philippine overseas employment …poea.gov.ph/transparency/files/viii.3.a coa annual audit...

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PHILIPPINE OVERSEAS EMPLOYMENT ADMINSTRATION (POEA) AGENCY ACTION PLAN & STATUS of IMPLEMENTATION

Audit Observations and Recommendations For the Calendar Year 2013

as of December 31, 2014

Ref Audit Observations Audit Recommendations Action Taken

AAR

Par. 1-8

The payment in the amount of P27,614,308.08

made by the agency to the LBP Service

Corporation for the hiring of 186 personnel

exceeded its contract cost of P26,525,969.06 by

P1,088,339.02 due to billing adjustments,

increase in number of personnel and claims for

overtime services, depleting its funds for

Maintenance and Other Operating Expenses

(MOOE). Moreover, this contract of service

which represented 34.38% of the agency’s total

manpower complement even included personnel

performing clerical and administrative functions

contrary to the provisions of Section 81 of RA

10352 or the General Appropriations Act for

Fiscal Year 2013.

We recommended that (i) the Service Contractor

and/or the agency officials responsible for this

transaction be made to refund the payments made in

excess of the contract cost; and discontinue the

hiring of personnel under a Contract of Service

where the functions to be performed are clerical or

administrative in nature or similar to work being

performed by the regular personnel of the agency.

A. A. The hiring of Service Contractors for CY 2013 exceeded the

allowed number due to the exigency of the need to hire additional

personnel in order to augment the lack of manpower in some

offices. Since we cannot immediately fill-up regular vacant

positions unless an authority to fill-up from the Department of

Budget and Management (DBM) is secured first.

Some offices, especially those in the frontline/operational areas

and regional offices, are considered very crucial and needs

personnel in order not to hamper the delivery of their basic

services. With the increasing workload in its daily operations and

backlog that needs to be addressed especially in the area of

encoding the OFW data and other pertinent documents, hiring of

additional staff is very vital. Thus, in order to address the need for

lack of personnel, the POEA resorted to hire additional staff under

Contract of Service.

Likewise, during the annual “Peak Season” particularly in the

processing of Workers-On-Leave (WOL) and/or Balik-

Manggagawa (BM) totaling between 3,000 to 5,000 a day were

being assisted to ensure their efficient and orderly deployment, the

POEA needs to augment its existing personnel at the said offices

as well as at the field processing centers at different malls

particularly at Duty Free Philippines at Parañaque, Trinoma Mall

and SM Manila. This is the same with our Landbased Center

where there is an increase of principals and workers for overseas

employment facilitation.

With the increased volume of OFWs, particularly those who are

returning or vacationing, employees have been rendering overtime

services in order to address not only workers’ queries and

problems in the processing of their documents but as well as in

addressing their complaints allegedly due to poor or inefficient

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system or services that they receive at the counters. Likewise, the

number of principals registered/accredited and number of agency-

hired workers processed/documented have significantly increased

through the years.

Assigning employees to render overtime service after office hours

and during weekends and holidays is quite difficult considering

that they cannot claim overtime pay for services rendered but only

compensatory day-off. Some employees do not opt for

compensatory day-off because of the difficulty in availing of such

leave of absence due to lack of personnel at their respective

divisions/units.

Further, at the Labor Assistance Center (LAC), the regular

personnel have overstretched themselves and rendered overtime

services to man its three (3) counters at NAIA Terminals 1, 2 and

3 on a 24/7 basis which is operating in three (3) work shifts. Thus,

in NAIA-LAC alone, the manpower requirement stands at twenty-

seven (27). Hence, as a stop-gap measure, LAC regular personnel

in their approved work schedule work six (6) or seven (7) days a

week, which is rendered as overtime services and the need to hire

25 Service Contractors in order to augment the lack of personnel.

Also, our Regional Offices, particularly at Cebu City, Davao City

and Clark Field Pampanga also need additional manpower to man

the international airports at the said offices. Aside from delivering

their basic services, they also render as Duty Officers at the

respective airports on a 24-hour basis and even during Saturdays,

Sundays and Holidays. An average of 3,300 Overseas Filipino

Workers (OFWs) per month or around forty thousand (40,000)

OFWs per year exit thru the Mactan International Airport while an

average of two hundred fifty (250) OFWs per month or around

three thousand (3,000) OFWs per year exit at the Davao

International Airport. Likewise, an average of three thousand two

hundred fifty (3,250) OFWs per month or around thirty nine

thousand (39,000) OFWs per year exit at the Diosdado Macapagal

International Airport in Clark Field, Pampanga.

Following the restoration of validation system for OFWs at the

airports, the role of LAC to check on workers who are carrying

fake or tampered documents secured through illegal means is even

critical. Hence, additional personnel is needed and without the

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continued rendition of overtime services to LAC personnel would

only jeopardize the purpose of LAC as important component in the

government’s campaign against illegal recruitment and human

trafficking at the airports.

It is not only the Landbased Center, BMPD and LAC at Manila,

Pampanga, Cebu and Davao but almost all areas and offices in the

POEA lacks the needed manpower in order to carry-out and

perform their respective basic services to OFWs. Thus, continuous

hiring of Service Contractors is very crucial and important as they

augment the lean manpower complement of POEA.

B. The expense was charged against lump sum appropriation for

general services referred to as “Mandatory Obligations” under

Maintenance and Other Operating Expenses (MOOE).

Per the National Budget Call for FY 2013 dated December 29,

2011, which showed the details of expenses charged against

Lump-sum Appropriation for General Services referred as

Mandatory Obligations under MOOE for 2013, it included among

others in the MOOE breakdown, General Services or Other

Professional Services. The Service Contractors are categorized

under Professional Services.

Also, under the General Appropriations Act for FY 2013

specifically on page 712, Professional Services under MOOE has

an appropriation of P36.594 million which was released through

an Agency Budget Matrix (ABM) by the Department of Budget

and Management (DBM).

C. The Contract of Service for calendar year 2013 cost

P26,525,969.06 inclusive of incentive leave, 13th month and

COLA, without provision for overtime services to work on night

shift/holidays or beyond the regular schedule. Nonetheless,

payments to contractor in 2013 reached P27,614,308.08 that

exceeded the contract cost by P1,088,339.02 due to billing

adjustments and claims for overtime services.

The billing adjustments were due to the following:

a. Issuance of Wage Order No. NCR-18 by the National Wages

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and Productivity Commission (NWPC) which increased the

daily minimum wage rates to P466.00 effective October 4,

2013, and

b. Payment of overtime pay to the drivers as authorized per SO

No. 043 and to those assigned at the Labor Assistance Center

per letter of authority to LBP Service Corporation.

AAR

Par. 9-25

The inspection of recruitment agencies

prescribed under Part III, B(2) and C(4) of the

POEA Inspection Manual to validate

compliance with POEA Rules and Regulations

appeared to have not been strictly conducted as

sanctions imposed against a number of erring

agencies for recruitment and other violations

have not been implemented, resulting in the

continued recruitment of workers by these

agencies.

We recommended that the Administrator direct the

strict implementation of the Rules and Regulations

Governing the Recruitment and Deployment of

Overseas Workers of the POEA. Attention in

particular is invited to the imposition of sanctions

against erring recruitment agencies for the protection

of Overseas Filipino Workers.

Delisting of licensed agencies is undertaken pursuant to standard

procedures and long-established practice. Delisted agencies are those

that either failed to upgrade provisional license to full license within

the prescribed period for failure to comply with the requirement to

deploy at least 100 workers and has not requested extension of

provisional license; or failed to submit application for the renewal of

license within the prescribed period; or whose licenses have been

suspended prior to expiry and have remained suspended after the

expiry of the license. The procedure for delisting involves three major

processes as follows:

1. Listing of delisted agencies - The list is electronically generated

on a quarterly basis. This has been adopted as publication of

delisted agencies is undertaken every three months for economic

consideration.

2. Approval by the Administrator of delisting - A memorandum

recommending the delisting is subsequently prepared for the

consideration of the Administrator. The list undergoes a three-

level review, specifically by the Director of the Licensing

Branch (LB), the Director of the Licensing and Regulation

Office (LRO) and the Deputy Administrator for Licensing and

Adjudication.

It bears stressing that the period to recommend approval of delisting

may be shortened or may take some time as several evaluation

procedures need to be undertaken as follows:

Verification of the deployment record of those with

provisional license and ensuring that there is no request for

extension of license filed by the agency.

Determination of whether or not an application for license has

been filed by agencies that failed to obtain license renewal

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within the prescribed period.

