EXECUTIVE SUMMARY
INTRODUCTION
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 R. A. 3917 creating it as a state agricultural
college. On January 22, 1998 it was converted into a state university by virtue of R.A.
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 Cavite State University (CvSU) is governed by the Board of Regents (BOR).
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
Dean, Carmona Campus
Dean, Cavite City Campus
Dean, Naic Campus
Dean, Rosario Campus
Dean, Imus Campus
Dean, Trece Martires City Campus
Dean, Tanza Campus
Dean, Silang Campus
Dean, Bacoor Campus
Dr. Ma. Agnes P. Nuestro
Dr. Hernando D. Robles
Dr. Alejandro C. Mojica
Dr. Luzviminda A. Rodrin
Dr. Cristina F. Olo
Dr. Lilibeth P. Novicio
Dr. Beng P. Umali
Dr. Camilo S. Polinga
Mr. Gilchor Cubillo
Dr. Cristina M. Signo
Dr. Dinah L. Espineli
Dr. Julio G. Alava
Mr. Henry O. Garcia
The University has a total manpower complement of 1,480 personnel, composed
of 390 regular and 1,090 contractual, temporary, fulltime and part-time faculty and
employees.
FINANCIAL HIGHLIGHTS
The total assets. liabilities, government equity, income and expenses for CY 2013
compared with that of the preceding year are as follows :
2013
Assets
P
Liabilities
Equity
Income
Expenses
Excess of Income Over
Expenses
2012
1,137,143,826 P
170,200,704
966,943,122
876,842,535
839,756,454
37,086,081
998,731,941 P
127,235,698
871,496,243
802,575,060
758,155,944
44,419,116
Increase
(Decrease)
138,411,885
42,965,006
95,446,879
74,267,475
81,600,510
(7,333,035)
For the year 2013, CvSU had a total budget of P303,883,998.00 Actual allotment
released to the University in accordance with Republic Act No. 10552 or the General
Appropriations Act of 2013 totaled P280,392,000.00 while expenditures amounted to
P303,875,114.39.
Total Income of P511,637,922.02, from internal and external sources were also
received and managed by the University. A total of P492,144,424.38 was budgeted and
approved for utilization of income by the Board of Regents as of the end of the year.
SCOPE OF AUDIT
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, 2013. 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.
AUDIT OPINION ON THE FINANCIAL STATEMENTS
The Auditor rendered qualified opinion on the fairness of presentation of the
Agency’s financial statements.
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SUMMARY OF SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS
Below are the significant findings and the corresponding recommendations:
1.
Unserviceable properties totaling P20,092,574.50 were not disposed of and were still
included in the book of accounts of the University, thus overstating the PPE account,
Accumulated Depreciation and expense accounts as of December 31, 2013 and
storage problem of the Agency and such could result in the further reduction of the
value of the properties and caused storage problem to the Agency.
We recommended that the University Accountant reclassify the unserviceable
property to Other Asset account in accordance with Section 43 of the Manual on the
New Government Accounting System (NGAS) while awaiting disposal; and
We also recommended immediate disposal of unserviceable properties in accordance
with Section 79 of PD 1445 to avoid further deterioration of the subject properties
and address the problem on storage.
2.
Payment of Collective Negotiation Agreement (CNA) in the amount of
P27,719,438.57 charged against Special Trust Fund, Trust Miscellaneous Fund and
Department of Agriculture, Agricultural Competitiveness Enhancement Fund (DAACEF) of the University is contrary to Section 4.3 of PD 1445 and Section 7.1 of
DBM Budget Circular No. 2006-1, hence, was disallowed in audit.
We recommended that the Management strictly comply with the laws, rules and
regulations covering the use of trust funds and require the persons liable as identified
in the ND to refund the disallowed claim.
3.
Payment of Calamity Relief Assistance (CRA) in the amount of P21,871,850.00
given to permanent, and contractual employees charged against Special Trust Fund,
Department of Agriculture, Agricultural Competitiveness Enhancement Fund (DAACEF) and Income Generating Fund (IGP) was disallowed in audit for being
contrary to Section 4.3 of PD 1445 and Section 12 of Republic Act (RA) No. 6758.
We recommended that the management strictly comply with the laws, rules and
regulations covering the use of trust funds and refund the payment of CRA.
4.
Payment of Economic Financial Assistance (EFA) in the amount of P21,447,499.83
given to permanent, and contractual employees charged against General Fund, Trust
Miscellaneous, Special Trust Fund, Department of Agriculture, Agricultural
Competitiveness Enhancement Fund (DA-ACEF) and Income Generating Fund
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(IGP) was disallowed in audit for being contrary to Section 12 of Republic Act (RA)
No. 6758 and Section 4.3 of PD 1445.
We recommended that the management strictly comply with provision of Section 12
of RA No. 6758 and Section 4.3 of PD 1445 and refund the payment of EFA.
5.
