republic of the philippines commission on audit national

Republic of the Philippines

COMMISSION ON AUDIT

National Government Sector

Cluster 5 – Education and Employment

Technical Education and Skills Development Authority

Regional Office No. II

Tuguegarao City, Cagayan

February 11, 2019

MR. RENATO D. UBIÑA, Ph.D.

Vocational School Administrator III


Aparri Polytechnic Institute

Aparri, Cagayan

Dear Sir:

We transmit herewith the Management Letter for the year ended December 31, 2018

on the operations of Technical Education and Skills Development Authority – Aparri

Polytechnic Institute.

We would appreciate being informed of the actions taken on the findings and

recommendations within sixty (60) days from receipt of this letter by accomplishing the

attached form on the Agency Action Plan and Status of Implementation (AAPSI) form

prescribed under COA Memo No. 2014-002 dated March 18, 2014 and to Section 93 of the

General Provisions of RA No. 10964, otherwise known as the General Appropriations Act of

2018.

We wish to convey our appreciation for the valuable support and cooperation extended

to the Audit Team, by the officials and employees of the Technical Education and Skills

Development Authority – Aparri Polytechnic Institute.

Very truly yours,

RITA R. PABLO

OIC – Regional Supervising Auditor

Republic of the Philippines COMMISSION ON AUDIT

Commonwealth Avenue, Quezon City

MANAGEMENT LETTER

on the

TESDA – Aparri Polytechnic Institute Aparri, Cagayan

For the Year Ended December 31, 2018

Republic of the Philippines

COMMISSION ON AUDIT

National Government Sector

Cluster 5 – Education and Employment


Regional Office No. II

Tuguegarao City, Cagayan

_____________________________________________________________________

February 11, 2019

MR. RENATO D. UBIÑA, Ph.D.

Vocational School Administrator III


Aparri Polytechnic Institute

Aparri, Cagayan

Dear Mr. Ubina:

Management Letter on the Audit of the

TESDA – Aparri Polytechnic Institute

For the Period January 1, 2018 to December 31, 2018

1. Pursuant to Section 2, Article IX-D of the Constitution of the Philippines and Section 43

of the Government Auditing Code of the Philippines (PD 1445), we audited the accounts

and operations of the TESDA – Aparri Polytechnic Institute (TESDA-API) for the

period ended December 31, 2018. The audit was conducted in accordance with

applicable legal, and regulatory requirements and the Philippine Public Sector Standards

on Auditing. Those standards require that we plan and perform the audit to obtain a

reasonable basis for our conclusion.

2. The audit was conducted to: (a) verify the level of assurance that may be placed on

management’s assertion on the financial statements; (b) recommend agency

improvement opportunities; and (c) determine the extent of implementation of prior

year’s audit recommendations.

3. Deficiencies noted in the course of the audit were earlier communicated through Audit

Observation Memoranda (AOMs) and discussed in an exit conference conducted last

February 8, 2019 with concerned TESDA-API officials and employees. Their comments

were incorporated in this letter, where appropriate. The significant audit observations

and recommendations shall be incorporated in the Regional Consolidated Management

Letter (RCML) of the Technical Education and Skills Development Authority, Regional

Office No. II for CY 2018.

A. Introduction

4. Republic Act (R.A) No. 948 in 1928 caused the founding of the Aparri Vocational High

(AVHS) through the Provincial Government of Cagayan. AVHS was converted to

Aparri School of Arts and Trades (ASAT) on June 22, 1963 by R.A. 3732.

Presidential Decree (P.D.) 1436 in 1978 affected the Bachelor of Science in Industrial

Technology (BSIT) courses and other technical education courses which ASAT was

offering aside from its Vocational Secondary Education Program to the Cagayan State

University (CSU)-Aparri including its staff and facilities.

In 1994, ASAT became a TESDA administered school and was again allowed in 1988

to offer the BSIT course and 2-year technical courses but was not reoffered on August

24, 2000 in a formal turn-over ceremony transferring the high school curriculum to the

Department of Education, Culture and Sports (DECS). Prior to the turn-over, on March

21, 1997, a Memorandum of Agreement was forged between the then DECS and

TESDA, the transfer of schools with predominantly post-secondary enrollment

including qualified employees and their proportionate share of the budget and other

assets to TESDA. Said turn-over caused ASAT to offer three TESDA Programs:

School-Based or Regular Program, Short-Term, and Community-Based or Extension

Program.

Bronze Award was bestowed upon ASAT by the Asia Pacific Accreditation and

Certification Commission (APACC) on August 9, 2012. Republic Act No. 10227 “An

Act Renaming ASAT into Aparri Polytechnic Institute (API)” was issued on October

18, 2012.

Gabay Nayon Award under the “Kalinga sa mga Tagasanay” was awarded to API by the

TESDA Central Office on August 23, 2013.

The TESDA Act

Republic Act No. 7796 otherwise known as the TECHNICAL EDUCATION AND

SKILLS DEVELOPMENT ACT was enacted into law on August 25, 1994. Through

this R.A. which created TESDA, the functions of the then National Manpower and

Youth Council (NMYC), Bureau of Technical-Vocational Education (BTVE),

Department of Education, Culture and Sports (DECS) and the apprenticeship program of

the Department of Labor and Employment (DOLE) were integrated.

VISION AND MISSION

Vision

The TESDA-Aparri Polytechnic Institute exists as “The Center of Technical Excellence”.

As such, it endeavors to make available quality technical vocational education and

trainings and ensures the inculcation of upright attitude towards work among all those

who pass through its portals.

Mission

The TESDA-Aparri Polytechnic Institute envisions itself as a state partner in the

development of globally competent and technically equipped middle-level manpower

who are efficient, effective and economically independent either as wage earners or

self-employed workers.

Value Statement

Commitment to one’s duties: the way to quality service,

The Core Business

Direction Setting

Support to TVET Provisions

Institutional Capability Building

Standards Setting & Development System

MANAGEMENT

The Aparri Polytechnic Institute is headed by Dr. Renato D. Ubiña as Vocational School

Administrator III, Dr. Eduardo Escobar as Head Instruction, and Ms. Sherly B.

Nepomuceno as Acting Administrative Officer IV.

5. MAJOR ACCOMPLISHMENTS

Office/Division Permanent Job-Order Total

Administrative/Finance 13 7 18

Instruction 36 3 45

TOTAL 49 16 63

Performance Indicators Target Accomplishment Percentage (%) of

Accomplishment

MFO 2. TESD Services

Operations of TESDA Schools and Training Centers

Quantity

Number of trainees enrolled 2,600 3,005 116%

Number of trainees graduated 2,340 2,468 105%

Average number of training

hours per Trainee 200 292 146%

Quality

Number of graduates who

are employed six (6) months

after completion of training

65 253 389%

Timeliness

% of training applications

acted upon within two (2)

weeks

90% 100% 111%

% of graduates in programs

with training regulations

certified within five days

after graduation

85% 91% 107%

Number of TVET clients

extended with career

guidance services consistent

with the Career Guidance

Advocacy Program (CGAP)

1,000 2,330 233%

Number of Blue Desk clients

referred/Served 1,000 1,140 114%

Number of persons profiled

(YP4SC/NCAE) 1,305 1,601 123%

Competency Assessment and Certification System

Number of persons assessed 2,340 1,948 83%

Number of persons certified 2,015 1,903 94%

6. FINANCIAL PROFILE

The financial position and performance for CY 2018 with comparative figures for CY

2017 are as follows:

2018 2017

Increase

(Decrease)

Financial Condition

Assets ₱23,854,463.10 ₱21,857,951.33 ₱ 1,996,511.77

Liabilities 5,784,267.51 0.00 5,784,267.51

Government Equity ₱18,070,195.59 ₱21,587,951.33 ₱(3,787,755.74)

Financial Performance

Total Revenue ₱ 6,937,762.16 ₱10,110,625.32 ₱(3,172,863.16)

Personnel Services 25,667,518.34 23,415,065.59 2,252,452.75

Maintenance and Other

Operating Expenses

11,137,649.57 11,421,986.38 (284,336.81)

Non-Cash Expenses 2,996,256.65 3,155,633.05 (159,376.40)

Total Current Operating

Expenses

₱ 39,801,424.56 ₱37,992,685.02 ₱ 1,808,739.54

Surplus/(Deficit) from

Current Operations

₱(32,863,662.40) ₱(27,882,059.70) ₱(4,981,602.70)

Losses (368,988.65) (244,677.79) (124,310.86)

Net Financial

Assistance/Subsidy

29,484,117.79 27,444,321.33 2,039,796.46

Surplus/(Deficit) for the

period

₱(P3,748,533.26) ₱ (682,416.16) ₱(3,066,117.1)

B. Summary of Recommendations

7. For the significant deficiencies observed in the course of the audit, we recommended

that the management:

7.1 advise the Accountant/designated staff to prepare and submit the monthly

Bank Reconciliation Statement (BRS) for each bank account maintained by

the agency within ten days from receipt of the monthly Bank Statement

(BS) pursuant to Section 21 of GAM. A Journal Entry Voucher (JEV) shall

be prepared to recognize all reconciling items that require adjustment and

correction in the books of accounts. Henceforth, prepare and submit BRS

together with all the supporting documents and JEV on time to detect

errors on a timely basis and make necessary corrections immediately;

7.2 direct the Property Officer to prepare IIRUP for the unserviceable and fully

depreciated properties recorded in the Other Assets account amounting to

₱530,929.21 and conduct disposal thereof in accordance with the provisions

of COA Circular 86-264 and Section 79 of Presidential Decree 1445;

7.3 require the Supply Division to include in the supply records each item of

stock/inventory in the physical inventory count amounting to amounting to

₱275,935.00. Likewise, conduct actual physical count of inventory semi-

annually and prepare the corresponding Report on the Physical Count of

Inventories (RPCI). The balances per RPCI should be reconciled with the

balance per stock cards and per books;

7.4 lead the Supply and Accounting Sections to follow a system of procedure in

the monitoring, controlling and recording of acquisition and disposal of

inventory. Upon request by end-user of supplies and materials that are

carried in stock and verification by the Supply Division as to the availability

of items requisitioned, the Supply Division prepares and accomplish the

Requisition and Issue Slip (RIS). Report of Supplies and Materials Issued

(RSMI) shall then be prepared the Supply Custodian supported by the duly

approved RIS and shall be the basis of the Accounting Division s in

preparing the JEV to record the supplies and materials issued; and

7.5 instruct the Accountant to submit within the prescribed period all

disbursement vouchers and its supporting documents, otherwise Notice of

Suspension may be issued if warranted, and appropriate action will be

taken against the responsible officials for the non-submission thereof.

Thereafter, ensure that submission of financial reports be made on time,

complete and in order;

C. Detailed Observations and Recommendations

FINANCIAL AND COMPLIANCE

Unreconciled book and bank cash balance - ₱844,408.25

8. The reported balance of Cash in Bank, Local Currency Current Account (LCCA)

of ₱5,874,702.53 as of December 31, 2018 is unreliable due to unreconciled balance

of ₱844,408.25 between the book and bank records, contrary to Sections 74 of

Presidential Decree (P.D.) 1445 and Chapter 21 of the Government and Accounting

Manual (GAM) Volume I.

8.1 Section 74 of P.D. 1445 provides that at the close of each month, depositories

shall report to the agency head, in such form as he may direct, the condition of

the agency account standing in their books. The head of the agency shall see to it

that reconciliation is made between the balance shown in the reports and the

balance found in the books of the agency.

