COMMISSION ON AUDIT MEMORANDUM NO.

86-444 January 2, 1986

TO : All COA Officials and Employees and Others concerned.

SUBJECT : Adopting a System-Based Approach in the Audit of Personal Services.

I. Rationale

The present audit procedures in the audit of personal services (e.g. payroll)
involve much routine work. The detailed checking and comparison of payees with the
master list, the recomputation of amounts due the individual payees and footings of
totals and extensions take up the major portion of the work of the auditing unit but does
not necessarily result in more effective audit work. Since nearly 70% of government
expenditures go to personal services, the quality and effectiveness of the audit need to
be improved through the adoption of a new approach.

II. Salient Features

The new audit objectives and procedures focus on the review and evaluation of
the systems and controls relative to personal services as the initial step in the audit. The
result of the auditor's survey and systems evaluation will determine the extent of the
detailed examination to be undertaken and whether or not the sampling technique will be
adopted.

Time and effort will be exerted only in the initial survey and evaluation of the
system, since subsequently the auditor needs only to periodically update his information
and validate the system. Detailed examination should concentrate on the changes in the
regular payroll, such as new employees, retirees, additional pay or changes in rates and
deduction. For regular payroll, random sampling technique will be adopted in the
detailed examination by selecting employees from the payroll sheet. The examination
should include checking and verification not only of the payroll data but also all
supporting documents such as leave cards, attendance records, and other permanent
records, rates or computation of pay of the employees selected including the funding
and recording of the transaction.

The objectives and procedures are numerous and exhaustive but this should not
give the impression that more time will be needed to audit under the new approach. The
application of the systems based approach and the adoption of sampling in audit will
result in time savings in audit which can be spent on other audit areas.

The attached appendix, which contains the new audit objectives and procedures,
is lifted from the State Audit Manual scheduled to be released in the first quarter of 1986.
It consist of objectives and procedures in the audit of different types of Personal
Services and related areas, broken down into the following sections:

1. Survey
2. Systems Evaluation
3. Detailed Examination
 4. Performance Audit of Personnel Management

III Effectivity

The objective and procedures issued under this memorandum shall be applied
effective January, 1986.

(SGD.) FRANCISCO S. TANTUICO, JR., Chairman

 "APPENDIX"

AUDIT OF PERSONAL SERVICES

OBJECTIVES

1. Survey : To understand the payroll system and its controls so that significant audit
areas can be determined and assessed, and possible audit objectives can be identified
in a relatively short period of time.

2. Systems Evaluation: To review and test management controls so as to ascertain

weaknesses that could give rise to material error and to determine the extent of detailed
audit to be conducted.

(a) Payroll Policies: To determine whether personnel policies and employee

assignments ensure completeness and accuracy in processing and summarizing
payroll data and payments to employees.

(b) Leave and Attendance Records: To determine if controls over the recording of
leaves and attendance records are adequate.

(c) Permanent Payroll Data: To ascertain whether controls over master payroll data
ensure that payments for personal services are made to legally appointed
employees only and at authorized rates.

(d) Payroll Payments: To determine whether controls over payroll payments ensure
that payroll funds are controlled and safeguard until claimed.

(e) Deductions: To determine if controls over payroll deductions ensure that

deductions are made at required/authorized rates and that these are accounted for
with accuracy and remitted to parties to whom they are due.

(f) Overtime Payments: To ascertain whether controls over overtime payments

ensure that payments are made only in valid and appropriate cases.

3. Examination of Payroll Payments: To ascertain 1) whether payments of salaries/wages

and allowances are made only to legally appointed employees and paid at authorized
rates in accordance with rules and regulations, 2) whether deductions are made accurately
and in accordance with rules and regulations, and remitted to the proper authorities, 3)
whether payments and deductions are supported by complete documents appearing legal
and proper, and 4) whether payments and deductions are charged to appropriate
allotment accounts and properly recorded in the books.

(a) Additional Objective for Labor Payroll: To determine correctness,

reasonableness and validity of the cost of labor vis-à-vis total project cost.

(b) Additional Objective for Payments to Casuals/Contractuals/Consultants:

To ascertain the correctness and validity of payments to casual/contractual
 employees and consultants, and to determine whether the services of all or a
certain number can be dispensed with without affecting agency operations.

(c) Overtime Payments: To determine the validity and appropriateness of payment for
overtime services and to ascertain whether such services can be dispensed with or
minimized without affecting operations.

