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STATEMENT OF MANAGEMENT’S RESPONSIBILITY

FOR FINANCIAL STATEMENTS

The management of Parole and Probation Administration is responsible for all information

and representation contained in the accompanying Consolidated Balance Sheet as of December 31,

2013 and the related Consolidated Statement of Income and Expenses and Consolidated Cash Flow

for the year then ended. The financial statements have been prepared in conformity with generally

accepted accounting principles and reflect amounts that are 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 control to ensure that transactions are properly authorized and recorded,

assets are safeguarded against unauthorized use or disposition and liabilities are recognized.

ELOISA L. MARQUEZ MANUEL G. CO

Chief Accountant Administrator

Republic of the Philippines

Department of Justice

PAROLE AND PROBATION ADMINISTRATION

DOJ Agencies Bldg., NIA Road, Diliman

Quezon City

(02-926-65-24) www.probation.gov.ph

2013 2012

Current Assets

Cash 414,349.82 1,343,497.18

Receivables 112,935,154.60 112,992,131.92

Inventories 1,676,133.16 1,559,489.10

Prepaid Expenses 107,250.13 83,168.22

Other Current Assets 3,000.00 3,000.00

115,135,887.71 115,981,286.42

Investment and Property, Plant and Equipment

Property, Plant and Equipment 30,835,576.91 35,665,853.98

30,835,576.91 35,665,853.98

Other Assets 1,182,281.05 927,122.74

1,182,281.05 927,122.74

147,153,745.67 152,574,263.14

Liabilities

Current Liabilities 4,203,145.31 3,073,354.24

4,203,145.31 3,073,354.24

Other Liabilities 186,245.80 593,101.77

186,245.80 593,101.77

Equity

Government Equity 142,764,354.56 148,907,807.13

142,764,354.56 148,907,807.13

147,153,745.67 152,574,263.14

-

LIABILITIES AND EQUITY


Consolidated Condensed Balance Sheet

as of December 31, 2013

(With Comparative Figures for 2012)

ASSETS

TOTAL LIABILITIES AND EQUITY

TOTAL ASSETS

CURRENT ASSETS 2013 2012

CASH

Cash, Collecting Officer 32,500.00 30.00

Cash, Disbursing officer 32,500.00

Petty Cash Fund 20,036.04 15,215.25

Payroll Fund - 451,100.86

Cash in Bank, Local Currency, Current Account 329,313.78 877,151.07

Total Cash 414,349.82 1,343,497.18

RECEIVABLES

Receivable Accounts

Inter-Agency Receivables

Due From National Treasury 152,211.10 78,170.00

Due From NGA's 111,434,815.37 111,434,815.37

Receivables-Disallowances/Charges 1,206,665.64 1,263,526.58

Advances to Officers and Employees 103,612.49 215,619.97

Other Recievables 37,850.00

Total Receivables 112,935,154.60 112,992,131.92

INVENTORIES

Supplies

Office Supplies Inventory 1,231,977.43 1,199,983.49

Accountable Forms Inventory 25,003.00 12,187.94

Med. Dental & Lab. Supplies Inventory -

Gasoline,Oil & Lubricants Inventory 36.56

Other Supplies Inventory 419,116.17 347,317.67

Total Inventories 1,676,133.16 1,559,489.10

PREPAYMENTS

Prepaid Insurance 107,250.13 83,168.22

Total Prepayments 107,250.13 83,168.22

OTHER CURRENT ASSETS

Guaranty Deposits 3,000.00 3,000.00

Total Guaranty Deposits 3,000.00 3,000.00

Total Current Assets 115,135,887.71 115,981,286.42

PROPERTY, PLANT AND EQUIPMENT

Land 7,680.00 7,680.00

Office Buildings 41,512,143.29 41,512,143.29

Less: Accumulated Depreciation 23,661,921.70 22,416,557.40

17,850,221.59 19,095,585.89

Leashold Improvement-Bldg. 23,750.00 23,750.00

Less: Accumulated Depreciation 21,375.00 21,375.00

2,375.00 2,375.00

Office Equipment, Furnitures and Fixtures

Office Equipment 13,507,453.17 15,072,428.16


2,900,286.51 3,952,317.09

Furnitures & Fixtures 7,423,588.20 7,488,492.30


2,474,446.84 2,693,229.78

IT Equipment and Software 25,175,605.42 26,446,288.79


4,893,494.10 5,600,185.14

Library Books 23,660.80 36,015.80


16,556.20 17,732.64

(With Comparative Figures for CY 2012)

ASSETS


Consolidated Detailed Balance Sheet


(In Philippine Pesos)

Machineries and Equipment

Telegraph,Tel., Cable, TV & Radio Equipment 467,843.30 571,612.02


152,511.59 254,681.13

Firefighting Equipments & Accessories 58,875.00 62,868.95


15,002.73 29,625.17

Medical, Dental and Lab.Supplies Exp. 488,275.70 488,275.70


162,806.02 176,841.16

Other Office Equipment - -

Less: Accumulated Depreciation - -

- -

Transportation Equipment

Motor Vehicles 9,436,977.81 9,912,459.81


Other Property, Plant and Equipment 2,291,412.24 3,572,809.48

Other Property, Plant and Equipment 415,989.43 803,874.75


68,784.09 262,791.50

Total Property, Plant and Equipment 30,835,576.91 35,665,853.98

OTHER ASSETS

Other Assets 1,182,281.05 927,122.74

Total Assets 147,153,745.67 152,574,263.14

LIABILITIES

CURRENT LIABILITIES

Payable Accounts

Accounts Payable 1,550,312.73 2,110,540.58

Due to Officers and Employees 2,097,032.46 531,383.23

3,647,345.19 2,641,923.81

Due to BIR 243,301.71 31,270.34

Due to GSIS 132,514.30 130,737.50

Due to PAG-IBIG 4,965.93 23,928.46

Due to PHILHEALTH 26,081.03 7,787.50

Due to NGAs 35,737.39 36,477.39

Due to GOCCs 29,485.13 29,485.13

Due to LGUS 79,535.56 167,565.04

Tax Refunds payable 4,179.07 4,179.07

555,800.12 431,430.43

Other Liabilty Accounts

Other Payables 186,245.80 593,101.77

TOTAL LIABILITIES 4,389,391.11 3,666,456.01

Equity

Government Equity

Government Equity 148,907,807.13 156,121,462.88

Current Operations (3,893,442.57) (4,829,918.62)

