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REPUBLIC OF THE PHILIPPINES

COMMISSION ON AUDIT
National Government Sector
Cluster NGS-5-Education and Employment
Audit Group R16-C, Audit Team No. R16-C-04
Department of Labor and Employment-Field Office, Bacolod City
Technological University of the Philippines-Visayas
Philippine Normal University Visayas
Technical Education and Skills Development Authority (TESDA), Talisay City
____________________________________________________________

AOM No. 2018-008


Date: March 14, 2018

AUDIT OBSERVATION MEMORANDUM

MA. LEONOR F. VALIDOR, Ph.D.


Director
Technological University of the Philippines - Visayas
Talisay City, Negros Occidental

Attention: CELESTE GRACE B. DELUMPA


Accountant III

We have audited the accounts and operations of the Technological University of the
Philippines – Visayas, Talisay City and observed the following deficiencies/errors:

Statement of Cash flows as of December 31, 2017 were incorrectly computed


showing a discrepancy of ₱7,901,474.84, rendering the financial statements
unreliable and the cash balance reported at year end doubtful.

In preparing the statement of cash flow, last paragraph of Section 23, Chapter 19 of the
Government Accounting Manual for NGAs. Volume 1 provides:

The net increase in cash provided by (used in) operating activities, investing activities and
financing activities for the year, and the cash balance at the start of the year, shall equal the
cash balance at the end of the year as shown in the Statement of Financial Position.

Financial Statements must be reliable. A reliable information is free from material error and bias,
and can be depended on by users to represent faithfully that which it purports to represent or could
reasonably be expected to represent (sec 6(e), Chapter 19, GAM, Volume I)

Review of the agency’s financial statements shows erroneous mathematical computation of cash
balance at the end of the year. Instead of adding the increase in cash to the cash balance at the
beginning of the year, the same was however, deducted to the latter. Thus, instead of a cash balance
of ₱129,128,071.06 only the amount of ₱121,226,596.22 were reported, as shown below:

Particulars As presented As recomputed Difference


Cash Flow from Operating Activities
Cash Inflows 134,850,743.13 134,850,743.13 -
Cash Outflows 115,835,180.80 115,835,180.80 -
Net cash provided by (used in) operating activities 19,015,562.33 19,015,562.33 -
Cash Flow from Investing Activities
Cash Inflow - - -
Cash Outflow 15,064,824.91 15,064,824.91 -
Net cash provided by (used in) investing activities (15,064,824.91) (15,064,824.91) -
Increase(decrease) in cash and cash equivalents 3,950,737.42 3,950,737.42 -
Add: Cash Balance, January 1, 2017 125,177,333.64 125,177,333.64 -
Cash Balance, December 31, 2017 121,226,596.22 129,128,071.06 (7,901,474.84)

As obtained from the records, this amount pertains to its cash balance under Fund 164. Same cash
balance (₱121,226,596.22) were also reported in the agency’s statement of financial position as
of December 31, 2017 as follows:

Cash-collecting officers ₱ 407,009.73


Cash in Bank- local currency,current 120,819,586.49
TOTAL ₱ 121,226,596.22

This erroneous presentation, and the agency’s consistent failure to submit its bank reconciliation
statement under fund 164 for more than two years as stated in our previous audit observations,
raises our doubts as to the correctness of the cash balances reported by the agency. Moreover, we
wonder how this cash balance as presented in the Statement of Cash Flows coincide with its
Statement of Financial Position, when the such amount were mathematically incorrect,

Based on the foregoing, we recommend that the agency immediately submit to us copy of its bank
statement as of December 31, 2017 for all of its bank accounts, specially under Fund 164 for us to
verify the correct cash in bank balance.

May we have your comments on the following observations within five (5) days from
receipt hereof.

NAID A. BRASILEÑO
State Auditor III
Audit Team Leader

BENEDICTA B. PAGUNSAN
State Auditor IV
OIC, Regional Supervising Auditor
Proof of receipt of AOM

MA. LEONOR F. VALIDOR, Ph.D.


Director
Date:__________________________

CELESTE GRACE B. DELUMPA


Accountant III
Date:__________________________