AUDIT PROGRAM

FOR THE PERIOD ______________________

Allocations to LGUs

A. Risks statements:

1. Allocated funds from various sources may not be utilized in accordance with the purpose
of the law granting or authorizing such taxes and proper recording in the books may not
be observed.

A. Special Shares of Local Government Units in the Proceeds of National Taxes:

a. Internal Revenue Allotment of LGUs pursuant to R.A. 9358 and in

accordance with Section 285 of R.A. 7160;
b. Use, Allocation and Release of LGU share in National Wealth pursuant to
Section 294 of R.A. 7160 where applicable;
c. Use, Allocation and Release of LGU Share in Excise Taxes for Locally
Manufactured Virginia-Type Cigarettes in accordance with Section 2 of R.A.
7171, Section 289 of R.A. 8424 and Memorandum Circular No. 61-A dated
November 28, 1993 where applicable;
d. Use, Allocation and Release of LGU Share in Excise Taxes from Barley and
Native Tobacco pursuant to Section 8 of R.A. 8240 where applicable;
e. Allocation and Release of LGU Share in Incremental Collection from Value-
Added Tax as authorized under R.A. No. 7643 as amended, R.A. 8424 in
relation to Section 150 of R.A. 7160 as implemented by DBM-DOF-DILG
Joint Circular No. 1-02 dated February 6, 2002;
f. Allocation and Release of LGU Share from Value-Added Tax in lieu of
franchise tax as authorized under R.A. No. 6631 as amended by R.A. No.
8407 and R.A. No. 6632 as amended by R.A. 7953 and DBM-DOF Circular
No. 2008-1 dated June 16, 2008;
g. Allocation and Release of LGU Share in Gross Income Tax Paid by all
businesses and enterprises within the economic zones as provided under R.A.
No. 7922 where applicable;
h. Internal Revenue Allotment Monetization Program as prescribed under E.O
No. 723, s. 2008 where applicable;
i. Tobacco Monetization Program pursuant to R.A. No. 7171 and BIR
Regulation No. 12-2008 dated September 23, 2008 and R.A. No. 8240 and
BIR Regulation No. 15-2008 dated November 21, 2008 where applicable; and
j. Release of LGU Shares in the Proceeds of National Taxes.

B. Local Government Support Fund;

C. Special Shares of Local Government Units in the proceeds of fire code fees pursuant
to Section 13 of R.A. 9514.

2. Implementation of the PAPs may not be validated.

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 3. The Disbursement Voucher and its supporting documents may not be complete as
required in COA Circular No. 2012-001 and RA 9184.
4. The required reports for a particular fund allocation may not be prepared and submitted.

B. Audit assertions:

R- Regularity
C- Completeness
O- Occurrence

C. Audit Objectives:

1. To determine whether allocated funds from various sources were utilized in accordance
with the purpose of the law granting or authorizing such taxes and proper recording is
made in the books.

A. Special Shares of Local Government Units in the Proceeds of National Taxes:

a. Internal Revenue Allotment of LGUs pursuant to R.A. 9358 and in accordance

with Section 285 of R.A. 7160;
b. Use, Allocation and Release of LGU share in National Wealth pursuant to
Section 294 of R.A. 7160 where applicable;
c. Use, Allocation and Release of LGU Share in Excise Taxes for Locally
Manufactured Virginia-Type Cigarettes in accordance with Section 2 of R.A.
7171, Section 289 of R.A. 8424 and Memorandum Circular No. 61-A dated
November 28, 1993 where applicable;
d. Use, Allocation and Release of LGU Share in Excise Taxes from Barley and
Native Tobacco pursuant to Section 8 of R.A. 8240 where applicable;
e. Allocation and Release of LGU Share in Incremental Collection from Value-
Added Tax as authorized under R.A. No. 7643 as amended, R.A. 8424 in
relation to Section 150 of R.A. 7160 as implemented by DBM-DOF-DILG
Joint Circular No. 1-02 dated February 6, 2002;
f. Allocation and Release of LGU Share from Value-Added Tax in lieu of
franchise tax as authorized under R.A. No. 6631 as amended by R.A. No.
8407 and R.A. No. 6632 as amended by R.A. 7953 and DBM-DOF Circular
No. 2008-1 dated June 16, 2008;
g. Allocation and Release of LGU Share in Gross Income Tax Paid by all
businesses and enterprises within the economic zones as provided under R.A.
No. 7922 where applicable;
h. Internal Revenue Allotment Monetization Program as prescribed under E.O
No. 723, s. 2008 where applicable;
i. Tobacco Monetization Program pursuant to R.A. No. 7171 and BIR Regulation
No. 12-2008 dated September 23, 2008 and R.A. No. 8240 and BIR
Regulation No. 15-2008 dated November 21, 2008 where applicable; and
j. Release of LGU Shares in the Proceeds of National Taxes.

