Annex IV

Deficiencies included in the Consolidated Management Letter (CML) on the Audit of COVID-19 Funds of the DOH as of December 31, 2020
Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder
Comments
Fund Utilization
CML – Par. Nos. 16- Various Various Considerable amounts of 11,890,217,589.50 We recommended that the Reconciliation of The downloading of
34, pages 12-16 unobligated allotments totaling Secretary of Health: sub-allotments with funds later in the
₱11,890,217,589.50 as of CHDs and operating year and with SAA
December 31, 2020 and a) Remind the heads of units was conducted expiry dates of
aimed at strengthening the various operating units to account for the December 31, 2020
Department’s capacity to (CHDs, Hospitals, TRCs and utilization of funds. or end of the year
address the COVID-19 Bureaus) to act with urgency Nonetheless, the are of no use
pandemic and further and efficiency in the second considering the very
buttressing the health care utilization of COVID-19 recommendation will little time remaining
system was noted. This funds; be immediately and the many
condition affects the efficient implemented. Large holidays set in the
utilization of COVID-19 funds b) Direct concerned percentage of the month of December.
vis-à-vis the agency’s officials, especially the unutilized balance Regardless of which
implementation capabilities program directors and heads comes from the offices are
and its response to the urgent of operating units, to Bayanihan II Funds responsible within
healthcare needs during the immediately address the wherein material the Department,
time of state of challenges and roadblocks amount is allocated there is only one
calamity/national emergency. currently impeding the for the health-related DOH under the
efficient use of COVID-19 responses such as Secretary of Health.
funds and come up with provision of Special Thus, more efficient
proper courses of action; Risk Allowance system/ways in the
(SRA) and Active processing of SAA
c) Instruct the Administration Hazard Duty Pay must be considered
and Financial Management (AHDP) among through proper
Team and program directors others. The funds for coordination of
to closely coordinate and the provision of various DOH
conduct regular/periodic SRA, AHDP, and Offices. This
assessment on the Page 15 other benefits under problem is noted to
of 49 utilization of COVID-19 RA No. 11494 or the be recurring and
funds to prevent delays in “Bayanihan to therefore it is further
downloading of funds and Recover as One recommended that
project implementation; and Act”, SARO-BMB-B- concrete solutions
20-0018166 and and specific courses
d) Order the concerned SARO-BMB-B-20- of actions must be
program directors to extend 0018167 were taken to avoid
guidance and assistance to approved on situations mentioned
the operating units as to the October 27, 2020 by where the SAAs
proper implementation of the DBM and were lapse without the
programs and utilization of received by this funds being used for
funds. Department on the benefit of the
October 30, 2020. health workers and
Likewise, the the general public.
guidelines for the The source of the
provision of SRA figures on allotments
and AHDP, received by the
Administrative Order DOH, which
Nos. 35 and 36, included the above
i
 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
respectively, were enumerated SAROs,
issued by the Office is the DBM website
of the President on which publicizes the
November 16, 2020. Status of COVID-19
This was Releases as of
immediately December 29, 2020
followed by the (https://www.dbm.go
development of v.ph/index.php/progr
policies by the DBM amsprojects/status-
and DOH supporting of-covid-19-
provision of these releases, accessed
benefits. The on February 7, 2021,
Administrative 7:32pm). The data
Service-Personnel gathered were
Administrative neither taken out of
Division (AS-PAD) thin air nor the
was the office product of COA
designated to Office’s mere
facilitate the imagination. These
provision of Health were borne out of
Care Workers’ the DBM’s official
(HCWs) benefits in enumeration of
accordance with the allotments received
RA No. 11494. by the DOH,
Coordination with specifically for
the regional offices, COVID-19 response.
DOH hospitals,
specialty hospitals
and other
stakeholders for the
number of eligible
HCWs for SRA and
AHDP grant, as well
as the preparation of
the guidelines of
Sub-Allotment
Advice (SAA),
through a
Department Order
(DO), were done by
AS-PAD. The FMS,
through the Budget
Division, ensures
prompt preparation
of SAA once
approved guidelines
on the SAA and
request for such is
forwarded thereto by

