Internal Audit Service Office
CREATION AND PURPOSE
The Internal Audit Service Office of the Local Government Unit of Tinambac was created pursuant to the national laws, statutes, and rules and regulations issued by the National Government. The creation of an Internal Audit Unit or Office was first mandated under Republic Act No. 3456 or the Internal Auditing Act of 1962 as amended by Republic Act No. 4177. It was further mandated by the Administrative Code of 1987, then by Administrative Order No. 278 dated April 28, 1992 and Administrative Order No. 70 dated April 14, 2003, both providing for the functions, duties and activities of the Internal Audit Service. The mandate was later on re-echoed by several issuances of the Department of Budget Management (DBM) like the DBM Budget Circular 2004-4 dated March 22, 2004 that provides for the policy guidelines in the organization, staffing, positions and salary grades of the Internal Audit Unit (IAU); DBM Circular Letter No. 2008-05 dated April 2008, that provides for the guidelines in the organization of the IAU, clarifying its functions and specifying the rank and salary grade of the head of the IAS/ IAU; and DBM Circular-Letter No. 2008-08 dated 23 October 2008.
Specifically, Internal Audit Service Office of LGU-Tinambac was created through the Municipal Ordinance No. 24,s.2020, under the direct supervision and control of the Municipal Mayor. It is a component of the internal control system and a strategic function in ensuring good governance throughout the bureaucracy. Also, the Local Government Unit of Tinambac recognizes the significant roles of Internal Audit Service Office as one of the pillars that will promote transparency, accountability and good governance.
VISION
A progressive Municipality of Tinambac that caters the needs of its people through adoptive, effective and reliable internal controls for good governance.
MISSION
Effectively and efficiently provide the Local Chief Executive with an objective and reliable audit report that is vital in making sound and economic decision to ensure that government thrusts and objective are properly achieved.
SERVICE PLEDGE
We, the LGU-Tinambac IAS are committed to provide independent and objective evaluation of internal controls systems of the municipality to improve the management and operation of the different offices of the Municipality of Tinambac.
We will also evaluate and improve the effectiveness of risk management, controls and governance processes.
Moreover, IAS are also committed to maintain high-performing and credible internal audit team who are dedicated to deliver quality service to its clienteles as well as to the public.
INTERNAL AUDIT PRINCIPLES AND STANDARDS
· Objectivity
The principle of objectivity imposes on all internal auditors the obligation to be fair and intellectually honest. Objectivity requires the auditors not to subordinate their judgment on audit matters to that of others. In the execution of an audit, the internal auditor must base his/her findings on relevant, reliable, sufficient and timely audit evidence and a set of criteria.
· Impartiality
The internal auditor is free from bias and conflict of interest. He/She does not use his/her position to acquire benefits or advantage for his/herself or his/her related interests. He/she shall not have vested interest in the activity being audited.
· Authority and Confidentiality
Based on the audit objectives and subject to compliance with the internal security policies of public service organizations, the LCE shall authorize internal auditors to have full, free and unrestricted access to all functions, premises, assets, personnel, records and other documents and information that considers necessary in undertaking internal audit activities.
The internal auditor shall respect the confidentiality of information acquired in the course of performing the audit activities. Unless there is a legal or professional right or duty to disclose, the Internal Auditor shall not use or disclose any such information without proper and specific authority. Likewise, confidentiality is not only a matter of disclosure of information but includes the prohibition on the use information for personal advantage or for the advantage of a third party.
The HoIA and the individual internal audit staff are responsible and accountable for maintaining the confidentiality of the information they receive during the course of their work.
· Professional Competence
The internal auditor shall maintain high standards of competence and the highest degree of professional integrity, both in the technical and ethical sense, commensurate with his/her responsibilities and mandated functions. He/she must possess and continually develop the knowledge, skills and other competence needed to perform their responsibilities to enhance the quality of audit.
ORGANIZATIONAL STRUCTURE
FUNCTIONS OF THE IAS
Generally, the Internal Audit Office shall have the following functions:
- Advise the local chief executive on all matters relating to internal/ management control and operations audit;
- Conduct management and operations performance audit of the LGU activities and determine the degree of compliance with the mandate, policies, government regulations, established objectives, systems and procedures, processes and contractual obligations;
- Review and appraise systems and procedures, processes, organizational structure, asset management practices, financial and management records, reports and performance standards of the units covered;
- Analyse and evaluate management deficiencies and assist top management by recommending realistic courses of actions;
- Perform such other related duties and responsibilities as may be assigned or delegated by the chief executive of the local government or as may be required by law.
