10-UP09 Part3-Status of PY's Recommendations

8/8/2019 10-UP09 Part3-Status of PY's Recommendations

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University of the Philippines-System Wide

Validation of Implementation of Prior Years Recommendations

Observations and Recommendations Ref. Managements Action

Status Of

Implementation(Full, Partial, Not-

Implemented)

Auditors Validatio

and Evaluation

I. EFFICIENCY AND

ECONOMY AUDIT

A. Deficiencies in the Operation of Income Generating Projects

(IGPs)

Inadequate enforcement of policies oncontracts/lease agreements, absence of

legal sanctions in the contracts and lack

of procedures and monitoring controls

on collection and recording of income

in four UP campuses resulted to loss

of income amounting to P1.68 million,

and understatement of Income of P21.6million.

Recommendations:

Intensify and monitor

collection of receivables from

the Lessees. Ensure that all

leases are covered by Lease

Contracts and that its

provisions are strictly enforced.

The Accounting Office of UP

Diliman should be required to

record the P14.3 millionincome from IGPs based onaccrual method of accounting

prescribed by NGAS.

Require the Deputy Director for

Fiscal Services of UP-PGH toprepare the guidelines for rental

operations incorporating therein

the duties and responsibilities

of each of the concerned

offices. Require the Internal

Audit Office to compute the

five percent income from grosssales and the Office of theEngineering and Technical

Services (OETS) for the

electricity consumption of the

lessees and submit to

Accounting Office regularly for

billing purposes.

Review the fishpond operations

CAAR

2008

par.

39-43

Units and offices responsible for

collection of receivables/arrears

from lessees are intensifying their

efforts to collect the outstanding

obligations, e.g. the Business

Concessions Office in UP

Diliman has strictly prohibitedconcessionaires with unsettled

accounts to participate in biddingfor canteen operations, which has

compelled a number of

concessionaires to settle long

standing obligations. Income

from IGPs have been recorded in

the books based on accrualmethod of accounting under JEV

No. 08-12-0469.

According to UP-PGH, the

Lessee is paying the fixed rental

of P66,000 plus additional of

P9,388.25 per month based onestimated sales of P187,765 as

reported by the Optical Shop, and

not on the 5% of gross sales, as per MOA. The Lessee was not

able to provide the data of their

actual sales as basis of the

additional 5% gross sales to be

audited by the Hospitals. Internal

Audit Division. The amount of

P81,000.00 unpaid rent and the

taxes withheld were all refundedand included in OR No. 077500

dated February 28, 2009amounting to P96,803.93.

UP Visayas is preparing for

ejectment case against lessees due

to breach of contract, etc.

UPLB Business Affairs Office

(BAO) will require licensee tosubmit the necessary reports so

Partially

Implemented

UP Diliman

Had fully implemented

recommendation.

UP PGH

Had submitted to the A

Team the propoProcedural Guidelines

the Implementation ofLease Contracts, subjec

the final approval of

Director.

UPLB

As of to date, Managemhas not yet submitted

legal document evidenloan by BIOTECH f

UPLB-FI.

BIOTECH has not

stopped collecting forUPLB-FI contrary to w

management has sta

BIOTECH still colfees for analysis in favo

UPLBFI as evidenced

UPLB-FI Official Rec

Nos. 31131

November 1, 2009, 31

dated November 13, 2

and 39726 dated Janu

14, 2010.

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at the Mariculture Station in

Bataan, Aklan and prepare theLeasehold Contract for each

lessee as basis for collection of

fees. Impose legal sanctions incase of breach of contract.

Require the Licensee to abide

by the terms and conditions of

the MOA, specifically on the

payment to the UPLB of the

correct amount of royalty based

on the quarterly production and

sales report. Require the

UPLB-FI to remit the amountof P1,360,699.30 collected in

favor of BIOTECH. Require

the Foundation to strictly

comply with Sections IV (2)

and V of the MOA on the

submission of projects

financial reports and remittance

of UPLBs share of grossincome of UPLBFIs managed

projects funded by the DA-

BAR and other Agencies.

that the correct royalty can be

computed. UPLBC has already

been remitting collections from

CASL in favor of BIOTECH.

B. Delayed, Non completion andPublication of Research Projects

Review of the UP Diliman and UP

Visayas research projects progress thruevaluation and comparison of outputs

with planned activities and budget,

yielded a total physical delivery rate of

48.64% with a much higher financial

utilization rate of 87.49% due to

termination and delays in the

submission of deliverables caused by

inadequate monitoring and nonimposition of sanctions against

delinquent proponents of P33.99

million researches.

Recommendation:

OVCRE to strictly monitor research

projects to ensure completion in

accordance with the Schedule of Outputs

and Terms of Reference, impose

appropriate sanctions to project

proponent who failed to complete

his/her project on time and evaluate

research outputs for possiblepublication.

CAAR

2008

par.

43-47

UP Diliman Management has

instituted additional measures and

sanctions together with the Office

of the Chancellor. Researcherswith overdue accountabilities are

not endorsed for new grants and

are asked to work with

management to complete their

accountabilities.

The UPV OVCRE is currently

monitoring research projects withthe assistance of the College

Deans. To further improve the

monitoring system, UPV will

implement a semi-annualmonitoring list next year to

closely monitor the progress of

research projects. In terms of

physical delivery rate, research projects, unlike other projects,

normally experience delays due

to the need for validation of

results. Often, these delays are

due to the uncertainty inherent in

Partially

Implemented

UP Diliman

Delayed completion

research projects are

noted. Reiterated in

report.

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research. The delays are often

within the allowable limits and

are at no additional cost to the

funding agency.

C. Unutilized PGMA-SEGS Funds

Only 37 faculty members or 44 % of the

85 target beneficiaries of the President

Gloria Macapagal-Arroyo Science and

Engineering Graduate Scholarship

(PGMA-SEGS) Faculty Development

Program have been screened andqualified due to inadequate information

dissemination.

