EXECUTIVE SUMMARY

A. INTRODUCTION

The Commission on Population (POPCOM) was created and mandated as the

central coordinating and policy making body of the government in the field of population.
It serves as the lead agency in the planning and monitoring of population programs.

Executive Order (EO) No. 171 was issued in 1969 creating a 22-member
Commission on Population, mainly to address the increasing list of concerns associated
with population growth. EO No. 233, Republic Act (RA) No. 6365, and Presidential
Decree (PD) No. 79 were issued in 1970, 1971 and 1972, respectively, for other
population policies. Other acts or orders were issued for further management of
population concerns in the ensuing years.

After having been under the supervision and jurisdiction of various agencies, such
as the Office of the President (OP) in 1971 and 1990, National Economic and
Development Authority (NEDA) in 1972 and 1991, and the Department of Social Work
and Development (DSWD) in 1987, POPCOM is now under the Department of Health
(DOH) since 2003 pursuant to EO No. 188, dated March 24, 2003.

The population policy is anchored on four pillars: responsible parenthood (RP),

respect for life, birth spacing, and informed choice.

POPCOM has developed strategies on RP and Natural Family Planning (NFP)

program by launching the Responsible Parenting Movement (RPM) starting December
2006, wherein the holding of RPM classes in the barangays is one of the major activities.
One class is composed of 10 married couples of child bearing age who want to practice
birth spacing through NFP. The program aims to mobilize 4.2 million couples in the
42,000 barangays throughout the country.

The POPCOM - Central Office (CO) is under the leadership of an Executive

Director while its 15 Regional Population Offices (RPOs) are headed each by a Regional
Director. POPCOM as a whole has an approved plantilla consisting of 422 positions, of
which 275 positions were filled-up while 147 remained vacant.

B. OPERATIONAL HIGHLIGHTS

Some of the major accomplishments of POPCOM for CY 2012 which were

validated on a sampling basis are as follows:

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 Percentage
Accomp-
Major Final Outputs (MFOs) Target of Accomp-
lishment
lishment

MFO 1: POPULATION POLICY AND

DEVELOPMENT (POPDEV)

No. of policies formulated in coordination with 286 99 35%

national and local bodies

No. of POPDEV sensitive program/agency plans 200 340 170%

and guidelines/standards developed at the national,
regional and local levels

No. of advocates/advocacy networks organized and 450 2,219 493%

maintained

No. of advocacy materials produced 3,690 3,383 92%

No. of events organized/promoted at the national 220 162 74%

and local levels

No. of population information/knowledge centers 75 64 85%

maintained/updated

No. of clients/users served 5,000 2,011 40%

MFO 2: CAPABILITY BUILDING SERVICES

FOR LGUs AND OTHER STAKEHOLDERS

No. of Technical Assistance through TOT

Trainings, orientations, workshops and other 38,455 36,382 95%
capability building activities, policy formulation,
plan development, standard/ Guideline setting, M
and E and resource mobilization on the three
program areas (POPDEV Integration, AHYD,
RH/FP, RP/NFP) provided to LGU program
workers & other stakeholders

C. FINANCIAL HIGHLIGHTS

RA No. 10155, the General Appropriations Act for FY 2012, provided total
appropriations of P304.543 million for the operations of POPCOM and additional
appropriations for Personal Services for the implementation of the Salary Adjustments,
for Productivity Enhancement Incentives as well as for the terminal pay of POPCOM
personnel who resigned/retired from government service.

The total allotments received from DBM as well as the obligations incurred by
POPCOM for CY 2011 are shown in the next page.

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 Unobligated
Allotments Obligations
Allotment Class Balance of
Received Incurred
Allotments
A. Regular Appropriations
Personal Services P99,805,000.00 P122,139,242.94 P(22,334,242.94)
Maintenance and
Operating Expenses 197,777,000.00 135,516,626.85 62,260,373.15
(MOOE)
Capital Outlay 3,099,000.00 1,518,082.12 1,580,917.88
B. Special Purpose Fund
Personal Services 16,417,467.00 15,246,263.66 1,171,203.34
Total Current Year’s
Allotment 317,098,467.00 274,420,215.57 42,678,251.43
C. Continuing
Appropriations
MOOE 15,714,985.18 7,734,207.34 7,980,777.84
Total P332,813,452.18 P282,154,422.91 P50,659,029.27

The POPCOM’s assets, liabilities, government equity and sources and application of
funds for CY 2012 with comparative figures with 2011 are presented as follows:

