EXECUTIVE SUMMARY
A. Introduction
By virtue of Republic Act (RA) 6975, known as “An Act Establishing the
Philippine National Police under a reorganized Department of the Interior and Local
Government and Other Purposes,” a highly effective and competent police force that
is national in scope and civilian in character was established in 1991. Also, as
amended under RA 8551, otherwise known as the Philippine National Police Reform
and Reorganization Act of 1998, the PNP was envisioned to be a community and
service oriented agency responsible for the maintenance of peace and order and
public safety.
The PNP Organizational Set-up is composed of the (a) Central Office or the
National Headquarters (NHQ), which house the offices of the PNP Chief, two Deputy
PNP Chiefs – one for Administration and one for Operations, the Chief Directorial
Staff, who acts as the chief operating officer and who coordinates, supervises and
directs the 10 Directorial Staffs, with the support of 10 Administrative and 10
Operational Units; and (b) 17 Police Regional Offices (PROs) nationwide
corresponding to the regional subdivisions of the country to include the NCRPO,
PROs 1, 2, 3, 4A (CALABARZON), 4B (MIMAROPA), 5, 6, 7, 8, 9, 10, 11, 12, 13
(CARAGA), Cordillera (COR) and ARMM.
The PNP Chief is also assisted by the Internal Affairs Service (IAS) to ensure the
operational readiness of the police and investigate infractions of the regulations
committed by members of the PNP, and the Program Management Office (PMO)
which serves as management facility and idea center for the PNP Integrated
Transformation Program. For police training, human resource development and
continuing education, the Philippine Public Safety College together with the Police
National Training Institute (PNTI) is the premier educational institution of all PNP
personnel. Also, PNTI has direct supervision and administrative control of the
Philippine National Police Academy (PNPA).
For CY 2012, the total manpower complement of PNP is 152,298 out of the
153,880authorized for CY 2012, broken down as follows:
Particulars
Authorized
Police Commissioned Officers (PCOs), from
Director General to Police Inspector
14,072
Police Non-Commissioned Officers (PNCOs),
from Senior Police Officer IV to Police
Officer I
134,212
Total Uniformed Personnel
148,284
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Actual
Variance
12,477
1,595
134,593
147,070
(381)
1,214
Particulars
Authorized
Non-Uniformed Personnel (NUP), Civilian
5,596
Total Uniformed and Non Uniformed
153,880
Personnel
Actual
5,228
152,298
Variance
368
1,582
B. Financial Highlights
The PNP’s financial condition and results of operations (in thousand pesos) for
calendaryear 2012, compared with that of the preceding year are as follows:
CY 2012
Financial condition
Total Assets
Total Liabilities
Total Government Equity
Results of Operations
Total Income
Total Expenses
Excess of Income
Expenses
CY 2011
Increase
(Decrease)
P26,540,395
7,612,153
18,928,242
P23,269,063
5,039,491
18,229,572
P3,271,332
2,572,662
698,670
P97,868,055
96,836,522
P82,137,130
81,519,074
P15,730,925
15,317,448
P 1,031,533
P
P
Over
618,056
413,477
Sources and applications of fund for the years 2012 and 2011 are as follows:
CY 2012
Allotment
Current Appropriation
Continuing Appropriation
Total Allotment
Total Obligations Incurred
Unexpended Balance
P 98,741,787
2,269,414
101,011,201
99,257,669
P 1,753,532
CY 2011
P 83,392,143
1,240,772
84,632,915
82,315,182
P 2,317,733
Increase
(Decrease)
P 15,349,644
1,028,642
16,378,286
16,942,487
P 564,201
Of the total allotment of P101,011,201for CY 2012, 98 percent or P99,257,669
was obligated/incurred for the following expenditures: (a) 90 percent or P89,740,468
for Personal Services (PS); (b) seven percent or P6,763,752 for Maintenance and
Other Operating Expenses (MOOE); and (c) 3 percent or 2,753,449 for Capital
Outlay (CO), thereby leaving an unexpended balance of P 1,753,532or 2percent.
The details of the Statement of Allotments, Obligations and Balances are
presented in Annex A.
