PART III - STATUS OF IMPLEMENTATION OF PRIOR YEARS’

AUDIT RECOMMENDATIONS
We made a follow-up on the actions taken by the Agency in the implementation of
prior years’ audit recommendations and noted the following:

Status of Implementation No. of Recommendations Percentage

Fully Implemented 17 16.67
Not Implemented 85 83.33
Total 102 100.00

Details are as follows:

Observations and
Ref.
Recommendations
CAAR CY 2017
1. The DepEd year-end CAAR CO
reports reflected a favorable 2017 • Re-constituted six Bids and
improvement in the utilization of Par. 1
allotment in CY 2017 compared
to previous years, as only
₱15,734,573,153 or three
percent had remained unutilized
as of year-end. However,
achieving the desired physical
outputs for the year were not
fully realized as operational
lapses in budget utilization were
still noted, such as: a) unutilized
allotment of ₱8,319,938,425
caused by delay in the
implementation of Government
Assistance to Students and
Teachers in Private Education
(GASTPE) grants and Science
and Mathematics Equipment
(SME) procurement in Central
Office (CO), unfilled positions
for teaching and non-teaching
personnel and unmet number of
school children served in the
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
Awards Committees
(BACs) under DepEd
Order No. 2018-008 dated
March 7, 2018 primarily to
undertake the functions
mandated under RA No.
9184 and its Implementing
Rules and Regulations
(IRR) and to focus on
specific programs and
transactions; Updated the
processes and procedures
on Activity Request (AR)
and Authority to Procure
(ATP), minimizing
documents needed for each
type of request.
• Created the DepEd Task
Force to monitor the
progress and status of funds
transferred to DBM-PS
under Office Order No. 00-

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 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
implementation of School-Based Osec-2018-028 dated April
Feeding Program (SBFP) in 16, 2018
National Capital Region (NCR),
and the late fund releases to • Outsourced the
operating units and schools procurement tasks of some
reported in five Regions; b) items to DBM-PS under the
obligations for Memorandum of
programs/projects of Agreement (MOA) entered
₱56,271,465,649 incurred in CO into by DepEd with the
were only made in the latter part DBM-PS, wherein DepEd
of the year, including the amount is still accountable for the
of ₱13,701,515,748 as fund transferred funds.
transfer to Department of Budget
and Management – Procurement • Strictly monitor through
Service (DBM-PS), thus maintenance of subsidiary
deliveries of their physical records incurrence of
targets are definitely deferred to obligations, disbursements
succeeding year; and c) and cash allocation to avoid
obligations incurred without overdraft in allotment and
valid and legitimate claims of obligation as well as
₱1,283,242,303 in NCR. unauthorized transfer of
Moreover, other deficiencies cash allocations, and
relating to fund utilization also maximize utilization of
exist, such as incurrence of NCAs
overdrafts in allotment and
obligation in CO, low capacity RO III
on disbursement in CO and The Management of Schools
Cordillera Administrative Division Office (SDO)
Region (CAR) and not fully Mabalacat City commented
utilized cash allocations for the that the Budget Unit was
year in CO, Regional Office already implementing the
(RO) IX and NCR. proper communication of
receiving Sub-Allotment
We recommended that the Release Orders (AROs) by
Management require: channeling it to its respective
program taker. The
CO to – recommendation will be
highly considered and with
a. make thorough and careful compliance with cited Not Implemented
study on the viability of provisions, laws and
transfers with DBM-PS

356
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
and conduct reconciliation regulations.
of balances to ensure that
fund transferred were fully
liquidated in terms of
delivery;

CO and ROs to –

b. strictly monitor through Not Implemented

maintenance of subsidiary
records incurrence of
obligations, disbursements
and cash allocation to avoid
overdraft in allotment and
obligation as well as
unauthorized transfer of
cash allocations, and
maximize utilization of
NCAs; and
2. The DepEd CAAR CO
Computerization Program 2017 • Transferred funds to DBM-
(DCP) revealed implementation Par. 2 PS
gaps showing: a) 99 percent
overall CYs 2015 to 2017 • Ensured continued
physical target deficiency or at endeavor, together with
least 77,704 schools still other offices, to comply
awaiting for the Information and with the timelines
Communications Technology prescribed in the Revised
(ICT) packages, including the IRR of RA No. 9184
17,016 identified recipient
schools with undelivered • ICT unit monitored the
packages out of the school’s readiness for the
₱2,059,940,765.59 from CY DCP
2015 budget transferred to
DBM-PS in CY 2016; b) RO I
extended contract execution
timeline up to 25 days from SDO Ilocos Norte
approval of Resolution to Award Request for complete
on awarded procurement under documents of the ICT
DCP CY 2017; and c) equipment delivered to the

357

Observations and
Ref.
Recommendations
deficiencies observed in the
deliveries and utilization of ICT
packages such as unmet
counterpart readiness
requirements for the schools,
defective/ incomplete items/
uninstalled delivered packages,
poor after sales service by
suppliers and weak financial
reporting compliance, among
others. These gaps deferred the
timely provision of necessary
learning interventions to
intended users of DCP packages
and weakened controls in proper
safeguarding of public funds and
property.
We recommended that the
Management in CO undertake
the following actions to address
the foregoing deficiencies
cited:
a. inquire into the unutilized
DCP funds with DBM-PS
as the benefits for the
intended beneficiaries are
at stake;
b. come up with an effective
monitoring and evaluation
system to be able to identify
key issues and other major
factors affecting DCP’s
implementation as well as
the related actions to be
taken;
c. review the Agency’s
internal processes related
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
SDO from the CO
SDO Ilocos Sur
Division of Ilocos Sur
implemented strictly the
recommendations during the
year.
SDO Dagupan City
Coordinated to the CO,
conducted physical count, and
properly recognized in the
books
SDO Urdaneta City
Property Acknowledgement
Receipts for the DCP Batches
14, 24, 26 and Lot 3 were
already secured by the
Division Accountant
SDO La Union
The DepEd La Union SDO
will continue to follow up to
the DepEd CO the needed Not Implemented
documents to establish the
accountabilities and records in
the school
SDO Laoag City
The Information Technology Not Implemented
and Communication
Equipment (ITC) under the
DepEd Computerization
Program Batches 26, 29, 30,
33, and 38 were directly
delivered by the DepEd CO to
the recipient schools and the
office was not provided with
the allocation list. However, Not Implemented
the Division Supply Officer

358
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
to procurement in order to required the recipient schools
further improve its service to submit Delivery Receipts
delivery and its compliance and Inspection and Acceptance
with timeline requirements Report which will serve as his
of the Revised IRR of RA only basis for the delivery
No. 9184; report.

d. institute effective reporting RO III Not Implemented

mechanism to immediately
monitor supplier’s contract SDO Tarlac Province
implementation so DepEd Schools heads and
can timely enforce after corresponding property
sales responsibility of custodians of recipient schools
supplier; of previously delivered DCP
packages were directed to
e. look into the reported submit IAR. Not Implemented
deficiencies on deliveries
and identify the responsible
supplier for immediate
rectification; and

f. consider performance Not Implemented

feedback in the awarding of
future contract to prevent
wastage of government
resources.
3. Eight regions fell short in CAAR RO I
achieving the objective of 2017
improved physical facilities Par. 3 SDO La Union
under the DepEd’s Basic To validate the completion of
Education Facilities Fund the repairs of the 161
(BEFF) for CYs 2017 and 2016 classrooms for Division of La
and in complying with the Union under Special
related DepEd guidelines and Allotment Release Order
COA regulations. Due to late (SARO) No. OSEC-17-5186
issuance of sub-allotments from dated July 3, 2017 amounting
the CO, improper timing of to ₱36,600,695.93, the
projects during the schedule of Management has submitted a
classes and inadequate request for the technical
monitoring thereof resulted in assistance of a COA Technical

359
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
the delayed completion of repair Audit Service on February 8,
projects in 49 out of the 91 2018 to assist in the ocular
schools inspected and the poor inspections of these BEFF
workmanship/defects of the Projects.
repairs done by contractors.
Other deficiencies such as SDO San Fernando
awarded contracts in SDO that During the Exit Conference,
exceeded the P15 million the Management replied that
threshold and paid contracts with they always been reminding
incomplete supporting their Inspectorate Team about
documents were also observed. their duties and
responsibilities to ensure
We recommended that the fulfillment/completion of
Management require: contracts prior to payments.

CO to – CAR

a. notify early on the SDO Ifugao Fully

ROs/DOs regarding the The DO agreed to impose Implemented
allocated funds on repair liquidated damages, which
projects and facilitate the will be deducted from the final
downloading thereof, as billing of the contractors.
much as possible before
start of school year, to RO III
ensure the timely
implementation of the SDO Malolos
projects; Copies of Program of Works,
Contracts and other documents
ROs and DOs to – relevant to the project have
already been forwarded to the
b. require the DO Engineers concerned school Head. Not Implemented
to strictly monitor,
evaluate, and validate all RO XI
project accomplishments
on a regular basis to ensure SDO Davao City
that projects are on The contractor already
schedule and are rectified all the corrective
performed in accordance works in Alambre ES and J.
with the approved Bastida ES and already
(Program of Works) inspected by Division
(POWs); Engineer.

360
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
4. The DepEd’s Public CAAR DepEd is in constant
Private Partnership School 2017 coordination with contractors
Infrastructure Program (PSIP) Par. 4 in the construction of school
with aggregate contract cost of building.
₱20,140,027,526 to construct
9,303 classrooms for PSIP I and
4,371 classrooms for PSIP II
experienced implementation
setbacks, such as: a) lack of
validation in allocation of sites
reduced the targeted number of
classrooms from 9,303 to 9,296
for PSIP I; b) delay by
one and a half years in the
completion of classrooms under
PSIP I mostly attributed to the
incidents considered as
Excusable Delays in
Construction under Section
12.8b of the contract agreement;
c) 1,327 classrooms under PSIP
II were still awaiting
construction completion after
more than two years of project
implementation caused by hard
access/clearing of sites, permits
issues, force majeure, demolition
of existing buildings,
realignment, among others; and
d) possible incremental
consultancy cost due to extended
project completion or
consultancy contract
termination/abandonment.
Hence, the overall achievement
of the program in supplementing
the current initiatives of the
DepEd to address classroom
backlog and fast track classroom
construction has not been
achieved.

361
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
We recommended that the
Management require the
concerned DepEd Offices to:

a. be more prudent and Not Implemented

objective in its
evaluation/assessment, and
to consider the availability
of needed machinery
before venturing into new
strategy/undertaking to
serve its mandate;

b. clearly define responsibility Not Implemented

areas, strengthen
coordination among
involved offices and strictly
enforce validation of
proposed sites to
immediately address
issues/problems prior to
project implementation;

c. evaluate and closely Not Implemented

monitor project sites that
were not yet completed and
ensure that the Proponents
comply with their
contractual obligations;

d. exercise proper diligence in Not Implemented

the monitoring and
supervision of the program
to ensure that only those
projects done in
accordance with the
requirements of the
contract are accepted and
paid to avoid wastage of
government resources; and

362

Observations and
Ref.
Recommendations
e. impose necessary and
appropriate penalty to
contractors, if warranted.
5. The desired outcome of CAAR CO
addressing furniture needs of 2017
schools thru the School Furniture Par. 5 • Downloading will no longer
Program (SFP) under the CYs
2016 and 2015 BEFF was not
fully met in seven regions due to
the: a) delay in the downloading
of funds by the DepEd CO and
execution of procurement
activities; b) non/delayed
deliveries of at least 70,124
pieces of armchairs (AC) and
2,242 sets of teachers’ tables and
chairs (TTC); c) non-utilization
of 19,493 pieces of AC and 286
sets of TTC that were stored in
vacant rooms, covered courts,
roof deck and along the
corridors/Principals’ office due
to, among others, delayed
completion of the school
buildings, oversupply of
furniture and poor
workmanship/inferior materials
used resulting in 3,049 and 54
damaged/broken AC and TTC,
respectively; and e)
deliveries/transfers to non-
recipient schools of excess 4,962
pieces of AC and 85 sets of TTC
due to lack of coordination
among the DepEd procuring
offices and between the DepEd
and the Local Government Units
(LGUs) resulting in the
deliveries of the same items.
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
Not Implemented
be done after the third quarter.
• Management to draft a
revised timeline of
Procurement
RO V
SDO Albay
Management of SDO Albay
averred that reliance was made
on the submitted Delivery
Receipts (DRs) by the supplier
and that validation from the
recipient schools as to the date
indicated in each DR was no
longer done. Accordingly, this
would result in inaccurate
computation of the liquidated
damages. Also, Management
committed to conduct a
reorientation to all Designated
Property Custodian/Supply
Officers reminding them of the
importance of indicating the
actual date of delivery of the
items.
SDO Tabaco City
Immediately furnished the
BAC a copy of the Authority
to Procure.
363
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
We recommended that the SDO Catanduanes
Management require: SDO Catanduanes officials
concerned explained that they
DepEd CO to: repeatedly called up the
suppliers to deliver the
a. be prompt in the furniture, but still, only partial Fully
downloading of funds to delivery was made on the first Implemented
the operating units; contracts awarded and none
for the last contract.
b. coordinate with the SDO Management and BAC Not Implemented
(Department of Public offered no objections to the
Works and Highways) audit observations and assured
DPWH to synchronize the Audit Team of their
timelines in the compliance with the
construction of school recommendations.
buildings with the
provision of school RO I
furniture;
SDO Ilocos Norte
c. ensure that the DepEd Demanded delivery of school Not Implemented
guidelines are consistently furniture. Deducted liquidated
observed and provide for damages in the final payment.
sanctions in case of
defiance by responsible RO IX
persons; and
SDO Zamboanga City
d. observe coordination Communication letter was sent Not Implemented
among the DepEd to contractors requesting the
procuring offices and replacement of
require ROs to coordinate defected/cracked armchairs;
with the LGUs to rightfully Full payment is still on-hold
address the furniture needs until rectification works are
of the school, thereby complied with. Recipient
avoiding oversupply schools were also advised to
thereof; and store/put the furniture items in
safe and secured areas.
concerned ROs/SDOs
(procuring entities) to:

e. comply with Section 7.6 of Fully

the 2016 Revised IRR of Implemented

364
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RA No. 9184 and DepEd
Guidelines regarding the
undertaking of
procurement activities
short of awarding prior to
the release of funds to
facilitate procurement of
goods and the procedures
on pre and post inspection
of items to ensure its
quality;

f. closely monitor the delivery Not Implemented

and condition of the goods
delivered and advise the
Principals, Property
Custodians and other
concerned DepEd officials
of the recipient schools to
immediately report
deliveries, reject outright
defective deliveries,
indicate the date of receipt
of deliveries and keep
record of DRs, IAR,
Certificate of Acceptance
and other related
documents on file for
future reference; and

g. conduct inventory of Not Implemented

unutilized excess furniture
for transfer to other schools
with furniture needs.
6. The current payroll CAAR NCR
system of the DepEd caused 2017
several drawbacks such as: Par. 7 ROP
a) net under-remittance of • Issued memorandum
payroll requirements amounting requiring the DOs/IUs to
to ₱74,388,234.21 and transfer exact amounts

365
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
unreconciled reciprocal account indicated in the Summary of
balances of the Due from Cash Disbursement Report
Operating Units and Due to (SCDR).
Regional Office per books of
DepEd NCR ROP and DOs with • Undeducted GSIS and
a net discrepancy of HDMF loan amortizations in
₱82,817,183.64; b) non- 2017 are being prioritized and
compliance with the order of deducted.
priority for authorized
deductions and uncontrolled • Remittance of the Pag-IBIG
types of loans offered by private contributions and loans are
lending institutions (PLIs) in now done by the DOs.
ROs NCR, CAR, I, IV-B, IX and
XIII that led to undeducted • Over-remittance will be off-
obligations in favor of the GSIS, set with the succeeding
HDMF/Pag-IBIG and PLIs remittances to PhilHealth.
amounting to ₱377.73 million,
₱16.56 million, and ₱1.80 RO XIII
billion, respectively; c) non-
observance with the required ROP
minimum net take home pay of As of November, 2017, Pag-
₱4,000.00 in ROs of NCR, I, IBIG loan amortizations were
VIII, IX and XI; d) inadequate given priority by the RPSU.
controls in processing payrolls in
ROs of NCR, I, VIII, IX and XI RO I
resulting in over or
underpayment of salaries, SDO Urdaneta City
erroneous computation of As to the Division Personnel,
contributions, unsupported employees' payslip were
payroll transactions and strictly monitored in
exposure of government funds to accordance with DepEd Order
the risk of loss or misuse with the No. 12 s. 2017.
adoption of payrolls thru cash
advance; and e) continuous SDO Dagupan City
payroll preparation and Monitor and strictly complied
processing by the Regional that deductions in the payroll
Payroll Servicing Unit (RPSU) must not reduce the employees
in ROs III and IX despite monthly net take home pay to
readiness of its concerned IUs to not lower the Four Thousand
implement the school-based Pesos (̈́₱4,000.00) and strictly
payroll preparation. comply with the provisions of

