Executive Summary
A.
Introduction
The National Parks Development Committee (NPDC) was created by virtue of Executive
Order No. 30 dated January 14, 1963 for the development of the Quezon Memorial Park, Fort
Santiago, Luneta Park and other national parks. In view of the tripartite agreement between the
Quezon City Government, the National Historical Institute and the NPDC, the management of
the Quezon Memorial Park is now with the Quezon City Government while the maintenance of
Fort Santiago is now with the Intramuros Administration.
With the issuance of the Executive Order No. 120 on January 20, 1987, the Committee
was attached to the Department of Tourism (DOT). It is responsible for the beautification,
preservation, and maintenance of Rizal Park, Paco Park, Pook ni Mariang Makiling, and other
satellite projects.
Specifically, the NPDC is directed to carry out the following tasks:
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Upgrade and maintain assigned parks including facilities, park grounds and
landscape themes, building and other structures.
Develop and implement cultural and educational support programs and services
particularly those in support of national and cultural heritage;
Improve financial viability in support of NPDC’s mission;
Ensure safety, orderliness and cleanliness in the assigned parks;
Undertake development of new parks; and
Establish inter-agency linkages in support of the agency programs.
NPDC is headed by Ms. Juliet H. Villegas, the Executive Director. The agency’s total
personnel complement is 289 distributed as follows:
Office of the Executive Director
Administrative
Planning
Arts and Culture
Finance
Park Operations
Total
6
50
7
16
12
198
289
B.
Financial Highlights
The agency’s financial condition, results of operation and sources and application of
funds for the year, with comparative figures for 2009, are as follows:
Particulars
Financial Condition
Assets
Liabilities
Government Equity
Results of Operation
Subsidy Income
Expenses
Excess of Income
Sources and
Applications of
Funds
Allotment
Obligations
Balance
C.
CY 2010
Amount of
Increase
(Decrease)
CY 2009
P 206,642,049.44
23,219,729.47
183,422,319.97
P 201,671,942.07
24,961,868.06
176,710,074.04
146,395,874.99
139,963,275.29
6,432,599.70
142,269,442.59
142,165,215.37
P
104,227.22
P
Percent of
Increase
(Decrease)
4,970,107.37
(1,742,138.59)
6,712,245.96
2.46
(6.98)
3.80
223,966,726.13
221,212,602.79
2,754,123.34
(77,570,851.14)
(81,249,327.50)
3,678,476.36
(34.63)
(36.73)
133.56
232,431,784.90
225,248,701.94
P 7,183,082.96
(90,162,342.31)
(83,083,486.57)
P (7,078,855.74)
(38.79)
(36.89)
(98.55)
Operational Highlights
The NPDC reported an income of P 46.90 million derived from entrance fees, rentals of
leased spaces, and use of facilities and comfort rooms showing an increase of 11% from its 2009
income of P 42.37 million. The amount of P 46.83 million was recorded in the national
government books while the amount of P 69,782.09 pertaining to interest income was recorded
in the regular agency books. All revenues collected were remitted to the Bureau of the Treasury.
The completion of the following highlighted the 2010 reported accomplishments of
NPDC:
Cost
1. Rehabilitation/Improvement of Rizal Park Public
Comfort Rooms
2. Rehabilitation/Improvement of the Children’s
Playground
P 19,971,717.80
2,258,859.20
P 22,230,577.00
The Audit Team had validated and inspected these accomplishments.
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D.
Scope of Audit
The audit covered the operations and financial transactions of the NPDC for the year
ended December 31, 2010. The objectives of the audit were to ascertain the fairness and
reliability of the agency’s reported financial position and results of its operation; determine the
extent of compliance with existing laws, rules and regulations; recommend agency improvement
opportunities; and determine the extent of implementation of prior years’ audit
recommendations. A Value for Money Audit was conducted on the lease contracts entered into
by NPDC with various concessionaires.
E.
Auditor’s Report
A qualified opinion was rendered on the fairness of the presentation of the financial
statements due to the (a) unreconciled difference of P3.253 million between the recorded
balance of the Cash-in-Bank, Local Currency Combo Account (for trust receipts) and the Trust
Liabilities Accounts and unreconciled difference of P485,367.92 million between the balance per
books and bank of the Cash-in-Bank, Local Currency Combo Account (Observation No. 3); (b)
unreconciled difference of P 1.839 million and P31.06 million between the book balances of the
Inventory and the Property, Plant and Equipment (PPE) Accounts, respectively, and balances of
the physical inventory reports; and (c) unserviceable property of P3.289 million not reclassified
to Other Asset Account (Observation Nos. 4 and 5 ).