Recommendation:

UP Diliman in cooperation with CHED,

aggressively disseminate information ofavailable scholarship slots to HEIs

faculty members for a wider

participation among stakeholders in

order to meet the target beneficiaries andefficiently utilized the government funds

infused to the program.

CAAR

2008

par.

47-50

As a result of recent marketing

strategies, UP Diliman has

already approved 55 scholars

with 11 pending applications that

are currently being evaluated. UP

Diliman projects to use up the

first tranche and start utilizing the

second tranche of the budgetshortly.

In early 2009, a roadshow was

conducted among selected

schools to disseminateinformation of the available

scholarship. IN addition, OVCRD

has outlined a recruitmentprogram during the 1 st semester of

AY 2009-2010.

Partially

Implemented

19 available slots from

85 target beneficia

remained not filled up

the program.

D. Inadequate supervision of

projects implemented by private

foundations.

Inadequate monitoring of compliance

with existing agreements and supervision of Fostering Democratic

Governance (FDG) project and labor

seminars implemented by UPPAF and

CLEARED, respectively, resulted in

unrecorded project funds of P7 millionin UP Diliman.

Recommendation:

UP Diliman strengthens its strategies on

projects implementation in collaboration

with private foundations. Monitor that proceeds of the training

programs/projects conducted by the

concerned college/unit as in the case of

UP NCPAG and SOLAIR are shared

and accounted for as government funds

and utilized by the contracting parties

for the intended purpose/s.

CAAR

2008Par.

35-41

SOLAIR-CLEARED now has an

approved Trust Account forwhich all proceeds from thetraining programs/projects

conducted are deposited.

UP NCPAG Memorandum of

Agreement (MOA) is subject for

review by the UPD Legal Office.

The Trust Account for NCPAG

cannot be opened without theMOA.

Partially

Implemented

MOA had not b

submitted to date.

E. Inefficient Operations of the

University Hotel

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Inadequate monitoring and evaluation

including insufficiency of guidelines forthe Hotels effective operations resulted

to lapses of the Board of Overseers

management, which adversely affected

the earning potential of the University.

Recommendation:

UP System to strictly monitor and

evaluate the performance of the UH in

accordance with existing government

rules and regulations.

CAAR

2008

Par.

54-58

Management tried to reassess the system to

comply with the recommendations

Not

Implemented

Reiterated in Part II

this report.

F. Disapproved/Disallowed

Philhealth Claims

Losses in revenues of UPPGH

amounted to P 8.7 million fordisapproved/disallowed Philhealth

hospital claims from CY 2004 up to May

2008 due to insufficient compliance of Philhealth documentary and timeline

requirements, as well as erroneous data

provided by the patients.

Recommendation:

UP PGH to revisit its existing

procedures on Philhealth claims to

minimize receivables and request for

reconsideration for those cases wherein

the hospital was aggrieved by Philhealthdecision/disallowance.

CAAR

2008par.

58-61

UP PGH is working on ways to

reduce the problem of uncollected/disapproved

Philhealth claims. This is due to

the volume of transactions arising

from the large number of patients

that PGH accommodates.

Partially

Implemented

The hospital is still wai

for the final result ofappeal for some claims

usually takes a long t

for Philhealth to rev

appeals.

The SLs for CY 2009

PhilHealth claims already updated

Accounting Division.

G. Inadequate Budgetary Allocationfor UPM-PGH

The UPM-PGHs inadequate

government budgetary allocationsresulted to inadequate facilities, poor

nurse to patient ratio, unpaid utility

bills, and underpaid medical personnel,

which may adversely affect its goal of

becoming one of the best national

university hospitals in Asia, andachieving the International

Organization for Standardization (ISO)9001:2000 Certification.

Recommendation:

UPM/PGH Management to make a

strong and persistent representation with

DBM thru the UP System for the

CAAR

2008par.

61-67

The UP Budget (including PGH)

already constitutes the biggest

percentage of the total budget for

SUCs offering higher education.Increasing the PGH budget will

reduce the share of other SUCs.This is why DBM and CHED

cannot address fully therequirements of the PGH.

Partially

Implemented

Most of

recommendations will

implemented as planne

CY 2010 due to manpoproblems.

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approval of the proposed Budget and the

Actual Personnel Requirements of the

Hospital including the release of the 20

percent Senior Citizens discounts and

raise more funds to augment government

subsidy through intensified collectionsof accounts receivables and creation of

more income generating projects in line

with the Hospitals mandate.

H. Deficiencies on Cost Recovery

Mechanism from Reneging

Fellows.

Sixty-seven faculty grantees in UPVisayas, Miag-ao, Iloilo reneged on

their contractual obligations to render

the required period of return service,

and failed to refund their monetary

obligations of P29,853,725.51 andUSD619,042.16,thus, depriving the

University of the benefits it could have

derived from its Faculty DevelopmentProgram.

Recommendations:

The University should strictlyimpose the sanctions provided

in the UP Faculty Manual and

Local and Foreign Fellowship

Study Leave Agreement. Exert

extra efforts to collect thefinancial obligations of

reneging fellows. Closely

monitor the scholarship grantsapproved by the UP Visayas

Scholarship Committee to

ensure proper implementation

of the UP Faculty Development

Program;

Reconcile records of the HRDO

and Accounting Office to avoid

discrepancies in the amountscollected and the outstanding

accounts of the reneging

fellows, as well as to ascertain

the amount that will be taken

up as Accounts Receivable in

the books.

CAAR

2008

par.

