mindanao development authority - … for reclassification to hired by administrative other assets...

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MINDANAO DEVELOPMENT AUTHORITY 'UflLI o cttIPlfl

AFT

28 August 2015

REV L. URSAL

Director IV

Regional Director

Commission on Audit-XI

Davao City

Dear RD Ursal:

In compliance to Section 93 of the General Provisions of the General Appropriations Act of

2015 (R.A. No. 10651), we are pleased to inform the Commission of the status report on the

actions taken by the Mindanao Development Authority (MinDA) on various audit

recommendations stated in the Annual Audit Report on MinDA for Fiscal Year 2014.

In this regard, please find attached the COA-required Agency Action Plan and Status of

Implementation (AAPSI) on the audit observations and recommendations of 2014 and prior

years.

In a nutshell, out of the 28 audit recommendations pertaining to various audit observations

made in 2014 transactions, 24 were fully implemented while the remaining four (4) are still

classified as on-going in terms of implementation status.

We would like to request your team to verify the information contained in the AAPSI and

inform us of the results related to the validation of our reported compliances to the audit

recommendations.

Again, we are very grateful for the opportunity that you have given to us in addressing the

audit observations and we hope to continuously strengthen our partnership towards

effective fiscal transparency and accountability.

Thank you.

Very truly yours,

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Davao City hilippifles. Not.: 638) 21 1HH 31 22 1 7L5

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Mindanao Development Authority

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111111111111111111111111111111111111111 IN *MINDA2O1 502370

MINDANAO DEVELOPMENT AUTHORITY

4/F 555 Building, JP Laurel Avenue, Davao City

AGENCY ACTION PLAN and STATUS of IMPLEMENTATION

Audit Observations and Recommendations

For the Calendar Year 2014 and Prior Years

As of 28 August 2015

A YLAK 2014 WA AUDIT OBSERVATIONS AND RECOMMENDATIONS

Agency Action Plan

Target Implementation Date

Reason for

Partial/Delay/Non- Person/Division Status of Implementation, if Action Taken/Action to be

Reference Audit Observations Audit Recommendations Action Plan Responsible From To Implementation applicable taken MInDA-14-06-111 Unutilized Trust Funds totaling Require the agency to remit The agency will remit the said Aurora J. Cuello/ Ma. March 2015 June 2015 Fully The amount of P800,000 dated 11/21/14 P883,756.90 of the Agency as of the unutilized fund balance to Trust Fund balance to the Cristina Camagong- implemented was transferred to LGU-

December 31, 2014 has not been the National Treasury in National Treasury and finalize Finance Division! Basey on June 8, 2015 and remitted to the National Treasury accordance with the its MOA with LGU-Basey, Office of the balance was remitted to contrary to the pertinent Memorandum of the Western Samar wherein part Executive Director National Treasury on June provisions of Sections 2 and 4 of Executive Director and COA- of the funds will be (MOA) 30, 2015 with OR# 8702276, PD 1445 and COA-DBM-DOF Joint DBM-DOF Joint Circular No. 1- transferred to the said LGU.

Circular No. 1-97 dated 2 January 97 dated 2 January 1997.

1997

MinDA- 15-04- Property, Plant and Equipment Require the Accountant to Prepare working paper prior Aurora J. Cuello- March 2015 June 2015 Fully Journal entries to adjust the 101 (14) dated totaling P70,011.02 were not make necessary adjustments to the reclassification of PPE Finance Division/Perla implemented PPE in the amount of 2/10/15 properly classified thus, affecting to properly classify items to through adjusting journal R. Pandan-Admin P70,011. 02 were made by

balances of individual PPE correct balances of affected entries to be made by the Division the Accountant and accounts at year-end. accounts. Acting Accountant, incorporated in the 2015

First Quarter Financial

Statements.

Page 1 of 11

%. YEAR Z014 COA AUDIT OBSERVATIONS AND RECOMMENDATIONS

Agency Action Plan


Reason for

Partial/Delay/Non- Person/Division Status of Implementation, if Action Taken/Action to be

Reference Audit Observations Audit Recommendations Action Plan Responsible From To Implementation applicable taken Management to create a Creation of Inventory Perla R. March 2015 March 2015 Fully An inventory committee was committee to conduct the Team/Committee to Pandan/Admin. implemented created following an Office physical count of PPE and spearhead regular count and Division Order No. AO-2015-003-004 expedite the completion proper classification of the duly signed by the MinDA thereof. Agency Property, Plant and Chairperson on March 9,

Equipment to ensure proper 2015. recording of the same in the

books.

