Guide on the Audit of Procurement - 1st Update-December 2009

8/22/2019 Guide on the Audit of Procurement - 1st Update-December 2009

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GUIDE IN THE AUDIT OF PROCUREMENT(First Update December 2009)

with focus on the

Government Procurement Policy Board (GPPB) Circular No.01-2009 dated January 22, 2009

Revised Implementing Rules and Regulations (IRR) of R.A.No. 9184 approved per GPPB Resolution No. 03-2009

dated July 22, 2009

Amendments to the Revised IRR of R.A. No. 9184approved per GPPB Resolution No. 06-2009 datedSeptember 30, 2009

Public Bidding Documents 3rd Edition (October 2009)approved per GPPB Resolution No. 05-2009 datedSeptember 30, 2009

Guidelines for Shopping and Small-Value Procurementapproved per GPPB Resolution No. 09-2009 dated 23November 2009

Amendments to the Revised IRR of RA 9184 approved perGPPB Resolution No. 11-2009 dated 30 November 2009

Amendments to the Revised IRR of RA 9184 approved perGPPB Resolution No. 13-2009 dated 16 December 2009

Technical Services OfficeSpecial Services SectorCommission on Audit

Republic of the Philippines


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TABLE OF CONTENTS

Page

COA Memorandum adopting the Guide in the Audit of Procurement

Title page iAcknowledgments iiTable of Contents iv

I INTRODUCTION 1

The Development of the Audit Guide 2

Objectives of the Audit Guide 3

Scope and Limitations of the Audit Guide 3

II GENERAL INSTRUCTIONS ON THE USE OF THE GUIDE 7

III GUIDE IN THE AUDIT OF PROCUREMENT 10

On the Basic Elements

Bids and Awards Committee (BAC) 11

Bids and Awards Committees Secretariat 24

Annual Procurement Plan (APP) 29

Bids and Awards Committees Observers 35

Bids and Awards Committees Technical Working Group(TWG)

39

Customized Bidding Documents for Goods 42

Customized Bidding Documents for Infrastructure Projects 51

Customized Bidding Documents for Consulting Services 60

On the Procurement Procedures

COMPETITIVE / PUBLIC BIDDING FOR THEPROCUREMENT OF GOODS

75

I. Bidding Documents 76

II. Pre-Procurement Conference 80

III. Advertising and Posting of the Invitation to Bid 87

IV. Posting of the Invitation to Bid 90

V.Issuance of Bidding Documents for theProcurement of Goods

93

VI. Pre-Bid Conference 96

VII.Supplemental / Bid Bulletins for the Procurement ofGoods

103

VIII.Submission, Receipt, Opening of Bids andPreliminaryExamination of Bids for the Procurement of Goods

107

IX. Bid Evaluation for the Procurement of Goods 128


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TABLE OF CONTENTS

X. Post-Qualification for the Procurement of Goods 137

XI. Award of Contract for the Procurement of Goods 153

XII. Failure of Bidding Declared By the BAC 169XIII. Failure of Bidding Declared by the HOPE 175

ALTERNATIVE METHODS OF PROCUREMENT FORGOODS

179

Limited Source Bidding 180

Direct Contracting 193

Repeat Order 202

Shopping 208

Negotiated Procurements

After Two (2) Failed Biddings 218

Emergency 244

Agency To Agency 249

Small Value Procurement 251

Defense Cooperation Agreement 262

United Nations Agencies 264

COMPETITIVE / PUBLIC BIDDING FOR THEPROCUREMENT INFRASTRUCURE PROJECTS

266

I. Bidding Documents 267

II. Pre-Procurement Conference 271

III. Advertising and Posting of the Invitation to Bid 279IV. Posting of the Invitation to Bid 283

V.Issuance Of Bidding Documents for theProcurement ofInfrastructure Project

286

VI. Pre-Bid Conference 289

VII. Supplemental / Bid Bulletins for the Procurement ofInfrastructure Project

296

VIII.

Submission, Receipt, Opening Of Bids AndPreliminaryExamination of Bids for the Procurement ofInfrastructure

Project

301

IX. Bid Evaluation 318

X. Post Qualification 327

XI. Award of Contract 349

XII. Failure of Bidding Declared by the BAC 366

XIII. Failure of Bidding Declared By the HOPE

373


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Prepared by: Technical Services OfficeSpecial Services SectorCommission on AuditRepublic of the Philippines

----------------------------------------------------------------------------------------------------------GUIDE IN THE AUDIT OF PROCUREMENT

First Update - December 2009

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TABLE OF CONTENTS

ALTERNATIVE METHODS OF PROCUREMENT FORINFRASTRUCTURE PROJECT 377

Negotiated Procurements:After Two (2) Failed Biddings 378

Emergency Cases 406

Take Over of Contracts 411

Adjacent or Contiguous 421

Community Participation 431

Small-Value Procurement 437

Non-Governmental Organizations (NGOs) Participation 446

COMPETITIVE / PUBLIC BIDDING FOR THE PROCUREMENTOF CONSULTING SERVICES

448

I. Bidding Documents 449II. Pre-Procurement Conference 453

III.Advertising and Posting of the Request for Expression ofInterest

461

IV. Posting of Request for Expression of Interest 465

V. Issuance of Bidding Documents to Consultants 468

VI. Eligibility Checking & Short listing of Consultants 470

VII. Pre-Bid Conference 486

VIII.Supplemental / Bid Bulletins for the Procurement ofConsulting Services

492

IX.

Submission, Receipt, Opening Of Bids And Preliminary

Examination of Bids for the Procurement of ConsultingServices (Using Quality-Based Evaluation Procedures) 497

X.Submission, Receipt, Opening of Bids and PreliminaryExamination of Bids for the Procurement of ConsultingServices (Using Quality-Cost Based Evaluation Procedures)

521

XI. Post Qualification 549

XII. Award of Contract 571

XIII. Failure of Bidding Declared by the BAC 588

XIV. Failure of Bidding Declared by the HOPE 594


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TABLE OF CONTENTS

ALTERNATIVE METHODS OF PROCUREMENT FOR

CONSULTING SERVICES 598Limited Source Bidding 599

Negotiated Procurement

After Two (2) Failed Biddings 611

Emergency Cases 637

Take Over of Contracts 642

Adjacent or Contiguous 653

Agency-to-Agency 660

Highly Technical Consultants 662

Small Value Procurement 666

On Offenses and Sanctions / Penalties 676

APPENDICES

1 List of Risks Associated with Procurement

2 Guidelines Clarifying the Procurement Activities which may be UndertakenWithout an Issued Allotment as approved through GovernmentProcurement Policy Board (GPPB) Circular 01-09 dated January 20, 2009

3 Revised Implementing Rules and Regulations (IRR) of Republic Act No.9184 which became effective in September 2, 2009 as approved throughGovernment Procurement Policy Board (GPPB) Resolution No. 03-2009dated 22 July 2009

4 Amendments to the Revised Implementing Rules and Regulations (IRR) ofRepublic Act No. 9184 as approved through Government ProcurementPolicy Board (GPPB) Resolution No. 06-2009 dated 30 September 2009

5 Philippine Bidding Documents for the Procurement of Goods, 3rd Edition asapproved through Government Procurement Policy Board (GPPB)Resolution No. 05-2009 dated 30 September 2009

6 Philippine Bidding Documents for the Procurement of InfrastructureProjects, 3rd Edition as approved through Government ProcurementPolicy Board (GPPB) Resolution No. 05-2009 dated 30 September 2009

7 Philippine Bidding Documents for the Procurement of Consulting Services,3rd Edition as approved through Government Procurement Policy Board(GPPB) Resolution No. 05-2009 dated 30 September 2009


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TABLE OF CONTENTS

8 Approving by Referendum, the Guidelines for Shopping and Small-ValueProcurement through Government Procurement Policy Board (GPPB)Resolution No. 09-2009 dated 23 November 2009

9 Approving Amendments to the Revised Implementing Rules andRegulations of Republic Act No. 9184 through Government ProcurementPolicy Board (GPPB) Resolution No. 11-2009 dated 30 November 2009

10 Approving Amendments to the Revised Implementing Rules and

Regulations of Republic Act No. 9184 through Government ProcurementPolicy Board (GPPB) Resolution No. 13-2009 dated 16 December 2009


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I. INTRODUCTION



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A. THE DEVELOPMENT OF THE GUIDE

The magnitude of the operations of the Government makes itundoubtedly the biggest buyer of infrastructure projects, goods and servicesin the country. The billions of pesos annually spent to buy the goods andservices needed in its day-to-day activities represent a significant percentageof government expenditures.

