II.

OBSERVATIONS AND RECOMMENDATIONS

A. Compliance Audit

Incorrect leave credit balances

1. The leave credits balances of 67 employees appearing in leave cards were

incorrect due to granting of non-commutable leave credits or compensatory
time-off (CTO) totaling 371 days or P680,675.91 to several employees to offset
the official travels undertaken on Saturdays/Sundays or on holidays, contrary
to the provisions of CSC DBM Joint Circular No. 2 series of 2004.

CSC-DBM Joint Circular No. 2 s. of 2004 defined CTO as the number of

hours or days an employee is excused from reporting for work with full pay and
benefits. It is a non-monetary benefit provided to an employee in lieu of overtime
pay pursuant to the adoption of austerity measure in the government.

Listed in the abovementioned circular are activities where overtime services

can be authorized, of which, official travels that fell on Saturdays, Sundays and
holidays are not included.

Further, Section 7.1 and Section 7.3 of the CSC-DBM Joint Circular No. 1 s.
of 2015 dated November 25, 2015, provides that Civilian personnel holding
positions higher than division chiefs or equivalent levels and those who are on travel
status are not authorized to render overtime services.

As provided by the Human Resource Management Unit (HRMU), out of 76

total permanent employees, 67 have availed of the CTOs/Special Day-Off (SDO)
while on travel status during the year.

The basis for the granting of non-commutable leave credits or CTOs/SDOs to

permanent employees was in lieu of overtime pay as embodied in Section 16 of
NYC and NYC Employees Association Collective Negotiation Agreement dated
October 13, 2017, which accordingly submitted and approved by the CSC. It did not
specify, however, that these included travels undertaken on Saturdays, Sundays and
holidays.

Verification disclosed that a total of 371 days of absence incurred by 67

employees were compensation by CTO/SDO which ranged from one to 22 days per
employee or the total amount of P680,675.91 (Annex 3).

We also noted that two officials occupying position whose rank are higher
than chiefs of division availed the CTOs/SDOs contrary to abovementioned Policies
and Guidelines on Overtimes Services and Overtime Pay for Government
Employees.

29
 Further, we noted that travels on a Saturday/Sunday were allotted for travel
back to official station/residence and were paid with the corresponding per
diem/travel allowance.

Hence, the balance of leave credits appearing in the leave cards were incorrect
due to the number of days of absence that were being compensated by the
CTOs/SDOs were not deducted from the leave credits of the said officials and
employees.

We recommended and Management agreed to:

a. deduct from their accumulated leave credits the availed CTOs/SDOs, if

available, or salary deduction, if applicable;

b. require the HRMU to immediately cancel applications for availment of

CTOs/SDOs in lieu of travels undertaken during Saturday/Sunday or on a
holiday inasmuch as these were not considered as overtime rendered; and

c. discontinue the granting of non-commutable leave credits or CTO/SDO to

officials and employees for official travels undertaken on Saturday/Sunday
or on a holiday.

Improperly supported Monetization of Leave credits

2. Out of the total payment of monetization of leave credits for CY 2018 to NYC
employees totaling P865,035.07, P858,926.63 were not in accordance with
Section 23 of the Omnibus Rules on Leave and Section 5.14 of COA Circular
No. 2012-01 dated June 14, 2012 due to the reasons thereto for the monetization
of 50 percent accumulated vacation/sick leave credits were not among the valid
and justifiable reasons hence, the validity and correctness could not be
ascertained.

Of the total leave monetization payments amounting to P865,035.07,

P858,926.63 were not in accordance with Section 23 of the Omnibus Rules on Leave
as reasons for the monetization of 50 percent accumulated vacation/sick leave credits
were not among the valid and justifiable reasons.

Section 23 of the Omnibus Rules on Leave, Rule XVI of the Omnibus Rules
Implementing Book V of Executive Order No. 292 and amplified in Section 5.14 of
the COA Circular No. 2012-01 dated June 14, 2012 provides that monetization of 50
percent or more of the accumulated vacation/sick leave credits may be allowed for
valid and justifiable reasons, such as:

30
 Reasons Supporting Documents
• Health, medical and hospital need  Medical Certificate
of the employee and the immediate  Medical Abstract
members of his family
• Financial aid and assistance brought  Barangay Clearance
about by force majeure events such  DSWD Clearance
as calamities, typhoons, fire,  Pictures of damage properties
earthquake and accidents that affect brought about by force majeure
the life, limb and property of the
employee and his/her immediate
family
• Educational needs of the employee  School registration
and the immediate member of
his/her family
• Payment of mortgages and loans  Copy of demand letter from the
which were entered into for the creditor
benefits of his/her family
• In cases of extreme financial needs  Barangay Clearance
of the employee or his/her  DSWD Clearance
immediate family where the present  Pictures of damage properties
sources of income are not enough to brought about by force majeure
fulfill basic needs such as food,
shelter and clothing; and
• Other analogous cases as may be  Certification from CSC that the
determined by the CSC condition is analogous cases

The following were the payments of leave monetization as of August 01, 2018
paid thru payroll via the Automated Teller Machine (ATM):

Accumulated Leave,
No.of
as of August 01, Charged to Amount
Name Days
2018 Monetized (P)
VL SL VL SL
Agusto C. Daquioag 10.253 49.250 29.752 5.000 24.752 25,945.14
Anife Q. De Chavez 43.250 90.195 66.723 38.250 28.473 126,940.72
Joseph M. De Guzman 9.122 11.750 10.436 4.122 6.314 10,148.81
Danilo D. Fermin 14.250 37.132 25.691 9.250 14.441 15,691.92
Mark Anthony Z. Fernandez 20.110 39.500 29.805 15.110 14.695 37,771.14
Julius D. Gutierrez 14.141 21.559 17.850 9.141 8.709 98,911.22
Norvin R. Laxamana 24.667 30.667 27.667 19.667 8.000 15,885.00
June R. Melchor 17.469 23.000 20.235 12.469 7.766 19,678.14
Ma. Rebecca D. Mondejar 9.365 29.757 19.561 4.323 15.238 61,428.05
Arlene R. Prepotente 32.186 28.607 30.397 27.186 3.211 27,210.77
Ma. Velsie Querubin 30.765 96.272 63.519 25.765 37.754 122,299.15
Eric A. Ramos 22.875 46.052 34.464 17.875 16.589 53,393.38
Lorenzo B. Ramos, Jr. 32.923 48.958 40.941 27.923 13.018 20,918.35
Rosalina D. Robles 21.250 68.176 44.713 16.250 28.463 40.026.16
Melanio R. Santella Jr 11.851 67.754 39.803 6.851 32.952 153,731.43
Nino G. Sialongo 18.248 48.726 33.487 13.248 20.487 28,947.25
31
 Accumulated Leave,
No.of
as of August 01, Charged to Amount
Name Days
2018 Monetized (P)
VL SL VL SL
Total 858,926.63
Review of the Disbursement Vouchers (DVs) covering the payments of
monetization of leave credits showed the following supporting documents:

a. Approved leave application;

b. Request of the concerned officials and employees stating their reasons for
availing the 50 percent leave credit monetization;
c. Service records; and
d. Copies of employee’s leave card

However, we observed that their reasons for availing the 50 percent

monetization of vacation/sick leave credits as enumerated hereunder were not among
the valid and justifiable reasons enumerated in the above-mentioned Omnibus Rules
on Leave, to wit:

a. House renovation/repair
b. Payment of housing/personal loan
c. Medication of father
d. Children’s educational expense
e. House bills
f. Other personal expenses

Although funds of P865,036.00 was approved by the DBM through CA No.

BMB-B-18-0017724 dated August 24, 2018 thru Special Allotment Release Order,
payments thereto are still subject to the existing rules and regulations.

We recommended and Management agreed to:

a. require the Personnel Officer to enforce strictly Rule XVI of the Omnibus
Rules Implementing Book V of Executive Order 292 and other applicable
rules and regulations;

b. to require the Chief Accountant to process only transactions with proper

documentation; and

c. submit explanation/justification as to why monetization of vacation/sick

leave credits were paid despite their reasons to avail the 50 percent were not
among the valid and justifiable reasons as enumerated in the
abovementioned laws, rules and regulations.

Management comment:

32
 Management explained/justified in its letter dated November 20, 2018 that the
request of the employees for monetization of 50 percent of their accumulated leave
credits was processed considering the reasons cited therein can be categorized as
valid as it falls within the purview of the allowable/valid reasons enumerated under
the CSC MC 41, s. 1998.
Auditor’s rejoinder:

We opined that although the leave credits were already earned by the officials
and employees, reasons for payment thereof should also in accordance with the rules
and regulations.

Over estimation of cash advances for especial undertakings

3. There were over estimation in the granting of cash advances for especial
undertakings in the total amount of P2,978,793.32, only P1,570,813.11 was
expended resulting in the non-usage of 47.27 percent or P1,407,980.21 which
were remitted to the general fund after refund contrary to Section 4 of
Presidential Decree (PD) No. 1445 and COA Circular No. 2012-001 dated June
14, 2012.

