EXECUTIVE SUMMARY
Introduction
The enactment of Republic Act 9157, has given rise to the merging of the former
Rizal State College and Rizal Polytechnic College to become the University of Rizal
System to cater to the needs and partake in the development of the Province of Rizal with
the vision of transforming the University of Rizal into a premier technology-driven
institution by the year 2015 and mandate of generating competent and value-laden
graduates in agriculture, engineering, science and technology, culture and arts, teacher
and business education through responsive instruction, research, extension and
production services in Region IV. But even before the enactment of this law, it has
continued on the realization of its vision and its goals anchored on Commission on
Higher Education’s Quality and Excellence, Relevance and Responsiveness, Access and
Equity, Efficiency and Effectiveness.
University of Rizal System is composed of ten campuses all over the Rizal
Province. These campuses were grouped into three clusters in line with the
rationalization program of the University. The clustering was based on the common
flagship programs of each group and is tended by a cluster chancellor: Cluster I,
composed of Tanay, Rodriguez and Cardona Campuses, with highly developed and
specialized courses in Agriculture, Fisheries and Allied Fields; Cluster II, consisting of
Morong, Taytay and Cainta Campuses, offers courses in the fields of Science,
Technology, Engineering, Health-Related Science and Teacher Education and Cluster III,
composed of Angono, Antipolo City, Binangonan and Pililla Campuses, concentrates on
Business, Information Technology, Social Science and Culture and Arts.
It has a total workforce of 911 personnel as of December 31, 2011 consisting of
508 teaching personnel, 124 non-teaching staff and 279 contractual/substitute/job order
employees.
Financial Highlights
A. Financial Condition
The financial condition of the University showed total assets of P426,595,995. Its
liability was recorded at P66,628,974 resulting in a net worth of P359,967,021.
The total assets, liabilities, government equity, income and expenses for CY 2011
compared with that of the preceding year are as follows:
Total Assets
Total Liabilities
Total Equity
Total Income
Total Expenses
CY 2011
P 426,595,995
66,628,974
359,967,021
412,634,461
388,794,345
CY 2010
P 401,880,151
66,392,003
335,488,148
388,500,193
343,250,064
B. Allotments, Obligations and Balances
Increase/(Decrease)
P 24,715,844
236,971
24,478,873
24,134,268
45,544,281
1. Total allotment available for the CY 2011 is P283,029,000 which includes the
2010 extended appropriation for maintenance and operating expenses amounting
to P300,000.
2. Total obligations incurred during the year amounted to P282,379,000 which
includes tax remittance advices (TRA) of P17,087,531.
SCOPE OF AUDIT
The audit covered the operations of the University of Rizal System for Calendar
Year 2011. It was conducted in accordance with applicable laws, rules and regulations
and generally accepted state auditing standards. The audit was also done to (a) ascertain
the propriety of financial transactions and compliance of the agency to prescribed rules
and regulations; and (b) verify the level of assurance that may be placed on
management’s assertions on the Financial Statements (FS).
AUDIT OPINION ON THE FINANCIAL STATEMENTS
The Auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements due to the failure of the University to record in the books of accounts
the acquired fixed assets costing P596,241.00, resulting to the inaccuracy of the recorded
year end balances of the Property, Plant and Equipment (PPE) accounts with a net book
value of P220,977,444.16.
SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS
For the exceptions cited above, we recommended that the University President:
a) direct the Accountant to make the necessary adjusting entries in the books of accounts
of the University including the computation of the depreciation, to reflect the correct
balances of the affected PPE accounts for the fair presentation of the value of its assets in
the financial statements; and b) require the Property Custodian to determine the
officials/employees to whom the equipment were issued and issue the corresponding
Acknowledgement Receipt for Property to pinpoint accountability and responsibility.
See to it that the AREs are updated and renewed every three years or everytime there is a
change of accountability.
In addition, the following are the other significant findings and recommendations:
1. Cash advances amounting to P1,461,714.32 in all funds remained unliquidated at
year-end even if the purpose for which they were granted have already been
served, contrary to Section 89 of P.D. 1445 and COA Circular No. 97-002 dated
February 10, 1997, thereby overstating the Cash and Receivable accounts and
understating the related Expense accounts by the same amount.
We recommended that management:
•
Continue issuing demand letters to all accountable officers with outstanding
cash advances to immediately settle the same and exert all possible efforts to
go after these individuals who have liability to the university;
•
Stop the practice of granting additional cash advances unless the previous
ones are first liquidated/settled;
•
Effect the withholding of the payment of any money due the accountable
officers who have continuously failed or refused to liquidate their cash
advances; and
•
Comply strictly with Section 89 of P.D. 1445 and COA Circular No. 97-002
in the granting, utilization and liquidation of cash advances.
2. Report of Sales from Water Refilling Station of the Business Affairs Office of the
University were not submitted to the Accounting Office regularly for proper
recording and reporting in violation of Section 111 and 112 of PD 1445, hence,
resulting to the unreliability of reported income for some income may not be
accurately accounted for.
We recommended that Management observe strictly the provision of Sections
111 and 112 of PD 1445 on the regular submission of report of sales and expenses to
the Accounting Offices for proper recording in the books of accounts.
3. Despite repeated recommendations of the audit team, payments totaling to
P208,000.00 were made during the year for the legal services of a private lawyer
without the prior written conformity and acquiescence of the Solicitor General
and the written concurrence of the Commission on Audit, contrary to COA
Circular 95-011 dated December 4, 1995 rendering the propriety of the
transaction doubtful.