Trust receipts due to BIR and GSIS totaling P11,698,835.61 were not remitted to
the concerned agencies within the prescribed period contrary to Section 9 (c) of BIR
Regulation No. 6-97, and Section 3.4 of RA 8291, respectively, thus resulting to
possible interest/penalty for late payments, deprivation of employees’
benefits/privileges and/or misuse of the funds.
We recommended that the Accountant properly monitor remittances of trust receipts
and immediately remit the same on or before their due dates. Any penalty arising
from the delay shall be the personal liability of the official concerned.
6.
Payment of fixed honoraria in the amount of P1,872,559.86 given to the Directors
of the University is contrary to Section 44 of the General Provision of the GAA for
CY 2013, thereby resulting in audit disallowance of the same amount.
We recommended that the management strictly comply with the provisions of
Section 44 of the General Provision of the GAA for CY 2013 and require the
persons liable as identified in the ND to refund the disallowed claim.
7. Payment of additional per diem given to the Board of Regents (BOR) in the amount
of P70,400.00 out of Special Trust Fund (STF) is contrary to Section 4.2 and Section
5.1 of Budget Circular No. 2003-6 dated September 29, 2003, hence was disallowed
in audit.
We recommended that management strictly follow the provisions of Section 4.2.1
and 5.1 of Budget Circular No. 2003-6 dated September 29, 2003 and require the
BOR to refund the disallowed amount.
8. Payment of Birthday Incentive in the aggregate amount of P697,000.00 given to
permanent and contractual employees of the University Main and its campuses
charged against General Fund (Fund 101) of the University is contrary to Section 12
of Republic Act No. 6758, thereby resulting in audit disallowance of the same
amount.
We recommended that the management strictly comply with the provisions of RA
6758 and refund the payment of Birthday Incentive.
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9.
Purchases of office supplies of CvSU-Main, Naic and Rosario Campus amounting
to P9,620,085.05 were charged/recorded directly to expense contrary to Section 4,
43, 47 and 287 of the New Government Accounting System (NGAS) Manual.
We recommended that the Accountant of Main Campus and other named Campuses
observe the perpetual inventory method of accounting for the procurement and
issuance of supplies and materials as required under NGAS Manual.
10.
Payment of fixed Transportation Allowance (TA) in the amount of P564,000.00 to
the President and Vice Presidents of the University Main Campus and P60,000.00
to the Former Dean of Naic Campus is contrary to Section 45 of RA 10352 or the
General Appropriations Act of Fiscal Year 2013, thereby resulted in audit
disallowance of the same amount.
We recommended that the Management strictly comply with the provision of
Section 45 of RA 10352 and refund the payment of Fixed TA.
11.
Submission of disbursement vouchers, payrolls, official receipts, bank
reconciliation statements and other financial reports of CvSU-Main, Naic and
Rosario Campus were delayed by 22 days to 66 days based on the deadline set
under COA Circular Nos. 2009-006 dated September 15, 2009 and 92-125A dated
March 4, 1992, thus inhibiting the prompt review/verification of the accounts and
reporting of the results thereof.
We recommended that the Head of the Agency ensure that:
•
the Cashier expedite the processing of financial transactions and reports
and effect the timely submission of the same to the Chief Accountant for
recording; and
•
The Chief Accountant strictly comply with the reglementary periods to
submit the financial reports to the Office of the Auditor.
12.
Prior Year’s expenses of P368,154.87 were taken up as expenses of the current year
in violation of Section 4(1) and 119 of Presidential Decree No. 1445.
We recommended that the Accounting Office record expenses within the principle of
accrual accounting in order to prepare and present fairly the financial statements.
Also, make certain that expenses are covered by adequate appropriation before or
incurred in strict compliance with Section 119 of PD 1445.
13.
Acknowledgement Receipt for Equipment (ARE) of CVSU-Main, Naic and Rosario
Campus were not renewed every January of the third year after issue in violation of
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Section 492 of GAAM, Volume I thus accountability of government property was
not monitored.
We recommended that the Supply Officer cause the renewal of the Memorandum
Receipts/Acknowledgement Receipt for Equipment (AREs) pursuant to Section 492,
GAAM Volume I and to exert more effort and sacrifice to work overtime to
accomplish the AREs as required considering the importance of these documents in
tracing equipment of the University to its employees.
14.
The CvSU Main, Naic and Rosario Campus failed to submit Monthly Report of
Fuel Consumption and Report of Official Travels as provided for under COA
Circular No. 77-61 dated September 26, 1977, thus reasonableness of fuel
consumption of each month could not be readily determined.
We recommended the submission of Monthly Report of Fuel Consumption and the
Report of Official Travel, as required in COA Circular No. 77-61 dated September
16, 1977.
15. Copies of contracts, purchase orders and its supporting documents of CVSU-Main,
Naic and Rosario Campus were not furnished the COA Auditor within five (5) days
from execution in violation of COA Circular No. 2009-001 dated February 12, 2009,
hence, timely evaluation and review thereof were not made.
We recommended that the Supply Officer submit copy of contracts/purchase orders
and all documents forming part thereof by reference or incorporation within five (5)
days from the execution/issuance thereof.