Adjustment of Prior Years (2,250,010.00) (2,383,737.13)

142,764,354.56 148,907,807.13

TOTAL LIABILITIES AND EQUITY 147,153,745.67 152,574,263.14

LIABILITIES AND EQUITY

2013 2012

Income 731,127,423.01 603,351,165.62

Less: Reversion of Unused Notice of Cash allocation 34,867,389.40 26,550,726.19

Total Income 696,260,033.61 576,800,439.43

Less: Expenses

Personal Services 628,346,691.25 509,526,831.78

Maintenance & Other Operating Expenses 71,805,634.93 72,102,626.27

Financial Expenses 1,150.00 900.00

Total Expenses 700,153,476.18 581,630,358.05

Excess of Expenses over Income (3,893,442.57) (4,829,918.62)


Consolidated Condensed Statement of Income and Expenses



2013 2012

Income GENERAL INCOME ACCOUNTS

Subsidy Income from National Government 731,079,540.41 603,350,570.02

Income from Grants and Donations 351,083.65

Miscellaneous Income 43,750.00 8,400.00

Other Fines and Penalties - 336.00

Gains/Loss on Sale of Disposed Assets (346,951.05) (8,140.40)

731,127,423.01 603,351,165.62

Less: Reversion of Unused Notice of Cash Allocation 34,867,389.40 26,550,726.19

TOTAL INCOME 696,260,033.61 576,800,439.43

Less: EXPENSES PERSONAL SERVICES

Salaries & Wages-Regular pay 355,981,475.06 356,173,692.70

PERA 21,933,779.67 23,195,808.14

Representation Allowance 11,506,509.31 10,529,068.64

Transportation Allowance 11,239,975.45 10,082,689.17

Clothing Allowance 4,688,020.00 4,827,500.00

Productivity Incentive Allowance 1,857,000.00 1,924,500.00

Other Bonuses and Allowances 1,158,656.48

Hazard Pay 2,011,323.25 663,415.65

Longevity Pay 326,906.97 296,919.11

Cash Gift 4,460,901.71 4,535,077.38

Year End Bonus 27,458,500.18 28,842,276.79

Life and Retirement Insurance Cont. 38,781,729.09 40,058,291.87

PAG-IBIG Contributions 1,080,100.00 1,162,450.00

PHILHEALTH Contributions 3,250,771.00 3,109,623.80

ECC Contributions 1,075,526.50 1,158,862.56

Terminal Leave Benefits 31,237,109.06 18,179,178.47

Health Workers Benefits 25,992.50 52,477.50

Other Personnel Benefits 110,272,415.02 4,735,000.00

Total Personal Services 628,346,691.25 509,526,831.78

MAINTENANCE AND OTHER OPERATING EXPENSES

Traveling Expense-Local 14,463,787.52 16,043,563.43

Training & Seminar Expenses 8,044,813.42 6,876,684.47

Office Supplies Expenses 5,954,673.95 6,409,832.06

Accountable Forms Expenses 39,197.14 42,599.38

Drugs and Medicines Expenses - 15,750.00

Medical, Dental and Lab.Supplies Exp. 15,740.50 58,384.50

Gasoline,Oil & Lubricants Expense 1,441,255.40 1,529,603.23

Other Supplies Expenses 2,958,571.06 2,803,624.45

Water Expenses 1,026,419.90 1,426,130.62

Electricity Expenses 5,038,382.71 5,325,844.70

Postage and Deliveries 1,623,397.28 1,529,330.18

Telephone Expenses-Landline 3,204,900.36 3,119,991.03

Telephone Expenses-Mobile 706,072.86 696,089.93

Internet Expense 784,565.45 610,037.01

Cable Expenses 8,000.00 55,917.90

Membership Dues 700.00 1,000.00

Advertising Expenses 3,510.00 5,900.00

Printing & Binding Expenses 1,039,782.50 762,215.79

Rent Expenses 3,573,950.70 3,404,744.59


Consolidated Detailed Statement of Income and Expenses



2013 2012

Representation Expenses 1,051,801.37 1,269,495.64

Transportation & Delivery Expenses 1,122.50 18,354.89

Subscription Expenses 58,147.79 47,350.53

Legal Services 364,370.00 364,794.50

Auditing Services 130,812.75 122,178.71

General Services 4,688,118.50 3,060,515.11

Janitorial Services 3,873,441.90 3,286,642.71

Security Services 757,042.20 761,796.19

Other Professional Services 1,449,712.03 1,993,280.72

Repair & Maintenance-Office Buildings 794,433.05 1,327,776.24

Repair & Maintenance-Other Structures - 6,384.50

Repair & Maintenance-Office Equipment 261,087.39 423,709.00

Repair & Maintenance-Fur. & Fixture 41,211.00 39,164.50

Repair & Maintenance-IT Equip. & SW 354,593.80 188,455.80

Repair & Maintenance-Comm. Equipt. 4,338.00 250.00

Repair & Maintenance-Med., Dent. & Lab. 2,000.00

Repair & Maintenance-Motor Vehicles 631,125.47 523,802.28

Repair & Maintenance-Other PPE 1,850.00

Donation 9,093.00 4,339.00

Extraordinary Expenses 355,515.92 379,119.65

Miscellaneous Expenses 1,130,099.46 1,141,820.44

Taxes, Duties and Licenses 48,012.86 25,857.62

Fidelity Bond Premiums 284,961.93 259,265.01

Insurance Expenses 459,420.20 347,635.10

Depreciation Expense-Office Buildings 1,245,364.30 1,245,364.30

Depreciation Expense-Office Equipment 801,861.17 798,672.94

Depreciation Expense-Furniture & Fixtures 295,857.49 284,835.76

Depreciation Expense-IT Equipment 1,799,727.63 2,362,233.32

Depreciation Expense-Communication Equipment 75,891.65 51,530.27

Depreciationenses-Firefghting Equipment 7,569.59 7,569.66

Depreciation - Medical, Dental & Lab. Equipment 14,035.14 14,035.14

Depreciation Expense-Motor Vehicles 839,138.04 978,404.04

Depreciation Expense-Other PPE 35,277.35 37,477.53

Other Maintenance & Operating Expenses 10,880.70 13,271.90

Total Maintenance and Other Operating Expenses 71,805,634.93 72,102,626.27

Bank Charges 1,150.00 900.00

TOTAL EXPENSES 700,153,476.18 581,630,358.05

Excess of Expenses over Income (3,893,442.57) (4,829,918.62)