We reiterated our recommendation that Management should secure the
written approval of the Solicitor General and the written concurrence of the COA
before hiring the services of a private lawyer to attend to the legal needs of the
University pursuant to COA Circular 95-011. Otherwise, the claims will be
disallowed in audit and shall be the personal liability of the officials concerned who
authorized or approved the transaction.
4. Failure of management to strictly enforce the provisions of the loan agreements
between the University and student-borrowers under the Student Financial
Assistance Program (STUFAP) resulted to uncollected loans of P970,757.26 as of
the end of the year. Also, the unpaid loans were not recorded in the books as
Receivable/Other Receivables account, thereby understating the accounts by the
same amount.
We recommended that the University President directs the Head of the
Student Development Services who is in-charge of the STUFAP funds to follow
strictly the guidelines in the granting and collection of loans to students. The
whereabouts of all student-borrowers should be monitored specially those who have
already graduated but with still unpaid loans. Send collection/demand letters regularly
to remind the student-debtors of their obligations.
We further recommended that the agency officials concerned to formulate, for
strict implementation, a more effective scheme to ensure the collection of unpaid
loans from students for the benefit of other grantees of the program.
Lastly, the Accountant should be required to record the uncollected loans from
the students as Receivables or Other Receivables in the books of accounts of the
University and maintain Subsidiary Ledgers for each student-debtor to facilitate
verification, billing and collection.
5. Due to lack of coordination among offices concerned, transactions with the
Procurement Service (PS) of the Department of Budget and Management (DBM)
have not been properly monitored resulting in the understatement of the Due
from NGAS account amounting to P120,154.83 representing PS unrealized
deliveries which have not been recognized in the books of URS. Prepayments of
the same amount was not recorded, thus undelivered requisitions were not
monitored in the books of accounts.
We recommended that the President require the Property Division to monitor
the procurement and delivery of supplies, materials and equipment by the
Procurement Service and to reconcile their records with that of the Accounting
Division and the requisitioning Office. Delivery receipts should be in the custody of
the Property Division or the Property Unit of the requisitioning divisions, copy
furnished the Accountant for the proper booking-up of the transactions.
Prepayments to Procurement Service should be taken-up in the books as Due from
NGAS. Adjust the books of accounts for the unrecorded and unrealized PS DBM –
Procurement Service deliveries per NGAS prescribed entries.
6. Purchased office supplies and other supplies amounting to P6,061,639.89 and
P8,161,191.48 respectively, or a total of P14,222,831.37 were outright charged to
expense account contrary to Section 43 of the Manual on New Government
Accounting System, Volume I, for National Government Agencies. Likewise,
procurement of majority of these supplies were made on a piece meal or on
staggered basis or as the need arises from private suppliers that precluded the
agency to avail of discount for bulk purchases.
We recommended that Management strictly comply with the provisions of
Section 43 of the NGAS Manual, Volume I, for National Government Agencies
regarding the perpetual inventory method for supplies and materials and treat the
same as Inventories as required. Proper check and balances should be maintained for
sound internal control over supplies and materials and lack of personnel must not be
an excuse and should be addressed by making proper representations to concerned
government agencies.
7. Failure to insure the University’s properties with a net book value of
P194,558,549.89 with the General Insurance Fund of the Government Service
Insurance System (GSIS) as required under Republic Act (RA) No. 656, the
Property Insurance Law, as amended and COA Circular No. 79-112 dated
August 30, 1979, exposes the University to the risk of not being compensated in
case of loss or destruction of said properties.
We recommended that the University President:
a. Requires the Property Custodian to make an inventory of all insurable
properties of the University and insure the same with the General Insurance
Fund of the GSIS, so that in case of loss or destruction of the same, the
University could be compensated; and
b. Directs the Budget Officer to incorporate in the annual budget of the
University the cost of the insurance premiums on said properties.
8. Special allowances of P1,069,500.00 were granted to the officers and employees
of the University contrary to Section 4(1) of Presidential Decree (PD) No. 1445,
Section 18(a) and 3rd paragraph of Section 18(d) of the Implementing Rules and
Regulations (IRR) of Republic Act (RA) 8292 and Section 12 of RA 6758,
resulting in the illegal disbursement of public funds.
We recommended that the concerned officials and employees be made to
refund the special allowances they received for the period January 2011 to June 2011.
Management should strictly adhere to pertinent laws, rules and regulations in the
disbursement of public funds. Benefits or allowances should not be granted in the
absence of any legal basis or statutory authority.
9. Unserviceable equipment with a net book valued at P443,305.00 remained
undisposed, thus, depriving the University of possible additional income from its
sales and the use of the space occupied by said properties.
We recommended that the Property Custodian to immediately dispose all
unserviceable equipment/properties of the University not only to avoid further
deterioration of the said properties but also to generate additional funds for the
University and to make use of the storage space presently occupied by these
equipment.
10. The University failed to provide an adequate budget for Gender and
Development (GAD) contrary to Section 28 of the 2011 General Appropriations
Act (GAA) and Joint Circular No. 2004-01 dated April 5, 2004 of the
Department of Budget and Management (DBM), National Economic and
Development Authority (NEDA), and National Commission on the Role of
Filipino Women (NCRFW). Only P140,752.00 or .02 percent (.02%) of its total
appropriations for the year of P11,600,800.00 was allocated for GAD related
activities which resulted to its failure to fully implement its GAD programs
thereby depriving the intended beneficiaries the full benefits of the same.
We reiterated that the University allocates the required budget for GAD,
which should be five percent of its total annual appropriation to ensure that all GAD
programs and activities are fully implemented as planned so that the maximum
benefits of the programs could be attained.
STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT
RECOMMENDATIONS
Of the 12 prior year’s audit recommendations embodied in the 2010 Annual Audit
Report, five were fully implemented and the remaining seven were partially
implemented.