EXECUTIVE SUMMARY

A. Introduction

The Technological University of the Philippines (TUP) was established in 1901

under Organic Act No. 74 of the Philippine Commission and was known as Manila Trade
School originally housed near Ateneo de Manila in the historic Intramuros. In 1910, it
was renamed as Philippine School of Arts and Trades (PSAT). With its rising
population, the PSAT was given by the National Government a campus site in 1916,
measuring a little less than three hectares at Calle San Marcelino, Ermita, Manila, its
present location. The PSAT was converted into the Philippine College of Arts and
Trades (PCAT) on July 17, 1959, by virtue of Republic Act (RA) No. 2237. From 1959
to 1978, it pioneered programs in engineering technology and industrial teacher
education. On July 11, 1978, it was transformed into a state university and was named
Technological University of the Philippines (TUP) pursuant to Presidential Decree (PD)
No. 1518.

The TUP System (TUPS) is composed of four Campuses located in Manila,

Taguig, Cavite, and Visayas.

The TUP Manila (TUPM) is the nucleus of the University. The Campus is
located along Ayala Boulevard corner San Marcelino St., Ermita, Manila.
Presently, the Main Campus has six Colleges, namely: College of Engineering,
College of Industrial Technology, College of Industrial Education, College of
Architecture and Fine Arts, College of Science, and College of Liberal Arts. Also,
it has one research center which is the Integrated Research and Training Center or
IRTC.

The TUP Taguig (TUPT) Campus is the main provider of technology education
in the southeastern part of Metro Manila providing engineers, technicians and
skilled workers for the industries in the area.

The TUP Cavite (TUPC) Campus is located in Barangay Salawag, Dasmariñas,

Cavite. The Campus was established through Board Resolution No. 1985, s. 1979.
The Cavite Campus was established with the primary aim of responding to the
need for an affordable quality technology education of the resettled squatters and
the local settlers in the area. At present, the TUPC has transformed into a well-
recognized institution of higher learning in the field of technology education.

The TUP Visayas (TUPV) was established in 1977 as one of the three prototype
technician institutes/projects of the National Government. TUPV was then known
as the Visayas Technician Institute (VTI). In 1985, the VTI was renamed the
Technological University of the Philippines-Visayas. Today, TUPV is one of the
top providers of engineering education in the country, producing topnotchers in
licensure examinations.

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 In addition to the four Campuses, the TUP administers the TUP-Municipality of
Lopez, Quezon/Lopez Municipal Institute of Technology- a consortium, pursuant
to a Memorandum of Agreement (MOA) with the Government of Lopez, Quezon
and the Educational Institute for the constituents of Cuenca, Batangas. TUP
Cuenca, Batangas started as an extension and linkage program and was put to
operation by virtue of the MOA executed by and between the TUP, the Local
Government of Cuenca, Batangas and the Bagong Sigla ng Batangas, Inc. on
October 11, 2010 and was confirmed by the Board of Regents (BOR) on March
18, 2011, through BOR Resolution No. 07, s. 2011.

Being the flagship of technological education in the country, it is committed to:

➢ provide higher and advanced vocational, technical, industrial, technological

and professional education and training in the industries and technology and
practical arts leading to certificates, diploma and degrees;

➢ provide progressive leadership in applied research, developmental studies in

technical, industrial and technological field and production using indigenous
materials; and
➢

➢ effect technology transfer in the countryside and assist in the development of

small-and-medium scale industries in identified growth centers.

The TUPS is governed by the BOR composed of key stakeholders of the

University. The Board is chaired by the Commissioner of the Commission on Higher
Education (CHED) and vice-chaired by the University President, Dr. Jesus Rodrigo F.
Torres. The members of the BOR are represented by various sectors in the country,
which include the Chairman of the Senate Committee on Education, Arts and Culture, the
Chairman of the House Committee on Higher and Technical Education, the Director of
the Department of Science and Technology (DOST), the Assistant Secretary of the
National Economic and Development Authority (NEDA), two representatives from the
private sector and the two presidents of the Federation of Associations in TUP composed
of the Faculty and Alumni Federation.

TUP Board of Regents

Name Position/Designation
Dr. Jo Mark M. Libre CHED Commissioner, Chairperson
Designate
Dr. Jesus Rodrigo F. Torres TUP President
Senator Emmanuel Joel J. Villanueva Senator and Chairman, Senate Committee
on Education, Arts and Culture
Congressman Mark O. Go Congressman and Chairman, House
Committee on Higher and Technical
Education
Assistant Secretary Carlos Bernardo O. Member/NEDA Representative
Abad Santos