67-69

Not

Implemented

Reasons for non-

implementation not

indicated. Reiterated

Part II of this report

I. Land Occupied by Informal

Dwellers

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A total of 30.5 hectares donated lands of

UP-Visayas Iloilo and Miag-ao

campuses are occupied by informal

dwellers due to inadequate measures to

secure the property, to protect the students and personnel to possibledangers to life and limb and to free the

University from incurring expenses

related to the ejectment of these

informal dwellers.

Recommendation:

Appropriate legal action be instituted by

the University to eject the illegal settlers

at identified UPV properties in Miag-ao

and Iloilo City campuses.

CAAR

2008

Par.

69-70

The UPV Legal Office has, on

record, made the appropriate

recommendation for the removal

of informal dwellers, especially in

Miag-ao. A standard format for

ejectment complaints againstknown squatters has already been

drafted.

Partially

implemented

A committee was cre

to conduct an inventor

illegal settlers in Mia

campus.

J. Operations of the UP Diliman

Legal Research Fund

The UPD Law Complex inadequatepolicies and inefficiency in the handling

of Legal Research Fund (LRF) resultedto the following:

Issuance of notice of cash

allocation by the Department

of Budget and Management

(DBM) was delayed for at least

five years;

Low LRF publication rate of9.1 percent;

Excessive honoraria of P10.07

million; and

Erroneous charges to LRF of

P20.23 million.

Recommendation:

We recommended the following courses

of action:

Formulate guidelines to

improve the UPLC LRFrecording process and

monitoring of collections

thereof;

Coordinate with the BTr to

formulate guidelines in order to

facilitate the process of

verification and reconcile

UPLC records with the BTr toensure the reliability of the

CAAR

2008

par.

71-89

UPLC will constantly coordinate

with the BTr regarding the early

verification of LRF collections so

that National Cash Allocation

will be issued by DBM on time.

UPLC will continue to abide bythe recommendations of COA

regarding formulation of

guidelines to improve LRF

collections by drafting anamendment to DBM-Finance-

COA Joint Circular No. 6-85,

which is on record, the sole legal

basis for the guidelines, rules and procedures for collection and

deposit/remittance of Legal

Research Fees by collecting

agencies.

UPLC has strengthened its

publication program by

encouraging the Law faculty and

Research personnel to publishtheir research works. UPLCs

publication division has already

adopted COAs recommendation

to use Stock Cards for inventory

purposes.

Earnest efforts have been

undertaken to ensure prudence in

spending LRF funds and

Not

Implemented

Management complia

to date is not updated, a

submissions of requi

reports were

complied.

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report of collection;

Revisit the UPLC mandate on

publications to effectively

utilize the LRF in order to

ensure that the books published

are adequate for all the targeted beneficiaries and distribute the books based on the official

distribution list on a timely

basis;

Maintain stockcards per book

title publication as required bythe NGAS, conduct yearly

physical inventory of books at

the end of each year to be

submitted to the UP Diliman

SPMO for information and

consolidation, copy furnish theOffice of the Auditor:

Charge the costs of the

publication for sale and for the

BAR review to the proper trust

fund accounts and not to LRF;

Ensure prudence in spending

the LRF funds and maximize

its utilization on projects

directly related to its mandate.

maximizing its utilization on

projects directly related to its

mandate by encouraging its

faculty and lawyer staff in

research projects, among others.

All expenditures for the

publications for sale and for the

Bar Review shall be drawn from

its collections deposited with the

Publication and UPLC Trust

Funds.

II. FINANCIAL ANDCOMPLIANCE AUDIT

K. Unliquidated Cash Advances

Cash Advances amounting to P58.99

Million in eight UP Campuses

remained unliquidated as of the end of

the year of which is P31.70 Million is

due and demandable resulting in

overstatement of the account Cash

Advances to Officers and Employeesand understatement of the appropriate

expense accounts by the same amountcontrary to COA Circular No. 97-002

dated February 10, 1997.

Recommendation:

Comply strictly with COA

Circular No. 97-002 dated

February 10, 1997;

CAAR

2008

Par.

90-91

Management will comply with

COAs recommendation to

strictly follow COA Circular No.97-002 in managing cash

advances.

The Management of the various

UP campuses has sent/will be

sending notification by phone,referral slips and demand letters

to the employees concerned tosettle their long outstanding cash

advances.

Sanctions such as withholding the

salaries of those with

unliquidated and due cash

advances after the

Partially

Implemented

UP Diliman

Only 19.85% of P

million or P1.2 milcash ddvances gra

were liquidated as

October 2009.

UP Visayas

The unliquidated advance as of Decem

31, 2009 is P39,246.49.

Reiterated in Part II of

report.

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with projects financial reports pursuant

to COA Circular 94-013 dated

December 13, 1994.

Recommendation:

That the Accounting Office prepare a

year-end project financial report in

addition to the semi-annual and annualreport in accordance with the MOA

between fund grantees to facilitate

reconciliation of account balance and to

coordinate with the Accounting Office

of DA-BAR for reconciliation of

unliquidated project fund balance.

OVCRE should closely monitor thesubmission of projects financial reports.

have been duly acknowledged by

that agency. In order to expedite

the reconciliation, the Chief

Accountant of DA-BAR sent

technical staff to UPLB to verify

and reconcile the accounts inquestion.

N. Unreliability of PPE Account

The variance of P 1.54 billion

between the balance per books in UP

Diliman and Tacloban campuses ofP4.98 billion and the Report on the

Physical Count of PPE of P3.44 billion

was due to absence of regular

reconciliation, inadequacy of perpetual

inventory records, failure to conduct

physical inventory, affected thereliability of the accounts balance.

Recommendations:

Regularly conduct the physical

count and inventory reporting on

PPE by the Property Unit or the

Committee created for that purpose

pursuant to Section 490 of the

GAAM, Vol I.