Among the fundamental principles set forth in Section 4 of PD No. 1445 and
reiterated under COA Circular No. 2012-001 dated June 14, 2012 is that generally
accepted accounting principles and practices as well as sound management and fiscal
administration shall be observed, provided that they do not contravene existing laws
and regulations.

For CY 2018, cash advances in the total amount of P2,978,793.32 were

granted for different undertakings. However, only P1,570,813.11 was expended, the
balance of P1,407,980.21 or 47.27 percent were refunded and remitted to the general
fund (Annex 4).

Accordingly, the four divisions – Regional Youth Development Division

(RYDD), Social Marketing Division (SMD), Policy, Research, Monitoring and
Evaluation Division (PRMED) and Administrative and Finance Division (AFD)
were required to submit their respective Work and Financial Plan (WFP) for CY
2018. Said WFP shall be the basis for granting and utilization of cash advances for
the year. But due to the following circumstances causes the over estimation of cash
advances that resulted to substantial refund:

a. Youth participants and other individuals to provide special services e.g.

stenographer, IT, programmer, performer etc confirmed their attendance
but failed to show during the actual activity;
b. Lack of information dissemination of various activity due to time
constraint that resulted to minimal attendance of youth;

33
 c. Change of programs e.g. from Regional Sangguniang Kabataan in 24
identified clustered areas to National Summit which is not the original
plan; and
d. Meals, fares and other incidental expenses of invited youth that are
included in the budget were shouldered by private individual.

The planning of the funding requirements of the requesting division for a cash
advance should be reviewed as to the necessity and reasonableness to mitigate the
refund.

The improper planning and unrealistic forecast of cash requirements led to the
ineffective and inefficient use of government resources. Had there been a good
estimate of activity expenses, the cash advance balances totalling P1,570,813.11
could have been utilized/used to augment funding of other agency’s
programs/projects beneficial to the public.

We recommended and Management agreed to require the concerned Division

Chiefs to prepare a well-planned and a realistic budget for cash advances.

Reimbursement of actual travel expenses by the employees

4. Excess claims of travel expenses totaling P129,718.66 as of September 30, 2018

was due to reimbursement of actual travel expenses granted to Officials and
staff/regular employees is inconsistent with Section 4 of EO No. 298 dated
March 23, 2004.

Section 4 of EO No. 298 states that –

The travel expenses of government personnel regardless of rank and

destination shall be in the amount of Eight Hundred Pesos (P800.00) per
day which shall be apportioned as follows: a) fifty percent (50%) for
hotel/lodging, b) thirty percent (30%) for meals and c) twenty percent
(20%) for incidental expenses.

Claims for reimbursement of actual expenses in excess of the travel

expenses authorized herein may be allowed upon certification by the
Head of Agency concerned as absolutely necessary in the performance of
an assignment and presentation of bills and receipts. Provided, that,
certification or affidavit of loss shall not be considered as appropriate
replacement for the required hotel/lodging bills and receipts.

On April 27, 2018, Management issued Office Order No. 272-2018,

superseding among other, the various Office Orders prescribing rules and regulations
allowing the claims for reimbursement of actual travel expenses per day, to wit:

34
 Staff/Regular Employee Officials
Travel Expenses
(P) (P)
Meals (maximum) 900.00 1,200.00
Accommodation (maximum) 1,500.00 4,000.00
Limit/day 2,400.00 5,200.00

Audit of the travelling expense account and verification of the documents

supporting the claims for travelling expenses revealed excessive claims in the
amount of P92,136.82 (Annex 5) since management allowed actual travel expense
for the employees as embodied in the said Office Order No. 227-2018.

Although the reimbursement of actual expenses maybe allowed to Officials,

such depends on the circumstances. Other claims not in accordance with EO No.298
were deemed “excessive” expenditures. The most economical meals and
accommodation should be availed under the existing rules and regulations.