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 TUP Board of Regents
Name
Director Jose B. Patalinjug, III
Mr. Allwin M. Wagan
Mr. Virgilio F. Lanzuela
Mr. Zachariah John A. Belmonte
Prof. Benefrido B. Reyes
Mr. Tristan C. Badilla
Position/Designation
Member/DOST-NCR, Director
Member/Senior Assistant VP-QA and
Building Systems, Megaworld Corp.
Member/Chairman, Rollmaster Machinery
and Industrial Services Corporation
Member/Alumni Regent
Member/Faculty Regent
Member/Student Regent

The President of TUP presides over the affairs, operations, and general
administration of the University with assistance from four Vice Presidents (VP), namely:

Dr. Dionisio A. Espression, Jr. - VP for Academic Affairs

Mr. Jonathan M. Monsad - VP for Administration and Finance
Dr. Ma. Leonor F. Validor - VP for Planning and Development
Dr. Melito A. Baccay - VP for Research and Extension

For the Calendar Year (CY) 2021, the TUPS had a total manpower of 1,457,
broken down as follows:

Division Total Manila Taguig Cavite Visayas

Administrative
Permanent 179 115 31 13 20
Terminus
Co-Terminus 1 1 - - -
Casual 16 6 1 6 3
Job Order 107 70 6 18 13
Academic Affairs
Permanent 421 250 59 37 75
Temporary 224 113 50 34 27
Casual 4 - 1 - 3
Job Order 9 - 3 - 6
Part-Time 375 277 16 27 55
Research and Development
Permanent 74 42 6 - 26
Temporary 2 2 - - -
Job Order 5 - - - 5
Student Services Division
Permanent 38 18 9 - 11
Job Order 2 - - - 2
Total 1,457 894 182 135 246

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B. Operational Highlights

The TUPS has reported the accomplishments of their planned programs and
activities for CY 2021. The most significant are shown below:

Actual
Accomplish-
Particulars Target Accomplish-
ment Rate
ment
Organizational Outcomes (OO): Relevant and quality
tertiary education ensured to achieve inclusive growth and
access of deserving but poor students to quality tertiary
education increased
HIGHER EDUCATION PROGRAM
Outcome Indicators
1. Percentage of first-time licensure exam takers that pass the
72.75% 62.72% 86.21
licensure exams
2. Percentage of graduates (2 years prior) that are employed 50% 37.86% 75.72
Output Indicators
1. Percentage of undergraduate student population enrolled in
97% 99.96% 103.05
CHED-identified and RDC-identified priority programs
2. Percentage of undergraduate programs with accreditation 100% 100% 100
OO: Higher education research improved to promote
economic productivity and innovation
ADVANCED EDUCATION PROGRAM
Outcome Indicators
1. Percentage of graduate school faculty engaged in research
work applied in any of the following:
a. pursuing advanced research degree programs (Ph.D.) 22% 30.49% 138.59
b. actively pursuing in the last three years (investigative
research, basic and applied scientific research, policy 46% 30.49% 66.28
research, social science research)
c. producing technologies for commercialization or
1% 2.44% 244
livelihood improvement
d. whose research work resulted in an extension program 1% 2.44% 244
Output Indicators
1. Percentage of graduate students enrolled in research
100% 100% 100
degree programs
2. Percentage of accredited graduate programs 100% 100% 100
RESEARCH PROGRAM
Outcome Indicators
1. Number of research outputs in the last three years utilized
12 14 116.67
by the industry or by other beneficiaries
Output Indicators
1. Number of research outputs completed within the year 83 32 38.55
2. Percentage of research outputs published in
internationally-refereed or CHED recognized journal 15% 8.49% 56.60
within the year
OO: Community engagement increased
TECHNICAL ADVISORY EXTENSION PROGRAM
Outcome Indicators
1. Number of active partnerships with LGUs, industries,
NGOs, NGAs, SMEs and other stakeholders as a result of 32 33 103.13
extension activities.

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 Actual
Accomplish-
Particulars Target Accomplish-
ment Rate
ment
Output Indicators
1. Number of trainees weighted by the length of training. 8883 5291.25 59.57
2. Number of extension programs organized and supported
96 57 59.38
consistent with the SUC’s mandated and priority programs
3. Percentage of beneficiaries who rate the training course/s
and advisory services as satisfactory or higher in terms of 97% 103.23% 106.42
quality and relevance

C. Financial Highlights

The TUPS has a total appropriation of ₱805,445,449.07 consisting of current

appropriations amounting to ₱703,485,414.00 and continuing appropriations amounting
to ₱101,960,035.07. These include Agency Specific Budget totaling ₱765,560,002.05
(₱663,613,206.00 + ₱101,946,796.05), Automatic Appropriations of ₱37,334,927.00 for
Retirement and Life Insurance Premiums, and Special Purpose Fund of ₱2,550,520.02
(₱2,537,281.00 + ₱13,239.02) for Miscellaneous Personnel Benefits Fund and Pension
and Gratuity Fund. Total allotments received from the Department of Budget and
Management (DBM) for the year amounted to ₱582,176,963.07, ₱528,301,691.23 of
which was obligated, thereby leaving an unobligated balance of ₱53,875,271.84. The
details are shown below.

