EXECUTIVE SUMMARY
A. Introduction
By virtue of Republic Act No. 1387, as amended by Republic Act Nos. 1893
and 3868, Mindanao State University (MSU) was created. The university was
organized in 1961 with the election of the first president by its newly formed Board of
Regents (BOR), the governing body of the university.
The MSU General Santos City has been operating as a community college since
1971 before it became a full pledge unit and integral part of the MSU Marawi City
through BOR Resolution No. 822, s. of 1973. It was given full autonomy in 1981
through BOR Resolution No. 60 which approved the reorganization of MSU General
Santos City, with its main campus at Fatima, General Santos City.
The university through its functions of instruction, research and extension
services shall provide its client communities the trained human resources required for
the development of South Cotabato, Sultan Kudarat, Saranggani, General Santos City
and Southern Mindanao and help hasten the upliftment of the living conditions of the
Muslims and other tribal communities therein.
Among its objectives are as follows:
1. To strengthen and pursue vigorously the training for technical skills in the
areas of agriculture, fisheries, engineering and allied fields which are needed
in the front line units of the burgeoning industries and private
entrepreneurial initiatives for self-sufficiency of its service area.
2. Develop competent middle-and-high level professionals to man and manage
the growing number of industries, government agencies and private
enterprises.
3. Utilize instruction, research and extension/community services in the
development, promotion and utilization of appropriate and useful
technologies in agro-forestry, fisheries, agribusiness, engineering, and other
allied fields/sciences.
4. Provide demand-driven and local-needs-centered extension/community
services for individual and collective economic capability building.
5. Promote and develop judicious utilization and protection of the environment
within the context of a sustainable development.
6. Work for the upliftment of the educationally disadvantaged ethnic/tribal
communities to hasten their holistic development.
7. Promote peace and development.
The university is headed by a Chancellor assisted by Vice-Chancellors for
Academic Affairs (VCAA) and Administration and Finance (VCAF).
For 2013, it has a total personnel complement of 531 broken down as follows:
Faculty
Administrative Staff
Non-teaching Academic Personnel
Job Order
Total
237
225
8
61
531
The number of enrollees for the academic year 2013-2014, tertiary level is, for
first semester, 8,216 and for the second semester 7,718 while in the secondary level
there were 471 students enrolled.
B. Financial Highlights (Consolidated)
Particulars
A. Financial Condition
Assets
Liabilities
Government Equity
2013
₱330,378,852.34
101,482,325.97
228,896,526.37
B. Statement of Income and Expenses
Subsidy Income– National
P232,914,732.01
Government
Other Income
33,996,038.81
Personal Services
219,037,970.18
MOOE
28,020,874.25
Capital Outlay
8,304,184.57
C.
2012
Increase
(Decrease)
P257,894,642.49 ₱72,484,209.85
39,415,163.75 62,067,162.22
218,479,478.74 10,417,047.63
P232,381,831.71 P 532,900.30
35,087,685.33
211,438,875.21
38,907,133.84
0
(1,091,646.52)
7,599,094.97
(7,289,295.37)
8,304,184.57
Scope of Audit
A financial audit was conducted on the accounts and operations of the Mindanao
State University for the year 2013 with the aim of expressing an opinion on the fairness
of presentation of the financial statements. The audit consisted of verification,
reconciliation, analysis of accounts on a test basis and such other procedures considered
necessary. A compliance audit was also carried out to ascertain the propriety of
disbursements, the reliability of financial reports and agency’s compliance with
government accounting and auditing rules and regulations. Likewise, an audit was
conducted to assess whether plans, programs, projects and activities for the year were
attained in an efficient, economical and effective manner.
D. Independent Auditor’s Report
A qualified opinion was rendered on the fairness of presentation of the
Statement of Financial Position and Results of Operations of the university for the year
ended December 31, 2013 due to the details of the balance of the account ReceivablesDisallowances/Charges amounting to P11,938,177.45 could not be verified/ascertained
because of the agency’s failure to prepare/maintain subsidiary ledger and the failure of
the accounting and supply to reconcile their records on the account Property, Plant and
Equipment having a total difference of P161,946,599.23.
