.
Accreditation from DSWD. 2017-A015 dated March 2,
2017 was submitted.
RFOs II, V and X Partially Implemented
Agreed that the Purchase Purchase orders/contracts
Order will be submitted to were submitted however
COA Office following the some were not compliant
specific period. to the required number of
days within which to
ATI submit.
The SMU regularly submits
with the required period the
PO and contracts to COA
RFO X
The delay in the submission
of POs/contracts is due to the
processing of OBR, thus,
they asked permission from
the commission if it is
possible to submit the
contracts without OBR
attached to comply with the
5-day deadline, and will just
follow through the OBR
when it is properly signed by
the signatories. The
commission allowed the
Management's request on the
condition that transmittal
attached should indicate that
there was no OBR attached
to the contracts submitted.
Endorsed copies of the Not Implemented
pertinent documents relative It is maintained that the
115
 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
the lost buffer stocks of to the matter to the office of Management pinpoint the
certified palay seeds and the agency’s retaining DA personnel accountable
direct the payment of the counsel to seek a sound for the lost buffer stocks
amount of ₱159,120.00, advice in filing the and make him pay for the
representing its market appropriate legal action to amount of loss.
value had it been vindicate the rights and
auctioned to the bidders in interest on the DA RFO6
June 2013;

o BAI
- to prepare and submit the Partially Implemented
inventory of all insurable The submission of the
physical assets to the inventory report is
GSIS so that properties reiterated in BAI CY 2016
could be insured under the ML.
General Insurance Fund
and the Property
Replacement Fund;

o RTC XI
- to submit documents on The management of RFO XI Partially Implemented
the nature of receipts to is exerting effort to reconcile Unaccounted balance still
substantiate the cash the cash balances of which exists.
account; and/or make the ₱1 million as per check no.
necessary adjustment to 237904 dated April 22, 2016
reflect the correct balance was remitted to the BTr but
of the account; most of the accounts
reconciliation is still on
going.
o RFO V
- management see to it that Management submitted a Partially Implemented
government funds are copy of the letter-request
utilized only in made by the RED addressed
accordance with the to the DA Secretary
appropriation authorized requesting permission for the
for the purpose; and that use of capital outlay of ₱16.9
no contract involving the million released for the
expenditure of public construction of various
funds shall be entered into production facilities under
unless there is an the QRF, among others.
appropriation therefor;

o RTC I and RFO XI

a) The members of the BAC Fully Implemented
require the preparation of The PPMPs and APPs

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
the PPMPs by each end- have been prepared.
user units;
b) The BAC Secretariat Fully Implemented
consolidate the PPMPs The PPMPs and APPs
into a comprehensive have been prepared.
Annual Procurement Plan;
c) Revise the PPMPs of RFO Management had initial talk Fully Implemented
XI to include the with PAL and Cebu Pac for a The PPMPs and APPs
procurement for air fare. possibility of direct have been prepared.
The revised PPMP shall contracting.
be consolidated as the
Revised APP of the
Agency;

o RTC I and RFO I

- plan their office supplies RTC I Partially Implemented
requirement for a quarter’s The end-users request The matter was brought to
use and procure common- supplies only a few days the attention of the
use supplies and materials before the conduct of concerned units.
from PS-DBM as often as trainings that is why the
needed; and Supply Unit resorted to
emergency/shopping often-
times.

RFO I
All office supplies were
procured at the DBM-PS,
however those items which
were not available thereat
were procured from outside
sources through alternative
mode of procurements.

o For all projects implemented

of RFO VII
a) revisit the Revised Not Implemented
Implementing Rules and No action was taken.
Regulations of R.A. 9184
in order to keep abreast of
the various revisions and
additional provisions
therein. Henceforth, any
procurement made by the
agency will be in
accordance to the Revised

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
Rules and Regulations;
b) submit all the enumerated Not Implemented
documents as required No action was taken.
under the law and
guidelines and explanation
on the deficiencies noted;
c) the Bids and Awards Not Implemented
Committee to submit the No action taken.
Minutes of the Pre-bid
Conference, if there’s any
and henceforth, to conduct
Pre-bid Conference in
accordance with the
threshold set forth under
Section 22 of same IRR in
future procurement; and
d) look into the contractor’s Not Implemented
failure to complete the No action was taken.
project within the contract
period and to re-compute
the actual work-days, with
consideration of work
suspension, in order to
determine and demand for
possible liquidated
damages. If indeed there
was, we recommend that
Management impose
liquidated damages.

o DA-OSEC
a) formulate a strategy that ACEF and the Legal Office Fully Implemented
will ensure collection of already sent Over-all assessment and
outstanding loans; and confirmation/demand letters evaluation of ACEF
to proponents. All projects projects are on-going.
within the region were
b) impose a penalty of 24 inspected by the Regional Not Implemented
percent per annum on loan ACEF focal person This is on the discretion of
outstanding as provided in designated to determine the ACEF Execom.
the Loan Agreement viability of the projects,
and/or file legal actions collectability of the
against the defaulting receivables and its
proponents. contribution in the field of
agriculture and fishery.

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Reference
Recommendations Management Results
11. Gender and Development
CAAR
Conduct mainstreaming and The Management, thru the Partially Implemented
2015
continue formulating a more GAD Focal Person, Submitted the GAD Plan
Pages 92-
comprehensive GAD formulates annual GAD but there were other
93
Plan/program that will promote plans and programs that are deficiencies noted.
poverty alleviation, economic manageable and feasible,
2014
empowerment of marginalized and the implementations are
Pages
women, gender equality and strictly monitored.
134-135
gender responsive governance at
the workplace; and ensure that
2013
the targeted plans and target for
Page 304
GAD is fully implemented to
achieve the objective of the
2012
Gender and Development
Page 249
Program.

12. Programs and Projects for

Senior Citizens and CAAR
Differently-Abled 2015
Pages 93-
Formulate plans, programs and 94 Proposed programs for Partially Implemented
activities that address the needs Senior Citizens and Some offices failed to
of senior citizens and 2014 Differently-Abled persons submit the plan and
differently-abled persons, Page 136 for CY 2017 are also accomplishment report.
allocate the required budget for prepared. Management considered
its implementation and prepare 2013 the recommendation and
the report pertaining thereto in Page 309 plans to fully attain the
compliance with the above cited goal and objective of the
regulation. 2012 Gender and Development
Page 253 Program

13. Non-compliance with Tax CAAR

Laws 2015
Pages 94-
Trace the existence of 95 OSEC Fully implemented
unreconciled balances by Taxes withheld for the year Taxes were remitted within
reviewing/analyzing the 2014 were accordingly remitted the prescribed period
supporting documents of the Pages within the prescribed period
past due accounts; thereafter 136-137 Monthly taxes withheld
prepare the necessary BSWM were remitted in full to the
adjustments as appropriate. 2013 Management commented Bureau of Internal
Moreover, always ensure that Page 310 that they shall adhere to the Revenue (BIR).
periodic reconciliation is recommendations

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
performed and taxes withheld 2012
are remitted within the Page 254
prescribed period to avoid the
imposition of penalty for late
remittance.