Customized AP/Proposed AP/ALGU1 Page 2

 B. Local Government Support Fund;
C. Special Shares of Local Government Units in the proceeds of fire code fees pursuant
to Section 13 of R.A. 9514.

2. To validate the implementation of the PAPs.

3. To ascertain that the Disbursement Voucher and its supporting documents are complete
pursuant to COA Circular No. 2012-001 and RA 9184.
4. To ascertain that the required reports for a particular fund allocation are prepared and
submitted.

D. Sub-objectives, criteria, validation procedures and suggested working papers

List of documents needed:

1. GAA;
2. Credit Advice from the bank, if available or any proof of receipt of fund ;
3. Disbursement Vouchers and its supporting documents.

Audit Sub-objective Audit Activities Audit Suggested Audit Working Paper

 Audit Criteria A
S
S
E
R
T
I
O
N
Audit Question Yes No Particul
ars of
the
answer
1. To determine Verify the amount Are the various
whether allocated received and the funds allocated
funds from various utilization of the utilized in
sources were allocations. accordance with
utilized in accordance Verify if the purpose of the purpose of
with the purpose of the allocations have been the law granting
the law granting or fulfilled. or authorizing
authorizing such such taxes and
taxes and proper In case of IRA, verify if are properly
recording in the it had been earmarked recorded in the
books. and used as collateral for books?
loans the maturity of
A. Special Shares of which is beyond the term
Local Government Units of the official securing
in the Proceeds of the same.

Customized AP/Proposed AP/ALGU1 Page 3

National Taxes:
Verify if the receipts of Are receipts of
a. Internal Revenue allocations are accounted allocations
Allotment of LGUs for and utilized in representing
pursuant to R.A. 9358 and accordance with Section shares from the
in accordance with 294 of RA 7160, in case national wealth
Section 285 of R.A. 7160; of LGUs with a share in accounted for
b. Use, Allocation national wealth. and utilized in
and Release of LGU share accordance with
in National Wealth Section 294 of
pursuant to Section 294 of RA 7160?
R.A. 7160 where
applicable; Verify if the receipts of Are receipts of
c. Use, Allocation allocations are accounted allocations
and Release of LGU Share for and utilized with representing
in Excise Taxes for regard to the Shares of shares of LGU
Locally Manufactured LGUs from tobacco from tobacco
Virginia-Type Cigarettes excise tax. excise tax
in accordance with accounted for
Section 2 of R.A. 7171, and utilized in
Section 289 of R.A. 8424 accordance with
and Memorandum Section 2 of RA
Circular No. 61-A dated 7171, Sec. 289
November 28, 1993 where of RA 8424 and
applicable; RA 8240?
d. Use, Allocation
and Release of LGU Share Verify if LGUs’ share Are receipts of
in Excise Taxes from from ecozones are allocations
Barley and Native accounted for and representing
Tobacco pursuant to utilized in accordance share of LGUs
Section 8 of R.A. 8240 with DBM-DILG-DOF from ecozones
where applicable; Joint Circular No. 99-2. the national
e. Allocation and wealth
Release of LGU Share in accounted for
Incremental Collection and utilized in
from Value-Added Tax as accordance with
authorized under R.A. No. Section 294 of
7643 as amended, R.A. RA 7160?
8424 in relation to Section
150 of R.A. 7160 as Verify if the release of Are receipts of
implemented by DBM- the 20% of the 50% allocations
DOF-DILG Joint Circular share of the LGUs in the representing
No. 1-02 dated February incremental collection of share of the
6, 2002; VAT are utilized and LGU in the
f. Allocation and accounted for pursuant incremental
Release of LGU Share DBM-DOF-DILG Joint collection of