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C. Operational Highlights
Based on the submitted PNP 2012 Annual Accomplishment Report, some of the
Agency’s major accomplishments are as follows: (Details are shown in Annex B)
1. On law enforcement, the PNP strengthened various campaigns against
criminalities such as:
Campaigns
Conducted
Campaign
illegal drugs
Campaign
carnapping
against
No. of Reported
Cases/Operation
s/
Raids/Searches
Conducted/
Neutralization
8,588
No. of
Arrests
Made
Campaign
against
Kidnapping
for
Ransom (KFR)
Campaign
against
bank robbery
Campaign
against
Highjacking/Highway
Robbery
Campaign
against
Illegal Gambling
Environmental
&
Natural
Resources
Protection Campaign
344
motor
vehicles;
85
motorcycles
86
motorcycles;
64
highpowered & 45
low-powered
firearms
427
29
5
3
626
5
for
highjack
ing;
153 for
highway
robbery
24,424
12,035
19,110
1,901
11,344
1,318
16,597
7,171
4,686
85
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No. of
Cases
Filed
In
Courts
336
14
11,229
Campaign
against
Prostitution/
Vagrancy
and Child Abuse
Campaign
against
Smuggling Piracy
No. of
Cases
Solved
14,900
against
Campaign
against
Motorcycle-riding
Criminals
No. of
Recovery/
Confiscation
P19.581M
cash bets
10,565,708
board ft of
logs;
P160M
assorted fishing
paraphernalias
5,017
310
800
616
P46M
goods
pirated
5,101
40
Campaigns
Conducted
No. of Reported
Cases/Operation
s/
Raids/Searches
Conducted/
Neutralization
Campaign
against
Cattle Rustling
Campaign
against
Persons with Head
Prize
Campaign
against
Persons without Head
Prize
Campaign
against 138
gangs/765
Criminal Gangs
members
Campaign
against
Loose Firearms
No. of
Arrests
Made
No. of
Recovery/
Confiscation
121
242 large cattle
No. of
Cases
Solved
No. of
Cases
Filed
In
Courts
73
115
33,232
5,304
147
assorted
firearms
7,960 firearms
237
3,848
2. On police visibility, LOI 63/2010 “Police Integrated Patrol System (PIPS),
directed all PNP units to enhance crime prevention and solution through intensified
police visibility (foot and mobile patrols), anti-criminality and police security
operations, Oplan Bakal/Sita (campaign against motor-riding criminals) and other
police interventions;
3. The PNP took the lead in the efforts of the government in serving and protecting
the country by launching Community Safety and Protection Programs; Internal
Security Operations and established Human Rights Help Desks at all PNP Unit
Levels;
4. Conferred of the “Compliance Status” and the “Proficiency Status” by the Institute
for Solidarity in Asia (ISA) during the Public Governance Forum; and was
awarded the prestigious “Governance Trailblazer Seal” by the National
Competitive Council (NCC) and ISA, in recognition of the organization’s
dedication and efforts in achieving lasting transformation.
D. Scope of Audit
The audit covered the operations and financial transactions of the PNP for
calendar year 2012 and the results of audit included the National Headquarters and the17
Police Regional Offices (PROs) nationwide.
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E. Auditor’s Report
The auditor rendered an adverse opinion on thefairness of presentation of the
financial statements of the Philippine National Police, in view of the accounting
errors and deficienciesshown in the Matrix on the Analysis of the Effects on the
Misstatements on the Financial Statements marked as Annex C and enumerated
belowtogether with the recommendations:
1. The year-end balance of the Cash - Collecting Officers account of P5,852,824.63
was inaccurate due to (a) unrecorded collections and deposits of P10,893,977.15
in the NCRPO and PRO 6; (b) collections of P5,450,254.62from PCSO-STL in
PRO 4Anot supported with documents; (c) unreconciled difference of
P4,322,330.66 between the General and Subsidiary Ledger balances; and (d)
undeposited collections of the relieved Collecting Officer of P1,526,583.97 in the
NHQ account balance.(Observation No. 1)
We recommended that Management require: (a) the Regional Chief Accountant in
NCRPO and PRO 6 to record the collections and deposits in the books of
accounts; (b) PRO 4A Management to make representation with the PNP NHQ to
review the policy on the receipt of PCSO-STL Fund; (c) the Accounting Office in
NHQ to instruct the concerned Collecting Officers to reconcile their
accountabilities with the Accounting Office and exert extra effort to trace from
previous records the validity of the unreconciled balances particularly the account
of the Collecting Officers and require full settlement thereof, if warranted; and (d)
record as Due from Officers and Employees the undeposited collections of the
relieved Collecting Officer.
