Bureau of Local Government Finance
8F EDPC Building, BSP Complex, Roxas Boulevard, Manila
Ref. Audit Observation
ML 2014 (29) The Other Supplies
Inventory account is
overstated by P61,182.00
which pertains to supplies
that had been issued in 2011
but not yet recorded in the
books during that year and
still not yet recorded in 2014.
ML 2014 (23) Management was not able to
conduct its annual physical
count of PPE; accordingly,
the preparation and
submission of the
corresponding RPCPPE
were not undertaken,
causing difficulty in
determining whether all
properties recorded in the
book exists and whether all
properties physically existing
are duly recorded in the
books, thus completeness,
accuracy and existence of
the PPE account balance of
P25,749,782.20 could not be
ascertained
AGENCY ACTION PLAN and STATUS OF IMPLEMENTATION
Audit Observation and Recommendations
For the Calendar Year 2014
As of December 31, 2015
Agency Action Plan
Reason for
Status of Partial/Delay/Non
Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
Supply Officer should submit the Instruct the Supply Officer to comply with the Supply Officer January onwards Fully Implemented The Supply Officer has submitted
required RSMI’s to the Accounting audit recommendation 2015 the required RSMI to the
Unit for the immediate adjustment of Accounting Division and to the
the account. Auditing Office. Adjustments were
already made by the Accounting
Division on January 2015
Create a committee consisting of Comply with the audit recommendations Management January onwards Partially No Inventory Committee Management has ordered the
two or more employees designated Property Officer 2015 Implemented was created Property Officer to prepare the
by the agency head, to take charge Inventory Plan.
of the inventory taking which shall
include the property officer or RPCPPE for 2014 has been
custodian to be witnessed by the submitted
Agency Auditor.
Require the concerned Property and
Supply Officers to prepare detailed
inventory action plan that is
understood and accepted by all the
members of the Inventory
Committee and take into
consideration the timing of the
counting to enable the Inventory
Committee to complete the activity
within the scheduled date and
submit the RPCPPE on or before Page 1 of 45
January 31 of the ensuing year
 corresponding RPCPPE
were not undertaken,
causing difficulty in
determining whether all
properties recorded in the
book exists and whether all
properties physically existing
Require the concerned Property and Agency Action Plan
are duly recorded in the
Supply Officers to prepare detailed Reason for
books, thus completeness,
inventory action plan that is Status of Partial/Delay/Non
Ref. accuracy
Auditand existence of
Observation Audit Recommendations Target Implementation Action taken/Action to be taken
understood and accepted by all the Person/Dept. Implementation implementation, if
the PPE account balance of Action Plan
members of the Inventory Reponsible applicable
P25,749,782.20 could not be
Committee and take into From To
ascertained
consideration the timing of the
counting to enable the Inventory
Committee to complete the activity
within the scheduled date and
submit the RPCPPE on or before
January 31 of the ensuing year

Page 2 of 45
 Agency Action Plan
Reason for
Status of Partial/Delay/Non
Ref. Audit Observation Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
Impose a deadline for the
submission of the RPCPPE so that
reconciliation of the physically
inventoried properties with the
accounting records can be done and
that discrepancies noted, if any, can
be immediately corrected

ML 2014 (34) The balances of Office Instruct the Accountant and the Comply with the audit recommendations Accountant January onwards Ongoing The Supply Officer is still in the
Supplies Inventory per books Supply Officer to reconcile the Supply Officer 2015 process of obtaining RIS' and
of the Accounting Unit and difference of P349,735.75 in the preparing Inventory reports for the
per records of the Supply Office Supplies Inventory years without reports
Unit has a discrepancy of
P349,735.75; likewise, a
monthly report prepared by Create an Inventory Committee to Reconciliation on-going
the Supply Unit on the conduct the physical count of the
Inventory of Supplies and inventories every six months and
Materials was not in submit the RPCI to the Office of the
accordance with the Auditor on or before July 31 and
Instructions C and D on page January 31 of each year
138, MNGAS, Volume II,
thus, the accuracy and
validity of the book balance
of P455,810.72 of the Office
Supplies Inventory is
doubtful

ML 2014 (42) Reimbursements of Instruct the personnel processing Comply with the audit recommendations Bookkeeper January onwards Fully Implemented The Accounting unit has submitted
travelling expenses of some the claims to oblige all claimants to Accountant 2015 the required documentary
officers and employees comply with the documentary requirements on April 28, 2015
totaling P251,342.82 were requirements pursuant to COA
not duly supported with basic Circular 2012-001 dated June 14,
documents contrary to 2012
Section 28, MNGAS, Volume
I and COA Circular No.
2012-001 dated June 14,
2012, thus lack of proper
evidence to validate and
establish regularity of the
claim

Page 3 of 45
 Reimbursements of
travelling expenses of some
officers and employees
totaling P251,342.82 were
not duly supported with basic
documents contrary to Agency Action Plan
Section 28, MNGAS, Volume Reason for
I and COA Circular No. Status of Partial/Delay/Non
Ref. Auditdated
2012-001 Observation
June 14, Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
2012, thus lack of proper Reponsible applicable
evidence to validate and From To
establish regularity of the
claim

