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PART III – STATUS OF IMPLEMENTATION OF PRIOR YEAR’S RECOMMENDATIONS

The Audit Team has followed up and validated the actions taken by DOH-CO, CHDs, hospitals and other DOH attached agencies to
implement the audit recommendations contained in the CY 2008 Consolidated Annual Audit Report (CAAR). Out of the 134 previous years’ audit
recommendations consolidated into 42 common audit recommendations embodied in the 2008 CAAR for the 85 DOH offices and hospitals, 25 or
19% were fully implemented, 62 or 46% were partially implemented, 5 or 4% are on-going while 9 or 7% were not implemented at all and 33 or
24% have no status report submitted.

Details on the actions taken on the audit recommendations are presented below:

Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

A. CASH

Observation # 1

Utilization of Priority Development 2008


Assistance Fund (PDAF) DOH-
CAAR
Improper utilization of PDAF by six pages
hospitals resulted in the accelerated 33-35
depletion of the funds, thereby depriving
indigent beneficiaries of the benefits from
the medical assistance fund. Using PDAF, a
CHD procured medicines amounting to
P92, 681,000.00, P23, 633.549.68 of which
remained undelivered and P625, 830.69 was
not utilized as of December 31, 2008.
Moreover, the pertinent provisions of the
GAA, DOH issuances and DBM Circulars
on the utilization of PDAF were not
complied with.

161
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

We recommended the following:

a. CHD for Central Visayas require the No Status Report


PS-DBM to return the amount of
P23,633,549.68 for the undelivered
medicines, considering that previous
deliveries were not fully utilized,
indicating that they are not urgently
needed. The funds to be refunded by
the PS-DBM should be remitted to the
Bureau of Treasury or requested by the
DOH to fund other health programs.

b. VSMMC management inform No Status Report


legislators concerned regarding the
depleted medical assistance funds and
two Congressmen responded positively
and informed the Medical Center Chief
that they will be sending the necessary
funds. We also recommended that
providing medicines for medical
missions be stopped or the conduct of
medical missions be included in the
MOA between the Medical Center and
the legislator.

c. Hospitals strictly comply with the Cotabato Regional and Medical Center Not Implemented Management still does not
provisions of the 2008 GAA and the have control over the charging
DOH issuances/policy guidelines on the of hospital expenses to PDAF.
proper utilization of the fund giving
particular attention to the limitation of Hospital bills classified as pay
its coverage to ensure that the use of patients were still charged to
PDAF support the hospital mandate of PDAF. Hospital management
delivering health care services. reasoned out that charging to
PDAF of pay patients were

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Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
beyond their control since
endorsement letters were
coming from the legislators.

Culion Sanitarium and Ospital ng Palawan have no


status report.

d. Pharmacists closely monitor issuance of Don Emilio del Valle Memorial Hospital and
drugs and medicines intended for Governor Celestino Gallares Memorial Hospital have
PDAF patients to prevent charging of no status report.
mark-ups since this is prohibited under
DOH Department Order No. 2007-0057
dated August 28, 2007.

Observation # 2

Petty Cash Fund

Deficiencies in handling petty cash fund in 2008


11 CHDs/hospitals/office that were contrary DOH-
to the provisions of COA Circular No. 97- CAAR
002, Republic Act No. 9184, the pages
Government Procurement Reform Act, 35-37
and Executive Order No. 40, series of 2001
resulted in the immediate depletion of the
fund and deprived the hospitals of obtaining
the most advantageous price for their
purchases.
Bureau of Quarantine On-going
We recommended that:
The Bureau is currently undergoing negotiation with
a. CHDs/Hospitals/Office carefully Petron Corporation for fuel supply of the Office
consider their needs and reduce the PCF including the Provincial Stations. The end-users has
to an amount sufficient to cover only prepared their respective PPMPs for their different
expenses that are difficult, impractical programs, activities, and projects and reflected their
or impossible to make payments by priorities and objectives. Procurement of commonly

163
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
check, pursuant to COA-Circular No. used office supplies were included in their APPs for CY
97-002 dated February 10, 1997. 2010 and submitted to the Planning Committee for
consolidation.

DJFMH Fully Implemented

The Hospital carefully plan and include in the APP the


Hospital’s requirements for common-use office supplies
to avoid purchases of the same through cash.

A P50,000.00 Petty Cash Fund is maintained in


anticipation for emergency and fortuitous events.

All commonly used supplies and materials had been


procured to Procurement Service.

Adela Serra Ty Memorial Medical Center Fully Implemented

Management strictly observe the rule on the granting


and utilization of cash advance and stop the practice of
authorizing the Pharmacist to procure goods and
services which is not among her duties and
responsibilities.

b. EAMC provide steel cabinets with EAMC Fully Implemented


safety lock to protect the cash on hand
of PCF Custodians from loss or theft, Management has already implemented the
while POC, ECS and SAMCH require recommendations of COA.
fund custodians to strictly comply with
COA Circular No. 97-002 dated POC Partially Implemented
February 10, 1997 on the submission of
official receipts to support the No drug company will agree to enter a written Management is in the process
liquidation of cash advances/ PCF as agreement for a direct payment scheme for the medical of looking for other
proof of payments. All accountable requirements of PDAF patients. Management initially drugstores.
officers of SAMCH should immediately approached Mercury Drug on the matters and they
record transactions in the CDRs as they responded in the negative regarding direct payment

164
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
occur and to close, rule and certify such scheme.
records at the end of every month The Petty Cash Fund is still
pursuant to Section 40, Volume II, Management issued Hospital Order No. 030 dated being used to procure
NGAS Manual. March 11, 2009 reducing cash advance from commonly used supplies
P100,000.00 to P50,000.00. needed in the hospital
operations.

c. The Annual Procurement Plan (APP) BGHMC, Ospital ng Palawan, Talisay District
include requirements for common-use Hospital, CHD for Davao, Eversley Child
office supplies to avoid purchases of the Sanitarium, St. Anthony Mother & Child Hospital
same through cash advances. The have no status report.
procuring entities should adopt public
bidding as the general mode of
procurement and should see to it that
the procurement program allows
sufficient lead time for such bidding in
accordance with RA 9184.

Observation # 3

Cash – Collecting Officers

Lack of adequate controls in handling cash, 2008


the absence of proper monitoring in the DOH-
issuances of official receipts as well as CAAR
failure to deposit collections intact daily as pages
required under Section 69 of PD No. 1445 37-41
and Section 21 of the Manual on NGAS,
Volume I, not only exposed substantial
amounts of undeposited collections to
possible losses but also resulted in a cash
shortage of P75,899.85 at the Jose N.
Rodriguez Memorial Medical Center
(DJNRMH).

165
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

We recommended the following:

a. Forfeit in favor of DJNRMH the The Head, Cashier Section and the designated Fully Implemented
overage of P44,367.23 which must be Collecting Officer monitored the deposit of all
duly receipted for and recorded as collections.
Miscellaneous Income pursuant to
Sections 51 and 55 of the Manual on Daily monitoring done by the Collecting Officer to all
NGAS, Volume I. All accountable designated collecting clerks at the Cashier extension
officers be regularly bonded. The offices.
Cashier review and sign the RCD to
ensure its accuracy and correctness and Proper coordination with the Accountant, Cashier and
to comply with existing regulations. Collecting Officer is being done to ensure preparation of
The Accountant maintain a complete JEV and proper recording in the CRJ.
file of updated subsidiary ledger for
each type of collection. Cash Receipt Records is properly maintained and
reconciled with the Collecting Officer’s cash on hand at
the end of the day. Likewise, Subsidiary Ledgers are
being updated.

b. Require Cashiers to deposit all Ilocos Training & Regional Medical Center Fully Implemented
collections intact daily or not later than
the next banking day, to protect the Collections were deposited intact daily.
interest of the government pursuant to
Section 21 on the Manual of the NGAS Tondo Medical Center Not Implemented Lack of manpower
Volume I and Section 69 of PD 1445.
Further, the Cashier and the Accountant One of the problems of the Hospital is the shortage in
should reconcile their records manpower. Due to existing moratorium on the filing up
periodically. At ECS, conduct an of certain positions, pending completion of the
investigation on the use of collections rationalization Plan, the Center has requested for the
for payment of miscellaneous expenses. deferment in the implementation of the Plan. As a
safeguard, internal control system of the Hospital was
strengthened.

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Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Las Piňas General Hospital and Satellite Trauma Partially Implemented
Center

Out of the P 1,269,950.42 balance of Cash-Collecting


Officers as of December 31, 2008, P 1,132,481.88 was
deposited in January 2009. The balance of P137,468.54
represents unaccounted amount from the previous years.

The Payable was reverted under JEV No. 09-01-151


dated January 31, 2009.

Baguio General Hospital and Medical Center, Eversley


Child Sanitarium and Eastern Visayas Regional Medical
Center have no status report.

c. Require the BFAD Accountant to Updating and correcting of Subsidiary Ledgers are still Partially Implemented
prepare a Journal Entry Voucher in process.
correcting the adjustment made in
December 2008 and the understatement Subsidiary Ledgers for Cash-Collecting officers are
of deposit made by DOH-CHD Region being reconstructed to determine the discrepancy noted
VIII, to clear the under/overstatements in the ML.
of Cash Collecting Officers – NG and
Due to National Treasury accounts. Adjusting entries were made for the overstatement in the
Subsidiary Ledger for each of the Cash-Collecting Officers –NG.
DOH-CHD designated Collecting
Officers should be maintained to
monitor the submission and recording
of BFAD collections and deposits so
that the balance of Cash Collecting
Officers-NG can be reconciled with the
GL. The Accountant should make
representation with BFAD officials to
assign additional staff with accounting
background to assist in updating and
reconciling accounting records.

167
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
d. Designate a personnel to be in-charge Some receipts were not issued by the bonded Not Implemented Due to volume of work, the
of the collection and deposit of amounts accountable officer. bonded personnel cannot issue
received by CHD for Bicol to pinpoint official receipts at all times
responsibility and accountability. particularly for the blood bank
Further, the designated personnel must which is open 24 hours.
be duly bonded in accordance with
existing laws and regulations to
safeguard the interest of the
government.

e. Require the EAMC Chief Accountant to Heads of Accounting and Cashier Sections are always Fully Implemented
record deposits only after actual reminded to reconcile their records ( Cash Receipts
deposits of collections have been made Records and General Ledger) to detect immediately any
by the collecting officer to immediately differences for adjustment, if necessary. As of December
notify the Collecting Officer of the 31, 2009, the balances of the two records were already
errors noted in the RCDs so that the reconciled.
accountable officer’s records could be
immediately corrected.

f. Require the Cashier and the Regional Obsolete checks and official receipts were condemned Fully Implemented
Accountant/Finance Officer of CHD for and witnessed by DOH officials concerned and a
Northern Mindanao to conduct an representative from the COA.
inventory of unused and obsolete
checks and official receipts. A request
for disposal of the obsolete forms be
filed with the Commission on Audit to
facilitate dropping of the accounts from
the accountability of the Cashier.

g. Require CRMC to submit financial Financial reports were submitted on time. Fully Implemented
reports on time pursuant to COA
Circular No. 89-299 and Section 122 of
PD No. 1445.

h. Require the R1MC Cashier to strictly Management booked up the alleged shortage by the then Partially Implemented Failure of the former Cashier
comply with Section 68, on the Manual retired Cashier due to undeposited collections incurred to restitute the alleged

168
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
on the NGAS Vol. II on the submission by her under Accounts Receivable for the year 2009. shortage incurred by her. The
of the Monthly Report of Accountant analyzed the
Accountability for Accountable Forms undeposited collections and
and to prepare the RCD and the CRR. for the year 2009 booked it up
as Accounts Receivable.

Management is still in the


Management prepares Monthly Report of Accountability stage of familiarization as to
for Accountable Forms but failed to submit the same to the preparation of the required
the COA Office. reports and tallying of official
receipts received and issued.
Management already prepares the Report of Collections
and Deposits regularly and submits the same to the COA
office.

Observation # 4

Cash – Disbursing Officers 2008


DOH-
Validity of the Cash-Disbursing Officers CAAR
account of DOH- Central Office (CO) pages
amounting to P1,513,323.62 as of 41-42
December 31, 2008 was unreliable because
it represents old balances which remained
dormant since CY 2000 and prior years.

We recommended that the DOH–CO The account was reclassified to Due from Officers and Partially Implemented
Accounting Division undertake actions to Employees. Management agreed to issue demand letters
expedite the verification and adjustment of to the disbursing officers concerned and require them to
the above-mentioned old balances so that liquidate their outstanding cash advances with the
the account Cash-Disbursing Officers can instruction of withholding their salaries until their
be reliably stated in the books of accounts. accounts are settled.
We also recommended that demand letters
be sent to above-mentioned accountable
officers requiring them to immediately
settle their accounts.

