PART III

STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT

RECOMMENDATIONS

We have followed up the actions taken by the agency to implement the prior years’
audit recommendations and the results are as follows:

Total No. of Status of Implementation as of December31, 2016

Year Outstanding
Fully Partially Not
Reported Recommendations as
Implemented Implemented Implemented
of January1, 2016
2015 45 15 30 -
2014 18 15 3 -
2013 5 5 - -
2012 1 1 - -
2011 and PYs 12 3 9 -
Total 81 39 42 -
% 100% 48% 52% -

The details of our validation are presented hereunder:

Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
CY 2015 CAAR
1. Unutilized allotments of P444.575 Obs. No. 1
million, thus, maximum utilization of CY 2015
of its authorized CAAR
appropriation/money available for
spending was not attained.

We recommended and Management Commented that the Partially Implemented

Management agreed to maximize Department has always been consistent
the utilization of allotment and in the preparation of a realistic budget Reiterated under
funds received within the year of for the implementation of its plans and Observation No. 2, Para.
receipt and schedule of programs. The unobligated balance of 2.1-2.9, Part II of this
implementation by ensuring the P44,575,410.25 represents funding for Report.
execution of projects/activities BUB projects in the regions, the
within the set timelines; implementation of which are DOT-ROs II and III MOAs
preparation of a more realistic dependent on the concerned LGUs with LGUs are not revised
budget; proper monitoring prompt and complete submission of and/or failed to include the
payments to suppliers; and the documentary requirements. DOT duration of implementation
extension of appropriate Regional Offices concerned have of the projects/activities.
assistance to LGUs to facilitate already been directed to provide
compliance of documentary assistance to LGUs in complying with DOT-RO IVA BUB projects
requirements for timely and the mandatory documentary were not fully implemented
optimum delivery of services to requirements to facilitate the delivery in view of the failure on the
the public. of services to the public. part of LGUs in the timely
submission of documentary
DOT-ROs II, IIIIVA, VIIand requirements.
XIrequired the BUB project officer to
continuously monitor the DOT-RO VII BUB projects
implementation and submission of for 2015 and 2016, LGUs are
liquidation reports of the projectsas required to liquidate prior yr.
well as to conduct site visits on BuB releases before releasing the
projects. BUB 2015 and 2016.

121
 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
DOT-RO VI management has
submitted several MOA.

DOT-RO VIII BUB projects were

already implemented but no turnover
of project to the respective LGUs
because they are still in the process of
reconciliation.

DOT-ROs XII and XII there’s an

unobligated balance since
LGUs involved were unable to comply
with the required documents to release
the fund.

2. Lapsed cash allocations of Obs. No. 2

P376.984 million was reverted to of CY 2015
the Bureau of Treasury, which CAAR
may be attributed to the
unrealistic forecasting of the cash
requirements reflected in Monthly
Disbursement Program (MDP) or
the inability to implement
programs and activities in line
with the disbursement forecast in
the MDP.

We recommended that Management commented that DOT Partially Implemented

Management direct the Director, Financial and Management Services
Financial and Management relayed the COAs recommendation Reiterated under
Service and concerned regional during the recently concluded Observation No. 1, Para.
officials to prepare realistic intervention/ workshop program with 1.1-1.10, Part II of this
estimates of the cash requirements all DOT Regional Offices accountants Report.
to be included in the MDP; and budget officers, all of whom
maximize use of cash allocations committed to comply with the COA DOT-NCR Review of NCAs
received through close monitoring recommendations. and corresponding
of project implementations and disbursements showed that
related disbursements strictly in DOT-RO IVA committed total NCA received
adherence with the MDP; and improvements on all facets of amounted to P21,788,764.00,
provide maximum assistance to operation of which P21,749,923.34 or
the LGUs to enable complete 99.82 percent was disbursed,
submission of documentary leaving an unutilized balance
requirements for BuB of only P38,840.66 or 0.18
implementation. percent.

3. Unutilized Tourism Development Obs. No. 3

Fund of P29.564 million in view of CY 2015
of the Department’s failure to CAAR
formulate the operational
guidelines and prepare the
Special Budget on the use thereof.
Consequently, the expected
benefits from the implementation
of tourism projects and activities
chargeable to the TDF were not
realized.

We reiterated our The management issued Memorandum Partially Implemented

recommendation that Circular 2016-01 which was approved

122

Observations and Recommendations
Management direct the
Undersecretary for Tourism
Regulation, Coordination and
Resource Generation and/or other
concerned officials to formulate
the plans and programs for
consideration in the Special
Budget and the guidelines
necessary to maximize the
availment of the TDF within the
limitations given under the GAA,
thus, ensuring that essential
programs, projects, activities for
the improvement of the tourism
industry are implemented and the
expected benefits are derived
therefrom.
4. Excessive expenses for the
network printing contract of
P3.367million. The
implementation of the Network
Printing Services (NPS) was not
adequately planned and supported
with cost benefit analysis to prove
that the rental of service units is
more beneficial to the office than
the use of existing 222 units of
printers and fax and xerox
machines valued at
P5,726,783.86.
We recommended and
Management agreed to reassess
the NPS contract and facilitate its
renegotiation to revise provisions
that are disadvantageous to the
DOT and direct the project
proponents to provide sufficient
basis to attest the claim that rental
of service units is more beneficial
to the office vis–a-vis use of
existing operational units with
maintenance and supplies costs.
Henceforth, we also
recommended that Management
ensure that project
implementation is properly
planned to avoid incurrence of
unnecessary expenses and ensure
that benefits from use of resources
are derived by the office.
5. Inaccurate and unreliable balance
of fund remittances to the
Philippine Tourism Offices
(PTOs) recorded under Cash in
Bank – Foreign Currency,
Current Account (FCCA) and
Cash in Bank, Foreign Currency,
Auditor’s Results of
Reference Management Action
Validation
by the Secretary and promulgated on Reiterated under
February 15, 2016, prescribing the Observation No. 3, Para.
guidelines for the implementation of 3.1-3.11, Part II of this
TDF funded projects in accordance Report.
with the intent and purpose as stated in
RA 9593. The circular provide for the Similar recommendations in
creation of a TDF Evaluation CY 2014CAAR.
Committee (TDFEC) to evaluate and
recommend priority projects for
funding allocation from the TDF. The
Committee held its first meeting on
March 22, 2016.
Obs. No. 4
of CY 2015
CAAR
Management commented that the Fully Implemented
Network Printing Service (NPS)
contract was already re-assessed. Extension of Contract for
Network or Centralize
Printing Services was made
last August 1, 2016 wherein
the basis of volume of
20,000 copies/ unit for
monochrome photocopier
and 5,000 copies/unit for
colored photocopier was
reduced to 5,000 and 1,300
copies/unit, respectively.
Therefore the rental of
service unit was already
beneficial to DOT and the
project proponent.
Obs. No. 5
of CY 2015
CAAR
123
 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
Savings Account (FCSA) in the
amount of P102,045,950.45 and
P76,199,660.93, respectively.

