Republic of the Philippines

COMMISSION ON AUDIT
Regional Office No. IV-A
Audit Team R4A-08,Audit Group NGS-3-B
Commonwealth Avenue, Quezon City

AOM No. : 2020-003(2019)

Date : January 22, 2020

AUDIT OBSERVATION MEMORANDUM (AOM)

For: Director MARIO G. LIPANA

OIC-Regional Director
COA Regional Office No. IV-A
Quezon City

Attention: Atty. Mark Ranier C. Arenas

Chairman-Bids and Awards Committee

Consolacion J. San Luis

OIC-Service Chief, ATFS

Delvee B. Gaasis
Regional Accountant

Maria Teresa N. Arcullo

Acting Budget Officer

We have audited the Notice of Fund Transfer for PSAO Quezon and observed the
following deficiency:

Fund Transfers in August and September 2018 for the purchase of other supplies
and materials, furniture and fixtures, Office and ICT Equipment in the amount of
P2,070,260.00 remained unutilized as of December 27, 2019, contrary to Chapter 6,
Section 4b of the Government Accounting Manual (GAM), Volume I, thus depriving
the beneficiaries of the immediate benefits that may be derived therefrom.

Chapter 6, Section 4b of the Government Accounting Manual (GAM), Volume I

states as follows:

“Section 4. Notice of Transfer of Allocation. The NTA shall be the authority of

the Regional and Operating Units to pay their operating expenses, purchases of supplies
and materials, acquisition of PPE, accounts payable, and other authorized disbursements
through the issue of MDS Checks, ADA or other modes of disbursements.”

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 Moreover, Section 4, item b of the said manual provides that the NTA issued by
the Central Office and credited to the Special MDS accounts of ROs/OUs for payment of
xxxxx as well as prior year’s accounts payable shall be valid within the period prescribed
under existing rules and regulations. xxxx

Verification of records showed that the following Notice of Fund Transfer (NFT)
with the corresponding cash allocation for the purchase of other supplies and materials,
furniture and fixtures, office and ICT Equipment of PSAO-Province of Quezon remained
unutilized as of December 31, 2019:

Source of Fund
Particulars NFT No. 2018-0102 NFT No. 2018-0104 Total
dated Aug 28, 2018 dated Sept 27, 2018
Other Supplies and
Materials 79,860.00 79,860.00
Furniture and 199,000.00 386,400.00 585,400.00
Fixtures
Office Equipment 115,000.00 1,053,000.00 1,168,000.00
ICT Equipment 24,000.00 213,000.00 237,000.00
Total 417,860.00 1,652,400.00 2,070,260.00

The above table showed that the unutilized amounts were funds transferred from
the COA Central Office in CY 2018. From the last date of NFT up to December 31,
2019, the fund was entrusted to the office for 460 days. Annex C of Republic Act 9184
showed a recommended maximum period allowed for the procurement of goods and
services which is 136 calendar days (CDs). If the required procurement process of 136
maximum CDs was achieved, the benefits for the said projects could have been
immediately experienced by the beneficiaries.

Further verification disclosed that although the Bids and Awards Committee
(BAC) Resolution No. 2019-020 has been approved on August 9, 2019, recommending to
the Head of the Procuring Entity (HOPE) that the procurement of the Furniture and
Fixtures, Office Equipment and ICT Equipment for the PSAO-Province of Quezon be
made thru Public Bidding by lot, no other procurement activities had been undertaken as
of December 31, 2019 resulted to the unutilized funds.

Moreover, the PSAO in Quezon Province has been inaugurated and has been
operational since CY 2018, however, the dormitory facilities is still not operational as of
December 31, 2019 due to lack of equipment and/or furniture and fixtures which was
brought about by the non-utilization of the available fund for the purpose, thus the benefit
of the COA employees especially those that are on official travel and the possible income
of said dormitory was not attained.

We recommend that the OIC-Regional Director require the BAC Chairman,

PSAO Quezon Administrator, the Acting Budget Officer and the Regional

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Accountant to immediately procure the necessary items pertaining to the said
transfer of fund.

May we have your comments on the foregoing audit observation within five (5)
calendar days upon receipt hereof.

MARIA VICTORIA D. ALBANO

Audit Team Leader

ANASTACIA V. ARGENTE
OIC-Regional Supervising Auditor

Proof of Receipt of AOM No. 2020-003(2019)

Dir.Mario G. Lipana
OIC-Regional Director
Date: ____________

Atty. Mark Ranier C. Arenas

Chairman-BAC
Date: _____________

Consolacion San Luis

OIC-Service Chief
Date: _____________

Ms. Delvee B. Gaasis

Regional Accountant
Date: _____________

Ms. Maria Teresa N. Arcullo

Acting Budget Officer
Date: _____________

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