EXECUTIVE SUMMARY

Introduction
The Camarines Sur Polytechnic Colleges (CSPC) is a state, non-sectarian, and non-profit
educational institution of higher learning established by virtue of Batas Pambansa (BP)
Bilang 512 as amended by Republic Act (RA) No. 8292. Its mandate is to provide higher
technological, professional, and vocational instruction and training in fisheries, trade and
technology, arts and sciences, as well as short term technical and vocational courses as the
Board of Trustees may deem necessary. Its institutional blueprint, which is in accord with
its philosophy: “Education for Economic Development and Social Progress,” is the
development of a critical mass of quality manpower in the area through ladderized
curricula in trades and technology and arts and sciences.

In calendar year (CY) 2002, pursuant to the provision of the Commission on Higher
Education (CHED) Fiscal Year (FY) 2002 budget under the General Appropriations Act
(GAA) FY 2000, the former Bicol College of Arts and Trades was converted to CSPC
Naga City Campus pursuant to CSPC Board of Trustees (BOT) Resolution No. 00-044.

On October 19, 2012, RA No. 10231 was approved separating CSPC-Naga City Campus
from CSPC Main Campus in Nabua and converting the former into what is now known as
the Bicol State College of Applied Science and Technology (BISCAST).

CSPC also opened its extension campus in Buhi, Camarines Sur in response to the quest of
the Local Government of Buhi to make college education accessible to the underprivileged
but deserving students of the municipality under BOT Resolution No. 08-439 approved on
February 28, 2008.

RA No. 11283 entitled “An Act Converting the Camarines Sur Polytechnic Colleges
(CSPC) in the Municipality of Nabua, Province of Camarines Sur, into a State University
to be known as the Polytechnic State University of Bicol and appropriating Funds therefor,
was approved and signed by President Rodrigo R. Duterte on April 12, 2019. However, it
is noteworthy to mention that despite the approval of the Republic Act, the college could
not yet adopt its new name as a University due to the non-issuance of the Certification by
the CHED to the effect as the school was not able to submit some required documents.

The Main Campus offers graduate programs in Masters in Engineering (ME),

Engineering Technology (MET), Business Management (MBM) and Nursing (MAN);
Bachelor Degree Programs in Electrical Engineering, Mechanical Engineering, Civil
Engineering, Electronics Engineering, Information Technology, Computer Science,
Library Information Science, Science in Information System, Nursing and Midwifery,
Office Administration, Hospitality Management, Tourism Management, Entrepreneurial
Management; and Mathematics, Arts in Language, Technical-Vocational Teacher
Education.

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Presently, the administration of the College is vested in its President, Dr. Charlito P.
Cadag, with the able and competent help from his three Vice-Presidents, namely: Dr.
Maria Laarni M. Salcedo (VP for Academic Affairs), Mr. Ferdinand B. Valencia (VP for
Administration and Finance) and Dr. Teresita B. Salazar (VP for Research, Extension,
Production and Entrepreneurial Development). These officials, together with over 300
academic and administrative personnel deployed in the Nabua, and Buhi campuses, steer
the College to sustainable, efficient and effective operations.

Scope of Audit
The audit was conducted to: (a) ascertain the level of assurance that may be placed on
management’s assertions on the financial statements; (b) determine the propriety of
transactions as well as the extent of compliance with applicable laws, rules and regulations;
(c) recommend agency improvement opportunities; and (d) determine the extent of
implementation of prior years’ audit recommendations.

Financial and Compliance audit covered the accounts and operations of the State College
for the period January 1 to December 31, 2020, conducted on test basis.

Operational Highlights
Enrolment Data

FIRST
SEMESTER
MAIN CAMPUS
Graduate Programs 158
College of Computer Studies 1104
College of Education, Arts and Sciences 1067
College of Business Management 2092
College of Health Sciences 546
College of Engineering 2151
BUHI EXTENSION CAMPUS
Bachelor of Science in Information Technology 77
Bachelor of Science in Office Administration 249
TOTAL 7444

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Graduates Data

Graduate Programs
Master in Business Management 3
Master of Arts in Nursing 5
Master in Engineering 2
Sub-Total 10
Terminal Degree
Diploma in Midwifery 1
Bachelor of Science in Information Technology 84
Bachelor of Science in Computer Science 5
Bachelor of Science in Office Administration 77
Bachelor of Science in Food Service Management 89
Bachelor of Science in Entrepreneurial Management 38
Bachelor of Science in Tourism Management 40
Bachelor of Technical Teacher Education:
-Major in Food Service Management 49
-Major in Electronics Technology 46
Bachelor of Science in Nursing 29
Bachelor of Science in Civil Engineering 125
Bachelor of Science in Electronics Engineering 74
Bachelor of Science in Electrical Engineering 62
Bachelor of Science in Mechanical Engineering 95
Bachelor of Science in Office Administration-Buhi Extension
58
Campus
Sub-Total 872
TOTAL 882