The volume of public expenditure passing through the publicprocurement system has increased rapidly in the last few years. Averagingaround P121 billion per year from 2003 to 2005, procurement expenditure

jumped to P168 billion when the Governments infrastructure program kickedoff in 2006, and increased further to P229 billion by 2007. a

The money spent to finance these procurements came from varioussources including foreign borrowing and as such must have been used withprudence. However, news of procurement transactions allegedly tainted with

fraud had been hugging the headlines incessantly.

In its continuing efforts to promote good governance the Governmenthas enacted laws on procurement, the latest of which is Republic Act No. 9184otherwise known as the Government Procurement Reform Act. This Actprovides for the Modernization, Standardization and Regulation of theProcurement Activities of the Government and For Other Purposes and tookeffect on January 26, 2003, while its Implementing Rules and Regulations PartA (IRR-A) took effect on 8 October 2003.

After five (5) years of implementation, much progress has been made inprocurement reforms in terms of rules and regulations but implementationand enforcement are still weak, and the objectives of the reform have notbeen fully achieved. This scenario is consistent with perceptions of a high levelof corruption in procurement and with the SWS survey findings that only 13percent of the public is aware of the new procurement law and its intendedbenefits.b

As to the assessment on the Internal Control and Audit, the finding isthat procurement audit is not yet given enough focus in most of the auditprograms because most auditors have inadequate knowledge of the law, itsimplementing rules, the harmonized bidding documents and contract forms,and the procurement manuals; and there is no procurement audit guide to act

as the basis for including procurement audit in the annual audit program. Mostauditors are not trained to carry out risk-based audit tailored for riskmanagement. Recommendation: A procurement audit guide should bedeveloped and implemented by COA with particular focus on the audit of theimplementation of the GPRA. A training program on procurement should bedeveloped and implemented for auditors with the procurement audit guide asa training material, and both the guide and the training should include a risk-based approach to audit. c

The 1987 Constitution provides for an independent Commission on

Audit (COA) that has the power to audit all accounts pertaining to government



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funds nationwide, including procurement-related transactions. TheGovernment Auditing Code (PD 1445) empowers COA to determine policies,promulgate rules and regulations, and prescribe standards governing theperformance of its powers and functions and realizing the need to address theCountry Procurement Assessment Report (CPAR) findings andrecommendation, development of this Guide in the Audit of Procurement isimperative.

B. OBJECTIVES OF THE GUIDE

This Guide is intended as a reference and guidance material forCOA auditors in planning for, conducting and reporting on the results of theaudit on the area of procurement.

COA Auditors are provided with e-copies of this Guide to enable them toimmediately utilize the audit matrices as working papers in their audits. Theymay also modify some aspects of these audit matrices to fit their particular

needs. In the process, each individual auditors copy of the Guide becomesunique to him/her as it reflects enhancements which he/she built into theGuide with constant use.

Under a risk-based audit approach, audit foci, objectives and audittechniques are identified through a risk-assessment process which auditorsperform following existing COA regulations. For the purpose of this Guide,audit foci, audit objectives/sub-objectives, audit techniques, and evensuggested audit working papers have been developed with no particular riskin mind. Auditors may adopt portions of the Guide which they considerappropriate for their risk-based audit purposes. To aid auditors in their riskassessment activities, a list of risks associated with procurement have beendeveloped and included in this Guide as APPENDIX 1.

It is hoped that as Auditors use this Guide they will identify other riskswhich are specific to their auditee entities and analyze them to identify theappropriate audit criteria, develop the appropriate audit objectives, identifythe audit techniques, develop the audit programs and design the auditworking papers.

Auditors are encouraged to provide feedback for improvement, throughthe COA Directors who have supervision over them, including the inclusion inthis Guide of the risks, audit objectives, audit techniques, audit programs, and

audit working papers they have developed.

The public is likewise encouraged to provide feedback to improve theGuide, either through any COA auditor they are acquainted with or throughthe COA Website: http://www.coa.gov.ph.

From the feedback and the continuing policy study, this Guide isexpected to evolve through updates which will be issued as they aredeveloped.



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C. SCOPE AND LIMITATIONS OF THE GUIDE

Procurementrefers to the acquisition of goods, consulting services, andthe contracting for infrastructure projects by the procuring entity. In case ofprojects involving mixed procurements, the nature of the procurement, i.e.,goods, infrastructure projects, or consulting services, shall be determinedbased on the primary purpose of the contract. Procurement also includes thelease of goods and real estate. With respect to real property, its procurementshall be governed by the provisions of Republic Act No. 8974 and otherapplicable laws, rules and regulations.d

This Guide in the Audit of Procurement will neither cover the entiregamut of procurement nor all possible related risks that could be subject toaudit.

The scope of the Guide is limited to the following:

1. Elements of Procurementa. Annual Procurement Plan (APP)b. Bids and Awards Committee (BAC)c. BAC Observersd. BAC Secretariate. BAC Technical Working Group (TWG)f. Bidding Documents

2. Procurement Processes:a. Competitive Bidding (from Bidding Documents to Award

of Contract) for Procurement of Goodsb. Alternative Methods of Procurement for Goodsc. Competitive Bidding (from Bidding Documents to Award

of Contract) for Procurement of Infrastructure Projectsd. Alternative Methods of Procurement for Infrastructure

Projectse. Competitive Bidding (from Bidding Documents to Award

of Contract) for Procurement of Consulting Servicesf. Alternative Methods of Procurement for Consulting

Services

3. Offenses and Penalties

The Guide may be used as a reference in the:

evaluation of compliance with the requirements of applicable laws,rules and regulations which is a component of the auditorial reviewprovided in COA Circular No. 2009-001 dated February 12, 2009 on thesubject: Restatement with Amendments of COA Circular No. 87-278 and COAMemorandum 2005-027 re: submission of copy of government contracts,

purchase orders and their supporting documents to the Commission on Audit,

review of bidding procedures, necessity and validity of otheralternative modes of procurement and manner of award to the winning



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bidder/contractor and such other relevant requirements provided in RA No.9184 and its implementing rules and regulations provided in item 4.3.6 ofCOA Circular No. 2009-002 dated May 18, 2009 dated May 18, 2009 on thesubject: Reinstituting Selective Pre-Audit on Government Transactions.

The extent of audit that can be conducted based on the Guide will belimited to the specific elements (areas/foci), procurements processes, auditobjectives/sub-objectives and audit activities mentioned in the variouscomponents of the Guide.