169
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation # 5

Reconciliation and Recording of Cash in 2008


Bank Balances DOH-
CAAR
Failure to completely record transactions pages
and to observe correct accounting 42-45
procedures resulted in the understatement of
the Cash in Bank- Local Currency, Current
Account (LCCA) account by
P1,520,319.41 as of December 31, 2008.
Moreover, failure to secure bank statements
on time and to prepare bank reconciliation
statements resulted in discrepancies
between the accounting and bank records
rendering the validity of the cash in bank
accounts of 16 offices unreliable.

We recommended the following courses of


action:

a. Promptly record all transactions CHD for Cagayan Valley Partially Implemented
affecting the cash accounts to ensure
accurate financial reporting. Journal Entry Voucher (JEV) was prepared on February Although management assured
18, 2009 taking up the unrecorded recommended to comply that bidders fee be
amount of P159,483.33. remitted to the BTr, the
amount remained unremitted
All moneys received are acknowledged by Official because they have to consider
Receipts. yet some obligations which
have to be charged against the
amount.

Management has to look


further on the details of the

170
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
amount of stale

b. Make representations with the Jose B. Lingad Memorial General Hospital Not Implemented The bank does not provide the
depository banks for the timely Bank Statement regularly.
submission of bank statements.
CHD for Central Luzon On-going

Management has sent letter-request to the depository


bank in the release of bank statement.

c. Prepare and submit the monthly BRS DOH-Central Office Fully Implemented
for all bank accounts within 15 days
after the end of each month. Take up Monthly Bank Reconciliation Statements are prepared
the necessary adjustments for and submitted to COA.
reconciling items and provide the banks
with copies of reconciliation statements Bicol Regional Training and Teaching Hospital Fully Implemented
to enable them to make the necessary
corrections in their records. Corresponding adjustment was effected.

Western Visayas Medical Center Partially Implemented The discrepancy in the Cash –
LCCA account already exist
Unrecorded interest income in 2008 was already before the OIC-Accountant
booked-up and the interest income was remitted to BTr assumed office in 2006. The
in June 2009. discrepancy was not corrected
because of time constraints as
Analysis and reconciliation of the account “Cash in well as difficulty in locating
Bank-Local Currency Account” General Ledger Balance the necessary documents for
and the171two Check Disbursement Records is still on- reconciliation.
going. Bank Reconciliation Statements for the three
bank accounts were already submitted last May 2009.

The Accounting personnel


have not yet started gathering
the data for reconciliation.

171
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Food and Drug Administration Not Implemented

The agency has not yet made the proper representations


with the Bureau of the Treasury because they have to
gather all the data for the reconciliation before doing so.

Bureau of Quarantine Partially Implemented

Accountant has already submitted the bank


reconciliation statements on all bank accounts
maintained by the Bureau as of December 31, 2009.

Mindanao Central Sanitarium Partially Implemented

Action taken by Management was not stated in the ML.

CHD for Metro Manila Fully Implemented

Monthly Bank Reconciliation Statements are now


regularly submitted.

Davao Medical Center, Eastern Visayas Regional


Medical Center, Southern Isabel General Hospital,
Batangas Regional Hospital, Don Jose S. Monfort
Medical Center and Extension Hospital and Don Emilio
Del Valle Memorial Hospital have no status report.

Observation # 6

Balances of Bank Accounts 2008


DOH-
The cash balances which include dormant CAAR
funds amounting to P16,035,510.44 of nine pages
CHDs/hospitals were not remitted to the 45-46
Bureau of the Treasury, contrary to the

172
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
provisions of GAFMIS Circular Letter No.
2003-004 dated November 19, 2003 and
COA, DBM and DOF Joint Circular 1-97
dated January 2, 1997, consequently
depriving the government of the use thereof.

a. We recommended that accountants of CHD for Cagayan Valley Not Implemented


CHDs for Cagayan Valley, Western
Visayas and SOCCKSARGEN prepare The amount will be remitted to the BTr. Although management assured
BRS and subsequently remit fund to comply with the
balances to the BTr. Moreover, cash recommendation, the amount
balances deposited to the current remained unremitted because
accounts of SLH, CHD for Cagayan they have to consider yet some
Valley, CVMC, CHD for MIMAROPA obligations which have to be
and SAMCH should be deposited to the charged against the amount.
BTr in conformity with the above-
mentioned regulations. San Lazaro Hospital Fully Implemented

The excess training fees were withdrawn from the local


bank account (income fund) and deposited with National
Treasury on July 2, 2009.

CHD for Western Visayas Fully Implemented

Letter request was personally given to PNB in-Charge of


dormant accounts, requesting them to remit whatever
balance in the PNB Account No.415-8406360 to the
National Treasury and eventually closing the said
account.

To date, no reply was received and a follow up letter


tracer to the said account will be made.

CHD for SOCCSKSARGEN Not Implemented The Accountant reasoned out


that she could not establish the
beginning balances since the

173
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
previous Accountants did not
prepare the same.

CHD for MIMAROPA and St. Anthony Mother & Child


Hospital have no status report.

b. We also recommended that WVMC and Jose B. Lingad Memorial General Hospital Fully Implemented
JBLMGH remit to BTr the accumulated
interests earned on bank deposits. The interest earned for CY 2007 and CY 2008 were
already remitted to the Bureau of the Treasury.

Western Visayas Medical Center Fully Implemented

Unrecorded interest income in 2008 was already


booked-up and remitted to BTr in June 2008.

Observation # 7 2008
DOH-
Cash maintained in excess of the amount CAAR
required by the bank resulted in the pages
accumulation of the balances of the Cash in 46-48
Bank- LCCA of East Avenue Medical
Center and San Lazaro Hospital totaling to
P13,975,758.19 and P221,807.96,
respectively, that could have been used to
fund other necessary expenditures/projects.

a. We recommended that EAMC stop the The Head of the Accounting Section was directed to Partially Implemented As of December 31, 2009,
practice of making deposits with the verify this amount and to determine the sources of this there was still an unutilized
Debt-Servicing account in excess of the idle Cash in Bank. Likewise, the Head of Personnel balance of P139,950.71 Debt-
required monthly amortization and that Section was instructed to coordinate with the Servicing account already
the excess funds of P11,957,921.70 be Accounting Section for the determination and closed as of report preparation.
transferred to Regular Income Funds to reconciliation of this idle fund.
provide additional financial resources

174
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
for the needs of the hospital.

b. We also recommended that the No Reconciliation Statement was yet submitted to the Partially Implemented Lack of written instruction on
Accountant determine the funding Auditor on the Hold and Release Orders issued in the the part of Management
source of the excess balance of past years. directing the immediate
P2,017,836.49 and if found to be part of reconciliation of all Hold and
the payroll fund, these should be Release Orders by the
utilized for the succeeding payrolls to Personnel Office.
make use of the excess funds. Hold
orders must be avoided by immediately
correcting all payments for those
employees who should no longer be
included in the payroll for one reason or
another. In cases where hold orders
could not be avoided, they should be
issued on time before the bank credits
the salaries or allowances/benefits to
the individual accounts of the
employees to avoid overpayments.
Release orders should be stopped and
instead, have the subject claims paid
through regular checks.

c. While at SLH, the amount The Accounting Office have reconciled the ATM bank Partially Implemented
corresponding to the total hold orders in account and deducted the cancelled salaries from the
the payroll of the current month be amount of the next payroll.
deducted from the payroll of the
succeeding month. Hospital Memo No. 20 s. 2009 was issued to
disseminate the exclusion of personnel with leave
credits of five days and below from the ATM payroll.

175
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
B. RECEIVABLES

Observation # 8

Advances to Officers and Employees

Cash advances granted to officers and 2008


employees for travel and other purposes DOH-
amounting to P14,334,452.88 remained CAAR
unliquidated even after these have already pages
been expended due to the inability of 48-49
responsible officials to strictly enforce
liquidation within the period prescribed
under Section 16 of Executive Order (EO)
No. 298 dated March 23, 2004 and COA
Circular No. 97-002 dated February 10,
1997.

We recommended that concerned Chief


Accountants of DOH-CO, CHDs and
hospitals:

a. Strictly enforce liquidation of all cash EAMC Fully Implemented


advances immediately after the
purposes for which these were granted These cash advances were already fully liquidated by
have been served. In case of failure to the concerned personnel.
liquidate, salaries of concerned officials
and employees should be suspended as Labuan Public Hospital Partially Implemented
required under Executive Order 298;
Certain officers and employees still did not liquidate
their cash advances within the reglamentary period.

CHD for Caraga Region Partially Implemented

Liquidation of cash advances is on -going.

176
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Adela Serra Ty Memorial Medical Center On-going

Monthly deductions from the salary of accountable


employees is being made.

CHD for Bicol Region Partially Implemented

The CHD observes the policy of not granting cash


advances to employees with unliquidated cash advances.

CHD for Western Visayas On-going

Officers and employees were informed of their


unliquidated cash advances and were willing to settle
their refunds through payroll deduction.

Management also issued an order that non-liquidation of


the cash advance of concerned officers and employees
will cause withholding of their salaries.

Western Visayas Medical Center On-going

COA and Management agreed that the Drugs and


Medicine account may be deducted from salaries
provided the employee give his/her consent. A memo
was issued for this.

Corazon Locsin Montelibano Memorial Regional Partially Implemented


Hospital

Only P93,068.83 of the P332,057.70 were liquidated,


leaving a balance of P238,988.87 as of December 31,
2009 for Advances to Officers and Employees.

177
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Eversley Childs Sanitarium, CHD for Eastern Visayas


and Schistosomiasis Control and Research Hospital
have no status report

Bicol Medical Center

Action taken by management was not stated in the status


report.

b. Record cash advances for both local San Lazaro Hospital


and foreign travels as debits to the
account Advances to Officers and All cash advances for travel were recorded as “Due from Partially Implemented Delayed submission of
Employees instead of treating them as Officers & Employees” using the new form of Itinerary liquidation reports with the
direct expense in order to facilitate of Travel. Likewise, the susbsistence allowances were required supporting
monitoring of liquidation; and deducted from travelling allowances. documents.

c. Record pertinent expenses in the same DOH – Central Office


year or period that the cash advances
were granted. Various Journal Entry Vouchers were already drawn in Partially Implemented
2009 to adjust the negative balances.

Management made a follow-up on their request for


write-off.
Observation # 9

Due from LGUs, NGAs, NGOs and POs 2008


DOH
The inability to strictly monitor transferred CAAR
funds and enforce liquidation by recipient pages
Local Government Units (LGUs), National 50-53
Government Agencies(NGAs), Non-
Government Organizations (NGOs) and
People’s Organizations (POs) immediately
after the completion of the projects as well
as the lack of a periodic reconciliation of

178
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
accounting records between the source
agencies and the implementing agencies
contrary to COA Circular Nos. 94-013 and
2007-001 dated December 13, 1994 and
October 25, 2007, respectively, resulted in
the accumulation of huge, long outstanding
receivables amounting to P245,320,805.46
and the non-recording of expenses at the
time of incurrence, casting doubt on the
validity of the consolidated receivable
balance.

a. As previously recommended, DOH-CO DOH – Central Office Partially Implemented


and CHDs make representations with
the Heads of concerned LGUs, NGAs, Communication and coordination with the agency heads
NGOs and POs regarding the or accountants of concerned implementing NGAs,
immediate submission of liquidation LGUs and NGOs/POs were made by the Reconciliation
reports for completed projects and Team. Some agencies have already submitted their
periodic monitoring, analysis and liquidation reports.
reconciliation of those receivables with
the accountants of the implementing CHD for Caraga Region Partially Implemented
agencies, especially those with non-
moving old balances. Those that are Out of P27,807,082.24 funds transferred only
reported as fully liquidated by P20,498,782.89 was liquidated, leaving a balance of
implementing agencies be validated, P7,308,299.35, as of Dec. 31, 2009.
and if substantiated, be dropped from
the books of accounts. Recipient CHD for Western Visayas
agencies be required to strictly comply
with laws, rules and regulations Out of the P39,778,063.73 Due from LGUs, On-going
governing the grant and liquidation of P9,793,897.85 was liquidated as of December 31, 2009.
fund transfers.
The CHD took an aggressive measure of not granting
b. Proper coordination be made with the additional advances to LGUs until liquidation of prior
DPWH officials and details/breakdown advances were made. Updated demand letters for
of the accounts be provided to them to liquidation were sent to the respective LGUs and
facilitate reconciliation of accounts. On NGOs/POs. No additional cash advances were granted

179
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
the other hand, concerned official of the to NGOs/POs for CY 2008.
Office of the Regional Government-
ARMM be requested to submit the CHD for CAR Not Implemented Management will monitor the
needed liquidation report in order to unliquidated funds. The
close their accounts in the DOH records change in local leadership is
while a journal entry voucher (JEV) be affecting liquidation of the
prepared reflecting the necessary dormant/long outstanding fund
adjusting entry to correct the erroneous assistance to LGUs.
recording of payments to PHILCAT. CHD for Eastern Visayas has no status report.

