Latest Trends & Issuances on Property Management

1. Latest Trends & Issuances on Property Management

2. COA Mandate Examine, audit and settle in, in accordance with laws, rules and regulations, all accounts pertaining to the revenues and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the government, or any of its subdivisions, agencies or instrumentalities, including government owned and controlled corporations.

3. COA Mission The COA, entrusted by the Filipino people with the duty to undertake independent audit, aims to provide adequate, reliable and current information on the affairs of the government through appropriate audit approaches, and the fair and impartial exercise of its powers so that accountability, transparency, economy, productivity and effectiveness in the conduct of government operations are hereby promoted.

4. COA 2011-2012 Thrusts Theme: “Mapping a Culture of Integrity” 1. Revisit the mandate and assess the directions; 2. Evaluate the organizational structure and management and business processes

5. COA 2011-2012 Thrusts and undertake the necessary reforms to institute best practices for efficiency and effectiveness in carrying out tasks and strengthening independence 3. Upgrade capabilities especially in the areas of forensic accounting, fraud audit and properly documenting audit findings so they will stand in courts of law;

6. COA 2011-2012 Thrusts 4. Engage citizen participation in the audit process and keep them informed of the workings of the Commission within the bounds of due process and confidentiality requirements; and 5. Fastidiously work and strive to grow in professionalism, patriotism and integrity.

7. Section 2 P.D. 1445 It is the declared policy of the state that all resources of the government shall be managed, expended or utilized in accordance with laws and regulations and safeguarded against loss or wastage through illegal or improper disposition, with a view to ensuring economy, efficiency and effectiveness in the operations of the government.

8. Relevant Laws, Rules and Regulations 1. Republic Act 7160 Local Government Code (Section 383) 2. Republic Act 9184- Government Procurement Reform Act (GPRA) 3. Presidential Decree No. 1445-Government Auditing Code of the Philippines 4. COA Circular No. 92-386 Except portions on Procurement- repealed/amended by R.A. 9184 5. Philippine Bidding Documents

9. Administrative Order No. 17 Directing the Use of the Procurement Service (PS) and Philippine Government Procurement System (PhilGEPS) in Procurement Activities of NGAs, GOCCs, GFIs, SUCs and LGUs 9

10. Circular Letter No. 2011-6 Implementing Guidelines of AO 17 Prescribes the procedures and guidelines for the implementation of AO 17 in order to facilitate compliance and achieve the objectives 10

11. Circular Letter No. 2011-6 Requires all NGAs, including Military and Police Units, GOCCs, GFIs, SUCs and LGUs to submit the Annual Procurement Plan for Common-Use Supplies (APP-CSE) in the prescribed format to: - Procurement Service (soft copy – e-mail or online) - DBM-ROs (hard copy) 11

12. Circular Letter No. 2011-6 Item and Specifications, Unit of measure, Quantity requirements on a monthly basis and the Total amount Items subdivided into categories: A. Items available at the PS stores - Legal size paper - Common office supplies (envelope, folder, acetate, alcohol, paper clip) - Computer supplies/consumables - Common electrical supplies 12

13. Circular Letter No. 2011-6 B. Other items not available at the PS butregularly purchased from others sources - Office equipment and accessories - Office supplies - Audio and visual presentation and composing equipment - Photographic/filming or video equipment - Cleaning equipment and supplies - Paper materials and products - Lighting fixtures and accessories - Computer supplies, equipment and accessories 13

14. COA Memo Circular No. 2011-10 Inclusion in the AnnualAudit Report of govt. agencies who are not complying with the IRR of R.A 9184 to ensure that such agencies procure their supply requirements through PS 14

15. Property and Supply Management Covers: 1. Procurement & Other Modes of Acquisition 2. Delivery, Inspection, Acceptance & Payment 3. Utilization, Accounting & Custodianship 4. Disposal 15