The audit criteria used in the Guide are those prevailing at the time ofthe development of the Guide as follows:

1. Guidelines Clarifying the Procurement Activities which may beUndertaken Without an Issued Allotment, approved per GovernmentProcurement Policy Board (GPPB) Circular No. 01-2009 dated

January 22, 2009 (attached to this Guide as APPENDIX 2);

2. Revised Implementing Rules and Regulations (IRR) of R.A. No. 9184,approved per Government Procurement Policy Board (GPPB)Resolution No. 03-2009 dated July 22, 2009 (attached to this Guideas APPENDIX 3);

3. Amendments to the Revised IRR approved per GovernmentProcurement Policy Board (GPPB) Resolution No. 06-2009 datedSeptember 30, 2009 (attached to this Guide as APPENDIX 4);

4. Philippine Bidding Documents 3rd Edition (October 2009) approvedper GPPB Resolution No. 05-2009 dated September 30, 2009(attached to this Guide as APPENDIX 5);

5. Approving by Referendum, the Guidelines for Shopping and Small-Value Procurement approved per Government Procurement PolicyBoard (GPPB) Resolution No. 09-2009 dated 23 November 2009(attached to this Guide as APPENDIX 6);

6. Amendments to the Revised IRR approved per GPPB Resolution No.11-2009 dated 30 November 2009 (attached to this Guide asAPPENDIX 7);

7. Amendments to the Revised IRR approved per GovernmentProcurement Policy Board (GPPB) Resolution No. 13-2009 dated 16December 2009 (attached to this Guide as APPENDIX 8).



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Amendments, revisions, repeal, and other changes in the above-mentioned law, rules and regulations will have the effect of correspondinglychanging the affected portions of this Guide. Users of this Guide shouldtherefore apprise themselves of the laws/regulations prevailing as of the timeof planning for, execution of, and reporting on the audit and correspondinglymodify the portions of the Guide affected by such amendments, revisions,repeal, and other changes in the above-mentioned law, rules and regulations.For the purpose, they may avail of the internet facilities of the GPPB:

www.gppb.gov.ph

[email protected]

END NOTES

a. World Banks Country Procurement Assessment Report (Philippines) 2008,

p. 14

b. World Banks Country Procurement Assessment Report (Philippines) 2008,p. 17

c. World Banks Country Procurement Assessment Report (Philippines) 2008,p. 37

d. Section 5(n), Republic Act No. 9184 otherwise known as the GovernmentProcurement Reform Act (GPRA) which became effective in January 26,2003



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II. GENERAL INSTRUCTIONS ON THE USE OF THE GUIDE



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Following are the steps to be considered by the user of this Guide:

Step 1 Determine the audit areas and audit objectives based on RiskAssessment pursuant to existing regulations and/or on requirements

of other regulations (e.g. COA Circular No. 2009-002 on selective pre-audit).

Procurement as defined in R.A. No. 9184 should be identified as anaudit area. The audit sub-areas should likewise be identified. The Tableof Contents of this Audit Guide will be useful for the purpose ofidentifying these audit sub-areas.

For each sub-area, the audit objectives shall be identified based on therisks determined during the Risk Assessment and/or based on therequirements of existing regulations (e.g. COA Circular No. 2009-002 onselective pre-audit).

Step 2 - Determine the audit scope (e.g. For Financial/Compliance Auditprocurement activities and transactions subject to audit during acalendar year).

Step 3 Determine the audit criteria that are relevant to the identified risksand audit scope.

The audit criteria identified in the Audit Guide were the IRR of RA No.9184 and GPPB issuances prevailing during the time of thedevelopment of the Guide. For his/her specific audit scope, the auditor



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shall determine versions of RA 9184, its IRR and GPPB issuances andidentify those that are applicable to the procurements subject of his/heraudit.

If no changes/updates have occurred, the Audit Guide may be used asis.

Otherwise, the audit criteria as quoted in the first column of the auditmatrices of this Guide shall be changed to reflect those that areapplicable to the audit scope.

Step 4 Determine the audit sub-objectives.

The audit sub-objectives in the first column of the audit matrices shallcorrespond to the identified audit objective(s) and the audit criteriaidentified in Step 3 above.

Step 5 Determine the audit activities that will attain the audit sub-objectives.

The Audit Activities identified in the Guide are mere suggestions andmay be substituted by the auditor with more effective, efficient, andeconomical activities which are more workable under his/her specificaudit situation.

Step 6 Determine the audit questions that will match the audit sub-objectives.

The audit questions in the 3rd column of the audit matrices of thisGuide shall be changed to correspond to the identified audit sub-objectives.

---- ----

It is suggested that the auditor be proactive in the sense that he/sheshould have already conducted auditorial review on the audit sub-areas thatwill impact on the succeeding sub-areas and/or audit sub-objectives whereaudit findings/conclusions of non-compliance will result in audit decisionsleading to the recommendations of imposition of sanctions onliable/responsible persons and/or recommendations of recovery of pecuniarylosses on the part of the Procuring Entity.

The Guide is to be used according to the following sequence:

At any time during the Audit Period prior to Any Procurement

1st: Basic Element Bids and Awards Committee (BAC)

2nd: Basic Element - BAC Secretariat

3rd: Basic Element Annual Procurement Plan (APP)



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4th: Basic Element Customized Bidding Documents

During Specific Procurements

5

th

: Basic Element BAC Observers

6th: Basic Element BAC Technical Working Group (TWG)

7th: Procurement Process - depending on the item to be procured,i.e., goods, infrastructure projects or consulting services &depending on the method of procurement, i.e., competitivebidding or alternative method of procurement

Upon discovery of non-compliances either through the ProcurementMonitoring Reports or during the audit conducted

Offenses and Penalties



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III. GUIDE IN THE AUDIT OF PROCUREMENT



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On the Basic Element:

BIDS AND AWARDS COMMITTEE

(BAC)

BASIC ELEMENT BIDS AND AWARDS COMMITTEE

A. AUDIT OBJECTIVES:1. To verify the existence of the Bids and Awards Committee (BAC),

2. To verify if the BAC composition is in accordance with laws/regulations,

3. To verify if the term of members of the BAC is fixed at one (1) year reckonedfrom the date of appointment.

4. To verify if the BAC prepared a procurement monitoring report as requiredby regulations and had it approved by the Head of the Procuring Entity forsubmission to the GPPB within the required timeline.

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

List of documents needed (those applicable to the procurements subject of audit for the auditperiod):



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1. Appointment of the Head of the Procuring Entity (HOPE), if an individual;2. Office Order of or the GOCC/GFI Board Resolution designating/authorizing a specific official

to act on his/her/their behalf;3. Office Orders creating the previous BACs and the present BAC;4. Office Orders designating the Chairman and Vice-Chairman of the BAC;5. Office Orders designating the alternate members of the BAC;

6. Office Orders of replacements and evidences of absence of the BAC members they arereplacing and the period of absence (e.g. approved applications for leave);

7. Plantilla/Organizational Chart of the procuring entity;8. Work History and evidences of training on procurement of BAC members;9. Minutes of meeting of LGU BAC electing the Chairman and Vice-Chairman;10. Approved Procurement Monitoring Reports;11. Others as appropriate based on the audit sub-objective and audit activity.

Audit Sub-objective Audit Criteria Audit Activities

Suggested Audit Working PaperAudit Question Ye

sNo Particulars

of theAnswer

1. To verify if a Bids andAwards Committee (BAC)exists in the procuring entity

Implementing Rules and Regulations(IRR) of RA 9184, as amended onSeptember 2, 2009: 11.1.1 Each procuring entity

shall establish in its head office asingle BAC to undertake thefunctions specified in Section 12 ofthe Revised IRR of RA 9184 inorder to facilitate

professionalization and

harmonization of procedures andstandards.

1. From the documents

(e.g. Office Orders,Resolutions) relative toprocurements to beaudited evidencing thecreation of the BAC,using the one (1) yearterm from the creationof the BAC as basis,determine if a BACexisted for theprocurements at handor for futureprocurements to besubject of audit.

