EXECUTIVE SUMMARY A.

INTRODUCTION The Institution started as the Manila Business School (MBS), founded in October 1904 as part of the city school system under the superintendence of C.A. OReilley, which responds to the demand for training personnel for government service and the felt need to provide skills essential for private employment. In 1908, it was renamed as Philippine School of Commerce (PSC) and merged with the Philippine Normal School (PNS) in 1933 to 1946. In 1952, by virtue of Republic Act No. (R.A.) 779, the PSC was again changed to the Philippine College of Commerce (PCC). Subsequently, the Philippine College of Commerce (PCC) was converted into a chartered state university, now known as the Polytechnic University of the Philippines (PUP) by virtue of Presidential Decree No. 1341 issued by the President of the Philippines on April 1, 1978. PUP celebrated its centenary in October 2004. The PUP is a government educational institution governed by R. A. No. 8292, otherwise known as the Higher Education Modernization Act of 1997, and its Implementing Rules and Regulations contained in Commission on Higher Education Memorandum Circular No. 4, series of 1997. Governance of PUP is vested upon the Board of Regents, which exercises policymaking functions to carry out the mission and programs of the University by virtue of R.A. No. 8292 granted by the Commission on Higher Education (CHED). As of December 31, 2011, the University was administered by Atty. Estelita Wi dela Rosa who was appointed by the Chairman of the CHED as Officer-in-Charge, in view of the termination of tenure of Dr. Dante G. Guevarra. He was assisted by an Executive Vice President and five Vice-Presidents. The University has a total personnel complement of 2,753 broken down as follows:
Office Office of the President and offices directly under it Office of the Executive President and offices directly under it Office of the Vice-President for Academic Affairs and offices directly under it Office of the Vice-President for Administration and offices directly under it Office of the Vice-Pres. for Student Services and offices directly under it Office of the Vice-President for Finance and offices directly under it Office of the Vice-President for Research, Extension and Development and offices directly under it Grand Total Name of Head of Office Atty. Estelita Wi Dela Rosa Dr. Victoria C. Naval Dr. Samuel M. Salvador Dr. Larry M. Alfonso Dr. Juan C. Birion Ms. Marissa J. Legaspi Dr. Pastor B. Malaborbor Permanent 188 4 Temporary 46 No. of Employees PartCasual time 94 1 565 Contrac -tual 0

Total 893 5

351 144 61 48 28 824

82 8 6 1 3 146

45 95 40 33 15 323

801 93 0 0 0 1459

0 0 0 0 1 1

1279 340 107 82 47 2753

The mission of PUP in the 21st Century is to provide the highest quality of comprehensive and global education and community services accessible to all students, Filipinos and foreigners alike. One of the major functions of the University is research, a key component of scholarship and teaching. It offers high quality undergraduate and graduate programs that are responsive to the changing needs of the students to enable them to lead productive and meaningful lives and it commits itself to: Democratize access to educational opportunities; Promote science and technology consciousness and develop relevant expertise and competence among all members of the academe, stressing their importance in building a truly independent and sovereign Philippines; Emphasize the unrestrained and unremitting search for truth and its defense, as well as the advancement of moral and spiritual values; Promote awareness of our beneficial and relevant cultural heritage; Develop in the students and faculty the values of self-discipline, love of country and social consciousness and the need to defend human rights; Provide its students and faculty with a liberal arts-based education essential to a broader understanding and appreciation of life and to the total development of the individual; Make the students and faculty aware of technological, social as well as political and economic problems and encourage them to contribute to the realization of nationalist industrialization and economic development of the country; Use and propagate the national language and other Philippine languages and develop proficiency in English and other foreign languages required by the students fields of specialization; Promote intellectual leadership and sustain a humane and technologically advanced academic community where people of diverse ideologies work and learn together to attain academic, research and service excellence in a continually changing world; and Build a learning community in touch with the main currents of political, economic and cultural life throughout the world; a community enriched by the presence of a significant number of international students; and a community supported by new technologies that facilitate active participation in the creation and use of information and knowledge on a global scale. ii

