POSITION PAPER
ON THE INSTITUTIONALIZATION OF INTERNAL AUDIT SERVICE
IN THE NATIONAL GOVERNMENT AGENCIES (NGAs), GOVERNMENT- OWNED
AND/OR CONTROLLED CORPORATIONS/GOVERNMENT FINANCIAL INSTITUTIONS (GOCCs/GFIs),
STATE UNIVERSITIES AND COLLEGES (SUCs) AND LOCAL GOVERNMENT UNITS (LGUs)

The institutionalization of Internal Audit Service (IAS) in all agencies of the national government is mandated under Republic Act No. 3456, otherwise known as the Internal Auditing Act of 1962.  This law was later amended by Republic Act No. 4177 in 1965, which provided for the creation of Internal Audit Service in government-owned and/or controlled corporations.  Subsequently,  Administrative Order No. 278 was issued by then President Corazon C. Aquino directing all heads of government offices, agencies, government-owned and/or controlled corporations, including  government financial institutions and local government units to organize Internal Audit Service in their respective offices, as an integral part of the organization.

 To further ensure that IAS is institutionalized, Administrative Order No. 70 dated April 14, 2003 and Memorandum Circular No. 89 dated August 2005 were issued. These latest issuances provided for the strengthening of internal control systems in government offices, agencies, government-owned and/or controlled corporations, government financial institutions, state universities and colleges and local government units through the institutionalization of Internal Audit.

The guidelines for the institutionalization of IAS was initially laid down in the Department of Budget and Management (DBM) Budget Circular No. 2004-4 dated March 22, 2004.  The most recent issuance on the guidelines in the organization and staffing of the IAS is DBM Circular Letter No. 2008-5 dated April 14, 2008.   

Under AO Nos. 278 and 70, the Association of Government Internal Auditors (AGIA), Inc. is mandated to “ensure that internal audit practices, methods and procedures are improved and updated through continuing education and that all audit works for each government agency are conducted in conformity with the standards of the internal audit profession” and “to best serve the interests of their Offices, in particular, and of the government service, in general, all Heads and Staff of the Internal Audit Service shall cooperate and actively participate in the activities of the AGIA.”

The recently concluded Annual Convention of the Association of Government Internal Auditors (AGIA), Inc.  held in Cagayan de Oro was attended by five hundred eighty six (586) government employees, representing the following agencies:

Sectors Represented	No. of Agencies/Sectors	No. of Participants
National Government Agencies	60	320
Local Government Units	27	73
Government-Owned and/or Controlled Corporations/Government Financial Institutions	26	121
State Universities and Colleges	18	72
TOTAL	131	586

 

In the said convention, the AGIA Board of Directors was again confronted with some of the most basic, but serious problems of public sector workers which were identified during the workshop conducted, the highlights of which are:

1.  Absence/Lack of Internal Audit Service/Unit in their respective agencies

2.  Absence/Lack of Plantilla Positions

The 68 agencies with IAS and those without IAS have indicated that there are no available plantilla positions for the staff of the IAS.  This means that they carry their original plantilla items while they perform IAS functions.  In some cases, those designated in the IAS are performing dual functions, that of IAS and the functions of their original positions.

3.  Unclear Functions of IAS

It was disclosed that majority of the agencies, both those with IAS and without IAS are encountering problems on the functions of IAS.  Though the DBM circulars and memoranda clearly state the functions of IAS in promoting efficiency and effectiveness in all government agencies, it seems that the functions of IAS are perceived in so many different ways and there is no clear delineation of functions.

 

In the light of the above, the AGIA strongly recommends the implementation of the provisions of RA 3456 as amended by RA 4177.  Hence, the AGIA being the organization composed of different government internal auditors, shall take active participation in revisiting the related issuances on internal control and internal auditing to address the above issues and concerns.

Actual Letter (Click Here)

 

Theme:  "AGIA Para Sa Pagsulong Ng Bagong Pilipinas"
Venue:  Pryce Plaza, Carmen Hill, Cagayan De Oro City
Date:    October 13 - 14, 2010

 

Keynote Speaker:  His Excellency BENIGNO SIMEON C. AQUINO, III
                                                          President of the Philippines

                                                          Hon KIM S. JACINTO-HENARES
                                                          Commissioner
                                                          Bureau of Internal Revenue

Technical Speakers:

"A Culture of Good Governance"                  
Atty. Alexander L. Lacson
Partner, Malcolm Law Office

"Instituting Change in the Workplace"
Dr. Margarita R. Cojuangco
President                                        
Philippine Public Safety College

"Restoring Public Trust"
Dr. Ronnie V. Amorado
National Coordinator
Ehem Anti-Corruption Group of the Philippines

"Transparency and Public Accountability"
Ms. Magdalena L. Mendoza
Senior Vice President for Programs              
Development Academy of the Philippines

"Tone at the Top: An Important Element in Strengthening Internal Control"
Dr. Ronnie V. Amorado
National Coordinator               
Ehem Anti-Corruption Group of the Philippines

CLICK HERE TO DOWNLOAD LECTURE MATERIALS

 

PRESIDENT'S REPORT-2010 Annual Convention
Remeliza Jovita Millarez-Gabuyo
 

Our most distinguished and highly regarded guest of honor, his excellency Benigno Simeon C. Aquino III represented by Hon. Kim Jacinto-Henares, Atty. Alexander L. Lacson, past and incumbent directors of the Association of Government Internal Auditors, Inc., my esteemed colleagues and fellow workers in the government service, ladies and gentlemen, a pleasant good morning to all of you.

Sulong Bagong Pilipinas!

I would like to repeat a common truism extolled by many of our leaders that says “our country will progress if every Filipino puts value in honest hard work.” 