Is there a BAC in

the procuringentity?

2. To verify if the Head ofthe Procuring Entity (HOPE)was the one that created theBAC

Implementing Rules and Regulations(IRR) of RA 9184, as amended onSeptember 2, 2009:

11.2.1 The Head of the Procuring

Entity shall designate at least fivebut not more than seven membersof the BAC of unquestionableintegrity and procurement

proficiency.

5 (t). Head of the Procuring Entity.Refers to: (i) the head of theagency or body, or his dulyauthorized official, for NGAs andthe constitutional commissions oroffices, and branches ofgovernment; (ii) the governing

2. Compare the OfficeOrder(s) creating theBAC(s) as follows:

a. Name and positionof the signatory vs.the name andposition of the HOPEper hisappointment/designating Officeor AssignmentOrder;

b. In NGAs,constitutionalcommissions oroffices, andbranches ofgovernment; and inGOCCs, GFIs, andSUCs, if the HOPE isnot the signatory,

Was the BACcreated by theHead of theProcuring Entity(HOPE)?



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sNo Particulars

of theAnswer

board or its duly authorizedofficial, for GOCCs, GFIs and SUCs;

or (iii) the local chief executive forLGUs: Provided, however, That inan agency, department, or officewhere the procurement isdecentralized the head of itsdecentralized unit shall beconsidered as the head of theProcuring Entity, subject to thelimitations and authority delegatedby the head of the agency,department, or office.

Name and positionof the signatory vs.

the name andposition of the dulyauthorized officialper Office Order orBoard Resolutiondesignating him/her.

3. To verify if the number ofBAC members conforms to

the required number of atleast 5 but not more than 7

Implementing Rules and Regulations(IRR) of RA 9184, as amended onSeptember 2, 2009: 11.2.1 The Head of the Procuring

Entity shall designate at least fivebut not more than seven membersof the BAC of unquestionableintegrity and procurement

proficiency.

3. Compare thenumber of BACmembers per OfficeOrder(s) with therequired number.

Did the numberof BAC membersconform to therequired numberof at least 5 butnot more than 7?

If the number ofBAC members isequal to theminimum of 5,were there onlythree (3) regularmembers and two(2) provisionalmembers?

If the number ofBAC members isequal to six (6),were there:

a. three (3)regular membersand three (3)provisionalmembers?

OR

b. at most four(4) regular

members and two(2) provisionalmembers?



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sNo Particulars

of theAnswer

If the number ofBAC members is

equal to themaximum ofseven (7), werethere:

a. three (3)regular membersand at most four(4) provisionalmembers?

OR

b. four (4) regularmembers and

three (3)provisionalmembers?

OR

c. at most five (5)regular membersand two (2)provisionalmembers?

4. For head offices ofNationalGovernment Agencies/GOCCs/GFIs, to verify if thequalifications of the regularmembers of the BAC conformwith the requirements:a. Chairman - at least a

third ranking permanentofficial of the procuringentity;

b. representative of the Legalor Administrative area, atleast a 5th rankingpermanent official of theprocuring entity withknowledge, experience

and/or expertise inprocurement;c. representative of the

Finance area, at least athird ranking permanentofficial of the procuringentity with knowledge,experience and/or expertisein procurement


4. Verify from theOffice Orderconstituting the BAC ifthe Chairman was

designated as such.

Was the BACChairmandesignated assuch?

5. Compare the rankand status of the BACChairman per Plantillaof the Procuring Entitywith the required atleast 3rd rank andpermanent status.

Was the BACChairman:

a. at least a 3rdranking officialof theProcuringEntity?

b. of permanentstatus?

6. For Regular

Members, comparetheir rank and statusper Plantilla of theProcuring Entity withthe required at least5th rank andpermanent status.

Were Regular

Members of theBAC at least 5thranking officialsof the ProcuringEntity?

7. For RegularMembers, comparetheir status perPlantilla of theProcuring Entity andper his/her

Were RegularMembers of theBAC ofpermanentstatus?



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sNo Particulars

of theAnswer

11.2.2. The BAC for NGAs,

departments, bureaus, offices, orinstrumentalities of the GOP,including the judicial andlegislative branches, constitutionalcommissions, SUCs, GOCCs, andGFIs shall be composed of thefollowing:

Regular Membersa.Chairman, who is at least a third

ranking permanent official of theprocuring entity;

b.An officer, who is at least a fifthranking permanent official, withknowledge, experience and/or

expertise in procurement who,to the extent possible,represents the legal oradministrative area of the

procuring entity, provided that inthe case of bureaus, regionaloffices and sub-regional/districtoffices, BAC members shall be atleast a third ranking permanent

personnel;c.An officer, who is at least a fifth

ranking permanent official, withknowledge, experience and/orexpertise in procurement who,

to the extent possible,represents the finance area ofthe procuring entity, providedthat in the case of bureaus,regional offices and sub-regional/district offices, BACmembers shall be at least a thirdranking permanent personnel.

appointment, with therequired permanent

status.

8. For RegularMembers, verify fromtheir Work History andtraining documents ifthey have knowledge,experience and/orexpertise inprocurement;

Were RegularMembers withknowledge,experienceand/or expertisein procurement?

9. For RegularMembers, verify fromtheir work assignmentsif at the time of

designation the legalarea or administrativeareas and the financialarea were represented.

Was/Were thereRegular membersrepresenting thelegal or

administrativearea of theProcuring Entity?

Was/Were thereRegular membersrepresenting thefinancial area ofthe ProcuringEntity?

5. For bureaus, regionaloffices and sub-regional/district offices ofNGAs, departments, orinstrumentalities of the

Government of thePhilippines (GOP), includingthe judicial and legislativebranches, constitutionalcommissions, SUCs, GOCCs,and GFIs, to verify if thequalifications of the regularBAC members conform to therequirements:a. Chairman, at least a 3rd

ranking permanent official

10. Verify from theOffice Orderconstituting the BAC ifthe Chairman wasdesignated as such.

Was the BACChairmandesignated assuch?

11. Compare the rankand status of the BACChairman per Plantillaof the ProcuringEntitys bureau,regional office, sub-regional office, ordistrict office with therequired at least 3rdrank in said Office andpermanent status.

Was the BACChairman:

a. at least a 3rdranking officialof theProcuringEntitysbureau,regional office,sub-regionaloffice, ordistrict office?



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sNo Particulars

of theAnswer

of the procuring entity;b. Legal or Administrative

area representative, atleast a 3rd rankingpermanent official of theprocuring entity withknowledge, experienceand/or expertise inprocurement;

c. Finance arearepresentative, at least a3rd ranking permanentofficial of the procuringentity with knowledge,experience and/or expertisein procurement

Implementing Rules andRegulations (IRR) of RA 9184, asamended on September 2, 2009:

11.2.2. The BAC for NGAs,departments, bureaus, offices, orinstrumentalities of the GOP,including the judicial andlegislative branches, constitutionalcommissions, SUCs, GOCCs, andGFIs shall be composed of thefollowing:

Regular Membersa.Chairman, who is at least a third

ranking permanent official of theprocuring entity;

b.An officer, who is at least a fifthranking permanent official, withknowledge, experience and/orexpertise in procurement who,to the extent possible,represents the legal oradministrative area of the

procuring entity, provided that inthe case of bureaus, regional

offices and sub-regional/districtoffices, BAC members shall be atleast a third ranking permanent

personnel;c.An officer, who is at least a fifth

ranking permanent official, withknowledge, experience and/orexpertise in procurement who,to the extent possible,represents the finance area ofthe procuring entity, providedthat in the case of bureaus,regional offices and sub-

b. of permanentstatus?