We reiterated our Management commented that the Fully Implemented

recommendations that accountant had maintained an updated
Management direct the Director, SL for each AO. Documents Updated SL for each AO is
Financial and Management supporting liquidation report of the already maintained.
Services and the Chief Accountant DOT Frankfurt had been submitted.
tomaintain an updated SL for each Surplus/ deficit using the closing rate Fully Implemented
AO and require all AOs to submit for the balances of the foreign currency
their bank statement and Cash account are already recognized at the Liquidation Report and
Disbursement Register monthly to end of CY 2016. Management does not supporting documents of
reconcile and ascertain the cause/s remit succeeding releases of MOOE if DOT Frankfurt was
of the discrepancy between the found with unutilized cash in the banks submitted under CaDJ No.
GL and SL;require the submission of AOs. 16-07-012 dated July 31,
of the documents supporting the 2016.
liquidation report of the DOT-
Frankfurt;translate the balances of Fully Implemented
foreign currency accounts using
the closing rate and recognize Unliquidated balance of
surplus or deficit from the Philippine Tourism Offices
resulting currency exchange is now revalued using the
differences thereof; and deduct closing rate wherein gain on
from the current releases the FOREX was recognized.
excess/unutilized cash in the
banks of the AOs. Partially Implemented

Excess/ unutilized cash in

the banks of the AOs were
not yet fully remitted/
returned to the National
Treasury.

Reiterated under
Observation No. 9, Para.
9.1-9.10, Part II of this
Report.

Similar recommendations in
CY2011-2014 CAARs.

6. Long outstanding fund transfers to Obs. No. 6

the NGAs/ GOCCs/ LGUs/ NGOs/ of CY 2015
POs/ROs in the amount CAAR
ofP1,243,682,804.43.

We reiterated our Managementcommented that Demand Partially Implemented

recommendations and letters were served for the concerned
Management agreed to: (a) oblige IAs/NGOs/POs to settle their Partially Implemented
the concerned IAs/NGOs/POs to outstanding balances. FMS in
immediately render their final coordination with the DOT Regional DOT-OSEC, ROs III, Vand
liquidation reports and Monitoring Office has sent XIII- there are still
settle/return any balance of funds, reminders/demand letters to grantees supporting documents & DV
otherwise, impose sanctions and likewise requested the DOT that remained unsubmitted/
against the officials of defaulting Regional Offices to monitor and delays in the submission of
IAs/NGOs/POs, after service of follow-up compliance. FMS continues terminal and liquidation
due notice; (b) ensure that no to enforce strictly the provisions and reports as of this date.
additional releases are made requirements of the MOAs by
unless the previous ones are fully requiring the grantees to submit the Partially Implemented

124

Observations and Recommendations
accounted for and settled to
prevent accumulation of
unliquidated accounts; and (c)
instruct the project proponents to
revisit the MOA to see to it that
provisions on project duration and
the period of submission of
financial and terminal reports are
provided therein.
We also recommended that
Management require the
Accountant to: (a)
submit/settle the lacking
documents and deficiencies noted
in the grant of fund transfers; (b)
coordinate with the Accountant of
ROs/IAs to examine and reconcile
the difference of the reciprocal
accounts and the results of
confirmations; and (c) review of
transactions and prepare the
necessary correcting entries to
adjust the overstated balance.
7. The unliquidated cash advances
accumulated to P29,674,287.89
as of December 31, 2015 in view
of the Management’s continued
inability to properly monitor and
enforce settlement and to
faithfully observe the rules and
regulations on the grant,
utilization, and liquidation of cash
advances
We reiterated our previous years’
recommendations and
Management agreed to demand
the immediate liquidation of the
outstanding cash advances,
otherwise withhold the salaries
Reference Management Action
terminal and liquidation reports within
the prescribed period. Continuous and
close monitoring of the projects are
being undertaken. No financial
assistance are being granted to
LGUs/NGOs/POs with unliquidated
accounts and those who do not comply
with the MOA. MOAs are being
reviewed to ensure that there are
provisions on project duration and the
period of submission of financial and
terminal reports.
DOT-NCR no action was made by
management except for a follow-up
done by the Finance Officer thru
telephone to reach the Chief of the
Accounting Department of
Mandaluyong However, it yielded
negative result. Refund are made by
the city of Manila amounting to
P100.00.
DOT-CAR conducted reconciliation of
the long outstanding fund transfers and
updated liquidation report or fund
utilization report was required from
each of the recipient LGUs.
DOT-ROs I,II, VIII, XII and XIIIhas
issued demand letters to various LGUs
for the liquidation of prior year’s BUB
projects.
DOT-RO I Management has submitted
some of the required reports or
documents.
DOT-RO IX is still in the process of
retrieving the records/supporting
documents of the fund transfer to
LGUs.
Obs. No. 7
of CY 2015
CAAR
Management commented that of the
P29,674,287.89 unliquidated cash
advance, P20,235,276.57 were
advances in the central office of which
69% have already been settled. The
bulk of the P9,439,011.32 represents
125
Auditor’s Results of
Validation
Additional funds were still
granted despite the non-
liquidation of the previous
fund transfers.
Reiterated under
Observation No. 6, Para.
6.1-6.9, Part II of this
Report.
Fully Implemented
Instructions were made to
the project proponents to
revisit the MOA.
Partially Implemented
Lacking documents and
deficiencies are still noted in
the grant of fund transfers.
Fully Implemented
Reciprocal accounts are
already reconciled.
Fully Implemented
DOT-RO III Accounting
Unit prepared the necessary
adjusting entries through
JEV 16-01-001 to correct the
overstated accounts.
Similar recommendations in
CY 2011-2014CAARs.
Partially Implemented
Reiterated under
Observation No. 9, Para.
9.1-9.10, Part II of this
Report.

