PROPOSED AUDIT FOCUS

AREAS FOR CY 2020

A. Financial and Compliance Audit of COVID 19 fund receipt, allocation and utilization

To keep track of receipt, allocation and utilization of COVID-19 funds, a summary for
each local government unit (province, city, municipality) shall be presented and submitted in the
format provided in Annex A and for the barangays in accordance with the format provided in
Annex B.

Compliance with the rules and regulations in the following phases of the financial
processes shall be verified/validated:

1. Budget
a. Approved budget for the Bayanihan grant releases under Local Budget Circular
(LBC) 125 and 126. Allocation or provision for appropriations only to the
allowable expenditures as provided under the LBCs.
b. Provision of the allocations for DRRM activities in the approved
annual/supplemental budgets.
c. Approval of ordinances for realignment/augmentation of budget in accordance with
Sec. 336 of RA 7160.
d. Updated/Supplemental Development Plan (DP) and Annual Investment Plan (AIP)
for the changes/realignment of the 20% Development Fund

2. Local Government Support Fund – Covid 19 Financial Assistance to LGUs in the

Bayanihan to Recover as One Act, RA 11494 (Trust Fund)
a. Recognition of the receipt in the Trust Funds books (LBC 128 dated September 17,
2020)

3. Grants and Donations

a. Recognition of the receipt of donations (in cash or in kind) in the appropriate
accounts in the Trust Fund books

4. AIP/Local Disaster Risk Reduction Investment Plan (LDRRMFIP)

a. Updated or supplemental AIP/LDRRMFIP.
b. Inclusion in the AIP/LDRRMFIP or supplemental AIP/LDRRMFIP of the
program/project/activities (PPAs) for the provision of the services to contain the
spread of COVID-19 and to provide basic services to the affected population,
including the necessary support to frontline workers.
c. Inclusion PPAs to be funded from the grants and donations in the supplemental
AIP/LDRRMFIP

5. Utilization of Funds
 a. Utilization of funds in accordance with the AIP/LDRRMFIP.
b. Charges in accordance with the approved budget and subject to the limitations
provided in the LBC for the bayanihan grant releases.
c. Documentation to support the validity of the claim.
d. Compliance to the NDRRMC-DILG-DBM JMC No. 2013-001 and COA Circular
2012-002
e. Compliance with RA 9184 and other issuances of the GPPB (GPPB Resolution No.
09-2020) specifically for the procurements during the state of emergency.
f. Utilization of funds compliant with the purpose of the donation, and incorporated in
the supplemental/updated AIP/LDRRMFIP.
g. Utilization of funds in accordance with LBC 128 dated Sept. 17, 2020 for the
LGSF-FA

6. Reporting
a. Monthly report on fund utilization and status of implementation funded from
bayanihan grants. (LBC 125 and 126)
b. Posting of the accumulated reports in the LGUs website and in at least three
conspicuous places in the locality at the end of every month.

7. Others
a. Return of the unutilized funds from the bayanihan grants to the Bureau of Treasury
by the recipient local government units after the lifting of the State of Calamity.

B. Financial Audit:

On top of the identified accounts for audit as a result of the agency risk assessment, the
following accounts shall be verified and the working papers thereon duly reviewed by the Audit
Team Leader and the Supervising Auditor:

1. Cash and cash equivalents

 Conduct of compulsory cash examination at least once a year

 Review and analysis of the Statement of Accountability for Accountable Forms to
determine whether all accountable forms are accounted for, all issuances thereof
are reported, and the corresponding proceeds remitted.
 Verification of the existence and validity of the cash in bank accounts.
 Emphasis on the cash analysis, to ascertain that the funds used were not from the
Trust Fund or the Special Education Fund and Program, Projects and Activities
are covered with actual funds/cash.
 2. Property, Plant and Equipment (PPE)

 Validation of PPE accounts based on inventory reports and other alternative

documents showing validity and existence of the property.
 Verification of existence, correctness and completeness of amount recognized on
procured PPEs as well as those acquired through donations in kind.

3. Inventories and Supplies for Distribution and for Operation and the corresponding
Expense accounts if utilized

 Verification of existence, correctness and completeness of inventory balances

related to COVID-19

C. Compliance Audit

4. Utilization of 20% Development Fund

 Verify the LGU’s compliance on the following:

 Compliance with RA 7160 in the allocation of the funds
 Compliance with DILG – DBM JMC No. 2020 – 01 dated March 27, 2020 -
Additional guidelines on the utilization of the twenty percent (20%) of the
annual internal revenue allotment for the development projects in view of
the COVID-19 pandemic
 DILG DBM Joint Memorandum Circular No. 2 dated March 30, 2020 –
Provisional Guidelines on the Preparation and Approval of the Annual
Investment Programs of Local Government Units in view of the COVID-19
pandemic
 Compliance with DILG – DBM JMC No. 2017 – 01 dated February 22,
2017 in the appropriation and utilization of the funds
 Compliance with RA No. 9184 in the implementation of the projects

5. Utilization of DRRM Funds

 Verify the LGU’s compliance on the following:

 Compliance with COA Circular No. 2014-002 – Accounting and Reporting

Guidelines on the receipt and utilization of National Disaster Risk
Reduction and Management Fund (NDRRMF), cash and in-kind
aids/donations from local and foreign sources, and funds allocated from the
agency regular budget for Disaster Risk Reduction and Management
(DRRM) program
 Compliance with COA Memorandum No. 2014-009 – Guidelines in the
Audit of Disaster Risk Reduction and Management (DRRM) Funds
 Compliance with COA Circular No. 2020-009 – Temporary relaxation in the
application of certain provisions of COA Circular No. 2014-002 dated April
15, 2014 and COA Memorandum No. 2014-009 dated August 28, 2014 in
areas subject to quarantine during the period of the State of Calamity
declared under Proclamation No. 929, dated March 16, 2020.