8.2 Chapter 21 of GAM requires the Chief Accountant/designated staff to prepare

the monthly Bank Reconciliation Statement (BRS) for each of the bank accounts

maintained by the agency within ten days from receipt of the monthly Bank

Statement (BS). A Journal Entry Voucher (JEV) shall be prepared to recognize

all reconciling items that require adjustment and correction in the books of

accounts. The BRS, together with all the supporting documents and JEV, shall

be submitted to COA within twenty days after receipt of the monthly BS.

8.3 Examination of the Cash in Bank, LCCA account disclosed an unreconciled

amount of ₱844,408.25 between the GL balance of ₱5,874,702.53 and the

confirmed bank balance of ₱6,719,110.78 (Annex I), as at year-end. The details

of the discrepancy are presented in the following table.

Account Name Bank Account No. Book Balance Bank Balance Difference

TESDA-Aparri

CA 0505-033791-

030 ₱ (95,846.24) ₱ 485,264.50 ₱ 581,110.74

TESDA API Hotel

CA 0505-034020-

030 153,434.03 164,416.21 10,982.18

Account Name Bank Account No. Book Balance Bank Balance Difference

TESDA Trust Fund

CA 0505-041274-

030 5,817,114.74 6,069,430.07 252,315.33

Total ₱5,874,702.53 ₱6,719,110.78

₱

844,408.25

8.4 The existence of the above discrepancy is a manifestation that management did

not undertake the regular reconciliation of the book and the bank balances as

required under the aforementioned rules and regulations. The following table

shows the submission of the monthly BRS for CY 2018 by the Accounting

Office.

Period Covered/

CY 2018

Current Account

0505-033791-030

Current Account

0505-034020-030

Current Account

0505-041274-030

January February 27, 2018 February 27, 2018 N/A

February March 7, 2018 March 7, 2018 N/A

March March 22, 2018 March 22, 2018 N/A

April May 7, 2018 May 7, 2018 N/A

May June 21, 2018 June 21, 2018 N/A

June January 23, 2019 January 23, 2019 N/A

July December 28, 2018 December 28, 2018 N/A

August September 7, 2018 September 7, 2018 N/A

September December 28, 2018 December 28, 2018 N/A

October December 28, 2018 December 28, 2018 not submitted

November December 28, 2018 December 28, 2018 not submitted

December not submitted not submitted not submitted

8.5 Review of general journals revealed that reconciling items were not timely

detected and corrected. The submitted BRS were not properly supported with

bank statements and other necessary attachments to validate correcting entries

for the reconciling items. For the Trust Fund which refers to the Universal

Access to Quality Tertiary Education Act (UAQTEA) scholarship program that

started later of October, 2018, the difference may pertain to outstanding checks

or disbursements checks not yet negotiated by the agency and other bank or book

errors noted. Any reconciling items could have been discovered and adjusted

through the timely preparation of BRS. The absence of the BRS and the late

preparation thereof lose its informative value to the management and decision

makers. It deprived the agency of the opportunity to detect errors on a timely

basis and make necessary corrections immediately to ensure that the reported

cash in bank balance reconcile with the balance/s shown in the agency’s

depository banks as of a given date.

8.6 The non-reconciliation of the book and bank balances due to non-

preparation/delayed submission of BRS affects the fairness of presentation of the

Cash in Bank, LCCA account in the Statement of Financial Position at year-end.

8.7 We recommended that the Management advise the Accountant/designated

staff to prepare and submit the monthly Bank Reconciliation Statement

(BRS) for each bank account maintained by the agency within ten days

from receipt of the monthly Bank Statement (BS) pursuant to Section 21 of

GAM. A Journal Entry Voucher (JEV) shall be prepared to recognize all

reconciling items that require adjustment and correction in the books of

accounts. Henceforth, prepare and submit BRS together with all the

supporting documents and JEV on time to detect errors on a timely basis

and make necessary corrections immediately.

8.8 Management averred that bank statements were received late from the bank, thus

the delay in the preparation of BRS and the adjustment of reconciling items if

any. The audit team advised the request for snap shots instead to capture the

bank balance and transactions as of month-end to which management agreed.

Non-disposal of unserviceable and fully depreciated properties - ₱530,929.21

9. Unserviceable and fully depreciated properties amounting to ₱530,929.21 were

incorrectly recorded in Other Assets account and still dumped inside the office

premises awaiting proper disposal, thus exposing it to further deterioration and

losses contrary to the provisions of COA Circular No. 89-296, Section 79 of

Presidential Decree 1445, COA Circular 86-264, and Sections 40(d) and 42(h) of

Chapter 10 of the Government Accounting Manual (GAM), Volume I.

9.1 COA Circular No. 89-296 provides that the authority and responsibility for

divestment or disposal of property and other assets is lodged in the agency head

or governing bodies.

9.2 Moreover, COA Circular 86-264 provides the Guidelines on the Divestment or

Disposal of Assets, as follows:

1. Constitute the Disposal Committee

- require the submission the list of assets to be disposed of: program for disposal,

IIR/RWM, appraisal documents, disposal procedures to be adopted

- inspect assets

-establish the floor price

2. Furnish the COA Auditor at least five days before the scheduled bidding with

a copy of program for disposal, IIR/RMW, appraisal documents & disposal

procedures.

9.3 Furthermore, Section 40(d), Chapter 10 of GAM Volume I provides the policies

on idle, unserviceable and fully depreciated PPE and prescribes that all

unserviceable property shall be reported in the Inventory and Inspection Report

of Unserviceable Property (IIRUP) (Appendix 74). PPE reported in the IIRUP

shall be dropped from the books by debiting Impairment Loss-Property, Plant

and Equipment (cost of the PPE less Accumulated Depreciation).

9.4 Section 42(h) also provides that the Inventory and Inspection Report for

Unserviceable Property shall be used to account for all unserviceable property of

an entity which is subject to disposal. It also serves as the basis in derecognizing

the unserviceable properties carried in the PPE accounts.

9.5 Analysis of Other Assets account revealed that unserviceable and fully

depreciated properties amounting to ₱530,929.21 remained in the books and still

dumped inside the office premises awaiting proper disposal. We have gathered

that in CY 2017, the Accountant derecognized the unserviceable properties as

part of the property, plant and equipment without the preparation of Inventory

and Inspection Report of Unserviceable Property (IIRUP) by the Property

Officer which should have served as reference by the Accountant to derecognize

the unserviceable properties carried in the PPE accounts.

9.6 Upon preparation of IIRUP, the Accountant should drop the unserviceable

properties from the books by debiting Impairment Loss-Property, Plant and

Equipment (cost of the PPE less Accumulated Depreciation). However, the

unserviceable properties were incorrectly reclassified to Other Assets account

and remained in the books as at the end of CY 2018.

9.7 A property, plant and equipment is unserviceable when the asset can no longer

be repaired or reconditioned, maintenance/repair costs more than outweighs the

benefits and services, has become obsolete or outmoded, has been rendered

unnecessary due to change in the entities functions/mandate and in excess of

requirements, and has become dangerous or hazardous to health.

9.8 The entity should give more attention on the disposal of its unserviceable

equipment in order to avoid continuing carrying/inventory costs, prevent further

deterioration thereby obtaining the fair return in case of sale, to relieve

accountable officers of unnecessary accountability, and make available space for

the agency.

9.9 We recommended that the Management direct the Property Officer to

prepare IIRUP for the unserviceable and fully depreciated properties

recorded in the Other Assets account amounting to ₱530,929.21 and

conduct disposal thereof in accordance with the provisions of COA Circular

86-264 and Section 79 of Presidential Decree 1445.

9.10 Management ensured to check on the unserviceable and fully depreciated

properties within the school. The audit team will be informed of the updates

pertaining to disposal of unserviceable properties.

Unreliable Inventory balance at year-end - ₱275,935.00

10. The validity, existence and accuracy of the Construction Materials Inventory

account balance amounting to ₱275,935.00 as at year-end could not be ascertained

due to non-inclusion of construction supplies held in stock for consumption in the

production process in the physical count of inventories, contrary to the pertinent

provisions of Chapter 8 of Government Accounting Manual (GAM) Volume I.

10.1 Chapter 8 of GAM Volume I includes specific guidelines and procedures on

acquisition, issue, disposal and impairment of inventory and defines the

benchmark for those tangible items not enough to be considered as Property,

Plant and Equipment (PPE) and provides the following:

Sec. 2(c). Inventories are assets:

1. In the form of materials or supplies to be consumed in the production process

(examples: materials and supplies awaiting use in the production process);

2. In the form of materials or supplies to be consumed or distributed in the

rendering of services (examples: office supplies, ammunitions, maintenance

materials);

3. Held for sale or distribution in the ordinary course of operations (examples:

merchandise purchased by an entity and held for resale, or land and other

property held for sale, agricultural produce); or

4. In the process of production for sale or distribution (examples: goods

purchased or produced for distribution to other parties for no charge or for a

nominal charge like educational books produced by a health authority for

donation to schools).

10.2 Sec. 9. Perpetual Inventory Method. Supplies and materials purchased for

inventory purpose shall be recorded using the perpetual inventory system,

resulting in a more accurate inventory records and a running total for the cost of

goods sold in each period. The system requires accounting records to show the

amount of inventory on hand at all times through the maintenance of the SLC

(Appendix 57) by the Accounting Division/Unit and Stock Card (SC) (Appendix

58) by the Supply and/or Property Division/Unit for each item in stock. xxx

10.3 Sec. 13. Inventory Accounting System. xxx

Physical count/inventory, which is required semi-annually, is an indispensable

procedure for checking the integrity of property custodianship.

10.4 Section 17. Records, Forms and Reports to be prepared and/or maintained.

The following records, forms and reports are prescribed for use:

X x x.

d. Requisition and Issue Slip (RIS) (Appendix 63) – shall be used by the end-user

to request issue of supplies and materials that are carried on stock. It is also

used by the Property and/or Supply Division/Unit to indicate availability or non-

availability of items requisitioned and/or to record issues of item/s

requisitioned.

e. Purchase Request (PR) (Appendix 60) – shall be used by the end-user to

request for the purchase of inventory or item/s not available on stock. It shall be

the basis of preparing the PO.

f. Purchase Order (PO) (Appendix 61) – shall be used by the Property and/or

Supply Custodian to support the purchase of property, supplies and materials,

etc. It shall be issued to the selected supplier indicating, among other

information, the specifications, quantities, and agreed prices of property,

supplies and materials to be purchased.

g. Report of Supplies and Materials Issued (RSMI) (Appendix 64) – shall be

prepared the Property and/or Supply Custodian based on the RIS and shall be

used by the Accounting Division/Unit as basis in preparing the JEV to record the

supplies and materials issued.

10.5 Review of the financial statements showed that Construction Materials

Inventory account has a balance of ₱275,935.00 as of December 31, 2018. The

balance refers to construction materials such as lumber, etc. purchased for

consumption in the construction of canteen undertaken by administration of

Aparri Polytechnic Institute. We noted that the Supply Officer has conducted

actual physical count of inventories, however construction materials still held in

stock were not included in the physical count of inventories as at year-end.

Thus, the reliability, accuracy and existence of Construction Materials Inventory

reported in the financial statements as of year-end could not be ascertained.

10.6 The audit team observed that supply records were improved in CY 2018 by the

establishment of pertinent records such as Stock Cards. However, non-

reconciliation of accounts and records between the Supply and Accounting

Divisions could best be developed by following the proper flow and process of

monitoring, controlling and recording of acquisition and disposal of inventory.

Both divisions should know the use and importance of the pertinent records in

relation to the supply management process.