Financial Highlights

A.1 Financial Position

Increase/(Decrease)
Particulars 2020 2019
Amount %
Assets ₱ 772,547,109.66 ₱ 707,164,527.91 ₱ 65,382,581.75 9.25
Liabilities 81,291,591.12 109,073,257.45 (27,781,666.33) (25.47)
Net Assets/Equity ₱ 691,255,518.54 ₱ 598,091,270.46 ₱ 93,164,248.08 15.58

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A.2 Financial Performance

Increase/(Decrease)
Particulars 2020 2019
Amount %
Subsidy from Nat’l Gov’t ₱ 266,542,852.98 ₱ 215,268,292.48 ₱ 51,274,560.50 23.82
Revenue 101,215,856.26 54,298,130.50 46,917,725.76 86.41
Expenses 271,707,718.14 244,239,177.25 27,468,540.89 11.25
Surplus/(Deficit) 96,050,991.10 25,327,245.73 70,723,745.37 279.24

B. Current and Continuing Appropriation

Increase/(Decrease)
Particulars 2020 2019
Amount %
Personal Services ₱ 135,063,000.00 ₱ 128,271,000.00 ₱ 6,792,000.00 5.30
Maintenance and Other
115,858,000.00 83,722,000.00 32,136,000.00 38.38
Operating Expenses
Capital Outlay 143,034,000.00 81,434,000.00 61,600,000.00 75.64
Total ₱ 393,955,000.00 ₱ 293,427,000.00 ₱ 100,528,000.00 34.26

Independent Auditor’s Report on the Financial Statements

We rendered a qualified opinion on the fairness of presentation of the College’s financial
statements for CY 2020 because:

1. Prior year’s audit observation on the non-reconciliation of the Accounting and

Inventory Custodian’s records remained unacted upon, contrary to pertinent
accounting and auditing rules and regulations, thus, accuracy and reliability of the
balances of inventory accounts totaling ₱16.05 million cannot be ascertained.
Likewise, the unit value of 1,401 pieces of six different items classified under Other
Supplies and Materials Inventory was not indicated in the Report on the Physical
Count of Inventories (RPCI), thus, understating the total cost of inventories.

2. The correctness and reliability of the balances of Property, Plant and Equipment
(PPE) accounts carried in the books at gross cost of ₱640.25 million as of December
31, 2020 were doubtful due to the non-reconciliation of the accounting and property
records, inability to derecognize the disposed properties amounting to ₱4.05 million
and inclusion as PPE of items below the capitalization threshold of ₱15,000.
Likewise, the Report on the Physical Count of Property, Plant and Equipment
(RPCPPE) includes unserviceable properties already disposed.

3. Other Payables account with General Ledger balance of ₱35.00 million as of

December 31, 2020 is doubtful due to the absence of necessary supporting documents
and updated subsidiary ledgers/schedules hindering the verification and reconciliation

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 of balances, thus, accuracy and reliability of the account balance reflected in the
financial statement could not be ascertained.

Significant Audit Observations and Recommendations

For the exceptions mentioned earlier, we recommended that Management:

1. Comply with the following courses of action:

a. Require the Accounting Office to maintain and update the recording of the receipts,
issuances and corresponding balances in the Supplies Ledger Cards (SLCs). It shall
be maintained to facilitate reconciliation with Supply Office at any given time.; and

b. Require the Accounting and Supplies Offices to conduct periodic reconciliation of

their respective records to ensure reliability of the inventory account balances.
Trace the discrepancies and effect the necessary adjustments on the affected
inventory accounts, including those inventory items with no unit cost/value.

2. Require the Accountant and Property Officer to:

a. Reconcile the RPCPPE with the General Ledger Balances and make the necessary
adjustments for the discrepancies noted in audit amounting to ₱13.17 million, to
present the correct PPE account balance in their respective books and records;

b. Prepare adjusting entries to derecognize the PPEs already disposed amounting to

₱4.05 million;

c. Remove from the PPE accounts, items amounting to ₱84,340 which are below the
capitalization threshold of ₱15,000 and classify them as inventory items pursuant
to Section 4, Chapter 10 of GAM for NGAs, Volume 1; and

d. Prepare adjusting entries to correct the overstatement of asset and equity accounts
for those semi-expendable property already issued to end-users and supported with
duly accomplished Inventory Custodian Slips (ICS).

3. Require the Accountant to:

a. Analyze, investigate and substantiate the validity and existence of the recorded
prior years’ transactions taken up under Other Payables account. Also, prepare a
complete and updated Schedule or SL thereof and make the necessary adjusting
entries to reflect the correct classification of the account; and

b. Revert to the National Treasury any payable amounts already dormant for two
years or more with no valid claimants/supporting documents.

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Moreover, the following are the notable observations and the corresponding
recommendations:

1. The accuracy and reliability of the Due to NGAs account balance of ₱7.86 million as of
December 31, 2020 cannot be ascertained due to the absence of supporting documents,
non-preparation of subsidiary ledgers/schedules, and inability to deduct from the
account all liquidations and refund of the unutilized funds to the Source Agencies,
contrary to COA Circular No. 2020-001 dated January 8, 2020, Presidential Decree
(PD) No. 1445 and GAM for NGAs.