PUP is the largest university in terms of student population serving more than 60,000 students in its 22 campuses, broken down as follows: Metro Manila Apolinario Mabini, Sta. Mesa, Manila (Main Campus) NDC Compound, Sta. Mesa, Manila M.H. Del Pilar, Sta. Mesa, Manila Bicutan, Taguig Commonwealth Avenue, Quezon City San Juan City Paranaque City Central Luzon Mariveles, Bataan Sta. Maria, Bulacan Pulilan, Bulacan Cabiao, Nueva Ecija Southern Luzon Maragondon, Cavite Binan, Laguna San Pedro, Laguna Sta. Rosa, Laguna Calauan, Laguna Sto. Tomas, Batangas Lopez, Quezon Mulanay, Quezon Unisan, Quezon General Luna, Quezon Bansud, Oriental Mindoro Sablayan, Occidental Mindoro Bicol Region Ragay, Camarines Sur

B. OPERATIONAL HIGHLIGHTS Programs/Projects/ Activities MFO 1-Advanced and Higher Education 1. Headcount of Enrolment Targets Actual Accomplishments % of Accomplishments

61,688 iii

67,784

110%

Programs/Projects/ Activities 2. No. of Graduates Advance Education Higher Education 3. Licensure Passing Rate MFO 2 Research Services 1. Research Outputs Published Refereed International Journals Other International Journals Refereed National Journals Other National Journals Institutional Journals 2. Research Outputs disseminated/presented International National 3. No. of Researchers with track record 4. No. of Externally-Funded Research Projects in Progress MFO 3 Extension Services 1. Persons Trained Technical/Vocational Literacy Program Total 2. Continuing Education for Professionals Total 3. Others: Community Service at Habitat for Humanity and many others Total C. FINANCIAL HIGHLIGHTS

Targets 264 9,852 45%

Actual Accomplishments 243 10,791 44%

% of Accomplishments 92% 110% 98%

2 2 5 0 35

1 0 3 1 18

50% 0 60% 0 51%

5 10 45 10

4 6 18 5

80% 60% 40% 50%

32 5160

180 1660

563% 311%

1,976

5,697

288.3%

During the year, the University was provided a total appropriation of P863,056,810.00 by virtue of R.A. 10147, also known as the GAA of 2011, of which, P861,755,050.92 was obligated, leaving an unexpended balance of P1,301,759.08. iv

Its assets, liabilities, government equity and sources and application of funds for CY 2011 with comparative figures in CY 2010 are presented as follows:

Particulars A.

CY 2011

CY 2010

Increase (Decrease)

Financial Condition Assets P1,770,550,598.14 P1,670,737,740.37 P 99,812,857.77 Liabilities 135,411,938.26 124,514,772.52 10,897,165.74 P1,635,138,659.88 P1,546,222,967.85 P 88,915,692.03

Government Equity B.1 Sources of Funds Subsidy from the National Government Other Income Total Income B.2 Application of Funds Personal Services MOOE Total Expenses Excess of Income over Expenses

P 855,937,321.71 P 828,095,445.48 P 27,841,876.23 336,402,747.45 268,845,427.97 67,557,319.48 P1,192,340,069.16 P1,096,940,873.45 P 95,399,195.71 P 848,722,827.32 P 761,341,700.37 P 87,381,126.95 236,325,875.19 223,680,103.90 126,457,771.29 P1,085,048,702.51 P 985,021,804.27 P 100,026,898.24 P 107,291,366.65 P 111,919,069.18 P (4,627,702.53)

D. SCOPE OF AUDIT The audit covered the accounts and operations of the Polytechnic University of the Philippines and its campuses for the year ended December 31, 2011. The audit was conducted to: (a) verify the level of assurance that may be placed on managements assertions on the financial statements; (b) recommend agency improvement opportunities; and (c) determine the extent of implementations of prior years audit recommendations.

E. INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENTS The Auditor rendered a qualified opinion on the fairness of presentation of the financial statements of the Polytechnic University of the Philippines for CY 2011, in view of the effects of the material exceptions observed in the course of the audit which are stated in the Independent Auditors report and discussed in detail under Part II of the report.