Observations and Recommendations
and any amount due the
concerned officials and employees
who are still in service. For those
who are no longer connected to
the agency, send final demand
letters and/or file appropriate
charges under the existing law.
Auditor’s Results of
Reference Management Action
Validation
the unliquidated advances by previous
officials and employees which already Similar recommendations in
been sent final notices to settle their CY 2011-2014 CAARs.
accountabilities.
DOT-CAR immediately required all
employees with outstanding CAs to
liquidate immediately and to refund
unutilized amounts.

The Management already sent demand

letters to former DOT-RO I RD
Ernesto Malay. DOT Central Office
will file charges against Mr. Malay and
elevate this to the Office of the
Ombudsman.

DOT-RO VIII and XII submitted the

8. Unreliable balance of inventories
of P23,916,032.35.
We reiterated our last year’s
recommendations and
Management agreed to direct the
Accountants and Property/Supply
Officers to examine and establish
the cause/s of the discrepancies
between the book and physical
inventory balances and adjust the
account balance, as necessary.
Moreover, periodically review
and analyze account balances;
conduct physical count and
prepare the RPCI for the timely
reconciliation and correction of
errors; record first the
procurement of promotional
materials and other inventories
under the appropriate Inventory
account; and take up inventories
as expense only when actually
issued thru the RSMI submitted.
We also recommended that the
DOT-OSEC Accountant adjust
the reclassification/accounting
errors to reflect the accurate
balance of the Other Supplies and
Materials Inventory and Expense
accounts.
Liquidation Reports.
Obs. No. 8
of CY 2015
CAAR
Management commented that DOT
OSEC-GSD is currently undertaking a
physical inventory of supplies and
materials to reconcile their recorded
balances with that of the accounting
books.
DOT-NCR Original copies of RIS and
RSMIwere already submitted to COA
on May 27, 2016
DOT-ROs I, III, IX and
XIManagement is still in the process of
reconciling the inventories.
DOT-RO III management created a
committee on inventory to facilitate,
prepare and update the necessary
inventory reports.
DOT-RO IVA updated its Stock Cards
and prepared the Supplies Ledger
Cards
Partially Implemented
Unreconciled balance were
still noted between the book
and physical inventory
balances.
Partially Implemented
Non-conduct of physical
count and non-maintenance
of updated SLCs and
SCswere still noted.
DOT-RO VIII failed to
conduct physical inventory
of equipment for the past
three or more years.
Partially Implemented
Some inventories were still
recorded as outright expense.
Reiterated under
Observation No. 7, Para.
7.1-7.10, Part II of this
Report.
Fully Implemented

JEV No. 2016-05-109 dated

4/27/16 were made to reflect
the accurate balance of the
Other Supplies and Materials
Inventory and Expense
accounts.

126

Observations and Recommendations
9. Inaccurate and unreliable
balances of PPE accounts of
P522.415 million.
We reiterated our previous year’s
recommendations and
Management agreed to direct the:
a) Accountants to review/verify
the recorded transactions and
ascertain the causes of the
noted discrepancies and
errors in recording and make
the necessary adjustments, as
necessary, and henceforth,
maintain an updated PPELC
and coordinate with the
Property Officer for the
conduct of periodic
reconciliation of accounting
records and reports to avoid
inconsistencies/discrepancies
. concerned LGUs.
b) As basis to monitor and
reconcile the recorded assets,
direct the Property Officer to
maintain an updated Property
Cards for all PPEs; conduct
timely physical inventory
and prepare the
corresponding RPCPPE.
We also recommended that
Management provide complete
and proper documentation of the
adjusted and dropped PPEs;
recognize in the books the value
of unrecorded PPEs and
immediate disposal of all
unserviceable assets.
10. Inaccurate and unreliable balance
of Other Non-Current Assets of
P5.686 million
We recommended and
Management agreed to direct the
Chief Accountant, in coordination
with the Inventory Committee and
Property Officer, to correct the
total of the RPCPPE; reconcile
the difference between the
physical count and book balances;
provide proper and complete
documentation to the dropped
donated assets; and substantiate
Auditor’s Results of
Reference Management Action
Validation
Similar recommendations in
CY 2011-2014 CAARs.
Obs. No. 9
of CY 2015
CAAR
Management commented that Partially Implemented
discrepancies and errors are being
verified to facilitate the adjustments of Discrepancies and errors in
balances. The Property officer of recording were still noted.
DOT-OSEC, DOT NCR and DOT-RO
V had been directed to conduct
periodic reconciliation of accounting
records to avoid
inconsistencies/discrepancies. Property
card and RPCPPE are being
maintained.
DOT-NCR regarding the donations of
firearms made to PNP was already
dropped in the books. Partially Implemented
DOT-RO I There are Certificates of Non-maintenance of
Completion received from the PPELCs/ PCs, Non-Conduct
of Physical Count and Non-
Preparation of RPCPPE were
DOT-RO II issued demand letter still noted
requiring submission of audited Report
of Disbursement and Certificate of
Completion and Acceptance. Partially Implemented
DOT-RO V property officer has just Adjusted and dropped PPEs
finished tagging the unserviceable were still not properly
properties for disposal and updated its documented. Non-disposal of
records. Unserviceable PPEs was still
noted.
Reiterated under
Observation No. 8, Para.
8.1-8.16, Part II of this
Report.
Similar recommendations in
CY 2011-2014 CAARs.
Obs. No. 10
of CY 2015
CAAR
DOT-CAR PPE custodian has Fully Implemented
conducted actual inventory count for
the first semester; however, The total of the RPCPPE
reconciliation of the total actual were already corrected.
inventory with the accountant is on-
going. Partially Implemented
Unreconciled differences
were still noted.
Partially Implemented
127
 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
the account balance with
schedules, subsidiary ledger Incomplete documentation
and/or other records providing on dropped assets was still
details thereof. noted.

