Engagement Letter BOC Subic

REPUBLIC OF THE PHILIPPINES
COMMISSION ON AUDIT
Regional Office No. III
DMGC, Maimpis, City of San Fernando, Pampanga
May 12, 2021
MARITESS T. MARTIN
District Collector
Bureau of Customs – Collection District No. XIII
Port of Subic
Subic Bay Freeport Zone, Olongapo City
Attention: Cynthia D. Lizada

Acting Chief Administrative Officer
Dear Madam:
Pursuant to the Philippine Constitution of 1987, Article IX-D, Section 2, the Commission
on Audit (COA) shall examine, audit, and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and property, owned or held in trust by, or
pertaining to the Government, or any of its subdivisions, agencies, or instrumentalities. In
this connection, the COA Audit Team will audit your Agency's financial reports and
financial reporting processes for the year ended December 31, 2021.
A. Audit Objectives
1. The objectives of this audit are as follows:
 To determine whether: a) all government funds and accountable forms in the

hands of the accountable officer (AO) are actually existing and properly
accounted for; b) the Agency and its AOs are adhering strictly to prescribed
rules and regulations on cash transactions; c) the Agency’s practices and
procedures provide adequate safeguards against fraud and losses of
governments funds, and d) the Agency has implemented the prior year’s audit
recommendations.
 Communicate whether the internal control, particularly those affecting

accounting and financial reporting systems, are operating effectively to provide
reasonable assurance that misstatements, losses, or non-compliance would be
reported in a timely basis.
 Communicate the results of tests of compliance with selected provisions of

laws and regulations, including budgets and accountability issues, and details
of audit suspensions, charges and disallowances identified during the audit.
B. Auditor's Responsibilities
2. We will conduct our audits in accordance with International Standards of Supreme
Audit Institutions (ISSAls) issued by the International Organization of Supreme
Audit Institutions (INTOSAI) to which the Commission is a member. Those
standards require that we comply with ethical requirements and plan and perform
COMMISSION ON AUDIT
the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement and comply with applicable laws and regulations.
3. We will perform procedures to obtain audit evidence about amounts

collected/received and expended/remitted as appearing in the financial records and
reports. The procedures selected depend on the auditor's judgment, including
assessment of the risks whether due to fraud or error. In making those risk
assessments, we will limit internal control testing to those controls over financial
reporting and compliance issues which we consider critical based on our
experienced professional judgment. However, we will not test compliance with all
the laws and regulations applicable to the Agency. We caution that non-compliance
may occur and not be detected by these tests and that such testing may not be
sufficient for other purposes.
4. Our procedures will include internal control review; examination of documents/

records/ reports; analysis, confirmation and inspection of selected accounts,
transactions and projects, as necessary.
5. We will communicate in writing any significant deficiencies and material

weaknesses that come to our attention as a result of the audit. In addition, we will
communicate suggestions to improve agency operations and address control
deficiencies identified during our audit.
C. Agency Financial Management Performance

6. As part of the audit, we will assess agency financial management performance.
D. Audit Limitations
7. Although the audit is designed to provide reasonable assurance of detecting errors
and irregularities that are material to the financial statements, it is not designed and
not an assurance to disclose all fraud, defalcations, or other irregularities. However,
we will inform you of any material errors, and all irregularities or illegal acts, unless
they are clearly inconsequential, that come to our attention.
E. Agency's Responsibilities
8. Management is responsible for:
 The preparation and correct/proper presentation of the financial records and

reports in accordance with IPSAS and submission of the same on deadlines set
by the Commission on Audit;
 Making all financial records and reports, and related information available to us
and other information as required under ISSAI 1720.
 Submission of the status of any pending claims and litigation involving the
Agency, breakdown of related party transactions and subsequent events which
have to be adjusted and/or disclosed.
COMMISSION ON AUDIT
F. Assistance from Management

9. We will request assistance for the following, among others:
 Assignment of focal person/s to facilitate meetings and requests relative to

the audit
 Preparing schedules or analyses and providing needed documents
 Conferring with your officials and staff to facilitate understanding of the
agency operation
 Access to the work of internal auditors to facilitate review of internal control
and risk assessment related to audit of financial information
 Workspace for the duration of the audit as required
 Facilitating requirements of the audit team/s assigned to conduct field
inspections and observations.
G. Use and Reproduction of COA Audit Reports

10. The working papers for this engagement are the property of the Commission on
Audit and constitute confidential information. However, certain documents may be
made available upon request subject to pertinent COA issuances. The Annual Audit
Report on the Bureau of Customs, once released, will be published in the COA
website, for information of the public.
H. Audit Timelines
11. Subject to availability of requirements contained in this Letter, we expect to
complete our audit and transmit the required Summary of Audit Observations &
Recommendations (SAOR) to management on or before February 28, 2022.
I. Auditee's Feedback on Audit Team's Performance

12. After completion of the audit, the COA Regional Office will send a Feedback Sheet
to assess the team's performance as a way of improving the quality of our audits and
our service to our audit clients. Please send the filled-out sheet duly signed by your
Designated Official to the Office of the Regional Director, COA Regional Office
No. III, City of San Fernando, Pampanga.
We look forward to your full cooperation during the audit.
Sincerely,
MADONNA S. ATENCION
OIC-Regional Supervising Auditor
Date Received by the Agency: ____________________

By: ____________________
Stamp date and signed received ____________________

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REPUBLIC OF THE PHILIPPINES

May 12, 2021

Attention: Cynthia D. Lizada

 To determine whether: a) all government funds and accountable forms in the

 Communicate whether the internal control, particularly those affecting

 Communicate the results of tests of compliance with selected provisions of

3. We will perform procedures to obtain audit evidence about amounts

4. Our procedures will include internal control review; examination of documents/

5. We will communicate in writing any significant deficiencies and material

C. Agency Financial Management Performance

 The preparation and correct/proper presentation of the financial records and

F. Assistance from Management

 Assignment of focal person/s to facilitate meetings and requests relative to

G. Use and Reproduction of COA Audit Reports

I. Auditee's Feedback on Audit Team's Performance

We look forward to your full cooperation during the audit.

Date Received by the Agency: ____________________

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