10.7 Inventories may be small value assets but they are prone to shrinkage due to

theft, breakage, damage or obsolescence. If not properly monitored, acquisition

and consumption of the assets may be abused. The matter was discussed with

management and they appreciated the value of maintaining Stock Cards and

other pertinent records in planning and decision-making especially in

monitoring expenditures of Divisions/Units.

10.8 We recommended that the Management require the Supply Division to

include in the supply records each item of stock/inventory in the physical

inventory count amounting to amounting to ₱275,935.00. Likewise, conduct

actual physical count of inventory semi-annually and prepare the

corresponding Report on the Physical Count of Inventories (RPCI). The

balances per RPCI should be reconciled with the balance per stock cards

and per books.

We further recommended that the Management lead the Supply and

Accounting Sections to follow a system of procedure in the monitoring,

controlling and recording of acquisition and disposal of inventory. Upon

request by end-user of supplies and materials that are carried in stock and

verification by the Supply Division as to the availability of items

requisitioned, the Supply Division prepares and accomplish the Requisition

and Issue Slip (RIS). Report of Supplies and Materials Issued (RSMI) shall

then be prepared the Supply Custodian supported by the duly approved

RIS and shall be the basis of the Accounting Division s in preparing the JEV

to record the supplies and materials issued.

10.9 The Supply Officer insisted that while these construction materials were not yet

consumed or utilized, they were already issued to end user for use in the

production. However, the Accountant maintained that he has no basis in

recording the issuance of the items since due to absence of issue slips and RSMI.

At his end, the construction materials were on hand, unissued and unused, thus

still valid to be carried as part of inventory. Management, nevertheless ensured

that proper communication of transactions between accounting and supply

sections will be made and the right process will be followed.

Delayed submission of disbursement vouchers

11. Disbursement vouchers and supporting documents covering transactions for

January 1, 2018 to December 31, 2018 were not submitted within the prescribed

period, incurring 3 to 40 days delay, contrary to the provisions of Section 39 of PD

1445 and Section 7.2.1(a) of COA Circular No. 2009-006, thus management

assertions of occurrence, accuracy, validity and completeness of the transactions

could not be established.

11.1 Section 39 of Presidential Decree (PD) No. 1445 states that:

(1) The Commission shall have the power, for purposes of inspection, to require

the submission of the original of any order, deed, contract, or other document

under which any collection of, or payment from, government funds may be

made, together with any certificate, receipt, or other evidence in connection

therewith. If an authenticated copy is needed for record purposes, the copy

shall upon demand be furnished. xxx

(3) It shall be the duty of the officials or employees concerned, including those in

non-government entities under audit, or affected in the audit of government

and non-government entities, to comply promptly with these requirements.

Failure or refusal to do so without justifiable cause shall constitute a ground for

administrative disciplinary action as well as for disallowing permanently a claim

under examination, assessing additional levy or government share, or

withholding or withdrawing government funding or donations through the

government.

11.2 Section 7.2.1(a) of COA Circular No. 2009-006 dated September 15, 2009 states

that, “the Chief Accountant, Bookkeeper or other authorized official performing

accounting and/or bookkeeping functions of the audited agency shall ensure

that the reports and supporting documents submitted by the accountable

officers are immediately recorded in the books of accounts and submitted to the

Auditor within the first ten (10) days of the ensuing month.”

11.3 Review of the financial records and reports for CY 2018 showed that

Disbursement Vouchers (DVs) totaling ₱42,377,298.19 were not submitted

within the prescribed period. The table below shows the schedule of

submission of paid vouchers to the Auditor’s Office.

Month Disbursements

Total Due dates Date of

Submission

No. of

Days

delayed

General Fund IGP HRM UAQTEA

January ₱ 1,641,669.39 ₱ 540,724.89 ₱ 600.00 ₱ 0.00 ₱ 2,182,994.28 2/10/2018 2/22/2018 12

February 1,224,140.94 809,763.26 600.00 0.00 2,034,504.20 3/10/2018 3/9/2018 0

March 2,990,167.87 1,042,677.65 7,293.21 0.00 4,040,138.73 4/10/2018 4/10/2018 0

April 1,735,053.71 1,077,778.25 50,591.79 0.00 2,863,423.75 5/10/2018 6/7/2018 28

May 3,072,083.31 548,553.69 600.00 0.00 3,621,237.00 6/10/2018 6/14/2018 4

June 2,513,563.22 782,787.80 600.00 0.00 3,296,951.02 7/10/2018 7/13/2018 3

July 1,980,390.77 698,458.26 12,759.00 0.00 2,691,608.03 8/10/2018 8/10/2018 0

11.4 It could be gleaned from the table that the delay in the submission of DVs to

the Auditor’s Office ranges from three to 40 days. It is however worthy to note

that the submission of paid vouchers improved gradually from last year and the

management was taking efforts to comply with audit recommendations to

submit accounts on time. The delayed submission of the paid vouchers and

documents evidencing the charges made to government funds precluded the

auditor from conducting timely post-audit and review of the agency’s financial

transactions. Thus, any deficiencies/error/s could not be immediately detected

and corrective measures could not be effected. Also, the propriety, accuracy,

and legality of the recorded transactions could not be evaluated.

11.5 We recommended that Management instruct the Accountant to submit

within the prescribed period all disbursement vouchers and its supporting

documents, otherwise Notice of Suspension may be issued if warranted, and

appropriate action will be taken against the responsible officials for the non-

submission thereof. Thereafter, ensure that submission of financial reports be

made on time, complete and in order.

11.6 Management justified that delayed submission of disbursement vouchers was

due to DVs for procurement transactions being borrowed from the disbursing

officer which will take time to be retrieved because of lacking documents

pending delivery of purchased items.

August 1,705,404.08 1,111,214.01 133,746.00 0.00 2,950,364.09 9/10/2018 9/7/2018 0

September 1,886,186.32 519,517.66 11,850.00 0.00 2,417,553.98 10/10/2018 10/19/2018 9

October 1,727,152.22 290,228.52 26,335.00 0.00 2,043,715.74 11/10/2018 11/21/2018 11

November 3,981,470.30 741,970.96 7,500.00 2,881,489.98 7,612,431.24 12/10/2018 1/19/2019 40

December 3,943,953.55 947,510.08 17,982.23 1,712,930.27 6,622,376.13 1/10/2019 not

submitted

Total ₱28,401,235.68 ₱9,111,185.03 ₱ 270,457.23 ₱4,594,420.25 ₱42,377,298.19

11.7 As a rejoinder, we recommended and management agreed to submit

disbursement vouchers regularly and on time indicating lacking DVs in the

transmittal and commit that lacking DVs be submitted as soon as possible, to

facilitate timely audit of transactions.

Implementation of GAD

12. The TESDA- API Gender and Development Plan which includes the setting aside of at

least 5% from their existing budget appropriation and 1% for Persons with Disabilities

and Senior Citizens totaling ₱1,384,875.00 as of December 31, 2018, was fully

implemented. GAD accomplishments for CY 2018 as shown hereunder were fully

accomplished, to wit:

1 GAD Plan and Budget formulated

4 Quarterly GAD Accomplishment Reports and 1 Annual Accomplishment Report submitted

1 program on the Celebration of National Women’s Month conducted which served 50 clients

1 GAD symposium conducted

Participation of 1 woman in Radio Broadcasting Services for advertising programs in TVET via Vargas Broadcasting and Advertising Agency

Women Empowerment through Competency Assessment and Certification (CAC) served 9 males and 6 females

Provision of equal access to economic opportunities through conduct of community/enterprise/institutional based programs and training for 74 males and 86 females

Increased productivity of senior citizens and persons with disabilities through the participation in skills trainings of 1 senior citizen in Dressmaking NC II, 1 PWD in Computer Systems Servicing NC II, 2 senior citizens and 1 PWD in training for Service Engine Components, 7 senior citizens in training for Prepare Sweets

Participation of 2 solo parents in free training for Caregiving NC II and 2 solo parents in training for Prepare Cold Meals

Compliance with Tax Laws

13. For CY 2018, TESDA-API has enforced strictly the provisions of DOF-DBM Joint Circular

No. 1-2000A dated July 31, 2001 and other tax laws relative to the withholding and

remittance of taxes. Withheld taxes totaling ₱1,435,353.23 were all remitted to the

Bureau of Internal Revenue Regional Office No. 02, Tuguegarao City. (Annex J)

Compliance with R.A. 8291, GSIS Act of 1997

14. For CY 2018, TESDA-API was compliant in withholding personal contributions

representing employees and employer share and loan repayments for Government

Service Insurance System totaling ₱ 5,681,674.60 and remitted the same to the GSIS

Regional Office No. 02, Tuguegarao City. (Annex K)

Compliance with R.A. 9679, An Act Further Strengthening the HDMF

15. For CY 2018, TESDA-API was compliant in withholding Pag-IBIG personal contributions

representing employees and employer share and loan repayments totaling

₱757,519.66 and remitted the same to the HDMF Regional Office No. 02, Tuguegarao

City. (Annex L)

Enforcement of COA Disallowances and Suspensions

16. The Statement of Audit Suspensions, Disallowances and Charges as of December 31,

2018 is shown in the following table:

Beginning

Balance as of

December 31,

2017

Issued this

Period Jan. 1,

2018 to Dec 31,

2018

Settlement this

Period Jan. 1,

2018 to Dec 31,

2018

Balance as

of December

31, 2018

Notice of P 0.00 P 0.00 P 0.00 P 0.00

Suspension

Notice of

Disallowance 0.00 0.00 0.00 0.00

Notice of

Charge 0.00 0.00 0.00

0.00

Total P 0.00 P 0.00 P 0.00 P 0.00

D. Status of Implementation of Prior Years’ Audit Recommendations

17. An evaluation was made on the status of implementation of prior year’s

recommendations and out of the seven audit recommendations for CY 2017, four

were fully implemented, two were partially implemented and one was not

implemented.

The results of the validation of the implementation of prior year’s recommendation

are presented in Annex H.

E. Acknowledgement

18. We wish to express our appreciation to the Management and staff of Technical

Education and Skills Development Authority – Aparri Polytechnic Institute for the

cooperation and assistance extended to our audit team during the audit.

19. We would appreciate receiving information on the actions taken both hard and

electronic copies within sixty (60) days from receipt of this letter by accomplishing the

attached form on the Agency Action Plan and Status of Implementation (AAPSI)

prescribed under COA Memo No. 2014-002 dated March 18, 2014 and in compliance

with Section 93 of Republic Act 10964 of the General Appropriations Act of 2018.

Very truly yours,

RAMON B. CUMIGAD

State Auditor IV

Audit Team Leader

Copy furnished:

Office of the Regional Director, COA R02

Office of the Regional Supervising Auditor, COA RO2

Office of the Regional Director, TESDA-Regional Office No. 02

ANNEXES

Annex Letter Particulars

A Statement of Management’s Responsibility for

Financial Statements

B Statement of Financial Position

C Statement of Financial Performance

D Statement of Cash Flows

E Statement of Changes in Net Assets/Equity

F Statement of Comparison of Budget and Actual

Amounts

G Notes to Financial Statements

H Status of Implementation of Prior Year’s Audit

Recommendations

I Bank Confirmation Inquiry

J Schedule of Tax Remittances

K GSIS Contribution and Loan Amortization

L Pag-IBIG Contributions and Loan Amortization

ANNEXES

Annex A

TECHNICAL EDUCATION AND SKILLS DEVLOPMENT AUTHORITY

REGION 02

APARRI POLYTECHNIC INSTITUTE

MAURA, APARRI, CAGAYAN

[email protected]

STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of APARRI POLYTECHNIC INSTITUTE is responsible for all information and

representations contained in the accompanying Statement of Financial Position as at December 31,

2018 and the related Statement of Financial Performance, Statement of Cash Flows, Statement of

Comparison of Budget and Actual Amounts, Statement of Changes in Net Assets/Equity and the Notes

to Financial Statements for the year then ended. The financial statements have been prepared in

conformity with the Philippine Public Sector Accounting Standards and generally accepted state

accounting principles, and reflect amounts that are based on the best estimates and informed judgment

of management with an appropriate consideration to materiality.

