EXECUTIVE SUMMARY
A. INTRODUCTION
The Bohol Island State University (BISU), formerly known as the Central Visayas
State College of Agriculture, Forestry and Technology (CVSCAFT), is composed of the
Main Campus which is located in Tagbilaran City and five (5) satellite campuses located
in the Municipalities of Balilihan, Bilar, Calape, Candijay and Clarin, all in the Province
of Bohol.
Organizational Set-Up
The governing body of the University is vested in the Board of Regents composed
of the following: The CHED Commissioner as Chairperson; BISU SUC President, ViceChairperson and the Members are: Chairperson of the Committee on Education, Arts and
Culture of the Senate; Chairperson of the Committee on Higher and Technical Education
of the House of Representatives; NEDA-7 and DA-7 Regional Directors; Presidents of
BISU Faculty Association, Alumni Association and Student Supreme Government; and
two (2) Private Sector Representatives in the fields of specialization of the university.
B. FINANCIAL AND OPERATIONAL HIGHLIGHTS
The comparative analysis on the financial profile of the Bohol Island State
University for the Calendar Years 2014 and 2013 is presented in graphical form as
follows:
Allotment/Income and Expenditure
1,000,000,000.00
800,000,000.00
600,000,000.00
400,000,000.00
200,000,000.00
0.00
Allotment
Income
Expenditure
2014
Allotment
347,105,000.00
Income
815,647,392.49
Expenditure
629,572,878.86
2013
184,674,000.00
561,954,833.29
473,368,090.95
2014
2013
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Financial Position
1,000,000,000.00
800,000,000.00
600,000,000.00
400,000,000.00
200,000,000.00
-
Assets
Liabilities
2014 849,432,236.58
132,753,843.19
Government
Equity
716,678,393.39
2013 672,176,835.47
130,752,657.33
541,424,178.14
2014
2013
The Academic Year 2014 has been a productive year for the Bohol Island State
University. In addition to its long list of notable achievements and awards in the past
years, BISU has produced board/licensure examination passers with remarkable passing
percentages which surpassed the national passing percentage of board examination results
in Mechanical Engineering, Electrical Engineering, Architecture, Master Electrician,
Bachelor in Elementary Education and Bachelor of Secondary Education. The University
has consistently maintained its status as a top performing school in the Philippines in CY
2014. Again, the University’s exceptional and commendable performance could be
attributed to its highly competent faculty as manifested in doctoral degrees earned and
seminars and trainings attended as well as Management’s concerted efforts in bringing
about quality education through its comprehensive and updated curricular and cocurricular offerings to its student clientele.
C. SCOPE OF AUDIT
The audit was conducted on the accounts and operations of the Bohol Island State
University for the calendar year ended December 31, 2014. The audit was aimed at
ascertaining the propriety and reliability of the financial transactions, the completeness
and adequacy of the books of accounts, the correctness of accounting procedures and the
University’s compliance with DBM, COA, CHED, GSIS and BIR rules and regulations
as well as value for money in the execution of its operations.
D. INDEPENDENT AUDITOR’S REPORT
The Auditor rendered a qualified opinion on the presentation of the financial
statements of the Bohol Island State University because of the following conditions as
discussed in detail in Part II of this Report:
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1. Non-settlement within the year granted of cash advances to various officials
and employees totaling P4,005,476.84 might have resulted to the
understatement of various expense accounts and overstatement of government
equity.
2. The accuracy of the book balance of the Cash-in-Bank account totaling
P48,401,697.76 could not be ascertained due to failure of the accounting unit
to prepare the Bank Reconciliation Statements.
3. The reliability of the Accounts Receivable of P14,493,943.31 could not be
ascertained due to a) the variance between the accounting and assessment
records; b) non-adoption of the accrual basis of accounting for income, thus
affecting the fair presentation of the account in the financial statements.
4. The correctness of the balances of the Inventories and the Property, Plant and
Equipment accounts totaling P16,332,791.34 and P280,146,577.40
respectively could not be established due to the absence of the physical
inventory taking for a number of years; b) failure to maintain Supplies and
PPE Ledger Cards and c) non-reconciliation of the PPE account balances
between the general ledger and the Inventory Report of Properties.
5. The validity of Other Payable Account in the Special Trust Fund amounting to
P14,688,318.57 is not assured because it was not supported with the list of
creditors.
Also considered are the following conditions which were enumerated in the CY
2013 Annual Audit Report and which remained unattended as of December 31, 2014:
1. Undocumented Accounts Payable of Candijay Campus totaling P20,923.25
and P97,011.52 in the General Fund and Special Trust Fund respectively for
more than two years were not reverted to Government Equity.
2. Refunds totaling P200,600.00 arising from an audit disallowance in the
Special Trust Fund of the Main Campus were recorded as Accounts Payable.