Further, it was noted that out of the P129,718.66 excessive claims, P37,581.84
or 28.97 percent included in the reimbursement of travelling expenses are meals
which are immoderate for one person’s consumption, details as follows:

No Amount
Payee Purpose of travel
. (P)
1 Arturo M. Magadan 2018 HR Symposium at SMX
Convention Center, Davao City on 1,000.00
June 18-21, 2018
2 Krezyl Joyce Pugna SK MT Provincial Management 794.00
Team Meeting in Negros Occidental
898.00
on April 29-30, 2018
3 Paul Anthony Integrated and Sustainable Solid
Pangilinan Waste Management Summit in 920.00
Bacolod City on June 13-14, 2018
4 Rhea Peñaflor 4th quarter RYAC VII Meeting and 1,200.00
Cebu Youth Consultation Meeting in
1,145.00
Cebu City on December 11-12, 2017
Hearing on Universal Health Care in 1,200.00
Cebu City on January 31 to February
955.00
1, 2018
10th Regular Commissioner’s
814.00
meeting on February 09, 2018
JENESYS Kizuna Get Together and
the 12th Mother Committee Meeting 893.21
in Manila on February 11-13, 2018
Meeting for the 2018 Fitfil NYC 1,200.00
Program in Quezon City on March 5-
1,108.89
7, 2018
NYC Team Building and 12th 880.00
35
No Amount
Payee Purpose of travel
. (P)
NAYHD-TWG Special Meeting on 1,006.50
March 08-13, 2018 930.00
1,200.00
1st Quarter Joint RDC Full Council 870.00
& Advisory Committee Meeting, and 1,030.00
Youth Development Officers'
Regional Summit on March 15-21, 1,031.00
2018
Preparation for the 2019 Budget
Conference Meeting with EGPAT in 1,500.00
NYC on March 23-25, 2018
57th Search for the TOSP, SK 812.61
Election and 1st sem meeting of 1,200.00
RYAC Visayas on May 11-20, 2018 1,200.00
1st Semester meeting of RYAC VII
1,200.00
in Cebu City on May 24, 2018
Visayas Wide Workshop to 1,200.00
Strengthen LBQ Woman and 930.00
Transmen Activism RYAC VI, 1,049.00
RYAC VII June 9-20, 2018 980.00
835.00
Regional Youth Development plan 924.00
(RYDP) Validation Workshop and
RYAC VIII Meeting on June 23-27, 1,200.00
2018
IYD 2018 Cebu and Iloilo/Linggo ng 920.00
kabataan/Youth Forum on Public 820.00
Health on August 10-13, 2018 1,105.63
5 Sheridan Athena RYAC on Cebu City and SK 900.00
Gajete Mandatory Training on May 23-26,
900.00
2018
Planning Workshop for RYAC
members of Region 7 on June 18-19, 830.00
2018
TOTAL 37,581.84

We recommended and Management agreed to:

a. exercise judiciousness and prudence in the use of government funds in

granting reimbursements for travel adhering to Section 4 of EO No. 298
dated March 23, 2004 for future claims; and

36
 b. require concerned officers and employees to refund the excess claims based
on the Notice of Disallowance under ND 2019-001(18) dated February 20,
2019.

Existence of Dormant Other Receivables account

5. The Other Receivable accounts in the amount of P138,844.18 as at December 31,

2018 was outstanding, inactive and non-moving for more than 13 years in the books
as shown in the table hereunder

No. of
Accounts/SL/ Nature of Amount of Reason for Action taken
Total Balance years
Details transactions dormant being dormant by ATLs
dormant
Other
Receivables
- Resigned from Issued AOM
service No. 2019-002
- Non dated January
availability of 16, 2019
SL since there
Cash advances on was no proper
Dal, Larry 14,000.00 14,000.00 17
travel turnover from
previous
accountant
- With criminal
case No.
147512
- End of Term
- Non
availability of
Cash advance for
Lapuz, SL since there
Sorority Council 60,850.28 60,850.28 20
Rommel was no proper
National Meeting
turnover from
previous
accountant
- Resigned from
service
- Non
availability of
Merano, Cash advance on
940.00 940.00 20 SL since there
Jommel travel
was no proper
turnover from
previous
accountant
- Resigned from
service
- Non
availability of
Oxales, Cash advance on
7,414.00 7,414.00 18 SL since there
Rafael travel
was no proper
turnover from
previous
accountant
Pepito, Cash advance for 37,994.90 37,994.90 20 - Resigned from
Lalaine Mindanao Youth service
Peace Summit - Non
availability of
SL since there
was no proper
37
 No. of
Accounts/SL/ Nature of Amount of Reason for Action taken
Total Balance years
Details transactions dormant being dormant by ATLs
dormant
turnover from
previous
accountant
- Resigned from
service
- Non
availability of
SL since there
was no proper
Ramirez, Cash advance on turnover from
2,880.00 2,880.00 13
Jonna travel previous
accountant
- With
Ombudsman
Case No.
CPL-C-06-
2210
Cash advance on - Retired
travel - Non
availability of
Rojo, SL since there
5,000.00 5,000.00 16
Antonio was no proper
turnover from
previous
accountant
- Resigned from
service
- Non
Cash advance for
availability of
Teves, Medium Term
965.00 965.00 20 SL since there
Mona Lee Youth
was no proper
Development Plan
turnover from
previous
accountant
- Resigned from
service
- Non
availability of
SL since there
Ulanday, was no proper
Cash advance on
Erwin 6,100.00 6,100.00 17 turnover from
travel
Joselito previous
accountant
- With
Ombudsman
Case No. C-C-
07-0418-1
- Resigned from
service
- Non
availability of
SL since there
was no proper
Yabut, Cash advance on turnover from
2,700.00 2,700.00 16
Francisco travel previous
accountant
- With
Ombudsman
Case No.
CPL-C-06-
2212
Total 138,844.18 138,844.18