12. For RegularMembers, comparetheir rank and statusper Plantilla of theProcuring Entitysbureau, regional office,sub-regional office, ordistrict office with therequired at least 3rdrank and permanentstatus.

Were RegularMembers of theBAC at least 3rdranking officialsof the ProcuringEntitys bureau,regional office,sub-regionaloffice, or districtoffice?

13. For RegularMembers, comparetheir status perPlantilla of theProcuring Entitysbureau, regional office,sub-regional office, ordistrict office and perhis/her appointment,with the requiredpermanent status.

Were RegularMembers of theBAC ofpermanentstatus?

14. For RegularMembers, verify fromtheir Work History andtraining documents if

they have knowledge,experience and/orexpertise inprocurement.

Were RegularMembers withknowledge,experience

and/or expertisein procurement?

15. For RegularMembers, verify fromtheir work assignmentsif at the time ofdesignation the legalarea or administrativeareas and the financialarea of the ProcuringEntitys bureau,

regional office, sub-regional office, ordistrict office wererepresented.

Was/Were thereRegular membersrepresenting thelegal oradministrativearea of theProcuring Entitysbureau, regionaloffice, sub-

regional office, ordistrict office?

Was/Were thereRegular membersrepresenting thefinancial area ofthe ProcuringEntitys bureau,regional office,sub-regionaloffice, or districtoffice?



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regional/district offices, BACmembers shall be at least a third

ranking permanent personnel.

11.2.2. The Chairman and the Vice-Chairman shall also be designatedby the Head of the procuringentity. Moreover, the Vice-Chairman shall be a regularmember of the BAC.

6. For National Government

Agencies/GOCCs/GFIs, to verifyif the Vice-Chairman wasdesignated by the Head ofthe procuring entity fromthe regular members of theBAC


11.2.2. The Chairman and the Vice-Chairman shall also be designated

by the Head of the procuringentity. Moreover, the Vice-Chairman shall be a regularmember of the BAC. For purposesof this IRR, the term permanentshall refer to a plantilla positionwithin the procuring entityconcerned.

16. Verify from the

Office Order if fromamong the RegularMembers of the BAC,the Vice-Chairman wasdesignated as such.

Was the BAC

Vice- Chairmandesignated assuch from theregular membersof the BAC?

7. For local governmentunits, to verify if the BAC iscomposed of onerepresentative each from theregular offices under the

Office of the Local ChiefExecutive


11.2.3.The BAC for LocalGovernment Units shall becomposed of the following:

a. One representative each fromthe regular offices under theOffice of the Local Chief

For Local GovernmentUnits (LGUs):

17. Compare the Officeassignments asindicated in theAppointment andAssignmentDocuments of thedesignated membersof the BAC with theregular Offices underthe Office of the LocalChief Executive perLGUs Organizational/Functional chart.

Are the membersof the BAC fromthe regularoffices under theOffice of the LocalChief Executive?



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of theAnswer

Executive such as, but notlimited to, the following:

Office of the Administrator,Budget Office, Legal Office,Engineering Office, GeneralServices Offices; and

b. A representative from theend user unit.

8. For local governmentunits, to verify if at least oneof the members representsthe end-user unit

Implementing Rules and Regulations(IRR) of RA 9184, as amended on

September 2, 2009:


a. One representative each fromthe regular offices under theOffice of the Local ChiefExecutive such as, but notlimited to, the following:Office of the Administrator,Budget Office, Legal Office,Engineering Office, General

Services Offices; and b. A representative from theend user unit.


18. Compare the Officeassignment of thedesignated member-representative-of-the-end user unit to theBAC as indicated in theOffice Order creatingthe BAC with the Officeassignment of theofficial as it appears inthe Appointmentdocuments/AssignmentOrder.

Is there arepresentative inthe BAC from theend user unit?

9. For local governmentunits, to verify if themembers of the BAC arepersonnel occupying plantillapositions of the procuringentity concerned



a. b.

The members shall elect amongthemselves who shall act asChairman and Vice-Chairman. TheChairman of the BAC shall be atleast a third ranking permanentofficial of the procuring entity. Themembers of the BAC shall be


19. From theAppointmentdocuments/AssignmentOrders of the membersof the BAC obtaininformation on theirrespective positiontitles and compare

these with the Plantillaof the Procuring Entity.

Did the membersof the BACoccupy plantillapositions of theprocuring entityconcerned?



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of theAnswer

personnel occupying plantillapositions of the procuring entity

concerned.

10. For local governmentunits, to verify if thedesignated members of theBAC elected amongthemselves who shall act asChairman and Vice-Chairman.



a. b.

The members shall elect amongthemselves who shall act asChairman and Vice-Chairman. TheChairman of the BAC shall be atleast a third ranking permanentofficial of the procuring entity. Themembers of the BAC shall be

personnel occupying plantillapositions of the procuring entity

concerned.


20. From the relevantMinutes of meetings ofthe BAC, compare thename and position ofthe Chairman with thename and position ofthe person elected bythe members fromamong themselves toact as Chairman and

Vice-Chairman.

Did the membersof the BAC electamongthemselves:

a. the Chairman?

b. Vice Chairman?

21. Compare the rankand status of the BACChairman per Plantillaof the Procuring Entitywith the required atleast 3rd rank andpermanent status.

Was theChairman of theBAC:

a. at least a 3rdranking officialof theprocuringentity?

b. a permanentofficial of theprocuring

entity?11. To verify if designatedalternate members of theBAC have the samequalifications as theirprincipals


11.2.4. The Head of the ProcuringEntity may designate alternatemembers to the BAC, who shall

have the same qualifications astheir principals as set in the Actand this IRR. The alternatemembers shall attend meetings ofthe BAC and receive thecorresponding honoraria,whenever their principals areabsent. The alternate membersshall have the same term as their

principals. The accountability ofthe principal and the alternatemember shall be limited to theirrespective acts and decisions.

22. For alternatemembers, compare thequalifications ofdesignated alternatemembers of the BACwith the qualificationsof their principals.

Were thequalifications ofdesignatedalternatemembers of theBAC the same asthe qualificationsof theirprincipals?



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of theAnswer

12. To verify if the membersof the BAC have a fixed term

of 1 year reckoned from thedate of appointment,renewable at the discretionof the HOPE

Implementing Rules and Regulations(IRR) of RA 9184, as amended onSeptember 2, 2009: 11.2.6. Unless sooner removed for

a cause, the members of the BACshall have a fixed term of one (1)

year reckoned from the date ofappointment, renewable at thediscretion of the Head of the

Procuring Entity. Upon expirationof the terms of the currentmembers, they shall continue toexercise their functions until newBAC members are designated. Incase of resignation, retirement,separation, transfer, re-assignment, removal, or death, thereplacement shall serve only forthe unexpired term: Provided,however, That in case of leave orsuspension, the replacement shallserve only for the duration of theleave or suspension. For justifiable

causes, a member shall besuspended or removed by theHead of the Procuring Entity.

23. From the OfficeOrders creating the

previous BACs and theOffice Order of the newBAC, compare the termof all members of theBAC with the fixedterm of one (1) yearreckoned from thedate of appointment,renewable at thediscretion of the Headof the Procuring Entity.

Was the term ofall members of

the BAC withinthe fixed term ofone (1) yearreckoned fromthe date ofappointment?

24. For a BAC memberdesignated to replace

a resigned, retired,separated, transferred,re-assigned, removed,or dead member,compare his/her termwith the un-expiredterm.

Was the term ofreplacements for

reason ofresignation,retirement,separation,transfer, re-assignment,removal, or deathwithin the un-expired termonly?

25. For a BAC memberdesignated to replacea member who wenton leave or was

suspended, comparehis/her term with theduration of the leaveor suspension.

