Coa Consolidated Arr Cy-2007 Reply

8/13/2019 Coa Consolidated Arr Cy-2007 Reply

1/7

LAND TRANSPORTATION OFFICE NCRSTATUS REPORT ON THE COA CONSOLIDATED FINDINGSFOR CY-2007 ANNUAL AUDIT REPORT (RA FUND-101)

SEPTEMBER 03, 2008

COA OBSERVATIONS RECOMMENDATIONS/ MANAGEMENT COMMENTS STATUS/ACTUnreliable Property, Plant and Equipment1. At least twenty three per cent of P132.2 million of the total consolidated

Property, Plant and Equipment (PPE) balance of P573.20 million as ofDecember 31, 2007, was doubtful due to absence of reconciliation ofvarious PPE accounts of LTO Regional Office Nos. II, VI, VIII and NCRcaused by the absence of physical inventory and updated property cardsand property and equipment ledger cards.

1.3 In LTO-NCR, recording of transactions in the Property Equipment LedgerCards is not updated. As at year-end, the agency has total PPE Account balanceof P66.97 million.

1.4 Likewise, the above LTO Regional Offices did not conduct Physicalinventory of their properties during the year to determine the existence andcondition of the asset.

We recommended that the management instruct/direct theProperty/supply Officers and Accountants of LTO RegionalOffice Nos. II, VI, VIII and NCR maintain and update theirproperty cards and PPE ledger cards for all items ofproperty and equipment, conduct physical inventory once ayear and reconcile their records.

Reconcilation of thPPE accounts with Section is now onPPE inventory for only received by theSection on JulyRecording, adjustupdating the SLaccount will be mthe closing of booCY-2008


2/7

COA OBSERVATIONS RECOMMENDATIONS/MANAGEMENT COMMENTS STATUS/ACTInaccurate balances of inventory accounts4. Several internal control measures prescribed in the NGAS manual tofacilitate accurate reporting of inventory accounts through check and balanceand reconciliation procedures, were not fully implemented by LTO Regional

Office Nos. II, V, VI, VII, X and NCR resulting in inaccurate balances ofinventories accounts as at year-end.

4.2 The inventory accounts of LTO Regional Offices No. I,, II, VII, VIII and theNational Capital Region also have inaccurate balances at year-end

4.8 NCR issuances of accountable forms, plates, tags and stickers were notyet recorded in the books due to the delay in the preparation and submissionof the Consolidated Monthly Report on Accountability for Accountable Forms,Plates, Tags and Stickers (CMRAAFPTS) by the Property Officer. The basis ofrecording issuances of inventory items was still the Report of Accountability forAccountable Forms, Plates, Tags and Stickers RAAFPTS) prepared by the SupplyOfficer, While the RAAFPTS shows the various issuances made by the Supply

Officer to various LTO-NCR offices, the CMRAAFPTS shows the issuances madeby the various district/extension/licensing and renewal centers which is theimportant information to record as expense the actual quantity and cost ofseveral accountable forms, plates, tags and stickers issued to motor vehicleregistrants and driver license applicants.

4.13 The quantity of accountable forms, plates, tags and stickers received bythe Accounting Section of LTO-NCR did not tally with the Property records. Thequantity appearing in the Report of Accountable and Non-Accountable FormsIssued (RAAFI) and Report of Supplies and Materials Issued (RSMI) did notreconcile with the Invoice Receipt of Accountable Forms, Plates, Tags andStickers (IRAF) which shows the actual quantity received by the LTO-NCR. Thedifference could not be determined because the supporting documents fromLTO- Main did not indicate the inclusive serial numbers of the accountable

Management Comment:The supply Officer said that the personnel In-charge of thesupplies inventory in the Property Section was on leave.

4.12 We recommended that management require theSupply Officers of LTO Regions V, VI, VII, X, XII and NCR toprepare the RSMIs and JEVs for issued, returned, damagedinventory items and submit them on time to the agencysAccountant for recording in the books of accounts.

4.17 We recommended that management instruct thecollecting and other accountable officers of LTO Region Vand NCR to prepare a complete and accurate Report ofAccountability for Accountable Forms (RAAF) in a formprescribed in the NGAS Manual and submit the same ontime to the Supply Officer for consolidation and submissionto the Accounting Office.