Partially Implemented

Subsidiary ledgers and

details of the balance in
some of the PPE accounts
were still not maintained.

Reiterated under
Observation No. 8, Para.
8.1-8.16, Part II of this
Report.

Similar recommendations in
CY 2011-2014 CAARs.
11. Accounting errors on the Obs. No. 11
classification of transactions of CY 2015
resulted in the net overstatement CAAR
of assets, liabilities, equity,
income and expenses by
P369,890,617.14;
P386,077,883.94;
P62,184,905.20; P 78,400,000.00;
and P78,372,172.00, respectively.

We recommended and Partially Implemented

Management agreed to direct the
concerned Accountants to draw Reiterated under
correcting entries to reflect the Observation No. 7&8,
accurate balances of the affected Para. 7.1-7.10 & 8.1-8.16,
accounts, and henceforth, to Part II of this Report.
review and validate the outputs of
the Accounting personnel for Similar recommendations in
accuracy and completeness. CY 2014 CAAR.

12. APEC disbursements aggregating Obs. No. 12

P163,863,910.25, payments of CY 2015
totaling P40,680,431.73 were CAAR
inadequately documented; fund
transfers totaling
P114,735,003.99 remained
unliquidated; and several
charges/items of expenditures in
the amount of P3,424,472.10 were
either not within the APEC
National Organizing Council
(NOC) allocated budget.

We recommended and Management commented that the Fully Implemented

Management agreed to direct the unused APEC funds have already been
Undersecretaries heading the returned and the corresponding report Unexpended balance
DOT APEC Sub-Committees and was submitted. amounting to
the Chief Accountant to P86,171,730.39 was
immediately return the unused refunded to the Office of the
fund to the APEC NOC; complete President under Official
the documentation of charges and Receipt No. 2253358 dated

128
 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
address the noted deficiencies; 8/10/2016.
enforce full liquidation of fund
transfers; and revise the Report of Fully Implemented
Disbursements to reflect the
exclusion of charges not within Supporting documents on the
the NOC allocated budget, noted deficiencies were
chargeable against regular budget already provided.
per authority granted, and those
that are personal in nature. Partially Implemented

Some of funds transferred to

IA were not fully liquidated.

Fully Implemented

Revised Report of
Disbursements to reflect the
exclusion of charges not
within the NOC allocated
budget were already
submitted.

13. Expenditures totaling Obs. No. 13

P160,831,479.65 charged against of CY 2015
funds sourced from the DOT CAAR
share in the net income of Duty
Free Philippines Corporation
were not covered by a Special
Budget duly approved by the
President.
Management commented that the CY Fully Implemented
We reiterated our 2016 GAA did not require the DOT
recommendation that share in the net income of Duty Free Similar recommendations in
Management support the TLA Philippines Corporation for a Special CY 2014 CAAR.
disbursements for CYs 2014 and Budget.
2015 with a Special Budget duly
approved by the President,
otherwise, same shall be
disallowed in audit for non-
compliance of the requirements
under the special provisions of the
covering annual appropriations
law and EO No. 292. Henceforth,
ensure that no charges are made
therefrom without a duly
approved Special Budget.

14. Unliquidated balance of fund Obs. No. 14

transfer of P433,997,232.91 to of CY 2015
DPWH under DAP funds CAAR

We reiterate our previous years’ Management commented that Partially Implemented

recommendations that immediate refund was enforced and
Management demand the remitted to the National Treasury. The Reiterated under
immediate refund or remittance to management continuously monitor its Observation No. 17, Para.
the National Treasury of all unliquidated balance with DPWH. 17.1-17.8, Part II of this
unutilized funds; full liquidation Report.
of the amount transferred; and
submission of Similar recommendations in
accomplishment/terminal reports. CY 2014 CAAR.

129
 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation

15. The amount of P204,745,222.42 Obs. No. 15

were allowed to remain of CY 2015
unaccounted for despite the CAAR
reported completion of the
DPWH-NCR project in 2015.

We reiterated our previous years’ Management commented that Partially Implemented

recommendations that immediate refund was enforced and
Management demand the remitted to the National Treasury. The Reiterated under
immediate full liquidation of the management continuously monitor its Observation No. 17, Para.
amount transferred and the unliquidated balance with DPWH. 17.1-17.8, Part II of this
submission of Report.
accomplishment/terminal reports.
Similar recommendations in
CY 2014 CAAR.

16. The year-end balance of the Obs. No. 16

Receivables-Disallowances/Charg of CY 2015
es, however, was understated by CAAR
P1,450,815.99 in view of the
unrecorded final and executory
audit disallowances and
unrecorded payroll deduction in
DOT-OSEC amounting to
P1,456,088.71 and P5,272.72,
respectively.

We reiterated our Management commented that the Partially implemented

recommendations and salaries of active officials and
Management agreed to enforce employees with final and executory Settlement of disallowances
immediate settlement of the audit disallowance have already been was still not enforced.
disallowances that have become withheld. Human Resource Division is
final and executory by directing also preparing a computation of Partially implemented
the Accountant to (a) withhold the whatever amount is due to retired
salaries and other claims of the employees with final disallowances to Present whereabouts of
incumbent officials and effect the collection of the same from former/retired DOT officials
employees; and (b) exhaust all the remaining monetary benefits due and employees, other
means in locating the present them. individuals and entities
whereabouts of former/retired cannot be located.
DOT officials and employees, DOT-NCR No action was taken by
other individuals and entities for Management since the present DOT-RO IVA No settlement
purposes of sending due notice residence/office of the persons liable was further made during the
and demand to settle their could not be located/not available. 4th Quarter of 2016.
accounts. File appropriate
charges in case of failure to settle. DOT-RO IVA and XI the balance of Reiterated under
disallowance was reduced. Observation No. 19, Para.
19.1-19.5, Part II of this
DOT-RO VII Audit disallowance was Report.
settled and collections were remitted to
the BTr in December 2016. Similar recommendations in
CY 2011-2014 CAARs.