(d) Payments for Other Personal Services: To ascertain whether payments are
authorized in accordance with existing rules and regulations and are supported by
complete documents appearing legal and proper, and to ascertain whether
deductions, if any, are remitted to appropriate parties.

4. Performance Audit of Personal Management: To ascertain if personnel policies and

practices can achieve operational economy and efficiency, and to determine whether
those responsible for administering and implementing programs/projects/activities
have the needed competence and qualifications for the job, and that there enough of
them.

PROCEDURES

1. Survey

Objective: To understand the payroll system and its controls so that significant audit
areas can be determined and assessed, and possible audit objectives can be
identified in a relatively short period of time.

(a) Obtain and study the following data/documents:

 Total budget/appropriation for personal services

 Actual funds available for personal services per allotment advice/cash

disbursement ceiling.

 Agency's written policies, guidelines, standards and operations manual for

payroll

 Approved plantilla of personnel/Personnel Services Itemization

 Organizational Chart

 Flowcharts for the different types of payroll

 Appropriate rules and regulations

 Original payroll sheets/vouchers

 Copies of relevant internal audit reports.

(b) Inquire into the agency's payroll procedures/operations and the control points
designed in the system. Prepare interview notes in memo form.
 (c) Identify the various types of payroll in the agency, such as:

 Regular Payroll (permanent and temporary employees)

 Labor payroll, casual, emergency employees

 Contractual, consultants, experts, lecturers

 Overtime/honorarium

 Subsistence and other allowances/benefits

(d) Validate the existing flowcharts, if any, by selecting one or two items for each
type of payroll transaction and tracing the route and the related documents and
records of each selected transaction from inception to ultimate disposition.
Prepare the working papers.

(e) If no existing flowcharts are available, prepare flowcharts for each payroll type
based on the data obtained:

 Hiring

 Time/record keeping for time worked and not worked

 Preparation of payroll, calculations and other clerical work

 Payment

 Termination of/retirement from employment

(f) Observe actual operation for procedures not documented to confirm

understanding of the system. Incorporate observations/findings in the working
papers.

(g) Evaluate data gathered and determine the areas with potential audit significance
considering such factors as the following:

 Importance or impact

 Materiality

 Known/suspected or potential area of uneconomical or inefficient

operation

 Suspected irregularity, non-compliance with rules and regulations

(h) Evaluate internal controls adopted on specific prescribed procedures expected to

be relied upon in determining the nature, extent and timing of the substantive test
of payroll.
2. Systems Evaluation

Objective: To determine whether personnel policies and employee assignments

ensure completeness and accuracy in processing and summarizing payroll data and
payments to employees.

(a) See if there are clearly defined and written procedures/guidelines outlining the
objectives, policies, standards and procedures for:

 Hiring and separation of personnel

 Inclusion in/deletion from payroll

 Recording of attendance and absences

 Processing regular and special payrolls for overtime, allowances,

differentials, etc.

 Paying, recording and accounting

If there are none, determine what guides are being followed and evaluate
their adequacy.

(b) Check compliance of personnel policies with Civil Service and other laws and
rules.

(c) Interview employees assigned to the payroll system to see if they are:

 Adequately informed of the agency’s policies, guidelines, standards and

objectives for payroll.

 Fully aware of applicable rules and regulations pertaining to the payroll

function.

 Informed of the lines of authority and responsibility and advised of

organizational changes in the payroll function.

Document results of interview.

(d) Look into the job assignments of the employees assigned to the payroll system
and check or test check if the duties are properly segregated such that a single
individual does not perform incompatible functions. Functions which should be
segregated include:

 Preparation of the payroll, payroll checks, pay envelops

 Checking of computations of gross pay, payroll deductions and extensions

and footings of payroll summaries before payment
  Authorization/approval of payments

 Payments by Cash

 Reconciliation of payroll bank account (if such is maintained)

(e) Observe actual operation to confirm data obtained in the preceding procedures.

(f) Document and summarize all findings.

Objective: To determine if controls over the recording of leaves and attendance

records ensure 1) that evidence of attendance is sufficient, 2) that
employees are entitled to all the leaves they have availed of, 3) that
earned leaves and those availed of are properly documented and
recorded, and 4) that undertimes and absences are properly deducted
from leave credits and/or payroll.