We recommended its recording as prior years’ adjustment account but no
correction was effected.
E. SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS
The following are the summary of other significant observations and
recommendations in the audit and/or evaluation of the operations of the BISU for CY
2014. The audit observations are fully discussed in Part II of this Report:
1. Payment of honoraria amounting to P1,483,179.40 by Clarin, Candijay and
Bilar Campuses, for the conduct of various special projects and activities,
were given to the schools’ officials and staff without adhering to the
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guidelines on the grant of honoraria in special projects and as management
costs of administrative/accounting staff who appeared not directly involved
with the project, is irregular and violates the provisions of Budget Circular
Nos. 2007-1 and 2007-2 dated April 23, 2007 and October 1, 2007
respectively; Section 53 of the General Provisions of Republic Act No. 10633
and COA Circular No. 2012-001 dated June 14, 2012.
We recommend that the Management of Clarin, Candijay and Bilar Campuses
to:
a. Submit documents enumerated in Section 4.3 of Budget Circular No.
2007-2 and COA Circular 2012-001 dated June 14, 2012 to establish the
validity of the claim and limit the grant of honoraria in accordance with
Section 4.4 of the same budget circular.
b. Require the administrative personnel concerned to refund the amount so
received without legal basis, pursuant to Republic Act No. 10633 or the
General Appropriations Act for Fiscal Year 2014 and DBM Budget
Circular 2007-1 dated April 23, 2007 and the refund of the Campus
Director of Candijay Campus for the amount of honoraria in excess of the
25% ceiling.
c. Revisit the provisions of the Department of Budget and Management
Circular No. 2007-1 with regards to the computation of honorarium of
lecturers or instructors involved in the implementation of TESDATraining for Work Scholarship Program (TWSP).
d. Require the involved instructors/professors to submit their teaching load/
schedule to substantiate the number of teaching hours done during
weekdays that these are in fact in excess of their teaching load.
e. Obtain an approved Sharing Scheme from the Governing Boards of the
University.
2. Payment of Collective Negotiation Agreement Incentives and the grant of
additional per diem to the Board of Regents/Trustees amounting to
P250,000.00 and P78,575.00 respectively violated the existing provisions of
Republic Act No. 8282 and Budget Circular No. 2003-6 dated September 29,
2003.
We recommend that the Management to:
a. Request the members of the Board of Regents/Trustees who received the
unauthorized CNA benefits to refund the same.
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b. Stop paying additional per diems to the chairperson and members of the
BOT in excess of the ceiling provided for in Republic Act No. 6758 and
Budget Circular No. 2003-6 dated September 29, 2003.
3. Deficiencies found in the payment of salary differentials to some school
officials and teaching personnel of Clarin, Balilihan and Calape Campuses
amounting to P1,035,509.88 were as follows: a) charging the amount against
the non-fiduciary income under the Special Trust Fund (STF) in violation of
Section 2.1.4 of COA Circular No. 2000-002 and CHED Memorandum Order
No. 20, series of 2011; b) non-deduction of withholding taxes contrary to
Revenue Regulation No. 2-98 dated April 17, 1998 and c) incomplete
documentation contrary to Section 4(6 ) of P.D. 1445 and COA Circular No.
2012-001 dated June 14, 2012.
We recommend that the Management of Clarin, Balilihan and Calape
Campuses to:
a. Strictly adhere to the provisions of COA Circular No. 2000-002 and
CHED Memorandum Order and charge all salaries of school officials and
teaching personnel to the General Fund.
b. Direct the respective Bookkeepers to withhold taxes on all compensation
received by government officials.
c. Submit the required supporting documents to validate the claim for salary
increase.
4. Consolidated Statement of Financial Position of Bohol Island State University
(BISU) did not tally with the individual Statement of Financial Position
submitted by the six external campuses with a net difference of P492,340.11,
thereby rendering some accounts in the Statement of Financial Position of
BISU for the year 2014 unreliable.
We recommend that the Accountant and the bookkeepers of the six external
campuses reconcile their accounts to show the correct Consolidated Statement
of Financial Position as at year end.
F. SETTLEMENT OF ACCOUNTS
Suspensions and disallowances amounting to P12,742,668.44
P11,500,928.68, respectively, remained unsettled as of December 31, 2014.
and
G. STATUS OF IMPLEMENTATION BY MANAGEMENT OF PRIOR YEARS’
AUDIT RECOMMENDATIONS
Of the thirty-five (35) audit recommendations embodied in the CY 2013 Annual
Audit Report of the Bohol Island State University, twelve (12) were fully implemented,
fourteen (14) were partially implemented and nine (9) were not implemented. Details are
discussed in Part III of this Report.
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