2. Eulogio “Amang” Rodriguez Institute of Science and Technology (continued)
- COA said that the EARIST administration agreed to comply strictly with the provisions of RA 9184 or the regarding funding requirements, modes of procurement and acceptance of deliveries; comply strictly with COA Circular No. 2009-002 dated May 18, 2009 reinstituting selective pre-audit on government transactions; and explain the significant deficiencies noted in audit and submit documents, where applicable.
- The procurement of a Digital Language Laboratory amounting to PhP 8.6 million awarded, supplied and delivered by Mars Laboratory Instrument Center (MLIC) was contrary to RA 9184, Sections 4 and 85 of Presidential Decree No. 1445 (Ordaining and Instituting a Government Auditing Code of the Philippines) and COA Circular No. 85-55A dated September 8, 1985, casting doubts on the validity and regularity of the transaction.
- COA said the EARIST administration agreed to comply strictly with the aforementioned laws, rules and regulations governing procurement of goods, documentation and regularity of transactions; explain the significant deficiencies noted in audit and submit documents, where applicable; explain why the contract was awarded to MLIC which bidded the amount of PhP 8.6 million as against the lowest bid of AMC in the amount of PhP 5.8 million; and explain why the transactions should not be disallowed in audit considering the significant deficiencies noted in audit.
- The payments on the repairs and renovation of the college’s facilities totaling PhP 24.9 million disclosed inadequate supporting documentation required to establish the validity and correctness of the claims against government funds and inadequate accounting and administrative controls in processing and payment of claims contrary to existing laws, rules and regulations.
COA's 2009 CAAR of EARIST also pointed out that the Business Development Center (BDC) collections of PhP 7.26 million were not deposited promptly and intact with the Philippine National Bank, as these remained in the possession of the Collecting Officer from one to 43 days contrary to existing rules and regulations thereby exposing said funds to possible loss and misuse. The EARIST Administration agreed with COA's recommendation to direct the Collecting Officer to deposit immediately to the PNB the remaining unremitted collections of P9,683.83; and closely monitor the collections and remittances to ensure that collections are promptly remitted to PNB.
The procurement of school and P.E. uniforms amounting to PhP 4.3 million in 2007 and PhP 3.1 million in 2008 by the EARIST Income Generating Project Office (EIGPO) and the corresponding rebates of about PhP 1.1 million thereon were likewise also not recorded in the books of accounts contrary to P.D. 1445, resulting in the understatement of the cash and other related accounts. Likewise, procurement of said uniforms was not in accordance with RA 9184.
COA recommended and the EARIST administration agreed to render an accounting and consolidate all the financial transactions of the EIGPO into the books of accounts and submit thereafter to the Auditor for custody and audit; comply strictly with the provisions of RA 9184; remit to the Bureau of Internal Revenue the taxes withheld from Seed Apparel; and refrain from entering into a contract with official and employees of the Institute to avoid the existence of conflict of interest.
The financial statements of the Institute did not include the PhP 3.53 million total assets, liabilities and government equity as well as the P1.96 million net income of its BDC’s operations which remained unrecorded in its books because the BDC Accountant continuously failed for years to submit the monthly financial reports to the Institute’s Accounting Unit for consolidation. (Paragraphs 82-90)
COA recommended, and the EARIST Administratiion agreed that it would require the BDC Director to remit all collections and all revenues generated by the Center which shall be the source of its funding, such that the funds for the operations of the Center shall be considered fund transfers from the Institute and its releases shall be recorded and accounted in both the books of the Institute and the BDC; require the BDC Director to report as well the Center’s disbursements for recording in the Institute’s books of accounts; and effect the transfer of all bank accounts maintained with private commercial bank to the Institute’s account with its depository bank.
COA also said that the Cash in Bank balance of PhP 47.6 million of EARIST was understated by PhP 1.3 million due to unrecorded transactions of the Institute’s Business Development Center (BDC) and Special Academic Program (SAP); EARIST also suffered from unreconciled variance of PhP 0.3 million between the books and bank balances in the absence of bank reconciliation statements thus, casting doubts on the validity of the cash accounts.
COA recommended that the EARIST Administration require the accountant to prepare a Journal Entry Voucher to record all unrecorded transactions of the BDC and SAP. Likewise, to regularly prepare the bank reconciliation statements of the Cash in Bank for trust and special trust funds to reconcile the cash in bank balances with the bank records.
COA also said the SAP’s estimated receipts of PhP1.4 million and unsupported disbursements of about PhP 2.3 million were not duly accounted for nor taken up in the books of accounts hence, the income or loss from operations cannot be determined for viability and decision making. Moreover, the amount of PhP 102,140.72 appearing in the SAP bank account as of January 31, 2009 was not recorded or ncluded in the cash balance resulting in the understatement of the cash and income accounts’ balances by PhP 1.5 million and expenses by PhP 2.3 million.
Lastly, COA recommended and the EARIST administration agreed to render and submit an accounting of all the receipts and disbursements pertaining to the program together with the disbursement vouchers, payrolls, and Memorandum Receipts for the laptops and printers reportedly disbursed or procured for recording and auditing purposes.