Observation # 10

Due from Operating Units

Failure of the DOH - Central Office 2008


Accounting Division to use the proper DOH-
account in recording transactions resulted CAAR
in the overstatement of the account Due pages
from Operating Units by P804,000.00 and 53-54
the understatement of the account Due
from Regional Offices/Staff Bureaus by the
same amount.

We recommended that a Journal Entry DOH – Central Office Fully Implemented


Voucher be prepared reflecting the
necessary adjusting entry in order to arrive An adjusting journal entry to reclassify fund transfers to
at the correct balances of the accounts Due the Special Hospitals has already been made to
from Operating Units and Due from implement the audit recommendation.
Regional Offices/Staff Bureaus. In
addition, the Accounting Division should
be consistent in the recording of the
accounts to make sure that the financial
statements of the Department are fairly
presented.

180
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Observation # 11

Hospital Claims from Philippine Health


Insurance Corporation

Losses in revenues from medical services 2008


totaling P25,167,461.93 were incurred by DOH-
11 hospitals because of Philippine Health CAAR
Insurance Corporation (Philhealth) pages
disallowances on hospital claims due to the 54-56
continued inability of the hospital Billing
Sections to strictly comply with pertinent
requirements and failure to review the
accuracy and completeness of information
disclosed on Philhealth forms.

a. We recommended for the review and Bicol Medical Center


evaluation of the reasons for denied or
disallowed Philhealth claims and to Demand letters are being sent to patients with Partially Implemented A reduction in disallowed
utilize possible remedies to protect the defective/lacking supporting documents with almost claims was noted. A workable
interests of the hospitals. Training and 100% response. Dialogs with Philhealth representatives strategy be formulated by
seminars should be regularly provided are being conducted. Updates on Philhealth issuances MANCON.
to officers and employees concerned to are taken up in the weekly IDCP meetings.
keep them abreast and updated with the
current rules, regulations and
procedures in the processing of
Philhealth claims.

b. We also recommended that Chiefs of


concerned hospitals file a letter of
appeal with Philhealth for the collection
of the disallowed amounts and require
all Chief of hospital Billing Sections to
strictly observe and comply with each
and every requirement of Philhealth in
filing hospital claims. They should

181
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
review carefully and thoroughly all Bicol Regional Training & Teaching Hospital
claim forms before submission and Partially Implemented Due to manual posting, and
ensure that these will be filed or re-filed A personnel was assigned dedicated in posting of the bulk of claims from PHIC,
within the prescribed time frame. In receivables from PHIC. delay in recording was
addition, they should send demand experienced. A software
letters to patients whose claims were however will be acquired by
not paid by Philhealth. Relative to long the Hospital for accurate and
outstanding claims which can no longer efficient recording of
be collected due to the financial receivables.
incapability of patients or their
unknown whereabouts, responsible Partially Implemented
officials should request authority to Jose R. Reyes Memorial Medical Center
write off the same from the
Commission on Audit following the Notification letters were continuously sent to patients
guidelines on their proper disposition or for submission of lacking documents and claims
closure prescribed under COA Circular disallowed by Philhealth were re-filed.
No. 97-001 dated February 5, 1997. Lack of documents and
However, the filing of the request for writing-off of long manpower.
outstanding accounts receivable could not be undertaken
due to the lack of personnel in the Billing Section to
take charge in the gathering/collation and completion of
the documentary requirements to support the request for
write-off.
Partially Implemented
Dr. Jose Fabella Memorial Hospital

The disallowed claims from PhilHealth undergo the


“Appeal Process” and it takes time before a decision is
given. The Management shall exhaust all means to
collect the said claims by sending demand letters to all
patients-debtors.

The Management committed that in the event that long


outstanding claims could no longer be collected and if
denial of Philhealth reimbursement is with finality, the
Hospital will request from COA authority to write-off

182
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
the receivables.

Luis Hora Memorial Medical Center, Far North Luzon


General Hospital & Training Center, Conner district
Hospital, Cagayan Valley Medical Center, Batanes
General Hospital, Sourthern Isabela General Hospital
and Culion Sanitarium have no status report.

c. The accountant of the POC record Action taken not included in the ML.
income earned from medical services
rendered using the accrual method of
accounting whereby a receivable
account is set-up and the appropriate
income account is recorded at the time
it is earned and to prepare adjusting
entries to correct the errors discussed
above.
Partially Implemented Only 90% was paid through
d. The Chief of the Tondo Medical Center Accredited doctors submitted the required documents to ACPS.
direct doctors who are given the Land Bank of the Philippines for enrollment in the
privilege of private practice to comply Automatic Credit Payment Scheme of Professional Fees.
with the requirements of Philhealth About 90% is being paid through ACPS to the ATM
Circular No. 009, s. 2000 dated May account of the physicians maintained for the purpose.
19, 2000 with the subject: Automatic
Credit Payment Scheme (ACPS) of
Professional Fees.

Observation # 12

Recording and Collection of Receivables 2008


DOH-
Receivables which were erroneously CAAR
recorded, unbooked, undocumented, pages
dormant and dropped from the books 56-59
without authority due to inadequacies and
inconsistencies in record-keeping not only

183
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
rendered the accuracy of the Receivable
balances doubtful but also resulted in the
net understatement of the account balance
by P 24,951,269.68.

We recommended that accountants of


concerned agencies undertake the following
courses of actions to correct the book
balances and to fairly state the amount
reflected in the financial statements:

a. Enhance collection of receivables. After DOH – Central Office Partially Implemented


exhausting all means to collect long
outstanding receivables, request for Some employees are no longer connected with the DOH
authority to write-off the same from the hence, it becomes difficult to collect these receivables
Commission on Audit following the from them. The following actions were also undertaken:
guideline prescribed under COA
Circular No. 97-001 dated February 5, a. Cash advance granted during the budget hearing
1997; amounting to P 60,000.00 was already liquidated.

b. JEV was prepared to adjust the CNA negative


balance of P309,525.00

Management informed that due to limited manpower in No personnel is assigned to


the Accounting Division, analysis of accounts was not monitor receivable accounts
given priority. because of the current
workloads that each
accounting staff has to handle.
In addition, there are
insufficient data on existing
balances and addresses or
contact references of some
individual debtors.

184
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Bicol Medical Center On-going Customers’ collection of
accounts receivable was noted.
Collection/Settlement of accounts receivable made from However, close monitoring by
July 1, 2008 to May 31, 2009 amounted to P814,025.38. Accounting personnel
This was due to the strict implementation of payroll regarding outstanding
deduction of overdue accounts with BMC personnel as accounts of guarantors should
guarantors in compliance to Rule No. 8 of the be strengthened.
aforementioned Policies and Procedures. Demand letters
are also being sent to debtors contributing to the
collection/settlement of accounts receivables.

Bicol Regional Training & Teaching Hospital Fully Implemented Reiterated in this report.
Management will then be
To maintain subsidiary ledger for each patient is not sending again demand letters
feasible due to the bulk of claims, instead a to patients.
computerized schedule is maintained.

Research Institute for Tropical Medicine Partially Implemented

Adjusting entries were made. RITM Memorandum No.


006 s. 2009 dated April 16, 2009 was issued prescribing
the guidelines on dispensing drugs and medicines on
account to its employees and the manner of payment
thereof.

San Lazaro Hospital Fully Implemented Request for dropping of the


long outstanding accounts
JEV was drawn to reverse the entry on the dropping of from the books was not yet
the accounts in the books. submitted to COA.

Food and Drug Administration Partially Implemented The request for write-off was
returned to Management for
FDA Director requested for write-off to Audit Team on compliance with the
November 19, 2009. documentations as prescribed

185
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
under COA Circular No. 97-
001 to date, the same was not
yet resubmitted.

Rizal Medical Center Partially Implemented

Billing of the affiliation fees is now being done at the


Billing Section starting with the bills for the third
quarter affiliation trainings.

The Affiliation Committee was tasked to and still in the


process of drafting and finalizing the policies on the
billing procedures, reportorial obligations and NCATs
requirement compliance.

Dr. Jose Fabella Memorial Hospital Not Implemented

The Management sent demand letters to patients with


unpaid hospitalization bills. After sending three (3)
consecutive letters with no reply, the Management will
request for authority from COA to write-off the
receivables.

East Avenue Medical Center Partially Implemented No formal memorandum is


issued by Management
As of December 31, 2009, the Training Units still have instructing the concerned
the complete documents and data on Affiliation Fees officials of offices to comply
transactions. However, as of report preparation, formal with the recommendations
instructions have been issued to this effect. proposed by the Auditor.
Further, no standard format for
affiliation contracts have yet
been made and due dates of
payments were not yet
reflected in the contracts.

186
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Western Visayas Medical Center On-going

Personnel wanted to settle their account through payroll


deduction. Thus, in April 2009, the Audit Team and
Management agreed that the Drugs and Medicines
account may be deducted from salaries provided the
employee gives his/her consent. Thus, Memo Order No.
60 s 2009 was issued.

b. Record services rendered and goods Philippine Orthopedic Center Partially Implemented
delivered as receivables and support
them with complete documents and Management had complied with the recommendations
subsidiary ledgers for monitoring and is still in the process of recording affiliation fees.
purposes;

c. Record promissory notes as receivables Cagayan Valley Medical Center, Veterans Regional
to ensure and facilitate monitoring of Hospital, Bataan Regional Hospital, Culion Sanitarium,
settlements by patients/guarantors; and Vicente Sotto Memorial Medical Center, Governor
Celestino Gallares Memorial Hospital and Caraga
d. Prepare journal entries to adjust errors Regional Hospital have no status report.
in recording receivables and income in
order to correct book balances.

Observation # 13

Advances to Contractors 2008


DOH-
Repayment made by a contractor in the CAAR
amount of P2,860,173.12 was not recorded pages
in the books of accounts of the Jose R. 59-60
Reyes Memorial Medical Center, thus,
overstating the Advances to Contractors
account by the same amount.

a. We recommended that the Chief The Chief Accountant made the necessary adjustments Fully Implemented
Accountant analyze the account and to the account inasmuch as the repair and renovation

187
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
prepare adjusting journal entries in projects of the Medical Center had already been
order to reflect the correct amount of completed.
the account Advances to Contractors in
the books of accounts of the Medical
Center.

b. We also recommended that the


Accounting Section maintain
Subsidiary Ledger for the above
account and trace back in its file of
disbursement vouchers, the composition
of the P1,425,722.23 pertaining to
previous years’ construction.

Observation # 14

Purchase of Drugs and Medicines, 2008


Medical Oxygen and Laboratory Reagents DOH-
CAAR
Improper practices of hospitals and DOH- pages
CO in recording receipts and issuances of 60-62
drugs and medicines, medical oxygen and
other laboratory supplies as well as the non-
compliance with pertinent procurement
rules and regulations resulted not only in the
overstatement of the account balances of
Drugs and Medicines Inventory and
Medical, Dental and Laboratory Supplies
Inventory by P103,031,957.54 and
P6,542,900.91, respectively, but also
rendered the validity of the other affected
inventory balances doubtful.

In order to present fairly the inventory


account balances in the financial statements,
we recommended the following courses of

188
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
action:

a. The Accounting Division of DOH-CO DOH – CO


exert efforts in retrieving all pertinent
documents on receipts and issuances of For the unrecorded deliveries, a total of P5,555,426.34 Partially Implemented
drugs and medicines as of year-end, was already booked-up while the remaining balance was
including those unrecorded in the requested to be delivered and inspection reports be
previous year to facilitate and update submitted by Materials Management Division.
recording of transactions in the books
of accounts. Likewise, the lone
employee in-charge of recording CHD for MIMAROPA has no status report.
transactions be assisted and priority in
recording should be those involving the
major accounts.

b. Responsible Medical oxygen is now treated as inventories. The Head Partially Implemented Assignment of a responsible
ARMMC officials, among others: a) of Supply Section was instructed to closely monitor personnel to keep charge of
record purchases of medical oxygen as issuance of medical gases by requiring end-user’s the receipt and issuance of
inventory upon delivery and only those reports on their actual consumption that will also serve medical oxygen was not yet
that are actually utilized should be as basis in the recording of actual expenses of the implemented.
taken up as expense based on the Hospital.
monthly utilization report of the end-
users; and b) procure medical gases and
all other goods and services based on
approved POs and comply with
pertinent procurement rules and
regulations at all times.
The Laboratory Section failed to submit the desired Partially Implemented Lack of manpower due to fast
c. Concerned report before the closing of the books for CY 2009 but turnover of personnel.
employees of the Accounting and as of March 31, 2010 has completed the 2009 report.
Laboratory Sections of the LPGHSTC Prior years reports will be worked out and gradually be
come up with a standard costing per submitted to the Accounting Section as soon as
unit of supplies to ensure uniform available.
recording of issuances at the end of
each month.

