Creation of Post Entry Audit Group in BOC

The President’s reorganization authority is grounded on Presidential Decree No. 1772, Section 2 par. 2(f), which grants continuing authority to reorganize the National Government, including to group and consolidate offices, abolish offices, transfer functions, create and classify functions, services, and activities, and standardize salaries and materials (WHEREAS clause).
Republic Act No. 9135 mandates the Bureau of Customs to conduct audit examination, inspection, verification and/or investigation of transaction records of importers and brokers, including through Sections 3515 and other related sections (WHEREAS clause).
The Executive Order’s design aligns with automation and valuation reforms that require shifting from border documentary checks to post-importation information analysis (WHEREAS clauses).

The post entry audit system is established to increase trade facilitation and encourage voluntary disclosures.
The post entry audit system is established to reduce incidence of fraud.
The post entry audit system is established to protect government revenues.
The Executive Order directs Customs to use information technology to support post-importation audit effectiveness (WHEREAS clauses).

A new office in the Bureau of Customs is created and named the Post Entry Audit Group (PEAG) (Section 1).
The PEAG operates under the direct supervision and control of the Commissioner of Customs (Section 1).
The PEAG is headed by an Assistant Commissioner of Customs (Director IV), SG-28 (Section 2).
The Assistant Commissioner (Director IV) is appointed by the President of the Philippines upon the recommendation of the Commissioner of Customs through the Secretary of Finance (Section 2).
The Assistant Commissioner (Director IV) exercises overall supervision in managing the operating units of the PEAG (Section 2).

The Trade Information and Risk Analysis Office (TIRAO) is part of the PEAG and is headed by a Director II (Section 2).
The Compliance Assessment Office (CAO) is part of the PEAG and is headed by a Director (Section 2).
The PEAG structure consists of the operating units expressly created under Section 2 (Section 2).

The PEAG establishes and operates the Bureau’s post entry audit system (Section 3).
The PEAG performs the following specific functions through its units (Section 3).

TIRAO sets the framework and benchmarks for compliance measurements of industry groups (Section 3(I)).
In coordination with the Management Information System and Technology Group (MISTG), TIRAO directs the development of a computer aided risk management system using data warehousing technology and other statistical tools (Section 3(I)).
TIRAO implements the computer-aided risk management system to develop and establish audit selection parameters based on objective and quantifiable data (Section 3(I)).
TIRAO establishes and recommends audit targets to the Commissioner of Customs (Section 3(I)).
TIRAO sets policies, guidelines, manuals and standard operating procedures relating to the audit and continuously assesses how audit performance can be improved through better and more fine-tuned policies and guidelines (Section 3(I)).
TIRAO performs other related functions (Section 3(I)).

CAO formulates the audit work plan for approved audit targets (Section 3(II)).
CAO conducts audit examination, inspection, verification or investigation in accordance with the set policies, guidelines, manuals and standard operating procedures (Section 3(II)).
CAO prepares and submits audit reports (Section 3(II)).
CAO develops and implements a customs compliance program (Section 3(II)).
CAO performs other related functions (Section 3(II)).

Funds for PEAG’s initial operations come from available funds of the Bureau (Section 4).
Subsequent appropriations are incorporated into budget proposals subject to existing accounting and auditing laws and procedures (Section 4).
With the approval of the Secretary of Finance, the Commissioner of Customs determines the number of personnel consistent with PEAG requirements and the principles of economy, efficiency and effectiveness (Section 5).
The Commissioner of Customs, with the same Secretary of Finance approval, organizes units under the Groups and Offices allowed under this Executive Order, subject to Department of Budget and Management evaluation (Section 5).

The Executive Order takes effect 15 days after completion of publication in the Official Gazette or in a newspaper of general publication (Section 6).
The Executive Order is dated January 06, 2003 and signed in Manila on that date by GLORIA M. ARROYO, with ALBERTO G. ROMULO as Executive Secretary (transmittal/signature block).