Verification of whether an application for renewal of license

filed has been by those agencies whose licenses were

suspended prior to expiry and have remained suspended after

the expiry of the license. In case of an application, the renewal

may still proceed as soon as the suspension is lifted. In this

case, the agency is not included in the delisting.

3. Publication of delisted agencies - Upon approval by the

Administrator of delisting, the list of delisted agencies is

endorsed to the Information and Education Division, Planning

Branch for publication.

In the instant case, the list was electronically generated on March 3l,

2014, the end of the quarter and prior to receipt of AOM on April 4,

2014. The Memorandum on delisting was recommended for the

Administrator’s approval on April 14, 2014, after the needed

verification procedures were undertaken. The delisting was approved

by the Administrator on April 21, 2014, ordering its publication. The

list was published at the Manila Bulletin and Manila Times on April

22, 2014.

We wish to emphasize that delisting of an agency is not a derogatory

record that will warrant immediate investigation. Delisted agencies

may still apply for a new license. As discussed earlier, delisting

accrues due to agency’s failure to extend/upgrade provisional license

or renew license. Thus, it is not, a priority for an investigation and

surveillance operation unlike in the cases of suspended or cancelled

agencies for recruitment violations or illegal recruitment activities by

persons or entities.

It was also during the joint conference that the idea of posting a notice

for delisted, suspended and cancelled agencies was brought about to

protect jobseekers.

However, the posting of a notice in the office of recruitment agencies

that they have been delisted, suspended or cancelled is not sanctioned

by existing rules and regulations. The posting of notice is only allowed

in cases of closure of establishments for illegal recruitment. To our

mind, until and unless there is specific regulation allowing the posting

of such notice, the POEA cannot on its own undertake such posting.

While posting on agency premises is not available, an online agency

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verification system is accessible to the public to protect them from

illegal recruitment and recruitment malpractices. The system, which is

also hosted at POEA official website, can provide information whether

an agency has a valid license (and valid job orders), or its licensed has

expired, suspended or cancelled. The list of licensed agencies,

including those that are subject of suspension and cancellation orders,

is also regularly published and widely disseminated.

The POEA has likewise instituted measures to further protect overseas

Filipino Workers from illegal recruitment and recruitment violations.

We launched in April 2014 a mobile application of the agency

verification system. Under the new application, any person with smart

phones can download the agency verification system and subsequently

verify agency status in an instant. We have also introduced in July

2014 an online Pre-Employment Orientation Seminar (PEOS) where

prospective applicants are provided with fast, comprehensive, and

reliable information that they will need in order to make a reasonable

decision about their plans of working overseas. PEOS is also

conducted by the Workers Education Division in areas with high

incidence of illegal recruitment and big volume of deployment of

household service workers.

The issue of post-suspension and post-cancellation inspection was

likewise raised in view of the AOM findings that some agencies that

have been suspended or cancelled appeared to be on "business as usual

operations”.

We wish to stress that the Operations and Surveillance Division (OSD)

of the Anti-Illegal Recruitment Branch (AIRB) conducts regular

surveillance on suspended or cancelled agencies and those reported to

be allegedly undertaking recruitment activities without the required

license. Surveillance operations are also undertaken on agencies in

good standing but are reported to be allegedly committing recruitment

violations.

In 2013 for instance, a total of 260 surveillance operations were

conducted, a 24% higher than the previous year. This included 115

unlicensed and cancelled agencies, 12 suspended agencies and 124

agencies with valid licenses. Nine (9) agencies were closed, including

two cancelled agencies. Between January and July 2014, 83

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surveillance operations were conducted, including 56 unlicensed and

cancelled and 5 suspended recruitment and manning agencies. These

operations were all undertaken with only six (6) operatives.

The Administration will step up its campaign against illegal

recruitment and recruitment malpractices by adopting a more

comprehensive and enhanced anti-illegal recruitment strategies, such

as, among others:

a. Strengthening cooperation with law enforcement agencies,

including conduct of joint operations;

b. Collaborating with public prosecutors in prosecuting illegal

recruitment cases;

c. Developing a blacklist database of persons and entities

engaged in trafficking in persons; and

d. Implementing an enhanced case monitoring and tracking

system of all illegal recruitment cases

AAR

Par. 26-32

The agency stands to lose P787,875.00 in rental

income year after year due to inadequate

information covering the implementation of

Computer - Based Test (CBT) under an

agreement entered with the Human Resource

Development – Korea (HRD-Korea), where the

POEA shall provide the space requirements for

the CBT. Moreover, the application of the

monthly rental fee to the renovation cost of the

venue, until fully recovered have resulted in

automatic appropriation of funds for the purpose.

29. We recommended that management direct:

• the HRD Korea pay for the rental expenses;

• the Memorandum of Agreement with the

POEA renting out the venue for the conduct of

Computer-Based Test be properly documented;

• the application/offsetting of the rental fees

against expenses incurred by the lessee for

renovation be discontinued and the officials

responsible be made to explain;

• responsible officials justify renting out its

office space to outsiders while simultaneously

paying rental/storage fees to outside contractors; and

• all documents and requested information be

submitted to the COA Audit Team for technical

review.

Relative to the Memorandum of Agreement (MOA) executed by

POEA with the Employment Permit System (EPS) Center of the

Philippines under the Human Resources Development Service of

Korea (HRD Korea) for the Computer-Based Test (CBT) Venue for

the Special EPS Test of Proficiency in Korean (TOPIK) below are the

clarifications on the above-mentioned COA-AOM:

1. In accordance with your recommendation, we shall engage the

EPS Center headed by Director-General Jeong Eun Hee for a

review of the Memorandum of Agreement (MOA) between the

POEA and the EPS Center regarding the CBT arrangements, upon

her return from Korea to celebrate the 10 years of EPS

implementation, involving 15 sending countries, which includes

the Philippines.

2. CBT is a special mode of EPS TOPIK initially implemented for

EPS returnees who are qualified to re-apply/re-enter Korea, in

accordance with the DOLE-MOEL, Memorandum of

Understanding (MOU) and the implementing POEA-HRD Korea

Service Commitment Agreement. Under such MOU, the

Philippines as a sending country is obliged, like other sending

countries to cooperate by providing space and venue. In other

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countries, the CBT space and venue are provided free in

consideration of the huge employment benefits rendered to their

respective nationals under the EPS.

In the Philippines, however, the most that we have done is to give the

available space at the 6th floor which was vacated by the Maritime

Training Council with an area of 238.75 square meters. The HRD-

Korea shall pay a monthly rental of ₱275.00 per square meter in

accordance with the prevailing rate based on DPWH formula or

₱65,656.25 per month which will be applied to the total cost of the

renovation of the CBT venue estimated at US$20,000.00 for a period

of twenty (20) months effective January 2013.

In relation to your concern of renting out office space to outsiders

while simultaneously paying rental/storage fees to outside contractors,

we humbly submit that:

1. With the structural capacity of the POEA building still uncertain

during that period and for safety purposes, additional dead load or

the weight of the OFW records is best not to be stocked at the 6th

floor of the POEA building, which is the only available vacant

space then. For such reason, the services of Lane Archive

Technologies (LAT) for storage space were considered.

We also would like to clarify that the Contract of Service with Lane

Archive Technologies (LAT) for the provision of storage space for

OFW records ended on January 31, 2014 wherein the 2,096 boxes

(129.64 cubic meters) were pulled from the 6th floor of the POEA

building on March 1, 2014. This is the result of our digitization project

and the National Archive of the Philippines’ (NAP’s) approval to

dispose records beyond its retention period. AAR

Par. 33-39

Unserviceable properties valued at

P9,024,541.06 have not been disposed of

depriving the agency to earn additional income

had disposal been made thru sale, as

prescribed under Section 79 of PD No. 1445 and

hence, the sizeable space occupied in the

stockrooms/basement area could have been

cleared and put to use for other purposes.

We recommended that the Head of the Agency

direct the creation of a Disposal Committee to

perform the following:

device a program for disposal with time

schedules;

inspect the unserviceable equipment to

Reclassification of the unserviceable equipment to Other Assets

account is taking time because of the unreconciled records of the

Accounting Division and the General Services and Property Division

and unavailability of some documents. Based on available records, we

will exert effort to reconcile said account. An appraiser may be hired

for the appraised value of the unserviceable properties. As per COA

recommendation, we will recreate the Disposal Committee because

other members were already rotated to other office and are no longer

active.

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verify its status in order to justify its disposal;

set the final appraised value of the property

considering obsolescence, market demand,

physical condition and result of previous bidding

for similar property;

recommend to the head of the agency for

approval the manner of disposal; and

dispose promptly items that do not have

economic value which are recommended for

immediate condemnation or destruction.