16. 1. No APP 2. Piecemeal procurement 3. PPMPs not consolidated 4. PBDs not posted in the PhilGEPS 5. Splitting of requisitions, contracts, payments 6. Non conduct of public bidding Common Problems in Procurement

17. 7. Alternative modes of procurement being the preferred methods 8. Non invitation of observers 9. Delayed procurement resulting to delayed implementation of projects 10. Ordinary/regular office supplies not purchased from the Procurement Service (PS) Common Problems in Procurement

18. 11. Erroneous bidding procedures 12. Non requirement of performance and warranty security 13. lapses in procedures 14. non observance of the no brand name rule 15. collusion among bidders/bidders & BAC 16. overstocking of supplies and property Common Problems in Procurement

19. Other Modes of Acquisition: 1. Transfers of property not properly documented and accounted for 2. Donations are not properly documented 3. Donated property are not taken up in the books. 4. Seized properties are not accounted for. Common Problems in Procurement

20. 1. Ghost/short deliveries deliveries 2. Deliveries are not in accordance with the contract 3. Non imposition of the liquidated damages in case of delay/non performance 4. Inspection of deliveries are not conducted rigidly 5. Acceptance of goods which are not in accordance with the contract 6. Non imposition of retention 7. Delayed payment of perfected contracts 8. Inadequate documents supporting payments Common Problems in Delivery, Acceptance & Payment

21. 1. Excessive consumption of supplies/materials. 2. Non preparation of the Monthly Report of Supplies and Materials Issued 3. Non conduct of physical count of government property 4. Unreconciled accounting and property records 5. Overstated balances of inventories and PPE in the books Common Problems in Utilization, Custodianship and Disposal

22. 6. Inadequate property and accounting records 7. Unserviceable properties not disposed 8. Disposed properties are not dropped in the agency’s books 9. Inadequate safeguards on government property 10. Loss of property not reported to COA 11. Non renewal of AREs 12. Costly repairs of property Common Problems in Utilization, Custodianship and Disposal

23. Procurement - Must be in accordance with Republic Act 9184 (R.A. 9184) otherwise known as the Government Procurement Reform Act (GPRA) - Public bidding as the default in procurement - Approved APP prior to procurement - Alternative modes of procurement only in highly exceptional cases.

24. Other Modes of Acquiring Govt. Property 1. Transfer 2. Donation 3. Confiscation, Attachment or Seizure and Foreclosure 4. Production and Manufacture 5. Construction

25. Transfer of Property Sec. 76 P.D. 1445 Any government property that is no longer needed by an agency or unserviceable maybe transferred without cost or at an appraised valuation to other government agencies upon authority of the respective heads of agencies.

26. Transfer of Property 1. Property officer shall conduct an inventory of the property no longer needed 2. Prepare a transfer and invoice receipt with the details of property description, cost, etc. 3. Agency Heads ( transferor and recipient agency) approves the transfer docs 4. Require appropriate receipt of items 5. Furnish the Accountants with original copy of transfer docs for recording in the books

27. Donation • Donations/contributions from private sector, other govt. agencies both local and foreign, and non governmental organizations • Require a “Deed of Donation” & “Acceptance of Donation”

28. Confiscation, Attachment, Seizure & Foreclosure Becomes government properties by reason of violation of laws, rules or regulations and the title to the property has been acquired by virtue of court decisions or by competent authorities. (Sec. 456, GAAM, Vol I.

29. Confiscation, Attachment, Seizure & Foreclosure - Govt. agencies concerned shall submit to the COA a monthly report of all goods and properties acquired by them through confiscation, attachment, forfeiture or donation within the first ten days of the following month stating the description, quantity, estimated value, date, place, mode of acquisition, location/where stored, disposition for the month.