Page 4 of 45

Ref. Audit Observation
ML 2014 (50) Appropriate accounts
prescribed under the revised
government chart of
accounts were not used in
recording various
transactions totaling
P37,000.91 contrary to
Section 112 of PD 1445,
resulting to misstatements of
the affected accounts
ML 2014 (57) The correctness and
reliability of the financial
statements (FS) of the BLGF
as of December 31, 2014 is
uncertain due to the doubtful
existence of inventories and
depreciated property, plant
and equipment appearing in
the FS of the Local
Government Finance
Development (LOGOFIND)
Project with total debit and
credit amount of
P8,965,240.88, in violation
with Paragraph 27, PPSAS,
Volume I, and Section 73.a
of the MNGAS, Volume I
ML 2014 (64) The BLGF outstanding
balance of the Due from
NGAs - Procurement
Service (PS) amounting to
P219,536.04 as of
December 31, 2014 differed
from the records of the PS of
P246,608.45 by P27,072.41
due to non-reconciliation of
both agencies’ records
Agency Action Plan
Reason for
Status of Partial/Delay/Non
Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
Chief, Financial and Management Comply with the audit recommendations Bookkeeper January onwards Fully Implemented The Bookkeeper has adjusted and
Division should adjust and reclassify Accountant 2015 reclassified the said accounts to
these accounts to their proper their proper accounts
accounts
Instruct the Accountant to exert best Comply with the audit recommendations Accountant January onwards Ongoing The Accountant has acquired a
effort to analyze/review and account 2015 copy of the Financial Statements
for the significant balances of of LOGOFIND from the project
P8,965,240.88 in the LOGOFIND accountant
project; and
To coordinate with the former
project accountant while effecting
Effect any adjustment, if any, and
the transferring and closing of
close the balances by transferring it
balances
to the General Fund of the BLGF
books of accounts for fair
presentation in the FS as prescribed
under Paragraph 27, PPSAS,
Volume I and Section 73.a of the
MNGAS, Volume I
Instruct the Accountant and the Accountant January onwards Ongoing The Supply Offcer in coordination
Supply Officer to regularly Supply Officer 2015 with the Accountant is in the
coordinate with the PS for the process of obtaining records to
periodic reconciliation of their help with the reconciliation of
records and to adjust any accounts with DBM-PS
discrepancy that may be uncovered
Page 5 of 45

Ref. Audit Observation
ML 2014 (72) Management failed to take
full advantage of the funds
received during the year,
contrary to DBM Circular
Letter No. 2011-15, thus, the
unused Notice of Cash
Allocation (NCA) totaling
P13,006,244.30 or 15.20 per
cent of the total NCAs
received for CY 2014
operations was reverted
Auditor’s Rejoinder: The
funds on hand could have
been used to pay existing
obligations since BLGF
financial position as at year-
end showed existing
obligations of P3,248,452.12.
Management must have
been confused with the use
of the NCA and allotment
Agency Action Plan
Reason for
Status of Partial/Delay/Non
Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
Review cash management program Exert all efforts to maximize budget utilization Management January onwards Not Implemented Management commented that they
and adhere strictly to the provision Accountant 2015 have been diligently and efficiently
of Paragraph No. 2 of DBM Circular managing its cash program in
Letter No. 2011-15 dated December Budget Officer accordance with the rules and
26, 2011 on the optimum utilization regulations. The issuance of the
of available NCA and require the National Budget Circular No. 551
concerned officials/personnel to dated January 2, 2014, amends the
submit promptly all claims for DBM Circular Letter 2011-15 which
payment with complete provides that “NCAs to cover the
documentation 2nd semester requirements for
regular budget shall be subject to
the submission of FARs/Budget
Accountability Reports (BARS) as
of end of June 30 and consistent
with the DBCC-approved MDP.
On the reverted amount of
P13,006,244.30, this comprises
Personnel Services for funded
positions of employees who availed
of the retirement option under the
Rationalization Plan of the BLGF.
Thus, resulting to an unused cash
for Personnel Services.
For the Capital Outlay of
P5,000,000.00, the amount is
intended for the purchase of
furniture and fixtures for the newly
renovated office space, however,
the DOF, furnished the Phase I
renovation project. DOF and BLGF
agreed that the amount be used for
the rehabilitation of the Air Handling
Unit, but the said undertaking will
cost P10,559,222.04 and the
P5,000,000 budget is not sufficient
for that project, hence, the funds for
capital outlay was reverted.
Page 6 of 45

Ref. Audit Observation
ML 2014 (83) The practice of recording
purchases of supplies and
materials as outright
expense resulted in the
understatement of Other
Supplies and Materials
Inventory; and
overstatement of Other
Supplies and Materials
Expense
ML 2014 (90) The Accounting Unit and the
Supply Unit do not maintain
the Supplies Ledger Card
(SLC) and Stock Card (SC),
respectively, for each item of
Office Supplies
received/issued resulting to
difficulty of reconciling the
balances recorded in the
Accounting Unit and the
Supply Unit
Agency Action Plan
Reason for
Status of Partial/Delay/Non
Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
The amount reverted cannot be
used for the payment of unpaid
obligations since said obligations or
services were not yet delivered nor
rendered
Management fully understands the
difference of NCA and allotment,
however, funds on hand could not
be use to pay existing obligations
as at year-end because the
creditors has not yet issued billing
statements or statement of
accounts during that time.
Stop the practice of charging directly Exert all efforts to comply with the audit Bookkeeper January onwards Not Implemented Management
to Other Supplies and Materials recommendations Accountant 2015 commented that
Expense all purchases of supplies supplies purchased
and materials not paid out of the from outside suppliers
PCF for fair presentation of the were recognized
Supplies and Materials Inventory immediately as expense
account in the Statement of to simplify journal
Financial Position. entries because these
items were immediately
issued to end-users
upon delivery and
supported with
corresponding RSMI
Accountant and the Supply Officer to Exert all efforts to comply with the audit Accountant January onwards Partially Impracticability of Stock Cards are now being
maintain properly the SLC and the recommendations Supply Officer 2015 Implemented maintaining two similar maintained by the Supply Officer
SC for each item of the supplies ledger cards
inventories
Page 7 of 45