189
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Jose B. Lingad Memorial General Hospital


d. The Chief
Accountants of JBLMGH and OP stop The unrecorded utilization of medical supplies was Fully Implemented
the practice of treating transfers of already adjusted under JEV No. RA-09-0769 dated April
inventories from the Supply Section to 30, 2009.
the ancillary units as outright expense
because only those that are actually Ospital ng Palawan has no status report.
consumed should be recorded as such
based on the monthly utilization report
of the end-users. Bicol Regional Training and Teaching Hospital

e. The Chief The bulk of discrepancy pertains to semi expendable Fully Implemented
Accountants of BRH and BRTTH take supplies for which necessary adjustment has been
up the necessary adjusting entries to effected.
correct the balances of the affected
accounts. Batangas Regional Hospital has no status report.

Observation # 15

Inventories

The absence of a periodic reconciliation of 2008


accounting records against property, DOH-
pharmacy and physical inventory reports on CAAR
drugs and medicines and laboratory page 63-
reagents as well as errors and omissions in 66
reporting, posting and recording of
transactions resulted in uncorrected
discrepancies, thus, casting doubt on the
existence of these items and the validity and
correctness of the reported year-end
inventory balances of P232,771,234.59.

190
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

We recommended that the concerned No Status Report for the following:


accounting, property and pharmacy
employees of BFAD, CHDs and the above- 1. Caraga Regional Hospital
mentioned hospitals adopt the following 2. Cagayan Valley Medical Center
corrective measures to address the 3. Southern Isabela General Hospital
deficiencies noted:

a. Exert extra efforts to regularly and Bicol Sanitarium Fully Implemented


properly reconcile respective records to
ensure accuracy of reported account Management has taken up in the books all 2008
balances in the financial statements. issuances/consumptions.
Require prompt submission of the
required monthly reports to the Bicol Regional Training and Teaching Hospital Fully Implemented
Accounting Section to facilitate timely
recording of transactions. The bulk of discrepancy pertains to semi-expendable
supplies for which necessary adjustment has been
b. The respective Accounting Sections of effected.
the above hospitals take up the
necessary adjusting journal entries to Dr. Paulino J. Garcia Memorial Research and Not Implemented The difference as alleged
correct the balances of all affected Medical Center belong to prior year’s
accounts specifically those pertaining to transaction whereby records
prior years’ carried over balances. The discrepancy was reduced to P15,828,952.45. needed to reconcile
discrepancies are no longer
available.

CHD for Western Visayas Not Implemented Included in CY 2009 ML

Western Visayas Medical Center

Supply Officer is continuously looking into records of On going


prior years to reconcile the balances of inventory items.

191
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Labuan Public Hospital Not Implemented There was still no action taken
to start with the reconciliation.

Mindanao Central Sanitarium Not Implemented No action taken by the


Management.
CHD for CAR

A team will be created to facilitate the physical counting Partially Implemented


of inventories as the final basis in adjusting the
unreconciled inventory accounts. The inventory was
not completed and is still on-going as of December 31,
2009.

c. The Property Unit of BFAD coordinate The periodic reconciliation of accounting and property Partially Implemented The usual reason cited by both
with the Accounting Unit to retrieve the records cannot be implemented due to lack of personnel the Accounting and Supply
source documents of prior years’ in both sections. Further, the Supply Section has not yet Sections for failure to
transactions to adequately support the classified the properties for disposal under the Other implement these
adjustments to be made on the Assets account in the Inventory Report of PPE for CY recommendations is the lack
inventories account and eventually 2009. of personnel.
reconcile the balances of the GL and
inventory reports. Depreciation was provided for five PPE accounts only, The LSD has not yet submitted
namely: Electrification, Office Building, Other the Inventory Report for
Structures, Fire Fighting Equipment, and Motor reagents hence, no
Vehicles. reconciliation could be started.

The Accountant has not yet made the necessary


adjustments and reclassifications while the Inventory
Committee has already prepared the annual Physical
Inventory Report in CY 2009.

The Accounting and Supply Sections committed to


implement the adjustment as soon as the year-end
inventory of reagents from the LSD is submitted.

192
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation # 16

Procurement System on Drugs and


Medicines, Medical Supplies and
Equipment
No Status Report for the following CHDs and Hospitals:
Systems practiced by nine hospitals and 2008 1. CHD for Western Visayas
three CHDs in the procurement of drugs DOH- 2. CHD for Northern Mindanao
and medicines, medical supplies, office CAAR 3. Ospital ng Palawan
supplies and equipment, which were page 66- 4. Talisay District Hospital
contrary to the provisions of RA No. 9184, 73 5. Saint Anthony Mother & Child Hospital
the Government Procurement Reform Act, 6. Davao Regional Hospital
deprived them from availing of volume 7. Cotabato Regional & Medical Center
discounts and reasonable prices, thereby 8. Vicente Sotto Mem. Medical Center
resulting in overpricing by P2,011,735.93.
Valenzuela Medical Center
We recommended that CHD and hospital
officials ensure strict compliance with the
Price monitoring scheme are being adopted by the end- Partially Implemented
provisions of RA No. 9184 to avail of
users and the BAC will come up with a realistic
volume discounts, obtain the most
Approved Budget for the Contract (ABC).
advantageous prices for the government and
avoid excessive procurement. At NCMH,
A letter was sent to the supplier, Respicare Enterprises,
an investigation to identify the persons
requesting for an explanation as to discrepancy in the
responsible and those who must be held
price offered to the Hospital and to JBLMGH and
personally liable for the procurement of
possibility of price reduction. The Center is waiting for
overpriced medical oxygen and blankets be
its reply.
conducted.
Tondo Medical Center

It is very unfortunate that suppliers are giving different Not Implemented No formal written request for
prices to Hospitals. Management relied on the results of consideration was submitted.
the bidding of 2008 which was made in good faith. Investigation on the subject
Performance bond was overlooked because it was only price difference was not also

193
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
an extension of the 1st semester bidding. The BAC was mentioned and included in the
newly constituted at that time. Management requested management action.
for consideration on this matter.

National Center for Mental Health

The Management pre-terminated its existing contract Partially Implemented The Center conducted public
with the CIGI effective May 15, 2009. As a consequence bidding for medical oxygen
thereof, the Management informed that they might be gas on June 9, 2009 wherein
compelled to adopt the “Shopping” mode of the contract was awarded to
procurement from a supplier of medical oxygen which the CIGI at a unit price of
offers a reasonably lower price than the CIGI. A steady P249.00 per cylinder for
supply of medical oxygen is essential to sustain lives of medical gas H size.
the hospital’s infirmary patients. The Center shall be
conducting a public bidding to obtain fair pricing of the No investigation was yet
commodity. Management earlier posted this item in the conducted on the reported
PhilGEPS but no one responded to their advertisement. over-pricing.

CHD for Caraga Region

Management instructed DOH representatives to retrieve


unreturned RISs with condition that PES shall not be
signed by the Regional Director without the RIS.

194
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation #17

Household Hazardous Substances


Procured by NCMH
2008
Suppliers previously post-disqualified by DOH-
the NCMH for non- submission of BFAD CAAR
License to Operate were later issued POs for page 73-
deliveries of hazardous household 77
substances amounting to P14,272,013.20
such as chemicals, disinfectants, soaps and
detergents, contrary to Section 23.6, IRR of
R.A. 9184.

a. We recommended that NCMH see to it National Center for Mental Health


that the pertinent provisions of RA No.
9184, particularly on public bidding and The pertinent provisions of RA No. 9184 are strictly Fully Implemented The BFAD, now FDA,
eligibility of suppliers, are strictly complied with together with the legal documents being certified that households
complied with in all procurement required in the bidding. hazardous substances need not
transactions. to be registered with them as
A BFAD License to Operate is required in the long as the purpose of
b. We also recommended that only processing of applications of an establishment intending purchase is for “industrial”
suppliers who are issued License to to market any product. which means that the items are
Operate and with BFAD registered not intended for commercial
household hazardous substances be use or not for retail
qualified as bidders not only to ensure distribution.
the safety of hospital patients and
employees and the effectiveness of such
substances for the intended purposes.

195
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation #18

Corporate Social Responsibility

Refusal by a multi-national drug company 2008 Vicente Sotto Mem. Medical Center – No Status
to accept six POs of VSMMC totaling DOH- Report
P1,243,266.80 for the delivery of much CAAR
needed drugs and medicines and medical pages
supplies, despite very substantial payments 78-79
made during the year, for reasons not
attributable to the hospital but due to DBM
rules and regulations, failed to give
importance to the public’s interest and the
significance of its Corporate Social
Responsibility as a business entity.

We recommended that Management impose


the appropriate sanctions provided under
RA No. 9184 against the multi-national
company which failed to comply with its
obligations for the supply and delivery of
drugs and medicines to the hospital.

Observation #19

Recording of Cost of Sales

Practices of two hospitals in recording the 2008


cost of drugs and medicines and medical DOH-
supplies sold resulted in the net CAAR
understatement of the balance of the page 79
account Cost of Goods Sold by
P7,905,446.66, overstatement of Drugs and
Medicines Expense by P8,991,420.84 and

196
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
the misstatement of the reported income for
the year.

We recommended that the concerned Amang Rodriguez Memorial Medical Center


Accountants of the hospitals adopt the
following corrective measures: Journal Entry Vouchers reflecting adjustments made on Fully Implemented
the accounts of the Hospital were submitted to the Audit
a. Strictly adhere to the accounting Team.
principle on the proper matching of cost
against revenue in order to arrive at the The Pharmacist included the sale of medical supplies in
correct income earned for the period by the list of consignment sales for CY 2008. Financial
recording the cost of drugs and Reports were revised to reflect correct balances of the
medicines and medical supplies sold as accounts for CY 2008.
a debit to the account Cost of Goods
Sold and a credit to the Merchandise
Inventory account.
Rizal Medical Center
b. Take up the adjusting entries to correct
the balances of the affected accounts. The recommendation had been adopted by the Fully Implemented
Accounting Section starting January 2009.

Observation #20

Purchase of Drugs and Medicines out of


the Revolving Fund

Drugs and medicines worth P925,918.09 2008 Far North Luzon General Hospital and Training
that were purchased out of the Revolving DOH- Center – No Status Report
Fund of Far North Luzon General Hospital CAAR
and Training Center (FNLGHTC) but issued page
to charity patients were not reimbursed from 80
the regular appropriations of the hospital
contrary to Sec. 2.5 of National Budget
Circular No. 321 and COA Circular No. 80-
128 dated February 6, 1980, thereby
depleting the hospital’s Revolving Fund for

197
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
drugs and medicines.

We recommended the reimbursement with


an equivalent amount from the regular
appropriation of the Hospital, the cost of
drugs and medicines purchased out of the
revolving fund but were issued to charity
patients pursuant to the above regulations.

Observation #21

Infrastructure Projects

Prolonged delay in the construction of the 2008 Sulu Sanitarium – No Status Report
Sulu Sanitarium costing P38,432,678.04 DOH-
deprived the intended beneficiaries of the CAAR
immediate use thereof while the non- pages
compliance with the plans and 81-82
specifications on the rehabilitation of two
projects at the National Center for Mental
Health resulted in the discrepancy of
P318,573.00. National Center for Mental Health

We recommended that Sulu Sanitarium Management justified that the handrail on the right side Partially Implemented Reply of Management to
require the contractor the immediate of the stairway was uninstalled because there was a AOM No. 2008-06 dated
completion of the project and impose the change order duly approved by proper authorities before October 20, 2008 was
corresponding liquidated damages. the completion of the project. The said change was an forwarded to the COA Sr.
Likewise, NCMH investigate the additive and deductive one. The deduction concerns the Technical Audit Specialist for
discrepancies noted and identify the persons right side of handrail of the stairway. comment. However, it was
liable. returned by COA Cluster C,
Social Services requesting
submission of documents
relative to the Change Order
made.