Our convention theme “AGIA Para Sa Pagsulong Ng Bagong Pilipinas” reminds us nothing less than this.  What the AGIA can contribute for a new Philippines is dependent, in many respects, on the quality and amount of hardwork that we, collectively, would put forth and stake for the best interest of our association, and the best interest of the respective agencies that brought us here and provided us this opportunity for professional and personal growth, in the first place.

Ang pagsulong tungo sa isang makabagong Pilipinas, kung sa ganun, ay nangangailan sa ating indibiduwal na pagtugon.  Nangangailan ng ating sama-samang pagkilos, at paglalahad ng serbisyong magiliw, matapat, at matiyaga bilang mga mapanagutang-katiwala o “responsible stewards of our country,” bilang mga lingkod bayan.

Alam natin na ang mga hamon sa hinaharap ay napakarami at kalimitan ay masalimuot.  Subalit hindi ito sapat upang tayo ay panghinaan ng loob at kusa na lamang magpasakop sa mapang-akit at puno ng mga patibong ng moderno at makabagong mundong ating ginagalawan.

Ngayon, higit kailanman, mas kailangan ang ating determinadong pagpupunyagi upang mapagyaman ang ating mga kaalaman at kakayahan.  Ngayon, mas lalo nating kailangang makausap at mariing pakinggan ang lahat ng nga may kinalaman sa ating trabaho at paglilingkod.  Ngayon mas lalo nating kailangan ang isa’t-isa tungo sa pagbalangkas ng mga sistema at solusyon tungo sa isang mas makabuluhan at mas akmang paglilingkod sa bayan.

Role of Internal Auditors

Ano ngayon ang implikasyon nito sa atin bilang mga internal auditors at mga kawani ng gobyerno?  Malaki at marami.  We need to provide our honest and hardwork in providing assurance to management that a conducive working environment is being promoted and the necessary internal controls are put in place, and are being followed in the pursuance of organizational visions, mandates, goals, and objectives.

We are supposed to be primary champions and advocates of good governance.  However, for us to effectively do this we must know what our strengths and weaknesses are.  We need to know where we are at present so we can aptly plot the roadmap to where we want to go in the future.

Break-away Sessions

Within our convention and with your active participation, we would like to know and analyze for ourselves the circumstances of our respective internal audit functions and benchmark ourselves with the rest of the bureaucracy.

With the assistance of our AGIA Directors and certain facilitators, we will be grouping ourselves into clusters and do some focused-group discussions to start our introspection and self-analysis of the challenges that we face as an internal auditors.  In the process, we are expecting to gather a good number strategic policy inputs which the AGIA Board can capture and consolidate our efforts in bringing each policy initiative to the appropriate forum.

Other Agenda Offering In Store

For this year’s convention your AGIA Board has lined up convention topics that need to be further reinforced and processed, and to elicit more sharing of best practices in the area of participated governance, transparency and accountability and internal control.

Proposed AGIA Awards and Incentives

We are also giving out draft policy guidelines and mechanics for the recognition and incentive program that the AGIA Board had been pursuing for internal audit practitioners.

Your suggestions and recommendations for the possible refinement of the proposed award categories, evaluation and selection criteria, and general policies would be valuable in making the program meaningful and sustainable.

Healthy AGIA financials and productive seminars

In behalf of the board, I am happy to report to you that AGIA continues to show good operating performance and financial buildup.

As of 31 August 2010, our total assets stand at P6.3M, reflecting a 16% growth than its relevant level the year before.  Revenues for the first eight months, on the other hand, ballooned to P5.0M from the P3.4M in the same period last year, or a P1.6M increase.  Net income more than doubled year-on-year from P0.4M for the period in 2009 to P1.0M in 2010.

As to seminar participants, AGIA was able to serve 1,286 pax in 2010 compared to only 821 pax in the same period in 2009, registering an almost 60% increase in the number of trained internal auditors and personnel in the allied services.

Best seller training programs in the year include Basic Internal Control Concepts, NGICS & Internal Auditing Principles, 2^nd Understanding, Auditing & Updates of Government. Procurement System, 3^rd Laws, Rules & Regulations on Government Expenditures compared to 2009 top sellers were Understanding, Auditing & Updates of Government Procurement System, Property & Supply Management System and Basic Internal Control Concepts, NGICS & Internal Audting principles.

Plans and Programs

A. Professional Development of Members

1. Certification - as an update regarding our planned professional certification for government internal auditors, your AGIA Board had broken grounds and made initial discussions with the Civil Service Commission, through Assistant Secretary Rogelio C. Limare;

2. Mobile training - in line with our commitment to assist government employees to become more responsive and effective public servants we proposed mobile training to be conducted in the provinces. The AGIA is reaching out to different local governments nationwide as we have been continuously conducting such seminars in different agencies in Metro Manila;

3. Research grant - AGIA is considering supporting significant research undertaking on the areas of internal control and/or will internal auditing.

B. AGIA Website

To improve on communication and leverage the use information and communication technology for a more interactive collaboration, the AGIA Board is bent on re-launching the association’s website.  To ensure quality and informative contents, your insights and feedbacks regarding this matter will be very helpful.

C. Purchasing Building for Seminar Venue

On another matter, and in order to provide a better and conducive venue to our seminar participants, the AGIA Board is now seriously considering the acquisition of a training center wholly-owned by the association.  This strategy will provide us more operational efficiency in the long run while still maintaining a good financial standing.

Your AGIA leadership is a believer of Benjamin Franklin’s philosophy that “good work is better that good words”.  With the quality, honest, and active participation of each of you, all of us, bound by the AGIA oath that we all profess, we will not fail. 

Sulong AGIA tungo sa pagsulong ng bagong Pilipinas!!!

Maraming, maraming salamat po uli.

RMGabuyo
President, AGIA