AN ORDINANCE CREATING THE OFFICE OF THE CITY INTERNAL AUDIT SERVICE (IAS) OF THE CITY OF TABACO.

2017, Ordinances

- Posted by: [ Jude Bongao]

EXCERPTS FROM THE MINUTES OF THE 67TH REGULAR SESSION OF THE 6th SANGGUNIANG PANLUNGSOD BATCH 2016-2019 OF THE CITY OF TABACO HELD AT THE SESSION HALL, LOCATED AT THE SECOND FLOOR TABACO CITY HALL BUILDING ON OCTOBER 30, 2017.

 

Present:

Hon. Luis Renir B. Burce                                      Acting City Vice Mayor,

President Pro-Tempore & Member,

Hon. Sheina Marie C. Onrubia                               Floor Leader & Member, &

Hon. John Gio Ong-Bongao                            Assistant Floor Leader & Member,

Hon. Roderick P. Martirez                                             Member,

Hon. Arnaldo B. Bragais                                    Member,

Hon. Raul Roi B. Borejon                                              Member,

Hon. Oscar R. Rocha                                                     Member,

Hon. Hector D. Rodriguez                                              Member, &

Hon. Danilo C. Buenconsejo                                          Member.

 

Absent:

Hon. Julio C. Azada Chua, Jr.                                         Member, &

Hon. Preciocisima B. Tanggo (Pres., LMB)                     Member.

 

Acting City Mayor:

Hon. Nestor T. San Pablo                           City Vice Mayor & Presiding Officer.

                                                                                                                                               

 

Proponent:      HON. RAUL ROI B. BOREJON

                                                                                                                                               

City Ordinance No. 031-2017

AN ORDINANCE CREATING THE OFFICE OF THE CITY INTERNAL AUDIT SERVICE (IAS) OF THE CITY OF TABACO.

 

EXPLANATORY NOTE

There is an imperative need for the City Government of Tabaco to create the Office of the Internal Audit Service pursuant to Republic Act (RA) No. 3456 (Internal Auditing Act of 1962) as amended by R.A No. 4177 entitled “Creating, Organizing, and Operating an Internal Audit Service in all government agencies which shall assist management to achieve efficient and effective Fiscal Administration and performance of agency affairs and functions”.

Administrative Order No. 278 issued on April 28, 1992 provides that all heads of government offices, agencies, GOCCs including GFIs and Local Government Units (LGUs) shall organize in their respective offices, the Internal Audit Service (IAS) which shall be an integral part of the office and shall assist the institution management in the effective discharge of its responsibilities in so far as the same would not encroach on or be adversarial with those of the Commission on Audit or COA.

Furthermore, Administrative Order No. 70 which was issued on April 14, 2003 mandates all heads of government agencies, GOCCs, GFI, SUCs and Local Government Units to immediately organize an Internal Auditing System in their respective offices, which shall function in accordance with the policies establish by the provisions of R.A No. 3456 as amended by R.A No. 4177.

The IAS shall be integral part of the Office of the City Mayor and will be in its direct supervision and control. Its main function is: (a) to assist the management in ensuring that City resources are used consistent with laws, regulations and policies; (b) that City properties are safeguarded against loss wastage and misuse; (c) that financial and non-financial information are reliable, accurate and timely and its operations are economical, efficient and effective.

It is to the best interest on the part of the City Government of Tabaco to create an office to function in such a way that the effectiveness and adequacy of security and management controls over information systems and databases and the integrity of each and every department shall be determined under the guidelines issued by the Department of Budget and Management specifically DBM Budget Circular No. 04-04 issued March 22, 2014 which provides that Internal Auditing in a Component City may be a department headed by a City Government Department Head I with Salary Grade 25. The qualification requirements of the positions under the Office of the Internal Auditor shall be governed by the existing qualifications and standards set by the Civil Service Commission as well as the wages and salaries which shall be based on existing wage rates prescribed by the Department of Budget and Management for Local Government Units.

 

NOW THEREFORE, be it ordained, as it is hereby ordained, by the Sangguniang Panlungsod of Tabaco in session duly assembled to enact this ordinance.

 

Section 1. Title. This ordinance shall be known as the “OFFICE OF THE CITY INTERNAL AUDIT SERVICE ORDINANCE OF THE CITY OF TABACO.”

