1. Common Audit Findings in the Provision of CNA Cash IncentivesBy
Ma. Carolina V. Taino, CPA, MGM, CESO IV
Director IV, Internal Audit Service

2. Issuances on the Granting CNA Incentives
Section 71 of the General Provision of General Appropriations Act (GAA) FY 2014, cited the basic provisions on the grant of CNA Incentives:
“Savings from allowable MOOE allotments, generated out of cost-cutting measures undertaken by the agencies of the government and their respective personnel , which are identified in the respective Collective Negotiation Agreements (CNAs) and supplements thereto may be used for the grant of CNA Incentives by agencies with duly executed CNAs: PROVIDED, that the one-time annual payment of CNA Incentive shall be made through a written resolution signed by agency representatives from both labor and management, and approved by the agency head: Provided further, that the funding sources and amount of CNA Incentive shall in all cases be limited to the allowable MOOE allotments and rated determined by the DBM respectively. Provided, finally, that the realignment of savings from the allowable MOOE allotments shall be subject to the approval by the DBM. Implementation of the provision shall be subject to guidelines issued by the DBM”
Department of Health
INTERNAL AUDIT SERVICE

3. Issuances on the Granting CNA Incentives
Budget Circular (BC) No – Guidelines on the Grant of Collective Negotiation Agreement Incentive for FY 2014
Under of BC No , CNA Incentive shall be sourced solely from the allowable MOOE allotments in FY 2014, provided the same have become available as a result of cost-cutting and systems improvement measures undertaken by the agencies and their respective personnel, which are identified in the respective “Agreements” and supplements thereto. Such fund sources shall be limited to the following MOOE items:
Travelling Expenses;
Communication Expenses;
Repairs and Maintenance;
Transportation and Delivery Expenses;
Supplies and Materials;
Utility Expenses
Department of Health
INTERNAL AUDIT SERVICE

4. Issuances on the Granting CNA Incentives
The use of the above-mentioned available MOOE allotments for the payment of the CNA Incentive shall be subject to approval of the DBM.
Department of Health
INTERNAL AUDIT SERVICE

5. Issuances on the Granting CNA Incentives
Budget Circular (BC) No – Guidelines on the Grant of Collective Negotiation Agreement Incentive for FY 2014
In no case shall the following be used as fund sources of the CNA Incentive:
Balances of allotments for programs/activities/projects which were later discontinued or deferred;
Released allotments intended for acquisition of goods and services to be distributed/delivered to, or to be used by the agency clients.
Department of Health
INTERNAL AUDIT SERVICE

6. Use of Hospital Income
DOH, DOF and DBM Joint Circular No dated 16 July 2003 and DO No dated Dec. 16, 2008 clearly states therein the “No amount of income shall be used for the payment of salaries and other allowances.”
Department of Health
INTERNAL AUDIT SERVICE

7. Common Audit Findings on the Provision/Giving CNA Cash Incentives
Non-preparation of computation of savings generated out of cost-cutting measures to support provision of CNA Cash Incentives;
Saving to be use in the payment of CNA Cash Incentives as declared by the hospital management/union were not sourced out from cost cutting measures nor from allowable MOOE items as cited under Under of BC No ;
Department of Health
INTERNAL AUDIT SERVICE

8. Common Audit Findings on the Provision/Giving CNA Incentives
Use of available savings for payment of CNA Cash Incentives were not approved by DBM contrary to the provision of Sec of BC No ;
Use of Sub-Allotment with specific purpose to pay for CNA Cash Incentives;
Use of Hospital Income to pay for CNA Cash Incentives;
Department of Health
INTERNAL AUDIT SERVICE

9. Sanctions that Management and Employees may be charged with due to non-compliance and/or violation of certain provision of laws, rules and regulations governing granting of CNA Incentives
COA Suspension and Disallowances;
Ombudsman charges of Malversation of Government Funds
Department of Health
INTERNAL AUDIT SERVICE

10. Remedy that Regional Offices/Hospitals may resort to in case of savings deficit/non-availability of saving out of cost cutting measures due to budget constraints
The management thru the Budget Officer may request for “Budget Re-alignment” from DBM (Regional Office) to support payment of CNA Cash Incentives out of any available savings;
Department of Health
INTERNAL AUDIT SERVICE

11. End of Presentation
Department of Health
INTERNAL AUDIT SERVICE