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F. SUMMARY OF SIGNIFICANT AUDIT OBSERVATIONS AND RECOMMENDATIONS The following are the significant observations with the corresponding recommendations: 1. The lack of proper planning and the absence of the Terms of Reference failed to establish the cost benefit analysis on the need to purchase the communication equipment amounting to P17,840,000.00 for video conferencing and security system project, which expenditures appeared unnecessary under Sec. 3.2 of COA Circular 85-55A dated September 8, 1985. Moreover, the lack of vital supporting documents resulted in the suspension in audit of the transaction. We recommended Management to: explain why the purchase of videophones and the Sony Bravia LCD TV costing P1,587,000.00 which duplicates the built-in monitor of the videophone, may not be disallowed in audit; revisit the need of the video phones vis a vis the traditional line before renewing the monthly service fee of P7,777.78 per unit or P6,440,000.00 for 3 years, after the expiration of the existing contract; submit documents a to e above including a final inspection report dealing on the actual delivery and utilization rating it from poor to excellent; and henceforth, give utmost importance to proper procurement planning and the terms of reference to establish the cost benefit analysis and the necessity of the items procured among others, to avoid unnecessary use of government funds.

2. There is a need to enhance the efficient implementation and coordination of the PUP and the CHED on the CHED-BPO ICC project for which the former was selected as one of the six implementing state universities, wherein various IT Equipment and Software, Other Structures and Other PPE with a total cost of P100,283,751.45 was provided for its initial operations as further delay may expose all these funds to unnecessary wastage and losses and defeats the objective of the project as the premium call center service provider of the National Government termed as the Government Information Contact Center (GICC) project. Moreover, failure of the CHED to provide the University with the necessary supporting documents to book up the donated facilities and equipment resulted in the understatement of the consolidated assets account of the national government by P100,283,751.45 as these assets were already dropped from the books of the CHED as of December 31, 2011.

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We recommended Management to: undertake close coordination and representations with the CHED to hasten the operation of the call center facilities as planned before they completely loss their value due to depreciation, considering the short economic life of IT equipment and software and to avoid prolonging the time-span that the hundreds of million peso project will be idle; make representations with the CHED to facilitate action on the discrepancies in the quantity or specifications between the installed items and those reflected in the plan including the submission by the e-SGS of the facilitys as built plan, network documentation and Operating System for the servers; require the CHED to disclose to PUP the proprietary know-how comprised of methods, techniques, specifications, procedures, information systems, knowledge of and experience in the operation of the project to facilitate making the project operational to avoid further wastage as contained in the original MOA; and create an inventory team to conduct physical count and prepare a report on the donated/transferred facilities and equipment pertaining to the BPO-ICC Project, and cause the proper receipt of the donated/transferred assets and the recording thereof in the books of the University, and furnish this Office documentation thereof.

3. The lack of bank confirmation on nine Cash in Bank - Local Currency Savings accounts maintained with the Philippine National Bank amounting to P3,653,035.97, the incomplete bank reconciliation with ten book balances and the unrecorded reconciling items existing for months rendered the Cash in BankLocal Currency Current and Savings Accounts in the total amount of P286,997,385.14 doubtful of validity. We recommended Management thru the: Fund Management Office: to explain why the bank confirmation issued by the Philippine National Bank as of December 31, 2011 did not include bank account balances recorded in the books in the amount of P3,653,035.97 and the amount of P53,830.01 under a Regular Checking Account No. 3674-8430-0016 which was confirmed by the PNB but not reported by either the Accounting or the Fund Management Office. to submit the legal basis in maintaining the 36 current and savings accounts and investments in high yield savings accounts; viii

to close accounts found to be without legal basis and transfer the deposit to appropriate existing LBP account and; to require the regular reconciliation of the Accounting and FMO records on the cash in bank accounts balances..

Accounting Office: to cause the transfer of the deposits with REAL Bank under the name Jimmy Go to appropriate existing accounts with the LBP, the authorized government deposit bank; to coordinate with the FMO so that the account numbers maintained by the Accounting Office are the same with those of the FMO and the bank; to record the reconciling items in the bank reconciliation statements needing adjustments immediately ; and to prepare and submit to the COA Auditor within the prescribed period the BRS for all the University current accounts.