AAR

Par. 40-45

Representation expenses of P5,083,824.11 could

have been considerably reduced had meetings

and related activities been conducted with

restraint and funds utilized instead for more

essential purposes.

We recommended that agency officials responsible

for the above activities exercise restraint in the

disbursement of government funds and henceforth,

discontinue:

e. the practice of serving meals and snacks

during meetings of its own officials and

employees;

f. distribution of tokens

g. conduct of workshops/meetings in hotels or

outside of the POEA offices

h. incurrence of expenses for religious

activities.

May we respectfully submit our comments on the items of

expenditures charged to representation expenses:

A. Meetings conducted within the premises of this Administration

We respectfully submit that the expenses were incurred in

buying meals and snacks during the meetings attended by our officials

and other rank and file employees. The meals provided for each

participant are simple. It is sometimes unavoidable to serve meals

during meetings which have lengthy discussions and which extend

even after office hours to address important issues in the

implementation of the policies, objectives and mission of the

Administration, particularly the concerns of our OFWs as well as the

political and economic crisis relative to the host countries. Such being

the case, we commit that we will minimize the practice of serving

meals during the meetings.

B. Reimbursement for the following expenditures:

B.1.Representation expenses of Php111,568.89 of the DOLE

Secretary as Chairman of the POEA Governing Board

It is deemed necessary to point out that the Honorable DOLE

Secretary as Chairman of the POEA Governing Board is not receiving

any honorarium in attending any of the meetings held by the Board. It

is deemed proper that she will be reimbursed of expenses incurred in

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the performance of her duties as such. Further, please be informed that

the implementation of the policies and programs of this Administration

requires the approval of the POEA Governing Board headed by the

Honorable DOLE Secretary. Since she is not claiming honorarium in

attending the meetings, fairness dictates that she be reimbursed of her

expenses, in the minimal amount of Php10,000.00 per month or a total

amount of Php111,568.89.

In this regard, we respectfully manifest to adopt the

documents earlier submitted to your Office to support the

representation expenses of Honorable DOLE Secretary as Chairman of

the POEA Governing Board.

B.2. Purchases and tokens of Php41,553.25 and Stipend of

Priest of Php3,000.00

We are pleased to inform your Honors that the said expenses

were already charged to the extraordinary expenses.

C. Expenses of Php1,497,268.03 for activities conducted outside the

POEA Office, breakdown as follows:

C.1. The amount of Php52,500.00 for the Enhancement of Merit

Promotion Plan at Holiday Inn Clark

The conduct of the Seminar-workshop on the Revision of the

POEA Merit Promotion Plan (MPP) by the Human Resource

Development Division (HRDD) in coordination with the Selection and

Promotions Board (SPB) and the Rank and File Employees

Association (RAFEA) was held outside the POEA Office particularly

at the Holiday Inn, Clark Field, Pampanga last 05-06 September 2013

due to the following reasons:

1. It was urgently needed that a revised hiring and promotion plan

incorporating the new rules and policies of the Civil Service

Commission should be finalized before the filling-up of the

thirty (30) vacant positions as approved by the Department of

Budget and Management (DBM) last September 2013. There

were a lot of concerns that needed to be resolved in the past

using the old POEA Merit and Promotion Plan that caused delay

in the filling up of previous vacancies that should not be

encountered with the new set of vacancies;

2. Difficulty in gathering all the members because of the demands

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of their work in the office

3. The members of the team needed to hold it outside the POEA

office so they would be able to concentrate on their discussions.

There were long discussions and deliberations on each item as

the group had to come up with a consensus that would strike a

balance between the interest of the organization and that of

employees and ensuring full conformity with CSC rules and

regulations.

4. In addition to the revision of the MPP, the team composed of

management representatives and RAFEA officers openly

discussed some issues and concerns of employees that needed

immediate resolution to maintain harmonious working relations.

Nevertheless, right after the seminar-workshop, a memorandum

order was submitted to the Administrator on the selection and

promotion of personnel for the approval, copy of which is hereto

attached for reference. Said Memorandum Order dated September 9,

2013 was immediately implemented during the filling up of vacant

positions in October, 2013.

C.2. The amount of Php873,263.03 for the Decision Writing

Workshops at Legend Villas

We are pleased to inform you that in the year 2013 and in

compliance with the SPEED Program of the DOLE, this

Administration committed to dispose/decide 4,050 cases involving

recruitment violations and disciplinary actions against OFWs and

foreign principals/employers. With only ten (10) Overseas

Employment Adjudicators (OEAs) with a monthly quota of twenty five

(25) draft orders each, it would be difficult to meet the case disposition

requirement.

As a strategy, Decision Writing and Review Workshops were

conducted to speed up the drafting of orders and increase the quota for

each OEA. The following are the details:

a) Five (5) Day Decision Writing Workshop was

conducted thrice in the year 2013.

For each workshop conducted every OEA was required to submit

additional draft orders outside of their regular monthly quota within

five (5) days at the end thereof. As a result, an additional seven

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hundred fifty (750) draft orders on top of 3,000 draft orders were

submitted to the undersigned.

b) Five (5) Day Review Workshop was conducted twice

in the same year which resulted to additional 400

draft orders reviewed as required outputs for each

OEA reviewer.

The conducted workshops were effective given the 80%

disposition accomplishment in 2013 equivalent to 3,938 cases resolved

that benefited a number of workers. While the participating OEAs

worked beyond the regular working hours, they were not paid any

additional compensation.

C.3. The amount of Php336,505.00 for the Review of

Amendments to POEA Rules and Regulations at Eugenio Lopez

Center in Antipolo

To be able to comply with the commitment of this Administration

for the submission of the final draft to the Governing Board by 3rd

quarter of 2014 and its publication in the same year, it was imperative

to engage the participation of the concerned officials and other

employees to draft and deliberate on the proposed amendments for the

Revised Rules. Considering the bulk of work of these officials and

employees during office hours and the big volume of clients they had

to attend to, it was deemed convenient that series of deliberations and

meetings had to be conducted outside the premises of the POEA. In so

doing, the concerned officials and employees were given ample

opportunity to study and deliberate the proposed amendments free

from interference of normal operations which could not be possible

had the deliberations been conducted within the POEA premises. The

review necessitated detailed discussion on every proposed provision

vis-à-vis the submitted proposals of both the recruitment industry and

workers’ associations.

C.4. The amount of ₱235,000.00 for the Team building Exercises

at Kabayan Beach Resort, Batangas

As to the conduct of the POEA Team building on 03-04 May

2013 which was held outside of the POEA office, particularly at

Kabayan Beach Resort, Laiya, Batangas, the management decided to

conduct this once-a-year activity as part of the effort to solidify the

partnership between management and employees, and enhance

working relations between and among employees. Considering the

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number of participants that included both the regular and casual

employees in the Central Office, a bigger venue was needed for the

conduct of the said activity to accommodate all.

A once a year team building is necessary in every organization to

reinforce the culture of trust, camaraderie, teamwork and continuous

service improvement. It likewise helps re-instill the value of working

as a team for higher productivity and more synchronized service

delivery to clients. It also serves as an avenue for the officials and

employees to unwind and momentarily be free from all pressures and

at the same time re-energize to carry out the day-to-day challenges in

the workplace. It is one rare occasion where management devotes time

to mingle with the employees under a relaxed atmosphere and engage

them in light discussions that in a way reassuring support to the over

all well-being of employees.

AAR

Par. 46-60

The agency’s Repatriation Unit have not acted

immediately to requests for repatriation of 119

distressed OFWs awaiting repatriation as of the

end of the year, that have further exposed them

to abuse/maltreatment and other risks that were

the subject of complaint.

We recommended that the Head of the Agency direct

the Repatriation Unit personnel to act immediately

on all repatriation requests and monitor completion

of the procedures until the worker is safely

repatriated back.

While we do not contest the Audit team findings that it took the RU 79

days to act on requests for the repatriation of the said 119 OFWs

(averaging 25 days), the delay was not deliberate, nor did it result from

the negligence of the unit. Most of these cases were received between

October and December 2013, where, for the same period, 1,097

repatriation requests were filed. During the time said requests were

made, only the RU Head and one (1) case officer evaluated all requests

for repatriation. This has been the situation since the retirement of two

(2) senior officers in December 2012 and in June 2013.