14. GSIS, PhilHealth, and Pag-

IBIG deductions and
remittances CAAR
2015
Remit the amount of Pages 95- Errors in the posting of Fully implemented
₱522,586.70; correct the 96 remittances in the SLs were All not remitted deductions
erroneous postings in the corrected. were already remitted.
subsidiary ledger of DA 2014
employees and prepare reports Pages Erroneous posting were
and remit the contributions 139-140 already corrected.
withheld on time in accordance
with the existing rules and
regulations.

15. Settlement of Audit ATI-CO

CAAR
Disallowances and Settlements of disallowance
2015
Suspensions are periodically made. For
Pages 98-
CY 2016, a total of
100
₱110,313.11 have been
settled. Reiterated in CY 2016
2014
CAAR with some updates.
Pages
BAI
137-139
Out of the ₱1,560,100.58
reported disallowance as of
2013
December 31, 2014, only
Page 312
₱115,000.00 or .0139% was
settled in CY 2015 contrary
2012
to Section 10.4 of COA
Page 257
Circular No. 2009-006 dated
September 15, 2009.

16. Accounting
Errors/Omissions
CAAR
2015
We recommended and Partially Implemented
Pages
Management agreed to require Adjusting entries were made
100-106
the Accountant to effect the but not all are adjusted.
necessary adjustments on the Reiterated in CY 2016

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 Observations and Action Taken by Auditor’s Validation
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omissions/errors to correct the CAAR with some updates.
reported balances of the affected
accounts in the Financial
Statements.

17. Accounting Deficiencies

a) Unreconciled SL and GL
balances due to the non-
recording of transactions in
the SL – ₱2.191 billion

Exert all efforts to analyze, Updating of SL was already Partially implemented

verify, confirm, and reconcile started and unutilized funds Unreconciled balances still
accounts by referring to the 2015 were refunded to the source exist.
earliest available records and CAAR agencies.
conferring with other concerned Pages
DA offices and make necessary 107-108
adjustments in the books of
accounts to correct the balances
of the accounts; and maintain
and prescribe subsidiary ledgers
to support the balances in the
General Ledger and Financial
Statements pursuant to the
NGAS.

b) Unreconciled differences
between book and physical
2015
count balances - ₱4.08
CAAR
billion
Page 108-
110
We recommended and
Management agreed to require
2014
the OSEC and ten DA Offices:
Pages
117-120
a) Accountant and Property Management is in the Partially Implemented
Officer to determine the process of reconciling the Unreconciled reports of
2013
causes of the discrepancy records. Property and Accounting
Page 281
between the books of still exist.
accounts and RPCI/RPCPPE
2012
for proper disposition;
Page 216
thereafter, reconcile their
records on a periodic basis to

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 Observations and Action Taken by Auditor’s Validation
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Recommendations Management Results
avoid accumulation of
reconciling items and in
preparing accurate property
inventory reports to facilitate
the comparison and
reconciliation with
accounting records;
b) Accountant to record in the Unrecorded inventory and Partially Implemented
books of accounts PPE are recorded in the Some are not recorded due
unrecognized/ unadjusted books of accounts. to lacking documents.
Inventory and PPE accounts;
and
c) Inventory Committee to Partially Implemented
conduct actual physical count Physical count of
of inventory and PPE and inventories and PPEs are
submit the RPCPPE within still not conducted in some
the prescribed period. offices.

c) Unadjusted/unsupported/un
accounted balances of
accounts – ₱1.480 billion

Prepare and submit the Bank Management agreed to Partially Implemented

Reconciliation Statements on all submit the Bank Management was not able
cash accounts to detect Reconciliation Statements to comply with the timely
2015
errors/omission and/or and effect the necessary submission of BRS.
CAAR
reconciling items for adjustment adjustments.
Pages 111
in the books of accounts; and to No report/adjustment has
fully support the debits and been made by the Regional
credits to the accounts or reverse Accountant of RFO IX
the accounting entries made to pertaining to this
restore the amount to the observation.
respective accounts.

d) Negative balances of
subsidiary ledgers – ₱4.303
million

Analyze negative balances and BPI and OSEC are Partially Implemented
prepare adjusting entries. continuously updating the Some of the negative
SL. BAI had no action taken. balances are adjusted.

e) Non-provision of 2015
Impairment Allowance for CAAR OSEC

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 Observations and Action Taken by Auditor’s Validation
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Loans Receivable Page 112- Validation and evaluation Monitoring was already
113 was conducted by conducted.
Management.

f) Non-provision of 2015
Impairment Allowance for CAAR Reiterated in CY 2016
unserviceable and burned Page 113- CAAR with some updates.
PPE 114

CAAR
2014
Pages
117-120

2013
Page 281

2012
Page 216

g) Other Deficiencies in the

presentation of Financial
Statements and incomplete
disclosures in the Notes to
Financial Statements

We recommended that The Chief Accountant Fully Implemented

Management instruct the Chief agreed to the Recommendation was
Accountant to be more vigilant recommendation. adhered to by the Chief
in observing the disclosure Accountant.
requirements as provided by the
PPSAS.
CY 2014 AND BELOW
18. Deficiencies in the
CAAR
Implementation of the
2014
Agricultural Competitiveness
Pages 58-
Enhancement Fund (ACEF)
67
Projects
2013
a) Conduct regular over-all
Page 149
assessment and evaluation of Fully Implemented
all ACEF projects thru the Over-all assessment and
2012
help of DA regional offices evaluation of ACEF
Page 96
and forward the results to the projects are conducted.

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ACEF Execom and DA
authorities to:
1. determine the status of
implementation of the
projects in compliance
with the signed agreement
and in line with the ACEF
objectives;
2. address the concerns of
the proponents, identify
the reasons for non-
payment, and establish the
accountability for those
proponents whose
proprietors are already
dead or corporations/
cooperatives which are
already dissolved; and
3. institute sanctions to
recover the loans from
defaulting proponents.
b) Collect from QUEDANCOR
the due and demandable loan Not Implemented
of ₱1 billion and demand No evidence of action
from QUEDANCOR the list taken. Balance still exists.
of proponents who availed of
this loan and blacklist these
proponents from the ACEF
Program and other DA
financing/loan programs.
c) immediately remit the
unutilized ACEF fund to Not Implemented
Bureau of Treasury. No evidence of action
taken. Balance still exists.