366

Observations and
Ref.
Recommendations
We recommended that the
Management require the ROs
to:
a. stop the practice of
transferring excess cash
allocations to the Payroll
Fund account maintained
by ROP, instead, revert the
same to the National
Treasury. Any transfer of
excess cash allocations to
prevent the lapsing thereof
and for invalid obligations
shall be disallowed in
audit;
b. provide the DBM with
updated plantilla of
personnel to ensure
accurate budget allocation
for PS of DOs/IUs; and
c. ensure that the authorized
deductions are done in
accordance with the order
of preference in the salary
deductions with due
consideration on the NTHP
threshold of ₱5,000.00, as
required in Section 48 of
the General Provisions of
the GAA for FY 2018.
Restudy DepEd’s policy on
the accreditation of PLIs
which should include the
limit on the types of loans to
be offered by them to
regulate the extension of
loans to DepEd employees
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
GAA 2017and with DepEd
Order No. 12 s. 2017.
SDO San Carlos City
The Administrative Officer V Not Implemented
(AO V) does not allow
anybody/or any personnel to
get a loan if his/her net pay
will be lower than ₱5,000.00.
SDO Ilocos Norte
Strict implementation of the
Net Take Home Pay by RPSU.
Re-issuance of demand letters
to the concerned employees
SDO La Union Not Implemented
Settlement of unsettled
overpayment of Regular
Salaries, Personnel relief
Allowance and Government
Contributions to GSIS, HDMF
and PHIC were collected by Not Implemented
the cashier.
SDO Laoag City
Payroll Officer is still in the
process of updating payroll
RO III
SDO Tarlac City
School Bookkeepers went to
the Regional Payroll Servicing
Unit to inquire about the
requirements on setting-up
School-Based Payroll System.
They were advised to submit
request for additional non-
teaching staff to accommodate
the additional workload.
367
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
for their protection and As of this date, the school
financial stability. bookkeepers are currently
updating index of payments
for each employee for paid
salaries and benefits.

RO IX

SDO Sibugay
14 Implementing units are
now trained by the RO to
implement the payroll
preparation in the schools
effective October 2018.
7. DepEd suffered loss CAAR CO
amounting to ₱25,213,511.10 2017
representing the cost of 820,682 Par. 8 • Created plan for the
damaged Grade 2 Learning refurbishment of warehouse.
Materials (LMs) at the Bureau of Learning Resources
contractor’s warehouse due to (BLR) to conduct a thorough
insufficient warehousing monitoring and inspection of
facilities to house the deliveries the buffer stocks in Taguig
and lack of prudence on the part warehouse
of DepEd to ensure the safety of
the LMs. Likewise, out of the • Supplier to cover liquidated
2,673,384 Textbooks (TXs)/ damages per new contract.
Teachers’ Manual (TMs) buffer
stocks procured from CYs 2013- • Management to draft a
2016, 79 percent or 2,101,670 revised timeline of
TXs/TMs worth at least Procurement and Warehousing
₱56,750,598.00 remained of Learning Materials.
undistributed as of inspection
date which may eventually result
in wastage of government
resources due to time
obsolescence, loss, damage or
deterioration. Moreover, control
weaknesses were observed in the
proper safekeeping and
inventory system of TXs/TMs

368
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
which can bring further damage
or loss of TXs/TMs.

We recommended that the

Management:

a. exercise due diligence in Not Implemented

procurement planning for
an effective service
delivery, allowing for
appropriate contingency
measures to prevent losses
of government resources;

b. for failing to observe the

rules under Sections 73 and
79 of PD No. 1445 in
disposing the damaged
materials –

b.1. conduct Fully

investigation to Implemented
establish persons who
should be held
responsible and
accountable for the loss
incurred and institute
recovery procedures;

b.2. require the Fully

officers concerned to Implemented
explain the deficiencies
noted and when
warranted by
circumstances should be
meted out with
appropriate sanctions
as a consequence of
their improper act;

369
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
b.3. revisit DepEd’s Fully
guidelines on supply Implemented
and property
management and
strengthen the system of
accountability of
involved DepEd officials
as well as the
monitoring of the
implementation thereof
by responsible and
accountable officers to
ensure proper
observance to duties
and responsibilities;

c. require the BLR to account Not Implemented

all stocks at the warehouse
and submit inventory
report to the Asset
Management Division
(AMD) for monitoring and
control and for submission
of appropriate reports to
Accounting Division.
8. The Cash in Bank - Local CAAR CO
Currency, Current Account 2017
(LCCA) includes trust accounts Par. 9 • Bureau of Alternative
maintained without specific Learning System (BALS)
authority/legal basis and is being Trust Account No. 0672-1001-
used for the unauthorized 27 has already been closed.
retention of various
receipts/income amounting to • Ongoing verification and
₱90,180,032.55 and reconciliation for other trust
unutilized/excess cash accounts for closure and for
allocations amounting to cash balances for remittance to
₱1,832,532,743.67, which Bureau of Treasury (BTr).
should have been properly
remitted to the National Treasury RO III
pursuant to pertinent provisions

370
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
of the GAA for FY 2017 and ROP
other applicable rules and The balance of Trust Account
regulations on the matter. number 3772-1002-63 as at
Moreover, bank accounts with May 31, 2018 are broken down
total balance of ₱31,348,897.05 as follows:
were maintained with banks
without universal bank license 1. Guaranty/Security
and approval from the Deposits Payable
Department of Finance (DOF) ₱8,133,014.11
contrary to the provisions under 2. Principals Test Fund
DOF Department Circular No. ₱130,096.16
001-2015 and DepEd 3. Proceeds from sale of
Memorandum No. 2015-007 Bid documents
dated July 27, 2015. ₱438,499.96
4. C.N.A. Fund balance
We recommended that the ₱6,307.19 Not Implemented
Management in concerned 5. Excess Funds for
Offices discontinue the remittance to the BTr
practice of transferring ₱7, 770, 574.64.
unutilized funds from MDS
Regular accounts to the Trust SDO Nueva Ecija
Fund account or to any other Management of SDO Nueva
bank account not authorized Ecija commented through the
by law. Accounting Division, in her
letter reply dated February 8,
2018, that a total of
₱767,653.41 was deposited to
the National Treasury on
February 8, 2018. The deposits
consist of ₱5,994.00 for the
erroneous deposit to the Trust
Fund account and ₱761,659.45
for partial remittance of the
unutilized Trust Fund account
balance. All other excess fund
of their Trust fund collections
will be immediately returned
to the BTr after payment of
remaining claims.

371
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO V

ROP
The Management had already
coordinated with DepEd CO
and according to Ms. Liza
Advincula, Accountant III, the
LBP Current Account No.
0220-2101-421, which was
maintained by the DepEd CO
for the account of DepEd ROV
had been closed at the Makati-
Buendia Branch. The
documents were already
forwarded to the RO and the
necessary journal entry was
recorded per JEV No. 01-
2018-02-0078 dated 2/28/18.

SDO Albay
Inventory of claims is ongoing
to account the amount to be
deposited if the request is not
granted favorably.

SDO Legazpi
In SDO Legazpi, Management
agreed to comply with the
above recommendations and
informed that starting CY
2018, all collections will be
remitted to the National
Treasury. As partial
compliance, Management had
already deposited the amount
of ₱1 million from the CY
2017 balance with the BTr last
December 2017. At year end,
the account had a balance of
₱460,759.42, which will be
remitted in the ensuing year.

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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
SDO Ligao
In SDO Ligao City,
Management was amenable
with the recommendation.
Accordingly, immediate
communication with the LBP-
Ligao Branch will be made
regarding the closure of the
bank account.

RO IX

SDO Sibugay
Follow-up with focal persons
for submission and
compliance.

NCR

ROP, SDOs Quezon City,

Manila, Caloocan, Valenzuela,
Malabon, Navotas, Pasig,
Marikina, San Juan, Pasay,
Muntinlupa, Parañaque, and
Las Piñas
Through the implementation
of the common fund system,
transfer of fund to current was
already avoided except for the
transfer of funds for the
purpose of BIR remittance.

RO II
Management already stopped
the practice of transferring
unused balances of NCAs
current account to Trust Fund
since January 2018.

Management instructed the

accountant to identify those

373
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
excess funds of completed
programs/projects/activities
and to remit it to the National
Treasury.
9. Non-preparation or CAAR CO
delayed submission of the 2017 • On-going reconciliation on
monthly Bank Reconciliation Par. 10 the cash balances for the year
Statement (BRS) as required
under Section 74, PD No. 1445 • Bookkeepers to strictly
and COA Circular No. 96-001, verify and review the propriety
failure to effect the of the transactions and
adjustments/recording of reliability of documents and
reconciling items, and the costing
unaccounted discrepancy
between the General Ledger • Directive to reconcile first
(GL) and Subsidiary Ledger (SL) the bank statement with the GL
balances, hindered the process of before preparing the BRS to
ascertaining the accuracy and check the accuracy in
reliability of the Cash-in-Bank- recording in the SL
LCCA balance with unaccounted
discrepancy/variance of NCR
₱1,130,121,420.48.
• On-going reconciliation on
Likewise, other deficiencies such the cash balances for the year
as unrecorded • Bookkeepers to strictly
receipts/collections, non- verify and review the propriety
issuance of official receipts, and of the transactions and
late or non-deposit of reliability of documents and
collections, as noted in six costing
regions, exposed government
funds to possible misuse or • Directive to reconcile first
misappropriation. the bank statement with the
general ledger before
We recommended that the preparing the BRS to check the
Management require the accuracy in recording in the
Accountants of concerned SL
offices to:
RO III
a. trace unaccounted funds Not Implemented
and deficiencies/variance ROP

374
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
and make necessary The stale checks mentioned
adjustment in the books; with a total amount of
and ₱28,479.69 have already been
recorded as per JEV No. 07-
b. strictly comply with the 2017-10-00352 dated October Not Implemented
provisions on record 1, 2017.
keeping and reconciliation
of accounts as required Further, the deductions have
under Section 74 of PD No. already been stopped by the
1445 and COA Circular No. RPSU.
96-011;
SDO Muñoz City
We further recommended that Monthly submission of BRS to Not Implemented
Management require COA has already been
concerned officials to strictly complied.
adhere to laws, rules and
regulations in the handling, RO IV-B
recording and utilization of
collections pursuant to SDO Palawan
Sections 63, 68 and 69 of PD BRS was already submitted.
No. 1445 and Section 4 of the
General Provisions of the GAA RO V
for FY 2017.
ROP
The Accounting Section had
already reconciled the
accounts Due to RO/Due from
OUs with the 12 SDOs except
for SDO Albay for years 2014-
2017. Numerous adjusting
entries had already been
recorded to wit:

JEV Date Amount

No.
201 1/31/2018 535,245.46
8-
01-
35
201 4/30/2018 309,148.67
8-
04-
188

375
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
201 4/30/2018 257,286.77
8-
04-
189
201 4/30/2018 98,036,387.31
8-
04-
190
201 4/30/2018 33,037,186.74
8-
04-
191
201 4/30/2018 8,999.98
8-
04-
192
201 5/30/2018 37,555,664.99
8-
05-
284
201 6/30/2018 135,948,673.43
8-
06-
338
201 7/31/2018 1,454,626.18
8-
07-
395
Total 307,143,219.53

SDO Legazpi
The Management agreed to
comply, and as of March 13,
2018, this has been partially
complied with. Only three out
of six bank accounts remained
not updated pending receipt of
the bank statements from the
concerned depository bank.

RO VII

ROP
Reports on Reconciliation of
Deposit and Collections of
PSU Net Pay (DBP Account
No. 00075-017359-080) for

376
 Status of
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Observations and
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Recommendations
Auditor’s
Validation
the month of February 2018
was submitted last March 8,
2018.

RO IX

ROP and two SDOs

The office of the Accounting
Section has submitted
updates on the status of the
implementation of the noted
subject. Although the late
receipt of the Bank Statements
is also a factor, but this Office
has the access to its accounts
that a snap shot could just be
provided anytime so advance
copy of BRS can be prepared
and submitted to the COA
Office. In addition, a letter was
also sent to the bank last
February 28, 2018, copy
enclosed, informing them of
errors/deficiencies noted in the
BRS for their appropriate
action. A letter was also sent to
your end last December 1,
2017 re: Proposed adjustment
as to the prior year’s
differences noted in LCCA
(Account No. 988-9, 983-3
and 848-8), copy attached.
Meanwhile, the Cash Treasury
Agency Deposit-Regular of
₱3,696,721.39 pertains to the
RELC Fund deposit under
Fund 184 in compliance with
Section 4, GAA 2017. The
Regional Officer justified that
the amount deposited with the
BTr was purposely to request

377
 Status of
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Observations and
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Recommendations
Auditor’s
Validation
NCA for the acquisition of 2
units of Van vehicles for the
use of the Training Center
(RELC) as approved by
Secretary of DepEd on
November 6, 2017 thru the
recommendation of the
Secretary of the DBM October
18, 2017. Please see attached
file copies. Recently, an NCA
dated March 3, 2018 for this
purpose was received from the
DBM which was credited to
our new MDS Trust Account
approved by BTR last Dec. 5,
2017 maintained with the PVB
under Account No. 02801-
137500-1.

RO XI

ROP
The Accounting Office is
performing a timely and
periodic Bank Reconciliation.

SDO IGaCoS
BRS for Provident fund were
already submitted. For other
accounts, the OIC –
Accountant is still in the
process of finalizing it.

SDO Panabo
In relation to LBP weAccess
online banking facilities,
DepEd Panabo City Division
has made action already on our
intention to register in this
online banking facilities
available at our government

378
 Status of
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Recommendations
Auditor’s
Validation
servicing bank, The Land
Bank of the Philippines,
Panabo Branch, and our office
have submitted the request to
our serving bank to enroll in
the electronic Modified
Disbursing System under the
weAccess online facility but
unfortunately the request was
still pending due to the non-
availability of LBP Panabo
Branch technical personnel
who will take charge in
enrolling our Office in the said
online service.

RO III

SDO Science City of Muñoz

The Management ensures that
the provisions of COA
GAFMIS Circular Letter No.
2002-001 will be strictly
observed for CY 2018.

Based on Government
Accounting Manual (GAM)
Section 56. Reversal should
not apply to MDS Accounts.

SDO San Jose City

The Management ensures that
the provisions of COA
GAFMIS Circular Letter No.
2002-001 will be strictly
observed for CY 2018.

SDO Cabanatuan City

The Cashier is advised to
submit list of unreleased check
to Accounting.

379
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
SDO Gapan City
The Management ensures that
the provisions of COA
GAFMIS Circular Letter No.
2002-001 will be strictly
observed for CY 2018.

RO II

SDO Nueva Vizcaya

Management shall inform
through the accounting office
the accountable officers of
Alfonso Castaneda National
High School (NHS), Kasibu
National Agricultural School
and Uddiawan NHS to
immediately submit report on
collections and deposits
including the supporting ORs
and DSs to their respective
accounting units.

SDO Ilagan
Bank Account for Trust
already opened and
maintained.

RO XI

ROP
A collecting officer in the
person of Ms. Rebecca G.
Remolino was already
designated.

SDO Compostela Valley

All cash collections are
deposited by the cashier either
daily or in the next banking
day.