FINANCIAL EXPENSE

2013 2012

Government Equity, Beginning January 01, 2013 148,907,807.13 156,121,462.88

Retained Operating Surplus

Current Operation (3,893,442.57) (4,829,918.62)

Prior Years' Adjustment (2,250,010.00) (2,383,737.13)

Total (6,143,452.57) (7,213,655.75)

Government Equity, ending December 31, 2013 142,764,354.56 148,907,807.13


Consolidated Statement of Government Equity



2013 2012

Cash Flows from Operating Activities

Cash InflowsReceipt of Notice of Cash Allocation (NCA) 677,733,455.00 549,861,746.00

Receipt of Inter Agency Cash Transfer 382,940.00 558,906.15

Collection of Income/Revenues (Interest Income) 583.65 539.05

Receipt from Gains/Loss on sale of Disposed Assets 4,881.10

Receipt of refunds of cash advances and overpayments 141,551.39 97,468.51

Receipt of Assistance from Other Agencies 58,166.13 1,170,792.19

Receipt of Other Fund from Grants and Donation 350,500.00

Receipt of Miscellaneous Income 43,100.00

Receipt from other fines and penalties - 44,688.84

Total Cash Inflows 678,715,177.27 551,734,140.74

Cash OutflowsCash payment of operating expenses 468,011,976.09 355,102,679.95

Cash payment of payable incurred in operations 1,490,006.58 8,404,081.45

Cash Payment of exp's. charge to Assist. Received 696,667.10 737,242.33

Cash purchase of inventories 4,096,579.39 3,398,418.02

Granting of cash advances/petty cash fund 35,040,753.31 25,039,667.19

Remittance of withholding taxes except thru TRA 179,758.86 9,722.39

Remittance of GSIS/PAG-IBIG/PHILHEALTH Payable 129,886,904.75 128,357,947.51

Remittance of Other Payables 3,588,541.49 2,691,037.16

Remittance to Bureau of the Treasury 381,574.78 82,669.36

Release of funds as inter-agency cash transfers 426,871.93 586,897.13

Reversion of Unused NCA 34,867,389.40 26,550,726.19

Total Cash Outflows 678,667,023.68 550,961,088.68

Cash Provided by Operating Activities 48,153.59 773,052.06

Cash Flow from Investing Activities

Cash Inflow: Region

Region Receipt of proceeds from sale of Other Assets 84,260.00 2,004.00

Region Increase in Petty Cash Fund - -

Total Cash Inflow 84,260.00 2,004.00

Cash Outflows Cash Purchase of Property, Plant and Equipment 977,300.95 214,424.24

Sales Proceeds from sale of assets deposited to Btr. 84,260.00

Total Cash Outflow 1,061,560.95

Total Cash Provided by Investing Activities (977,300.95) (212,420.24)

Total Cash Provided by Operating and Investing Activities (929,147.36) 560,631.82

Add: Cash Balance, Beginning January 01, 2013 1,343,497.18 782,865.36

Cash Balance, Ending December 31, 2013 414,349.82 1,343,497.18


Consolidated Statement of Cash Flows




CONSOLIDATEDNOTES TO FINANCIAL STATEMENT

December 31, 2013

1. GENERAL /AGENCY PROFILE

1.1 The Parole and Probation Administration (PPA) was formerly known as Probation Administration which was created by virtue of Presidential Decree (PD) No. 968, “The Probation Law of 1976”. Executive Order NO. 292 otherwise known as “Administrative Code of 1987” where the current name becomes effective. It expands the function of the Agency to include the supervision and administration of the parole system in the country.

1.2 The mandate of the Agency is the rehabilitation of convicted offenders/prisoners who would like to undertake probation or parole or conditional pardon. The goals of the Agency are as follows;

a. Promote the reformation of criminal offenders and reduce the incidence of recidivism;

b. Provide a cheaper alternative to the institutional confinement of first time offenders who show signs of responding to individualized, community – based treatment programs; and

c. Provide an opportunity for the reformation of a penitent offender, which might be less probable if he were not to serve prison sentence and prevent commission of other offenses.

d. To carry out its goals, it performs the following functions:

∑ Administer the Parole and Probation System∑ Exercise supervision over parolees, pardonees and probationers∑ Promote the correction and rehabilitation of criminal offenders

2. BASIS OF FINANCIAL STATEMENTS PRESENTATION

The financial statements include the Statement of Management Responsibility, Balance Sheet, Statement of Income and Expenses, Statement of Cash Flows and Notes to Financial Statement as of December 31, 2013. These are prepared in accordance with the Generally Accepted State Accounting Principles, which includes all financial transactions of all regional offices.

The Agency is decentralized in financial operation. Regional Offices received their funds for their disbursement directly from Department of Budget and Management (DBM). As such, Regional Offices are directly responsible for their funds.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 The Agency uses accrual basis of accounting. All expenses are recognized when incurred and reported in the financial statements in the period to which they relate. Income is on accrual basis except for transactions where accrual basis is impractical or when the law requires other methods.

3.2 Notice of Cash Allocation (NCA) is recorded in the Regular Agency (RA) books as well as those income/receipts which the agency are authorized to use.

3.3 Income/receipts which the agency are not authorized to use and are required to be remitted the National Treasury are recorded in the National Government (NG) Books.

3.4 The Modified Obligation System is used to record allotments received and obligations incurred. Separate registries are maintained to control allotments and Obligations for each class of allotment.

3.5 Petty Cash Fund (PCF) account is maintained under the Imprest System. All replenishments are directly charged to the expense account. The PCF is not used to purchase regular inventory items for stock.

