Creation of Regional Internal Audit Team to Conduct Audit and Spot-Check of Cash and Non-Cash Accountabilities of Revenue Collection/Accountable Officers, and Other Property Accountabilities of Revenue Personnel in the Region, and Random Check of Revenue Official Receipts (RORs), Bank Validation/Bank Official Receipts Issued to Taxpayers

February 3, 1999 REVENUE MEMORANDUM ORDER NO. 09-99 TO : Assistant Commissioners, Regional Directors and Others Concerned SUBJECT : Creation of Regional Internal Audit Team to Conduct Audit and Spot-Check of Cash and Non-Cash Accountabilities of Revenue Collection/Accountable Officers, and Other Property Accountabilities of Revenue Personnel in the Region, and Random Check of Revenue Official Receipts (RORs), Bank Validation/Bank Official Receipts Issued to Taxpayers I. OBJECTIVES: This Order is issued to: 1. Provide guidelines in the creation of Regional Internal Audit Team (RIAT); 2. Define the functions of the Regional Internal Audit Team; and 3. Prescribe policies, guidelines and procedures in the conduct of audit and spot-check of cash and non-cash accountabilities of Revenue Collection/Accountable Officers, and other property accountabilities of revenue personnel, and the conduct of random check of Revenue Official Receipts (RORs), Bank Validation/Bank Official Receipts issued to taxpayers. II. POLICIES AND GUIDELINES: In order to guard against loss of revenue collection due to fake and/or tampered revenue official receipts, bank validation/bank official receipts and to strengthen the internal controls on cash and non-cash accountabilities and other property accountabilities of revenue personnel in the Region, the following policies, guidelines and procedures are hereby promulgated: 1. The Regional Director shall create thru a Regional Revenue Special Order, (RRSO) the Regional Internal Audit Team (RIAT) which shall be headed by the Assistant Regional Director as Over-all Coordinator. 2. Each team shall be composed of representatives from Finance Division, Collection Division, Special Investigation Division and Revenue District Office. A team leader shall be designated for each team which shall be composed of not less than three members. 3. The number of teams shall depend upon the amount of collection, number of taxpayers, the number of district offices and municipalities under the jurisdiction of the Regional Office. 4. The RIAT shall perform the following functions: 4.1 Conduct, on a continual basis, audit and spot-check of cash and non-cash accountabilities of Revenue Collection/Accountable Officers, and other property accountabilities of revenue personnel in the Region; and 4.2 Random check Revenue Official Receipts (RORs) issued by Revenue Collection Officers (RCOs), and Bank Validation/Bank Official Receipts issued by Accredited Agent Banks (AABs) in the possession of taxpayers in order to validate the correctness of the amount of tax paid, name of taxpayer, kind of tax and other pertinent information appearing therein against the Collection Report of RCOs and Batch Control Sheets submitted by AABs and records on file of the Bureau. llcd 5. The actions taken on this matter shall cover detection of fake and/or tampered revenue official receipts, bank validation/bank official receipts, defalcations and malfeasances of Revenue Collection/Accountable Officers and other revenue personnel including the detection of any diversion, non-remittance or under-remittance of taxes collected by AABs. 6. Random checking of RORs, bank validation and bank official receipts in the possession of taxpayers (i.e. remittances of withholding taxes, payment for one-time transactions such as capital gains tax, estate and donors taxes, etc.) shall be done on a continual basis. Confirmation Letter using the attached format (Annex "A") shall be sent to the taxpayer to validate taxpayer's copy of RORs, bank validation/bank official receipts against the copies/records on file of the Bureau. 7. The RIAT shall submit a Monthly Report on Receipts Verified using the attached format (Annex "B") and Bank Validation/Bank Official Receipts Verified (Annex "C"), every fifth (5 th ) day of the month in four (4) copies (original copy - Regional Director, duplicate - RIAT file copy, triplicate - Chief, Finance Division and quadruplicate - Chief, Collection Division). 8. The spot-checking of cash and non-cash accountabilities and other property accountabilities of Revenue Collection/Accountable Officers shall also be done on a continual basis upon presentation of a Demand Authority (Annex "D"). A Report on Spot-check of Cash, Non-cash, and Other Property Accountabilities (Annexes "E" to "E-3") shall be immediately submitted by RIAT after spot-checking in four (4) copies (original copy - Regional Director, duplicate - RIAT file copy, triplicate - Chief, Finance Division and quadruplicate - Chief, Collection Division). 9. Detailed audit of cash and non-cash accountabilities of Revenue Collection/Accountable Officers shall be referred to Chief, Finance Division. Regional Mission Orders shall be issued by the Regional Director for every conduct of audit. Audit Reports pursuant to a Mission Order shall be submitted to the Regional Director thru the Over-all Coordinator, RIAT within ten (10) days upon completion of the audit. 