EXECUTIVE SUMMARY

INTRODUCTION

The PANGASINAN STATE UNIVERSITY (PSU) was created by virtue of Presidential

Decree No. 1497 promulgated on June 11, 1978 and became operational on July 1, 1979.
It consists of nine (9) campuses and two (2) academic work units namely:

o Alaminos Campus
o Asingan Campus
o Bayambang Campus
o Binmaley Campus
o Infanta Campus
o Lingayen Campus
o San Carlos Campus
o Sta. Maria Campus
o Urdaneta City Campus
o Open University System (OUS)
o School of Advances Studies (SAS)

The University is anchored on its new vision to become an ASEAN Premier State
University in 2020. The PSU’s mandate is to serve as an instrument towards the rapid
development of the natural and manpower resources of Region I, particularly, of the
Province of Pangasinan. The University shall provide advanced instruction in the arts,
agricultural and natural sciences as well as in technological and professional fields. The
University shall provide better services in professional and technical training in the arts
and sciences, humanities and technology and in the conduct of scientific research and
technological studies. PSU’s mission – The Pangasinan State University, through
instruction, research, extension and production commits to develop highly principled,
morally upright, innovative and globally competent individuals capable of meeting the
needs of industry, public service and civil society.

ORGANIZATIONAL SET UP

The University is headed by its 6th University President Dr. Dexter R. Buted who assumed
on December 9, 2014. He is assisted by Vice-Presidents for Administration, Student
Services, Extension and Training, Research and Academic Affairs, and Finance, Business
and Resource Generation, and nine (9) Campus Executive Directors who head the different
campuses.

The PSU President had received notable awards from international and local award giving
bodies in citation for his outstanding contribution to education, as follows:

 2016 Gawad Pilipino Dangal ng Husay at Galing as Outstanding Educator of the

Philippines awarded last December 7, 2016 at Diliman, Quezon City;

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  OUTSTANDING ADMINISTRATOR cited by the PSU-Board of Regents commended
last October 24, 2016 at PSU-Lingayen Campus; and
 CMO ASIA’S EDUCATION EXCELLENCE AWARDEE for his Outstanding
Contribution to Education given last August 5, 2016 in Pan Pacific, Singapore.

The total personnel complement of the University for CY 2016 is as follows:

Plantilla Items:
Permanent 597
Temporary 249
Total Plantilla Items 846

Non-Plantilla Items:
Casual 43
Job Order 172
Total Non-Plantilla Items 215
Total 1,061

FINANCIAL HIGHLIGHTS

A comparative financial profile of the University is presented as follows:

A. Financial Condition:
Increase
Accounts 2016 2015 (Decrease)
Assets 1,980,238,594.77 1,839,742,675.70 140,495,919.07
Liabilities 262,906,768.28 127,068,622.96 135,838,145.32
Net Asset/Equity 1,717,331,826.49 1,712,674,052.74 4,657,773.75

B. Income and Expenses:

Increase
Accounts 2016 2015 (Decrease)
Income 884,004,218.05 699,550,848.46 184,453,369.59
Expenditures 754,845,015.68 561,470,704.39 193,374,311.29
Excess of Income over
Expenses 129,159,202.37 138,080,144.07 8,920,941.70

C. Appropriation/Allotment and Obligations:

Increase
Accounts 2016 2015 (Decrease)
Appropriation/Allotmen
492,187,622.10
t 930,562,704.00 438,375,081.90
Obligations 833,314,578.31 404,871,831.44 428,442,746.87

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OPERATIONAL HIGHLIGHTS

Hereunder were the targets vis-à-vis accomplishments of Pangasinan State University for
the calendar year 2016 under Department Performance Targets and Accomplishments.

