EXECUTIVE SUMMARY
A. INTRODUCTION
By virtue of Republic Act No. 9157 enacted by the Senate and House of
Representatives of the Philippines on 11 August 2001, the University of Rizal System
(URS) was established by integrating the Rizal State College and its extension campuses
in Angono, Binangonan, Pililia and Rodriguez, the Rizal Polytechnic College and its
extension campus in Cainta and the Rizal Technological University – Antipolo Annex.
The URS primarily offers higher professional and technical instruction and
training in science and technology and promotes research, extension, and production
services, advanced studies and specialized training in all fields deemed relevant to the
development goals of Rizal Province. Likewise, the University adopts public elementary
and secondary schools to serve as pilot centers for innovative teaching and learning
strategies and approaches so operated and maintained under the Department of
Education, Culture and Sports (DECS).
As a state university in the field of science and technology, it is committed to
produce competent and valuable graduates in agriculture, engineering, science and
technology, culture and arts, teacher and business education through responsive
instruction, research, extension and production services. In 2014, the URS produced
professionals in the recent PRC Licensure Board Examinations in various fields, as
follows:
Profession
Number of Board Passers
Agricultural Engineers
4
Mechanical Engineers
19
Electronics Engineers
8
Civil Engineers
4
Electrical Engineers
5
LET Elementary Teachers
411
LET Secondary Teachers
370
Social Work
15
Foresters
2
Agriculturists
3
Certified Public Accountants
8
The governance of the URS is bestowed on the Board of Regents chaired by the
Commissioner of the Commission on Higher Education (CHED), Dr. Alex B. Brillantes
Jr., Vice-chaired by the University President, Dr. Marita R. Canapi and other members,
who are representatives of various sectors in the country. The President officiates over
the affairs, operations and general administration of the URS with the assistance of three
Vice Presidents (VPs), namely, Dr. Ronnie N. Parica- Vice- President for Administration
and Finance, Dr. Flordeliza R. Peñaranda - Vice-President for Academic Affairs and
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Dr. Namerod F. Mateo - Vice-President for Research Development, Extension and
Production.
For the year 2014, URS had a total manpower of 1,112, broken down as follows:
Campuses
Angono
Antipolo
Binangonan
Cainta
Cardona
Morong
Pililia
Rodriguez
Tanay
Taytay
Total
Faculty
Temporary/
Permanent
Contractual /
Part-time
26
36
21
35
44
42
8
36
5
8
223
68
33
31
36
25
82
16
12
26
490
323
Non-teaching
Contractual /
Permanent Casual / Job
Order
2
10
2
8
2
12
2
10
0
3
49
84
3
12
1
10
51
30
1
7
113
186
Total
74
66
100
56
16
424
79
72
179
46
1,112
The audit covered the accounts, operations and financial transactions of the URS
with ten campuses for Calendar Year 2014. The audit was conducted to (a) verify the
level of assurance that may be placed on Management’s assertions on the financial
statements; (b) recommend agency improvement opportunities; and (c) determine the
extent of implementation of prior years’ audit recommendations.
B. FINANCIAL HIGHLIGHTS
The URS’ financial condition, results of operations and sources and application of
funds for the CY 2014 are shown below:
Group of Accounts
Financial Condition
Assets
Liabilities
Net Assets/ Equity
Results of Operations
Income
Expenses
Net Income
2014
P529,195,280.34
94,063,116.19
435,132,164.15
514,261,438.90
469,244,330.50
P45,017,108.40
Appropriations, Allotments, Obligations and Balances
a) The budget for Personal Services authorized under the General Appropriations
Act (GAA) for CY 2014, RA No. 10633 of the URS amounted to
P232,162,000.00. The URS also received from the Department of Budget and
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Management (DBM) the allotment of P22,174,000.00 for Retirement and Life
Insurance Premium (RLIP), P7,295,500.00 allotment for Performance-Based
Bonus (PBB) and P3,240,000.00 allotment for Productivity Enhancement
Incentive (PEI) or a total of P264,871,500.00 budget for Personal Services. Of
this amount, P264,870,913.42 was obligated, thereby leaving an unobligated
balance of P586.58.
b) The GAA for CY 2014 also authorized the URS to obligate the amount of
P61,025,000.00 for its Maintenance and Other Operating Expenses wherein
P51,722,014.69 was obligated, leaving an unobligated amount of P9,302,985.31.
c) In addition to the URS appropriation, the DBM released to the URS Special
Allotment Release Order (SARO) No. RO IVA-14-0009975 for Capital Outlay
amounting to P17,219,000.00, which was intended for the construction of
buildings and for the procurement of technical and scientific equipment. During
the year, P6,855,935.64 was obligated with the remaining P10,363,064.36 free of
obligation, the validity of which is until 2015.
d) At the end of the year, the total amount of P323,448,863.75 was obligated with
unobligated balance of P19,666,636.25. See table below:
Allotment Class / Source
Personal Services
Maintenance and Other
Operating Expenses
Capital Outlay
Total
Allotment
Obligations
Received
P264,871,500.00 P264,870,913.42
61,025,000.00
51,722,014.69
Unobligated
Balances
P586.58
9,302,985.31
17,219,000.00
6,855,935.64
P343,115,500.00 P323,448,863.75
10,363,064.36
P19,666,636.25
e) In addition to the above, the Board of Regents (BOR) approved the Budget and
Financial Plan of the URS in the amount of P295,013,351.00 from Special Trust
Fund (STF) and Income Generating Projects (IGP), wherein the amount of
P145,809,301.09 was obligated, leaving a balance of P149,204,049.91 at yearend.