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 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
the concerned office
which in this case,
by the AS-PAD.
Upon issuance of
the DBM-DOH Joint
Circular Nos. 1 and
2 for the
implementation of
AHDP and SRA,
respectively, on
November 25, 2020,
the FMS, with the
necessary
documents secured,
have downloaded
funds to CHDs,
operating units and
other concerned
offices the following
day. Request for
downloading of SAA
to cover funding for
the provision of
meals,
accommodation,
transportation and
life insurance to
DOH hospitals was
submitted by AS-
PAD to FMS on
December 9, 2020.
For the HCWs of
LGUs and private
hospitals, funding for
the provision of
meals,
accommodation,
transportation and
life insurance were
coursed through
SAA to the Regional
Office. The SAA for
the Regional Office
was requested for
downloading by AS-
PAD to FMS on
December 23, 2020
since the previous
DO dated December

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 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Implementation of foreign-assisted projects
CML – Par. Nos. 35- NCR
69, pages 17-24
Sub-total 11,890,217,589.50
DOH-FAPs Accomplishment targets for 3,421,390,418.00 b) Instruct the Project
the implementation of foreign- Directors to make use of
assisted projects with allotted alternative modes of
funds of ₱3,421,390,418.00 procurements presently
were not met as of year-end, allowed by existing laws and
thus, optimum benefits that regulations, define specific
could have been derived schedule of deliveries for
therefrom did not redound to proper compliance by the
the intended beneficiaries in suppliers and conduct
Calendar Year (CY) 2020. thorough evaluation on all
possible roadblocks that
may be encountered in
project implementation in
order to lay-out specific
Comments
9, 2020 for the
provision of meals,
accommodation and
insurance for CHDs
was not funded,
hence, appropriate
modifications Page
16 of 49 and
activities were
undertaken. FMS
subsequently
downloaded the
SAA to the Regional
Office on December
23, 2020. With the
foregoing, the high
or low/non-utilization
of funds lies with the
programs. The FMS
only facilitates
downloading of
funds, SAA, once
requested by the
program owners.
Based on
Management’s
report, the total
allotment received
by the DOH for the
COVID19 responses
was
₱77,879,262,584.00
only.
Per the revised WFP We note that specific
dated December 4, reasons on the delay
2020, submitted to C ed commencement
OA on February 12, of project implement
2021, the HEAL CO ation in November 2
VID-19 Project has a 020 and approval of
total allotment of ₱2, the WFP on Decemb
000,797,199 for Des er 4, 2020 were not
ign Fee of Isolation presented. Neverth
and Laboratory build eless, we expect the
ings, procurement of PMT to hasten the p
medical equipment, rocurement of medic
COVID-19 vaccines, al equipment/device
patient transport veh s/supplies and the pr