 

Section 2. Legal Bases for the Creation of the Office of Internal Audit Service.  The chronological summary of issuances on the organization, staffing, functions, and activities of internal audit is provided as follows:

  1. RA No. 3456 (Internal Auditing Act of 1962), as amended by RA No. 4177, which created and organized an IAS/U in all government agencies to help management achieve an efficient and effective fiscal administration and assist in the performance of agency affairs and functions.
  2. D. No. 1 (Reorganizing the Executive Branch of the National Government), which abolished the IAS/U created under RA No. 3456, as amended by RA No. 4177. The function was subsequently merged with the Management Division of the Financial and Management Service in the Departments pursuant to Item 3, Article IV, Chapter I, Part IV of the P.D.
  3. Section 1 of Administrative Order (AO) No. 119 dated 29 March 1989, which mandated government entities to strengthen their internal control systems and organize systems and procedures in coordination with DBM.
  4. Memorandum Order No. 277 dated 17 January 1990, directing the DBM to promulgate the necessary rules, regulations, and circulars for the strengthening of the internal control systems of government offices, agencies, government-owned or controlled corporations (GOCCs), and LGUs.
  5. Section 3(b) of RA No. 7160 (The Local Government Code of 1991), which mandated the establishment of an accountable, efficient, and dynamic organizational structure and operating mechanisms that will meet the priority needs and service requirements of its communities in every LGU. Section 474(b) further provides for the qualifications, powers, and duties of an Accountant, among which is the mandate to take charge of both the accounting and internal audit services of the LGU.
  6. AO No. 278 dated 28 April 1992 [Directing the Strengthening of the Internal Control Systems of Government Financial Institutions (GFIs) and LGUs, in their Operations], which provided for the functions, duties, and activities of the IAS/U. It also provides that IAS shall be detached from all functions of routine operating character.
  7. AO No. 70 dated 14 April 2003 [Strengthening of the Internal Control Systems of Government Offices, Agencies, GOCCs, including GFIs, State Universities and Colleges (SUCs) and LGUs], which reiterated the authority for the creation of the IAS/U and its functions.
  8. DBM Budget Circular No. 2004-4 dated 22 March 2004 (Guidelines on the Organization and Staffing of IAUs) which provided for the policy guidelines in the organization, staffing, positions, and salary grades of the IAS/U in Departments/Agencies/GOCCS/GFIs/LGUs concerned.
  9. DBM-CSC Joint Resolution No. 1 dated 12 May 2006 (Rationalization Program’s Organization and Staffing Standards and Guidelines), which provided for the creation of the IAS/U with its functions in line with Executive Order No. 366, as supplemented by CSC MC No. 12 s. 2006 issued on 22 June 2006.

 

  1. DOJ Opinion No. 007 dated 29 January 2007 (in response to the query on whether or not RA No. 3456, as amended by RA No. 4177, is still the enabling law on the establishment of the internal audit function in government agencies), which cited the evolution of the IAS/U from RA No. 3456, as amended by RA No. 4177 and P.D. No. 1. The IAS/U was abolished but its functions were merged with the Management Division under the FMS. It also recognized DBM Budget Circular (BC) No. 2004-04 in setting the Guidelines on the Organization and Staffing of IAUs. However, the DOJ opined that the query should be coursed to the Office of the Government Corporate Counsel (OGCC) and/or DBM.
  2. OGCC Opinion No. 099 dated 30 May 2007, which stated that P.D. No. 1 recognized that the IAS/U had been abolished but that its functions had been merged with the Management Division under the FMS and DBM BC 2004-04.
  3. DBM Circular Letter No. 2008-5 dated 14 April 2008 (Guidelines in the Organization and Staffing of an IAS/U and Management Division/Unit in Departments/Agencies/ GOCCs/GFIs concerned), which provides the guidelines in the organization of the IAS/U, clarifies its functions, and specifies the rank and salary grade of the head of the IAS/U. The circular states that the head of the IAS/U shall directly report to the Department Secretary/Head of the Agency in the case of Departments and regularly attached agencies, and to the Audit Committee of the Governing Board in the case of GOCCs/GFIs.
  4. DBM Circular Letter No. 2008-8 dated 23 October 2008 [National Guidelines on Internal Control System (NGICS)], which provides guidance to heads of departments and agencies in designing, installing, implementing, and monitoring their respective ICS, taking into consideration the requirements of their organizations.

 

 

Section 3. Creation of the City Internal Audit Service Office.  The Office of the Internal Audit Service of the City of Tabaco is hereby created.

