BAICS Form No.

Narrative Procedures (NP)

Name of Office/Program/Process:_________________________________________
Activity Procedure/Document Person Responsible
No.
1) Understanding of the process/procedure,
policies and guidelines in
handling/processing of eLAs and eMOAs

a) Conduct initial interview/inquiry with

process owners to validate/understand
processes and procedures relative to the
proper handling, disposition and reporting
of eLA cases.

b) Obtain, request secure/gather

relevant/pertinent documents such as:

Ø Related Revenue Memorandum Orders

(RMOs), Revenue Memorandum
Circulars (RMCs), Revenue Regulations
(RRs), Operations Memorandum (OM),
Memorandum, Revenue Administrative
Order (RAO), Revenue Audit
Memorandum Order (RAMO);

Ø Operations/procedural manual and work

around procedures being implemented (if
any);

Ø Process flow diagrams used by revenue

personnel, section, or office.

c) Review previous audit findings and

dockets of the office to be audited, their
answers to these audit findings.

2) Walkthrough

a) Conduct walkthrough of the process to

ascertain if the process flow based on
existing regulations is being implemented
and the to determine if the necessary
controls are in place.

b) During walkthrough, check/validate if there

is segregation of duties and if the following
Activity Procedure/Document Person Responsible
No.
incompatible duties are assigned to only
one personnel:
· Custody
· Authorization
· Record-keeping
· Execution

c) Document actual practice and compare as

against the Process flow diagrams used
by the office.

d) Note down deviations from the Process

flowchart and assess effect on the overall
process.

3) Data Gathering

a) Extract data from EeLAMS/IRIS for open

cases currently located on the Revenue
District and identify long outstanding
cases and cases with prescribed taxable
years to be accounted and prioritized
during audit.

b) Obtain documents needed for audit such

as, but not limited to the following:

o Logbooks

o Soft Copy database being maintained

o Referral Slips or memorandum in

assigning cases for review

o Transmittal/indorsement of incoming
and outgoing eLA, DN and ONETT
Dockets

o Inventory list of pending dockets for

review.

o Print screen/snipped of logged in

access to EeLAMS, IRIS and ARMS
of each personnel given access to the
said system.

4) Conduct of audit
Activity Procedure/Document Person Responsible
No.
Select transactions (from the period scope of
audit) and verify through checking of the
applicable supporting documents.

Activity: Preliminaries

a) Conduct a meeting with the Chief,

Assessment Section (CAS), GS, ROs eLA
custodian and personnel in-charge of
monitoring eLA to schedule the inventory
taking of eLa cases/dockets of the GS and
ROs.

b) Discuss with the auditee the scope and

purpose of the audit.

c) Furnish the auditee with the eLA/case

dockets inventory sheet and checklist of
documentary requirements needed for audit.

d) Clarify to the auditee all the

documents/accountabilities to be presented
simplify/expedite the audit.

e) Schedule date of audit/inventory taking of

accountabilities with the auditees.

Activity: Requisition and issuance of eLAs and

eMOAs

On eLA

a) Take inventory or account unused eLAs

on hand of the eLA custodian and
accomplish the accountable form count
sheet.

b) Gather relevant data from the Chief,

Admin Officer/RDO pertaining to the eLA
forms issued to the eLA custodian in the
Assessment Section/RDO Secretary such
as.

o The Requisition Issue Slip (RIS) and

Invoice Receipt of Accountable forms
(IRAF) of accountable forms issued to
the eLA custodian/RDO Secretary.
Activity Procedure/Document Person Responsible
No.

o Serial number of eLA forms referred to

the eLA custodian/RDO Secretary in
the RIS, IRAF and logbook

c) Check/verify if all issued eLA forms are

sequentially filed and intact and account
all the serial number of the same for
reconciliation purposes.

d) Check/verify that all cancelled/ spoiled eLA

forms are forwarded intact to the AHRMD
using BIR Form 2622.

e) Check/verify that all cancelled/ spoiled

eLA forms found on filed and yet to be
forwarded to the AHRMD are properly
stamped cancelled and all copies
(Taxpayer, Docket and Office) are intact.

f) Reconcile the issuance eLA by checking

the ending serial number of issued eLA to
determine the total number of eLAs
issued and comparing the same to the
unused eLA forms on hand during audit.

On eMOA/MOA

a) To check/verify whether eMOA is being used

to assign returned cases for compliance of
review findings prior to the issuance of PAN,
Response to PAN, Reinvestigation case,
compliance on review findings on
recommendations for FDDA, compliance on
review findings of paid cases reconcile
records of pending returned eLA cases from
Assessment Division to the file copies of
eMOA/MOA.

b) Account/inventory all issued eMOA.

c) To check/verify completeness of eMOA

reconcile data provided by the EeLAMS/IRIS
and pending returned cases per AD records
with file copies of eMOA.

