Republic of the Philippines

COMMISSION ON AUDIT
Regional Office No. VI
Ungka I, Pavia, Iloilo

Telefax No. 033-329-2234

AUDIT PROGRAMME
Audit Areas:
1. Fund Transfers from National Government Agencies
2. Audit Program on Fund Transfers to NGO/PO and other LGU

Audit Procedures:

A. Audit Program on Fund Transfers from National Government Agencies

Account :Due to NGAs; Subsidy from NGA

Risk Statement :Funds transferred to the LGU from the source agency may not be
properly accounted and recorded.
Assertions : Accuracy and Completeness
Criteria : COA Circular No. 94-013 dated December 13, 1994; Applicable
International Public Sector Accountings Standards (IPSASs)
Audit Objective : (1) To ascertain receipt of funds received by the LGU as well as the
purpose of the fund and such funds are properly accounted and
recorded.

Staff
Audit Procedures WP Ref. Mandays
Responsible
1. Secure/Prepare a list of funds received from the WP-FT-
source agency indicating the amount and purpose NGA-1
of the fund/project.

2. Obtain and verify documents such as SAROs,

credit memos or any proof of fund transfer to
validate/confirm information above.

3. Examine the covering journal entry voucher and

supporting documents, check accounts used and
trace to the general ledger account. Check if the
appropriate account was used.

4. Validate with the bank statements received from

the LGU to ascertain correct posting to the proper
bank account.

1
 Staff
Audit Procedures WP Ref. Mandays
Responsible
5. Note deficiencies in audit working papers,
prepare and issue audit observation memorandum,
if warranted.

Account : Due to NGAs

Risk Statement : Programs/Projects/Activities may not have been implemented on
schedule and according to the work plan.
Assertions : Compliance
Criteria : Memorandum of Agreement; Work Plan of the Project
Audit Objective : (2) To determine whether the Programs/Projects/Activities were
undertaken on schedule and according to the work plan.

Staff
Audit Procedures WP Ref. Mandays
Responsible
1. Ascertain the project/s to be undertaken by WP-FT-
examining/reviewing the following documents: NGA-2a &
a) MOA and related documents WP-FT-
b) Work and Financial Plan for the Project NGA-2b
c) Budget for the project
d) Project progress evaluation report
e) Revised approved budget if there is any
f) Progress reports, if any
g) Accomplishment report
h) Other related reports/documents
2. Validate timely implementation of PPAs by
performing the following:
• Evaluate the terms and condition embodied in
the MOA against the Progress Evaluation
Reports and note observations on the audit
working paper.
• Based on the foregoing documents, determine
from the Work and Financial Plan the following:
• Project activities to be undertaken
• Time frame within which to undertake the
activities
• Targeted output

• Compare the data in the work and financial plan

against actual accomplishments embodied in the
Progress Evaluation reports and ascertain the
following:
§ The activities that were undertaken/not
undertaken

2
 Staff
Audit Procedures WP Ref. Mandays
Responsible
§ Whether the activities were undertaken
within the time frame
§ Whether the expected outputs for the
year were attained.
(as additional guide to auditors, reference to Item 2.2 of
COA Circular No. 2012-001 is advised
3. Note for any delay and obtain explanation from WP-FT-
concerned project personnel NGA-3
4. Validate the explanation/reasons for the delay
through conduct of ocular inspections.
5. Evaluate Budget and Progress Evaluation Reports to
determine reasonableness of disbursements against
actual work done.
6. Note variances/deficiencies, if any, in the audit
working papers.
7. Assess the reasonableness of the gaps between
reported financial/technical accomplishments by
comparing program budget vis- a- vis actual
expenditure, planned level of implementation vis-a - vis
actual accomplishments.
8. Determine and compute for the percentage of actual
accomplishment against the expected output.
(Slippage)
9. Note deficiencies if any.

10. Prepare and issue Audit Observation Memorandum

(AOM) if warranted, if necessary.

Account : Due to NGAs

Risk Statement : There may be duplication or overlapping of projects implemented
in the locality by other government agencies.
Assertions : Compliance
Criteria : Agency Mandate; COA Circular No. 2012-003
Audit Objective : (3) To determine whether there may or may not be duplication or
overlapping of projects implemented in the locality by other
government agencies.