2. The correctness of the year-end balance of Cash in Bank – Local Currency,
Current Account of P2,457,273,287.55 could not be ascertained due to various
unrecorded reconciling items of P58,032,969.33 and undocumented reconciling
items ofP237,662,541.67 in NHQ account; and non/late preparation and
submission of Bank Reconciliation Statements (BRS) by NCRPO, PROs 3, 5, 6
and SAF. (Observation No. 2)
We reiterated the prior year’s audit recommendations thatManagement: (a)
require the Accounting Office to make the necessary adjusting entries for the
erroneous entries made; and exert extra effort to locate the whereabouts of the
supporting documents relative to the undocumented reconciling items; (b) NHQ
Management require the Accounting Office to evaluate and monitor all existing
bank account balances to determine their actual status as of a given time and
ensure proper utilization; and ensure the return of the unutilized funds to the
Source Agency or to the National Treasury; (c) and NCRPO, PROs 3, 5, 6 and
SAF Management coordinate with the depository bank for the prompt delivery of
the Monthly Bank Statements with the supporting documents.
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3. The existence and accuracy of the Inventory Accounts totaling P1,065,777,330.79
could not be established due to (a) inclusion in NHQ of dormant accounts totaling
P52,735,602.36 and transferred balance of P1,899,983.61 from PC/INP; (b) the
failure to conduct physical inventory in PRO 6; non-submission of the Report on
the Physical Count of Inventories (RPCI) by NHQ and PRO 5; and nonreconciliation of the accounting and supply records in PRO 8; (c) late submission
of the Report of Supplies and Materials Issued (RSMI) in PROs 4B and 8; (d)
inability of the Supply Accountable Officers in NHQ and PRO 4B to properly
maintain and update the Stock Cards (SC); and (e) recording as outright expense
of supplies and materials totalling P130,420,641.41 purchased by PROs COR, 8
and 13.(Observation No. 3)
We recommended that (a) NHQ Management require the Accounting Division to
request authority to write-off those inventory balances that remained dormant for
more than five years and require the concerned SAO to prepare and submit the
RSMI in order to clear him from accountabilities; henceforth, require all SAOs to
prepare said report regularly and submit the same to the Accounting Office at the
end of each month; (b) PRO 6 to conduct physical count of all inventories, NHQ
and PRO 5 to submit the RPCI and PRO 8 to reconcile the general ledger and
supply records balances of the inventory accounts; (c) PROs 4B and 8 to prepare
and submit on a regular basis the RSMI at the end of each month; and the
Accountant to use the RSMI as basis in recording issuances of supplies and
materials; (d) NHQ and PRO 4B to require the SAO to regularly maintain and
update the Stock Cards; and (e) PROs COR, 8 and 13 to record supplies and
materials as inventories upon purchase and record as expenses upon receipt from
the SAO of the RSMI.
4. The reported balance of PPE totaling P27,752,036,132.71 was inaccurate due to
the (a) net overstatement of P485,275,311.85 of PPE accounts of PROs 1, 3, 4A,
5, 6, 7, 9, 11 and 13; (b) unreconciled difference of P108,903,394.43 between the
property records and accounting records of PROs 1, 3, 4A, 6 and 7; (c)failure of
PROs 6 and 13 to conduct physical inventory; hence the existence of the reported
balance of P795,511,368.86 could not be validated; (d) the construction of police
stations and perimeter fences totaling P38,453,770.04 on the lots in PRO 6 which
the agency has no absolute ownership; and (e) the parcels of land in PRO 10
which do not have Tax Declaration and the donated lots in Iligan and Lanao
which do not have titles. Moreover, in PRO 13, Acknowledgement Receipts of
Equipment (ARE) for property and equipment totaling P13,454,399.80 were not
issued to end-users; thus, accountability for the property issued was not
established exposing the government resources to risk of losses and
wastage.(Observation No. 4)
We recommended that Management: (a) require their respective Accounting
Office to take up the necessary adjustment of the PPE accounts affected from the
net results of non/over/erroneous-recording of transactions;(b) require their
respective Property Office and the Accounting Office of the Police Regional
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Offices to periodically reconcile their records and determine the causes of
discrepancies; (c) PNP-PRO 6 and PRO 13 conduct physical count of all PPE to
establish actual existence of assets; and the Accountant and Regional Supply
Accountable Officers to reconcile their records based on the Report of Physical
Count of Property, Plant and Equipment (RPCPPE); (d) PROs 6 and 10 secure
titles to all donated andacquired lots in order that the agency can claim absolute
ownership and the police stations constructed upon the said lots will not be
prejudiced; and(e) PRO 13cover all property issued with ARE to
establish/pinpoint responsibility and accountability for their custody and use.
