Monday, November 1, 2010

State Universities and Colleges are Haunted by COA's 2009 Audits into their Financial Expenditures (A Series of Articles co-located on one (1) continuously updated link)

By Chanda Shahani

As this first paragraph is written, it's not even All Soul's Day (November 2) yet, but many Philippine State Universities and Colleges (SUCs) based in Metro Manila are already being haunted by the latest 2009 Consolidated Audited Annual Reports (CAAR) of the Commission on Audit (COA), which have already been uploaded at the COA website (

Many of the COA findings fit within a broad pattern of systemic financial abuse by government officials working for these SUCs. These findings come at a time when the 2011 budgets of these SUCs are being deliberated upon by Congress. For example, the 2009 COA CAARs of the U.P. System has criticized the U.P. Administration for major lapses concerning its inability to open the books of accounts of university-affiliated foundations, as documented by the Diliman Diary (see: and as well as the 2007 investiture expenditures of the U.P. Mindanao Chancellor. However, the COA findings remain under appeal (see: and

The findings are deeply troubling as they come at a time when the outgoing U.P. Administration says that it does not have enough funds to settle its obligations in the form of Board of Regents-approved benefits to U.P. Staff and REPS and has even gone as far as beginning the closure of the University Food Service as “cost-cutting measures.” (see: and

The Diliman Diary will continuously report on the findings of the COA in their respective 2009 CAARs as well as endeavor to obtain the comments of the officials of the affected institutions of the following SUCs as soon as possible. Thus this particular dispatch is intended to be organic - that is, as more facts and comments come on hand, it will be updated in this same one link. This is intended primarily for the ease of reference of our readers who may wish to refer over and over again to this link for its policy implications.

Here are the highlights of the 2009 CAAR of COA of Metro Manila-based SUCs:

1. Polytechnic University of the Philippines (PUP)

Take the case of the Polytechnic University of the Philippines (PUP) a chartered state university.

With 22 PUP campuses serving more than 60,000 students, PUP is the largest university in terms of student population, lerger than even the 50,000 of the U.P. System. The main campus is named after a national hero, Apolinario Mabini, and is located in Sta. Mesa, Manila.

The total number of PUP campuses, including the Mabini campuses are: Six (6) in Metro Manila as well as in four (4) in each province for Laguna and Quezon, two (2) in Bulacan, and one each (1) in Bataan, Nueva Ecija, Cavite, Batangas, Oriental Mindoro, Batangas and Camarines Sur.

The 2009 CAAR of COA for PUP said cash advances granted in 1993 to 2009 for special purposes or time bounded undertakings “remained unliquidated due to lack of intensive monitoring thereof and laxity in enforcing the requirements of COA Circular No. 97-002 dated February 10, 1997, resulting in its accumulation totaling PhP 2.7 million as of December 31, 2009.”

Read the rest here: Polytechnic University of the Philippines

2. Eulogio “Amang” Rodriguez Institute of Science and Technology 

Like many SUCs, subsidies from the National Government to the state college, Eulogio “Amang” Rodriguez Institute of Science and Technology (EARIST) has gone down. In the case of EARIST, it went down from PhP 138 million in 2008 to PhP 130 million in 2009. Additionally, MOOE went down from PhP 64 million in 2008 to PhP 49.5 million in 2009. On the other hand, other income went up from PhP 66.8 million in 2008 to PhP 104 million in 2009, leaving it with a budget surplus, data from COA's 2009 CAAR of EARIST shows.

But even with a budget surplus of PhP 74 million in 2009 compared to a budget surplus of PhP 38 million in 2008, which the Diliman Diary computed using the COA data, COA itself pointed out the following nagging problems:
  • COA said the procurement of Chemistry and Physics Laboratory equipment amounting to PhP 15.4 million awarded, supplied and delivered by Mars Laboratory Instrument Center was contrary to the provisions of R.A. 9184 (Government Procurement Reform Act of 2003), casting doubts on the validity and regularity of the transaction.
3. Marikina Polytechnic College

The COA 2009 CAAR of the Marikina Polytechnic College (MPC) said that MPC still adopts the manual system in payroll operation resulting in inefficient and uneconomical operation as well as exposing its resources to security risks such as robbery and holdups. Moreover, 31 employees had net take home pay of less than PhP 3,000.00 per month from January to December 2009 which was contrary to Section 40 of R.A. 9524 of the 2009 General Appropriations Act.