Gender and Development Plan and Implementation

38
6. Programs, projects and activities (PPAs) implemented exceeded the approved
GAD Plan and Budget (GPB) prepared for CY 2018 due to the GAD Plan was
not thoroughly evaluated/planned as shown in the three over-budgeted activities
where actual costs were much lower than the budget and
results/accomplishment had exceeded targets.

Section 30 of the General Provisions of the said GAA provides that “all
agencies of the government shall formulate a GAD Plan designed to address gender
issues within their concerned sectors or mandate and implement applicable
provisions under RA No. 9710 or the Magna Carta of Women, the Beijing Platform
for Action, the Philippine Plan for Gender-Responsive Development (1995-2025),
and the Philippine Development Plan (2017-2022).”

The GAD Plan shall be integrated in the regular activities of the agencies with
a budget of at least five percent of NYC’s appropriations. Utilization of GAD
Budget shall be evaluated based on the GAD performance indicators identified by
said agencies.

Under RA No. 9710 or Magna Carta of Women, COA shall conduct an annual
audit on the use of the GAD budget for the purpose of determining its judicious use
and the efficiency and effectiveness of interventions in addressing gender issues
towards the realization of the objectives of the country’s commitments, plans and
policies on women empowerment, gender equality and GAD.

As indicated in the GPB for CY 2018, the agency exceeded the allocated
amount of P509,000.00 representing .30 percent of its total appropriation of
P164,567,000.00 for the implementation of six targeted GAD PPAs due to the actual
cost/expenditures incurred amounted to P5,119,468.52. The details are shown in the
table below:

ActualCost/ Difference
Approved Budget
GAD Activity Objective Targets Accomplished Expenditures Budgetvs Actual
(P)
(P)
Client-Focused Activities
1 Conduct GSTs for Increased 35 youth 120 youth 95,000.00 95,106.55 (106.55)
Beneficiaries of GAD leaders per leaders
NYC Programs awareness area trained attended
(YORP, among youth in Gender
International Sensitivity
Programs, LYDO,
NYP and other
similar programs)
Organization-Focused Activities
2 Celebration of Institutional 80% of NYC 90% of 216,000.00 80,000.00 136,000.00
Women’s Day appreciation employees NYC
of the employees
important role
of women in
households,
communities

39
 ActualCost/ Difference
Approved Budget
GAD Activity Objective Targets Accomplished Expenditures Budgetvs Actual
(P)
(P)
and
workplaces
3 Conduct Gender Increased 80% of NYC 90% of 100,000.00 93,050.00 109.50
Sensitivity awareness of employees NYC
Training (with NYC staff on employees
Men and GAD and
Masculinities, gender issues
Women
Empowerment
and Sexual
Orientation and
Gender Identity
and Expression
(GIE)
Consciousness Lessened 80% of NYC 90% of 6,840.50
and awareness incidence of employees NYC
raising for NYC stereotyping employees
employees of women and
girls
4 Regular GAD Updates on the Regular Regular 30,000.00 4,205.40 25,794.46
Focal Point implementation monthly monthly
System (GFPS) of the NYC meeting meeting
meetings 2018 GAD
Plan
5 Capacity building Enhancement Approved 100% of 34,000.00 147,942.00 (113,942.00)
for GFPS of the draft NYC GAD GFPS
Members NYC GAD Policy members
Policy. through En trained
Banc
Resolution –
GFPS
member will
be trained
6 2019 Annual To prepare Approved GAD plan 34,000.00 7,575.00 26,425.00
GAD Planning the GAD plan and submitted
Workshop for approval endorsed to PCW on
of the GAD Plan July 26,
Chairman and 2018
endorsement
to PCW

