Republic of the Philippines COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City
ANNUAL AUDIT REPORT
on the
HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL
For the Year Ended December 31, 2013
i
EXECUTIVE SUMMARY
A. Introduction
The House of Representatives Electoral Tribunal (HRET) was constituted
under Section 17, Article VI of the 1987 Philippine Constitution to act as the sole
judge of all contests relating to the election, returns and qualifications of Members of
the House of Representatives. The major function of the HRET and its principal
program, project and activity is the adjudication of electoral contests involving
Members of the House of Representatives.
B. Financial Highlights
A comparative analysis of the financial condition and allotment and utilization
of funds for the years 2013 and 2012 is presented below:
Financial Condition
Sources and Uses of Funds
Particulars
2013
2012
Increase/
(Decrease)
Allotments Received 155,902,111.80 138,551,688.20 17,350,423.60
Continuing
Appropriations
411,200.00
4,870,311.80
(4,459,111.80)
Total Allotments 156,313,311.80 143,422,000.00 12,891,311.80
Obligations Incurred 155,732,856.33 138,214,961.71 17,517,894.62
Unexpended Balance 580,455.47 5,207,038.29 (4,626,582.82)
The Statement of Allotments, Obligations and Balances for calendar year
2012 is shown in Annex A.
Particulars
2013
2012
Increase/
(Decrease)
Assets 38,550,306.29 18,097,207.69 20,453,098.60
Liabilities 25,508,809.60 13,174,669.93 12,334,139.67
Equity 13,041,496.69 4,922,537.76 8,118,958.93
ii
C. Scope of Audit
An audit was made on the accounts and operations of the HRET for the CY
2013. The audit was aimed to ascertain the propriety of the financial transactions and
determine the fairness of the presentation of the financial statements of the agency.
D. Auditor’s Report
The Auditor rendered an unqualified opinion on the fairness of presentation of
the financial statements of HRET as of December 31, 2013.
E. Audit Observations and Recommendations
The following audit observations and corresponding recommendations were
discussed with management officials concerned during the exit conference on June 2,
2014 and their comments were incorporated in the report, where appropriate:
1. Management failed to furnish the Office of the Auditor copy of purchase orders
within five (5) working days from issuance thereof contrary to COA Circular
No. 2009-001 dated February 12, 2009.
We recommended that Management require the official concerned to comply
with COA Circular No. 2009-001 dated February 12, 2009 on the submission of
a copy of purchase order issued within the reglementary period.
2. The agency did not have programs/projects related to senior citizens and the
differently-abled persons as required under Section 29 of the General
Provisions of the General Appropriations Act (GAA) for CY 2013 (RA 10352).
We recommended that Management prepare programs/projects related to the
senior citizens and differently-abled persons as required in the above cited
GAA provision.
F. Implementation of Prior Years’ Recommendations
Of the four prior years’ audit recommendations, one was implemented and
three were not implemented.
TABLE OF CONTENTS
PART PARTICULARS PAGE
I
Audited Financial Statements
Independent Auditor’s Report
Statement of Management’s Responsibility
for Financial Statements
Balance Sheet
Statement of Income and Expenses
Statement of Cash Flows
Notes to Financial Statements
1
2
3
5
7
9
II
Observations and Recommendations 16
III Status of Implementation of Prior Years’ Audit
Recommendations
20
IV Annexes
22
Statement of Allotments, Obligations and Balances
Breakdown of Expenditure/Obligations Incurred
Obligations Liquidated/Disbursement and Unliquidated
Obligations
PART I
AUDITED FINANCIAL STATEMENTS
PART II
OBSERVATIONS AND RECOMMENDATIONS
PART III
STATUS OF IMPLEMENTATION OF PRIOR YEARS’
AUDIT RECOMMENDATIONS
PART IV
ANNEXES
INDEPENDENT AUDITOR’S REPORT
Honorable Presbitero J. Velasco, Jr.
Chairman
House of Representatives Electoral Tribunal
Quezon City
Pursuant to Section 2, Article IX-D of the Philippine Constitution and pertinent
provisions of the Government Auditing Code of the Philippines (PD 1445), we have
audited the accompanying Balance Sheet of the House of Representatives Electoral
Tribunal as of December 31, 2013 and the related Statements of Income and Expenses
and Cash Flows for the year ended. These financial statements are the responsibility of
the Auditee. Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted state auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance that the financial statements are free from material misstatement/s.