F. OTHER SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS
1. Liquidation of fund transfer from different source agencies lacks the necessary
documents to support the expenses contrary to COA Circular No. 2012-001 dated
June 14, 2012; thus, casting doubts on the validity of the
transactions.(Observation No. 5)
We recommended that the Management require the Special Disbursing Officers
concerned to complete the documentary requirements in the liquidation of funds
transferred to the PNP by the different Source Agencies.
2. In NHQ, NCRPO, PROs 3 and 11, there were no records which could show that
the cost of bidding documents were collected from participating bidders, contrary
to Section 17.4 of the Revised IRR of RA 9184. (Observation No. 6)
We recommended that Managementrequire: (a) the concerned BACs to explain
the non-collection of cost of bidding documents from interested bidders; and if
there are collections, require them to report/ account all the proceeds and remit
them to the Collecting Officer.
3. In NHQ, the validity period of the lease entered into by and between the PNP and
concessionaires BLDCC, PNPLTMPC and VFSTCI was not clearly established
because the corresponding Memorandum of Agreement (MOA) was either not
dated, had no effectivity or expiration date, or not notarized. Moreover, the use of
PNP space by the APMPC and PNP-ERMC was not covered by contract; and the
private offices/associations such as APOLE, ACPPI, PCAI and the unregistered
MPC Cooperative operating as a mini store had no written authority from the PNP
to use its facility or operate within the PNP premises and were not required to pay
their monthly consumption of water and electricity. Thus, unauthorized expenses
were charged to the government. (Observation No. 7)
We recommended that NHQ Management (a) revisit the existing contract/MOA
with the BLDCC, PNPLTMPC and VFSTCI to include provisions on the
effectivity and expiration period of the agreement as well as sanctions in case of
default in payment;(b) execute a MOA with APMPC and PNP-ERMC for the use
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of spaces within Camp Crame; and (c) require the unregistered MPC Cooperative
to obtain authority from the PNP to use space and operate within its premises.
4. Restoration of 111 out of 898 deleted pensioners in the Master List was made by
the PNP NHQ Retirement and Benefits Administration Service (PRBS) prior to
completion of documentary requirements; and from CY 2009 to 2011, pension
claims totaling P7,717,622.05 were paid to 19 pensioners whose retirement
records are not existing in the DPRM-PAIS, contrary to the provisions of PNP
Circular No. 2011-07 dated February 26, 2011 and DILG Circular No. 2011-07
dated June 3, 2011.(Observation No. 8)
We recommended that NHQ Management(a) require/instruct the PRBS and PAIS
to strictly implement the requirements in processing the documents for the
restoration of deleted pensioners in the Master List/Payroll; and(b) cause the
refund of pension claims paid to 19 fake pensioners, and take appropriate action
against the erring officers and employees involved in the payment of such claims.
5. The present practice of direct payment to the Nanjing Industrial Tools and
Equipment Company of P150.00 per upgraded security license card fee by the
applicants, and the procurement of supplies and materials for firearms license
cards totaling P8,993,185.42by the Civil Security Group are not in consonance
with the Memorandum of Agreement (MOA) between PNP and the
former.(Observation No. 9)
We recommended that NHQ Management: (a) comply with the provision in the
MOA which stipulates that it is the PNP who shall pay the company from the
proceeds of the license card and in consonance with Section 4b of the IRR of
Executive Order No. 256 and discontinue the present practice of direct payment to
the company of the upgraded security license card fee by the applicants; and(b)
explain why there were procurement of supplies and materials for license cards by
CSG when it is stipulated in the MOA that Nanjing Industrial Tools and
Equipment Company will supply all the materials for the same; henceforth,
discontinue the procurement thereof.
Other equally significant audit observations and recommendations were also
noted and discussed in detail under Part II of this report.
The above findings and recommendations contained in the report were
discussed with the concerned officials of the agency in an exit conference held on
June 17, 2013. Management views and reactions were incorporated in the report,
where appropriate.
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G. STATUS
IMPLEMENTATION
RECOMMENDATIONS
OF
PRIOR
YEARS’
AUDIT
Of the 35audit recommendations contained in the CY 2011 and CY 2010
Annual Audit Reports, sixwere fully implemented, 24were partially implemented and
fivewere not implemented at all, hence, reiterated in this report.
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