EXECUTIVE SUMMARY

A. Introduction

The Bataan Peninsula State University (BPSU) came into existence by virtue of RA
9403 which marked the merging of Bataan Polytechnic State College and Bataan State
College. The University is headed by energetic, versatile and bright President in the person
of Dr. Delfin O. Magpantay.

During the year, the University aimed to soar to greater heights to prove that they
deserve to be called as the premiere state university in the province and the center of
excellence. Its commitment to deliver quality education is listed always as number one in
the Universitys mission and vision in order for them to be at par with other state
universities and colleges.

As of December 2013, the University has six (6) campuses and is supported by a
total of 801 Teaching and Non-Teaching personnel inclusive of the President and Vice
Presidents.

The University had various accomplishments to be proud of and some of them are
presented in the succeeding topics.

B. Financial Highlights
The financial condition, results of operation and sources and application of funds
of BPSU for CY 2013 with comparative figures for CY 2012 are as follows:

Increase Percentage
CY 2013 CY 2012
(Decrease) of Change

Financial Condition
Assets 457,156,962.69 354,464,430.97 102,692,531.72 28.97%
Liabilities 115,630,824.80 83,427,269.63 32,203,555.17 38.60%
Govt. Equity 341,526,137.89 271,037,161.34 70,488,976.55 26.01%

Results of Operations
Income 501,917,900.80 448,675,750.10 53,242,150.70 11.87%
Expenses 432,201,514.15 424,786,345.37 7,415,168.78 1.75%
Net Income 69,716,386.65 23,889,404.73 45,826,981.92 191.83%

Sources and Application of Funds

Allotment 239,764,151.87 199,429,334.50 40,334,817.37 20.23%
Obligations
Incurred 239,764,151.87 199,429,334.50 40,334,817.37 20.23%
Balance - - -

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C. Operational Highlights

The BPSU reported the following accomplishments which were validated on a

random basis:
Presented hereunder are the significant accomplishments of the University.
Enrollment according to Campus (AY 2013 - 2014)

Campus First Semester Second Semester

As of July, 2013 As of December
2013
Main 8,113 7,263
Balanga 3,979 3,564
Orani 1,422 1,142
Abucay 880 861
Dinalupihan 2,323 1,917
Bagac 300 245
Total 17,017 14,992

Graduates According to Major Fields of Discipline (AY 2013-2014)

Major Fields of Discipline Number of Graduates

Education Science and Teacher Training 325
Social and Behavioral Sciences 30
Business Administration and Related 408
IT-Related Disciplines 506
Medical and Allied 240
Trade, Craft and Industrial 281
Engineering and Tech 494
Architecture and Town Planning 41
Agriculture, Forestry, Fisheries 37
High School 17
Graduate School (Masteral) 62
Total 2,441

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 Performance in PRC Licensure Examinations

University National
Date of No. of No. of
Course Passing Passing
Examination Takers Passers
Rate Rate
Balanga Campus
CPA May 2013 16 4 25.00% 27.41%
CPA Oct. 2013 78 17 21.79% 41.00%
BSED Sept. 2013 193 97 50.26% 39.35%
Nursing June 2013 139 67 48.20% 42.80%
Midwifery Apr. 2013 21 13 61.90% 50.00%
Orani Campus
BED Sept. 2013 53 31 58.49% 31.18%
Main Campus
BSAR Jan. 2013 30 20 66.67% 52.47%
BSAR June 2013 19 9 47.37% 47.37%
BSCE May 2013 15 5 33.33% 42.80%
BSCE Nov. 2013 51 26 50.98% 32.73%
BSEE April 2013 14 3 21.43% 41.23%
BSEE Sept. 2013 33 20 60.61% 53.64%
BSME Sept. 2013 60 49 81.67% 68.87%
BSECE Apr. 2013 24 8 33.33% 52.00%
BSECE Oct. 2013 60 9 15.00% 34.51%
Dinalupihan
Campus
BED Sept. 2013 86 37 43.02% 31.18%
BSED Sept. 2013 32 29 90.63% 79.75%

D. Scope of Audit

The audit covered the financial transactions and operations of the Bataan Peninsula
State University for the Calendar Year 2013. The objective of the audit were (a) to ascertain
the level of assurance that may be placed on managements assertion on the financial
statements; (b) recommend agency improvement opportunities; and (c) determine the
extent of implementation of the prior years audit recommendations.

E. Independent Auditors Report

The Auditor rendered a qualified opinion on the fairness of presentation of the

Bataan Peninsula State University for the year ended December 31, 2013 due to deviation
from prescribed procedures and non-compliance with rules and regulations resulting in
misstatements and error in some account balances.

Further, the Inventories and Property, Plant and Equipment with a balance of
4,113,824.60 and 531,504,426.17, respectively cannot be relied upon due to non-
conduct of physical count of inventory and of property, plant and equipment; non-

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maintenance of the Supplies Ledger Cards; and reliance on undependable PPE Ledger
Cards which did not permit the verification of the reported balances.