19. Delayed provision of

Agricultural and Equipment
Facilities
2014
CAAR
a) Program Director for Not Implemented
Pages 75-
Livestock and High Value No evidence of action
79
Commercial Crops in DA- taken.
OSEC to formulate a
realistic, specific and

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
attainable work and financial
plan to ensure that programs,
projects and activities are
ready for implementation
upon the release of the
allocated funds;
b) DA-RFO V to require the (i) No update on the action Partially Implemented
RAED, to account, prepare taken. No update of the
and submit an updated implementation in CY
inventory list of the 2016.
undistributed farm equipment
and machinery on hand as of
December 31, 2014 and every
quarter thereafter, to ensure
proper accounting and
facilitate physical inventory
of the same; (ii) Accountant
and other concerned
Officials, to strictly enforce
the rules and regulations in
the implementation, proper
procedures in the grant and
distribution of the equipment
particularly the identification
of the beneficiaries, as well
as the programs where these
will be awarded, in
accordance with the
provisions set forth in the
GAA and the MOA and stop
the practice of distributing
machinery to FAs without the
15 percent counterpart; and
(iii) the concerned employee
to stop accepting directly
from FAs the 15 percent
equity but rather advise them
to pay directly through bank
transfer or deposit to the
supplier’s account;
c) DA RFO XI to come up with Management adopted the Partially Implemented
corrective measures for the recommendation and is On-going implementation
timely implementation of strengthening the feedback in RFO XI.
projects and in case of non- mechanism with LGUs.
viability/impracticality,

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 Observations and Action Taken by Auditor’s Validation
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propose immediate
reprogramming of
projects/beneficiaries/contrac
tors which may have the
capability and the time to
implement such projects;
d) BAC of DA-RFO XII to fast Fully Implemented
track the procurement RFO XII is implementing
process; provide proper the recommendation in CY
safekeeping of farm 2015 and was reiterated in
machinery prior to their 2015 ML.
distribution; and schedule the
distribution of agricultural
equipment and facilities to
partner LGUs and farmer
beneficiaries within the
budget year to ensure the full
attainment of its purpose; and
e) for the non-submission of Partially Implemented
master plan and master list of No evidence of action
beneficiaries: DA CAR to taken in RFO CAR.
prepare and strictly follow
the master plan to ensure that
identified priorities are given
the needed agricultural
equipment and support
services.

20. Rapid Seed Supply

Financing Project
(RaSSFiP)

We recommended that NFA management had Partially implemented

management (a) require the
concerned NFA officials to be
made accountable for the total
loss incurred on converted palay
of ₱83,712,371.63; (b)
determine the liability of the
NFA and DA officials for the
said loss and ineligible expenses
which was charged against the
project fund; and (c) file
appropriate sanctions against
submitted their comments Still no payment was made
2014 and justifications and by NFA for the loss on the
CAAR reiterated that the loss on the conversion of CS to
Pages 79- conversion of certified seed ordinary palay. It is not
82 to ordinary palay should not clear which office will
be charged to the NFA and shoulder the loss.
the loss shall be shouldered
by the Government of the
Philippines.

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 Observations and Action Taken by Auditor’s Validation
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those responsible for the loss.
21. Unreliable Cash Balances –
₱568.314 million

a) instruct the Cashier of BAR Fully Implemented

to comply with the Schedule of Unreleased
preparation of a Schedule of Checks no longer required
Unreleased Checks at the end under the GAM.
of each month and submit the
same to the Accounting
Office as basis in restoring
the amount of cash equivalent
of the unreleased check at the 2014
end of the year; and instruct CAAR
the Chief Accountant of BAR Pages 83-
to recognize the appropriate 87
liability account at the end of
the year; and
b) require the Accountant of Partially Implemented
BAR to analyze the Cash On-going reconciliation of
Collecting Officer account items for adjustment.
and record/adjust all the
identified reconciling items;
and

22. Doubtful Cash Balances

a) direct the Cashiers and the RFO V Partially Implemented

Accountants of DA RFO V to Extensive effort to comply is No status report on the
submit the vouchers and the CAAR being done by the implementation of
supporting documents for 2014 management to fully submit recommendation by RFO
disbursements totaling Pages 88- DVs for CY-2014 to COA. V.
₱514,686,369.60 and 91
₱1,038,570,088.78,
respectively, for verification 2013
and audit of the auditors; Page 232
b) instruct the Accountants of Fully Implemented
BAR and DA RFO V to RFO V started the
prepare and submit the Bank 2012 implementation in CY
Reconciliation Statements Page 162 2015 and BAR fully
(BRS) on all cash accounts to implement the
detect errors/omission and or recommendation in CY
reconciling items for 2016.
adjustment in the books of

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
accounts; reconcile the same
with the General Ledger
(GL); and enroll all the cash
accounts with the weaccess
online program of LBP to
facilitate the preparation of
bank reconciliation
statements and analysis and
recording of reconciling
items; and
c) RFO V exert more effort in RFO V Partially Implemented
verifying further and locating Already submitted letter Request for write-off was
the pertinent records and request for write-off of already submitted to COA.
documents on the CIB-LCCA dormant account. Request No update on the
and CCO Accounts, and to was made due to implementation in CY
request for the write-off of unavailability of supporting 2016.
the subject accounts with documents to support the
COA, if such verification and said balance. We are still
search prove futile and after waiting for the COA
complying with the response regarding the status
requirements for the write-off of our request.
of an account. In addition, for
all other accounts, instruct the
concerned agency personnel
to always prepare/keep a
subsidiary ledger and other
supporting documents that
will provide essential
information for the proper
identification,
reconciliation/adjustment and
audit of the accounts

23. Understated Loans CAAR

Receivable – Others 2014
Pages 91-
The Accountant to reconcile SL 92 Partial correcting entry for Partially Implemented
balances of ACEF proponents John Piggery and RM No correction has been
with the LBP report and 2013 Gatchalian was made in CY made for the erroneous
exercise caution in recording Page 149 2015 per JEV-2015-06- collection of Mardal and
collections to avoid errors and 000028. Sagay.
misrepresentation of the 2012
amounts. Page 96

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 Observations and Action Taken by Auditor’s Validation
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24. Unreliable Loans
CAAR
Receivable from
2014
GOCCs/LGUs/Others
Pages 92-
96
We recommend that DA Fully Implemented
revisit the guidelines on the A law was enacted relative
2013
grant and collection of loans to the implementation of
Page 244
and introduce improvements ACEF.
that will address the
2012
flaws/deficiencies in the
Page 170
system.

