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).
The University is now under a new management headed by Dr. Divinia C. Chavez who
was appointed as the new University President on August 1, 2008 under BOR Resolution
No. 62 s. 2008. She is 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. Lorna L. Penales
Dr. Hernando D. Robles
Dr. Josefina R. Rint
Dr. Luzviminda A. Rodrin
Dr. Cristina F. Olo
Dr. Cristeta M. Montano
Dr. Lorenzo A. Lapitan
Dr. Cecilia F. Genuino
Mr. Gilchor Cubillo
Dr. Ma. Corazon Y. Mercado
Dr. Reynaldo E. Samonte
Dr. Julio G. Alava
Mr. Henry O. Garcia
The University has a total manpower complement of 1,127 personnel, composed
of 360 regular and 767 contractual, temporary, fulltime and part-time faculty and
employees.
FINANCIAL HIGHLIGHTS
The financial position of the university for CY 2010 compared with that of the
preceding year is shown below:
2010
Assets
P
Liabilities
Gov’t. Equity
Income
Expenses
867,723,365 P
93,522,058
774,201,307
613,105,508
571,985,886
2009
842,836,342 P
90,821,731
752,014,611
532,769,732
473,812,142
% of Increase/
Increase
(Decrease)
(Decrease)
24,887,023
2.95%
2,700,327
2.97%
22,186,696
2.95%
80,335,776
15.08%
98,173,744
20.72%
For the year 2010, CvSU had a total budget of P256,772,869. Actual allotment
released to the university in accordance with Republic Act No. 9498 or the General
Appropriations Act of 2010 totaled P242,574,395 while expenditures amounted to
P221,431,057.
Total Income of P613,105,508 from internal and external sources were also
received and managed by the university. The same amount 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 Campus and the Naic and Rosario Campuses for the calendar year
ended December 31, 2010. The objective of the audit was to ascertain the fairness of
presentation of the financial statements of the University and the two campuses. We
conducted our audit in accordance with generally accepted auditing standards. These
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 a qualified opinion on the fairness of presentation of the
agency’s financial statements due to the failure of the Agency to record the difference
between the Accounting and Supply records amounting to P69,458,015.18 and of the
Accountant to provide depreciation for these assets for the year 2010.
The consolidated balance of the Cash in Bank account as of December 31, 2010
of Rosario Campus was unreliable and inaccurate due to the discrepancies between the
books and bank balances amounting to P60,040,678.77 and P63,315,734.05,
respectively, and no bank reconciliation statements were prepared for each of the three
funds of the agency in violation of Section 74 of Presidential Decree 1445.
SUMMARY OF SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS
For the exceptions cited above, we recommended that the University President
require the Accountant and the Supply Officer to immediately verify the
discrepancies on the Property, Plant and Equipment account and make the necessary
reconciliations and adjustments. We also recommended that the University
President instruct the Accountant to compute for the depreciation of the Property,
Plant and Equipment so as to present fairly the balances of the University’s PPE and
accumulated depreciation accounts on the financial statements. We again
recommended that the Head of the School direct the Accountant to prepare the Bank
Reconciliation Statements for the three funds and effect the necessary adjustments to
the Cash in Bank account to be able to come up with its correct account balances.
Below are the other significant observations and the corresponding recommendations:
1. The Accountant failed to revert to Cash in Bank – Local Currency, Current Account
(LCC) stale checks totaling P6,475,577.61 which remained outstanding for more than
five years, in violation of Section 52 of the Manual on the New Government
Accounting System (NGAS) and thereby understating said account by the same
amount.
We recommended that the University President require the University Accountant
to revert all stale checks to the Cash in Bank – LCC account by the following Journal
Entries:
Cash in Bank-Local Currency, Current Account (111) 6,457,577.61
Prior Years Adjustment
6,457,577.61
2. Three of the 20 units Olympia Manual Typewriter at CvSU-Silang Campus with
serial nos. 7120428, 7277649 and 6626947 and three Steel Filing Cabinets and two
Steel Bookshelves were missing, in violation of Section 494 of the Government
Accounting and Auditing Manual (GAAM), Volume 1, thus, existence could not be
established.