380

Observations and
Ref.
Recommendations
10. Unliquidated cash CAAR CO
advances at year-end had 2017 • Accounting have imposed
accumulated to Par. 11 some rules to regulate the
₱1,448,096,479.51 in DepEd CO
and 11 ROs due to laxity in the
granting and liquidation of cash
advances and the monitoring
thereof, contrary to existing
COA rules and regulations and
DepEd guidelines. Likewise,
validity and reliability of year-
end account balances and full
settlement thereof cannot be
assured due to: a) long
outstanding/dormant accounts
amounting to ₱144,043,472.85;
b) absence of complete/updated
subsidiary ledgers/details to
substantiate the total cash
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
The Cashier already enrolled
the current accounts of the
SDO, however, the MDS
accounts were not enrolled
since only current accounts are
not allowed to be registered in
weAccess. Monthly snapshots
are requested as advised by
LandBank since bank
statements are available only
after two months.
SDO Davao del Norte
The practice has been stopped
as ordered by the SDS.
Henceforth, the Division
Office will undertake the
procurement process for
obligations/expenditures for
activities of the
Schools/District Office.
issuance of cash advance such
as:
Cash advance should be
liquidated within 30 days after
the completion of the project,
otherwise, no additional CA
will be granted.
Quarterly issuances of
Demand Letters to Special
Disbursing Officers with
unliquidated cash advance.
Recommendation to
withhold the salary of
Accountable Officers (AOs)
with unliquidated cash
381
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
advances of ₱191,576,136.12; c) advances.
errors in recording/posting of
transactions that understated the • Re-orientation of Special
reported advances balance by Disbursing Officers
₱102,317,679.28; and d) other
deficiencies noted that further • Creation of task force for
exposed government funds to reconciliation
loss and non-recovery.
RO I
We recommended that the
Management require ROP and DO La Union
concerned offices to: As of March 31, 2018, all
unliquidated cash advances by
a. enforce strict compliance the Basic Education Research Not Implemented
with the rules and Fund (BERF) recipients were
regulations on the granting, already settled.
utilization and liquidation
of cash advances within the RO II
prescribed period, demand
settlement specifically those ROP
pertaining to long • Liquidation of
outstanding advances, and outstanding cash advances
impose appropriate had been submitted.
sanctions on AOs who
continually disregard the • Policy on the grant of
set timelines on liquidation; cash advances will be strictly
adhered to.
b. direct the DO Accountant/s Not Implemented
to exert efforts in • Reconciliation is still
determining the causes of ongoing.
the negative
accountabilities of AOs as • Request for write-off
well as those amounts of long outstanding cash
described as “for advances has been submitted.
reconciliation” and effect
the necessary adjustments RO IV-B
to correct the balances of
the advances accounts; SDO Puerto Princesa
AOs settled their accounts.
c. request write-off of long Not Implemented
outstanding cash advances,

382
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
settlement of which is SDO Marinduque
uncertain and nil, after Refrain from granting
having exhausted all additional cash advances to
appropriate remedies for officers with existing cash
their liquidation, in advances.
accordance with COA
Circular No. 2016-005 RO V
dated December 19, 2016;
and SDO Camarines Norte
Demand Letters were already
d. instruct the sent. Follow-ups were also Not Implemented
Accountants/Bookkeepers done and request for write-off
to pay salaries, RATA, was already given to the Local
allowances and other Auditor. Further, necessary
personnel’s claims thru adjustment was made upon
Automatic Debit Advice to reconciliation of the available
simplify the transactions records.
and efficiently reach the
recipients on time. RO IX

SDO Zamboanga City

The Senior Bookkeeper from
Labuan Central School was
approved by the SDS to be
detailed at the SDO to aid in
the reconciliation of records of
cash advances. Though
Demand Letters were not yet
issued, AOs with outstanding
cash advances from prior years
were informed of the same.
Some of the AOs have
submitted proofs of liquidation
which was used as basis for the
preparation of adjusting
entries to close such cash
advances from the books of
accounts.

383
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO XIII

SDO Surigao del Norte

Coordinated with COA
Auditors regarding the
accountable officers (those
cannot be traced) on what
remedy can be applied

NCR

SDO Quezon City

The Accounting Unit is doing
efforts to reconcile the
balances of long outstanding
cash advances.

RO III

SDO Angeles
Follow-up people responsible
for opening a current account
at LBP or any authorized
Government Depository Bank
(GDB)

SDO Aurora
SDO Aurora has already
secured authority from the BTr
to open current accounts for
schools with downloaded
funds thru cash advances.
Request is submitted to the
LBP and forms were
distributed to the schools for
filling-up and submission to
LBP.

SDO Bulacan
The balance of Advances to
Officers and Employees

384
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
account was fully liquidated as
of January 2018.

SDO Gapan
The management is in process
of opening of a checking
account under the name of the
school.

SDO Mabalacat
• Opening of Current
Account of Schools

• Orientation of School
Heads regarding the
disbursement thru
checks

SDO Meycauayan
• Processing of fidelity
bond, manpower
deficiency/
requirements.
• Still have
Administrative
Assistant II positions
for hiring

SDO Olongapo
Cash advances are now issued
by checks addressed to the
school principals, but still in
the process of opening of
checking accounts under the
name of school.

SDO Science City of Muñoz

In the process of requesting
opening of checking accounts
to BTr.

385
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
SDO Tarlac Province
For the month of June 2018, no
cash advances were deposited
to the personal account of the
accountable officers.

As of June 7, 2018, 224 out of

426 Elementary Schools, 29
out of 41 Secondary Schools
(Non-Implementing) and 44
out of 67 Senior High Schools
(26 Implementing and 41 Non-
Implementing Units have
already opened Checking
Accounts.

Training proposal was already

prepared for the
briefing/orientation of school
heads and disbursing officers.

SDO Tarlac City

The Division Accountant had
already secured an authority
from the BTr regarding the
opening of Current Accounts
to the school level. After a
series of follow ups and
requests, the Manager of DBP
has already allowed a lesser
amount for maintaining
balance.

RO VIII

SDO Samar
Implementation of said
recommendation would
deviate from DepEd Order No.
13, s. 2016, which mandates
that MOOE funds should be

386
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
downloaded to the school
principals/heads.

RO XI

SDO Panabo City

The Division Accountant and
the Division Cashier have
agreed that they will no longer
make any forms of
downloading of Cash
Advances (MOOE, SBFP and
Special Projects) direct to the
Payroll Account of the School
Heads or any assigned Special
Disbursing Officer of the
Elementary and Non-IUs
Secondary Schools.

SDO Davao del Norte

11. Lack of coordination CAAR
between the Asset Management 2017
and Accounting Divisions; laxity Par. 12
in the control and monitoring of
DBM-PS fund transfers for the
procurement and deliveries of
various office supplies, materials
and equipment; absence of
periodic reconciliation of
records; and insufficient DepEd
guidelines resulted in: a)
unreconciled variance of
₱4,471,988,027 between the CO
The Office issued a Division
Memorandum No. 114
directing the Administrative
Officer IV (Cashier II) to
strictly monitor the expiry of
the fidelity bonds of all school
heads.
CO
Management assured to trace
and reconcile records of
DBM-PS with the records of
the Accounting Division.
Submitted Accounted
Delivery Receipts for proper
derecognition of settlements
made by DBM-PS.
NCR
SDO Quezon City

387
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
and NCR balances, and DBM-PS SDO QC has adhered to all
account balance; b) dormant and COA recommendations
long outstanding accounts of pertaining to DBM-PS.
₱898,581,407 in CO; and c)
other recording deficiencies in
NCR.

We recommended that the

Management require
concerned offices to:

a. limit fund transfer to Not Implemented

programs/project already
due for implementation to
avoid accumulation of
receivable account in the
books; and

b. establish guidelines to cover Not Implemented

the processes of fund
transfer, settlement
(deliveries, cancellations,
sales return, change in price
per item, service fee
charges) and reporting with
proper
coordination/consultation
with the DBM-PS.
12. Non-monitoring of the CAAR CO
submission of Liquidation 2017 Accounting Division is in
Reports; laxity in the control and Par. 13 constant coordination with the
absence of periodic project/program owners (i.e.
reconciliation of records; and DepEd IPSeO for DSWD
insufficient DepEd guidelines account; Schools Titling for
resulted in: a) dormant and long DENR among others) on how
outstanding accounts of to fast track the submission of
₱199,195,914; b) unaccounted liquidation reports.
confirmation variance of
₱28,297,851 in CO receivable Received the final liquidation,
balances; c) unaccounted thru electronic email, the

388

Observations and
Ref.
Recommendations
balances without subsidiary
records of ₱31,379,546 in CO; d)
lack/insufficient records for CO
and ROs III and V of
P91,141,263.00, and e) other
deficiencies in recording and
classification of accounts.
We recommended that the
Management in concerned
offices:
a. create a committee or team
to –
a.1. trace, analyze and
reconcile prior years
intra-agency fund
transfers;
a.2. conduct investigation
and validation of long
outstanding inter-
agency fund transfers
with government
agencies (national,
local corporations)
and other receivables
with non-government
organizations;
a.3. submit a report with
recommendations as
to appropriate actions
to be undertaken,
such as the:
a.3.1. proposed
adjusting entries for
identified
errors/misstatements,
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
account of City of Valenzuela,
on May 29, 2018.
However, a letter will be sent
to the BTr to verify the
authenticity as to the reported
refund of the balance to the
BTr.
The disallowance issued to the
City of Puerto Princesa is still
under the Due from LGUs
account since we have not
received the Notice of Finality
of Decision (NFD); hence, no
Receivables- Not Implemented
Disallowances/Charges
account is recorded yet.
The account Due from
Regional Office (RO) – Not Implemented
The result of the reconciliation
activity conducted nationwide
by DepEd - CO, reduced the
amount by 99.39% or
₱1,759,919,332.83 from
₱1,766,949,121.35 balance
from 12/31/2015 (amount
indicated includes bureaus).
The balance of this account as
of report date is now
₱6,887,291.00. Not Implemented
The negative balances were
adjusted by the Accounting
Division in March 2018.
The Management also
committed to clear up dormant
receivable account until
December 2018.
389
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
a.3.2. demand RO V
for submission of
financial reports ROP
through appropriate Demand Letters will be sent to
legal process, the responsible officials of the
LGUs included in the
a.3.3. request schedule, for immediate
for authority for the liquidation and submission of
possible write-off of the documentary
dormant accounts in requirements. If the records
compliance with COA are no longer available since
Circular No. 2016- the transaction happened in
005, CY 1996, a Certification under
oath of the concerned
a.3.4. proposed accountable officers and/or
accounting guidelines, municipal accountant will be
or requested to effect the
recording of settlement/
a.3.5. other liquidation of the Poverty
procedures deemed Alleviation Project fund
most appropriate, and transfer which was presumed
to have been fully
b. henceforth, instruct the implemented. Not Implemented
Accounting Division to
closely monitor all fund Further, after all the remedies
transfers, keep for settlement and liquidation
records/documents relative had been fully exhausted, the
thereto for future reference, Management will again
and to immediately prepare request for write-off of the
the necessary adjusting account with the necessary
journal entries to reflect documentary requirements.
more accurate receivable
account balances. RO XI

SDO Davao del Sur

• Closely monitor the
collection on active
employees.

• Coordinate with the

concern family and

390

Observations and
Ref.
Recommendations
13. Laxity in the grant of CAAR RO III
Provident Fund loans to DepEd 2017
officials and employees in ROs Par. 14 SDO Angeles City
I, III, IV-B and V resulted in the
accumulation of loans receivable
balance to ₱194,432,009.38
consisting of ₱15,112,752.42
past due accounts of more than
one to 15 years, out of which
₱11,624,028.86 or 75.65 percent
are receivables from deceased,
retired, resigned, AWOL,
transferred or can no longer be
located borrowers, thus
depleting the funds available for
prospective borrowers and the
slim probability of its full
collectability, contrary to Section
X.10 of DepEd Order 36, s. 2007
and negating the purpose for the
creation of Provident Fund of
providing loan facility in case of
emergency.
We recommended that the
Management require:
a. DepEd CO to revisit DepEd
Order No. 36, s. 2007 and
study the possibility of
providing stricter sanction
or penalty for borrowers
who have defaulted in the
repayment of their loans;
b. concerned RO/DO to –
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
gather documents as
evidence and request to
COA for write-off of
the account
Review the list and will
contact the co-maker of these
borrowers to settle the balance.
For the transferees, we will bill
the SDO where they
transferred.
SDO San Fernando City
The Management will follow
the corrective measures on the
grant of Provident Loans.
SDO Mabalacat
The Management explained
that the amount pertained to
the transferred loans
receivable of the SDO
Pampanga last July 2015. The
Agency already issued a
memorandum and letters and
deduction of employees’
outstanding loan balances.
However, the remaining
balance cannot be located in
the Regional Payroll Services Not Implemented
Unit upon request of
deductions. Management
resorts that the following
actions shall be made:
a)inquire with the SDO of
Pampanga of the details of the
borrowers and co-makers such
as address, school, clearances
391
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
issued (if any) etc.; b)issuance
b.1. observe strict of letters to the borrowers and Not Implemented
compliance as regards the co-makers (in case collection
provision limiting the is no longer feasible); c)
borrower’s maximum request deduction for such
loanable amount of borrowers or co-makers (in
₱100,000.00; case collection is no longer
feasible); and d) Ensure that
b.2. consider borrowers who are about to Not Implemented
borrower’s ability to pay retire, resign or transfer shall
before granting loans and be cleared from
stop granting of loans to accountabilities upon
those with net pay of less settlement of their obligation.
than the required monthly
net pay; SDO Cabanatuan
The Management shall
b.3. strictly enforce execute Demand Letters to the Not Implemented
collection of loans through concerned employees for the
payroll deductions in collection of their unpaid
compliance with the balances and ensure
existing rules and compliance with the
regulations of the guidelines set forth in DepEd
Provident Fund and enjoin Order No. 36, s. 2007.
the co-maker to pay their
obligations on the SDO Muñoz City
delinquent borrowers The Management will follow
being the secondary the corrective measures on the
persons liable; grant of Provident Loans.

b.4. determine the In the process of getting Not Implemented

delinquent borrowers with updated balances and list of
past due accounts and issue co-makers of the delinquent
Demand Letters for the borrower to the SDO of Nueva
recovery of past due Ecija as most of the delinquent
accounts; accounts are from the
transferred JEV.
b.5. instruct the Not Implemented
concerned officials to SDOs San Jose City and
strictly enforce the Gapan City
provisions of DepEd Order The Management will follow
No. 12, s. 2004 in the the corrective measures on the

392
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
administration and/or grant of Provident Loans.
management of the
Provident Fund and RO IV-B
determine the persons
responsible for not SDOs Calapan City and
implementing Section X, Romblon
Item 13 of DepEd Order Ask the DepEd CO to issue a
No. 12, s. 2004 causing the memo for the specific
failure of collection on the procedure in the collection of
remaining balances of past due loans.
loans;
RO V
b.6. ensure that Not Implemented
borrowers who are about to SDO Tabaco City
retire, resign, or transfer
shall only be cleared from Research of the discrepancies
accountabilities upon full noted on the account Loans
settlement of their Receivable per FS of
obligations; and ₱6,166,179.14, errors found
on postings under Status of
b.7. direct the Budget Funds from previous years and Not Implemented
Officer to ensure that adjustments were taken up
provident loan transactions amounted to ₱4,688,852.62 as
are covered by a Budget of January 2018; and the
Utilization Request Status amount balance of
to support the legality and ₱1,477,326.52 is still subject
necessity of the for reconciliation.
transactions. The Management shall
observe strict compliance with
the existing rules and
regulations of the Provident
Fund and comply with the
recommendations noted.
14. The existence, CAAR CO
completeness and valuation of 2017 AMD, Accounting Division
PPE account balances cannot be Par. 16 and Project Implementers (PI)
fully relied upon due to noted agreed in the reconciliation
deficiencies and weakness in the activity (balances for CY 2017
internal control in DepEd CO and below), which was held
and 11 ROs, such as, a) last June 3 – 7, 2018, of the