(a) Determine if daily time records and leave applications are required from
each employee and see if:

 Said records are properly authorized/approved

 Leaves availed of are in accordance with entitlements

 A responsible official supervises use of time clock

(b) Ascertain whether leave records and time logbooks are maintained and see if:

 Leave records are maintained for each employee and regularly updated

 Time record books are properly safeguarded or controlled to avoid alterations

or loss

 Time logbooks, leave records and individual personal records (including

contracts of employment) are maintained independently of the payroll
department

(c) Reconcile data on attendance reports with those in time logbook and leave
records and determine if undertimes and absences are recorded/deducted from
either the leave credits or the payroll.

(d) From the data gathered, summarize audit findings and observations.

Objective: To ascertain whether controls over master payroll data ensure that
payments for personal services are made only to legally appointed
employees at authorized rates of pay.

(a) Verify if changes to master payroll data are fully documented and authorized in
writing and approved by duly authorized official. Such changes include:
  New Hires/additions to the payroll
 Separations/deletions to payroll
 Changes in rates of pay and deductions from pay

(b) Determine the time lag between the preparation and receipt of notice of changes
and adjustments, and the effectivity of the required changes in the master
payroll.

(c) From the data gathered, summarize findings.

Objective: To determine whether controls over payroll payments ensure that payroll
funds are adequately controlled and safeguarded until claimed by the
proper employees.

Payment by Check/Warrant and Bank Transfer:

(a) Verify if each check is compared to the individual items in the payroll, and that
the totals of the checks are compared to the totals of the payroll.

(b) See if the checks are directly released to employees or their duly authorized
representative.

(c) Determine if payment/mailing of payroll checks/warrants or bank transfers

are performed by persons who:

 Take no part in the payroll preparation

 Are not responsible for hiring or firing
 Do not approve time records

(d) Determine if the payroll discloses:

 The names of employees who release the check/warrant

 The name of the person to whom the check was released if other than payee

 The date of release

 The official or employee who witnessed the payment

(e) Verify if unclaimed checks are in the possession of the cashier/responsible officer
and are adequately safeguarded. Find out why these checks remain unclaimed.

PAYMENT BY CASH:

(a) See whether advances drawn by disbursing officers/special disbursing officers

are only for the total net payroll for the week/pay period.

(b) Look into time-lags among payroll preparation, receipt of cash advance, and
actual payment. See if cash advances for salaries and wages are paid promptly.
(c) Analyze reports of disbursements. See that payments of salaries and wages are
given priority over other expenditures.

(d) Determine if persons other than those who prepare the payroll control the cash
until paid to employees. If not, look into other control measures instituted.

(e) See that disbursing officers pay only the payrolls assigned to them.

(f) Verify whether unclaimed salaries and wages have been cancelled from the
payroll, refunded, and duly receipted for and deposited/remitted. See that proper
adjustments are made.

Objective: To determine if controls over payroll deductions ensure that deductions are
made at required/authorized rates and that these are accounted for with
accuracy and remitted to the parties to whom they are due.

(a) Check if all required/authorized deductions are affected at the rates prescribed
and/or authorized. See that unauthorized deductions are discontinued.

(b) Verify if individual subsidiary ledgers for accounts withheld are maintained and
updated.

(c) See if the ledgers are independently reviewed on a regular basis to ensure that
withheld amounts are remitted promptly.

(d) Reconcile the payroll deductions remitted against the payroll for the period.
Determine whether the variances, if any, are immediately investigated and
corrected.

Objective: To ascertain whether controls over overtime services ensure validity and
appropriateness of payments.

(a) See that the system for overtime work requires approval/authorization. Ascertain
whether the duration of said authority:

 is specific as to the period within which such service is to be performed

 is made for a period not longer than three months

 does not extend beyond the end of the calendar year.

(b) Determine if overtime payments are reviewed to ensure that they are computed
at authorized rates and/or are within the ceiling allowed for overtime pay or for
compensation in lieu of overtime pay.

(c) See if overtime services are properly supervised.

(d) See if overtime services are properly reflected in the authorized attendance
reports and time logbook for the period under review.
 (e) Ascertain that overtime is not used to offset undertimes.

(f) Summarize findings.

3. Examination of Payroll Payments

Objective (for Regular Payroll): To ascertain whether payments of and deductions

from salaries/wages and allowances are 1) made to legally appointed
employees (or remitted to other parties in the case of deductions) in
accordance with rules and regulations and following the authorized rates,
2) supported by complete documents appearing legal and proper and, 3)
charged to the appropriate allotment accounts and properly recorded.