For the above-mentioned accounting deficiency, we recommended that Management:
a. reconcile the CIB-LC, combo account with the subsidiary ledger balance, trace all
trust liabilities set-up for this account to determine the discrepancies and draw
adjusting entries, if necessary.
b. direct the Property Officer to record all purchases of supplies and other inventories in
the supplies ledger cards and render a monthly report for the issuances required under
Section 4, (c), NGAS Manual Volume I, furnishing the Accounting Office as basis for
recording issuances in the books of accounts.
c. require the Chief Accountant to make a periodic reconciliation of the balances of the
PPE and Inventory accounts with the property records and furnish the Property
Officer with reports of any addition/acquisition or reclassification of the assets and
obtain copies of records/reports of disposal/issuances to correct discrepancies noted
pursuant to Section 491 of the GAAM, Volume 1;
d. require the Property Officer to update Property Cards for property, plant and
equipment and Stock Cards for inventories and reconcile with the Ledger Cards of
the Accounting unit in accordance with Section 43, paragraph 3 and 4 of the Manual
on the New Government Accounting System (NGAS), Vol. I;
e. require the Property Officer to renew AREs every three years or every time there is a
change of accountability in accordance to Section 56 of the Manual of the NGAS;
and
f. reclassify unserviceable assets to Other Assets account in consonance with Section 4
(p) Chapter 2 of the NGAS Manual.
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F.
Other Significant Observations and Recommendations
Value for Money Audit
1. Non-implementation of prior years’ audit recommendations to undertake measures to correct
lease agreements with various concessionaires that are grossly disadvantageous to the
government, such as the lease agreement with the operator of Jollibee Rizal Park at rental
rates without classification and grossly disadvantageous to the government that started at
P70.96 per sq.m. at the commencement of the contract in March 1999, contrary to the
prevailing rental rate at that time of P182.00 per sq.m., and in 2007 at the rate of P108.67 per
sq.m. vis the prevailing rate of P352.00 per sq.m.
We reiterated the previous year’s audit recommendations that the Committee take the
following courses of action:
a.
conduct a comprehensive review of the leasing operation of the NPDC to ensure that
the interest of the Government is the prime consideration and to negotiate the
amendment of the lease agreement with the Joint Venture to conform to the new set
of guidelines for entering into lease agreements;
b.
negotiate for the amendment of the lease agreement with the Lessee to increase the
rental rate from P108.67 per sq.m. to the prevailing rate of P352.00 or a total
monthly rental of P664,950.88;
c.
work for contract modification with the Joint Venture to recover the rental
deficiency of P 51,120,468.07 which is the difference between the contracted rental
rate and the prevailing rental rate from the start of rental payment on
September 9, 1999 to December 31, 2010;
d.
require the Joint Venture to transform the Jollibee into a tourism-oriented
restaurant to comply with the DOT and lease requirements; and
e.
require the Joint Venture and the sub-lessees to submit their Articles of
Incorporation.
2. The Tourism Infrastracture and Enterprise Zone Authority (TIEZA) and the NPDC have not
yet agreed on remedial corrective legal measure on the questionable Assignment of Rights as
previously recommended in the 2008 and 2009 Annual Audit Reports. Moreover, the China
Oceanis PTE.,LTD. (COPL) occupied 45,343.25 sq.m. of land which is 2,792.25 sq.m. more
than the assigned rights to TIEZA of 42,551 square meters. TIEZA failed to remit to NPDC
the consideration for the assignment of the right for the period of three months to three years
totalling P6,357,056.27 and TIEZA thru an addendum to its contract of lease with COPL,
increased the lease area from 42,551 sq. m. to 51,178 sq. m. without the consent of NPDC.
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We reiterated the following prior year’s recommendations that:
3.
a.
NPDC and TIEZA agree on remedial corrective legal measure on the questionable
assignment of rights by NPDC to TIEZA of a portion of Rizal Park and to continue
honoring the commitments to COPL;
b.
TIEZA be informed of the actual area occupied by COPL and to advise the latter
to vacate the excess area;
c.
NPDC make a follow-up for the immediate payment by TIEZA of the consideration
of the assignment of right that was delayed for three months to three years already
totalling P6,357,056.27;
d.
NPDC take appropriate action against TIEZA for entering into an amended
agreement for an area of 51,178 sq. m. which is 8,627 sq. m. more than the 42,551
sq. m. that NPDC had assigned to them.
The supplemental lease agreement entered into by and between NPDC and the Luneta
Seafarers’ Welfare Foundation, Inc. on January 5, 2009 that provided for an extension of
seven years of its contract did not state the rental payment for the additional space of
761.41 sq. m. occupied, thus, there is a monthly deficiency of P109,164.00 in rental
payments or a total of P2,619,936.00 for the period January 2009 to December 2010.
The Foundation also failed to maintain the premises of the leased space in good,
habitable, clean and sanitary condition in violation of Sec. 7 of the original lease
agreement.
We recommended that the Committee:
a. revise the supplemental lease agreement to include therein the rental payment
for the additional space occupied and collect the deficiency rental for the period
January 2009 to December 2010 totaling P2,619,936.00; and
b. enforce strictly the provision of the lease agreement pertaining to the
maintenance of the cleanliness and sanitation of the leased space.
G.
Implementation of Prior Years’ Audit Recommendations
We validated the implementation of the 23 prior years’ audit recommendations and we
found that three were fully implemented, 13 were partially implemented, and seven were not
implemented. The details of the results of the validation are presented in Part III of the Report.
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