Republic of the Philippines COMMISSION ON AUDIT NATIONAL GOVERNMENT SECTOR Cluster C Social Services OFFICE OF THE SUPERVISING AUDITOR

R Department of Health Audit Group Sta. Cruz, Manila

April 15, 2012 DIR. TOMAS M. OSIAS Executive Director Commission on Population Main Office Addition Hills, Welfareville Compound, Mandaluyong City Dear Director Osias: Management Letter on the Audit of the Commission on Population Main Office for the Calendar Year 2011 1. Pursuant to Section 2, Article IX-D of the Constitution of the Philippines and Section 43 of the Government Auditing Code of the Philippines (PD No. 1445), we have audited the accounts and operations of the Commission on Population (POPCOM) Main Office for the period ended December 31, 2011. The audit was conducted in accordance with applicable legal and regulatory requirements and generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain a reasonable basis for our conclusions. 2. The audit was conducted by the audit team led by Mr./Ms. _______, State Auditor IV, to (a) verify the level of assurance that may be placed on managements assertions on the financial statements; (b) recommend agency improvement opportunities; and (c) determine the extent of implementation of prior years audit recommendations. 3. The Agencys financial conditions, results of operations and cash flows as of December 31, 2011 are shown in the attached audited financial statements (Annexes A-E). 4. Deficiencies observed in the course of the audit were earlier communicated through Audit Observation Memoranda (AOM) and discussed in an exit conference with concerned Commission on Population Main Office officials and employees on _______. Their comments were incorporated in this Management Letter, where appropriate. The significant audit
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observations and recommendations shall be incorporated in the Consolidated Annual Audit Report (CAAR) of the Commission on Population for CY 2011. A. INTRODUCTION 5. 6. 7. Agencys mandate and personnel complement Major accomplishments Financial Profile B. SUMMARY OF RECOMMENDATIONS (Applicable if there are two or more observations) 8. that: a. For the significant deficiencies observed in the course of the audit, we recommended The Accountant (i) secure bank statements from the depository banks for all the bank accounts, including those with reported negative balances; (ii) verify, analyze the subsidiary accounts reconcile the same with secured bank statements and make the needed adjustments; and (iii) remit the unexpended balances to the National Treasury in compliance with EO No.338, s. of 1996 and COA Circular No. 97-001 dated February 5, 1997 or return to the donors, as the case may be. The BAC (i) render explanation on the noted excessive procured price of the two (2) Units Commuter Vans; and (ii) as allowed by the IRR of R.A. No. 1984, update the APP as often as the need arises to have a reliable and updated price references in obtaining the most advantageous offers for items to be procured. C. DETAILED OBSERVATIONS AND RECOMMENDATIONS FINANCIAL AND COMPLIANCE The Cash in Bank Local Currency, Current Account with book balance of P884,934.26 still includes the P753,347.55 balances of terminated/completed ten projects as these were not yet remitted to the National Treasury as required under Executive Order No. 338 and COA Circular No. 97-001. Further, the causes of the disparity between the book and bank balances of cash balances totaling P38,778.11 could not be ascertained due to nonpreparation of the bank reconciliation statements prescribed by COA Circular 92-125A which rendered the reported cash in bank balance as of year-end unreliable. 9. 10. 11. Xxx Xxx Xxx
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b.

12. We recommended and the Accountant agreed to (i) secure bank statements from the depository banks for all the bank accounts, including those with reported negative balances; (ii) verify, analyze the subsidiary accounts reconcile the same with secured bank statements and make the needed adjustments; and (iii) remit the unexpended balances to the National Treasury in compliance with EO No.338, s. of 1996 and COA Circular No. 97001 dated February 5, 1997 or return to the donors, as the case may be. VALUE FOR MONEY The procured price of P2,820,000.00 of the two commuter vans was excessive by P420,000.00 or 17.5 percent when compared with the prevailing Sales Retail Price from the same brand dealers which was beyond the 10% price variance between the procured and canvassed price allowed by COA Circular No. 85-55A. 13. 14. 15. 16. Xxx Xxx Xxx We recommended that the BAC: a. Render an explanation on the noted excessive procured price of the two (2) Units Commuter Vans; and b. As allowed by the IRR of R.A. No. 1984, update the APP as often as the need arises to have a reliable and updated price references in obtaining the most advantageous offers for items to be procured. 17. 18. The POPCOM Management presented the following explanations, to wit: Xxx (Auditors rejoinder)

GENDER AND DEVELOPMENT 19. 20. Xxx Xxx

SENIOR CITIZENS AND DIFFERENTLY ABLED PERSONS 21. 22.

Xxx Xxx 3

COMPLIANCE WITH TAX LAWS 23. 24. Xxx Xxx

SETTLEMENT OF SUSPENSIONS, DISALLOWANCES AND CHARGES 25. 26. Xxx Xxx D. STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT RECOMMENDATIONS 27. We made a follow-up on the action taken by the Management to implement the recommendations of prior years and noted the following: Status of Implementation Fully Implemented Partially Implemented Not Implemented Total No. of Recommendations 3 15 1 19

28. The results of the validation of the implementation of prior years recommendations are presented in Annex H. E. ACKNOWLEDGEMENT 29. We wish to express our appreciation to the Management and staff of POPCOM Main Office for the cooperation and assistance extended to our audit team during the audit. 30. We request a status report on the action taken on the audit recommendations within 60 days from the date of receipt hereof pursuant to Section 95, General Provisions, General Appropriations Act FY 2011 (R.A. 10147). Very truly yours, MA. CORAZON S. GOMEZ Supervising Auditor DOH Audit Group
Copy Furnished: The Cluster Director
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Cluster C Social Services National Government Sector Commission Audit Quezon City The Honorable Secretary Department of Health Manila

ANNEXES Annex Letter A B C D E F G H

Particulars Statement of Managements Responsibility for Financial Statements Detailed Balance Sheet for CY 2011 with Comparative Figures for CY 2010 Detailed Statement of Income and Expenses for CY 2011 with Comparative Figures for CY 2010 Detailed Statement of Cash Flows for CY 2011 with Comparative Figures for CY 2010 Notes to Financial Statements Status of Implementation of Prior Years Audit Recommendation

Annex H
STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT RECOMMENDATIONS Status of Implementation (Full, Partial, Not Implemented) Reason for Partial or NonImplementation

Observations and Recommendations

Ref.

Managements Action