In this regard, management maintains a system of accounting and reporting which provides for the

necessary internal controls to ensure that transactions are properly authorized and recorded, assets are

safeguarded against unauthorized use or disposition and liabilities are recognized.

SHIRLEY B. NEPOMUCENO RENATO D.UBIÑA Acting Accountant Vocational School Administrator III

February 7, 2019 February 7, 2019

Date signed Date signed

Annex B

TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY


Statement of Financial Position

(All Funds)

As of December 31, 2018

Notes

2018

2017

ASSETS

Current Assets

Cash and Cash Equivalents 6

P5,843,102.53

P728,938.08

Receivables

P0.00

P1,767,440.00

Inventories

8

P275,935.00

P94,500.00

Construction in Progress

P1,317,775.27

P524,006.05

Other Current Assets

P0.00

P0.00

Total Current Assets

P7,436,812.80

P3,114,884.13

Non-Current Assets

Receivables

7

P683,058.74

P683,058.74

Property,Plant and Equipment 9

P15,203,662.35

P17,529,079.25

Other Non-Current Assets 10

P530,929.21

P530,929.21

Total Non-Current Assets

P16,417,650.30

P18,743,067.20

TOTAL ASSETS

P23,854,463.10

P21,857,951.33

LIABILITIES

Due to Regional

Office

P5,784,267.51

P0.00

TOTAL LIABILITIES

P5,784,267.51

P0.00

NET ASSETS/EQUITY

Accumulated Surplus/(Deficit)

P18,070,195.59

P21,857,951.33

TOTAL LIABILITIES AND NET

ASSETS/EQUITY

P23,854,463.10

P21,857,951.33

(See accompanying Notes to Financial Statements)




(All Funds)


2018

2017

ASSETS

Current Assets

Cash and Cash Equivalent

P5,843,102.53

P728,938.08

Cash in Bank

P5,843,102.53

P728,938.08

Cash in Bank-Local Currency Current

Account P5,843,102.53

P728,938.08

Other Receivables

P0.00

P1,767,440.00

Accounts Receivable from

PO/RO P0.00

P1,767,440.00

Inventories

Inventory Held for Distribution

P275,935.00

P94,500.00

Construction Materials

Inventory P275,935.00

P0.00

Other

Supplies

Inventory Other Supplies Inventory

P0.00

P94,500.00

Construction in Progress

P1,317,775.27

P524,006.05

Construction in Progress-School

building P1,317,775.27

P524,006.05

Total Current Assets

P7,436,812.80

P3,114,884.13

Non-current Assets

Other Receivables

P683,058.74

P683,058.74

Receivable-Disallowances/Charges

P683,058.74

P683,058.74

Property, Plant and Equipment

P15,203,662.35

P17,529,079.25

Land

P48,230.00

P48,230.00

Land

P48,230.00

P48,230.00

Land

Improvements P218,302.45

P258,746.75

Other Land Improvement

P2,126,724.70

P2,126,724.70

Less: Accumulated

Depreciation P1,908,422.25

P1,867,977.95

Net Value

P218,302.45

P258,746.75

Infrastructure Assets

P23,888.62

P12,143.87

Water Supply Systems

P35,975.00

P70,215.00

Less: Accumulated

Depreciation P12,086.38

P58,071.13

Net Value

P23,888.62

P12,143.87

Buildings and Other Structures

P8,183,709.09

P8,599,800.78

School Buildings

P23,837,772.07

P23,837,772.07

Less: Accumulated


P15,555,456.01

Net Value

P7,890,514.29

P8,282,316.06

Other Structures

P1,026,459.29

P1,026,459.29

Less: Accumulated


P708,974.57

Net Value

P293,194.80

P317,484.72

Machinery and Equipment

P6,282,215.80

P7,954,513.96

Office Equipment

P1,932,999.01

P2,234,673.01

Less: Accumulated


P1,592,319.49

Net VAlue

P684,957.68

P642,353.52

Information &

Communication

Tech. Equipment

P2,952,802.87

P3,234,304.47

Less: Accumulated


P1,868,796.36

Net Value

P1,503,034.68

P1,365,508.11

Disaster Response and Rescue

Equipment P0.00

P0.00

Less: Accumulated

Depreciation P0.00

P0.00

Net Value

P0.00

P0.00

Technical and Scientific

Equipment P1,830,065.00

P2,018,926.00

Less: Accumulated


P770,641.84

Net Value

P1,091,180.81

P1,248,284.16

Other Machinery and

Equipment P22,647,291.62

P22,665,091.62

Less: Accumulated


P17,966,723.45

Net VAlue

P3,003,042.63

P4,698,368.17

Transportation Equipment

P258,740.64

P300,092.03

Motor Vehicles

P1,002,597.53

P1,002,597.53

Less: Accumulated


P702,505.50

Net Value

P258,740.64

P300,092.03

Other Transportation

Equipment P0.00

P0.00

Less: Accumulated

Depreciation P0.00

P0.00

Net Value

P0.00

P0.00

Furnitures,Fixtures and Books

P188,575.75

P355,551.86

Furniture and Fixtures

P507,433.00

P755,203.00

Less: Accumulated

P318,857.25

P399,651.14

Depreciation

Net Value

P188,575.75

P355,551.86

Other Property, Plant and Equipment

- P0.00

P0.00

Less: Accumulated

Depreciation

-

Books

Other Assets

P530,929.21

P530,929.21

Total Non-Current Assets

P16,417,650.30

P18,743,067.20

TOTAL ASSETS

P23,854,463.10

P21,857,951.33

LIABILITIES

Current Liabilities

Accounts Payable

P0.00

P0.00

Due to Officers and Employees

P0.00

P0.00

Due to BIR

P0.00

P0.00

Due to GSIS

P0.00

P0.00

Due to Pag-ibig

P0.00

P0.00

Due to PhilHealth

P0.00

P0.00

Due to Regional Office

P5,784,267.51

Other Payables

P0.00

P0.00

Total Liabilities

P5,784,267.51

P0.00

NET ASSETS/EQUITY

Equity

Government Equity

P18,070,195.59

P21,857,951.33

Accumulated

surplus/(deficit) P21,818,728.85

P22,540,367.49

Unrealized Gain/(Loss)

(P3,748,533.26)

(P682,416.16)

TOTAL LIABILITES and NET ASSETS/EQUITY

P23,854,463.10

P21,857,951.33


Annex C



Statement of Financial Performance

(All Funds)


Notes

2018

2017

Revenue

Tax Revenue

Service and Business Income 11

P6,937,762.16

P10,110,625.32

Shares,Grants and Donations

Gains

Total Revenue

P6,937,762.16

P10,110,625.32

Less:Current Operating

Expenses

Personnel Services

12

P25,667,518.34

P23,415,065.59

Maintenance and Other Operating

Expenses 13

P11,137,649.57

P11,421,986.38

Non-Cash Expenses 14

P2,996,256.65

P3,155,633.05

Total Current Operating

Expenses

P39,801,424.56

P37,992,685.02

Surplus/(Deficit)from Current

Operations

#############

(P27,882,059.70)

Losses

15

(P368,988.65)

(P244,677.79)

Net Financial Assistance/Subsidy 16

P29,484,117.79

P27,444,321.33

Surplus/(Deficit)for the period

(P3,748,533.26)

(P682,416.16)




Statement of Financial Performance

(All Funds)


2018

2017

Revenue

Business/Service Income

Training Fee

P3,303,739.82

P7,269,005.32

Examination Fee

P2,205,055.00

P2,438,625.00

Income from

Hostels/Dormitories

P420,190.00

P232,010.00

Sales Revenue

P0.00

P12,504.00

Other Business Income

P20,460.37

P34,589.00

School Fees

P985,650.00

P118,328.00

Rent/Lease Income

P0.00

P0.00

Interest Income

P2,666.97

P5,564.00

Other Service Income

P0.00

P0.00

Total Revenue

P6,937,762.16

P10,110,625.32

Less:Current Operating

Expenses

Personnel Services

Salaries and Wages-

Regular

P16,923,443.67

P15,244,836.43

Total Salaries and

Wages

P16,923,443.67

P15,244,836.43

Other Compensation

Personnel Economic

Relief Allow.(PERA)

P1,191,000.00

P1,145,000.00

Representation

Allowance (RA)

P60,000.00

P60,000.00

Transportation (TA)

P60,000.00

P60,000.00

Clothing/Uniform

Allowance

P306,000.00

P245,000.00

Subsistence Allowance

P10,800.00

P10,800.00

Laundry Allowance

P1,500.00

P1,500.00

Hazard Pay

P0.00

P0.00

Longevity Pay

P0.00

P628.00

Productivity Incentive

Allowance

P0.00

P0.00

Mid-Year Bonus

P1,363,619.00

P1,214,677.00

Year-end Bonus

P1,433,270.00

P1,304,941.63

Cash Gift

P255,000.00

P242,500.00

Other Bonuses and

Allowances-PBB

P566,273.90

Other Bonuses and

Allowances-PEI

P245,000.00

P236,500.00

Other Bonuses and

Allowances-C.N.A

P719,877.36

P887,811.81

Monetization of Leave

Credits

P0.00

P0.00

Total Other

Compensation

P5,646,066.36

P5,975,632.34

Personnel Benefit

Contributions

Retirement and Life

Insurance Premiums

P2,030,281.60

P1,827,327.96

Pag-ibig Contributions

P60,100.00

P57,400.00

PHILHEALTH

Contributions

P214,648.90

P167,675.00

Employees

Compensation

Insurance Premiums

P59,899.81

P57,193.86

Total Personnel

Benefit Contributions

P2,364,930.31

P2,109,596.82

Other Personnel

Benefits

Terminal Leave Benefits

P195,776.00

P0.00

Other Personnel

Benefits(Loyalty

Incentive)

P145,000.00

P85,000.00

Other Personnel

Benefits(Monetization)

P392,302.00

P0.00

Other Personnel

Benefits(CNA)