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 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
courses of actions; icles and payment fo ogram implementati
r individual consulta on as a whole. The i
c) Require the recipient nts for the project. ssue is not only on t
health facilities/institutions, he non-accomplishm
in writing and within a Out of ₱2,000,797,1 ent of targets, there
specific time-frame, to 99, the Project was are lives of the Filipi
submit promptly all the able to obligate ₱47 no people that need
technical documents such 9,670,589.95 for the to be saved in this ti
as DAED, BOQ and other (1) 90 units of Mech me of state emergen
relevant documents, anical Ventilator, (2) cy. The purpose on
otherwise the funds will be 85 units of X-ray ma the urgency of securi
offered to other health chines, and (3) remu ng funds from foreig
institutions who are also in neration for the Proj n sources will be put
need of additional funding; ect Staff from Nove to naught if the DO
mber to December 2 H, through the BHIC
d) Remind the TWC/PMT to 020. However, disb and PMT, will dilly-d
consider decentralizing the ursement was made ally the project imple
implementation of the in January 2021 thro mentation and not a
Project by downloading the ugh direct payment ct efficiently.
funds to intended beneficiary (40% for X-ray and
health facilities/institutions, Mechanical Ventilato
subject to proper liquidation rs and Nov. 26-Dec.
and submission of Fund 31, 2020 Salaries).
Utilization Reports, and
proper monitoring/guidance Meanwhile, other act
by the TWC; and ivities were not met i
n CY 2020 because
e) Order the PMT to properly the project impleme
fill in the columns provided ntation started only i
for “time-frames” and n November 2020.
“targets” for each The said activities w
activity/output indicated in ere carried over to C
the Work and Financial Plan Y 2021. Consequen
Matrices and submit tly, the PMT updated
corrected copies to the COA the Project Administr
Office. ation Manual (PAM)
to include the activiti
es not met in 2020,
as this is a working
document.

The PMT shall cond

uct close monitoring
thru regularly updati
ng the Project Perfor
mance Updates (PP
U) for submission to
NEDA, Quarterly Pr
ogress Reports (QP

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 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
Rs), and Annual Co
nsolidated Reports f
or submission to the
ADB.

In addition, a fortnig
htly (every two week
s) meeting for HEAL
COVID-19 Project s
hall be conducted wi
th members of the pr
oject, the managem
ent team and ADB t
o discuss the progre
ss of each item of th
e operation plan of t
he project.

The PMT, Procurem

ent Service, and HF
EP regularly meet to
discuss alternative
modes of procureme
nts that are aligned
with the ADB and D
OH procurement pro
cess. The Project al
so hired an addition
al project staff dedic
ated to assist the He
alth Facility Enhance
ment Bureau Manag
ement Office (HFEP
MO) and Supply Ch
ain Management Se
rvice (SCMS) in all
HEA: COVID-19 Pro
ject-related matters.

HFEP is closely coor

dinating with the Fiel
d Implementation an
d Coordination Tea
m (FICT) for the req
uired submission of
documents needed f
rom the recipient he
alth facilities/instituti
ons. A memorandu

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 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
m is expected to be i
ssued by the FICT.

The Work and Finan

cial Plan (WFP) for 2
020 were only appro
ved last December
4, 2020. It is therefo
re understood that th
e time-frame is Dece
mber 2020 (Q4). Ne
vertheless, we have
indicated said ‘time-f
rames’ and ‘targets’
to the WFP as reque
sted. Rest assured t
hat preferential atten
tion will be accorded
thereto and that acti
on may be expected
at the soonest possi
ble time.

As to the PCERP, th
e Undersecretary of
Health and OIC of th
e Administration and
Financial Managem
ent Team prepared
a Memorandum date
d February 15, 202
1, informing the con
cerned officers of th
e COA recommenda
tions. The BHIC info
rmed that their com
ments will be directe
d to the COA Office.

Deficiencies in Procurement
CML – Par. Nos. 71- Various
118, pages 24-30
Sub-total 3,421,390,418.00
Various Procedural deficiencies in the 5,038,428,371.74 We recommended that the None None
procurement process and lack Secretary of Health:
of documentation in various
contracts totaling a) Remind the Heads of
₱5,038,428,371.74 entered various operating units to
into and implemented by the comply strictly with existing
DOH operating units were not procurement laws, rules and
in keeping with pertinent regulations through the