Our audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements; assessing the accounting principles used and the
significant estimates made by the auditee, as well as, evaluating the overall financial
statements presentation. We believe that our audit provides reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the House of Representatives Electoral
Tribunal as of December 31, 2013, and the results of its operations and its cash flows for
the year then ended in conformity with applicable generally accepted state accounting
principles.
April 15, 2013
Republic of the Philippines
COMMISSION ON AUDIT Commonwealth Avenue, Quezon City
2
Notes 2013 2012
Current Assets
Cash 5
Petty Cash Fund 44,074.09 4,533.30
Cash - National Treasury - MDS 3,918,835.40 2,465,071.44
Cash in Bank - Local Currency, Current Account 17,443,568.42 6,752,698.47
Total Cash 21,406,477.91 9,222,303.21
Receivables 6
Due from NGAs 16,240.92 19,555.32
Advances to Officers and Employees 8,794.89 166,055.64
Total Receivables 25,035.81 185,610.96
Inventories 7
Office Supplies Inventory 549,717.82 221,857.63
Other Supplies Inventory 4,733.60 722.59
Spare Parts Inventory 5,152.00 5,152.00
Total Inventories 559,603.42 227,732.22
Prepayments 8
Other Prepaid Expenses 7,360.00 9,200.00
Other Current Assets 9
Guaranty Deposits 55,209.75 54,709.75
Total Current Assets 22,053,686.89 9,699,556.14
Investments 10
Investments in Stocks 24,500.00 24,500.00
Property, Plant and Equipment 11
Leasehold Improvements, Buildings 3,589,274.21 3,589,274.21
Office Equipment 4,819,687.90 4,592,149.86
HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL
Balance Sheet
As of December 31, 2013
(With comparative figures for CY 2012)
(In Philippine Peso)
ASSETS
3
Notes 2013 2012
Furniture and Fixtures 3,346,751.15 3,006,586.06
IT Equipment and Software 7,655,834.40 8,200,918.40
Library Books 1,177,612.40 1,131,124.30
Communication Equipment 1,110,727.92 1,451,532.92
Firefighting Equipment and Accessories 105,902.85 105,902.85
Other Machineries and Equipment 20,992.20 20,992.20
Motor Vehicles 8,856,142.17 1,945,642.17
Total Property, Plant and Equipment 30,682,925.20 24,044,122.97
Less: Total Accumulated Depreciation 14,534,072.96 15,998,408.57
Property, Plant and Equipment- Net 16,148,852.24 8,045,714.40
Other Assets 12
Other Assets 323,267.16 327,437.15
TOTAL ASSETS 38,550,306.29 18,097,207.69
Current Liabilities 13
Accounts Payable 8,149,778.55 6,338,852.93
Due to Officers and Employees 0.00 5.53
Due to National Treasury 7,004.48 5,899.67
Due to BIR 0.00 0.00
Due to GSIS 3,065.15 4,910.27
Due to Pag-IBIG 912.89 300.00
Due to PhilHealth 312.50 675.00
Performance Bonds Payable 21,000.00 21,000.00
Other Payables 17,326,736.03 6,803,026.53
Total Current Liabilities 25,508,809.60 13,174,669.93
Equity 14
Government Equity, Beginning 4,922,537.76 8,514,558.20
Retained Operating Surplus
Current Operations 8,112,413.62 (3,495,572.86)
Prior Years' Adjustments 6,545.31 (96,447.58)
Total Retained Operating Surplus 8,118,958.93 (3,592,020.44)
Government Equity, End 13,041,496.69 4,922,537.76
TOTAL LIABILITIES AND EQUITY 38,550,306.29 18,097,207.69
LIABILITIES AND EQUITY
See accompanying Notes to Financial Statements
4
9
HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL
Notes to Financial Statements December 31, 2013
1. General/Agency Profile
1.1 The House of Representatives Electoral Tribunal (HRET) was constituted under
the 1987 Constitution (Section 17, Article VI) to act as the sole judge of all
contests relating to the election, returns and qualifications of Members of the
House of Representatives (HREP).