COA recommended that the MPC Administration adopt the Payroll-thru-Bank system to promote operational efficiency and also to avoid hold-ups and similar incidents as well as coordinate with the government-servicing bank for the installation of ATM facilities to be stationed within the campus and that MPC should see to it that employee’s net monthly pay should not be less than P3,000.00 per month as required under Section 40 of R.A. 9524.

The good news is that Excess of Income over Expenses increased to PhP 9,143,738.37 in 2009 from PhP 7,490,554.56 in 2008 or a total increase of PhP 1,653,183.81 largely thanks to the fact that Subsidy Income from the National Government increased to PhP 54,254,259.16 in 2009 from PhP 53,841,648.19 or a total increase of PhP 412,610.97 while other income also increased to PhP 25,954,369.30 in 2009 from PhP 22,081,110.35 in 2008 or a total increase of PhP 3,873,258.95.

However, the 2009 CAAR of COA still revealed the following problems:

Read the rest here: Marikina Polytechnic College

4. Technological University of the Philippines

TUP is a system comprising of four campuses. The main Campus of the University is located in Manila and the three satellite campuses are in Taguig, Cavite and Visayas. In addition to the four campuses, TUP maintains the Integrated Research and Training Center (IRTC) located in the main campus. The Center was established by the Japan International Cooperation Agency (JICA) through a Technical Cooperation in 1982.

COA's 2009 CAAR of TUP showed that tuition and other fees, ranging from PhP 134,840.99 to PhP 2,095,013.00, collected by the Cashier at the TUP-Cavite campus were not deposited intact and promptly, contrary to PD 1445, thus exposing the funds to possible loss and/or misuse.

COA recommended that the TUP Administration strictly require the Cashier to comply with Section 69 of Presidential Decree No. 1445 by depositing all collections intact and promptly not later than the next banking day.

COA's 2009 CAAR of TUP also found that the Accounts Payable of TUP Manila campus were understated by PhP 6.9 million due to erroneous posting of the 2008 and 2009 transactions, and were also characterized by a failure to set-up paid liabilities for current and prior years and unrecorded prior years’ transactions, thus, casting doubts on the validity and reliability of the said account.  

5. Philippine Normal University

The Philippine Normal University (PNU) Main Campus is located in Manila and at present, has four provincial campuses in Alicia, Isabela; Lopez, Quezon; Cadiz, Negros Occidental; and Prosperidad, Agusan del Sur. The University’s manpower complement is 541 composed of 341 faculty members and 200 general administration and auxiliary services personnel distributed among the different campuses.

As the flagship national university for teacher education, PNU is dedicated to the modernization of the system of continuing education and training of Filipino teachers.

Meantime, the COA's 2009 CAAR of PNU showed the following significant observations with the corresponding recommendations:

The PNU Main Campus appeared unduly disadvantaged with the agreement allowing the Multi Purpose Cooperative (MPC) to enter into service contracts with stallholders of which it earned an average annual rental income of only PhP 2.9 million from 2005-2009, which results in only a five percent share of its net income or an average of PhP 6,381.88 monthly or PhP 76,582.55 being remitted annually to PNU.

Read the rest here:  Philippine Normal University

6. University of the Philippines System

For the Diliman Diary's reportage on the Commission on Audit's (COA) 2009 Consolidated Audited Annual Report of the U.P. System, please click on this link: To see a Diliman Diary-authored report on the COA 2006 to 2008 CAARs, please click on this link:

7. Philippine State College of Aeronautics

The Commission on Audit's (COA) 2009 Consolidated Audited Annual Report (CAAR) said that the Philippine State College of Aeronautics (PhilSCA) had 423 personnel from Villamor Air Base and other campuses consisting of permanent – 148; part-timers – 197; temporary – 9 and support staff – 69. Out of the 423 workforce, 287 belong to the academe and 136 are administrative support staff.

The Philippine State College of Aeronautics (PhilSCA) was established in 1967 as a community college, the Basa Air Base Community College, in Floridablanca, Pampanga. The College was operated under AFP Regulations s. 168-342 issued by the Armed Forces of the Philippines and approved by the Department of National Defense on April 1, 1968 to cater to the educational needs of the military personnel, civilian employees and their dependents. In 1977, then President Ferdinand Marcos signed P.D. 1078 converting Basa Air Base Community College into a full-pledged College and was renamed Philippine Air Force College of Aeronautics (PAFCA). On June 3, 1992, R.A. 7605 was approved by then President Corazon C. Aquino, converting PAFCA into a state college, the Philippine State College of Aeronautics (PhilSCA). There are four campuses located in Mactan, Cebu, Floridablanca, Pampanga, Lipa City and the main campus in Villamor Air Base (VAB), Pasay City.