25. Doubtful Advances

a) Accountants of DA-OSEC OSEC Partially Implemented

and other concerned offices Reconciliation of Unliquidated balances of
(i) send demand letters to the Agricultural Attachés’ (AA)
former and active AAs
concerned officials and accountabilities is on-going.
decreased due to
employees for the immediate Salaries of active AA with
submission of liquidation
settlement of their outstanding CA are withheld.
documents, refund and
accountabilities and withhold adjustments as a result of
the salaries and any amount RFO I and IVB reconciliation of the
due them, if they fail to settle 2014 Management implement the accounts.
their accountabilities, until CAAR recommendation.
their balances have been fully Pages
liquidated; and (ii) fast track 105-109
the reconciliation of the
accountabilities of the 2013
agricultural attaches and CAAR
update the correct balance of Page 270
each agricultural attaché; (iii)
require the accountable 2012
officers of RFO I to refund CAAR
immediately the excess Page 203
amount of cash advances and
(iv) RFO IVB trace the
documents pertaining to the
debit to Advances to Officers
and Employees in the amount
of ₱615,375.80 under Fund
102 and require the
accountable officers to
liquidate and/or refund their
outstanding account balances.

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 Observations and Action Taken by Auditor’s Validation
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b) BAR Accountant reconcile Fully Implemented
and account for the BAR Accountant fully
differences in the financial implement the
records to present the recommendation during
accurate balance of the CY 2016.
Advances to Officers and
Employees in the financial
statements and prepare and
maintain updated Subsidiary
Ledgers to support the
balances of the accounts
appearing in the FS;
c) Concerned offices strictly Partially Implemented
adhere to the rules and All cash advance granted
regulations on the grant, are being monitored.
utilization and liquidation of Demand letters are sent to
advances and adopt accountable officers with
mechanism to monitor the cash advances due for
prompt liquidation to avoid liquidation.
accumulation of unliquidated
cash advances;
d) BAR, ATI and RFO V refrain Partially Implemented
from granting additional cash There were still instances
advances to officers and of granting additional cash
employees who have advances in BAR, ATI,
previous unliquidated RFO V.
accountabilities; and
e) BAR stop the practice of Not Implemented
transferring cash advances No evidence of action
from one officer to another; taken.
and authorize the other
officials who need funds to
defray their expenses for
special undertakings, to draw
cash advances under their
name so that they will be
personally liable/responsible
therefore.

26. Misstatement of Balances of

2014
Other Assets-Advances
CAAR
Pages
a) BPI adopt an efficient and Partially Implemented
109-110
effective system of internal Management implemented

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 Observations and Action Taken by Auditor’s Validation
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Recommendations Management Results
control in monitoring the strict monitoring of the
cash advances granted to balances.
officials and employees from
the grant, liquidation and
recording the same and
analyze the accounts of those
with negative balances and
prepare adjusting entries to
show the correct
accountabilities of each
officer and employee; and
b) BPI Accountants prepare Partially Implemented
adjusting entries to correct On-going implementation
the balances of the affected in BPI.
accounts.

27. Overstatement of balances

of Inventory Accounts

a) Accountants of RFOs III and RFO III Fully Implemented

XI adhere to the rules and Effective CY 2016, the The rules on the requisition
procedures prescribed on the management had adopted the and issuance of inventory
requisition and issuance of Perpetual Inventory Method are adhered accordingly by
inventory items; require the in the recording of RFO III and XI.
Supply Officer to submit the procurement of goods.
RIS/RSMI daily to the CAAR
Accounting Office as basis in 2014
recording to avoid Pages
unrecorded issuances as well 110-113
as overstatement of balances
of inventory accounts; 2013
b) Accountants and the Supply Page 276 DA-OSEC Partially Implemented
Officers of DA-OSEC and A directive was issued to Still in the process of
BAR reconcile their 2012 Property and Accounting reconciliation.
inventory records and prepare Page 209 Sections to reconcile both
the necessary adjustments records.
thereon;
BAR
Reconciliation is on-going.
c) Accountant of BPI analyze Partially Implemented
the Inventory accounts to Reconciliation is on-going.
reflect the correct balances in
the financial statements; and
d) Property Unit of DA OSEC, ATI Partially Implemented

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 Observations and Action Taken by Auditor’s Validation
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ATI-CO, BAI, BSWM and RSMI & ICS by the Property Management prepares and
RFO III prepare and submit & Supply Unit (PSU) were submits the RSMI in
to the Accounting Unit the not regularly maintained due OSEC and RFO III. ATI-
RSMI for the issued to lack of manpower. CO reiterated the
inventories and thereafter, recommendation in their
prepare and submit the same BSWM ML while delays in the
on a monthly basis to the No action was taken. submission are noted in
latter. BAI.

28. Misstated liability account

balances

a) prepare Journal Entry Partially Implemented

Vouchers to take up and Partial adjustments were
record settled accounts to made in OSEC.
arrive at the correct balances
of the affected accounts; and
2014
b) examine the transactions of OSEC Partially Implemented
CAAR
individual SLs with negative Still conducting analysis of The Other Payables-
Pages
balances and make the accounts for SLs with DAMC SL with negative
120-121
appropriate adjustments to negative balances. balance increased from
reflect the correct balances of ₱209,903.70to
the account; and ensure that ₱225,434.19. The negative
due diligence is exercised SL balances of Due to BIR
before posting/recording and Other Payables –
financial transactions in the NADAMCO were
books. corrected.

29. Unreliable liability account

balances

Instruct the concerned CAAR

Accountants to: 2014
a) review and analyze the long Pages OSEC and XI Partially Implemented
outstanding/dormant payables 121-125 Management is on process of Adjusting entries were
to determine its proper reviewing the accounts made in OSEC and RFO
disposition and, if warranted, 2013 XI but not all were
revert outstanding payables Page 297 ATI –RTC XII, BAI adjusted. Observation
aged more than two years No action/update was reiterated in MLs of ATI-
without valid 2012 taken/made during CY 2016. RTC XII and BAI.
claimants/documents to the Page 228
General Fund pursuant to
Section 3.2(b) of COA
Circular No. 99-004 dated