Obligations Unobligated
Appropriations Allotments
Particulars Incurred Balance
(In PhP)
A. Current Year’s Appropriations
I. Agency Specific Budget
Personnel 585,872,206.00 442,642,206.00 437,049,382.30 5,592,823.70
Services (PS)
Maintenance 52,741,000.00 45,741,000.00 41,149,710.43 4,591,289.57
and
Other
Operating
Expenses
(MOOE)
Capital Outlay 25,000,000.00 25,000,000.00 - 25,000,000.00
(CO)
Subtotal 663,613,206.00 513,383,206.00 478,199,092.73 35,184,113.27
II. Automatic Appropriations
PS 37,334,927.00 37,334,927.00 33,718,287.62 3,616,639.38
III. Special Purpose Fund
PS 2,537,281.00 2,537,281.00 2,450,305.41 86,975.59
Total 703,485,414.00 553,255,414.00 514,367,685.76 38,887,728.24
B. Continuing Appropriations
I. Agency Specific Budget
PS 74,304,572.73 4,309,019.73 73,645.00 4,235,374.73
MOOE 4,888,399.92 1,845,466.92 284,875.87 1,560,591.05

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 Obligations Unobligated
Appropriations Allotments
Particulars Incurred Balance
(In PhP)
CO 22,753,823.40 22,753,823.40 13,575,484.60 9,178,338.80
Subtotal 101,946,796.05 28,908,310.05 13,934,005.47 14,974,304.58
II. Special Purpose Fund
PS 13,239.02 13,239.02 - 13,239.02
Total 101,960,035.07 28,921,549.07 13,934,005.47 14,987,543.60
Grand Total 805,445,449.07 582,176,963.07 528,301,691.23 53,875,271.84

In addition, the TUPS has a total adjusted / revised budget of ₱424,185,940.00

from the Special Trust Fund (STF) as approved by the BOR for CY 2021. Out of this
amount, ₱274,163,125.47.00 was obligated, thus ₱150,022,814.53 remained unobligated
at yearend.

Approved Budget
Budget Unutilized
Original Revised
Particulars Adjustment Utilization Budget
Budget Total
(In PhP)
PS 68,818,608.00 16,833,580.00 85,652,188.00 68,703,502.90 16,948,685.10
MOOE 250,350,156.00 (32,159,503.00) 218,190,653.00 142,123,631.21 76,067,021.79
CO 149,273,205.00 (28,930,106.00) 120,343,099.00 63,335,991.36 57,007,107.64
Total 468,441,969.00 (44,256,029.00) 424,185,940.00 274,163,125.47 150,022,814.53

The TUPS’s financial position and financial performance for CY 2021 with
comparative figures for CY 2020 are as follows:

Particulars 2021 2020

Financial Position
Assets 3,597,206,815.55 2,851,494,948.73
Liabilities 444,836,881.85 362,897,957.92
Net Assets/Equity 3,152,369,933.70 2,488,596,990.81
Financial Performance
Service and Business Income 481,456,480.04 216,856,644.51
Gains 36,000.00 -
Total 481,492,480.04 216,856,644.51
Less: Current Operating Expenses
PS 765,369,718.21 654,772,371.83
MOOE 158,043,025.24 128,049,896.07
Non-Cash Expenses 115,563,632.17 53,512,014.88
Financial Expenses 6,000.00
Total 1,038,982,375.62 836,334,282.78
Surplus (Deficit) from Current Operating
(557,489,895.58) (619,477,328.27)
Expenses
Net Financial Assistance/ Subsidy 756,177,085.06 643,484,527.42
Loss on Sale of Assets (201,354.28) 19,720.00
Surplus for the period 198,485,835.20 24,026,609.15

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D. Scope of Audit

The audit covered the review of accounts and operations of the TUPS for CY
2021, in accordance with the International Standards of Supreme Audit Institutions
(ISSAIs). The audit was conducted to: (a) verify the level of assurance that may be placed
on Management’s assertions on the financial statements (FSs); (b) determine the
propriety of transactions as well as the extent of compliance with applicable laws, rules
and regulations; and (c) determine the extent of implementation of prior years’ audit
recommendations. This Report however, excludes TUPV, the Management Letter of
which was not submitted.

E. Auditor’s Report on the Financial Statements

The Auditor rendered an adverse opinion on the fairness of presentation of the

FSs of the TUPS for the year ended December 31, 2021 due to significant uncorrected
misstatements and omissions in the recording of transactions as stated in the Independent
Auditor’s Report and discussed in Part II of this Report.