Require the Accounting and

Property Units to observe strictlythe procedures on the preparation,

proper recording and the

maintenance/updating of

SL/Property Ledger Cards andProperty Cards for PPE in

accordance with NGAS. Likewise,

require the Accounting Division to

reconcile the account balances in

the GL against the individual

CAAR

2008

par.

94-97

UP Diliman

In lieu of the Manual Property

Ledger Cards required by the

COA, the UPDAO and SPMO

maintain a computerized property

database containing all the

needed information in the manual

property ledger card per NGAS.

The UPDAO maintains

computerized database containingnecessary data from the

Acknowledgement Receipt of

Equipment (ARE) attached to the

Disbursement Vouchers. Regular

updating is being conducted on

COD transactions thru the

copies of ARE being submitted

by the Cash Office. The account balances of the database are

reconciled with the general ledger

balance on a monthly basis.

PPE reconciliation is ongoing for

CYs 2006, 2007 and 2008.

UP System

The System Accounting Office

and the System Supply Property

Management Office have already

conducted a physical count of all

the fixed assets of the System

PartiallyImplemented

UP Diliman

The Accounting Office

yet to provide the SP

with details of prope

recorded in the books

reconciliation purposes

The physical inven

report for the prevyears is still incomp

hence reconciliathereof is still ongo


report.

UP System

Ongoing reconcilia

between the Accou

Office and System SupProperty Management

being co


report.

UP Visayas

The UP Visayas had f

implemented recommendations.

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subsidiary/property ledger card

including the inventory reportprepared by the Committee.

Provide depreciation for alldepreciable assets of the University.

offices. The two offices are now

in the process of reconciling the

recorded balances based on the

results of the actual physical

count.

UP Visayas

A committee was created to

implement COAs

recommendations and an

adjustment was taken up in the

books per General Journal

January 2009.

O. Unreliability of Land Account

The accuracy, validity and ownership

of Land in UP Manila and Visayas

Campuses with a total book value of

P21.4 million cannot be determined

due to incomplete records.

Recommendation:

The Accounting Office to

record at cost or in its absence,

the appraised/zonal value of the

land holdings following NGAS,

maintain and update SLs for theLand account which should

contain basic information suchas location, area, title reference

and valuation reference; and

disclose in the Notes to the

Financial Statements the basis

of the Land valuation if the

acquisition costs are notavailable.

The UPV officials should

follow up with the LRA and

LMB on the release of the

OCTs/TCTs and the SpecialPatents, respectively, of the

UPV lots to obtain legal

ownership and to ensure the

CAAR

2008par.

97-100

UP Visayas

Special Patent No. 3631 (1st

Special Patent covering 280.8147

has.)

Requirements for the plotting of

corners were already requested

from the Bureau of Lands. There

are some data however, that are

missing at the Bureau. The Legal

Officer made a follow-up at the

LRA last August, 2009. Herequested LRA to expedite the

issuance of OCT to UPV. There

are some technical problems such

as overlapping of corners of

several lots. Recomputation of

corners is now being done at the

Bureau of Lands, Iloilo.

Presidential Proclamation No.

866 covering 227.2528 has. Thishas a pending application for

Special Patent now pending at the

Land Management Bureau.

LMB has requested the Bureau of

Lands to recompute the polygonof twelve (12) lots.

Recomputation is now being done

at the Bureau of Lands. Follow-

Partially

Implemented

The Chancellor has

follow-up letter to Lrequesting to expedite

processing of sp

patent.

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accuracy of the accounting and

property records of the

University.

up is being done regularly but

some folders containing the data

needed are not available at the

Bureau.

UP Manila

Director Edgardo M. Gonzaga of

the DOH Center for Health

Development Eastern Visayas

in his letter dated November 10,

2009 to Secretary Francisco

Duque, informed that they have

no objection to the reconveyance

of the Cablawan and Diit

properties in Tacloban City backto Department of Health, also

indicating their plans for the

property.

Disclosed in the Notes to FS the

Zonal Value of the UPM Lands.

P. Unreliability of Land

Improvement Account

The continued existence for 24 years of

the account Land Improvements

amounting to P4.06 million at the UP

Manila due to insufficient records and

the failure to complete the documents for writing-off dormant accounts as

required by COA resulted to the non fair presentation of the accounts in the

financial statements.

Recommendation:

Management to submit the necessary

documents to support the apparent

misclassification of the recordedpayment of consultants fee to the Land

Improvement account.

CAAR

2008

Par.

100-

101

Management is still locating the

records.

Not

Implemented

Q. Overstatement of AccountsPayable

The lack or insufficient documents to

warrant validity of claims, erroneous

inclusion of valid commitments and

receivables from Procurement Service

(PS) totalling P67.57 million in three

UP campuses overstated the Accounts

Payable account.

CAAR

2008

par.

101-104

In UPV, other Long Term

Liabilities account code has been

reclassified as of May 2009.

In UP Baguio, necessaryadjustments on the accounts

payable account were taken up in

Partially

Implemented

UPV and UP Baguio

fully implemented

recommendations. It

not implemented in

Diliman, hence, reiterin Part II of this report.

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Recommendation:

That the Accounting Office prepare

adjusting entries to correct the balances

of the affected accounts in the Financial

Statements, refrain from certifying andrecording obligations to accounts

payable without receipt by the agency of

the suppliers/creditors bills for goods

delivered, services rendered or projects

accepted, comply strictly with Section 98

of PD 1445 on the reversion of accounts

payable, and strictly adhere to the

provisions of DBM Circular Letter No.

2004-2 as amended by Circular Letter

2005-2.

February 2009.

In UP Diliman, accounts payables

are recorded based on duly

approved ALOBS and BUS

submitted by the UPD BudgetOffice with valid claimants

except for Capital Outlay which

is subject to bidding.