Actual % of
Programs/Projects/Activities Targets Accomplishments Accomplishments
MFO I-Higher Education Services
1. No. of Graduates 3,500 4,069 116%
MFO 2-Advance Education Services
1. No. of Graduates 70 221 316%
MFO 3-Research Services
1. Number of research studies completed 90 130 144%
in the last 3 years.
2. Percentage of research outputs 10% 11% 111%
published in a recognized journal or
submitted to patenting/patented.
MFO 4-Extension Services
1. Numbers of persons trained weighted 3,624 3,660 101%
by length training
2. Percentage of trainees/clients who rate 94% 39% 41%
services rendered as good or better
Support to Operations
1. Percentage of faculty and personnel 100% 117% 117%
enabled to pursue studies / training
General Administration and
Support Services
1. Budget Utilization Rate (BUR)
a. Obligation BUR 85% 86% 101%
b. Disbursement BUR 85% 79% 93%
2. Submission of PFM to COA and
DBM
a. Report of Ageing Cash Advance 100% 100% 100%
b. COA Financial Reports 100% 100% 100%

SCOPE OF AUDIT

The audit was conducted on the accounts and operations of the Pangasinan State University
for the calendar year 2016. The objectives of the audit were to ascertain the propriety of
financial transactions and compliance of the agency to prescribed rules and regulations and
as to whether funds were utilized in the most efficient, effective and economical manner.
It was also made to ascertain the accuracy of financial records and reports, as well as the
fairness in the presentation of the financial statements. Our audit was conducted in
accordance with generally accepted auditing standards and we believe that it provides
reasonable basis for the results of audit.

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INDEPENDENT AUDITOR’S REPORT

The auditor rendered a qualified opinion on the fairness of the presentation of the financial
statements of the University and the results of its operation as of December 31, 2016,
reasons of which are stated in the State Auditor’s Report on the Financial Statement in
Part I.

SUMMARY OF SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS

We are pleased to note that the PSU Management has satisfactorily complied with the
directive of the Administrative Order No. 17 s. 2011 and DBM Circular letter No.
2011-6 dated August 25, 2011 which require that all agencies of the government including
State University and Colleges to procure their common use supplies from the PS without
the need of public bidding. For Calendar Year 2016, the University had procured from
DBM-PS commonly-used office supplies totaling P5,785,835.54.

We also commend the management for being compliant with BIR regulations as to the
timely remittance of withholding taxes to the BIR.

Likewise, we commend the PSU Management for having complied with Republic Act
No.656, otherwise known as the “Property Insurance Law” as amended by Presidential
Decree No. 245 dated July 13, 1973 for the properties and assets that were insured with
General Insurance Fund (GIF) administered by GSIS totaling P313,550,382.10 out of
P629,437,529.10 or 50% of the total cost of Buildings and Other Structures of Pangasinan
State University.

Further, PSU was able to achieve recognition for its excellence in Academic Affairs by
producing two (2) topnotchers who have occupied top spots in the Electrical Engineering
Licensure Examination, of whom one (1) ranked no. 2 and the other ranked no. 8, both
graduates of PSU-Urdaneta Campus. Likewise, the same Campus has produced another
two (2) topnotchers in the Registered Master Electrician Licensure Examination, of whom
ranked no. 6 and 10. In addition, one (1) graduate of PSU-Binmaley Campus also
garnered recognition as topnotcher in Fisheries Technology Licensure Examination who
ranked as no. six (6). Likewise, in PSU-Bayambang Campus, it has also produced two (2)
topnotchers, who ranked no. 4 and 5 in the Licensure Examination for Teachers for
Elementary Education (LET).

Two flagship programs of Pangasinan State University in Bayambang and Binmaley

campuses were granted by Commission on Higher Education (CHED) the Center of
Excellence status in Region 1. The Teacher Education program of PSU Bayambang
Campus and the Fisheries program of PSU Binmaley Campus have been granted the
Center of Excellence last March 31, 2016 and May 17, 2016, respectively.

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 Moreover, PSU marked a history to be the first ISO 9001:2015 CERTIFIED SUC in the
region for the year 2016 after passing the quality assurance audit on December 14, 2016
attested by the AJA Registrars Inc.