Was the term ofreplacements forreason of leave orsuspension within

the duration ofthe said leave orsuspension only?

13. To verify if the HOPE and/orapproving authority is not theChairman or a member of theBAC

Implementing Rules and Regulations(IRR) of RA 9184, as amended onSeptember 2, 2009: 11.2.5. In no case shall the Head

of the Procuring Entity and/or the

approving authority be theChairman or a member of the BAC.

26. Compare thename and position ofthe Head of theProcuring Entity and/orthe approvingauthority (fromAppointmentdocuments/electiondocuments/relevantOffice Orders/

Assignment Orders)with the names andpositions of theChairman and allmembers of the BAC.

Is the HOPE:a. NOT the

Chairman ofthe BAC?

AND

b. NOT a memberof the BAC?

Is the approvingauthority:a. NOT the

Chairman ofthe BAC?

AND

b. NOT a memberof the BAC?

PROCUREMENT MONITORING REPORT



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of theAnswer

1. To verify if the BAC:a. prepared a procurement

monitoring report in theform prescribed by theGPPB;

b. covering all procurementactivities specified in theAnnual Procurement Plan(APP), whether on-goingand completed, from theholding of the pre-procurement conference tothe issuance of the noticeof award and the approvalof the contract, includingthe standard and actualtime for each majorprocurement activity;

c. submitted the monitoringreport to the Head of theProcuring Entity (HOPE) forapproval and submission tothe GPPB in printed andelectronic format within 14days after the end of eachsemester

Implementing Rules and Regulations

(IRR) of RA 9184, as amended onSeptember 2, 2009:

12.2. The BAC shall be responsiblefor ensuring that the procuring entityabides by the standards set forth bythe Act and this IRR, and it shall

prepare a procurement monitoringreport in the form prescribed by theGPPB. The procurement monitoringreport shall cover all procurementactivities specified in the APP,whether ongoing and completed,

1. Based on approvedProcurement

Monitoring Reports andcommunications onsubmissions (by theBAC to the HOPE andby the HOPE to theGPPB) obtained fromthe BAC or the Officeof the HOPE and on acopy of the formrequired by the GPPB,determine if theReports are in the formprescribed.

Did the BACprepare the

procurementmonitoringreports in theform prescribedby the GPPB?

2. Based on approvedProcurementMonitoring Reports andcommunications onsubmissions (by theBAC to the HOPE andby the HOPE to theGPPB) obtained fromthe BAC or the Officeof the HOPE,determine if theReports covered all theitems required.

Did theprocurementmonitoringreports preparedby the BAC cover:

a. allprocurementactivitiesspecified in theAPP, whether on-going andcompleted?

b. from the

holding of thepre-procurementconference to theissuance of thenotice of awardand the approvalof the contract?

c. standard andactual time foreach majorprocurementactivity?



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from the holding of the pre-procurement conference to the

issuance of notice of award and theapproval of the contract, includingthe standard and actual time foreach major procurement activity.The procurement monitoring reportshall be approved and submitted bythe Head of the Procuring Entity tothe GPPB in printed and electronicformat within fourteen (14) calendardays after the end of each semester.

Annex CPeriod of Action on Procurement

Activities

3. Based on approvedProcurement

Monitoring Reports andcommunications onsubmissions (by theBAC to the HOPE andby the HOPE to theGPPB) obtained fromthe BAC or the Officeof the HOPE, verify ifthe Reports weresubmitted by the BACto the HOPE forapproval andsubmission to theGPPB in both printed

and electronic formatwithin 14 calendardays after the end ofeach semester.

Did the BACsubmit the

procurementmonitoringreports to theHOPE:

a. for approval?

b. for submissionto the GPPB inboth printed andelectronicformat?

c. for submission

to the GPPBwithin 14calendar daysafter the end ofeach semester?

2. To verify if the HOPE:

a. approved the ProcurementMonitoring Report and

b. submitted it to the GPPB inprinted and electronicformat within 14 days afterthe end of each semester


12.2. The procurement monitoringreport shall be approved andsubmitted by the Head of theProcuring Entity to the GPPB in

printed and electronic format withinfourteen (14) calendar days after theend of each semester.

4. Based on approvedProcurementMonitoring Reports andcommunications onsubmissions by theHOPE to the GPPBobtained from the BACor the Office of the

HOPE, verify if theReports were approvedby the HOPE andsubmitted to the GPPBin both printed andelectronic formatwithin 14 calendardays after the end ofeach semester.

Did the HOPEapproveprocurementmonitoringreports?

Did the HOPE

submit theprocurementmonitoringreports to theGPPB in bothprinted andelectronicformat?

Did the HOPEsubmit theapprovedprocurementmonitoringreports to theGPPBwithin 14calendar daysafter the end ofeach semester?

3. To verify if appropriateactions have been taken bythe HOPE in case ofinstances ofnoncompliance committed

5. Identify instances ofnoncompliancediscovered by theBAC and/or by theHOPE in theProcurement

Were appropriateactions taken bythe auditee inregard toinstances of non-compliance?



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of theAnswer

by the BAC, BAC TWG, BACSecretariat and/or bidders

Monitoring Report;and, instances of

noncompliancenoted during thecourse of the audit.

Look forinformation/documentson the actions takenby the auditee inregard to such non-compliances andcompare these withthe actions required bythe Revised IRR of RA9184 and other

relevant regulations.

4. To verify what actionshave been taken by theGPPB in regard toinstances ofnoncompliance

Implementing Rules and Regulations(IRR) of RA 9184, as amended onSeptember 2, 2009: 63.1. The Government

Procurement Policy Board

(GPPB), as established in Section63 of the Act, shall have thefollowing duties andresponsibilities:a. d. To ensure the properimplementation by procuringentities of the Act, this IRR andall other relevant rules andregulations pertaining to public

procurement.

6. Request forinformation fromthe GPPB on theactions they havetaken on instancesof noncomplianceinvolving theauditee, includingnon-submission ofthe ProcurementMonitoring Report.

Did the GPPBtake action oninstances ofnoncomplianceinvolving theauditee, includingnon-submissionof theProcurementMonitoringReport?

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OFAUDIT1. To verify the effects ofinstances of non-complianceon the:a. validity of the designation

of the BACmembers/Chairman/ Vice-Chairman;

b. validity of the actions ofthe BAC including thevalidity of the resulting

Analyze the instancesof non-compliances toestablish the effectsand developappropriate auditrecommendations.

Appropriate Audit Working Papers



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contract;

c. validity of any payment tobe made on the basis ofthe contract;

d. etc.

and make appropriate auditrecommendations2. To verify the causes ofinstances of non-complianceand make appropriate auditrecommendations

Analyze the instancesof non-compliances toestablish the cause(s)and developappropriate auditrecommendations.


3. To communicate theresults of the audit withmanagement

COA Circular No. 2009-006 datedSeptember 15, 2009 re-Prescribing the Use of the Rulesand Regulations on Settlement of

Accounts

Prepare theappropriate audit/validation documentreflecting the results ofthe audit/validationand transmit tomanagement

Audit Observation Memorandum (AOM), ifapplicable



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BIDS AND AWARDS COMMITTEEsSECRETARIAT



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BASIC ELEMENT BAC SECRETARIAT

A. AUDIT OBJECTIVES:1. To verify the existence of the Bids and Awards Committee (BAC) Secretariat

2. To verify if the BAC Secretariat was constituted as required bylaw/regulations

3. To verify if the designated Head of the BAC Secretariat is qualified

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

List of documents needed (those applicable to the procurements subject of audit for the auditperiod):

1. Appointment of the Head of the Procuring Entity (HOPE), if an individual;2. Office Order of or the GOCC/GFI Board Resolution designating/authorizing a specific official

to act on his/her/their behalf;3. Office Orders creating the BAC Secretariat;4. Office Order designating the Head of the BAC Secretariat;5. Office Orders designating the alternate members of the BAC;6. Plantilla/Organizational Chart of the procuring entity;7. Work History and evidences of training on procurement of the Head of the BAC Secretariat;8. Others as appropriate based on the audit sub-objective and audit activity.