Master list

(a) Beginning January 1986, and every three years thereafter, establish the
accuracy of the master list. For subsequent audits, compare the total number of
payees for the pay period under review with the latest audited payroll. List down
employees added to or deleted from the payroll. List down changes observed.

(b) Look into the changes noted and see if:

 the changes are duly authorized.

 those included in the approved plantilla which are added to the payroll are
covered by the approved budget.

 the computations are correct.

 the inclusions and deletions are supported by complete documents appearing

legal and proper.

(c) Obtain monthly a list of employees who have retired, resigned, transferred, died,
fined, etc. from the Personnel Unit. See that they are deleted from the payroll or
that proper deductions have been made from their salaries.

(d) Once every quarter, select sample employees from payrolls, and undertake the
following:

 Look into the authority and documentation on the rates of pay, deductions
and allowances noted as well as the correctness of the gross and net pay
totals of the sample tested.

 Trace samples to index cards kept by the Accounting Unit to check for
possible double payments.

 Document and summarize relevant data/evidence gathered and findings,

observations and conclusions reached.
Leave and Attendance

(a) Ascertain whether attendance reports are approved and duly supported by
approved daily time records and leave applications, if any.

(b) Check reports with the logbooks. Verify any signs of tampered time/attendance
records.

(c) Trace absences and undertimes to leave records and see that they are deducted
either from the leave records or the succeeding month's payroll.

(d) See that leave records are updated, showing leaves availed of and the remaining
leave credits.

Allowances and Deductions

(a) Verify whether allowances granted and deductions made are authorized by law
and rules.

(b) Voucher and test-check mathematical computations of allowances granted and

deductions made.

(c) Verify withholding rates with 1) tax tables and 2) employees deductions
declaration form, and check or test check computations of the deductions for
withholding taxes.

(d) Reconcile balances of payroll deductions in the subsidiary ledger with the related
payroll, and compare remittances made during the year with the actual
deductions per payroll.

(e) Compare dates of remittances with their corresponding due dates. Ascertain the
liability for late/non-remittance and discuss them with appropriate officials.

Payroll Payment

(a) Determine if the payroll was certified and approved by authorized officials.

(b) Check or test check arithmetical accuracy of the footings and crossfootings of the
payroll sheets/reports audited.

(c) Reconcile total net pay per payroll with cash advance vouchers or the payroll
checks, individually or in aggregate, to ensure that no excess disbursement was
made.

(d) Observe payroll payment, noting particularly the procedures used in identifying
employees.

(e) Follow up the disposition of unclaimed pay checks or cash.

If payment is through the bank,

(a) Ascertain correctness of amount remitted to the bank.

 Trace remittance against the net pay totals in the payroll.

 Determine if the list on net pay per employee sent to the bank reconciles with
that of the payroll/masterfile.

(b) Verify monthly bank reconciliation statement. On a test basis, trace credits to
payroll master list.

(c) Look into the bank credit memos for returned salaries/other personal services
payments.

(d) Verify if remittances for the required deductions have been properly adjusted.

Objective: To determine correctness, reasonableness and validity of the cost of labor.

(a) On a regular basis, secure copies of the following:

 Programs of work

 Employment list/Job Order

 Standards for labor costs

 Progress/Accomplishment Reports

(b) With the assistance of engineers/technical staff, look into and analyze the
proportion of labor cost with the total project cost. Compare against standards.

(c) Conduct ocular inspection of projects. See if the laborers on the employment
list/job orders are actually rendering service. If possible, conduct inspection
during payday to observe payroll payment.
(d) Compare number of laborers/workers and wage rate of laborers in the timebook
and payroll against employment list/job order and program of work. See if the
actual number of laborers exceed the number specified in the program. Secure
explanation for deviations.

(e) See if the number of laborers who undertake the work is in accordance with
the established standards considering the skills requirements.

(f) Verify if, on the timebook and payrolls, the thumbmarks of individual laborers
made in lieu of signatures are properly witnessed, and if needed data about
their residence certificates are indicated.
(g) On a test basis, compare the signatures of laborers with the signatures on
existing records and on payroll sheets for other periods. Take note of and verify
discrepancies.

(h) Compare total cost of labor against program/accomplishment report

and the cost as per the program of work.

Objective (for Payments to Casuals/Contractuals/Consultants): To ascertain the

correctness and validity of payments to casual employees,
contractuals and consultants, and to determine whether the services of
all or only a certain of number can be dispensed with without affecting
agency operations.