E. Summary of Significant Audit Observations and Recommendations
I. Favorable Observations:
In the pursuit of its mandate and objectives, some of the university’s notable
accomplishments for the year under review are the following, viz:
A. Board Examinations
1. Michael Jim P. Polancos, 4th Placer – CPA Licensure Examination
2. Nellie Dominique Deximo, 2nd Placer-Agricultural Board Examination
3. Janaisa Bai M. Tito, 8th Placer-Electronics and Communication
Engineering Exam
4. Allan D. Valiente, 10th Placer-Electronics and Communication
Enginneering Exam
5. Rodelyn A. Caliso, 8th Placer-Fisheries Technologist Exam
6. Eufemio A. Simtim, Jr., 5th Placer-Real Estate Broker Exam
B. Award
1. Ava Claire Robles, a recipient of the following award during the awarding
ceremony at Marco Polo Hotel, Davao City on May 3, 2013
a. Outstanding Filipino Researcher for 2013
b. Best Abstract Award in Ecology
c. Best in Paper Presentation
d. Best in Powerpoint
2. Joharia Nicart, a recipient of Best in Oral Research Presentation during the
awarding ceremony held in Planta Central Hotel, Bacolod City on
February 8, 2013.
3. Hall of Fame in Kalilangan Festival for Best Tourism Event for Culture
and Arts, City Level from the Association of Tourism Organization of the
Philippines and the Department of Tourism.
4. MSU, General Santos City was awarded the first Place in Science and
Technology Category during the first MSU Systemwide Research Summit
in MSU Marawi on July 30-31, 2013 spearheaded by Dr. Edna Oconer.
5. Erli Neil Aban, senior IT, champion in the Digital Arts Competition
besting 22 students from different tertiary schools in Mindanao
II. The following are the significant audit observations with their corresponding
recommendations:
1. The agency failed to prepare/maintain a subsidiary ledger for ReceivablesDisallowances/Charges (Account 146-Fund 101) amounting to P11,938,177.45
contrary to Section 12, Volume II of the New Government Accounting System
(NGAS) thus details of the account could not immediately be verified and may affect
the fair presentation of the financial statements.
We recommend that the Accounting Office should trace the original records and
identify who the persons liable on the disallowances. Further, we recommend the
maintenance of subsidiary ledgers for Receivables-Disallowances/Charges (Account
146-Fund 101) to monitor the movement and/or payment of officers and employees
concerned.
Adherence to the aforementioned regulation is very much enjoined.
2. The accounting and supply offices failed to reconcile their reports on the Property,
Plant and Equipment thus causes understatement and/or overstatement of individual
accounts and affect the fair presentation of the financial statements.
We recommend the periodic/regular reconciliation of records of the Accounting
Office and the Supply Management Office for an early detection of discrepancies
and submission of accurate reports.
3. The amount of bond and maximum cash accountability of three Accountable Officers
of the agency are not in accordance with the Revised Schedule of Premium Rates
prescribed by Treasury Circular No. 02-2009 dated August 6, 2009 thus, public funds
are at risk in case of loss while they are in transit, caused by fire, theft or other
casualty or force majeure.
We recommend that the Fidelity Bond of AO’s should be in accordance with aforecited regulation. Further, we encourage management to refrain from granting cash
advances and accumulated collections on the hands of the collecting officer in excess
of their maximum cash accountability, thus safeguarding the public funds in case of
untowards incident happened.
Much further, we recommend that the Fidelity Bond of the AO’s should be increased
since their current accountabilities are much higher than their approved bond.
4. Various checks amounting to P90,243.21remained outstanding for more than six
months and are considered stale in violation of pertinent provisions of Republic Act
No. 2031, “Negotiable Instruments Law” thus affect the fair presentation of the
financial statements.
We recommend that the stale checks shall be marked cancelled on its face and
reported as follows, viz:
1. Unclaimed stale checks which are still with Cashier shall be cancelled and
reported in the List of Unreleased Checks as cancelled. The List of Unreleased
Checks is attached to the Report of Checks Issued (RCI).
2. For stale checks which are in the hands of the payees or holders in due course
requested for replacement, new checks maybe issued upon submission of the
stale checks to the Accounting Unit. A certified copy of the previously paid
DV’s shall be attached to the request for replacement. A JEV shall be prepared
to take up the cancellation. The replacement check shall be reported in the
RCI.
However, if the staled checks are in the hands of the payees or holders in due course
and no request for replacement is made, we recommend that the checks should still be
cancelled and accounted for as a miscellaneous income.
5. The construction and completion of two university’s projects were found to be with
deficiencies contrary to the deed of agreement thus the agency and other stakeholders
could not fully utilize its benefits on time.
We recommend that management require the contractor to rectify the crack, install
the electrical system and the fire exit ladder.
Further, we recommend that the agency should revisit, reassess and evaluate its
monitoring and evaluation procedures of all projects implemented so as to preclude
the occurrence of delayed completion on time.
B. Status of Implementation of Prior Year’s Recommendation
Out of the three audit recommendations embodied in 2012 Annual Audit Report, two
were fully implemented and one was partially given due course.