AGREED-UPON PROCEDURES ENGAGEMENT FOR CALAPAN CITY NIGHT MARKET ASSOCIATION

FOR THE PERIOD JUNE 1, 2013 FEBRUARY 7, 2014

OBJECTIVES OF THE ENGAGEMENT

The objective of this engagement is to:
Carry out audit procedures agreed on with the clients and any appropriate third parties identified in the report Examine cash and accounts Evaluate the completeness of its documents and records Recommend any suggestions which will be helpful in solving problems becoming known to us

SCOPE OF THE ENGAGEMENT

The scope of this engagement covers the Night Market Associations transactions from June 1, 2013- February 7,2014. The analysis of the association will include the investigation of the following processes :

Authorization Collection Recording Disbursement Loan Custody

ENGAGEMENT TEAM
Cash Collection Group Team Leader: Jiely Abigail Balat Team Members: Ronalyn Cabrillas Joana Marie Cabanatan Von Carlo Anonuevo Nina Marie Armada Raymond Joseph Paredes Jaime Victorio Gutierrez- Document Custodian
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ENGAGEMENT TEAM
Cash Disbursements Group Team Leader: Jayson Malimata Team Members: Ramil Populi Rolito Dionela Lyn Castillo Jonna Cortez Sheryl Decano

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ENGAGEMENT TEAM
Risk Assessment Group Team Leader: Jessica Egeron Team Members: Myla Custodio April Bagot Sharlene Aleman Dennis Dimaano

ENGAGEMENT TEAM

Instructor: Mr. Mark Edgar Aceron, CPA

Support: Babynor Laudencia, CPA (former City Govt Auditor and Provl Auditor)
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SAMAHAN NG MANININDA SA NIGHT MARKET NG LUNGSOD NG CALAPAN (NIGHT MARKET ASSOCIATION)

Association of night market vendors Located at Calapan City Public Market began operating since June 1 , 2013 registered as a legitimate Workers Association of the Philippines since July 10, 2013, under the Department of Labor and Employment. As agreed, each member will contribute: P100 membership fee P5.00 per member for the fund per day P5.00 per stall for the security guards weekly wages The fund is made available to members as: loan if applied for return of capital in case of withdrawal

LIST OF OFFICERS
June 10, 2013 President: Celso Diaz Vice-president: Richard Icaro Secretary: Rosalea Rodriguez Treasurer: Joane Maralit Auditor: Grace Saballo P.R.O.: Romnick Soriano Rowena Culala Sgt at Arms: Rey Torrecampo
Joane Maralit , the treasurer resigned and Rowena Culala , the P.R.O ser ved as the treasurer af ter Maralits resignation.
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CURRENT SYSTEM OVERVIEW

The security guard collects and records the members contribution for the fund and the contribution for his weekly wages
The grant of loan is to be approved by the president and treasurer of the association. The P.R.O. collects and records the daily payment of loan of members who have borrowed. The two above remit their collection to the treasurer.
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PROCEDURES OF THE ENGAGEMENT

The agreed procedures include examination of cash and accounts.

DETAILED PROCEDURES PERFORMED

Engagement Planning

Conduct preliminary activities Initial documentation Inspecting records and documents Design and preparation of working papers Extracting and encoding information Observation of collection Obtaining confirmation Recomputation and analysis of amounts and balances
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 Supervision and direction by team leaders

Review and verification of work accomplished Comparison of amounts and balances established Observation of cash count Review of subsequent period records (Jan-Feb)

Preparation of Statement of Accountability

Drafting and designing of system flowcharts Final editing of working papers Final review by overall audit team leader Final documentation, completion of narrative report
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The following were identified:

Source of Collection: Membership fee, Trust fund, security guard fund, Loan Collection, Filing Fee, Interest, Share Disbursement Activities: Weekly wages of security guard, loan grants, Anniversary of Night Market, miscellaneous expenses, DOLE registration fee, Christmas gifts

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FINDINGS AND RECOMMENDATIONS

FINDINGS The association is registered under DOLE RECOMMENDATIONS For long term purposes, register to SEC to obtain juridical personality. Bank account is named under Richard Pacia Bank account (legality is a requirement) should be Icaro, vice-president and Joanne Panganiban named under the organization. Maralit, treasurer of the association Unclear policies like in the loan agreement: penalty-papatawan ng ___________ Establish clear and specific policies and terms of agreement and make sure they are followed. Example: Set a fixed interest for loan and state the Inconsistent application of interest on loans manner of payment including consequences in case of default Guard collects fund for payment for himself One person is assigned for Proper segregation of duties must be strictly

collection, observed.
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custody and recording

FINDINGS
appropriate duties like the PRO-who collects, keep and disburse money No proper list of members

RECOMMENDATIONS

Elected officers are not doing their Establish quality control procedures like monitoring.