Increase
Particulars 2012 2011
(Decrease)
A. Financial Condition
Assets P251,811,327.72 P264,529,701.26 P(12,718,373.54)
Liabilities 38,207,962.18 24,003,545.12 14,204,417.06
Government Equity 213,603,365.54 240,526,156.14 (26,922,790.60)
B. Sources and Application
of Funds
Income 277,459,530.88 308,356,285.58 (30,896,754.70)
Personal Services 138,099,636.25 144,183,451.34 (6,083,815.09)
Maintenance and Other
Operating Expenses 140,844,688.45 153,629,110.20 (12,784,421.75)
Financial Expenses 4,400.00 2,750.00 1,650.00
Total Expenses 278,948,724.70 297,815,311.54 (18,866,586.84)
Excess of Income over
Expenses P (1,489,193.82) P 10,540,974.04 P (12,030,167.86)

D. SCOPE OF AUDIT

The audit was conducted on the accounts and operations of POPCOM for the year
ended December 31, 2012 to determine the fairness of presentation of the financial
statements (FS) and propriety of the recorded and reported financial transactions in
accordance with applicable laws, rules and regulations.

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E. INDEPENDENT AUDITOR’S REPORT ON THE FS

The Auditor rendered a qualified opinion on the fairness of presentation of the FS

as of December 31, 2012 due to material exceptions noted in audit which are stated in the
Independent Auditor’s Report and discussed in detail in Part II of the Report.

F. SUMMARY OF SIGNIFICANT AUDIT OBSERVATIONS AND

RECOMMENDATIONS

Among the significant audit observations with corresponding recommendations,

which are discussed in detail in Part II of the Report, are as follows:

1. The Due from NGAs, LGUs and NGOs/POs accounts totaling P96.759 million,
P24.473 million, and P0.583 million, respectively, in thirteen POPCOM offices are
past due contrary to the provisions of COA Circular Nos. 94-013 and 2007-001. In
addition, the Due from NGOs/POs in RPO IV is overstated by P0.400 million due to
error in recording of unreleased funds to NGO at year-end, contrary to Section 32 of
the MNGAS, Volume III, as amended. (Finding No. 4)

We recommended and Management agreed to direct the twelve RPO and

POPCOM CO Directors to:

a. require the concerned LGUs, NGAs and NGOs/POs to immediately submit

the required liquidation reports (RCI and RD) together with the
supporting documents to report the utilization of funds, and to return any
unused balance to fully settle their outstanding accounts with the
POPCOM;

b. henceforth, refrain from granting additional fund transfers to IAs unless

the previous releases are fully liquidated; and

c. instruct the Regional Accountant of RPO IV to prepare a journal entry

voucher to adjust the overstatement of Due from NGOs/POs and Accounts
Payable of P0.400 million.

2. Excess collections of P1.041 million deposited with the Land Bank of the
Philippines were not remitted to the National Treasury contrary to EO Nos. 338 and
431, resulting in idle funds in the AGDB which could have been used by the national
government to implement its programs and projects. (Finding No. 1)

We recommended and Management agreed to direct the POPCOM CO and

RPO IV Directors to remit the idle funds to the BTr to allow the government to
utilize the funds for other priority projects.

3. The non-preparation of Bank Reconciliation Statements (BRSs) for the Cash in

Bank-LCCA of RPOs IV and VIII due to absence of records had affected the

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 accuracy of the recorded balances in the amounts of P153,335.30 and P38,610.85,
respectively . (Finding No. 2)

We recommended and Management agreed to direct the concerned RPO

Directors to require their Accountants to:

a. prepare and submit periodic BRS as required under COA Circular 92-
125A, analyze reconciling items and prepare necessary adjusting entries to
reflect the correct balances of the Cash in Bank – LCCA; and

b. enroll the agency’s depository account in the LANDBANK weAccess facility

for on-line generation of bank statements.

4. Advances to officers and employees in POPCOM CO and RPO VIII amounting to

P0.846 million and P1.067 million, respectively, or a total of P1.913 million were
not liquidated on time, thus, resulting in the accumulation of outstanding cash
advances at year end contrary to COA Circular Nos. 2009-002 and 97-002. (Finding
No. 3)

We recommended and Management agreed to direct the POPCOM CO and

RPO VIII Directors to:

a. require their officials and employees with unliquidated cash advances to

submit the liquidation documents to the Accountant for recording in the
books and refund excess balances, if any, to fully settle their outstanding
accounts;

b. instruct their Accountants to monitor closely the liquidation of cash

advances granted to AOs within the prescribed period to ensure prompt
settlement of accounts; and

c. henceforth, ensure that the granting, utilization and liquidation of all cash
advances are in accordance with COA Circular No. 97-002.