17. The taxes withheld and remitted Obs. No. 17

aggregated P72,200,871.16 and of CY 2015
P65,293,572.20 respectively, of CAAR
which P6,557,720.34 was remitted
in January to March 2016 while
the remaining balance of
P349,578.62 is subject for

130
 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
reconciliation.

We recommended and DOT-NCR and DOT-RO V personnel Partially Implemented

Management agreed to direct the and accounting section is in the
Accountant to collect from the process of reconciling the taxes Reiterated under
concerned employees and remit to withheld and remitted. Observation No. 14, Para.
the BIR the tax deficiency on the 14.1-14.3, Part II of this
payments of Other Benefits and Report.
henceforth, continue faithful
adherence on tax law, rules and Similar recommendations in
regulations. CY 2011-2014 CAARs.

18. Seven of the DOT Regional Obs. No. 18

Offices (ROs) did not allocate a of CY 2015
budget of at least five percent of CAAR
the appropriation for the
implementation of GAD-related
activities. Of the overall GAD
budget of P105,360,170.51, only
P48,713,034.54 or 2.31 percent,
was allocated and
P54,949,282.78, or 112.80
percent thereof was actually used.

We reiterated our Management Commented that it is in PartiallyImplemented

recommendations and the process of creating the planning
Management agreed to direct the service for the administrative sector. Eleven of the DOT Regional
GAD Focal Persons to: (a) ensure The Director of the said office shall be Offices (ROs) still did not
that all activities addressing the the focal person who will be tasked to allocate a budget of at least
DOT gender issues and concerns oversee the planning and five percent of the
that are mainstreamed in the implementation of GAD and Senior appropriation for the
regular programs/project activities Citizens projects and activities, while implementation of GAD-
of the office are incorporated in the created service unit shall be tasked related activities.
the GPB with a budget allocation to monitor the implementation of the
of at least five percent of its total projects. DOT NCR and DOT-RO
appropriation; (b) make certain IVA - GAD Budget for CY
that GPB are prepared and fully DOT NCR - the lacking documentary 2016 were fully utilized and
implemented by all Regional requirements were submitted to COA the plans were implemented.
Offices; and (c) see to it that on March 23, 2016.
complete and proper Fully Implemented
documentation of GAD DOT-ROs VIA, VIII and IXGAD
accomplishments and cost Plans and Budget submitted to the GPB are prepared and fully
attribution are observed. We also audit team. implemented by all Regional
recommended and Management Offices.
agreed that GAD DOT-RO XIII - commented that
Accomplishments Report should previously submitted GAD PartiallyImplemented
be submitted on time to facilitate Accomplishment Report is still for
evaluation thereof. revision/update. GAD accomplishments and
cost attribution were still not
properly documented.

Reiterated under
Observation No. 12, Para.
12.1-12.6, Part II of this
Report.

Similar recommendation in
CY 2011-2014 CAARs.
19. DOT failed to formulate and Obs. No. 19

131
 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
implement a separate plan that of CY 2015
will address the concerns of CAAR
senior citizens (SCs) and
differently-abled persons as
directed under Section 35 of the
GAA for FY 2015. Although
certain activities were reported,
the same only benefitted the SC
employees of the DOT.

We recommended and Management of DOT-OSEC and Partially Implemented

Management agreed to direct the DOT-ROs IVA and VIII commented
focal person to comply with the that they already complied with the Reiterated under
required formulation and required formulation and Observation No. 13, Para.
implementation of implementation of plans/ programs for 13.1-13.4, Part II of this
plans/programs/projects in SCs and differently-abled individuals. Report.
compliance with the requirements
under the General Appropriations DOT-RO I No plan prepared yet but DOT RO I - The
Act and related laws for the activities/programs to address the Management was not able to
greater benefits of the SCs and concerns of the Senior Citizen and prepare a plan for CY 2016
differently-abled individuals. Differently-abled persons were for senior citizens
implemented. &differently-abled persons
but was able to accomplish
several activities costing
P436,484.00 which 1.45
percent of their
appropriation.

Similar recommendations in
CY 2011-2014 CAARs.

20. Out of the total GSIS withheld Obs. No. 20

contributions of P34,666,964.98, of CY 2015
the amount of P34,555,216.53 CAAR
was remitted in CY 2015.Of the
unremitted amount of
P111,748.45 as of 31 December
2015, the amount of P88,354.56
was remitted in January 2016
while the remaining balance were
either result of over/(under)
remittance and/or subject of
reconciliation.

We reiterated our Management commented that periodic PartiallyImplemented

recommendations and review is being conducted to ensure
Management agreed to direct the accuracy and avoid accounting errors. Unremitted balances were
concerned Accountants to still subject for verification
immediately review and reconcile DOT-NCR and DOT-RO V - The and reconciliation.
the unremitted balances and remit Accountant is in the progress of
any amount due to GSIS; ensure reconciling the Payroll Register and Partially Implemented
full remittance of withheld Due to GSIS account.
contributions on or before the Withheld contributions were
deadline; and conduct periodic fully remitted except for
review of records to some unreconciled balances.
avoid/minimize accounting errors
and allow correction thereof in a Reiterated under
timely manner. Observation No. 15, Para.
15.1-15.4, Part II of this
Report.

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 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation

Fully Implemented
Periodic reviews were
already made.

Similar recommendations in
CY 2013-2014 CAARs.
21. Summary results of the audit of Obs. No. 21
the different PDOT offices for the of CY 2015
years 2013 and 2014. CAAR

We recommended that Partially Implemented

Management monitor the
compliance by the concerned Reiterated under
Tourism Attaches and Observation No. 20, Para.
Administrative Officers/Special 20.1-20.2, Part II of this
Disbursing Officers with the Report.
foregoing audit recommendations.