Ref. Audit Observation
ML 2014 (96) Submission of reports such
as (a) Disbursement
Records with all paid
vouchers and supporting
documents and Liquidation
Reports; (b) Report of
Collections with
corresponding issued Official
Receipts; (c) Trial
Balances/Financial
Statements; and (d) Bank
Reconciliation Statements,
were delayed, thus, deter us
to a timely examination and
audit of the transactions and
communication of the results
thereof
ML 2014 (104) The purposes and
usefulness of the Report on
the Physical Count of
Inventories (RPCI) are not
attained due to non-
submission of the said report
within the required period in
violation of Section 65 of the
Manual on the NGAS,
Volume II
Agency Action Plan
Reason for
Status of Partial/Delay/Non
Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
The Accountant should submit the The Management through the Administrative Accountant January onwards Fully Implemented The Cash and Accounting Unit has
Report of Disbursements and Division (Admin) and Financial and Management Cashier 2015 already registered to the weAccess
Report of Collections together with Division (FMD), shall register to the we Access facility of the Landbank of the
all the paid vouchers and supporting facility of the Land Bank of the Philippines to be Philippines
documents evidencing the able to immediately print the Bank Statements
transactions regularly to the Audit and enable them to prepare and submit the
Team within ten (10) days from date Bank Reconciliation Statements on time
of receipt of said documents
Submit Financial Reports regularly
in compliance with Section 71 of the
Manual on NGAS
Submit Bank Reconciliation
Statement regularly in compliance
with Section of COA Circular No. 96-
011 dated October 2, 1996
Oblige the Inventory Committee to Exert all efforts to comply with the audit Supply Officer January onwards Fully Implemented Supply Officer has submitted RPCI
prepare and finalize immediately the recommendations 2015 for July 31 and January 31 of 2015
RPCI for submission to the Auditor to the Auditor
on or before July 31 and January 31
of each year as prescribed under
Section 65 of the MNGAS, Volume
II; and
Impose a deadline to all concerned
on the submission of the RPCI so
that reconciliation of the physical
inventories with the accounting
records can be done and that
discrepancies noted, if any, can be
corrected promptly
Page 8 of 45

Ref. Audit Observation
ML 2014 (109) The Collecting Officer does
not maintain Cash Receipts
Record (CRR) for cash
collections and deposits,
thus, monitoring of
accountability at any given
period could not be easily
determined
ML 2014 (117) The AO has not
prepared/submitted the
monthly Report of
Accountability for
Accountable Forms (RAAF)
Audit Recommendations
Instruct the Collecting Officer to
update her records by
accomplishing the prescribed Cash
Receipts Register in accordance
with Section 38 of the MGAS, for
proper monitoring of her collections
and deposits in order to
determine/establish easily the
running cash balance at any point in
time
Accountable Officer should prepare Comply with the audit recommendations
and submit the Report of
Accountability of Accountable Forms
monthly to the concern offices to
comply with Sec. 445 of GAAM,
Volume II, and Sec. 68 of MNGAS,
Volume II, to check the existence
and completeness of used and
unused accountable forms on hand
Designate the custody, safekeeping
and disbursing of other cash
advances to other qualified
Officers/Employees so that the
Collecting/Disbursing Officer could
perform her duties and
responsibilities satisfactorily. The
management may also add/assign
qualified personnel to assist the
Cashier
Agency Action Plan
Reason for
Status of Partial/Delay/Non
Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
Comply with the audit recommendations Cashier January onwards Fully Implemented Management commented that
2015 participants to the CPD courses
requires sending registration
through email to the Training
Management Staff at
tms.blgf.gov.ph. Once the training
team acknowledges the
registration, participants are
required to deposit their payments
through Land Bank of the
Philippines (LBP). The Official
Receipt is issued to the participant
in the venue during the training. In
this case, the Cashier was not able
to keep track immediately those
who have paid and relied only on
the Bank Statements provided by
the LBP, hence, encounter difficulty
in maintaining an updated CRR
Cashier January onwards Fully Implemented The RAAF are already submitted
Management 2015 by the Cashier.
The management has designated
another employee to the Cash
Section to assist the Cashier
Page 9 of 45
 Agency Action Plan
Reason for
Status of Partial/Delay/Non
Ref. Audit Observation Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
ML 2014 (125) The insurance coverage of Property Officer should Secure Comply with the audit recommendations Property Officer January onwards Fully Implemented Management commented that they
BLGF properties, with net immediately property insurance for 2015 are in the process of disposing
book value of P7,859,800.92 the properties which were not Office Furniture and Fixtures and
was inadequate due to the included in the insurance coverage Other Properties. The renovated
non-renewal of the insurance as required under RA No. 656 and office of the BLGF is furnished by
of its properties (except for COA Circular 92-390 dated the DOF. They opined that it is no
motor vehicles) as required November 17, 1992 longer necessary to insure the
under RA No. 656 and COA properties which are to be disposed
Circular 92-390. Likewise, Property Officer should ensure that
there was no updated all insurable assets as reported in
Inventory Report of PPE the updated RPCPPE duly verified
submitted to the General by the Auditor are adequately
Insurance Fund of the covered/insured with GSIS
Government Insurance
System (GSIS) as basis for
the insurance coverage,
thus, posing risks on non-
indemnification of the total
value of assets and
properties in case of loss

Auditor’s Rejoinder: While it

is true that the subject
disposable properties may
no longer be required to be
insured with the GSIS, this
does not mean that
Management should wait for
their properties to be
considered disposable first
before these are to be
insured with the GSIS
because this is required
under RA No. 656.