198
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation #22

Repair/Rehabilitation of Various Offices 2008 Dr. Jose Fabella Memorial Hospital –


DOH-
Staggered purchases of construction CAAR Purchase Request and Purchase Order with different Fully Implemented
materials in the amount of P748,417.00 pages dates had been prepared separately because of the
from the same supplier for the 82-83 different rehabilitation projects of various hospital
repair/rehabilitation of the various offices of offices, wherein it was charged to the remaining balance
Dr. Jose Fabella Memorial Hospital to of the Calamity Fund (Continuing Appropriation) which
justify shopping as the mode of procurement lapsed on December 31, 2008.
resulted in splitting of Purchase Orders, in
violation of Section 54.1 of the IRR of RA The Management has no intention to violate Section
No. 9184. 54.1 of the IRR of RA No. 9184 (splitting of
Government Contracts) and give assurance that it will
We recommended that the Hospital strictly not be repeated in the future.
comply with Section 54.1 of the IRR of RA
No. 9184 and submit
comments/justifications why the nine
contracts entered into for the
repair/rehabilitation of the various offices of
the hospital may not be considered as
splitting to avoid the required public
bidding.
Observation #23

Property, Plant and Equipment

Inadequate controls or procedures adopted 2008


by DOH-CO, some hospitals and CHDs DOH-
over property management prevented the CAAR
facility of determining the existence and pages
custodianship of properties, while erroneous 83-89
and incomplete recording of transactions

199
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
and non-reconciliation of accounting and
property records, resulted in the
overstatement of the balance of Property,
Plant and Equipment account by
P70,164,109.76 as of December 31, 2008.

We recommended the following to address DOH – Central Office


the foregoing deficiencies:
Management informed that a Property Management Partially Implemented
a. Direct the concerned Team was created whose function is to look into the
accountants to record in the books of assets of the whole Department. Its function includes the
accounts all equipment, whether maintenance of property cards.
acquired thru purchase or donation, and
those transferred to other offices and Rizal Medical Center
make the necessary adjustments and
reclassification for all errors noted. This is partially complied with due to lack of manpower. Partially Implemented
Only the most recent (last eight years transactions) were
b. Instruct the Inventory updated and reconciled with the books. Transactions
Committee to conduct the annual prior to year 2002 are yet to be worked back and the
physical count and submit the Physical Accounting Section committed to deliver the output by
Inventory Report of PPE to the June, 2010.
accounting and auditing offices.
San Lazaro Hospital
c. Reconcile periodically
both the accounting and property The Physical Report of Equipment for 2008 was Fully Implemented
records to ensure accuracy of the submitted. The report had been reconciled with the
financial statements. accounting records. Adjustments had been made for the
noted discrepancy due to double entry in the books of
accounts.

Eighty percent of old Memorandum Receipts for Partially Implemented


Equipment (MRs) were replaced with AREs and AREs
are being updated and renewed every three years.

Calabarzon & MIMAROPA have no status report

200
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Food and Drug Administration

The Accounting and Supply Sections committed to Not Implemented The Inventory Report for LSD
implement the adjustment as soon as the year-end has not yet submitted the year-
inventory of reagents from the LSD is submitted. end.

Western Visayas Medical Center

Supply Officer is continuously looking into records of On-going


prior years to reconcile the balances of inventory items.

Corazon Locsin Montelibano Mem. Regional


Hospital

The OIC-Chief of Hospital coordinated the On-going


reconciliation of the Accountant’s and Property Officer’s
independent records. The reconciling items identified
are:
 Unserviceable properties amounting to
P2,531,376.58 which were included in the physical
count but were not recorded in the books of
accounts;
 Donations which were not recorded in the books of
account
 Semi-expendable items (the unit cost is below
P10,000.00) included in the count as property,
plant and equipment, but were recorded as
expenses in the books of accounts; and
 Personal properties of the employees found inside
the Hospital that were included in the count. A
memo was issued prior to the scheduled inventory
count that all personal properties must be taken out
or the Property Section must be notified of the

201
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
presence of these personal properties otherwise,
these will be treated as hospital property.

The correct property, plant and equipment balance will


be taken up in the books of accounts.

Reclassification of unserviceable properties from


Property, Plant and Equipment” account to “Other
Assets” account in the net book value of P924,597.70
was taken up under JEV No. 2008-01-148 dated
1/31/08.

CHD for Central Visayas – No Status Report

CHD for Caraga Region Not Implemented The said equipment is not
delivered to end-user.

CHD for CAR

Individual AREs pertaining to a single unit of IT Partially Implemented The newly assembled units
hardware were consolidated by the Supply and IT will be booked upon final
Committee. verification based on physical
inventory report to be
submitted by the Inventory
Committee.
CHD for Ilocos Region

The P70,000,000 was already adjusted thru JEV 09-03- Partially Implemented The P15,000,000.00 lodged
035. under Construction In
Progress was not yet adjusted.
Zamboanga Peninsula – Labuan Public Hospital

Provided depreciation for all depreciable assets. Fully Implemented

Northern Mindano, Davao Region, Central Visayas–


have no status report

202
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

CHD for SOCCSKSARGEN Region Not Implemented The Accounting Section has
not prepared subsidiary
ledgers of all property, plant
and equipment accounts and
has not reconciled its records
with those of Supply Section.

Amang Rodriguez Memorial Medical Center


The flood waters from
Out of the 15 sets of equipment found to be unutilized, Not Implemented typhoon Ondoy in September
nine have become operational. The remaining six are 2009 have destroyed most of
either partly operational, for condemnation and some the hospital equipment
needs to be further tested and evaluated. obtained thru the 1995 French
Protocol. These items are now
included in the request for
relief from accountability.
d. Direct the Administrative CHD for Western Visayas, DJSMMCEH,
and Property Supply Officers of DOH
WV, DJSMMCEH, WVS and ECS to A follow-up letter has been sent last May 8, 2009 to On-going
exhaust all means to secure the Transfer DOH Asst. Secretary Lydia P. Fernandez, requesting the
Certificate of Title or any document that status of the titling of the lot on which this Office and
will serve as evidence of ownership the WCMC are located.
over the lots they occupy.
Documents relative to this have already been sent to the
office of Secretary Francisco T. Duque in July 2007.

Eversley Child Sanitarium (ECS) – No Status Report

e. Require the concerned DPJGMRMC – Talavera Extension


administrative officer of the Application for the renewal of
DPJGMRMC-Talavera Extension to Hospital Buildings and Equipment were not insured up Not Implemented insurance was filed with GSIS.
strictly comply with RA 656, otherwise to September 2009.
known as the “Property Insurance Law”

203
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
which provides that all insurable assets
are insured with the GSIS in order to
ensure indemnification of the
equivalent value of government
properties in case of damage to or loss
of assets thru fire or any other
unforeseen events.
Las Pinas General Hospital and Trauma Center
f. Provide depreciation for
all depreciable assets. The Management has provided the depreciation of Fully Implemented
property, plant and equipment account per JEV No. 09-
12-2240 dated December 31, 2009.
The Accounting Unit is a one-
Labuan Public Hospital Not Implemented woman unit. There was no
support personnel to assist the
Batangas Regional Hospital, Bataan General Acting Accountant.
Hospital, Southern Isabela General Hospital have no
status report

Vicente Sotto Memorial Medical Center – No Status


g. Require the property Report
officer or administrative officer of
VSMMC design a system in the
unloading, receipt and distribution of
donated properties from abroad.
Unloading area should be strictly
restricted to the members of the
inventory and inspection committee.
Moreover, Management file a
complaint against the shipper for the
undelivered/lost 226 items of donations
from Canada, copy furnished the donor.
Hold the persons responsible for the
inaction in the recovery of the 226
undelivered/lost donated properties.

204
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation # 24

Recording of Liabilities

Errors and omissions in recording liabilities 2008


and the non-reversion of long outstanding DOH-
undocumented payables amounting to CAAR
P4,180,540.94 resulted in the net pages
overstatement of the affected liability 90-92
accounts. Moreover, validity of payables
totaling P44,756,819.50 were doubtful
because they have no breakdown, not
supported with complete documentation and
not reconciled with subsidiary ledgers and
DOH-CO records.

We recommended that the concerned


Accountants of BFAD, hospitals and CHDs
undertake the following courses of action to
address the foregoing deficiencies:

a. Review all outstanding payables and Food and Drug Administration


revert those which are
undocumented/not supported with valid FDA Director requested for write-off of the accounts to Partially Implemented Although there was a request
claims and those aged two years or the Audit Team November 19, 2009. for write-off, the same was
more; returned for compliance with
the documentations as required
b. Maintain and update subsidiary ledgers D.P.J. Garcia Mem. Research & Medical Center in COA Circular No. 97-001.
for each payable account;
Subsidiary and general ledgers balances are now in Fully Implemented
agreement.

c. Confirm the existence of the payable Bicol Medical Center

205
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
accounts;
The 2008 year-end payables for salaries and wages were Fully Implemented
already based on actual processed payrolls.

Dr. Jose Fabella Mem. Hospital

d. Comply strictly with Section 19 of the For prior year’s accounts payable amounting to Partially Implemented
Special Provisions of the 2008 GAA P311,988.31, a letter had been sent to Marquez and Sons
regarding payment of claims of prior Construction, Inc. reiterating compliance/submission of
years’ valid unbooked obligations; the required documents to facilitate the processing of
claims.

For Philhealth overpayment, the said amount was


adjusted under JEV No. 08-10-0547 RA dated October
24, 2008.

e. Stop the practice of allowing No Status Report


unauthorized deductions from
Schistosomiasis Control & Research
Hospital (SCRH) employees’ salaries
for payment of loans due to private
financing entities.

f. Require the accountant of CHD for A letter response to the previous AOM with full Fully Implemented
Western Visayas to explain the reason explanation was already received by your Office last
for incurring a debit balance in the March 13, 2009.
account Due to BIR. Strictly adhere to
COA Circular No. 2003-001 dated June The reply to the Management Letter on the Financial
17, 2003 prescribing the use of the New Audit of CHD for WV dated June 9, 2009, the “Due to
Standard Government Chart of BIR” account as of April 30, 2009 has already a credit
Accounts. balance of P123,826.85.

206
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation #25

Losses in Revenue

Seven hospitals and the DOH-CO lost a 2008


total of P17,366,608.04 in revenues either DOH-
due to uncollected penalties/liquidated CAAR
damages, overdue promissory notes and pages
receivables guaranteed by hospital 93-95
employees, as well as misclassification of
patients, absconding patients and deficient
Hospital Operations and Management
System (HOMIS).

To address the deficiencies noted, we


recommended the following courses of
action:

a. DOH- Management claimed that they assumed that the penalty Partially Implemented
CO require ACES to pay the charges were already settled by ACES. Since ACES
corresponding liquidated damages. have numerous transactions with NCHP, the Accounting
Closely monitor the submission of Division communicated the matter with them and
deliverables of all contracts entered into eventually ACES agreed to have the penalty deducted
with third parties and see to it that from its existing account with the DOH. It was only this
penalties for late submission of the time that they found out that the charges remained
same are deducted from payments to unsettled.
contractors in accordance with the
provisions of the contract.
The Legal Office has already prepared the renewal of Partially Implemented For CY 2010, the Hospital has
b. East the contracts of various clinics located at Mezzanine. moved for the centralization of
Avenue Medical Center enforce Letter was already furnished to Heaven Indulge inviting all billings and collections of
collection of rentals and cost of utilities. it for a meeting to discuss its contract and its unpaid lease contracts with the Billing
rentals, electric and water consumptions. and Collection Unit.

207
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

There was still uncollected


income from rental spaces as
of 12/31/09.