Repatriation proceedings are started not by simply sending out notices

to those responsible for repatriation of workers. As a matter of

procedure, repatriation requests are individually evaluated by verifying

the status of the worker to determine whether such a worker is

documented or undocumented. The repatriation of these two types of

workers differs. Evaluation of repatriation request is followed by

preparation of notices. Such notices are reviewed by the RU Head and

subsequently by the Director of the Anti-Illegal Recruitment Branch

(AIRB) before the Director of the Licensing and Regulation Office

(LRO) signs. The notices are addressed and sent via courier to the

recruitment/manning agency, the employer and the Philippine

Overseas Labor Office (POLO) concerned, or the Overseas Workers

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Welfare Administration (OWWA) if the worker is categorized as

worker-on-leave, or when the license of the deploying agency has been

suspended or cancelled.

As a matter of practice, repatriation requests are acted upon on a "first

come, first served" basis. In many instances, however, endorsements or

requests from NGOs, media and other government entities are given

priority, especially when they require immediate action. Other than

preparing and sending out notices, the RU likewise receives and

evaluates reports from agencies to determine whether there is sufficient

compliance that will prevent the issuance of documentary suspension

against an agency and/or an employer. The RU head likewise attends

internal and inter agency meetings from time to time. While it is

currently supported by staff on “job order” status, such staff are merely

assigned clerical work as evaluation of requests cannot be entrusted to

them.

In sum, and as we have previously mentioned, the major factor that

affected repatriation proceedings during the period in question was the

inadequate staff complement in the RU as against the volume of

repatriation cases. In addition, the scope of work of RU staff and

processes involved in facilitating return of distressed workers likewise

affected the action taken by the unit.

It was also noted that repatriation proceedings are completed at a

recorded average time of twenty-five (25) days, or from one (1) to

eighty two (82) days from the date the repatriation request was filed.

Under Section 3, Rule XIII of the Implementing Rules and Regulations

of Republic Act No. 8042, as amended by R.A. No. 10022, a forty-

eight (48) hour notice is issued to a deploying agency to provide a

ticket if the OFW is ready for repatriation, or in some cases, if a ticket

is required to be able to secure an exit visa. In case there is a need to

secure an exit visa for the repatriation of the worker, a 15-day notice is

instead issued to provide the agency sufficient time to coordinate with

the employer to secure the same. The agency is likewise required to

submit the status of the repatriation of the OFW.

There are cases, however, where repatriation cannot be possibly

undertaken despite notice. These include instances where a worker has

absconded and cannot be found, or when he instituted a case at

destination that requires his presence, or has been detained. Records

would show that in reference to the 119 workers, repatriation cannot be

15


undertaken within the prescribed period as 32 of the workers-have

either pending cases (9) or are detained (l8) or involved the repatriation

of remains (5). Notices to 61 others were subsequently completed

while 26 workers awaited agency compliance for their repatriation.

Per information gathered from repatriation folders and based on COA

data, the following is the current status of the 119 workers:

It is important to note that the primary responsibility to repatriate

workers rests upon the employer and the recruitment agency pursuant

to law and the 2002 POEA Rules and Regulations Governing the

Recruitment and Employment of Land-Based Overseas Workers and

the 2003 POEA Rules for Seafarers. Such responsibility is also

contained in standard employment contracts and in the Affidavit of

Undertaking executed by the recruitment/manning agencies during

their application for license. As mentioned above, OWWA, on the

other hand, takes responsibility in case of default of employers/recruitment agencies or when the licenses of such agencies

have been either suspended or cancelled. The role of POEA in this

whole continuum is ensuring that those primarily responsible for

repatriation of workers comply with their obligations.

It bears stressing that the 119 OFWs subject of the audit report

Status Number

Repatriated on different dates (including 4

repatriation of human remains

77

Opted to stay and continue working 20

Repatriated but did not report to POEA

(including 1 human remain

11

Cannot be located per POLO report 3

Availed of amnesty 3

With expected arrival date per prepaid ticket

advice but did not report to POEA

2

Withdrawn request for repatriation 1

Detained 1

Referred to OWWA (deploying agency

cancelled)

1

Total 119

16


represent only 2.64% of the total requests of 4,515 for 2013. Records

would show that the RU had acted upon the rest of the requests which

constituted 97.36%.

In terms of enforcement, the Administration had issued 206 orders of

documentary suspension in 2013 against recruitment/manning agencies

that failed to comply with their obligation to repatriate workers. In

most instances, those who have been meted out with such suspension

have taken adequate efforts to repatriate their deployed workers.

Notwithstanding the above efforts and mindful that the protection of

Filipino migrant workers is central to the country's policy on overseas

employment, the POEA has been seriously addressing issues

concerning the repatriation of workers to facilitate return of distressed

workers in less time or within the prescribed period, and without

unnecessary delays.

A Repatriation Tracking System is currently being developed by our

ICT Branch that will document, store, track, monitor and generate

reports on cases of repatriation. This will effectively measure the

efficiency, effectiveness, accuracy and timeliness of action. It will also

promote responsibility and accountability among staff as well as

transparency of repatriation proceedings.

An inter-agency review of repatriation procedures is likewise being

undertaken towards developing a well-coordinated DOLE-wide

repatriation system, consistent with the convergence program on OFW

programs and services.

AAR

Par. 61-72

The accountability over the implementation of

the Employment Permit System – Test of

Proficiency in Korea (EPS-TOPIK) which is a

special government to government hiring

program covering the period CY 2005 to CY

2011 had not been transparent due to non-

recording of financial transactions, including

collections estimated at US$515,436.00 as

well as disbursements made out of the funds.

We recommended that the POEA officials

responsible in implementing the Employment Permit

System – Test of Proficiency in Korea (EPS-TOPIK)

from 2005 to 2011 account for the funds received.

That complete recording/accounting of the funds be

submitted as well as all the documentary

requirements covering the expenses incurred to

implement the program.

We also recommended submission of all Memoranda

of Understanding covering the 1st up to the 7th EPS-

TOPIK and the Service Commitment Agreements

executed pursuant to the MOU.

May we provide you information to clarify the issue on accountability

over the implementation of the EPS-TOPIK.

1. The EPS-TOPIK 1-5 covering the period September 11, 2005 to

May 6, 2007 was formerly referred to as Korean Language Test

(EPS-KLT) and was executed between this Administration and

International Korean Language Foundation (IKLF) designated test

agency of MOL Korea.

2. Sometime in August 2005, the DOLE and Korean MOL executed

an implementing Agreement, the purpose of which is to provide the

terms and conditions in the conduct and administrations of EPS-

KLT as stated in paragraph 9 of MOU dated April 23, 2004 Article

5 of the implementing agreement.

3. The guidelines in the conduct and administration of the

17


Henceforth, all funds received by the POEA to

implement the EPS-TOPIK and similar programs be

treated as government funds and utilization thereof

be subjected to all pertinent laws, and accounting and

auditing rules and regulations.

Employment Permit System – Korean Language Test (EPS-KLT)

on C. Collection and Expenses provides:

C-2. All expenses to implement the EPS-KLT shall be

charged to the account of IKLF

4. On Dec. 3, 2009, a Service Commitment Agreement (SCA) of EPS-

KLT was executed between this Administration and HRD-Korea

for the implementation of the 6th and 7th EPS-TOPIK on May 2,

2010 and on November 2, 2010, respectively. In the said agreement

both parties committed to support and cooperate for the smooth

conduct of EPS-TOPIK.

5. The SCA 2009 Article 2.5 provides: HRD Korea will pay the

necessary expenditure (payment for proctors etc.) for implementing

EPS-TOPIK.

6. A certification that all expenses for test administration for the 1st to

5th KLT was handled by the IKLF was issued by Director General

Jeong Eun Hee of HRD Korea – Philippine EPS Center. She also

certified that the IKLF has ceased to operate and that the liquidation

documents of the 1st up to the 5th KLT could not be recovered

anymore in spite of due diligence to do so.

AAR

Par. 73-79

Management commitment to put to use thru

donation/transfer to another government agency,

one unit of server valued at P8,129,266.45

purchased out of the P72,919,000.00 funds

intended for the OFW e-Link Project, that had

been terminated prior to full implementation five

years ago, had not been accomplished to date.

We recommended that the Head of the Agency thru

the Director of the Information and Communication

Technology Branch coordinate with counterparts at

the Bureau of Immigration for the transfer of one

unit server. Henceforth, conduct a judicious planning

and ensure complete documentation with identified

partners before implementing similar projects in the

future.

The POEA has undertaken the following activities to carry out the

above-cited commitment:

1. Meeting with Acting Director-General Denis Villorente and the

team of e-Government Fund Management Office (GFMO),

National Computer Center – Information and Communication

Technology Office (NCC-ICTO) on 19 July 2013 to discuss the

AOM and status of the POEA’s e-Link project. The e-GFMO is

tasked to evaluate, approve and monitor the implementation of all

ICT projects financed by the e-Gov Fund.