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 Observations and Action Taken by Auditor’s Validation
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August 17, 1999 and/or make
a request for authority to
write-off the dormant
accounts from COA in
accordance with COA
Circular No. 97-001 dated
February 5, 1997;
b) review and analyze (i) the The recommendation was Partially Implemented
trust accounts of DA RFO adapted by RFO CAR while Discrepancies between the
CAR vis-à-vis the RFO XI management is in schedules and the financial
corresponding cash in bank the process of reviewing the position for payables of
balances and determine the accounts. RFO CAR still exist. In
reconciling items and adjust RFO XI, adjusting entries
the balances of the affected were made but not all were
accounts; (ii) the discrepancy adjusted.
between the schedules and
the statement of financial
position of Inter and Intra
Agency Payables to come up
with the correct balances; and
(iii) exert effort to locate the
documents and entries
supporting the unreconciled
balances of various payable
accounts of RFO XI;
c) remit promptly and on time RFO VI Fully Implemented
all the contributions and The accountant made the The books are adjusted
payments of employees’ necessary adjusting entries accordingly.
liabilities to Pag-IBIG and per JEV No. F101-2016-01-
PhilHealth in accordance 020 and F101-2016-01-025
with the existing rules and to 026 dated January 29,
regulations to avoid possible 2016.
imposition of penalty and
interest and deprivation of
employees’ benefits.

30. Deficiencies in accounting

for expenses
a) the concerned Division Head
strictly monitor the monthly
bills and payment of the light
and water consumption of
offices not connected to DA-
2014
CAAR NADAMCO and Landbank Partially implemented
Pages unpaid bills were fully Bill of SCDI is not yet
126-128 settled in August 2015. settled.
No report of action taken in

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 Observations and Action Taken by Auditor’s Validation
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OSEC and ensure collection CY 2016.
thereof;
b) RFO VII stop the practice of No report of action taken in Partially Implemented
granting travelling CY 2016 No update on the
allowances to non-employees implementation made in
for lack of legal basis; and CY 2016.

c) RFO-IVB require the Head of No report of action taken in Not Implemented

Station to submit the CY 2016 Follow-up has been sent on
necessary documents May 2, 2017. No reply yet.
particularly the Deed of
Donation and the list and
acknowledgement of
recipients/beneficiaries as
required in Sections 4.3 and
4.4 of COA Circular No.
2007-001;

31. Erroneous charges of cost

of DA NAFC/LDC building
to Fund 101 - ₱33.93
million

We recommended and FAPs Partially Implemented

management agreed to require An analysis was already No adjustments were made
2014
the Accountant to correct the prepared during CY 2016. at the end of CY 2016.
CAAR
erroneous recording of JEV will be prepared to
Pages
₱33,930,645.57 in Fund 101 effect the necessary
128-129
representing partial payment for adjustment in the Book of
the construction of the DA Accounts.
NAFC/LDC building and its
corresponding credit entries in
the books; and record it
accordingly to Fund 102.

32. Non-compliance with

Procurement Law and other
laws, rules and regulations
2014
CAAR
Require the RFOs II, IVB, X Recommendation already Partially Implemented
Pages
and XIII to strictly adhere to the complied by the concerned RFO IVB did not
131-132
provisions of R.A. 9184 and its bureaus and regional offices implement the
IRR, as amended and other rules except for RFO IVB which recommendation. Follow-
and regulations. did not take any action. up has been sent on May 2,

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2017 and no reply was
received yet.

33. Non-submission of
contracts for review

We recommended and OSEC Partially Implemented

management agreed to require Memoranda were issued to FAPs implemented the
the concerned Division Heads responsible personnel to recommendation.
of DA-OSEC, FAPs, BAR, DA- comply with the timely Submission of perfected
RFOs VI and XII to adhere to submission of the contracts was still delayed
the rules and regulations MOAs/contracts. for OSEC, BAR and RFO
prescribed under COA Circular 2014 XII. Recommendation
No. 2009-001 dated February CAAR RFO VI reiterated in RFO VI.
12, 2009 on the submission of Pages Most of the suppliers were
the MOAs by compelling the 132-133 not from Region VI. Duly
responsible officials and signed documents from them
employees to comply with the took days to reach DA RFO
timely submission of the VI.
MOAs/contracts to the Office of
the Auditor for review and
justify the delayed submission
of the perfected contract and its
supporting documents.

34. Failure to submit the

Statement of Comparison of
Budget and Actual Amounts
(SCBAA)
2014
Require the Budget and the OSEC Not Implemented
CAAR
Accounting Divisions to prepare Management submitted the SCBAA was not prepared
Pages
and submit the SCBAA for CY SCBAA for OSEC only. as of December 31, 2016.
133-134
2014, and henceforth ensure that
the financial statements to be
submitted for the succeeding
years are complete.

35. The objective of the

program to promote,
propagate, develop further
2013
and implement the practice
CAAR
of organic agriculture may
Page 107
not be fully attained.

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a) The NOAP Program OSEC Partially implemented
coordinator (i) strictly abide Management discussed the Deficiencies in NOAP
by the existing rules, laws monitoring scheme with the Program still exist. No
and regulations, specifically implementing units and the implementation update in
the execution of the Monitoring Unit of DA RFO CY 2016.
documentary requirements; CAR for the regular
b) Immediately investigate and monitoring of OTPs and Not implemented
determine accountable other projects No investigation was
officers and employees conducted by
responsible in the inefficient Management.
management and
implementation of OAF
projects and file appropriate
charges for gross negligence
of duty.
c) Instruct the NGOs to support Not implemented
all transactions with valid and Report on action taken was
complete documents; not submitted.
blacklist NGOs and their
officers for submitting
questionable documents,
failure to effectively
implement the project, or
liquidate fund transferred to
them within the prescribed
period, and take other actions
appropriate under the
circumstances; and require
the LGUs to liquidate and/ or
refund immediately the
outstanding balances of funds
transferred to them and
justify the reasons causing
the delay of liquidation and
implementation of the OAF
projects;
d) The NOAP Program Coor- Not implemented
dinator submit clear approved No guidelines were
written guidelines in the submitted by the NOAP
monitoring and reporting Program Coordinator.
mechanisms of the program
to ascertain the efficiency and
effectiveness of the program;
require the NOAB to prepare
and maintain financial

136
 Observations and Action Taken by Auditor’s Validation
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statements of the program as
required in Rule 28 of RA
10068 for review and
analysis of the auditors; and
review and submit final
Physical and Financial
Accomplishment Reports
duly signed and approved by
the NOAB authorized
representatives including the
details to support such
reports; and
e) BAI Director (i) exert efforts BAI Not implemented
to locate the documents left The project leader of the The documents pertaining
behind by the former official program left the country for to the project are still not
pertaining to the project vacation and has not come located/found.
funded by BAR which back since CY 2012. It was
remained unutilized and informed that there was
unimplemented for more than neither proper turn-over of
two years for the possibility the documents nor
of continuing the project. information as to the status
Otherwise, return the of the project/research,
unexpended balance of the hence, implementation of the
funds to the BAR for project was not pushed
remittance to the Bureau of through as at year-end.
Treasury to maximize the use
of scarce government
resources to finance other
priority programs and
expenditures; (ii) accomplish
all the parts/studies of the
project during the last
extension so as to complete
and achieve the
objective/purpose of the
project and to gain the
benefits that may be derived
from the project
implementation.