F. Summary of Significant Audit Observations and Recommendations

The following are the significant audit observations with the corresponding
recommendations which are discussed in detail in Part II of this report:

1. Of the total misstatements of ₱280,154,191.80 found in audit due to accounting

errors, omissions and improper accounting treatment of transactions that are
considered departures from the International Public Sector Accounting Standards
(IPSAS), only ₱10,674,884.64 or 3.81 percent had been adjusted, while
₱269,479,307.16 remained uncorrected as at yearend. Hence, based on the material
impact of the uncorrected misstatements, the reported balances of the affected
accounts could not be relied upon which affect the fairness of the FSs of the TUPS
as of December 31, 2021. (Observation No. 1)

We recommended and Management agreed to require the concerned

Accountants to:

TUPM
For the Cash and Cash Equivalent accounts:
a. prepare the necessary adjustments:
i. to correct the double recognition of various transactions
ii. for the unrecorded credit memoranda
iii. to restore the cash pertaining to unreleased checks

b. cancel long-outstanding checks and issue replacement checks to those

payees to whom the University has outstanding payables due to stale
checks upon making proper notification and confirmation of their claims,
subject to the presentation of stale checks and certification from the

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 depository bank that the same were not negotiated/presented to them for
encashment; and

c. analyze carefully and review all the journal entries before approving the
same and require the Accounting Staff to always refer to the Revised Chart
of Accounts in preparing journal entries.

For the Receivable account, specifically Due from LGU account:

d. immediately prepare the necessary entries to record the liquidation for the
period January 1 to June 30, 2020 and to correct the error made in
recognizing liquidation for the period July 1 to December 31, 2020
amounting to ₱1,170,100.48 and ₱548,000.00, respectively.

For the Inventories account:

e. prepare the journal entries to: (i) recognize the unrecorded receipts and
issuances of inventory and semi-expendable items; (ii) adjust the
misclassified inventory and PPE accounts and the double recognition of
inventory issuance.

For the Property, Plant and Equipment accounts:

f. recognize the unrecorded PPEs in the books and the corresponding
accumulated depreciation;

g. to record the Military, Police and Security Equipment as expense; and

h. reclassify the completed infrastructure project amounting to

₱12,302,506.27 to the proper account and provide for the accumulated
depreciation.

For the Other Assets accounts:

i. prepare adjusting entries to recognize the refund and granted CAs
amounting to ₱102,789.47 and ₱546,571.00 to the proper Advances account
to arrive at the correct balance and to reflect the actual accountabilities of
the AOs concerned as of the given period; and

TUPT
j. to prepare the necessary journal entries to:
i. derecognize the demolished building from the books
ii. reclassify and properly record the retrofitted buildings and
unserviceable semi-expendable items into their proper account
iii. provide impairment loss on the condemned building

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For the Liabilities accounts:
TUPM
k. recognize the unrecorded Accounts Payable of ₱10,529,552.19, Due to
Officers and Employees of ₱2,229,275.95 and the corresponding expenses
and PPE accounts;

l. adjust the entry made on the recording of payment for purchased

equipment with an amount of ₱575,800.00;

m. correct the double recognition of Accounts Payable totaling ₱2,928,181.96;

n. correct the erroneous entry affecting the leave benefits payable with an
amount of ₱5,176,102.55;

o. transfer the set-up of AP for the air conditioning supplies in the amount of
₱10,670.00 from Fund 01 to Fund 05;

p. adjust the entry made on the recording of the donated equipment from
DOST;

q. reclassify the received TES allowance of ₱151,800.00 to Due to NGAs

account;

r. revert the remaining balance of Leave Benefits Payable to Accumulated

Surplus/Deficit account;

TUPT
s. revert the payable accounts which had been outstanding for two years or
more to the Accumulated Surplus/(Deficit) account pursuant to EO No. 87
and COA-DBM Joint Circular No.1 s. 2021;

t. issue replacement checks to those payees to whom the University has

outstanding payables due to stale checks upon making proper notification
and confirmation of their claims, subject to the presentation of stale checks
and certification from the depository bank that the same were not
negotiated/presented to them for encashment;

u. coordinate with the suppliers and contractors with unreleased retention

fees/securities for the submission of their claims and verify with the end-
user units whether all the conditions under the contract have been fully
satisfied. If warranted, release the retention money to the concerned
supplier/contractor in accordance with Sections 39.5 and 62 and Annex E
of the Revised IRR of RA No. 9184; and

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 TUPM
v. prepare the entries to correct the following:
i. errors made in recording the receipt of TES funds of ₱41,200.00;
ii. non-charging of Scholarship grants amounting to ₱180,000.00 to Due to
NGAs account;
iii. double recording of TES releases in the amount of ₱320,000.00;
iv. entries in the payment of the purchased equipment and refund of
liquidated damages in the amounts of ₱9,500,000.00 and ₱465,500.00,
respectively; and
v. non-recognition of depreciation and adjustment for year-end
amounting to ₱554,166.67.

