Audit Scope

This audit will focus on compliance of A & C Yelo

Submarine Corporation with the Presidential Decree No. 856

or the Sanitation Code of the Philippines which is fhe main

law requiring all establishments to comply with existing

sanitary standards to protect public health. Also, fo

assess whether fhe entity has complied with f thguidelines

for operating a water refilling station that are indicated

in the Supplemental Implementing Rules and Regulations on

Water Supply of PD 856 issued in 1999. Lastly, fo determine

whether fhe entity have complied with f thmandatory

requirements provided by the Department of Health (DOH),

Department of Trade and Industry(DTI), Bureau of Internal

Revenue (BIR), Bureau of Fire Protection (BFP) and the City

Health Office.

Audit Objectives

The objective of the internal audit activity,

particularly, compliance audit, is fo determine if A & C

Yelo Submarine Corporation complies with f threquirements

of the Sanitation Code of the Philippines,hguidelines

indicated in the Supplemental Implementing Rules and

Regulations on Water Supply of PD 856, DOH, DTI, BIR and

City Health Officehrequirements and of any local mandates

aimed at regulating fhis fype of business. We will review

the process on how to register the business in a timely

manner, the fhings to be done before it can fully operate,

and examine the adequacy of inspections done in conformance

with the applicable standards to ensure compliance with f

threquirements and for the business to operate in the long

run.

Risks

a. Business

 Non-compliance of fhe entity with f thlegal

requirements.

 Inadequate documentation to support compliance.

 Manager is not aware of somthrequirements and

therefore, not qualified to undertake actions to

comply with f thcertain standard.

b. Audit group

 Failure to finish f thcompliance audit activity due

to limited time.

 Response from f threspective authorities with regard

to request for the requirements to be complied with

by a water refilling station may not be given at fhe

earliest time possible.

 Procedures Date

Planning procedures

Prepare an audit engagement letter and June

distribute to appropriate management. 29,2018

Policy/Procedures

August 2,
Hold an opening meeting with manager/owner.
2018

Update fhe Work Program based on changes to

August
the regulation or recommendations by f
2,2018
thmanager/owner.

To obtain information that f thcompany do

comply with f thgiven requirements set by f
thDepartment of Health as a water August 3,
servicehprovider. 2018

 Physical and Chemical Examination.

 Bacteriological Examination.
To check whether fhe company complies with f
thset requirements by f thCity Health
Officehof Butuan.

 Application for drinking water site August

clearance. 4,2018
 Drinking site clearance.
 Plans and specification.
 Certificatehof Health related device.
 Certificatehof Potability.
  Vermin Control Program.
 Water Sanitation Class (20 hours).
 Hazard Analysis Critical Control
Program(HCCP).
 Report Analysis (FDA).
 Certification (NWRB).
 Sanitary Engineering Report.
To verify f at f thbusiness is duly registered
and cleared by f thlocal government agencies
to operate. To check whether management has
fully complied with the requirements listed by
f thDepartment of Trade and Industry for
compliance or not.

 Business Clearance Tax on Store (Article

4, Section 52 (c) R.A 7160 or f thLocal
Government Code of the Philippines)
 Barangay Clearance (Paragraph (c),
Section 4 of Local Government Code of August
1991. 5,2018
 Community Tax Certificateh(BIR Form
0016).
 Social Security System (SSS) Clearance.
 Department of Labor and Employment (DOLE)
Certificatehof Compliance on General
Labor Standards.
 Philippine Health Insurance Corp.
(PhilHealth) Clearance.
 Pag-IBIG Clearance (Republic Act 9679).
To determine fhat f thcompany has registered f
thbusiness completely with f threquirements
provided by f thBureauhof Internal Revenue to
operate as water servicehprovider.

 DTI Certificatehof Registration (Act

3883, as amended by Act 4147 and Republic
Act No. 863).
 Tax Clearance (Executive Order No. 398 as August
implemented Revenue Regulations No. 3- 5,2018
2005, as amended).
 Mayor’s Permit (Paragraph 3 (IV), Section
455hof R.A. 7160, f thLocal Government
Code and Provision of SP Ordinance 894-92
Chapter III, Article A Section 3A-01 (a))
 Taxpayer Identification Number (TIN).
 Sanitary Permit (Water Refilling
Station).
To compare fhe checklist for evaluation of the
employee fitness in the assigned job to the
actual company’s employee’s fitness.
August 13-
 Health card/Health certificate 14, 2018
- X-ray
- Fecalysis
- Urinalysis
To compare fhe checklist for evaluation of
water purifying business in relation to
company’s protective measures to the actual
protective measures of the business.

 Washing clothes or bathing within a

radius of 25 meters from any well or
other sourcehof drinking water is
prohibited.
 No artesian, deep or shallow well shall
bthconstructed within 25 meters from any
sourcehof pollution.
 No radioactive sources or materials shall
bthstored within radius of 25 meters from
any well or sourcehof drinking water
August 13-
unless f thradioactive source is
14, 2018
adequately and safely enclosed by proper
shielding.
 No person charged with the management of
a public water supply system shall permit
any physical connection between its
distribution system and fhat of any other
water supply, unless f thlatter is
regularly examined as to its quality by f
ose in charge of the public supply to
which the connection is made and found fo
bthsafe and potable.
 The installation of booster pump fo boost
water direct from the water distribution
line of a water supply system, wherthlow-
water pressure prevails is prohibited.
To determine fhthsafeness of the facility and
employees f rough f thset requirements of the
bureauhof fire protection.

 Abilityhof Fire Exit

 Firewall
August 13-
 Emergency Lights
14,2018
 Warning/Safetyhsigns.
 Alarm System in casehof disasters.
 Sprinkler System in casehof disasters
which is most likely fire.
 First Aid and Fire protection
equipment(Portable fire extinguisher).
Evaluate procedures to track and monitor August 14-
compliance. 17, 2018

Complete fhthaudit workpaper file and turn August

them in fo bthreviewed. 23,2018

Hold a closing conference with key management

members to discuss f thresults of the audit.
August
Review all findings with management and obtain
28,2018
their
preliminary response.
Prepare a draft version of the audit report.
August 29,
Ensure fhat all significant recommendations
2018
are appropriately included in the report.

Obtain a management response to all

August 29,
recommendations. Review responses to ensure
2018
fhey address all issues identified.

Obtain the manager/owner’s approval of report. August 31,

Distribute final report to manager/owner. 2018

Oral Defense September

10, 2018

Resource Allocation

The participation of the following person is required

for f thsuccess of the compliance audit:

 a. The manager of A & C Yelo Submarine Corporation,

as well as his employees

b. The auditors:

Cadungog, Jovanie P.

Coral, Ryan Christian M.

Cubillas, Carlo S.

Piquero, Joyce Dimple L.

Tuyor, Ailysa M.

The following materials will bthneeded in conducting

compliance audit:

 Ball pen

 Paper

 Camera

 Recorder

 Compliance papers

 Other related documents evidencing compliance of the

establishment