The report submitProperty Sectionevaluated to dete

comply with requirement and casubstantiate any radjustments of invthe books of accoun

The Supply Officerwas directed to required reports onRegional Accountarecording in theaccounts.

The supporting doJEV transferred Main Office contanumbers of accounplates, tags and sticto this region. In Office had already with the LTO Se


3/7

forms to facilitate reconciliation with Property records.

4.20 LTO Regional Office No. X and NCR did not conduct physical inventory oftheir inventory items with a balance of P83,529,346.80 as of December 31,2007 ( P80,571,257.42 for NCR). As provided in Section 490, Volume I, of theGovernment Accounting and Auditing Manual (GAAM), physical stock taking isan indispensable procedure to ascertain the existence of reported assets and

check the integrity of property custodian.

4.25 Audit of the inventory accounts of the following LTO regional officesrevealed that the above regulations are not strictly implemented, thus, thecorrectness and accuracy of the reported balances of such accounts as at year-end could not be established:

In LTO-NCR, the regional audit team noted that the Accounting Offices SLCsand Property Offices SCs wer e not updated and reconciled.

Management Comments:The supply Officer said that the personnel-in-charge ofrecording the receipt and issuance of supplies in theProperty Section was on leave, thus the updating andreconciliation of property records with the accounting

records could not be performed. Also , the AccountingSection alleged that the office lacks manpower andsufficient time to update and reconcile their records.

4.23 We recommended that the management instruct theSupply Officers of LTO Region X and NCR to performperiodic physical count of inventories in accordance withSection 490, Volume I of GAAM; require Inventory Team tosubmit the Physical Inventory Report on the Inventories ofthe region; and instruct the Accountant and PropertyOfficer to reconcile their SLCs and SCs in accordance withSection 4(I), Volume I of the NGAS Manual to identify andcorrect the discrepancies in the property and accountingrecords.

4.28 We recommended that management require theProperty Officers and Accountants of LTO Regions II, V, VI,VII, X and NCR to maintain updated stock card andsubsidiary ledger cards for various inventory items/accounts of the agency as prescribed in Section 43, VolumeI of the NGAS Manual, and reconcile them regularly asprovided in Section 4(I), volume I of the same manual toidentify and adjust the discrepancies in the property andaccount records.

relative to this mattdated 28 February 2

We have taken nrecommendation. RProperty Section swere already subm

Accounting Sectioprior to recordiadjustments to be mthe closing of CY-2accounts.

Physical count ofwere conducted asubmitted to youApril 21, 2008.

Updating and recoSLC and SC is now


4/7

COA OBSERVATIONS RECOMMENDATION/ MANAGEMENT COMMENTS STATUS/ACTNon-deposit/delayed deposit of collections7. Collections of LTO Regional Offices Nos. III, IV, X, XII and NCR were notdeposited promptly and intact to the authorized government depository bankin violation of Sections 21 and 22 of the NGAS Manual and COA-MOF Joint

Circular No. 1-81.

7.2 Our audit showed that in NCR, Regions III, IV, VII and X collections were notdeposited intact and at the required schedule ( NRC- Makati District Office 1-15days).

Management Comments:The management assured the team that actions shall betaken on the collecting officer of Makati DO regarding the

discrepancies in his collections.

We recommended that management advise the collectingofficers of LTO Regions III, IV, VII, X, XII and NCR to deposittheir collections promptly and regularly especially duringFridays or days prior to holidays, to avoid the risk ofloss/theft and misappropriation

The Collecting OfMakati District immediately reli

February 22, reassigned in the FManagement Divisresult of the spot report by the Finaon the shortages. Thas been forwardLegal Officer, thisappropriate legal ac


5/7

COA OBSERVATIONS RECOMMENDATIONS/MANAGEMENT COMMENTS STATUS/ACTInaccurate recording of collections and deposits8. Discrepancies in the Reports of Collections and Deposits submitted by thecollecting officers of Manila West, San Juan and Makati District Offices, all ofLTO National Region, were not detected due to lack of reconciliation and

review by the Accountant of the LTO National Capital Region and the certifyingofficials of the concerned district offices, in violation of Section 23, Chapter 3,Volume I of NGAS Manual and LTO Memorandum Circular No. 89-101.

8.1 Section 23, Chapter 3, Volume I of NGAS Manual requires the Head of theCash Unit to review the Reports of Collections and Deposits prepared by thecollecting officers before recording in the books of accounts. The reports shallbe the basis in preparing the JEV for recording in the Cash Receipt Journal/CashJournal as the case may be (Section 57, Chapter I, Volume II of the NGASmanual).