393
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
unaccounted reporting difference following:
of ₱39,941,045,473.48 between a. PI will furnish copy of
the accounting and property recipient schools per
records; b) non-performance of Contract No./Obligations
physical inventory to verify Request and Slip (ORS)/
existence and completeness of Supplier/Title or Project
the reported assets worth at least Name and classified per
₱23,483,751,530.60 in nine SDOs for easy dropping of
regions; c) non-maintenance of accounts. The list of
PPELC and PC or other records Contract
supporting PPE balances worth Nos./ORS/Supplier/Title or
at least ₱51,363,611,820.21; and Project Name with the
d) the existence of corresponding amount that
dormant/undocumented is recorded in the
balances of ₱2,000,925,441.22. accounting books of
accounts were already
Moreover, errors and omissions provided to AMD and PI by
in the recording of transactions AD.
affecting PPE accounts were also b. AMD creates PTRs based
observed, such as, a) inclusion of on the list provided by the
semi-expendable items costing at PIs and facilitate the
least ₱46,235,897.02; b) sending of PTRs to the
unrecorded concerned offices/schools,
unserviceable/demolished/razed retrieves, consolidates and
by transmits signed PTRs
fire/losses/transferred/disposed (based on the format that
PPEs amounting to were agreed upon by the
₱14,452,858.69;c) unrecorded reconciling team) to the
properties of ₱3,016,356,877; d) Accounting Division.
PPE items not yet dropped from c. Accounting Division
books of accounts of CO and records the transfer of
ROs of ₱10,819,693,024.50; and accountability thru Journal
e) other errors and omissions in Entry Vouchers (JEVs) and
classification to proper PPE transmits the JEV to
accounts and provision of Resident Auditor, copy
depreciation, undocumented furnished the respective
PPEs, titling and non- SDOs.
recognition of asset with respect
to land accounts. Accounting Division has
submitted additional four
We recommended that the PPELC on May 18, 2018 – a Not Implemented

394
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Management of concerned total of 10 PPE accounts as of
offices observe complete and this date.
proper documentation of PPE
account balance and other RO I
adjustments related thereto.
SDO Vigan
We further recommended that Ongoing reconciliation and
the Management in CO: updating of records

a. revisit DO No. 45 as regards RO II Not Implemented

the dropping of
centrally/regionally SDOs Batanes Proper,
procured PPE items to Cauayan City, Santiago City
introduce possible Proper, Quirino Proper,
updates/amendments, and Tuguegarao City Proper
to orient or re-orient the Supply Officers and the
Operating Units (DOs and Accounting Units recorded the
recipient schools), adjustments based on the
particularly those reconciled PPE ledgers.
personnel involve in the
process; and RO III

b. coordinate with the UNDP ROP Not Implemented

for the proper disposition of Prepared a schedule of the
the ₱83.87 million Reconciliation Statement of
transferred fund balance Physical Count Report with
that remains outstanding General Ledger as of
despite complete delivery of December 30, 2017.
the subject DCP Batches.
DepEd should also consider SDO Aurora
requesting for the reversion SDO Aurora Inventory Team
of such fund pursuant to has an on-going physical
Clause 10 of the UNDP inventory count at the schools.
Project Document. Schools in 4 out of 8 Districts
have completed physical count
and reports are being
consolidated.

SDO Balanga City

Physical inventory count is
about to start in coordination

395
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
with the school’s officials.

SDO Bulacan
Prepare the reconciliation with
Supply Office and necessary
JEVs for adjusting entries.

SDO Meycauayan
Already reconciled

SDO Tarlac City

The Division Accountant has
already updated Property
Ledger Cards for each type of
property. Reconciliation of
accounts will be done
immediately after the
Inventory taking of the
Division Supply Officer.

RO VIII

SDO Calbayog City

The SDO had assigned one
Financial Staff to maintain the
PPE and CIP Ledger Cards.

RO XI

ROP
• The Chairperson of the
Regional Inventory
Committee is performing
periodic reconciliation to
ensure that the records of
the Asset Management
Section agree with that of
the Accounting Office and
vice versa.

396
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
• The concerned office
maintains a file of these
documents.

• Deliveries are recorded by

both offices in accordance
with the appropriate
provisions.

• The Accountant II and a

Supply Section Staff are
assigned to keep and update
the PPELC and PC.

CAR

SDO Abra
PPE reports for Year 2011 to
present were done.

SDO Tabuk
Adjusted the accounts with
JEV No. 01-2018-03-00510
dated March 30, 2018.

SDO Ifugao
The Legal Officer and SDO
Engineer are coordinating with
School Heads for needed
documents.

SDO Apayao
• Transfer Reports with
Reference Nos. DCP-2016-
08-02503 to DCP-2016-08-
02547 all dated August 30,
2016.

• The transfer of
accountability has been

397
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
recorded in the books of
accounts under journal
entry

• Apayao National Industrial

Agricultural High School
had prepared journal entry
following the suggested
adjusting journal entry as
reflected in JEV No.
01101101-2018-04-116
dated April 27, 2018.

ROP
The ESSD and Supply Office
are in the process of gathering
the necessary documents.

RO I

SDO Laoag
The Supply Officer already
conducted the physical count
of all properties at the SDO
and we are planning to conduct
the physical count of all
properties in the schools.

SDO Olongapo City

Physical count of inventories
will be conducted.

SDO Science City of Muñoz

Created our Inventory Team as
per Division Memorandum
No. 25 s. 2018. Consequently,
Division Memorandum No. 35
s. 2018 was issued for the
schedule of inventory for the
year 2018.

398
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO V

SDO Camarines Norte

Once all Non-implementing
School Heads have submitted
the needed documents,
reconciliation of the actual and
recorded amount of PPE will
be made and any adjustment
will immediately be effected to
update and maintain PPELC
and PC as prescribed by the
GAM. Moreover,
Management has already
formed an Inventory
Committee to conduct a
thorough physical inventory of
all its properties.

SDO Legazpi
Management made an
assurance that the
recommendation will be
complied this ensuing year.

SDO Tabaco
• On-going reconciliation of
data with the ITO and SO.

• On-going reconciliation of
Inventory & PPE accounts
between the Accounting
and SO/Property Custodian
records.

• Reclassification of assets
from capital outlay to semi-
expendable expense
accounts was complied.

399
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
SDO Catanduanes
Agency Officials concerned
promised to complete the
inventory taking which is in
progress as of January 2018
and committed to submit the
report upon completion of the
undertaking. Also, they
committed to exert all efforts
to locate the report of the
previous Accountant and to
make necessary adjustment in
the books for previous years’
unrecognized depreciation.

ROP
We had already recorded the
annual depreciation on PPE
for CY 2017. The provision
for the monthly computation
of depreciation of PPEs were
already implemented this CY
2018.

RO VIII

SDO Southern Leyte

Created an Inventory
Committee and conducted a
Physical Inventory last
February 2018, and presently
consolidating the Inventory
Report.

SDO Catbalogan City

Inventory taking of the SDO’s
PPE is not yet possible since
records of the
buildings/repairs before this
office existed are still with
SDO Samar.

400

Observations and
Ref.
Recommendations
15. The Liability account CAAR NCR
balances are not reliable due to: 2017
a) recognition of invalid claims Par. 17 ROP and SDOs Quezon City
pertaining to undocumented
payables of ₱107,318,863.108
and dormant/long outstanding
payables of ₱69,986,894.98,
which should have been reverted
to Accumulated Surplus pursuant
to Section 98 of PD No. 1445; b)
net understatement of the
account by ₱3,704,818.43 due to
erroneous recording/omission of
entries; c) misclassification of
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
SDO Samar
The conduct of physical
inventory is still on-going.
RO XIII
SDO Surigao del Norte
Rescheduled the Physical
count on September-October
2018.
SDO Tandag City
The Inventory Committee has
visited the schools to inspect
and conduct actual physical
count and coincide with
accounting records.
SDO Bislig City
• Conducted the semi-annual
Physical Count for CY
2018; and
• Ongoing reconciliation of
Accounting and Property
Office records.
and Manila
Regional Office in the latter
response to COA dated April
04, 2018, that other payable
account composes mostly of
the payables to PLI for the
month of December 2017 and
other related transactions such
as unremitted service fee
collected, staled/cancelled
checks as of December 2017,
401
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Liability Accounts; and which was paid in January
d) liability account balance in 2018, including that of service
RO III not supported by fee. Attached also in the said
subsidiary ledgers to validate letter is JEV#2018-02-556 to
existence. adjust the balance of AP to
Cooperative de Muebles
We recommended that the Filipinas which pertain to the Not Implemented
Management recognize liquidated damages incurred
liability on the date of last CY 2012.
delivery/rendition/completion
and acceptance of the RO V
goods/services/projects,
regardless of the year of SDO Legazpi City
incurrence of such obligations Made necessary adjusting
in accordance with the Section entry on accounts payable
37, Chapter 2, Volume I of the
GAM, and DBM Circular SDO Tabaco City
Letter No. 2013-16 dated Management promised to
December 23, 2013. comply with the
recommendations.
But for justification purposes,
PS-Due to Officers &
Employees account balance of
₱1.2 million shall be for the
unclaimed salaries/maternity
benefits/Salary
Differentials/other PS claims
due till December 31, 2017
which need complete
supporting documents before
payment. Other PS balances
amounted to ₱1,965,416.52
included the additional
hardship allowance; MOOE of
₱4,642.75 was the unclaimed
travel expense and CO total
balance of ₱12,483,017.37
was for the repair/rehab of
DO/School Buildings and
School Furniture of
₱1,418,200.00 which lack of

402
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
SDs as of December 31, 2017

CO
• The Accounting Division
coordinated with the
concerned offices on this
account last year and found
them to be valid
obligations. However, to
comply with the
recommendations by the
Commission and since this
is a recurring issue,
Accounting Division will
revert these accounts to the
unappropriated surplus of
the general fund with
reference number of
Manual JEV 01-2018-02-
002 dated February 28,
2018. Accounting Division
just reclassify/restore
DepEd’s liability on this
account upon submission
of the progress billing by
the supplier.

• Adjusting entries totaling

₱1,428,850.00 are reflected
on same manual JEV 01-
2018-02-002

• Adjusting entries
totaling₱465,009.60 are
reflected on same manual
JEV 01-2018-02-002

CAR

SDO Kalinga

403
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Accountable Officers were
enjoined to submit Liquidation
Reports for outstanding
balances.

RO II

SDO Batanes, Itbayat NAHS,

Sabtang National School of
Fisheries (NSF), and Cauayan
City NHS
1. The Accounting Section
will againtrace vouchers
and accounting records
from PVB, RPSU andSDO
Cashier's Office to
determine the existence of
the accounts.
2. The Management requests
to the COA for the accounts
to be written-off.

RO V

SDO Albay
Ongoing Inventory of
Accounts Payable to
determine which among these
accounts are supported with
valid, complete and proper
supporting documents.

RO IX

SDO Dapitan
The Accountant was directed
to exert extra effort in locating
the required documents of the
long outstanding Accounts
Payable. To date, the
Accountant still has

404
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
reservation of the claims of
Stars &Stripes Construction
and Westmin. Construction
which were recorded in 2013.
The payable to Mr. Benedick
Inoferio amounting to
₱5,000.00 for accounting
system is already reverted to
accumulated surplus.
16. Total disbursements of CAAR CO
₱251,672,610.30 were found to 2017 Employees take overtime
be contravening to the existing Par. 18 services due to the volume and
government rules and urgency of workload that
regulations, while total amount needs to be done and lack of
of ₱422,275,649.24 were not personnel. If CTO will be
supported with adequate chosen over Cash Payment,
documentation, and there would be even less
₱108,674,503.42 deviated from personnel to deliver services
the proper standard since COC must be used
process/procedures on within the succeeding year.
disbursements, thus, casting
doubts as to the validity and CAR
propriety of expenditures.
SDO Kalinga
We recommended that the Management will ensure that
Management of concerned payment for overtime services
offices: is in accordance with the
provision of CSC-DBM
a. observe the proper Circular No. 1 s. 2015. Not Implemented
standard procedures in
processing disbursements; RO II
and
SDO Isabela
b. require the refund of The recommendations are well Not Implemented
unauthorized claims of taken.
benefits and allowances.
RO VIII

SDO Calbayog
• Informed the Division

405
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Office personnel to
submit additional
supporting documents as
basis for the
recomputation of
overtime pay.

• Attended a consultative
meeting with the COA
Supervising Auditor and
the Division Office State
Auditors.

SDO Samar
The Cashier's Office is still in
process of settling the records.

RO IX

SDO Zamboanga del Norte

Promulgate financial
strategies that could alleviate
the proper utilization of the
fund and fast track
downloading but not to
compromise internal control
measures.

RO II

SDO Isabela and three IUs

• Management stop the
granting of
Communication
Allowance since no legal
basis or guidelines exist
for the said allowance.

• The Management adhere

to the recommendation of

406
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
the COA Auditor.

NEAP Fund
CSC-DBM JC No. 1, s.2015
has been observed. Thus,
payment of overtime services
to Job Orders of NEAP had
been stopped.

RO III

SDO Aurora
The Management of SDO of
Aurora explained that there is
no available service provider
for telephones landlines and
there is a valid need for the
provision of
communication/cell card
allowances. They recognized
that payment of such has no
sufficient legal basis. In line
with this, they have already
stopped payment of
communication allowance to
selected SDO personnel
effective October 2017. As per
their coordination with Central
Office Finance Service during
the Accounting Field
Monitoring on November 8-
11, 2017, they have been
informed that there is an
ongoing revision of the
Memorandum on the provision
of communication/cell card
allowance to DepEd
personnel. While waiting for
the release of the revised
Memorandum, SDO of Aurora
also stopped providing

407
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
communication/cell card
allowances to school heads
and school personnel.

SDO Cabanatuan
Personnel Unit were already
advised to collect supporting
documents.

SDO Gapan
The Management has made
the concerned employees to
refund the cell card allowance
and quarter allowance and
submitted to COA the
corresponding Official Receipt
and deposit slip.

SDO Muñoz
The HRMO agreed that
starting CY 2018 all
supporting documents should
be attached to the
disbursement vouchers for
payment. Submission of CY
2017 DTR will be
accomplished based on the
target date of implementation.

SDO Malolos
Pertinent documents have
already been submitted last
June 13, 2017 to the Office of
the Auditor for validation. The
BAC Members and the
Division Technical Working
Group attended various
seminars and trainings on
procurement aimed to improve
Division Procurement System.
In addition, the management

408
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
included re-tooling as one of
the strategies in equipping
them about the processes of
procurement.

RO V

SDO Albay
To secure the required
authority. Otherwise, the
accountable officer will be
required to return the amount
disallowed.

SDO Ligao
The office immediately stops
the granting of cell card/ cell
phone plan allowances after
receipt of AOM from COA. In
addition, communication was
made to Usec. Anne Sevilla
dated March 14, 2018 asking
for an authority in the granting
of cellphone load
allowance/expenses, waiting
for her official response.

RO IX

SDO Dipolog
Subsequent payment of
monetization was already
credited to individual bank
account.

SDO Calbayog City

Required the Accountant to
coordinate with the focal
persons thru series of meetings
to assist in the gathering of
required lacking documents.

409
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
SDO Zamboanga del Norte
• With the Advent of the
PMIS (Program
Management Information
System) created by DepEd
CO, wherein a duly
accomplished Work and
Financial Plan as a requisite
for implementation, we can
streamline preventable
expenditures.

• Materialize a composite
convergence together with
the Evaluation Team,
Planning Section and the
concerned District Senior
Bookkeeper in order to
discuss, review and
validate the consolidated
listing before finalizing as
requisite for the release.

RO I

SDO Dagupan City

Complied with the provision
of Section17 of GAA of CY
2017 and Section 119 of PD
No. 1445 limiting the use of
the current year’s
appropriations for current
operation only.