Page 10 of 45

Ref. Audit Observation
ML 2014 (136) The Agency’s Acting
Property Officer and the
Supply Officer were not
bonded, thus, government
properties were not
protected in case of
improper or unauthorized
use or misapplication thereof
ML 2014 (144) An Official Receipt or
Taximeter Issuing Receipt
were not attached for the taxi
fares claimed by some
employees for their travel
from their residence to
airport and vice versa but
instead used a
Reimbursement Expense
Receipt (RER) which is not
in accordance with COA
Circular No. 2004-006 dated
September 9, 2004 and
Revenue Regulations No.
17-2006 dated September 6,
2006
Agency Action Plan
Reason for
Status of Partial/Delay/Non
Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
Concerned personnel of the Comply with the audit recommendations Accounting Unit January onwards Fully Implemented Management immediately acted on
Administrative and Finance Division 2015 the recommendation and in the
should immediately secure fidelity process of securing all the
bond insurance for the Acting necessary documents for the
Property Officer and the Supplies, bonds application of the AOs
based on the Revised Schedule of
Premium Rates or Annex C of
Treasury Circular No. 02-2009 dated
August 6, 2009 to properly
safeguard the agency’s fund and
properties
Comply with the BIR and LTFRB Comply with the audit recommendations Management January onwards Fully Implemented The OIC-Executive Director in his
regulations to always ask from the 2015 Memorandum dated May 15, 2015
taxi driver/s an OR/TIR for the directed to all officers/employees
reimbursement of taxi fare as this is that reimbursement of taxi fares
a requirement for the reimbursement without submitting the ORs /TIR as
of traveling expenses since this is required by the BIR and LTFRB
considered as an official function. rules and regulations, will be
Otherwise, taxi fares without TIR disallowed effective May 7, 2015
should be disallowed in audit
Page 11 of 45

Ref. Audit Observation
ML 2014 (151) The airline ticket/fare in the
amount of P8,257.00
incurred by the Deputy
Executive Director for
Administration who was
invited by the PHALTRA
President to grace the 81st
National Convention and
Seminar Workshop of all
local government treasurers
and assessors and to deliver
a message was charged to
the account Travelling
Expenses - Local in violation
of Section 73, Book VI of the
Revised Administrative Code
of 1987 and the policy
statement of BLGF as
embodied in its Training
Management System
Guidebook
Audit Recommendations
Adhere strictly with Section 73,
Book VI of the Revised
Administrative Code of 1987 and the
policy of BLGF as embodied in the
Training Manual System Guidebook
on charging the Traveling Expense
of the invited officers to act as
resource persons/subject matter
experts
Agency Action Plan
Reason for
Status of Partial/Delay/Non
Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
Comply with the audit recommendations Management January onwards Partially Management Exert all efforts to adhere strictly to
2015 Implemented commented that while Section 73, Book VI of the Revised
the Bureau is exerting Administrative Code of 1987 and
all efforts to conform the policy of BLGF
with the rules and
regulations of the
existing travel policies
of Resource Persons, it
is sometimes inevitable
that transportation
expenses are not
shouldered by the
recipient agency. In the
case of Deputy
Executive Director for
Administration, her
plane fare was not
shouldered by the
PHALTRA, as certified
by the attached
Certification, hence her
ticket was purchased by
the Bureau

ML 2014 (157) Airline tickets for P99,568.00
of some officers/employees
were booked through private
companies rather than
booking directly with the
airlines companies which
resulted in a higher
rates/fares as compared to
the officers/employees who
booked directly with the
airlines/bus, thus,
disadvantageous to the
government
Direct the concerned officers and
employees who booked their airline
tickets through private firms to
explain/justify. Likewise, the
practice of booking airline fares
through a private firm should be
stopped and refrained from to avoid
suspensions/disallowances
Comply with the audit recommendations
Concerned January onwards Fully Implemented Management commented that
Officers and 2015 during the bookings made, there
Employees was no advice that bookings have
to be made directly with airlines
companies. The memorandum
itself does not provide a legal basis
to support this Observation.
Moreover, there is no conclusive
proof given that the BLGF was put
in a disadvantageous position
when it bought the ticket from the
travel agencies.

Page 12 of 45
 Agency Action Plan
Reason for
Status of Partial/Delay/Non
Ref. Audit Observation Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
It is not always the case that the
airline companies give lower rates
than accredited travel agencies.
The latter are given slots with lower
rates. Such that, if a buyer can
luckily avail of these slots, there is
a possibility that he/she will pay
smaller amount.

As of today the Bureau has

stopped purchasing airline tickets
from private companies

ML 2014 (163) The Agency’s GAD Plan and GAD Plan and Budget should Comply with the audit recommendations Admin January onwards Fully Implemented Management has adhered with the
Budget (GPB) for the year always be in accordance with the GAD Focal Person 2015 recommendation
2014, was not endorsed by applicable guidelines and activities
Philippine Commission on in support to GAD focused program
Women (PCW) to the approved and properly endorsed by
Department of Budget and PCW to the DBM as required under
Management (DBM) as Section 28 of GAA to determine
required under Section whether the GAD Accomplishment
12.2.1 of the PCW-NEDA- Report is compliant with the
DBM Joint Circular No. endorsed GAD Plan and Budget
2012-01, thus, the GAD
Accomplishment Report
(AR) submitted could not be
determined whether the
activities could be
considered sufficient
compliance or aligned with
said requirement

Page 13 of 45
 Agency Action Plan
Reason for
Status of Partial/Delay/Non
Ref. Audit Observation Audit Recommendations Person/Dept. Target Implementation Action taken/Action to be taken
Action Plan Implementation implementation, if
Reponsible applicable
From To
ML 2014 (170) The amount allocated for Allocate at least five percent of their Comply with the audit recommendations January onwards Fully Implemented GAD Focal Person has adhered
Gender and Development budget for GAD programs as 2015 with the recommendation, used
(GAD) programs for CY provided for under Section 28 of the attribution method in the
2014 was only GAA for FY 2014 in order to carry- preparation of the GAD Plan
P3,033,296.80 instead of the out all projects that were identified
amount required under and to be GAD related GAD Activities were conducted
Section 28 of the GAA which
is P3,223,450.00 or five
percent (5%) of the total
budget of the Agency. As
such, the benefits that could
be derived by the
beneficiaries on GAD
program and activities were
not fully achieved

Agency Sign-off:

Armi M. Advincula
Director II, AFMS

Note: Status of Implementation may either be (a) Fully Implemented, (b) Ongoing, (c) Not Implemented, (d) Partially Implemented, or (e) Delayed