5. The reliability, accuracy and existence of Inventories and PPE recorded in the books
at P0.136 million and P44.065 million, respectively, were affected by the
unreconciled balances between the inventory report and books of accounts. (Finding
No. 5)

We recommended and Management agreed to direct the concerned RPO

Directors to require their:

a. Property Officers and Regional Accountants to: (i) analyze and reconcile
the discrepancy between the Reports on Physical Count of (RPCPPE) and
Report of Physical Count of Inventories (RPCI) and the General Ledger
(GL); and (ii) effect necessary adjustments in either records if warranted;

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 b. Inventory Teams to facilitate the preparation of the RPCPPE and RPCI as
of December 31, 2012 and submit copy to the Audit Teams for review;

c. Property Officers to: (i) issue ARE and strictly observe the renewal period
which is every January of the third year after issue, or whenever there is
transfer of accountability; and (ii) prepare property tags or inventory
labels to be uniformly printed in indelible ink and pasted on prominent and
secure portion of the property for easy identification; and

d. Supply Officers to include in the RPCPPE the necessary information, such

as the type, description, unit value and remarks as to the whereabouts and
condition of the property as required in Section 66, MNGAS, Volume II.

6. Unserviceable properties of RPOs IV and CARAGA costing P1.768 million were

not reclassified to Other Assets account as required in Section 143 of the MNGAS,
Volume III. Likewise, unserviceable vehicles in RPO VIII were not disposed as
required in Section 79 of PD No. 1445, and two vehicles in RPO CAR were not
utilized. (Finding No. 6)

We recommended and Management agreed to direct the concerned RPO

Directors to:

a. instruct their Regional Accountants to prepare a journal entry to reclassify

unserviceable properties of P1.768 million to Other Assets account;

b. require their Property Officers to immediately dispose the unserviceable

PPEs to prevent their further deterioration; and

c. evaluate the need to maintain the two motor vehicles of RPO CAR,
otherwise, consider the transfer thereof to other RPOs to prevent further
deterioration.

7. The lack or absence of relevant records and documents to support the nine dormant
asset accounts of POPCOM CO, RPO IV and V totaling P107.100 million have
consistently rendered the reported balances of these accounts unreliable. No request
for write-off was yet made pursuant to COA Circular No. 97-001 dated February 5,
1997. (Finding No. 7)

We reiterated our prior year’s recommendations and the following officials

agreed that:

a. the Accountant exert more efforts to analyze, document and adjust the
dormant accounts; and

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 b. if the efforts proved to be futile, the POPCOM – CO, through the Executive
Director, consider requesting authority to write-off the dormant accounts
to the Commission on Audit in accordance with COA Circular No. 97-001.

8. The validity of remaining allotments totaling P7.471 million for various projects/
activities of POPCOM-CO had expired on December 31, 2012 due to failure to
implement planned programs and activities, thus, depriving the beneficiaries of the
POPCOM programs and activities. (Finding No. 12)

We recommended and Management agreed to require the POPCOM CO to be

more cautious, reasonable and realistic in the preparation of budget proposals
for programs, projects and activities, including its implementation, to prevent
the expiration of allotment and ensure attainment of project objectives.

9. Hazard pay was granted to POPCOM officials with salary grades 20 and above at a
fixed amount of P4,989.75 per month contrary to Section 21 of RA 7305 or the
Magna Carta of Public Health Workers and its IRR resulting in overpayment of
P2.254 million. (Finding No. 8)

We recommended that Management of the RPOs concerned to:

a. require the concerned personnel to refund the overpayment of hazard pay;

and

b. comply with the provisions of Section 21 of RA 7305 and its IRR in the
payment of hazard pay to officials and employees with salary grades 20 and
above based on five percent of their basic salaries, to avoid disallowance in
audit.

10. The classification and recording of consultancy, advertising, training, including other
regular operating expenditures incurred in POPCOM CO, RPOs NCR and VIII for
CY 2012 to expense accounts Membership Dues and Contribution to Organizations
and Donations totaling P10.543 million was not in accordance with COA Circular
2004-008; thus, misstating the affected accounts. (Finding No. 9)

We recommended and Management agreed to direct the RPOs to instruct their

Accountants to ensure the recording of expenses to their proper accounts as
prescribed in COA Circular 2004-008.

These observations and recommendations were communicated through Audit

Observations Memorandum and discussed with management officials concerned during
the exit conference. Management views and comments were incorporated in the report,
where appropriate.

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G. STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT
RECOMMENDATIONS

The status of implementation of prior years’ audit recommendations is shown

below. Details are presented in Part III of the report.

Status Number Percentage

Fully Implemented 8 30%
Partially Implemented 14 52%
Not Implemented 5 18%
Total 27 100%

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