Likewise, notify the Audit Team of the time and place of the scheduled deliveries of
procured items within twenty-four (24) hours pursuant to the provisions of COA
Circular No. 2009-001.
16. Purchase Orders were not properly accomplished contrary to the format prescribed
in Handbook on Property and Supply Management and Appendix 52 of the Manual
on the New Government Accounting System (NGAS) Volume II thus, propriety of
the transaction could not be determined.
We recommended that Management require personnel/officials responsible for the
preparation and issuance of purchase orders/contracts to properly accomplish all the
required data/information in the Purchase Order in order to effectively serve as a
basis for enforcement of the terms and conditions contained therein.
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17. The reliability, accuracy and existence of the balance of Plant, Property and
Equipment (PPE) accounts of CvSU Naic and Rosario Campus amounting to
P10,053,981.98 and P67,615,044.17, respectively, could not be ascertained due to the
failure of both Campus to conduct physical count of all properties, prepare and
submit the required Report on the Physical Count of Property, Plant and Equipment
(RPCPPE). Furthermore, no disposal of unserviceable properties was made by
Rosario Campus.
We recommended that the Campus Dean of Naic Campus create an inventory team
which could exert extra effort to conduct on a yearly basis an actual inventory-taking
of all properties in order to validate their existence. Similarly, prepare and submit an
inventory report not later than January 31 of each year.
Likewise, we recommended that the Campus Dean of Rosario Campus cause the
following courses of action:
1. Direct the Inventory Committee to prioritize the conduct of inventory taking and
prepare Report of Physical Count of Property, Plant and Equipment (RPCPPE);
2. Direct the Property and Supply Officer to prepare the Inventory and Inspection
Report of Unserviceable Property (IIRUP) and submit the same to the Accountant
to reclassify the unserviceable properties as Other Asset.
3. Direct the Property and Supply Officer to immediately dispose unserviceable
properties in accordance with Section 79 of PD 1445.
18. The correctness and accuracy of the Cash-in-Bank-Local Currency, Current Account
balance of P32,663,651.40 as of December 31, 2013 of CvSU Naic Campus could
not be ascertained due to the non-preparation of Bank Reconciliation Statements
(BRS) from July 2005 to December 31, 2013, contrary to Section 74 of PD 1445,
otherwise known as “State Auditing Code of the Philippines”.
We recommended that the Accountant immediately prepare and update the
submission of bank reconciliation statements for all funds to facilitate determination
of the accuracy of the cash balance per books and per bank.
19. The Accounts Receivable account was not maintained in the books of the CvSU –
Naic Campus to take up uncollected tuition fees in violation of COA Circular No.
2004-002 dated September 30, 2004 resulting in understatement of Accounts
Receivable and Income accounts amounting to P3,098,082.00.
We recommended that the Accountant adjust the records to reflect the Account
Receivable and Income accounts arising from uncollected tuition fees.
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We also recommended that the Management adhere to the provisions of COA
Circular Letter No. 2004-002 in the recording of income from tuition fees in the
ensuing years.
20. Office supplies of CvSU-Rosario in the amount of P403,603.17 have been worn-out,
expired, or remained unutilized due to absence of specific recipients, non
monitoring and control on utilization and distribution and maintaining inventory of
more than three months requirement.
We recommended that the Supply Officer:
a) prioritize the distribution of old stock office supplies before the approval of new
Purchase Requests:
b) observe the normal three-month requirements in their purchase of office supplies
in accordance with Section 428 of the GAAM, Volume I; and
c) coordinate and plan the timing of procurement taking into consideration the need
and expiration of the supplies.
21. The amount of fidelity bond of the Cashier, Rosario-Campus was not adequate
compared to her cash accountability, contrary to the requirement stipulated under
Item 5.1 of the Revised Schedule of Premium Rates of Treasury Circular No. 022009 dated August 6, 2009, thereby, the government funds under her custody were
not properly safeguarded against loss due to unforeseen events or theft/robbery.
We recommended that the OIC-Accountant review the cash accountabilities of the
Cashier and correspondingly apply for an appropriate amount of fidelity bond for
her.
22. The Management of Naic and Rosario Campus were not able to implement all the
programs/activities/projects indicated in the GAD in violation of Section 4.6 of the
Joint Circular No. 2004-1, thus depriving the intended beneficiaries of the benefits
that may be derived therefrom.
We recommended that the Campus Deans ensure that all GAD programs/activities
are implemented and that GAD Focal Person monitor full implementation thereof.
23. Cash advances for scholarship grant under Priority Development Assistance Fund
(PDAF) totaling P10,225,500.00 were recorded under the account “Cash Disbursing
Officer” instead of “Advances to Officers and Employees”, contrary to Accounting
Circular No. 2006-001.
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We recommended that Management require the Accountant to comply strictly with
Accounting Circular No. 2006-001 in recording cash advances for scholarship
grants.
STATUS
OF
IMPLEMENTATION
RECOMMENDATIONS
OF
PRIOR
YEAR’S
AUDIT
Of the 12 audit recommendations contained in the 2012 Annual Audit Report 2
were partially implemented and 10 were not implemented.
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