Implementation of Revenue Memorandum Circular No. 23-75 Relative to Visitation of Field Offices by Performance Control Officers to Conduct Management Performance Audit

November 26, 1976 REVENUE MEMORANDUM ORDER NO. 01-77 SUBJECT : Implementation of Revenue Memorandum Circular No. 23-75 Relative to Visitation of Field Offices by Performance Control Officers to Conduct Management Performance Audit TO : All Internal Revenue Officers and Others Concerned In order to implement the provisions of Revenue Memorandum Circular No. 23-75 and to provide Performance Control Officers with guidelines to conduct the performance audit of Regional Offices, the following guidelines are hereby promulgated for compliance by the Performance Control Officers to be assigned in the performance audit of Regional Offices: I. PLAN OF ACTION A. Teams of at least two (2) men each, shall conduct the audit of every region and the Working units under it. The number of the members of the teams may be increased depending upon the area of the particular region and the number of Revenue District Offices under its jurisdiction. In the cases of Manila and Quezon City, their audit and those of their Working units should be conducted simultaneously, thus requiring the concentration thereat of all Performance Officers. The members of each team need not work always together. Each Officer should be prepared to conduct an audit of a working unit by himself. B. To avoid cris-crossing a region and waste much time in travelling, itineraries shall first be reviewed and subjected to prior approval. C. Weather conditions within the region to be audited should also first be ascertained. D. Each audit shall last for thirty (30) days. Requests for extensions must be fully justified. E. To facilitate comparison, analysis and appraisal of the results, audit of all the regions within each of the three subdivisions of the country Luzon, Visayas, and Mindanao, should be conducted simultaneously. cd F. Since management affects performance and vice-versa, there need not be a separate report for each phase of the audit. II. BASES A. Work programs, their objectives, goals and projections; B. Data compiled from reports submitted to the Central Office; C. Degree of compliance with the Tax Code, issuances and policies of the Bureau of Internal Revenue, and D. Minutes of Staff Meeting. III. PROCEDURE The audit (management-performance) should be divided into four (4) classifications, namely, Administration, Investigation and Assessment, Collection and Legal. The guidelines, Annex "A" of RMC No. 23-75, should always be consulted. A. Administration, Regional and District Offices Combined 1. Office space Adequacy, accessibility and security. 2. Personnel a. Adequacy Itemize by working unit; look into statement of duties and quantify workload if possible. If inadequate, ascertain cause and determine necessity for continued hiring of casuals. b. Qualifications Ascertain whether or not each employee meets the qualification standards. c. Behavior Observe and comment on punctuality, observance of office hours, decorum and general conduct in office. 3. Equipment Adequacy, condition and further needs, if any. Justify or explain. 4. Supplies Sufficiency and flow. 5. Action on correspondence Prompt, proper. 6. Records keeping Systems used, its adequacy and effectiveness. 7. Special activities or campaigns Enumerate including results. 8. Recommendations if any Enumerate and explain. B. Investigation and Assessment Regional Office 1. Records keeping Procedure for Letters of Authority and Confirmation; deficiency assessments; incoming and out-going correspondence. 2. Review of reports of investigation Procedure followed, compliance with relevant issuances, results and statistics compiled if any. Describe with comparative figures if available. 3. Action on correspondence Prompt, proper. 4. Monthly reports of activities, collections, etc., consolidation of those of the Revenue District Officers Whether done, complete, submitted on time, statistics compiled and evaluated and attention of all concerned called. The accomplishments of the Specific Tax Branch should be included. 5. Special activities or campaigns Enumerate including results. 6. Recommendations if any Enumerate and explain. C. Investigation and Assessment District Office 1. Records keeping Procedure for Letters of Authority and Confirmation, deficiency assessments recommended, in-coming and out-going correspondence. 2. Field investigation Procedure followed whether relevant issuances were adhered to regarding proper distribution of returns and preliminary audit thereof, whether reports of investigation are complete in every respect and promptly submitted. 3. Developing tax fraud cases Whether already started or on-going, how much time devoted thereto, potential sources of information tapped and the results if any. 4. Review of reports of investigation Procedure followed compliance with relevant issuances, results and statistics compiled. Describe with comparative figures if available. 5. Action on correspondence Prompt, proper. 6. Monthly reports of activities, collections, etc. consolidation of those of examiners and collection agents Whether done, complete, submitted on time, statistics compiled and evaluated and further action taken if any. 7. Performance of examiners Show comparative figures as to cases closed, assessments recommended, collection of delinquent accounts and those through investigative efforts in relation to the number of cases, assigned to each of them. 8. Special activities or campaigns Enumerate including results. 9. Recommendations, if any Enumerate and explain. D. Collection Regional and District Offices Combined Show comparative figures on 1. Gross collections classified by kinds of taxes and by Districts and total for the region. 2. Collections through investigative efforts, as in No. 1. 3. Collection of delinquent accounts, comparative. 4. Offices of Collection Agents, as many as possible Comment on the conditions thereat along the same lines as in "Administration". 5. Action on correspondence on collection matters Proper, prompt. 6. Records keeping System used and degree of effectiveness as an aid to management. 7. Special activities or campaigns Enumerate including results. 8. Recommendations, if any Enumerate and explain. E. Legal Among others, the following are relevant, With comparative figures. 1. Pending cases overall. 2. Pending cases, in court. 3. Cases received. 4. Results cases closed, won, lost and amount collected. 5. Records keeping Describe procedure and devices used. 6. Special activities or campaigns Enumerate including results. 7. Recommendations, if any Enumerate and explain. IV. EFFECTIVITY The provisions of this Memorandum order are effective immediately. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3