P0.00

P0.00

Total Other Personnel

Benefit Contributions

P733,078.00

P85,000.00

Total Personnel Services

P25,667,518.34

P23,415,065.59


Operating Expenses

Travelling Expenses

Traveling Expenses-

Local

P791,676.06

P874,464.31

Traveling Expenses-

Foreign

P0.00

P0.00

Total Travelling

Expenses

P791,676.06

P874,464.31

Training and Scholarship

Expenses

Training Expenses

P564,690.00

P503,404.67

Scholarship

Grants/Expenses

P580,500.00

P0.00

Total Training and

Scholarship Expenses

P1,145,190.00

P503,404.67

Supplies and Materials

Expenses

Office Supplies

Expenses

P330,626.05

P659,498.84

Accountable Forms

Expenses

P50,554.80

P12,350.00

Drugs and Medicines

Expenses

P0.00

P17,521.00

Fuel, Oil and

Lubricants Expenses

P258,425.73

P279,473.60

Textbooks and

Instructional Materials

Expenses

P0.00

P1,026,264.01

Semi-Expendable

Office Equipment

P63,850.00

P70,585.00

Semi-Expendable Information

and Communication Equipment P396,119.15

P280,963.78

Semi-Expendable

Communications

Equipment

P4,100.00

P28,390.00

Semi-Expendable

Disaster & Rescue

Equipment

P0.00

P0.00

Semi-Expendable

Medical Equipment

P0.00

P0.00

Semi-Expendable

Printing Equipment

P0.00

P11,299.00

Semi-Expendable

Sports Equipment

Equipment

P0.00

P11,519.00

Semi-Expendable Technical and

Scientific Equipment P59,500.00

P55,250.00

Semi-Expendable

Other Machinery and

Equipment

P104,596.67

P480,894.06

Semi-Expendable

Furniture,Fixtures and Books

Expenses P29,476.00

P86,894.00

Other Supplies and

Materials Expenses

P3,184,827.02

P2,147,953.20

Total Supplies and

Materials Expenses

P4,482,075.42

P5,168,855.49

Utility Expenses

Water Expenses

P0.00

P1,968.00

Electricity Expenses

P862,398.82

P930,802.33

Total Utility Expenses

P862,398.82

P932,770.33

Communication

Expenses

Postage and Courier

Services

P0.00

P0.00

Telephone Expenses

P129,164.73

P139,193.95

Internet Subscription

Expenses

P54,119.89

P53,646.93

Cable, Satellite,

Telegraph, and Radio

Expenses

P19,619.63

P12,600.00

Total Communication

Expenses

P202,904.25

P205,440.88

Professional Services

Legal Fees

P0.00

P0.00

Other Professional

Services

P724,952.34

P717,336.03

Total Professional

Services

P724,952.34

P717,336.03

General Services

Other General Services

P1,022,981.71

P1,336,763.40

Security Services

P640,952.96

P548,622.18

Total General

Services

P1,663,934.67

P1,885,385.58

Repairs and

Maintenance

Repairs and

Maintenance - Land

Improvements

P0.00

P0.00

Repairs and

Maintenance-


P0.00

P0.00

Repairs and Maintenance-

Buildings and Other Structures P753,469.30

P709,485.52


Machinery and Equipment P55,218.12

P11,872.00


Transportation Equipment P73,525.00

P193,343.94

Repairs and

Maintenance- Furniture

and Fixtures

P0.00

P0.00

Repairs and Maintenance- Other

Property, Plant and Equipment P0.00

P0.00

Total Repairs and

Maintenance

P882,212.42

P914,701.46

Taxes,Insurance

Premiums and Other

Fees

Taxes, Duties and

Licenses

P11,165.30

P13,425.30

Fidelity Bond

Premiums

P26,746.50

P61,746.50

Insurance Expenses

P31,738.34

P18,670.83

Total Taxes,Insurance

Premiums and Other Fees P69,650.14

P93,842.63

Other Maintenance &

Operating Expenses

Advertising Expenses

P22,300.00

P6,800.00

Subscription Expenses

P2,241.00

P14,580.00

Printing and

Publication Expenses

P0.00

P0.00

Representation

Expenses

P483.00

P41,025.00

Transportation and

Delivery Expenses

P0.00

P10,850.00

Other Maintenance &

Operating Expenses

P287,631.45

P52,529.00

Bank Charges

P0.00

P1.00

Total Other Maintenance and

Other Operating Expenses P312,655.45

P125,785.00

Total Maintenance and

Other Operating

Expenses

P11,137,649.57

P11,421,986.38

Non-Cash Expenses

Depreciation

Depreciation- Land

Improvements

P40,444.30

P41,461.57

Depreciation -


P3,453.25

P5,733.25

Depreciation -

Buildings and Other

Structures

P416,091.69

P416,091.69

Depreciation-

Machinery and

Equipment

P2,440,363.65

P2,578,017.48

Depreciation-

Transportation

P41,351.39

P36,238.54

Equipment

Depreciation-

Furniture, Fixtures and

Books

P54,552.37

P78,090.52

Depreciation- Other

Property,Plant and

Equipment

P0.00

P0.00

Total Depreciation

P2,996,256.65

P3,155,633.05

Current Operating

Expenses

P39,801,424.56

P37,992,685.02

Surplus(deficit)from

current operations

(P39,801,424.56)

(P37,992,685.02)

Financial

Assistance/Subsidy from

NGAs, LGUs, GOCCs

Subsidy from National

Government

P30,361,026.12

P29,012,295.46

Subsidy from Other

National Government

(Reversion of Unused

NCA)

(P876,908.33)

(P1,567,974.13)

P36,421,879.95

P37,554,946.65

Losses

Loss of Assets

P0.00

(P124,218.00)

Loss on sale of

Property,Plant and

Equipment

(P368,988.65)

(P120,459.79)

Total Loss

(P368,988.65)

(P244,677.79)

Surplus(deficit)for the

period

(P3,748,533.26)

(P682,416.16)


Annex D

TECHNICAL EDUCATION AND SKILLS DEVELOPMENT

AUTHORITY


Statement of Cash Flows

(All Funds)


2018

2017

Cash Flows From

Operating Activities

Cash Inflows

Receipt of Notice

of Cash Allocation

P30,361,026.12

P26,597,135.90

Collection of

Income/Revenues

P6,937,762.16

P8,343,185.32

Collection of

Receivables

P2,015,265.00

P0.00

Receipt of Inter-

Agency Fund

Transfers

P10,183,230.88

P0.00

Other

Receipts(refund of

cash advance)

P42,040.93

P68,220.67

Total Cash

Inflows

P49,539,325.09

P35,008,541.89

Cash Outflows

Payment of

Expenses

(P34,928,485.04)

(P19,734,061.06)

Purchase of

Inventories

(P2,971,226.75)

(P4,707,254.40)

Grant of Cash

Advances

(P1,006,314.00)

(P910,773.00)

Remittance of

Personnel Benefit

Contributions and

Mandatory Deductions (P2,364,930.31)

(P6,835,122.86)

Reversal of

Unutilized NCA (P876,908.33) (P1,567,974.13)

Remittance of taxes

withheld not covered

by TRA

(P357,411.11)

(P425,484.01)

Total Cash

Outflows

(P42,505,275.54)

(P34,180,669.46)

Net Cash Provided by

(Used in) Operating

Activities

P7,034,049.55

P827,872.43

Cash Flows from

Investing Activities

Cash Inflows

Proceeds from

Sale/Disposal of

Property, Plant and

Equipment

P0.00

P0.00

Total Cash

Inflows

P0.00

P0.00

Cash Outflows

Purchase/Constructi

on of Property, Plant

and Equipment

(P1,919,885.10)

(P3,071,424.36)

Total Cash

Outflows

(P1,919,885.10)

(P3,071,424.36)

Net Cash Provided by

(Used in) Investing

Activities

(P1,919,885.10)

(P3,071,424.36)

Increase (Decrease) in

Cash and Cash

Equivalents

P5,114,164.45

(P2,243,551.93)

Effects of Exchange

Rate Changes on Cash

and Cash Equivalents

Cash and Cash

Equivalents, January 1

P728,938.08

P2,972,490.01

Cash and Cash

Equivalents, December

31

P5,843,102.53

P728,938.08


Annex E



Statement of Changes in Net Assets/Equity

(All Funds)


2018

2017

Balance at January 1

P21,857,951.33

P23,206,622.48

Add/(Deduct):

Changes in accounting policy

P0.00

P0.00

Prior period

errors

(P53,214.48)

P0.00

Other

adjustments

P13,992.00

(P666,254.99)

Restated

balance

P21,818,728.85

P22,540,367.49

Add/(Deduct):

Changes in Net Assets/Equity for the Calendar Year

Surplus/(Deficit) for the period

(P3,748,533.26)

(P682,416.16)

Adjustment of net revenue recognized directly in net

assets/equity 1

P0.00

P0.00

Others 2

P0.00

P0.00

Balance at December 31

P18,070,195.59

P21,857,951.33


Annex F



Statement of Comparison of Actual and Budgeted Amounts

(All Funds)


(in currency units)

Budgeted Amounts Actual

Amounts on

Comparable

Basis

Difference:

Final Budget

and Actual Original Final

RECEIPTS

Business/Service

Income P6,936,514.93 P6,936,514.93 P6,936,514.93 P0.00

Assistance and Subsidy P29,484,117.79 P29,484,117.79 P29,484,117.79 P0.00

Total Receipts P36,420,632.72 P36,420,632.72 P36,420,632.72 P0.00

PAYMENTS

Personal Services P25,667,518.34 P25,667,518.34 P25,667,518.34 P0.00


Operating

Expenses P12,472,296.69 P12,472,296.69 P12,472,296.69 P0.00

Capital Outlay P883,443.70 P883,443.70 P883,443.70 P0.00

Financial Expenses P0.00 P0.00 P0.00 P0.00

Others P0.00 P0.00 P0.00 P0.00

Total Payments P39,023,258.73 P39,023,258.73 P39,023,258.73 P0.00

NET

RECEIPTS/(PAYMENTS) (P2,602,626.01) (P2,602,626.01) (P2,602,626.01) P0.00


Annex G

TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY APARRI POLYTECHNIC INSTITUTE

Consolidated Financial statements for the year ended December 31, 2018

Notes to Financial Statements Reference

A. Header Aparri Polytechnic Institute

Notes to [Consolidated] Financial Statements

For the year ended December 31, 2018

PPSAS 1

B. Body

1. General Information/Agency Profile

The consolidated financial statements of Aparri Polytechnic Institute were

authorized for issue on February 14,2018 as shown in the Statement of

Management Responsibility for Financial Statements signed by Renato D. Ubiña,

Ph.D. the Vocational School Administrator III

The Aparri Polytechnic Institute is operating units renamed on October 18, 2012 by

RA 10227 and operates under the authority of the RA 7796 otherwise known as the

Technical Education and Skills Development Act of 1994. The mandate of Aparri

Polytechnic Institute is to provide relevant, accessible, high quality and efficient

technical education and skills development training. The Agency's registered office

is located in Maura, Aparri, Cagayan.

Its mission is to exist as “The Center of Technical Excellence”. As, such it endeavors

to make available quality technical vocational education and trainings and ensures

the inculcation of upright attitude towards work among all those who pass through

its portals.

PPSAS 1.63(b) PPSAS 14.26 PPSAS 1.150 PPSAS ,


2. Statement of Compliance and Basis of Preparation of Financial Statements

The consolidated financial statements have been prepared in accordance with and

comply with the Philippine Public Sector Accounting Standards (PPSAS) issued by

the Commission on Audit per COA Resolution No. 2014-003 dated January 24, 2014.

The consolidated financial statements have been prepared on the basis of historical

cost, unless stated otherwise. The Statement of Cash Flows is prepared using the

direct method.

PPSAS 1.129 PPSAS 2 PPSAS 6

3. Summary of Significant Accounting Policies

3.1 Basis of accounting

The consolidated financial statements are prepared on an accrual basis in

accordance with the Philippine Public Sector Accounting Standards (PPSAS).

PPSAS 1, 6

3.2 Inventories and Semi-Expendables Machineries and Equipment

PPSAS 2.8

PPSAS 2.9

PPSAS 2.56 Inventories and Semi-Expendables Machineries and Equipment are recognized

as an expense when deployed for utilization or consumption in the ordinary

course of operations of the Aparri Polytechnic Institute.


3.3 Property, Plant and Equipment

Recognition

An item is recognized as property, plant, and equipment (PPE) if it meets the

characteristics and recognition criteria as a PPE.