4. The non-adoption of the requirements in recording payroll payment thru bank as prescribed under the Manual on National Government Accounting System (MNGAS), Volume I resulted in the excessive, unaccounted fund transfer/over remittance of an estimated amount of P5,146,860.43 to the Payroll Fund account maintained at the Land Bank of the Philippines and the corresponding understatement of payroll expenses of the same amount due to the failure to recognize liability at the time services were rendered. Moreover, the issuance of check to withdraw from the payroll bank account without preparing the Report of Checks Issued to be submitted to the Accounting Unit for the preparation of JEV is inconsistent with Section 33 of the MNGAS, Chapter 3, Volume I. We recommended management thru the: Fund Management Office: to make proper representations with LBP concerned officials so that the daily minimum deposit balance requirement of P15 million be reduced to that of a regular account, to avoid the possibility of maintaining a material amount idle with the bank; to account for the details of the payroll bank account balance of P5,146,860.43 pertaining to salaries/allowances/benefits of employees with no leave credits and those requested by management to put on hold

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and determine those that are still valid and revert the remaining balance to the National Treasury; and

to stop the practice of issuing checks in the name of LBP to transfer amount from the payroll fund bank accounts to the individual payroll account of employees, but instead issue an Authority to Debit Account. The issuance of check which is not supported with Disbursement Voucher and not included in the Report of Checks issued being submitted to the Accounting Office for recording is inconsistent with Section 33 of MNGAS, Chapter 3, Volume I and the cardinal rule of internal control. Accounting Office: to record payment of payroll services as required under Section 4(s), Chapter 2, Volume I of the MNGAS,

5. Laxity in the implementation of the pertinent provisions of COA Circular No. 97002 dated February 10, 1997 resulted in the accumulation of P1,961,840.11 unliquidated cash advances granted in 1993 to 2011 for time bounded undertakings, of which, 12 accountable officers have outstanding balances of more than P50,000.00 each, hence, reportable to appropriate agencies for filing of charges as required under COA Memoranda Nos. 2004-014 and 2005-074 dated February 24, 2004 and September 15, 2005, respectively. Moreover, P394,557.91 or 57% of the Petty Cash Funds of P865,424.72 was dormant and had no replenishment during the year. We recommended Management to: adhere strictly to the provisions COA Circular No. 97-002 dated February 10, 1997 such that no additional cash advance should be issued to any official or employee unless the previous cash advance given to him is first settled or a proper accounting thereof is made, especially those with long outstanding cash advances; regulate the granting of cash advance/PCF to disbursing officers for purposes that may be very difficult, impractical or impossible to make payments by check and limit to a reasonable amount to each accountable officer to avoid excessive cash in the hands of accountable officers; strengthen monitoring procedures to ensure timely submission of documents to facilitate liquidation of cash advances to avoid accumulation of unliquidated cash advances; strictly enforce the regulation that at the start of the ensuing year, when no liquidation of the previous cash advance is received on or before January 20, the Accountant shall cause the withholding of the Accountable Officers salary with emphasis to those whose cash advances have long been outstanding; and liquidate/close the dormant Petty Cash Funds in the amount P394,557.91 and review existing PCFs and reduce the same if found excessive. xi

6. The P456,387.56 unrecorded deliveries and the unreconciled discrepancy of P31,238.94 existing between the University and the DBM-PS records resulted in the misstatement of the Due from NGAs-DBM-PS account balance of P623,587.65. We recommended Management to require the Accounting Office to: cause the reconciliation of the difference of P31,328.94, between the accounting and DBM-PS records and book up the deliveries of P487,626.50 in CY 2010; complete submission of original copies of disbursement vouchers for the advance payments made to DBM-PS as required in NS No. 2011-001101(2009-2010); and cause the Procurement Office to facilitate the immediate delivery of all undelivered supplies and materials by the DBM-PS.

7. Lack of written policies regarding the Universitys IGP on the lease of stalls, function rooms and dormitory, non-issuance/renewal of contracts, failure to promptly issue billing statements and to collect income on time from the Universitys IGPs due to the negligence of responsible officials in performing their assigned tasks resulted in the accumulation of unrealized and uncollected income amounting to P13,798,513.76 inclusive of the use of electricity and water which may impair the Universitys capability to generate additional funds for the gradual reduction of government subsidy. This practice also resulted in the overstatement of the Universitys expenses for electricity of P2,613,655.01 utilized but unpaid by tenants/clients and understatement of the Universitys income representing uncollected stall rentals, dormitory and function room fees in the amount of P11,184,585.75. We recommended management thru the following: Income Generating Project Office: to issue contracts of lease and renew all expired contracts of concessionaires and stop the practice of allowing them to operate without valid contracts, and ensure that the terms and conditions of the contracts are strictly implemented; to furnish copies of contracts (in the absence thereof, list of actually operating concessionaires) to the Accounting office and coordinate with them so that prompt billing and collection of income and usage of water and electricity will be effected;