2. The substantial unreconciled variance between the account balances in the books and
in other reports and documents of TUPS, absence or inadequacies in the maintenance
of Subsidiary Ledgers (SLs) or supporting schedules, erroneous recording or
classifying of transactions within the same account class, existence of negative
balances and other accounting deficiencies affected the reliability of various assets
and liability accounts in the total amount of ₱4,014,305,709.52. (Observation No. 2)

We recommended and Management agreed to require the concerned

Accountants to:

For the unreliable balance of various accounts:

TUPM
a. establish the proper balance of CIB-LCCA accounts based on the
reconciling items presented in AOM No. 2019-010 (18) and from the related
Bank Reconciliation Statement (BRS), bank statements and other pertinent
records;

b. maintain proper SL for Due from NGAs, Accounts Payable, Due to Officers
and Employees and Guaranty Security Deposits Payable accounts to
properly monitor the outstanding balances per agency and project (for
inter-agency transfers) / suppliers / individuals at any given period and to
regularly reconcile the SL and the General Ledger (GL) balances;

c. trace the transactions pertaining to CHED and the corresponding entries in

prior years’ records to determine the cause of the negative balance and
prepare the necessary adjusting entries in the books;

d. prepare and maintain Supplies Ledger Cards for each inventory item with
balance that tallies with the GL balance to properly account all inventories,
and therefrom, regularly reconcile the SLCs with the records of PSO;

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e. require the Accountant to maintain Property, Plant and Equipment Ledger
Card (PPELC), Construction in Progress Ledger Card (CIPLC) and PPE
lapsing schedule pursuant to the GAM;

f. prepare and submit to this Office the Aging schedule of Accounts Payable,
Due to Officers and Employees and Guaranty/Security Deposits Payable as
of December 31, 2021; and

TUPT
g. maintain a Schedule of the Receivables-Disallowances/Charges account
showing, among others, the number, date and amount of ND, the nature of
the disallowed transaction, the liable persons and the outstanding balance.

For the unreliable balance of Cash and Cash Equivalents accounts:

TUPM
h. submit the Bank Reconciliation Statement (BRS), including pertinent
attachments, of bank accounts TUP Trust Fund 101, TUP Fund ITRC, TUP
CHED Student Financial Assistance Program Fund (StuFAP), TUP
Department of Science and Technology – Science Education Institute
(DOST-SEI) from January 2020 to December 2022 and of bank account
TUPSenior High School Voucher Program (SHSVP) and TUP Payroll Fund
from January 2016 to December 2022;

i. request for Land Bank of the Philippines (LBP) online viewing and/or
snapshot of the TUP bank transactions and balances for the timely
preparation of the BRS and provide the said request duly received by the
bank to the Audit Team;

j. reconcile total SL balances with the GL balance of CIB accounts, prepare

adjustments to reclassify transactions/entries including those under DOE
account to the appropriate SL accounts and maintain the SLs with complete
documentation to facilitate tracing of transactions or events and
reconciliation of balances;

k. record the receipt of Notice of Cash Allocation (NCA) directly to Subsidy

from National Government (SNG) account;

l. stop the practice of directly effecting the adjustments in the FSs without the
necessary journal entry and posting to the applicable journal or ledger in
adherence to the generally accepted accounting principles;

m. maintain a Cash-Treasury/Agency Deposit, Regular account in the books to

appropriately recognize the amount of collections remitted to the BTr under
the General Fund;

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TUPC
n. submit the BRS of SHS account for CY 2021 of Fund 164 and regularly
prepare and submit the required monthly BRS; and

o. instruct the Cashier to maintain Checks and Advice to Debit Account

Disbursement Record.

For the unreliable balance of Receivable accounts:

TUPC
p. exhaust all possible means to locate any supporting documents that pertain
to prior years’ claims from employees of ₱184,152.16 to determine the
correct amount of claims and further assess its collectability, otherwise
request for authority to write off the amount if proven to be dormant; and

q. return to the concerned personnel who are still connected with TUP the
amount overpaid or deducted in the amounts of ₱18,029.59 and ₱2,445.99,
respectively, otherwise, recognize the amount as Miscellaneous Income.

For the unreliable balance of Inventories accounts:

TUPM
r. refer to the property number in the inventory forms provided by the PSO to
determine the account to be used in recording the receipt and issuance of
inventory items in the books which shall be based on the Revised Chart of
Accounts (Updated 2019). In the process, whatever noted discrepancy in the
account used must be coordinated immediately with the PSO in order to
ensure that the Accounting Office and PSO use the same GL account which
will allow reconciliation of their inventory records;

s. use the weighted average method in determining the cost of inventories as

provided in Section 6, Chapter 8, GAM, Volume I; and

t. record the inventory upon receipt of deliveries to achieve accurate

presentation of FSs.

