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Risk Management and Internal Controls

The document discusses the importance of risk management and internal controls in the financial management of the Department of Education (DepEd) in the Philippines. It outlines compliance with financial discipline through various DepEd orders, the Government Procurement Reform Act, and the Government Accounting Manual, while also presenting case studies on financial mismanagement and best practices for enhancing transparency and accountability. The conclusion emphasizes the need for ethical behavior and continuous improvement in internal controls to maintain financial integrity within DepEd.

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David Refuncion
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34 views4 pages

Risk Management and Internal Controls

The document discusses the importance of risk management and internal controls in the financial management of the Department of Education (DepEd) in the Philippines. It outlines compliance with financial discipline through various DepEd orders, the Government Procurement Reform Act, and the Government Accounting Manual, while also presenting case studies on financial mismanagement and best practices for enhancing transparency and accountability. The conclusion emphasizes the need for ethical behavior and continuous improvement in internal controls to maintain financial integrity within DepEd.

Uploaded by

David Refuncion
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Province of San Antonio de Padua – Philippines

ORDER OF FRIARS MINOR (OFM) – FRANCISCANS

Christ the King College of Calbayog City,


Inc.
THE PIONEER CATHOLIC FRANCISCAN INSTITUTION OF EASTERN VISAYAS
Founded 1905
INSTITUTE OF GRADUATE STUDIES AND RESEARCH
Fraternitas Studiositas Minoritas Oratio et Devotio

Module 7: Risk Management and Internal Controls


 Compliance with financial discipline and ethics in DepEd
 Case studies on financial mismanagement and best practices
Introduction
Risk management and internal controls are essential components in ensuring the
integrity, transparency, and efficiency of financial management in any organization. In the
context of the Department of Education (DepEd) in the Philippines, these components play a
crucial role in promoting ethical behavior, compliance with financial regulations, and the
prevention of financial mismanagement. This report aims to explore the compliance with
financial discipline and ethics within DepEd, as well as to present case studies on financial
mismanagement and best practices.

Compliance with Financial Discipline and Ethics in DepEd


1. DepEd Orders and Memoranda on Financial Management
DepEd has issued various orders and memoranda to guide financial management
practices within the organization. These documents outline the policies and procedures that
employees must follow to ensure compliance with financial discipline and ethics.
Key references:
 DepEd Order No. 24, s. 2021: This order provides guidelines on the release and
utilization of financial assistance to schools. It ensures that funds are used efficiently
and transparently for their intended purposes.
 DepEd Order No. 33, s. 2016: This order implements the rules and regulations on
financial management within DepEd. It highlights the importance of internal controls,
accurate record-keeping, and regular financial reporting.
 DepEd Memorandum No. 50, s. 2019: This memorandum provides guidelines on the
conduct of financial audits within DepEd. It emphasizes the need for regular audits to
detect and prevent financial irregularities.
2. Republic Act 9184 (Government Procurement Reform Act)
Republic Act 9184, also known as the Government Procurement Reform Act, provides a
comprehensive framework for the procurement process in government agencies, including
DepEd. The act aims to promote transparency, competitiveness, and accountability in
government procurement activities.
Province of San Antonio de Padua – Philippines
ORDER OF FRIARS MINOR (OFM) – FRANCISCANS

Christ the King College of Calbayog City,


Inc.
THE PIONEER CATHOLIC FRANCISCAN INSTITUTION OF EASTERN VISAYAS
Founded 1905
INSTITUTE OF GRADUATE STUDIES AND RESEARCH
Fraternitas Studiositas Minoritas Oratio et Devotio