SERVICE PROCESS
- Internal Audit Services
- Compliance Audit
Compliance audit is the evaluation of the degree of compliance with laws, regulations, managerial policies, and operating procedures in the LGU, including compliance with accountability measures, ethical standards, and contractual obligations (1.9.1 Compliance Audit, Department of Budget and Management (DBM) Internal Audit Manual for Local Government Units (LGUs) (2016), p. 10).
- Management Audit
Management audit is a separate evaluation of the effectiveness of internal controls adapted in the operating and support services units/systems to determine whether they achieve the control objectives over a period of time or as of a specific date.
This includes the determination of the degree of compliance with laws, regulations, managerial policies, accountability measures, ethical standards, and contractual obligations covering specific timeframes. It is a review and appraisal of the systems and processes, organizational and staffing structures, operations and management practices, records, reports, and performance standards of the agencies/units covered (1.9.2 Management Audit, DBM Internal Audit Manual for LGUs (2016), p. 10).
- Operations Audit
Operations audit is a separate evaluation of the outcome, output, process, and input to determine whether government operations, programs, and projects are effective, efficient, ethical and economical, including compliance with laws, regulations, managerial policies, accountability measures, and contractual obligations. Operations audit of organizations, programs, and projects involves an evaluation of whether or not performance targets and expected results were achieved (1.9.3 Operations Audit, DBM Internal Audit Manual for LGUs (2016), p. 10).
Office or Division: | Internal Audit Services | ||
Classification: | Simple, Complex or Highly Technical (may vary per Project) | ||
Type of Transaction: | G2G – Government-to-Government | ||
Who may avail: | Local Chief Executive Department/Offices of the Local Government Unit of Tinambac | ||
Total Processing Time: | 363 working days, 7 hours | ||
Fees to be Paid | NONE | ||
CHECKLIST OF REQUIREMENTS | WHERE TO SECURE | ||
Documents, Records, and Reports relevant to the Audit area/coverage | Concerned Office | ||
CLIENT STEPS | AGENCY ACTIONS | PERSON RESPONSIBLE | PROCESSING TIME |
AUDIT ENGAGEMENT PLANNING | |||
1. Local Chief Executive(LCE)- Direct the conduct of audit through the issuance of the Department Order | 1. Prepare, review and release Office/Department Order directing the conduct of internal audit for approval of the LCE | IAS Head, Team Leader/Members | 3 Working Days |
2. Auditee – Provide relevant documents, records and reports of the audit areas | 1. Prepare, review and approve Audit Notification Memorandum (ANM) requesting relevant document, records, and reports with attached approved Office/Department Order | IAS Head, Audit Team Leader/Members | 2 Working Days |
2. Release the ANM with attached approved Office/Department Order and Matrix of List of Required Documents to the concerned auditee/s. | IAS Staff | 1 Working Day | |
3. Prepare, review and approve Audit Engagement Plan | IAS Head, Audit Team Leader/Members | ||
4. Prepare, review and approve the Audit Work Program which indicates the activities and timelines per phases of audit (planning, execution, reporting, follow- up) | IAS Head, Audit Team Leader/Members | 3 working days | |
5. Prepare, review and approve audit planning tools/workpaper templates, list the specific laws/policy/guidelines/standards, indicate the requirements and Means of Verifications (MOVs) for review of IAS team and approval of IAS Head. | Audit Team Member, Team Leader, IAS Head | 2 Working Days | |
6. Prepare the System/Process Flowcharts from the analyzed process/system documentations to identify controls and other process details. Refer to the audit checklists to identify controsl and input in theWalkthrough Test for review of the Team Leader | Audit Team Member, Team Leader | 2 Working Days | |
END OF AUDIT ENGAGEMENT PLANNING | |||
CLIENT STEPS | AGENCY ACTIONS | PERSON RESPONSIBLE | PROCESSING TIME |
AUDIT EXECUTION | |||
3. Auditees – Participate in the Entry Conference: Provide reply or comments/concur in the Minutes of the Entry Conference Receive Memo invitations for the conduct of entry conference: deliver message | 1. Prepare, review, approve and release of Notice of Entry Conference Memorandum (NECM) to the concerned office/s. | IAS Head, Audit Team Leader/Members | 6 Hours |
2. Prepare memo invitations for top officials for review of the Team Leader and signature of the IAS Head. Forward/release the memo invitations for top officials and concerned offices. | IAS Head, Audit Team Leader/Members | 6 Hours | |
3. Prepare entry conference powerpoint presentations. Review and approve the powerpoint presentations. | IAS Head, Audit Team Leader/Members | 6 Hours | |