Page 14 of 45
 Actual Implementation
Status of Date REMARKS
Date of Follow-up
Implementation
From To

Page 15 of 45
 Actual Implementation
Status of Date REMARKS
Date of Follow-up
Implementation
From To

Page 16 of 45
 Actual Implementation
Status of Date REMARKS
Date of Follow-up
Implementation
From To

Page 17 of 45
 Actual Implementation
Status of Date REMARKS
Date of Follow-up
Implementation
From To

Page 18 of 45
 Actual Implementation
Status of Date REMARKS
Date of Follow-up
Implementation
From To

Page 19 of 45
 Bureau of Local Government Finance
8F EDPC Building, BSP Complex, Roxas Boulevard, Manila

AGENCY ACTION PLAN and STATUS OF IMPLEMENTATION

Audit Observation and Recommendations
For the Calendar Year 2014
As of December 31, 2015

Agency Action Plan

Target Status of
Ref. Audit Observation Audit Recommendations Person/Dept.
Action Plan Implementation Implementation
Reponsible
From To
ML 2014 (29) The Other Supplies Inventory Supply Officer should submit the Instruct the Supply Officer to Supply Officer January onwards Fully
account is overstated by required RSMI’s to the comply with the audit 2015 Implemented
P61,182.00 which pertains to Accounting Unit for the recommendation
supplies that had been issued in immediate adjustment of the
2011 but not yet recorded in the account.
books during that year and still
not yet recorded in 2014.

ML 2014 (23) Management was not able to Create a committee consisting of Comply with the audit Management January onwards Partially
conduct its annual physical count two or more employees recommendations Property Officer 2015 Implemented
of PPE; accordingly, the designated by the agency head,
preparation and submission of to take charge of the inventory
the corresponding RPCPPE were taking which shall include the
not undertaken, causing difficulty property officer or custodian to
in determining whether all be witnessed by the Agency
properties recorded in the book Auditor.
exists and whether all properties
physically existing are duly
recorded in the books, thus
completeness, accuracy and
existence of the PPE account
balance of P25,749,782.20 could
not be ascertained
 in determining whether all
properties recorded in the book
exists and whether all properties
physically existing are duly
recorded in the books, thus
completeness, accuracy and
existence of the PPE account
balance of P25,749,782.20 could and Supply Officers to prepare
not be ascertained
Require the concerned Property
detailed inventory action plan
that is understood and accepted
by all the members of the
Inventory Committee and take
into consideration the timing of
the counting to enable the
Inventory Committee to
complete the activity within the
scheduled date and submit the
RPCPPE on or before January 31
of the ensuing year

Impose a deadline for the

submission of the RPCPPE so
that reconciliation of the
physically inventoried properties
with the accounting records can
be done and that discrepancies
noted, if any, can be immediately
corrected

ML 2014 (34) The balances of Office Supplies Instruct the Accountant and the Comply with the audit Accountant January onwards Ongoing
Inventory per books of the Supply Officer to reconcile the recommendations Supply Officer 2015
Accounting Unit and per records difference of P349,735.75 in the
of the Supply Unit has a Office Supplies Inventory
discrepancy of P349,735.75;
likewise, a monthly report
prepared by the Supply Unit on
the Inventory of Supplies and
Materials was not in accordance
with the Instructions C and D on
page 138, MNGAS, Volume II,
thus, the accuracy and validity of
the book balance of P455,810.72
of the Office Supplies Inventory is
doubtful
 likewise, a monthly report
prepared by the Supply Unit on
the Inventory of Supplies and
Materials was not in accordance
with the Instructions C and D on
page 138, MNGAS, Volume II,
thus, the accuracy and validity of Create an Inventory Committee
the book balance of P455,810.72 to conduct the physical count of
of the Office Supplies Inventory is the inventories every six months
doubtful and submit the RPCI to the
Office of the Auditor on or
before July 31 and January 31 of
each year

ML 2014 (42) Reimbursements of travelling Instruct the personnel Comply with the audit Bookkeeper January onwards Fully
expenses of some officers and processing the claims to oblige recommendations Accountant 2015 Implemented
employees totaling P251,342.82 all claimants to comply with the
were not duly supported with documentary requirements
basic documents contrary to pursuant to COA Circular 2012-
Section 28, MNGAS, Volume I and 001 dated June 14, 2012
COA Circular No. 2012-001 dated
June 14, 2012, thus lack of proper
evidence to validate and establish
regularity of the claim

ML 2014 (50) Appropriate accounts prescribed Chief, Financial and Comply with the audit Bookkeeper January onwards Fully
under the revised government Management Division should recommendations Accountant 2015 Implemented
chart of accounts were not used adjust and reclassify these
in recording various transactions accounts to their proper
totaling P37,000.91 contrary to accounts
Section 112 of PD 1445, resulting
to misstatements of the affected
accounts

