EXECUTIVE SUMMARY
INTRODUCTION
The PUBLIC ESTATES AUTHORITY (PEA) was created by virtue of Presidential Decree No.
1084 dated February 4, 1977, as amended by Executive Order No. 525 dated February 14,
1979 and Executive Order No. 654 dated February 26, 1981, with the following objectives:
1) to reclaim land, including foreshore and submerged areas, by dredging, filling, or other
means, to acquire land; 2) to develop, improve, acquire, administer, deal in, subdivide,
dispose, lease, and sell any and all kinds of lands, building, estates, and other forms of real
property, owned, managed, controlled and/or operated by the government; and 3) to provide
for, operate or administer such services as may be necessary for the efficient, economical
and beneficial utilization of the above properties.
As of the year ending 2000, PEA received 20,924 Pabahay 2000 socialized housing units
from Filinvest Development Corporation (FDC) out of which a total of 11,382 units were
turned over to government agencies and other beneficiaries. The Central Boulevard Road
Project is 49.76% completed as against the projected accomplishment of 43.10%, while the
construction of the Ombudsman Building is 26.29% completed as compared to the projected
accomplishment of 37.90%. Three (3) units of the Coastal Plaza Condominium Project were
sold during the year for a total amount of P2.15 million.
As of December 31, 2000, PEA’s assets, liabilities and capital amounted to P23.732 billion,
P18.043 billion and P5.689 billion, respectively, or an increase of P1.663 billion, P1.662
billion and P0.544 million, respectively, over that of last year’s balances. Net income for the
year amounted to P1.328 million compared to last year’s figure of P60.714 million. Revenue
generated during the year consisted of P121.343 million in operating income and P10.731
million in other income (interest, dividend, miscellaneous). Expenses totalled P130.746
million as against last year’s total of P133.628 million.
SCOPE OF AUDIT
The audit included, among others, the verification of compliance and regularity of
transactions and, to a limited extent, an evaluation of the adequacy and effectiveness of
systems/procedures of certain aspects of the agency’s operation.
STATE AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
The Auditor rendered an unqualified opinion on the fairness of presentation of the Agency’s
financial statements.
SUMMARY OF SIGNIFICANT FINDINGS AND RECOMMENDATIONS
The following are the significant findings and the corresponding recommendations:
1.
The failure to establish accounting systems/procedures prior to the implementation of
the Alabang Stock Farm Project resulted in accounting information which do not
present fairly PEA’s accountability over the various assets which arose out of the
project and which it holds in trust for the National Government. We recommend the
setting up of accounting systems for the ASF Project to ensure that the project
transactions are properly documented, analyzed and recorded and the accountability
of the agency to the NG properly reported.
2.
The absence of internal controls over the amounts being deducted by Filinvest from
the supervision fee due to PEA resulted in the latter’s not being able to determine the
propriety and legality of the charges made amounting to P6.424 million and to set up
and recover the same from appropriate parties. We recommend the setting up of
internal controls that would ensure adequate documentation, verification and prior
approval of the expenses to be charged by Filinvest against PEA and the collection
of the same from the parties concerned.
3.
The inability to collect long-outstanding claims from various government and private
agencies totaling P67.063 million hindered PEA from putting into productive use the
cash equivalent of these receivables. We recommend that appropriate measures be
taken up to have these receivables collected the soonest.
4.
The laxity in collecting the various loans extended to officers and employees who
were either separated, transferred, resigned, or have died, or whose terms of office
have expired resulted in delinquencies in payments, with some accounts likely to
become doubtful of collection. We recommend that a concerted effort be made to
collect all overdue accounts/installments considering the need of the Agency for
funds.
5.
The non-accounting for and non-deduction from the salaries of the advances made
by PEA for the health care insurance coverage of the personnel’s extended
dependents resulted in receivables amounting to P239,565 to remain longoutstanding. We recommend immediate collection of the outstanding balances.
Further, employees should not be allowed the privilege of securing coverage for their
extended dependents unless they have fully paid their outstanding accounts.
6.
Inadequate controls on the use of PEA telephone lines for personal long-distance and
overseas calls and laxity in the collection of the personal charges resulted in abuse
and accumulation of unpaid accounts, some of which may no longer be collected.
We recommend that stricter controls be instituted. All personnel with outstanding
accounts should be required to pay their accounts immediately; and appropriate
action should be taken for the collection of the accounts of separated personnel.
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7.
Audit suspensions and disallowances amounting to P.050 million and P16.32 million,
respectively, remained unsettled in violation of Section 9.1 of the Revised Manual on
Certificate of Settlement and Balances. We recommend compliance with the
documentary requirements of transactions suspended in audit and immediate
settlement of disallowances that have already become final and executory.
The findings and recommendations were discussed with Management and their comments
were considered in the report where appropriate.
STATUS OF IMPLEMENTATION
RECOMMENDATIONS
BY
PEA
OF
PRIOR
YEAR’S
AUDIT
PEA has partially acted on the three (3) audit observations embodied in the Annual Audit
Report for the CY 1999.
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