3.6 The costs of ending Inventory of Office supplies, other supplies, accountable forms and other inventory items are computed using the Moving Average Method.

3.7 Property, Plant and Equipment are carried at cost less accumulated depreciation.

3.8 The Straight Line Method of depreciation is used in depreciating the property, plant and equipment with estimated useful lives ranging from five to fifty years. A residual value, computed at ten percent of the cost of asset is set and depreciation starts in the second month after purchase.

3.9 Payable accounts are recognized and recorded in the books of accounts only upon acceptance of the goods/inventory/other assets and rendition of services to the agency.

4. CORRECTION OF FUNDAMENTAL ERRORS

Fundamental errors of prior years are corrected by using the Prior Years’ Adjustment account. Errors affecting current year’s operation are charged to the current year’s accounts.

5. CASH

5.1 Cash-Collecting Officers –P32,500.00

This amount is from Region VIII represents collection of refund of TEV and RATA; it was deposited to Bureau of Treasury in January 2014.

5.2 Cash-Disbursing Officers –P32,500.00

Represents cash advance of Special Disbursing Officer of Region XI for payment of TEV of Volunteer Probation Aides (VPAs) for the last quarter of CY 2013; it was liquidated in March 2014.

5.3 Petty Cash Fund – P20,036.04

Petty Cash Fund granted to disbursing officers to defray small operating, gasoline and transportation expenses of liaison officers are charged to this account. The account balance in this account is the unused portion which was remitted to Bureau of Treasury in January 2014.

Office AmountCentral Office 36.04NCR 10,000.00Region VII 10,000.00Total 20,036.04

5.4 Cash In Bank- Local Currency, Current Account – P329,313.78

The Cash In Bank – Local Currency, Current Account includes the following:

Office Particulars Amount

Central Office

These amounts represent the minimum monthly Average Dailiy Balance (ADB) to PPA Payroll fund account in compliance to MOA between Land Bank of the Philippines-Edsa Nia Road and PPA Central Office in the amount of Php 20,000.00 and Trust Fund Account represents cash proceeds from the rentals of PPA Multi-Purpose Hall amounting to Php 38,900.00 58,900.00

Region VI Loacal aide from LGU to PPA Field offices for client's livelihood program 141,722.17

Region VIIThis amount represents aid from different Local Government Unit to be used for client's livelihood program. 114,625.61

Region XILocal aid solicited by Compostela Valley (COMVAL) PPO Php 1,006.00, Alternative Learning System (ALS) program by Davao SPPO Php 3,060.00 and maintaining balance taken from MOOE Php 10,000.00 14,066.00

329,313.78Total

6. RECEIVABLES

6.1 Due from National Treasury – P152,211.10

This account consists of the following:


CO

This amount represents proceeds from sale of unserviceable assets with OR # 8597650 dated March 6, 2013 and OR # 8597658 dated July 4, 2013 and Collection from employees who sleep in the sleeping quarter and proceeds from the payment of bidding documents. 88,960.00

NCR

This amount represents proceed from sale of unserviceable property with an OR# 399303 dated October 21, 2011, which was deposited to Btr with an intention of requesting such amount to purchase equipments.

58,370.00

Region 1This amount represents proceeds from sale of unsevicebale property with OR# 3784721 dated March 25, 2013

4,881.10

152,211.10Total

6.2 Due from NGAS – P111,434,815.37


CO

This account represents fund transferred to National Computer Information System which is still subject for liquidation. There is no significant development in this account despite of the constant follow-ups made to National Computer Center.

111,434,815.37

111,434,815.37Total

6.3 Receivables-Disallowances – P1,206,665.64

This account represents disallowances of the officers and employees of PPA, which have become final and executory.

Office ParticularsDisallowance on purchase of Motor Vehicle from Prince Motor Corp. 685,575.54Disalowance of Christopher Cui 55,647.79Disallownce on Honorarium CY 1998 9,797.80

NCRDisallowance on Family Visit of RD Susan Bornas and RD Charito Zamora 14,866.00Disallowance on payment of Personnel Motivation Allowance to employees in CY 2001 15,000.00Disallowance on claims of TEV re insufficient documents 4,569.50Disallowamce on GSIS and LBP Salary loan withdrawn and remitted in 2001 5,855.50Disallowance on Remittance to PPAECO loan in CY 2003 1,487.50

Disallowance on Family Visit of Josepilar Bermudez in CY 2001 and Jeorgette Paderanga in CY 2012 22,537.58Balance forwarded of Various disallowances of officers and employees. This is outstanding for more than 10 years already. 373,339.43Disallowance due to invalid appointment of AAIV Bautissta per GAAM vol. I sec.193 7,099.00ND# 2001-009-101- M. Agot re Signing bonus 3,074.00ND# 10-01-09 CAPPAEA 1,800.00MODTRADE-Employees Anniversarry T-Shirts 1,065.00Cash Gift 2010-Jimsel Balansag & Ermarie Tanso 3,000.00Sports and cultural allowance ND#11-01-05 1,725.00Disallowance on PCF replenishment 226.00

1,206,665.64Total10,890.00

Amount

Region XII

CO

751,021.13

49,450.08

Region X

380,438.43

Region XIII

6.4 Advances to Officers and Employees – P103,612.49


NCR

This account consists of unliquidated cash advance of Dahlia Yuson to cover unpaid MOOE for the month of December 2013 amounting P22,412.73 and cash advance of CPPO Lindayag during the VPA Annual Convention on December 13, 2013, amounting to P23,000.00, these amounts were liquidated in January 2014; Overpayment to Clarence Narabal amounting to P1,200.50 was also settled in January 2014 46,613.23

CARUnder collection of Cooperative Loan of Helen Monta. It was collected and remitted to Cooperative in January 2014. 504.00

Region II

Overpayment of last salary to Editha Estal. This account is still outstanding but the concern person issued a promissory note, stating that she will settle her obligation upon release of her Terminal Leave Benefit. 13,138.36

Region VII

Cash advance for TEV of Nanete Dela Pena P1,560.00, Hanna Villamor P6,626, and Eileen Dumali P1,114.90. these amounts were liquidated in January 2014. 9,300.90

Region XII

Unliquidated TEV cash advance of Auditor Myrla Fermin re: Attendance to COA seminar in Manila. This is still outstanding. According to the Accountant, he already made several follow-ups regarding her liquidation report. 16,556.00

Region XIII

Unliquidated cash advance of Venus Agapo re: Year-end Evaluation and Planning, General Assembly and Praise Awards. This amount was liquidated in January 2014. 17,500.00

Total 103,612.49

6.5 Other Receivables – P37,850.00

This account is from Region X, represents Year-end benefits and cash gift for CY 2012 given to CPPO Tomada. This amount is subject for refund in compliance to Budget Circular No. 2010-1 par. 6.11; sub.par.6.11.1 dated April 28, 2010.