ML 2014 (57) The correctness and reliability of Instruct the Accountant to exert Comply with the audit Accountant January onwards Ongoing
the financial statements (FS) of best effort to analyze/review and recommendations 2015
the BLGF as of December 31, account for the significant
2014 is uncertain due to the balances of P8,965,240.88 in the
doubtful existence of inventories LOGOFIND project; and
and depreciated property, plant
and equipment appearing in the
FS of the Local Government
Finance Development
(LOGOFIND) Project with total
debit and credit amount of
P8,965,240.88, in violation with
Paragraph 27, PPSAS, Volume I,
and Section 73.a of the MNGAS,
Volume I
 2014 is uncertain due to the
doubtful existence of inventories
and depreciated property, plant
and equipment appearing in the
FS of the Local Government
Finance Development
(LOGOFIND) Project with total
debit and credit amount of
P8,965,240.88, in violation with
Paragraph 27, PPSAS, Volume I,
and Section 73.a of the MNGAS,
Volume I
ML 2014 (64) The BLGF outstanding balance of
the Due from NGAs -
Procurement Service (PS)
amounting to P219,536.04 as of
December 31, 2014 differed from
the records of the PS of
P246,608.45 by P27,072.41 due
to non-reconciliation of both
agencies’ records
ML 2014 (72) Management failed to take full
advantage of the funds received
during the year, contrary to DBM
Circular Letter No. 2011-15, thus,
the unused Notice of Cash
Allocation (NCA) totaling
P13,006,244.30 or 15.20 per cent
of the total NCAs received for CY
2014 operations was reverted
Effect any adjustment, if any, and
close the balances by
transferring it to the General
Fund of the BLGF books of
accounts for fair presentation in
the FS as prescribed under
Paragraph 27, PPSAS, Volume I
and Section 73.a of the MNGAS,
Volume I
Instruct the Accountant and the Accountant January onwards Ongoing
Supply Officer to regularly Supply Officer 2015
coordinate with the PS for the
periodic reconciliation of their
records and to adjust any
discrepancy that may be
uncovered
Review cash management Exert all efforts to maximize budget Management January onwards Not
program and adhere strictly to utilization Accountant 2015 Implemented
the provision of Paragraph No. 2 Budget Officer
of DBM Circular Letter No. 2011-
15 dated December 26, 2011 on
the optimum utilization of
available NCA and require the
concerned officials/personnel to
submit promptly all claims for
payment with complete
documentation
Auditor’s Rejoinder: The funds on
hand could have been used to pay
existing obligations since BLGF
financial position as at year-end
showed existing obligations of
P3,248,452.12. Management
must have been confused with
the use of the NCA and allotment
ML 2014 (83) The practice of recording
purchases of supplies and
materials as outright expense
resulted in the understatement of
Other Supplies and Materials
Inventory; and overstatement of
Other Supplies and Materials
Expense
Stop the practice of charging Exert all efforts to comply with the Bookkeeper January onwards Not
directly to Other Supplies and audit recommendations Accountant 2015 Implemented
Materials Expense all purchases
of supplies and materials not
paid out of the PCF for fair
presentation of the Supplies and
Materials Inventory account in
the Statement of Financial
Position.

ML 2014 (90) The Accounting Unit and the Accountant and the Supply Exert all efforts to comply with the Accountant January onwards Partially
Supply Unit do not maintain the Officer to maintain properly the audit recommendations Supply Officer 2015 Implemented
Supplies Ledger Card (SLC) and SLC and the SC for each item of
Stock Card (SC), respectively, for the supplies inventories
each item of Office Supplies
received/issued resulting to
difficulty of reconciling the
balances recorded in the
Accounting Unit and the Supply
Unit
ML 2014 (96) Submission of reports such as (a)
Disbursement Records with all
paid vouchers and supporting
documents and Liquidation
Reports; (b) Report of Collections
with corresponding issued Official
Receipts; (c) Trial
Balances/Financial Statements;
and (d) Bank Reconciliation
Statements, were delayed, thus,
deter us to a timely examination
and audit of the transactions and
communication of the results
thereof
The Accountant should submit
the Report of Disbursements and
Report of Collections together
with all the paid vouchers and
supporting documents
evidencing the transactions
regularly to the Audit Team
within ten (10) days from date of
receipt of said documents
Submit Financial Reports
regularly in compliance with
Section 71 of the Manual on
NGAS
The Management through the Accountant January onwards Fully
Administrative Division (Admin) and Cashier 2015 Implemented
Financial and Management Division
(FMD), shall register to the we
Access facility of the Land Bank of
the Philippines to be able to
immediately print the Bank
Statements and enable them to
prepare and submit the Bank
Reconciliation Statements on time

Submit Bank Reconciliation

Statement regularly in
compliance with Section of COA
Circular No. 96-011 dated
October 2, 1996

ML 2014 (104) The purposes and usefulness of
the Report on the Physical Count
of Inventories (RPCI) are not
attained due to non-submission
of the said report within the
required period in violation of
Section 65 of the Manual on the
NGAS, Volume II
Oblige the Inventory Committee Exert all efforts to comply with the Supply Officer January onwards Fully
to prepare and finalize audit recommendations 2015 Implemented
immediately the RPCI for
submission to the Auditor on or
before July 31 and January 31 of
each year as prescribed under
Section 65 of the MNGAS,
Volume II; and

Impose a deadline to all

concerned on the submission of
the RPCI so that reconciliation of
the physical inventories with the
accounting records can be done
and that discrepancies noted, if
any, can be corrected promptly
ML 2014 (109) The Collecting Officer does not
maintain Cash Receipts Record
(CRR) for cash collections and
deposits, thus, monitoring of
accountability at any given period
could not be easily determined
ML 2014 (117) The AO has not
prepared/submitted the monthly
Report of Accountability for
Accountable Forms (RAAF)
Instruct the Collecting Officer to Comply with the audit Cashier January onwards Fully
update her records by recommendations 2015 Implemented
accomplishing the prescribed
Cash Receipts Register in
accordance with Section 38 of
the MGAS, for proper monitoring
of her collections and deposits in
order to determine/establish
easily the running cash balance
at any point in time
Accountable Officer should Comply with the audit Cashier January onwards Fully
prepare and submit the Report recommendations Management 2015 Implemented
of Accountability of Accountable
Forms monthly to the concern
offices to comply with Sec. 445
of GAAM, Volume II, and Sec. 68
of MNGAS, Volume II, to check
the existence and completeness
of used and unused accountable
forms on hand
 Designate the custody,
safekeeping and disbursing of
other cash advances to other
qualified Officers/Employees so
that the Collecting/Disbursing
Officer could perform her duties
and responsibilities satisfactorily.
The management may also
add/assign qualified personnel
to assist the Cashier