7 Attributed
Program
a) National - - No action - 3,666,216.00 (3,666,216.00)
Youth taken was
Parliament indicated in
(NYP) the
submitted
AR
b) Ship for - - No action - 1,008,533.07 (1,008,533.07)
Southeast taken was
Asian Youth indicated in
Program the
(SSAYP) – submitted
Pre-Departure AR
Training
Total 509,000.00 5,119,468.52

40
 GAD activity No. 7 with total actual cost/expenditure of P4,674,749.07 were
not included in the GPB but were reconsidered part of the GAD activities mainly due
to the Philippine delegation has a balanced number of males and females and issues
and concerns within the youth sector that were addressed, as follows:

a. NYP

• Violence against women;

• Gendered job discrimination;
• Discrimination against LGBTQ+; and
• Decreasing male enrolment and enrolment attrition

b. SSEAYP

• Gender inequality in accessing government programs;

• Minimal awareness on gender and sexuality concerns among the youth
• High prevalence of HIV and AIDS among the youth

We recommended that Management require the GAD Focal Persons, in

coordination with the Budget and Planning Officer to allocate and prepare a
well-planned GAD PPAs that would address gender issues within the agency or
community.

Senior Citizens and Persons with Disability Program/Project

7. The NYC had not prepared and formulated specific plans, programs and
activities that would address the concerns of Senior Citizen (SC) and
Differently-Abled Persons (DAPs) contrary to Section 31 of the General
Provisions of General Appropriation Act (GAA) for FY 2018.

Section 31 of the General Provisions of the GAA for FY 2018 provides that
all agencies of the government shall formulate plans, programs and projects intended
to address the concerns of SCs and DAPs, insofar as it relates to their mandated
functions, and integrate the same to their regular activities.

Verification disclosed that Management had not prepared and formulated

specific plans, program and projects to address the concerns of SCs and DAPs as
required under Section 31 of the General Provisions of GAA FY 2018.

Management explained that services for SC and DAPS were already

integrated in the NYC particularly on the following:

• During the Local Youth Development Officer (LYDO) and Sangguniang

Kabataan (SK) Summits in July 2018, briefing-presentation intended to
magnify the importance of all the nine Centers of Youth Participation for

41
 consideration in formulating the Local Youth Development Plans
(LYDPs) and Comprehensive Barangay Youth Development Plans
(CBYDPs) – one of the Centers highlights the objective of increasing the
facilities and services for youth with disabilities under the Social Inclusion
Center of Youth Participation;
• Five DAPs youth were hired as Government Internship Program (GIP)
interns;
• One employee retired in 2018 and two employees retiring in 2019
underwent Retirement Orientation Program conducted by GSIS; and
• The rented building was provided with ramp and elevator for the
use/mobility, safety and welfare of the SCs and DAPs.

While the above activities were integrated in the programs, they were
incidental, and not planned.

We recommended that Management instruct concerned officials to prepare and

formulate plans, programs and projects intended for SCs and DAPs in order to
address their concerns and integrate the same in their regular activities, as
required under Section 31 of the General Provisions of the GAA FY 2018.

Non-compliance with Tax Laws

8. The balance of the Due to BIR account of P1,538,232.24 as of year-end is still

unreliable due to the uncorrected over-remittance of tax withheld from
employees’ compensation and purchase of goods and services totaling
P120,803.08 representing P119,613.08 and P1,190.00 for the prior and current
years, respectively.

Section 3.4 and 3.6 of DOF-DBM-COA Joint Circular No. 1-2000 dated
January 3, 2000 provides that the amount of request should be equal to the
unremitted current and prior years’ taxes withheld and all adjustment (over or under
remittances) of taxes withheld by the NGAs shall be considered in the following
month’s request.

Among the recommendations contained in CY 2017 Annual Audit Report

(AAR) was for the Accountant to verify the discrepancies noted between the
amounts withheld and the amount remitted in compliance with the tax laws.