1.2 The major function of the HRET and its principal program/project/activity is the
adjudication of electoral contests involving Members of the HREP. No target is
set for the number of electoral cases to be resolved each year because the
adjudication depends upon the progress of each proceeding strictly followed in
each case.
1.3 The Tribunal is composed of nine members, three of whom are Justices of
Supreme Court and the rest are Members of the HREP. The Senior Justice acts
as the Chairman.
The following are the incumbent officers of the Tribunal Proper as of
December 31, 2013:
Hon. Justice Presbitero J. Velasco, Jr. Chairman
Hon. Justice Diosdado M. Peralta Member
Hon. Justice Lucas P. Bersamin Member
Hon. Congressman Franklin P. Bautista Member
Hon. Congressman Wilfrido Mark Enverga Member
Hon. Congressman Joselito Andrew R. Mendoza Member
Hon. Congressman Jerry P.Trenas Member
Hon. Congresswoman Ma. Theresa B. Bonoan-David Member
Hon. Congressman Luzviminda C. Ilagan Member
1.4 The HRET has a total personnel complement of 124 as of December 31, 2013,
as follows:
Permanent 79
Co-terminus
45
Total 124
10
2. Basis of Financial Statements Presentation
The Financial Statements have been prepared in accordance with generally
accepted state accounting principles and standards.
3. Summary of Significant Accounting Policies
3.1 The Tribunal uses accrual basis of accounting. All expenses are recognized when
incurred and income is reported upon receipt. Income is generally composed of
filing fees, photocopying and certification charges and sale of Transcript of
Stenographic Notes (TSNs), HRET Rules, CDs and Reports of the Tribunal.
3.2 Notice of Cash Allocation (NCA) is recorded in the Regular Agency (RA)
books. The agency does not have authority to use whatever income it receives.
All collections are therefore recorded in the National Government (NG) books
and remitted to the National Treasury.
3.3 The modified obligation system is used to record allotments received and
obligations incurred. Separate registries are maintained to control allotments and
obligations for each class of allotment.
3.4 Petty Cash Fund (PCF) account is maintained under the Imprest System. All
replenishments are directly charged to the expense account. The PCF is not used
to purchase regular inventory items for stock.
3.5 The moving average method is used in the valuation of inventories.
3.6 Supplies and materials purchased are recorded using the Perpetual Inventory
System.
3.7 Property, Plant and Equipment (PPE) are carried at cost less accumulated
depreciation. Regular maintenance, repair and minor replacements are charged
against Maintenance and Other Operating Expenses (MOOE) as they are
incurred.
3.8 Straight Line Method of depreciation is used in depreciating the PPE with
estimated useful lives ranging from 5 to10 years as provided for in COA Circular
No. 2003-07 dated December 11, 2003 and as amended by COA Circular No.
2004-005 dated August 9, 2004. A residual value of 10 per cent of the cost of the
asset is set and depreciation starts on the next month after purchase.
3.9 Payable accounts are recognized and recorded in the books of account only upon
acceptance of the goods/inventory/other assets and rendition of services to the
agency.
11
3.10 Accounts were reclassified to conform with the revised Chart of Accounts per
COA Circular No. 2003-001 dated June 17, 2003 and Updated Description of
Accounts under the NGAS per COA Circular No. 2004-008 dated September 20,
2004.
3.11 Accounts for cash transactions were reclassified in compliance with COA
Accounting Circular No. 2006-001 dated November 9, 2006. Cash Advance for
Payroll recorded as Cash-Disbursing Officers was reclassified to Payroll Fund.
Cash Advance for Special Purpose/Time bound Undertaking recorded as Cash-
Disbursing Officers or as Due from Officers and Employees were also
reclassified to Advances to Officers and Employees.
4. Correction of Fundamental Errors
Fundamental errors of prior years are corrected by using the Prior Years’
Adjustments account. Errors affecting current year’s operation are charged to the
current year’s account.
5. Cash
The Petty Cash Fund of P44,074.09 represents the unliquidated petty cash
advances used for emergency, petty expenses and urgent requirements of the
Tribunal.
The Cash - National Treasury, MDS of P3,918,835.40 represents the balance
of the restored cash equivalent of all unreleased checks at year end.
The Cash in Bank - Local Currency, Current Account of P17,443,568.42 are
deposits of protestants and protestees who are both parties to electoral cases for
expenses incidental to the adjudication of their cases, which are held-in-trust by the
Tribunal.