ML 2014 (125) The insurance coverage of BLGF Property Officer should Secure Comply with the audit Property Officer January onwards Fully
properties, with net book value of immediately property insurance recommendations 2015 Implemented
P7,859,800.92 was inadequate for the properties which were
due to the non-renewal of the not included in the insurance
insurance of its properties (except coverage as required under RA
for motor vehicles) as required No. 656 and COA Circular 92-390
under RA No. 656 and COA dated November 17, 1992
Circular 92-390. Likewise, there
was no updated Inventory Report
of PPE submitted to the General
Insurance Fund of the
Government Insurance System
(GSIS) as basis for the insurance
coverage, thus, posing risks on
non-indemnification of the total
value of assets and properties in
case of loss
 Auditor’s Rejoinder: While it is
true that the subject disposable
properties may no longer be
required to be insured with the
GSIS, this does not mean that
Management should wait for
their properties to be considered
disposable first before these are
to be insured with the GSIS
because this is required under RA
No. 656.
ML 2014 (136) The Agency’s Acting Property
Officer and the Supply Officer
were not bonded, thus,
government properties were not
protected in case of improper or
unauthorized use or
misapplication thereof
Property Officer should ensure
that all insurable assets as
reported in the updated RPCPPE
duly verified by the Auditor are
adequately covered/insured with
GSIS
Concerned personnel of the Comply with the audit Accounting Unit January onwards Fully
Administrative and Finance recommendations 2015 Implemented
Division should immediately
secure fidelity bond insurance
for the Acting Property Officer
and the Supplies, based on the
Revised Schedule of Premium
Rates or Annex C of Treasury
Circular No. 02-2009 dated
August 6, 2009 to properly
safeguard the agency’s fund and
properties
ML 2014 (144) An Official Receipt or Taximeter Comply with the BIR and LTFRB Comply with the audit Management January onwards Fully
Issuing Receipt were not attached regulations to always ask from recommendations 2015 Implemented
for the taxi fares claimed by some the taxi driver/s an OR/TIR for
employees for their travel from the reimbursement of taxi fare as
their residence to airport and vice this is a requirement for the
versa but instead used a reimbursement of traveling
Reimbursement Expense Receipt expenses since this is considered
(RER) which is not in accordance as an official function.
with COA Circular No. 2004-006 Otherwise, taxi fares without TIR
dated September 9, 2004 and should be disallowed in audit
Revenue Regulations No. 17-2006
dated September 6, 2006

ML 2014 (151) The airline ticket/fare in the Adhere strictly with Section 73, Comply with the audit Management January onwards Partially
amount of P8,257.00 incurred by Book VI of the Revised recommendations 2015 Implemented
the Deputy Executive Director for Administrative Code of 1987 and
Administration who was invited the policy of BLGF as embodied
by the PHALTRA President to in the Training Manual System
grace the 81st National Guidebook on charging the
Convention and Seminar Traveling Expense of the invited
Workshop of all local government officers to act as resource
treasurers and assessors and to persons/subject matter experts
deliver a message was charged to
the account Travelling Expenses -
Local in violation of Section 73,
Book VI of the Revised
Administrative Code of 1987 and
the policy statement of BLGF as
embodied in its Training
Management System Guidebook
ML 2014 (157) Airline tickets for P99,568.00 of Direct the concerned officers and Comply with the audit Concerned January onwards Fully
some officers/employees were employees who booked their recommendations Officers and 2015 Implemented
booked through private airline tickets through private Employees
companies rather than booking firms to explain/justify. Likewise,
directly with the airlines the practice of booking airline
companies which resulted in a fares through a private firm
higher rates/fares as compared to should be stopped and refrained
the officers/employees who from to avoid
booked directly with the suspensions/disallowances
airlines/bus, thus,
disadvantageous to the
government
ML 2014 (163) The Agency’s GAD Plan and
Budget (GPB) for the year 2014,
was not endorsed by Philippine
Commission on Women (PCW) to
the Department of Budget and
Management (DBM) as required
under Section 12.2.1 of the PCW-
NEDA-DBM Joint Circular No.
2012-01, thus, the GAD
Accomplishment Report (AR)
submitted could not be
determined whether the
activities could be considered
sufficient compliance or aligned
with said requirement
ML 2014 (170) The amount allocated for Gender
and Development (GAD)
programs for CY 2014 was only
P3,033,296.80 instead of the
amount required under Section
28 of the GAA which is
P3,223,450.00 or five percent
(5%) of the total budget of the
Agency. As such, the benefits
that could be derived by the
beneficiaries on GAD program
and activities were not fully
achieved
GAD Plan and Budget should Comply with the audit Admin January onwards Fully
always be in accordance with the recommendations GAD Focal 2015 Implemented
applicable guidelines and Person
activities in support to GAD
focused program approved and
properly endorsed by PCW to
the DBM as required under
Section 28 of GAA to determine
whether the GAD
Accomplishment Report is
compliant with the endorsed
GAD Plan and Budget
Allocate at least five percent of Comply with the audit January onwards Fully
their budget for GAD programs recommendations 2015 Implemented
as provided for under Section 28
of the GAA for FY 2014 in order
to carry-out all projects that
were identified and to be GAD
related
 Reason for
Partial/Delay/Non Actual Implementation Date
Action taken/Action to be taken Date of Follow-up Status of Implementation REMARKS
implementation, if
applicable
From To
The Supply Officer has submitted Copy received.
the required RSMI to the Accounting
Division and to the Auditing Office.
Adjustments were already made by
the Accounting Division on January
2015 December 31,
Fully Implemented June 2, 2015 2015

No Inventory Committee was Management has ordered the No Inventory Committee was created
created Property Officer to prepare the thus no deatiled inventory action plan
Inventory Plan. was submitted to the Auditor. No
physical inventory was conducted for the
year 2015 as of the date. Imposition of
deadline for the submission of RPCPPE is
still ongoing.

Not Implemented
 still ongoing.