CY 2014 CAAR
1. Unutilized Tourism Development Obs. No. 1 Fully Implemented
Fund (TDF) of P15,268,882.88, of CY 2014
deposited as Special Fund in the CAAR Reiterated in CY 2015
National Treasury CAAR.

2. Unsettled advances of Obs. No. 3

P2,078,260.03 in DOT-RO V not of CY 2014
remitted to the National Treasury CAAR

We recommended that MDS funds are no longer being Partially Implemented

Management remit to the National utilized for special projects.
Treasury the advanced amount The interest income of
from the MDS account Interest income from bank deposits P11,898.67 was remitted to
aggregating P1,997,042.29; was already deposited to the National BTr on January 3, 2015.
registration fees collected of Treasury.
P8,164.42; bid The remaining balances were
forms/security/bonds in the Other bidders / security bond were determined and will be
amount of P61,154.65; and already refunded refunded to corresponding
interest income from bank agencies.
deposits amounting to P11,898.67.
Likewise, direct the Accountant to
ensure that MDS funds are not
utilized for special
projects/activities.

3. Inaccurate and unreliable balance Obs. No. 4 Fully Implemented

of fund remittances to the of CY 2014
Philippine Tourism Offices CAAR Reiterated in CY 2015
(PTOs) recorded under Cash in CAAR.
Bank – Foreign Currency,
Current Account (FCCA) and Similar recommendations in
Cash in Bank, Foreign Currency, CY 2011-2013 CAAR
Savings Account (FCSA) in the
amount of P152,348,871.57 and
P49,723,315.88, respectively

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 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
4. Long outstanding fund transfers Obs. No. 5 Fully Implemented
to the NGAs/GOCCs/LGUs/ of CY 2014
NGOs/POs/ROs in the amount CAAR Reiterated in CY 2015
ofP1,586,484,141.77 CAAR.

Similar recommendations in
CY 2011-2013 CAAR

5. Unreconciled difference of Obs. No. 6 Fully Implemented

P1,655,296.68 between the of CY 2014
balances of Due from Regional CAAR Reiterated in CY 2015
Offices and Due to Central Office CAAR.
accounts
Similar recommendations in
CY 2011-2013 CAAR

6. Unliquidated cash advances of Obs. No. 7 DOT-RO XI cash advances granted Fully Implemented
P19,969,992.91 and net of CY 2014 to officials and employees was fully
overstatement of the Advances to CAAR liquidated as of December 31, 2016. Reiterated in CY 2015
Officers and Employees account CAAR.
by P5,676,076.58 and net
understatement of the account Similar recommendations in
Advances to Special Disbursing CY 2011-2013 CAAR
Officers by P5,676,076.58

7. Incorrect and unreliable Office Obs. No. 8 Fully Implemented

Supplies Inventory and of CY 2014
Other Supplies and Materials CAAR Reiterated in CY 2015
Inventory accounts amounting CAAR.
to P5,827,975.73 and
P15,519,906.67, respectively Similar recommendations in
CY 2011-2013 CAAR

8. Inaccurate and unreliable balance Obs. No. 9 Fully Implemented

of PPE accounts aggregating of CY 2014
P440,261,352.96 CAAR Reiterated in CY 2015
CAAR.

Similar recommendations in
CY 2011-2013 CAAR

9. Overstatement of expenses by Obs. No. 11 Fully Implemented

P23,948,504.64 and of CY 2014
understatement of assets, CAAR Reiterated in CY 2015
liability, equity and income CAAR.
accounts by P23,121,053.52;
P2,081,756.38; P21,969,370.45;
and P2,112,653.15, respectively

10. Total disbursements of P0charged Obs. No. 12 Fully Implemented

against funds sourced from the of CY 2014
DOT share in the net income of CAAR Reiterated in CY 2015
DFPC not covered by a Special CAAR.
Budget

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 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
11. Disbursements aggregating Obs. No. 13
P9,943,370.85 not supported by of CY 2014
complete documents CAAR

We recommended and DOT–NCR and DOT-RO Partially Implemented

Management agreed to direct the Imanagement already furnished copies
concerned Accountants to: (a) of contracts of POs and JOs and/or DOT-RO I The agency is
submit the lacking documents; DVs and other supporting documents. not yet compliant with some
and (b) exercise caution and of the provisions of COA
diligence in processing claims, Circular No. 2012-001.
thus, ensuring completeness of
appropriate supporting documents Partially Implemented
to avoid suspension and
disallowance in audit. Some disbursements were
still not supported with
complete documentation.

Similar recommendations in
CY 2011-2013 CAAR

12. Partial liquidation or only Obs. No. 14 Fully Implemented

P572,885,534.78 or 32.23 percent of CY 2014
of P1,777,226,000.00 of DAP CAAR Reiterated in CY 2015
funds released to the DPWH in CAAR.
the implementation of the
Convergence Program in
Enhancing Tourist Access

13. Unliquidated funds released to the Obs. No. 15 Fully Implemented

DPWH-NCR for the Roxas of CY 2014
Boulevard Redevelopment Project CAAR Reiterated in CY 2015
in the amount of P237,500,000.00 CAAR.
and the unobligated amount of
P32,754,777.59 not returned to
DOT.

14. Taxes withheld amounting Obs. No. 17 Fully Implemented

to P2,899,073.17 remained of CY 2014
unremitted to the Bureau CAAR Reiterated in CY 2015
of Internal Revenue (BIR) CAAR.
and appropriate taxes of
P5,972,768.06 not deducted from Similar recommendations in
the payments of other benefits in CY 2011-2013 CAAR
excess of the P30,000

15. Disallowances amounting to Obs. No. 18 Fully Implemented

P177,538,085.43 or 96 percent of CY 2014
under appeal and P5,872,695.26, CAAR Reiterated in CY 2015
or 3 percent are already CAAR.
final and executory.
Receivables-Disallowances/ Similar recommendations in
Charges account is understated by CY 2011-2013 CAAR
P1,568,838.30

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 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
16. Inability to formulate and Obs. No. 20 Fully Implemented
implement a separate plan of CY 2014
containing programs/projects/ CAAR Reiterated in CY 2015
activities that will address the CAAR.
concerns of senior citizens (SCs)
and differently-abled persons Similar recommendations in
CY 2011-2013 CAAR

17. Unremitted and unreconciled Obs. No. 21 Fully Implemented

GSIS balance of P139,461.12 of CY 2014
CAAR Reiterated in CY 2015
CAAR.