We recommended that the Dean – Silang Campus direct the property custodian to
exert more effort to locate the three missing typewriters, the three filing cabinets and
the two steel bookshelves and act accordingly on the results of this undertaking.
3. The acquired 20 units typewriters worth P325,240.00 were stored and still unused
since delivery on March 23, 2010 up to audit date, delivery of an ordinary counter
instead of a bar counter and one unit Commercial Coffee Roaster Machine (PROBAT
PROBATONE 12 TYP 1 P SSH PC), with a capacity of 48 kgs/hour with batch size
of 5-12 kgs. of green coffee. LPG fueled. Equipped with PC control pilot roaster
shop software, with a voltage of 230 VAC, 3 Phase, Frequency 60 Hz is not yet
installed despite the fact that this was delivered and received on January 13, 2010,
thereby, defeating the purpose for which they were purchased and subjecting
government funds to probable waste.
We recommended that the Dean – Silang Campus find ways to make use of the
typewriters purchased otherwise, responsible officers of the agency would answer for
the said procurement and instruct the Supply and Property Officer not to accept items
which do not conform with the items stated in the Purchase Request and Purchase
Order. Also, require the supplier to pay the liquidated damages of P741.00 for the
delayed delivery.
We recommended that the University President require the personnel concern to
prioritize the installation of the ground so that the machine can now be installed by
the dealer and serve its purpose.
4. The amount of P114,710.90 representing payment of administrative cost for 2nd
semester of School Year 2009-2010 and the amount of P28,160.05 representing
reimbursement for Traveling Expenses Voucher (TEV) during University Intrams
2009 were not supported with proper documentation, contrary to Section 4(6) of
Presidential Decree No. 1445 thus, casting doubt on the propriety of the
disbursements.
We recommended that the University Accountant submit legal basis and the
detailed computation of the administrative cost and the supporting documents for the
TEV in order to determine the legality of the said transactions.
5. Collections by Silang Campus were not remitted intact and regularly as required
under Section 21 of the New Government Accounting System (NGAS) Manual, thus
collections were utilized for payments of some Maintenance and Other Operating
Expenses (MOOE) of the campus and exposing the funds to possible loss and/ or
misuse.
We recommended that the Silang Campus Dean and the Head of CvSU-Trece
Martires City see that all collections received by the deputized and designated
collecting officers are remitted to the Cashier of the Main Campus/deposited intact
with authorized depository bank daily or not later than the next banking day as
required under Section 21 of the NGAS Manual to protect government funds from
possible loss or misuse.
Silang Campus Dean stated that they will comply with the recommendations.
6. The Deputized Collecting Officer – Silang Campus was not bonded as required
under Section 7 of COA Circular No. 97-002 dated February 10, 1997 and Treasury
Circular No. 02-2009 dated August 6, 2009.
We recommended that the Campus Dean see that the deputized collecting officer
is adequately bonded to cover the maximum cash accountabilities.
7. Disbursements totaling P16,811.00 were paid out of the AREC Fund, although not
used for the purpose stated in the line item budget, in violation of Section 3.1. (a)
and 3.2 (d) of the Memorandum of Agreement (MOA) between the Department of
Energy (DOE) and Cavite State University (CvSU).
We recommended that the University Accountant make the necessary adjusting
entries to effect replenishment on AREC funds in the amount of P16,811.00 and stop
the practice of charging the expenses for activities not related to the said fund.
8. The cashbooks for the check disbursements for all funds of the Main Campus have no
running balance while the accountable officer does not use the cashbook to record the
collections and deposits of the Cavite City Campus, in violation of Section 181 of the
Government Accounting and Auditing Manual (GAAM) Volume I, and is not up to
date in the preparation of the Report of Accountability for Accountable Forms
(RAAF), in violation of Section 68 of the NGAS Manual, thus accountability for
cash and accountable forms for a certain date could not be determined.
We recommended that the University Cashier record in the cashbook the cash
allotment for the PS and the MOOE and the deposits of collections for the Trust –
Income and Trust Miscellaneous of the Main Campus and all the other campuses.