Further, require the Supply Hiring of additional Perla R. March 2015 December On-going The inventory team led by Officer to identify the administrative staff on job Pandan/Admin. 2015 Maricel Caagoy is in the unserviceable PPE items and order basis to assist the Division process of accounting and prepare inventory report of Supply Officer. identifying asset accounts. Unserviceable Property as Three (3) JO personnel were basis for reclassification to hired by Administrative Other assets account prior to Division to support the disposal. Procurement Unit.

MinDA-15-04-101 Unreconciled items totaling Require the Accountant and Regular inventory of asset Aurora J. Cuello- March 2015 December On-going The inventory team led by (14) dated P653,132.32 remain in the PPE the Supply Officer to accounts shall be made so Finance Division/ 2015 Maricel Caagoy is still in the 2/10/15 account since December 2006, coordinate and exhaust all that valuation of property Maricel Caagoy- process of accounting and

thereby affecting management's efforts to identify the said and equipment is properly Admin Division identifying asset accounts. assertions on its account balances items and decide on the ascertained.

as of December 31, 2014 appropriate adjustments to

be made.

MinDA-15-01-101 Two PPE units without acquisition Accountant to determine the Accountant to coordinate Aurora J. Cuello- February 2015 March 2015 Fully Adjusting entries were (14) dated cost per books were depreciated costs of the aforesaid items with the Supply Officer in the Finance Division implemented already made and were 2/10/15 rendering a negative balance of and make the appropriate proper identification of these incorporated in the 2015

P68,497.92 thereby, understating adjustments. assets and as basis for the First Quarter Financial total PPE by the same amount at adjusting entries statements. yearend.

Page 2 of 11

.YEAR 2014 COA AUDIT OBSERVATIONS AND RECOMMENDATIONS Agency Action Plan

Target I on Date

Reason for

Partial/Delay/Non-

Implementation, if Action Taken/Action to be

applicable taken

An official Finance policy

guidelines was formulated

and disseminated to all

MinDA staff on July 3, 2015.

Everybody is advised to

strictly adhere to the said

policies. A copy of the said

guidelines was sent to our

Auditors.

Reference Audit Observations

Disbursements pertaining to

Audit Recommendations

Management to formulate

Action Plan

Formulation and strict

Person/Division

Responsible

Finance

From

March 2015

To

July 2015

Status of

Implemental

Fully

implemented V1inDA-15-01-101

14) dated meals, catering services and hotel policy guidelines and establish implementation of Finance Division/Office of the

1/26/15 accommodations amounting to ceiling of cost to be incurred policy guidelines and Executive Director

P590,359.42 were paid over and per participant/guest adoption of austerity or cost-

above the amount of the including the number of saving measures.

Purchase Orders supporting the participants who will attend

19 DV5 hence, considered the activity to preclude over-

irregular disbursements not charging of expenses over

allowed in audit. and above its actual

contracted price. Accountant

to strictly observe and ensure

that documents are complete

and proper before certifying

and processing claims.

Page 3 of 11

. YEAR 2014 COA AUDIT OBSERVATIONS AND RECOMMENDATIONS Agency Action Plan


Reason for

Partial/Delay/Non-

person/Division Status of Implementation, if Action Taken/Action to be

Reference Audit Observations Audit Recommendations Action Plan Responsible From To Implementation applicable taken

MinDA-15-01-101 The attendance of some MinDA Management to review and Formulate an office policy to All Offices/Divisions April 2015 Continuing Fully An official Finance policy

(14) dated staff which ranges from 12%-62% evaluate number of MinDA address the audit Implemented guidelines which includes

1/26/15 to activities undertaken may not participants who will attend recommendations. this audit observation was

be relevant to the program thus the activity. Only those Attendance of MinDA staff to formulated and

unnecessary expenses were involved in the program shall activities shall be carefully disseminated to all MinDA

incurred not dictated by the be authorized to attend the identified and shall be staff on July 3, 2015. A copy

demands of good government activity. included in the activity of the aforesaid guidelines

and funds estimated at design. Program/Activity was sent to our COA

P423,314.67 could have been proponents should Auditors. Presently, the

channeled to more important enumerate the names, or activity proponents are

programs. number of participants per specific in identifying the

agency to be invited, participants that are directly

involved in the undertaking.