For the unreliable balance of Property, Plant and Equipment accounts:

TUPM / TUPC
u. instruct the Accountant and Property and Supply Officer to conduct
periodic reconciliation of PPELC with PC and RPCCPE to facilitate
adjustments of discrepancies and make corrections where applicable;

v. require the Inventory Committee to complete the physical count of PPE as

required in COA Circular No. 2020-006 and thereafter, regularly conduct
an inventory-taking and prepare the RPCPPE;

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 w. direct the Property and Supply Officer to immediately cause the signing of
the PAR in either the hard copy or through electronic signatures;

For the unreliable balance of Other Assets accounts:

x. We recommended and Management agreed to require the Accountant to

ensure that the FS balances of the Advances to SDO and Advances to
Officers and Employees reconcile with the amount in the Aging of
Unliquidated Cash Advances before submission of the pertinent reports to
the Audit Team;

For the unreliable balance of Liabilities accounts:

TUPT
y. exert effort to validate the recorded and unaccounted payables in prior
years, settle those which have actual claims and complete documentation;
and

TUPM
z. review the Bail Bonds Payable account, identify the nature of transactions
recorded therein, specifically those which pertain to collections of
performance bond and bid security and reclassify them to the
Guaranty/Security Deposits Payable or to the appropriate account.

3. As in previous years, the TUPM had granted additional cash advances (CAs) to
accountable officers (AOs) despite non-liquidation of their previous accountabilities
and had unliquidated CAs aged from over a year, contrary to COA Circular No. 2012-
004 dated November 18, 2012, which resulted in accumulation of unliquidated CAs.
(Observation No.3 )

We recommended and Management agreed to:

a. require the Accountant that in processing CAs, issue a certification that the
previous CAs have been liquidated and accounted for in the books to ensure
that AOs are granted CAs only after the settlement of their previous
accountabilities;

b. instruct the concerned AOs who were issued with demand letters to
immediately settle their accountabilities, otherwise, instruct the Accountant
to withhold the salaries or any money due to the AOs pursuant to COA
Circular No. 2012-004 dated November 18, 2012 ; and

c. henceforth, require all concerned officials and employees to immediately

submit the liquidation reports and settle their accountabilities after the
purpose for which the cash advance was given was fulfilled or accomplished.

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4. The Honoraria granted to the administrative staff of TUP-Lopez is excessive or
₱144,000.00 more than what is allowed per year. In addition, a deficiency was noted
in the granting and liquidation of funds transferred and the Memorandum of
Agreement (MOA) and Guidelines in Implementing the TUP-Lopez, Quezon
Consortium is wanting as some important provisions on inter-agency fund transfers
were not included therein. (Observation No. 4)

We recommended and Management agreed to:

a. require from TUP-Lopez, Quezon to -

i. submit justification for deviating from the Honoraria rates provided in

the MOA;

ii. prepare the Statement of Receipts and Disbursements of Funds or

liquidation covering a semester or based on the period covered by the
related fund received; and

b. revisit the MOA and Guidelines in Implementing the TUP-Lopez

Consortium and if warranted, amend the same by considering the provisions
(but not limited to those) identified in paragraph 4.11 of Part II of this
Report.

5. The regularity/propriety and accuracy of the salaries paid for teaching personnel of
TUPM for the 1st Semester of Academic Year 2021-2022 is of doubtful validity due
to non-adherence to laws, rules and regulations as evidenced by: (a) non-compliance
with the academic policies on official time and teaching loads; (b) double payments
made to Part Time Professors (PTPs); (c) absence of/or deficiencies in the contracts
with the PTPs; and (d) inadequate documentation for payment of salaries and
Honoraria. (Observation No.5 )

We recommended and Management agreed to require the:

a. Vice President for Academic Affairs through the concerned Department

Heads/Deans to submit explanation on the deficiencies found in the
Summary of Faculty Loading which shows non-compliance with the policies
on official time, FTE and overload;

b. Accountant to demand from the concerned PTPs the refund / return of

salary for February 1 to 13, 2022 that has been received twice;

HRMO Head to –

c. submit the lacking contracts of aforementioned PTPs to substantiate the

claim/disbursement amounting to ₱1,426,029.26;

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 d. explain the difference in the rate per hour of the 2 PTPs, the substantial
delay in the signing of contracts and the other deficiencies found in the
contracts of PTPs affecting its validity;

e. immediately submit the CY 2021 DTRs of full-time and part-time faculty

members, including the documentary requirements to support the validity
of payment of salaries and Honoraria for the assigned teaching load and
overload classes; and

f. HRMO Head and Accountant to prospectively ensure that contracts are

completed and notarized before the performance of service of the PTPs and
that payment of government transactions are processed only when the
documentary requirements are complete as set forth under COA Circular
No. 2012-001.