36. Unliquidated fund transfers

to LGUs and NGOs/POs
from Organic Farming
Fund 2013

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 Observations and Action Taken by Auditor’s Validation
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We recommended that the CAAR RFO V Partially implemented
Management of DA RFO V and Page 138 No update on the action Unliquidated fund transfers
BAR discontinue the practice of taken by Management in CY still exist as of year-end.
granting additional fund 2015.
transfers to LGUs and
NGAs/NGOs/POs without BAR
ensuring first Fund transfers made in prior
settlement/liquidation of the years (CYs 2011 to 2014)
previous fund transfers by the posted a total liquidation of
implementing agencies; strict-ly P83,052,431.49 out of the
enforce/monitor liquidations of P262,900,335.73 balance as
fund transfers and faithfully of CY 2014 which represents
adhere to the provisions of the a 31.59 percent reduction
COA Circulars No. 94-013 while that for CY 2015, no
dated December 13, 194 and liquidation had been posted
2007-001 dated October 25, during the year.
2007 to avoid the accumulation
of unliquidated fund transfers
and non-recording of related
expenses; and ensure that
monitoring and
accomplishment/evaluation
reports are submitted by the
concerned program managers
and the IAs to validate the
implementation of the projects
in accordance with the approved
Project Proposal and the Work
and Financial Plan.

37. Implementation of the

Quick Response Fund

a) DA IV-A Accountants fully Fully Implemented

document the disbursement Documents were
of the QRF; and submitted.

b) RFO VI Executive Director 2013 RFO VI Fully Implemented

direct the personnel and/or CAAR Endorsed copies of the Management is exploring
official/s accountable for the Page 142 pertinent documents relative the possibility of
missing 234 bags of buffer to the matter to the office of settlement with the LGU of
stocks of certified palay the agency’s retaining the Province of Antique.
seeds to pay the amount of counsel to seek a sound
₱159,120.00, representing advice in filing the

138
 Observations and
Recommendations
the value of the certified
seeds had it been sold to the
private individuals during the
auction on June 28, 2013 and
strengthen its internal control
system in order to safeguard
its resources by conducting
regular monitoring of buffer
stocks and other inventories
stored in warehouses at the
different drop-off points in
the Region.
38. Slow attainment of project
objective in BAI
Provide an alternative
plan/program on the
undistributed semen and issue
approved guidelines/ criteria and
reporting/moni-toring scheme
for the utilization of the semen
to: (a) fast track the genetic
improvement of Brahman
breeder base cattle throughout
the country benefitting
especially the small hold
farmers and (b) maximize
immediately the benefits that
can be derived from the infusion
of the bullsemen to existing
cattle both in the government
and private farms.
39. Uninstalled air-
conditioning units
Make strategic planning and
prioritize fund utilization that
will include options for the
Action Taken by Auditor’s Validation
Reference
Management Results
appropriate legal action to
vindicate the rights and
interests on the DA RFO 6.
BAI Partially implemented
Original plan for frozen Management has
semen purchase by the formulated alternative
AGRIPBES was to provide program on the dispersal of
three doses for every the undistributed semen.
purebred Brahman heifer
distributed. Live animal
importation did not
materialize and the
2013 component of the project
CAAR was reprogrammed.
Page 193
The imported cattle will
arrive before December
2015, thus some of the
imported semen will be
utilized. Some will be used
in artificial insemination
program at multiplier farms
and will be sold to farmers
and private cattle raisers.
2013
CAAR BAI Fully Implemented
Page 196 The remaining three units Management adapted the
were installed. recommendation.
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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
immediate rehabilitation/
renovation of laboratory
facilities and buildings.

40. Unauthorized extension of

Fulbright-Philippine
Agriculture Scholarship
Program (FPASP)

a. Review and revisit all the ATI-CO Partially Implemented

provisions in the Memoranda PAEF already made the final With letter sent by
of Agreement and take liquidation per JEV No. Management to PAEF but
appropriate actions in the 2015-0133 dated September still no compliance with
unauthorized extension of the 10, 2015. On April 8, 2016 a the latter.
Fulbright-Philippine follow-up letter with Ref.
Agricultural Scholarship No. 2016-04-661 was sent
Program (FPASP) and reiterating their response on
unauthorized charging and the COA observations. The
utilization of funds by the management will again issue
Philippine American a demand letter on the same.
Educational Foundation
(PAEF);
b.Require the immediate Partially implemented
refund by the PAEF to the Final liquidation was
2013
Agricultural Training submitted amounting to
CAAR
Institute (ATI) of the ₱48,053,685.00, still for
Page 199
unutilized fund transfer in the evaluation.
amount of ₱57,547,053.00
and the interest amounting to
₱37,314,834.00 or a total of
₱94,861,887.00 as required
under COA Circular No.
2007-001 dated October 25,
2007;
c. Require PAEF to submit the Fully Implemented
lists of the scholars with their Documents required were
acceptance/acknowledgment submitted.
of the funds received by each
and every scholar as required
under COA Circular No.
2007-001;
d.Demand an explanation from Fully Implemented
PAEF on the inconsistency in With disallowance for the
the actual expenses incurred Scholarship Service

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
for Ms. Luna Miraflor Contract of Ms. Luna
Aguirre amounting to Miraflor Aguirre in the
$63,477.22 as against the value amount of ₱3,115,195.71
stated in the Scholarship and is on appeal with
Service Contract in the Cluster 8 Director,
amount of $29,500.00; Commission on Audit.

e. Require the Officer-in- Fully Implemented

Charge, Extension Inno- Documents required were
vation and Training Division submitted.
(EITD) and the Focal Person,
Scholarship Pro-gram to
coordinate with the PAEF
for the immediate submission
of the copy of the
Scholarship Service Con-
tracts and all other vital
documents for proper
monitoring of the scholars;
and
f. Require the Officer-in- Fully Implemented
Charge, Accounting Section The records are corrected.
to correct the recorded
outstanding balance of the
PAEF from ₱48,053,685.00
to ₱57,547,053.00.