7. INVENTORIES

This account represents supplies and materials of prior years’ and current year which remain un-issued at the end of the year. Costing of Ending Inventory is computed using the Moving Average Method.

7.1 Office Supplies Inventories – P1,231,977.43

This account is composed of regular and common used supplies of the following offices. It is supported by an office supplies inventory report.

Office AmountCentral Office 184,906.54National Capital Region 44,610.55CAR 58,762.85Region I 96,830.04Region IV 333,890.97Region V 4,722.90Region VI 103,076.99Region X 99,241.24Region XI 86,149.16Region XII 207,248.44Region XIII 12,537.75Total 1,231,977.43

7.2 Accountable Forms Inventories – P25,003.00

Accounting forms, Official Receipts and other forms are charged to this account.

Office AmountRegion IV 946.29Region VIII 7,135.36Region XII 16,921.35Total 25,003.00

7.3 Gasoline, Oil & Lubricants Inventory – P36.56

This balance represents the remaining fuel in the service vehicle of Region X.

7.3 Other supplies Inventory – P419,116.17

Represents other materials not included in the regular supplies. These supplies are semi-expendable like staplers and plastic chairs.

Office AmountCentral Office 185,270.40CAR 1,500.00Region X 93,165.07Region XI 110,895.00Region XII 28,285.70Total 419,116.17

8. PREPAYMENTS

8.1 Prepaid Insurance – P107,250.13

Represents un-expired portion of insurance paid in the year 2013.

Office ParticularsInsurance for Vehicles 7,661.40Building insurance 67,718.74Furnitures & Fixtures Insurance 18,559.17Insurance for Vehicles P621.55 621.55Insurance for PPE P5,566.25 5,566.25Fidelity Bond Premium of CPPO 6,436.80Insurance for Vehicles 686.22 7,123.02

107,250.13

Amount

Region VI6,187.80

Total

CO 93,939.31

Region VII

9. GUARANTY DEPOSITS – P3,000.00

Guaranty deposits account of Php 3,000.00 represents deposit for 25 pieces of 3-gallon bottle water of Purification Purified Drinking Water.

10. OTHER ASSETS – P1,182,281.05

This account represents the total unserviceable property and equipment of the Agency. Although these properties are obsolete, some Regional offices are still using it, due to lack of funds to buy and replace it. Disposal may not be the best option for the Regional Offices because according to them, proceeds may not be sufficient to purchase replacement of the said equipments. Increased was due to destroyed properties of Region VIII during typhoon Yolanda.

2013 2012NCR 13,336.64 71,443.94Region I 229,234.20 245,049.37Region II 7,683.78 19,158.58Region III 20,723.00 20,723.00Region VI 6,848.00 6,848.00Region VII 180,460.00 194,594.10Region VIII 523,746.73 134,825.20Region IX 198,736.20 204,284.20Region X - 5,323.80Region XI 1,512.50 4,002.95Region XIII 20,869.00Grand Total 1,182,281.05 927,122.14

AmountOffice

11. PROPERTY, PLANT AND EQUIPMENT – P30,835,576.91

This account consists of the Property Plant and Equipment of the agency. Decrease in the PPE account is due to destroyed property of Region VIII during Typhoon Yolanda, book value of those properties was transferred to other assets.

AccountLand 7,680.00Office Building 41,512,143.29Leasehold Improvement-Building 23,750.00Office Equipment 13,507,453.17Furnitures and Fixtures 7,423,588.20IT Equipment and Software 25,175,605.42Library Books 23,660.80Communication Equipment 467,843.30Firefighting Equipment and Accessories 58,875.00Medical, Dental, and Lab. Equipment 488,275.70Motor Vehicle 9,436,977.81Other Property, Plant and Equipment 415,989.43Total Cost 98,541,842.12Less: Accmumulated DepreciationAccumulated Depreciation-Office Building 23,661,921.70Accumulated Depreciation-Leasehold Imp. Bldg 21,375.00Accumulated Depreciation-Office Equipment 10,607,166.66Accumulated Depreciation-Furnitures & Fixtures 4,949,141.36Accumulated Depreciation-IT Equipment 20,282,111.32Accumulated Depreciation-Library Books 7,104.60Accumulated Depreciation-Communication Equipment 315,331.71Accumulated Depreciation-Firefighting Equipment 43,872.27Accumulated Depreciation-Med., Dental, Lab. 325,469.68Accumulated Depreciation-Motor Vehicle 7,145,565.57Accumulated Depreciation-Other PPE 347,205.34Total Accumulated Depreciation 67,706,265.21Total Book Value 30,835,576.91

Amount

The Land in the amount of Php 7,680.00 represents the property acquired by Regional X.

Account 2013 2012Reasons for

Increase/DecreaseLand 7,680.00 7,680.00 -Office Building 41,512,143.29 41,512,143.29 -Leasehold Improvement - Bldg. 23,750.00 23,750.00 -

Office Equipment 13,507,453.17 15,072,428.16

The decrease is due to reclassification of account from PPE to other assets, disposal and adjustments made by Region I, II, IV, VII, IX, XI, Central Office and destroyed equipments of Region VIII.

Furnitures and Fixtures 7,423,588.20 7,488,492.30

The decrease is due to reclassification of account from PPE to other assets, disposal and adjustments made by Region I, II, IX, XI, NCR, Central Office and destoyed Furnitures and Fixtures of Region VIII.

IT Equipment 25,175,605.42 26,446,288.79

The decrease is due to reclassification of account from PPE to other assets, disposal and adjustments made by Region I, II, IX, XI, NCR, CAR Central Office and destoyed IT Equipments of Region VIII.