In that meeting, Acting Director-General Denis Villorente gave the

assurance that NCC-ICTO will accept the server as a donation

from POEA.

2. However, the transfer of the server to NCC-ICTO was deferred in

view of the development of the POEA-BI One-Stop Overseas

Employment Certificate (OEC) Validation System, a data sharing

project of the POEA and the Bureau of Immigration (BI) where we

could explore also the utilization of the said server.

18


Also, to ensure the server’s usability, the BI consultants invited

various IBM server specialists to look into the condition of the

server and to determine the cost to be incurred, if any, in the

restoration process. The findings indicated some server parts

replacement amounting to more than One Hundred Thousand

Pesos. If to be restored, the server would also need annual

maintenance fee, software license renewal and training updates

fees. Given the cost to be incurred in the restoration of the server,

the BI team opted not to use the server for this purpose.

3. The POEA reverted to the original option which is the donation of

the server to the NCC. The letter of donation and corresponding

Invoice Receipt for Property containing the details of the

equipment was received by NCC’s Record Section on 15 May

2014. As per verification of the status of our request with the

Office of Executive Director Louis Napoleon Casambre on 11

August 2014, the offer of donation is still for evaluation.

4. Aside from the above options, the POEA was able to trace other

agencies which procured similar server in 2005; namely the

Government Service Insurance System (GSIS) and Social Security

System (SSS), where the server can be donated in the event that

NCC-ICTO decided not to accept the POEA’s offer.

5. As committed in the previous AOM, may we reiterate that

although the server and licenses that were procured were not

utilized for the original e-Link project, the POEA had done its best

to reach the desired outcome of the e-Link project, which is the

connectivity of POEA databases and operations with other

agencies to improve the services to our OFWs.

As of date, the POEA has existing agreements on data sharing with the

following agencies:

Bureau Of Immigration – implementation of One-Stop OEC

Validation System, a database information sharing system jointly

developed and undertaken by the POEA and Bureau of

Immigration to streamline departure formalities for departing

19


OFWs

Overseas Workers Welfare Administration - data sharing of OFW

Data (OFW personal and Contracts data) and OWWA membership

data (e-Receipt Number, date paid, collecting officer, amount paid)

Philippine Health Insurance Corporation and Pag-IBIG Fund -

POEA regularly provides record of documented OFWs with

contribution for reference/updating of their membership databases

Technical Education and Skills Development Authority (TESDA),

Philippine Regulation Commission (PRC), Bureau of Local

Employment (BLE), and the former DOLE attached agency

Maritime Training Council (MTC) for the establishment of

DOLE’s Skills Data Warehouse (DSDW)

Department of Foreign Affairs (DFA), Philippine Overseas

Employment Administration (POEA), Overseas Workers Welfare

Administration (OWWA), Bureau of Immigration (BI), National

Computer Center (NCC) and Advanced Science and Technology

Institute (ASTI) for the implementation of the Overseas Filipino

Information System (OFIS), a central database system that will

provide accurate information on the number and profile as well as

the whereabouts and movements of OFWs in a given country. This

is in compliance with the President’s directive to consolidate

various databases of Overseas Filipinos (Ofs) from concerned

agencies and eliminate discrepancies in their figures.

AAR

Par. 80-87

Unliquidated Advances to Officers and

Employees as of December 31, 2013 in the total

amount of P 458,956.85 aged eight to 17 years,

contrary to Section 89 of Presidential Decree

No. 1445 and of COA Circular No. 97-002

resulted in the overstatement both of assets and

of government equity accounts year after year.

We recommended that the Head of the Agency- (i)

strictly enforce liquidation of all cash advances

immediately after the purposes for which they were

granted have been served; (ii) refrain from granting

additional cash advances to Accountable Officers

with unsettled cash advances; (iii) institute

appropriate sanctions against Accountable Officers

who fail to liquidate cash advances within the period

prescribed by law and regulations; and (iv) request

for write off of long overdue accounts if warranted,

and following the guidelines prescribed under

Liquidation of cash advances are strictly being monitored, such that

withholding of salaries of accountable officers who fail to submit their

liquidation on time is being implemented. As to the cash advances of

prior years, these were granted to employees who have already

resigned/retired and demand letters have already been sent. A request

for write off for the cash advance granted to Mr. Reynaldo Jaylo, a

former POEA Director IV, whose whereabout is unknown, will be

submitted to COA.

20


existing regulations.

AAR

Par. 88-94

Stale Checks amounting to P47,635.10 at the

Regional Center for Luzon have remained as

reconciling items in the bank (Outstanding

Checks) for over six months to five (5) years,

thus keeping idle cash in the bank.

We recommended that the Accountant- Designate

prepare a JEV for the cancellation of the check in the

Head Office Books.

It is further recommended that Management should

inform the bank that the stale checks which have

remained outstanding be reverted back to the Bureau

of Treasury.

Said stale check was already returned to the POEA-Central Office and

refunded under OR no. 0562292 dated January 22, 2015.

AAR

Par. 95-

101

The amount of P 7,692,352.00 that formed part

of the total year-end cash balance of

P13,043,409.72 maintained in a trust fund had

not been remitted to the National Treasury

contrary to Sections 4 and 8 of the General

Provisions of R. A. No. 10352 or the General

Appropriations Act for FY 2013, depriving the

government use of dormant cash balances.

We recommended that the officials responsible for

these lapses render a satisfactory explanation on the

non-remittance of the trust funds to the National

Treasury. Henceforth, the Agency’s Cashier deposit

all trust collections to the National Treasury, unless

otherwise authorized, in compliance with the above-

cited provisions of law.

Review of the composition of the Trust Fund is being conducted and

all balances of projects for which the purpose have been served will be

remitted to the Bureau of the Treasury. Trust account especially for

projects whose implementation/purpose has not ended yet such as the

fund for the Continuing Agency Education Program, Pre-Licensing

Orientation Program, EPS Training Fund, EPS-Computer Based

Training and EPS-TOPIK, GPB-Employers’ Guarantee Trust Fund,

Presidential Task Force on Anti Illegal Recruitment will be retained

with the LBP.

AAR

Par. 102-

114

Credits totaling P 915,681.77 were posted to the

subsidiary ledger of an Accountable Officer in

settlement of cash advances for intelligence

purposes, without the covering Credit Advice

issued by the COA Chairman or authorized

representative, contrary to COA Circular No.

2003-002 dated July 30, 2003 that in effect

understated the balance of account Advances to

Officers and Employees (148) by the same

amount.


the Chief Accountant to restore the amount of

P915,681.77 under the accountability of the AO and

explain settlements made without Credit Advices

and the Management to exert effort in locating the

whereabouts of the AO for filing of necessary

charges/sanctions.

As recommended, the amount of P915,681.77 under the

accountability of Reynaldo Jaylo was restored to the account

Advances to Officers and Employees under JEV No. 14-023

dated March 31, 2014.

AAR

Par. 115-

127

Collections and deposits at the POEA Regional

Extension Units and Satellite Offices in the

amount of P 3,265,179.00 have not been

recorded in the books as of December 31, 2013

due to late submission of Reports of Collections

and Deposits resulting in the understatement of

income by the same amount. Moreover,

We recommended that the Agency Head – (i)

require the Chief Accountant and other officials

performing accounting and/or bookkeeping functions

of the agency to ensure that the financial reports

required to be submitted by the accountable officers

are forwarded to the Accounting Unit on the

prescribed period and financial information be

Collections from the Regional Extension Units/Satellite Offices as of

December 31, 2013 were already recorded in 2014. As to the 15

POLOs, listed below is the status of their submission:

21


Accountable Officers from 15 Philippine

Overseas Labor Offices (POLOs) have similarly

failed to submit their reports and remittances for

an undetermined amount of collections made.

recorded in the books promptly to avoid the

repetition of the deficiencies noted in audit; and (ii)

direct the Chief of the ROCO to closely monitor

submission of monthly Reports of Collections and

Deposits/ Remittances from the Regional Centers

and Satellite/ Extension Units and coordinate

immediately with the concerned Accountable

Officers of the fifteen identified POLOs to remit

immediately all collections to the account of POEA

and submit the collection reports together with the

supporting documents right after the deposit of

collections to avoid delay in the submission of such

to the Accounting Office.

POLO Collection

Period Remarks

Australia Jan-Dec

2013

Collection reports submitted to COA on

July 1, 2014. Remittance Advice

submitted to COA on Sept. 1, 2014.

Brunei Jan-Dec

2013

Collection and remittance reports

submitted to COA on July 1, 2014

Canada Jul-Dec

2013



Dubai

Apr-Nov

2013


submitted to COA on July 1, 2014. ORs

were submitted to COA on Nov. 10,

2014.