41. Financial Assistance to 4-H

Club Youth Development
Program

We recommended that ATI ATI Management has Partially Implemented

RTC II, IV-A and XIII stopped/discontinued the ATI RTC IV-A did not
discontinue the granting of granting of financial submit/report compliance.
financial assistance to 4-H assistance to 4H clubs.
Clubs as it is not within its
2013
mandate; and instead use the
CAAR
funds to come up with more
Page 204
training and organizational
strengthening programs.
Any financial assistance or
after-training support
requested should be referred
to the Department of

141
 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
Agriculture and the Regional
Field Unit for evaluation and
implementation.

42. Low collection of loaned

amount from 4H Club
members –₱475,632 out of
₱3.450 million

We recommended that ATI The Focal Person conducted Fully Implemented

Caraga instruct the 4-H project assessment last Monitored and evaluated
Coordinator to conduct an October 2014. the projects at Surigao del
immediate visit and assessment Sur and Surigao City as of
of the actual status of the 4-H Management also informed January 2015.
projects and identify the causes that regular and close
2013
and problems of non-repayment/ monitoring of the on-going
CAAR
recovery of the financial projects will be conducted so
Page 206
assistance granted to them and they could extend the
take appropriate actions to projects to other groups who
address the problems and need assistance.
conduct regular and close
monitoring of the on-going
projects to ensure success of the
projects and recover the
financial assistance for the roll-
over of fund to the next- in- line
qualified recipients.

43. Implementation of
Disbursement Acceleration
Program (DAP) -
₱4,479,307,765

I. For FMR Projects

a. provide supplementary Not implemented
2013
documents to justify the No justification submitted
CAAR
identical projects noted for the identical projects.
Page 217
above and re-visit the
assessment/evaluation
procedures in funding
specific projects to ensure the
validity of data presented;
b. ascertain the frequency of DPWH regularly submits Not implemented
reports to be submitted by Physical and Financial status Proof that Physical and

142
 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
DA monitoring group vis-à- of implementation to DA. Financial status are
vis the monthly report published in the Agency’s
provided by DPWH, and official website per GAA
comply with Section 3 of the CY 2011 was not provided.
Special Provision cited in
GAA CY 2011.

II. For projects on High Value

Commercial Crops, Livestock
and Corn Program
a. Maharlikang Lipi Foundation
1.5 million
 submit the distribution list OSEC Partially implemented
properly acknowledged by Distribution list submitted. Distribution list submitted
the beneficiaries to support is deficient and
the liquidation report incomplete.
submitted by Maharlikang
Lipi Foundation, Inc.
prescribed in COA Circular
2012-01 dated June 14, 2012;
and
 require the proponent NGO Not implemented
and the supplier Merhan Certification from BPI on
Trading to secure seeds delivered not yet
certification from BPI on submitted.
seeds delivered for the
project pursuant to DA
Administrative Order No. 23
series of 2012.
 instruct the DA Special Not implemented
Screening Committee to Not yet complied by DA
further review the validity Special Screening
and reason-ableness of the Committee.
costing and estimation
provided by the NGO
particularly on the trainer’s
fee/seminar tuition fee that
consumes 37% of the total
fund allocation for the
Livestock Program and come
up with the result as basis for
further action; and formulate
measures and guidelines that
will regulate fees for trainers

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
and lecturers and other
seminar expenses for
programs and projects to be
implemented by accredited
NGOs/POs.
b. Kasangga sa Magandang
Bukas Foundation, Inc.
(KMBFI) - ₱1.125 million
 submit the list of intended Not implemented
beneficiaries that meet the List of intended
selection criteria prior to beneficiaries not yet
actual distribution in order to submitted.
ascertain that the actual
recipients are the bona fide
beneficiaries of the program;
 submit justification in Justification submitted. Partially implemented
selecting and allowing Auditor’s rejoinder was
KMBFI as the implementing prepared in reply to
NGO to implement the management comments in
livelihood projects despite CY 2015.
non-compliance with Section
4.4.1 of COA Circular No.
2007-001 dated October 25,
2007.
c. Implementation in RFOs
IVA and V
 RFO IVA explain/justify the Not implemented
inconsistency in the No explanation submitted
implementation of Farmers for the inconsistency of
Field School program implementation.
specially the incurrence of
meals and snacks for the
entire training session
contrary to the programmed
expenditures of regular FFS
for rice and crop;
 Submit evidence for posting Not implemented
requirement of the Revised Evidence of posting
IRR of RA 9184; and requirements not
submitted.

 Observe proper classification Not implemented

of accounts in the recording Not complied.
of transactions.

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results

44. Excessive Anniversary

Bonus in RFO IVB -
₱1,836,000.00

We recommended that in Management issued first Partially Implemented

accordance with Section 4.0 of demand letter and had Still has an outstanding
Administrative Order No. 263, collected ₱1,299,570.00 as balance of ₱533,430.00 as
2013
the Regional Director cause the of December 31, 2016. of December 31, 2016.
CAAR
refund of ₱1,836,000.00 Management will issue
Page 303
representing the excess payment second demand letter.
of the Anniversary Bonus for
2013 granted to RFO IV-B
employees.

45. Non-collection from LGUs

for the distributed weighing
scales totaling
₱3,529,841.77 for the
Livestock “Oksyon” Market
and recovery costs of
undistributed equipment
costing ₱875,000.00

The Director send demand 2012 BAI Partially implemented

letters to the recipient LGUs CAAR Management sent demand None of the recipients with
with unsettled accounts for the Page 96 letters to the recipient LGUs outstanding balance made
immediate payment of their concerned. payments to BAI.
outstanding accounts.

46. Non-submission/
accomplishment on targeted
deliverables for the Aurora
e-Village Project costing
₱26,269,850.81 (ATI)

The Director (i) determine the CAAR A demand letter was issued Fully Implemented
problems/causes of the delay in 2012 in 2015 for these two DAP submitted the
the project implementation and implementing agencies to required liquidation
take appropriate action thereof; submit liquidation documents and refunded
(ii) take appropriate actions on requirements and request to the unused balance.
the problems encountered by the return any unused balances.
farmer beneficiaries as per
initial evaluation of the project; The PhilRice has made the

145
 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
and (iii) review thoroughly all liquidation per GJ-2015-
future projects to avoid 0088 dated 06/26/2015 and
problems/lapses in the refunded the amount of
implementation. ₱1,659,473.55 per OR No.
6798784 dated 06/24/2015.