As of 12/31/09, the contractor


has not yet settled its rentals
for several months as well as
its utilities expenses. Its
contract remained valid. The
contractor wants that its
accounts be first reconciled
before payment.
No Status Report

c. Souther
n Isabela General Hospital devise a
hospital form indicating the preferred
accommodation and the corresponding
charges to be accomplished by the
patient’s relative/guardian before
admission. Likewise, strictly follow the
guidelines on the classification of
patients pursuant to DOH
Administrative Order No. 51-A, s. The Management already conducted a meeting and Fully Implemented
2001. discussed this matter with the security guards. Security
measures were tightened and the security personnel
d. Jose B. were tasked to home visit absconding patients. These
Lingad Memorial General Hospital new strategies were found to be more effective in
(JBLMGH) adopt measures to prevent decreasing the number of absconding patients.
incidence of absconding patients such
as double checking of incoming and
outgoing visitors especially in the OB- Collection/settlement of accounts receivable made from On-going

208
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Gyne area by guards on duty. July 1, 2008 to May 31, 2009 amounted to P814,025.38.
This was due to the strict implementation of payroll
e. The deduction of overdue accounts with BMC personnel as
Bicol Medical Center (BMC) strictly guarantors in compliance to Rule No. 8 of the
observe the policies and procedures in aforementioned Policies and Procedures. Demand
the acceptance and settlement of letters are also being sent to debtors contributing to the
promissory notes and intensify collection/settlement of accounts receivables.
collection of overdue accounts. In
addition, consider the take home pay of No Status Report
personnel before allowing them as
guarantors.

f. Norther
n Mindanao Medical Center (NMMC)
create a Committee to make a thorough
study on the hospital’s billing system,
where all cost centers are to be linked
with the Billing Section to capture all
the necessary data for inclusion in the
computerized management information
system. Likewise, undertake periodic
maintenance and up-keep of the
computerized system so that minor The Hospital Accountant had already started since the Fully Implemented
defects will not lead to serious later part of 2008 reviewing properly the claims for PF
damage/breakdown. of the medical practitioners that requires the Billing
Section to attach the Patient’s Billing Statement and the
g. Mayor corresponding Official Receipt evidencing payment
Hilarion Ramiro Sr. Regional Training thereof, and effecting deductions corresponding to the
and Teaching Hospital (MHRJRTTH) unpaid balances of patients paying the consequent
strictly comply with the provisions of doctor’s PF.
DOH Administrative Order No. 92 s.
2003 dated September 22, 2003 to
ensure full settlement of hospital bills
prior to the payment of professional
fees.

209
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation #26

Incurrence of Expenses

Twelve hospitals, six CHDs and two 2008


bureaus incurred unauthorized and DOH-
excessive expenses totaling P4,196,318.19, CAAR
thus, rendering the validity of the balances page
of affected expense accounts doubtful. 95-98

We recommended the following courses of Food and Drug Administration


action to correct the deficiencies noted:
The amount has been refunded through salary Fully Implemented
a. Concerned employees of the above deductions in 2009.
offices be required to refund the excess
and unauthorized amounts collected. Bureau of Quarantine

There was already an on-going repair at the BQ Canteen Partially Implemented


when the Contract between BQ and BQEMPC was
signed. The previous occupant got the electrical wirings
of the canteen that causes the next bid winner to back-
out thus, the repair was made to habitable. The drainage
of the BOQ was also repaired and the flooring of the
canteen was included in the repair because the drainage
pass through the kitchen of the canteen hence, the
inclusion of the kitchen in the repair.

CHD for Ilocos Region

210
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Management stands to their belief that Step Increment Not Implemented


and Longevity Pay are two separate benefits.

CHD for Caraga Region

Management filed an Appeal Memorandum to the COA Not Implemented


Regional Director.

CHD for Cagayan Valley

Initial guidelines were in place to provide information Partially Implemented


to those in charge of trainings in order to consider
economy in the selection of venue and food preparation.

CHD for Zamboang Peninsula


Fully Implemented
The following CHDs have no status report:
 Calabarzon
 Davao

Basilan General Hospital


Not Implemented No comments from Dr. Dayrit.
Zamboanga City Medical Center

Management decided to follow, despite certain


arguments, COA recommendation to pay Longevity and Fully Implemented
Hazard Pay based on E.O. 611 and DBM National
Budget Circular (NBC) No. 511 dated June 18, 2007
without prejudice to the grant of differential in the
future.

Corazon Locsin S. Monfort Medical Center


Extension Hospital Not Implemented No reply from management on
payment of salaries &
Management submitted on Feb. 12, 2010 DOH Dept. allowances of resigned

211
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Personnel Order No. 2007-2931 C dated December 14, employees and on payment of
2009, authorizing the Management Team for CLMMRH excess travelling expenses
to collect per diems for the duration of their
reassignment in CLMMRH as Officers-In-Charge.

Ilocos Training & Regional Medical Center

Some of the persons hired under contract of service


were no longer connected with the Hospital. Partially Implemented No refund was made by those
no longer connected with the
Regional 1 Medical Center hospital.

The Management filed Civil Case No. 2008-0293-D


against Integra Asia Konstruct Inc. (IAKI). Demands to On-going
return of the mobilization fund amounting to
P599,756.84 was made through a formal demand letter
both sent thru Registered Mail with Return Cards.

The following hospital have no status report:


b. Western Visayas Sanitarium submit  Batangas Regional Hospital,
justification for the purchase of various  Don Jose S. Monfort Medical Center
equipment using HEMS funds while Extension Hospital,
CHD for Western Visayas should  Western Visayas Sanitarium
submit legal basis for payment of  Eversley Child Sanitarium
donation and advertising expenses.  Eastern Vissayas Regional Medical Center
 Amai Pakpak Medical Center
c. Eversley Child Sanitarium demand  Northern Mindanao Medical Center
payment from the Mandaue City
College for the cost of electric and
water consumption that were paid by
the hospital. The MOA should be
amended to include provisions on the
payment of utilities and the installation

212
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
of sub-meters to monitor the College’s
actual light and water consumption.

Observation #27

Hiring of Consultants

Seven hospitals spent a total amount of 2008


P1,232,749.73 for consultancy services DOH-
entered into with Atty. Quintin O. Magsico, CAAR
Jr. which was not in accordance with the page 98-
provisions of RA 9184, COA Circular No. 103
85-55A dated September 2, 1985 and Joint
Memorandum Circular No 2, s. 1979, of the
CSC, Ministry of Budget and COA.

a. We recommended to the Heads of the Jose R. Reyes Memorial Medical Center


concerned hospitals terminate the
consultancy contracts with Atty. A request for reconsideration on the disallowed Not Implemented Management maintained its
Magsico and henceforth, stop the hiring consultancy agreement with Atty. Quintin O. Magsico position that the services of the
of consultants for the above-mentioned will be filed before the Commission on Audit before the consultant was a necessary
purposes. prescribed 6-month period to appeal shall lapse. expenditure as the BAC and
TWG members do not possess
b. Hospitals consider the knowledge, any technical capability in so
training, competence and expertise in far as government
the appointment or selection of Quirino Memorial Medical Center procurement process is
employees to compose the BAC and the concerned.
TWG. Training of employees and Considering that Atty. Magsico has thoroughly provided Fully Implemented
research and consultations with all the training seminars regarding the implementation
appropriate government agency or body of the Government Procurement Reform Act or RA No.
should be considered by the hospital to 9184, that benefited all the members of the Bids and

213
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
improve employees’ competence, Award Committee, its Technical Working Group, BAC
efficiency and effectiveness in Secretariat as well as all the hospital officers and
procurement. The provisions of Joint employees concerned therein, the previous Medical
Memorandum Circular No 2, s. 1979, Director finds it appropriate not to renew the
of the CSC, Ministry of Budget and Consultancy Contract with Atty. Magsico effective July
COA on the hiring of consultants 2009 as per Notice dated June 9, 2009.
should be strictly adhered to.

Rizal Medical Center

The consultancy contract was terminated effective May, Fully Implemented


2009. Notice of Disallowance No. 09-01-101 dated
November 19, 2009 was received on the payments of
said consultancy services.

Tondo Medical Center

The consultancy agreement was terminated. The Partially Implemented


management made no mention as to whether the
knowledge, training, competence and expertise in the
selection of members of the BAC and TWG were
considered.

Valenzuela Medical Center

The consultancy contract with Atty. Quintin Q. Magsico, Fully Implemented


Jr. was already been terminated since June 2009.

There is a pending appeal on the Notice of Disallowance


No. 2009-002 in the amount of P120,000.00
representing the salary of Atty. Magsico for the period
June 16, 2008 to December 15, 2008.

BAC is currently coordinating with PhilGEPS and


GPPB regarding schedule of training for the BAC

214
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
members and Secretariat. However, no date has been
given by PhilGEPS and GPPB.

Corazon L. Montelibano Mem. Regional Hospital

Management informed that the consultancy agreement


with Atty. Quintin Magsico, Jr., ended in December 31, Partially Implemented Although Management has
2008 and was not subsequently renewed. stopped/terminated the
consultancy agreement and has
sent personnel to trainings,
To update the skills of the members of the Bids and Management has yet to
Awards Committee (BAC), the Technical Working determine the liability of
Group (TWG), and the BAC Secretariat, the Hospital is officials involved in the hiring
sending them to available seminars/trainings of the consultant.
specifically the training on the new PhilGEPS Module 1
& 2 last May 28-29, 2008 conducted by the Governor’s
Office wherein two (2) personnel participated. In
September 11-12, 2009, the BAC and TWG had a
training on the “Revised Implementing Rules and
Regulations of RA No. 9184.

Zamboanga City Medical Center

Effective immediately, all perfected contracts that are to


be submitted to the Office of the Auditor pursuant to Partially Implemented Management informed that
COA Circular NO. 2009-001. In addition, an they are preparing their
indorsement to this effect was made to the Accounting, request for
BAC and Supply Sections for their compliance. reconsideration/appeal on the
audit disallowance re payment
of consultancy services.

215
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Observation # 28

Preparation of Purchase Order

The existing practice of the Property 2008


Section of DOH-CO, a bureau and seven DOH-
hospitals of not disclosing or indicating in CAAR
the Purchase Orders the complete pages
specifications and all other necessary 104-
information regarding items purchased was 106
inconsistent with COA Circular No. 96-010
dated August 16, 1996 and resulted in the
difficulty of validating the accuracy and
completeness of deliveries before receipt
and acceptance by personnel concerned.

a. We recommended that employees Valenzuela Medical Center Partially Implemented VMC had already conducted a
assigned in preparing POs be required fact finding investigation re:
to strictly comply with the provisions of alleged tampering of sales
the above-mentioned COA Circular by invoices. Copy of the said
indicating the complete specifications report will be submitted as
of the items ordered. The PO serves as soon as the same is made
the contract between the agency and the available by the Committee.
supplier and is also used as basis for
inspection before accepting deliveries, Eat Avenue Medical Center
thus, it is necessary that all the required
data pertaining to the purchased items The Hospital Management has already been strict in the Fully Implemented
be indicated therein. processing of claims without proper documentations,

216
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
particularly Purchase Orders and other forms of
b. Corrections and/or alterations be not contracts. It also ensures that sufficient funds are
tolerated. In the event that such cannot available before it enters into contracts with suppliers.
be avoided, the same be properly
identified and noted by the approving The construction supplies mentioned have not yet been
official of the Tondo Medical Center. paid due to incomplete documentations.

The purchase of equipment was already paid as this was


agreed in the contract that it shall be paid in two years
installment basis.

National Children’s Hospital

The Head of the Property Section and all her staff were Fully Implemented
advised to adhere strictly with the audit
recommendations.

Tondo Medical Center

The complete item descriptions including the brand Fully Implemented


name as supplied in the offer are now indicated in the
Purchase Order. Also, all corrections and/or alterations
in the Purchase Orders are now properly identified and
noted by the authorized approving official.

National Center for Mental Health

The Management has been complying with COA Fully Implemented


Circular No. 96-010 dated August 15, 1996 regarding
the preparation and submission of PO to the Office of
the Auditor relative to the procurement of
supplies/materials and equipment.

Due to several changes/replacement of the items


delivered to meet the requirements of the HEMS, the
specifications were inadvertently omitted in the PO.

217
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Dr. Jose N. Rodriguez Memorial Hospital

The Administrative Officer V and Head of the Supply Fully Implemented


Section is on strictly monitoring submitted Purchase
Order in compliance with the recommendation.

Research Institute for Tropical Medicine

The POs submitted to the Audit Team contain the Fully Implemented
complete specifications of the procured items.

Southern Isabela General Hospital (SIGH)

POs submitted are now properly filled up and showed Fully Implemented
complete specifications of items ordered.

DOH – Central Office

The following actions were undertaken by the Fully Implemented


Management:

a. Conducted inventory of the remaining kits at


the supplier’s warehouse.
b. Prior to withdrawal of the testing kits, these
were checked to ensure that the items were the
same as the ones inspected and accepted by
DOH.
c. A reagent refrigerator was installed and the
testing reagents withdrawn at the supplier’s
warehouse were stored.
d. Reiterated the DOH policy to all concerned
personnel and instructed them not to accept
testing kits with shelf below 18 months.
e. The remaining kits withdrawn which are

218
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
nearing expiry were already utilized.