Dec 2013

Received reports on May 23, 2014.

Reports still for checking and recording

(c/o ROCO and Accounting)Cancelled

Ors couldn’t be distinguished due to

lack of Report of Accountability of

Accountable Forms. Duplicate copies of

Ors were already submitted to COA on

Nov. 10, 2014.

Geneva Jul-Dec

2013

Collection reports submitted to COA on

July 1, 2014. Remittance Advice was


Kaohsiung Jun-Dec

2013


submitted to COA on April 8, 2014

Al-Khobar Jun-Dec

2013



Jeddah Nov-Dec

2013



Riyadh Aug-Dec

2013



Libya Jun-Dec

2013



Macau Sep-Dec

2013


submitted to COA on Jan. 23, 2015

22


Qatar Sep-Dec

2013



Taichung May-Dec

2013


submitted to COA on April 8, 2014.

Remittance advice was received on July

22, 2014..

Taipei Jun-Dec

2013



USA Jan-Dec

2013



The regional offices as well as the POLOs are regularly being

reminded through letters of the submission of reports. For regional

offices, withholding of the salaries of the accountable officers

responsible for the submission of reports is being done.

AAR

Par. 128-

141

The Former Collecting Officer at the Regional

Center for Mindanao failed to render accounts

contrary to Section 64 of PD No. 1445 and

Sections 57, 60 and 68 of the MNGAS-National,

Volume II, which is punishable under Article

218 of the Revised Penal Code, thus resulting to

the non-completion of the cash examination

conducted and the unaccounted discrepancy in

her reported remittances against the amount

confirmed with the Bureau of Treasury

amounting to P73,175.40.

We recommended that the POEA top Management

institute the necessary administrative action against

the concerned Accountable Officer for failure to

render complete accounting of her accountability,

which caused the delay in the completion of the audit

on the cash accounts COA.

We also recommended that Management direct the

Accountant to record the said unreconciled

remittances amounting to P73,175.40 as debit to the

Account Cash Collecting Officer (102) and credit to

the Account Due to Bureau of Treasury (411).

Based on the reconciliation of the reported collection with the

certification issued by the Bureau of the Treasury (BTr), it was found

out that there was error in the summation in one of the certificates

issued by the BTr. This was already communicated to the BTr for the

issuance of the corrected certification.

AAR

Par. 142-

148

Non-recording of audit disallowance of P

797,500.00 with Notice of Finality of Decision

(NFD) and COA Order of Adjudication (COE)

as receivable was contrary to Section 22.6 of

COA Circular No. 2009-006 and Section 53 of

the Manual on the New Government Accounting

System, Volume I resulting in the

understatement of the Receivables-

Disallowances/ Charges and understatement of

We recommended that the Chief Accountant record

the audit disallowance with Notices of Finality of

Decision in the books of accounts pursuant to

Section 22.6 of COA Circular No. 2009-006 and

Section 53 of the MNGAS, Volume I so that the

financial statements will be fairly presented.

As recommended, the audit disallowance amounting to ₱797,500.00

with the Notice of Finality of Decision and COA Order of Execution

was already recorded to the Receivable-Disallowance/Charges

Account under Journal Entry Voucher No. 14-030 dated April 30,

2014.

23


the Prior Years’ Adjustment account by the same

amount.

AAR

Par. 149-

156

The unreconciled discrepancy of P 1,889,757.78

between the records of the POEA and of the

Procurement Service rendered unreliable the

Due from NGAs (DBM-PS) account balance of

P 7,043,470.46.

We recommended that (i) the Supply Officer and the

Accountant exert effort in reconciling their records

with that of the Procurement Service covering prior

years’ transactions; and (ii) henceforth, undertake

periodic reconciliation to immediately identify and

settle reconciling transactions.

This balance included the amount intended for the E-link project and

for the regular supplies. Reconciliation of account with PS is regularly

being done to identify how much is for the E-link project. A meeting

with the DBM-PS will be set for the reconciliation of this account.

AAR

Par. 157-

164

Out of the balance of P12,713,119.22 in

Accounts Receivable in the Agency’s National

Government (NG) books, P 10,757,967.91 or

85% have been dormant from over 3 to 30

years, making collection almost nil due to

management failure to intensify efforts toward

settlement thereof. Hence, the government had

been denied of additional funds to finance its

priority projects.


direct the Chief Accountant and other responsible

officials to : (i) resort to legal means to enforce

collection of long overdue accounts or coordinate

with foreign offices like embassies and POLOs; and

(ii) send follow-up letters on the status of the request

for write-off of the dormant receivable accounts

submitted to COA.

As per COA recommendation, follow up letter will be sent to COA for

the status of our request for write off of the dormant receivable

accounts totaling to P8,899,824.92. With regard to the other accounts

receivable, demand letters are continuously being sent to the employers

and subsequently be requested for write off if it already qualified as

dormant accounts receivable.

AAR

Par. 165-

171

Uncollected rental fees from seven

concessionaires at the end of the year amounted

to P857,563.70 which is contrary to Section 120

of the General Accounting and Auditing Manual,

Volume I, denying the government use of

added funds to finance priority programs/

projects.

We recommended that the Head of the Agency – (i)

direct the Accountant to follow-up demand letters to

the delinquent tenant/s to settle their accounts with

the agency and (ii) to strictly monitor billings issued

and demand letters sent and if possible, institute

appropriate sanctions against delinquent tenants

such as non-renewal of lease contract.

Out of the seven concessionaires, 4 of them have already settled their

outstanding accounts as of December 2013 in CY 2014. Regarding the

status of accounts receivable from the 3 concessionaires which have

not settled their account: (1) Globe Telecom is already in the process

of settling their account with POEA because it was the condition given

for the renewal of their contract. (2) Elite Travel have been issued

demand letters, but these were always marked “Returned to Sender”.

(3) Wall City will again be issued demand letters.

AAR

Par. 172-

177

Advance payments of Insurance Premiums and

Fidelity Bond Premiums amounting to

P748,109.67 were recorded as outright expense

during the year instead of taking up Prepaid

Insurance for the unexpired portion of

P373,042.68, contrary to COA Circular No.

2004-008 dated September 20, 2004, thus,

overstating expense account and understating the

We recommended that the Chief Accountant adjust

insurance expenses to exclude the unexpired portions

in the books by drawing a Journal Entry Voucher

(JEV) to take up the necessary adjustments.

Henceforth, faithfully comply with the provisions of

the MNGAS regarding Asset/Expense adjustments at

the end of accounting period.

As recommended, the unexpired portion of the Insurance premiums

and Fidelity Bond Premiums paid was already recognized as Prepaid

Insurance per Journal Entry Voucher no. 14-023 dated March 31,

2014.

24


asset account at the end of the year.

AAR

Par. 177-

186

The accuracy of the reported balances of

inventory accounts totaling P 2,520,646.83 could

not be ascertained due to the discrepancy of P

801,760.32 between the physical count and book

balances of inventory accounts as well as other

lapses noted over inventory management.


- (i) the Accountant and the Supply Officer to

update and reconcile their records and make

necessary adjustments on the discrepancies noted to

reflect the correct balances of their inventory account

in the financial statements; (ii) the Accountant to

record on a monthly basis the value of inventories

issued based on the submitted Report of Supplies

and Materials Issued; (iii) to take up the cost of

medicines as well as oil, lubricants and similar items

for stocks, under appropriate inventory accounts

until issuance of the items to end-users; and (iv)

update postings to supplies ledger cards and stock

cards.

As per COA recommendation, the Accountant and the Supply Officer

are working together to update and reconcile our records. This was

reconciled last June, 2013 so we will just have to work back for 12

months.

Recording of the inventories issuances was not done on a monthly

basis because the Report of Supplies and Materials Issued being

submitted by the GSPD to Accounting Division reported the daily

issuance of supplies, so the Accounting Division has to summarize the

issuance on a monthly basis by encoding each type of supplies issued

so we can compute the supplies issuances based on the moving average

which is a very tedious process. The Accounting Division had already

coordinated with GSPD for the submission of a summarized monthly

report, so we can effect the adjustment in the August, 2014 financial

reports.

As to the medicines, these are directly issued to the clinic under the

care of the doctor and issuance is monitored by him because the

medicines are issued based on the needs of the end user as identified by

the doctor. They maintain a log book where the medicines and their

issuances are listed properly received by the end users. Per verification

with GSPD, the doctors are maintaining the stock cards for the

medicines. As per COA recommendation, purchases of medicines will

be recorded as inventory.