 

 

Section 4. Functions of the City Internal Audit Service Office. The City Internal Audit Service Office (CIASO), pursuant to the Administrative Code of 1987, and as reiterated in Item 3.5.4 of the NGICS and Section 3.2 of the Scope of Internal Audit of the PGIAM, shall perform the following functions:

  1. Advise the Local Chief Executive (LCE) or Sanggunian on all matters relating to management control and operations audit of the executive or legislative branches;
  2. Conduct management and operations audit of LGU functions, programs, projects, activities, and outputs and determine the degree of compliance with their mandate, policies, government regulations, established objectives, systems and procedures/ processes, and contractual obligations;
  3. Review and appraise systems and procedures, organizational structures, asset management practices, financial and management records, reports, and performance standards of the LGU;
  4. Analyze and evaluate management deficiencies and assist top management by recommending realistic courses of action; and
  5. Perform such other related duties and responsibilities as may be assigned or delegated by the LCE or as may be required by law.

 

 

Section 5. The Office of the City Internal Audit Service shall consist of two divisions, namely, the Operations Audit Division and Management Audit Division.

  1. Management Audit Division

The Management Audit Division shall evaluate the achievement of the control objectives, which include the safeguarding of assets, checking the accuracy and reliability of accounting data, adherence to managerial policies, compliance with laws, rules, and regulations by utilizing internal auditing methods. It has the following functions:

  1. Conduct management audit of activities of the LGU and determine the degree of compliance with the mandate, policies, government regulations, established objectives, systems and procedures/ processes, and contractual obligations (Section 2.4b, DBM Circular Letter No. 2008-5 and Section 1.1.2, AO 278, s. 1992);
  2. Review and appraise systems and procedures/processes, organizational structure, assets management practices, financial and management records, reports, and performance standards of the LGUs covered (Section 2.4c, DBM Circular Letter No. 2008-5);
  3. Verification and analysis of financial and management data to ascertain if attendant management information systems generate data or reports that are complete, accurate, and valid (Section 4.1.1.2, DBM Budget Circular No. 2004-4);
  4. Ascertain the reliability and integrity of financial and management information and the means used to identify, measure, classify, and report such information (Section 1.1.1, AO No. 278, s. 1992);
  5. Ascertain the extent to which the assets and other resources of the institutions are accounted for and safeguarded from losses of all kinds (Section 1.1.3, AO 278, s. 1992);
  6. Review and evaluate the soundness, adequacy and application of accounting, financial and management controls and promote the most effective control at reasonable cost (Section 1.1.4, AO 278, s. 1992);
  7. Evaluate the quality of performance of groups/individuals in carrying out their assigned responsibilities (Section 1.1.6, AO 278, s. 1992);
  8. Perform functions of a protective nature, such as prevention and detection of fraud or dishonesty; review of cases involving misuse of agency property; and checking of transactions with outside parties (4.1.1.4, DBM Budget Circular No. 2004-4); and
  9. Perform miscellaneous services, including special investigations and assistance to outside contacts such as COA (Section 4.1.1.5, DBM Budget Circular No. 2004-4).

 

  1. The Operations Audit Division

The Operation Audit Division shall evaluate the extent of compliance and ascertain the effective, efficient, ethical, and economical execution of operations by utilizing internal auditing methods. The Division is tasked to perform the following functions:

  1. Conduct operations audit of activities of the LGU and its departments and determine the degree of compliance with the mandate, policies, government regulations, established objectives, systems and procedures/processes, and contractual obligations (Section 2.4b, DBM Circular Letter No. 2008-5);
  2. Review and appraise systems and procedures/processes, organizational structure, operations practices, operations records, reports, and performance standards of the LGU and the departments covered (Section 2.4c, DBM Circular Letter No. 2008-5);
  3. Verify and analyze operations data to ascertain if attendant management information systems generate data or reports that are complete, accurate, and valid (Section 4.1.1.2, DBM Budget Circular No. 2004-4);
  4. Ascertain the reliability and integrity of operational information and the means used to identify, measure, classify, and report such information (Section 1.1.1, AO No. 278 s. 1992);
  5. Review operations or programs to ascertain whether or not results are consistent with established objectives and goals, and whether or not such programs are being carried out as planned (Section 1.1.5, AO 278 s.1992);
  6. Evaluate the quality of performance of groups/individuals in carrying out their assigned responsibilities (Section 1.1.6, AO 278 s. 1992);
  7. Recommend courses of action on operational deficiencies observed (Section 1.1.7, AO 278 s. 1992);
  8. Perform functions of a protective nature, such as prevention and detection of fraud or dishonesty; review of cases involving misuse of agency property; and checking of transactions with outside parties (Section 4.1.1.4, DBM Budget Circular No. 2004-4); and
  9. Perform miscellaneous services, including special investigations and assistance to outside contacts such as COA (Section 4.1.1.5, DBM Budget Circular No. 2004-4).