Key provisions:
 Ensuring competitive bidding processes: RA 9184 mandates that procurement
activities must follow a competitive bidding process to ensure fairness and prevent
corruption.
 Strengthening internal controls and monitoring mechanisms: The act requires
government agencies to establish internal controls and monitoring mechanisms to
detect and prevent procurement irregularities.
 Establishing clear guidelines for procurement planning, execution, and reporting:
RA 9184 provides detailed guidelines on the entire procurement process, from
planning to execution and reporting.
3. Government Accounting Manual (GAM)
The Government Accounting Manual (GAM) serves as the standard reference for
accounting procedures and practices in government agencies. It provides detailed guidelines
on financial reporting, budgeting, and internal control systems to ensure accurate and
reliable financial information.
Key sections:
 Chapter 1: Financial Management and Accountability Framework: This chapter
outlines the principles and standards for financial management and accountability in
government agencies.
 Chapter 3: Budgeting and Fund Management: This chapter provides guidelines on
the preparation and management of budgets, ensuring that funds are allocated and
utilized effectively.
 Chapter 5: Internal Control Systems: This chapter emphasizes the importance of
internal control systems in safeguarding assets, preventing fraud, and ensuring the
accuracy of financial records.
4. COA Guidelines on Financial Reporting
The Commission on Audit (COA) issues guidelines on financial reporting to enhance the
transparency and accountability of government agencies. These guidelines help ensure that
financial statements are prepared in accordance with generally accepted accounting
principles and standards.
Key guidelines:
Province of San Antonio de Padua – Philippines
ORDER OF FRIARS MINOR (OFM) – FRANCISCANS

Christ the King College of Calbayog City,


Inc.
THE PIONEER CATHOLIC FRANCISCAN INSTITUTION OF EASTERN VISAYAS
Founded 1905
INSTITUTE OF GRADUATE STUDIES AND RESEARCH
Fraternitas Studiositas Minoritas Oratio et Devotio

 COA Circular No. 2015-002: This circular provides the revised chart of accounts for
government agencies, ensuring consistency and accuracy in financial reporting.
 COA Memorandum No. 2019-001: This memorandum provides guidelines on the
preparation of financial statements, emphasizing the need for transparency and
accuracy.
 COA Resolution No. 2020-002: This resolution adopts the Philippine Public Sector
Accounting Standards, ensuring that government financial statements are prepared
in accordance with international standards.

Case Studies on Financial Mismanagement and Best Practices


1. Case Studies on Financial Mismanagement
Case Study 1: XYZ School
 Background: Financial irregularities were discovered during an audit of XYZ School.
 Issues: Unauthorized expenditures, lack of proper documentation, and non-
compliance with procurement rules.
 Consequences: Suspension of responsible officials and implementation of corrective
measures. The incident highlighted the need for stronger internal controls and
regular audits to detect and prevent financial irregularities.
Case Study 2: ABC District Office
 Background: A whistleblower reported anomalies in the financial transactions of ABC
District Office.
 Issues: Misappropriation of funds, falsification of documents, and failure to follow
internal controls.
 Consequences: Criminal charges filed against involved personnel and strengthening
of internal audit functions. The case underscored the importance of ethical behavior
and the role of whistleblowers in promoting transparency and accountability.
2. Best Practices
Best Practice 1: Strengthening Internal Controls
 Implementing robust internal control systems: Establishing comprehensive internal
control systems to detect and prevent financial irregularities.
Province of San Antonio de Padua – Philippines
ORDER OF FRIARS MINOR (OFM) – FRANCISCANS

Christ the King College of Calbayog City,


Inc.
THE PIONEER CATHOLIC FRANCISCAN INSTITUTION OF EASTERN VISAYAS
Founded 1905
INSTITUTE OF GRADUATE STUDIES AND RESEARCH
Fraternitas Studiositas Minoritas Oratio et Devotio

 Regular training and capacity-building programs: Conducting regular training


programs for staff on financial management and ethics to ensure they are well-
equipped to handle financial responsibilities.

Best Practice 2: Enhancing Transparency and Accountability


 Adopting transparent procurement processes: Ensuring that procurement activities
are conducted transparently and involving stakeholders in decision-making.
 Regularly publishing financial reports and audit findings: Making financial reports
and audit findings publicly available to promote accountability and transparency.
Best Practice 3: Promoting Ethical Behavior
 Establishing a code of conduct and ethics: Developing a code of conduct and ethics
for all employees to promote honesty, integrity, and accountability.
 Encouraging a culture of honesty and integrity: Fostering a culture of honesty,
integrity, and accountability within the organization through regular training and
awareness programs.
Conclusion
Effective risk management and internal controls are crucial in maintaining the
financial integrity of DepEd. By adhering to established policies and guidelines, promoting
ethical behavior, and continuously improving internal control systems, DepEd can ensure the
efficient and transparent use of public funds. These measures not only prevent financial
mismanagement but also promote a culture of accountability and transparency within the
organization.

Prepared by:

DAVID S. REFUNCION
MAED-EM 1 Student

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