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to issue demand letters to delinquent lessees/tenants and the cause the immediate collection of their outstanding accounts/arrearages; to immediate closure of stalls of concessionaires as stipulated in the contract should be strictly implemented to avoid increase in their outstanding account balances with the University to an unmanageable proportion; and to conduct physical count/inventory and prepare and maintain an updated of listing of stall-owners/concessionaires in all campuses so that income thereon will be completely monitored.

Accounting Office to: promptly issue demand letters to delinquent lessees/tenants and monitor collection/settlement thereof; coordinate with the IGPO so that a complete Subsidiary Ledger (SL) will be maintained and updated on all existing/actually operating lessees/tenants in all campuses with or without contract of lease in order to have a complete monitoring and recording of receivables and income; and require the Hostel Clerk of Hasmin Campus to submit copies of billing statements issued, report of collections and monthly report of users of the function rooms, AVR, executive lounges and stall concessionaires.

Hasmin Hostel/Dormitory to: prepare and issue contracts of lease to all tenants/clients; coordinate with the Fund Management Office and cause the deduction of outstanding accounts from the salaries of employee/tenants concerned; keep track of the accountability of student tenants and have proper coordination with the Dean of their respective colleges so that payment thereof is effected before clearing their accounts which is done every semester; promptly prepare and issue billing statements to all tenants/clients and users of function rooms and submit copies thereof to the Accounting Office on a monthly basis; submit monthly report of users of the function rooms, AVR, executive lounges and stall concessionaires and occupants of the dormitory; and xiii

maintain an updated SL of all tenants/clients.

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8. The inadequate controls and/or procedures over property management system such as the absence of a) complete physical inventory count, b) updated Acknowledgement Receipt for Equipment (ARE), c) complete and updated ledger and stock cards, and d) reconciliation of the accounting and property records on Inventories and Property, Plant and Equipment (PPE) and the nonrecording of issuances of inventories accounts cast doubts on the reliability and accuracy of the balance of Inventories and PPE accounts recorded at P8,948,034.54 and P1,538,324,077.00, respectively, as of December 31,2011. We recommended that Management strengthen the controls over the use, custody and reporting of the Universitys inventories and PPE such that it should: create an Inventory Committee to conduct a complete physical count and prepare the necessary report on all the Universitys PPE including the inventories following the instructions provided under Appendices 62 and 63, Volume II of the Manual on the New Government Accounting System (MNGAS). The report on the physical count of PPE should be classified as to their account name; cause the reconciliation of the balances of the property records (property cards and physical inventory report) and accounting records for the said accounts and the prompt adjustment of noted discrepancies to ensure the reliability of PPE balances in the financial statements; require the Accounting Office to prepare JEV to book up inventory issuances for CY 2011 based on the RSMI received from the Property Office; require the Accounting Office to review the PPE accounts without any provision or with incomplete provision for depreciation and make adjustments where necessary to reflect the accurate value of said properties/accounts; and require the Property Office to re-examine and update the ARE every three years or each time a change of accountability occurs and to have a proper turnover of accountabilities between the outgoing and incoming accountable officers.

9. The unreconciled difference/overstatement of P188,000.00 between the recorded amount and the inventory report of the 13 units motor vehicles of the University, the overstatement of the accumulated depreciation by P132,942.87 pertaining thereto and of their aggregate net book value by P55,057.13; the condemned motor vehicles costing P720,000.00 which were inadvertently dropped from the books which understated the account by the same amount and other deficiencies

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noted resulted to the misstatement of the Motor Vehicles account balance recorded at P11,793,836.00.

