___________________

HON. FERDINAND M. AMANTE, JR. MD.

City Mayor
Butuan City Hall

Thru:

ARMANDO PEREZ, SR.

City Budget Officer
Butuan City Hall

Dear Hon. Amante:

Greetings!
As one of the academic requirements in our Internal Auditing (Acctg 415) subject in our
undergraduate studies at Father Saturnino Urios University, Butuan City, we are tasked to conduct an
operational audit in our industry. We, Marjorie M. Acerado, Janena Marie C. Alloso, Rica Jane R.
Arancon, Jonn Nandreian M. Atupan, Jonarissa L. Beltran, Janica Mae I. Robles, and Rachel C.
Saplot, decided to audit the operational procedures of City Budget Office.
In this regard, we would like to ask permission from your office to allow us to conduct an audit
planning in the City Budget regarding its operational procedures.
The audit planning stage primarily involves inquiry, interview, observation and testing. During this
stage, the auditors are required to have sufficient understanding about its operations in order to come
up with an audit plan. The inquiry will be in the form of survey questionnaires, interviews with the
respondents and direct observation. It is to be emphasized that we, auditors, are also going to conduct
test of controls or substantive audit testing because our objective is to understand the operational
procedures and to be able to give recommendations on what to improve in the control process.

Audit Phase
The audit plan generally presents the details of how the operational audit is going to be conducted.
We, auditors, will conduct the operational audit as soon as this proposal is approved by your office.
We will begin the operational audit by reading and understanding the organizational chart of the
relevant divisions and the relevant operational policies applied in the respective divisions, identifying
the effective management allocation and internal control of the City expenditures and understanding
the technical and staff support to the offices of the City through consultative dialogue. We will also
conduct walk-through testing, control testing and substantive test (if applicable).
The following are deemed relevant in our operational audit:

Divisons
1
2
3
4

General Government Services

Social Services
Economic Services
Administrative Staff

People
1. Head of every division
2. Secretary of every division
3. Regular employees

Documents
1.
2.
3.
4.
5.
6.
7.

Mission and Vision of the City Hall of Butuan

Mission and Vision of the City Budget Office
Objectives or Service Values of the City Budget Office
Organizational Chart
Information System Flowchart
Manual Flowchart
Some documents which are deemed relevant in the operation audit

The auditors through inquiry, interviews, observation and testing should obtain sufficient
understanding of the operational process, custody, control and monitoring at the end of the of the
operational audit.

Perceived Benefits
The operational audit gives in sufficient details the understanding of the auditors in the operational
procedures in the City Budget Office relating to the approval of consolidated budget proposal of
various operating departments. It is the phase in the audit process where a decision as to the
auditability of the subject matter is made.
In this case, the operational audit may be executed further to test the assertion of the management
about the existence, design and implementation, adequacy and sufficiency of policies and control over
the operational procedures, which primarily is their responsibility. The operational audits primary
objective is to add-value to the City Budget Office and find unit on how to measure or evaluate its
performance, identify areas for improvements and make recommendations on what to improve in the
control process.

Non-Disclosure of Information
The result output of the conduct of an operational audit is a written operational audit report. All
significant information obtained during the audit phase through inquiry, interviews, observation and
testing should remain confidential. Moreover, prior to submission of the operational audit report as
such is our academic requirements in our Internal Auditing subject in our undergraduate studies, it
will be submitted first to the management for review.
In the case of violation of the confidentiality of significant information gathered, we, Marjorie M.
Acerado, Janena Marie C. Alloso, Rica Jane R. Arancon, Jonn Nandreian M. Atupan, Jonarissa L.
Beltran, Janica Mae I. Robles, and Rachel C. Saplot, shall be held responsible for the consequences of
the act.
If you have further questions and clarifications, please do not hesitate to call us at 0909-6185753 or email us at jonarissabeltran@gmail.com.

Respectfully,

JONARISSA L. BELTRAN
Team Leader

Noted by:

JISRYL H. RAZ, CPA

Accountancy Faculty

Endorsed by:

DR. EVANGELINE P. JAMILI, CPA

Dean
Accountancy Program