The characteristics of PPE are as follows:

tangible items;

are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and

are expected to be used during more than one reporting period.

An item of PPE is recognized as an asset if:

It is probable that future economic benefits or service potential associated with the item will flow to the entity; and

The cost or fair value of the item can be measured reliably.


Measurement at Recognition

An item recognized as property, plant, and equipment is measured at cost.

The cost of the PPE is the cash price equivalent or, for PPE acquired through

non-exchange transaction its cost is its fair value as at recognition date.

Cost includes the following:

Its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates;

expenditure that is directly attributable to the acquisition of the items; and

Initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired, or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.

PPSAS 17.26

PPSAS 17.37

PPSAS 17.30

Measurement After Recognition

After recognition, all property, plant, and equipment are stated at cost less

accumulated depreciation and impairment losses.

PPSAS 17.43

PAG2 of

PPSAS 17

When significant parts of property, plant and equipment are required to be

replaced at intervals, the Aparri, Polytechnic Institute recognizes such parts as

individual assets with specific useful lives and depreciates them accordingly.

PPSAS 17.24

PPSAS 17.25


Likewise, when a major repair/replacement is done, its cost is recognized in the

carrying amount of the plant and equipment as a replacement if the recognition

criteria are satisfied.

All other repair and maintenance costs are recognized as expense in surplus or

deficit as incurred.

PPSAS 17.23

Depreciation

Each part of an item of property, plant, and equipment with a cost that is

significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognized as expense unless it is

included in the cost of another asset.

PPSAS 17.59

PPSAS 17.64

Initial Recognition of Depreciation

Depreciation of an asset begins when it is available for use such as when it is in

the location and condition necessary for it to be capable of operating in the

manner intended by management.

For simplicity and to avoid proportionate computation, the depreciation is for

one month if the PPE is available for use on or before the 15th of the month.

However, if the PPE is available for use after the 15th of the month,

PAG3 of

PPSAS 17


depreciation is for the succeeding month.

Depreciation Method

The straight line method of depreciation is adopted.

PAG4 of

PPSAS 17

Estimated Useful Life

The Aparri Polytechnic Institute uses the Schedule on the Estimated Useful Life

of PPE by classification prepared by COA.

PAG5 of

PPSAS 17

The Aparri Polytechnic Institute uses a residual value equivalent to at least five

percent (5%) of the cost of the PPE.

PAG6 of

PPSAS 17

3.4 Changes in accounting policies and estimates

The Aparri Polytechnic Institute recognizes the effects of changes in accounting

policy retrospectively. The effects of changes in accounting policy were applied

prospectively if retrospective application is impractical.

The Aparri Polytechnic Institute recognizes the effects of changes in accounting

estimates prospectively by including in surplus or deficit.

The Aparri Polytechnic Institute correct material prior period errors

retrospectively in the first set of financial statements authorized for issue after

their discovery by:

PPSAS 3.27

PPSAS 3.30

PPSAS 3.41

PPSAS 3.47


Restating the comparative amounts for prior period(s) presented in which the error occurred; or

If the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and net assets/equity for the earliest prior period presented.

3.5 Business/Service Income

Measurement of Revenue

Revenue was measured at the fair value of the consideration received or

receivable.

Business/Service Income are income collected from training fee, assessment

fee, interest income, income from hostels/dormitories, sales from canteen

operations, school fees and other business income not classified with the

above mentioned classification of income.

PPSAS 9.14

4. Changes in Accounting Policies

There are no other policies adopted by the Agency.

5. Prior Period Adjustments

Adjustment of Prior Period Errors are adjusted in the Accumulated Surplus/Deficit.

6. Cash and Cash Equivalents

Accounts

As of December 31,

2018

Cash on Hand

Cash in Bank-Local Currency 5,843,102.53

Total Cash and Cash Equivalents 5,843,102.53


Particulars As of December 31, 2018

Financial assets 6,526,161.27

Liabilities -

Net Liabilities (-)

Non-financial assets 17,328,301.83

Accumulated surplus (deficit) 23,854,463.1

Financial Assets are composed of Cash in Bank, Accounts Receivable from Provincial Office

and Receivable-Disallowances/Charges before year 1994. Non-Financial Assets are

Property, Plant, Equipment, Other Supplies Inventory and Construction in Progress-School

Canteen.

Consolidated Statement of Operations

Particulars For CY 2018

Revenue 36,421,879.95

Expenses 39,801,424.56

Losses 368,988.65

Accumulated surplus (deficit) – beginning of year 21,857,951.33

Adjustments (39,222.48)

Surplus (deficit) for the year (3,748,533.26)

Accumulated surplus (deficit) , December 31, 2018 18,070,195.59

7. Receivables

7.1 Loans and Receivables

Accounts

2018

Current Non-Current Total

Receivables-Disallowances/Charges

683,058.74 683,058.74

Accounts Receivable-Provincial Office

TOTALS

683,058.74 683,058.74

According to the former Accountant the Receivables-Disallowances of 683,058.74, are

disallowances before CY 1994 from officers and employees of Aparri Polytechnic Institute formerly

Aparri School of Arts and Trade which could not be reconciled/collected due to no records turned

over to her and no accurate records filed by the office.

8. Inventories

Other Supplies Inventory are inventories for construction of school canteen which has not

yet been issued in the construction.

9. Property, Plant and Equipment

Land

Land

Improvements

Infrastructure

Assets

Buildings and

Other Structures

Machinery and

Equipment

Carrying Amount,

January 1, 2018 48,230.00 258,746.75 12,143.87 8,599,800.78 7,954,513.96

Additions/Acquisitions 0 0 17,800.00 982,568.40

Total 48,230.00 258,746.75 29,943.87 8,599,800.78 8,937,082.36

Adjustments it was

reclassified twice in cy

2018

Reclassification of Assets

directly to

Accumulated/Surplus

deficit (0) (0) (0) (0) (0)

(0) (0) (0) (0)

(0)

Adjustment of Accumulated

Depreciation(net) (0) (40,444.30) (6,055.25) (416,091.71) (2,654,866.56)

Carrying Amount, December

31, 2018

(As per Statement of

Financial Position) 48,230.00 218,302.45 23,888.62 8,183,709.07 6,282,215.8

Land

Land

Improvements

Infrastructure

Assets

Buildings and

Other Structures

Machinery and

Equipment

Gross Cost (Asset Account

Balance per Statement of

Financial Position) 48,230.00 2,126,724.70 35,975.00 24,864,231.36 29,363,158.50

Less : Accumulated

Depreciation (0) (1,908,422.25) (12,086.38)

(16,680,522.27

) (23,080,942.70)

Allowance for

Impairment (0) (0) (0) (0) (0)


31, 2018


Financial Position) 48,230.00 218,302.45 23,888.62 8,183,709.09 6,282,215.80

Transportation

Equipment

Furniture,

Fixtures, Books TOTAL

Carrying Amount,

January 1, 2018 300,092.03 355,551.86 17,529,079.25

Additions/Acquisitions 1,000,368.40

Total 300,092.03 355,551.86 18,529,447.65

Adjustments (0) (112,453.74)

(112,453.74)

Depreciation (As per

Statement of Financial

Performance) (41,351.39) (54,522.37) (3,213,331.56)

Adjustment of Accumulated

Depreciation (0) (0) (0)


31, 2018


Financial Position) 258,740.64 188,575.75 15,203,662.35

Transportation

Equipment

Furniture,

Fixtures, Books TOTAL

Gross Cost (Asset Account

Balance per Statement of

Financial Position) 1,002,597.53 507,433.00 57,948,450.09

Less : Accumulated

Depreciation (743,856.89) (318,857.25) (42,744,687.74)

Allowance for

Impairment (0) (0) (0)


31, 2017


Financial Position) 258,740.64 188,575.75 15,203,662.35

10. Other Assets

10.1 Current and Non-Current Other Assets

Particulars

2017

(in thousand pesos)

Current Non-Current Total

Advances - - -

Prepayments - - -

Deposits - - -

Other Assets - 530,929.21 530,929.21

TOTALS - 530,929.21 530,929.21

These are assets that are fully depreciated.

11. Service and Business Income

Particulars 2018 2017

Service Income 0.00 0.00

Other Service Income 0.00 0.00

Business Income 6,937,762.16

10,110,625.3

2

Training fee 3,303,739.82 7,269,005.32

Examination fee 2,205,055.00 2,438,625.00

Income from Hostels/Dormitories 420,190.00 232,010.00


Sales Revenue 0.00 12,504.00

Interest Income 2,666.97 5,564.00

School Fees 985,650.00 118,328.00

Other Business Income 20,460.37 34,589.00

Other Service Income 0.00 0.00

Rent/Lease Income 0.00 0.00

Total Service and Business Income

P6,937,762.1

6

10,110,625.3

2

Training fee and examination fee are income collected from the payment of training fee and

assessment fee of the different qualifications offered by this Institute.

Income from Hostels/Dormitories are payment of hotel accommodation.

Interest Income are income earned from the deposited amount at Development Bank of the

Philippines Aparri branch.

Sales Revenue are sales from Canteen operations.

School fees are collections from the sales of ID lace.

Other Business Income are sales from training cum production like sales from the output of

Bread and Pastry Production.

12. Personnel Services

12.1 Salaries and Wages


Salaries and Wages-Regular 16,923,433.67 15,244,836.43

Salaries and Wages-Casual/Contractual - -

Total Salaries and Wages 16,923,433.67 15,244,836.43

12.2 Other Compensation


Personal Economic Relief Allowance (PERA) 1,191,000.00 1,145,000.00

Representation Allowance (RA) 60,000.00 60,000.00

Transportation Allowance (TA) 60,000.00 60,000.00

Clothing/Uniform Allowance 306,000 245,000.00

Subsistence Allowance 10,800.00 10,800.00

Laundry Allowance 1,500.00 1,500.00

Longevity Pay 0.00 628.00

Mid-Year Bonus 1,363,619.00 1,214,677.00

Year End Bonus 1,433,270.00 1,304,941.63

Cash Gift 255,000.00 242,500.00

Other Bonuses and Allowances 964,877.36 1,690,585.71

Total Other Compensation 5,646,066.36 5,975,632.34

12.3 Employees Future Benefits

The Aparri Polytechnic Institute and its employees contribute to the GSIS in accordance

with the GSIS Act. The Government Service Insurance System administers the plan,

including payment of pension benefits to employees to whom the act applies.