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Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
provisions of RA No. 9184 and issuance of a Department
its Revised Implementing Memorandum;
Rules and Regulations (RIRR)
and GPPB guidelines for b) Direct the Heads of
procurement under RA Nos. various DOH Programs
11469 and 11494, thus, based in the Central Office
deprived the government of to strengthen monitoring of
the most disadvantageous procurement activities vis-à-
prices and cast doubt on the vis compliance with laws,
regularity in the payment of rules and regulations, and
transactions. provide guidance whenever
needed;
The deficiencies include:
c) Conduct thorough
 Defects in the Omnibus investigation on irregularities
Sworn Statements noted through the Internal
involving procurement Audit Service and impose
contracts totaling proper administrative
₱611,240,642.97 sanctions when warranted;
 Deficiencies in the posting
of procurement information d) Instruct the concerned
involving contracts totaling operating units to submit
₱1,885,943,617.92 written explanations on the
 Procurement of CSE deficiencies noted, evaluate
outside PS-DBM without the same and implement
CNAS totaling corrective actions when
₱10,460,858.34 deemed necessary; and
 Procurement
disadvantageous to the e) Consider the deficiencies
Government totaling noted in the performance
₱194,403,113.97 evaluation of operating units
 Non-provision of adequate concerned and their
technical specifications in officials/employees and in
contract documents the granting of future funds
involving procurement for project implementation.
contracts totaling
₱401,354,130.00
 Incomplete submission of
documentary requirements
for contracts totaling
₱994,512,744.64
 Non-preparation of
updated APPs and defects
in APPs for procurements
totaling ₱130,122,464.70
 Inappropriate mode of
procurement for contracts
totaling ₱81,435,546.75
 Procurement of
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 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
goods/services sans
warranty clause totaling
₱619,051,287.07
 Other irregularities and
compliance issues in the
procurement process
CML – Par. Nos. Various Various Medical equipment and 74,433,471.00 We recommended that the None None
119-124, pages 30- supplies procured for COVID- Secretary of Health:
31 19 response totaling
₱69,942,628.00 remained a) Require the concerned
unutilized or were not operating units to submit
immediately utilized due to written explanations on the
factors that could have been deficiencies noted, evaluate
avoided had there been proper the same and implement
procurement planning, corrective actions when
thereby, depriving the public of deemed necessary;
the immediate use of the
equipment during the b) Remind program directors
pandemic. Moreover, and heads of operating units
liquidated damages totaling to, henceforth, conduct
₱4,490,843.00 were not proper procurement
applied against payments to planning and consider all
suppliers in default, thus, factors in the use of medical
denying the government of equipment prior to actual
immediate means to enforce purchase;
compensation.
c) Instruct the concerned
officials in the Central Office
to monitor the procurement
of medical equipment by
operating units and
determine actual usage
thereof so that immediate
assistance can be extended
in case of non- use; and

d) Direct the heads of

operating units to
immediately address the
challenges encountered in
the use of procured medical
equipment and submit
reports to the Central Office
for monitoring purposes.

Sub-total 5,112,861,842.74
Lapses in the handling of Petty Cash Funds
CML – Par. Nos. Various Various The management of cash 98,409,569.48 We recommended that the None None

ix
 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
126-132, pages 31- advances and petty cash Secretary of Health:
32 funds by various DOH
Operating a) Remind the Heads of
Units in the aggregate amount various operating units to
of ₱98,409,569.48 and comply strictly with existing
intended for the COVID-19 laws, rules and regulations
response on the handling of cash
was non-compliant with advances and petty cash
existing laws, rules and funds through the issuance
regulations, thereby casting of Department
doubts on the Memorandum;
validity and propriety of
covered transactions. b) Direct the Legal Service
and Internal Audit Services
to conduct thorough
investigation on irregularities
noted in the handling of
Petty Cash Funds and non-
liquidation of cash
advances, and impose
proper administrative
sanctions
when warranted;

c) Order in writing the Heads

of operating units to submit
complete documentation
(certification on previous
liquidation, liquidation
documents, procurement
records such as Mayor’s or
business permits,
income/Business tax
returns, Omnibus Sworn
Statements of the
suppliers/contractors, etc.)
and strengthen internal
controls involving funds
management and enforce on
time liquidation of cash
advances at all times; and

d) Instruct the concerned

operating units to submit
written explanations on the
deficiencies noted, evaluate
the same and implement
corrective actions when
deemed necessary.