SDO Laoag City

The expenditures made
through reimbursement are
unforeseen contingencies
requiring immediate purchase.
17. The delay/non- CAAR NCR

410
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
submission by the ROs, DOs and 2017 SDOs Quezon City, Manila,
Schools of financial and other Par. 19 Caloocan, Malabon, Pasig,
reports and documents contrary Marikina, San Juan,
to PD No. 1445 and other Mandaluyong and Taguig/
pertinent rules and regulations, Pateros
as well as deficiencies noted in A series of follow-up and
reporting, prevented the Audit monitoring will be conducted.
Teams to conduct timely review The SDO has been exhausting
and evaluation of recorded all means to solve the matter
transactions for the immediate which includes BRS
corrections of any deficiencies preparation within 20 days
noted and lessened the upon receipt of Bank
usefulness or value to the Statements.
intended users thereof.
RO I
We recommended that the Not Implemented
Schools Division SDO Alaminos
Superintendent/ Principals Submitted all the required
observe strict compliance with reports.
the applicable provisions of the
GAM and the RCA for NGAs RO III
as prescribed under COA
Circular No. 2013-002 dated SDO Malolos
January 10, 2013. Documents have already been
submitted last June 13, 2017 to
the Office of the Auditor for
validation.

RO IX

SDO Sibugay
Call the attention of the
concern bookkeepers to exert
effort to locate the documents
required for submission.

RO II

ROP
Subsidiary Ledgers (SLs) of
CY 2017 has been prepared.

411
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Prior years ledgers are still in-
process. The Accounting
Office is currently using the
Enhanced Financial Reporting
System (EFRS) to process
accounting data which
includes maintenance of SLs.
Reports of SL can now be
generated through this system.

RO III

ROP
The said monthly reports
including those for the month
of May 2018 were already
submitted.

SDO Aurora
• Casiguran NHS has
complied with the required
disbursement vouchers and
supporting documents to
COA.

• Disallowed amount was

already paid and deposited
to the BTr.

• Required reports already

submitted to COA.

SDO Bulacan
Submitted the Financial
Report together with
supporting schedules to COA
Resident Auditor on a monthly
basis.

412
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
SDO Cabanatuan-Gapan
• The management
submitted the financial
reports to COA on a
monthly basis.

• Copies of contracts,
Purchase Order (PO) and
Purchase Request (PR) are
being submitted to COA.

SDO Muñoz
• Quarterly budgetary
reports have been
submitted to COA last
November 24, 2017.

• Copies of government
contracts, POs and other
supporting documents have
been given to COA.

SDO Olongapo
Copies of Contracts/POs/JOs,
together with their supporting
documents and notice of
deliveries of the procurement
activities of the school were
provided and passed within the
prescribed time of Contract of
Service.

SDO Angeles City

• Financial reports are
submitted on a monthly
basis to COA

• Coordinated with the DBM

– Unified Reporting
System (URS).

413
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO IX

SDO Zamboanga
The Accounting Section is
continuously submitting to the
Audit Team the supporting
documents - vouchers,
liquidations, etc., as well as
Bank Reconciliation
Statements. Monthly Trial
Balance is still aimed to be
produced on a timely basis.

SDO Sibugay
The agency to comply
implemented RA No. 9184 in
the purchase of fuel, gasoline,
and lubricant, hence, the
drivers are required to get a
prenumbered gas slip from the
AO with approved travel order
and trip ticket before they can
get the supply from the
supplier.

SDO Zamboanga del Norte

Directed the Division Senior
Bookkeeper and Accountant to
be candid relative to
submission of report to
oversight agencies particularly
COA on a monthly basis.

RO XIII

SDO Dinagat Islands

The Management requested
the Finance personnel to
immediately submit the
required monthly and/or
quarterly BFARs from January

414
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
1 until the month/ quarter
ending September 30, 2017, in
the prescribed formats as
required by the
aforementioned Joint Circular,
and submit a written
explanation for the delay in
submitting these reports to this
Office.

SDO Zambonga del Sur-

Bayog NHS
The Bookkeeper started
maintaining the Index of
Payment.

SDO Pagadian City and three

IUs
The Budget Officer of this
division has already prepared
the prescribed form of Report
on Allotments, Obligations,
and Disbursements (RAOD)
for PS and MOOE.

SDO Tandag City

This office has issued Order
No. 13, s. 2017 (Annex D)
directing the Division
Accountant to revisit COA
Circular No. 2012-001 which
sets forth the required
supporting documents for all
transactions, thereby
strengthening the internal
control particularly in the
disbursement process.
18. The accommodation of CAAR CAR
private lending institutions 2017
(PLIs) and the “First-In, First Par. 26 ROP

415
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Served” queuing system for the A Memorandum dated March
deduction of loans in the payroll 21, 2018 was issued to the
of teaching and non-teaching Superintendents, Public
personnel in six ROs that Elementary and Secondary
disregarded the prioritization of School Heads regarding the
deductions provided in Section undeducted loans.
47 of the General Provisions of
the GAA for the FY 2017 SDO Kalinga
resulted in undeducted GSIS Concerned personnel
premiums and loan coordinated with GSIS to
amortizations amounting to correct the BP numbers in the
₱377,728,531.94. As a personnel records.
consequence, compound
interests, penalties and/or Conner Central NHS
surcharges could be incurred or The SDS instructed the former
worst, non-availment of bookkeeper to prepare the said
retirement benefits by the necessary schedules covering
employees affected thereof. transactions up to June
Furthermore, contributions 2016and the current
and/or loan amortizations bookkeeper to prepare the
totaling ₱649,908,531.20 necessary schedules
deducted from the payrolls of applicable from July 2016
employees of 11 CO/ROs onwards.
remained unremitted to GSIS as
at year-end exposing the RO I
concerned employees of
penalties/interests that could ROP
result to undue limitations in The management has already
enjoying the privileges and remitted the GSIS loan
benefits conferred under the repayments/amortization.
GSIS law.
RO XIII
We recommended that the Not Implemented
Management of concerned ROP
offices/schools to require the As of November 2017, GSIS
DepEd Authorized Approving loan amortizations were given
Officers and PLIs to exercise priority by the RPSU.
due diligence in certifying and
approving loan applications to CO
avoid accumulation of To address the issues raised in
undeducted contributions and this AOM, the Bookkeeping –

416
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
loan amortizations. A (Book-A) Section of
Accounting Division (AD)
together with Personnel
Division (PD) will work on
Due to GSIS, Due to
PhilHealth and Due to BIR.
The account Due to Pag-IBIG
is with the PD alone and was
never handled by the AD.

On the other hand, the

recommended
adjustments/reclassification of
accounts will be made this
2018.

RO II
Reconciliation is still in
process.

RO III

SDO Bulacan
Made the reconciliation and
analysis of accounts and
ensure the remittance of
premiums within the
reglementary period and
record the government share
as Due to GSIS and remit fully
the amount deducted. We have
already maintained the
subsidiary ledger to support
the account balances, and to be
more extra careful in recording
transaction to avoid
adjustments.

SDO Malolos
Premiums have already been
remitted and current year

417
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
deductions and remittance are
being properly monitored.

SDO Angeles
The delay was due to the
transition of bookkeeper.

Made the necessary

adjustments to correct the
records in the school’s books.

RO IV-B

SDOs Romblon, Calapan City

and Marinduque
For checking, reconciliation,
and adjustment of balances.

RO V

ROP
The ROP's outstanding
balance of Due to GSIS was
only ₱69,839.82 as of
December 31, 2017, which
will be remitted on the 10th
day of the following month.

SDO Albay
Reconcile the account.

SDO Camarines Norte

Unremitted balance was due to
misposted entries and was
already adjusted to appropriate
account. Assignment of
Accounting personnel to
closely monitor the said
account was already made to
ensure that any GSIS loan
payments and contributions

418
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
withheld were properly
remitted to concerned Agency.

SDO Camarines Sur

The management has provided
for an additional staff to work
on this matter. Reconciliation
of the amount withheld and
remitted is on-going.

SDOs Masbate Province and

Iriga City
Remitted the amount to GSIS.

SDO Ligao City

The outstanding balance as of
December 31, 2017 amounting
to ₱461,342.77 is still subject
for reconciliation.

SDO Masbate City

The balance of ₱61,701.25
Due to GSIS was remitted to
GSIS on January 29, 2018.

SDO Naga City

GSIS premiums withheld in
December2017 were remitted
under check numbers 72303
dated 2/9/2018, 735489 dated
3/7/2018, 735371 dated
4/10/2018, 735396 dated
5/10/2018, 744591 dated
6/6/2018, 744660-62 dated 7/6
and 9/2018 and were issued
OR numbers 740015580 dated
2/9/2018, 740015745 dated
3/8/2018, 700035557 dated
4/10/2018, 7000369068 dated
5/10/2018, 700036461 dated
6/7/2018, 700037060-62 dated

419
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
7/10/2018, respectively.
SDO Sorsogon City
The year-end balance of due to
GSIS account in the account of
₱277,855.83 was remitted last
January 4, 2018.

SDO Tabaco City

Ending balance on Due to
GSIS account as of December
31, 2017 was ₱560,626.88 and
said amount was remitted to
GSIS the following month of
the ensuing year, dated 1/17/18
and 1/30/18.

RO XIII

SDO Bayugan City

CAAR CY 2016
1. The multi million CAAR
contract of fund transfer ranging 2016
from P100 million to P163 Paras.2
million annually entered into by -2.32
the DepEd in previous years with
the Fund for Assistance to
Private Education (FAPE) as a
service provider, and now with
the Private Education Assistance
Committee (PEAC) as the trustee
of FAPE, for the
Office Memorandum No. 9 s.
2018 is being issued
instructing the accountant and
cashier to strictly observe the
remittance schedule of the
premium contributions to the
concerned agencies to
preclude from incurring
interests and penalties.
Management clarified that the
DepEd has no intention to
mislead the Audit Team, or any
interested party for that matter,
as regards the legal personality
of FAPE/PEAC. That when
this was first raised by COA in
CY 2013, the Department
responded that it is “not the
competent authority to decide
on the issue” since

420

Observations and
Ref.
Recommendations
implementation of the GASTPE
programs, over the years had
restricted the COA’s audit
authority due to misleading
information or misrepresentation
as to the legal personality of
FAPE and PEAC, which from
the very start had created an
impression to be a private entity,
where in fact, it is a public entity
according to its creation, and is
likewise vested with authority to
perform public functions.
Moreover, the Irrevocable Trust
Fund created under EO No. 156,
known as FAPE entrusted to
PEAC which is being chaired by
the DepEd Secretary, with a
reported year-end equity of
P184,378,049.69 has not been
accounted as government funds,
and was not subjected to COA
audit, hence, the validity of the
increase and charges made to the
fund since its creation has not
been validated.
We recommended that the
DepEd Secretary, in her
capacity as Chairman of
PEAC, and with reference to
Sandiganbayan decision on
Criminal Case No. SB-12-
CRM-0134, to:
a. initiate the opening of the
books and records
pertaining to all receipts of
and uses of funds and
properties of PEAC/FAPE
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
FAPE/PEAC is not an attached
agency of the DepEd, that the
team may wish to refer this
matter to the Office of the
President or the Department of
Justice for proper
adjudication.
That there is some confusion
between FAPE and PEAC
caused by the
interchangeability of these two
terms in documents. It was
clarified then that the
appropriated agency which
acts as service provider for the
GASTPE Program is the
PEAC, through its National
Secretariat and not FAPE,
since the latter is purely a trust
fund created by EO No. 156 (s.
1963).
That the contract between
PEAC and DepEd is not a new
arrangement, it has been
existing for several years
already. The legal basis for the
CY 2016 contract is the
Special Provision No. 14 of
the 2016 General
Appropriations Act (GAA)
which states that “the
implementation of the ESC
and voucher programs shall be
subject to the issuance of
policies and guidelines by the Fully
DepEd and shall be jointly Implemented
managed by the DepEd and the
Private Education Assistance
Committee.
421

Observations and
Ref.
Recommendations
for the audit and
examination of COA for
transparency and public
accountability;
b. direct preservation of all
PEAC/FAPE funds and
properties including the
financial reports, records
and documents from the
time it has been in
operation;
c. immediately submit
complete set of financial
statements including the
necessary schedules, for
FAPE’s Account 00022594
TA 01, as well as financial
reports on other funds,
investments or financial
interests of PEAC/FAPE
for the CYs 2014 to 2016, to
COA for
audit/examination; and
d. instruct the officers
concerned to submit other
documents and records
when needed in the course
of audit to establish
unaccounted government
funds and property
entrusted to PEAC/FAPE.
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
The responsibilities of PEAC
in the SY 2016-2017 MOA,
particularly Section 4.11 states
the requirement for PEAC to
submit to DepEd reports on a Not Implemented
quarterly basis, or whenever
necessary, including an annual
report and liquidation of
expenses with regard to
funding provided by DepEd
for the conduct of teacher and
administrator training and
research. That PEAC has been Not Implemented
submitting these reports to
DepEd-Accounting Division,
and copies have been
submitted to and are available
to COA for further review and
audit. It does not however,
cover program management
fees transferred to PEAC
which is subject to submission
of processed billing statements
to CO.
That since the Irrevocable Fully
Trust Fund (FAPE) was Implemented
created by and EO and was
entrusted to PEAC and not the
DepEd, the DepEd may not be
the competent authority to
compel PEAC to subject itself
for COA Audit for this fund.
However, management have
requested for a special audit of
FAPE (and management of
GASTPE by PEAC) from the
COA Special Audit Office, so
that the Secretary, in her
capacity as Chairman of
422

Observations and
Ref.
Recommendations
2. The Public Secondary CAAR
School’s unreadiness to 2016
accommodate the expected Paras.3
number of SHS entrants, that -3.28
necessitated the utilization of
Private Secondary Schools
facilities/resources to
accommodate the projected
1,445,107 enrollees nationwide,
ensures the latter a guaranteed
revenue, as 90 percent of their
senior high enrollees are SHS VP
grantees. On the part of DepEd,
it incurred an additional
expenses of P33,000,000.00 due
to the corresponding increase in
the administration cost to pay
PEAC/FAPE.
Further, the student’s financial
capacity was not considered to
qualify for the SHS Voucher
Program (VP) and likewise, as
recipient of other scholarship
grants/programs, to conform
with the provision of Section 22
of RA No. 10533. Thus, students
enrolled in prestigious/high
paying private
schools/universities who are
financially capable even without
government’s financial
assistance, were also SHS VP
grantees.
Moreover, DepEd did not closely
monitor and supervise the
implementation of the GASTPE
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
PEAC, may be advised and
ensure that it is spent correctly
and judiciously.
On the SHS VP designed to
utilize private high schools’
facilities resources as an
option to address the limited
number of fully equipped
public secondary schools
While the program also
decongests public high
schools, thus, gives more time
for the DepEdf to construct
and equip schools and
laboratories, this was not the
main consideration in
conceptualizing the SHS VP.
Contrary to what was
mentioned in the AOM, it was
not designed to be
“temporary” or a “remedial
option.” The SHS VP is
envisioned as a long-term
program of the Department-
not a stop-gap measure to be
pursued only in the early years
of K to 12 implementation.
On the guaranteed revenue on
the part of the private or non-
DepEd institutions as 90
percent of their senior high
school enrollees are SHS VP
grantees
That the SHS VP payment
given to schools is meant to
subsidize and defray the costs
of the qualified voucher
423

Observations and
Ref.
Recommendations
Program to ensure the wise
utilization of the funds and the
effectiveness of the Program to
address any deficiencies noted in
the period of implementation.
We recommended that the
Management:
a. ensure public secondary
schools’ readiness to
implement the SHS
Program by closely
monitoring and timely
addressing
issues/deficiencies
encountered so as not to
rely on the capability and
resources of private/non-
DepEd schools and
therefore funds set aside to
support these institutions
could be allocated to
sustain and enhance the
basic education services in
public schools;
b. provide concrete guidelines
in assessing the financial
capacity of the grantees in
conformance with Section
22 of RA No. 10533 and
impose reasonable
limitations on the
availment of financial
grant;
c. determine reasonableness
and propriety of covering
those students that are
enrolled in the prestigious
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
recipients (QVRs) enrolled
with them.
The high percentage of
grantees in some schools is
due to the fact that more than
90 percent of JHS completers
(public and private ESC
grantees) were already pre-
qualified to the program. Not Implemented
DepEd opened the
applications to private non-
ESC grantees to give them a
chance to participate shoud
they also need financial
assistance.
On entailing additional
expenses for the program due
to the corresponding increase
in the administration cost of
P33 million to pay
PEAC/FAPE
The increase in management
fees payable to PEAC is due to
the addition of the SHS VP to
the programs being handled by Not Implemented
the committee.
On determining
reasonableness and validity of
covering those students that
are enrolled in the prestigious
high-paying
schools/univesities and those
who are covered with other
scholarship programs of the Not Implemented
schools/universities
424
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
high paying The DepEd does not
schools/universities and discriminate between students
those who are covered with who choose to enroll in
other scholarship prestigious high-paying
programs of the schools and those who do not.
schools/universities; As the principle of the SHS VP
is enabling student choice,
d. consider the process that they are allowed to enroll in a Not Implemented
the financial capacity of the school with SHS permit if they
JHS grantees be assessed can afford to pay the top-up
before enrolment to SHS fees or the difference between
and not just for the initial the voucher amount and the
(one-time) assessment; and total school fees.

e. establish strategy to The DepEd have different tier Fully

validate and monitor level depending of where the Implemented
compliance with rules and student completed JHS. Public
procedures of the program completers receive 100
and to assess PEAC/FAPE percent of the voucher amount,
performance at least while private completers
annually. receive 80 percent with the
assumption that these students
have more capacity to pay.