(a) Validate the data contained in the following documents:

 Updated schedule of casuals/contractuals and consultants hired by operating

units with the following information: 1) names, 2) description of actual duties,
3) terms of employment, and 4) rates

 Copy of contracts or appointments

(b) On a test basis, undertake the following:

 Compare payees against the schedule and examine any

discrepancies/changes

 Trace sample to index cards to check for possible double payments.

 Look into attendance records or equivalent. Ascertain whether absences are

deducted from pay. In the case of casuals, determine if they are entitled to
earn leave credits.

 Check the accuracy of the rate and frequency of payment by referring to the
terms of the contract.

(c) Review appointments/contracts and take note of the following:

 Conformity with pertinent laws and rules and Civil Service rules and
regulations

 Authority of signatories (contracting parties)

 Date of effectivity and terms of the contract

 Specific duties and responsibilities of the contracting parties. In the case of

Consultants, the nature of their assignments

 Reasonableness of the contract price/salary in the light of complexity,

degree of specialization, etc.
  Appropriation for the services contracted

 Time extensions if allowed

(d) Gather information on the following:

 Reasons for hiring

 Workload of the unit

 Workload assigned to regular employees

 Workload assigned to casuals/contractuals/consultants

 Comparative cost incurred for said services for the last N years

 System of monitoring of costs and accomplishment to ensure conformity with

the contract and that allotments are not exceeded as regards the former

(e) Examine reports of accomplishments of regular employees and ascertain

whether work done by casuals/contractuals can be undertaken by them.

(f) Assess the projects/activities within the context of the programs and manpower
of the agency. Determine if the services performed, including those done by
consultants because of their specialized knowledge or the regular staff of the
agency can render expertise.

(g) Examine reports of accomplishments. See if these reports:

 Contain the activities of the unit/office/project

 Are accomplished within the approved time frame and budget allocation and
following the specifications

 Are reflective of actual operations. Be on the lookout for unutilized man-

hours by the regular employees and the hires.

(h) From the above data, determine whether the need to hire is due to the unutilized
man-hours of regular employees and determine the cost equivalent of such
unutilized man-hours.

(I) Analyze the growth in expenditure for services by

casuals/contractuals/consultants. Comment on any significant trends.

(j) Compute the possible savings if hiring is done only when necessary and in the
interest of the service.

(k) Summarize all findings/observations and conclusions.

Objective: To determine the validity and appropriateness of payment for overtime
services and to ascertain whether such services can be dispensed with or
minimized without affecting agency operations.

(a) On a test basis, examine overtime payments taking note of the following:

 Authority to render overtime

 Rate authorized

 Overtime work performed and actual accomplishment

 Man-hours utilized

 Position/rank of the person rendering overtime

(b) Check accuracy of the overtime payments and compare the amount with that
appearing in the payroll. See that the total overtime does not exceed the
maximum ceiling set.

(c) Obtain descriptions of jobs actually performed at regular hours and during
overtime by employees rendering the overtime.

(d) Determine whether the overtime work can be performed during regular
working hours.

 Interview supervisors and determine routine and seasonal activities

undertaken. Identify the peak and slack periods.

 Look into requirements for reports and/or documents being prepared during
overtime.

 By examining reports and other documents, determine whether the activities

that can be done during slack periods are being done.

 By examining approved daily time records, see if need to render overtime

resulted from absences and/or undertimes.

(e) Prepare an analysis of the work performed against the purpose of the overtime
as authorized and the man-hours utilized. Compute for the possible savings if
overtime had been kept to the minimum and/or prepare comparative analysis on
cost of hiring new employees as against total overtime expenses.

(f) Evaluate data gathered and documented. Summarize findings/observations and

recommendations.

Objectives: To ascertain whether payments are authorized in accordance with

existing rules and regulations, and are supported by complete documents
appearing legal and proper; and to ascertain whether deductions, if any,
are remitted to appropriate parties.
Initial Salary - Permanent or Temporary Employees

(a) Verify appointment papers and check the names, designation and rate of pay of
employees against approved plantilla of personnel.

(b) Ascertain the correctness of the amount to be paid. Verify deductions. Trace
number of days/hours worked from the daily time record/attendance sheet.