4. Conduct of Entry Conference with the Auditees. | Team Leader/Audit Teams Office/Department (Auditee) | 4 Hours | |
5. Take down notes including the auditee’s view for the overall framework for the conduct of the audit and record proceedings of the meeting | |||
6. Prepare the Entry Conference Notes for review of the Audit Team Leader and release with Memo Transmittal for concurrence of the auditee | IAS Head, Audit Team Office/Department (Auditee) | 5 Hours | |
4. Auditee/s- Participate and provide full, free and unrestricted access to all functions, premises, records and other documents and information that the Audit Team necessary in undertaking audit activities. | 7. Conduct of actual audit a. Process information documents in the checklists and determine the answers with complete information/document. b. Perform the walkthrough of documents and process flow on the subject matter. Record the result. Perform test of control of document and process flow based on sampling on the subject matter of audit. If control is ineffective, subject to interim analysis. c. Determine if interview is needed. Conduct the interview and document the result in the Interview Notes. d. For additional documents needed, prepare Audit Inquiry Memorandum (AIM), as necessary. Review and sign Audit Inquiry Memorandum. Release Audit Inquiry Memorandum to concerned auditees. | Audit Team Office/Department (Auditee) | Project Dependent |
8. Develop/draft audit findings in terms of the 4Cs. Draft audit condition on the results of review and appraisal of control in case of Compliance and Management audit based on sampling and evaluation of 4Es in case of Operations Audit | |||
9. Process probable/root cause analyses on the established audit condition and draft the audit cause. Probable Cause for Compliance Audit and Root Cause for Management/Operations Audit. | |||
10. Prepare Interim Audit Memorandum, if any. Draft report on significant deficiencies | |||
requiring immediate action and its probable cause for review of team Leader and IAS Head | ||||
11. Finalize and organize working papers. Index, file, collect and prepare workpapers for analysis and process all workpapers for the preparation of audit findings | ||||
12. Prepare Initial Audit Report and the Highlight of Audit Findings | ||||
5. Auditee- Receive the Notice of Exit Conference, Memorandum and communicate | 13. Prepare, review and approve the Progress Assessment Report (PARe) before the conduct of Exit Conference | Audit Team Member, Team Leader/IAS Head | 1 Working Day | |
14. Prepare for the conduct of exit conference. Discuss necessary documents and activities in the conduct of exit conference for the identification of attendees, location and schedule and the preparation and review of the Notice of Exit Conference Memorandum. | Audit Team Member/s, Team Leader | |||
1 Working Day | ||||
15. Prepare and review the memo invitations for concerned auditee/s. Forward/release the memo invitations for top officials and to concerned offices. | Audit Team Member/s, Team Leader, IAS Head, IAS Staff | |||
16. Prepare the powerpoint presentation. Review and approve the powerpoint presentations using the Exit Conference Powerpoint template. Review and approve the powerpoint presentations. | Audit Team Member/s, Team Leader, IAS Head | |||
6. Auditees – Receive/Accept the Highlights of Audit Findings and submit Management | 17. Conduct of Exit Conference with the Audit Team and Auditee’s. | Audit Team Member/s, Team Leader, IAS Head | ||
a. Take down notes including additional information to be considered in the audit report and record proceedings of the meeting b. Prepare the Exit Conference Notes, attach the Highlights of Audit findings requiring submission of Management Comments within 10 days and memo transmittal for review of Audit Team or IAS Head. | ||||
Office/Department (Auditee) | 1 Working day | |||
Reply/Comments | ||||
18. Administer the Audit Feedback Survey, record, analyze using the Internal Audit Feedback Survey Analysis Report and include the results in the Internal Audit Report | Audit Team Member/s, Team Leader, IAS Head | |||
END OF AUDIT EXECUTION | ||||
CLIENT STEPS | AGENCY ACTIONS | PERSON RESPONSIBLE | PROCESSING TIME |
AUDIT REPORTING | |||
7. LCE Receive Internal Audit Report with the Recommendations for approval of the LCE LCE- approves the Internal Audit Report | 1. Prepare the Internal Audit Report (IAR) | ||
2. Prepare Memo transmittal to LCE with Memo Auditee/s directing the implementation of the recommendations and requiring the submission of the auditee’s action plan. | Audit Team, IAS Head | 30 Working Days | |
3. Release the approved IAR with Memo to Auditees directing the implementation of the recommendations and requiring the submission of the auditee’s action plan | IAS Team | 30 Minutes | |
END OF AUDIT REPORTING | |||
CLIENT STEPS | AGENCY ACTIONS | PERSON RESPONSIBLE | PROCESSING TIME |
AUDIT FOLLOW-UP | |||