Also, use separate cashbooks for PS and MOOE. We recommended also that the
Accountable Officer use a cashbook for the Cavite City Campus to record all the
collections and deposits to determine the accountabilities for the day. Reconcile both
the records of the Cashier and the Accountant and prepare the Report of
Accountability for Accountable Forms at the end of each month.
9. Non-expendable properties purchased out of AREC Funds were not marked as DOE
properties, in violation of Section IV of the Memorandum of Agreement between the
DOE and CvSU.
We recommended that the Supply Officer mark on the property purchased by
CvSU out of AREC fund, the words “DOE Property” to separate them from the
property of the University.
10. The agency was not aggressive in implementing the programs/activities/projects of
the GAD, resulting in the under implementation of the GAD plans and budget, thus
depriving the intended beneficiaries of the benefits that may be derived therefrom
while the Rosario Campus failed to develop Gender and Development (GAD) Plan
and to allocate at least five percent (5%) of its total appropriation for GAD activities
in violation of DBM, NEDA and NCRFW Joint Circular No. 2001-1 dated August
15, 2001.
We recommended that the University President implement all the planned
programs/activities/projects of the GAD and that GAD Focal Point do her part of
monitoring its implementation.
We recommended that the Rosario Campus Dean implement a GAD Plan and
include and/or allocate not less than five percent (5%) of the agency’s total budget/
appropriation for its implementation pursuant to the aforementioned provisions of
DBM, NEDA and NCRFW Joint Circular.
11. Cash advances granted to various officials and employees of the University totalling
P10,981,775.28 remained unliquidated as of year end, contrary to the provisions of
COA Circular No. 97-002 and Section 179 (h) of the Government Accounting and
Auditing Manual (GAAM), Volume I, thus exposing the funds to possible loss and/or
misuse.
We recommended that the University Accountant a) compel concerned
personnel to immediately liquidate their cash advances; b) require those with unused
cash advances to refund to the Cashier; and c) comply strictly with the rules and
regulations on cash advances.
12. Trial Balances and other accounting reports were not submitted promptly in violation
of Section 57 of the Manual on New Government Accounting System (NGAS),
Volume I.
We recommended that the University President require the Accountants of the
Main Campus, Rosario and Naic Campuses to prepare and submit promptly the
required reports in accordance with existing rules and regulations, to facilitate the
audit of related accounts and the preparation and presentation of accurate and reliable
financial reports.
13. The Accountable Officer handling petty cash fund failed to maintain a Cash
Disbursement Record (CDR) for his transactions contrary to Section 40 of the Manual
on the New Government Accounting System (NGAS), Volume 1, for national
government agencies thus, hindering the verification of his accountability at any
given time.
We recommended that the Petty Cash Custodian maintain a Cash Disbursement
Record as required in Section 40 of the Manual on NGAS, Volume 1, to facilitate the
verification of his accountability at any given time and correction of errors, if any.
14. The amount of P281,901.77 was obligated at year-end even without actual claimant
and valid claim contrary to Section 14 of the Manual on the New Government
Accounting System (NGAS) purposely to avoid the reversion of the same to the
Commission on Higher Education (CHED).
We recommended that the Dean – Naic Campus fully justify the non-reversion to
CHED-NAFES of the unutilized portion of the financial assistance amounting to
P281,901.77 at year-end despite the express provision to return the unspent balance of
the fund releases to CHED upon termination of the projects.
15. Two (2) Job Order employees of Cavite State University – Naic Campus (CvSU-Naic
Campus) were allowed to collect tuition and other fees in violation of the applicable
policy on Cash Management, Section 66 of the Government Accounting and Auditing
Manual (GAAM) Volume 1 and Section 101 of P.D. 1445 thereby exposing
government funds to undue risk of loss or misuse.
We recommended that the Dean – Naic Campus stop the practice of allowing Job
Order employees to collect tuition and other fees and sign ORs to acknowledge
receipt therefor and instead assign regular/permanent employees for the job.
STATUS
OF
IMPLEMENTATION
RECOMMENDATIONS
OF
PRIOR
YEARS’
AUDIT
Of the 20 audit recommendations contained in the 2009 Annual Audit Report, 13
were implemented, six were partially implemented and one remained unimplemented.