Republic of the Philippines

DEPARTMENT OF LABOR AND EMPLOYMENT

EMPLOYEES COMPENSATION COMMISSION

th

4 & 5th Floor, ECC Building, 355 Sen. Gil J. Puyat Avenue, City of Makati
Tel. No. 899-4251 Fax. No. 897-7597 E-mail: ecc_mails@yahoo.comWebsite: http://www.ecc.gov.ph

2011 COA ANNUAL AUDIT OBSERVATIONS, RECOMMENDATIONS AND ACTIONS TAKEN

As of December 31 2012
OBSERVATIONS / AUDIT FINDINGS
2
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1
0

1. Engaging the legal services of Solicitors

from the Office of the Solicitor General
(OSG) for an allowance aggregating
P40,000.00 a month that amounted to
P360,000.00 in 2011 is unnecessary per
COA Circular No. 85-55A resulting in
excessive expenditures.

COA RECOMMENDATIONS

ACTIONS TAKEN BY MANAGEMENT

- Consider revoking the Memorandum of Agreement with - Complied

OSG and for the Appeals Division to exert effort to - The Secretariat suspended the renewal of its MOA with the OSG
collect the subject receivables.
indefinitely in reference to COA observation
-

The management stopped the payment of the retainership allowance of

five OSG lawyers as of October 25, 2011

- The Secretariat submitted its comment to COA incorporating therein the

OSG reply to the COA during the exit conference on April 27, 2012
- In preparation for the filing of complaints, final demand letters were sent to
the following hospitals with standing obligations below Php 100,000
- :Unciano Medical Center, Antipolo City; Perpetual Help Hospital, Binan,
Laguna (date letter sent: Oct. 18, 2012 (deadline Nov. 16, 2012
- Hospital of the Holy Cross, Calapan, Oriental Mindoro; Canos Medical
Center, Digos, Davao del Sur (date letter sent: Nov.15, 2012 (deadline
Dec. 14. 2012)
- Target date of Filing of Collection Cases: 1st Quarter 2013(in coordination
with the Office of the Solicitor General)

OBSERVATIONS / AUDIT FINDINGS

COA RECOMMENDATIONS

ACTIONS TAKEN BY MANAGEMENT

- To date, no positive response from the abovementioned delinquent
hospitals.

2. The payment of P119,058.00 paid by ECC

to Job Order Personnel who rendered
services at the Office of a Congressman
considered irregular per COA Circular 8555A dated September 8, 1985.

- Exercise prudence in the discharge of its functions, - Fully settled.

which included determination as to regularity and validity
of transactions; and
- AOM was referred to the DOLE-FMS for comments on April 04, 2012
- Hold accountable and liable all officers who have taken - The management stopped the payment of salaries to the subject Job
part in the perfection and payment of the transaction and
Order personnel effective March 2012.
payment of the transactions.
- Informed ATL such action taken in a memo dated April 24, 2012
- Refunded per OR #9978757 dated Dec. 14, 2012

3. The Plant, property and equipment is

overstated by a total P2.579 million due to
unserviceable/disposed/missing office and
information technology equipment items still
carried in the books, contrary to Philippine
Accounting Standards (PAS) 16.

- Prepare the Inventory and Inspection Report of - Complied

Unserviceable Property to serve as the basis by the
Accounting Section to make the necessary adjusting - Office Order No. 12-073 was issued creating a task force to facilitate the
entries to correct the balance of the PPE accounts.
inventory taking of unserviceable property in compliance with the AOM
- Investigate the missing items and identify accountable - Identified missing items and accountable /liable officers/employees
officers/employees.
- Prepared/submitted Inventory and Inspection Report of 26 Unserviceable
Property to COA on July 26, 2012
- Necessary adjustments dropping the unserviceable equipment were
made by the Finance Division to correct the PPE account per Inventory
and Inspection Report of Unserviceable Property as of May 31, 2012
submitted by the Administrative Division-Supply Section. Adjustments
were made per General Journal JEV Nos. 12-06-029, 12-06-030 and 120-031, all dated June 29, 2012. Reports pertaining to the said adjustment
were submitted to COA Audit Team Leader in July 11, 2012.

OBSERVATIONS / AUDIT FINDINGS

COA RECOMMENDATIONS

ACTIONS TAKEN BY MANAGEMENT

4. The notes receivable from a hospital remain

outstanding and carried in the books
amounting to P167,483.00 despite the
foreclosure on September 4, 2008 of its
mortgaged property as settlement, contrary
to Philippine Accounting Standards (PAS)
40, and resulting in the overstatement of
receivable account and understatement of
the acquired asset account.

