EXECUTIVE SUMMARY
INTRODUCTION
The Construction Manpower and Development Foundation (CMDF) was created as one
of the boards under the Construction Industry Authority of the Philippines (CIAP), an attached
agency of Department of Trade and Industry, pursuant to Section 7 of Executive Order No.
1746 dated November 18, 1980, as amended, by Executive Order Nos. 679 and 768.
On April 28, 1992, the Department of Trade and Industry issued Department Order No.
34, as amended by Department Order No. 40 and 57, all series of 1992, placing CMDF under
the Industry Centers of the Department.
The agency is mandated to (1) draw up an overall construction manpower development
plan and relevant strategies; (2) develop and implement manpower training programs for the
construction industry; (3) formulate and adopt construction skill standards and establish skills
testing and certification facilities in coordination with the National Manpower and Youth
Council (NMYC); (4) recommend appropriate policies and measures to rationalize training and
export of trained manpower in the construction industry in coordination with the Department
of Labor and other pertinent government agencies; (5) develop a funding mechanism in
cooperation with the construction industry to enable it to carry out its functions by collecting
fees and undertaking income-generating activities; (6) borrow from financing institutions both
domestic and international to support its operations; and (7) to perform such other functions as
may be assigned by the authority.
The CMDF is currently headed by the Deputy Executive Director/Caretaker, Mr.
Florencio G. Sison. The agency has seven divisions and has a total personnel complement of
84, 47 were filled up and 37 remained vacant.
The plans/targets and accomplishments of the agency are shown in Annex A.
Accomplishments reported matched vis-a-vis plans and targets were far beyond compare. The
agency may have targeted too low or they failed to consider other areas. Validation of'
accomplishments were made through the number of seminars conducted and number of'
participants only.
Total appropriations for the year pursuant to Republic Act No. 8522 or the 1998 General
Appropriations Act was P15,514,000.00, while total releases by the Department of Budget and
Management for Fund 101 and Fund 102 amounted to P11,159,903.07 and P7,869,776.84,
respectively, or a total of P19,029,679.91. Total obligations incurred for the year for Fund 101
was P10,826,690.69 and P5, 029,740.43 for Fund 102. Of the total obligations for Fund 101,
P9,230,129.61 was incurred for personal services and P1,596,561.08 was for maintenance and
other operating expenses. Total obligations of Fund 102 was incurred for maintenance and
other operating expenses.
Total trust receipts for the year amounted to P3,229,430.33.
Total assets, liabilities and equity as of December 31, 1998, for Fund 101 were
P13,124,195.84, P13,413,173.83 and ( P288,979.99), respectively while total assets, liabilities
and equity for Fund 102 were P101,845,232.92, P12,808,731.70 and P89,036,696.62,
respectively.
SCOPE OF AUDIT
The audit covered the operations of the Construction Manpower Development Foundation
for 1998. The objectives of the audit were to ascertain the validity and propriety of
disbursements, the reliability of financial reports and the adequacy of the books of accounts.
Likewise, observation of day to day activities, ocular inspection coupled with verbal interviews
of officials and employees were also conducted to determine whether the programs and activities
for the year were attained in an efficient, economical and effective manner. However, validation
of the agency's reported accomplishments was only based on the number of seminars conducted
and the number of training participants.
OPINION IN THE STATE AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
The Auditor rendered a qualified opinion on the fairness of the presentation of the financial
statements due to several deficiencies noted such as the doubtful balances of the fixed assets,
furniture, fixtures and equipment and supplies and materials accounts totaling P97,342,136.97
due to the non-submission of inventory reports, and the non-liquidation of prior years cash
advances amounting to P1, 170,071.75 which resulted to the overstatement of cash account
SUMMARY OF SIGNIFICANT FINDINGS AND RECOMMENDATIONS
For the exceptions cited in the preceding paragraph, the Auditor recommended the
submission of inventory reports for fixed assets and supplies and materials accounts and the
immediate liquidation of cash advances. In addition, the following are the other significant
findings and recommendations:
1 . Cash in bank balances representing collection of seminar fees from 1996 to 1998 totaling
P14,031,241.77 remained unremitted to the National Treasury contrary to Executive Order
No. 338 dated May 17, 1996, and Joint Circular No. 1-97 dated January 2, 1997
Require the agency to comply with the provision cited in Executive Order No. 338 and Joint
Circular No. 1-97.
2.
Rates of seminar fees were neither standard nor approved by the Department of Budget and
Management. Subsequently, quarterly reports for the receipts and disbursements of the
seminars conducted were not submitted.
Prepare standard rates for each type of seminar and seek approval from DBM. Also, prepare
and submit the required quarterly report pertaining to the receipts and disbursements of the
seminars conducted.
3.
Handbooks for sale prepared by the agency and funded by Japan International Cooperation
Agency (JICA) were not properly safeguarded and accounted. Likewise, no accounting was
made for the proceeds of the handbooks sold out and the same were not deposited at the
National Treasury.
Secure from JICA written document as basis for accounting the books. Designate an
accountable officer and require him/her to submit the required reports. Moreover, institute
sound internal control in handling government properties.
4.
The contract entered into by and between the CMDF represented by Ms. Alicia A. Tiongson,
then Officer-in-Charge of CMDF, and Polytechnic University of the Philippines, represented
by Dr. Zenaida A. Olonan, then PUP President, was not in accordance with Section 85, P. D.
1445. The aforementioned contract was entered without the corresponding appropriation.
Define clearly the objective of the program/project. If the objective is already clear, include
the project in the agency's lined activities and proposed a budget for the said activity.
Regarding the existing contract, communicate the deficiency to the contracting parties citing
the provisions of Section 87, of P.D. 1445. Also, avoid paying trust funds for those
expenses, which are not related to training activities.
5.
Bank Reconciliation Statements for Account Nos. 265-840148-6, 52-1244-09, 0052-107318 and 0142-0237-92 were not submitted to the Office of the Auditor contrarv to Section
147 of the National Accounting and Auditing Manual.
Require the Accounting Official to prepare and submit the Bank Reconciliation Statements
for each account monthly.
6.
The agency's Supply Officer is not bonded contrary to Section 1O1, P.D. 1445 and Section
66 of the Government Accounting and Auditing Manual (GAAM Vol. 1).
Require the bonding of Accountable Official pursuant to Section 101 of P.D. 1445 and the
proper delegation of authority, duties and responsibilities to officials and employees must
be enforced.
7.
Audit suspensions which matured into disallowance amounted to P3,208,170.78 of which
settlement was P1,202,640.48 or 37.48 percent while audit disallowances of P651,304.72
remained unsettled.
Enforce settlement of the suspensions/disallowances pursuant to COA Manual on Certificate
of Settlement and Balances
The above, together with the other findings and recommendations contained in the report
were discussed with concerned agency officials. Management views and reactions were
considered in the report, where appropriate.
STATUS OF IMPLEMENTATION BY THE AUDITEE OF PRIOR YEARS' AUDIT
RECOMMENDATIONS
There were 15 prior years' audit recommendations. One or 7 percent was fully
implemented, while eight or 53 percent were partially implemented and six or 40 percent were
not implemented. Two prior year's audit recommendations, which were not implemented, were
reiterated and included under Part II of this report.