VALUE FOR MONEY AUDIT

Observation #29

Utilization of Hospital Equipment and


other Facilities

Vital hospital equipment worth 2008


P42,185,878.0, construction materials, DOH-
buildings, and other facilities were found to CAAR
be either defective, unutilized, or left page
unfinished, thereby resulting in foregone 107-
revenues, wastage of government funds and 113
deprived patients of access to low cost but
quality health care services. Moreover,
failure of the Cotabato Sanitarium to
provide a garage not only exposed motor
vehicles costing P1,266,900.00 to natural
elements that may hasten their deterioration
but may also result in their possible loss and
unauthorized use.

We recommended that concerned Chiefs of CHD for Caraga Region Partially Implemented Television set amounting to
Hospitals and CHD Director undertake the P115,000.00 was not delivered
following corrective measures to maximize to end-user.
use of equipment and other facilities in
order to avoid wastage of funds:
Partially Implemented Anesthesia Machine worth
a. Ensure availability of Cotabato Sanitarium P1,900,000.00 remained idle.

219
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
equipment accessories and spare parts
in the local market and of adequately
trained equipment operators before
making any purchase.

b. Adopt a preventive
maintenance program for equipment,
building and other facilities to ensure
that these are properly maintained at all
times to avoid expensive repair costs. It
should include timely reporting of
defective equipment and other facilities
so that they can be immediately
repaired.

c. Regularly evaluate and assess


the actual condition of all unutilized
equipment and identify which of these
could still be repaired economically and
those that are already beyond repair.

We also recommended the following


measures to address the other identified
deficiencies:
The medical equipment was replaced by the Supplier. Partially Implemented Penalty for late deliveries was
a. QMMC demand replacement of the not imposed.
defective equipment delivered and
impose liquidated damages against the
supplier.
The following have no status report:
b. BGHMC officials impose liquidated

220
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
damages against Homebrewed a. Baguio General Hospital and Medical
Digitech, Inc. and demand immediate Center
completion of the project to enable the b. Conner District Hospital (CDH)
hospital to avail of the project’s benefits c. Batangas Regional Hospital (BRH)

c. Conner District Hospital (CDH) should


request assistance from CHD for CAR
in the installation of the computer
server and LAN to facilitate e-NGAS
implementation.

d. BRH officials should: a)


assign four nurses of the Surgical ICU
as initial personnel of the new ICU and
b) require trainees, upon return, to re-
echo their learnings to hospital
personnel in order to upgrade their
skills on proper ICU management.
Two (2) new units 500 KVA generator sets are already Partially Implemented The present generator sets of
e. BMC officials should conduct scheduled for bidding. BMC was repaired. However,
a regular and timely inspection of the the donated WHO generator
hospital’s power facilities and set was not yet installed.
immediately rehabilitate them in order Moreover, the capacity of the
to improve delivery of health services. generator cannot meet the
power demand of the hospital.
Thus, a need for a bigger
generator set capacity.

Adela Serra Ty Memorial Medical Center Partially Implemented


f. ASTMMC and CHD for (ASTMMC)
Western Visayas should closely monitor
and supervise construction of Not stated in the status report.
infrastructure projects and other
facilities to ensure their timely CHD for Western Visayas
completion. ASTMMC should also
rescind the contract, forfeit the As of October 2009, the upgrading of the Conference Partially Implemented The remaining work to be

221
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
contractor’s performance security, and Room and Comfort Room was 90% accomplished. Out done cannot be performed
take over the prosecution of the project. of the P291,318.94 worth of materials, 70% or because of the water
P203,923.26 have been utilized and the 30% was kept in underneath the main structure.
a safe place and protected from deterioration.

Action taken by management was not stated in the ML.


g. BFAD-CO and BFAD-Visayas
officials require the contractor, WT
Construction Inc., to immediately
correct the construction defects noted
by our COA-TAS and fast track the
procurement of the much needed
laboratory equipment and wares in
order to make use of the satellite
laboratory. The following have no status report:

h. The Head of Drug Treatment a. Northern Mindanao Medical Center


and Rehabilitation Center (DTRC) and (NMMC)
NMMC officials rehabilitate and install b. Cotabato Sanitarium (CS)
the necessary facilities to make the
buildings fully operational. Moreover,
an adequate equipment preventive
maintenance program should be
adopted to ensure that all equipment are
kept in good working condition at all
times and avoid expensive repair costs.

i. CS provide a garage for its


vehicles to avoid deterioration, damage
or possible loss.

Observation #30

222
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Contract of Lease by the East Avenue
Medical Center

The contract of lease entered into by the 2008


East Avenue Medical Center with the East DOH-
Avenue Obstetrics and Gynecology CAAR
Ultrasound Services, Inc. (EA-OGUSI) was pages
grossly disadvantageous to the government 113-117
because it is in direct competition with the
existing ultrasound services of EAMC’s
Radiology and Obstetrics and Gynecology
Departments, resulting in the
underutilization of EAMC’s two ultrasound
machines and loss of an undetermined
amount of income.

We recommended that EAMC’s responsible


officials adopt the following courses of
action to correct the above deficiencies:

a. Utilize hospital income and at the same The Mancom decided to re-study the contract entered Partially Implemented The NGO still holds clinic at
time make representations with the into with EA-OGUSI which will expire this December the OB-Gyne Ward of the
DBM through DOH-CO to request for 31, 2010. When the physical rehabilitation of Radiology Hospital.
additional funds to acquire sufficient Department is finished, the Ultrasound stationed at EA-
number of diagnostic equipment needed OGUSI shall be relocated to Radiology Dept. The OGUSI is still operating as of
by the hospital to improve its services. MANCOM, likewise, decided that the conflict of audit report preparation.
It should also consider soliciting interest issue shall be addressed since the Hospital is
financial assistance from other also offering Ultrasound to patients. The Agreement
government agencies such as the PCSO, will expire this coming December 2010.
PAGCOR and from congressional
initiatives of other lawmakers.

b. Immediately transfer the ultrasound


machine owned by the EAMC from the
ultrasound facilities of the EA-OGUSI
to the Radiology Department and issue

223
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
a policy giving priority to the use of the
ultrasound machines for OB-GYNE
cases in its Radiology Department over
that of the EA-OGUSI.

c. Restudy the terms and conditions of the


lease contract specifically on the
alignment of rates of ultrasound
services to be charged by the lessee
with those of EAMC, and to revise
those provisions that are grossly
disadvantageous to the government,
with the end in view of ensuring that
the hospital is able to generate fair
income not only from the rental of
space leased by the foundation but also
from the operation of the ultrasound
machines. The lease contract should be
amended to comply with the required
one year (instead of five years) period
for government contracts.

d. Consider the termination of similar


contracts with profit oriented
organizations like the EA-OGUSI in the
event that the EAMC is able to acquire
adequate number of high -end
ultrasound machines required by the
OB-GYNE Society of the Philippines.

Observation #31

Revenue Sharing Scheme between


JRRMMC and Himex Corporation

Failure of the Jose R. Reyes Memorial 2008-

224
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Medical Center (JRRMMC) to collect on DOH-
time its share in the revenue sharing scheme CAAR
embodied in a Memorandum of Agreement pages
(MOA) with Himex Corporation (HIMEX) 117-119
deprived the hospital of much needed
revenues and resulted in the understatement
of income for the period September 24,
2007 to December 31, 2008.

We recommended the following corrective Verbal requests for the immediate submission of the Not Implemented Reiterated in JRRMMC CY
measures to address the above deficiencies: Monthly Revenue Sharing Statement were made to 2009 ML.
Himex Corporation so as to verify the amount due to the
a. Enforce collection of the hospital’s Medical Center.
share in the profit sharing scheme from
September 24, 2007 to present.

b. Strictly comply with the provisions of


the MOA on the payment of the 50%
revenue share by HIMEX to JRRMMC
in order that said income may be
properly used for priority
projects/programs of the Medical
Center.

c. See to it that JRRMMC’s share in the


revenue-sharing scheme is computed
accurately and remitted by HIMEX to
the Medical Center every 5 th working
day of each month as provided for
under Section 4.1 of the MOA.

d. Amend the MOA to include a penalty


clause providing for the rate of interest
for every day of delay in the remittance
of JRRMMC’s share by HIMEX. Make
a re-evaluation of the estimated useful

225
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
life of the equipment and consider 15
years as their useful life.

Observation #32

Completion of BFAD Integrated


Information System
2008
Final completion of the Bureau of Food and DOH-
Drugs Integrated Information System CAAR
(BFAD-BIIS) was further delayed despite pages
its pilot implementation because bugs were 119-120
still found in the System Development and
Implementation, encoding of data
parameters for non-drugs was not yet
complete and the MOA with the National
Computer Center (NCC) for the online
payment and the contract for Internet
Service Provider were not yet finalized,
thus, preventing BFAD to resolve the
existing backlog on product application and
to facilitate a more transparent and
systematic processing of applications.

We recommended the following courses of System for Drug Product Registration has already been Partially Implemented The Audit Team was not
action to address the causes of delay: completed but no report was received from MediData furnished with a copy of the
Inc. on the actions taken on the bugs while the MOA MOA with NCC relative to the
a. Require MediData Inc. to with NCC for on-line payments was finalized but the on-line payment. As to the
submit a report on the actions taken on said component was not included in the pilot status report, the FDA Project
the bugs noted and set a deadline to implementation in February 2010. Moreover, there was Technical Committee should
complete the encoding of data no deadline set for the incorporation of the on-line set time frame for the

226
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
parameters for non-drugs. payment into the system. identified improvements as
enumerated in the status
b. Follow up the MOA with The Head of FDA Project Technical Committee report. As a whole, the BIIS
NCC for the online payment so that the submitted the status report for the BIIS which identified Project is not yet completed as
said component will be incorporated some areas for improvement namely: of reporting date due to the
into the system and included in the pilot various areas that needs
implementation of the BIIS. In addition,  Upgrading of hardware specifically the servers improvement.
immediately follow up the finalization which are essential to make the system work.
of the contract for the  Upgrade the Internet Connectivity in
installation/configuration of a dedicated anticipation for the deluge of submission of
E1 internet connection with Prime applications for registration of products and
Communications. licensing of establishments once the BIIS is
fully implemented.
c. Submit action plan to be  Additional Information Technology (IT)
undertaken to facilitate the final personnel needed for set-up and maintenance of
completion of the BIIS. Help Desk, Kiosk and Registration Desk, BIIS
System Administration, BIIS data build-up and
training of the users.
 Upgrading of Application Support
 Alignment of Policies which means
o Existing policies and procedures
concerning BIIS processes should be
reviewed and be aligned with the
system.
o Formulate and develop new policies
and procedures that are necessary for
the implementation of the BIIS.
 Finalize Data Parameters
Observation #33

Utilization of Funds Released by the


DOH-CO

A major portion of P2,540,000.00 sub- 2008


alloted by DOH-CO to two hospitals to DOH-

227
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
address the pediatric needs of the children CAAR
and adolescent patients of the DOH-Bicutan pages
Treatment and Rehabilitation Center (TRC), 121-122
to implement the Health Emergency
Management Staff’s (HEMS) strategies as
well as for the conduct of Mercy Relief
Mission for 2008, was spent for the salaries
of nine contractual personnel and for other
expenses that were not related to the
purpose of the programs, thus, there is a risk
that these hospitals may not be able to
totally carry out or fully accomplish the
programs’ objectives.

We recommended the following courses of National Children’s Hospital


action to address the above deficiencies:
The guidelines of DOH for DOH-Bicutan Treatment & Fully Implemented
a. National Children’s Hospital and Far Rehabilitation Center were followed. The
North Luzon General Hospital and staff/personnel of DOH-Bicutan was reduced.
Training Center limit the use of funds
only to what is authorized and strictly Far North Luzon General Hospital has no status
comply with the program of report.
expenditures specified in the covering
DOH guidelines in order to fully attain
the objectives of the program for which
the funds were released.

b. NCH limit the hiring of contractual


personnel to what is necessary in order
to save on government resources. The
number of pediatric cases being
attended to is very minimal, thus, these
can be done by the regular employees
of the hospital.

Observation #34

228
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)

Procurement and Distribution of Supplies

Inadequate planning by CHD for Central 2008


Luzon on the procurement and distribution DOH-
of supplies resulted in the purchase of CAAR
various commodities that were not urgently pages
needed, thus, resulting in the accumulation 123-
of stocks worth P3,084,630.50 in the 124
warehouse and deprived the intended
beneficiaries of basic healthcare services.

