EXECUTIVE SUMMARY

A. Introduction

Agency’s Mandate

The Cotabato Foundation College of Science and Technology (CFCST) used to be known
as the Cotabato Educational Foundation Village (CEFV) was created under RA 3801 on
June 22, 1963 to serve the educational needs of “children of adversity”. It was founded by the
illustrious Muslim leader Bai Hadji Matabay Plang who also founded the then Mindanao
Institute of Technology, now the University of Southern Mindanao.

The CEFV was renamed to CFCST under BP 408 in June 10, 1983. It is the only
educational institution in the country with a custodial care program wholly supported by the
government.

The mandate of the College is to offer elementary, secondary and tertiary education.

Pursuant to RA 8292 approved on June 6, 1997, supervision over the College was
transferred from the DECS to the CHED. Under this law, the composition of the Board of
Trustees (BOT) was also changed with new members added.

Personnel Complement

The College is headed by Mr. Samson L. Molao, Ed. D. It has a total personnel of 205 as
of December 31, 2013. Of these, 95 are teaching personnel while 110 are administrative staff.

B. Financial Highlights

Financial Profile

The following are the financial condition, results of operations and sources and
application of funds of Cotabato Foundation College of Science and Technology as of
December 31, 2013, with comparative figures for CY 2012 summarized as follows:

Particulars 2013 2012 Increase/(Decrease)

Financial Conditions
Assets P 71,615,247 P 69,358,317 P 2,256,930
Liability 33,454 158,904 (125,450)
Government Equity 71,581,793 69,199,413 2,131,480
Results of Operations
Income 105,538,043 101,578,209 3,959,834
Expenses 102,740,046 100,882,262 1,857,784
Excess of Income 2,797,997 695,947 2,102,050
 Funds for operations come from the Subsidy Income from the National Government
(SING). Income are generated locally from Income-Generating Projects (IGPs) and from the
collections of tuition and other fees.

C. Operational Highlights

Major Accomplishments

For School Year (SY) 2012 - 2013, enrollment in College increased by 8.55%, while in
High School and Elementary, it decreased by .009% and 19.61%, respectively, as shown in the
following table:

SY 2012-2013 SY 2011-2012 Increase/(Decrease) %

College 2,348 2,163 8.55%
High School 446 450 (.009%)
Elementary 246 306 (19.61%)

For the past years, the college was accredited by the AACCUP under Level II for
Bachelor of Science in Agriculture, Elementary Education and Secondary Education and Level I
for BS in Home Economics. As of December 31, 2013, the School obtain accreditation: BS
Agriculture, Elementary Education and Secondary Education were re-accredited under Level II;
HE-Level I; while Forestry, Agribusiness and Graduate Master’s (MAEd) with Candidate Status.
For the Graduate Master’s degree (MS Agronomy), assessment is on-going for candidate status.
This status of accreditation did not change from that of last year.

It is also noteworthy to mention that during the year the College was the only one among
the State Universities and Colleges in the region which was granted Performance Based Bonus
authorized under E.O. No 80 in recognition of their fully liquidated cash advances as of
December 31, 2013.

D. Scope of Audit

A financial and compliance audit was conducted on the accounts and operations of the
CFCST for the year ended December 31, 2013. The audit consisted of verification,
reconciliation, analysis of accounts and such other procedures considered necessary. It was
aimed at ascertaining the propriety of disbursements, the reliability of financial reports and the
Agency’s compliance with government accounting and auditing rules and regulations.

E. Auditor’s Report

The auditor rendered a qualified opinion on the fairness of presentation of the financial
statements, and the propriety of financial transactions of CFCST for the calendar year 2013.

The account Property, Plant and Equipment in the amount of P63,131,157 per book was
not reconciled the Physical Inventory Report due to the absence of the latter, thus rendering the
correctness of the account balance doubtful.
F. Comments and Observations
The report contains four (4) observations, viz:

1. Procurement of 3 units Macerator/Creper machines in CY 2007 in the total amount of

P870,000.00 were kept idle at the Cotabato Foundation College of Science and
Technology (CFCST) Gymnasium due of lack of proper planning, hence, the units were
not utilized and made operational to its intended purpose to the disadvantage of
government interest.

We recommended for Management to make a feasibility study in order to materialize

their plan of putting up a rubber processing plant. The impending deterioration of the
three (3) units Macerator/Creper should be immediately addressed to avoid further waste
of government funds and resources.

2. The correctness of the Property, Plant and Equipment account as of December 31, 2013
in the amount of P63,131,157, net of accumulated depreciation, was doubtful due to the
absence of a Physical Inventory Report duly reconciled with the accounting records as
deficiencies found in other relevant property and accounting reports affecting the fair
presentation of the account in the financial statement.

We recommended that the Property Officer conduct a physical inventory count of all
Property, Plant and Equipment of the College in accordance with the procedures
prescribed in the Government Accounting and Auditing Manual, Vol. I. The property
records such as ledger cards, history cards with supporting documents such as Official
Receipt, Purchase Order and Acknowledgement Receipt of Equipment should be
maintained to determine who is accountable. Likewise actual condition of properties
should be declared and if found unserviceable, the same may be disposed following the
provision of Section 79 of P.D. 1445.

3. Public Funds totaling P498,662.50 were illegally and periodically withheld through
habitual delays in depositing and reporting of collections under Trust Fund of Pikit and
Datu Montawal Extensions of Cotabato Foundation College of Science and Technology,
in gross violation of COA-DOF Joint Circular 1-81 and Section 32 of the NGAS Manual,
thereby depriving the College for the immediate use of income to augment its operating
budget.

We recommended that the management should implement measures to ensure prompt

reporting, remittances and deposits of collections in order to reflect the correct balances
in the Financial Statements. Require the Vice President of Finance to closely monitor the
collections and deposits of the collecting officer and ensure that succeeding collections
are deposited intact and regularly in accordance with Section 69 of PD 1445, Section 32
of the NGAS Manual, Volume I and COA-MOF Joint Circular No. 1-81. The Accountant
and the Cashier should conduct jointly a review of the accounting and reporting policies
of the Cotabato Foundation College of Science and Technology with regard to
collection, deposit and recording of revenues, as well as the handling of direct deposits or
collections made by banks for the account of the College, in order to ensure correctness
and accuracy of cash balances in the financial statements and to preclude any duplication
 of procedures and functions. The President require the Collecting Officer to explain in
writing why he delayed the recording, reporting and deposit of his collections in the
aggregate amount of P498,662.50.

4. The Acting Collecting Officer, Ms. Bailina P. Dalam, Administrative Aide III is not
covered with the Fidelity Bond in violation of Section 101 of PD No. 1445, thus
government interest is not protected in case of loss of property.

We recommended that Management comply with the requirements of the aforesaid

regulations and facilitate the processing of the application for the fidelity bond in order to
safeguard the government property against any loss that may be brought by unforeseen
occurrences.

G. Implementation of Prior Year’s Audit Recommendations

Of the five recommendations embodied in 2012 Annual Audit Report, four were fully
implemented and one was partially implemented.