Library Books 23,660.80 36,015.80

Decrease in this account is due to adjustment made by Region XI

Communication Equipment 467,843.30 571,612.02

Decrease in this account is due to adjustment made by Region I and XI

Firefighting Equipment and Accessories 58,875.00 62,868.95

Decrease in this account is due to adjustment made by Region VII

Medical, Dental and Lab. Equipment 488,275.70 488,275.70 -

Motor Vehicle 9,436,977.81 9,912,459.81

The Decrease is due to adjustment made by Region I, and Destroyed Vehicle of Region VIII due to typhoon Yolanda

Other Property Plant and Equipment 415,989.43 803,874.75

The Decrease is due to disposal and adjustmnets made by NCR, Region XI and destroyed properties of Region VIII due to Typhoon Yolanda.

98,541,842.12 102,425,889.57

12. LIABILITIES

12.1 Accounts Payable – P1,550,312.73

This account represents unsettled obligation to internal and external creditors. As per NGAS Sec. 144, this account should be used for external creditors only, but there are Regional Offices who are still using this account for internal creditors’ in-spite of constant reminders about proper use of account codes.

Office Particular AmountCO Un-settled obligations of Prior years payable. 19,523.24Region II Cancellation of Stale check 1,016.00

Region VIIUnpaid obligation to employees re hazard pay, monetization of keave credits and TEV claims 601,908.56

Region IX Unpaid monetization of leave credits of employees 468,955.05Regn XI Unapaid obligations to various creditord 23,117.88

Region XIIUn-settled Collecting Negotiation Agreement (CNA) incentives of Employees 435,792.00

Total 1,550,312.73

12.2 Due To Officers and Employee – P2,097,032.46

Unpaid obligations to Officers and Employees are recorded under this account.

Office Particular Amount

COUnpaid salaries and allowance of PPA-CO employees 13,772.02

NCR Unpaid claims of an employee 100.00

Region II Monetization of leave credits, salary increment and salary differential of employees 209,614.29

Region IIIUnpaid Hazard Pay, Monetization and various claims of employees 1,872,246.53

Regon VII Unpaid TEV claims of Laura Llena re field audit 1,278.58Region XIII Unpaid claims of an employee 21.04Total 2,097,032.46

12.3 Other Payables – P186,245.80

Obligations of Central Office and Regional Offices to PPA-Multi Purpose Cooperative,Land Bank of the Philippines and other Financial Lending Institutions are charged to this account.


Central OfficeUnpaid obligations to PPAMCO, QUEDANCOR and LBP 33,042.20

NCR Over Remittance to PPAMCO (5,828.55)Region II Uncreconciled balance from previous years 1,569.98Region IV Donation to Yolanda Victims 5,740.00

Region VILoacal aide from LGUs to PPA Field offices for client's livelihood program 141,722.17

Region VIII Unpaid obligation to Probation and Parole Officers & Employees Credit Cooperative (PPOECC) 10,000.00

Total 186,245.80

12.4 Trust Liabilities – P555,800.12

Obligations due to other Government Institutions which were remitted in January 2014 are reported under this account. Some of it remains outstanding because they are unaccounted balances from previous years. Due to PHILHEALTH account increases for the reason of over deducted of personal share of employees made by NCR. Due to BIR account consists of previous years’ un accounted balances in the amount of P21,439.44 (Region IV P6,295.99 & Central Office P15,143.45) and Current year’s over withheld taxes amounting to P221,862.27. As per record of the Central Office prior years’ over withheld taxes should be refunded to the former employees, but these persons could not be located anymore, this amount has been outstanding for years already. Listing below is the balance per account.

Accounts AmountDue to BIR 243,301.71Due to GSIS 132,514.30Due to PAG-IBIG 4,965.93Due to PHILHEALTH 26,081.03Due to NGAs 35,737.39Due to GOCCs 29,485.13Due to LGUS 79,535.56Tax Refunds payable 4,179.07Total 555,800.12

13. GOVERNMENT EQUITY – P142,764,354.56

A significant change in the Government equity is explained below:

Government Equity January 01, 2013 148,907,807.13Add: Retained Operating Surplus Current Operation (3,893,442.57) Prior Years' Adjustment (2,250,010.00) (6,143,452.57)

Government Equity December 31, 2013 142,764,354.56

14. PRIOR YEARS ADJUSTMENT – P2,250,010.00

These are the lists of the Prior Years Adjustment of Central Office and Regional Offices. All prior years’ adjustment pertaining to Real and Nominal Accounts are charged to this account, subsequently closed under Government Equity Account. See attached Annex “B”.

Office Debit CreditCentral Office 391,657.82NCR 638,854.96CAR 527,158.01Region I 383,642.93Region II 24,922.72Region IV 76,973.12Region VII 15,920.47Region IX 329,729.98Region X 52,397.37Region XI 30,371.00Region XII 5,151.00Region XIII 31,971.60Total 2,379,380.49 129,370.49

Balance 2,250,010.00

15. EXPENSES

15.1 Salaries and Wages – P355,981,475.06

This account represents salaries and wages of employees incurred in CY 2013.Monetization of leave credits and Loyalty awards given to employees are alsocharged to this account.

15.2 Representation Allowance- P11,506,509.31 and Transportation AllowanceP11,239,975.45

Increase in this account is due to compliance in the National Budget Circular No. 546 dated January 17, 2013.

15.3 Clothing Allowance – P4,688,020.00

Decrease in this account is due to retirement of PPA employees, resulting to fewer recipients of clothing benefits.

15.4 Other Bonuses and Allowances – P1,158,656.48

This account refers to CNA Incentive given by Central Office, Region VII and Region XII to their respective personnel. This benefit is the result of the savings generated from cost-cutting measure identified in the Collective Negotiation Agreement which resulted from joint efforts of labor and management and system/productivity improvement.

15.5 Hazard Pay – P2,011,323.25

This pertains to benefits and privileges that are granted to Public Health Workers in view of the issuance in November 1999 of the revised Implementing Rules and Regulation (IRR) of Republic Act No. 7305 otherwise known as the Magna Carta of

Public Health Workers. It shall be paid on a monthly, quarterly or annual basis. PPA granted Hazard Pay to Clinical Services Division (CO).

