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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
Technical Education and Skills Development Authority
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
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
Technical Education and Skills Development Authority
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
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
APARRI POLYTECHNIC INSTITUTE
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)
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY
APARRI POLYTECHNIC INSTITUTE
Statement of Financial Position
(All Funds)
As of December 31, 2018
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
Depreciation P15,947,257.78
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
Depreciation P733,264.49
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
Depreciation P1,248,041.33
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
Depreciation P1,449,768.19
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
Depreciation P738,884.19
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
Depreciation P19,644,248.99
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
Depreciation P743,856.89
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
(See accompanying Notes to Financial Statements)
Annex C
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY
APARRI POLYTECHNIC INSTITUTE
Statement of Financial Performance
(All Funds)
For the Year Ended December 31, 2018
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)
(See accompanying Notes to Financial Statements)
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY
APARRI POLYTECHNIC INSTITUTE
Statement of Financial Performance
(All Funds)
For the Year Ended December 31, 2018
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
Maintenance and Other
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-
Infrastructure Assets
P0.00
P0.00
Repairs and Maintenance-
Buildings and Other Structures P753,469.30
P709,485.52
Repairs and Maintenance-
Machinery and Equipment P55,218.12
P11,872.00
Repairs and Maintenance-
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 -
Infrastructure Assets
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)
(See accompanying Notes to Financial Statements)
Annex D
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT
AUTHORITY
APARRI POLYTECHNIC INSTITUTE
Statement of Cash Flows
(All Funds)
For the Year Ended December 31, 2018
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
(See accompanying Notes to Financial Statements)
Annex E
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY
APARRI POLYTECHNIC INSTITUTE
Statement of Changes in Net Assets/Equity
(All Funds)
For the Year Ended December 31, 2018
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
(See accompanying Notes to Financial Statements)
Annex F
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY
APARRI POLYTECHNIC INSTITUTE
Statement of Comparison of Actual and Budgeted Amounts
(All Funds)
For the Year Ended December 31, 2018
(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
Maintenance and Other
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
(See accompanying Notes to Financial Statements)
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 ,
Notes to Financial Statements Reference
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.
Notes to Financial Statements Reference
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.
Notes to Financial Statements Reference
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
Notes to Financial Statements Reference
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
Notes to Financial Statements Reference
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
Notes to Financial Statements Reference
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
Statement of Financial Position
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)
Carrying Amount, December
31, 2018
(As per Statement of
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)
Carrying Amount, December
31, 2018
(As per Statement of
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)
Carrying Amount, December
31, 2017
(As per Statement of
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
Traveling Expenses-Local 791,676.06 874,464.31
Total Traveling Expenses 791,676.06 874,464.31
13.2 Training and Scholarship Expenses
Particulars 2018 2017
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
Other Professional Services 724,952.34 717,336.03
Particulars 2018 2017
Total Professional Services 724,952.34 717,536.03
13.8 Repairs and Maintenance
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
Advertising Expenses 22,300.00 6,800.00
Printing and Publication Expenses 0.00 0.00
Representation Expenses 483.00 41,025.00
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
Particulars 2018 2017
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
As of December 31, 2018
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
REF Management Action Status of
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.
We recommended that the
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
REF Management Action Status of
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.
We recommended that the
Management require the
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
REF Management Action Status of
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.
We recommended that the
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
supporting documents
forming part thereof to
the Office of the
Auditor.
ed
Observation and
Recommendation
REF Management Action Status of
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.
We recommended that the
Management require the
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
REF Management Action Status of
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
REF Management Action Status of
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.
We recommended that the
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
REF Management Action Status of
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
REF Management Action Status of
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.
We recommended that the
Management require the
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
supporting documents
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