They required voucher

applicants to submit
documents that will help
assess their financial capacity
for purposes of priorization,
but since it was only the first
year of implementation of
SHS and voucher program,
DepEd decided to accept all
students who submitted their
applications.

Regarding those who are also

recipients of other
scholarships, the voucher
subsidy is a fixed amount that
is not given as cash to students,

425
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
it is paid directly to the schools
through fund transfer.

On considering the process

that the financial capacity of
the grantees be assessed on a
yearly basis and not just for
the initial (one-time)
assessment only

To ensure that the Voucher

Program Beneficiaries finish
their SHS education, the SHS
VP subsidy covers two years
of education-Grades 11 and
12. The grantees shall
continue to receive financial
assistance as long as they get
promoted to the next level and
are enrolled in a non-DepEd
SHS provider.

The DepEd does not disqualify

grantees if there are changes in
their financial status.
However, DepEd shall
consider the COA Audit
Team’s recommendation
when reviewing and re-
assessing the guidelines.

On establishing strategy to
validate and monitor
compliance with rules and
procedures of the program
and to assess PEAC/FAPE
performance regularly

Pending the creation of a full-

time unit that will manage the
program, an interim Project

426

Observations and
Ref.
Recommendations
3. Out of the total allotment CAAR
of P8,966,176,422.00 for CYs 2016
2014 to 2016 provision for Paras.4
Science and Mathematics -4.35
Equipment (SME) program
consisting of three projects,
P1,220,123,879.00 was not
utilized and had lapsed, while
P792,790,343.00 is expected to
lapse by end of CY 2017 if
problems on delayed
procurement cannot be remedied.
Further, the awarded contracts
for P2,443,289,053.00 was
already due for termination on
account of breach of
contract/default of the supplier.
In view of these deficiencies, the
program suffers implementation
setbacks, depriving the recipient
schools with the needed SMEs as
targeted by DepEd.
Moreover, the Management
through the Bids and Awards
Committee (BAC), failed to
institute appropriate remedy
measures to immediately address
the default in the contractual
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
Management Office (PMO)
for GASTPE at the Central
Office was created through
DO 16, series of 2016. The
interim GASTPE PMO
coordinates with and performs
monitoring and oversight
functions on PEAC. Proposal
for the creation of the
GASTPE PMS was already
submitted to the DBM.
The budget for 2014 was not
utilized since the award for
2014 bidding did not push
through and was bidded to the
latter part of 2015, hence, the
lapse of allotment for lack of
time to bid the project;
The obligation for termination
involved only one contractor,
Philab who has questionable
deliveries since not all items
passed the quality control
inspection and also incomplete
delivery to the sites. The
budget for this contract
amounting to P116,112,674.00
can still be utilized and can be
subjected to another bidding
once the termination becomes
final since the fund was duly
obligated. The contract was
recommended for termination
last March 15, 2017.
BLR – Cebu concurred with
COA observation that there
was a delay in the FY 2014
bidding that caused the
427
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
obligations incurred by Philab domino effect of the bidding of
Industries Inc. in Joint Venture projects for FYs 2015 and
agreement with Zacto System 2016. DepEd is extra careful
Philippines, Inc., and China not to sacrifice established
Educational Instrument & rules and standards in order to
Equipment Corporation, as the fast track the awarding of
company was able to participate projects.
in the subsequent biddings and
was again awarded several The huge budget for the SMEs
contracts, undermining the has challenged the capacity of
possible risks it poses on the DepEd to handle bid ticket
program’s implementation. items but the small DepEd
Besides, two advance payments units involve in the bidding of
of P42,916,901.04 and the project has stretched their
P211,906,724.01 were granted to limits to vigorously conquer
the same supplier for the the high expectations.
subsequent awarded projects.

We recommended the
Management that:

For unutilized SME Budget:

a. adhere to the procurement Not Implemented

law giving importance to
the process of post
qualification on which the
DepEd made lapses in
determining the supplier’s
responsiveness to the
project that led to a huge
setback on the SME
project;

b. conduct a rigorous market Not Implemented

survey to obtain a more
objective and reasonable
estimates to encourage
more bidders to
participate, or minimize
failure of bidding;

428
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
c. consider decentralization Not Implemented
of procurement at least at
the regional level or those
regions which are already
well equipped to handle the
procurement;

d. assess the availability and Not Implemented

capabilities of local
markets or manufacturers
in the country to supply the
needed SMEs;

e. strictly evaluate bidders’ Not Implemented

track records in awarding
contracts; and

f. revisit existing guidelines Fully

and procedures in the Implemented
procurement for possible
enhancement and to
consider previous problems
encountered.

For breach of contract by

Philab Industries Inc:

g. conduct investigation on Not Implemented

the validity and propriety
of the awarded contracts to
Philab Industries Inc. and
its Joint Venture Partners
and institute appropriate
sanctions against
responsible
officers/employees when
warranted;

h. institute forfeiture of Not Implemented

performance
bond/securities and

429
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
immediately demand for
the return of the advance
payments of
P254,823,625.05;

i. impose administrative Not Implemented

penalty against the Philab
Industries Inc. and its Joint
Venture partners as
provided under Rule XXIII
of the Revised IRR of RA
9184; and

j. require NSTIC monitoring Not Implemented

teams in coordination with
the Asset Management
Division to strictly monitor
supplier’s compliance with
contractual commitments,
especially for contracts
under massive projects that
will significantly affect the
achievement of the
Agency’s goals/mandate
and address the issues
causing the inefficient
delivery of the project.
4. The CYs 2014 and 2015 CAAR NCR
delivered SMEs to various 2016
recipient schools were not fully Paras.5 DOs Las Piñas, Muntinlupa,
utilized due to non-readiness of -5.11 Pasay, Parañaque
the recipients to accept the Management in DOs Las
deliveries for lack of suitable Piñas, Muntinlupa, Pasay and
classrooms or laboratories, Parañaque agreed to
non/late/partial delivery of SME implement the
items in the package/kit allotted recommendations.
per recipient schools, lack of
training and the reported missing SDO San Juan
or unaccounted items. Further, SME items are being utilized
non-compliance with the DepEd to improve and enhance

430
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Order No. 45, s. 2006 had quality of learning and
resulted in unaccounted delivered teaching Science and Math
SMEs in the books of the subjects, and the items when
recipient DOs/IUs. not in use are stored properly
to prevent exposure to the risks
We recommended that the CO of loss and deterioration. Fully
and the officers of concerned Implemented
SDOs to establish proper SDO Marikina
accountability on the missing Inadequate space for Science
and/or unaccounted items as Laboratory is still not
noted during inspection by the addressed.
Audit Team. In case of neglect
of duty, impose appropriate SDO Las Piñas
sanction against the erring SME packages are properly
personnel for the loss of the recorded and accounted for but
delivered items. still in process of filing and
securing records and
documents such as DRs, IARs.

SDO Pasay
Some schools are just starting
to prepare the proper
procedure for the receipt and
recording of properties.

CAR

SDO Kalinga
Coordinated with the CO for
the cost allocation. However,
no report on deliveries was
prepared.

RO I

SDOs San Fernando City, La

Union, Candon City and Vigan
City

Management agreed to comply

with the recommendations.

431
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO II

SDO Nueva Vizcaya

Management will require the
submission of Property Form 1
to the SDO to facilitate the
consolidation and recording of
these assets in the books of the
SDO.

The Supply Officer informed

that as of February 15, 2017,
Package 19 and 13 of Philab
Industries, Inc. and
Eduresources Publishing, Inc.,
respectively, have just
delivered the items for the
SME and for the rest of the
packages. They also informed
that they will coordinate with
the CO/RO to the suppliers for
the immediate delivery of the
undelivered SMEs.

RO VI

SDOs Antique, Aklan

SDO Antique assured to
comply with the regulation on
the delivery, inspection,
acceptance and recording of
all properties including SME
procured by CO.

The Education Program

Supervisors of Science and
Mathematics in the DO Aklan
commented that the list of
recipient schools was not
provided to them nor they
were informed of the

432
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
scheduled deliveries of the
SME. Nevertheless, they will
adhere to the
recommendations as to the
monitoring of the utilization of
the equipment and the training
of teachers to maximize the
benefits that could be derived
therefrom.

The Supply Officer of SDO

Aklan commented that the
district and school property
custodians were reminded
several times of the proper
procedures in the delivery,
inspection and acceptance of
properties procured by CO.
For the deliveries received
from August to December
2016, the Supply Officer will
require them to submit the
DRs and IARs to her office.
Copy of DRs and IARs of
SME on file were already
provided by the Division
Supply Unit to the Accounting
Unit for booking up.

The Management assured the

office of their plan of
constructing laboratory rooms
this 2017. Content of the
findings will also be
communicated to the CO who
procured the SME for further
actions. Moreover, the
Management will meet with
the School Heads to discuss
possible actions while more
permanent measures are being

433
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
set-up.

RO XIII

SDOs Agusan del Sur,

Bayugan City
Management in SDO Agusan
del Sur settled to look for a
latest DepEd Order to support
the current practice of the CO
and the SDO as to the
reporting of delivery and
inspection, as well as the
recording of those items in the
books of both the agencies.
The Supply Office of SDO
Bayugan City was not
provided with an allocation list
or schedule of deliveries. The
SDO has disseminated the
allocation list and the delivery
schedule to the districts and
recipient schools perDepEd
Order No. 45, s. 2006. The
school heads were required to
confirm during the delivery of
the SMEs whether there are
discrepancies between the
allocation list of SMEs as
against the actual SMEs
delivered.
5. The implementation of CAAR The AMD is in constant
CY 2015 DCP with allocated 2016 coordination with the
budget of P7,400,223,434.82 Paras.6 Accounting Division in order
was not fully attained due to -6.28 to record and to transfer all
extended timelines in the ICTS equipment, however,
performance of some the only problem is the late
procurement activities and submission of the copies of
inability of the awarded suppliers DRs and IARs by the
to comply with the targeted suppliers.

434

Observations and
Ref.
Recommendations
delivery period, thus, the ICT
equipment was not made
available to the intended
beneficiaries at the most
opportune time.
Moreover, to address the
perennial delay encountered in
the program implementation, the
DepEd transferred
P2,800,639,480.00 to United
Nations Development
Programme (UNDP) to handle
the procurement of ICT
equipment covering the CYs
2015 and 2016 budgets.
We recommended that the
Management require the
concerned offices to:
a. advise ICTS to submit a
justification for the grant of
contract extension of the
two identified suppliers,
otherwise, it is
recommended that the
Accounting Division should
impose the corresponding
liquidated damages;
b. consider decentralization
of procurement in selected
areas in line with the fiscal
responsibility principle for
an efficient and effective
functioning of the DepEd’s
procurement system;
c. for fund transfer made to
UNDP, provide necessary
documents, such as the
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
As to UNDP packages, copy
of the Transfer of Title of
Assets for DepEd Lot 2
Computerization Package is
submitted to the Audit Team.
For other lots, AMD is still
waiting for the transfer
documents from UNDP.
On deficiencies noted in the
procurement of ICT, the PMS
Director explained that it took
four bidding activities before
the 14 lots were awarded out
of the 20 lots. The first two
failed bids were attributed to
the non-submission of bids
that resulted in the intensive
review by the end-user ICTS
of their technical
specifications vis-a-vis the Fully
budget. Notably, the BAC Implemented
started the procurement
process earlier than the
projected timelines indicated
in the APP, however, the two
failed biddings resulted in the
delay of implemenation of the
project. Likewise, the
procurement of ICT
equipment which requires the Not Implemented
submission of samples, testing
and post-qualification of the
Lowest Calculated Bids is a
rigorous process that resulted
in the lengthening of the post-
qualification period.
Management ensured to Not Implemented
continue to endeavor together
with other offices to comply
435
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
cost-benefit analysis, with the timelines prescribed
detailed breakdown of in the Revised IRR of RA No.
items to be procured 9184.
including other
components chargeable out
of the transferred funds to
UNDP, operating
guidelines to include
accounting and reporting
requirements for the
settlement thereof, to
establish the propriety that
the support services of
UNDP is more
advantageous to the DepEd
and the government as a
whole; and

d. designate or assign specific Fully

unit which shall coordinate Implemented
with UNDP regarding the
transfer of ownership for
the ICTS equipment and
instruct the Accounting
Division and AMD to
coordinate and effect
appropriate adjustment in
the books.
6. Aside from the delayed CAAR NCR
procurement and deliveries to 2016
recipient schools, other factors Paras.7 SDO Manila
adversely affecting the -7.8 Submission of certificate of
implementation of DCP such as proper electrical wirings and
non-utilization due to outlets has been required from
unreadiness of recipient schools, the City Electrician
lost ICT packages, and defective
poor after sale assistance from SDO Quezon City
suppliers, were also reported that ICT unit has been conducting
resulted in non-utilization and the monitoring of the school
eventual deterioration of the ICT readiness for the DCP. The

436
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Equipment. Certification on proper
electrical wirings and outlets
We recommended that the will be submitted to the Audit
Management require the Team.
concerned officers to:
SDO Caloocan
a. assess the readiness of the The Division ICT Officer Not Implemented
intended school recipients issued a Division
particularly infrastructure Memorandum reiterating the
requirements before proper storage of the delivered
including them as ICT equipments. Prior the
beneficiaries of the ICT delivery, all schools have e-
packages; classrooms and the delivery
and installation were made by
b. consider the allocation of the supplier in their ICT Fully
budget for the construction classroom. The ICT Officer Implemented
of computer classrooms already monitored the said
especially for those without packages and all schools were
funds for the purpose; compliant.

c. revisit the guidelines and SDO Navotas Not Implemented

procedure on the
implementation of DCP at
all levels, review the
process involved in the
recording of deliveries and
establishing accountability
over the ICT packages;
d. strictly enforce the
warranty and after sales
support provision of the
contracts against the
suppliers by charging
liquidated damages or
blacklisting the same from
other DCP procurement;
and
e. impose appropriate
sanctions under RA No.
There was a delay in the
delivery and installation of the
DCP Packages for some
schools in the Division of
Navotas, because of the
simultaneous transmission of
batches 33 and 38. The
Division Office informed the
Central Office through email Not Implemented
concerning this matter.
SDO Valenzuela
The SDO Valenzuela
organized a monitoring
Inspectorate Team composed
of the following:
1. EPS in TLE
2. ITO Not Implemented
3. Facility Officer/Engineer

437
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
9184 on suppliers who 4. Supply Officer
refused to rectify defects or 5. SEPS in M&E
replace
missing/incomplete/damag Conducted Quarterly
ed units/parts on delivered Monitoring in the utilization of
items. ICT equipment.

CAR
SDO Ifugao was still gathering
the DRs and IARs while SDO
Kalinga fully implemented the
recommendation. On the other
hand, SDOs Apayao, Baguio
and Benguet partially
implemented the
recommendation.