III. OTHER PRIOR YEARSRECOMMENDATION NOT

IMPLEMENTED OR ONLYPARTIALLY

IMPLEMENTED BY

MANAGEMENT.

Efficiency and Economy Audit

The absence of policy regarding UP

affiliated foundations raised doubt on

funds accountability over an estimated

P55 million and $95,968.32 received by

these foundations from 2003 to 2007 in

behalf of the University since these

funds are not fully disclosed/reported tothe University or covered bycontract/agreement given that

members/officers of the foundations areat the same time incumbent faculty

members and officers of the University.

Recommendations:

We recommended that the Foundations

programs/ projects/ activities and fund

sources be reported to the University for

monitoring and transparency purposes.Likewise, the UP System Administration

should issue the guidelines for UP-

affiliated foundations accreditation for

the compliance of all concerned.

CAAR2007

par.

01-09

Management submitted on April23, 2008 a copy of the

Guidelines for Recognition of

UP-Affiliated Donor

Organizations which provides

the basis for UPs recognition of

foundations as private institutions

in support of UPs academic

functions. However, since funds

are received by officers of these

foundations, who are at the sametime incumbent faculty members

of the University, the funds must

be accounted for as government

funds and property, hence the

issue has to be addressed by the

guidelines as agreed upon during

the exit conference.


Except for the guidelithat had been submitted

still did not address

issue on the monitor

and transparency of

Foundations program

projects/ activities

fund sources that sho

be reported to

University. Reiterated

Part II of this report.

Out of the 511.3 hectares intended for

educational purposes in UP Diliman

and Visayas-Cebu, 79 hectares are

occupied by informal dwellers due to

inadequate measures to protect their

CAAR

2007

par.

10-24

The UP System constituted a

Committee tasked to study the

strategies in dealing with the

informal settlers/illegal occupants

Partially

Implemented

In the UP Diliman, 7 ou

the 16 hectares occu

by the informal settlers

been recovered by havi

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property, thus the campus land area are

at risk of being lost, and affecting the

security of its campuses.

Recommendations:

Pursue efforts to complete a

comprehensive census data to

effectively detect and preventthe entry of squatters.

Provide the amount needed in

the profiling of illegal dwellersand for filing legal action, as

well as the construction of

perimeter fence to secure

campus properties.

in all UP campuses. Specifically,

the Committee was expected to

come up with report containing

policies on how to prevent further

increase in the number of

informal settlers/illegal occupantsand how to recover as much as

possible, in coordination with

concerned government housing

agencies. Copy of the said report

shall be forwarded to COA, once

this has been forwarded by the

Committee to the President.

The Task Force on Squatting

Communities and HousingUtilities (TF-SCHU) continues to

monitor UP properties and

regularly carries out demolitionof illegal structures. In fact, for

January 2007 to December 2007,

about 249 illegal structures were

demolished, including a shanty in

front of NIMBB and Ikapati Farmthat was demolished last

September 4, 2007, where it

occupies UP for 15 years now.

Others that were demolished are

illegal settlers of CHED, Area 11

which were relocated to Pook

Libis where most informal

settlers are contained. Elevenfamilies were also removed from

Area 11 to give way to the

construction of the Institute

of Chemistry Building as part of

the National Science Complex.

UP Visayas- Cebu

The UPVCC administrative

management will be conducting

regular monitoring of intrusionand activities of the informal

settlers; and

Will implement the auditrecommendations. As to the

Talisay property it will be acted

based on the final

advice/recommendation of theUPVCC Advisory Council and

Board of Regents.

proactive approach

dealing with this probl

The Administra

continues with

endeavours to achieve

goals, and its recovefforts for the unive

land.

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Deficiency on Cost Recovery

Mechanism from Reneging Fellows

Inadequate administration of the cost

recovery mechanism on the contractual

obligations of the reneging fellows in sixUP campuses totalling 202 million,

capacity to continuously provide

scholarship grant to other deserving

faculty members/ employees.

Recommendation:

Periodic monitoring and reconciliation

of the Accounting and the Human

Resources Offices records be made toaccurately determine and record the

accountability of reneging fellows.

Continuously monitor the status of casesreferred to the Office of Legal Services

(OLS), and the issuance of demand

letters for the enforcement of surety

agreements. Submit to COA long

outstanding accounts for possible write-off

CAAR

2007

par.

52-76

UP-Diliman:

There is a continuous legal and

accounting actions being done:the Masterlist of Reneging

Fellows was prepared as of June

30, 2007.

Per Administrative Order of U.P.

President Emerlinda R. Roman

No. PERR-06-31, the handling of

matters relative to reneging

fellows is delegated to all

Constituent Units through theirrespective Chief Legal Officers.

Files/records of reneging fellows

were transmitted from System toDLO starting June 25, 2007.

Current efforts are being done by

the Accounting Office, DLO,

HRDO and the Office of the

Vice-Chancellor for AcademicAffairs (OVCAA) to monitor,

pursue legal action, and demand

full compliance of return service

obligation.

UP-Manila/PGH:

HRDO submitted the profile of

Mariluz Mojica Henshaw toAccounting Division and College

of Medicine;

Accounting Division computed

the obligation of Rhona

Limcangco;

Submitted to OLS local and

the UP System the Status ofReneging Fellows as of

November 2007;

Accounting Division is currently

reconciling its records with

HRDO;

UP Baguio

Drafts of letters to be sent to the

fellows/grantees have been made

but have not yet been mailed to

the recipients.

UP Mindanao

Review of the surety agreements

Partially

Implemented

Substantial decrease

reneging fellows not

noted.

Marina Umaois partia

paid her account

follows:

OR No. Date Amount 287/13/07 60,000.00

2814519 7/27/07 25,022.29

2831592 12/5/07 20,000.00

Total 105,022.29

The Committee Reneging Fellows are

reviewing

accountability of P

Cecilio Costales and P

Anna Marie Cruz.

