Republic of the Philippines

Province of Bukidnon
CITY OF MALAYBALAY
***
OFFICE OF THE CITY MAYOR
Telephone # (088) 221-2267 local 123 & 124
Fax No. 813-2739
INTERNAL AUDIT MANAGEMENT DIVISION

Audit Plan and Program for Human Resource

Management

INTRODUCTION
Human Resource (HR) refers to the people, including their qualifications,
competencies, talents, and potentials, in the Philippine Civil Service including CSC.
Human Resource as a function pertains to the management, development
and utilization of the people in the Philippine Civil Service towards the excellent and
ethical achievement of the vision of the organization. (CSC: Local Government
Forum Manual (LGFM), par. 2, p. 24)
The Human Resource Management Office function is structured as follows
(City Ordinance # 624):
 Personnel Administration Division
o Personnel Transactions and Services section
o Recruitment and Selection/Records Management Section
 Career and Performance Management Division
o Training and Development Section
o Performance Management Section

The Human Resource Development Service shall provide the Department

with a program and corresponding projects that shall make available training,
education and development opportunities needed to upgrade the levels of
competence and productivity of Department managers and personnel. It shall absorb
the powers and functions of the Administrative Service in relation to the development
and administration of personnel programs including (Sec. 11, Chapter 3, Title VII,
Book IV, Executive Order 292):
  Selection and placement
 Development
 Performance evaluation
 Employee relations
 Welfare
AUDIT OBJECTIVE AND SCOPE
The audit aims to:
 look into the essential HR processes and determine whether or not they
comply with their organizational mandates, guidelines, policies and laws and
are in accordance with the requirements of the Civil Service Commission.
 check the HR documents to determine whether or not they maintain sufficient
and updated records that would help them to accomplish their tasks in
personnel management and administration.
 Identify gaps in the HRMO practices versus identified standards and offer
possible recommendations to improve their systems and procedures.
The team targets a total of _____ hours of field work to be able accomplish
the planned audit.

Assessment of Controls
The Controls integrated in each of the areas of the Human Resource
Management Office system would be evaluated using Internal Control
Questionnaires as a guide for each of the 5 Internal Control components which
consists of:
1. Control Environment
2. Risk Assessment
3. Control Activities
4. Information and Communication
5. Monitoring
These Internal Control components contribute to the achievement of the
Internal Control objectives which are:
1. Safeguarding of Assets
2. Checking the accuracy and reliability of Accounting Data
3. Adherence to managerial policies
4. Compliance with laws and regulations
5. Ensuring Economical, Efficient, Effective and Ethical operations

The following Questions could be used as a guide in assessing the HRMO

control functions in place:
 Organization

☐Is there a mission and vision statement?

☐Are the HR goals aligned with the organizational goals and strategies?

☐How many managers and supervisors does the company have?

☐How many full-time employees? Part-time employees?

☐How many hours per week define full-time? Part-time?

☐Are employees aware of their status?

☐How long can an employee be temporary?

☐How many locations does the company have?

☐EEO-1 compliance, if applicable, do you file annually?

☐What are the company hours? Are shifts defined?

☐How does HR communicate with management and employees?

Hiring

☐What procedures are used for hiring in your organization?

☐What recruitment sources are used, i.e., advertisements, job boards, referrals, social
media, etc.?

☐Do job descriptions exist and are they up-to-date? Are the job descriptions ADA
compliant? ☐Are I-9 forms and acceptable documentation reviewed annually?

☐Is e-verify being used for new hires?

☐Are I-9s and medical information kept separately from personnel files?

☐Are job openings posted? Are job openings offered to current employees?

☐Are current employees given appropriate consideration for promotion or lateral position
changes? Who makes those decisions and are they properly documented?

☐Who does the preliminary screening of candidates?

 ☐Who selects candidates for interviews?

☐Is training provided for those who conduct interviews?

☐How are the recruitment, screening, and selection processes documented?

☐Are applicant backgrounds checked? Are references checked? How is reference checking
documented?

☐Do employment applications refrain from requesting protecting information?

☐Does application form ask if applicant needs accommodation (ADA)?

☐Who has the final authority to hire? ☐Who makes the offer of employment?

☐Is there a standard offer letter? ☐Are selection processes used with reference to the
Uniform Guidelines?

☐Is the hiring staff asking legal interview questions?

☐Are applicants asked to voluntarily identify their affirmative action information?

☐Are turnover rates monitored?

☐Are independent contractors accurately identified?

☐Is the 20+ point test for independent contractors being used for classification?

☐Have issues related to classification of employees been raised?

☐Are exempt employees accurately classified?

☐Are all new hires reported to the state and IRS timely?

☐Do new employees complete W-4 forms?

☐Are workplace policies in place, i.e., EEO, harassment, safety, attendance, etc.?

☐Are policies communicated and enforced?

☐Is there an employee handbook?

☐Is the employee handbook aligned to the workplace and up-to-date?

☐Are employees required to attend orientation?

 ☐How long is the new hire “orientation” period?

☐Are all employees trained on discrimination and harassment issues?

Compensation and Benefits

☐Who negotiates compensation packages?

☐Are compensation levels/plans monitored and reviewed annually?

☐Are employees correctly designated as exempt or non-exempt per FLSA?

☐Are independent contractors correctly identified?

☐Is there a formal pay structure? Is performance tied to compensation?

☐Is work time documented? How?

☐Are paid time off (vacation, holidays, etc.) structures developed?

☐Are non-exempt employees compensated at least one and one-half times their hourly
wage for any hours worked beyond 40 (including bonuses)?

☐Is the compensation plan communicated to all employees?

☐Are benefit plans reviewed annually?