3
 Staff
Audit Procedures WP Ref. Mandays
Responsible
1. Obtain a list of projects/programs/activities implemented
by other government agencies within the area of
jurisdiction noting their location and purpose/project
description.
Note: Data may be obtained from ARDIS: Government
Agencies Project/Program/Activity Information System.
2. Prepare a master-list of projects/programs/activities WP-FT-
(PPAs implemented by the LGU from Objective No. 1 and NGA-4
those by other government agencies) within the area of
jurisdiction. Filter the said list by “Purpose” and sort
“Location” alphabetically. Check whether there are
duplicate/overlapping projects by other government
agencies and accordingly identify them.
3. Based on the PPAs identified, conduct ocular inspection Interview
and interviews to confirm/validate whether there are Notes,
duplicate or overlapping projects by other government Inspection
agencies within the location of PPAs. Photos
4. Take note of any deficiencies noted and communicate
the result through an AOM.
5. Evaluate management comments.

Account : Due to NGAs

Risk Statement : Excess or unutilized funds from the source agency may not have
been returned by the LGU after the fulfillment of the its purpose.
Assertions/Criteria : Compliance
Criteria : COA Circular No. 94-013 dated December 13, 1994
Audit Objective : (4) To ascertain any excess or unutilized funds from the source
agency have been returned after the intended purpose of which was
completed.

Staff
Audit Procedures WP Ref. Mandays
Responsible
1. Review the Fund Utilization Reports including the WP-FT-
Report of Checks Issued (RCI), Report of NGA-5
Disbursements (RD), all supporting vouchers/payrolls
and other documents certified by the LGU accountant
and approved by the Agency Head for completed
projects.

4
 Staff
Audit Procedures WP Ref. Mandays
Responsible
2. Compare total funds received from the source agency
based on the validated information derived from
Objective No. 1 against the total disbursements made
by the implementing agency for each specified project to
determine excess/deficit.
3. Obtain, review and validate Disbursement Vouchers
and their supporting documents for the return of any
excess or unutilized funds for each completed projects.
4. Note deficiencies, prepare and issue audit
observation memorandum, if warranted.

B. Audit Program on Fund Transfers to NGO/PO and other LGU

Account : Due from NGO/PO; Due from LGU

Risk Statement : Fund transfer transactions to POs/NGOs/LGUs may have been
transferred to unaccredited and incapable NGOs, POs or LGUs and not
supported with appropriate documentation; and the terms and conditions
of the MOA may not have been complied with.
Assertions : Regularity/Compliance
Criteria : COA Circular 2007-001 dated October 25, 2007; COA Circular No.
2012-001 dated June 14, 2012; Agency Mandate; Memorandum of
Agreement
Audit Objectives : (1) To ascertain that all fund transfer transactions to POs/NGOs/LGUs
are transferred only to duly accredited, qualified and capable NGOs,
POs or LGUs; and to determine whether fund transfers are supported
with appropriate documentation and the terms and conditins of the MOA
are complied with.

Staff
Audit Procedures WP Ref. Mandays
Responsible

1. Prepare/obtain schedule or list of fund transfers to List of

POs/NGOs and other LGUs. If the audited agency Releases
uses eNGAS, extract the list needed schedules/list to
from. If the audited agency does not use eNGAS, refer Recipient
to the Registry of Checks Issued. NGOs/POs

2. Secure vouchers pertaining to fund transfers.

5
 Staff
Audit Procedures WP Ref. Mandays
Responsible

3. Post-audit vouchers to validate if the source LGU

has set standards for accreditation and qualification of
NGOs, POs or LGUs to which funds are transferred WP-FT-
and note audit observations on audit working papers NGO/PO-
(WP-FT-NGO/PO-1_Fund Release Documentation 1a & WP-
Check per NGO/PO). FT-
NGO/PO-
4. Verify if the NGOs/POs have been accredited by 1b
the LGU through its BAC or the committee created for
the purpose and note audit observations on AWP.
(Item 4.5.2, COA Circular No. 2007-001 dated
October 25, 2007)

5. Validate legitimacy of NGOs/POs through

verification of certificate of registration to SEC / CDA
and note audit observations on AWP.

6. Validate whether the funds are released only upon

complete documentation pursuant to Item 2.1 of COA
Circular No. 2012-001 dated June 14, 2012 and note
audit observations on AWP.