6. Receivables
Due from NGAs of P16,240.92 consists of prepayments to the Procurement
Service for various office supplies.
Advances to Officers and Employees of P8,794.89 pertains to excess of cash
advances over expenses incurred for travels and other special purposes/time-bound
undertakings embarked on by the HRET officials and employees, which has already
been refunded on the first week of January 2014.
12
7. Inventories
This group of accounts totaling to P559,603.42 includes office supplies and
materials, spare parts, and other supplies inventory on hand as of December 31, 2013.
8. Prepayments
The Other Prepaid Expenses account amounting to P7,360.00 represents
prepayments to Central Book Supply, Inc. for Supreme Court Reports Annotated
(SCRA) Volumes 697 to 700 which have not yet been delivered as of December 31,
2013. They were delivered on January 17, 2014 as per Charge Invoice No. 122998
and Inspection and Acceptance Report (IAR) No. 2014-002 dated January 17, 2014.
9. Other Current Assets
Guaranty Deposits account of P55,209.75 pertains to deposits for PLDT
telephone lines, MWSS water lines, and cellular phones.
10. Investments
Investment in Stocks of P24,500.00 pertains to the investment in PLDT stocks
which are carried at cost in connection with the telephone line for HRET’s use.
11. Plant, Property and Equipment
This group of accounts consists of the following:
Account
Description
Balance
1/01/13
2013
Addition /
(Deduction)
Balance
12/31/13
Accumulated
Depreciation
12/31/13
Net Book
Value
12/31/13
Leasehold Improvement,
Building
P3,589,274.21 P3,589,274.21 P 996,413.84 P2,592,860.37
Office
Equipment
4,592,149.86 227,538.04 4,819,687.90 3,711,728.27 1,107,959.63
Furniture and
Fixtures
3,006,586.06
340,165.09
3,346,751.15
2,323,445.12
1,020,586.03
IT Equipment
and Software 8,200,918.40 (545,084.00) 7,655,834.40 4,582,256.12 3,073,578.28
Library Books 1,131,124.30 46,488.10 1,177,612.40 953,117.80 224,494.60
Communication
Equipment
1,451,532.92
(340,805.00)
1,110,727.92
662,707.64
448,020.28
Firefighting Equipment and
Accessories
105,902.85
105,902.85
88,573.51
17,329.34
13
Account
Description
Balance
1/01/13
2013
Addition / (Deduction)
Balance
12/31/13
Accumulated
Depreciation
12/31/13
Net Book
Value
12/31/13
Other
Machineries and Equipment
20,992.20 20,992.20 17,246.26 3,745.94
Motor Vehicles 1,945,642.17 6,910,500.00 8,856,142.17 1,198,584.40 7,657,557.77
Total P24,044,122.97 P6,638,802.23 P30,682,925.20 P14,534,072.96 P16,148,852.24
12. Other Assets
The Other Assets account of P323,267.16 represents the net book value of
reclassified unserviceable property and equipment with a total acquisition cost of
P3,227,388.16. The said property are no longer utilized and are for disposal.
13. Current Liabilities
This group of accounts consists of the following:
Accounts Payable totaling P8,149,778.55 consists of obligations to various
suppliers arising from the purchase of goods and services. The amount of
P4,056,527.30 represents various accruals made on services rendered and goods
delivered which remained unpaid as of December 31, 2013. The account also
includes the restored cash equivalent of various unreleased checks drawn from the
Cash National Treasury, MDS account of P3,918,835.40, and prior year’s accounts
payable of P174,415.85.
Due to National Treasury of P 7,004.48 represents the unremitted balance of
the interest income earned for the 4th
quarter of 2013 from the HRET Trust Account
maintained at the Land Bank-COA Branch. The said interest income was credited by
the bank on December 27, 2013 and was remitted to the National Treasury in January
2014.
Other Payables amounting to P17,326,736.03 pertains to the cash deposits
made by various Protestants and Protestees for expenses to be incurred in connection
with the adjudication of their cases filed with the Tribunal. The increase in this
account was due mainly to the cash deposits of various parties.
14. Government Equity
The Government Equity account amounting to P13,041,496.69 includes the
Prior Years’ Adjustments account of P 6,545.31, which is a credit balance, pertains to
the net result of prior year’s expenses (debit balance) which were paid this year as
against the reversion of various payable accounts (credit balance) which have
remained outstanding in the books for more than two (2) years.