☐Are employees informed/oriented regarding their benefits?

☐Are Summary Plan Descriptions provided to plan participants?

☐Are general COBRA notices provided to plan participants?

☐Are employees allowed the appropriate leave time under the FMLA?

☐Are plan documents in compliance with ERISA?

☐Are supervisors and managers trained to report employee absences of more than three
days to management for FMLA purposes?

☐Are total compensation letters provided?

☐Are open enrollment meetings held?

 ☐Are minors prohibited from working more than their hours allowed by the Fair Labor
Standards Act?

☐Are final paychecks provided on time?

☐Are paid time off (vacation, holidays, etc.) structures developed and equally enforced?

☐Are the appropriate payroll withholdings performed and forwarded?

☐Is a payroll service used, and if so, which service? Employee Relations

☐Is there a system for performance evaluation? Are you aware of the different types of
evaluations?

☐Does the system check for effectiveness of the evaluation?

☐Is quality and quantity of work evaluated?

☐Are disciplinary actions for violating workplace policies flexible? Does documentation exist
for each incident?

☐Is there a process for employees to lodge complaints?

☐Are effective policies in place that prohibits retaliation against employees who exercise
their rights?

☐Are there a variety of individuals to whom employees may lodge complaints (supervisor,
manager, HR representative, etc.)

☐Are employment practices in line with the various anti-discrimination laws?

☐Are supervisors and managers trained in anti-discrimination practices?

☐Do exit interviews take place? ☐Does a member of management evaluate each
termination before it takes place?

☐Is there a whistleblower policy in effect? Safety, Security, and Worker’s Compensation

☐Are safety hazards reported to the appropriate personnel?

☐Has a safety committee been established? Do you have an Emergency Response Plan?

☐Are workplace accidents, near-misses, injuries, and illnesses reported and investigated?
 ☐Is bright, effective lighting installed indoors and outdoors?

☐Is there a reliable response system in place in the event an alarm is triggered?

☐Are employees encouraged to promptly report incidents, and suggest ways to reduce or
eliminate risks? ☐Are structures readily accessible to disabled employees?

☐Are minors prohibited from performing hazardous work?

☐Are MSDS sheets available for every chemical in the building (including cleaning supplies)?

☐Is the proper OSHA and workers compensation information posted and distributed to new
hires?

☐Are ALL injuries/incidents investigated?

☐Is follow-up remediation performed where appropriate?

☐Are return-to-work programs checked for effectiveness?

☐Are insurance premiums and competitive quotes reviewed on a periodic basis?

☐Is the workplace environment maintained with safety in mind?

☐Are state (new and existing) requirements monitored? Record Keeping and Other
Documentation

☐Are personnel files current? ☐What documents are held in personnel files?

☐How long are files held and where are they stored after employees leave?

☐Are items with medical protected information kept in a separate, locked location?

☐Is there training of managers and employees about personnel files?

☐Are all federal and state labor posters displayed in a conspicuous place?

☐Are documents regarding employees kept for their required duration (application,
personnel files, payroll, I-9s, etc.

☐How are Paid Time Off, FMLA, and Worker’s Compensation documented?

E. 2 Section I – Control Environment

 QUESTIONS YES or NO Cite Reference Documents

1. Are the agency‟s/organization‟s

administrative structures and
procedures designed to serve the
people? (4th whereas clause EO 292,
“Administrative Code of 1987”)

2. Are the agency‟s/organization‟s major

functional, procedural and structural
principles and rules of governance in
accordance with the Administrative
Code of 1987 or the law creating the
agency/organization? (3rd whereas clause
EO 292, “Administrative Code of 1987”)

3. a. Does the Department Secretary

(DS)/Head of Agency
(HoA)/Governing Board (GB)
ensure adherence to the principle
of public office is a public trust?
b. Do the public officers and
employees:
i. hold themselves accountable to
the people at all times?
ii. serve the people with utmost
responsibility, integrity, loyalty
and efficiency, act with
patriotism and justice and lead
modest lives? (Sec. 32, Chapter 9,
Book I, EO 292, “Administrative Code of
1987”)

4. Is the agency/organization structured

and maintained to insure their capacity
to plan and implement programs in
accordance with established national
policies? (Sec. 2(1), Chapter 1, Book IV, EO
292, “Administrative Code of 1987”)

One of the most critical processes that the Human Resource Management
Office handles is employee compensation and benefits including maintenance and
preparation of lists for mandatory deductions such as: BIR, SSS, GSIS, Phil Health
and PAG-IBIG. It is important that this aspect be checked and monitored for
procedural compliance and timely update and submission.
 This audit aims to focus on this aspect of the Human Resource function to
determine whether functions in the said agencies were accomplished currently and
accurately.

Audit Approach
Our approach for the execution of this audit engagement will consist of
interviews with key employees, observation, inspection and review of documents,
data extractions and access of the office’s computer programs/systems to determine
whether its processes and systems are sufficient for their functions and are
compliant with laws and regulations.
To accomplish the set objectives, the following documents need to be
gathered:
 Human Resource Office’s OPCR
 Citizen’s Charter
 RA 6713 (Code of Ethics and Ethical Standards)
 Accomplishment Reports (for historical data)
 Benchmarking Reports
Resources/ Inputs
Internal Audit Staff: Head of Internal Audit & 4 staff
Computer, software
Existing systems and processes of the Human Resource Management Office
Existing Organizational Structure

Audit Criteria
PAG-IBIG, SSS & GSIS Guidelines & Policies
Human Resource Office policy manuals/handbook
Human Resource Office Statement of Vision, Mission and Objectives
EO 292, Administrative Code of 1987