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We recommended and Management agreed to require the: Accounting Office to reconcile the difference of the balance of the Motor Vehicle account of P188,000.00 with the Property Office records and take up adjustments where necessary; to verify the seeming overstatement of the recorded accumulated depreciation by P132,942.87 and the net book value by P55,057.13 for the motor vehicles account; the condemned motor vehicles which were inadvertently dropped from the books in the amount of P720,000.00 and the eight (8) motor vehicles which were dropped from the books at their net book value of P489,719.75 and take up the necessary adjustments to reflect the correct valuation of the Motor Vehicles account; and to maintain PPELC, PPELC-SI, reconcile their records with that of the Property Office, verify discrepancies and take up necessary adjustments in the books.

Property Office to make use of the Property Card prescribed under Section 42 of MNGAS and to update entries as needed; to cause the Ford Everest, Model 3.0L Dura Torq Teci 4x4, Diesel, 16 Valve acquired in November 26, 2007 at Ford Edsa, Inc. to bear a red plate as required; and to renew the ARE every three years or every time there is a change in accountability.

10. The University failed to submit to the Auditor original copies of the documents forming part of the contracts for infrastructure projects entered into by the University with various contractors from CY 2008 to 2010 with an aggregate amount of P153,211,410.38, thereby limiting the scope of audit, thus defeats the purpose of COA Circular No. 2009-001 dated February 12, 2009. We recommended Management thru the Accounting Office to request from the BAC the submission of all basic supporting documents before any payment is to be made and that disbursement vouchers pertaining to the payment of infrastructure progress/final billing together with the basic supporting documents be submitted to the Office of the Auditor for auditorial and legal review/evaluation to determine completeness of documentary requirements, validity of claims and reasonableness of the contract and review of technical aspects by COA Technical Audit Specialist xvii

to immediately correct any defects and deficiencies noted therein and to always adhere to the documentary requirements prescribed under 3.1.2 of COA Circular No. 2009-001 February 12, 2009. 11. The absence of Annual Procurement Plan of the University resulted to noncompliance to Section 7.1 and 7.2 of the Revised Implementing Rules and Regulations IRR of RA 9184 and the failure to conduct public bidding in the procurement of most of its supplies and equipment as prescribed under Section 10 of the same IRR and had forgone the possibility of purchase discounts thru bulk purchase. Out of the purchases of the University from January to July 2011 with an aggregate amount of P28,273,422.40, only P1,215,240.00 or 4.30% was purchased through public bidding, P16,961,942.65 or 59.99% thru shopping, P1,537,215.07 or 5.44% thru direct contracting, P8,263,426.58 or 29.23% thru small value procurement and P295,598.10 and 1.04% thru Repeat Order. We recommended Management to require the Procurement Office to: prepare the Annual Procurement Plan as prescribed and purchase supplies and equipment in bulk thru public bidding to be able to avail discounts, unless there is adequate evidence to support the conclusion that public bidding cannot be ultimately pursued, to comply with pertinent provisions of the revised IRR of RA 9184; and resort to alternative mode in the purchase of supplies and equipment invariably applying the requirements prescribed in the same IRR only when there are evidences to support the conclusion that public bidding cannot be ultimately pursued; with emphasis that repeat order should be done in the prescribed quantity and period. POs should be properly and completely filled up with all the basic data, specially the date of issuance to the supplier and submitted to the Auditor within five (5) days from issuance thereof pursuant to COA Circular No. 96-010 dated August 15, 1996. Moreover, this should be duly supported with pertinent/necessary documents.

12. Failure on the part of the University to submit their NCRFW-endorsed Annual GAD Plans and Budget to the Department of Budget and Management (DBM) resulted in the non-inclusion thereof in the agency budget proposals and the nonimposition of at least five percent of the total agency budget appropriations for the funding of GAD activities. Moreover, it did not submit its GAD accomplishments to the DBM as prescribed under Section 5.2 of Joint Circular No. 2004-1. We recommended Management to strictly comply with the requirements of Joint Circular 2004-1 of the Department of Budget and Management (DBM), National Economic Development Authority (NEDA) and the National

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Commission on the Role of Filipino Women (NCRFW) with emphasis on the following: submit the Annual GAD Plan and Budget to the NCRFW earlier so that it will be included in the agency budget proposals in accordance with the budget call, to ensure that the cost of implementing the GAD activities is part of their approved budget equivalent to at least five percent of the total agency budget appropriations as authorized under the annual General Appropriations Act; and implement plans as indicated in the Annual GAD Plans and Budget and prepare an accomplishment report vis a vis the plans and submit a copy thereof to the DBM.