14
15. Subsidy Income from National Government (SING)
This account includes the following:
NCA received from DBM for operational
requirements
P146,838,862.00
Tax Remittance Advice (TRA) issued to BIR 9,398,274.19
Total P156,237,136.19
Less: Return of Salaries and Cash Advances and
overpayment of Expenses
252,530.39
Reversion of unused NCA 731,486.79
Net SING P155,253,119.01
16. Income and Expenses
As of December 31, 2013, Income and Expenses amounted to P155,253,119.01
and P147,140,705.39, respectively, resulting to an excess of expense over income of
P8,112,413.62.
The increase in Traveling Expenses-Local, Office Supplies Expenses,
Telephone Expenses-Mobile and Representation Expenses accounts is due to the
reimbursement of expenses incurred by the Members of the Tribunal in connection
with the discharge of their functions. The said expenses are covered by Official
Receipts. Moreover, the increase in Office Supplies Expenses account is due to
additional office supplies needed in relation to the new cases filed by various
Protestants.
17. Consultancy Services
The decrease in Consultancy Services of P321,159.23 is due to the decrease in
the total number of months the consultants served the Tribunal, from 206 months in
CY 2012 to 190 months in CY 2013, as shown below:
No. of
Consultants
No. of Months
in Service
Total No. of
Months Served
CY 2013 5 12 60
1 11 11
1 9 9
9 6 54
9 5 45
1 4 4
2 3 6
1 1 1
Total 24 190 months
15
No. of
Consultants
No. of Months
in Service
Total No. of
Months Served
CY 2012 15 12 180
1 11 11
1 7 7
2 2 4
1 4 4
Total 20 206 months
Decrease 16 months
18. Allotments, Obligations and Balances
Total allotments available during the year including allotment in CY 2012
carried over in CY 2013 was P156,313,311.80 while obligations incurred amounted
to P155,732,856.33, details of which are as follows:
Allotment
Class Allotments Obligations Balance
PS P 90,978,196.23 P 90,808,940.76 P 169,255.47
MOOE 55,260,371.18 54,849,171.18 411,200.00
CO 10,074,744.39 10,074,744.39 0.00
Total P156,313,311.80 P155,732,856.33 P580,455.47
The breakdown of Obligations Incurred is as follows:
Obligations Paid P151,676,329.03
Due and Demandable 4,056,527.30
Total P155,732,856.33
For CY 2012, there was no unbooked obligations.
16
OBSERVATIONS AND RECOMMENDATIONS
Non-submission of approved purchase orders
1. Management failed to furnish the Office of the Auditor copy of purchase orders
within five (5) working days from issuance thereof contrary to COA Circular
No. 2009-001 dated February 12, 2009.
1.1 Review of the Purchase Orders attached to disbursement vouchers revealed that
they were not forwarded to the Office of the Auditor within five (5) working days
from issuance thereof. Hereunder are the Purchase Orders not submitted to the
Auditing Unit:
Purchase
Order
No.
Date Supplier Amount Remarks
P.O No. 2013-026
10/25/2013 SI Technologies P 121, 500.00 For IT Equipment (Apple IPOD)
P.O No.
2013-025
10/22/2013 Micro Quadkey’s
Corporation
P 171,480.00 For IT Equipment
(IPAD & Notebook)
P.O No. 2013-024
10/20/2013 Avid Sales Corporation
P 224, 393.00 For IT Equipment
P.O No.
2013-023
10/18/2013 Palces
Manufacturing,
Inc.
P 56,379.60 For Furniture &
Fixtures
P.O. No.
2013-021
10/08/2013 Toyota
Commonwealth
Inc.
P 3,192,400 For Delivery
Equipment (2
Toyota Hi-Ace GL Grandia)
P.O No.
2013-020
9/25/2013 BOC’s Trading
Co., Inc.,
P 334,584.55 For various office
supplies.
P.O. No. 2013-019
07/10/2013 Adecs International
Corporation
P 189,963.00 For various toners/ink cart.
P.O. No.
2013 -018
07/10/2013 Luzon Sales Co.
Inc.,
P 114,542.60 For materials for
repainting of the Office Building
P.O. No.