8. Auditee – Implement the Audit Recommendations and report Status of Implementation through the submission of Approved Action Plan Implementation Status (AAPIS) to the Internal Audit Service and participate in the conduct of Audit Follow- up validation activity, as necessary | 1. Prepare for the conduct of audit follow- up to monitor the implementation of approved audit findings and recommendations a. Process the Internal Audit Report and prepare the Audit Follow-up Program listing the audit activities to be performed for the evaluation of compliance with audit recommendations for review and approval of IAS Head | Audit | 5 Working Days |
9. Auditee- Receive Audit Inquiry Memorandum, communicate to concerned office/personnel an d submit additional documents requested | 2. Prepare, review and approve the Audit Follow-up Notification Memorandum (AFNM) with attached AAPIS. Release the AFNM to concerned office/s. | Audit Team Member/s, Team Leader, IAS Head | |
3. Validate status of implementation and evaluate compliance with audit recommendations using the Internal Assessment of Compliance to Audit Recommendations (IAsCARes) | |||
4. Process the submitted AAPIS to validate and evaluate the documents and supporting evidences submitted, and status of action or actions taken by the auditee on each recommendation using the IAsCARes | |||
10. Auditee – Receive Audit Inquiry Memorandum, communicate to concerned office/ personnel and submit additional documents requested | 5. Prepare Audit Inquiry Memorandum requesting additional documents needed and/or clarification in the implementation of audit recommendations. Record receipt of additional documents of implementation, perform cursory evaluation on the checklist of submitted documents and process the additional documents received. | Audit Team, IAS Head | |
11. Auditee- Receive the IAsCARes | 6. Prepare and review the IAsCARes and Memo transmittal to communicate to the auditee the result of the monitoring and assessment of their compliance to audit recommendations and release to the concerned office. | ||
12. LCE- Receive the Internal Audit Follow-up Report (IAFR) for the approval of the LCE | 7. Prepare, review and submit the IAFR to the Office of the Municipal Mayor | Audit Team/s, Team Leader, IAS Head | 30 Working Days |
13. LCE- Approve the Internal Audit Follow- up Report | 8. After the 4th IAsCARes or validated full compliance whichever comes early, prepare and review the IAFR. a. Submit the IAFR with Memo Transmittal to Office of the LCE for approval. | ||
9. Accomplish the Completion Assessment Report (ComARe) | |||
a. Prepare, review and approve the Completion Assessment Report b. Retain documented information in accordance with the Control of Retained Documented Information Procedure and Master List of Retained Documented Information. | Audit Team/s, Team Leader, IAS Head | 1 working day | |
END OF AUDIT FOLLOW-UP | |||
END OF TRANSACTION | |||
FEEDBACK AND COMPLAINT MECHANISMS
How to send feedback? | 1. Fill out Feedback Form and drop it on the Suggestion Box or the concerned individual can write a formal letter and submit it to the Office of the Internal Audit Service or they may send it through our office EMAIL lgutinambacias00@gmail.coml or FACEBOOK PAGE LGU Tinambac Internal Audit Service |
How feedbacks are processed? | 3. Every month, the Suggestion/Comment/Complaint Box will be opened, and then concerns will be encoded and summarized.
Negative feedback indicative of client dissatisfaction is referred to the concerned Section/Department Head and discussed with concerned office staff. Remedial action is taken thereafter.
4. Formal letter will be endorsed to the Head of Internal Audit. |
How to file a complaint? | 5. Concerned individuals can write a formal letter addressed to the Local Chief Executive and be filed thru the HRMO, MO, IAS or Public Information Desk/Office. |
How complaints are processed? | 6. Complaints are referred to the concerned Department Head /Office In- Charge. An initial investigation of the complaint is conducted to ascertain the validity of the complaint and determination of employee culpability if any. Complaints constituting an administrative offense are referred to the Administrative Hearing Board for filing of formal charges in the presence of a prima facie case. Administrative proceedings ensue thereafter in accordance with the Rules of Procedures in Administrative Cases. |
CONTACT INFORMATION
LGU-TINAMBAC OFFICE OF THE INTERNAL AUDIT SERVICE | Email : lgutinambacias00@gmail.com FB Page: LGU Tinambac Internal Audit Service |
ANTI-RED TAPE AUTHORITY | For Smart/TNT/Sun: • 09692577242 • 0928-690-4080
Email: complaints@arta.gov.ph |
PRESIDENTIAL COMPLAINT CENTER | Dial/text : 8888 E-mail Address : pcc@malacanang.gov.ph |
CONTACT CENTER NG BAYAN | Hotline: 1-6565 accessible via PLDT and Smart landlines nationwide • SMS/Text Access: 0908-8816565 • Email: email@contactcenterngbayan.gov.ph • Website: www.contactcenterngbayan.gov.ph • Facebook page: www.facebook.com/contactcenterngbayan |