12.4 Personnel Benefit Contributions


Retirement and Life Insurance Premiums 2,030,281.60 1,827,327.96

PhilHealth Contributions 214,648.90 167,675.00

Employees Compensation Insurance Premiums 59,899.81 57,193.86

HDMF Contributions 60,100.00 57,400.00

Total Personnel Benefit Contributions 2,364,930.31 2,109,596.82

12.5 Other Personnel Benefits


Other Personnel Benefits-Monetization of Leave Credits 392,302.00 0.00

Other Personnel Benefits-Loyalty Pay 145,000.00 85,000.00

Other Personnel Benefits-Terminal Leave Benefits 195,776.00 0.00

Total Other Personnel Benefits 733,078.00 85,000.00

13. Maintenance and Other Operating Expenses

13.1 Traveling Expenses


Traveling Expenses-Local 791,676.06 874,464.31

Total Traveling Expenses 791,676.06 874,464.31

13.2 Training and Scholarship Expenses



Training Expenses 564,690.00 503,404.67

Scholarship Expenses 580,500.00 0.00

Total Training and Scholarship Expenses 1,145,190.00 503,404.67

13.3 Supplies and Materials Expenses


Office Supplies Expenses 330,626.05 659,498.84

Accountable Forms Expenses 50,554.80 12,350.00

Drugs and Medicines Expenses 0.00 17,521.00

Fuel, Oil and Lubricants Expenses 258,425.73 279,473.60

Textbooks and Instructional Materials Expenses 0.00 1,026,264.01

Semi-Expendable Office Equipment 63,850.00 70,585.00

Semi-Expendable Information and Communication

Equipment 396,119.15 280,963.78

Semi-Expendable Communications Equipment 4,100.00 28,390

Semi-Expendable Machinery and Equipment Expenses 0.00 0.00

Semi-Expendable Medical Equipment 0.00 0.00

Semi-Expendable Printing Equipment 0.00 11,299.00

Semi-Expendable Sports Equipment 0.00 11,519.00

Semi-Expendable Technical and Scientific Equipment 59,500.00 55,250.00

Semi-Expendable Other Machinery and Equipment 104,596.67 480,894.06

Semi-Expendable Furnitures,Fixtures and Books 29,476.00 86,894.00

Other Supplies and Materials Expenses 3,184,827.02 2,147,953.20

Total Supplies and Materials Expenses 4,482,075.42 5,168,855.49

13.4Utility Expenses


Water Expenses 0.00 1,968.00

Electricity Expenses 862,398.82 930,802.33

Total Utility Expenses 862,398.82 932,770.33

13.5 Communication Expenses


Postage and Courier Services 0.00 0.00

Telephone Expenses 129,164.73 139,193.95

Internet Subscription Expenses 54,119.89 53,646.93

Cable, Satellite, Telegraph and Radio Expenses 19,619.63 12,600.00

Total Communication Expenses 202,904.25 205,440.88

13.6 General Services


Other General Services 1,022,981.71 1,336,763.40

Securirty Services 640,952.96 548,622.18

Total General Services 1,663,934.67 1,885,385.58

13.7 Professional Services


Other Professional Services 724,952.34 717,336.03


Total Professional Services 724,952.34 717,536.03

13.8 Repairs and Maintenance


Repairs and Maintenance-Buildings and Other Structures 753,469.30 709,485.52

Repairs and Maintenance-Machinery and Equipment 55,218.12 11,872.00

Repairs and Maintenance-Transportation Equipment 73,525.00 193,343.94

Repairs and Maintenance-Other Property, Plant and

Equipment 0.00 0.00

Total Repairs and Maintenance Expenses 882,212.42 914,701.46

13.9 Taxes, Insurance Premiums and Other Fees


Taxes, Duties and Licenses 11,165.30 13,425.30

Fidelity Bond Premiums 26,746.50 61,746.50

Insurance Expenses 31,738.34 18,670.83

Total Taxes, Insurance Premiums and Other Fees 69,650.14 93,842.63

13.10 Other Maintenance and Operating Expenses


Advertising Expenses 22,300.00 6,800.00

Printing and Publication Expenses 0.00 0.00

Representation Expenses 483.00 41,025.00


Transportation and Delivery Expenses 0.00 10,850.00

Subscription Expenses 2,241.00 14,580.00

Other Maintenance and Operating Expenses 287,631.45 52,529.00

Total Other Maintenance and Operating Expenses 312,655.45 125,784.00

14. Non-Cash Expenses

14.1 Depreciation


Depreciation-Land Improvements 40,444.30 41,461.57

Depreciation-Infrastructure Assets 3,453.25 5,733.25

Depreciation-Buildings and Other Structures 416,091.69 416,091.69

Depreciation-Machinery and Equipment 2,440,363.65 2,578,017.48

Depreciation-Transportation Equipment 41,351.39 36,238.54

Depreciation-Furniture, Fixtures and Books 54,552.37 78,090.52

Depreciation-Other Property, Plant and Equipment 0.00 0.00

Total Depreciation 2,996,256.65 3,155,633.05

15. Non-Operating Income, Gain or Losses

15.1Non-Operating Losses


Loss on Asset 368,988.65 124,218.00

Loss on Sale of Property, Plant and Equipment 0.00 120,459.79

Loss on Asset is the partially damaged by fire on Carpentry and Plumbing training room last

October 13, 2017, while the Loss on Sale of property, plant and equipment are Unserviceable Other

Assets sold with a net proceeds of 26,256.95.

16. Net Financial Assistance/Subsidy

Financial Assistance/Subsidy from NGAs, LGUs, GOCCs


Subsidy from National Government 29,484,117.79 27,444,321.33

Total Financial Assistance/Subsidy from NGAs, LGUs, GOCCs 29,484,117.79 27,444,321.33

Subsidy from National Government composed of Notice of Cash Allocation released by

Department of Budget and Management, Notice of Fund Transfer from Regional Office and Tax

Remittance Advice (net of reversion to Bureau of Treasury amounting to One Million Five Hundred

Sixty Seven Thousand Nine Hundred Seventy Four & 13/100 (876,908.33), Computed as follows:

Particulars Amount

DBM released 26,526,505.00

RO/CO released 2,756,579.00

TRA 1,077,942.12

Reversion to the Bureau of Treasury (876,908.33)

Net Amount 29,484,117.79

Less: Financial Assistance/Subsidy to NGAs, LGUs, GOCCs, NGOs/POs


Financial Assistance to NGAs 0.00 0.00

Subsidy to NGAs (for BTr only) 0.00 0.00

Financial Assistance to Local Government Units 0.00 0.00

Budgetary Support to GOCCs 0.00 0.00

Financial Assistance to NGOs/POs 0.00 0.00

Subsidies-Others 0.00 0.00

Total Financial Assistance/Subsidy to NGAs, LGUs, GOCCs 0.00 0.00

Net Financial Assistance/Subsidy 29,484,117.79 27,444,321.33

17. Budget Information

The Annual Budget of the Institution are Appropriations approved in the General

Appropriation Act 2017, Special Allotment Release Order (SARO) from Department of Budget

and Management (DBM) and sub-allotment released by the TESDA-Regional Office.

Annex H

STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT RECOMMENDATIONS


Out of seven prior years’ audit recommendations, four were fully implemented, two

were partially implemented and one was not implemented. Details are as follows:

Observation and

Recommendation

REF Management Action Status of

Implemen-

tation

Reasons for

Partial/ Non-

implementation

1. The reported balance of Cash in Bank, Local Currency Current Account (LCCA) of ₱728,938.08 as of December 31, 2017 is unreliable due to unreconciled difference of ₱786,850.22 between the book and bank records, contrary to Sections 74 of Presidential Decree (P.D.) 1445 and Chapter 21 of the Government and Accounting Manual (GAM) volume I.

We recommended that the

Management require the

Accountant/designated

staff to prepare and submit

to the Auditor’s Office all

unsubmitted Bank

Reconciliation Statement

ML

2017

Management required

the Accountant/

designated staff to

prepare and submit to

the Auditor’s Office all

unsubmitted Bank

Reconciliation

Statement (BRS).

Henceforth, to submit

BRS on time.

Not

Implement

ed

Management

averred that bank

statements were

received late from

the bank, thus the

delay in the

preparation of BRS

and the adjustment

of reconciling items

if any.

Observation and

Recommendation


Implemen-

tation

Reasons for

Partial/ Non-

implementation

(BRS) for CY 2017 together

with all the supporting

documents for each bank

account maintained by the

agency. A Journal Entry

Voucher (JEV) shall be

prepared to recognize all

reconciling items that

require adjustment and

correction in the books of

accounts.

2. The accountable officer did not maintain Cash Disbursements Records for the cash advances granted for operational expenses contrary to Section 17, Chapter 6, of the Government Accounting Manual (GAM) Volume I.


Management direct the AO

to maintain Cash

Disbursements Record for

each fund cluster and

record all transactions

made during the day to

properly monitor and

establish the balances of

accountabilities as of a

given time or date.

ML

2017

Management directed

the AO to maintain Cash

Disbursements Record

for each fund cluster

and record all

transactions made

during the day to

properly monitor and

establish the balances

of accountabilities as of

a given time or date.

Fully

Implement

ed

Observation and

Recommendation


Implemen-

tation

Reasons for

Partial/ Non-

implementation

3. The validity, existence and accuracy of the Other Supplies Inventory account balance amounting to ₱94,500.00 as at year-end could not be ascertained due to failure to conduct physical inventory and maintain Stock Cards, contrary to the pertinent provisions of Chapter 8 of Government Accounting Manual (GAM) Volume I.



Supply Division to maintain

Stock Card for each item of

stock/inventory to account

receipts and issuances of

the same. Likewise, conduct

actual physical count of

inventory and prepare the

corresponding Report on

the Physical Count of

Inventories (RPCI). The

balances per RPCI should be

reconciled with the balance

per stock cards and per

books.

ML

2017

Management required

the Supply Division to

maintain Stock Card for

each item of

stock/inventory to

account receipts and

issuances of the same.

Likewise, the Supply

Officer conducted

actual physical count of

inventory and prepared

the corresponding

Report on the Physical

Count of Inventories

(RPCI).

Fully

Implement

ed

4. Management failed to submit copies of purchase

ML Management directed

the Supply Officer to

Fully

Implement

Observation and

Recommendation


Implemen-

tation

Reasons for

Partial/ Non-

implementation

orders totaling ₱5.7 million within five days upon its issuance/execution and notify the Auditor of the time and date of the scheduled deliveries, in violation of COA Circular Nos. 2009-001 and 96-010, thus precluding timely and objective review and evaluation of transactions. Likewise, inspection of deliveries to determine completeness, nature and condition cannot be done due to the failure of the agency to inform the audit team on the schedule of deliveries.


Management:

a. direct the Supply Officer

to submit copies of

purchase orders and the

supporting documents

forming part thereof to the

Office of the Auditor within

five working days from

issuance or execution to

ensure timely and objective

review of transactions;

2017 submit copies of

purchase orders and the


forming part thereof to

the Office of the

Auditor.

ed

Observation and

Recommendation


Implemen-

tation

Reasons for

Partial/ Non-

implementation

b. instruct the official

responsible for accepting

deliveries of procured items

that within twenty-four (24)

hours acceptance, he shall

notify the Auditor of the

time and date of the

scheduled deliveries

pursuant to COA Circular

96-010. In case of partial

delivery of any item in the

P.O., the copy to be

submitted shall indicate

which items have been

delivered, and which have

not.

5. The validity, existence and accuracy of the Property Plant and Equipment (PPE) account of ₱59,020,196.69 as at year-end could not be ascertained due to (a) non-conduct of physical count of PPE and (b) non-maintenance of Property Cards (PC), contrary to the provisions of the Government Accounting Manual (GAM) Volume I.



ML

2017

Management required

the Property Division to

conduct actual physical

count of PPE to

ascertain existence and

current condition of the

PPE items. Moreover,

the Property Division

established Property

Cards to record the

description, acquisition,

transfer, disposal, and

other information about

the PPE.

Fully

Implement

ed

Observation and

Recommendation


Implemen-

tation

Reasons for

Partial/ Non-

implementation

Property Division to

conduct actual physical

count of PPE to ascertain

existence and current

condition of the PPE items.

The Property Division may

perform it quarterly or

semi-annually to accurately

update and come up with

the annual RPCPPE.

Moreover, the Property

Division shall maintain

Property Cards to record

the description, acquisition,

transfer, disposal, and other

information about the PPE.