RPCPPE for 2014 has been

submitted

Not Implemented

Ongoing

The Supply Officer is still in the Reconciliation of Supplies and

process of obtaining RIS' and Accounting Records are still ongoing. No
preparing Inventory reports for the inventory committee was created to
years without reports conduct physical count of inventories.
Ongoing
Reconciliation on-going

Not implemented

The Accounting unit has submitted

the required documentary
requirements on April 28, 2015

Fully Implemented

The Bookkeeper has adjusted and The Bookkeeper has adjusted and
reclassified the said accounts to reclassified to the account Accountable
their proper accounts Forms, Plates and Stickers Inventory but
failed to create Drugs and Medicines
Inventory account thus account is still
misstated and unadjusted.
Partially Implemented

The Accountant has acquired a copy Status of implementation is still ongoing.

of the Financial Statements of
LOGOFIND from the project
accountant

Ongoing
To coordinate with the former
project accountant while effecting Ongoing
the transferring and closing of
balances

The Supply Offcer in coordination Status of implementation is stil ongoing.

with the Accountant is in the
process of obtaining records to help
with the reconciliation of accounts
with DBM-PS

Ongoing

Management commented that they

have been diligently and efficiently
managing its cash program in
accordance with the rules and
regulations. The issuance of the
National Budget Circular No. 551
dated January 2, 2014, amends the
DBM Circular Letter 2011-15 which
provides that “NCAs to cover the
2nd semester requirements for
regular budget shall be subject to
the submission of FARs/Budget Not Implemented
Accountability Reports (BARS) as of
end of June 30 and consistent with
the DBCC-approved MDP.
On the reverted amount of
P13,006,244.30, this comprises
Personnel Services for funded
positions of employees who availed
of the retirement option under the
Rationalization Plan of the BLGF.
Thus, resulting to an unused cash
for Personnel Services.

For the Capital Outlay of

P5,000,000.00, the amount is
intended for the purchase of
furniture and fixtures for the newly
renovated office space, however,
the DOF, furnished the Phase I
renovation project. DOF and BLGF
agreed that the amount be used for
the rehabilitation of the Air
Handling Unit, but the said
undertaking will cost
P10,559,222.04 and the P5,000,000
budget is not sufficient for that
project, hence, the funds for capital
outlay was reverted.

The amount reverted cannot be

used for the payment of unpaid
obligations since said obligations or
services were not yet delivered nor
rendered
 Management fully understands the
difference of NCA and allotment,
however, funds on hand could not
be use to pay existing obligations as
at year-end because the creditors
has not yet issued billing statements
or statement of accounts during
that time.

Management commented
that supplies purchased from
outside suppliers were
recognized immediately as
expense to simplify journal
entries because these items
were immediately issued to
end-users upon delivery and
supported with
corresponding RSMI
Not Implemented

Impracticability of Stock Cards are now being Stock Cards and Supplies Ledger Cards
maintaining two similar maintained by the Supply Officer are now being maintained but not yet
ledger cards updated as of date.

Partially Implemented
The Cash and Accounting Unit has The management has now registered to
already registered to the weAccess the eMDS system of Landbank to provide
facility of the Landbank of the easier and faster access to bank
Philippines statements and reports.

Fully Implemented

Supply Officer has submitted RPCI

for July 31 and January 31 of 2015
to the Auditor

Fully Implemented
Management commented that
participants to the CPD courses
requires sending registration
through email to the Training
Management Staff at
tms.blgf.gov.ph. Once the training
team acknowledges the registration,
participants are required to deposit
their payments through Land Bank
of the Philippines (LBP). The Official
Receipt is issued to the participant
in the venue during the training. In
this case, the Cashier was not able
to keep track immediately those
who have paid and relied only on
the Bank Statements provided by
the LBP, hence, encounter difficulty
in maintaining an updated CRR

The RAAF are already submitted by

the Cashier.

The management has designated

another employee to the Cash
Section to assist the Cashier

Fully Implemented
 Fully Implemented

Management commented that they

are in the process of disposing
Office Furniture and Fixtures and
Other Properties. The renovated
office of the BLGF is furnished by
the DOF. They opined that it is no
longer necessary to insure the
properties which are to be disposed
Management immediately acted on
the recommendation and in the
process of securing all the necessary
documents for the bonds
application of the AOs
As of the date, the Auditor has not
received any document for the bonds
application of the accountable officers

Not implemented
 The OIC-Executive Director in his
Memorandum dated May 15, 2015
directed to all officers/employees
that reimbursement of taxi fares
without submitting the ORs /TIR as
required by the BIR and LTFRB rules
and regulations, will be disallowed
effective May 7, 2015

Fully Implemented

Management commented Exert all efforts to adhere strictly to

that while the Bureau is Section 73, Book VI of the Revised
exerting all efforts to conform Administrative Code of 1987 and
with the rules and the policy of BLGF
regulations of the existing
travel policies of Resource
Persons, it is sometimes
inevitable that transportation
expenses are not shouldered
by the recipient agency. In
the case of Deputy Executive
Director for Administration,
her plane fare was not
shouldered by the PHALTRA,
as certified by the attached
Certification, hence her ticket Partially Implemented
was purchased by the Bureau
Management commented that
during the bookings made, there
was no advice that bookings have to
be made directly with airlines
companies. The memorandum itself
does not provide a legal basis to
support this Observation.
Moreover, there is no conclusive
proof given that the BLGF was put in
a disadvantageous position when it
bought the ticket from the travel
agencies.

Fully Implemented
It is not always the case that the
airline companies give lower rates
than accredited travel agencies. The
latter are given slots with lower
rates. Such that, if a buyer can
luckily avail of these slots, there is a
possibility that he/she will pay
smaller amount.

As of today the Bureau has stopped

purchasing airline tickets from
private companies
Management has adhered with the
recommendation

Fully Implemented

GAD Focal Person has adhered with

the recommendation, used
attribution method in the
preparation of the GAD Plan

Fully Implemented
GAD Activities were conducted