Similar recommendations in
CY 2013 CAAR

CY 2013 CAAR
1. Absence of database on Tourism Obs. No. 1
Enterprises (TEs) in most DOT of CY 2013
Regional Offices (ROs) and low CAAR
rate of accreditation

We recommended and Management commented that an

Management agreed to direct the updated information/database of TEs
officials in charge of the can now be viewed in the DOT
accreditation of tourism website.
enterprises to:
The Accreditation Units are already Fully Implemented
(a) create and maintain an maintaining a database of tourism
updated information/ enterprises operating within their The list of accredited
database of TEs operating jurisdiction which is used as bases for establishments can be found
within their jurisdiction for their accreditation targets. in the DOT website.
realistic planning and
monitoring purposes, thus, All applications for accreditation are
ensuring full realization of processed within fifteen (15) days
the goals of the accreditation, upon receipt of applications with
that is to make sure that TEs complete requirements/supporting
operate based on documents.
international standards;
The DOT-Accreditation Units Fully Implemented
(b) fast tract the processing of all intensified their accreditation
applications for accreditation campaign. Applications for
to ensure that all TEs are accreditation are processed
checked and monitored as to DOT-DILG Joint Memorandum on time provided that
their compliance to Circular No. 2014-001 dated 16 requirements/ supporting
standards; and January 2014 was issued adopting a documents are complete.
convergence program on tourism as a
vehicle towards local economic Fully Implemented
(c) intensify campaign activities
development.
for heightened awareness of
Strong awareness on
as many stakeholders to
accreditation is being done
maximize accreditation.
by DOT-Accreditation
Units.

Similar recommendations in
CY 2012 CAAR.

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 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
2. Capital outlay funds aggregating Obs. No. 14
P5,577,600.00 used for other of CY 2013
purposes CAAR

We recommended and The Accountant commented that the Fully Implemented

Management agreed to direct the: balance of the PCSSD account was
remitted to the National Treasury last PCSSD Current Account
(a) Executive Director of July 29, 2015. balance was remitted to the
PCSSD to return the capital Bureau of Treasury under
outlay transferred funds; and OR No. 2896865 dated July
29, 2015.
(b) Budget Officer to secure
from the DBM post facto
approval of the utilization of
the capital outlay funds for
purposes other than what
were authorized, otherwise,
officers and employees who
approved and permitted such
disbursements shall be held
personally liable for the full
amount obligated or actually
spent.

3. Irregular payments of honoraria Obs. No. 16

to the officers and members of the of CY 2013
DOT-OSEC Project Evaluation CAAR
Committee (PEC) and its
Secretariat totalling P456,300.00

We recommended and Management justified that the Fully Implemented

Management agreed to stop the
payment of the honoraria to PEC
officers, members, and its
secretariat and to direct the
concerned personnel to refund the
payments received.
honoraria given was in compliance
with the existing guidelines on the
grant of honoraria in government
special projects as stated in the
certification dated 21 June 2013 issued
by the former Chairman of the PEC
which was noted and approved by the
DOT Secretary.
No payments for honoraria
to the officers and members
of the DOT-OSEC Project
Evaluation Committee (PEC)
and its Secretariat were
madeas of December 31,
2016.

DOT submitted a rejoinder to AOM

2014-019 (2013-2014) for COA’s
consideration. Nevertheless, the
payment of honoraria to PEC and its
Secretariat was stopped in CY 2014
upon receipt of COA’s noted
observation.

1. Keeping of 75 units of various

firearms with a book value of Obs. No. 2
P1,340,155.50 by DOT-NCR for of CY 2012
the tourist police officers of the CAAR
defunct Tourist Security Division

We recommended and DOT NCR

Management agreed to facilitate DOT-NCR - Management had turned Fully Implemented
the immediate donation/turn-over over to the PNP the 75 pcs.
of the firearms to the appropriate firearms.The book value of Verification of JEV No. 16-
government agency which can put P1,340,155.50 was already recorded in 0046G dated 30 April 2016
these assets to good use in line the books under JEV No. 16-0046G showed that the

137

Observations and Recommendations
with the performance of their
official functions.
CY 2011 CAAR
1. Understatement of the Due from
NGOs/POs account by P574,000
due to direct charging of financial
assistance to advertising expense
We recommended that
management (a) book up the
financial assistance to the account
Due from NGOs/POs and strictly
comply with the provisions of
COA Circular No. 2007-001 dated
October 25, 2007 on proper
accounting treatment of financial
assistance to NGOs/POs; (b)
refrain from granting financial
assistance for projects already
concluded/completed; and (c)
require PETCO to submit a
liquidation report.
2. Several deficiencies in the
Department’s procurement of
goods and services system
We recommended that
management require the end-user
to prepare their respective PMPPs
for their different programs,
activities, and projects (PAPs)
prior to the preparation of the
APP. In particular, we also
recommended that OSEC
management require the
Marketing Teams to appropriately
include the familiarization tours in
their PPMPs and submit the
PPMPs on time, so that
procurement for the said activity
will be included in the APP of the
Department. In this manner the
APP will be truthful and
incurrence of allocations for
unprogrammed activities will be
Auditor’s Results of
Reference Management Action
Validation
dated 30 April 2016. transfer/donation of the
firearms to PNP was already
recognized in the books.
Obs. No. 7
of CY 2011
CAAR
Management accepted the Partially Implemented
recommendation and recognized the
fund transfers to the account Due from Financial assistance are now
LGUs under JEV No. 15-03-081 dated booked up to the account
13 March 2014. The concerned Due from LGUs under JEV
project officers / focal persons were No. 15-03-081 dated 13
also reminded to follow up the March 2014.
liquidation/terminal reports for funds
transferred to the LGUs. Partially Implemented
Financial assistance were
still granted for projects
already concluded/
completed.
Partially Implemented
Management failed to
monitor the submission of
the liquidation/terminal
reports of the completed
projects/activities of LGUs.
Reiterated in CY 2012-2015
CAARs.
Obs. No. 14
of CY 2011
CAAR
The Department has been complying Fully Implemented
with the provisions of RA No. 9184
and its IRR in the procurement of pre- PPMPs and APP were
determined/programmed goods and already prepared.
services in line with its annual
procurement plan.
DOT has been conducting or sending
concerned DOT personnel to
orientation/training programs on
RA9184 and its IRR.
Heads of Marketing Teams were urged
to include Familiarization Tours in
their APPs.
The Department is putting its best
efforts to strictly comply with the
provisions of RA No. 9184 and its IRR
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 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
avoided. in the procurement of
pre-determined/programmed goods
and services in line with its annual
procurement plan.