Standardize Activity design in Revision of Activity Design Rommel March 2015 July 2015 Fully -same comment as above-

order that the target and Attendance Sheets Castillo/Finance implemented

participants are clearly format. Division

identified prior to

implementation.

Program Secretariat to Revision of Activity Design Rommel March 2015 July 2015 Fully -same comment as above-

prepare an attendance sheet and Attendance Sheets Castillo/Finance implemented

with columns for In-Out in the format. Division

morning and afternoon

session on a daily basis

including column for the

name of agency. Must be

properly and clearly filled up

Page 4 of 11

Implementation Date

Status of From To Implementation

March 2015 August 2015 Fully

implemented

Reason for

Partial/Delay/Non

Implementation, if Action Taken/Action to be applicable taken

The Operations Committee

of MinDA regularly meets,

monitors and assesses the

status of each division's PAR

and ensures that activities

are carried out as designed

and as planned.

VAp 7niA rrlA Al Irl-r '.' EEJIVIIVILI'JMlIUJJ

Agency Action Plan

Reference Audit Observations Audit Recommendations Action Plan Responsible Person/Division

MinDA 15-01-101 Lapses in planning, coordination Management to ensure that Regular conduct of physical All Divisions (14) dated and execution by MinDA all aspects of planning, and financial planning 1/26/15 Secretariat/In-charge of the coordination and execution workshops as well as

program resulted to low turn- be observed in every activity assessment of status of the out/excess of attendance and to safeguard the use of funds. Programs, Projects and incurrence of unnecessary Implement program based Activities of each division. expense amounting to on activity design and in p133,000.00 for room accordance with laws, rules reservations which were not and regulations. occupied by the intended participants/guests and MinDA staff who have not attended the activity.

MinDA- 15-01- Lack of suoriortinp r1nriimpnt r,1-,,1- k 1 .... -............... . an . , w uiiuw-up rcemrna activity proponents Accountant/ Finance March 2015 101 (14) dated were noted in 39 Disbursement lacking documents and to submit complete Division 1/26/15 Vouchers totaling P1,710,270.23 submit immediately to COA to documentation to Finance in violation to Section 4 (6) f PD avoid Division. 1445 which states that claims suspension/disallowance in The Accountant shall not against government funds shall be audit. process any transaction with supported with complete incomplete attachments. documentation.

St 2015 Fully

implemented Stringent review of

documents as part of

Finance Division's internal

control is strengthened.

Disbursing Officer shall strictly Disbursing Officer (Cashier) Ma. Cristina S. monitor the submission of to make regular follow-up Camagong/Cashier Official Receipts by the with suppliers where

suppliers if accommodation payment was made through to deposit their check is check deposit. Follow-up can allowed, be done through calls, text

and email.

March 2015 I August 2015 limplementedFully This is considered as sound

financial management

reminder by COA that is

being implemented by

concerned official of MinDA.

Page 5 of 11

ementation Date

Status of From To Implementation


implemented

Reason for I

Partial/Delay/Non

Implementation, if Action Taken/Action to be applicable taken

This is considered as sound

financial management

reminder by COA that is

being implemented by

concerned official of MinDA.


implemented This audit observation was

noted and included in the

official Finance guidelines

disseminated to all MinDA

staff and being implemented

starting July 2015.

COA AUDIT OBSERVATIONS

Action Plan

Reference Audit Observations Audit Recommendations Action Plan Person/Division

Responsible Accountant to review all Remind the Accountant of Aurora J. supporting documents before her basic responsibility to Cuello/Acting certifying that all documents diligently review the Accountant Ill are proper and complete. supporting documents prior

to processing of payment.

MinDA 15-01-101 Reimbursements/Cash advances Management to limitthe Cash advances and All Divisions (14) dated for meals and entertainment are granting of cash advances for reimbursements for meals 1/26/15 prevalent and common practice payment of meals unless shall be discouraged except if

by officials/employees authorized extremely necessary and extremely necessary and to incur representation expenses impractical for them to pay by shall be limited only to thereby depriving the check. Division Chief level and up. government of collecting taxes

estimated at P194,735.07 in

violation of BIR regulation on the

withholding of taxes.