AAR

Par. 187-

199

The existence and accuracy of the Property,

Plant and Equipment (PPE) account balances in

the aggregate amount of P 381,493,833.98

could not be reliably established due to the

absence of inventory report on two property

accounts valued at P 8,346,096.06, a net

discrepancy of P146,666,245.73 between the

book balance and physical count of PPE

accounts with inventory reports, as well as

other lapses noted over property management.


– (i) the Inventory Committee to complete the

physical stock-taking and inventory reporting on all

PPE units of the Agency; (ii) the Accountant and the

Property Officer (i) exert efforts for the immediate

reconciliation of their respective records to

determine the causes of the noted discrepancies in

the balances of the PPE accounts so that the

necessary adjustments could be effected; and (ii)

henceforth, conduct periodic reconciliation of their

records to detect any errors and/or discrepancies in

the PPE balances and the causes thereof for

correction; (iii) the GSPD to submit a complete

The General Services and Property Division (GSPD) and the

Accounting Division are working hand in hand in the reconciliation of

the PPE accounts.

As of December, 2013, three accounts, namely Motor

Vehicles (240), Electrification, Power and Energy Structures (205) and

Fire Fighting Equipment and Accessories (231) were already

reconciled. Reconciliation of Office Equipment Account (221),

Furniture and Fixtures Account (222) and IT Equipment and Software

Account (223) requires time because it involve numerous small and

identical items, thus it is being done on a year to year basis. So far,

CY 2012 and CY 2013 acquisitions have already been updated and

reconciled.

25


inventory list of fabricated cabinets/shelves with

proper costing to the Accounting Division for

recording in the books of accounts, assign Property

Numbers and prepare/issue Acknowledgment

Receipt of Equipment (ARE) to end-users; and

(iv)both the Accountant and the Property Officer to

record all properties of the agency and ensure correct

balances thereof.

Relative to the inventory list of fabricated cabinets/shelves

with proper costing which has to be submitted by the GSPD to the

Accounting Division for recording in the books of accounts, inspection

and inventory of said items are already being done on a per

division/per floor basis; for the assignment of the corresponding

property number and issuance of Acknowledgement Receipt of

Equipment (ARE) to end-user.

AAR

Par. 200-

209

Donations of various items listed in the

Agency’s Report on the Physical Count of PPE,

valued at P 2,003,527.00 have not been

recorded in the books of accounts contrary to

Section 7 of the General Provisions of RA

10352, and the Budgetary Act of each year,

rendering both the asset accounts and income

from grants and donation both understated by the

same amount. Conversely, recorded donations of

various properties worth P1,242,330.00 were

not listed in the inventory report. Moreover, the

Agency had not to date prepared and submitted

a quarterly report of all donations received,

whether in cash or in kind, as required under the

same law.

We recommended that the Property Officer (a)

furnish the Accountant with copies of all documents

covering the donations; and (b) obtain value of all

donated items using the price lists of suppliers of

similar items as references.

We also recommended that the Accountant (a) after

receipt of the donation documents, record the

cost/value of the donated items in the books of

accounts; and (b) submit quarterly report on

donations received to the appropriate government

agencies as required by law.

Per verification, some of the items in the list totaling to ₱1,135,292.00

were already recorded as of December 31, 2013 per JEV No. RA-11-

105, RA-12-053, RA-13-101, RA-12-037, RA-13-101. For the other

items, which are not recorded in the books due to non-availability of

documents as basis for recording, we will look for alternative

documents which will be the basis for recording in the books.

AAR

Par. 214-

221

Unserviceable properties valued at

P6,924,668.86 were not reclassified to Other

Assets account as required under Section 143 of

the Manual on the NGAS, Volume III thus,

overstating the PPE accounts and understating

the Other Assets account.


direct the Accountant to reclassify the value of the

unserviceable equipment from PPE to Other Assets

account based on the IIRUP.

Reclassification of the unserviceable equipment to Other Assets account is taking time because of the unreconciled records of the Accounting Division and the General Services and Property Division and unavailability of some documents. Based on available records, we will try to reconcile said account as of September 30, 2014. As per COA recommendation, we will recreate the Disposal Committee because other members were already rotated to other office and are no longer active.

AAR

Par. 222-

227

Due to GSIS account posted a negative credit

balance of P1,042,497.07 for the current and the

past years due to errors in recording that

rendered the account balance doubtful and

We recommended that the Chief Accountant direct

the review and analysis of the details of the

abnormal balance of Due to GSIS account balance of

P1,042,497.07 and prepare adjusting entries to reflect

Analysis of this account is already being done by tracing back

transactions and reconciling items based on available documents.

Reconciliation for CY 2008-2013 have already been completed and

adjusted. The analysis of 2007 transactions is nearly completed. May

26


unreliable.

the correct amount in the balance sheet.

we request consideration to give us more time to reconcile this account

which is quite complicated due to numerous transactions and changes in

the chart of accounts in 2002, 2003 and 2008 which is also one cause of

confusion and unreconciled balance.

AAR

Par. 228-

236

Dormant balances of assets and liability

accounts in the total amount of P 10,322,439.33

remain unadjusted in the books of accounts for

five to 30 years now, due to the absence of

records and supporting documents, contrary to

the provisions of COA Circular No. 97-001

dated February 5, 1997 and which may have

effect on the fair presentation of the financial

statements.

We recommended that the Agency Head – (i) direct

the Chief Accountant and staff to review, analyze

and adjust these dormant accounts, together with

other related accounts in the trial balance for those

duly supported with documents; (ii) exert effort to

locate pertinent records/schedules and supporting

documents to verify the nature/purpose of the

recorded transactions and determine the existence

and validity of the dormant accounts’ balances. If the

effort proves futile, request from COA Central

Office through the COA Audit Team for the write-

off and/or adjustment of account balances, supported

by a list of available records and extent of validation

made on the accounts as well as certification on the

reasons for the absence or failure to locate pertinent

books of accounts/records, financial

statements/schedules and supporting

vouchers/documents; and (iii) institute appropriate

sanctions against officials responsible for the non-

remittance of taxes withheld and/or trace records if

the dormant balances constitute items for adjustment.

The reasons for the non-availability of the documents is the transfer of office from one floor to another and no proper turn over of documents from previous officers who have already resigned. A request for write off will be submitted for those accounts which may already be written off. With regards to the Due to BIR account, the difference was caused by the transition from the old system to the Tax Remittance Advice (TRA) system. Reconciliation of this account specially with the Regional Offices will be done immediately.

AAR

Par. 237-

249

Purchases of common-use supplies worth P

190,171.58 thru shopping instead of thru the

Procurement Service was contrary to

Administrative Order (AO) No. 17 dated July

28, 2011. Similarly, procurement of common-

use supplies and equipment in the total amount

of P 1,811,511.22 that were not listed in the

approved Annual Procurement Plan for CY 2013

was contrary to R.A. 9184, that defeated the

essence of the procurement law which is

transparency and competitiveness.

We recommended that the head of agency direct that

– (i) the purchase of its requirements for common-

use supplies and equipment through the PS to protect

the interest of the government and achieve the

objectives of AO No. 17 and DBM Circular Letter

No. 2011-6; and (ii) all procurement be meticulously

and judiciously planned within the approved budget

of the Agency and be listed on its approved Annual

Procurement Program.

Items procured outside of the PS were only made due to the following circumstances:

1. Our General Services and Property Division (GSPD) used the Virtual Store of the PS as required by RA 9184, to determine the availability or non-availability of the items. Since PS issued the Certificate of Non-Availability of Stocks and/or during query that the system replied a “No item(s) Found” that we considered procurement outside of the PS.

2. Items purchased outside PS were due to its urgent need and PS could not deliver within the prescribed period.

27


Nonetheless, such practice is made only upon our inquiry/coordination with the Agency Servicing Division (ASD) of the PS;

3. We also purchased outside of the PS since PS could not anymore deliver the item(s) included in the approved Agency’s Procurement Request (APR) duly received by the PS citing the reason that the item(s) is no longer available with them.

As with regard to the procured items that are not included in the approved APP, may we ask consideration as we found these items necessary to be purchased due to the following reasons:

1. Equipment and furniture to serve as a replacement unit due to either unexpected breakdown of the unit and/or the unit is found to be beyond repair;

2. Items are internal parts of an equipment found only to be defective when an equipment/machine failed to operate and diagnosed only during repair;

3. Items need for the repair of a newly found defective furniture;

4. Items which are not actually detailed in the APP but necessary for the completion of a special project included in the APP;

5. Accountable forms which are considered necessary in our day to day operation which we strictly have it printed only by an authorized government printing agency.