We recommended that Management require the Accounting Office to:

a. Exert effort in retrieving the documents and records pertaining to the funds
received from the College’s files if there is any or request a copy from the source
agency;

b. Prepare and maintain subsidiary ledgers which aid in monitoring and detecting
errors/omissions on specific accounts;

c. Reconcile records with the concerned source agencies and effect necessary
adjustments in the books for accurate account balances; and

d. Henceforth, ensure that financial transactions are accurately recorded in the

accounting books.

2. Management was not able to enforce/exercise the remedies provided in the Revised
Implementing Rules and Regulations (IRR) of RA No. 9184 for lapses in the
implementation of various infrastructure projects resulting in possible loss of
government funds.

We recommended that Management:

a. Cause the immediate termination of the contract for the abandoned infrastructure
project Center for Innovation and Technology Development (CITD Phase III) and
award the contract to another qualified contractor;

b. Forfeit the contractor’s performance security and initiate the suspension or

blacklisting of defaulting contractor in accordance with the guidelines issued by the
GPPB;

c. Conduct preliminary detailed engineering activities thoroughly for future

infrastructure projects and ensure that present and past issues that contribute to the
delay in the project implementation are resolved prior to the procurement and
construction of the infrastructure projects;

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 d. Require the Project Engineers to monitor closely and supervise the project
implementation in accordance with the plans, specifications and timelines, and
institute appropriate penalties, where necessary, to protect the interest of the
government;

e. Require the Bids and Awards Committee (BAC) and Technical Working Group
(TWG) to thoroughly and strictly review the post-qualification of Contractors in
terms of manpower, equipment requirements and performances on ongoing and
completed government and private civil works contracts; and

f. Submit explanation why the CITD building, which was not yet completed and
accepted, was already repaired out of the fund Special Trust Fund (STF) for CY
2020.

3. Buildings constructed and completed in CYs 2017 and 2019 in the total amount of
₱139.16 million were being utilized/occupied despite the absence of the necessary
Building and Occupancy permits required under Sections 301 and 309, Chapter III of
PD No. 1096.

We recommended that Management:

a. Immediately follow up the building permits and thereafter secure the occupancy
permits of the completed constructed building to ensure their conformity to safety
and other standard requirements; and

b. Strictly comply with the Building Code requirements by securing building permits
prior to commencing the construction of buildings and structures.

4. Registries to monitor the budget were not complete and not compliant with the format
prescribed under pertinent provisions of the GAM for NGAs Volumes I and II, posing
difficulty in the verification and reconciliation of the balances reflected in the Budget
and Financial Accountability Reports (BFARs).

We recommended that Management require the Budget Officer to prepare and

maintain all the registries in the format prescribed under the GAM for NGAs.

5. Productivity Incentive Allowance totaling ₱1.4 million granted to 242 employees as

PRAISE incentive was contrary to item 6 of CSC MC No. 01 s. 2001 due to absence of
proof that suggestions, inventions, superior accomplishments and other personal
efforts result in monetary savings which shall not exceed 20% of the savings
generated.

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 We recommended that Management:

a. Submit documents to show that there were acceptable exemplary achievements

which resulted in monetary savings that made the personnel of the College eligible
to receive said incentive;

b. Submit proof that there were available savings from Personnel Services of the
General Appropriations Act in FY 2020; and

c. Refrain from granting allowances, benefits and incentives without legal basis to
avoid possible disallowance in audit.

The afore cited observations and recommendations were discussed with concerned officials
of the Camarines Sur Polytechnic Colleges (CSPC) during the exit conference held on May
7, 2021. Management views and reactions were considered in the Report, where
appropriate.

Summary of Total Suspensions, Disallowances and Charges as of Year-

End
Review of records on audit suspensions, disallowances and charges disclosed that the same
were not fully settled within the period prescribed under 2009 Rules and Regulations on
the Settlement of Accounts (RRSA). Details are shown as follows:

This Period
Beg. Balance Ending Balance
January 1 to December 31, 2020
As of As of
12/31/2019 NS/ND/NC NSSDC 12/31/2020
Notice of Suspension ₱ 10,138.89 ₱ 0.00 ₱ 0.00 ₱ 10,138.89
Notice of Disallowance 343,009.54 0.00 0.00 343,009.54
Notice of Charge 0.00 0.00 0.00 0.00
Total ₱ 353,148.43 ₱ 0.00 ₱ 0.00 ₱ 353,148.43

Status of Implementation of Prior Years’ Audit Recommendations

Out of the 53 significant audit recommendations contained in the AAR for CY 2019, 24 or
45 per cent were fully implemented, 20 or 38 per cent were partially implemented and nine
or 17 per cent were not implemented as of December 31, 2020.

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