RO V

SDO Tabaco City

The SDO released a
Memorandum to all concerned
schools, careful assessment on
the adequacy and availability
in infrastructure/counterpart
during inspection and
validation of the necessary
requirements were made; and
advised the recipient schools
to immediately notify the
suppliers of any deficiencies
noted in the operation to
address the defects while
under warranty and continuous
monitoring of these DCP
packages.

RO VI
SDO Antique
The SDO reported the
defective computers to the

438
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Supplier and to the Central
Office and conducted
troubleshooting and
maintenance for schools
monitored that have defective
computers. Laptops were
delivered a week after the
partial delivery of DCP
Packages to schools for Batch
26.

SDO Passi City

School Heads of Mambiranan
and Salngan-Alimono
Elementary Schools made the
defective laptops repaired.

RO XIII

SDO Surigao del Sur

The Management crafted ICT
Monitoring and Evaluation
Tool and ICT Work Plan to
assess the condition and
utilization of the schools'
computer laboratories and to
closely monitor the status of
DCP packages.

SDO Butuan City

The Management directed
immediately the IT Officer to
conduct monitoring on the IT
Equipment of the schools and
assess the actual condition as
to its functionality status as to
the present.

SDO Dinagat Islands

School ICT coordinators will
contact the suppliers in case of

439

Observations and
Ref.
Recommendations
7. Structural and other CAAR
identified defects that were not 2016
rectified/fixed in the school Paras.9
buildings implemented under the -9.8
Public-Private Partnership for
School Infrastructure Programs
(PSIP) resulted in either idle or
structurally unstable/defective
school facilities in Regions II,
IV-A and VI. Likewise, there
were noted documentary
requirements of the National
Building Code of the Philippines
(NBCP) that were not yet
submitted in Region IV-A.
We recommended that the
Management of concerned DOs
in Regions II, IV-A and VI to:
a. immediately notify the
Division Physical Facilities
Engineer on the defects
identified for proper
coordination and reporting
with appropriate DepEd
office in charged with PSIP
to ensure that the
Proponent comply with its
obligation to repair or
rectify, at its own cost, all
defects and deficiencies on
project’s compliance with
the MPSS for the safety of
the students/teachers; and
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
problems with DCP packages
and shall inform the Division
IT Officer if there is a need to
pull-out or change the unit.
RO IV-A
SDO San Pablo City
Management informed and
notified the contractor through
a letter dated February 8, 2016
regarding the observed defects
on all PSIP I Projects. On-
going inspection and
rectification works are being
conducted by the contractor.
The requested copies of
Certificates of Completion and
Certificates of Building
Occupancy are not yet
forwarded to the SDO.
SDO Sta. Rosa City
The Management of SDO Sta.
Rosa City tried to coordinate
with the contractor but the Not Implemented
latter refused to coordinate
with the DO. The case was
also referred to the DepEd CO
but as of this date, no advice or
information was received from
them.
RO VI
SDO Antique
The Management commented
that the defects were reported
to the contractors for
corresponding correction.
440
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
b. ascertain compliance with Not Implemented
the PD No. 1096, the 1997
NBCP and other relevant
rules and regulations
related to construction.
8. The late release of Sub- CAAR NCR
AROs by the CO for the 2016
implementation of the School Paras.1 ROP
Furniture Program (SFP), delay 0-10.1 ROP Management commented
in the execution of procurement that the cause of delay in the
activities and the inability of delivery of school furniture is
suppliers to meet delivery dates due to some factors such as the
had compromised the size of the truck used for the
availability of school furniture delivery and road accessibility.
amounting to at least Nonetheless, the Management
P153,353,807.69 in six Regions, will impose liquidated
in disregard of the urgent nature damages for the delay in the
of the program to timely address deliveries. School furniture
the need for school furniture. which were found damaged
Other deficiencies such as: (a) during ocular inspection by the
noted defects/inferior Audit Team had already been
quality/non-compliance with the replaced.
technical specifications of at
least 2,043 delivered school SDO Marikina
furniture; (b) delay in the Management made follow-up
completion of new school of the CO and RO
buildings intended to implemented procurement
accommodate the deliveries in intended for San Roque
27 recipient schools; and National High School,
(c) inconsistency/omission of the Conception Integrated School,
actual delivery dates in the DRs and Parang High School and
and non-compliance with informed them the need to
documentary requirements deliver the furniture as the
contributed to the program’s building of the recipient
unsatisfactory implementation. schools under the jurisdiction
of the DO were nearing
We recommended and the completion and ready for use Fully
concerned Management on the opening of classes in Implemented
agreed to require the June 2017. On the DO-
submission of the DRs, IAR, implemented procurement,

441
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Certificate of Acceptance and constructions of school
other relevant supporting buildings are nearly completed
documents to determine the and partial deliveries have
completeness of deliveries, to been made to schools which
establish the propriety of have not been delivered with
claim/s for payment by the complete armchairs, tables and
supplier and for proper chairs.
recording by the Accounting
and Property/Supply SDO Caloocan
Divisions. Already made representation
with the DepEd Central Office
and furniture were already
procured and delivered.

SDO Quezon City

No penalties have been
imposed on the Supplier.

RO II

Various SDOs
As of this date, all school
recipients in the Divisions of
Cauayan City, City of Ilagan
and Tuguegarao City had been
delivered with the
corresponding allocation.
Also, items that were found
with defects during inspection
were withdrawn for
rectification and said items
were already delivered on site.
For the SDO Batanes, the
goods were not yet delivered
due to Design Modification
from steel and wood
combination to all-wood
composition which is more
adoptable to weather condition
in the area.

442
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO III

SDO La Union
All furnitures have been
delived to all the recipient
schools

SDO San Fernando City

made all deliveries to all the
schools after thorough analysis
on the distribution of
armchairs

RO IV-A

SDOs San Pablo City; Sta.

Rosa City; and SDO Lipa City
The Division Accountant of
SDO San Pablo City promised
to comply with the
recommendation and ensure
that transactions with
incomplete supporting
documents will not be paid and
the Supply Unit and the BAC
assured that they will execute
contracts in conformity with
the Philippine Bidding
Documents for the
Procurement of Goods.
In SDO Sta. Rosa City, the
OIC-Schools Division
Superintendent will require all
the members of the BAC to
strictly comply with the
provisions of RA No. 9184 and
its IRR and regularly
coordinate with the DepEd
Central Office for the timely
issuance and release of
SAROs to ensure the efficient

443
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
and effective implementation
of BEFF.

In SDO Lipa City, the

Management promised to
settle the issue with Ma.
Gracia Furniture and General
Merchandise. The BAC and
the Property and Supply Unit
will firmly adhere to the
pertinent rules and regulations
with regard to inspection and
acceptance as well as strict
compliance with RA 9184.

RO V
DepEd CO already issued a
Memorandum and SARO for
the implementation of the
School Furniture project even
though construction have not
yet been finished, thus, they
proceeded with the
procurement. Management
further explained that
deliveries and inspection
passed from inspection
committee and were accepted
by the School Heads in good
condition. Management
accepted and confirmed that in
some schools, the furniture
were only kept on the walkway
of the building under
construction due to acute
shortage of classrooms.
Considering the noted
deficiencies, the DO
immediately instructed the
recipient schools to utilize the
furniture in the classrooms and

444
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
not in the stockrooms. The
Schools Division
Superintendent immediately
instructed the Heads of the
recipient schools to submit an
Inventory Report of the
damaged/deteriorated
armchairs and teachers’ tables
delivered in CY 2016 for
immediate replacement by the
Supplier since the items are
still under the warranty period.
Moreover, orientation will be
conducted to School Heads
and Property Custodians on
the proper handling,
stockpiling, storage,
safekeeping and utilization of
school furniture to avoid
further deterioration and waste
government funds.

RO VI

SDO of Antique
During random inspection
prior to delivery, the furniture
were in good condition. Due to
lack of feedback from school
recipients, they also issued a
memorandum encouraging
schools to submit reports to the
DO if there are problems or
defects in the furniture
received and the same is
forwarded to the supplier for
rectification. Management
assured to coordinate with the.
BAC regarding the
deficiencies in the
procurement process.

445
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO X
The BAC and the BAC
Secretariat were instructed to
inform the supplier to fast-
tract the delivery of armchairs
in accordance to the stipulated
number of days. The TWG or
the assigned unit will conduct
separate inspection and
monitoring on said lapses and
render liquidated damages to
be imposed on the final billing
of said contract.
9. Weakness in the CAAR NCR
procedures of the centralized 2016 The Accountant is providing
payroll system and the leniency Paras.1 the SDOs/IUs on a quarterly
in budgeting, resulted in: 2- basis with the status of
a) presence of excess 12.10 remittances aimed at
remittances amounting to reconciling the balances of the
P25,999,282.27 by the Dos/Ius reciprocal accounts.
of their payroll requirements to
ROP to avoid the lapsing of In a letter dated March 20,
Notice of Cash Allocations 2017, Management explained,
(NCAs) at the same time with that, it has implemented the
under remittances of following procedures to
P103,754,171.82 due to simplify payroll transactions:
insufficient allotment to cover
the required remittance, which • GSIS remittances are now
led to the improper use of the being processed by all the
over remittances to augment the DOs for elementary
funding requirement of other teachers/non-teaching
Dos/Ius with budget deficit; personnel effective July
b) discrepancies between 2014;
the payrolls amount of
P7,326,577,385.85 and • Philhealth remittances
deposits/remittances of were already transferred to
P7,291,997,632.75 per books of all the 16 SDOs/IUs
the NCR (ROP) and its Dos/Ius effective January 2017 to
as well as the address the concerns on the
unidentified/unreconciled lump Philhealth Electronic

446
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
sum and abnormal negative Premium Remittance
balances of Due from Operating System and updating of
Units of ₱865,846,694.45 and records;
₱166,275,346.28, respectively,
in Region V; and • Issued DepEd-NCR
Memorandum Order dated
c) non-deduction and September 26, 2016
remittance of P92,905,087.58 requiring the preparation of
required contribution for GSIS only one check or LDDAP-
and P3,002,417.57 in favor of ADA per every payroll
Pag-IBIG in Region XI; and month for easy monitoring
over/double payment of salaries of fund transfers/deposits;
amounting to P1,172,558.40 in and
Regions I and X.
There are plans of
We recommended that the downloading the payroll
Management undertake the processing to the field and the
following: agency is still waiting for the
new payroll system developed
a. require the by DepEd CO for the roll out Not Implemented
settlement/refund of the of payroll.
overpaid salaries in
Regions I and X. Strictly The Chief Accountant assured
ensure no duplication of that the SDO Navotas will
records of employees in the comply with the submission of
payroll data base to avoid deposit slips to the RO.
double payment of salaries
and deduct in the payroll RO I
all monetary value of leaves SDOs Pangasinan I,
without pay using the Pangasinan II, Alaminos,
formula prescribed under Dagupan committed to comply
CSC Circular No. 08 s. with the audit
2014 and DepEd recommendations. The SDO
Memorandum No.78 s. San Fernando has already
2016; informed the teachers of the
unsettled overpayment of
b. draw journal entry to salaries while the SDO Vigan Fully
correct the inappropriate issued a memorandum to the Implemented
take up of payroll employee in charge of payroll
deductions in Region VIII; preparation advising him/her
and to be more accurate in her

447
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
c. ensure that authorized computations. Moreover, the Not Implemented
deductions are done in the SDO Candon submitted the
order of preference in required forms to the RPSU
Region XI as prescribed in for LWOP deduction and
the GAA and the full during the exit conference, it
implementation of the was agreed that the
ATM payroll system in corresponding Notice of
Region XIII to avoid the Disallowance shall be issued
risk of possible loss or for the overpayments made.
misapplication of public While SDO Urdaneta
funds. informed that Ms. Basbas has
already paid the overpayment
and committed to strictly
monitor timely submission of
DTRs and Form 48.

RO III

The autonomous schools

under SDO Pampanga
informed that they will
coordinate with the ROP and
that their schools are not yet
ready to implement the payroll
system due to lack of
manpower, equipment and
supplies and trained personnel.
The RPSU shall first update,
reconcile records for GSIS
remittances, loans and other
records for proper and
complete recording of payroll.

SDOs Nueva Ecija,

Cabanatuan City, Science City
of Munoz and Gapan will
advise their schools to apply
for the implementation of the
school-based payroll system.

448
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO IV-B
This perennial problem of
over/under remittances of
payroll funds are being
analyzed and will come up
with the solution that the
Summary of Disbursements
will be net of the SDOs’
under/over remittances.
Management issued a
Memorandum dated February
26, 2016 informing all
Division Accountants of
continuous monitoring of trust
account-remittances.

RO V
Management replied that
reconciliation of the reciprocal
accounts Due to Regional
Office versus Due from
Operating Units is still being
conducted by the Regional
Office-Finance Division and
its Operating Units (SDOs and
Secondary Implementing
Units). In this regard, several
Secondary IUs had already
submitted their Report of
Reconciliation and necessary
adjusting entries were made
per JEV Nos. 01-2016-10-731;
01-2016-10-732; 01-2016-11-
796; 01-2016-11-797, among
others.

Management further
commented that during the CY
2016 Year-End Seminar
Workshop held last January
11-13, 2017 at the Avenue

449
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Plaza Hotel, Naga City, the
Operating Units were given
Subsidiary Ledgers of their
Due from Operating Units
account as of November 30,
2016 for reconciliation. They
were also instructed to prepare
their working papers of the
unreconciled accounts, and
submit the same with the
attached deposit slips,
validated LDDAP-ADA of the
fund transfers made, Summary
Payroll Disbursement and
others to support their claim.

RO X
Starting September 2016, the
policy of “no
integration/adjustment of
salaries will be effected
without ensuring the deletion
of its name from the former
directory/station even in the
absence of request of the DO
for a Certificate of Last
Payment (CLP). This is a
deviation from the old system
wherein deletion of the name
is dependent on the request for
the CLP.

RO XIII
Management had a hard time
collecting all the DTRs of
teachers assigned in the island
schools; teachers have no
ATM cards yet due to lacking
requirements, however, it
committed to implement the
audit recommendation.

450

Observations and
Ref.
Recommendations
10. Fund transfers made by CAAR
CO, NCR (ROP) and Region V 2016
(DO Camarines Sur) to various Paras.1
government agencies and non- 6-
government organizations taken 16.20
up in the books as receivable
account subject to liquidation
includes long outstanding
accounts as of year-end of
P310,457,780.00 aged over one
year to more than 10 years due to
non-monitoring of the
submission of Liquidation
Reports as required under COA
Circular No. 94-013 dated
December 13, 1994, COA
Circular No. 2007-001 dated
October 25, 2007 and COA
Circular No. 2016-005 dated
December 19, 2016, thus,
indicating the DepEd Offices’
inability to keep tract on the
fund transfers made.
We recommended that the
Management investigate fund
transfers made to various
NGOs and validate if these
agencies actually exist or had
actually existed.
11. The completeness and CAAR
existence of the Inventories with 2016
total account balance of Paras.1
P406,977,744.29 in 11 Regions 8
is of doubtful validity due to: a)
absence of physical inventory
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
CO
On-going reconciliation
NCR
ROP
Management committed to
undertake the following: a)
assign a specific staff to handle
dormant accounts who will
focus on retrieving the
documents to support the
balances thereof; b) secure
copies of the Journal Entry
Vouchers (JEVs) pertaining to
the receivables from the GSIS
of P1,665,009.13 and
thereafter will make
representations with the GSIS
for possible refund of the
overpayment; and c) the
Accounting Unit will closely
coordinate with the Supply
Unit and the PS-DBM as to the
status of the unliquidated fund Not Implemented
transfers.
RO V
SDO Camarines Sur
The SDO Management will
file a request for the write-off
of the dormant receivables
account and will follow up
liquidation from the LGU.
a. Non-compliance with
proper procedures and
controls pursuant to Chapter
8, Volume 1 of the GAM
NCR

451

Observations and
Ref.
Recommendations
taking/supporting details or
failure to submit Report on the
Physical Count of Inventory
(RPCI); b) non-maintenance of
updated Supplies and Ledger
Cards (SLC) and Stock Cards
(SC); c) overstatement by
P15,783,450.62 pertaining to
unrecorded issuances and
recognition of undelivered
purchases; and d) other lapses,
contrary to applicable provisions
of Chapter 8 of the GAM,
Volume I.
We recommended that the
Management observe close
coordination among the
concerned DepEd offices
officials for proper
documentation, recording and
complete accounting of the
textbooks/instructional
materials and SME packages
procured by the CO and
received by the
DOs/IUs/Schools and draw the
appropriate journal entry, and
in case of issuances of the
items, require the end-
user/responsible person to
acknowledge receipt in the
ICS.
Status of
Implementation
Management's Actions and Results of
Auditor’s
Validation
SDO Quezon City
Guidelines will be issued to
reiterate the proper control in
recording transactions.
SDO Pasig
No SLC and Stock Cards
maintained for supplies
inventory.
SDO Pasay
Started to maintain their
respective records, however,
IUs still need to reconcile their
records.
Not Implemented
RO X
Management is conducting a
monthly reconciliation of
office supplies per record with
the actual physical count.
b. Misstatement of the
Inventory accounts due to the
following reasons:
CAR
Tabuk City NHS and Eastern
Bontoc National Agricultural
and Vocational HS fully
implemented the
recommendation by making
the necessary adjustments.