G. IMPLEMENTATION OF PRIOR YEARS AUDIT RECOMMENDATIONS The recommendations on the following significant audit findings/observations were either partially implemented/not implemented as of December 31, 2011: Partially Implemented: CY 2010 Unliquidated cash advances of P2.5 million granted in 1993 to 2010 for special purpose/time bounded undertakings. Unaccounted discrepancy of P2.3 million of the Due to NGAs-DBM-PS account as against the DBM-PS records. Non-issuance/renewal of contracts of lease, lack of monitoring and incomplete billing to IGP concessionaires resulted in uncollected income of P13.6 million Unreliable/doubtful Inventory account balance of P3.3 million and PPE accounts balance P1.4 billion of due weak internal control and absence of physical count and updated PPELCs. Failure to report and to dispose promptly of unserviceable PPE amounting to P15.3 million and transfer to Other Assets account of fully depreciated PPE Lack of University guidelines to implement RA 7079 resulted in unaccounted funds/unliquidated expenses of about P3.9 million which may affect the promotion of campus journalism and transparency in governance.

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 Non-submission of complete documents precluded the audit of infrastructure projects costing P123.5 million Erroneous classification and dormant other payables overstated the payables account by P4.8 million. CY 2009 Absence of records to properly implement the Student Financial Assistance Program of the CHED CY 2008 Viability of the acquired GSIS Condotel-Hostel business as an IGP and reasonableness of its acquisition cost projected at P578.6 million cannot be determined due to failure to submit required documents essential to auditorial and technical evaluation. Stipulation of free tuition fee in the MOA entered into with the Mayor of Cabiao, Nueva Ecija for PUP Open University is inconsistent with RA 8292 resulting in unrealized income of P0.13 million and inconveniences/difficulties of students in acquiring their Transcript of Record, Diploma and other credentials necessary for employment from the University. Absence of stipulation in the MOA with Local Government on the management of properties which they have donated/purchased for PUP Campuses create confusion on the custodianship of properties. Extension campuses in Sta. Maria and Pulilan in Bulacan and San Pedro in Laguna collected unauthorized fees of P3.5 million for their operations in violation of Section 4d of RA 8292. CY 2007 Various unserviceable equipment of undetermined amount in the different branches and campuses were not yet disposed due to the absence of policy on disposal thus exposing these equipment to further deterioration and unnecessarily occupying considerable space in the University Infrastructure projects costing P0.76 million at PUP Maragondon, Cavite were not yet taken up in the books of the University due to lack of documents. The reliability of the balances of seven general ledger accounts; Accounts Receivables, Disallowances/Charges, Other Prepaid Expenses, Advances to Contractors, Guaranty Deposits, Performance/Bidders/Bail Bonds Payable and Other Payables totaling P24.2 million could not be ascertained due to xx

inadequate supporting documents and improperly maintained subsidiary records.

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Not Implemented: CY 2010 The deteriorated condition of the PUP Antique House which the Manila City Engineer recommended for the complete dismantling of the building appred to have been cause by negligence in the proper use and care therof resulting in wastage of government resources CY 2008 Abandonment and failure to secure the premises from illegal settlers since CY 1998 of a 96.6% completed construction project of the College of Nutrition and Food Science building valued at P10.7 million defeat the purpose for which it was constructed and Change Order of P574,830.81 was made without documentations. Claims for P46.6 million packages of books, IT software and Speech Laboratories were paid thru direct payment system in the absence of prior liability recognition. CY 2007 Of the procured 23,153 library books costing P6 million out of a financial assistance from the CHED, 16,833 or 73 percent of which, remained unutilized after almost a year from procurement indicating lack of needs assessment resulting in unnecessary and excessive inventory of library books. Granting of year end benefits (YEB) and incentives totaling P21.2 million without appropriate authorization from the Department of Budget and Management in violation of Section 4.1.1 of DBM Budget circular No. 320056 dated October 28, 2005. CY 2006 Direct selling of faculty authored textbooks to students without the University Textbooks and Instructional Materials Evaluation Committees evaluation and recommendations may have impact on the quality of instruction. The University failed to monitor unpaid accounts of f students at the end of the school term due to its adoption of the cash basis in accounting for tuition resulting in uncollected income of P11.6 million.

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