30. Construction • By Administration • By Contract

31. Requisitionsof supplies and materials Requisitions for supplies and materials drawn during the last days of December intended to be paid out of the unexpended balance of the appropriation for supplies and materials shall not be allowed. (Sec. 427 GAAM Vol. 1), except as provided in the GAA

32. Requisitionsof supplies and materials Except as provided in the GAA, the stock on hand of supplies, materials and equipment spare parts, acquired through ordinary or emergency purchase shall at no time exceed the normal three (3) months requirements. (1987 Adm. Code)

33. Deliveries Deliveries of supplies, materials and equipment being requisitioned must be made by the supplier/contractor in accordance with the specifications, terms and conditions as provided for in the contract.

34. Deliveries In case of failure to deliver within the prescribed period, liquidated damages of (1/10) of one percent (1%) shall be imposed for every day of delay for the undelivered/unperformed portion.

35. Inspection -a means of verifying physical evidence to establish existence and condition of assets. - the act of measuring, examining, testing or gauging the characteristics and features of a product or service.

36. Inspection COA Circular No. 92-386 Prescribing Rules and Regulations on Supply and Property Management in the Local Governments • Sec. 467- Inspection of Property • Sec. 466- Inspection Reports • Sec. 467- Records of Inspection.

37. Inspection Phil. Bidding Documents (May 2005): Procurement of GOODS, Sec. IV – General Conditions of the Contract • Clause 14. Inspection and Tests • 14.1 The Procuring Entity (PE) shall have the right to inspect and/or test the Goods

38. Inspection 14.2 The Inspection & Testing may be conducted on the premises of the Supplier or its subcontractor, at the point of delivery, and/or at the GOODS’ final destination.

39. Inspection 14.3 The PE shall be entitled to attend the inspection and/or tests. 14.4 The PE may reject any GOODS that fail to pass any inspection and/or test or do not conform to the specifications.

40. Inspection 14.5 The Supplier agrees that neither the execution of an inspection and/or test of the GOODS nor the attendance by the PE shall release the Supplier from any warranties or other obligations under the contract.

41. Acceptance and rejection of deliveries - Supplies and materials tested and found to be in accordance with existing specifications – accepted and paid in full. - With a deficiency of 10% and over – rejected and replacement demanded.

42. Acceptance and rejection of deliveries - With a deficiency of less than 10% - may be accepted, provided they will serve the purpose for which they were purchased (minor defect and contract price reduced).

43. Custodianship Guardianship of government property by the person accountable includes: a. Receipt b. Safekeeping c. Issuance d. Repair and maintenance

44. Custodianship Also includes: - Accountability - Responsibility - Liability that may arise from loss, misuse, damage or deterioration of government property due to fault or negligence in safekeeping.

45. Custodianship - Bonding of Accountable Officers (filed with the Bureau of Treasury) - Insurance of Government Property The agency head has the responsibility to insure government property under the Property Insurance Fund administered by the GSIS.

46. Responsibility and Accountability The head of any agency of the government is immediately and primarily responsible for all government funds and property pertaining to his agency (Sec. 102 (1), PD 1445). 46

47. Responsibility of the Head of Agency - Develop and install the internal control structure of the agency to include the internal control environment, accounting system and procedures. - Maintain the internal control environment in order to safeguard assets, produce reliable accounting data and promote operational efficiency and effectiveness. 47

48. Responsibility of the Head of Agency - financial and other reports and statements are submitted - appropriate actions are taken on the deficiencies noted as contained in the NS, ND, NC, AOM) and AAR - the requirements of transactions suspended in audit are complied with; - the settlement of disallowances and charges is made within the prescribed period. 48

49. Responsibility of the Head of Agency Clearance from money and property accountabilities in favor of any employee shall not be approved, unless all charges, disallowances and suspensions are first settled; otherwise, he shall be jointly and severally liable with the employee concerned. 49

50. Responsibility of the Head of Agency The head of the agency shall initiate the necessary administrative and/or criminal charges in case of unjustified failure/refusal to effect compliance with the above requirements by subordinate officials. 50