Annex A

National Irrigation Administration

CY 2017

AUDIT Initial Audit

THRUSTS/FOCU Audit Status Observations and
S AREAS AUDIT ISSUES/RISKS IMPACT/EFFECT Audit Criteria Approach/Procedures of Audit Recommendations
Existence, Valuation and Balances are not fairly Section 111, PD 1445
PPE and Completeness: The following PPE presented in the financial (State Audit Code of the
Procurement accounts have no subsidiary ledgers: statements, affecting Philippines)
Land decisions of the Section 7.2.1, COA Conduct analysis and On-going Draft AOM
Land improvements management and external Circular No. 2009-006, inventory of the
Other structures users. September 15, 2009 recorded assets under
Furniture and fixtures PPE accounts to
IT equipment and software determine the actual
Library books cost of the existing
Communication equipment assets.
Firefighting equipment and
accessories
Medical, dental and laboratory
equipment

Other transportation equipment

Existence, Valuation and
Completeness: The subsidiary
schedules provided for PPE
accounts are not updated to
substantiate the book balance. Such
schedules only present the running
balances of the respective accounts
and have no detailed or itemized list
to support the balances.
There is no fair
presentation of the correct
carrying amount of the fixed
assets in the financial
statements. Absent a
complete, detailed and
itemized subsidiary ledger
impacts the determination
of depreciation, impairment
and other losses.
Sections 58 and 111, Conduct analysis and Draft AOM
PD 1445 (State Audit inventory of the
Code of the Philippines) recorded assets under
Section 7.2.1, COA PPE accounts to
Circular No. 2009-006, determine the actual
On-going
September 15, 2009 cost of the existing
Section 42, Chapter 10, assets.
Manual on the New
Government Accounting
System (MNGAS),
PPE portfolio is not periodically Volume I
reviewed for possible impairment.

There is a risk that additions to PPE
are not properly recorded because of
the following:
a. Cost recognized does not
comply with the criteria on
initial recognition
(Valuation)
b. Period costs are incorrectly
capitalized (Valuation)
c. Reclassifications from
construction in progress
were not properly done
d. PPE are not actually owned
by NIA (Rights and
Ownership)
Carrying amounts are not
properly presented in the
financial statements.
Chapter 10, Manual on Obtain movements in
the New Government PPE during the year. On-going On-going
Accounting (MNGAS), Examine supporting
Volume I documents and
PPSAS No. 17 determine whether the
acquisition cost is
correctly accounted or
measured under the
correct criteria.

Valuation and Allocation: Prior year assets are Chapter 10, Manual on Conduct review and On-going Draft AOM
Depreciation is erroneously misrepresented as to their the New Government analysis of
calculated in contravention with real value thereby affecting Accounting (MNGAS), depreciation schedule.
applicable standards. Depreciation the determination whether Volume I Determine assets with
of assets for 2011 and prior years is these are already fully PPSAS No. 17 zero useful lives and
done per lump-sum and not per depreciated and for ascertain whether they
asset. Depreciation schedule is not retirement. can already be
periodically updated and reviewed. considered for
retirement and/or
disposal.
 PPE are not adequately insured for
possible losses.
Compliance: Procurement of assets
is not in accordance with RA 9184.
Procurement of
goods
Compliance: Use of alternative
modes of procurement may not be
justified and appropriate
Prepared by:
ANGELO KARL C. DOCEO
State Auditing Examiner II
Reviewed by:
Assets may be exposed to
unnecessary risk of not
being indemnified for any
damage or loss due to any
fortuitous event and of third
party liability.
Procured assets may not
be in conformity with the
specifications required.
Unsatisfactory performance
of ineligible contractors,
causing delays in the
delivery of goods.
Procured assets may not
exist.
Assets procured through
alternative modes may not
be in compliance with RA
9184 thereby affecting
efficient, effective and
speedy delivery thereof.
RA 656 On-going On-going
Administrative Order Obtain an inventory of
33, August 25, 1987 the fixed assets and
COA Circular No. 92- ascertain whether or
390 not these are
insurable.
RA 9184 (Government Conduct auditorial On-going On-going auditorial
Procurement Reform review of all review and
Act) procurements and inspection.
COA Circular No. 2010- recommend sanctions,
003, January 1, 2010 if necessary. Conduct
Executive Order No. 34 inspection of deliveries.
RA 9184 (Government Conduct auditorial On-going On-going auditorial
Procurement Reform review of all review
Act) procurements and
COA Circular No. 2010- recommend sanctions,
003, January 1, 2010 if necessary.
Executive Order No. 34
ELENA L. AGUSTIN
Supervising Auditor