Office AmountCentral Office 168,491.25NCR 1,009,313.60CAR 101,276.12Region VI 320,530.64Region VII 411,711.64Total 2,011,323.25

15.6 Terminal Leave – P31,237,109.06

This refers to the terminal leave pay granted to retired employees’ equivalent to their accumulated sick and vacation leave credits during employment. There were 41 retired employees. See attached “Annex A”

15.7 Other Personnel Benefit – 110,272,415.02

This account represents the bonuses given to employees such as Performance Based Bonus (PBB) CY 2012, Performance Enhancement Incentive (PEI) CY 2013 and RAT Plan Incentive Package for those personnel who availed of EO 366.

ParticularEO 366 - RAT Plan Incentive 99,344,180.52Performance Based Bonus (PBB) CY 2012 6,673,234.50Performance Enhancement Incetive (PEI) CY 2013Central Office 534,500.00NCR 462,000.00CAR 141,500.00Region I 217,000.00Region II 180,000.00Region III 280,000.00Region IV 410,000.00Region V 155,000.00Region VI 280,000.00Region VII 400,000.00Region VIII 215,000.00Region IX 315,000.00Region X 225,000.00Region XI 195,000.00Region XII 125,000.00Region XIII 120,000.00 4,255,000.00Grand Total 110,272,415.02

Amount

15.8 Traveling Expenses – P14,463,787.52

This account pertains to the transportation expenses incurred by officers and employees within the country; this includes bus fares, airplane tickets, per diems and all other related expenses. Most of the traveling expenses incurred by the PPA are due the following; Financial and Management Audit, Investigation of Clients and Supervision of Probationers and Parolees.

15.9 Training Expenses – P8,044,813.42

Trainings conducted by PPA, Executive conference expenses, and other trainings attended by the officers and employees are charged to this account.

15.10 Office Supplies Expenses – P5,954,673.95

Office supplies expenses for day to day operation of the offices are charged to this account, any significant changes maybe result of increase in demand or price adjustment.

15.11 Gasoline, Oil and Lubricants Expenses – P1,441,255.40

Gasoline expenses of Administrator, Deputy Administrator, Regional Directors and forday to day operations of the offices are charged to this account.

15.12 Other Supplies Expenses – P2,958,571.06

Supplies and materials that can not be classified under office supplies expense account are charged this account. Change in this account compared to last year is due to increase in demand and price.

15.13 Water Expenses – P1,026,419.90

Water expenses incurred in the day to day operations of the offices are charged to this account. Increase is due to consumption or rate adjustments.

15.14 Electricity Expenses – P5,038,382.71

Electricity expenses of the offices are charged to this account. Any significant change or increase is due to the rate adjustment.

15.15 Postage and Deliveries – P1,623,397.28

Mailing of letters and other communication documents from/to Central Office, Regional Offices and Field Offices are charged to this account.

15.16 Telephone Expenses- Landline – P3,204,900.36

Telephone calls and sending of communications thru fax machines are charged to this account. Increase is due to long-distance calls made by offices.

15.17 Telephone Expenses- Mobile – P706,072.86

Mobile phone allowance of Administrator, Regional Directors, Assistant Regional Directors, Division Chiefs, officers-in-charge and regional unit chiefs are charged under this account.

15.18 Internet Expenses – P784,565.45

Expenses that are related to internet, such as DSL landline and prepaid load for broad band incurred by Central Office, Regional Offices and Field offices are charged to this account.

15.19 Printing and Binding Expenses – P1,039,782.50

Printing of tarpaulins, other materials and binding of books incurred by the offices are charged to this account.

Office AmountCentral Office 54,796.90NCR 101,847.50CAR 10,990.50Region I 27,956.37Region II 55,052.25Region III 87,812.97Region IV 142,420.17Region V 38,922.37Region VI 56,834.47Region VII 133,287.75Region VIII 38,161.77Region IX 60,486.75Region X 73,274.96Region XI 49,345.47Region XII 81,225.47Region XIII 27,366.83Total 1,039,782.50

15.20 Rent Expenses – P3,573,950.70

This account includes expenses for the Quarters allowance of Regional Directors and Assistant Regional Directors, Office Rental of Regional Offices and Field Offices and Office Equipment rental.

Quarters Allowance granted to Certain Officials and their equivalents that re-assigned or transferred to a place other than that of their domicile and do not own houses or room there in, by virtue of agencies policies or rotation as per DBM Circular No. 456 dated November 11, 1996.

Office Particular AmountNCR Rentals for Field Offices 888,384.00CAR Rentals for Field Offices 97,000.00Region I Rentals for Regional Office and Office equipment 531,400.00Region II Rentals for Field Offices and Quarters Allowance of RD 115,700.00Region III Rentals for Regional Office 271,449.60Region IV Rentals for Regional Office and Field Offices 652,244.56

Region VRentals for Regional Office and Quarters Allowance of RD 124,933.35

Region VI Rentals for Regional Office 35,774.19Region VII Rentals for Field Offices 166,000.00Region VIII Rentals for Field Offices 45,400.00Region IX Quarters Allowance of RD & Assistant RD 52,300.00Region X Quarters Allowance of RD & Assistant RD 28,500.00Region XII Rentals for Regional Office and Field Offices 372,865.00Region XIII Rentals for Regional Office 192,000.00

3,573,950.70Total

15.21 Representation Expenses – P1,051,801.37

Expenses that are minor in nature are charged to this account, such as meals and other miscellaneous expenditure during general assembly, meetings and other occasions within the office.

15.22 Legal Services – P364,370.00

This account consists of notarial fee for various documents and consultancy fee of Atty. Fidencio D. Zerrudo as a legal consultant of central office.

15.23 Auditing Services – P130,812.75

All expenses incurred that are related to auditors are charged to this account.

Office AmountCentral Office 44,774.82Region II 11,020.00Region V 2,704.00Region VI 4,704.00Region XI 36,138.88Region XII 25,218.10Region XIII 6,252.95Total 130,812.75

15.24 General Services – P4,688,118.50

Expenses for Allowances, Traveling, and Trainings related to Volunteer Probation Aides (VPAs) are charged to this account. Appropriation for the General Services account was incorporated in the Professional Services account as per GAA of 2013 but breakdown of appropriation was clearly stated in the Agency Budget Matrix (ABM) released by the DBM. Such matrix stated the exact released of appropriation per object of expenditures.