Activity: Management, and assignment of eLA

cases/dockets
Activity Procedure/Document Person Responsible
No.

a) Ascertain selection criteria/standard of

assigning cases to Revenue Officers.

b) Check whether there is monitoring of

workload assignment.

c) Check/verify whether all eLA cases are

properly received by revenue officers in
the triplicate/office file copies of eLA and
eMOA with complete name, date and
initials in the office file copy of eLA.

d) Check whether all ROs/GS has access to

EeLAMS/IRIS and updates the status of
assigned cases.

e) Check/verify the reassignment of cases

(for turned-over cases by transferred/ out-
going personnel, resigning retiring or
separated employees).

o Check/verify whether outstanding eLA

cases of personnel with issued RTAO
for more than one hundred eighty
(180) days from issuance are not
turned-over/submitted without
completion of audit report of
investigation and not reassigned to a
new RO for continuance of audit.

o Check/verify whether outstanding eLA

for more than one hundred eighty
(180) of personnel six (6) months
before date of separation not turned-
over/submitted without completion of
audit report of investigation and not
reassigned to a new RO for
continuance of audit.

Activity: Monitoring of assignment of eLA

cases/dockets

On eLA

a) Check whether the database for eLAs is

Activity Procedure/Document Person Responsible
No.
being maintained and updated and
request a softcopy of the same. The
databases should indicate the following
information:

o Name of Taxpayer
o LOA Number
o eLA Number
o Date eLA was issued
o Taxable year
o Assigned Revenue Officer
o eMOA number
o eMOA date
o Status/Remarks
o Aging of eLA case

If no database is available, recommend a

database with the above mentioned
details/information;

b) Check the transmittal list of referred eLA

cases to/from other divisions to identify
closed, reported, unreported and missing
cases.

c) Check whether the office maintains

Inventory list pending cases of ROs on a
periodic/monthly basis.

d) Check/verify whether no new eLA was

assigned to RO who has:

o Pending workload of 30 or more eLAs;

or

o Ten (10) or more

prescribing/prescribed cases; or

o No office clearance as required under

existing revenue issuances; or

o More than ten (10) returned dockets

which have not been acted upon for
more than fifteen (15) days from
receipt of the docket; or

o Case(s) of claims for tax refund/credit

held for more than the prescribed
Activity Procedure/Document Person Responsible
No.
number of days to submit the report;
or

o Other mandatory case/s already

outstanding for more than 180 days

e) Check/verify if Head of Office or Section

Chief issued call up memoranda/tracer
for unreported eLA/eMOA beyond the
prescribed time-frame to render report.

Activity: Handling and investigation of eLA cases

a) Inventory all cases/dockets on hand of

the Revenue Officers and crosscheck
details of eLA with the inventory sheet
prepared by examiners and accomplish
eLA working paper to be attached to the
inventory sheet of examiners.\

b) Check/verify whether ROs comply with

the following eLA investigation
requirements:

o eLA forms are personally served and

duly received by the taxpayer or
his/her representative.

o In case personal service cannot be

made, eLA was served using the
alternative modes of service. (RMC
110-2020).

o 1st and 2nd notices before the

recommendation/request for issuance
of SDT was made and served in
compliance with the proper mode of
service and time-frame to send the
said notices. (RMOs 45-2010, 10-
2013 and 8-2014).

o eLA cases pending for more than one

hundred eighty days (180) to render
report of investigation are with
attached progress report.

o Procedures for issuance and service of

Notice of Discrepancy are complied
Activity Procedure/Document Person Responsible
No.
with. (RR 22-2020, 7-2018, 18-2013).

o Preliminary Assessment Notice (PAN),

Final Assessment Notice (FAN),
Formal Letter of Demand (FLD) was
served using the proper modes of
services (RMO No. 40-2019, RR No.
18-2013).

o FAN was served after the lapsed of the

fifteen (15) day period from
issuance/receipt of PAN.

o Taxpayer protested the FAN/FLD

within thirty (30) days from his receipt
of the assessment notices.

o eLA cases/dockets with prescribed

taxable years has attached duly
accomplished Waiver of Defense of
Prescription. (RMC No. 141-2019).

o eLA cases/dockets with prescribing

taxable years within six (6) months
has duly accomplished Waiver of
Defense of Prescription. (RMC No.
141-2019 in correlation with RMC No.
111-2016)

o Unserved eLAs followed the procedure

on the proper mode of services (RMC
110-2020).

o Unserved eLAs where concerned

taxpayers cannot be located followed
the procedures and requirements for
unserved eLA (RMC 98-2010).

c) Check if the Revenue Officers maintain

individual incoming logbook on their
assigned cases for their own monitoring
and/or proper accountability.

d) Note down any discrepancy.

