Findings No.7 COA Annual Audit Report 2006

July 25, 2008

7. The City Government failed to organize its Internal Audit Service (IAS) in accordance with Administrative Order No. 70 of the President dated April 14, 2003 and COA Memorandum No. 95-092,

Section 1 of Administrative Order No. 70 of the President provides that all heads of government offices, agencies, government-owned and/or controlled corporations, including government financial institutions, State Universities and Colleges (SUCs) and local government units, shall organize an Internal Audit Service (IAS) in their respective offices.

The Internal Audit Service (IAS) shall be an integral part of the office and shall assist in the management and effective discharge of the responsibilities of the office, without intruding into the authority and mandate of the Commission on Audit (COA) granted under the Constitution. It shall function in accordance with the policies established by the provisions of Republic Act No. 3456 as amended by Republic Act No. 4177 and shall perform staff functions with primary responsibilities encompassing the examination and evaluation of the adequacy and effectiveness of internal control and the quality of performance.

Section 4 of said Administrative Order further provides that agencies without Internal Audit Services shall immediately organize one. The head of the agency shall review the organizational structure and personnel complement and convert existing vacant positions and/or parallel positions of incumbent in the agency necessary for the creation/strengthening of the Internal Audit Services.

It was observed that the Internal Audit Service was not organized at the Local Government of Gingoog City, in violation of the provision of Administrative Order No. 70 of the President.

The management justified that due to manpower constraint, the Internal Audit Service (IAS) was not organized. They have the plan to organize the IAS by picking up employees from the Accounting Division, City Engineer’s Office and City Mayor’s Office. But these offices would not let go of their employees because they need them in their organization. They further justified that anyway, they have the Internal Audit Division of the City Accountant’s Office who handles the pre-audit of all government transactions.

The Internal Audit Division of the City Accountant’s Office has limited task in verifying only the validity of the documents attached to the disbursement vouchers and checking if payments made are in accordance with existing rules and regulations. Their duties and responsibilities did not include the examination and evaluation of the adequacy and effectiveness of internal control and the quality of performance of each office/department in attaining its goals and targets.

During the exit conference, the City Administrator and the City Accountant promised to review again the possibility of organizing the Internal Audit System.

Recommendation:

Organize the Internal Audit Service pursuant to Administrative Order No. 70 of the President dated April 14, 2003 and COA Memorandum No. 95-092. As provided for under Section 4 of said Administrative Order, review the organizational structure and personnel complement and convert existing vacant positions and/or parallel positions of incumbents in the agency necessary for the creation/strengthening of the Internal Audit Service.

CLICK HERE for the latest 2nd Hand Laptops, Mobile Phones, SMART/ GLOBE /TALK 'N TEXT/ TOUCH MOBILE / SUN CELLULAR Postpaid, Pre-paid and International Roaming PROMOS, Philippine Airlines (PAL) and Cebu Pacific Airlines Airline AIRFARE DISCOUNT tickets for sale!

Check out our Updated/Latest List of GOVERNMENT JOBS AND OTHER GOVERNMENT VACANT POSITIONS, PRIVATE JOBS, PRIVATE FULL-TIME JOBS, PRIVATE PART-TIME JOBS and OTHER ONLINE JOBS in this link!

Written by admin · Filed Under Commission on Audit, Gingoog City