EXECUTIVE SUMMARY
INTRODUCTION
The Cavite State University was established as a pioneer intermediate school in
Indang, Cavite in 1906. The school was first named as Indang Intermediate School. It
became known as the Don Severino Agricultural College (DSAC) in 1964 under
Republic Act (R.A.) No. 3917, creating it as a state agricultural college. On January 22,
1998, it was converted into a state university by virtue of R.A. No. 4868 and is now
known as Cavite State University (CvSU).
The University is tasked primarily to provide instruction, research and extension
services in the arts, technology and literature towards the development of individuals
with practical and applied orientation. Its avowed mission is to provide excellent,
equitable and relevant educational opportunities in the arts, technology through quality
instruction and responsive research and development activities. It shall produce
professional, skilled and morally upright individuals for global competitiveness. The
premier university in the historic Cavite is recognized for excellence in the development
of globally competitive and morally upright individuals.
The administration of the University and the exercise of its corporate powers are
vested exclusively in the Board of Regents (BOR) and the President of the University,
insofar as authorized by the Board. It is headed by Dr. Divinia C. Chavez and assisted by
the following members of the Administrative Council:
Vice President for Academic Affairs
Vice President for Admin. and Support Services
Vice President for Research and Development
Vice President for External and Business Affairs
Dr. Ma. Agnes P. Nuestro
Dr. Hernando D. Robles
Dr. Alejandro dC. Mojica, Sr.
Dr. Luzviminda A. Rodrin
Aside from the Main Campus, CvSU also operates ten campuses located in
different locations in Cavite, each with its respective Dean:
Campus
Carmona Campus
Cavite City Campus
Naic Campus
Rosario Campus
Imus Campus
Trece Martires City Campus
Tanza Campus and General Trias Campus
Silang Campus
Bacoor Campus
Dean
Dr. Yolanda A. Ilagan
Dr. Julio G. Alava
Dr. Beng P. Umali
Dr. Camilo S. Polinga
Dr. Lilibeth Novicio
Prof. Gilchor P. Cubillo
Prof. Cristina M. Signo
Dr. Dinah L. Espineli
Dr. Henry O. Garcia
The University has a total manpower complement of 1,657 personnel, composed
of 386 regular and 1,271 contractual, temporary, full-time and part-time faculty and
employees.
The audit covered the financial transactions on the operations of the Cavite State
University Main and its campuses for the calendar year ended December 31, 2014. The
objective of the audit was to ascertain the fairness of presentation of the financial
statements of the University. We conducted our audit in accordance with generally
accepted auditing standards. Those standards require that we perform the audit to obtain
reasonable assurance that the financial statements are free of material misstatement. We
also conducted compliance audit and checked the validity and propriety of the
transactions.
FINANCIAL HIGHLIGHTS
The total assets, liabilities, net assets/equity, revenue and expenses for CY 2014
are as follows:
Assets
Liabilities
Net Assets/Equity
Total Revenue
Total Expenses
Surplus (Deficit) from Current Operations
Net Financial Assistance/Subsidy
Surplus (Deficit) for the Period
P
1,392,910,262
168,534,532
1,224,375,730
622,212,910
724,054,134
(101,841,224)
349,849,040
248,007,816
For the year 2014, The Cavite State University had a total budget of
P376,535,146.00. Actual allotment released to the University in accordance with
Republic Act No. 10633 or the General Appropriations Act of 2014 totaled
P376,535,146.00, while expenditures amounted to P376,530,021.65.
Total Income of P622,212,909.66 from internal and external sources were also
received and managed by the University. A total of P374,791,144.92 was utilized as of
the end of the year.
AUDIT OPINION ON THE FINANCIAL STATEMENTS
The Auditor rendered a qualified opinion on the fairness of the presentation of the
consolidated financial statements of the Cavite State University due to the following:
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
Twenty three accounts of the University posted negative balance, thus affecting
the fairness of presentation of the affected accounts in the financial statements;

Variances of P304,496,146.36 and (P36,846.31) between the accounting records
and the accountable officer’s cashbooks cast doubt on the validity and reliability
of the reported Cash in Bank - Local Currency, Current Account and
Cash - Collecting Officer accounts;

The existence and reliability of Property, Plant and Equipment (PPE) accounts of
the Cavite State University – Naic Campus with total carrying value of
P18,566,833.45 as at year-end could not be ascertained due to the Management’s
failure to conduct physical inventory and submit the Report on the Physical Count
of Property, Plant and Equipment (RPCPPE), as well as to maintain updated PPE
Ledger Cards;

Stale checks totaling P39,270.92 of CvSU Naic Campus were not cancelled nor
adjusted in the books of accounts and still included in the list of outstanding
checks, thus resulted in the understatement of the Cash in Bank account and the
Accounts Payable balances; and