Activity: Reporting of assigned eLA cases/dockets

a) Create masterlist of eLA based on district

Activity Procedure/Document Person Responsible
No.
records/documents, Assessment Division
records and pending in EeLAMS/IRIS.

b) Cross-check inventoried pending eLA with

the eLA masterlist and account eLA pending
per records that are not inventoried/
accounted during inventory taking.

c) Check the compliance of Revenue Officers

on the regulations relative to the submission
of report of investigation which are as
follows:

On eLAs

o One hundred eighty (180) days from its

issuance;

o Ten (10) days from the date of settlement

of deficiency taxes;

o Submitted to the AD six (6) months before

prescription of eLA;

On eMOAs

o On protested eLA case for reinvestigation,

within (60) days from submission of
complete documents by taxpayer;

o On protested eLA case for reconsideration,

within (60) days from date of
assignment / reassignment (eMOA)

o Returned eLA cases by reviewing office for

compliance with certain audit
documentary requirements or for further
conduct of audit to meet procedural
requirement, within fifteen (15) days from
receipt of docket from reviewing office.

d) Note down deviations concerning time frame

to render eLA report of investigation and
issued concerning eLA accountabilities which
includes but not limited to the following:

Ø eLAs are reported within:

Activity Procedure/Document Person Responsible
No.

o Within 180 days from its issuance to

render report of investigation if with or
w/o attached monthly progress report.
\
o Prescribed eLa cases w/o attached
waiver of statute of limitation which
conforms with RMC No. 141-2019.

o Prescribing eLA cases still unreported

to the Assessment Division six (6)
months before prescription.

o Paid eLA case still unreported for over

ten (10) days from the date of
settlement of deficiency taxes.

o Reassigned eLA case due to the

transfer, of Revenue Officer which are
outstanding for more than 180 days
before it was reassigned.

o Unturned-over eLA case of transferred,

resigned, retired or AWOL revenue
officer.

o Unpresented eLA case/docket by

transferred or current revenue officer.

o Unaccounted eLA case/docket

Ø On eMOAs

o Protested eLA cases for reinvestigation

pending for more than sixty (60) days
from submission of complete
documents by taxpayer.

o Protested eLA cases for

reconsideration pending for more
than sixty (60) days from date of
assignment / reassignment (eMOA).

o Returned eLA cases by reviewing

office for compliance with certain
audit documentary requirements or
for further conduct of audit to meet
procedural requirement pending for
 Activity Procedure/Document Person Responsible
No.
more than fifteen (15) days from
receipt of docket from reviewing
office.

Activity: Compliance to existing policies, procedures,

guidelines, rules and regulations relative to eLA
accountabilities.

a) Check/verify whether there are newly

transferred ROs to the district office.

b) Check/verify whether ROs have

necessary district and office clearance.

c) Check/verify whether ROs have pending

eLA cases from previous office.

d) Check/verify whether there are

transferred ROs to other offices with
pending eLA accountability.

e) Check/verify whether there are resigned,

retired, AWOL revenue personnel with
pending eLA accountability.

f) Check/verify if the Quarterly report on

taxpayers that cannot be located is
submitted to AITIED on or before every
10th day of the following close of the
quarter.

g) Finalize the internal audit

checklist/questionnaire.

Purpose of Narrative Procedures:

● To document the Office major systems or operations.

● To identify the key control attributes -- those attributes that achieve control objectives
Guides:

A. Clarity and simplicity in presentation; descriptions are clear, concise and cover relevant
details. Break the process into its actual or logical components for ease of review.

B. All significant part of the process (especially control points) should be covered (such as
control over authorization, recording, safeguarding, reconciliation and valuation). The key
 elements are namely actions and decisions. Also, the name(s) and position(s) of the people
performing the transactions, and timing of ach action should be indicated for each action.

C. The auditor obtains information for preparing or updating narratives by interviewing

personnel at each site about procedures followed, and by reviewing procedure manuals,
existing flow charts and other system documentation. Sample documents are collected.

D. The auditors' findings on control procedures and preliminary conclusions/suggestions for

improvement should be tested by a walk-through and written up in the work papers. Since
those who use a system know it best, the auditor should ask site personnel to review and
comment on the accuracy of the narrative.

E. Narratives should be reviewed by supervisory personnel after they have been reviewed by
responsible site personnel.

(Source: Old Dominon University, Office of University Auditor, Audit Manual

http://www.theiia.org/intAuditor/back-to-basics/2008/documenting-controls-10-07/
NARRATIVE DOCUMENTATION STANDARDS)