8.3 Comparison of the amounts posted to the subsidiary ledgers and theReports of Collections and Deposits of the Manila West and San Juan DistrictOffices on selected months in 2007, showed differences in amounts rangingfrom negative P169.06 to positive 117,000.00.

8.4 Likewise, comparison of the Report o f Collections and Deposits against thecomputer-generated Abstract of Collections/Deposits for the month of Januaryto December 2007 of the Makati District Office, also revealed discrepanciesranging from P.25 to P550,000.00 .

8.5 We also noted that the ending balance of September 2007 which should bethe beginning balance of the Report of Deposits for the month of October 2007was taken up as P1,342,276.50 in the books of the Makati DO instead ofP1,442,276.50 or a difference of P100,000.00.

8.6 Discrepancies in the reported amounts of collections and deposits in prior

Analysis of finanand spot moncollecting officers adone by the Finan

Division.

The Finance Chief ia detailed financial Collecting OfficerWest.

A memorandumCollecting Officer District Office has to deposit the shortages and financial audit foDistrict Office waccordingly.

The discrepanciefinancial reportsCollecting OfficerDistrict Office incorporated in submitted by thOfficer and the interof this region.


6/7

years could still occur pending the result of the audit/cash examination of theaccountabilities of the collecting officers.8.7 While LTO Memorandum circular No. 89-101 requires the Regional Financeand Management Division Chiefs to conduct monthly reconciliation of theaccounts of all accountable officers, reconciliation of the differences in thecollections and deposits of the above three LTO-NCR District Office and otherLTO regional offices that may have unreconciled balances, could not befacilitated because of the following:

Bank Statements on the accounts are not regularly submitted by theLand Bank of the Philippines (LBP) to the agency. Likewise,confirmation letters are not sent by the agencys accounting Unit tothe LBP.

Lack of review of the Reports of Collections and Deposits by thecertifying official and the head of Accounting Unit against the actualamounts in the abstract of Collections/Deposits generated by thecomputerized revenue Collection System resulting in the non-detection of erroneous postings to the subsidiary ledger andconsequently to the general ledger.

Subsidiary ledgers (SL are not updated thus reconciliation of thecollecting officers cash records with the SL is not conducted regularly

Validated deposit slips are not traced to the RCD by the AccountingUnit

The computerization of LTOs Revenue Collection Systems covers onlyup to the preparation of the Summary of Collections for Registrationand Licensing Transactions (SCRLT). Succeeding processes such as thepreparation of the monthly Report of Collections and Deposits (RCD)are prepared manually by the collecting officers of the district andextension offices, licensing and renewal centers and certified correctby the concerned head of offices or the duly designated head of office.Erroneous transfer of amounts from the SCRLT to the RCD maytherefore occur, as in the case of the Makati District Office, especiallyof the prepared RCDs are not compared against the computer-generated SCRLT by the certifying officials and accountants.

8.8 a. Require the Accountant of LTO-NCR and thecertifying officials on the SCRLT in the district/extensionoffices and licensing and renewal centers, to review anddetermine the correctness and accuracy of reportedamounts in the RCDs by comparing the balances in thecomputer-generated Abstract of Collections/Deposits withthe RCDs manually prepared by the collecting officers todetect attempts of the collecting officers to understatecollections and overstate deposits and manipulate records;

b. Compel Land Bank of the Philippines to submit regularlybank statements and confirmation letter s to LTOaccountants; and require the accountants to reconcileregularly the accountabilities of the collecting offices bycomparing banks statements issued by LBP against thereported SL balances; and assign additional personnel atthe Accounting Section to assist in the review of Abstract ofCollections and deposit slips and RCD before recordingcollections and deposits in the books of accounts; and

c. Take appropriate disciplinary actions against thecollecting officers of Manila West, Sa Juan and MakatiDistrict Offices for misstating their collections and deposits.

This matter has beenwith the Accountanthe accuracy of finareports submitted bCollecting Officers

This Office haconstant communithe Land Bank oregarding the submission ostatement/s and con

Additional personassigned in the FManagement Divisas the ban on the hiemployees has been


7/7

Coa Consolidated Arr Cy-2007 Reply

Documents

Transcript of Coa Consolidated Arr Cy-2007 Reply