Discontinue the Fully reimbursement mode of MinDA staff through issuance Castillo/

payment to third party to of Finance and Logistic Division

Issue formal advisory to Rommel S.

inance1fimPlementd ensure that taxes due to the Guidelines approved at the

government is collected and level of the Chairperson.

remitted.

This particular audit concern

was already included in the

recently issued Finance and

Logistic Guidelines approved

by the MinDA Chairperson.

Copy of which was furnished

to the COA Auditor, Ms.

Nilda Escalante.

Page 6 of 11

\_ YEAR 2014 COA AUDIT OBSERVATIONS AND RECOMMENDATIONS

Agency Action Plan


Reason for

Partial/Delay/Non-



VIinDA-15-02-101 Cash advances/Excess cash Cashier to withhold payment Deduction from payroll of Accountant-Finance March 2015 August 2015 Fully Audit recommendation

'14) dated 2/6/15 totaling P448,323.20 were not of any money due the officials any unliquidated cash Division implemented being complied through

liquidated or refunded by the and employees concerned in advance by employees, payroll deduction of unspent

concerned officials and accordance with Section 37 of balance of cash advance by

employees in violation of [.0 248, PD 1445 concerned employee.

as amended; Section 37 and 89 of

PD 1445 and COA Circular No. 97-

_______________ 002.

OM No. MinDA- Discontinue the grant of Close monitoring of Cash Accountant-Finance March 2015 August 2015 Fully This has been taken into

14-002-(13) additional cash advances advance releases and Division implemented consideration and being

unless the previous cash liquidation and continue implemented by MinDA.

advance given to him is first strict implementation of 'No

settled or a proper liquidation, No advance

accounting thereof is made in policy'.

accordance with Section 9 of

PD 1445.

Accountant to strictly monitor Close monitoring of Cash Accountant-Finance March 2015 August 2015 Fully This has been taken into

the grant and liquidation of advance releases and Division implemented consideration and being

cash advances in accordance liquidation and continue implemented by MinDA.

with existing regulations. strict implementation of "No

liquidation, No advance

policy".

Page 7 of 11

\_ YEAR 2014 COA AUDIT OBSERVATIONS AND RECOMMENDATIONS Agency Action Plan


Reason for

Partial/Delay/Non-

Person/Division Status of Implementation, if Action Taken/Action to be


d1inDA-14-07-101 Incurrence of Gasoline expense Consider looking for other Accreditation by MinDA Bids Perla R. January 2015 March 2015 Fully The Bids and Awards

iated 12/15/14 estimated at P27,566.43 is gasoline stations or suppliers and Awards Committee of a Pandan/Admin. implemented Committee (BAC) has

deemed excessive, pursuant to that can offer rates most new supplier for fuel, oil and Division accredited the Davao Airport

COA Circular no. 85-55-A dated 08 advantageous to government lubricants. View Petron Service Station

September 1995, due to or better terms for MinDA. in C.N. Garcia Highway

additional charge ranging from (Buhangin) as a new supplier

P2.82 to P5.82 per liter by the and MinDA has started to

supplier Cameros Shell during the avail of its credit facility on

period 02 Dec 2013 to Aug 2014, January 19,2015.

as compared to other gasoline

stations.

Furnish the Auditor copy of Administrative Division to Perla R. March 2015 Continuing On-going Despite diligent efforts to

the contract or any document locate the requested Pandan/Admin. locate the contract of

evidencing that the additional contract. Division supplier Cameros Shell,

cost per liter being charged MinDA could no longer find

by Cameros Shell was it as of this time. Attached is

authorized by MinDA officials, the explanation attached to

since it is considered AOM to reiterate our

excessive and may not be request for Auditors

allowed in audit. consideration.

Page 8 of 11

4. YEAR 2014 COA AUDIT OBSERVATIONS AND RECOMMENDATIONS Agency Action Plan


Reason for

Partial/Delay/Non-



MinDA-14-07-101 Actual fuel utilization, average Require the Administrative Conduct re-learning sessions Administrative January 2015 March 2015 Fully Re-learning or coaching

dated 12/15/14 distance travelled/per liter, fuel Officer/Officer in charge to for all drivers as Division Implemented sessions were conducted by

balance vis-à-vis fuel tank capacity orient/teach all drivers in the recommended by Auditors the Administrative Division

and erasures/alterations of the filling out of entries on the Chief and the agency drivers

entries on the trip tickets are trip tickets and monthly particularly in the fuel

indications of questionable report of fuel consumption utilization and proper filling

reporting and irregularity in fuel and utilization for proper out of trip tickets.

utilization detrimental to the reporting.

government.