C. AUDIT OPINION ON THE FINANCIAL STATEMENTS
The Auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements of the URS for the year ended December 31, 2014 in view of the
accounting errors and deficiencies as stated in the Independent Auditor’s Report. Audit
observations on (1) unrecorded receivables and income from school fees-P10,735,361.75;
(2) unreliable total book balance of inventory accounts-P60,368,303.09; (3) inaccurate
and understated balances of PPE accounts due to unrecorded land, unrecorded buildings
and other structures with undetermined amount, unrecorded donated equipmentP2,531,270.00; and (4) doubtful balances of inter-agency payables-P17,985,552.41 are
discussed in Part II of this Annual Audit Report.
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D.
SUMMARY
OF
SIGNIFICANT
RECOMMENDATIONS
OBSERVATIONS
AND
For the foregoing exceptions, we have recommended that the University President
(1) require all the Campus Cashiers of the URS to provide the Accounting Office copies
of the billing statements every end of each semester for proper recording and accounting
of receivables and income from tuition fees and to observe the accrual method of
accounting for Accounts Receivables and Income from “School Fees”; (2) instruct the
Accounting Office to comply with Sections 4(j), 43 and 46 of the MNGAS, Volume I,
Sections 62 and 65 of the MNGAS Volume I and Section 490 of GAAM, Volume I; (3)
require the Supply Property Management Office (SPMO) to exert more effort in
obtaining documents to support ownership of the land, conduct actual inventory of
buildings and other structures and require the Accounting Office to account and record
them at cost or fair value if donated properties; require SPMO to submit quarterly reports
of donated items to COA and Accounting Office for proper recording in the books and to
submit copy of the List of Donated Equipment received in 2014 to the Accounting
Office, create an Appraisal Committee to appraise donated equipment without valuation
costs; and (4) require the project implementers to refund/return fun balances to source
agencies and return to LGU Cainta the unused funds received which remained dormant
for four years.
In addition, the following are the other significant observations and
recommendations:
1. Laxity in the granting of sales on account, non-implementation of policies and
guidelines in the production services, and ineffective collection system resulted
in long outstanding accounts receivable from Income Generating Projects (IGPs)
ranging from 61 days to more than one year, which accumulated to
P2,152,918.55.
We recommended that the University President instruct the officials concerned in the
production services to strictly implement the guidelines and policies in the operation
of and to collect the long outstanding accounts receivable from the IGPs.
2. Advances to the Department of Budget and Management- Procurement Service
(DBM-PS) amounting to P2,272,257.11 for the procurement of commonly used
office supplies and various office equipment remained unliquidated/ undelivered
as of December 31, 2014. Of the total funds transferred, P922,647.83 has been
outstanding for six months to one year but despite the unserved requisitions, the
URS still transferred the amount of P916,252.00 during the last five months of
the year. Moreover, the total balance of transferred funds of P841,609.28 was
not yet refunded to the URS as at year-end.
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We recommended that the University President instruct the concerned offices to make
representation with the DBM-PS to demand for the immediate delivery of various
supplies and office equipment requested and already paid for and require the agency
to refund the long outstanding balances of funds transferred to them requesting
undelivered items.
3. Tangible properties of the University of Rizal System recorded with net book
value of P120,487,595.69 were not insured with the GSIS General Insurance
Fund and the Property Replacement Fund.
We recommended that the University President instruct the concerned offices to
insure all insurable physical assets with GSIS under the General Insurance Fund and
the Property Replacement Fund pursuant to COA Circular No. 92-390.
4. The 2014 Internal Operating Budget (IOB) of the URS amounting to
P295,013,351.00 as approved by the Board of Regents (BOR) under Resolution
No. 045-431-13 on November 29, 2013 was not fully utilized during the year due
to lack of proper planning. Construction and repair of buildings and other
structures as well as procurement of various equipment and vehicles
programmed to be sourced from income from tuition fees and production
services totaling P149,204,049.91 were not fully implemented despite the readily
available budget from Special Trust Fund (STF).
We recommended that the University President instruct the concerned officials to
hasten the implementation of various projects as planned and utilize the approved
STF in accordance with the approved use of income within the mandate of RA No.
8292 and CHED Memorandum No. 20, and to respond to the full range of obligations
to the students, teachers and employees as in URS mandate with efficient, timely and
cost-effective physical and financial accomplishments.
E.
SUMMARY OF TOTAL SUSPENSIONS, DISALLOWANCES AND
CHARGES
Notice of Suspension in the amount of P127,487.45 and Notices of Disallowance
with total amount of P17,228,619.01 were issued during the year.
F.
STATUS OF IMPLEMENTATION
RECOMMENDATIONS
OF
PRIOR
YEARS’
AUDIT
Of the 13 prior years’ audit recommendations, 9 were fully implemented, 1 was
partially implemented and 3 were not implemented.
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