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 Annex IV

Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
Sub-total 98,409,569.48
Management of Fund Transfers
Par. Nos. 134-145, Various Various Public funds in the aggregate 42,412,302,819.95 We recommended that the Refer to Par. 144 Refer to Par. 145
pages 34-35 of amount of Secretary of Health to: and pages 34-35 of and pages 35 of
COVID CML ₱42,412,302,819.95 intended COVID CML COVID CML
for the Department’s COVID - a) Direct the Heads of the
19 programs were transferred OUs to prepare/amend and
to procurement/implementing submit the duly signed
partner-agencies sans the MOAs and henceforth,
required MOA and other require MOAs prior to
supporting documents, thus transfer/receipt of funds;
posing questions on regularity
of transactions and the lack of b) Instruct the various DOH
details on the implementation OUs to require PLGUs to
of agreed procurement and/or comply with the directive to
program implementation. submit the dedicated LGU-
Likewise the noted delays in owned lot where the
the delivery of the much- Temporary Treatment
needed medical equipment Monitoring Facility (TTMF)
/supplies/devices resulted to will be constructed; and
delays in the provision of
quality health service during c) Strictly comply with the
the challenging times of the rules and regulations in the
pandemic. grant, utilization and
liquidation of funds
transferred.
Sub-total 42,412,302,819.95
Implementation of Financial Assistance Programs
CML – Par. Nos. VI CHD Claims for financial assistance 4,885,000.00 We recommended that the None None
146-157, pages 35- of intended beneficiaries Secretary of Health:
37 amounting to ₱4,885,000.00
were not paid as of year-end a) Require the Finance
due to the delayed Management Service and
downloading of cash Accounting Division of the
allocations through sub- Central Office to explain in
allotment advice, thus, the writing why there is delay in
intention of the law to cushion the release of allotments
the impact of COVID-19 and cash back-ups for the
disease to both the private and payment of assistance to
public health workers was not health workers as authorized
fully attained by RA 11494;

b) Remind the concerned

officials to hasten the
processing and release of
financial assistance to
qualified beneficiaries and
henceforth download without

xi
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Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
further delays the funding
necessary for the purpose;
and

c) Instruct the WVCHD to

submit written explanation
on the deficiency noted,
evaluate the same and
implement corrective actions
when deemed necessary.
TOTAL 4,885,000.00
Payment of COVID – 19 Allowances
CML - Par. Nos. 158- Various Various Non-compliance with 814,246,482.26 We recommended the None None
168, pages 37-39 applicable rules. Laws and Secretary of Health to:
regulations on the grant of
various COVID-19 allowances a) Direct the operating units,
resulted in the: (a) payment of including the Central Office,
total allowances of P to submit an explanation as
539,297,614.13 to health to why sufficient
personnel sans complete documentation was not
documentary support; (b) submitted in support of the
payment of P214,000,228.77 disbursement transactions
to unqualified recipients; (c) and thereby present the
overpayment of required records/documents
P6,493,735.91; and (d) which will afford the Audit
payment of P54,454,903.45 Team a thorough validation
during periods not covered by on the full compliance with
ECQ. pertinent guidelines:

b) Require the
Administration and Financial
Management Team to
submit explanation in what
way does “ECQ still
characterizes MECQ”;

c) Instruct the Heads of

operating units to submit
written explanations/
justifications on the
deficiencies noted, evaluate
the same and implement
corrective actions whenever
necessary;

d) Provide
policies/guidelines that
clearly provide the true
intention of the government
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Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
in granting additional
benefits to health workers
and without further
interpretation; and