Financial transactions for General Fund (GF), Special Trust Fund (STF), Trust
Fund (TF) and Income Generating Project (IGP) Fund were recorded in the same
set of books maintained for the General Fund which generated a one-fund
monthly trial balance and financial statements, thus financial condition and results
of operations of each fund could not be readily ascertained, and the reports thereof
could mislead their users.
The reliability and validity of these accounts were affected due to the prevailing
conditions and deficiencies.
SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS
For the exceptions enumerated above, the Auditor recommended that the
University President direct the Accountant to conduct in-depth review/analysis of the
accounts with abnormal/negative balances and effect the necessary adjustments thereon.
It was also recommended that the University President require the Accountant and the
Cashier to exert more efforts in reconciling their records, to be able to come up with the
correct balances of the Cash in Bank - Local Currency, Current Account and
Cash - Collecting Officer accounts. The Inventory Committee should complete the
physical count of properties and prepare the required Report on the Physical Count of
PPE accounts, while the Accountant should update the ledger cards and reconcile the
same with the records of the Supply Officer as required under the Manual on the New
Government Accounting System (MNGAS), Volume I.
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Moreover, require the Accounting Unit to cancel the stale checks and prepare the
necessary adjusting entries to correct the balance of the affected accounts. Lastly, we
recommended that the Dean of Naic Campus direct the Accountant to prepare and
maintain separate set of books and generate Trial Balances, financial statements and other
reports for the General Fund, Special Trust Fund and Income Generating Projects as
required under pertinent provisions of Section 3 of COA Circular No. 2000-002 and the
Manual of Operation for IGP.
The following are the other significant findings and recommendations:
1. The contracts on eight infrastructure projects with an aggregate cost of
P66,302,879.21 were not submitted within (5) days after their perfection, in violation
of Section 3.1.1 of COA Circular No. 2009-001. Moreover, the related claims thereto
were paid in spite of some lacking required documents provided for under Section 3.1
of COA Circular No. 2009-001, thus a timely review and evaluation of the said
contracts and inspection of the projects were not made possible to ascertain that
projects were implemented in accordance with the plans and specifications.
We recommended that the named responsible University officials in the Notices of
Suspension issued effect the immediate settlement thereof, and ensure compliance
with the provisions of COA Circular No. 2009-001 insofar as contracts, Purchase
Orders and the like are concerned.
2. Funds for Research Program, Student Grant-in-Aid Program for Poverty Alleviation
and Implementation of Infrastructure Projects and Facilities Upgrading for Leading
SUCs amounting to P46,541,880.00 received from the Commission on Higher
Education (CHED) from its Disbursement Acceleration Program (DAP) were not
fully utilized as of December 31, 2014, and such unutilized amount of
P12,840,832.34 was not returned to the CHED, thereby violating COA Circular No.
94-013 dated December 13, 1994 and Supreme Court Decision dated July 1, 2014.
We recommended that the Chief Administrative Officer - Accountant strictly comply
with the provision of COA Circular No. 94-013 and immediately return the unutilized
DAP funds in the amount of P12,840,832.34 to the CHED.
3. Expenditure for cultural activity amounting to P1,744,700.00 was paid as cash
allowance to Job Order (JO) personnel and part-time instructors charged against
Special Trust Fund (Fund 164), contrary to Item 2.2 of COA Circular No. 2000-002
dated April 4, 2000, thereby resulting in audit disallowance of the same amount.
We recommended that the University officials strictly adhere to the provision
embodied in COA Circular No. 2000-002 and refund the payment for cultural activity
in the form of cash allowance.
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4. Hiring of legal consultant was without prior approval of the Office of the Solicitor
General (OSG) and written concurrence of Commission on Audit (COA), contrary to
COA Circular No. 95-11, thereby resulting to unauthorized disbursement of
government funds.
We recommended that the University President:
a. secure first the written conformity and acquiescence of the Solicitor General
as well as the written concurrence of the Commission on Audit before hiring a
legal consultant;
b. see to it that the first page of the contract bears the signatures of the
contracting parties; and
c. require the persons liable thereto to refund the full amount of consultancy fee
totaling P180,000.00.
These observations and recommendations, together with the details as contained in
the report, were discussed with the University President, Vice Presidents, Deans, and
other officials referred to in the Audit Observations during the exit conference.
Management’s comments were incorporated in the report, where appropriate.
SUMMARY OF TOTAL SUSPENSIONS, DISALLOWANCES AND CHARGES
The consolidated Status of Audit Suspensions, Disallowances and Charges
(SASDC) is summarized below:
Campus
Main
Naic
Rosario
Total
Balance
12/31/2013
P 743,174.58
0.00
0.00
P 743,174.58
Suspension
Disallowances
P10,952,111.03
1,558,326.00
2,168,750.01
P14,679,187.04
P62,717,931.14
5,842,954.38
7,416,026.61
P75,976,912.13
STATUS
OF
IMPLEMENTATION
RECOMMENDATIONS
OF
Charges
P 0.00
0.00
0.00
P 0.00
Settled
P117,781.74
0.00
0.00
P117,781.74
PRIOR
Balance
12/31/2014
P74,295,435.01
7,401,280.38
9,584,776.62
P91,281,492.01
YEARS’
AUDIT
Of the 39 audit recommendations contained in the 2013 Annual Audit Report, two
were fully implemented, 13 were partially implemented and 24 were not implemented.
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