 

 

Section 6. Creation of the New Positions. The following positions under the City Internal Audit Service Office of the City of Tabaco are hereby created:

  1. City Government Department Head I SG 25
  2. Internal Auditor IV Salary Grade 22
  3. Internal Auditor III SG 18
  4. Internal Auditor I SG11
  5. Internal Auditing Assistant SG 8
  6. Administrative Aide III (clerk I) SG 3

 

 

Section 7. Qualification Requirements of Positions of the Office of the Internal Audit Service. As provided for by the Civil Service Commission’s Basic Qualification Standards for Government Personnel, the following are the qualifications needed for the positions:

  1. City Government Department Head I

Salary Grade – 25 Level – 2

Education – Bachelor’s degree relevant to the Job

Work Experience – 5 years in position involving management and supervision

Training –32 hours of training in management and supervision Eligibility

Career Service Professional (Second Level Eligibility)

  1. Internal Auditor IV

Salary Grade – 22 Level – 1

Education – Bachelor’s Degree relevant to the Job

Work Experience – 3 years of relevant experience

Training – 16 hours of relevant training Eligibility

Career Service Professional (Second Level Eligibility)

 

 

  1. Internal Auditor III

Salary Grade – 18 Level – 1

Education – Bachelor’s Degree relevant to the Job

Work Experience – 2 years of relevant experience

Training – 8 hours of relevant training Eligibility

Career Service Professional (Second Level Eligibility)

  1. Internal Auditor I

Salary Grade – 11 Level – 1

Education – Bachelor’s Degree relevant to the Job

Work Experience – None Required

Training: None Required

Eligibility – Career Service Professional (Second Level Eligibility)

  1. Internal Auditing Assistant

Salary Grade – 8 Level – 2

Education – Completion of 2 years studies in College

Work Experience – 1 year of relevant experience

Training – 4 hours of relevant training

Eligibility – Career Service Sub Professional (First Level Eligibility)

  1. Administrative Aide III (Clerk I)

Salary Grade – 3 Level – 1

Education – Completion of 2 years studies in College

Eligibility – Career Service Sub-professional (First Level Eligibility)

 

 

Section 8.  Sangguniang Panlungsod Concurrence. Pursuant to the Provision of R.A 7160 otherwise known as the Local Government Code of 1991 and Civil Service Rules and Regulations the Appointment of the City Government Department Head I shall be subject to the concurrence of the Sangguniang Panlungsod.

 

 

Section 9.  Duties and Responsibilities. The duties and responsibilities of the positions under the City Internal Audit Office shall be determined by the Local Chief Executive consistent or in accordance with the general functions provided for by the Civil Service Commission (CSC).

 

Section 10.  Funding.  The funding requirements for the creation and operationalization of the City Internal Service Office shall be incorporated in the Annual Investment Plan (AIP) and the City’s Annual Budget, beginning in FY 2018.

 

 

Section 11. Separability Clause. Should any provision in this ordinance be declared unconstitutional by any competent court, the remaining provisions shall remain valid and legal.

 

 

Section 12. Repealing Clause. Any ordinance, rules and regulations and executive issuances found inconsistent with the provisions of this ordinance are hereby repealed or modified accordingly.

 

 

Section 13. Effectivity. This ordinance shall take effect beginning FY 2018.

 

 

APPROVED.

 

 

We hereby certify to the correctness of the foregoing Ordinance.

 

 

 (Sgd.)

                   RAUL ROI B. BOREJON                            LUIS RENIR B. BURCE

                               Proponent                                             Acting City Vice Mayor &

                                                                                                   President Pro-Tempore

 

 

ATTESTED:

 

GLENDA B. PANTI

Secretary to the Sangguniang Panlungsod

 

 

                                                                                    APPROVED:

 

 

NESTOR T. SAN PABLO

Acting City Mayor