2013-014
04/17/2013 BOC’s Trading
Co., Inc.,
P 180,522.85 For Supplies.
P.O. No. 2013-013
04/05/2013 Philippine Duplicators. Inc.,
P 60,487.46 For 2 units Manual Punch & Binding
machine.
P.O. No.
2013-012
04/01/2013 Compucare Center P 34,500.00 For 1 unit Printer
USB-Cable.
P.O. No.
2013-011
03/15/2013 Compucare Center P 108,700.00 For assorted toners.
P.O No. 02/08/2013 Maximum P 52,110.00 For IT Equipment &
17
Purchase
Order
No.
Date Supplier Amount Remarks
2013-005 Solutions
Corporation
Software (27 units of
Mcafee Anti-Virus)
P.O. No. 2013-004
01/03/2012 Central book supply
P 44,160.00 For Subscription of SCRA volume 653-
676 (2 copies each)
P.O. No.
2013-003
01/29/2013 Solerex Water
Store Inc.
P 41,472.00 For Purified water
for 2013
P.O. No.
2013-002
01/28/2013 Gadgets in Style
Trading
Corporation
P 386,480.00 For various IT
Equipment (Ipad 4)
1.2 Attention is invited to Section 3.2.1 of COA Circular 2009-001 dated February
12, 2009 which requires the submission of the purchase order:
“A copy of any purchase orders irrespective of amount, and each and
every supporting documents, shall, within five (5) working days from
issuance thereof, be submitted to the auditor concerned.”
1.3 We recommended that Management require the officials concerned to
comply with COA Circular No. 2009-001 on the submission of a copy of
purchase order issued within the reglementary period.
1.4 Management acknowledged their failure to submit Purchase Orders to the Office
of the Auditor within five (5) days from issuance thereof and commented that
starting 2014 they will religiously comply with COA Circular No. 2009-001.
2. Status of Audit Suspensions, Disallowances and Charges (SASDC)
2.1 There was no Audit Suspension and Disallowances for CY 2013.
3. The agency was able to identify, include and attain programs/activities in its
Gender and Development (GAD) plan for CY 2013.
3.1 For CY 2013 the agency spent P451,500 which is 100 percent of the allocated
GAD budget for the year. The following are the GAD projects/activities
accomplished for CY 2013:
Project/Activity Amount
Creation of GAD Focal Point System (GFPS) in FY
2009
No cost
Creation of GAD Technical Working Group (GAD-
TWG) in FY 2013
No cost
18
Project/Activity Amount
Creation of sex disaggregated data of personnel No cost
Revision of Agency Merit Promotion Plan (MPP) for
non-sexist language
No cost
Revisiting of terms of reference on service providers of
security personnel
No cost
GAD Strategic Planning and Budgeting Seminar-
Workshop
450,000.00
Creation of GAD Bulletin 1,500.00
Non-compliance with Budget Requirement for Programs/Projects Related to Senior
Citizens and Differently-Abled Persons
4. The agency did not have programs/projects related to senior citizens and the
differently-abled persons as required under Section 29 of the General Provisions
of the General Appropriations Act for CY 2013 (RA 10352).
4.1 Section 29 of RA 10352 (GAA CY 2013), provides that, “Programs and Project
Related to Senior Citizens and Differently-Abled. All agencies of the government
shall formulate plans, programs and projects intended to address the concerns of
senior citizens and differently-abled persons, insofar as it relates to their
mandated functions, and integrate the same in their regular activities.”
4.2 For CY 2013, the Agency did not prepare any programs/projects related to senior
citizens and differently-abled persons, hence, no disbursements were made.
4.3 We recommended that Management prepare programs/projects related to
the senior citizens and differently-abled persons as required in the above
cited GAA provision.
4.4 Management commented that they already instructed the General Service to
complete the plan for the project as soon as possible, so that the necessary budget
be allocated for the purpose.
5. Compliance with Tax Laws
5.1 In compliance with DOF-DBM-COA Joint Circular 1-200 dated January 3, 2000
and Presidential Memorandum Order No. 219 dated February 13, 1989, taxes
withheld from 2013 disbursements were remitted to the Bureau of Internal
Revenue (BIR) on or before due dates. The total taxes remitted to BIR amounting
to P9,398,274.19 consist of taxes withheld from salaries and expanded and final
taxes withheld from payment of goods and services.