Have formal list of members and a monthly update of it. Control number may be used to trace addition and withdrawal of members.

Records persons

are

kept

by

different Responsible/accountable officers must have enough knowledge of recordkeeping or they may hire a bookkeeper Association). (not a member of Night Market

Incomplete and unorganized records Subsidiary ledgers of every member must be provided. Documents must be proved/signed by proper

signatories.
Members who applied for loan are Members may maintain own records to verify their not aware of their outstanding balances.
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balance at a specific date

FINDINGS

RECOMMENDATIONS

Members with outstanding loan There should be a strict policy regarding the loan
balances are granted with a new application wherein loans are available only to members loan. having no outstanding balance since the association is still small and all the members should have equal rights to loan. No appropriate turnover of Every change in the officers, especially the Treasurer

records and cash on hand in case position should have an appropriate turnover in writing,

of

change

in

the

officers wherein the records and assets custody is appropriately

given to the new officer. This would help determine the accountable officers after an audit is conducted.

(Treasurer)

Deposit of collections in the Net bank is discontinued The treasurer resigned and the P.R.O. took over.
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amount

of

collections

(after

deduction

for

disbursement) should be deposited to savings account. There should be a policy regarding vacant positions and appointments.
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 Other Findings
There has been a record of collection for November 31, 2013. This day does not exist. Records for Security Guard Fund and Trust Fund ( paluwagan contribution) for January 6-14, 2014 are not included in the records requested. Cash shortage is calculated.

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OTHER RECOMMENDATION
Collection
Collecting officer collects the amounts due from the members, record the amount to the collection book, and remits to the Treasurer Treasurer is responsible for the custody of cash on hand and deposit the same to the associations bank account.

Disbursement
Before actual disbursement of cash, the disbursing officer should check if the transaction is authorized. If authorized, he will inform the Treasurer of the amount of outflow. The treasurer then gives the disbursing officer the said amount. Disbursing officer should record the transaction and release the amount to appropriate person.
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Control Number

SUBTOTAL Name

GRAND TOTAL

TOTAL PER AUDIT 7-Nov-13 8-Nov-13 9-Nov-13 20-Nov-13 21-Nov-13 22-Nov-13 23-Nov-13 Subtotal 24-Nov-13 25-Nov-13 26-Nov-13 27-Nov-13

OVER/ UNDER

ABSTRACT OF COLLECTION:
SECURIT Y GUARD
28-Nov-13
29-Nov-13 30-Nov-13 Subtotal Total

Control Number

SUBTOTAL

Name

GRAND TOTAL

TOTAL PER AUDIT 7-Nov-13 8-Nov-13 9-Nov-13 20-Nov-13 21-Nov-13 22-Nov-13 23-Nov-13 Subtotal 24-Nov-13 25-Nov-13 26-Nov-13 27-Nov-13 28-Nov-13

OVER/ UNDER

ABSTRACT OF COLLECTION:
TRUST FUND
29-Nov-13
30-Nov-13

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Subtotal Total

ABSTRACT OF COLLECTION:
TRUST FUND AND SECURIT Y GUARD
JUNE CONTROL NUMBER TF 119
WPTF1S

JULY TF TOTAL SG TOTAL

WPTF2B WP-SG2B WPTF3B

AUGUST TF SG TOTAL
WP-SG3B WPTF4B

SEPTEMBER TF SG TOTAL
WP-SG4B WPTF5B

OCTOBER TF SG TOTAL
WP-SG5B

NAME

TF 2030
WPTF1B

SG

WP-SG1B

SUBTOTAL GRAND TOTAL TOTAL PER AUDIT OVER/ UNDER

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ABSTRACT OF COLLECTION:
WEEKLY LOAN COLLECTION
NAME: WEEKLY LOAN COLLECTION FOR THE MONTH OF___________ Weekly Reconciliation

1
1.

2
Amount paid Initial(member)

3
Amount paid Initial(member)

4
Amount paid Initial(member)

5
Amount paid Initial(member)

6
Amount paid Initial(member

7
Amount paid Initial(member

Amount paid Initial(member)

TOTAL SIGNATURE

2.

3.

4.

5.

6.

7.

8.

9.

1O.

11.

ABSTRACT OF COLLECTION:
SUMMARY LOAN COLLECTION
CTRL #
DATE OF RELEASE AMOUNT PAID Reference Number Balance from _____ Loan

NAME

DUE DATE

AMOUNT

INTEREST

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Total Outstanding Balance

LOAN SUBSIDIARY LEDGER

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