The College aims to provide professional and advance technical and technological instructions and trainings in the fields of aeronautical sciences and in the general area of science and technology for the Philippine Air Force and the airline industries. It also aims to promote research, advance studies and progressive leadership in its field of specialization.

But the 2009 CAAR also found the following irregularities in its 2009 CAAR:

The COA 2009 CAAR noted that in PhilSCA and its campuses, “the existence and valuation of the Property, Plant and Equipment accounts totaling P182.63 million cannot be relied upon due to inclusion of damaged property worth P2.7 million lost thru fire; the absence of Reports on the Physical Count of Property, Plant and Equipment (RPCPPE) for CYs 2007 to 2009 and the unreconciled account balances of accounting and property records of P19.6 million, P1.6 million and P18.3 million for CYs 2004, 2005 and 2006, respectively.”

COA recommended that the PhilSCA Administration ask the concerned accountable officers to prepare and submit to COA a formal request for relief from property accountability for the fixed assets worth P2.7 million lost thru fire pursuant to Section 73 of the Government Auditing Code of the Philippines (P.D.1445). Failure to comply with the above provision will make the accountable officers concerned liable for the loss of property, COA said.

Read the rest here: Philippine State College of Aeronautics

8. Rizal Technological University

Though it was founded in 1975 as Rizal Technological Colleges (RTC), the College was converted into the Rizal Technological University (RTU) on October 11, 1997, by virtue of Republic Act No. 8365. RTU is tasked to provide highly professional, scientific, technological and special instructions in the fields of engineering and technology, education, business and entrepreneurial technology and arts and sciences and to the promotion of research, extension and advance studies in its area of specialization.

The Commission on Audit's (COA) 2009 Consolidated Audited Annual Report (CAAR) of RTU found that RTU's income increased from P 359 million in 2008 to P 397 million in 2009 or an increase in P 38 million. Of this, P 25 million  was from the National Government and P 12.7 million was from other income, 

But COA's 2009 CAAR also found the following problems with RTU's usage of the taxpayer's money:
  • A misstatement in the Receivables-Disallowances or charges was committed due to the erroneous debit of P5,954,279.25 to the same account for the disallowed Emergency Cost of Living Allowance (ECOLA) which was not yet final and executory, instead of P8,418,620.34, the total amount of the Notice of Disallowance, subject of two the Notices of Finality of Decision (NFD), both dated November 27, 2009 pursuant to COA Circular No. 2009-006, thus, casting doubt on the reliability of the Account Receivables-Disallowances/Charges balance of P5,954,279.25 as at year end.
  • COA is asking the RTU Administration to require the Accountant to prepare the journal entry voucher to adjust the Receivables-Disallowances/Charges and henceforth, ensure the accuracy of balances and reliability of the accounting reports pursuant to provisions of the NGAS Manual, Volume III and Section 22 of COA Circular No. 2009-065 dated September 15, 2009; and also to comply strictly with Section 7.2 of COA Circular No. 2009-006 dated September 15, 2009.
  • The validity and existence of the Property, Plant and Equipment (PPE) accounts totaling P779.72 million could not be ascertained due to the inclusion of unaccounted/missing properties costing P0.65 million; non-reclassification of unserviceable properties to Other Assets awaiting disposal costing P30.88 million; non-dropping from the books of accounts of disposed properties costing P3.88 million and the incomplete physical inventory of properties hence, unreconciled variance of P46.88 million between the Property and Accounting records existed contrary to sound property management system. 
  • COA is correspondingly asking the RTU Administration to formally create an inventory team to complete and submit the physical inventory reports of all properties of the University and reconcile these with the accounting records; identify the accountable persons for the missing/unaccounted properties and require them to settle their accountabilities and/or submit the request for relief from accountability in accordance with Section 73, PD 1445; and require the Accounting Office to prepare a journal entry voucher to reclassify to Other Assets account all unserviceable properties awaiting disposal and drop from the books all disposed properties.
Read the rest here: Rizal Technological University

(Editor's note: This particular link will be continuously updated to reflect new information on all the featured SUCs).

(Chanda Shahani is the Editor of the Diliman Diary)

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