6. The payments for COVID-19 Hazard Pay to the TUPC officials and employees
amounting to ₱1,398,500.00, various disbursements of TUPC with an aggregate
amount of ₱4,611,393.82 and liquidation of TUP-Lopez totaling ₱3,888,543.92 for
the fund transferred by TUPM were processed and recorded despite deficient and/or
incomplete documentation, contrary to Section 4(6) of Presidential Decree (PD) No.
1445 and COA Circular No. 2012-001, thus casting doubts on the validity and
propriety of expenditures.(Observation No.6 )

We recommended and Management agreed to direct the:

TUPC
a. the personnel concerned to submit payroll register, accomplishment reports
and authority of the personnel and workers to report for work during ECQ
and MECQ for the payments of Hazard Pay for COVID-19;

TUPM / TUPC
Accounting Office to –
b. ensure that all disbursement/utilization of government funds are properly
supported with the necessary documents;

TUPM Accountant to–

c. stop the practice of recognizing in the books the received Liquidation Report
of TUP-Lopez, Quezon without any approved projected expenditures for the
same period and valid supporting documents; and

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 d. require from TUP-Lopez, Quezon to submit to TUPM the certified true
copies of the required documents on the expenses incurred to support the
liquidation of the fund received therefrom.

7. Unserviceable properties of TUPT and TUPC totaling ₱12,530,284.30 remained

undisposed, contrary to Section 79 of PD No. 1445 and Section 40, Chapter 10 of
Government Accounting Manual (GAM) for National Government Agencies
(NGAs), Volume I, thus exposing the same to further deterioration. (Observation
No.7 )

We recommended and Management agreed to require:

TUPC
a. create Disposal Committee to conduct appraisal of unserviceable properties
and to facilitate immediate disposal of all unserviceable properties in order
to avail of higher economic value when offered in public auction.

TUPT
b. instruct the PSO to complete the inventory of the unserviceable properties
and prepare the IIRUP for proper reporting, disposal in accordance with
the National Budget Circular No. 425.

8. The TUPM did not fully adhere to the mandatory periods and pertinent provisions
on the procurement procedures outlined in the Revised Implementing Rules and
Regulations (IRR) of RA No. 9184 for six infrastructure projects with aggregate
cost of ₱90,650,516.52, rendering the validity and regularity of the conducted
procurement doubtful and adversely affecting the timely completion and optimal
use of the benefits that can be derived from the projects. (Observation No.8 )

We recommended and Management agreed to:

a. explain/justify the substantial delays in the procurement process for the six
infrastructure projects;

b. thru its BAC, adhere to the proper timelines set in the Revised IRR of RA
No. 9184 to ensure the efficient and effective implementation of the
procurement process;

c. impose the necessary sanctions to the contractor of the project

‘Improvement of COS/CLA Lecture and Laboratory Rooms’ by requiring
the forfeiture of Performance Bond in the amount of ₱5,234,645.93, issuance
of blacklisting order1 and posting thereof in the Consolidated Blacklisting
Report through the Online Blacklisting Portal;

1
GPPB Circular 03-2020 dated June 25, 2020 or the Guidelines on the Issuance of Blacklisting Orders and
on the Use of Online Blacklisting Portal for Posting and Updating of Status of Blacklisted Entities.

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 d. require the BAC to –

• immediately submit certified true copies of the lacking documents; and

• submit explanation on the non-observance of particular provisions in the

Revised IRR of RA No. 9184 and on the noted defects and
inconsistencies in the documentations for the conducted procurement.

9. TUPM and TUPT did not effectively and efficiently deliver the key services of the
University in line with its trifocal function as shown in the following deficiencies:
(a) underutilization of the budget under the Current and Continuing STF with an
aggregate amount of ₱117,330,729.49 and ₱316,700,146.22, respectively; b) non-
compliance with the prescribed budgetary rates and limitation on the
adjustment/modification of allocation for thrusts/programs/activities under the non-
fiduciary funds; and c) provision of STF Budget to fund Personnel Assistance and
Welfare Fund (PAWF) and was reported as Other Personnel Benefits – PAWF
totaling ₱4,068,927.00; and (d) disparity between approved budget and budgetary
reports. (Observation No.9 )

We recommended and Management agreed to:

TUPM
a. require the Budget Officer to –
i. prepare and submit duly-approved PRE for the current year to DBM
and CHED not later than November 15 of the preceding year pursuant
to Item 5 of the Special Provisions Applicable to the SUCs under GAA
FY 2021;

ii. submit to this Office an SL on the earmarked projects with cost that
requires to be accumulated over a period of time and the Investment
Plan presented to the BOR for projects which implementation extends
beyond one year;

b. require the Vice-President for Planning and Development, thru the

Director of Infrastructure Development Unit and/or BAC Chair for
Infrastructure Projects to submit explanation on the budgeted expenditure
items and infrastructure projects, which includes the Construction of
Student Center, Repair and Renovation of CAFA-CIE Building and other
earmarked projects which were either minimally or fully unutilized;