(c) Check the following documents:

 Assumption to Office

 Oath of Office properly accomplished and subscribed to, and dated not
earlier than assumption to office

 Statement of Assets and Liabilities for the preceding year, properly

accomplished and subscribed to

(d) If transferee, check the following additional documents:

 Approval of the transfer of the employee

 Certificate of Clearance from former office

 Certificate of leave credits from former office

 Certificate showing the date the appointee left his former official station

 Statement verified by the auditor thereat as to the amount of salary last paid
by the former office and for what period.

(e) Inspect time/attendance records and see if absences were deducted either from
the pay or the leave credits, if transferee.

(f) If the appointment is by reinstatement, look over the appointee’s certificate

relative to any retirement or lay-off gratuity received and the leave or money
value commuted/enjoyed.

 Verify evidence on refunds and remittance of amounts previously collected

for unexpired portion of gratuity and the money value of unused
vacation/sick leave.

 See that the reappointed employee only receives either the salary for the
position or the pension/gratuity/annuity.

(h) See that the deductions were remitted to appropriate parties.

Sick/Vacation/Terminal Leave

(a) Check if application for leave was approved. Trace to leave cards. Determine if
there is enough leave credits.

(b) Verify the propriety and correctness of the following supporting documents:

 Medical certificate in case of sick leave of more than 5 days

 Certificate of Clearance for leave of more than 30 days

 Statement of Assets and Liabilities

 Approved resignation or retirement (for terminal leave)

 Certification from disbursing officer that the claim had not been included in
the payroll

Maternity Leave

(a) Check if application for leave was approved.

(b) Verify the propriety and correctness of the following supporting documents:

 Marriage Certificate (for first maternity leave)

 Medical certificate

 Certificate of Clearance

(c) Look into the employee's status of employment and number of years in service
(See Manual on Audit of Disbursements.

Honorarium

(a) Check the following supporting documents.

 Authority to collect honorarium

 Certification of services rendered

 Copy of the contract, if any, between the agency and the grantee if latter is
not an employee of the agency

(b) See that the rates and totals in accordance with rules and regulations.

(c) Verify the amount of the honorarium actually paid. Check correctness of income
tax withheld. See that they have been remitted.
 (d) Check if an appropriation for honoraria is specifically provided for.

Commutable Representation, Transportation and Other Allowances

(a) Check specific authority of law and determine if the allowances are within the
authority granted.

(b) Verify double collection. Ensure that if allowances are given in kind, such
as living quarters, or subsistence, no cash payments are made.

4. Performance Audit of Personnel Management

Objectives: To ascertain if personnel policies and practices can achieve operational

economy and efficiency; and to determine whether those responsible for
administering and implementing the program/project/activities possess
the needed competence and qualifications for the job, and that there are
enough of them.

(a) Determine how officials and employees belonging to various management levels
perform their tasks.

 Review the agency's organization chart and/or policies to identify staff with
responsibility for management.

 Obtain list of personnel and the responsibilities assigned to each.

(b) Select a number of personnel and review their job descriptions. Discuss their
functions with them and determine if:

 They know their responsibilities

 The work actually performed is in accordance with their job descriptions.

(c) Determine if functions being performed are necessary. See if those in

lesser positions and receiving lower compensation can perform these functions.

(d) Ascertain if work is duplicative. If the work can be combined with other related
tasks, determine possible man-hours that could have been saved and utilized to
carry out other activities of the agency.

(e) Prepare a comparative analysis of employee's accomplishments against the

targets set per their individual work program. Note down variances observed
and secure management's/employee's comment/justifications. Look into the
following:

 Frequency of work evaluation of employees

 Criteria used for performance appraisal. Determine their sufficiency and

validity.
  Qualifications of the supervisory and support personnel i.e., their abilities,
skills, education and training needed to accomplish their jobs. Evaluate their
qualifications against the standards set by the Office of Budget and
Management and the Civil Service Commission.

(f) Look into other causes of shortcomings/gaps in expected performance, if any.

Distinguish internal from external causes.

(g) Determine existence of a human resource development program. See if it

addresses training needs and provides adequate external and internal training.

(h) Look into the following:

 Working condition and improvements that can be recommended.

 Morale. Observe signs of discontent, indifference or antagonism.

 Attitudes towards personnel policies

 Rate of employee turnover and the mechanisms to identify reasons for

transfer, resignations, etc. and how they are relayed back to units concerned
for appropriate action.

(i) Inquire into causes of frequent absences, tardiness and excessive time offs.
Determine if absences and undertimes greatly affect work accomplishment.
Look into actions taken to remedy the situation.

(j) Summarize audit findings and recommendations.