However, the account for the year still showed the same error, as shown
below:

Amount Net Amount Amount (over)/under

Period Adjustments
withheld Withheld Remitted remittance
covered (P)
(P) (P) (P) (P)
Beg. balance (119,613.08)
January 399,675.76 470.00 400,145.76 401,425.76 (1,280.00)
42
 Amount Net Amount Amount (over)/under
Period Adjustments
withheld Withheld Remitted remittance
covered (P)
(P) (P) (P) (P)
February 649,246.16 - 649,246.16 649,246.16 -
March 658,003.48 - 658,003.48 658,003.48 -
April 851,454.60 - 851,454.60 851,454.60 -
May 658,700.10 (2,921.57) 655,778.53 657,658.53 (1,880.00)
June 577,039.32 - 577,039.32 575,159.32 1,880.00
July 331,330.31 - 331,330.31 331,330.31 -
August 582,608.52 - 582,608.52 582,518.52 90.00
September 626,668.47 (1,187.50) 625,480.97 625,480.97 -
October 384,987.82 - 384,987.82 384,987.82 -
November 755,536.53 - 755,536.53 753,790.53 1,746.00
December 1,842,686.50 (185,397.18) 1,657,289.32 1,659,035.32 (1,746.00)
Total 8,317,937.57 (189,036.25) 8,128,901.32 8,130,091.32 (120,803.08)

Management verbally requested the BIR to offset the over remittance in prior
year with current unremitted taxes but accordingly, offsetting is possible only if it
pertains to the same payees – employee, suppliers and contractors.

The uncorrected/unadjusted account renders the Due to BIR account

understated and the Subsidy Income from National Government account overstated
in addition to the non-compliance to the DOF-DBM-COA Joint Circular No. 1-2000.

We recommended and the Accountant agreed to:

a. exert effort in locating the records/documents pertaining to the over

remittances such as the alphabetical list of payees subjected to taxes;

b. verify the discrepancies noted with BIR; and

c. effect the corresponding adjustment/s to correct the balance of Due to BIR

account.

During the exit conference, the Accountant informed the Audit Team that the
amount of P90.00 under remittance in August, 2018 was already adjusted per JEV
No. 2019-01-011.

Compliance with the Property Insurance Law

9. NYC was able to adequately insure all its insurable assets and properties with the
General Insurance Fund (GIF) of the Government Service Insurance System.

Under RA No. 656, as amended by Presidential Decree (PD) No. 245,

properties, assets and interests of the government are required to be insured with the
GIF, as administered by the GSIS against any insurable risk.

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 The measure of an insurable interest in property is the extent to which the
insured might be indemnified by loss or injury thereof. (Sec. 17 of RA No. 10607).

Verification disclosed that all insurable properties, assets and interests of

NYC are adequately insured with GIF administered by GSIS under the following
Policy Number:

Policy Number Period Covered

MV-PC-GSISHO-0149209 December 04, 2018 – December 04, 2019
MV-PC-GSISHO-0141242 February 24, 2018 – February 24, 2019
MV-PC-GSISHO-0138606 November 01, 2017-November 18, 2018
MV-PC-GSISHO-0143229 June 01, 2018-June 01, 2019
Policy ID 10005573854 November 01, 2017 – November 01, 2018
FI-NM-GSISHO-0030471 August 28, 2018-August 28, 2019

Disaster Risk Reduction (DRR) and Climate Change Adaptation (CCA) and Mitigation
Projects

10. NYC submitted its CY 2018 accomplishment on DRR and CCA Mitigation Projects
as follows:

a. Conducted local and national conference of Youth with a total number 256 and
102 youth participants in three legs and one leg, respectively, in coordination
with the Climate Change Commission (CCC) and Yes Pinoy Foundation as
project partners of the project;
b. Created Agency Emergency Response Teams;
c. 20 NYC employees underwent two Emergency Response Trainings with Rescue
Recon as trainer, the training includes simulated earthquake drill; and
d. NYC developed a big pocket size Emergency Response Manual which was
available inside the Disaster Kit Go Bags and accessible at the Office of the
Chairperson, Office of the Executive Director, all Divisions and in all area
Offices.

However, it is recommended that NYC should participate in the Metro-wide

earthquake and fire drill conducted by local and national government in order to
raise awareness and preparedness, developed security and safety practices when it
comes to facing environmental phenomena and natural disaster.

Compliance with RA No. 7875 (PHilhealth)

11. For CY 2018, NYC had deducted a total of P359,397.22 Philhealth contributions and
remitted a total of P358,510.21, leaving a balance of P887.01 which was remitted on
February 21, 2019.

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Compliance with GSIS with the GSIS Act of 1997

12. For the CY 2018, NYC deducted from the fixed monthly compensation the personal
share of the members, premiums and loan amortization the total amount of
P3,161,871.47 of which P3,156,182.41 was remitted together with the government
share of P4,213,165.35 as of December 31, 2018, leaving a balance of P5,689.06
which was remitted on February 21, 2019.