Audit Sub-objective Audit Criteria

Audit Activities

Suggested Audit Working Paper

Audit QuestionYe

sNo

Particulars of theAnswer

1.To verify if theprocuring entitys Bidsand Awards Committee(BAC) Secretariat wasconstituted by the Headof the Procuring Entity

Implementing Rules andRegulations (IRR) of RA 9184,as amended on September 2,2009:

14.1 The HOPE shall createa Secretariat which will serve

as the main support unit of theBAC. An existing organic officewithin the procuring entitymay also be designated toserve as Secretariat. However,to strengthen and promote the

professionalization of theorganizations procuring unit,the HOPE may create

procurement units that mayserve concurrently as BACSecretariat in accordance withthe guidelines issued by theDBM

1. Compare the OfficeOrder creating the BACSecretariat as follows:

a. Name and position ofthe signatory vs. thename and position ofthe HOPE perhis/her/theirappointment(s);

b. In NGAs, constitutionalcommissions oroffices, and branches

of government; and inGOCCs, GFIs, andSUCs, if the HOPE isnot the signatory,

Name and position ofthe signatory vs. thename and position ofthe duly authorizedofficial per OfficeOrder or BoardResolution designatinghim/her.

Was the BACSecretariatconstituted bythe Head of theProcuring Entity?



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Audit Activities


Audit QuestionYe

sNo


2. To verify if the BACSecretariatwas created:a. as a Secretariat to

serve as the main

support unit of theBAC,

b. bydesignating anexisting organic officewithin the procuringentity,

c. or by creating aprocurement unit toserve concurrently asBAC Secretariat

in accordance with theguidelines issued by theDBM

Implementing Rules andRegulations (IRR) of RA 9184,as amended on September 2,2009:

14.1 The HOPE shall createa Secretariat which will serveas the main support unit of theBAC. An existing organic officewithin the procuring entitymay also be designated toserve as Secretariat. However,to strengthen and promote the

professionalization of theorganizations procuring unit,the HOPE may create

procurement units that mayserve concurrently as BACSecretariat in accordance withthe guidelines issued by theDBM

NOTE: The guidelinesavailable are those inBudget Circular No. 2007 -3dated November 29, 2007,Budget Circular No. 2004-5A

2. Identify the method ofcreation and thefunctions of the BACSecretariat from theOffice Order andcompare with therequirements ofregulations.

Was the BACSecretariatcreated:

a. as aSecretariat toserve as themain supportunit of theBAC?

b. bydesignatingan existingorganic officewithin theprocuringentity?

OR

c. by creating aprocurementunit to serveconcurrentlyas BACSecretariat inaccordancewith theguidelinesissued by theDBM?



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Audit Activities


Audit QuestionYe

sNo


dated October 7, 2005 and

Budget Circular No. 2004-5dated March 23, 2004 onthe Grant of honoraria toGovernment PersonnelInvolved in GovernmentProcurement.

3. To verify if the Headof the BAC Secretariatmet the followingqualifications:

a. at least a fifth rankingpermanent employeeor, if not available, apermanent official ofthe next lower rank;

b. at least a thirdranking permanentemployee in bureaus,regional offices andsub-regional/ districtoffices, or if notavailable, apermanent employee

of the next lowerrank;

c. possesses integrity;d. possesses

procurementproficiency

Implementing Rules andRegulations (IRR) of RA 9184,as amended on September 2,2009:14.2 The head of the

Secretariat in central offices

shall be at least a fifthranking permanentemployee or, if notavailable, a permanentofficial of the next lowerrank; or shall be at least athird ranking permanentemployee in bureaus,regional offices and sub-regional/ district offices, orif not available, a

permanent employee of thenext lower rank. In additionto integrity, heads of

3. In the head office ofthe Procuring Entity:

Compare the rank andstatus of the Head ofthe BAC Secretariatper Plantilla of theProcuring Entity withthe required at least5th rank (or if notavailable, a next lowerrank) and permanentstatus

Was the Head ofthe BACSecretariat atleast a fifthranking official inthe head office?

If a 5th rankingofficial is notavailable, was theHead of the BACSecretariat atleast of the nextlower rank officialin the headoffice?Was the Head ofthe BACSecretariat a

permanentofficial in thehead office?

4. In bureaus, regionaloffices and sub-regional/ districtoffices of theProcuring Entity:

Compare the rank andstatus of the Head ofthe BAC Secretariatper Plantilla of the

organizational unitconcerned of theProcuring Entity withthe required at least3rd rank (or if notavailable, a next lowerrank) and permanentstatus

Was the Head ofthe BACSecretariat atleast a 3rdranking official in

bureaus, regionaloffices and sub-regional/ districtoffices?

If a 3rd rankingofficial is notavailable, was theHead of the BACSecretariat atleast of the nextlower rank officialin the bureaus,regional offices



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Audit Activities


Audit QuestionYe

sNo


Procuring Entities shall

consider procurementproficiency as a factor indesignating the head of theSecretariat andProcurement Unit

and sub-regional/

district offices?

Was the Head ofthe BACSecretariat apermanentofficial in thebureaus, regionaloffices and sub-regional/ districtoffices?

5. Identify the criteria /method adopted by

the procuring entity inconsidering integrityas a factor indesignating the Headof the BAC Secretariat.

Did the procuringentity consider

integrity as afactor indesignating theHead of the BACSecretariat?

6. From the Work Historyand trainingdocuments of theHead of the BACSecretariat verify ifhe/she hasprocurementproficiency.

Did the Head ofthe BACSecretariatpossessprocurementproficiency?

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OFAUDIT1. To verify the effectsof instances of non-compliance and makeappropriate auditrecommendations

Analyze the instances ofnon-compliances toestablish the effects anddevelop appropriateaudit recommendations.


2. To verify the causesof instances of non-compliance and makeappropriate auditrecommendations

Analyze the instances ofnon-compliances toestablish the cause(s)and develop appropriateaudit recommendations.


3.To communicate theresults of the audit withmanagement

COA Circular No. 2009-006dated September 15, 2009re- Prescribing the Use of theRules and Regulations onSettlement of Accounts

Prepare the appropriateaudit/ validationdocument reflecting theresults of theaudit/validation andtransmit to management




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ANNUAL PROCUREMENT PLAN(APP)



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BASIC ELEMENT - ANNUAL PROCUREMENT PLAN (APP)

A. AUDIT OBJECTIVES:

1. To verify the existence of an approvedAnnual Procurement Plan (APP) andsupporting Project Procurement Management Plans (PPMPs)

2. To verify the completeness of the required information in the APP

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKINGPAPER

List of Documents needed:1. Budget approved by the HOPE (could be the Budget Proposal approved by the

HOPE if the GAA, corporate budget or budget ordinance has not yet becomefinal);

2. Approved APP with supporting PPMPs based on the final budget per GAA,corporate budget, or budget ordinance (could be the initial approved APPbased on the approved budget proposal when the budget has not yet becomefinal);

3. Copy of the report on the review of the PPMPs conducted by the BACSecretariat pertaining to the finalization of the modes of procurement underthe APP;

4. Relevant portions of the GAA (national government) or corporate budget(GOCCs & GFIs) or budget ordinance (LGUs);5. Appointment document of the HOPE;6. Office order designating the official to act on behalf of the HOPE, if applicable;7. Organizational Chart/Plantilla or other document with information on the rank

of the designated official;8. Approved updated APP with supporting PPMPs;9. Updated budget approved by the HOPE or the designated second-ranking

official;10. Authority for the supplemental/updated budget (appropriation document for

the supplemental appropriation, supplemental or updated corporate budget,supplemental or updated budget resolution).