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and Evaluation

is ongoing. Any action made will

be referred to the OVP Legal

Affairs.

The Statement of Accountability

of Ms. May Marie Monforte-

Milton was already approved bythe Chancellor and this was

already sent by Atty. Oliver

Saniel, Legal Counsel of the

University.

The Accounting Office will

already book this as Accounts

Receivable amounting to

P748,350.11 in the June 2008

books of accounts.

Procedural deficiencies in the

operation of Newborn Screening

Services

An estimated P27 million uncollected

and unrecorded revenue and otherprocedural deficiencies in the operation

of the Newborn Screening Services of

UP Manila/PGH due to inadequate

enforcement of policies and

procedures/regulations on billing and

collection could affect the sustainability

of the programs operations.

Recommendations:

We recommended that management

need to reassess and review its billing

and collection procedures on the NBS

in conformity with existing governmentrules and regulations thus:

Accounting Division send

demand and/or confirmation letters to

Newborn Screening Facilities with

outstanding unpaid account balances

based on Subsidiary Ledgers.

to purchase the Sales Invoice

necessary in its operations from the

NPO, which is tasked to print

accountable forms to be used by

government agencies in their

operations;

to submit monthly sales report

to Accounting Division for recording ofsales on account;

CAAR-

2007

par.

77- 84

Letter dated May 2, 2008 of the

Director, IHG, the Report of

Income from the issued NBS kits

for the months of January,February, March and April,

2008.

To date, the 2% interest per

month for unpaid accounts after

the 45 days grace period is still

not implemented by the Institute.

Partially

Implemented

The

IHG AccountOffice is manned

only 2 Account

personnel han

1,200 active NSFs;

A softwto facilitate the

system of N

(Jeonsoft Invent

and Financ

Management Systewill soon

implemented;

The

Institutions, f

priority is to be

service to the NS

who they consider

their helping hand

the success

implementation of

program given

thrust of saving newborn babies of lthreatening disord

Instead of issuing

demand letter to th

NSFs, they carry

less harass

strategies;

The delayed record

of the online paym

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to secure Tax Exemption

Certificate from BIR and furnish a copyto the NSF. Instruct NSF not to

withhold taxes since it will no longer be

honored by IHG since the University is

tax exempt pursuant to Section 109 ofR.A. 8424. Further, require NSF to

submit to IHG a copy of their BIR

remittances of taxes withheld from

NBS services so that claims for taxcredits could be applied by UP Manila

to the BIR;

to inform NSF with

outstanding balances to immediately

settle their accounts to avoid non

processing of their Pos; and

inform LBP to comply strictlywith the MOA specially on the

submission of monthly Bank

Statements and the daily Schedule of

On-line Collections and ensure that NSF codes are reflected in the said

reports for monitoring and recording

purposes. Request for the names and

codes of NSF depositors that cannot be

identified in the previous Bank reports

for the appropriate recording of their

payments in the books.

The Cashier to issue separateseries of Official Receipts for On-line

collections and prepare a Report of On-

line Collection which will be the basis

of the Accounting Office to draw a JEV

to record such collection.

of Pagamuta

Pangmasa ng Lagu

(PPL) dated 03/24/

05/18/07 a

09/14/07, which w

posted only October 10, 2007 w

due to the use by P

of PNB Acco

Number 200-8306

2 instead of the

collect Acco

Number 075-8000

2, thus, resulting

unidentified

depositor. The sdeposit was identif

only after

reconciliation afollow-ups of

IHG.

Accounting withnumber of NSFs w

collection problems

Inadequate Implementation of Student

Loan Program

The lack of supervision of the

Universitys student loan programresulted in unrecorded P1.9 million andat least P6.5 million uncollected loans

on tuition fees in four UP campuses

thereby, reducing funds to finance

similar student programs.

Recommendations:

The Office of Student Affairs

CAAR

2007

par.

115-

125

UP DilimanManagement reconciliation was

undertaken between the

Accounting and Student Services

offices and that unrecorded

receivables will be set up as

recommended.

UP Visayas


Substantial amount uncollected loans

tuition fees still ex

Reiterated in Part II

this report.

Letter request to OP a

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and/or the Accounting Office

prepare the necessary collection

letters/billing statements

addressed to the students

(debtors) and the co-debtors

concerned and pursuecollection of outstanding loan

receivables; and

Student Loan Board strictly

apply the rules; deduct the

unsettled amount from the

salary of the co-debtors

pursuant to the Notarized

Promissory Note covering theloan.

Management agreed to the

observation

UP Manila

The Director of OSA, in her letter

dated December 10, 2007requested a meeting with the

representative of the College

OSR, OUR and the Accounting

Office to discuss measures,

strengthen procedures and strict

implementation of collection

policy.

UP Los Baos

During the exit conference, theChancellor verbally instructed

the Director of OSA to course

through his Office anyinstructions to the Deans of each

College to strictly comply with

the withholding of the students

registration until they settle their

outstanding accounts. OSA isnow in the process of preparing

demand letters to the students

with outstand-ing loans for more

than five (5) years.

then DBM were co

furnished the Audit Tea

The total receiva

arising from tuition f

per actual enrollment semester is still

booked up as receivable

Meeting was conducted

strengthen collect

procedures.

Demand letters w

issued to those lo

outstanding for more thfive years.

Uncollected income from Expanded

Senior Citizens Act of 2003

Uncollected 20 percent discount granted

under the Expanded Senior Citizens Act

of 2003 covered by R.A. 9257

accumulated to P64.9 million due to the

funding constraints from the

Department of Budget and Management(DBM) thus, adversely affecting the UP

Manila-PGH meager resources, andthe delivery of quality health care

services.