Compliance with RA No. 9769 (Pag-IBIG)

13. The NYC and its employees contributed to the Home and Development Mutual Fund
(HDMF), more popularly known as the Pag-IBIG Fund, in accordance with RA No.
9679. For CY 2018, the agency withheld the total amount of P165,400.00 of which
P165,200.00 was remitted as at December 31, 2018. The balance of P200.00 is still
unremitted and subject to further validation by Pag-IBIG.

Enforcement of COA Audit Suspensions, Disallowances and Charges

14. Audit of Suspension in the amount of P262,114.15 issued in 2018 was settled during
the year leaving a zero balance at the year end.

Hiring of Job Order/Contract of Service Individuals

15. NYC has 18 personnel covered with Contract of Service (COS) Agreement as of
December 31, 2018 on a semestral basis. The payment for their salaries were
charged against Maintenance and Other Operating Expenses (MOOE) in the total
amount of P3,885,299.47 as authorized under DBM Circular Letter (CL) No. 2013-5
dated July 22, 2013 to augment the regular plantilla employees. The additional
workforce of 18 comprised of personnel performing technical, clerical and other
administrative functions while filling up the available plantilla positions and
awaiting for the approval of the 30 proposed additional/reclassified position from the
Department of Budget and Management.

Publication and disclosure of Programs/Projects/Activities (PPAs)

16. The NYC posted relevant information of their PPAs on posters, streamers, tarpaulin
and similar materials within the agency premises, in compliance with COA Circular
No. 2013-004 dated January 30, 2013 (Information and Publicity on
Programs/Projects/Activities of Government Agencies).

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Audit of funds received from other sources

17. NYC received fund transfers during the year and prior years from the United Nation
International Children Emergency (UNICEF) for the implementation of UN
programmes and ASEAN Youth Social Entrepreneurship Awards (AYSEA) for the
conduct of commemorative activity of ASEAN.

The partnership aim to achieve the following:

A. UNICEF -

a. Assist provinces in developing local youth development plans responsive to

the needs of young people in their locality;
b. Produce knowledge products which will guide national government agencies
and local government units in developing evidence based youth-responsive
programs; and
c. Provide venue for young people to share their views on issues, programs and
policies affecting their lives.

B. AYSEA –

a. Recognize young social entrepreneur in the region;

b. Provide a platform for young social entrepreneur to connect with one another
and share best practices;
c. Speak about their advocates and social enterprises; and
d. Site visitations of social enterprises that can serve as models for budding
social entrepreneurs.

Table hereunder shows the status of the said fund transfer for CY 2018.

Fund Disbursement/
Refund Balance
Date Transfer Liquidation
(c) (d=d+a-b+c)
(a) (b)
A. UNICEF
12/31/2017 2,457,290.16
January - 791,672.50 - 1,665,617.66
February - 73,701.15 - 1,591,916.51
March - 1,591,916.50 - 0.01
July 8,417,800.00 .01 - 8,417,800.00
August - 261,163.45 5,657.99 8,162,294.54
September - 92,170.94 19,655.76 8,089,779.36
October - 280,429.06 - 7,809,350.30
November - 937,748.97 75,253.15 6,94,854.48
December 230,000.00 3,588,251.63 92,784.71 3,681,387.56
B. AYSEA
June 2017 8,341,205.35 - - 8,341,205.35
July - 264,205.00 - 8,077,000.35

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 Fund Disbursement/
Refund Balance
Date Transfer Liquidation
(c) (d=d+a-b+c)
(a) (b)
August - 4,013,207.53 89,746.53 4,153,539.35
September - 192,898.22 - 3,960,641.13
October - 2,634,077.21 - 1,326,563.92
November - 973,495.78 261,816.39 614,884.53
December - 53,234.37 40,000.00 601,650.16
May 2018 - 507,862.50 - 93,787.66

The transaction in the UNICEF fund were audited by a private Auditing firm
sent by UNICEF while the AYSEA’s balance is subject for refund and its
disbursement is for review and post-audit by the Audit Team.

Compliance with RA No. 9184 (Procurement Law)

18. The provisions of the RA 9184 otherwise known as the Government Procurement
Reform Act and its Revised Implementing Rules and Regulations (IRR) were strictly
adhered to, thereby the government was assured of the most economical price in the
purchase of goods and services.

Fund Utilization

19. Out of the total appropriations and allotment of P180,364,228.00 in CY 2018,

P137,934,322.87 or 76.48 percent of which was obligated and P133,944,981.83 or
97.11 percent was disbursed.

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