- To make the necessary adjustment to drop from the - Complied

books the receivables from the hospital and recognize
the assets that were foreclosed in settlement of the - Prepared/submitted reply to COA dated May 10, 2012
obligation by virtue of the Certificate of Sale.
- Adjustments to records the foreclosed property of Anillo Hospital in
Talisay, Batangas by virtue of the Certificate of Sale and to adjust the
Notes Receivable account per Audit Observation Memorandum (AOM)
No. 2012-007 dated April 23, 2012 were already made in the books per
General Journal JEV No. 12-04-022 dated April 30, 2012. Said accounting
journal was submitted to the Office of the Audit Team Leader, ECC in May
10, 2012.

5. The delayed remittance of GSIS in its share

of the loading fund for ECCs operational
expenses is in violation of Article 177(g),
Chapter III of Presidential Decree (PD) 626,
and which may affect the delivery of ECCs
services.

- To coordinate with GSIS on the timely remittance of its - Complied

quarterly share of the loading funds, invoking Article
177(g), Chapter III of PD 626.
- Copy of the Audit Observation Memorandum (AOM) No. 12-001 LF dated
February 23, 2012 was sent to the Office of Commissioner Dionisio C.
Ebdane, Jr., Member-Designate from the GSIS on February 29, 2012 for
comments.
- In February 23, 2012, Commissioner Ebdane, Jr. in his letter to OIC
Executive Director Stella Z. Banawis replied that the GSIS will remit 30%
share of the loading fund for the 1st three quarters based on the ECCs
previous years approved COB and the GSIS remittance for the last
quarters share will be adjusted accordingly or as soon as the COB for the
current year is approved by the DBM. The Office of the Audit Team
Leader. ECC was furnished with the copy of the said letter in April 2,
2012.
- GSIS has fully remitted its share of the ECC COB for 2012 on December
28 2012

OBSERVATIONS / AUDIT FINDINGS

6. A total of P60,000.00 paid as a cash

rewards to six employees who have
rendered 25 years continuous service at
ECC has no valid basis because such an
incentive was not among the loyalty awards
under ECC PRAISE approved by the Civil
Service Commission (CSC).

COA RECOMMENDATIONS

- Require the Committee to amend the guidelines in the implementation of the ECC PRAISE in accordance with
the CSC existing circular, and henceforth, make sure that guidelines are formulated within the ambit of
existing policies; and
- Take immediate steps to effect the refund of P60,000.00
- Notice of Suspension was issued on October 29, 2012

7. The Acquisition of IT equipments amounting

ACTIONS TAKEN BY MANAGEMENT

- To comply with the requirements of RA 9184 and its

For compliance
The ECC PRAISE crafted during the term of Executive Director Elmor D.
Juridico did not provide for amounts to be awarded for the benefits
provided therein. This being the case, the ECC PRAISE Committee
issued guidelines dated October 2, 2006 to institutionalize and
standardize the grant of rewards and incentives to be effective
retroactive January 2003.

The payments made based on these guidelines have not been

questioned in previous audits. Thus, it was our understanding that the
payment of loyalty award was valid.

The ECC management stopped the granting of such loyalty award until a
new PRAISE providing for the said rates have been approved by the
CSC.

The ECC management send letter dated July 16, 2012 to CSC Field
Office requesting for a post approval of the loyalty grants already granted
to employees pending the submission of the Enhanced ECC-PRAISE

The ECC management received a reply from the CSC Makati Field
Office dated November 8, 2012. The CSC Field Office advised the
agency to submit the Revised PRAISE to CSC-National Capital Region
for approval

Letter to CSC- NCR is being prepared.

The management is revising the existing PRAISE and will submit a new
one to CSC for their approval
- Complied

OBSERVATIONS / AUDIT FINDINGS

to P46,830.00 was not included in the 2011
Annual Procurement Plan (APP), contrary to
the Revised Implementing Rules and
Regulations of RA 9184.

COA RECOMMENDATIONS
revised IRR.

ACTIONS TAKEN BY MANAGEMENT

- The purchase of IT equipment was made in accordance with the NCCapproved ISSP. Thus, these were no longer included in the Agency
Annual Procurement Plan (APP).
- Revised 2011 APP in accordance with Sec. 7.1 & 7.2 of Rule 11 of the
Revised Implementing Rules and Regulation of R.A 9184 was submitted
to COA.