The DOT APP indicates the mode of

procurement of all goods and services
required by the various offices of the
Department. The approved APP
serves as a guide in the acquisition of
the requirements of the Department.

3. Various deficiencies in the Obs. No. 15

composition of the BAC and BAC of CY 2011
secretariat in RO XI CAAR

We recommended that the Head Management explained that in view of Partially Implemented
of the Procuring Entity (HOPE) the limited manpower complement of
create a BAC Secretariat that will the DOT Regional Offices, creating BAC and BAC Secretariat
serve as the main support to the their own BAC and BAC Secretariat is were created but deficiencies
BAC. In addition, designate a not feasible. In lieu thereof, the in its composition are still
Head of the BAC Secretariat who Regional Offices requests the BAC of noted.
meets the following required the DOT-Main Office to bid out
qualifications. requirements amounting to
P500,000.00 and up. Partially Implemented
We recommended that the HOPE
create a BAC for 2012 in Although there is an office
accordance with Sections 11.2.1 to order creating the BAC but
11.2.2 of the IRR of RA 9184, as the BAC members were still
amended on September 2, 2009. considered insufficient.

4. Grant of financial assistance/ Obs. No. 16

donations of DOT RO I to five of CY 2011
LGUs despite non-submission of CAAR
the required terminal reports to
liquidate previous financial
assistance

We recommended that Demand and follow-up were made to Fully Implemented

management to (a) verify the the concerned LGUs and required them
standing of the LGUs requesting to submit Certificate of Completion Reiterated in CY 2012-2015
assistance and compel them to and Fund Utilization Reports. CAARs.
submit liquidation papers (terminal
report) before granting another
financial assistance; and
(b) provide stiffer sanctions in the
MOA for failure to submit
Terminal Report.

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 Auditor’s Results of
Observations and Recommendations Reference Management Action
Validation
5. Non-submission of disbursement Obs. No. 21
vouchers and their supporting of CY 2011
documents within the prescribed CAAR
period.

We recommended that Management informed that Partially Implemented

management require the recommendations were implemented
Accountant to submit the last January 2015. POs and other Non/delayed submission of
disbursement vouchers as well as mandatory supporting documents are financial reports,
the financial reports of the required in processing claims for disbursement vouchers,
Agency on time as required in payment. official receipts and
Section 7.2.1 of the 2009 Rules supporting documents were
and Regulations on the Settlement still noted in CY 2016 audit.
of Accounts prescribed under
COA Circular No. 2009-006.

We also recommended that

management:

a. require the Disbursing Officer Partially Implemented

of RO I to pay only
disbursement vouchers duly The DOT RO I was not yet
supported with proper compliant with some of the
documents and signed by all provisions of COA Circular
signatories and prepare the No. 2012-001.
RCI daily and consolidated on
a weekly or monthly basis,
whichever is applicable; and

b. require in RO III, the Partially Implemented

following:
Non/delayed submission of
(i) that the Accountant financial reports,
review all claims and disbursement vouchers,
prepare, monitor, and official receipts and
submit the financial supporting documents were
reports within ten days of still noted in CY 2016 audit.
the ensuing month for
timely audit;

(ii) that checks and ACIC be

prepared based on
approved disbursement
vouchers and complete
supporting documents;

(iii) that a workflow of

operations for
disbursement,
procurement,
and collection in
consonance with the New
Government Accounting
System and Internal
Control System be
established;

(iv) that duties and

responsibilities of each
employee assigned in the

140

Observations and Recommendations
accounting, cashiering,
and property sections be
clearly defined; and
(v) that a proper review of
transactions and
supervision of accounting
staff be undertaken by the
accountant.
6. Non-submission of copies of
contracts and purchase orders
We recommended that
management require the:
a. officials concerned to submit
to the Office of the Auditor
a copy of contracts/POs and
all supporting documents
forming part thereof within
five days after
perfection/issuance in
compliance with COA
Circular No. 2009-001 dated
February 12, 2009; and
b. Chief, Supply and Property
Section to notify the Office
of the Auditor, within 24
hours from acceptance of the
items delivered, of the time
and date of the scheduled
deliveries pursuant to COA
Circular 96-010 dated
August 15, 1996.
Auditor’s Results of
Reference Management Action
Validation
Obs. No. 22
of CY 2011
CAAR
Management commented that copies of
contracts and all supporting documents
are submitted to the office of the
Resident Auditor within five (5) days
after perfection/ issuance. Partially Implemented
Chief GSD notifies the Office of the The prescribed period of
Auditor within 24 hours from submission was still not
acceptance of the items delivered of followed and some contract
the time and date of scheduled documentary requirements
deliveries. and deficiencies were not
submitted.
In DOT-RO IX, recommendations
were already implemented last January
2015.
In DOT-CAR, Management reiterated Fully Implemented
compliance to the submission of
MOA/Contracts prior to the events. The Chief GSD already
The whole year’s projects and events notifies the Office of the
were discussed for everybody’s Auditor within 24 hours
information. from acceptance of the items
delivered and of the time and
date of scheduled deliveries.
141