We recommended that CHD for Central The transfer of inventory account from supply unit to Partially Implemented Dialogue with the Supplies
Luzon adopt the following remedial ancillary unit were taken up and adjusted accordingly. Section Staff was conducted
measures: to further review existing
policies on the issuance and
a. Carefully and properly plan its release of supplies/inventories
procurement by including in the APP is on-going.
only the inventory items that are vital to
its operations.

b. Purchase goods and services thru public


bidding to ensure that the most
advantageous prices are obtained.

c. Consider the actual data of dengue


cases per province in the distribution of
anti-dengue chemicals to prevent the
outbreak of the disease.
Observation # 35

Fellowship Trainings of Doctors

Some doctors of the Northern Mindanao 2008 No status report.


Medical Center (NMMC) who were granted DOH-
fellowship trainings resigned without CAAR

229
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
serving the required payback service and pages
without refunding the amount of 124-125
P1,146,490.26 representing salaries and
other remunerations received during their
training as well as the cost of the fellowship
program, resulting in unnecessary expenses
and deprived the hospital from availing of
the scholars’ upgraded skills that could
contribute in improving the delivery of
health care services.

We recommended that concerned NMMC


officials undertake the following remedial
measures to correct the noted deficiencies:

a. Submit to the Office of the Auditor the


legal basis in considering as payback
service the part-time employment of the
medical scholar. In the absence of a
legal basis, require the two scholars to
refund the salaries and other
remunerations, cost of the fellowship
training and other expenses spent by the
hospital while they were on training and
include as persons liable, officials who
allowed these scholars to resign even
without refunding the same.

b. Instruct the head of the training


program to monitor those granted
scholarship/fellowship trainings to
ensure that the required payback
services are rendered and other
requirements are complied with.
Observation #36

230
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Training Expenses

Savings of P1,154,017.00 in training 2008


expenses could have been realized by CHD DOH-
for Eastern Visayas had it limited its CAAR
expenses to what is necessary and had pages
adequate control measures been provided to 125-127
safeguard agency resources.

We recommended that concerned officials No status report.


of CHD for Eastern Visayas devise adequate
control measures to safeguard agency
resources, as follows:

a. Exert more efforts to attain a 100%


attendance in all trainings/meetings to
avoid incurring unnecessary expenses.
Number of participants be carefully
estimated and the minimum number
must be stated in the PO with allowance
for additional participants if the actual
number exceeds the minimum.

b. Limit the number of meals served to


live-out participants and stop serving
dinner on the last day of training if it
ends at 5 pm.

c. Stop granting live-in accommodation to


agency personnel for trainings
conducted in the office or within
Candahug, Palo, Leyte and in Tacloban
City.

d. Reduce the number of persons assigned


as facilitators/secretariat. Coordinators

231
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
of trainings especially for CHD
employees who are just within the
compound, first determine the number
of participants who will be available for
the scheduled activities before
preparing the POs.

e. The terms and conditions that are


favorable to the government be clearly
stated in the Purchase Order.

f. Limit the number of delegates to be


sent to PPHA conventions.
Observation #37

Operation of Two Rehabilitation Centers

Weaknesses in the financial and 2008


administrative systems and controls in the DOH-
operations of the New Horizon Treatment CAAR
and Rehabilitation Center (NHTRC) and the pages
Cebu City Treatment and Rehabilitation 127-128
Center (CCTRC) which are under the
supervision and control of the Vicente Sotto
Memorial Medical Center may result in the
inability to achieve their mandate.

We recommended that VSMMC officials No Status Report


make representations with DOH-CO
officials regarding the following:

a. Proper channeling of communications


from DOH-CO to VSMMC and from
VSMMC to the rehabilitation centers in
order to make the VSMMC Chief an
efficient and effective administrator of

232
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
the Rehabilitation Centers.

b. Formulate policies on: 1) reasonable


amount of monthly fees to be charged
from residents as well as the
corresponding cost of daily meal
allocation and the appropriate sanctions
to be imposed for refusal to pay the
same; and 2) implementation to the
fullest extent of the provisions of the
DDA.

We also recommended that the Center


Directors or the VSMMC officials make
representations with DBM officials to
facilitate the approval of the proposed
plantilla of the two Centers.
Observation # 38

Disposal of Unserviceable Equipment

The continuous or prolonged delay in the 2008


disposal of unserviceable equipment valued DOH-
at P43,833,783.81 that are beyond CAAR
economic repair resulted in their pages
accumulation, diminished value due to 129-
prolonged exposure to natural elements and 130
possible loss, thus, depriving hospitals to
earn additional income that could have been
used to purchase new units of equipment
and preventing them from using the space
that these properties continued to occupy.

We recommended that the concerned Chiefs Dr. Jose Fabella Memorial Hospital
of hospitals and CHDs immediately dispose
of all equipment found to be beyond All of the items were disposed of as of February 2010. Fully Implemented.

233
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
economical repair not only to avoid further
deterioration but also to generate additional CHD for Central Luzon
funds for the purchase of new equipment
and to make use of the storage spaces The Disposal and Appraisal Committee recommended
occupied by these equipment. that disposal of unserviceable properties be conducted Partially Implemented
once a year.

CHD for Central Visayas, St. Anthony Mother Child


Hospital, Northern Mindanao Medical Center and
Cotabato Sanitarium have no status report.

Dr. Jose Rizal Memorial Hospital

Not included in the status report.

We also recommended that the respective Dr. Jose Fabella Memorial Hospital Fully Implemented
Property Sections of the above hospitals and
CHDs submit to the Accounting Section the A copy of Inventory and Inspection Report of
Inventory and Inspection Report for Unserviceable Property (IIRUP) as of December 31,
Unserviceable Property and other pertinent 2008 was submitted to the Auditing Unit and
documents to facilitate dropping from the Accounting Department last March 18, 2009.
books the cost of the disposed properties.

Ilocos Training & Regional Medical Center Partially Implemented Preparation of Inventory and
Inspection Report for
The Disposal and Appraisal Committee recommended Unserviceable Property and
that disposal of unserviceable properties should be other documents before
conducted once a year. disposal is on-going.

Observation # 39

234
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Closure of BnBs/Return of Seed Capital 2008
DOH-
Failure of three CHDs to recover the seed CAAR
capital in the form of drugs and medicines pages
amounting to P5,432,218.01 distributed to 130-132
223 Botica ng Barangay outlets that closed
operations resulted in wastage of
government funds and defeated the
objective of assuring the sustainability of
the BnB Program.

We recommended that Management send CHD for Northern Mindanao


demand letters to the BnB operators, copy
furnished the Barangay Captains and the Management made representation with the concerned Partially Implemented
Municipal Mayors, for the recovery of the LGUs and Operators and agreed on the possibility on
initial seed capital of closed BnBs. We also the revival of BnBs to be financed by the concerned
recommended that management institute LGUS.
legal sanctions against operators of the
closed BnB outlets. If after sending
demand letters, the BnB operators still resist
to pay the said infused seed capital,
Municipal Mayors and Barangay Captains
who were signatories of the MOA should be
held responsible for the immediate recovery
of the initial capital.

We also recommended that CHDs for CHD for Central Luzon


Central Luzon and Central Visayas clearly
stipulate in the MOA the legal obligations of The Committee will meet the soonest possible time to On-going
BnB operators in order to safeguard resolve the issue.
government funds.
CHD for Central Visayas has no status report.

Observation #40

235
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
Establishment of Revolving Fund for 2008
Stock Replenishment of BnBs DOH-
CAAR
The continuous failure of DOH-CO and the pages
DBM to issue implementing guidelines on 132-133
the policy of establishing a revolving fund
intended for the replenishment of BnB
drugs and medicines resulted in the
procurement of stocks from non-accredited
suppliers by BnB operators in CHD for
Central Luzon, thus, its ultimate objective
of ensuring availability of affordable, safe
and effective quality essential drugs may
not be attained.

We reiterated our recommendation that CHD for Central Luzon


DOH immediately issue, without further
delay, the guidelines for the establishment Not included in the status report.
of the Revolving Fund by the CHDs for the
purpose of receiving BnB remittances for
stock replenishments. The Revolving Fund
would allow CHDs to buy medicines in
bulk from reputable suppliers/manufacturers
at lower prices.

In the meantime that the Revolving Fund


does not yet exist, we recommended that
CHDs conduct a centralized public bidding
for purposes of accrediting BnB drug
suppliers from whom operators could get
their replenishment stocks. The list of
authorized suppliers and the corresponding
approved prices should be disseminated to
all BnB operators. The stock replenishment
procedures prescribed under DOH issuances
should be strictly implemented to assure

236
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
quality and affordability of drug prices.

Observation #41

Licensing of BnBs

Numerous BnB outlets were allowed to 2008


operate and were given seed capital in the DOH-
form of drugs and medicines in the total CAAR
amount of P31,543,971.00 pending pages
approval of their licenses. Special Licenses 133-134
to Operate (SLTOs) were not issued to these
BnB outlets despite their operation for
considerable length of time, hence, BnBs
operated illegally and therefore, could not
be penalized with certain sanctions in case
of violations committed by their operators.

We reiterated our recommendation that CHD for Central Visayas has no status report.
concerned CHDs explain and justify their
inability to enforce the licensing CHD for Caraga Region
requirements from operators. BnB operators
who did not comply with the documentary Management informed DOH-CO regarding the contents Partially Implemented
requirements within the deadline be of BNB packages on drugs and medicines and its BnB
required to return the seed capital and operations.
immediately pay the equivalent amount of
the unaccounted items. Henceforth, BnB CHD for Bicol Region
packages issued only to duly licensed,

237
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
trained and responsible operators who could FDROs of Albay did not revalidate the SLTOs of BnBs Partially Implemented Three Supervising Pharmacist
ensure the viability of the BnB Program. specifically in the 3rd District of Albay because the three resigned.
Supervising Pharmacists hired by then Cong. Salceda
resigned. Pursuant to BFAD laws, absence of a
supervising pharmacist is ground for non-renewal of
LTO hence, no revalidations were made.

We also recommended that Management of CHD for Northern Mindanao Partially Implemented
CHD for Northern Mindanao instruct the
DOH representative to follow up the status Management hired personnel to assist and facilitate
of SLTOs of these BNBs within their area of processing of SLTOS.
jurisdiction. Concerned Food and Drug
Regulations Officers (FDROs) assigned in
different provinces and cities should give
priority to the licensing of the BnBs with
applications that have been pending with
them for quite a considerable time.

Observation #42

Gender and Development Plan (GAD)

Failure to prepare Gender and Development 2008


Plan, allocate funds to implement the plans DOH-
or submit accomplishment reports for the CAAR
planned activities and lack of technical pages
knowledge in gender planning by concerned 135-137
officials of DOH agencies and the failure of
the oversight bodies to require reasonable
compliance with Section 30 of the General
Provisions of the 2008 General
Appropriations Act and the implementing
guidelines under Joint Circular 2004-l of the

238
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
DBM, NEDA and NCRFW resulted in the
identification and pursuance of
programs/projects/activities that did not
contribute to the attainment of our country’s
international commitment to pursue
women’s empowerment and gender
equality.

We recommended that all DOH agencies:

 prepare an annual GAD plan, budget DOH-Central Office


and accomplishment reports following
the policy guidelines set forth by DBM, For CY 2009, DOH-Central Office already prepared a Partially Implemented
NEDA and NCRFW Joint Circular No. comprehensive GAD Plan and Budget.
2004-1 requiring all government
agencies to formulate an annual plan East Avenue Medical Center Not Implemented No GAD project was
and budget designed to address gender implemented for CY 2009.
issues within their concerned sectors.
Bicol Regional Training & Teaching Hospital Partially Implemented
 include only those programs, activities
and projects that directly address The bulk of the budget was allocated for the WCPU, for
gender issues and concerns that are well which a place is still to be identified.
-defined to avoid duplication of or
overlapping with the regular activities Bicol Sanitarium
and submit the GAD Plan to NCRFW
for the required review and Not included in the status report
endorsement to the DBM.
Western Visayas Medical Center
 allocate funds for GAD Plan’s activities
of at least five percent of not only the Fully Implemented
5% was allocated for GAD for CY 2009.
total budget for maintenance and other
operating expenses but based on the Corazon Locsin Montelibano Memorial Regional
total agency budget appropriations. Hospital
Agency heads should ensure that GAD
budget is utilized exclusively for GAD Management allocated five (5%) of FY 2009 budget for Fully Implemented

239
Status of
Observations and Implementation (Full, Reason for Partial/Non-
Ref. Action Taken by Management
Recommendations Partial, On-going or Not Implementation
Implemented)
activities included in the GAD Plan. GAD.

CHD for Central Visayas, Vicente Sotto Memorial


Medical Hospital, Eversley Childs Sanitarium, Saint
Anthony Mother and Child Hospital, Talisay District
Hospital, Don Emilio Del Valle Memorial Hospital
and Governor Celestino Gallares Memorial Hospital
have no status report.

240

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