10. Consolidated Monthly RIAT Reports shall be prepared by the Over-all Coordinator, RIAT for review and approval of the Regional Director who shall submit said reports to the Assistant Commissioner, Internal Affairs Service using the attached format (Annexes "F-1" to "F-4") not later than the tenth (10 th ) day of the following month. A Memorandum Report on violations and/or discrepancy found shall likewise be submitted together with all supporting documents and necessary attachments, specifying among others, the following: a. Name of collection/accountable officer or Name of Bank and Code b. Name of Taxpayer c. Activity: (e.g. audit, spot-check, random check) d. Date conducted e. Mission Order No. and date (for detailed audit) f. Period covered g. Nature of violation h. Amount of discrepancy i. Action taken j. Name of RIAT members 11. Docket of reports on violations and/or discrepancy found upon audit/verification, spot-check and random check shall be immediately submitted to the Chief, Special Investigation Division (SID) in the Regional Office for appropriate administrative investigation. 12. Reports of investigation conducted by SID shall be forwarded to the Assistant Commissioner, Internal Affairs Service for appropriate administrative disciplinary action. All cases for criminal prosecution shall be forwarded to the Assistant Commissioner, Legal Service for further appropriate action. III. REPEALING CLAUSE: All issuances or portions thereof not consistent with the provisions of this Order are hereby amended, revoked or repealed accordingly. IV. EFFECTIVITY: This Order shall take effect immediately. LibLex (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue ANNEX A (RMO No. ____) Bureau of Internal Revenue Revenue Region No. ___ REGIONAL INTERNAL AUDIT TEAM ____________ Date CONFIRMATION LETTER __________________ __________________ Sir/Madam : The Bureau is presently conducting random check of Revenue Official Receipts/Bank Validation/Bank Official Receipts issued to taxpayers in order to reconcile/validate our records with your own records. It appears that you have paid ________ for the period _______, in the (Kind of Tax) amount of ___________ under ROR/Bank Validation/Bank O.R. No. _________ dated ________________ issued by _____________________________________________. (Revenue Collection Officer/Accredited Agent Bank) For confirmation, please sign on the space provided for below and return this letter to the undersigned. Thank you for your cooperation. Very truly yours, REGIONAL DIRECTOR By: ___________________ Asst. Regional Director and Over-all Coordinator Regional Internal Audit Team _____________________ VALIDATION Date: _______ The Regional Director Attention: Regional Internal Audit Team Sir/Madam: In reply to your Confirmation Letter dated _________, please be informed of the following: (check appropriate box) [ ] all information indicated above are correct: Kind of Tax ___________ Period covered ___________ ROR No. ___________ Issuing Collection Officer ___________ Bank ___________ Bank Code ___________ Amount Paid P ___________ Date Paid/Validated ___________ [ ] discrepancy is noted as follows: (please specify) ___________________________________________________________ ___________________________________________________________ Very truly yours, __________________________ (Signature over printed name) Position: ___________ TIN: ___________ To be accomplished in duplicate: Original: to be returned to BIR Duplicate: taxpayer's copy Reference: SN ___________________ ANNEX B Regional Internal Audit Team Monthly Report of RORs Verified ANNEX C Regional Internal Audit Team Monthly Report of Bank Validation/Bank Receipts Verified ANNEX D (RMO No. ____) Bureau of Internal Revenue Revenue Region No. ___ REGIONAL INTERNAL AUDIT TEAM ____________ Date DEMAND AUTHORITY To: ___________________ Demand is hereby made that you produce and present to the Regional Internal Audit Team composed of: Team Leader : _____________ Members : _____________ _____________ _____________ all your cash, checks, money orders, cash items and non-cash accountabilities such as documentary stamps, Revenue Official Receipts (BIR Form 25.24), Accountable Form No. 51, etc., in your possession for which you are officially accountable to date as _____________ of (Position) __________________________ under the jurisdiction of RDO No. ____________. (Station: Municipality/City) ___________________________________ Asst. Regional Director and Over-all Coordinator Regional Internal Audit Team Noted and complied with: Witnessed by: ________________________ 1. _________________________ (Accountable Officer) Date: ____________________ 2. _________________________ (Signature over printed name) ANNEX E (RMO No. ____) Bureau of Internal Revenue Revenue Region No. ___ REGIONAL INTERNAL AUDIT TEAM ____________ (Date of Report) Report on Spot-check of Cash/Non-cash/Other Property Accountabilities Name of Revenue Collection/Accountable Officer: _______________________________ Place of Assignment: Municipality/City: __________________ RDO: ________________ Period covered: ____________ Date conducted: ________ A: Cash accountability: Total Collections (based on RORs/Cashbook/12.31 Report) P______________ Total Remittances (based on Validated Remittance Advice) P______________ Undeposited Collections P______________ Cash on Hand per Cash Count (Annex E-1) P______________ Discrepancy (Shortage/Overage) P______________ B: Non-cash accountability: a. Statement of Documentary Stamps Accountability Balance as of _______________ P______________ Per Inventory count on ______________ (Annex E-2) P______________ Discrepancy (Shortage/Overage) P______________ b. Revenue Official Receipts (BIR form No. 25.24) Quantity balance as of _______________ ___________ pcs. Per Inventory count on ____________ (Annex E-3) ___________ pcs. Discrepancy (Shortage/Overage) ___________ pcs. c. Accountable Form No. 51 Quantity balance as of _______________ ___________ pcs. Per Inventory count on ____________ (Annex E-3) ___________ pcs. Discrepancy (Shortage/Overage) ___________ pcs. Other Findings/Observations: ________________________________________ ___________________________________________________________ Certified Correct: (Regional Internal Audit Team): __________________ __________________ Team Leader Member __________________ __________________ Member Member Conforme: Witnessed by: (at least two witnesses) _________________________________ 1. _____________________ Revenue Collection/Accountable Officer 2. _____________________ (Signature over Printed Name) ANNEX E-1 (RMO No. ____) Bureau of Internal Revenue Revenue Region No. ___ REGIONAL INTERNAL AUDIT TEAM CASH COUNT Name of Revenue Collection/Accountable Officer: _______________________________ Place of Assignment: Municipality/City: _________________ RDO: _______________ Period covered: __________________________________ Date Conducted: _______ CURRENCY DENOMINATION PIECES AMOUNT TOTAL BILLS P1,000.00 _______ P________ 500.00 _______ ________ 100.00 _______ ________ 50.00 _______ ________ 20.00 _______ ________ 10.00 _______ ________ 5.00 _______ ________ P__________ COINS P5.00 _______ P________ 1.00 _______ ________ 0.25 _______ ________ 0.10 _______ ________ 0.05 _______ ________ __________ TOTAL CASH P__________ C H E C K S: NUMBER DATE BANK PAYOR O.R. NO. DATE PAID AMOUNT REMARKS _______ _________ ________ ______ ________ _________ ______ ___________ _______ _________ ________ ______ ________ _________ ______ ___________ _______ _________ ________ ______ ________ _________ ______ ___________ _______ _________ ________ ______ ________ _________ ______ ___________ _______ _________ ________ ______ ________ _________ ______ ___________ _______ _________ ________ ______ ________ _________ ______ ___________ _______ _________ ________ ______ ________ _________ ______ ___________ TOTAL CHECKS COUNTED P__________ CASH ITEMS AS PRESENTED DISALLOWED ALLOWED Checks/MO/TW/(Sch) P________ P________ P________ Others (Sch) ________ ________ ________ ___________ TOTAL CASH AND VALID CASH ITEMS P___________ ___________________________ Revenue Officer(s) Regional Internal Audit Team I hereby certify that upon demand by the abovenamed Revenue Officer(s), I produced all my cash, checks, money orders and other cash items for which I am officially accountable; that the inventory of such cash and cash items in my possession and produced to the said RIAT Members at the time of the cash count to date _______, 19__ at ________ A.M./P.M. is correctly stated above totalling (in words) ______________________________ (P___________) of which ________________________________ (P______________) was disallowed by the said Revenue Officer(s) and that the total cash and cash items were returned to me intact after the cash count. ________________________ Accountable Officer WITNESSES: 1) ____________ 2) ____________ ANNEX E-2 (RMO No. ____) Bureau of Internal Revenue Revenue Region No. ___ REGIONAL INTERNAL AUDIT TEAM INVENTORY OF DOCUMENTARY STAMPS QUANTITY DENOMINATION TOTAL VALUE _________ P_______ P____________ _________ _______ ____________ _________ _______ ____________ TOTAL P____________ ___________________________ Revenue Officer(s) Regional Internal Audit Team I hereby certify that the foregoing report shows the true balance of all documentary stamps in my possession as of __________, 19___ and which were returned to me intact after the physical count. __________________________ Accountable Officer WITNESSES: 1. ________________ 2. ________________ ANNEX E-3 (RMO No. ____) Bureau of Internal Revenue Revenue Region No. ___ REGIONAL INTERNAL AUDIT TEAM INVENTORY OF ACCOUNTABLE FORMS Name of Revenue Collection/Accountable Officer: ________________________________ Place of Assignment: Municipality/City: ____________________ RDO: _______________ Period covered: ______________ Date conducted: _________ Kind of Form Inclusive Serial Number Quantity A. Revenue Official Receipts (BIR Form No. 25.24) ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ B. Accountable Form No. 51 ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ C. Other Accountable Forms ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ ____________ ________________________ ____________ I hereby certify that the foregoing report shows the true balance of all accountable forms in my possession as of ______________, 19___ and which were returned to me intact after the physical count. Verified and found Correct: __________________________ _____________________ Regional Internal Audit Team Accountable Officer WITNESSES: 1. ________________ 2. ________________ ANNEX F-1 Consolidated Monthly Report Spot-Check of Cash Accountability ANNEX F-2 Consolidated Monthly Report Spot-Check of Non-Cash Accountability ANNEX F-3 Consolidated Monthly Report on Random Check of Revenue Official Receipts ANNEX F-4 Consolidated Monthly Report on Random Check of Bank Validation/Bank Official Receipts