6. Other Assets account was inappropriately used to record unserviceable properties costing ₱1,340,697.10. Out of which, ₱146,716.74 was disposed through sale, ₱663,051.15 was derecognized and charged to Accumulated Surplus/(Deficit) based on the Inventory and Inspection Report of Unserviceable Property (IIRUP) (Appendix 74) prepared by the Property Officer and ₱530,929.21 remained in the books, contrary to the provisions

ML

2017

Management

instructed the

Accountant to prepare a

Journal Entry Voucher

(JEV) to correct the

journal entries

previously made to

record the

unserviceable

properties based on the

IIRUP and committed to

start disposing the

unserviceable

properties in

accordance with the

aforementioned rules

Partially

Implement

ed

As of December 31,

2018, some

unserviceable were

still recorded in the

books. Moreover,

the unserviceable

properties are still

dumped within the

office premises

awaiting proper

disposal.

Observation and

Recommendation


Implemen-

tation

Reasons for

Partial/ Non-

implementation

of Section 40(d) Chapter 10 of the Government Accounting Manual (GAM) Volume I. Moreover, undisposed unserviceable properties were still dumped inside the office premises awaiting proper disposal, thus exposing it to further deterioration and losses contrary to the provisions of COA Circular No. 89-296, Section 79 of Presidential Decree 1445, COA Circular 86-264, and Section 40(d) Chapter 10 of the Government Accounting Manual (GAM) Volume I.


Management:

a) instruct the Accountant

to prepare a Journal Entry

Voucher (JEV) to correct the

journal entries previously

made to record the

unserviceable properties

based on the IIRUP in

accord with Section 40(d),

Chapter 10 of GAM Volume

I;

and regulations.

Observation and

Recommendation


Implemen-

tation

Reasons for

Partial/ Non-

implementation

b) direct the Property

Officer to prepare IIRUP for

the remaining

unserviceable properties

recorded in the Other

Assets account amounting

to ₱530,929.21. The report

shall serve as basis of the

Accountant to properly

dropped them from the

books;

c) start disposing the

unserviceable properties in

accordance with the

provisions of COA Circular

86-264 and Section 79 of

Presidential Decree 1445;

and

d) furnish the COA Auditor

with all prepared IRRUPs

and furnish at least five

days before the scheduled

bidding with a copy of

program for disposal,

IIR/RMW, appraisal

documents and disposal

procedures.

7. Disbursement vouchers ML Management informed Partially Though DVs for CY

Observation and

Recommendation


Implemen-

tation

Reasons for

Partial/ Non-

implementation

and supporting documents covering transactions for January 1, 2017 to December 31, 2017 were not submitted within the prescribed period, contrary to the provisions of Section 39 of PD 1445 and Section 7.2.1(a) of COA Circular No. 2009-006, thus management assertions of occurrence, accuracy, validity and completeness of the transactions could not be established.



Accountant to submit

within the prescribed

period the disbursement

vouchers and the necessary

supporting documents as

corresponding Notice of

Suspension may be issued

for the non-submission

thereof and appropriate

action will be taken against

the responsible officials.

Thereafter, ensure that

submission of financial

reports be made on time,

complete and in order.

2017 and instructed the

concerned personnel to

facilitate the timely

submission of

Disbursement Vouchers

and the necessary


for CY 2018. Meanwhile,

DVs for October to

December 2017 were

forwarded to the

Auditor’s Office on

February 7, 2018.

Implement

ed

2017 were already

submitted, CY 2018

accounts were not

submitted on time.

Annex

L-2

Agency:

Technical Education and Skills Development

Authority

Operating Unit: APARRI POLYTECHNIC INSTITUTE

Table- Pag-IBIG CONTRIBUTIONS and LOAN

AMORTIZATION

CY 2018

Month/

CY 2018

PAG-IBIG Contribution Employee Loans/

Repayments

Amortization

Total Amounts

Remitted

Check

No.

Date of

Check

Unremitt

ed

Balance Employee Share

Governm

ent Share

Premiu

m

Pag-

IBIG II

Cont.

Calamit

y Loan

Multi-

purpose

Loans

Beginning Balance

January

P6,456.6

4

P2,000.0

0 P4,700.00

P11,018.

57

P39,964.7

8

P64,139.9

9

P11,156.6

4 61762

01/12/20

18

50,983.35 61763

01/12/20

18

2,000.00 61764

01/12/20

18

subtotal

64,139.99

-

February

6,956.64

2,000.00

5,200.00

7,916.93

38,241.86

60,315.43

12,156.64 61777

02/14/20

18

46,158.79 61778

02/14/20

18

2,000.00 61779

02/14/20

18

subtotal

60,315.43

-

March

6,756.64

2,000.00

5,000.00

7,916.93

38,241.86

59,915.43

11,756.64 61780

03/14/20

18

46,158.79 61789

03/14/20

18

2,000.00 61779

03/14/20

18

subtotal

59,915.43

-

April

6,256.64

2,000.00

4,900.00

6,244.82

38,713.78

58,115.24

11,156.64 62824

04/12/20

18

44,958.60 62825

04/12/20

18

2,000.00 62826

04/12/20

18

subtotal

58,115.24

-

May

6,156.64

2,000.00

4,800.00

4,703.44

37,303.13

54,963.21

10,956.64 62852

05/09/20

18

42,006.57 62853

05/09/20

18

2,000.00 62854

05/09/20

18

subtotal

54,963.21

-

June

6,156.64

2,000.00

4,800.00

4,703.44

39,521.35

57,181.43

10,956.64 62866

06/14/20

18

44,224.79 62867

06/14/20

18

2,000.00 62868

06/14/20

18

subtotal

57,181.43

-

July 63401 07/13/20

6,756.64 2,000.00 5,400.00 4,703.44 40,421.35 59,281.43 12,156.64 18

2,000.00 63402

07/13/20

18

45,124.79 63403

07/13/20

18

subtotal

59,281.43

-

August

6,456.64

2,000.00

5,100.00

4,703.44

45,038.30

63,298.38

11,556.64 63404

08/14/20

18

49,741.74 63405

08/14/20

18

2,000.00 63406

08/14/20

18

subtotal

63,298.38

-

Septemb

er

6,456.64

2,000.00

5,100.00

4,703.44

51,731.48

69,991.56

11,556.64 63416

09/20/20

18

56,434.92 63417

09/20/20

18

2,000.00 63418

09/20/20

18

subtotal

69,991.56

-

October

6,456.64

2,000.00

5,100.00

4,703.44

51,731.48

69,991.56

11,556.64 63429

10/16/20

18

56,434.92 63430

10/16/20

18

2,000.00 63431

10/16/20

18

subtotal

69,991.56

-

Novemb

er

6,856.64

2,000.00

5,100.00

4,703.44

52,756.10

71,416.18

11,956.64

ADA-

10110

1-11-

099-

2018

11/14/20

18

57,459.54

ADA-

10110

1-11-

099-

2018

11/14/20

18

2,000.00

ADA-

10110

1-11-

099-

2018

11/14/20

18

subtotal

71,416.18

-

Decemb

er

6,656.64

2,000.00

4,900.00

4,703.44

50,649.74

68,909.82

11,556.64

ADA-

10110

1-12-

117-

2018

12/14/20

18

55,353.18

ADA-

10110

1-12-

117-

2018

12/14/20

18

2,000.00

ADA-

10110

1-12-

117-

2018

12/14/20

18

subtotal

68,909.82

-

TOTAL

P78,379.

68

P24,000.

00

P60,100.0

0

P70,724.

77

P524,315.

21

P757,519.

66

P757,519.

66

Aparri Polytechnic Institute Aparri, Cagayan

Agency Action Plan and Status of Implementation As of December 31, 2018

Reference No. (AOM)

Audit

Observations

Audit Recommendations

Agency Action Plan

Status of

Implementation

Reason for Partial/Delay/No

n-Implementation, if applicable

Action

Taken/Action to be

taken

Action

Plan

Person/De

pt. Responsibl

e

Target

Implementation Date

From To

AOM No. 2019-001

(18)

Disbursement vouchers and supporting

documents covering transactions for January

1, 2018 to December 31, 2018 were not

submitted within the prescribed period,

incurring 3 to 40 days delay, contrary to

the provisions of Section 39 of PD 1445 and

Section 7.2.1(a) of COA Circular No. 2009-

006, thus management assertions of occurrence,

accuracy, validity and completeness of the

transactions could not be established.

Management should instruct the Accountant to submit within the

prescribed period all disbursement vouchers and its supporting

documents, otherwise Notice of Suspension may be issued if warranted,

and appropriate action will be taken against the responsible officials

for the non-submission thereof. Thereafter, ensure that submission of

financial reports be made on time, complete and in order.

AOM No.

19-002 (18)

The reported

balance of Cash in Bank, Local Currency

Current Account (LCCA) of ₱5,874,702.

53 as of December 31, 2018 is unreliable

due to unreconciled balance of ₱844,408.25

between the book and bank records,

Management should

advise the Accountant/designated staff to prepare and submit the

monthly Bank Reconciliation Statement (BRS) for each bank account

maintained by the agency within ten days from receipt of the monthly Bank

Statement (BS) pursuant to Section 21 of GAM. A Journal Entry

Voucher (JEV) shall be prepared to recognize all reconciling items

contrary to Sections 74 of

Presidential Decree (P.D.) 1445 and Chapter

21 of the Government and Accounting

Manual (GAM) Volume I.

that require adjustment and correction in the

books of accounts. Henceforth, prepare and submit BRS together with all the

supporting documents and JEV on time to detect errors on a timely

basis and make necessary corrections immediately.

AOM No. 19-003

(18)

Unserviceable and fully depreciated

properties amounting to ₱530,929.21 were

incorrectly recorded in Other Assets account and

still dumped inside the office premises

awaiting proper disposal, thus

exposing it to further deterioration and losses

contrary to the provisions of COA Circular

No. 89-296, Section 79 of Presidential Decree

1445, COA Circular 86-264, and Sections

40(d) and 42(h) of Chapter 10 of the

Government Accounting Manual (GAM),

Volume I.

Management should direct the Property Officer to prepare

IIRUP for the unserviceable and fully depreciated properties recorded

in the Other Assets account amounting to ₱530,929.21 and conduct disposal

thereof in accordance with the provisions of COA Circular 86-264 and

Section 79 of Presidential Decree 1445.

AOM No. 19-004

(18)

The validity, existence and accuracy

of the Construction Materials Inventory

account balance amounting to ₱275,935.00

Management should require the Supply Division to include in

the supply records each item of stock/inventory in the physical

inventory count amounting to amounting to ₱275,935.00.

as at year-end could not be

ascertained due to non-inclusion of construction

supplies held in stock for consumption in the

production process in the physical count of

inventories, contrary to the pertinent provisions of

Chapter 8 of Government Accounting Manual

(GAM) Volume I.

Likewise, conduct actual physical count of inventory

semi-annually and prepare the corresponding Report on the

Physical Count of Inventories (RPCI). The balances per RPCI should be

reconciled with the balance per stock cards and per books.Furthermore,

Management should lead the Supply and Accounting Sections to follow a system of

procedure in the monitoring, controlling and recording of

acquisition and disposal of inventory. Upon request by end-user

of supplies and materials that are carried in stock and verification by the

Supply Division as to the availability of items requisitioned, the Supply Division

prepares and accomplish the Requisition and Issue Slip (RIS).

Report of Supplies and Materials Issued (RSMI) shall then be prepared

the Supply Custodian supported by the duly approved RIS

and shall be the basis of the Accounting Division s in preparing the

JEV to record the supplies and materials issued.

Prepared

by:

Accountant

republic of the philippines commission on audit national

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