Recommendation:

That UPM/PGH Management thru theUP System to make strong

representation with Congress for the

approval of the budget of UPM-PGH

incorporating the discounts given to

Senior Citizens, as mandated by law.

This will ensure the sustainability ofHospital operations and the funds could

be utilized to purchase medical

equipment and drugs and medicines,

CAAR

2007

par.

126-

134

a.

b.

c.

d. Strong representations have

been made in previous

years discussions at

Congress and the DBM.Both are aware of this non-

compliance of the law and

the continued unfavorable

impact on the PGH Budget.

e. Stronger representations

will be given in the near

future, with the aid of theCommission on Audit.

Specific representations by UPM and

PGH through the UP System shall be

done soon through letters and formal

meetings in Congress and the DBM

regarding this crucial matter.

Partially

Implemented

Letter request to OP a

DBM were co

furnished to the Au

Team.

The request

reimbursement of

incurred foregone inc

for 2004 and 2005 as

the Senior Citizens

and its Implementing R

and Regulations (IRR) submitted to the Offic

the President and thenDBM.

Unfortunately, th

requests were not

granted.

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which are necessary to provide quality

health care to indigent patients.

Inappropriate/Lack of Accounting

Policy on Uncollectible, Write-Offs and

Recognition of Income

Hospital Fees of P131.6 million

excluding interest due from Corporate,

Government and Individual Accounts

remained uncollected from one to 12

years in UP PGH, due to inadequateand inconsistent implementation of

existing policies on admission and

collection for Pay-In Patients, which

deplete its financial resources to sustain

operations.

Recommendation:

That Management review its billing andcollection system to ensure payment

from clients, thus:

Require the HMOs/PrivateCompanies and Other

Government Offices whichclientele and personnel are

provided with medical services

by the UP-PGH to post a Cash

and Surety Bond deposit at an

amount to be approved by the

PGH Director, pursuant to UP

Board of Regents delegation of

authority. The bonds will

guaranty the fulfilment of the

obligations stipulated in theMOA;

Enforce the P15,000 limit onoutstanding accounts of Pay-InPatients

Inform Nurses Station not todischarge patients without

clearance;

Include in the existing Hospitalpolicies the specific time framewithin which the Statement of

Accounts/Bills should be

forwarded by the Billing

Section to the clients for

collection;

Require the Accounting

CAAR-

2007

par.145-

149

PGH Memo 2008-07 delineates

the levels of authority in the

approval of PNs according to

unsettled accounts.

Started implementing a new

policy for the posting of a surety

bond for applications/ renewals of

contracts of different categories of

clients.

Additional strategies are placed to

overcome problems on personnel

and to upgrade computer performance at the cost centers.

Operational procedures will bereviewed in the discharge of

patients involving all sectors.

A new policy to have a fixed

time frame in sending

bills/collection notices to the

clients will be included in the

forthcoming MOAs.

Guidelines for the Handling of

Receivables at the DPPS will be

prepared in coordination withconcerned offices of Legal,

Accounting and Cash.

Partially

Implemented

PGH Memo 2008-07 w

furnished to the Audit

Team.

Started implementing

requirement for posting

surety bond

applications/ renewals

contracts for HM

except for governm

agencies.

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Division to compute the

interests and penalties of all

unpaid accounts as stipulated in

the MOA/Contract;

Refer to the UPM-PGH LegalOffice all delinquent debtors,for possible legal action to

enforce collection or request

the COA for possible write-offs

of unpaid Hospital Bills; and

Aside from the Promissory Notes, Management consider

acceptance of Post-Dated

checks (PDCs) or bonds toensure payment of long

outstanding hospital bills. In

case of acceptance of PDCs,internal control policy be

prepared to safeguard the cash

items.

Unaccounted Financial Transactions

of University Hotel

Absence of financial and operation

reports on the University Hotel

(formerly Philippine Center for

Economic Development), which was

donated to the UP System in 1983 purportedly due to managements

representation of an on-going process ofprivatization of the Hotel, is irregular

and without valid justification.

Recommendation:

That management take appropriate

action to consolidate in its books of

accounts the result of the Hotel

operations as well as its financial

condition. Henceforth, record all

financial transactions of the Hotel in the

UP System books of accounts until it isprivatized/ concessioned/ bidded out.

CAAR

2007

par.

203-

214

University is currently evaluatingthe report of the Committee

created to review the status of the

University Hotel. It shall take into

consideration COAs

recommendation on the matter,

when it makes its recommendationto the Board of Regents for its

action in its May 30 meeting. UP

will also take into consideration

the provision of the new Chapterin relation to its corporate powers.

NotImplemented.

To date the report ofcommittee created

review the status of

University Hotel is no

submitted

Reiterated in Part II of report.

Inappropriate/Lack of Accounting

Policy on Uncollectible, Write-Offs and

Recognition of Income

Hospital Fees of P131.6 million

excluding interest due from Corporate,

Government and Individual Accounts

remained uncollected from one to 12

years in UP PGH, due to inadequate

CAAR

2006

par.

21-28

On October 26, 2006, the

Chronology of Events documents

were submitted to the President.

On November 24, 2006, during

the 1215th meeting of the Board

Partially

Implemented

Management has ye

decide on which of

two option to take,

follows:

Retain

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and inconsistent implementation of

existing policies on admission and

collection for Pay-In Patients, which

deplete its financial resources to sustain

operations.