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from Value-Added Tax in Circular No. 1-02 dated VAT are
lieu of franchise tax as February 6, 2002. accounted for
authorized under R.A. No. and utilized in
6631 as amended by R.A. accordance with
No. 8407 and R.A. No. DBM-DOF-
6632 as amended by R.A. DILG Joint
7953 and DBM-DOF Circular No. 1-
Circular No. 2008-1 dated 02 dated
June 16, 2008; February 6,
g. Allocation and 2002?
Release of LGU Share in
Gross Income Tax Paid by Verify if there are any Are there
all businesses and automatic releases of automatic
enterprises within the funds from the DBM. releases of funds
economic zones as from the DBM?
provided under R.A. No.
7922 where applicable;
h. Internal Revenue
Allotment Monetization
Program as prescribed
under E.O No. 723, s.
2008 where applicable;
i. Tobacco
Monetization Program
pursuant to R.A. No. 7171
and BIR Regulation No.
12-2008 dated September
23, 2008 and R.A. No.
8240 and BIR Regulation
No. 15-2008 dated
November 21, 2008 where
applicable; and
j. Release of LGU
Shares in the Proceeds of
National Taxes.

B. Local Government
Support Fund;
C. Special Shares of
Local Government Units
in the proceeds of fire
code fees pursuant to
Section 13 of R.A. 9514
2. To validate the Monitor and verify the Are the PAPs
implementation of status of the PAPs report reports
the PAPs. through ocular submitted reflect

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 inspections. the true status
COA Memorandum indicated in the
No. 2005-027. report?

In case of infrastructure Is the project/s

projects, request within the COA
TechITS for inspection Cost
and contract review for Evaluation?
the determination of
reasonableness of the
cost of the projects.

3. To ascertain whether Obtain the Subsidiary Are Subsidiary

the receipt, use and Ledgers of the special Ledgers being
allocation of the said funds and verify if the maintained?
fund is in accordance receipt of funds were
with the purpose of properly recorded as Are reports of
the law for which it well as the utilization of receipt and
was granted. the same. utilization
prepared?

Compare the GAA or

any document
supporting the
issuance/release of the
special fund with the
Subsidiary Ledger, PAPs
actually implemented.

4. To ascertain that the Verify the disbursement Are the

Disbursement vouchers and disbursement
Voucher and its completeness of its vouchers and its
supporting supporting documents in supporting
documents are accordance with COA documents
complete pursuant to Circular No. 2012-001 complete?
COA Circular No. and RA 9184.
2012-001 and RA Is the procure
9184 ment in
accordance with
RA 9184?

EVALUATING AUDIT EVIDENCES GATHERED AND

COMMUNICATING THE RESULTS OF AUDIT
1. To verify the causes Analyze the instances of Appropriate working papers
of instances of non- non-compliance to
compliance and make establish the effects and
appropriate audit develop appropriate

Customized AP/Proposed AP/ALGU1 Page 6

 recommendations audit recommendations
2. To communicate the Prepare the appropriate Audit Observation Memorandum
results of audit with audit/validation (AOM), if applicable
management document reflecting the
results of the
COA Circular No. 2009- audit/validation and
006 dated September 15, transmit to management
2009 re-Prescribing the
use of the rules and
regulations on the
settlement of accounts.

Prepared by: Reviewed by:

_____________________ ______________________
Name and Designation Name and Designation

_____________________ ______________________
Date Date

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