7. Verify whether the requirements for the release of

funds embodied in Items 4.4 and 4.5 of COA Circular WP-FT-
No. 2007-001, particularly those applicable for the NGO/PO-2
local government unit, are complied and note audit
observations on AWP.

8. Verify whether the terms and conditions of the MOA

are complied.

9. Examine whether the supporting documents are

appropriate, completely filled-out and/or properly
certified/approved by authorized officers and
accordingly prepare working papers.

10. Note observations and prepare and issue AOM if

warranted.

Account : Due from NGO/POs; Due from LGUs; Subsidy to LGUs

Risk Statement : Fund transfers may not be correctly recorded and completely
accounted in the books of the audited agency.
Assertions/Criteria : Accuracy and Completeness

6
Criteria : NGAS Manual for LGUs, Vol. 3; Applicable International Public
Sector Accountings Standards (IPSASs)
Audit Objective : (2) To ascertain that all funds transferred to POs/NGOs are correctly
recorded and accounted for in the books of the audited agency.

Staff
Audit Procedures WP Ref. Mandays
Responsible
1. Prepare/obtain schedule or list of fund transfers
to POs/NGOs and other LGUs. If the audited
agency uses eNGAS, extract the list needed
schedules/list from. If the audited agency does not
use eNGAS, refer to the Registry of Checks
Issued.
2. Secure vouchers pertaining to fund transfers. WP-FT-
NGO/PO-3

3. Check whether all are completely recorded

following correct accounts and accounting entries
by tracing the recording of fund transfers from
source documents to journals, subsidiary ledgers,
and general ledgers.
4. Prepare audit working papers. Analyze and
investigate differences noted.
5. Prepare and issue the AOM, if necessary.

6. Evaluate management’s comment on audit

observations.

Account : Due from NGO/PO; Due from LGU

Risk Statement : Implementing agencies may not be compliant with regards to reporting
and liquidation requirements.
Assertions : Compliance
Criteria : COA Circular No. 2012-001 dated June 14, 2012; COA Circular No.
2007-001 dated October 25, 2007
Audit Objective : (3) To ascertain whether funds transferred are reported and liquidated in
compliance with the established criteria.

Staff
Audit Procedures WP Ref. Mandays
Responsible
1. Verify the submitted Fund Utilization Reports
and/or liquidation reports of funds granted to
NGOs/POs and other LGUs.

7
 Staff
Audit Procedures WP Ref. Mandays
Responsible
2. Post audit liquidation documents submitted by WP-FT-
NGOs/POs. See to it that the final Fund Utilization NGO/PO-4
Reports, certified by the NGO/PO accountant and
approved by its president/Chairman, are submitted
within sixty (60) days after completion of the project.
(Item 5.4, COA Circular 2007-001)

3. Check if other reporting requirements are

accordingly complied with (Item 2.0, COA Circular
2012-001)
4. Verify if there is a post project accomplishment
performance evaluation conducted on the
implementing PO/NGO.
5. Note deficiencies on audit working paper and prepare and issue AOM if
warranted.

Account : Due from NGO/PO; Due from LGU

Risk Statement : The payable accounts of the concerned agencies for transfers to
NGOs/POs and other LGUs may not exist.
Assertions : Existence
Criteria : COA Circular No. 2007-001 dated October 25, 2007
Audit Objective : (4) To ascertain the existence of payable accounts of the concerned
agencies for transfers to NGOs/POs and other LGUs .

Staff
Audit Procedures WP Ref. Mandays
Responsible
1. Prepare/obtain schedule or list of fund transfers to
POs/NGOs and other LGUs.
2. Prepare and send confirmation letters to verify the Confirmation
receipt by, amount and current status Letters & WP-
(utilized/unutilized) of fund transfers to NGOs/POs. FT-LGU-5
3. For non-utilization/non-implementation, require the
respective NGO/POs to submit reasons/justifications.

4. Evaluate reasons/justifications submitted by

recipients NGOs/POs.
5. Note observations in audit working papers.

6. Prepare and issue AOM if warranted.

8
 8.3 of COA Circular 2016-005, if not note
any deficiencies on the dormant
receivables and issue AOM if warranted.

Prepared by:

Peter Lorenz S. Salmon Phileo M. Bais

State Auditor I State Auditing Examiner II

Reviewed by:

Marie Jean G. Salcedo

State Auditor IV