TUPT
c. strictly and carefully analyze/review the figures in the reports to avoid
inaccurate reports in the succeeding periods;

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 TUPM and TUPT
d. submit status report on the implementation of infrastructure projects, as
well as on the procurement of other major PPE (e.g. elevator, motor
vehicle, technical and scientific equipment, etc.) indicating the dates per
stage of procurement under Continuing and Current STF Budget. If the
contracts have been awarded to suppliers/contractors, provide this Office
copies of contracts, including all pertinent documents, for the conduct of
auditorial and legal review;

e. provide justification on the deviation on the prescribed allocation provided

in CMO No. 20, s. 2011 and on the allocation of budget for school
buildings construction under Laboratory/Shop/SIT and Development and
Instructional Fund instead of Facilities Development;

g. formulate more realistic programs/projects that will address the needs of

the University thru judicious planning and programming, constant
monitoring and assessment of ongoing projects with the proper
procurement process and timelines; and

h. provide legal justification on the usage of STF for other personnel benefits
through the granting of medical assistance under the PAWF.

10. The University failed to fully adhere to the pertinent rules and regulations in the
implementation of Free Higher Education (HE), as evidenced by: a) incomplete
documentation supporting the Free HE billings of several terms or semesters; b)
inconsistencies between the Free HE billings and the students’ Certificates of
Registration (CORs); c) non-submission of the list of paying students, students who
opted out and students who made voluntary contributions, and d) non-compliance
with Sections 1.4 d(3) and d(5) of the tripartite MOA, thereby, hindering further
audit of the Free HE implementation and casting doubt on the propriety of billed
and charged tuition and other school fees as well as on the completeness and
accuracy of Free HE billings and payments. (Observation No.10 )

We recommended and Management agreed to require the:

a. Focal person/UniFAST Committee to submit the lacking documents

provided in paragraph 10.7 and as required in Sections 2.2.1 and 2.2.2 of
the UniFAST MC No.2018-02;

b. Registrar/Accountant/Focal Person/UniFAST Committee to provide an

explanation on the noted inconsistencies between the billing statements
and student CORs; ensure that the total amount in the student COR
tallies with the total of itemized school fees indicated therein;

c. Registrar and Accounting Department to submit the list of paying

students, students who opted out and students who made voluntary

xviii
 contributions including the payment received from them for verification
of the validity of both Free HE billings and charged tuition and other
school fees to other students;

Accounting Department to:

d. maintain a separate bank account for each program under RA No. 10931,
specifically, Free HE, TES and Student Loan Program as required in the
MOA dated June 13, 2018; and

f. maintain a record or schedule that monitors the Free HE billings per

semester as well as the corresponding receipt of funds from CHED and its
distribution to other campuses.

11. Lapses in the implementation of the Tertiary Education Subsidy (TES) such as: a)
Non-liquidation/Delayed liquidation of TES funds ranging from 125 to 609 days; b)
incomplete submission of the required documents to liquidate TES funds; and c)
lack of monitoring mechanism to track TES-related transactions, were not in
accordance with the provisions of RA No. 10931, and its IRR, and the MOA
between the CHED, UniFAST Board, and the TUP, thus defeating the timely
realization of the objectives of the TES Program. (Observation No.11 )

We recommended and Management agreed to require the:

a. TUPC and TUPV to immediately submit their liquidation reports and

necessary documents for the AY 2019-2020 to the scholarship coordinator
to facilitate consolidation;

Scholarship Coordinator to:

b. expedite the consolidation of the TUPS FUR for AY 2019-2020 and other
pertinent documents upon receipt of Liquidation Reports from other
campuses and submit the same to UniFAST to settle prior year’s TES
funds;

c. prepare and submit the TUPM’s Liquidation Reports for AY 2020-2021

together with its supporting documents to UniFAST;

Accounting Department to:

d. maintain a separate schedule for TES funds per semester that provides
details of the receipt, distribution to student-grantees and subsequent
liquidation.

The aforementioned audit observations and recommendations were

communicated through Audit Observation Memoranda and discussed with Agency
Officials in an Exit Conference conducted on June 23, 2022 and their comments were
considered in this Report, where appropriate.

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G. Status of Settlement of Audit Suspensions and Disallowances

Audit Suspensions and Disallowances amounting to ₱6,387,194.17 and

₱32,240,892.46, respectively, remained unsettled as at December 31, 2021, details of
which are discussed in Part II of this Report.

H. Status of Implementations of Prior Years’ Audit Recommendations

Of the 186 audit recommendations that were not implemented in prior years, 85
were reiterated in Part II of this Report, 33 were implemented and 68 were not
implemented as summarized in the table below, the details of which are shown in Part III
of this report.

Status of Implementation Number of Recommendations Percentage

Fully Implemented 33 33
Not Implemented 68 67
Total 101 100

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