Also, there are some items, as the like of POEA letterhead and Correction fluid, that although not included in the APP for Projects but can be found in the APP for common supplies.

AAR

Par. 250-

257

A significant number of reported cancelled,

damaged and spoiled accountable forms for

various reasons, that were submitted for

inspection and destruction resulted in the

wastage of 12,034 sets of forms and exposed the

same to the risk of fraudulent use.

We recommended that Management (i) monitor the

issuance and utilization of accountable forms; (ii)

advice the accredited recruitment agency to be

prudent in processing documents of workers, to

avoid spoilage; and (iii) direct the users of these

forms to exercise caution in the use thereof to

eliminate errors.

As reported by the agencies processing these workers under the In-House Processing Facility and our Balik Manggagawa Processing Division, the damage/spoilage of the OEC forms is due to error in printer set up, system breakdowns, rush of BM processing and inadvertent oversight because of the big volume of workers, paper jams, typographical error, double printing, obsolescence, among

28


others. As per your recommendation, to avoid spoilage of accountable forms, we shall ensure the implementation of the following:

1. The Regional and Overseas Coordinating Office (ROCO) in coordination with the Accounting Division and the General Services and Property Division (GSPD) will closely monitor the issuance and utilization of accountable forms by requiring all Philippine Overseas Labor Offices (POLOs) and Regional Offices to submit the Monthly Report of Accountability for Accountable Forms regularly;

2. The agencies under the In House Processing Facility Program shall be regularly notified on any observation relative to the issuance and utilization of OECs in accordance with the existing rules and regulations. They will be continually reminded to exercise caution and to be prudent in processing documents of workers to eliminate errors.

3. Likewise, the BMPD staff are directed to be extra careful in the issuance of OECs specially during manual processing.

AAR

Par. 258-

265

Control and monitoring over official receipts

dispatched to the Philippine Overseas Labor

Office (POLO) in Abu Dhabi had not been

strictly observed as the Accountable Officer

thereat failed to account for one pad or 50

pieces of Official Receipts as well as the

equivalent 50 pieces of Overseas Employment

Certificate (OEC) Forms. In addition, the AO

reported 137 ORs to have been canceled and/or

spoiled. These and other lapses tend to expose

government funds to the risk of possible losses

and render the integrity of accountability reports

doubtful.

We recommended that the Accountable Officer be

required to immediately account or explain in

writing the missing official receipts as well as the

big number of spoiled and damaged ORs in CY

2012, and stop the practice of cancelling the OR and

OEC forms when either of the two is cancelled or

spoiled.

The Philippine Overseas Labor Office (POLO) in Abu Dhabi

through its Labor Attache, Ms. Delia S. Palomar, was already notified

on December 12, 2013 that the 50 pieces or one booklet of cancelled

OR with series no. 5187051-5187100 and the corresponding OEC

series no. 3757051-3757100 have not yet been received by POEA. But

Ms. Palomar has not responded to this communication. A follow up

letter was again sent to her in 2014. The amount corresponding to the

collections for the said receipts was refunded by the accountable

officer.

29


AAR

Par. 266-

272

Copies of contracts and supporting documents

for the procurement of goods and services were

not furnished the COA Audit Team within five

working days upon approval as required under

COA Circular No. 2009-001. Moreover,

submission of contract documents and/or

information necessary for technical review and

inspection of locally-funded projects have not

been complied with. As a result, the auditorial

review and evaluation thereof particularly on the

legal and technical aspects had not been

immediately rendered.

We recommended that Management strictly adhere

to the requirements of COA Circular No. 2009-001

on the submission of advance copies of contracts to

the Auditor.

The requested contracts and the corresponding supporting documents were submitted to COA on April 16, 2014.

AAR

Par. 273-

277

The agency failed to secure fidelity bonds for its

Officials authorized to approve Disbursement

Vouchers and sign/countersign checks, as well

as designated Collecting Officers assigned at the

Labor Assistance Centers (LAC) in NAIA

Terminals, contrary to Section 101 (2) of

Presidential Decree No. 1445 and Treasury

Circular No. 02-2009 of the Bureau of the

Treasury, preventing possible indemnification in

the event of loss/es of government funds.


secure fidelity bonds with the Bureau of Treasury to

cover all officers and employees covered by P.D.

1445 and Treasury Circular No. 02-2009.

As recommended, fidelity bonds with the Bureau of the Treasury will be secured to cover all the concerned officers and employees.

AAR

Par. 278-

283

Delay in the preparation and submission of

financial reports, contrary to existing rules and

regulations prevented the Audit Team from

conducting a timely and effective auditorial

review and evaluation of the recorded

transactions.

We recommended that the Management require the

Chief Accountant and other officials responsible, to

promptly submit all reports necessary in the exercise

of the functions of the Commission on Audit, and

enable the Audit Team to render a timely and more

effective review of the Agency’s financial

transactions and evaluation of operations.

Submission of our reports depends on the receipt of reports from the

Cash Division, Regional Offices, POLOs and accountable officers. All

the concerned units who are delayed in the submission of their reports

such as the Regional Offices, POLOs and some accountable officers

are always reminded of the deadline for the submission of reports. We

even resorted to withholding of salaries of accountable officers to

ensure compliance to deadlines. Since May, 2013, we have submitted

our reports on time. With regard to the Bank Reconciliation, our

submission was dependent on the receipt of the Bank Statement, which

could not be provided by Land Bank of the Philippines on a regular

date. Thus, we make it a point to submit the said report 2 days upon

receipt of the Bank Statement.

30


AAR

Par. 284-

290

Out of the P368,915,000.00 budget of the POEA

for CY 2013, only P16,699,400.00 or 4.53%

was allotted for the implementation of GAD

Plan contrary to Section 28 of RA 10352.

Moreover, out of this budget, only

P8,539,103.40 or 51% was actually utilized for

GAD activities

We recommended that the Agency Head direct the

GAD Focal Person to allocate at least 5% of the

total agency appropriations for GAD Programs,

Projects and Activities. In addition, to support, the

Accomplishment Report with Fund Utilization

Report containing the details of the expenses paid for

the implementation of GAD activities.

For 2013, the POEA had a total appropriation of P368.915 million per

the General Appropriations Act and 5% of it or P18.445 million could

have been earmarked for GAD budget. However, GAD allocation

amounting to P10.159 million was based on the GAD Plan approved

by the PCW and was sourced from MOOE. POEA was able to utilize

P9.58 million.

For 2014, the amount allocated is P15.696 million which is equivalent

to 4.7% of the total appropriation including PS component. This is

based on the 2014 GAD Plan approved by PCW as attached. For the

ensuing years we will ensure to comply with the budgetary

requirement for GAD pursuant to the provision in the GAA for the

pertinent period.

AAR

Par. 291-

296

The Agency had not implemented programs and

projects related to Senior Citizens and

Differently-Abled Persons in CY 2013 contrary

to Section 29 of the General Provisions of RA

10352 or the General Appropriations Act for

Fiscal Year 2013.

We recommended that the agency comply with the

requirements of the General Appropriations Act of

each year of formulating plans, programs and

projects intended to address the concerns of senior

citizens and differently-abled persons.

We will consider programs and projects related to Differently-Abled

Persons and Senior Citizens for the remaining months of CY 2014

during the preparation of our action plan for the 2nd semester.

The following facilities and structures for Differently-Abled Persons

and Senior Citizens that we have implemented since last year in

compliance to the standards and requirements of Batas Pambansa Bld.

344.

1. All public Comfort Rooms main entrance door, cubicle door,

lavatory counter are of standard dimension and design and

accessible to wheel-chaired persons.

2. All public Comfort Rooms within the building were provided

with the required measurement of cubicle for wheel-chaired

persons including provisions of grab bars and proper signage.

3. The three (3) elevators were provided with voice

prompt/assistance, door closing/opening safety control censor

and provided with grab bar. The other elevator was provided

with brailed buttons for visually impaired person, panel

control board for wheel-chaired person and grabs bars.

4. All lobbies/elevator landing were provided with signages for

Person With Disability (PWD), Pregnant and Senior Citizen.

5. Priority Lane Counters with proper Signage for PWD,

Pregnant and Senior Citizen are in placed.

6. Parking Slots for PWD were also identified with appropriate

signages.

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7. Provision of the standard ramps for PWD along the main

entrance of the building and going in and out of the Lower

Ground Floor (Balik Manggagawa Processing Center, Travel

Centers and Canteen).

HANS LEO J. CACDAC Feb. 27, 2015

Administrator Date

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Note: Status of Implementation may either be (a) Fully Implemented, (b) Ongoing (c) Not Implemented, (d) Partially Implemented, or (e) Delayed

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