e) Remind all officials

concerned to, henceforth,
ensure that all transactions
are adequately supported
with required documents,
refrain from processing
those
with incomplete
documentation and comply
fully with pertinent laws,
rules and regulations.
TOTAL 814,246,482.26
Unauthorized grant of meal allowances
CML - Par. Nos. 169- Various Various The distribution to OU 275,908,701.91 We recommended the No comments
182, pages 39-41 personnel of meal allowance Secretary of Health to:
totalling P275,908,701.91 in
the form of cash allowances, a) Require the Heads of
gift certificates and grocery concerned operating units to
items charged out of the funds cause the refund of the meal
received from the DOH allowances distributed
intended for provision for life without legal basis;
insurance, accommodations,
transportation and meals of b) Direct the Heads of
PHWs was found to be concerned operating units
inconsistent with the strictly adhere to the
provisions and implementing provisions of RA No. 11494
guidelines of RA 11494 and and pertinent issuances of
pertinent DOH issuances, the DOH or other competent
defeats the purpose of the authorities concerning the
funds, and lacks sufficient provision of life insurance,
legal basis. accommodation,
transportation, and meals
during the state of national
emergency; and

c) Remind operating units to

ensure that funds received
by them are utilized
exclusively for their intended
purposes.
TOTAL 275,908,701.91
Incomplete Documentation for Death and Sickness Compensation
CML - Par. Nos. 183- Various Various The non-submission of 11,665,0000.00 We recommended the None None
xiii
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Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
190, pages 41-42 required documents and Secretary of Health to:
deficiencies noted in the
payments of death and a) Require the heads of
sickness compensation concerned operating units to
totalling P11,665,0000.00 are cause the immediate
contrary to existing rules and submission of required
guidelines and have therefore documents and explain in
made the validity and writing their failure to attach
regularity of transactions the same in the
highly doubtful disbursement vouchers, with
the explanation subject to
the evaluation of the DOH
Audit Committee;

b) Remind operating units to

ensure that there should be
proper approval prior to
payment of the benefits as
part of internal controls; and

c) Instruct the operating

units to, henceforth, strictly
comply with existing rules
and guidelines on the
matter.
Sub-total 11,665,0000.00
Failure to prepare the required reports and documents for COVID-19 related donations in-kind
CML Par. Nos. 191- NCR TMC, SLH, Donations in-kind with 1,405,960,550.46 We recommended the None None
198, pages 42-43 JRRMMC approximate value of Secretary of Health to
₱1,405,960,550.46 were not remind the operating units
properly accounted due to the through a
failure to prepare and submit Memorandum to: (i) ensure
the required Summary/List of proper monitoring of all
Donations Received, donations in-kind received
Distributed and Balances of from all sources by
COVID-19 related donations maintaining records of
with supporting documents. receipts and issuance/
distribution thereof, and (ii)
to
prepare the required reports
with the necessary
supporting documents and
submit to the NDRRM
Council, through the OCD.
Sub-total 1,405,960,550.46
Lapses in the management of IRM funds
CML – Par. Nos. Various Various The noted deficiencies in the 734,503,351.01 We recommended the None None
200-208, pages 43- management of IRM funds Secretary of Health:
xiv
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Reference Region OU Observation Amount Recommendations Management’s Auditor’s Rejoinder

Comments
44 totaling ₱734,503,351.01 by
public health care institutions a) Consider making
are counter-beneficial to the representations with PHIC to
government’s thrust of facilitate the approval of
providing quick relief to utilizing IRM Fund for
medical facilities in time of reimbursement of HCIs’
COVID-19 health emergency. claims related to the COVID-
19 cases;

b) Remind the Heads of

various operating units to
comply strictly with existing
PHIC regulations on the IRM
and effect the required
adjustments;

c) Instruct the operating

units concerned to submit
written explanations on the
deficiencies noted, evaluate
the same and implement
corrective actions when
deemed necessary; and

d) Direct the Legal Service

and Internal Audit Service to
conduct thorough
investigation on the noted
irregularities in the
management of IRM Funds
and impose administrative
sanctions when necessary
under the circumstances.
TOTAL 734,503,351.01
    GRAND TOTAL 66,287,336,325.31      

xv