AOM No.

: 2018-001(17)CRH

Date : March 2, 2018

AOM REPLY

MARITESS A. ODTOJAN, CESE

Regional Supervising Auditor
COMMISSION ON AUDIT
Butuan City

Ma’am,

Greetings!

This is in response to your Audit Observation Memorandum (AOM) No. 2018-001-(17)CRH dated
January 22, 2018 in which we received on the 28th of March 2018 stating the following findings:

Finding No. 1 – Collection and Remittances of the five Accountable Officers which totalled to
P10,554,154.98 and P10,486,468.31, respectively, could not be readily ascertained due to the non-
maintenance of a Cash Receipt Records, thus, affecting the reliability and completeness of the
reported balances on their monthly collections and remittances.

The management is amenable to this finding as the existing set-up in the Cash Section is that only the
Designated Collecting and Liquidating Officer is the only personnel maintaining the Cash Receipt
Records (CRRec) and Report of Collections and Deposits (RCD), as all other Collecting Officers are
turning over their collections to the former for consolidation of the required reports and deposit.

And in order to correct this finding, the management will direct all Collecting Officer to maintain a
Cash Receipt Records compliant to the Appendix 29 Forms of GAM Volume II, and regularly be
reviewed by the Head of the Cashier Section.

Finding No. 2 – The amount of fidelity bond of seven Accountable Officers is significantly lower than
the required bond amount in accordance with Treasury Circular No.02-2009 dated August 6, 2009,
thus, exposing to the risk against loss of public funds while in transit, caused by fire, theft or other
casualty or force majeure.

The management already directed the Head of Cash Section to review and update the required amount
of bond for Accountable Officers and to monitor their average monthly collection to determine their
respective accountability prior to the filing of renewal of the fidelity bond. In fact, the bonds of some
of the Accountable Officers were already increased based on the recommendation/computation by
your Auditors.

Finding No. 3 – The balance of accountability of eight Accountable Officers totalled P259,142.21 as
of May 4, 2017, the Cash Examination date is not supported by a Subsidiary Ledger from the
Accounting from the Accounting Section, thus, periodic reconciliation was not made which cast doubt
to accuracy and validity of the reported balances of accountability.

To address this finding, the management will direct the Accountant to prepare and maintain
Subsidiary Ledgers for every Accountable Officers upon submission of their individual Report of
Collection and Deposits (RCDs) as basis for the entries to be made in the Subsidiary Ledgers.

In addition, the management will direct the Accountant and the Cashier to regularly reconcile their
respective registers/records/books and to follow the guidelines prescribed by the GAM.

Moreover, the management will ensure that all risks involving cash operation are adequately
identified and included in the Risk Register, and that proper control measures are effectively installed
to reduce, if not eliminate the risks and promote efficiency in the performance of tasks by the
Accounting and Cashiering Section’s personnel.

Rest assured, the management will adhere to the requirements under Section 124 of PD 1445 to
install, implement, and monitor sound internal control system within the hospital.

Truly yours,

PONCIANO S. LIMCANGCO,MD,MBA,CEO VI
Medical Center Chief - I