For the above cited errors and deficiencies, we recommended the following:

For the Inventory and Property, Plant and Equipment accounts:

a) Create a Property, Plant and Equipment Inventory Committee which will take in
charge of having a comprehensive physical inventory taking of property, plant,
equipment and inventories on hand and submit the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) and Report on the Physical Count of
Inventories (RPCI), respectively;

b) Direct the Accountant and the Supply Officer to maintain Supply Ledger Cards,
Property, Plant and Equipment Ledger Cards and Property Cards as required under
Section 43, Vol. I of the NGAS Manual for NGAs, in order to provide proper check
and balance and to facilitate reconciliation with the physical count;

c) Observe strict adherence to the uses and essentials of all the forms required by
Sections 53 and 56 of Vol. II of the NGAS Manual for National Government
Agencies and the related COA Circular 2005-002 to permit accountability checking
of property, plant and equipment as well as proper recording in the agency books;

d) Oblige the Accountant to comply with the provisions of Sections 43 and 44 of the
NGAS Manual, Vol. I in the method of recording purchases of inventoriable
supplies and materials in order to present fairly the resources still owned by the
University as of a given time and the amount of related resources used up for the
year end; and

e) Direct the Accountant to effect the necessary adjustments in the books.

F. Other Significant Observations and Recommendations

Understatement of Due to Bureau of Internal Revenue (BIR)

Considering that Accountants of government agencies are deputized withholding

agents of the BIR, the amount withheld for the period and consequently remitted to the
BIR is understated due to (a) non-withholding of taxes on income of employees for
overtime and night services rendered and (b) substantial reliance on purchases of
regular supplies through reimbursement and cash advances in violation of pertinent
provisions of National Internal Revenue Code, Revenue Regulation No. 10-2008 and
Government Money Payment Chart in relation to Revenue Memorandum Circular No.
56-2009.

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 We recommended that management

a) Establish and maintain Payroll Unit which will be in-charge of preparation of

general payrolls for salaries and wages, overtime and night pay as well as extra-
teaching loads of instructors and professors. The Payroll Unit should adhere to the
principle of adequate documentation and ensure a system of monitoring the total
compensation received by each employee;

b) Faithfully comply with the Agencys Annual Procurement Plan (APP) and refrain
from procuring supplies through reimbursement and through cash advances; and

c) Require full compliance to BIR requirements regarding taxes on compensation and

withholding on government money payments. Institute a control mechanism and/or
system where total taxes that need to be remitted to the BIR will be remitted timely
and appropriately.

Extraordinary and Miscellaneous Expenses

The current practice of handling charges to Extraordinary and Miscellaneous Expenses

(EMEs) by the University resulted to errors and poor monitoring of actual
disbursements, thus (a) transactions and events that have been recorded do not pertain
to the entity, (b) amounts and other data relating to recorded transactions and events
have not been recorded appropriately, (c) transactions and events have not been
recorded in the correct accounting period; and (d) transactions and events have not been
recorded in the proper accounts. Said practice violated pertinent provisions of General
Provisions of the General Appropriations Act and COA Circular 2004-002.

We recommended that management

a) Review the General Provisions of the General Appropriations Act and establish
procedures to strictly adhere to the same;

b) Require the Accounting Unit to review the policy regarding allowable time within
which reimbursement is allowable to observe the principles of cut-off; and

c) Require the Accounting Unit to employ strict adherence to the Prescribed Chart of
Accounts under the New Government Accounting System (COA Circular 2004-
002); discrepancy in the figures reported must be settled by employing stern
procedures in recording the details of Journal Entry Vouchers as well as posting to
appropriate account classifications.

Review of Infrastructure Contract/Documentation

Contrary to various issuances, the latest of which was COA Circular No. 2012-001
dated June 14, 2012, payments were made to contractors despite the absence of the

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 complete documentation to support the claims thus resulting to inability to
arrive/finalize a decision in audit.

We recommended that management comply strictly with COA Circular Nos. 2009-
001 and 2012-001, respectively, on the submission of contracts and completion of
requirements of government financial transactions.

Value for Money Audit

Considering the aggregate increase of enrollees per academic years 2012-2013 and
2013-2014, a drop in the number of enrollees was observed from 17,017 total for
1st Semester to 14,992 for the 2nd Semester of AY2013-2014. This could be
attributed to several factors namely: poverty, loss of scholarship grant, steep cost
of sustaining education and higher standard of living. On the other hand, review of
the Results of Operations for CYs 2012 and 2013, revealed an impressive increase
of 45,826,981.92 or 191.83% on net income, from 23,889,404.73 for 2012 to
69,716,386.65 for 2013. The same Results of Operation showed that overall
income increased by 53,242,150.70 or 11.87% while total expenses increased only
by 1.75% or 7,415,168.78.

It is on the above data that we recommended to BPSU management to study and

consider the following areas in the planning and budgeting of their
income/resources, to wit:

a) Creation of the Universitys Scholarship Fund for poor and/or deserving students
especially in the absence of scholarship grant from other sources/proponents;

b) Intensify academic and administrative professionalization and upgrading by

increasing study grants, trainings, seminars available for all; and

c) Continue the modernization and upgrading of facilities, equipment, laboratory and

technical gadgets in aid to the academe and benefit to studentry.

G. Status of Implementation of Prior Years Recommendations

Out of eleven recommendations embodied in the CY 2012 Annual Audit Report,

three were implemented, six were partially implemented and two were not implemented.

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