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Suggested Audit Working PaperAudit

QuestionYe

sNo Particulars of

the Answer

1. To verify if theprocuring entity has

an AnnualProcurement Plan(APP)

Implementing Rules andRegulations (IRR) of RA9184, as amended onSeptember 2, 2009:

7.3.2. The end-user units shall prepare theirrespective PPMPs

7.3.4. budget officeshall furnish a copy of the

procuring entitys budgetproposal as well as thecorresponding PPMPs tothe BAC Secretariat for itsreview and consolidationinto the proposed APP

7.3.5. end-user unitsshall revise and adjust thePPMP to reflect thebudgetary allocation fortheir respective PAPs. Therevised PPMPs shall besubmitted to the BACthrough its Secretariat for

the finalization of themodes of procurementunder the proposed APP

The APP shall then beapproved in accordancewith Sec 7.2 of this IRR.

1. Upon approval ofthe budget proposal bythe HOPE, obtain acopy of the proposedAPP from the BACSecretariat.

OR

When the GAA,corporate budget, orappropriationordinance, as the casemay be, becomes final,obtain a copy of theapproved APP from theBAC Secretariat.

Does the entityhave a proposedAPP?

Does the entityhave anapproved APP?

2. To verify if the APPis approved by theHOPE or by a second-ranking officialdesignated by theHOPE to act on his

behalf

Implementing Rules andRegulations (IRR) of RA9184, as amended onSeptember 2, 2009: 7.2. The APP shall bear

the approval of the HOPEor second ranking officialdesignated by the HOPEto act on his behalf, andmust be consistent withits duly approved yearlybudget

2. Compare the name,position, anddesignation of theperson who approvedthe APP with therelevant data in theappointment document

of the HOPE.

2.1. If the signatory isnot the HOPE, comparethe name, position,and designation of theperson who approvedthe APP with therelevant data in theoffice orderdesignating the officialto act on behalf of theHOPE.

Is the APPapproved by theHOPE or second-ranking officialdesignated bythe HOPE to acton his behalf?



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QuestionYe

sNo Particulars of

the Answer

2.2. Compare the rankof the designatedofficial with the

second-in-rank perOrganizationalStructure / Plantilla ofthe procuring entity.

3. To verify if the APPcontains the followinginformation:

a. name of theprocurementprogram/ project;

b. projectmanagement office

or end-user unit;c. general

description of theprocurement;

d. procurementmethod to beadopted;

e. time schedule foreach procurementactivity;

f. source of fund;g. approved budget

for the contract.

GPPB Circular 1-2009dated 20 January 2009:

3.2. AnnualProcurement Plan (APP) the requisitedocument that theagency must prepare toreflect the entire

procurement activity(i.e., goods, services,civil works to be

procured) that it plansto undertake within thecalendar year. Thisdocument contains thefollowing information:3.2.1. Name of the

procurementprogram/project;

3.2.2. Projectmanagement officeor end-user unit;

3.2.3. Generaldescription of the

procurement;

3. From the APP, lookfor the followinginformation:

a. name of theprocurement program/project;b. project managementoffice or end-user unit;

c. general descriptionof the procurement;d. procurementmethod to be adopted;e. time schedule foreach procurementactivity;f. source of fund;g. approved budget forthe contract.

Does the APPcontain thefollowinginformation:

a. name of theprocurementprogram/project?

b. projectmanagementoffice or end-user unit?

c. generaldescription oftheprocurement?

d. procurementmethod to beadopted?

e. time schedulefor eachprocurementactivity?

f. source offund?

g. approved

budget for thecontract?



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QuestionYe

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3.2.4. Procurementmethod to beadopted;

3.2.5. Time schedulefor eachprocurement activity;

3.2.6. Source of fund;and

3.2.7. ApprovedBudget for theContract.

4. To verify if the APPis supported by PPMPsprepared by therespective end-userunits


7.3.2. The end-user units shall prepare theirrespective PPMPs

7.3.4. budget officeshall furnish a copy of the

procuring entitys budgetproposal as well as thecorresponding PPMPs to

the BAC Secretariat for itsreview and consolidationinto the proposed APP

7.3.5. end-user unitsshall revise and adjust thePPMP to reflect thebudgetary allocation fortheir respective PAPs. Therevised PPMPs shall besubmitted to the BACthrough its Secretariat forthe finalization of themodes of procurementunder the proposed APP

4. Upon approval ofthe budget proposal bythe HOPE, obtain fromthe BAC Secretariat acopy each of thePPMPs which it

reviewed andconsolidated into theproposed APP.

Also obtain a copy ofthe report on thereview of the PPMPsconducted by the BACSecretariat.

OR

When the GAA,

corporate budget, orappropriationordinance, as the casemay be, becomes final,obtain from the BACSecretariat a copyeach of the PPMPsadjusted by the end-user units which itconsolidated into theapproved APP.

Also obtain a copyof the report on the

review of the PPMPsconducted by the BACSecretariat.

Is the proposedAPP supportedby PPMPsprepared by therespective end-user units?

Is the approvedAPP supported

by adjustedPPMPs adjustedby end-userunits to reflectthe final budget?

5. To verify if theitems in the approvedAPP were included inthe PPMPs


5. Compare the itemsin the approved APPwith the items in thePPMPs.

Identify items whichdo not match.

Are the items inthe approvedAPP included inthe PPMPs?



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7.3.2. The end-user units shall prepare their

respective PPMPs 7.3.4. budget office

shall furnish a copy of theprocuring entitys budgetproposal as well as thecorresponding PPMPs tothe BAC Secretariat for itsreview and consolidationinto the proposed APP

7.3.5. end-user unitsshall revise and adjust thePPMP to reflect thebudgetary allocation fortheir respective PAPs. The

revised PPMPs shall besubmitted to the BACthrough its Secretariat forthe finalization of themodes of procurementunder the proposed APP

6. To verify if the APPmatches the budgetper GAA, corporatebudget, appropriationordinance, as the casemay be

Implementing Rules andRegulations (IRR) of RA9184, as amended onSeptember 2, 2009: 7.1. All procurement shall

be within the approvedbudget of the procuringentity and should bemeticulously and

judiciously planned by theprocuring entity.

7.2. No procurement shallbe undertaken unless it isin accordance with theapproved APP of the

procuring entity.

6. Compare the itemsand budgets in theGAA, corporatebudget, appropriationordinance, as the casemay be, with the itemsand amounts in the

approved APP.

Does the APPmatch thebudget per GAA,corporatebudget,appropriationordinance, as

the case maybe?

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OFAUDIT1. To verify theeffects of instances ofnon-compliance onthe:

a. validity of theprocurement

Analyze the instancesof non-compliances toestablish the effectsand developappropriate auditrecommendations.




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activities andoutputs includingthe validity of the

resulting contract;

b. validity of anypayment to be madeon the basis of thecontract;

c. etc.

and developappropriate auditrecommendations

2. To verify the causes

of instances of non-compliance anddevelop appropriateauditrecommendations

Analyze the instances

of non-compliances toestablish the cause(s)and developappropriate auditrecommendations.


3. To communicate theresults of the auditwith the auditeesManagement

COA Circular No. 2009-006 dated September 15,

2009 re- Prescribing theUse of the Rules andRegulations onSettlement of Accounts

Prepare theappropriate audit/validation documentreflecting the results ofthe audit/validationand transmit toManagement




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