47. Inadequate Documentation

and Excessive CNA
Incentives – ₱42.435
million
 DA-OSEC, through the Not implemented
Accountant, submit the The authority for the
authority from the DBM for payment of excess CNA
the granting of the was not submitted by DA
excess/additional CNA 2012 OSEC.
incentive otherwise, the CAAR
amount shall be disallowed in Page 240
audit; and
 Accountant of DA-OSEC Management submitted the Fully implemented
submit all the required required documents for the Notice of suspension was
documents for the payment of payment of 2011 CNA. partially settled per
the 2011 CNA otherwise, the NSSDC No. 17-008 dated
amount shall be suspended in May 19, 2017.
audit.
48. Violation of Procurement RFO IV-A
Rules and Regulations Majority of supply
We recommended that the requirements are procured Partially implemented
Procurement Officers of RFOs from the PS. Discouraged Management of RFOs IV-
IV-A, IV-B, and XIII (i) procure the purchase of supplies A and XIII have started
their requirements from PS- through reimbursements, procuring majority of its
DBM; and (ii) use the PhilGEPS however, the supplies from supply requirements from
services in all their procurement PS is of poor quality. the PS. Follow-up was
activities. 2012 made to RFO IV-B
CAAR RFO IV-B Management on May 2,
Page 242 Not implemented. 2017 but no reply has been
received yet.
RFO XIII
The management stopped the
practice of procuring the
common-use office supplies
and materials outside DBM-
PS.

49. The procurement of

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
imported 1,200 heads of 2011
Brahman Heifers and 25 CAAR
heads of Beef Sires for the Page 113
“Accelerating the Genetic
Resources Improvement
Program for Beef Cattle
and Small Ruminants”, was
still not implemented as of
the end of CY 2011 (BAI)

a. revisit the approved WP and Fully implemented

prepare a separate timeline Management implemented
covering the four-year the recommendation
implementation schedule; during CY 2016.

b. monitor closely the Fully implemented

implementation of the project Management implemented
to ensure that they are the recommendation
operating within the during CY 2016.
approved procurement
timelines; and
c. fast track the procurement of Fully implemented
high-breed cattle and Management implemented
ruminants in accordance with the recommendation
the revised implementation during CY 2016.
schedule to fully achieve the
objectives of the project that
will benefit the farmers,
livestock industry and the
country’s economy.

50. Two units of Mango Hot

Water Tank amounting to
₱676,000.00 procured in
RFO X remained non-
operational
2011
We also recommended that DA The Cagayan de Oro Mango Fully Implemented
CAAR
RFO X management take the Growers Ass. Is raising There is no information on
Page 93
necessary steps to repair and funds for the acquisition of the status of
make the two unutilized Mango one unit cooling tank which implementation of this
Hot Water Tanks costing is required to operationalize recommendation in CY
₱676,000.00 operational and test the treatment facility, while 2013, 2014, 2015 and
the same in coordination with the unit in Iligan was 2016.

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
the supplier to maximize devastated by Typhoon
utilization of the same by the Sendong last December 2011
beneficiaries.

51. The Vermi Composting As follow up to the Hands on

Facilities (VCF) for the Training conducted and in
implementation of the response to beneficiaries’
Organic Fertilizer requests particularly the new
Production Project (OFPP) recipients of retrieved
with an initial investment of composting facilities,
₱952.700 million, had not refresher courses were
been fully utilized by the conducted by the
beneficiaries management wherein
vermicomposting was
a. ensure the effective and thoroughly discussed and Fully Implemented
efficient operation of the demonstrated and advantages Already implemented in
OFPP by: (i) properly of vermitea were emphasized CY 2013.
evaluating the need and to promote vermitea
capacity of the intended brewing.
beneficiary/LGU in sustaining
the implementation of the Likewise proper care,
project; (ii) extending maintenance and
assistance only to those LGUs management of the facility
and agencies that are were included in one of the
2011
committed to provide courses. To date, 684 farmer
CAAR
adequate counterpart fund and beneficiaries have been
Page 103
personnel to sustain the trained in the con-duct of
continuous operation of the refresher courses and 4,845
program; and (iii) ensuring farmer beneficiaries have
that the guidelines and the been trained in the conduct
MOA contain provisions to of Hands on Training.
pinpoint responsibility;
b. require the LGUs/ Retrieval letters were served Fully Implemented
beneficiaries to provide to project beneficiaries with Beneficiaries ensured that
proper care and adequate unproductive and non- adequate protection is
protection to the subsidized operational composting provided to the equipment.
equipment in order to prolong facilities by the management.
its life and prevent its loss due The concerned recipient was
to exposure to the elements; informed of the composting
c. compel/request the LGU facility’s retrieval to be Fully Implemented
/beneficiaries to return the transferred to a more com- Already implemented in
unutilized shredders for non- mitted beneficiary. The CY 2013.
compliance with the transfers were supported by
requirements of the OFPP, Memorandum of Agreement

148
 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
and distribute the same to and waiver. To date, 143
those prospective retrieval letters had been
beneficiaries who are willing served and 32 composting
and committed to achieve the facilities (1 unit shredder and
objectives of the program; and 2 units of vermitea brewer
d. require the LGU/ beneficiaries per composting facility) Fully Implemented
thru its Municipal were transferred. On Already implemented in
Agriculturist to submit instances of request for CY 2013.
production/accomplishment reports reconsideration, OFPP grants
on the OFPP for evaluation the recipient a limited period
purposes on the extent of its of time to prove their
implementation, and commitment, subject to
consolidate and conduct a specific conditions.
comprehensive evaluation of
the same to see the overall
impact of the program on the
lives of the farmers.

52. Doubtful validity and

accuracy of Deposit on
Letters of Credit, Other
Current Assets, Other
Investments and Marketable
Securities and Investment in
Stocks

Require the Accounting Unit to The Management of OSEC Partially implemented

analyze the accounts “For and BAI did not provide SL “For Reconciliation
Reconciliation” in the SLs of the update on the reconciliation. accounts still exists in
various accounts to arrive at the OSEC and BAI.
correct balances of the affected 2011
accounts. CAAR
Page 150
Instruct the Accountant of RFO RFO XI Fully Implemented
XI to prepare adjusting entries The accounting section The accounting section
and furnish a copy of the Deed worked on the adjustment of prepares deed of donation
of Donation to LGUs in entries. whenever donations occur.
recording the donated PPE.

We recommended and OSEC Fully Implemented

management agreed to require Negative balances are Appropriate adjustments
the Accounting Unit to analyze reclassified per JEV Nos. were made and deducted to
the abnormal negative balances 2014-09-009957 and 2014- the balance of the For
in the SL of Other Current 09-009945 dated September Reconciliation account.

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 Observations and Action Taken by Auditor’s Validation
Reference
Recommendations Management Results
Assets and prepare the necessary 30, 2014.
adjusting entries to arrive at the
correct balance of the account.

150