Recommendations:

Require the HMOs/Private

Companies and Other

Government Offices which

clientele and personnel are

provided with medical services

by the UP-PGH to post a Cash

and Surety Bond deposit at anamount to be approved by the

PGH Director, pursuant to UP

Board of Regents delegation of

authority. The bonds will

guaranty the fulfilment of the

obligations stipulated in the

MOA;

Enforce the P15,000 limit on

outstanding accounts of Pay-In

Patients;

Inform Nurses Station not to

discharge patients without

clearance;

Include in the existing Hospital

policies the specific time frame

within which the Statement of

Accounts/Bills should beforwarded by the Billing

Section to the clients for

collection;

Require the Accounting

Division to compute the

interests and penalties of all

unpaid accounts as stipulated

in the MOA/Contract;

Refer to the UPM-PGH Legal

Office all delinquent debtors,

for possible legal action to

enforce collection or request

the COA for possible write-

offs of unpaid Hospital Bills;

and

of Regents (BOR) held in Palo,

Leyte, and the UPM SHS

Properties were discussed and

they have the following action:

Notation. The Regents, however,

requested for a copy of theexperts report on the status of

these properties.

property.

Give up

property

return it to DO

Requires B

action/ decisio

Consultations

with the DOH

concerned

Legislators h

to be made.

Management are colla

the report for submis

to the BOR. They are

waiting for confirmatiothey can proceed with

meeting with the Secre

of Health and later, w

Senator Flavier. Tassured that they w

update the auditors

these Management A

Findings.

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and Evaluation

Aside from the Promissory

Notes, Management consider

acceptance of Post-Dated

checks (PDCs) or bonds to

ensure payment of long

outstanding hospital bills. Incase of acceptance of PDCs,internal control policy be

prepared to safeguard the cash

items.

b. Financial and

Compliance

Use of MDS funding checks

The UP System Administration still uses

the Modified Disbursement Scheme(MDS) funding checks in remitting to its

constituent campuses their monthlyoperating requirements instead of

through Notice of Transfer Allocation

(NTA).

CAAR

2006

par.55-61

The management of the

University sought exemption

through its Budget Proposals toDBM in its 2008 Proposal. The

House of Representatives and theSenate included this proposal in

their GAA Bill. The said

provision was vetoed by the

President and in her veto message

recommended to bring the matter

to the attention of DBM. In

keeping with the instruction of

President Arroyo, on April; 4,2008, UP President Emerlinda

Roman wrote DBM Secretary

Rolando G. Andaya seeking

exemption from the Circular.

Partially

Implemented

Requested exemption f

DBM and awaiting re

of communications wappropriate governm

agencies concerned.

Unreconciled Cash in Bank accounts

The Cash in Bank accounts of UP

Diliman, Manila and Visayas showed

unreconciled discrepancies of P57.3million due to the non-preparation of

bank reconciliation statements (BRS).

Recommendation:

Management agreed that the

University Accounting Office

concerned update the preparation of

bank reconciliation statements and

take up the necessary adjusting entries

to reflect the accounts correctbalances.

CAAR

2006

par.

77-82

UP-Diliman:

Adjustments were recorded inDecember 31, 2007 trial balance.

Subsequently bank reconciliationstatement was submitted to the

COA.

UP Manila

Update the preparation of bank

reconciliation statements and take

up the necessary adjusting entries

to reflect the accounts correctbalances.

Partially

Implemented

BRS for combo acco

were submitted but notime.

Understated Accounts Receivable and

Income Accounts

Inconsistencies in the manner of UP System Adm. Not Accounts Re

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and Evaluation

recording receivables and

corresponding income accounts in threecampuses resulted in the understatement

of both accounts by P6.3 million.

Recommendation:

Accounting Office adopt the accrual

basis of accounting in recording

revenues from its income generating

projects and auxiliary services as

prescribed by NGAS.

CAAR

2006

Par.

89-93

The University will follow the

recommendation of COA which

is to include in future contracts

the office that will monitor and

implement the provisions

particularly the collection ofincome. Dilimans Business

Concessions Office shall be

provided with copies of the

contracts. UP Diliman has been

instructed to record the

receivables from PNRC and FFVI

UPM-PGH

Review of assessment and bills

will be sent to the concernedstudents, and recording of

receivables in books of accounts

will be made.

Implemented from PNRC and FFVI

yet to be recorded.

Appropriate docum

concerning implementaof recommendations

yet to be submitted.

Unauthorized allowance/ benefits

Payment of representation and

transportation allowances (RATA) and

subsistence allowance totaling P2.5

million to officers and employees of UP

Open University and Visayas did not

conform to existing rules and

regulations.

Recommendation:

Management of UP Visayas agreed to

strictly adhere to E.O. No. 292 and NBCNo. 404.

CAAR

2006

par.106-

113

UP Open U

Despite denial of Request for

Reconsideration, payment still

continues.

Not

implemented

Records show that RA

of these personnel f

January 2004 to Novem

2004 was disallowed

the RLAO, Region IV

appeal was denied processing of the

claim was not stop

Verified per disbursem

reports that the Univer

is still paying honor

without secu

exemption from DBM.

Reduced Income from Drugs and

Medicines

Procurement of drugs and medicines

thru cash advances from nearby

drugstores at higher cost and lower

mark-up deprived the Philippines

General Hospital (PGH) of extra

income of approximately P215,133.13.

CAAR

2006-

par.

143-

147

UPM-PGH

A re-evaluation of the

procurement systems and

streamlining of procurement

processes will be conducted. All

common problems and issues on

the delay in processing of

Partial

Implementation

There are

procurements made f

the nearby Drugstores

cash advances.

Cash Advance/ Ceiling

the purchase of Drugs

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Recommendation:

Management agreed that the Pharmacy

Department ensure the availability ofneeded drugs and medicines by

following the procurement guidelines

prescribed under PGH Memorandum

2006-11, and to minimize emergency

procurements which may turn out to be

more expensive.

requests will be addressed. Medicines was redu

however, Measures

will be undertaken

PGH/ Pharmacy w

will help improve

procurement processany, were not

submitted to the A

Team.

10-UP09 Part3-Status of PY's Recommendations

Documents

Transcript of 10-UP09 Part3-Status of PY's Recommendations