RO VII
The Property and the
Accounting department are
still doing the necessary
reconciliation for all PPE and
inventory asset account.

452
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
RO X
The Bookkeeper has written
off the said accounts and
reflects the same as a reduction
from the government equity
since these inventories are
expensed in prior years.

c. Unreliable account balance

of P11,261,659.29 compared
to the minimal quantities of
stock in the storage rooms of
NCR-DO Muntinlupa

SDO Muntinlupa did not

implement the
recommendations.

d. Dormant Inventories
account balances totaling
P279,206,604.67

NCR-SDO Quezon City

The SDO is currently
complying with the standards.
The SDO is also reconciling
the dormancy of the balances
and will take necessary
adjustments for these
transactions.

Region V-SDO Camarines Sur

Division
Absence of inventory count
and unavailability of report of
supplies and materials issued
(RSMI) in prior years.
Conduct of physical inventory
count is on-going.
12. The existence, CAAR CO

453
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
completeness and valuation of 2016 Reconciliation activity will be
PPE accounts balances cannot be Paras.1 conducted by AMD together
fully relied upon due to noted 9- with other concerned offices to
deficiencies in CO and 13 19.15 reconcile the discrepancies
Regions such as: a) reporting between property and
difference of accounting records.
P23,414,327,275.25 between the
CO accounting and property Absence of physical inventory
records; b) non-performance of to verify existence and
physical inventory to verify completeness of the reported
existence and completeness of assets – P20,565,319,146.52
the reported assets worth at least
P20,565,319,146.52 in the NCR
Regions; c) non-maintenance of Conducted physical count in
PPELC and PC or other records ROP and SDO Parañaque but
supporting PPE balances; and d) no submission was made to the
various errors and omissions in Audit Team while SDO Las
recording transactions affecting Piñas submitted their report to
PPE accounts like inclusion of the Audit Team.
semi-expendable items costing at
least P154,068,245.61; On the other hand, in SDO
unrecorded TAPAT, no physical count of
unserviceable/demolished/razed PPE was made. Likewise, no
by reconciliation was made in
fire/losses/transferred/disposed SDO Parañaque.
PPEs amounting to
P125,870,052.52; unrecorded SDO San Juan
properties of P628,900,400.34; Directed the designated
completed school buildings still Property Officer to conduct
in Construction in Progress physical stock-taking and
account of P532,714,034.49; prepare inventory report of all
existence of unsubstantiated PPE items of the school.
balances in total amount of
P757,710,107.68; and other CAR
errors and omissions in
classification to proper PPE ROP
accounts and insufficient and/or Physical inventory is on-
non-provision of depreciation. going.

We recommended that the SDO Benguet Not Implemented

Management of concerned Inventory Team for Office

454
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
offices closely coordinate with Supplies was created and will
the concerned DepEd CO conduct Inventory of supplies.
officials and other concerned
offices for proper RO I
documentation, recording and
complete accounting and/or SDO La Union
necessary disclosures in the Management has already
Notes to Financial Statements reclassified PPE costing below
regarding status of ownership P15,000 as semi-expendable.
or rights over agency The supply unit is currently
properties being held/used. conducting the physical
inventory for the whole
division.

SDO Laoag City

The management designated a
focal person that will be
responsible in the titling of
Land. The management started
to reclassify PPE costing
below the capitalization
threshold.

SDO Candon
The management has already
created a Division Appraisal
Committee. The Supply
Officer is currently conducting
a physical count of inventories
of Division Office Properties

SDO Alaminos
The inventory of equipment is
on-going.

SDO Batac
Management conducted
Physical Inventory and
submitted RPCPPE.

SDO Pangasinan II

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 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
The SDO conducted PPE
inventory validation of
schools.

SDO Pangasinan I
The management has already
instructed its covered schools
to submit to the responsible
Department the physical
inventory of their property,
plant and equipment.

RO V

SDO Legazpi City

Physical inventory was made
on August 31, 2017 and
subject to reconciliation with
the accounting records.

SDO Camarines Sur

The Supply Officer has
conducted orientation for all
property officers of the
different schools where he
provided for a template on the
inventory of PPE. 2) To ensure
that all schools shall submit
the PPE report, the
Management requires that all
school head/Principal must
secure school year-end
clearance in which a Report of
Physical Count of Inventory is
one of the requirements before
clearance is granted. 3) The
Accountant has already
coordinated with the DPWH
Accountants of the
deficiencies noted in the
documents submitted but was

456
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
not yet returned for book up.
SDO Iriga City
A conference had already been
conducted by the SDS. The
creation of Inventory
Committee is on process.

SDO Naga City

The Supply Unit has submitted
the Report on the Physical
Count of PPE – School
Building Account at the COA
office. The Division Supply
Officer and the Division
Accountant made an
agreement to reconcile PPE
account balances CY 2016
starting October 2017.

RO VI- SDO Passi City

Supply Officer already
submitted the RPCPPE and
reconciled Property Cards
with the PPE Ledger Cards of
the Accounting Unit.

RO XIII

SDO Surigao City

Updating of PPE Ledger Cards
by the accounting staff in-
charge is on-going.
Reconciliation of records will
be done as soon as inventory
report is done by the Supply
Officer. Corresponding
adjustment will be made when
necessary to reconcile the
actual inventory and the
accounting records.

457
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
SDO Bislig City
Reconciliation was done
between the supply and
accounting records to wit:
Property Cards and Stock
Cards reconciled with
Supplies Ledger Cards and
Property, Plant and Equipment
Ledger Cards.

NIR

SDO Bago City

The Management conducted
physical inventory.

SDO Escalante City

There was delay in gathering
of supporting documents.

Non-maintenance of PPELC
and PC or other records
supporting PPE account
balances
NCR SDO San Juan
Management directed the
Accountant and the Property
Officer in both offices to
maintain PPELC and PC,
respectively, for all PPE items
and bring balances to
agreement at any given time.

Various errors/omissions in
recording transactions
affecting PPE accounts

NCR
Breakdown of construction
projects transferred from
DPWH to the Division of

458
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Marikina remained
unidentified. While SDO
Valenzuela is still waiting for
data from Schools.

CAR

SDO Abra has yet to fully

reclassify the cost of
completed projects from CIP
to the appropriate asset
accounts while SDO Kalinga
has already made the required
reclassification.

With regard to the unrecorded

13. The laws, rules and CAAR
regulations on the granting, 2016
utilization and liquidation of Paras.2
cash advances under Section 89 1-
of PD No. 1445, COA Circular 21.12
Nos. 97-002 and 2012-004 dated
February 10, 1997 and
November 28, 2012,
respectively, as well as DepEd
Order No. 12 s. 2014 dated
March 6, 2014 on downloading
of MOOE to schools, were not
DCP and SME, SDO Apayao,
Antadao NHS, Guinzadan
NHS and MPGCHS obtained
copies of the PTR from the CO
and recorded the DCP
packages. However, DO
Ifugao was still gathering the
DRs and has yet to record the
DCP packages amounting to
₱40.63 million and SME sets
of ₱8.64 million, which were
received in 2016.
CO
Issued demand letters to
accountable officers.
NCR
SDO Manila
As of December 31, 2016,
record showed the CA balance
of P6,103,902.94. As of March
22, the said amount was
reduced to P403,302.00.

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 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
strictly observed at the CO and in SDO Caloocan
14 Regions resulting in Audit Demand Letters were
accumulation of unliquidated issued for outstanding cash
cash advances granted to officers advances granted for the year
and employees and school heads 2016 and 2017. For the years
totaling P2,128,524,935.82 as of 2015 and below, no Subsidiary
December 31, 2016. Moreover, ledgers were obtained from the
misclassification of accounts, previous accountant.
erroneous recording, absence
of/unreconciled GL and SL, SDO Pasig
negative balances and deposit in Reconciliation for December
the personal bank account of 2015 and 2016 had been
school heads cast doubts on the submitted to COA.
reliability of the Advances
account balances. SDO San Juan
Implemented stricter internal
We recommended that the control on cash advances.
Management:
SDO Valenzuela
a. monitor the granting and All outstanding prior year's Fully
liquidation of cash cash advances were already Implemented
advances through the liquidated. Cash advances
maintenance of updated were not given to designated
subsidiary ledgers and officers with expired bond.
systematic record keeping Newly designated School
to ensure immediate Heads are being required to be
liquidation thereof and bonded before MOOE
proper recording to downloaded checks are
prevent errors and processed and released.
negative balances; and
CAR
b. observe the Revised Chart Not Implemented
of Accounts in GAM, Vol. SDO Mountain Province
III in classifying and The former school head of
recording of the different Besao Central School
types of cash advances and refunded the amount of
prepare the necessary ₱24,000.00 in January 2017.
journal entries to correct
the misclassification of RO V
accounts in order to reflect
the correct balances of the SDO Albay

460
 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
affected accounts in the The Management is strict in
Financial Statements. sending demand letters and
imposed that those with
unliquidated cash advances
shall not be
considered/included for
promotion.

SDO Tabaco
SDO Tabaco City's
Accounting Office sent several
demand letters addressed to
wife of the deceased principal,
properly notified to submit
documents for clearance of her
husband in order to process his
terminal leave benefit and
deduct/settle the remaining
amount of P78,229.52.

SDO Iriga
There are AO's that can no
longer be located for CA's
granted in CY 2011 and
beyond. Request for write-off
cannot still be requested
because the requirement for
write-off must be at least 10
years per COA Circular No.
2016-005. No records are
available to verify the CAs
granted in CY 2011 and
beyond.

SDO Naga
Management issued another
set of Demand Letters to
concerned
officials/employees,
reiterating prompt settlement
of their unliquidated cash

461
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
advances. As of quarter ended
August 31, 2017, 91 percent of
the year-end balance for
Advances for Operating
Expenses and 70 percent for
Advances for Special
Disbursing Officers were
already settled and credited to
appropriate receivable
accounts.

RO VI

SDO Guimaras
Demand Letters were sent to
accountable officers for the
liquidation of cash advances.
14. Various disbursements CAAR Salaries and Wages
totaling P4,599,772,693.53 2016
included payments of salary, Paras.2 RO I
RATA, monetization, 3-23.4 SDO Urdaneta City
traveling/training, and The SDO instructed Personnel
procurement which were found to require school heads and all
either contravening to existing SDO staffs prompt submission
government laws, rules and of payroll supporting
regulations or not supported with documents.
adequate documentation, thus,
casting doubts on the validity SDO Pangasinan II
and propriety of expenditures. The Management submitted
all the required supporting
We recommended that the documents. Not Implemented
Management of concerned
offices require the concerned RO XIII
personnel and officials to
submit the required pertinent SDO Siargao Islands
documents to establish the Upon verification with the
propriety, reasonableness and payroll in-charge,
regularity of the corresponding Disbursement
disbursements. Vouchers were prepared and
submitted with complete

462
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
attached documents to the
Cashier. Hence, Management
will adhere to COA
recommendation that payment
of salaries and wages of
employees shall be made
through cash advance by the
Agency’s regular Disbursing
Officer instead of paying it
through issuance of individual
checks.

RO X
The mentioned
lacking/deficient documents
have been submitted. In the
future, all documentary
requirements will be attached
before the payment of any
claims.

Special Hardship Allowance

RO XIII

SDO Siargao Islands

Management will adhere to the
recommendation.

Hazard Duty Allowance

RO X

SDO-Iligan City
Require the Health and
Nutrition Section to submit the
required documents.

Performance-Based Bonus

RO X- Various SDOs

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 Status of
Implementation
Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
Submitted the documentary
requirements in the grant of
PBB 2014.

Quarter Allowance

RO IV-B

SDO-PuertoPrincesa City
Requested the officer to refund
the excess amount.

Monetization

CAR
The Personnel Officer
required the submission of
lacking documents from the
concerned payees. The
concerned payees
subsequently complied.
RO IV-B

SDO-Palawan Magara School

for Philippine Craftsmen
(MPSC)
Refunded OR No. 4393028
P315,844.69 and OR No.
4393050P182,039.29.

RO V

ROP
The agency had already
adopted the interpretation of
DBM in the computation of
monetization of leave credits.

SDO Ligao City

Proper determination of the
allowable number of days to

464
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
be monetized chargeable
against personnel's leave
credits was done and ensured
that all the needed
documentary requirements
were attached to the claims.

RO VI

SDO Antique
Required the concerned
persons to comply with the
requirements on leave
monetization.

RO X

Bukidnon NHS
Instructed the AO IV to
exercise due prudence in the
recommendation of approval
of monetization of leave
credits and directed the head of
the Accounting Unit to adhere
to the provisions of DBM
Circular.

Valencia NHS
Abided and followed the
existing CSC Rules on Leave
and COA Circular and be
guided accordingly.

Travelling expenses of
individuals under Contract of
Service.

RO X-ROP
Discussed and justified
exhaustively on our reply to
that Office with the assurance

465
 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
that future essential travel
expenses to be incurred by any
of the personnel shall not be
termed as per diem in
compliance with the
recommendation of that
Office.

RO VI- SDO Antique

Required the needed
supporting documents for
reimbursement.

Procurement of Supplies

SDO Ilocos Norte

All supplies available at DBM
were procured.

SDO Vigan
Out of several items requested
from DBM-PS, only one or
two items are available. Thus,
issued a memorandum
regarding the matter.

SDO Candon City

The management will procure
supplies good for three-month
consumption.

SDOs Pangasinan II and

Dagupan City
Fully implemented

SDO Urdaneta City

Instructed school heads to
purchase office/school
supplies through PS in bulk for
at least three months supply
coverage.

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 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
15. A substantial portion of CAAR CAR
the unremitted balance of 2016 Management in SDO Apayao
P527,328,051.88 in seven Paras.2 informed that a focal person
Regions consists of prior years’ 8 will be assigned to
balances which were not communicate with the GSIS
reconciled with the GSIS records and that a database of
contrary to RA No. 8291 and to employee records will be
the prejudice of the affected developed and deployed for
members. real-time access of
information.
We recommended that the Not Implemented
Management ascertain the RO V
details of prior years’ GSIS
balances through reconciliation ROP
of their records with the GSIS, All GSIS contributions/
remit the adjusted balance deductions for the month of
immediately to the GSIS and December 2016 were already
effect the necessary adjustment remitted on January 5, 2017.
in the books of account.
SDO Camarines Sur
Reconciliation of GSIS
withholding and remittance is
on-going. The Division PSU
Head promised to remit the
amount due to GSIS.

SDO Iriga City

The SDO remitted to GSIS the
amount due.

SDO Sorsogon City

The GSIS Contribution of
Employees of the Division of
Sorsogon City was remitted
within the month. The Due to
GSIS account of Sorsogon
City as of December 31, 2016
has zero balance.

SDO Tabaco City

Recommendations were

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 Status of
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Observations and
Ref. Management's Actions and Results of
Recommendations
Auditor’s
Validation
complied with.

RO VIII
SDO Samar will take action to
improve the situation.
Moreover, they are exerting
efforts to facilitate the
immediate remittance of the
GSIS withheld deductions.

468