Recommend driver to Administrative Division to Perla R. March 2015 August 2015 Fully This audit recommendation

conduct test drive to schedule the conduct of the Pandan/Admin. Implemented is being implemented in a

determine the actual full fuel test drive and furnish the Division continuing manner by the

tank capacity and distance COA with the completed head of the Administrative

travel/liter to validate/refute report/observations. Division.

COA observation. Furnish

COA Team copy of the report.

Require the Administrative Close monitoring of the Perla R. March 2015 August 2015 Fully This audit recommendation

Officer/Officer in charge to Administrative Division on Pandan/Admin. Implemented is being implemented in a

strictly monitor fuel utilization the prompt submission of the Division continuing manner by the

by requiring prompt trip ticket reports. Institute head of the Administrative

submission and verification of an internal policy on No Division.

fuel consumption reports/trip report, No travel policy to

tickets. drivers.

Page 9 of 11

YEAR 2014 COA AUDIT OBSERVATIONS AND RECOMMENDATIONS

Agency Action Plan


Reason for

Partial/Delay/Non-



MinDA 14-08-101 Despite the agency's existence for Revisit its project activities The Agency Management will Office of the March 2015 Continuing On-going Noted by Management. For

lated 12/22/14 five (5) years now, it appears that and consider the refer this matter to MinDA Chairperson! Office of further discussion in the

management has no plan to implementation of the Board, the highest policy the Executive Director next MinDA Board of

transfer its main office in provision on the transfer of making body, in the next Directors' meeting.

Maramag, Bukidnon as provided MinDA main office to Board Meeting.

under Section 5 of the republic Maramag, Bukidnon,

Act 9996. otherwise officials may

initiate amendment to RA

9996.

MinDA-15-03-101 Recurring delays in the Management to instruct Filling up of two (2) vacancies Rommel S. Castillo- March 2015 July 2015 Fully Accountant Ill and Budget

(14) dated submission of financial reports Agency Accountantto in the Finance Division, Finance Division! Implemented Aide posts have been filled

2!10/15 and the rendering of accounts, immediately submit all namely the Accountant Ill Perla R. Pandan- up effective July 1, 2015.

ranging from 12 days to 234 days, require financial reports and Budget Aide posts to Administrative With this new development,

may affect the reliability and which are already overdue for address delays! deficiencies Division (Hiring) the workload of each

accuracy of accounting submission to the COA. in the preparation and Finance staff shall be

information since audit submission of financial properly adjusted and

verification cannot be done on reports. deadlines for reports and

time in violation of Section 122 of other deliverables shall be

PD 1445 and Section 7.2.1 (a) of met.

COA Circular No. 2009-006.

Revisit the actual duties and Filling up of key finance posts March 2015 July 2015 Fully All seven (7) plantilla responsibilities of the (Accountant Ill & Budget Implemented positions approved for the Accountant and the entire Aide) will significantly Finance Division were filled-

Finance division to address address this audit up by Management effective

the cause of recurring delays recommendation. The actual 01 July 2015.

in the preparation and duties and responsibilities of

submission of reports. Accountant are being

handled by the concurrent

Supervising Administrative

Officer in concurrent

capacity.

Page 10 of 11

YEAR 2014 COA AUDIT OBSERVATIONS AND RECOMMENDATIONS

Agency Action Plan


Reason for

Partial/Delay/Non-



Management shall ensure With the implementation of March 2015 August 2015 Fully COA and DBM have both

that financial reports and CSCs Strategic Performance Implemented adopted the online filing of

other Accounting reports are Management System (SPMS), financial accountability

prepared promptly by the timely submission of reports reports, thus tracking of

Accountable Officers and other deliverables of submission is being

concerned and submitted to accountable officers in monitored electronically.

the COA within the period Finance Division shall be the Finance personnel has been

prescribed under Section basis of performance rating. implementing this particular

7.2.1 of Coal Circular No. Strict monitoring of tasks audit recommendation on a

2009-006 dated September assigned to individual staff continuing basis.

15, 2009 shall also be carried out by

the Chief Administrative

Officer of FD.

sign-off:

LUWALHATI R. /NTONINO

Ch son 1

Page 11 of 11

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