15.25 Janitorial Services – P3,873,441.90

Janitorial Expenses incurred by Central Office, Regional Offices and Field Offices are charged to this account. Increased was due to implementation of salary/cola adjustment based on the Mandated Wage Order no. NCR-18 CY 2013.

15.26 Security Services – P757,042.20

This account represents salaries and wages of the 3 security guards hired by central office.

15.27 Other Professional Services – P1,449,712.03

Payment for Job order drivers and clerks are charged to this account. Regional Offices are required to hire job order workers due to lack of manpower to perform such services.

15.28 Repair & Maintenance-Office Building – P794,433.05

Repairs and maintenance of Office building incurred by Central Office and Regional Offices are charged to this account.

15.29 Repair & Maintenance – Office Equipment – P261,087.39

Repairs and maintenance of office equipments such printers, fax machines, air conditions and other equipments are charged to this account.

15.30 Repair and Maintenance- IT Equipment and Software – P354,593.80

Repairs and maintenance of computers and other IT equipment are charged to this account; significant increase is due to installation of anti-virus and other software upgrading in the Central office.

15.31 Repair & Maintenance – Motor Vehicles- P631,125.47

Repair and maintenance of Motor vehicles and purchases of spare parts are charged to this account. Any significant increase may be result of frequent repairs.

15.32 Extra Ordinary Expenses - P355 515.92 and Miscellaneous Expenses –P1,130,099.46

These accounts represent monthly expenses incurred by the Administrator and Regional Directors, in accordance with the intent and purpose enumerated in the 2000 GAA Sec. 23 according to the Government Auditing Rules and Regulation provided by the Government GAAM Vol. I, Book III, Title 6 Chapter 17 on Extra-Ordinary and Miscellaneous Expenses of Section 397, page 232 issued on January 1992 by the COA.

16. Income From Grants and Donation – P351,083.65


Central Office

Donation from TADECO Php 340,000.00 and Donation from Josefina Belmonte, Ernesto Matugas and New Osaka Lumber amounting to Php 10,500.00 350,500.00

Region VII Interest earned from Income & Grants donation 583.65Total 351,083.65

17. Miscellaneous Income – P43,750.00


Central Office

This account represents proceeds from the payment of bid documents and collection from employees who sleep in the sleeping quarter of the Multipurpose hall of PPA-DOJ. 43,100.00

Region I Collection from the payment of damaged equipment. 650.00Total 43,750.00

18. Gain/Loss on sale of disposed assets – P346,951.05

This account represents realized loss on sale of unserviceable asset of Central Officeand Regional Offices.

Office AmountCentral Office 43,087.62NCR 39,308.40Region I 24,030.77Region II 14,767.58Region VIII 171,131.68Region IX 54,625.00Grand Total 346,951.05

19. Excess of Expenses over Income – P3,893,442.57

Excess of expenses over income is due to depreciation expense of the agency.

Income 696,260,033.61Less: Personal Services 628,346,691.25 MOOE 66,692,062.57 695,038,753.82Excess of income over expenses before depreciation 1,221,279.79Less: Depreciation 5,114,722.36Excess of Expenses over income after depreciation (3,893,442.57)

20. SUBSIDY INCOME FROM NATIONAL GOVERNMENT/TOTAL INCOME –696,260,033.61

The Agency received cash allocation in the total amount of Php 677,733,455.00 from Department of Budget and Management, breakdown as follows;

NCA - Regular 535,991,500.00NCA - EO36 -Rationalization 99,344,182.00NCA - PBB CY 2012 6,159,400.00NCA - Terminal Leave 31,238,852.00NCA - PEI 4,140,000.00NCA - Accounts Payable 859,521.00Total NCA 677,733,455.00Add: Tax Remittance Advice (TRA) 53,638,067.12Subsidy Income from National Government 731,371,522.12 Miscellaneous Income (Central Office) 43,100.00 Miscellaneous Income (Region I) 650.00 Interest Income (Region VII) 583.65 Incom from Grants and Donation (Central Office) 350,500.00 394,833.65Total Income 731,766,355.77Less: Reversion of NCACentral Office 2,612,044.39NCR 9,381,092.01CAR 874,695.82Region I 2,274,436.23Region II 96,434.42Region III 3,651,316.01Region IV 1,509,974.20Region V 659,221.60Region VI 2,945,854.28Region VII 2,691,320.78Region VIII 1,286,796.83Region IX 1,643,428.22Region X 2,532,341.11Region XI 1,160,222.81Region XII 766.89Region XIII 1,547,443.80 34,867,389.40Less: Refund and AdjustmentCentral Office - Refund 116,906.12NCR - Refund 37,818.47Region II - Refund of TEV 21,496.23Region III- Refund of overpayment of salary 29,281.26Region IV-Refund of cash advances 11,645.36Region VII - Refund 1,094.00Region VIII - Refund 12,583.00Region X - Refund of TEV 5,082.27Region XI - Refund 56,075.00 291,981.71Less: Loss on Sale of disposed assetsCentral Office 43,087.62NCR 39,308.40Region I 24,030.77Region II 14,767.58Region VIII 171,131.68Region IX 54,625.00 346,951.05Total SING 696,260,033.61

21. ALLOTMENTS, OBLIGATIONS AND BALANCES – P710,488,510.00

Parole and Probation Administration has an appropriation of Php 710,488,510.00,while the unobligated portion was automatically reverted.

Particulars Category Allotment Obligations Balances

Current Year's PS 566,302,767.00 555,461,223.92 10,841,543.08Allotment RLIP 43,403,272.00 39,254,941.71 4,148,330.29

TLB 31,238,852.00 31,237,109.06 1,742.94MOOE 69,370,000.00 69,072,756.04 297,243.96CO 173,619.00 173,544.00 75.00

Total Current Year 710,488,510.00 695,199,574.73 15,288,935.27

Grand Total 710,488,510.00 695,199,574.73 15,288,935.27

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