However, we also noted some deficiencies in the course of the audit that were earlier
communicated through Audit Observation Memoranda and discussed with concerned
Management officials and employees during the Exit Conference. Their comments were
incorporated in this report, where appropriate.

Hereunder are the significant observations and recommendations, to wit:

1. The consolidated balance of the Property, Plant and Equipment (PPE) accounts
of PSU totaling P1,991,968,010.29 as of year-end does not reconcile with the
Report on the Physical Count of Property for Plant and Equipment of
P1,701,905,242.39, or a difference of P290,062,767.90, which is not in conformity
with Section 38 and 42 of the Government Accounting Manual (GAM), thus the
accuracy, existence and physical condition of these assets could not be
ascertained.

We have recommended to the Management the following courses of action:

a. Require the Supply Officers and the Accountants of all PSU Campuses to
conduct actual count of all physical assets and to submit the reconciled copy of
the Report on the Physical Count of Property, Plant and Equipment to the
Auditor not later than January 31 of the following year in compliance to
Sections 38 and 42 of the Government Accounting Manual (GAM).

b. The Project-in-Charge of IGP of PSU San Carlos and PSU Sta. Maria
Campuses to account and update its Livestock Inventory records, prepare
reports on its operations reflect the changes and movements of the
swine/piggery/goat projects, and submit the reports on a regular basis to the
Accounting Office, copy furnished the Office of the Auditor.

c. The Accountant of PSU Infanta Campus to account and recognize the

cost/value of the Biological Assets in order to present fairly the correct value of
the PPE accounts in the financial statements of the affected Campus.

2. Collections/receipts from students and from other National Government

Agencies (NGAs) were recognized in the books under Trust Liability and Other
Payables accounts amounting P4,543,800.00 and P6,052,168.62, respectively or
a total of P10,595,968.62, which is not consistent with the Revised Chart of
Accounts (RCA) of the Government Accounting Manual (GAM) and the
provisions of CHED Memo No. 20 series of 2011 on the use of income and IRR
of R.A. 8292, thus rendering unreliable the consolidated balance of the liability
account.

We have recommended that Management ensure strict compliance with the proper
classification fees collected from students as Income of the Special Trust Fund
under which it was collected in accordance with the provisions of CHED Memo
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 No. 20 series of 2011 on the use of income and IRR of R.A. 8292; and to classify
funds received from other National Government Agencies (NGAs) to the Inter-
agency account, Due to NGAs, consistent with the Revised Chart of Accounts.
Further, for the Accounting Office to document and analyze the accounts, and to
make the necessary adjustments/reclassifications to the proper accounts.

3. Long-Term Investment amounting to P3,750,000.00 included in the balance of

the Other Assets account was not supported by a Certificate of Investment or
equivalent official document containing the terms and conditions of the
investment, rendering the propriety, validity, and existence of the reported
investment doubtful.

We have recommended that management to account for the Long-Term Investment

of P3,750,000.00 by requesting from the concerned banks a copy of the loan
agreement containing the stipulations binding the University as guarantor of the
said loan agreement granted by the LBP to the Federation of Pangasinan Farmers
Cooperative together with the records on the actual application against the security
deposit posted by the University for its undertaking, for record and audit purposes.

STATEMENT OF AUDIT SUSPENSIONS, DISALLOWANCES AND CHARGES

(SASDC)

Based on the total Statement of Audit Suspensions, Disallowances and Charges (SASDC)
issued during the year, there was a Notice of Suspension issued to the agency for the year
2016 amounting to P17,425,134.51.

As of December 31, 2016, the total suspensions and disallowances of all campuses
amounted to P17,425,134.51 and P12,979,270.96, respectively.

STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT

RECOMMENDATIONS

Out of the 18 audit recommendations contained in prior years’ Annual Audit Reports, 8
were fully implemented, 9 were partially implemented and the remaining 1 is still subject
for implementation.