19
6. Compliance with GSIS Premium Deductions and Remittances (RA 8291)
6.1 GSIS Social Insurance and Employees Compensation Fund (SIF and ECIF)
premiums were deducted from salaries of employees and remitted on time to the
GSIS. The Due to GSIS balance of P3,065.15 as of December 31, 2013 was
remitted on January 2014.
20
STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT
RECOMMENDATIONS
Of the four prior years’ audit recommendations, one was implemented and three
were not implemented.
Observations and
Recommendations
Reference
AAR
Page No.
Actions Taken by
Management
Auditor’s
Validation
Results
2012
1. Other Maintenance and
Operating Expenses
amounting to
P28,019,640.21 included
the additional allowance
of P8,856,000 given to
the Members of the
Electoral Tribunal with
no documents to support
the expenditures but only
a certification that the
expenditures that the
amounts were expended
in the performance of the
official duties.
We recommended that
Management
immediately cause the
submission of the
supporting documents
for the liquidation
vouchers for December
2012. Further, strict
compliance with
Section4 (6) of PD 1445
be adhered to for all
transactions of the
HRET starting January
1, 2013.
16-17
Implemented
Liquidation
vouchers of
additional
allowance
of the Chairman
and Members of
the Tribunal are
now supported of
documents that
substantiate the
expenses starting
only April 1,
2013.
Management had
already complied
with Audit
Instruction dated
February 8, 2013
that expenditures
in the form of
additional
allowance
incurred by the
Chairman and
Members of the
Tribunal were
supported by
documents which
includes sales
invoices, official
receipts and
other pertinent
supporting
documents.
21
Observations and
Recommendations
Reference
AAR
Page No.
Actions Taken by
Management
Auditor’s
Validation
Results
2. The agency had no
programs/projects
related to senior citizens
and the differently-
abled persons and did
not allocate at least one
per cent of its budget as
required under Section
29 of the General
Provisions of R.A. No.
10155, GAA for CY
2012.
We recommended that
Management prepare
programs/projects
related to the senior
citizens and differently-
abled persons and
allocate at least one
percent (1%) of its
budget as required in
the GAA provision.
Not implemented
Management had
instructed
the General
Service to
complete the plan
for the project as
soon as possible,
so that the
necessary budget
be allocated for
the purpose.
Management did
not prepare
plans/projects
related to the
senior citizens
and differently-
able persons,
hence no
disbursement
was made.
2011
3. Management was still
using the traditional
cash payroll scheme in
paying the salaries,
allowances and other
personnel benefits of
its officers and
employees instead of
the automated payroll-
thru-bank system, thus,
incurring unnecessary
manpower resources
and exposing payroll
money to risks of
losses through theft or
robbery.
20-21
Not implemented
The HRET has
only 127
employees and
payment of
salaries,
allowances and
other personnel
benefits is more
convenient using
the traditional
cash payroll
scheme.
Management
contended that
using the
Automated Bank
Scheme would
entail much
time queuing at
the bank. And
if they use such
scheme,
employees
assigned at the
Cash
Management
Service will have
no more duties to
perform.
22
Observations and
Recommendations
Reference
AAR
Page No.
Actions Taken by
Management
Auditor’s
Validation
Results
We recommended that
Management consider
adopting payment of
salaries thru automated
bank scheme to
strengthen internal
control on cash and to
promote operational
efficiency. Initiate
arrangements/coordinate
with government
depository bank to
implement the payroll
thru ATM.
Moreover, their
depository bank
is very near the
HRET.
4. The agency has not
created an Internal Audit
Service/Unit contrary to
Administrative Order
Nos. 278 and 70 dated
April 28, 1992 and April
14, 2003, respectively.
We reiterated our
previous recommendation
that Management
organize an IAS pursuant
to Administrative Order
Nos. 278 and 70.
Otherwise, Management
should request an
exemption from the
application of these
regulations.
21
Not implemented
In compliance
with the
provision of
Administrative
Order Nos. 278
and 70, the
Tribunal will
create an IAS to
be supervised by
the Section Chief
of the Accounting
Service, who will
be relieved of her
work in the
Processing Unit.
Management is
considering
implementing the
recommendation
in CY 2014.
An
nex A
23
26
27